The customer finance business delivered higher levels of gross income during the quarter as a result of continued growth in earning assets and positive margin development.
New financing volume during the quarter of SEK 11.1 billion was approximately the same as last year. Adjusting for movements in exchange rates, new financing volume increased by 5% compared to the third quarter of 2012. In total, 12,215 new Volvo Group units (12,253) were financed during the quarter. In the markets where financing is offered, the average market penetration rate in the third quarter was 26% (28%).
As of September 30, 2013, the gross credit portfolio amounted to SEK 101.3 billion (97.5). On a currency adjusted basis, the credit portfolio increased by 7.0% when compared to the third quarter of 2012.
Credit provisions in the quarter amounted to SEK 293 M (135) while write-offs of SEK 262 M (110) were recorded. The increased provisions relate to non-performing loans and leases in Spain stemming from the global financial crisis in 2009 and 2010. Due to the continuing recession and protracted legal processes in that country, collateral positions and values have deteriorated. Credit reserves remained stable at 1.34% of the credit portfolio. The annualized write-off ratio through September 30, 2013 was 0.66% (0.53%).
Operating income in the third quarter amounted to SEK 327 M (384). The decrease compared to the previous year is driven by higher provisions in Spain which were partially offset by improvements in gross income and operating expenses.
During the quarter, VFS syndicated approximately SEK 0.8 billion of the credit portfolio. The result of the syndications is included in Other operating income and expenses.