Sharechat Logo

Daily ShareChat: Westpac Banking Corporation

By Jenny Ruth

Tuesday 11th August 2009

Text too small?
 Jenny Ruth

Westpac Bank's reduction in exception fees appears to be aimed at reducing political and public pressure over the banks' increasing market strength, says David Ellis, an analyst at Aegis Equities Research.

The move follows a similar one from National Australia Bank (Bank of New Zealand's owner) and will cost Westpac about $210 million in net profit in 2010.

"Westpac continues to gain market share in the key residential loan and retail deposit product segments (in Australia)." Australian Prudential Regulation Authority figures showed "residential loan growth was a standout with a 6.7% uplift in the three months ended June."

The bank's merger with St George Bank and the additional capital raised in the first-half of 2009 have put it in a good position to continue driving revenue growth, despite slowing economic conditions, Ellis says.

"We expect Westpac to leverage its brand and distribution strengths, its cost-to-income advantage and improving margin performance to underpin further earnings growth."

Despite increased bad-debt expenses, higher funding costs and the slowing economy, the capital raising provide the bank with some short-term buffer and will support business growth. "Westpac is well-positioned to take advantage of market conditions and we expect strong earnings recovery in 2010 following softness in 2009," he says.

 

BROKER CALL:  Aegis Equities Research rate Westpac Bank (NZX: WBC ) as buy.

 



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Westpac NZ boosts annual earnings 22 percent on bigger market share
Westpac sees more digital banking in the future, launches new budgeting ap
Westpac NZ outperforms parent as FY earnings climb 41%
Westpac targets SME, agricultural lending
Westpac lifts June quarter cash earnings
Daily ShareChat: Westpac Bank
Westpac profit drops
Westpac seeks to package foresters' carbon credits
Westpac first-quarter profit rises about 33% on loan demand, fewer defaults
Westpac to appeal tax avoidance ruling