Operating income for the year amounted to €633 million while pre-tax profit totalled €548 million, with an increase of €27 million (5%) on 2017.
Such increase was due to the growth of total outstanding, which rose to €26.8 billion from €23.9 billion in 2017.
The innovativeness of FCA Bank’s financial solutions addressed to FCA’s customers along with those of the other commercial partners resulted in total new financing in the amount of €13.3 billion, up 10.3% on 2017. The cost of risk continued to improve in line with previous years, thanks to the effectiveness of the credit policies adopted, as it fell from 0.20% in 2017 to 0.18% in 2018.
Financial and operating highlights (€ millions)
|FCA Bank Group||31.12.2018||31.12.2017||FY '18 vs FY '17||Change %|
|Net banking income and
|Net operating expenses||-277||-264||-13||5%|
|Cost of risk||-44||-43||-1||3%|
|Other income / (expanses)||-85||-13||-72||ns|
|Profit before tax||548||521||27||5%|
Total new financing in 2018 amounted to €13.3 billion, including the rental activities. FCA Bank achieved a penetration rate of 46.9% of total new FCA vehicle registrations.
Total portfolio at the end of 2018 amounted to €26.8 billion, with a 12% increase on 2017.
Net banking income and rental margin
Il margine d’intermediazione bancaria e margine di noleggio dell’anno è cresciuto del 13% rispetto al 2017, raggiungendo il valore di 954 milioni di euro, trainato dalla crescita degli impieghi e dalla redditività del portafoglio che si è mantenuta stabile al 4% circa.
Operating efficiency reduced the cost/income ratio to 29%, continuing along the improvement path undertaken in the last years. The €13 million increase in absolute terms of net operating costs compared to 2017 is mainly due to the portfolio growth as well as the new investments in Information Technology, necessary for the digitalization of the business.
Cost of risk
FCA Bank’s cost of risk showed further improvement, confirming the trend already shown in the last years. In absolute terms, the cost of risk stood at €44 million, equal to 0.18% of the average portfolio.
Also in 2018 the Group strengthened its policy aimed at diversifying the sources of funding, with access to the bond and securitization markets and through online deposit-taking with Conto Deposito. Specifically, the Group continued to be active in capital markets and, with its “Euro Medium Term Notes” program, raised more than €1.9 billion thanks to two public and two private placements of senior unsecured notes. In 2018 FCA Bank also continue to expand its securitization programs, with three ABS placements that raised over €1.6 billion in funding.
FCA Bank maintains a first rate capitalization level, with Supervisory Capital in the amount of €3.1 billion, a Core Tier 1 Ratio of 12.45% and a Total Capital Ratio of 14.02 at the consolidated level.
In 2018 Moody’s, following Italy’s downgrade, lowered to Baa1 the rating on long-term deposits and brought back to stable (from positive) the long-term rating. Similarly, Standard&Poor’s changed to negative (from stable) the rating outlook, following a similar action on Italy’s rating. Fitch confirmed its BBB+ long-term rating, with a stable outlook.