Will CBA renew ?, page-2

How would GMA respond if they lose CBA? Easy by giving back even more capital. NTA still close to $4.00 and it is real NTA - can easily be converted to cash by selling down the highly liquid bond portfolio. Share price still only $3.25.

I actually hope they lose it so they accelerate the capital management. I have no doubts the share price would drop in the near term but that would just present an even more amazing opportunity for when the capital management kicks in.

Having said that I think they will retain CBA even if only on a reduced basis. People are ignoring the bigger picture with this stock. It has low overheads - mortgage insurance doesn't need advertising or high staff levels - so redundancies are low if they lose business. It is also effectively a fixed income LIC with NTA of around $4.00 and trading at a substantial discount to that price.

Assuming the big property crash doesn't hit you can expect massive dividends and/or capital returns to continue for the next few years yet.