B2Holding’s business continues to grow strongly

The Southeast European subsidiaries of Holding will share good practices. 

The business of Norwegian B2Holding,  part of which is Debt Collection Agency (DCA), continues to grow strongly, and the holding plans new investments to expand its operations in the coming months. This is stated in the holding’s report for 2018, which includes the results of the holding’s subsidiaries in four South Eastern Europe (SEE) countries – Bulgaria, Romania, Greece and Cyprus. Last year the company’s receivables in the region reached EUR 54 million, which is more than double growth compared to 2017.

In the South East Europe region, the debt purchase markets are characterized by distinct differences in maturity, competition and regulatory environment. The Romanian market is quite mature with several well positioned key  players. Romania posted an exceptional reduction in new NPLs formation during 2018. Over the last three years, the country’s corporate and retail NPL volumes have been reduced by 19 % and 40 % respectively. Still, there is an expectation that credit institutions will aim to reduce their non-performing exposures.

The NPL ratios are significantly higher in the Bulgarian market. In 2018 the market developed positively with a
record volume in portfolio sales. In the first half of 2018 alone, the market recorded 60 % growth year-on-year.
Corporate secured NPLs have been offered in the market since 2017 and this segment is among the fastest developing segments.

The Greek market is in a growth phase and with NPL volumes at approximately EUR 95 billion is currently one of the four largest NPL markets in Europe. B2Holding expects banks to accelerate the sale of loans, especially within secured segments and to a lesser extent in the consumer unsecured segment. Approximately EUR 50 billion NPLs are expected to be put up for sale in Greece by 2021. Cyprus is a market in its early stages, with relative NPL levels almost at the same percentage level as in Greece. The NPL volume is approximately EUR 13 billion.

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The region has experienced steady growth in 2018, with significant contributions to the B2Holding Group.
B2Holding is a leading player in most of the markets, with a strong market position, and is considered a preferred partner. The sale of UniCredit Bulbank’s portfolio to DСA for nearly EUR 250 mln last year was the biggest deal for overdue loans ever since in Bulgaria. In Romania, the expectation is for continued growth within the corporate secured segments as available retail portfolios may be impacted by proposed legislative changes. The expectations are the same for Bulgaria – stable growth in the purchase of receivables this year.

In Bulgaria, B2Holding has seen steady growth in 2018 and is the market leader in terms of acquired assets through its fully owned subsidiary DCA. Many forward flow transactions have been completed throughout the year, and B2Holding has become the leading acquirer in the forward flow market. The growth is expected to continue in
2019, while the portfolio risk will be spread by engaging in corporate and SMEs’. sale processes.

With respect to the number of employees by the end of 2018, SEE ranks third after Western Europe and Poland with a total of 510 employees in B2Holding companies. For the last year,the group’s total operating revenues reached nearly NOK 3 billion (EUR 300 million), which is 40% growth per year. Net profit grew by 35% to over € 66 million. Assets increased by 50%, exceeding € 1.65 million.

In its report B2Holding focuses on the negative effects of allowing overdue debts. First, it lowers asset quality, then leads to a decline in bank profits, increased reserve allocation, shrinking lending, and finally – a negative impact on economic growth and a further worsening of the debt problem.

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