Shareholders here seem to have optimism and I do not blame you for that. However, I am trying to better understand BNK and I need your help - you would know better than I if you are an existing shareholder. There is no doubt they will return back some of the proceeds from the sale of Finsure (a portion as they say). My uninformed guess is 50-60%, so say around $80m. After that they "will consider capital management options" ..again my guess is that they will capitalise the Bank, reduce some of the liabilities etc. No objection to that - it looks that they recently raised $10m+$14m for that purpose and that they will need more of that if they are too expand. However, their bank segment is currently losing money and Finsure was the big money making part of the company. Looking at one of their recent presentations, their plan to make the bank profitable is:
- reduce white loans -> this is good as they currently do not seem to make any money and it is a competitive space.
- "Establish prime and specialist warehouse securitisation programs: Am I correct to say that this is related to the Goldman Sachs deal and that means selling the debt to others by using Goldman's capital and making a small fee out of this? Anyone who can explain this?
- Then they are saying that in the future "Lending margin transformation accelerates with term outs" - does this mean offsetting some of the short term liabilities to long term? Will this be affected by the upcoming increases of interest rates?
- They are also saying that instead of white loans they aim to increase lending "on balance sheet" - what is the difference? I understand what white loans are but not sure of the "on balance sheet lending"
Sorry for the many questions. I am struggling to put a $ value to this company other than the return of capital from the sale of Finsure ($80m?). Any comments also on how the increase of the interest rates will affect any of the above are very welcome.
BBC Price at posting:
$1.22 Sentiment: Hold Disclosure: Not Held
