IBM Credit Corp, IBM Corp’s Stamford, Connecticut lease and dealer inventory finance subsidiary, reported third-quarter net profit down 32.5% at $37.7m; a charge of $25.4m resulting from an increase in the federal income tax rate to 35% from 34% is included in the figures, and without it, the third quarter profit would have been $63.1m, up 12.9%. IBM Credit initiated restructuring actions in 1993 to reduce expenses and bring resources in line with market conditions. A net charge of $7.5m was recorded in the second quarter to recognise the cost of this; as a result of all these factors, nine month net profit was down 12.1% at $146.5m. Return on average equity for the first nine months of 1993 was 16.8%, compared with 19.7% for the same period of 1992. In the first nine months, IBM Credit originated financing totalling $6,000m of equipment, software and services for IBM’s end-user customers and distribution channels, an increase of 2% on last year. The decline in demand for mainframes meant that capital equipment financing generated for end users slumped 26% to $2,200m – but financing for dealers rose by 30% and was $3,800m.
