William Malcolm

Home Credit Posts €619M First-Half Loss

Petr Kellner’s Home Credit Group, which provides consumer loans worldwide, reported a loss of EUR 619 million in the first half of the year. The loss was due to the creation of massive reserves of 1.8 billion euros to cover the risks associated with the global coronavirus pandemic. A year ago, Home Credit had a profit of EUR 250 million.

The group strengthened its resilience to possible future losses from the negative economic consequences of the COVID-19 disease by creating reserves, according to a spokesperson.

In the first half of the year, Home Credit financed its clients in ten countries of the world by purchasing goods and services worth 5.9 billion euros (so-called new loans), representing a year-on-year decrease of 44 percent. This result reflected the impact of widespread closing and the introduction of quarantines on dampening consumer demand. In response to the new market situation, the group also restricted new loans by tightening their provision conditions.

As of June 30 this year, the total volume of all Home Credit loans reached 16.2 billion euros, representing a decrease of 20 percent compared to the end of 2019. The share of non-performing loans in the total portfolio thus rose to 6.2 percent as of June 30, from 5.6 percent last year. At present, the group still provides “installment holidays” to hundreds of thousands of clients in response to market conditions.

“The simultaneous impact of the coronavirus pandemic on all the markets where Home Credit operates is something we have never faced before. It is a credit to our teams and to our business model that we remain well-positioned going into the latter part of the year. I am confident that by keeping our business intact despite such strong headwinds, recalibrating our operations to reflect the changing environment and assisting our communities most hurt by this health crisis, HCGBV can draw a line under the first-half performance. I am encouraged to see that our business has already been improving since late in the second quarter. Barring further economic shocks, we expect the business tocontinue rebounding in the second half of 2020,” said Jean-Pascal Duvieusart, CEO of Home Credit.

Home Credit is part of the PPF Group, which has generated a cumulative net profit of four billion euros in the last five years and has 9.6 billion euros in capital.

Home Credit was founded in the Czech Republic and is registered in the Netherlands. Its majority owner is the PPF Group, which is owned by Czech billionaire Petr Kellner.