KRUK invests almost PLN 1bn in European markets with record-high recoveries in first half 2016

In the first half of 2016, KRUK contracted investments totalling almost PLN 934m and delivered recoveries from purchased debt portfolios of PLN 446m. ‘The share of KRUK’s new markets in our total investments has been growing consistently – and we are strongly focused on building our potential in Western Europe,’ said Piotr Krupa, KRUK’s CEO.

In the first half of the year, KRUK purchased 43 debt portfolios with an aggregate nominal value of PLN 6.4bn, with the expenditure of PLN 731m. In the second quarter alone, investments reached PLN 667m, marking the best three months in KRUK’s history. The amount does not include purchase of a debt portfolio in Romania with The World Bank. The transaction has been the largest ever KRUK’s investment in unsecured debt on the Romanian market, and comprises individual debts with a nominal value of PLN 2.6m. As part of the transaction, KRUK’s expenditure will amount to PLN 203m* and will be accounted for in the third quarter. With Romanian investment included, KRUK’s year-to-date contracted expenditure amounts to PLN 934m.

‘Investments of PLN 1bn put us in the top tier of the fastest growing debt management companies in Europe. KRUK is a Polish Wrocław-based company, which has been consistently expanding into the challenging markets of Western and Central Europe. In the first half of the year, we purchased debt portfolios in six European countries, with most of the spending outside our home market. The agreement under which KRUK and the World Bank are to purchase a debt portfolio in Romania and the purchase of an attractive portfolio on the Italian market both deserve a mention. Let me add that we purchased the Italian portfolio for PLN 222m from Banca Monte dei Paschi di Siena, the oldest operating bank in the world,’ says Piotr Krupa. ‘And although after the six months of the year we have already executed 93 percent of PLN 1bn investments planned for the year, we do not slow down and actively participate in further auctions. Typically, the second half of the year is intensive, as confirmed by inquiries and information on potential future auctions we receive,’ adds Mr Krupa.

The first half of the year also saw further increase in recoveries from purchased debt portfolios, to PLN 446m, that is by 12 percent year on year. In the second quarter alone, KRUK delivered recoveries of PLN 230m, the best quarterly result in the Company’s history.

‘In terms of the scale of operations, Poland and Romania remain our most important markets, but we have been gradually expanding our business in Germany, Italy and Spain, the markets we entered only recently. We are already aware of the great potential offered by these markets; therefore, we are strongly focused on developing our operations there. We follow the path we know well – we intend to apply our unique amicable model of out-of-court settlements, based on partnership with our customers, that is debtors. Such approach has not been previously used in Western Europe,” adds Piotr Krupa.

* The amount will be reduced by adjustments provided for in the agreement, made at the exchange rate quoted by the NBP for May 20th 2016.