Consumer lending drives Credit Corp's earnings growth 05 August 2015 3:50PM John Kavanagh Credit Corp's lending division was the driver of the company's earnings growth in the past 12 months, turning around a loss of A$3.5 million in 2013/14 to report a pre-tax profit of $1.4 million in the 12 months to June.The company's debt purchasing and collections business managed only a $500,000 increase in pre-tax profit.Credit Corp made a net profit of $38.4 million - an increase of ten per cent over the previous year. Revenue also grew by ten per cent to $191.1 million.The company got into credit-impaired consumer lending in 2011. During the year to June its net lending was $41 million and its loan book reached $100 million.The business was rebranded Wallet Wizard earlier this year.Credit Corp chief executive Thomas Beregi said $100 million was an important milestone for the lending business, producing annualised interest revenue of around $47 million and giving it enough scale to justify a television advertising campaign.Beregi said the company's strategy was to position Wallet Wizard as a sustainable and ethical lender in the credit-impaired market."We are not a payday lender. Our shortest term is four months and our average term is two years. We don't charge the legislated maximum interest rate, nor do we charge for early repayment," he said.On the purchased debt ledger side of the business, Credit Corp purchased $143 million of debt in the year to June - down a little from $145 million in 2013/14.Beregi said purchased debt ledger price growth moderated in the second half, giving the business momentum. The company has $60 million of contracted forward flows for the current financial year and is forecasting that it will acquire between $90 million and $120 million for the full year.He said a good indicator for the business was the 15 per cent growth in the number of overdue accounts that entered into payment arrangements during the year. Payment arrangements accounted for 75 per cent of purchased debt ledger collections - up from 73 per cent in 2013/14.Credit Corp's US venture, which was launched in 2010, remains a work in progress. Beregi said there were purchased debt ledger supply constraints, brought about by regulatory activity, which would probably remain in place for another year.