Concerns around structural decline of credit card use from BNPL....

Concerns around structural decline of credit card use from BNPL. Card balances down from high 20s billion to under 20 since Covid.

"Morningstar analyst Shaun Ler said that while Credit Corp’s near-term earnings outlook was murky, some cited problems such as the US staff resourcing issue were “likely temporary”.“But the falling Australian credit card balances, which reduces the supply of new debt ledgers, may be structural given the rise of alternative forms of credit like buy now, pay later,” he said.While buy now, pay later also can rack up arrears, Mr Ler told the Financial Review this kind of debt potentially had some restrictions on collections and would probably come up less frequently than credit card debt."


Regarding staffing, gist of it being PH staff retrained for US work may struggle given differences in approaches needed, such as in getting a person to identify themselves.

"Analysts are watching the issue of staff being able to collect US debt.“Purchased debt ledgers depreciate in value over time, so any elongation of the collections profile, given the lower than optimal headcount, could impact anticipated returns,” JPMorgan analyst Russell Gill said.“We note that the company has reallocated some Philippines headcount, but it is still too early to assess the success of the resource reallocation in meeting return hurdles,” he said."

Perhaps if and when CCP can allay fears around staffing issues the market will give more credit to the US opportunity, whenever that may be...