PSA Peugeot Citroen has responded to reports that the French Ministry of Finance and national banks were negotiating a rescue plan for Banque PSA Finance (BPF) by confirming that a support plan is currently being reviewed.
Reuters reported that the OEM has said it is reviewing options to enable its banking unit to maintain sufficient financing volumes amid concerns that debt rating cuts could push the bank into junk status.
A Le Figaro report had asserted that the Ministry of Finance and banks, including BNP Paribas, Credit Agricole, Natixis, Societe Generale and foreign banks which represent 50% of the loans outstanding, were preparing a rescue plan for BPF which could lead to a decision within days. The plan was said to involve a commitment by banks to postpone the payment date of €4bn (US$5.2bn) of debt and bring new credit lines of €1.5bn to BPF, while the state would provide a guarantee for around €4bn.
Reuters quotes a PSA spokesperson as saying: “The management of PSA is reviewing different options to set up solutions enabling Banque PSA to maintain sufficient financing volumes for its end customers and its dealer network for the carmaking unit and the company as a whole to function well.”
Wholly-owned by Peugeot SA, Banque PSA Finance provides financing for sales of Peugeot and Citroen cars and light commercial vehicles in 23 countries. It offers retail and fleet customers a range of financing solutions and related services, and provides Peugeot and Citroen dealers with financing for new and used vehicles and spare parts inventories.
BPF reported revenue of €979m in the first six months of 2012, a rise of 3.9% from the January-June 2011 total of €942m. Net banking revenue was €542m, compared with €524m, growth that primarily reflected “the carefully managed increase in corporate dealer loans, with an 8.6% improvement.” Recurring operating income was €271m, versus €274m.
PSA noted that in a challenging economic environment, BPF delivered “a healthy marketing and financial performance thanks to the quality and robustness of its business model.”
The bank saw its penetration rate among the PSA group’s customers rise by 1.7 points during H1 2012 to a historic high of 28.1%. Developing synergies with the brands’ marketing organisations was said to be an essential factor in the bank’s sales strategy.
A total of 413,531 new and used vehicles were financed during the H1 2012 period, a decline of 6.8% compared with H1 2011 that reflected lower registrations across the bank’s markets. A growing proportion of the bank’s revenue is generated outside Europe, with “solid” contributions from Brazil, Argentina and Russia. Markets outside Europe accounted for 19.4% of new vehicle financing volumes versus 18% the year before.
New retail financing extended in H1 2012 totalled €4,327m, a decrease of 6.2% from €4,612m in H1 2011, reflecting the end of scrappage incentives at the end of Q1 2011 and “the unfavourable economic environment’’ frontline impact on consumers.”
New financing for corporate fleet customers increased by 5.4% in H1 2012.
As of 30 June 2012, the retail loan book stood at €17,448m versus €17,474m at 31 December 2011. The wholesale loan book at 30 June 2012 was €7,300m, up 6.8% from €6,840m at 31 December 2011.
Total outstanding retail and wholesale loans stood at €24,748m at 30 June 2012 compared with €24,314m at year end 2011, an increase of 1.8%.
The penetration rate for services and insurance offerings rose during the H1 2012 period, with 1.67 service/insurance contracts sold for every financing contract, versus 1.66 in H1 2011.
PSA also noted that: “Thanks to the success of several refinancing transactions, the bank has a considerable €8,300m in liquidity reserves, in line with its strategy of constantly maintaining a more than six-month margin of security. Since 1 January 2012, it has access to €700m in LTRO financing, as well as a diversified array of financing sources. The bank is still pursuing a dynamic refinancing programme, with the support of its banking pool and the will to increase loan securitisation from 14% to around 30%.”
