During the quarter, the customer finance business achieved further profitability improvements as a result of strong portfolio growth and lower credit losses. The quality of the credit portfolio also improved as evidenced by lower delinquencies and write-offs.
New financing volume during the quarter amounted to SEK 10.7 billion (8.8). Adjusting for movements in exchange rates, new financing volume increased by 27.5% compared to the third quarter of 2010. This increase is due to higher Volvo Group unit deliveries and stable market penetration. In total, 11,356 new Volvo Group units (8,678) were financed during the quarter. In the markets where financing is offered, the average penetration rate in the third quarter was 25% (26%).
As of September 30, 2011, the gross credit portfolio amounted to SEK 87.8 billion (80.8). On a currency adjusted basis, the credit portfolio increased by 8% when compared to the third quarter 2010.
Credit provisions in the quarter amounted to SEK 145 M (339) while write-offs of SEK 166 M (397) were recorded. This resulted in a decrease in credit reserves from 1.58% to 1.52% of the credit portfolio at June 30, 2011 and September 30, 2011, respectively. The annualized write-off ratio through September 30, 2011 was 0.91% (1.68).
Operating income in the third quarter amounted to SEK 251 M (48). The improvement compared to the previous year is driven mainly by lower credit provisions and higher earning assets.