Profits during the third quarter were down at PRA Group, but investments that the company has made in recent years is expected to start paying off in the near future, according to the company, which released its third quarter financial statement yesterday.
The company earned $9.9 million during the third quarter of 2018, down from $15.6 million a year earlier. For the first nine months of 2018, PRA Group has made a profit of $50 million, compared with $75 million for the same period of 2017. In a statement announcing the results, the company did not provide a direct reason for the drop in profits, but did announce that it had made “significant investments” in the U.S. during the quarter.
PRA Group has an estimated remaining collections balance of $5.8 billion, which is $388 million higher than at the end of the third quarter of 2017.
One area where the company appears to be making a big investment is in legal collections. Kevin Stevenson, PRA Group’s chief executive officer, referenced expected benefits that the company is hoping to reap from more legal collections and the company said it spent nearly $15 million more during the third quarter of 2018 on legal collection-related expenses than it did during the same period last year.
Collections from its call center activities was 12% higher than last year and legal collections were up 11% on a year-over-year basis, the company announced. PRA Group spent $237 million buying new portfolios during the third quarter and has agreements to purchase $593 million on a forward-flow basis. The company actually purchased fewer receivables in the U.S. during the third quarter, but ramped up its purchases in Europe.