Shares of Australia-based Westpac Banking Corporation (AU:WBC) gained nearly 3% today after the bank disclosed a decline in its stressed assets by four basis points to 1.22% of its total committed exposures in Q1 FY24. The bank posted a 4% decrease in its first-quarter unaudited net profit of AU$1.5 billion compared to the second half of FY23. The profits were impacted by “Notable” items, mainly related to hedge accounting, which Westpac expects to reverse gradually over time.
WBC stock has gained over 20% in the last six months of trading.
Westpac Banking Corporation is the leading financial institution in Australia, offering banking and financial services to approximately 14 million customers.
Continued Resilience
Moving forward, the bank anticipates a potential relaxation in Australian monetary policy. It expressed confidence in the economy’s resilience, citing low unemployment and robust corporate sector balance sheets. The bank’s chief executive officer, Peter King, noted that the economic slowdown, along with diminishing inflationary pressures, could pave the way for a less restrictive monetary policy in the coming year.
In Q1 FY24, Westpac recorded a core net interest margin of 1.80%, marking a decrease of 4 basis points compared to the latter half of Fiscal 2023. As of the end of December, the bank’s common equity tier 1 (CET1) ratio, an indicator of available funds, was 12.3%, a slight decrease from 12.4% at the end of September.
Is Westpac a Good Share to Buy?
According to TipRanks’ analyst rating consensus, WBC stock has received a Hold rating. Westpac stock has a total of nine ratings, including three Buy, four Hold, and two sell recommendations.
The Westpac share price target is AU$23.16, which is 7.8% lower than the current levels.
