Someone has to provide credit to customers the mainstream lenders refuse to deal with. Now you can you look at that in two ways 1) providing an essential service to allow lower income people to buy cars & stay in employment 2) exploiting people on lower incomes.
If lenders like SVR didn't exist then there would a lot of people worse off through not being able to buy a car & not being able to secure/maintain employment.
SVR's duty is to ensure that borrowers can repay the loans they issue. SVR has had a successful track record of low defaults ,so that in itself proves that SVR has been a responsible lender. The dip in profitability has been fully disclosed & is not a systemic issue but a temporary one.
Use can use the term 'sub prime' if you like but it doesn't necessarily mean liar loans & loans to people on welfare. In fact in SVR's case it is more the case of people with lower credit scores & in the case of the AFS division not even that.
We are basically at the bottom on the investment cycle for SVR, going forward things are only going to get better. The ideal time to buy companies like SVR.
SVR Price at posting:
$1.32 Sentiment: Buy Disclosure: Held
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