lochaz-index wrote:VituVingiSana wrote:Horton wrote:VituVingiSana wrote:NIC
The LLP (Group) under the P&L (Expenses) is down 770mn Y-O-Y.
The Net LLP (Group) under the BS is down 88mn [negligible]
BUT back to Equity...
You like digressing 😁😁
Check the thread(s) above... @lochaz, @pesanane, @ericsson were going on and on about NIC
Granted the Equity numbers are much larger but 770mn is 20.5% down yoy which is not insignificant on the back of a flattish TNPL. The only explanation I can piece together is that there was a huge loan that was fully written off in FY 2016 hence not recurring in FY 2017. Then there is a ~196mn difference in the SLR which I can't decipher whether it is a write off or a write back. If it's the former the LLP difference bulges to 966mn.
NIC took huge NPLs 3 years ago [when the current CEO and CFO were appointed] and
perhaps those benefits are coming though. I prefer prudence i.e. take as much of a hit as possible so when things get cleared up there are no disappointments.
I will use KK as an example: Provide for the debt KPRL owes KK. If KPRL does pay the money in 5 years, that's a nice write-back.
Equity: It took the hit on SS early on. JM spoke about it. Since then Equity has made a profit in SS. The goal was to salvage what Equity could from the SS business BUT prudently provide for what might not be salvageable. Now Equity/KCB/Coop uses "hyperinflationary" accounting.
IFRS 9 in a sense is about prudence i.e. take the hit (provision) for POTENTIAL bad debts upfront when making loans. If a loan is paid back, reverse the provision. It the loan(ee) defaults, then there a provision that can be utilized.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett