Grenke Lowers Group Earnings Forecast

German banking group Grenke has lowered its group earnings forecast for the current financial year. This is largely due to the impact of the COVID-19 pandemic on its factoring business.

Mainly affected by the renewed wave of infections in Germany and France

The company now expects to report group earnings before interest and taxes (EBIT) of between €80 million and €120 million in 2022. This is down from the previous forecast of between €140 million and €160 million. The main reason for the downward revision is the negative impact of the COVID-19 pandemic on Grenke's factoring business.

Factoring is a type of financial transaction in which a company sells its accounts receivable to a third party, known as a factor. The factor then collects the payments from the company's customers and provides the company with a loan or cash advance.

Grenke's factoring business has been hit hard by the COVID-19 pandemic, as many of its customers have been struggling to collect payments from their own customers. This has led to a decline in Grenke's factoring revenue and an increase in its bad debt provisions.

In addition to the impact of the COVID-19 pandemic, Grenke is also facing challenges from the ongoing economic uncertainty in Europe. The company is also facing increased competition from other factoring providers.

Despite the challenges, Grenke remains confident in its long-term prospects. The company is continuing to invest in its factoring business and is exploring new opportunities to grow its revenue.

Grenke is a leading global provider of factoring services. The company has a presence in over 30 countries and serves over 100,000 customers.