Debt group sees upside in higher credit card balances
Debt collection and lending group Credit Corp posted a flat interim profit, driven by lower earnings from its Australia and New Zealand loan book.
The company, which also owns the Wallet Wizard small cash loans and Wizit ‘interest-free forever’ credit card businesses, made a net profit of $44.1 million in the first half, in line with the previous corresponding period.
Credit Corp’s Australian and New Zealand debt purchasing business has suffered as many issuers temporarily suspended debt book sales, impacting collection volumes.
But the group bought up a large pile of debt, including a large credit card book, in the December-January period and said these would deliver stronger collections and earnings in the second half of 2025/26.
“While the Australia/New Zealand debt buying market remains competitive, there are some early signs of supply as buyers seek to secure volume in the post-COVID reduced market,” it said in a statement on Tuesday.
“Interest-bearing credit card balances increased by 12 percent during the year.
“Over time, this growth will likely be reflected in charge-offs and sales volumes.”
Credit Corp, which also operates in the US, also noted that volume growth from new Australian and New Zealand customers with credit problems increased by 25 per cent in the half year.
These are customers who face obstacles when trying to access loans and are the main targets of the unsecured Wallet Wizard loans business.
“Reserve Bank of Australia statistics show a modest recovery in demand for unsecured loans, while more detailed credit bureau data shows credit-problem segment demand remains stable,” the company said.
“Accordingly, Credit Corp’s market-leading Wallet Wizard product has managed to increase its share in the credit distressed market segment.”
Wizit digital credit card operations added more than 4,000 new customers to a total loan book of $17 million, as Wallet Wizard loan book grew to $442 million in the half year.
Credit Corp’s earnings forecast for net profit growth for the 2025/26 financial year of between six and 17 per cent remains unchanged.
Shares of the group, whose stock market value is approaching $1 billion, closed at $14.28 on Monday.
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