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.”