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  "documentTitle": "Canadian Tire Corporation (CTC.A)",
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  "authorName": "Spruce Point Capital Management",
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  "presentationDate": "2019-12-05 00:00:00",
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      "text": "If investors worry about the credit profiles of traditional Canadian banks, they should fear the level of risk in Canadian Tire Bank’s credit card portfolio.",
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      "text": "Canadian Tire Credit Card customers are typically higher risk given the nature of CTC's business. The typical customer uses a credit card as a source of financing to make a purchase rather than as an easy payment method. Risky customer profiles combined with the continuous growth and evolution of the credit portfolio, leave CTC in a vulnerable position at this stage of the credit cycle. If investors worry about the credit profiles of traditional Canadian banks, they should fear the level of risk in Canadian Tire Bank's credit card portfolio.",
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      "text": "We believe CTB's class of credit card customer is higher risk than peers and during an economic stress, the bank will experience higher than-peer credit losses... This reflects its chosen market niche of focusing on customers who primarily use a credit card as a source of financing (revolving balances), rather than payment.",
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      "text": "We view CTB's asset quality to be of a higher risk than its peer group...CTB's credit card franchise is more narrowly linked to the Canadian Tire brand; supporting its Triangle Rewards loyalty program.",
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      "text": "CTFS continues to expand its financial services business... While CTC has a long history of prudently managing risk with smaller, tightly focused financial services operation, continuous growth could lead to the possibility of evolving customer profiles, which may result in additional risk.",
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      "text": "\"We view CTB's asset quality to be of a higher risk than its peer group...CTB's credit card franchise is more narrowly linked to the Canadian Tire brand; supporting its Triangle Rewards loyalty program.\" — Moody's, June 11, 2019; \"We believe CTB's class of credit card customer is higher risk than peers and during an economic stress, the bank will experience higher than-peer credit losses... This reflects its chosen market niche of focusing on customers who primarily use a credit card as a source of financing (revolving balances), rather than payment.\" — Moody's, June 11, 2019; \"CTFS continues to expand its financial services business... While CTC has a long history of prudently managing risk with smaller, tightly focused financial services operation, continuous growth could lead to the possibility of evolving customer profiles, which may result in additional risk.\" — DBRS Report, April 8, 2019",
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      "text": "Source: Rating Agency reports",
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      "kind": "title",
      "text": "CTC Lends To Higher Risk Customers",
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