Ann: MNY enters NZ Market and exits SACC with sale for $46m, page-17

*16% to 18% ROE based on 30% to 40% gearing and 7% funding costs, down from 9% current. At 50% gearing ROE would be in the region of 20% based on auto loan division margins, but that increases the risk to the business more in a downturn. At the moment they seem to targeting that 30 to 40% number with gearing currently at 30%, and even if that extra 50m debt draw down was deployed immediately gearing would rise to only 37%. In reality more retained earnings will come through to offset some of this by the time they draw down on that. Naturally, how bad debts perform in a higher unemployment downturn is really the sticking point, as a doubling of bad debt charge would wipe out about half of EBIT and could trigger covenants ect.