PRAGUE (Reuters) – Consumer lender Home Credit Group on Friday recorded a first-half loss of € 619 million on provisioning to cover loan losses as the coronavirus pandemic hit consumers.
The lender whose operations include China, India and other Southeast Asian markets, Russia or the Czech Republic, said it had reduced its loan portfolio by 20% in response to the crisis, but said business has started to pick up.
“I am encouraged to see that our business has already improved since the end of the second quarter,” said Managing Director Jean-Pascal Duvieusart. “Barring further economic shocks, we expect activity to continue to rebound in the second half of 2020.”
Impairment losses jumped to 1.79 billion euros from 871 million a year ago, the company said. The non-performing loan coverage ratio increased 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 helping our communities most affected by this health crisis, Home Credit can pull the plug. on the performance of the first half, ”said Duvieusart. .
Total net lending fell to 16.16 billion euros from 20.19 billion a year ago, and the volume of new loans plunged 44% year-on-year to 5.9 billion euros.
The company, owned by Czech billionaire Petr Kellner’s PPF group with a minority stake owned by fellow Czech businessman Jiri Smejc, cut operating expenses by 17.4% in the second quarter from the level of ahead of the pandemic in the last quarter of 2019, and said the pandemic had accelerated its shift to selling online.