Digital collections and scoring analytics have made PRA Group so efficient that it likely will not ramp up its headcount, either during tax season or as the company purchases more portfolios and increases the amount of debt it can collect on, the company’s chief executive discussed during a conference call with analysts on Monday following the release of its quarterly earnings report.
Overall, the company reported net income of $15.9 million for the fourth quarter of 2022, compared with $34.2 million during the same period a year ago. For the full year, profits were $117 million, compared with $183 million in 2021.
The company’s digital collection platform is bringing in as much money as its two largest call centers, CEO Kevin Stephenson said during the call with analysts. Overall, digital collections are up at the company 80% since 2019.
The growth of the digital platform, as well as improved analytics, will help keep the number of collectors needed lower as well, Stephenson said. Where PRA Group once had as many as 3,000 collectors, it can do just as much with 25% of that total. “… I doubt very seriously you’ll see us at 3,500 collectors again,” Stephenson said during the call with analysts. “I think that we could buy so much paper and be far less than that number, given how much digital and how much our scoring analytics have improved everything. And so — and I’d also say that our training times and our maturation times have greatly sped up.
So as you look at us right now, we’re at, what, 797, just about 800 people. And we are 830 at the end of last quarter. And here we are entering tax time, right, with that kind of level of people, and we’re very comfortable with it. So, it’s been quite — again, I’ll use the word maturation, and I think that really sums it up. So, it isn’t, again, quite like the old days.”
PRA Group collected more than $230 million during the fourth quarter of 2022, compared with $293 million during the same period a year earlier.
“Looking ahead, we are seeing U.S. card balances, delinquency rates, charge-off rates, and bank loan loss reserves continue to increase which we believe will lead to more portfolio supply in the coming months,” Stephenson said. “We also expect to continue to purchase at healthy levels in Europe. We are well-positioned to capitalize on this anticipated increased supply due to our funding capacity, global presence, operational efficiency, and experienced team.”