KRUK posts good recoveries and debt sales market reopens in Q3 2020
Recoveries from the portfolios held by the KRUK Group totalled PLN 1,346m in the first three quarters of 2020, having risen 3% year on year. Total recoveries in the third quarter of 2020 alone amounted to PLN 452m, up 4% year on year and as much as 8% quarter on quarter.
“The third quarter saw very good recoveries on unsecured retail debt portfolios, mainly in Poland and Romania. In KRUK’s history, only the fourth quarter of 2019 and the first quarter of 2020 saw higher recoveries”, said Piotr Krupa, President of the KRUK Management Board. “At the same time, we are analysing the recoveries and the progress of processes relating to secured portfolios. Here, the adverse impact of the pandemic is still felt. We are also monitoring the situation in each of our markets in terms of the COVID-19 developments and preparing for different scenarios. We hope that there will be no restrictions similar to those imposed in the first half of the year, but safety and health are most important to us,” added Piotr Krupa, President of the KRUK Management Board.
In the first three quarters of 2020, KRUK invested over PLN 113m in debt portfolios with a total nominal value of PLN 825m. In the third quarter alone, KRUK invested PLN 33m in retail portfolios, mainly in Poland, Romania and the Czech Republic.
“At the end of the third quarter, both banks and financial institutions started to return to organising debt sales processes. Many tenders are already open or will be launched in the coming weeks. However, this does not mean that the risks associated with COVID-19 are gone. The situation across Europe is dynamic, with increases in infection rates and high levels of uncertainty regarding the development of the situation reported practically on a daily basis. This is why we are also cautious in our investment activity,” commented Piotr Krupa. “We believe that in the current situation the transaction price of debts put up for sale should reflect the higher risk and uncertainty. Everything seems to indicate that we can expect a higher supply of debt on the markets in 2021, and we are prepared for this situation both in terms of our financial resources and liquidity,” concluded Piotr Krupa, President of the KRUK Management Board.
As at September 30th 2020, the estimated amount of the KRUK Group’s cash and cash equivalents was PLN 264m, up by PLN 14m on June 30th 2020. The undrawn amount of credit lines was PLN 1,181m as at September 30th 2020, having grown by PLN 271m compared with the end of June 2020.