Strong result and reasonable valuation

16 May 2023

Westpac shares bucked the trend amongst its banking peers rising after revealing its half-year result for the first half of the 2023 financial year. Cash earnings came in at $4,001m which rose +22% from last year benefiting from higher interest rates and making progress to become a simpler, stronger bank with disciplined cost and margin management providing $1 billion of in cost savings.
Interim dividend came in at 70 cents per share, up +15% from last year, and a 61% payout ratio to further strengthen their balance sheet.
We welcome Westpac’s result which was in-line with market expectations and with a conservative view anticipate loan business and margins to tighten slightly given the slowdown in the housing market due to rising interest rates. Westpac as still trades at a reasonable multiple compared to other big four banks’ forecasted to pay out a 6.5% dividend (taking a prudent approach of assuming no dividend growth from here).
Read more at: research.blackbull.com/stocks/wbc-asx/