Credit Corp shares drop after first-half loss

The news: Shares in Credit Corp have dropped sharply after Australia’s biggest debt collector posted a half-year loss due to impairments against its US debt assets.

The numbers: The debt collection company reported a net loss of $12.1 million for the six months to 31 December, following a $45.6 million or roughly 14% impairment on its US loan book. However, the company has kept its full-year net profit and earnings per share guidance at the same levels outlined in October. Credit Corp shares were down 6.4% at $16.53 in early trading on the ASX.

The context: Credit Corp attributed the writedown to elevated bad debts in the US as repayments dropped amid tighter credit conditions. Itq said the rate has remained stable but added that it has already secured a strong pipeline of debt and can invest selectively over the balance of the year. The company grew its consumer lending by a record $414 million in the first half.