Ann: 1Q24 Trading Update - Strong Revenue and Lower Losses, page-41

Wilbur
Thanks for highlighting that metric as I don't remember seeing that, but quite informative.

What I think it was meant to demonstrate is that the business (even back in 2022) was indicating it could deliver a 21.5% or 60.7% return on equity based on investment of the capital raise (and/or reinvestment of profits).

What arguably has not happened is the ability for the business to generate a lot of access capital because they have been recycling those funds into paying down the corporate debt facility. Nor have they managed to get any additional warehouse lending facilities, and I believe that again may be due to the inability to put down the initial capital for these facilities as MME usually takes the initial losses on these loans.

Where I think your conclusion is incorrect is:
- the loses they are indicating in Aug22 is the annual losses on those type of loans which is different to the 4.9% they are claiming which is the whole of life losses on the loan book (in that example, the whole of life losses on secured is 3% & unsecured is 8%). Although the 4.9% seems low compared to that metric in Aug22, what has changed is the split between secured/unsecured not to mention a significant change in who/how they write loans given the significant change in the interest rate environment.

Look, I'm not saying they are not loosing money on loans written (clearly they are losing at least 4.9% and that is after they sell part of their loan book to collection agents so the actual losses are slightly higher), but they provision upfront and the hope is that the provision is sufficient to cover losses over the term of the loan (plus not to mention that they software does what it claims.......that is the biggest black box to me........being able to charge 19% to somone means these are not borrowers that cannot go to the big 4 banks, so you'd have to assume that there is going to be decent risk embedded in that business)