Vic and NSW would have the majority of the loans outstanding, so if in recession that would still be quite a negative.
I agree that anchoring to 50m+ NPAT a couple years out and SVR is very cheap, but again its the macro and prospect of bad debts wiping out profits for a year or so that isnt helping the stock.
A "one off economic provision" of a percentage of the loan book is not out of the question next year if unemployment rises a couple of percent, surely that would mean some percentage of the loan book lose thier jobs and can't pay? Perhaps the company recoups something from the sale of the car, though then there is the issue of inflated used car values.
However, on the other side with the loan book repriced upwards and funding costs (the overnight margin) lilely reducing in response to a weaker economy that is a very good postion for the company into a recovey.
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