UK Unsecured Non-Prime Consumer Lending: Market Insight 2019

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Published: Jan 2018
Pages: 68
Format: PDF

 

 

 

 

 

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About UK Unsecured Non-Prime Consumer Lending: Market Insight 2019

 

This is a new report for 2019, expected to be available in June

What is the focus of the report?

This report covers the UK consumer debt purchase and debt collection markets:
– Debt collection involves the collection of debts on behalf of the original debtor as an outsourced business process
– Debt purchase involves buying the actual debts and the right to collect them.

The report quantifies the sizes of each segment and their respective historical and forecast growth rates while reviewing key factors behind these figures and exploring drivers of growth and profitability.

We also report on and analyse the drivers of growth – in particular relevant economic indicators such as total consumer debt, unemployment levels, debt write-off rates, levels of personal insolvencies – and more specific factors including recovery rates, commission levels, the attitudes of consumer creditors to the concept of debt sale and the discount to face value typically paid for debt.

The leading debt purchasers and debt collections agencies are profiled and their performance is compared.

What does it contain?

– Quantification of market size and historical growth rates since 2012
– Summary of market trends
– Analysis and profiles of leading debt collection agencies and debt purchasers
– Our forecasts for market and driver growth (2018-22)
– Insights from interviews with a range of industry experts

Who Is it intended for?

– Debt collections agencies and debt purchasers,
– Sellers and outsourcers of debt,
– Investors in the industry,
– Market analysts and consultants
– Regulators
– Other parties with interests in the sector.
What are the sources and methodology?

This report is based on
– Publicly available data including company annual reports, websites, press releases and government statistics
– Interviews with a range of senior-level contacts in the market
– In-depth analysis of the macroeconomic environment and other relevant market drivers

Information from these sources has been synthesised and presented clearly and concisely with extensive use of charts and tables to illuminate points and support conclusions

Main changes from our previous report in this area

– Profiles updated to include acquisitions, latest financial results and important company news.
– Analysis and description of the market updated to reflect recent trends such as increasing barriers to entry as a result of greater regulation and shift towards outsourcing / partnership models for debt collection
– Financial information and market drivers updated
– Forecast models rebuilt to reflect new information and changes in the market context
– Comments from interviews included to illustrate key points

Which companies are covered in the debt collection / debt purchase market report?

The report includes profiles of the following companies:
– Arvato
– Capita
– Moorcroft
– Wescot
– 1st Credit
– Arrow Global
– Cabot Financial
– Hoist Finance UK
– Idem Capital
– Link Financial
– Lowell Group
– Max Recovery
– Motormile Finance (MMF)
– PRA Group

UK Consumer Debt Collection and Debt Purchase: Market Insight Report 2018
About this report 2
Summary 3
About Apex Insight 5

About the market 10
Market definitions 10
Market background 11
Adjacent markets 13
Market attractiveness and barriers to entry 14
Value drivers 15
Regulation 16

Market size and growth 18
Methodology 18
Market size 19
Debt sale market 20
Appetite of investors and availability of capital 22
Credit Services Association data 23
Revenue trends 24
Industry profitability 25

Market drivers 26
Economic performance 26
Consumer borrowing 27
Ability to service borrowing 28
Attitude of creditors 31
Improvements in systems and data usage 33
Growth in outsourcing by the public sector 33
Increased interest from other asset classes 34

Competitive landscape 35
Profiles of leading debt collectors 40
Arvato 40
Capita plc 41
Moorcroft 42
Wescot 43
Profiles of leading debt purchasers 44
1st Credit 44
Arrow Global 45
Cabot Financial 47
Hoist Finance UK 49
Idem Capital 50
Link Financial 51
Lowell Group 53
Max Recovery 55
Motormile Finance (MMF) 56
PRA Group 57

Forecasts 58
Approach 58
Key driver forecasts 58
Debt sale market forecasts 60
Collections environment 63
Market forecast 65
Outlook for further consolidation 65
Risks to the forecast 66

List of figures

Scope of market 10
Alternative measures of debt purchase activity 18
UK consumer debt purchase and collection market size / £m 19
Face value of debt sold / £bn 20
Average price paid for debt purchased / pence per £ face value 21
Total amount spent on debt / £m 21
Total debt held for collection by CSA members / £bn 23
Total debt collected by CSA members / £m 24
Combined revenue of leading debt purchasers & collections agencies / £m 24
Combined pre-tax margins of leading debt purchasers and collection agencies / % 25
UK real GDP / % annual changes 26
UK outstanding unsecured consumer credit / £bn 27
HCSTC lending market size by new business / £bn 27
Historical number of unemployed and underemployed / m 28
UK median earnings (current prices) and real household disposable income annual growth rates / % annual change 29
UK household debt to income ratio 29
Historical number of new personal insolvencies per year / '000 30
UK bank & building society unsecured consumer debt written off / £bn, % of total unsecured consumer debt 32
Rates of unemployment and bank & building society unsecured consumer debt write-off / % 32
Leading UK debt purchasers and DCAs by latest revenue / £ m 35
Revenue growth rates of leading debt purchasers and DCAs / % CAGR 36
Revenue per employee / £000 36
84-month ERCs for leading debt purchasers / £m 38
120-month ERCs for leading debt purchasers / £m 39
Arvato Financial Solutions Ltd. summary financials 40
Capita debt collection summary financials 41
Moorcroft Group PLC summary financials 42
Wescot Topco Ltd. summary financials 43
1st Credit (Funding) summary financials 44
Arrow Global Group plc 45
Cabot Financial Limited summary financials 47
Hoist UK summary financials 49
Idem Capital Holdings Limited summary financials 50
Link Financial summary financials 51
Metis Bidco Limited summary financials 53
Max Recovery Limited summary financials 55
Motormile Finance UK Limited summary financials 56
PRA Group (UK) Ltd. summary financials 57
UK real GDP / annual changes 58
UK historical & forecast unsecured household debt / £bn 59
Historical & forecast rates of unemployment and bank & building society unsecured consumer debt write-off / % 61
Historical & forecast UK bank & building society unsecured consumer debt written off / £bn (LHS), % of total unsecured consumer debt (RHS) 61
Historical & forecast average price paid for debt purchased / pence per £ face value 62
Historical & forecast total amount spent on debt / £m 62
Unemployment and underemployment / m 63
Number of people in employment / m 63
UK median earnings (current prices) and real household disposable income annual growth rates / % annual change 64
UK consumer debt purchase and collection historical & forecast market size / £m 65

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