BEN - Bendigo Bank

[ricee007]

Just hit a long-term high... seems to have trouble breaking through $11, but it did just reach 11.43 (now 11.26), so that is a reasonable way past $11..... wonder if this time is the real deal?

I watched BEN for a while, but in the end decided against it..... which is a shame. Would have got in at around $8... could have got a cheeky 40% profit + good dividend yield in a reasonably short period of time.

If it gets to $10.50, I might have to buy in... but i wouldnt be surprised if it stayed above 10.9

 

[Garpal Gumnut]

Quite an increase in volume in BEN this calendar year.

BEN could surprise on the upside.

gg

Just hit a long-term high... seems to have trouble breaking through $11, but it did just reach 11.43 (now 11.26), so that is a reasonable way past $11..... wonder if this time is the real deal?

I watched BEN for a while, but in the end decided against it..... which is a shame. Would have got in at around $8... could have got a cheeky 40% profit + good dividend yield in a reasonably short period of time.

If it gets to $10.50, I might have to buy in... but i wouldnt be surprised if it stayed above 10.9

Why did you decide against it.

Was it on fundamental reasoning or the chart at the time?

gg

 

[ricee007]

MQG and ANZ made up >50% of my portfolio... so didn't need to add another bank... loved ANZ and liked MQG...

Since sold out of MQG, but will be keeping ANZ for a long while yet.... but, that means I only have one financial services equity... so there is room for BEN

 

[peter2]

Poor old BEN. Its lagging the other banks by a long way. The others have all broken out to new highs as seen by the XFJ line chart.

I see a low sized risk setup at a past level of resistance. I would have preferred to have seen the price bounce off 13.00 rather fall through it. This is NOT one for the momentum traders. They should have bought the ones that have already broken out.

If I was a FA person, I'd have to ask if the mgt know what they are doing.

 

[MrBurns]

I put a fair bit into this mob a week or 2 before the correction.
I was told they would benefit from the capital raising because they weren't effected like the big banks but they keep declining, I'm down $5k already

 

[MrBurns]

I put a fair bit into this mob a week or 2 before the correction.
I was told they would benefit from the capital raising because they weren't effected like the big banks but they keep declining, I'm down $5k already

30% down, is this a bank or an oil producer ?

 

[sinner]

30% down, is this a bank or an oil producer ?

Considering that within the last decade BEN has previously suffered a peak-trough 66% decline from $18 to $6 and another 35% decline from $10.45 to $6.80, what precisely made you think that banks, especially BEN, would be impervious to 30% declines?

 

[Knobby22]

I'm feeling pretty silly, bought yesterday and already down.
I will wait till the results come out before making a decision.

It should be pointed out though that the yield is about 7% and some growth is expected.
Unless the Australian economy is about to go over a cliff, BEN shares look very cheap.
We shall know Monday. You might as well hold on till then Mr Burns.

 

[MrBurns]

Considering that within the last decade BEN has previously suffered a peak-trough 66% decline from $18 to $6 and another 35% decline from $10.45 to $6.80, what precisely made you think that banks, especially BEN, would be impervious to 30% declines?

I heard at the time that smaller banks would prosper as they wouldn't be as effected by the cash reserve requirements...no point selling now, just hang in there.

As usual research is not my strong point, I'm more of a "roll the dice" investor and have the tax losses to prove it.

 

[sinner]

I
I was told ...

I heard...

I wonder where the person or people you were listening to previously are now and what they are saying? Why not ask them whether BEN is a bank or oil stock?

 

[MrBurns]

I heard at the time that smaller banks would prosper as they wouldn't be as effected by the cash reserve requirements...no point selling now, just hang in there.

As usual research is not my strong point, I'm more of a "roll the dice" investor and have the tax losses to prove it.

Also bought SDL, worthless now thank goodness I didn't put much in.

 

[Knobby22]

I note that Glenn Stevens today stated that the only way interest rates are going is down and also this latest fall is overblown.
A change in sentiment could see some very large rises of companies with good yields.
Its probably smart to look at companies that provide good yield and some growth but mainly income not too reliant on the economy.

I don't own any banks except this one as they are riskier in bad times but its getting a bit crazy at present and it gets to the point where you have to start buying a few things.

I have seen the market turn quickly before and its annoying to miss the boat. on the other hand I still have 2/3rds in cash.

 

[notting]

“The low interest rate environment also impacted growth as many customers chose to reduce debt.
About 43 per cent of the Bank’s customers are ahead in their loan repayments, while mortgage
offset accounts grew by 12 percent over the period.

I wonder what the percentage of people being ahead on their loans normally is. I suspect not so dramatically different?


Sometimes it's easier to win as a light weight -

“Funding is a particular strength, with about 81 percent of funding now provided by retail customers.
As the wholesale markets move through a period of volatility and higher prices, our funding profile provides some insulation from those issues.

 

[Knobby22]

The markets not happy. Not sure why.

 

[notting]

The markets not happy. Not sure why.

The size of this is most important. It's where the profit is made. It reprosents the difference between what the bank pays for money it lends and what it gets back from the customer.
It was a tad soft.



But on that you'd think all the banks should have been soft today.

I'm thinking higher competition especially from ANZ and NAB trying to get back into focusing on the Ausi retail Mortgage business after shrinking off shore experiences. Hardly too much of an issue given relative cost of borrowing for the others is tighter as they depend more on Big internationals to get their money to lend where credit is a tightening with the nervousness around European bank exposure to China and oil.

 

[Knobby22]

Thanks Notting

Also margins have since risen due to the recent "rate rise" the banks gave themselves.

 

[skc]

The markets not happy. Not sure why.

According to Macquarie, BEN derives a lot of it's income from the revaluation of an entity called "Homesafe" which is essentially a residential property portfolio.

Here's a snippet of what they said.

While at headline level BEN delivered a solid pre-provision result (~1.8% ahead of our expectations), we note that it was largely underpinned by contribution from HomeSafe ($54.5m in 1H16). We believe there is limited further upside to property prices in 2016, as such see a ~$40m headwind to BEN’s revenue in 2H16. Excluding the HomeSafe contribution, BEN’s pre-provision result was ~8% below our expectations.

It's comparable to me quoting my income as my wage plus the increase in my home value.

I am not sure the history behind HomeSafe and what is the end game, but that part of the earning is not sustainable or recurring. So the market is perhaps rightly marking it down.

 

[qldfrog]

Interesting, Thanks for the info skc, was nearly tempted to jump in, but not under these condition as i have a more pessimistic view than MAQ on RE

 

[Knobby22]

According to Macquarie, BEN derives a lot of it's income from the revaluation of an entity called "Homesafe" which is essentially a residential property portfolio.

It's comparable to me quoting my income as my wage plus the increase in my home value.

I am not sure the history behind HomeSafe and what is the end game, but that part of the earning is not sustainable or recurring. So the market is perhaps rightly marking it down.

I think HomeSafe is a clever way to get market share. There are protections inherent.
HomeSafe works as follows:

“Bendigo Homesafe is not a loan – it is a deferred sale of an agreed proportion of the home,” Mr Davies said.

“It provides the customer with the peace of mind that they will always retain their percentage of the value of their home, no matter what happens.”

Homesafe has won support from the Victorian and NSW state governments, which have provided stamp duty exemption for the initial transaction needed to release equity in the home.

It works like this:
A homeowner sells a percentage of the future sale proceeds of their home (to a maximum of 50 per cent) in return for an immediate lump sum cash payment.
The customer continues to live in the home until they die or decide to sell the property. They make no payments, pay no rent and have control over the property.
On the sale of the property, the customer or their estate pays Homesafe its fixed percentage of sale proceeds and retains the balance.

“In other words, if you sold 30 per cent of your home to Homesafe, then you retain 70 per cent ownership no matter when the home is sold,” Mr Davies said.

“Homesafe is a totally new approach to a very serious social problem – the enforced poverty of elderly people who are on a pension but who own a valuable asset that cannot be realised.”

 

[sinner]

What's with the magical post above from Garpal Gumnut, dated 2013 but has a chart from Jan 2016?