...Losses Remain Below Base Case: The annualised net loss rate (ANL) fell by 9bp in 3Q14, but was still 5bp above 3Q14. Loss levels remain below Fitch Ratings' base case despite the year-on- year increase and strong excess spread has generally covered those losses. We expect net losses to remain steady at around 0.5%-0.6%. Delinquencies Decrease in 3Q15: The last quarter saw the lowest levels of 30+ day delinquencies for 2015, with delinquencies falling by 28bp. The third quarter is typically characterised by falling delinquencies, as borrowers recover from higher arrears experienced in the first half of the year due to holiday spending. Recovery Rates Trending Down: The five-year average dropped from 46% to 44% in September 2015, despite the quarterly increase in recovery rates. There is some uncertainty as to whether the recovery rates will be affected by the Volkswagen emission scandal, as Australia has yet to see the impact on the used-car prices for affected vehicles. Stable Economic...
