Collections, revenue, and net income were all up in 2021 at Encore Capital Group, compared with 2020, according to the company’s financial results, which were released yesterday. For the fourth quarter of 2021, net income was twice as high as the same quarter a year earlier, while collection totals and revenue were down slightly.
The company reported net income of $350 million for 2021, up from $212 million a year earlier. For the fourth quarter, net income was $76 million, up from $37 million during the fourth quarter of 2020.
During a conference call with analysts last evening, Ashish Masih, the Chief Executive of Encore, cited the strong performance of the company’s Midland Credit Management unit as a reason for the improved financials. “Our MCM business in the US delivered exceptional performance in 2021 as collections grew 7% to an all-time high of $1.6 billion,” he said during the call, according to a transcript. “The continuous improvement in collections operations, the scale effect of higher collections and the change in consumer behavior during the pandemic led to a lower cost to collect for MCM in 2021 compared to 2020.”
Masih also mentioned that the company is starting to see signs of “credit normalization” which indicates that delinquency and default rates are likely to start increasing later in the year, which will lead to an increase in the supply of debt to be purchased and collected. Overall, the company spent $409 million in purchasing portfolios in 2021, down from $543 million a year earlier.
