Westpac’s (WBC) strong result yesterday laid the foundations for a another strong session by the local Banking Sector – year to-date WBC and ANZ have led the way for the Big Four, both advancing ~30% compared to the ASX which is up only +6.7%. A couple of points from the WBC result that would have investors re-considering their valuations across the whole sector:
- Cash earning per share came in more than 4% above expectations.
- They declared a 58c fully franked dividend putting them on a forecasted 12-month of 3.4% pa and over 5% for buyers today who hold for 13-months.
- Net interest margin and their Tier 1 capital came in especially strong.
We remain bullish the local Banking Sector in the medium term and ideally we would like to increase our exposure into a 6-8% pullback.
MM is bullish the banks medium-term
