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Post by extremis on May 17, 2016 20:10:50 GMT
There is something that bothers me for some time with Capitalia: if they can borrow at 12% at Nasdaq Baltic Market, why they list their loans on Mintos platform for 12-16%?
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Post by littleinvestor on May 17, 2016 21:59:22 GMT
Strange indeed, with Twino is the opposite practice.
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Post by thep2pinvestor on May 18, 2016 4:37:59 GMT
www.mintos.com/2015_CONSOLIDATED_ENG.pdfHere are the consolidated financials of Capitalia. 173'000 Eur own funds for 3 Mio loans. And I do not find the buyback guarantee. Should be booked as an off balance sheet item somewhere. All this looks not very impressive.
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p2pmaster
investment is life.
Posts: 128 
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Post by p2pmaster on May 18, 2016 9:02:19 GMT
Would you invest in junk bonds at 12% interest rates given very low (ie 6%) capital base? The risk-return profile is not that good and economic downturn might result in significant losses. According to IFRS, all off-balance sheet liabilities should be listed and disclosed in the financial statements. Strange that liabilities to Mintos/Buyback are not included. Could martins comment regarding Capitalia's view to strengthening capital base and to disclose off-balance sheet liabilities? |
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Post by reeknralf on May 18, 2016 10:51:52 GMT
Say you can derive loans paying 20%, with 5% loss to defaults. Would you rather borrow money at 12% and pocket the anticipated 3% profit, or pass on the loans to someone else at 16% and pocket the guaranteed 4% fees?
The question is, why are they borrowing any money at 12%? Presumably because they can derive more loans than Mintos can fill.
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Post by jurisgrisins on May 18, 2016 11:40:26 GMT
Hello,
Thank you for your comments. I will try to consolidate answers to all questions in the following post:
(1) Accounting. We book all loans that are sold with buyback guarantee as liabilities (not off-balance sheet, but on-balance sheet). Since mostly we put through Mintos loans without buyback, we did not have large amount to book as of the end of year - all in total EUR 28 478. This reflects in note 20 of our annual report;
(2) Pricing. Our full range of pricing on Mintos is from 10-17%. Loans that we sell with buyback guarantee we put at average rate of 12%, which is similar cost to our borrowing through NASDAQ. Pricing on Mintos is also subject to supply/demand on Mintos platform as well as our own liquidity needs, hence the price of loans with buyback that we put up has fluctuated between 11.5-12.5%. For loans that have no buy-back the pricing reflects the higher risk of default;
(3) Capital base. It is true that we have relatively low equity capital, however, we also have subordinated liabilities in the amount of around EUR 400,000. We are currently in talks with a few investment funds in order to raise the equity capital.
Let me know if you have any other questions or comments. I am happy to answer here or via email at juris@capitalia.lv
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