DoValue in Italy targets 6% loan recovery rate by 2024

MILAN, Jan 26 (Reuters) – Italy’s biggest debt collection firm doValue (DOVA.MI) will aim to keep the amount of loans it handles at 160 billion euros ($180.5 billion) through the end of 2024, while improving its recovery rate to 6% from 4%, he said Tuesday evening.

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

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

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

The company, which spun off from UniCredit’s bad debt management unit, said it expected the improved collection rate to lead to revenue growth of 3-4% a year on average over the period 2022-2024.

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

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

To improve productivity, doValue said it plans to invest in technology, while seeking to diversify into data management and debt enforcement.

The company is targeting cumulative dividends of at least 200 million euros over the 2021-2024 period, Citi analysts said on Wednesday in a note above market expectations.

(1 = 0.8862 euros)

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Reporting by Valentina Za; Editing by Jan Harvey and Rashmi Aich

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