Operating result for the year totaled €416,5 million and net profit reached €311.6 million, up 25% compared to 2015. The increase was driven by the average portfolio growth, which rose to € 18.5 billion compared to €16.1 billion in 2015. The increase in new car registrations and FCA Bank’s growing commercial support to FCA (with a financial penetration of 48% on the European sales) resulted in total financed volumes of €11.6 billion, up 21% on 2015. The net portfolio at the end of December 2016 reached €21 billion. The reduction in the cost of risk also continued in 2016, down to €55 million at 0.30% of the average portfolio amount, compared to 0.44% in 2015.
“The launch of the online Conto Deposito (Euro term deposits) in Italy, the Joint Venture with Ferrari Financial Services GmbH, progress made in the ambitious digitalization process of the bank, along with the development of new mobility solutions allowed FCA Bank – according to the, Chief Executive Officer, Giacomo Carelli – to continue in the implementation of the Growth and Diversification strategy, receiving positive feedback from customers, commercial partners and investors”.
Total FCA Bank Group new financed volumes in 2016 reached €11.6 billion including the longterm rental activities. FCA Bank supported FCA’s new car sales, with an increased penetration rate at 48% on total registrations (46% in the previous year).
Year-end portfolio also grew to €20.8 billion, with an increase of 15% on 2015.
Net Banking Income and Rental Margin
Net banking income and rental margin for the year increased by 10% compared to 2015, to €731.6 million, driven by the portfolio growth, that at the end of 2016 reached €21 billion and by a profitability stable at 4%.
Operating efficiency drove the Cost/Income ratio down to 33%, in line with the improvement process that has been underway for several years.
In absolute terms, net operating costs grew by approximately €9 million compared to 2015, consistent with the substantial increase in the average portfolio.
Cost of risk
The cost of risk of FCA Bank decreases again, confirming the trend already seen in 2015. In absolute terms, the cost of risk reached €55 million, equal to 0.30% of the average portfolio.
In 2016 the Group strengthened its funding diversification policy: accessing the Capital Markets with a combination of secured and unsecured transactions, increasing its participation in the ECB’s “Targeted Long Term Refinancing Operations” program and launching its first deposit account product, Conto Deposito.
Thanks to Conto Deposito, funding sources were further diversified, and savings accounts total inflows in Italy already reached almost €200 few months after the launch.
Specifically, the Group issued debt under the MTN Program in the public and private markets for a total value of €2.4 billion, and accessed the ECB refinancing scheme (TLTRO2) for additional € 0.8 billion.
FCA Bank maintains a good level of capitalization, having also distributed dividends to shareholders for €125 million. As at 31 December 2016, the Shareholders’ Equity was at €2.2 billion, with a Core Tier 1 Ratio at 11.3%.
IV. Conto Deposito
On the back of the experience and skills developed in over 90 years also in the private savings products, in October 2016 FCA Bank launched the “Conto Deposito” deposit account with competitive returns and terms & conditions, thanks to the highly remunerative fixed interest rates.
“Conto Deposito” is available to FCA Bank’s customers and all other customers looking for a sound and profitable investment.
During 2016 the rating agencies upgraded FCA Bank’s rating, on the basis of the positive trend in Group results.
- Moody’s upgraded the long-term rating to Baa1 (Outlook Stable) and the long-term rating on deposit to A3 on 19 July 2016. Eventually, on 9 December 2016 Moody’s confirmed the ratings but changed the outlook on long-term deposits from stable to negative, prompted by the change in the Italian banking system outlook.
- Fitch confirmed the long-term rating to BBB with positive outlook on 15 June 2016
- Standard&Poor’s upgraded the rating to BBB- with stable outlook on 19 May 2016.