DF Capital reported strong third-quarter growth, with its loan book up 22% as the specialist dealer-finance bank built momentum in asset finance.
The lender’s trading update on Friday was strong, and the share price decline may reflect caution in the CEO’s comments about the macro environment.
DF Capital said new lending rose 22% year-on-year to £561m in the quarter, taking originations past £1.6bn so far this year, while its loan book reached £929m, also up 22%.
Credit quality remained solid, with the proportion of the book in arrears or legal recovery edging down to 1.3%.
Two dealer insolvencies in the marine and motorcycle sectors during the quarter left it holding about £27m of assets to sell, though it expects to recover these in the ordinary course without additional losses.
Its newer asset finance business continued to grow quickly, with its loan book there almost doubling since the first half to around £78m, supported by more than 290 dealers across 390 retail locations.
DF Capital also launched a direct-to-consumer finance portal, broadening its routes to market.
The 3% dip in DF Capital on Friday may well be one that’s bought into.
Carl D’Ammassa, Chief Executive Officer, commented: “It has been another strong period for the Group, with both inventory and structured finance lending holding strong, complemented by significant momentum building in asset finance which has seen our loan book in that segment almost double during the quarter.
“The strength of our relationships but also the quality of our new lending capabilities underpins these strong results. Given our cautious view on the macro-economic and geo-political environment, we continue to focus on maintaining strong credit risk disciplines and ensuring we have a solid handle on our underlying asset security. The Group remains on track to meet market expectations for the full year.”