PRAGUE (Reuters) – Consumer lender Home Credit Group posted on Friday a 619 million euro loss for the first half on provisioning to cover loan losses as the coronavirus pandemic hit consumers.
The lender whose operations include China, India and other markets in South-east Asia, Russia or the Czech Republic, said it had shrunk its lending book by 20% in response to the crisis but said business had started recovering.
“I am encouraged to see that our business has already been improving since late in the second quarter,” said Chief Executive Jean-Pascal Duvieusart. “Barring further economic shocks, we expect the business to continue rebounding in the second half of 2020.”
Impairment losses jumped to 1.79 billion euros from 871 million a year ago, the company said. Non-performing loan coverage ratio rose to 197.8% from 124.1% a year earlier.
“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, Home Credit can draw a line under the first-half performance,” Duvieusart said.
Total net loans dropped to 16.16 billion euros from 20.19 billion a year ago, and new loan volume plunged 44% year-on-year to 5.9 billion euros.
The firm, owned by Czech billionaire Petr Kellner’s PPF Group with a minority stake held by another Czech businessman Jiri Smejc, slashed operating expenses by 17.4% in the second quarter versus pre-pandemic level in the final quarter of 2019, and said the pandemic had accelerated its shift to online sales.