Credit Corp delivered a 12% profit rise to a record $105.5 million in FY2026, powered by a 57% surge in US debt buying earnings and a strategic entry into UK consumer lending.
- Record $105.5m net profit after tax
- 57% US segment earnings growth
- 15% lending volume increase to $510.5m
- UK consumer lending operations commenced
- FY2027 NPAT guidance of $110-$118m
US Debt Buying Drives Earnings Surge
Credit Corp (ASX:CCP) posted a standout FY2026 with net profit after tax (NPAT) hitting a record $105.5 million, up 12% on the prior year. The US debt buying segment was the engine room, delivering a 57% jump in earnings to $26.2 million, underpinned by a 24% increase in collections and operational improvements, particularly in legal collections which grew 36% in the final quarter versus the prior year.
Despite tougher investment conditions in the US market, Credit Corp secured $166 million in ledger investments during FY2026 and holds a $62 million pipeline for FY2027. The company signalled confidence in continuing to invest between $100 million and $130 million in the US next year without compromising return discipline, leveraging a broad base of seller relationships and improved competitiveness.
Lending Volume Hits New Heights with UK Expansion
The consumer lending division also contributed to growth with a 15% increase in lending volumes to a record $510.5 million, driven largely by market share gains and enhanced underwriting accuracy. While earnings were modestly affected by provisioning for loan growth and start-up losses from new products and markets, adjusted segment earnings grew 9%.
Notably, Credit Corp launched its UK consumer lending operations in early July 2026, entering a large and underserved sub-prime market. The company acquired a licensed shell, built local systems tailored to the UK market, and issued its first loans, aiming to leverage its responsible lending reputation and affordable product offerings to capture market share during a period of excess demand.
The innovative Wizit digital credit card and Powerup line of credit product accounted for 17% of new lending customers acquired during FY2026, with run-rate breakeven expected in FY2027. This complements the flagship Wallet Wizard unsecured cash loan product, which continues to perform strongly across Australia and New Zealand.
Australian and New Zealand Debt Buying Stabilises
In Australia and New Zealand, Credit Corp’s debt buying business saw a 5% NPAT increase to $23.4 million, supported by a 50% jump in investment to $136 million, including a large one-off credit card run-off book acquisition. Collections grew 4%, marking the first increase since FY2022. Although the market remains competitive and relatively small, Credit Corp is positioned to capitalize on larger opportunities as they arise and enters FY2027 with a $54 million investment pipeline, targeting $100 to $150 million in outlays.
Strong Capital Position and Dividend Policy
Credit Corp maintained a conservative capital structure with net gearing at 32%, below its 40% target, providing flexibility for future investments. The company declared a fully franked final dividend of 45.5 cents per share, bringing the full-year payout ratio to 50%, consistent with historical practice.
FY2027 Guidance and Strategic Outlook
Looking ahead, Credit Corp is guiding for NPAT growth between 4% and 12% in FY2027. This range reflects expected headwinds from more challenging US debt buying market conditions but also the potential for accelerated growth in UK lending and the Wizit product. The company anticipates ledger investments of $200 to $280 million, gross lending volumes of $445 to $495 million, and earnings per share between 161 and 173 cents.
CEO Thomas Beregi highlighted the strategic importance of product and geographic diversification to sustain long-term growth. He noted that the UK entry offers a significant runway due to regulatory exits of some incumbents and unmet demand, while improved US operational performance should continue to drive earnings despite market pressures.
ESG and AI Initiatives Support Operational Excellence
Credit Corp further advanced its sustainability agenda, embedding climate-related disclosures in line with AASB S2 standards for the first time and maintaining its top ranking for consumer hardship response in Australia. The company also scaled its AI capabilities, deploying Large Language Models to improve collections efficiency and customer engagement, contributing to operational improvements without increasing workforce size.
With a global workforce of 2,223 employees and a strong culture of compliance and transparency, Credit Corp is positioning itself as a diversified financial services leader in the credit-impaired segment across multiple markets.
Bottom Line?
Credit Corp’s record FY2026 profit, driven by US growth and UK market entry, sets a solid foundation but FY2027 will test its ability to navigate tougher US conditions while scaling new lending products.
Questions in the middle?
- How will Credit Corp manage pricing discipline amid tightening US debt buying market supply?
- What is the timeline and scale for UK lending to meaningfully contribute to group earnings?
- Can AI-driven operational gains sustain margin expansion without headcount growth?