In 2016, the KRUK Group, Central Europe’s leading debt management company, invested PLN 1.3bn in 99 debt portfolios with a total nominal value of PLN 16.4bn. It was the highest amount ever spent by this Wrocław-based company.
In Q4 alone, KRUK invested PLN 347m, up 76% year on year, in 39 debt portfolios with a nominal value of PLN 8.0bn.
“2016 was marked with KRUK’s expansion across Europe, as about two-thirds of our expenditure were made outside of Poland. Over the last 12 months, we purchased debt portfolios from the largest institutions in seven countries: Poland, Romania, the Czech Republic, Slovakia, Germany, Spain, and Italy. In each of the countries, the institutions showed a strong readiness to sell the portfolios. With our extensive geographical reach and product range, we were able to continue participating in plenty of auctions, picking the best investment opportunities. All this makes me confident about our business in 2017. Although purchasing debt portfolios for another PLN 1.3bn may be difficult to repeat, we can already see that European institutions are likely to be actively selling their debt portfolios in the coming quarters. Other projects, of various sizes, are ahead of us, and we are an organisation with a constant appetite for growth. In 2017, the share of foreign markets in our portfolio is expected to grow further,” said Piotr Krupa, President of KRUK S.A.
KRUK also posted record recoveries on purchased portfolios in 2016, of PLN 992m, 20% more than a year ago. In the fourth quarter alone, recoveries amounted to PLN 290m, up 32% year on year.
“For the first time in our operating history, recoveries reached close to billion zlotys. It’s a huge sum, which in each case required a lot of effort, a good understanding of the household budget, and a disciplined approach to money management. We feel great satisfaction that we and our customers go through this process together. For many of them, KRUK was the first debt collector to lend a helping hand and split up their debt into smaller payments. Today we can celebrate as our customers are as much as billion closer to financial health. 2016 reaffirmed our belief that amicable debt collection and our treatment of debtors as equal partners is a win-win approach,” said Piotr Krupa.
He added KRUK plans to apply the same collection model in new markets in Western Europe: “We are blazing a trail, no doubt. There is no other firm around right now that would employ the same amicable approach to debtors. Our strategy has won support from our business partners and has been well received by customers, driving fast growth in recoveries. Our recent investments in Germany, Italy and Spain have already added dozens of millions in quarterly recoveries. They still represent a mere ten-to-twenty percent of the total, but are set to rise in future. In 2016, we expanded our business through the acquisition of CreditBase International of Italy and Grupo Espand of Spain. Both companies have on-the-ground experience in their local markets, and had worked with us for several months in the area of debt portfolio valuations and servicing. Our unique collection strategy, combined with local insight and a new team in our family, are bound to make KRUK a leader of the debt management market in Western Europe before long,” Mr Krupa added.