Axis Auto Finance, a Canadian used-vehicle lender, grew its originations to $13.5 million in the nine month period ending March 31 — a 43% increase, compared with the same period the prior year, the company announced in its latest earnings report.
The company has sought an expansion of its credit facility to accommodate this growth. In February, Axis successfully renegotiated the maximum principal amount of the credit facility to $20 million, up from the $7.5 million it agreed on in October 2016.
Some of the company’s growth is attributed to assets acquired through the finalization of an acquisition of Verdant Financial Partners I Inc. in July of last year. The deal allowed the company to go public without issuing a traditional initial public offering.
In part, because of that deal, lease receivable balances increased to $21.9 million at the end of the latest quarter, compared with $15.4 million as of June 30, 2016 — the earliest available figures under the company’s current operating name.
The annualized loss rate stood at 7.3% for the first nine months ending March 31, down from 8.8% for the fiscal year 2016. This level of credit loss is “well within the management expectations” of 5% to 10% and shows that there is still strength in the subprime market, Ilja Troitschanski, president of Axis Auto Finance, told AFN earlier this year.
“In our opinion, the subprime market is certainly not in trouble, delinquencies are at a level that is manageable, but that doesn’t mean we’re not vigilant,” he said. “If you look at Axis our loss rate is falling. [Losses] are not something I lose sleep over, but it is something that will be watched very closely — to date it has not been an issue.”