Proven financial performance

Excellent operational execution against our strategy delivered strong growth and a very good financial performance in 2022.

Closing receivables increased by 14% in 2022 driven by excellent execution of our strategy to rebuild post pandemic. Growth in closing receivables will be relatively modest in 2023 as we transition the Polish business to meet the requirements of the new lower rate cap. 

Revenue yield strengthened in 2022 reflecting stronger growth in Mexico, improved repayment performance, selective price increases and a reduction in promotional activity. In 2023, we expect revenue yield to improve towards our medium-term target of 53% to 56%.

The Group impairment rate remains lower than normal benefiting from improved credit quality, strong debt sale activity and central collections. We expect the rate to rise to around 14% to 16% as we regrow the business and the Covid-19 period flows out of the calculations.

The cost-income ratio improved as we maintained stringent focus on costs while investing in growth. We are continuing to drive efficiencies through technology and expect the ratio to improve to within a range of 52% to 54% in the medium term. 

Return on required equity (RORE) and return on equity (ROE) are lower than our target range of 15% to 20%. ROE is lower than RORE due to the additional capital held above our target level of 40%. We expect both measures to reduce modestly in 2023 as we transition the Polish business to the new lower rate cap but expect to rebuild in 2024 and deliver our target returns in 2025. 

* based on a target equity-to-receivables ratio of 40%.

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