DLL delivered a strong first-half performance, highlighted by exceptional net profit growth. The company recorded both portfolio and income growth during the first six months of the year, while risk costs improved significantly due to more favorable economic conditions.
The company’s portfolio balance increased by almost 2 percent over the prior year’s interim results and totaled $42.7 billion. During this same period, new business volume was $16.0 billion, representing 9.5 percent growth over the prior year. This strong commercial performance was realized despite product shortages in certain industry sectors beginning to impact equipment availability and potentially delaying the activation of lease and finance contracts.
The company recorded net profit of $359 million in the first six months of 2021, an increase of 520 percent from the prior year. This result was positively impacted by a significant improvement in risk costs as economic conditions improved in many key markets. The underlying financial performance of the portfolio continued to trend positively, with net income totaling $905 million, which represented 4 percent growth over the prior year when adjusted for currency movements.
“It is promising to see these first early signs of economic reawakening and that DLL continues to be an integral part of the growth and success of our customers around the world,” said Bill Stephenson, CEO and Chairman of the Executive Board. “In an improving, albeit still challenging market environment, the underlying performance of the business remains strong.”
Improving Economic Conditions Enhance Performance
Due to improved macro-economic conditions in the first half of 2021, DLL was able to reverse previously booked loss provisions, which shifted total risk costs to a net positive result of $68 million. This exceptional result corresponds to minus 33 basis points of the average loan portfolio and is well below DLL's historical long-term average of plus 52 basis points.
“Overall, and barring any significant adverse changes in the macro-economic environment due to COVID-19 or other unforeseen factors, we continue to remain comfortable with the overall quality of the portfolio and the long-term outlook on performance,” said Marc Dierckx, Chief Financial Officer and Member of the Executive Board. “As we enter the second half of 2021, we will closely monitor supply chain disruptions and downstream product shortages, as well as the potential impact these events could have on our new business growth and portfolio development.”
Resuming a Trajectory of Growth and Success
“DLL entered this business year with a goal of resuming the trajectory of growth and success that was disrupted by COVID-19,” said Stephenson. “Our results in the first six months of this year make clear that we are realizing this ambition. I am very proud of the hard work and dedication exhibited by our global workforce in supporting our customers, and the efforts being made to ensure DLL is positioned for continued success in 2022 and beyond.”