The financial arm of German automaker Volkswagen stated on Wednesday that it expects an increase in operating profit in this year, regardless of a diesel scandal that has impacted the market.
Volkswagen Financial Services stated 2017 profit would surpass a record 2.1 billion euros ($2.47 billion) in last year.
The bank also stated provisionary figures show the number of contracts in its portfolio increased 8 percent to 19.7 million in 2017, increased from 18.2 million in 2016. Those contracts are for consumer financing, leasing, maintenance and evaluation. The 2017 figure includes for the first time about 250,000 contracts for Porsche. The last year was not adjusted.
Chief Financial Officer Frank Fiedler stated that lower refinancing expenses and the portfolio growth credited to the profit gain.
A study from the consultancy Bain & Company stated that automobile banks were amongst Germany’s most profitable financial institutions due to their narrow focus and captive clientele.
New car registrations in Germany, Europe’s biggest auto market, will grow to among their highest-ever levels this year, sustained by a strong economy and sales incentives for cleaner diesel models, the nation’s main auto lobby stated previously in December.