DaimlerChrysler Financial Services reported stable business developments in the first quarter

DaimlerChrysler Financial Services reported stable business developments in the first quarter of this year. The division’s EBIT decreased by €36 million compared with the prior-year quarter to €419 million.

The reduction in earnings is partially due to currency effects, caused especially by the weaker US dollar. Another factor is that risk costs were higher than the exceptionally low level of the prior-year quarter. However, this was almost offset by an increased profit contribution of the overall portfolio, which, adjusted for currency translation effects, expanded slightly, and by efficiency improvements.

The division’s worldwide contract volume decreased by €5.2 billion to €112.5 billion; adjusted for exchange-rate effects, there was an increase of 3%. New business of €11.8 billion was 14% below the high level attained in the prior-year quarter; adjusted for exchange-rate effects, the decrease was 9%.

Contract volume in the Americas region (North and South America) amounted to €79.8 billion at the end of the quarter (Q1 2006: €86.6 billion). Contract volume of €32.8 billion in the Europe, Africa & Asia/Pacific region was 5% higher than a year earlier. In Germany, DaimlerChrysler Bank’s portfolio grew by 5% to €15.9 billion.

The Financial Services division strives to achieve further efficiency improvements this year. In addition, it will collaborate even more closely with the dealers and brands worldwide in order to achieve optimal sales support for the automotive divisions. The division anticipates a slight reduction in Financial Services’ contract volume due to the effects of currency translation. Financial Services aims to achieve a return on equity of more than 14% in 2007.