Home Credit PH gets double-A rating

Home Credit Philippines (HCPH) was assigned a high Issuer Credit Rating of PRS Aa (corp.), with a Stable Outlook, by Philippine Rating Services Corporation (PhilRatings).
The firm, whose corporate name is HC Consumer Finance Philippines, Inc., is a financial institution which focuses on lending to people with little or no credit history who may be underserved by traditional banks.
An Issuer Credit Rating is an opinion on the general and overall creditworthiness of the company, evaluating its ability to meet all its financial obligations within a time horizon of one year.
A company rated PRS Aa (corp.) differs from the highest rated corporates (PRS Aaa) only to a small degree, and has a strong capacity to meet its financial commitments relative to that of other Philippine corporates. A Stable Outlook means that rating is likely to be maintained in the next 12 months.
In assigning the rating and Outlook, PhilRatings said it considered HCPH’s ability to sustain growth and compete in its chosen niche, despite the presence of other lending institutions; the contemplated entry of strong shareholders; and the Company’s steady growth which is expected to be sustained.
Since HCPH’s launch in 2013, it has lent to millions of customers nationwide, with also millions of monthly active mobile app users as of end-2022.
The Company uses its vast point-of-sale (POS) presence in all major malls and mid-sized stores all over the country to optimize accessibility to end customers.
Such omni-channel business model enables the Company to be present wherever and whenever customers need financing.
Despite several competitors in the consumer lending industry, HCPH has been able to grow and compete in its chosen niche.
For its POS product, HCPH has a leadership position in the Philippines. According to HCPH’s internal data, the Company has captured a significant share of the market for its POS product, given its quick underwriting and processing time and high approval rates.
On November 24, 2022, Home Credit Group B.V. (HCGBV) announced the signing of an agreement to sell two of its Asia-based businesses, Home Credit Philippines and Home Credit Indonesia, in deals worth approximately €‎615 million (approximately ₱36.1 billion).
The transaction is with a consortium of Mitsubishi UFJ Financial Group (MUFG) affiliates, led by Krungsri Bank (Krungsri, a leading Thai financial institution). The transaction is anticipated to be completed by the first half of 2023 (1H2023). The sale is seen to result in operational synergies.
In 2021, HCPH recorded a net income of P942 million, jumpstarting its recovery from the impact of the COVID-19 outbreak.
Bottom-line rallied mainly on account of the 60 percent dip in allowance for credit and impairment losses, coupled with the 36 percent jump in service and other fees income.