Bancherul - BANCI / ENGLISH / Kruk invested about 100 million for the purchase of non performing credits portfolios in Romania and Poland

KRUK International, top company on the receivables management market in Romania, continued its development trend in 2011 and reported a significant increase in the number and value of debts accepted for collection, maintaining the same pace as its parent company, KRUK Group, the leader of the receivables management market in Poland, said the company in a press release.

At KRUK Group level, the value of the recovered amounts from purchase debts registered an increase of 67% during the first nine months of 2011, as compared to the similar period of 2010, from approx. RON 138 million to approx. RON 229.5 million. During the same period, the nominal value of the cases transmitted for collection increased by 54%, from RON 4,1 billion to RON 6,3 bln. During the first 9 months of the year, KRUK invested about 100 million for the purchase of non performing credits portfolios in Romania and Poland.

The receivables management market in Romania was impacted in 2011 by the financial crisis, mainly in terms of the banking sector evolutions. In 2011, even the medium and small banks decided to externalize, not only to sell cases. A possible cause of this evolution could be the increase of the value of the non performing loans to RON 21 billion in October 2011, versus RON 16 bln. in October 2010, representing an increase by approx. 34%. According to the most recent data made public by the National Bank of Romania, the total value of the outstanding credits reached RON 223 billion in October 2011, as compared to RON 208 bln. in October 2010, representing an increase of 7%. At the same time, the value of the outstanding credits granted to the population was RON 104 billion, in October 2011, versus RON 101 bln. at the end of October 2010.

According to the National Bank of Romania, the year-on-year comparison of the banks provisions shows an increase of approx. 33%, from RON 23 billion as at end of October 2010 to RON 30,5 bln. at the end of October 2011. The ever more harsh crediting conditions, corroborated with the reduced financial capacity of the debtors, made the receivables collection industry be confronted with overdue payments of these credits. The year 2011 confirmed the 2010 tendency of switch between the purchased portfolios and the servicing portfolios.

“In 2011, the receivables collection market reacted in the manner we predicted: even the medium and small size banks decided to sell receivables portfolios, thus we witnessed a switch between the debt purchased and the debt servicing, in favor of the debt purchase. Accordingly, the KRUK Group investment in Romania at consolidated level, generated during the first three quarters of 2011, a turnover of RON 77 million, representing an increase of 183% versus the same period of 2010 ”, said Isabela Iacob (foto), Managing Director and member of the Board of KRUK International.
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According to the estimates of the KRUK Group specialists, for the first half of 2011, the banks in Romania continued their strong retail debt sell off reaching the nominal value of approximately RON 1,45 billion. Thus, the purchased receivables market is expected to remain at a similar level as in 2010.

“During the period January to September 2011, KRUK Group invested approx. Euro 100 million in debt portfolios purchased in Poland and Romania. These results were generated by the very active approach of acquiring over 50% share of the debt purchasing market in Poland and Romania during the first six months of the year”, said Piotr Krupa, President of the Board of KRUK SA.

The approach of KRUK International to the effects of the financial crisis was the renewal of the arrangements offer and adapted its efforts towards offering the best solutions of repayment in convenient installments. The aim of the company is that of making possible a flexible cash-flow in a sensitive environment which impacted both companies and individuals. KRUK Group considers the debt collection activity as a permanent negotiation process, during which the best solution is seeked in order to encourage a responsible approach of debt settling. It is a process meant to alleviate worries of the creditor and of the debtor alike. KRUK International is the first receivables management company in Romania that developped an educational and communication campaign Datoria Mea, during the period September – November 2011, aimed at presenting the receivables collection process within the context of the relations between the debtor and the collection company. The results of the campaign are benefic for the debtors, the collection companies and financial-banking sector as well, managing to present to the general public the complex approach of the receivables collection industry.

During the period July 2010 – June 2011, over 24.000 debt repayment arrangements were signed, while during the communication campaign unfolded by KRUK International between September and November 2011, another 7.000 arrangements valued at RON 90 million, were concluded. According to the statistics data of KRUK International, the average installment paid by the debtors in its portfolio is RON 313.

KRUK International is prepared to answer the difficult financial conditions, by the offer of conclusion of payment arrangements in convenient installments, which represents a win-win solution both for the crediting institutions and the persons with debts alike, who can thus repay their debts and re-enter the economic cycle.

About KRUK International

KRUK International S.R.L. was established in 2007 by the KRUK Group – the leader of receivables management in Poland. The company specializes in comprehensive management of mass receivables. It works both with the finance sector and with institutional clients. KRUK International manages the receivables of banks, credit intermediaries, insurance companies, leasing companies, fixed-line and mobile telephone operators and FMCG companies. It is also an active player on the debt purchasing market.