09/05/2022 16:52

Westpac (WBC) $24.60

WBC +3.23%: A strong 1H22 result this morning from Westpac beating consensus expectations by ~6%.Cash NPAT of $3.1bn was ahead of the $2.9bn expected while the interim dividend of 61c was a tick above the 60c pencilled in by the market. Cost management was a key driver and they did a good job here, cutting underlying costs by 10% plus they also guided for 2H22 costs to be 0-2% lower than the...

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17/02/2022 09:14

Westpac Banking Corp (WBC) $23.29

Waves of buying have washed through the Australian banks of late with Westpac (WBC) and Bendigo (BEN) catching my attention over the last fortnight – it’s felt like an institution has pressed the buy button in a meaningful manner for a couple of days catapulting the lucky recipient higher in the process. Elsewhere in the sector NAB has just traded at levels...

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04/02/2022 09:13

Westpac (WBC) v Commonwealth Bank (CBA)

Westpac reported a solid quarterly result yesterday which lead to the stock rallying while heavyweight CBA slipped lower – I’m sure the majority of subscribers cannot remember when CBA’s valuation was less than half of WBC’s size, even if it was only 10-years ago, today CBA is larger as the adage towards our banks feels like it’s been in play for years...

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03/02/2022 17:08

Westpac (WBC) $21.07

WBC +2.28%: the first of the banks to present the quarterly update and they led the way with a strong result. Cash earnings of $41.58b was 1% higher than the 2H21 average and a 7% beat to consensus. Better Treasury and Markets revenue as well as a fall in costs led the beat. Net interest margin (NIM) was disappointing, falling 8bps vs the 2H average to...

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19/01/2022 09:15

National Australia Bank (NAB) v Westpac Bank (WBC)

The performance differential between NAB and WBC has stretched noticeably over recent months and especially since Novembers disappointing full year result – almost overnight WBC became the ugly duckling of the “Big 4 Banks”. Australia’s oldest bank  may have seen their margins contract but the action of the share price is starting to feel overdone...

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23/11/2021 09:17

Westpac (WBC)

Westpac (WBC) has also endured a similar fate to CBA correcting over 20% following its very poor result which showed higher costs and weaker margins but a 20% dip has taken the bank back into the value space plus a 5.4% forecast yield over the next 12-months is very appealing. However while we think value has returned to WBC, we are more likely to..

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02/11/2021 09:18

Westpac (WBC) $23.78

WBC dominated the stock news yesterday after disappointing the market and subsequently being punished 7% making fresh 9-month lows in the process. The positives of a $3.5bn buyback and 60c fully franked dividend couldn’t mask the issues under the hood.

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01/11/2021 17:00

Westpac (WBC) $23.78

WBC -7.36%: Reported full year results this morning that were underwhelming. While Cash profit was only a slight miss coming in at $5.35b versus $5.42b expected, the real issue stemmed from higher costs, weaker net interest margins (NIMs) and a concerning trend half on half. While the dividend of 60cps was a positive and they also announced an up to $3.5b off market share buyback, focussing on the 2H showed a deterioration in profit and a NIM that went from 2.09% down to 1.99%. Expenses increased from $5,236m in the first half to $5,700m in the second – with $140m additional costs for ‘financial crime capabilities and systems, product governance, data and regulatory changes’. This saw their cost to income ratio rise from 61.6% to 63.1%. All up, a weak result and a ~7% decline in share price is probably warranted. Focus now will be on the large cost out program they announced and the ongoing turnaround that is (apparently) underway.

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26/10/2021 17:06

Banks

Barrenjoey initiated on the banks today with banking analyst Jono Mott leading the coverage. At Shaw, we have a research partnership with UBS which is where Jono was, and while I only had lunch with him once, he’s an exceptional analysts, the best articulator of key themes I’ve come across. The Barrenjoey calls in the banks today were interesting, essentially they are:

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13/10/2021 09:29

Westpac (WBC) $25.63

Yesterday saw WBC announce a substantial $1.3bn write-down on asset value & additional provisions for customer remediation, yet on a down day the stock only fell -1.65%. The banks have traded sideways for months and our view hasn’t changed - buy around $23 and sell around $28, the only likely tweak to these levels is when the stock trades ex-dividend in early November.

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