More to the point Browny, banks lend 20 times their own equity...so I'd presume this is somewhat of a good deal for them given they have the underlying property collateral and have nailed a few people to the wall on guarantees.
Given that banks are struggling to build their property loan books I am somewhat surprised there is not more funding coming FSA's way. They continue to say they have the quality people to lend to.
But we appear to be in a funny part of the credit cycle. On the one hand the banks want to lend money as they have a growing deposit base yet, on the other, they are crimping the loan pipeline by a much greater scrutiny of people to whom to lend.
More pertinent to us as shareholders is the hope that FSA have been diligent in their lending policies as the effects of loan losses are massive.
Also, its time they abandon the lofty dream of a $600m book by 2013. They never say whether it is FY 2013 or calendar 2013. We won't get within a bulls roar of this.
Surely we are better concentrating in a niche financial area where we can have a genuine advantage. That of factoring and business finance.
The time is right for these products and the mainstream financiers aren't concentrating fully in these areas.
Finally, I won't be hanging out for a dividend as I am sure the preservation of all cash is a condition precedent for the book loans.
For sure, I am as frustrated as everybody else that FSA just cannot break out of its capital imposed rut.
FSA Price at posting:
26.5¢ Sentiment: Hold Disclosure: Held
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