Cat Financial Q3 NBV up $83MM Year/Year

Cat Financial reported Q3/17 revenues of $673 million, an increase of $22 million, or 3% compared with Q3/16. Third-quarter 2017 profit was $86 million, an $11 million (11%) decrease from Q3/16.

The increase in revenues was primarily due to a $15 million favorable impact from higher average financing rates and a $14 million favorable impact from lending activity with Caterpillar, partially offset by a $6 million unfavorable impact from lower average earning assets.

Profit before income taxes was $126 million for Q3/17, compared with $146 million for Q3/16. The decrease was primarily due to a $19 million increase in provision for credit losses and a $16 million increase in general, operating and administrative expenses primarily due to higher incentive compensation. These unfavorable impacts were partially offset by a $9 million favorable impact from lending activity with Caterpillar and an $8 million increase in net yield on average earning assets.

During Q3/17, retail new business volume was $2.78 billion, an increase of $83 million, or 3% from Q3/16. The increase was primarily related to higher volume in Asia/Pacific and Mining, partially offset by decreases in Latin America and Caterpillar Power Finance.

At the end of Q3/17, past dues were 2.73% compared with 2.77% at the end of Q3/16. Write-offs, net of recoveries, were $47 million for Q3/17, compared with $29 million for Q3/16. The increase in write-offs, net of recoveries, was primarily due to the Latin America and marine portfolios.

As of September 30, 2017, the allowance for credit losses totaled $343 million, or 1.27%, of finance receivables, compared with $346 million, or 1.28%, of finance receivables at September 30, 2016.  The allowance for credit losses at year-end 2016 was $343 million, or 1.29%, of finance receivables.

“Cat Financial’s portfolio and business continues to perform well. We believe customer risk exposure is well managed, with a broad distribution of portfolio exposure across our global customer base,” said Dave Walton, president of Cat Financial and vice president with responsibility for the Financial Products Division of Caterpillar. “Cat Financial remains well positioned to serve Caterpillar customers and dealers worldwide through financial services excellence.”

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