(Reuters) - European investor and asset manager Arrow Global ARWA.L on Tuesday posted a loss for the first half of the year, mainly due to a non-cash charge of 133.6 million pounds as it revalued its balance sheet in the face of the coronavirus crisis.
The company, which buys defaulted customer accounts from retail banks and credit card companies, posted an after-tax loss of 110.4 million pounds ($144.51 million) for the six months ended June 30, compared with a profit of 24.3 million pounds a year earlier.
Arrow Global said the collections performance was improving, with the business expected to return to profitability in the second half of the year.
However, UK-listed Arrow Global said it remained cautious about the risk of a spike in unemployment after the government support schemes end.
Funds under management (FUM) stood at 2.6 billion euros, and the company targets FUM to exceed 3 billion euros by 2021.
“As we exit the crisis, European banks will be under significant pressure to provision for non-performing loans. With 1.1 billion euros of discretionary undeployed fund management capital, we are extremely well placed to be a leading investor in this huge market,” Chief Executive Officer Lee Rochford said.
The company said it was expecting an increased demand for its services given the anticipated rise in non-performing assets due to the pandemic’s economic impact.
Arrow Global shares edged 1% higher on the FTSE small-cap index by 0706 GMT.
Reporting by Muvija M in Bengaluru; Editing by Shailesh Kuber and Anil D’Silva
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