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Australia's largest debt collector says domestic supplies of delinquent debts remain constrained, a sign that the tight labour market is letting consumers keep up with payments despite rising interest rates.
Credit Corp on Tuesday said that while some one-off purchases of Australian and New Zealand debt ledgers were secured late in the 2023 financial year, the pipeline for fiscal 2024 remained modest.
Credit Corp buys debt ledgers from financial institutions, telecommunications companies and utilities at a steep discount, then tries to collect as much as possible.
However, it said it has had to transfer some debt purchasing staff in Australian and New Zealand to its collection business.
Credit Corp CEO Thomas Beregi said a $372 million increase in the collection agency's corporate banking facility would allow it "to seize any one-off purchasing opportunities that may arise as economic conditions tighten".
In the US, it has seen more supply of debt ledgers, but collection conditions there may have deteriorated, with more consumers falling behind on repayments in the final quarter.
Overall Credit Corp reported that its net profit after tax fell five per cent to $91.3 million, despite its revenue rising 15 per cent to $473.4 million.
It forecast a 2023/24 net profit after tax of $90 million to $100 million.
At 2.31pm AEST, Credit Corp shares were down 13.9 per cent to a three-week low of $20.31.