Grenke Group – which includes Grenke Leasing, Grenke Factoring and Grenke Bank – has reported net profit of 59.7m, up 24% year-on-year.
Across the group, profit from new business was 6.7% higher year-on-year at 37.3m. Over the first nine months of the year, its leasing division’s new business volumes grew 17% year-on-year to 961.1m, while the new business volumes of its factoring division rose by 54.3% to 230.2m.
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In addition, the group saw its interest income rise by 21.9% to 140.4m, which resulted from higher interest income from financing business and lower interest expenses on refinancing.
Expenses for the settlement of claims and risk provision increased at a slower rate in the first nine months and rose 12.2% to 43.8m.
Renate Hauss, head of investor relations told Leasing Life that this figure gives the company confidence that the scoring system it uses to evaluate the leasing contracts is performing well.
Net interest income after the settlement of claims and risk provision increased by 26.8% from 76.2m in the previous year’s period to 96.6m.
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By GlobalDataOverall expenses had a moderate rise in the first nine months in comparison to income growth. Staff costs grew by 15.1% to 46.3m, while selling and administrative expenses were 13.2% higher at 38.5m. The number of full-time employees working for the group grew from 838 in the first nine months to 2014 to 918 in the same period this year.
Grenke Group’s cost/income ratio fell from 55.1% to 53.8% and its equity ratio rose from 16.7% to 17.5%.
Hauss said that the equity ratio is in a good position in relation to Basel III framework and explained that in Germany the group is regulated as a bank because it has a banking division.
In order to improve to "further strengthen" its equity base, the group issued a hybrid bond in July for a total of 30m.
Jörg Eicker, chief financial officer at Grenke Leasing said: "With this instrument, which we used for the first time and fits in well strategically with our profitable growth path and our equity ratio of 17.5%, based on total assets of 3.2 billion, we are well equipped to reach our future targets."
Following the third quarter results, the group decided to revise upwards its profit expectations for 2015.
Wolfgang Grenke, chairman of the board of directors at Grenke Leasing, said: "The positive trend witnessed in the first six months of the year continued unabated in the third quarter. Net profit in the nine-month period grew a satisfactory 24 percent to 60m. On the basis of this encouraging development, we expect to even exceed the increased guidance provided in July 2015 of a net profit in the range of 74 – 78m. For the year as a whole, we expect a net profit between 78 – 80m, representing year-on-year growth of at least 20 percent. With these positive results we are entering the last quarter of 2015 with the confidence that we will end the fiscal year as a whole on a successful note."
