Polish debt collector Kruk SA is working to accelerate its expansion into the US and UK as it looks for a new engine of growth beyond continental Europe. CEO Piotr Krupa said the company is considering both direct purchases of debt portfolios and opportunistic acquisitions of profitable competitors in the two markets.
The founder owns an 8.7% stake in the company, making him one of its largest shareholders. Over the past two decades, Kruk has expanded from Poland into Romania, Italy, Spain and, most recently, France. It is Europe's largest listed debt collector by market value and estimated remaining recoveries. Its focus on unsecured consumer loans has kept leverage relatively low, but the firm has struggled to maintain the pace of portfolio purchases seen in previous years.
Krupa acknowledged that European lenders are now selling troubled consumer loans earlier, making portfolios higher quality but more expensive upfront. Kruk could make its first portfolio investment in the UK or US within the next several quarters. "We won't wait until the end of our strategy horizon," he said.
The move would effectively close Kruk's continental European expansion chapter, which has included setbacks such as court delays in Spain that forced writedowns, and exits or cutbacks in smaller markets including the Czech Republic and Slovakia. Krupa said the company's model works best in large markets. Kruk shares have fallen 25% this year, making it the worst performer in Warsaw's WIG20 benchmark.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing