KRUK Group reports the best financial and operational results in in the company’s 15-years history on the Romanian market

Deniza Cristian 30/06/2022 | 14:09

KRUK Group, the largest debt collection company in Central and Eastern Europe, operating in seven countries, including Romania, reports the best financial and operational results in the company’s 15-years history on the Romanian market.

 

In 2021, the investments have increased by 2,5 compared to the previous year, the business by 10%, the operational income by 31% and the portfolio acquisitions have doubled as compared to 2020.

„The results were also generated by the rising trend in saving, more prominent in 2020 due to the pandemic; therefore, more and more clients have managed to pay their debts entirely and regain their financial balance in return. Additionally, we noticed that last year’s investments have proved to materialize better, if we look at the number of purchased portfolios. The growth was also supported by the company’s operational efficiency efforts – which prioritized online debt management and payment solutions.”, declared Cosmina Marinescu, CEO KRUK Romania.

On the Romanian market, KRUK Group invested 35,4 million euros (167 million PLN) in 2021, representing 10% of the total investments at group level, by purchasing debts/receivables with a nominal value of 148.5 million euros (0,7 billion PLN and 60% of the estimated value of total investments in the debt collection industry in the country – 63 million euros (PLN 296 milion)).

As for the amounts retrieved, their value reached 119,9 million euros (575 million PLN), meaning 25% of the total recoveries at group level. Also, at the end of last year the registered a book value of the acquired portfolios was of 188,2 million euros (887 million PLN); Romanian portfolios accounted for 17% of the book value of all KRUK Group owned portfolios. In fact, the non-performing debts held by The Romanian banks reached 3.4 billion euros (16 billion PLN). Over the past five years, the value of depreciated claims has steadily declined. In 2021, on the Romanian market were sold non-guaranteed portfolios from the retail and corporate areas with a nominal value of 339.5 million euros (1.6 billion PLN).

“In 2021 we managed to recover all the losses recorded in 2020, when the business contracted by 8% due to the pandemic. This year, there is a possibility of further reduction – not exceeding 10%, generated by the increase in inflation, which has an effect on people’s bills and other expenses, and which consequently affects the payment of debts. Anyway, the number of amiable payments increases, because those with overdue payments do not want to end up in the situation of seizures and foreclosures”, estimates Liviu Costică, COO Kruk România.

Regarding the plans for this year, KRUK officials said that the investment budget for the Romanian market allows the acquisition of all portfolios that contribute to the profitability target. At the same time, this budget is designed to actively and significantly contribute to the financial balance and sustainability of the banking system, as well as of the telecommunications or utility sectors. In this respect, the Group’s intention is to cover the entire spectrum of claims, guaranteed or non-guaranteed, concerning both physical and legal persons. Besides, the Group’s Romanian subsidiary intends to also accelerate the digital transformation in 2022 and further invests in improving online payment solutions, automating processes and increasing operational efficiency. In addition, the company aims to become paperless by the end of this year, which will establish the complete autonomy of all KRUK Romania customers regarding online signing of payment commitments, receipts, participation agreement in the loyalty program „Dorințe implinite” (“Fulfilled Wishes”). In 2021, online payments accounted in Romania for over 20% of the total amiable recoveries and the number of payment commitments signed online represented 36% of the total payment commitments signed by KRUK Romania customers.

Also this year, KRUK acquired the non-performing receivables portfolio of a local telecom operator at a nominal value of over 160 million euros, consisting of overdue invoices. Liviu Costică: “This year we intend to become market leader in the telecom segment as well, not only in the banking one. This new debt package, which contains almost 470,000 cases, ensures that the number of customers increases by 25% and contributes to the goal of expanding the business by 5% for the first semester, compared to the same period of last year”. Most of the cases included in the newly acquired debt package belong to individuals, with only 2.5% of the debt holders that make up the portfolio being legal entities. Moreover, the cases pertaining to the portfolio were taken over entirely through process of amiable collection.”

At the end of last year, following an agreement with UniCredit Consumer Financing IFN, KRUK Group made an aquisition on the Romanian market – new receivables’ portfolios – with a nominal value of up to 48.5 million euros.

Also at Group level, the company announces record-breaking results for 2021: a registered profit of 147.4 million euros (695 million PLN), up by 758% compared to last year, and a record in terms of amounts recovered from purchased portfolios –466.8 million euros (2.2 billion PLN), an increase of 21%, but also record investments –360.7 million euros (1.7 billion PLN), 281% more than last year. Regarding the Polish Group’s activity in Europe, another significant transaction was the acquisition on the Spanish market of a portfolio of non-guaranteed claims with a nominal value of 132 million euros. Throughout 2021, KRUK Group bought, in total, portfolios with a total nominal value of 2.1 billion euros, a record number in the company’s last 20 years of activity. The Group’s investments have overcome 372 million euros last year, up by 281% as compared to last year and took place in Poland (63%), Italy, Romania, Spain, Czech Republic and Slovakia.

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