...High Arrears, Losses: The second quarter of 2015 recorded a 9bp increase in the 30+days delinquency rate, and a 2bp increase in the annualised net loss rate (ANL). Atypical 2Q: This in contrast to historical performance as delinquency rates in the second quarter tend to be similar to that in the first quarter, while net loss rate tends to be higher, specifically, by 8bp in the past five years on average. This is because higher delinquencies in the first quarter materialise into losses in the second quarter. Higher 3Q15 Losses Expected: Fitch Ratings expects higher losses and repossessions in 3Q15, as losses have not materialised yet, and arrears are increasing. Losses Remain Low: The ANL rose 15bp year-on-year (yoy) to 0.60% as of end-June 2015. Loss levels have remained significantly below our expectation despite the increase, and strong excess spread has generally covered those losses. We expect net losses to remain steady at around 0.5%-0.6%. Higher Unemployment by Year-end: We expect...
