Irish-headquartered HP subsidiary records $140m profit

An Irish-based subsidiary of Hewlett-Packard that provides leases, rentals and loan facilities to HP customers to finance the acquisition of its products, recorded pretax profits of $140 million (€125 million) for the year ending October 2015.

This marks a 3.3 per cent decline on the $145 million recorded for the same period 12 months earlier, newly-filed accounts show.

Hewlett-Packard International Bank attributed the fall in profits to the weakness of the euro versus the dollar and to declining lease margins. It said the profit decline was offset by lower bad debts, which had led directors to reassess the level of provisions for loan losses from 1.1 per cent of portfolio assets to 0.75 per cent.

Leixlip base

The Leixlip-based bank reported new financing volumes of $1.6 million, up 6.6 per cent on the prior year. Operating income fell from $800 million to $690 million due to the currency impact while admin expenses declined by 14.4 per cent. Net interest income totalled $59 million versus $72 million a year earlier. Balance sheet assets were flat at $4 billion as against $3.6 billion in 2014.

The bank said loans and advances to other financial institutions declined significantly as third-party debt financing fell to $409 million versus $685 million in the prior year. It attributed the fall to a temporary controlled wind-down of its commercial paper programme in the lead-up to the separation of HP into two companies last year.

Hewlett-Packard International Bank employed 196 people last year with wages and salaries amounting to $17.3 million. Directors’ remuneration totalled $1.12 million.

Moody’s reaffirmed the bank’s long-term deposit ratings at A3 earlier this year.