Ok so lets deal with this. Loan guarantees and loans are two completely different things. A loan being a loan and a loan guarantee being equivalent in layman terms to co signing for a house that many parents do as their children would otherwise not be able to get a home loan.
Now the loan guarantee will result in absolutely zero expenses and zero liabilities if the other part does not default. Now considering that SBB has been giving out these loan guarantees for the past 5 years of available records (and likely prior before that) and they have totalled up to $10 million dollars in some of the years. Now considering that they have done this for years and years yet still have not had a serious bad debt shows that it is actually quite low risk and they are prudent with who they give out these loan guarantees to.
So really why is there such a fuss about this when it is very common in China to do loan guarantees and SBB has shown that it is very prudent in who it chooses to give loan guarantees to as can be seen by zero bad debts arising from the loan guarantees.
SBB Price at posting:
4.7¢ Sentiment: Buy Disclosure: Held
