Credit data firm Experian boosted by sustained consumer lending

Experian boosted by elevated consumer borrowing demand and lenders tightening their criteria

  • Experian revealed that total turnover rose by 7% in the final quarter of 2022
  • Its N. American arm benefited from a strong performance by Experian Ascend
  • The firm noted sales were impacted in the UK by ‘market disruption’ in October

Experian has posted robust third-quarter revenue growth, thanks to steady progress across the Americas and continued high borrowing levels.

The world’s biggest credit reporting group revealed that total turnover rose by 7 per cent at constant exchange rates in the final three months of 2022, in line with company forecasts.

In North America, where the firm derives more than two-thirds of its sales, trading benefited from a strong performance by Experian Ascend, its analytics platform, as well as its verification services and health divisions.

Results: The world’s biggest credit reporting group revealed that total turnover rose by 7 per cent in the final three months of 2022, which was in line with company forecasts

Meanwhile, its Latin American business saw organic revenue increase by 16 per cent, supported by expansion in its consumer services arm and the acquisition of data products in Brazil.

There was also healthy growth in the UK and Ireland, although Experian noted sales being impacted by ‘market disruption’ in October, which followed a controversial mini-budget containing £45billion of unfunded tax cuts.

Trading was further affected by stiffer lending requirements, as the turmoil resulting from the UK Government’s fiscal plan caused mortgage rates to jump, home loan approvals to slump and additional interest rate hikes.

Yet despite significant economic troubles, Experian has upheld its full-year forecasts, with organic turnover set to rise by 7 to 9 per cent. 

Brian Cassin, the group’s chief executive, said: ‘While pressures in the global economy are likely to continue for some time, we expect to remain resilient, supported by the delivery of our growth strategy and growth in countercyclical revenue streams.’ 

Experian added that consumer demand for credit was ‘generally elevated’ and lenders are progressively becoming more interested in analytics tools centred on evaluating affordability, cost-of-living insights and small business economic exposure.

Back in November, it revealed that utility and energy clients were insisting on seeing more analytics showing the impact of skyrocketing energy bills on Britons.

At the same time, the Dublin-based firm observed higher demand for debt management tools and facilities among customers in the telecommunications industry.

Matt Britzman, an equity analyst at Hargreaves Lansdown, commented: ‘Lenders are tightening criteria, and that’s where Experian’s suite of tools are an invaluable source of information; at the same time, consumers are continuing to look for credit on good terms to keep spending.

‘There’s certainly a worry about how long that spending trend can continue, and that’s especially true if conditions for consumers’ real wealth worsen over the next few quarters.

‘The US mortgage segment is a prime example, where performance suffered given the challenges facing both buyers and lenders as mortgage costs soar.’

Experian shares were 0.6 per cent lower at £29.36 on Tuesday morning, although their value has still grown by about 77 per cent over the past five years.