Q: Just speculating on the possibility that propel could be bought out by one of the major banks in Canada-I don’t believe they offer a similar type of business and this seems like way to diversify a little
5i Research Answer:
We would not consider it a strong possibility. PRL is too small to really make an impact. But the bigger reason is that banks specifically do not want the type of business that PRL operates in. Higher-risk customers do not fit in well with their credit granting process, and banks would have an extremely difficult time handling 11% losses on loan portfolios. PRL exists specifically because banks do not want this business.