by Adrian-Liviu Dorofte

Mercedes-Benz Bank continues to grow

Mercedes-Benz Bank AG achieved once again solid business results in 2012. The total volume of the bank’s leasing and financing contracts for Daimler vehicles rose by five percent to €17.8 billion at the end of last year. Compared to 2011, new business increased by one percent to the record figure of €9.1 billion. As a result, the Stuttgart-based automotive bank also increased the share of Daimler vehicles it finances or leases in Germany to an all-time high. In fact, Mercedes-Benz Bank put more than half of the new Daimler vehicles on the road last year with a leasing or financing agreement.

“Mercedes-Benz Bank is performing well. We continued to profitably grow in 2012, we have our credit risks firmly under control, and our direct banking business provides us with a strong basis for refinancing our activities. In addition, our profitability is higher than our return on equity target of 17 percent,” stated Franz Reiner, CEO of Mercedes-Benz Bank. The bank, which is a subsidiary of Daimler Financial Services AG, made a significant contribution to its parent company’s operating profit of nearly €1.3 billion in 2012.

Mercedes-Benz Bank did particularly well last year in the insurance business, where the number of policies (motor insurance, payment protection insurance, purchase price protection, and traffic-related legal expenses insurance) increased by six percent to nearly 260,000. Mercedes-Benz Bank also combines individual components such as leasing, insurance, servicing, and maintenance into complete packages, which it offers at a single monthly rate. The total volume of these complete packages increased by seven percent last year to nearly 160,000. The bank’s fleet management business also experienced strong growth last year, with the number of contracts rising by six percent to nearly 280,000.

Outlook: Growth in the fleet management sector and in Europe

Reiner expects Mercedes-Benz Bank to continue to grow this year through the systematic expansion of its product range. “We are expanding our business model by adding mobility-related services to the products of a purely automotive bank — namely, leasing, financing, and direct banking,” Reiner said. Among other things, the company will get involved in the rental car business and offer more financial services products for pre-owned vehicles.

As the fleet management business will be an important strategic growth segment in the coming years, the subsidiary Daimler Fleet Management will expand its business model in this area. “At Daimler Fleet Management we mainly focused on the German market, but we will now intensify our efforts to gain internationally operating customers from Europe,” Reiner said.

The stronger focus on business opportunities outside Germany is also evidenced by Mercedes-Benz Bank’s new service center in Berlin. In addition to serving commercial vehicle customers in Germany, the center now offers services to customers in Spain. In a few months from now, the Berlin center will also begin serving customers in Italy.

Mercedes-Benz Bank also plans to increase the number of branches it operates in Europe. The company currently has branches in the UK and Spain, where it offers dealer financing. Another branch will be opened in France this year, and preparations to expand into additional countries are under way. “Mercedes-Benz Bank is becoming more European in scope. We can invest in such growth projects, because of our financial strength and strong position in our home market,” says Reiner.

Growth to result from Daimler’s model offensive

In the years ahead, Reiner also expects the bank to get a boost from the many new vehicle models that Mercedes-Benz will be launching in the coming months. “The Mercedes-Benz model offensive will provide us with outstanding growth opportunities in 2013 and beyond, as it encompasses a range of new commercial vehicles as well as new cars such as the new E-Class, the new S-Class, and the new CLA,” stated Reiner. In particular, Mercedes-Benz Bank will support the launch of the new Mercedes-Benz E-Class models this spring with complete packages for private and commercial customers.

Savings accounts from the direct banking business help secure growth and the provision of loans

In 2012, Mercedes-Benz Bank’s deposit banking business grew by ten percent to €12.1 billion. This puts the bank in a good position to continue to give customers and dealers affordable loans and thus to support Daimler sales. “Because of our good refinancing situation, we can always finance our planned growth without having to depend on the financial markets,” said Reiner. Mercedes-Benz Bank expects to continue to increase its contract volume and new business this year.

Credits: Daimler AG

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