During the quarter, the customer finance business achieved solid portfolio growth and further improvements in profitability. Portfolio performance remained stable during the quarter.
New financing volume during the quarter amounted to SEK 10.4 billion (9.4). Adjusting for movements in exchange rates, new financing volume increased by 8.1% compared to the first quarter of 2011. This increase is due to higher Volvo Group unit deliveries and stable market penetration. In total, 11,172 new Volvo Group units (10,664) were financed during the quarter. In the markets where financing is offered, the average penetration rate in the first quarter was 25% (23%).
As of March 31, 2012, the gross credit portfolio amounted to SEK 95.8 billion (83.0). On a currency adjusted basis, the credit portfolio increased by 13.9% when compared to the first quarter 2011.
Credit provisions in the quarter amounted to SEK 127 M (178) while write-offs of SEK 117 M (168) were recorded. This resulted in a slight decrease in credit reserves from 1.33% to 1.31% of the credit portfolio at December 31, 2011 and March 31, 2012, respectively. The annualized write-off ratio through March 31, 2012 was 0.49% (0.88).
In March, VFS successfully completed its second asset-backed securitization. Under the terms of the transaction, USD 642.1 M of securities tied to US-based loans on trucking and construction equipment assets were issued. The transaction was oversubscribed 3.4 times.
Operating income in the first quarter amounted to SEK 333 M (187). The improvement compared to the previous year is driven mainly by higher earning assets and lower credit provisions.