@keygio, I did a bit of research over the weekend in regards to...

@keygio, I did a bit of research over the weekend in regards to the Fox Symes Car Loans. As you are aware, this is a relatively new business for FSA.

The business model seems relatively straight forward, FSA borrows the money from Westpac at 3.96% (page 52 of the FY2015 annual report) and then charges a flat rate of 16% to customers wanting to borrow to buy a vehicle. On average, they expect the loan will take about 5 years to repay.

Like any loan, there are fees and charges payable, it would appear that customers are probably paying an application fee of around $1,650. Page 40 of the FY2015 annual report shows fee income of $330,807 for personal loans. I estimate there were approximately new 200 loans for the FY2015.

In November and December 2015, on average, the loan pool increased by $1.1M per month. I estimate approximately 45 new loans a month were written in those months alone. If this growth rate continued for the second half of FY2016, then the loan pool is likely to be sitting around $17.5M plus as at 30 June 2016.

I contacted Tim over the weekend to confirm the rates and ascertain if $1.1M ongoing growth per month is feasible. He is confident that they can and will do better over the coming months and years. He put it to me that if the combined loan books are ever going to get to $500M in four years’ time as flagged last year, then the car loan pool would probably need to be sitting around $100M.

You might recall that at the half yearly results, there were no arrears over 30 days. Let’s hope that has continued. This product is going to be a game changer for this company.

Thank you for your posts. Keep them up.