PRA Group | 2022 Annual Report

Over 25 years of redefining the nonperforming loan industry.

As a global leader in acquiring and collecting nonperforming loans, PRA Group, Inc. returns capital to banks and other creditors to help expand financial services for consumers.

Letter from the Chairman of the Board

Steve Fredrickson, Chairman of the Board

To the stockholders of PRA Group, Inc.,

I want to start this year’s letter with a heartfelt thanks to my friend and colleague Kevin Stevenson for 27 years of service at PRA Group. As a co-founder, longtime CFO, and our CEO for the past six years, Kevin contributed so much to PRA, including most recently steering it successfully through the COVID-19 pandemic. On behalf of PRA’s board of directors and senior leadership team, we wish Kevin the very best.

PRA has been through plenty over the past 27 years, navigating diverse credit and economic cycles while achieving incredible growth and geographic expansion. The industry and regulatory oversight have matured, and we’ve seen and benefited from significant development in digital and data and analytics. Through it all, we have remained true to our core beliefs in conservative underwriting and disciplined purchasing, combined with an entrepreneurial drive to grow profitably. The board and I have full confidence that Vik Atal, as president and CEO, will ensure the lessons of the past remain ingrained while we pursue our vision for the future with dogged determination and excellent execution. Vik joined the board in the early days of both our European and digital collection journeys, and he has been a tremendous asset throughout. I believe that, in this principal role, his strong vision, integrity, market insight, energy, and leadership skills will unlock new opportunities to serve our customers, scale our business, and expand our reach around the globe.

As we look ahead, it is important to evaluate where we stand today. In 2022, our continued execution of PRA’s long-term strategy brought us strong results—not breaking, as they were in 2020 and 2021, but still considerable given the economic factors we’ve discussed often on our recent earnings calls. As you may remember, the unusually high levels of consumer liquidity in 2020 and 2021 drove U.S. delinquency and charge-off rates to historic lows, which, in turn, reduced the number and size of portfolios available for sale over those years. Nevertheless, the $850.0 million we invested in 2022 have brought our total purchases to $11.9 billion since our first full year as a public company in 2002. Our significant positions in markets around the world are helping us weather this trough in U.S. debt buying as supply gradually continues to build. Europe and South America have been recent bright spots for investing and profit generation. We believe that our teams in both regions are best-in-class, and we look to them to continue their strong performance.

With nearly three decades in the business, we have successfully navigated and learned from each of the consumer credit cycles we’ve experienced. In a capital-intensive business like ours, low interest rates and easy commercial credit translate into higher portfolio prices and lower returns—trends that have been headwinds for us in the past several years. We now see both of those trends reversing themselves rather abruptly. We also continue to see strong indications that we are entering another period of credit normalization in the U.S. Federal Reserve data shows consumer savings balances declining, while credit card balances are surpassing pre-pandemic levels and charge off-rates are moving up from their historic lows. We anticipate this will lead to increased U.S. portfolio supply. Similar trends are also emerging in Europe.

Steve FredricksonChairman of the Board

Our mission is to deliver nonperforming loan solutions that drive success through a long-term focus and customer care.

Letter from the President and CEO

Vik Atal, President and CEO

To my fellow stockholders,

First and foremost, I thank everyone at PRA Group who has welcomed and supported me as I transition from a seat at the boardroom table into this new role. Over the last quarter century, Steve Fredrickson and Kevin Stevenson led PRA from infancy to industry preeminence. I step into their big shoes with humility and deep respect for all that they accomplished, and I extend my deepest gratitude for the wisdom and insights they have shared to prepare me for the journey on which we are about to embark.

I would also like to thank the entire board for their faith in my ability to guide PRA in this new chapter. My exposure to the company as a board member, and my most recent observations and interactions with our teams, leave me confident that PRA’s business rests on strong pillars:

•

We possess one of the industry’s strongest balance sheets, which gives us significant flexibility to invest globally, including in new markets and geographies where we already have significant market share;

This is an enviable situation for any incoming CEO—and particularly important as we position ourselves for an anticipated increase in the supply of nonperforming loan portfolios, while also navigating changes in the macro environment, including rising interest rates, reduced consumer liquidity, heightened competition, regulatory developments, and an accelerating shift in consumer preference toward digital interactions.

Let there be no confusion—our overall business objectives and strategic direction remain unchanged:

Expanding products and market share

We will maintain our capital allocation priorities, led by our core focus on purchasing nonperforming loans, supplemented with our expansion into our newer markets and continuing to actively explore opportunities to grow market share across clients, products, and geographies.

I am excited at the prospect of leveraging our team’s passion, focus, and experience to help drive PRA forward from this new vantage point. I don’t carry the CEO title—or its roles and responsibilities—lightly. There is no question that we have a lot to accomplish and significant opportunities ahead of us. Know that I and my management team are fully committed to ensuring PRA Group reaches its full potential.

I will end this letter the way I started it—with a deep sense of gratitude. It is my privilege to have this opportunity to serve you and each of our employees, customers, partners, and other stakeholders as PRA’s president and chief executive officer.

Thank you for putting your trust in me, in PRA Group, and in our future together.

Vik AtalPresident and CEO

Our vision is to be the trusted leader, changing the world’s perception of the nonperforming loan

2022 Financial Results

Estimated Remaining Collections ($M)

2018

$6,143

2019

$6,754

2020

$6,455

2021

$6,007

At December 31

2022

$5,700

Cash Receipts($M)

2018

$1,640

2019

$1,857

2020

$2,015

2021

$2,076

Cash Collections Plus Fee Income

2022

$1,746

2018

$908

TotalRevenues ($M)

2019

$1,017

2020

$1,065

2021

$1,096

$967

2022

NetIncome($M)

2018

$66

2019

$86

2020

$149

2021

$183

Attributable to PRA Group, Inc.

$117

2022

Form 10-K and Downloads

This Annual Report contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements involve risks, uncertainties and assumptions that could cause our actual results to differ materially from those expressed or implied by such forward-looking statements. See “Forward-Looking Statements” in the attached Annual Report on Form 10-K for the year ended December 31, 2022 for a discussion of the risks, uncertainties and assumptions that could cause our actual results to differ from those contained in our forward-looking

DownloadForm 10-K

DownloadFull Annual Report

DownloadProxy Statement