chw earnings - more steady progress more good results from chw
loan book now $2.2 billion and diversified across geographies and industry sector.
credit still performing well in Canada and us. more than 90 delinquency was steady and the ABS got a ratings upgrade from Moody’s.
the free cash flow ($0.72 per share) was so much better than adjusted eps ($0.46 per share) in part because chw has doing really good collecting $$$ from previously written off loans. this was over $4 million in the quarter. they expect more progress in collections in remainder of year.
As prime mix continues to rise in loan book, interest margin % realized dipped again in US and Canada but I welcome this shift ahead of economic bumpiness. more prime credits = lower write offs for bad debt.
cost of funds remains very attractive.
company confirmed what I had suspected bout castlelake deal. Getting origination fee, servicing fee and ongoing management fee. expect this type of biz with other third parties to grow. attractive since it requires no balance sheet commitment (so very little credit risk) and is virtually all margin so will be very positive for higher roe.
Company expects loan demand industry wide to moderate due to higher rates but expects chw to see positive momentum persist thru rest of year.
from free cash flow yield and earning angle, and p/B relative to roe, chw continues to look attractive to me. I think will morph into more of a hybrid asset management co over time. still early for chw and share price imo.