RCI Banque reports a pre-tax profit of €460 million and a stable return on equity of 15.1%

- RCI Banque recorded a pre-tax profit of €460 million in the year ended 31 December 2007, down slightly by 6% from the year before. Net profit came to €316 million. Return on equity held steady compared with 2006 at 15.1% not taking into account non-recurrent items.
- Performing loans averaged €22.9bn compared with €23.1bn in 2006, while loan production came to €9.4 billion.
- RCI Banque continues to achieve a satisfactory overall penetration rate of 32.1% for its operations as a whole. In what are difficult conditions, its penetration rate in Western Europe reached 33% compared with 34% in 2006.
- RCI Banque has been authorised by the Banking Commission to use the advanced internal ratings-based approach to determine risk components from 1 January 2008 in connection with the application of the Basel II Framework.

2007: the group achieved the objectives set in Renault’s Contrat 2009 plan

In 2007, RCI Banque produced 898,334 new financing contracts, down 5.3% from 2006. This in fact masks contrasted performances since the number of contracts for new vehicles was steady at 727,325, whereas financing contracts for used vehicles declined by 18% to 171,009. RCI Banque financed 32.1% of all sales of new vehicles, corresponding to 34.5% of Renault’s sales, 23.7% of Nissan’s, 24.2% of Dacia’s and 26.6% of Renault Samsung Motor’s.

The group pressed on with its internal development, focusing on two goals, to strengthen existing operations and to develop activities in new countries. In the United Kingdom, RCI Banque assumed total control over Renault’s financing activities in July 2007 (previously carried on by a joint venture owned fifty-fifty with a local partner). It started up a finance company in Morocco to provide both retail and wholesale financing. Finally, RCI Banque took over wholesale financing activities in Slovakia and Slovenia.

Pressing ahead with its development in new countries, RCI Banque started up a Renault Finance Nordic branch to provide retail and wholesale financing in Denmark, Finland, Norway and Sweden and set up a marketing company in the Ukraine.

As regards new products, RCI Banque launched a Carte Bleue Visa credit card cobranded with Renault in France.

In France, Diac was able to maintain its positions in 2007, with performing loans of €7.7 billion on average and a penetration rate of 32% for new vehicle financing compared with 32.1% in 2006. The penetration rate for retail vehicle sales in fact reached a new record of 39.4%. These performances enabled Diac to record a 1% increase in pre-tax profit to €164.3 million despite a 3% decline in loan production to €3.28 billion.

At group level, consolidated profit before tax came to €460 million, down 6% from 2006. The 1% increase in net banking income to €1,030 million was due to average loans outstanding being virtually unchanged, so too the financial margin and distribution costs, while the margin on services improved to 0.81% of loans outstanding from 0.72% in 2006. The increase in operating expenses was mainly due to non-recurring items (costs linked to the merger of the British entities), but for which these expenses would have been stable compared with 2006. Cost of risk continued to be tightly controlled despite inching up to 0.68% from 0.61% in 2006, the deterioration experienced in the United Kingdom, Brazil and Spain being counterbalanced by good performances in Germany, France and Italy.

The prudent refinancing adopted in the past enabled RCI Banque to weather the financial crisis with no particular impact on the group’s margins or its liquidity. At 31 December 2007, the reserve of liquidity amounted to over €3 billion.

At 15.1% before taking into account non-recurring items, return on equity was stable compared with 2006.

2008: focus on accompanying Renault’s sales offensive

Seven new models will be launched in 2008, an opportunity for RCI Banque to achieve stronger growth and press ahead with its international development, notably by consolidating its presence in Russian and in Nordic countries, also by examining new development projects abroad. For these reasons, return on equity is expected to hold at a high level of around 15%, meaning RCI Banque will continue to contribute to the success of Renault’s Contrat 2009 plan.


RCI Banque - Communications Division

Contact: Luc Gendrot - tel: +33 (0) 1 49 32 88 15 - e-mail: luc.gendrot@rcibanque.com

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