ASX:WBC

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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

Flawless balance sheet and slightly overvalued.


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's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

1.9%

WBC

6.1%

AU Banks

1.8%

AU Market


1 Year Return

-35.0%

WBC

-29.5%

AU Banks

-8.3%

AU Market

Return vs Industry: WBC underperformed the Australian Banks industry which returned -29.5% over the past year.

Return vs Market: WBC underperformed the Australian Market which returned -8.3% over the past year.


Shareholder returns

WBCIndustryMarket
7 Day1.9%6.1%1.8%
30 Day13.8%10.9%12.3%
90 Day-19.3%-20.6%-7.1%
1 Year-33.1%-35.0%-26.5%-29.5%-4.5%-8.3%
3 Year-29.1%-39.6%-19.9%-32.1%14.8%-0.4%
5 Year-23.6%-42.8%-13.9%-36.5%31.2%2.8%

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?

13.17x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: WBC (A$17.95) is trading above our estimate of fair value (A$10.4)

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 (13.2x) compared to the Banks industry average (9.8x).

PE vs Market: WBC is good value based on its PE Ratio (13.2x) compared to the Australian market (15.5x).


Price to Earnings Growth Ratio

PEG Ratio: WBC is good value based on its PEG Ratio (0.7x)


Price to Book Ratio

PB vs Industry: WBC is overvalued based on its PB Ratio (1x) compared to the AU Banks industry average (0.9x).


Next Steps

Future Growth

How is Westpac Banking forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

18.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: WBC's forecast earnings growth (18% per year) is above the savings rate (2.3%).

Earnings vs Market: WBC's earnings (18% per year) are forecast to grow faster than the Australian market (14.3% per year).

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

Revenue vs Market: WBC's revenue (1.4% per year) is forecast to grow slower than the Australian market (4.2% per year).

High Growth Revenue: WBC's revenue (1.4% 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 (9.7%).


Next Steps

Past Performance

How has Westpac Banking performed over the past 5 years?

-4.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: WBC has high quality earnings.

Growing Profit Margin: WBC's current net profit margins (25.8%) are lower than last year (34.9%).


Past Earnings Growth Analysis

Earnings Trend: WBC's earnings have declined by -4.4% 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 (-32.1%) over the past year, making it difficult to compare to the Banks industry average (-13.6%).


Return on Equity

High ROE: WBC's Return on Equity (7.1%) is considered low.


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


Financial Institutions Analysis

Asset Level: WBC's Assets to Equity ratio (14.3x) is moderate.

Allowance for Bad Loans: WBC has a sufficient allowance for bad loans (305%).

Low Risk Liabilities: 65% of WBC's liabilities are made up of primarily low risk sources of funding.

Loan Level: WBC has an appropriate level of Loans to Assets ratio (74%).

Low Risk Deposits: WBC's Loans to Deposits ratio (123%) is appropriate.

Level of Bad Loans: WBC has an appropriate level of bad loans (0.2%).


Next Steps

Dividend

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

4.95%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate WBC's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate WBC's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if WBC's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if WBC's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: WBC is not paying a notable dividend for the Australian market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of WBC's dividend in 3 years as they are not forecast to pay a notable one for the Australian market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.1yrs

Average management tenure


CEO

Peter King (49yo)

0.50

Tenure

AU$2,641,920

Compensation

Mr. Peter Francis King, BEc, FCA, has been the Chief Executive Officer of Westpac Banking Corporation since April 02, 2020 and served as its Acting Chief Executive Officer since December 2, 2019 until Apri ...


CEO Compensation Analysis

Compensation vs Market: Peter's total compensation ($USD1.82M) is below average for companies of similar size in the Australian market ($USD3.80M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Peter King
CEO, MD of Westpac Group & Director0.50yrAU$2.64m0.0033% A$2.0m
Gary Thursby
Acting Chief Financial Officer0.50yrAU$1.98m0.0030% A$1.9m
Rebecca Lim
Group General Counsel0.42yrAU$1.95m0.0013% A$775.3k
Christine Parker
Group Executive of Human Resources8.67yrsAU$2.03m0.00082% A$508.6k
Carolyn McCann
Group Executive of Customer & Corporate Relationsno dataAU$1.60m0.0016% A$1.0m
Lynette Cobley
Chief Executive of Westpac Institutional Bank4.75yrsAU$2.52m0.0031% A$1.9m
David Stephen
Chief Risk Officer1.67yrsAU$5.36m0.0038% A$2.3m
David McLean
Chief Executive Officer of Westpac New Zealand Limited5.33yrsAU$2.29m0.00027% A$167.5k
Andrew Bowden
Head of Investor Relationsno datano datano data
Leslie Vance
Group Executive of Financial Crime0.083yrno datano data

1.1yrs

Average Tenure

55yo

Average Age

Experienced Management: WBC's management team is not considered experienced ( 1.1 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Peter King
CEO, MD of Westpac Group & Director0.50yrAU$2.64m0.0033% A$2.0m
John McFarlane
Independent Chairman of the Board0.17yrno data0.00028% A$173.7k
Peter Marriott
Independent Non-Executive Director7yrsAU$323.06k0.0012% A$725.6k
Craig Dunn
Independent Non-Executive Director5yrsAU$296.46k0.00042% A$260.5k
Catriona Deans
Independent Non-Executive Director6.17yrsAU$296.86k0.00043% A$266.7k
Nerida Caesar
Independent Non-Executive Director2.75yrsAU$252.66k0.00038% A$235.7k
Jonathan Nicholson
Chairman of Westpac Foundation7.42yrsno datano data
Steven Harker
Independent Non-Executive Director1.25yrsAU$135.64k0.00032% A$198.5k
Peter Nash
Independent Non-Executive Director2.25yrsAU$264.66k0.00042% A$260.5k
Margaret Seale
Independent Non-Executive Director1.25yrsAU$135.64k0.00064% A$396.9k

2.5yrs

Average Tenure

57yo

Average Age

Experienced Board: WBC's board of directors are not considered experienced ( 2.5 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

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


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 4.8%.


Top Shareholders

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$62.020b
  • 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
WBKNYSE (New York Stock Exchange)ADR(EACH REP 1 ORD NPV)USUSDMar 1989
WBCCDB (Deutsche Boerse AG)ADR(EACH REP 1 ORD NPV)DEEURMar 1989
0LVVLSE (London Stock Exchange)ADR(EACH REP 1 ORD NPV)GBUSDMar 1989
WEBN.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
WBCDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
WBCASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJan 1992
WBCNZSE (New Zealand Stock Exchange)YesOrdinary SharesNZNZDJan 1992
WBCCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJan 1992
WBCPEASX (Australian Securities Exchange)FRN CNV PERP AUD1000AUAUDMay 2014
WBCPHASX (Australian Securities Exchange)FRN CNV SUB PERP AUD1000AUAUDMar 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 Analysis2020/06/03 10:35
End of Day Share Price2020/06/03 00:00
Earnings2020/03/31
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.