The loss of profits on the bottom line at Dutch vendor finance and lessor DLL after the sale of mobility specialist Athlon has been revealed as €70m (£64.39m) in its results.
DLL’s leasing segment booked a net profit of €176m, a decrease of €70m compared to the same period last year, which the lessor said was primarily the result of the sale of Athlon.
The lessor said that with the exclusion of the Athlon results from the interim figures 2016, DLL’s net interest income increased in the first half of 2017, while staff costs increased only slightly.
The company’s managed portfolio balance increased by 7% compared to the same period in 2016, and totalled €30.2bn (£27.78bn). New business originations were up by 16% on a year-on-year basis.
DLL said loan impairment charges were €41m or 26 basis points of the average portfolio, which it said was “well below the long-term average of 60 basis points”.
In the first six months of 2017, the lease portfolio decreased by 1% to €30.3bn, fully caused by currency fluctuations. Excluding these currency effects, the portfolio increased by 4%. The share of food & agriculture in the lease portfolio amounted to 39%.
€4.4bn DLL Financial Solutions transferred from DLL to Rabobank
As of April 2017, the portfolio of DLL’s Financial Solutions division was transferred to Rabobank’s domestic retail banking business segment.
Financial Solutions includes leasing and consumer finance products offered to Rabobank customers in the Netherlands. DLL said migrating DLL’s non-vendor finance activities to Rabobank allows it to deliver more value to the customers that make use of these products. Additionally, it allows DLL to focus all of its resources on its vendor finance business. The migration to Rabobank was completed in April 2017 after the necessary regulatory approvals were secured.
For a like-for-like comparison, the lease portfolio at 31 December 2016 was adjusted by €4.4bn and restated to €30.5bn from €34.9bn.
“These strong first-half results continue to validate the strategic decision to focus on our leading global vendor finance business,” said Bill Stephenson, chief executive and chairman of the executive board. “By providing innovative financial products, easy-to-use digital tools and a first-class customer experience, all delivered by our empowered and engaged workforce, DLL remains a leader in this dynamic, highly competitive market.”
“Despite pressure on new business margins, we continue to diversify our income model in areas such as secondary market equipment sales,” said Marc Dierckx, chief financial officer and member of the Executive Board. “Our risk costs were in line with market conditions, but still remain historically low. Our future outlook remains strong.”
“Our strategy is clear. We are targeting continued growth for our award-winning vendor finance business, including expansion of our customer service network in select markets to provide a more personal and localized level of service to our partners,” added Stephenson. “The first phase of this expansion is already underway in North America and we are very excited about the potential.”