over done

I'll go out on a limb here and call this sell off overdone and that the sp should head up to 1.05-1.10, just over 10% higher.

My rationale is that looking at the trading update and looking at the new regulations there appear to be some interesting anomolies and yes I am adding some assumptions into the mix as well.

The first an probably the biggest (not without contention though) is with the new recognition of principal payments early in the cycle would mean a reduction in the provisions required. Based on what I see relative to the revenue being stable quarter on quarter the provisions do not seem to have adjusted accordingly.

Secondly the bulk of the fall is on personal loans, which is an apple and oranges comparison as Q1 is based on the new recognition method while Q4 is on the old. As stated in an earlier mail the break down has not been provided so prepared to reduce the impact. Which would have happened anyway over the life of the personal book.

Thirdly Head office cost increase has probably been impacted by both the class action and implementing the new change so are not ongoing (may be some ongoing admin work but don't believe that will be large). Some would apply to the stamp duty.