Credit Corp Boosts FY27 Earnings Guidance with HSBC Credit Card Book Acquisition
Credit Corp has agreed to acquire HSBC Bank Australia's credit card run-off portfolio for about A$150 million, prompting a 10% uplift in FY27 NPAT guidance.
- Binding agreement to acquire HSBC's Australian credit card run-off book
- Transaction valued at approximately A$150 million, subject to regulatory approval
- FY27 PDL acquisitions guidance raised by up to A$100 million
- NPAT guidance increased to A$112-120 million, reflecting 10% growth on FY26
- Completion expected early 2027 after HSBC deactivates cards
Strategic Acquisition Expands Credit Corp's Australian Footprint
Credit Corp Group Limited (ASX:CCP) is set to acquire HSBC Bank Australia Limited's Australian credit card run-off book in a deal valued at around A$150 million. This move, subject to regulatory approval and expected to close in early 2027, adds a significant portfolio of charged-off credit card receivables to Credit Corp’s existing assets.
The acquisition price is structured to meet Credit Corp’s hurdle return, although the receivables’ duration is anticipated to be shorter than typical charged-off debt portfolios. HSBC will first deactivate the credit cards on issue before the transaction completes, marking a phased transition of the portfolio.
Upward Revision to FY27 Financial Guidance
Following the announcement, Credit Corp has revised its FY27 market guidance upward. The projected Purchased Debt Ledger (PDL) acquisitions have increased from an original range of A$200-280 million to A$300-380 million, driven by a substantial uplift in the Australian/New Zealand segment from A$100-150 million to A$200-250 million. The US segment guidance remains steady at A$100-130 million.
Net profit after tax (NPAT) guidance now sits between A$112 million and A$120 million, representing a 10% increase in earnings growth relative to FY26 at the midpoint. Earnings per share (EPS) guidance has also been nudged higher to 164-176 cents from 161-173 cents.
Maintaining Lending Volumes Amid Acquisition
Gross lending volumes are forecast to remain stable within the previous guidance range of A$445-495 million, indicating that the acquisition will primarily bolster Credit Corp’s debt buying activities rather than its lending operations. This reflects the company’s ongoing strategy to diversify and strengthen its portfolio through targeted acquisitions.
Credit Corp’s Managing Director and CEO, Thomas Beregi, authorised the release, underscoring the board’s confidence in the transaction and its contribution to the company’s growth trajectory.
Bottom Line?
The HSBC credit card run-off acquisition signals Credit Corp’s intent to accelerate growth in its Australian debt portfolio, with FY27 guidance reflecting this strategic expansion ahead of regulatory approval.
Questions in the middle?
- How will the shorter duration of HSBC’s receivables impact Credit Corp’s cash flow and recovery timelines?
- What regulatory hurdles could affect the timing or terms of the acquisition completion?
- Will Credit Corp pursue further acquisitions to complement this portfolio expansion in FY27?
