FRANKFURT, MARCH 15 - Volkswagen's Financial Services AG expects earnings to stagnate both this year and the next, the company said on Thursday.

"Assuming slightly increasing refinancing costs and a highly uncertain environment with an impact on risk costs, among others, (...) earnings in 2012 are expected to be at the level of 2011," it said in its annual report.

Although it expects a more stable economic environment next year "might have a positive effect on the development of risk costs in individual markets," overall profits nonetheless should still be flat in 2013, it said in the report.

Volkswagen Financial Services said it paid 512 million euros ($667 million) last year in dividends to its parent Volkswagen AG last year. ($1 = 0.7677 euros)