Is the Westpac Banking Corp share price in bargain territory after its recent decline?

The Westpac Banking Corp (ASX:WBC) share price has fallen sharply in the last couple of weeks. Is now the time to snap up shares?

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It has been a tough couple of weeks for the Westpac Banking Corp (ASX: WBC) share price following the release of a mixed half-year result and the latest federal budget.

Month-to-date Westpac's shares have lost just over 6% of their value and are trading close to a three-month low.

Is now the time to snap them up?

Whilst I do think that Westpac looks to be far better value now than it did at the start of the month, I wouldn't necessarily be in a rush to invest in Australia's oldest bank just yet.

Although at this stage the impact of the new $6.2 billion bank levy is reasonably uncertain, it does look like there is a reasonably high chance that shareholders will be amongst the biggest losers from the move.

With the banks unable to pass these costs onto their customers, a dividend cut seems like one of the only options available to Westpac, Commonwealth Bank of Australia (ASX: CBA), and the rest of the big four banks.

Should the banks be forced into cutting their dividends, I believe it could weigh heavily on their respective share prices over the next 12 months.

So for this reason I would suggest that investors stay clear of the banks for the time being. Ultimately I believe there is far more downside risk than upside potential at this stage and investors can find far better value elsewhere in the market.

Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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