02/04/2015 - 13:34

Pioneer sells $3m bankruptcy portfolio

02/04/2015 - 13:34

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Financial services provider Pioneer Credit has sold $3.1 million worth of bankruptcy-comprised customer accounts if felt could not generate any further value, but none of the proceeds will be contributing to the company’s full-year profit.

Pioneer sells $3m bankruptcy portfolio
Pioneer Credit managing director Keith John.

Financial services provider Pioneer Credit has sold $3.1 million worth of bankruptcy-comprised customer accounts if felt could not generate any further value, but none of the proceeds will be contributing to the company’s full-year profit.

In a statement today, Pioneer managing director Keith John said Part IX accounts emerged in the company’s portfolios some time after acquisition through the changing circumstances of customers.

“These are accounts where our service teams cannot add any further value to the customer, and we are able to capitalise on an opportunity to realise a superior gain than we can achieve through our normal servicing,” Mr John said.

“While the majority of our customers experience an improved financial position over time, unfortunately some do not, as is the case with this small portfolio.”

Mr John said while the portfolio sale delivered a good profit to Pioneer, the funds would be invested to further expand the business, mainly through development of new products for customers.

“As a result, this will not add to the company’s forecast profit for FY15,” he said.

The company said it was the second successful transaction of this type, following a similar movement in December last year, and anticipated similar sales would become a regular feature of its operation.

Pioneer, which purchases overdue retail debt from banks and works with customers to recover the loans, also reaffirmed a forecast net profit of $6.6 million for the year to June 30.

“The sale of this portfolio results in us foregoing a material amount of customer payments in this half and beyond,” Mr John said.

“Our focus is now very firmly on quality customers whose creditworthiness can be successfully rehabilitated and who can ultimately be a part of our plans to market new financial products to as the business continues to evolve,” he said.

Pioneer shares closed 1.2 per cent lower at $1.92 per share.

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