The Home Credit Group, which provides consumer loans worldwide, reported a loss of 584 million euros (15.3 billion crowns) last year. A year earlier, it had a profit of 400 million euros (10.5 billion crowns). The reason for the loss was a pandemic situation, according to Home Credit spokesman Milan Tománek. Home Credit is part of the PPF group of billionaire Petr Kellner.
In the first quarter, the group lost 619 million euros (16.182 billion crowns) due to the creation of massive reserves for risks from the pandemic. It ended the second half of the year with 35 million euros (919 million crowns). According to Tománek, the return to profitability was made possible by the renewal of consumer demand with the gradual fading of the closure of shops and establishments in individual markets and a significant digitization process of the sales network.
The group provided clients with new loans to purchase goods and services in the amount of 12.7 billion euros, representing a year-on-year decrease of 37 percent. The turning point for the growth of the new loan portfolio was the third quarter of last year.
Thanks to the tightening of credit conditions and the emphasis on relationships with long-term clients, the share of non-performing loans (90 days past due) in the company’s total portfolio increased slightly at the end of last year, 6.4 percent from 5.6 percent at the end of 2019. In the second half, the group was able to significantly reduce the creation of provisions to cover the risks associated with the COVID-19 pandemic from 1.8 billion euros (47.1 billion crowns) in the first half of the year 560 million euros (14.65 billion crowns).
Last year, another 21 million clients actively used the group’s mobile application, bringing their total number by 30 percent to 91 million. An average of 100,000 transactions took place digitally per day. According to the company, the acceleration in implementing the digital strategy significantly contributed to the decrease in operating costs. The group stated that it achieves up to a quarter of savings in the ongoing quarterly comparison.
“Thanks to the measures we took during the year, a solid foundation was laid for further growth. We’re watching now. Since the third quarter, we have seen an improvement in demand, which continues in the first months of this year. I am pleased that we have returned to profitability in still tricky conditions, “said Jean-Pascal Duvieusart, CEO of the Home Credit Group.
Home Credit is part of the PPF Group, which has generated a cumulative net profit of four billion euros (104.6 billion crowns) in the last five years and has a capital of 9.6 billion euros (251 billion crowns).
Home Credit was founded in the Czech Republic, and the international group Home Credit is registered in the Netherlands. Its majority owner is the PPF group of the wealthiest Czech, Petr Kellner.