Recoveries from portfolios held by the KRUK Group totalled PLN 894m in the first half of 2020, having risen 2% year on year. All the markets where KRUK operates were affected to varying degrees by the COVID-19 pandemic and related lockdown restrictions in the first half of the year. Consequently, the year-on-year growth reported in the first half of 2020 was mainly led by the record first-quarter figures. Total recoveries in the second quarter of 2020 amounted to PLN 417m, down 7% year on year and down 13% quarter of quarter.
‘As expected, we saw COVID-19 take its toll on the second-quarter recoveries, which fell 13% quarter on quarter. April was the worst month in terms of recoveries. We recorded some improvement in repayments in the following months, but it is too early for optimism. This was mainly an effect of reopening the economy and returning to business from before the lockdown. We are glad to have resumed field visits in all markets and to have advanced our online tools. The future development of the pandemic and its impact on the economy in each our market in the coming quarters remain unknown,’ noted Piotr Krupa, President of the KRUK S.A. Management Board.
In the first half of 2020, KRUK invested PLN 80m in debt portfolios with a total nominal value of PLN 692m. In the second quarter alone, KRUK invested PLN 23m, chiefly to purchase retail portfolios in Poland, Romania and the Czech Republic, their total face value amounting to PLN 187m.
The KRUK Group's finances and liquidity position as at the end of the second quarter of 2020 remained stable. Its cash and cash equivalents at June 30th 2020 were PLN 248m, an increase of PLN 18m compared with the end of March 2020. The undrawn lines of credit available to the Group as at June 30th 2020 totalled PLN 910m, up by PLN 198m relative to the end of March 2020.
The Management Board resolved to change the release date for the first-half 2020 results from September 9th 2020 to August 27th 2020.
‘First auctions were held on the debt market in the second quarter of the year. As we said a few months ago, we take a cautious approach to debt purchasing, although the Group is well positioned in terms of financial strength and liquidity to resume full investing activity. For the time being, we are investing mainly in Poland and Romania, but the scale of the auctions remains limited. We expect the debt sale market to open more widely towards the end of the year, or even not until 2021,’Piotr Krupa said. ‘Given the COVID-19 pandemic and uncertainty over the state of the economy in the coming quarters, I am aware we need to face the difficult process of asset revaluation at the end of the first half of the year. Let me emphasise, though, that the KRUK Group enjoys a stable financial and liquidity position and is therefore well prepared for more challenging times,’ Mr Krupa added.