Money3 risks and revenue model, page-5

I think a considerable risk in the amount of loans in 30 days or more arrears. I also think the commentary and disclosure in this area is poor.

The last couple of financial years the percentage of the loan book in arreas more than 30 days has stabalised, but very high.

However, it is a a big concern of mine that money is being loaned out somewhat unsustainably with a view to grow.

Because so much new lending is happening each year, this growth is hiding the poor performance of existing lending. New loans are far less likely to be provisioned/ in arrears at the beggining of the term.

Its the major flaw here. Why hasnt management provided commentary around why 30% of the loan book hasnt made a payment in 30 days or more?

Thats 2 or more fortninghtly direct debit payments supposedly alligned to borrowers pay cycles missed in 30% of loans on the books. Wasn't car lending supposed to of higher quality?

Although 'in the target range', bad debts spiked in the first half. Further evidence the push for growth is showing up in poor lending.

I am going to be looking closely at the percentage of the book in arrears in the annual report, given thats the only time its disclosed.

I hope it is more to do with inadequate collection processes because of the exponetial growth in the loan book. Though, it doesn't help to sell the business as sustainable, which is a major critisism.