Updating the actual bad debt write offs in relation to the size of the loan book at the end of FY2015. Section 7 in the UDC 2015 prospectus is named "Provision for Credit Impairment". Bad debts actually written off are compared against the 'provision for loan impairment' stated on page 32, the 'Summary Financial Statement', which were $10.427m (FY2015) and $11.733m (FY2014).
UDC |
Bad Debt Write Off |
New Bad Debt Provision |
FY2010 |
|
$17.343m |
FY2011 |
|
$4.891m |
FY2012 |
$10.164m |
$6.031m |
FY2013 |
$12.399m |
$7.123m |
FY2014 |
$18.633m |
$11.733m |
FY2015 |
$12.162m |
$10.427m |
Actual write offs are down, coming off a spike from FY2014
Putting these actual write offs as a percentage of the end of year loan book gives them better context.
FY2012: $10.164m/$2,014.473m = 0.505%
FY2013: $12.399m/$2,065.117m = 0.600%
FY2014: $18.633m/$2,272.081m = 0.820%
FY2015: $12.162m/$2,347.163m = 0.518%
This is an improvement back towards FY2012 values.
For comparative purposes, it is informative to look 'over the fence' to Heartland Bank. Note 6 (AR2015) details impaired asset expense as follows:
FY2012: $5.642m
FY2013: $22.527m
FY2014: $5.895m
FY2015: $12.105m
Normalize these against the total finance receivables
FY2012: $5.642m/ $2078.3m = 0.271%
FY2013: $22.527m/ $2010.4m = 1.12%
FY2014: $5.895m/ $2607.4m = 0.226%
FY2015: $12.105m/ $2862.1m = 0.423%
It is interesting to see that Heartland's write offs are increasing whereas UDC write offs are decreasing. The overall write offs for Heartland are nevertheless still less in percentage terms than UDC.
|
UDC Debt Write Off |
Heartland Debt Write Off |
FY2012 |
0.505% |
0.271% |
FY2013 |
0.600% |
1.12% |
FY2014 |
0.820% |
0.226% |
FY2015 |
0.518% |
0.423% |