The KRUK Group, a leader on the debt collection market in Central Europe, has entered into an agreement to purchase its first consumer debt portfolios in Germany from Commerzfinanz. The open-ended agreement guarantees a flow of approximately EUR 37,5m of nominal value of the debt within the next 15 months.
“This is a tremendous success and an important moment in the history of the KRUK Group. After several months of efforts to build relations with German institutions selling debt portfolios and following the valuation of the portfolios, we signed the agreement which guarantees a regular flow of debt portfolios. Such contracts, popular in western countries and called “forward flow contracts”, are very favourable for buyers as they stabilize the business. Our partner in the transaction is Commerz Finanz, a joint venture of BNP Paribas Personal Finance and Commerzbank. We are positively surprised by the quality of offered cases – the average days past due will be no more than 90 days. We are happy that our unique amicable approach finds increasing recognition in the German market and that German institutions appreciate our strategy and view us as a reliable partner. We are ready to handle the first debt cases in the German market. We believe that we will be a positive example of a Polish company that has achieved business success in Germany”, said Piotr Krupa, President of the Management Board of KRUK S.A.
By entering into this agreement, KRUK has secured an inflow of debts from the seller. This arrangement will allow KRUK to closely analyse the effects of its actions and improve its processes applied in the new market. It will be typical portfolio for the KRUK Group - it comprises unsecured retail debts with an average nominal value of no more than EUR 3 thousand.
“We know that KRUK shareholders have been waiting for this moment. I would like to thank them for their trust and patience. I have pointed out from the start that first of all we wanted to make profit, and not just invest at any cost. I believe that this agreement has allowed us not only to make a good start in the German market, but also to make the first step towards our expansion into the markets of other Western European countries. I also hope that following this first transaction, more banks in Germany will be open to cooperation with KRUK and will sign agreements with us - also on the credit management market”, said Mr Krupa.
Mr Krupa also added that today’s agreement confirms KRUK’s high ambitions regarding the European market. This is also another step in the implementation of the strategy to achieve the position of one of Europe’s leading debt management companies in terms of net profit. KRUK plans to achieve this goal through, inter alia, expansion into other geographical markets. Following the first successful transaction in Germany, the KRUK Group plans on expanding its geographical reach and is considering Italy, Spain, Portugal and the UK as its potential new markets.