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Italy's doValue aims for 6% loan recovery rate by 2024

By Reuters

MILAN – Italy’s biggest debt recovery firm doValue will aim to keep the amount of loans it manages stable at 160 billion euros ($180.5 billion) to the end of 2024, while improving its collection rate to 6% from 4%, it said late Tuesday.

“The credit servicing sector is evolving rapidly,” doValue said in a statement, adding that companies operating in the industry must also change.

“Transformation means extracting more revenues per unit of gross book value managed … (and) lower costs per unit of gross book value managed.”

To keep its loan portfolio at a stable level, doValue said it plans to secure new contracts for 13 billion-14 billion euros of debt a year over the 2022-2024 period under its new strategic plan.

The company, which was born from the spin-off of UniCredit’s bad loan management unit, said it expected the improved collection rate to drive revenues up by 3-4% a year on average in the 2022-2024 period.

doValue, which also operates in Spain and Greece, said it forecast growth in all its three main markets, with Greece outperforming thanks to a strong pipeline of new inflows.

Greece’s higher recovery rates and better margins will lead doValue to increase the relative weight of the country in its portfolio, it said.

To improve productivity, doValue said it plans to invest in technology, while also looking to branch out into data management and performing debt.

The company targets cumulative dividends of at least 200 million euros over the 2021-2024 period, which Citi analysts said in a note on Wednesday was higher than markets expected.

(1 = 0.8862 euros)

(The story has been refiled to add dropped word in last paragraph)