B2Holding increases its profit and gross collections in South Eastern Europe

Eric J. Johnsen, CEO of B2Holding

Norway based B2Holding, owner of “Debt Collection Agency”, increased its profit for the last year, shows the consolidated report of the Group. The profit for 2021 is EUR 58.13 million, almost doubled, compared to 2020. 

“2021 was the year when extraordinary became the new normal. We turned challenges into opportunities, and during the year we have built a stronger company and a solid foundation for the future.”, commented Erik J. Johnsen, Chief Executive Officer of the Holding. 

During 2021 B2Holding observed good collections and recoveries, but the Group is still conscious of the financial impact of the pandemic, noted Johnsen. According to him the economic crises, caused by the COVID-19 pandemic, is likely to trigger an increase in non-performing loans (NPLs) as moratoriums are lifted, and we already observed a significant increase of stage 2 loans through the pandemic. Stage 2 are loans with difficulty in payment, but are out of 90-delay, after that they are considered as non-performing, required by the European rules.

The gross collected receivables of the Norwegian company decreased slightly in 2021, compared to 2020, but their value exceeds that of the pre-crisis 2019 (see the chart). In South Eastern Europe, gross collections increased by 6% on an annual basis to EUR 67.93 million.

Acquired portfolios in 2021, excluding joint-venture deals, were EUR 122.23 million, a 28% decrease compared to 2020. 18% of them are located in South Eastern Europe, which includes Bulgaria, Romania, Greece and Cyprus. The whole exposition of the holding toward the region is 14% from all estimated remaining collections. Their total value within the Group is EUR 2.03 billion at the end of 2021 and 78% are unsecured.

The impact of the pandemic in South Eastern Europe was more visible than in the other regions. In North Europe and Poland performance is in line with or above pre-Covid-19 levels. 

Johnsen expects measures, introduced by the regulatory authorities for loss coverage for NPLs, to create strong incentives for banks to sell more frequently. 

“Going forward, we will play an important role in the financial ecosystem to help avoid the creation of new NPLs in European banks which could reduce the volume of new credits”, says Johnsen. The low volume of portfolios acquired in 2021 was mainly a result of low volumes coming to market, coupled with a conservative approach to not price portfolios aggressively in a period where competition has been high in several portfolio auctions, noted Johnsen. 

According to him, an improving pipeline for NPLs deals in the first month of 2022 which signals a more normalized market this year. Johnsen added that the war in Ukraine introduces new uncertainty to the outlook for Europe and B2Holding. As a sign of solidarity, the holding donated funds to the UN Refugee Agency. 

B2Holding’s efforts to pursue a policy of sustainability and environmental protection and corporate social responsibility continue. Thanks to the effort in the Sustainalytics rating, published in November 2021, B2Holding placed among the top one percent of rated companies globally and at the top of the debt management industry. The company has also improved its ESG rating from The Governance Group, who rate the 100 largest companies on the Oslo Stock Exchange. ESG is a term for compliance with the principles of environmental responsibility, sustainable development and good corporate governance.

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