Credit Corp’s HSBC book sets up a record investment year

HSBC portfolio anchors record FY2027 investment

Credit Corp Group Limited (ASX:CCP) is holding its earnings line while preparing to deploy more capital than ever across debt buying and consumer lending. The company reaffirmed FY2027 guidance for net profit after tax of $112 million to $120 million, equivalent to 10% growth at the midpoint, alongside basic earnings per share of 164 to 176 cents.

The HSBC credit card run-off book remains the centrepiece of the investment plan. Credit Corp expects the portfolio to represent about $150 million of its $200 million to $250 million Australian and New Zealand debt-buying program, with completion expected in the first half of FY2027. The final consideration will be determined closer to completion, leaving an important valuation detail outstanding. The transaction was first announced in the HSBC credit card acquisition, which had lifted the company’s FY2027 profit outlook earlier this year.

US collections improve as purchasing stays selective

Credit Corp’s US operation is producing better collections without abandoning its pricing discipline. Legal collections increased 50% from the prior year, while total US collections reached $75 million in the September quarter, up 23% on a constant-currency basis. The company also reported improved digital execution and a quarterly asset-turnover result approaching market leaders.

That operating progress is being offset, at least for now, by expensive portfolios. Elevated pricing has constrained US purchasing, with FY2027 investment guidance set at A$100 million to A$130 million. Credit Corp said its improved platform should allow it to increase buying if pricing conditions ease, but the update does not suggest that such an easing has yet occurred.

Consumer lending passes $500 million milestone

Consumer lending is supplying a second growth engine. September-quarter lending volume rose 19% year on year, while the gross loan book increased 12% to more than $500 million. The company said its newer products are gaining traction, with volume in one product line up 35% on the prior year and a run-rate break-even target set for late FY2027.

The Wizit digital credit card and Powerup line of credit have also moved beyond the launch phase, although the update says the newer line of credit has issued roughly 120 loans to date and remains subject to a review of its ramp-up. Credit Corp’s FY2026 expansion into UK lending adds another growth avenue, following the UK lending launch, but the current guidance is being driven by the established Australian, New Zealand and US operations.

Guidance depends on execution across three engines

For FY2027, Credit Corp is targeting total ledger investment of $300 million to $380 million and gross lending of $445 million to $495 million. The figures imply a broad deployment range: the HSBC book should materially increase Australian and New Zealand buying, while US investment remains conditional on portfolio pricing and the lending division continues to expand its book.

The company also highlighted low dispute rates and its standing in hardship response, alongside a 15% constant-currency increase in combined debt-buying collections in the September quarter. Those operating measures are supportive, but the more consequential tests are financial: whether the HSBC transaction completes on acceptable terms, whether US collections can translate into sustained earnings growth, and whether newer lending products scale without weakening credit performance.