checkSURE News Articles
The Credit Crunch is affecting the Credit Checking Giant Experian!
21th January 2008
The leading credit checking agency giant, Experian, has been feeling the sting of the credit crunch. Since the credit crunch has hit their major banking customers last summer, Experian’s share prices have also dropped – taking another knock last week. Described as a “frontline casualty” of the credit crisis that has enveloped the world’s financial institutions, Experian has seen their major banking customers running less credit checks as they cut back dramatically on mortgages and loans.
As their banking customers account for half of Experian’s revenue, this has placed the group in some financial difficulties as they have seen only 2% improvement in their business in the third and fourth quarter last year compared to a 7% rise in the last year. To combat this, Experian has had to turn to cutting costs in its own cost base. They have decided on merging some of their data centres and outsourcing some services to its lower cost operations in Chile, India, Bulgaria and China which will cost £55million but would give them an annual saving of £40million. This down-sizing will mean that the credit checking giant will be axing just under a thousand jobs in the UK – some voluntary and some compulsory.
Luckily, as well as its credit checking operations, Experian has spread its risk by purchasing price-comparison websites such as LowerMyBills.com and PriceGrabber.co.uk recently. It has also made a push into the telecoms and public sector markets, further reducing its dependency on financial institutions.
This downturn has badly affected this credit checking giant and their shares have fallen 40% since last July.
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