Curo Group (ticker: CURO) announced a strong first quarter after the close.  Revenue of $290MM was up 48% and beat analyst estimates of $274MM.  Adjusted earnings of $.15 also beat expectations by $.03.  Like Enova International (ticker: ENVA), Curo is regrowing the loan book after a lack of economic activity caused by Covid shutdowns reduced loan demand in 2020 and into 2021.  We find it encouraging that the company grew the loan book by 60% (backing out acquired growth which more than doubled the size of the portfolio).  Curo also managed to reduce net charge-off rates while growing the loan book.  That’s because the company made the decision to focus on loan quality at the expense of higher interest rates.

We’ve done a number of industry calls recently on competitor, Enova International where some have previously expressed concern that high levels of loan growth could potentially be masking a decrease in loan quality.  That didn’t happen at CURO, and both of these companies make relatively short-term loans.  While charge-offs will increase from pandemic lows, we believe that if there were a problem with the new business, it would have shown up in the numbers by now.  We’ll find out after the close tomorrow when ENVA reports results.