Originally posted by Tarvold
From the presentation they are running down the SACC loan book but increasing both the long term unsecured & auto secured lending.
Broker loans are increasing but there's no mention of branch loans either way.
Does anyone remember what sort of proportion of revenue in the Branches comes from SACC & how much from long term unsecured / auto?
A 2016 presentation i looked at said the Broker network is the major channel for Auto loans & the Branch Network for SACC & LT unsecured.
Is it possible that they could still maintain the majority of the Branch Network profitably with just lending to LT secured & Auto?
If so that would be a big ? removed from current result.
$36m NPAT would be a 12.5% increase yoy but with the conversion of the options EPS would be down around 1%.
All in all i think that is a solid result & i expect them to at least hit that top end result with them expecting market share to rise to 3% this year.
The branch network is mainly the personal loans, if they run off the SACC perhaps they will have to close some stores. I don't recall a break down of branch segment loans. No detail was given at the AGM in terms of formal plans other than the standard exit line.
However, if you assume that 'online' is basically only SACC lending (200 - 2000 are the amounts specified), that gross loan book is about 9.5m. Therefore, given total SACC was 28.1m (declining again in q1 FY19) perhaps up to 18.5m of the branch gross loan book is SACC (FY18 45.9m). That is upwards of 30 - 40% of the loan book for the branch segment.
I think this is reasonble given you can see the large decline in online segment lending fairly consistant with the 7.5m SACC loan book decline, while the branch network incresed it's book by 4.5m. This is also consistant with 'larger amount longer term' loans growing by 7.2m over FY18, some of this presumably housed in the branch segment. It's mentioned in the MD address that larger and longer term loans are expected to see 'good growth' in FY19.
Maybe the SACC exit is looking to transition the branches to high interest, yet sub 48%, mainstream credit personal loans. Maybe thats why no sale occured and SACC keeps running down, yet larger peronal loans increase while the branch network stays the same.
