In key news on Australian stocks, Westpac Banking Corporation (AU:WBC) gained nearly 1% today despite the bank reporting a setback of AU$164 million related to notable items in the first half profits of FY24. However, this marked an improvement over the AU$173 million of notable item impact reported for the full year 2023. This was further reduced from 2022’s notable item impact of AU$874 million.
The bank explained that the notable items are related to unrealized gains and losses on economic hedges and net ineffectiveness on qualifying hedges, which are expected to reverse over time.
Westpac Banking Corporation is the leading financial institution in Australia, offering banking and financial services to approximately 14 million customers.
Westpac’s H124 Reporting Changes
Westpac also announced changes to its reporting segments ahead of the upcoming half-year results, scheduled for May 6, 2024.
The bank indicated a restructuring of its operating segments, with the creation of separate Consumer and Business & Wealth segments, and the discontinuation of the Specialist Businesses segment. Other changes to enhance its reporting include refinements in fund transfer pricing, adjustments to capital allocations, and improved allocation of operating expenses from enterprise functions. Moreover, some deposit products will undergo a shift in classification from interest-bearing to non-interest-bearing, along with adjustments to the methodology for categorizing credit quality.
Westpac clarified that these changes do not affect overall net profit after tax (NPAT).
Are Westpac Shares a Good Buy?
Overall, analysts have a bearish outlook on Westpac shares. WBC stock is up by a notable 17% in the last 12 months. Post-announcement, analyst Richard Wiles from Morgan Stanley confirmed a Sell rating on the stock, predicting a downside of 11.4%.
According to TipRanks’ analyst rating consensus, WBC stock has received a Moderate Sell rating. The company has a total of 10 ratings, including one Buy, five Hold, and four sell recommendations. The Westpac share price target is AU$24.22, which is 7% lower than the current share price.
