ASX:WBC

Stock Analysis Report

Westpac Banking

Executive Summary

Westpac Banking Corporation provides various banking and financial services in Australia, New Zealand, Asia, the Pacific region, and internationally.


Snowflake Analysis

Excellent balance sheet established dividend payer.


Similar Companies

Share Price & News

How has Westpac Banking's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: WBC has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.5%

WBC

1.0%

AU Banks

0.1%

AU Market


1 Year Return

-1.1%

WBC

5.3%

AU Banks

19.5%

AU Market

Return vs Industry: WBC underperformed the Australian Banks industry which returned 3.3% over the past year.

Return vs Market: WBC underperformed the Australian Market which returned 19.4% over the past year.


Shareholder returns

WBCIndustryMarket
7 Day-0.5%1.0%0.1%
30 Day2.8%4.2%4.0%
90 Day-12.4%-5.0%4.8%
1 Year5.5%-1.1%11.9%5.3%24.9%19.5%
3 Year-4.7%-21.2%7.2%-10.6%39.7%20.9%
5 Year-2.7%-29.1%10.8%-19.6%59.0%23.1%

Price Volatility Vs. Market

How volatile is Westpac Banking's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Westpac Banking undervalued compared to its fair value and its price relative to the market?

12.72x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: WBC (A$24.69) is trading above our estimate of fair value (A$20.54)

Significantly Below Fair Value: WBC is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: WBC is poor value based on its PE Ratio (12.6x) compared to the Banks industry average (11.3x).

PE vs Market: WBC is good value based on its PE Ratio (12.6x) compared to the Australian market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: WBC is poor value based on its PEG Ratio (1.8x)


Price to Book Ratio

PB vs Industry: WBC is overvalued based on its PB Ratio (1.3x) compared to the AU Banks industry average (1.1x).


Next Steps

Future Growth

How is Westpac Banking forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

7.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: WBC's forecast earnings growth (7% per year) is above the savings rate (1.1%).

Earnings vs Market: WBC's earnings (7% per year) are forecast to grow slower than the Australian market (9.6% per year).

High Growth Earnings: WBC's earnings are forecast to grow, but not significantly.

Revenue vs Market: WBC's revenue (3.4% per year) is forecast to grow slower than the Australian market (3.8% per year).

High Growth Revenue: WBC's revenue (3.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: WBC's Return on Equity is forecast to be low in 3 years time (10.3%).


Next Steps

Past Performance

How has Westpac Banking performed over the past 5 years?

-1.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: WBC has high quality earnings.

Growing Profit Margin: WBC's current net profit margins (34.1%) are lower than last year (38%).


Past Earnings Growth Analysis

Earnings Trend: WBC's earnings have declined by -1% per year over the past 5 years.

Accelerating Growth: WBC's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: WBC had negative earnings growth (-16.2%) over the past year, making it difficult to compare to the Banks industry average (-10.6%).


Return on Equity

High ROE: WBC's Return on Equity (10.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Westpac Banking's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: WBC has a low level of unsold assets or inventory.

Debt Coverage by Assets: WBC's debt is not covered by short term assets (assets are 0.4x debt).


Financial Institutions Analysis

Asset Level: WBC's level of assets compared to its equity is moderate.

Allowance for Bad Loans: WBC has a sufficient allowance for bad loans.

Low Risk Liabilities: WBC's liabilities are made up of primarily low risk sources of funding.

Loan Level: WBC has an acceptable proportion of non-loan assets held.

Low Risk Deposits: WBC has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: WBC has an appropriate level of bad loans (0.18%)


Next Steps

Dividend

What is Westpac Banking's current dividend yield, its reliability and sustainability?

6.40%

Current Dividend Yield


Dividend Yield vs Market

company6.4%marketbottom25%2.3%markettop25%5.5%industryaverage5.9%forecastin3Years6.4%

Current dividend yield vs market & industry

Notable Dividend: WBC's dividend (6.48%) is higher than the bottom 25% of dividend payers in the Australian market (2.34%).

High Dividend: WBC's dividend (6.48%) is in the top 25% of dividend payers in the Australian market (5.47%)


Stability and Growth of Payments

Stable Dividend: WBC's dividend payments have been volatile in the past 10 years.

Growing Dividend: WBC's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (88.6%), WBC's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: WBC's dividends in 3 years are forecast to be covered by earnings (77.6% payout ratio).


Next Steps

Management

What is the CEO of Westpac Banking's salary, the management and board of directors tenure and is there insider trading?

4.3yrs

Average management tenure


CEO

Peter King (49yo)

0.08yrs

Tenure

AU$2,641,920

Compensation

Mr. Peter Francis King, BEc, FCA, has been Acting Chief Executive Officer, Acting Managing Director of Westpac group & Director of Westpac Banking Corporation since December 2, 2019. Mr. King was the Chief ...


CEO Compensation Analysis

Compensation vs Market: Peter's total compensation ($USD1.82M) is below average for companies of similar size in the Australian market ($USD3.87M).

Compensation vs Earnings: Peter's compensation has been consistent with company performance over the past year.


Management Age and Tenure

4.3yrs

Average Tenure

54yo

Average Age

Experienced Management: WBC's management team is considered experienced (4.3 years average tenure).


Board Age and Tenure

3.5yrs

Average Tenure

57.5yo

Average Age

Experienced Board: WBC's board of directors are considered experienced (3.5 years average tenure).


Insider Trading

Insider Buying: WBC insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyAU$2418 Dec 19
Peter Marriott
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares1,240
Max PriceAU$0.02
BuyAU$298,98430 Jul 19
Steven Harker
EntityIndividual
Shares10,365
Max PriceAU$28.85
BuyAU$30,03219 Jul 19
Margaret Seale
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares1,068
Max PriceAU$28.12

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • David McLean (61yo)

    Chief Executive Officer of Westpac New Zealand Limited

    • Tenure: 4.9yrs
    • Compensation: AU$2.29m
  • Gary Thursby (57yo)

    Acting Chief Financial Officer

    • Tenure: 0.08yrs
    • Compensation: AU$1.98m
  • Christine Parker (59yo)

    Group Executive of Human Resources

    • Tenure: 8.3yrs
    • Compensation: AU$2.03m
  • Lyn Cobley (56yo)

    Chief Executive of Westpac Institutional Bank

    • Tenure: 4.3yrs
    • Compensation: AU$2.52m
  • David Stephen (54yo)

    Chief Risk Officer

    • Tenure: 1.3yrs
    • Compensation: AU$5.36m
  • Rebecca Lim (47yo)

    Group Executive of Legal & Secretariat

    • Tenure: 8.2yrs
    • Compensation: AU$1.95m
  • Peter King (49yo)

    Acting CEO

    • Tenure: 0.08yrs
    • Compensation: AU$2.64m
  • Carolyn McCann (47yo)

    Group Executive of Customer & Corporate Relations

    • Compensation: AU$1.60m
  • David Lindberg (44yo)

    Chief Executive of Consumer

    • Tenure: 4.6yrs
    • Compensation: AU$2.26m
  • Craig Bright (54yo)

    Chief Information Officer

    • Tenure: 1.1yrs
    • Compensation: AU$5.05m

Board Members

  • Peter Marriott (62yo)

    Independent Non-Executive Director

    • Tenure: 6.6yrs
    • Compensation: AU$323.06k
  • Craig Dunn (56yo)

    Independent Non-Executive Director

    • Tenure: 4.6yrs
    • Compensation: AU$296.46k
  • Catriona Deans (52yo)

    Independent Non-Executive Director

    • Tenure: 5.8yrs
    • Compensation: AU$296.86k
  • Lindsay Maxsted (65yo)

    Independent Chairman of the Board

    • Tenure: 8.1yrs
    • Compensation: AU$668.66k
  • Nerida Caesar (55yo)

    Independent Non-Executive Director

    • Tenure: 2.3yrs
    • Compensation: AU$252.66k
  • Anita Fung (59yo)

    Independent Non-Executive Director

    • Tenure: 1.3yrs
    • Compensation: AU$322.10k
  • Jon Nicholson (63yo)

    Chairman of Westpac Foundation

    • Tenure: 7yrs
  • Peter Nash (57yo)

    Independent Non-Executive Director

    • Tenure: 1.8yrs
    • Compensation: AU$264.66k
  • Margie Seale (58yo)

    Independent Non-Executive Director

    • Tenure: 0.8yrs
    • Compensation: AU$135.64k
  • Peter King (49yo)

    Acting CEO

    • Tenure: 0.08yrs
    • Compensation: AU$2.64m

Company Information

Westpac Banking Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Westpac Banking Corporation
  • Ticker: WBC
  • Exchange: ASX
  • Founded: 1817
  • Industry: Diversified Banks
  • Sector: Banks
  • Market Cap: AU$90.887b
  • Shares outstanding: 3.61b
  • Website: https://www.westpac.com.au

Number of Employees


Location

  • Westpac Banking Corporation
  • 275 Kent Street
  • Sydney
  • New South Wales
  • 2000
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
WBCCDB (Deutsche Boerse AG)SPONSORED ADRDEEURMar 1989
WBKNYSE (New York Stock Exchange)SPONSORED ADRUSUSDMar 1989
0LVVLSE (London Stock Exchange)SPONSORED ADRGBUSDMar 1989
WBCASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJan 1992
WBCNZSE (New Zealand Stock Exchange)YesOrdinary SharesNZNZDJan 1992
WEBN.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
WBCCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJan 1992
WBCDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
WBCPEASX (Australian Securities Exchange)FRN CNV PERP AUD1000AUAUDMay 2014
WBCPHASX (Australian Securities Exchange)FRN CNV SUB PERP AUD5000AUAUDMar 2018
WBCPIASX (Australian Securities Exchange)FRN SUB MTN PERP AUD1000 '6'AUAUDDec 2018

Biography

Westpac Banking Corporation provides various banking and financial services in Australia, New Zealand, Asia, the Pacific region, and internationally. The company operates through four divisions: Consumer, Business, Westpac Institutional Bank, and Westpac New Zealand. It offers everyday banking, savings, term deposit, moving to Australia, under 21 and student, business one, community solutions one, and foreign currency accounts; home, personal, and business loans; credit cards; international and travel services; and share trading services, and investment and insurance services. The company also provides merchant, corporate and institutional, transaction banking, financial market, corporate and structured finance, trade and supply chain financing, and industry specific banking and treasury services, as well as online banking services. It serves individuals; micro, small, and medium enterprises; and commercial, corporate, institutional, and government customers. The company was formerly known as Bank of New South Wales and changed its name to Westpac Banking Corporation in October 1982. The company was founded in 1817 and is headquartered in Sydney, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/01/28 10:35
End of Day Share Price2020/01/28 00:00
Earnings2019/09/30
Annual Earnings2019/09/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.