Debt Purchase in Ireland - 30/09/2011

Cabot Financial (Ireland) Limited - The Leading Player

Cabot Financial (Ireland) Limited remains highly active in the Irish debt purchase sector and wider DCA market. Today it is the only mainstream purchaser operating in the Irish market.

The success story of the Irish economy in the 1990s and the early years of the 21st century came to an abrupt halt in 2008, when the credit crunch and global recession hit. The virtual collapse of the Irish banking community, rising unemployment and concerns about the country’s capacity to manage its deficit combined to seriously dent the confidence of all parties. As a result, in November 2010, the Irish government accepted an EU/IMF bailout of up to £77bn to help it through the challenges facing the economy.

Central to the challenges faced was the financial services sector, which had grown rapidly on the back of the Celtic Tiger. The situation was so severe that the government had to step in to support the six main Irish banks. At the same time, concerns about the economic outlook saw other lenders exit the market to concentrate on their own core domestic challenges.

The rapid growth of the Irish economy was mirrored by a rapid rise in personal debt. Government figures in 2010 reported that household debt to disposable income had risen by 270% from 1995 to 2008, higher than many other comparable countries.

As Dublin based Cabot Financial Ireland’s Chief Operating Officer, Sean Webb, notes;
“The rapid pace of the economic crisis in Ireland hit the country very hard; helping clients to manage the rapidly rising levels of debt that has followed has been a major challenge. We have developed bespoke strategies to work with each client, including both traditional DCA and purchase options. In many areas of our work our clients have strong government support and in this respect our ethical, values-led approach to debt management has proved itself to be very welcome. We are proud to have accepted the challenges presented with a total solution that offers debt purchase, contingency debt management and legal support from our in-house legal team.”

The negative perception of the Irish economic landscape has seen the exit of a number of DCA/debt purchase organisations from Ireland. The dramatic rise in debt, the banking crisis and the cultural and technical issues facing collections being perceived as too significant by some former players. Cabot sees things differently; “we are here for the long haul” notes Webb, pointing to some more positive indicators:

• The country has made €21bn of savings since July 2008 with a further €3.6bn of savings expected this year to help reduce the country deficit.
• According to statistics published in September, the Irish economy expanded at a faster rate than expected in the second quarter of the year, putting in its strongest quarterly growth performance since the recession began, according to data published in late September.
• A deeper look at the 2010 Government personal debt report reveals that notwithstanding the comparatively high levels of debt highlighted, the levels of financial ‘stress’ amongst individuals in Ireland were lower than in many other EU 27 countries. Indeed, on many indicators, Ireland was considered above or close to the EU average.

These are, however, early days and concerns centred upon the Eurozone remain headline news, as Webb concludes: “It is clear that the Irish economy faces significant challenges ahead. Employment is heavily reliant upon inward investment and this is all about confidence. Our role in the economy is clear; we must help people to resolve past debt issues, at a time of falling disposable income and lingering high levels of unemployment and we must help our financial services partners to rebuild confidence. It is, as always, a delicate balance.

Our success in achieving this is about; our own great people, a long track record here, a real understanding and empathy for the situation, culturally and politically, and a detailed knowledge of the wider legal, environmental and economic nuances. This is expertise not easily replicated. The problems have been unprecedented, the solutions must be timely and wholly appropriate, and this is where we are succeeding.”
 

-Ends-

For further information, please contact:
Kimberley Robinson / Michael Smith
Redleaf Polhill
Tel: 020 7566 6750
Email: kr@redleafpolhill.com / msm@redleafpolhill.com

Back to list