Your words "offset by the increased provisions on new PDLs and debt." are not correct. PDLs are not subjected to initial provisioning, like loan debts are. Accounting for PDLs and accounting for loans differ, and as such growing the PDL stock has a different time-related impact on reported NPAT and Equity than growing the Loan Book has.
CCP creates an upfront provision for doubtful debt, and hence a paper loss is made initially, which is typically clawed back years later when bad debts written off are set against their provisions, and any over/under provisioning adjustments are made that impact NPAT. Consequently, debt advanced late in the year has a negative impact on that year's NPAT.
Reasonable quality PDLs are bought for about 20c in the dollar, and they are debited to the asset account at their purchase price. When money is collected generally, the valuation of uncollected PDLs tends to be amortised in such a way as to make amortisation equal about 47% of collections in CCPs case. Consequently, PDLs bought late in the year have a low negative impact on that year's NPAT.
CCP Price at posting:
$11.45 Sentiment: Hold Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)