Increase in provision of 3.3%, of which 1.9% is macro. That leaves the provision that relates to the expected performance of the book at 8.4%. We will see how net bad debts track this, but in 1H23, net bad debts were 6.9% and the book related provision 7%.
The rise in impairments is a worry, though expected given the deterioration of the credit environment. If they can keep a lid on it, then we can expect the next quarters to return to a better financial performance and that's the message they're trying to convey. Note also that they're writing off some intangibles so they will be aiming for a strong 2024 performance (probably hoping for the macro economics to improve too).
In that context, the new loan makes sense. They will need to draw some cash as they swallow the new impairments and keep the financing facilities going.
I wouldn't be surprised to see some renewed weakness, given the slowdown and the credit losses. I have not set a price target yet to add to my position, but likely 20-30% down from here I would say.
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