B2Holding increase its revenues from South Eastern Europe by 22% per year

Norway based B2Holding, owner of Debt Collection Agency, is improving its financial results and performance of most of the indicators in the South Eastern Europe region (SEE), according to the report for the first quarter of 2022. 

The increase on an annual basis is noted in total revenues, as well as revenues from purchased loan portfolios and the unchanging level of cost to collect has helped the increase in earning before interests and taxes (EBIT). Compared to the first quarter of 2021, in the first quarter three month of this year acquired portfolios with non-performing loans (NPL) have decreased. The forecast for the coming month is the reverse of the trend. NPL transaction activity continued the positive trend from the end of 2021 into the first quarter of 2022, noted the B2Holding managers in the report. 

During the first quarter the Group has invested EUR 23.5 million in new portfolios all around Europe and at the end of the first quarter the Group had spent and committed EUR 68.8 million for forward flow deals which is expected to conclude during 2022. 

Unlike the first quarter of 2021, in the same period of this year B2Holding has benefited from the acquired portfolios – for the Group as a whole and particularly in SEE. At the end of March 2021 the net credit loss from purchased loan portfolios was over EUR 2 million, but this year noted net credit gain close to EUR 0.9 million. Gross collections in SEE are mainly from unsecured portfolios. The trend is opposite only in the SEE region – more revenues are collected from secured portfolios, and in West Europe the differences between two types of portfolios are very small (see the chart). 

On the results presentation managers of B2Holding announced that the results exceeded the initial forecasts. Recoveries from secured portfolios were EUR 23.9 million for the quarter and 151% of latest forecast. Collections on unsecured portfolios came in at 102% of forecast.

Neither inflation nor uncertainties related to the war in Ukraine have so far shown notable impact on the performance of portfolios owned by the Group.  In the medium to long run, those macroeconomic trends should most likely increase the supply of unsecured NPLs, and B2Holding is well positioned to play an important role in the market development. 

Bulgaria is among the countries with high inflation rate and by the latest data of National Statistic institute the inflation rate in April was 14.4% on an annual basis. International studies shows that high inflation rate lead to difficulties in debt payment, specially in the countries with developing economies being the most affected. 

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