Increase in risk provisions at Daimler Financial Services in first quarter 2009

At Daimler Financial Services, new business decreased by 12% compared with the prior-year quarter to €5.9 billion. Contract volume amounted to €62.0 billion at the end of the first quarter, which was 2% lower than at the end of 2008.

The division posted first-quarter EBIT of minus €167 million (Q1 2008: plus €168 million). The decline in earnings was primarily due to charges resulting from further increases in risk provisions. An additional factor is that the EBIT for the period includes losses from the sale of parts of the non-automotive leasing portfolio. Furthermore, expansion of Mercedes-Benz Bank’s direct banking business entailed expenses, which had a negative impact on first-quarter earnings.

Daimler Financial Services anticipates rising credit defaults and higher refinancing expenses in full-year 2009. The lowest point for earnings should have been reached in the first quarter, however. Contract volume is expected to decrease compared with 2008.