Saturday, April 11, 2009
The big U.S. banks may be on federal life support due to subprime loans, but the consumer "nonrecourse secured loan" business (a/k/a the pawn shop) appears to be holding up pretty well. Cash America International, Inc., the nation's largest chain of pawn shops, which also has a substantial payday loan business, has announced that its first quarter earnings for 2009 should "significantly exceed" its earlier guidance. Cash America attributes the strong performance to an uptick in its pawn business and reduced losses in its payday loan) usiness.
The company is still looking for lower year-over-year earnings, though, because it got a big boost last year from tax stimulus checks in 2008, and no equivalent payments are expected this year.