You can't assume loan originations = loan book growth, maintains an exact beta.
For FY 20, $134million in loan originations, loan book grew to $94million.
This is natural attrition for any lender (refinance, early repayment, the default of loans, natural runoff - they have no early repayment fees)
I would like to understand when the break-even point on a loan is. With mortgages it can be 12-18months into the loan, the bank starts to make a profit on the mortgage. On page 20 of the presentation they quote ' increase in customer processing costs' - this is a real concern for a 'fintech' lender - with origination growth, you should see the ROI filter into the P&L.
This is vital to understand, especially with a company that is making huge losses and the credit quality of the book is deteriorating.
Also, page 35 of the presentation is a concern. Lotfy assumption on the gross yields applied of 12.5%, though on their website comparison rates of 8% for lending (based on excellent credit)
So are they after customers with excellent or poor credit? This impacts assumed NIM.
