Encore Capital, one of the world leaders in debt purchasing, listed on the Nasdaq in New York, has published the closing data for the 4th quarter and the full 2023.
The most striking data is the strong increase in the volumes of NPLs acquired during 2023, favored both by the significant offer of new portfolios put up for sale by originators and by purchase prices that have returned to normal, after years of excesses.
The total purchases in 2023 rose by 34% to over 1 billion dollars with a record of 815 million for the U.S.. Compared to the previous 5 years, in which 56% of the total acquisitions were allocated to the United States, last year this share rose significantly, reaching 76%.
A picture therefore completely opposite to the European one, as correctly highlighted by Ashish Masih, president and CEO of the group, who speaking on the European subsidiary Cabot pointed out, unlike the parent company, the acquisitions of new portfolios on the UK market and in other European countries have been very limited due to poor supply and strong price competitiveness.
Coming therefore to the financial results, there is a decline in 2023 both in terms of collection and revenues. Total recoveries stood at $1.86 billion (-3% compared to 2022), while Revenues fell by 13% to $1.22 billion.
There was a loss of 206 million dollars compared to 2022 which closed with a profit of 194 million dollars.
However, the CEO also explains that this loss is attributable to a goodwill impairment operation for 238 million dollars.
However, the ERC (the indicator that evaluates future collections) is growing thanks also to new acquisitions and an improvement in the behavior of debtors in compliance with repayment plans
View the complete data also for the 4th quarter of 2023.
Managing Director of Credit Village, Roberto Sergio has more than 20 years of experience in NPL and distressed debt in the Italian and International market. He is the editor of the NPL column in Credit Village Magazine and the director of Credit Village's National NPL Market Observatory.