Siemens’ bid to expand its
financial services using an official banking licence has been
justified by a strong performance at financing subsidiary Siemens
Financial Services (SFS).

SFS has reported a 5.1% rise in new
orders to €597m for the nine months to 30 June 2010. Profit before
tax rose by 14.8% to €310m.

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With the help of a licensed credit
institution, Siemens aims to expand the product portfolio,
particularly in the sales finance area, to add flexibility to group
financing and to optimise its risk management.

The company would be among the
first industrial businesses in Germany to gain such a licence,
outside the car industry. Its consolidated interim report cited a
strong performance in commercial financing, driven by significantly
lower loss reserves and higher interest results.

In the third quarter of 2010,
profit before tax was up 29.9% to €113m, compared to €87m in the
third quarter of 2009. These factors more than offset lower results
from Siemens Financial Services’ internal services business.

Early termination of financings had
contributed to the strong performance in the third quarter and the
company had benefitted from a favourable credit environment.

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Margin at Siemens Financial
Services rose from 26.4% in the second quarter of 2010, to 30.6% in
the third.

The parent company’s application
for a licence is still being considered by Germany’s Federal
Financial Supervisory Authority (BaFin) at the time of writing.

In 2009 SFS reported an unexpected fall in profit of a third
during the final quarter of the year.