fric
Member of DD Central
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Post by fric on Mar 1, 2017 14:15:10 GMT
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p40l0m4r
Member of DD Central
Posts: 63
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Post by p40l0m4r on Mar 1, 2017 15:23:56 GMT
I'm a bit surprised not to see any showed provisions for bad debt.
It's a pwc audited f.statement, so it will be surely ok, but i have this doubt: Are probably credits already at the net value of those provisions? Any other reason?
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Post by southseacompany on Mar 2, 2017 2:09:20 GMT
p40l0m4rThe results are net of provisions: see "Impairment" in the income statement. It is interesting that in 2015 Mogo took writedowns of 2.3m euros on a loan book of 23.8m (9.8% impairment) but in 2016, they only wrote down 0.9m on a loan book of 25.0m (3.6% impairment), so either Estonian car buyers have become a lot more diligent about their finances or Mogo's collection procedure has improved sharply. (This difference also accounts for about half of Mogo's annual profit.) Anyone who's had a Mogo loan go into default and wondered about the apparently high cost of recovery may be interested to note the item "Income from debt collection activities". At 280k euros last year, it's a nice little earner for Mogo.
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Post by rahafoorum on Mar 7, 2017 9:58:22 GMT
p40l0m4r The results are net of provisions: see "Impairment" in the income statement. It is interesting that in 2015 Mogo took writedowns of 2.3m euros on a loan book of 23.8m (9.8% impairment) but in 2016, they only wrote down 0.9m on a loan book of 25.0m (3.6% impairment), so either Estonian car buyers have become a lot more diligent about their finances or Mogo's collection procedure has improved sharply. (This difference also accounts for about half of Mogo's annual profit.) Any chance that difference is coming from the fact that Mogo has sold the low performers to investors without buyback guarantee?
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Post by southseacompany on Mar 7, 2017 13:43:41 GMT
It's true that Mogo has sold some real stinkers to investors without BBG. According to the Mintos statistics page, defaulted Mogo loans total under 140k euros, so that does not explain it. However, over 3.5m euros of Mogo loans are currently late (~15% of all outstanding loans). Mogo uses historical default rates to compute writedowns for late loans, but they don't disclose what those default rates are, so it's not possible to calculate the answer. Still, I think you may be right.
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Post by rahafoorum on Mar 7, 2017 14:50:52 GMT
There are also many loans in the dataset where loan contract has been "amended". Whatever that means. Perhaps simply rescheduled/restructured to avoid defaults and hopefully increasing recovery? This is what the "terminated" (I assume this is defaulted?) percentage of loan contracts per month was when I checked it in 2016 September. rahafoorum.ee/wp-content/uploads/Mogo-default-rate.pngMind you, this was with roughly 50% of buybacks having reason as "not specified", which also included many loans that were going to default, but were bought back before actual deadline. Haven't done any analyses later on though. rahafoorum.ee/wp-content/uploads/mogo-ennet%C3%A4htaegselt-tagastatud-laenud-pirukas.pngNot sure, but your 3.6% seems too conservative figure to be honest.
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