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Non-bank lenders' profits grow, portfolios deteriorate

Although non-bank lenders had bigger profits in Q1-Q3 2005 than in the same period a year earlier, the quality of their portfolios deteriorated and their return on assets (ROA) worsened, according to a report on the sector by the State Financial Supervisory Authority (PSZÁF). Non-bank lenders had combined after-tax profits of Ft 31.86 billion in Q1-Q3 2005, 11.4% more than in the same period a year earlier. (Profits rose after a 6.8% year-on-year fall in the first quarter, the PSZÁF noted.) The sector's nine-month pre-tax profits rose 20.6% year-on-year to Ft 41.18 billion. Average ROA in Q1-Q3 2005 fell to 2.44% from 2.81% in the same period a year earlier. Still, the sector's ROA is high compared to other financial companies, the supervision said.
Non-bank lenders had total assets of Ft 1,875.06 billion at the end of September, 14.6% more than twelve months earlier. Total assets rose in spite of a slowdown among vehicle financing businesses, which earlier boosted the sector, and were helped by a pickup in business lending by factoring companies as well as lending to high-risk retail clients.