Westpac Banking Corp (ASX: WBC) has dropped 97c or 2.8% this morning, with its shares now trading ex-dividend.
Given the low level of bad debts and increased lending activity, the banking major managed to increase its interim dividend by 4c, or 5%, to 90 cents per share, on the back of a record first-half cash profit of $3.77 billion. However, investors were left disappointed, as the bank failed to announce its third successive special dividend in its half-year results.
Following this morning's drop, the shares are now trading at $34.17, which is 5.1% below the record high it set, just two weeks ago. The bank is now trading on a P/E ratio of 14.9 and offers a 5.1% fully franked dividend yield.
National Australia Bank Ltd (ASX: NAB) has also fallen 2.6% in early trade, while Australia and New Zealand Banking Group (ASX: ANZ) and Commonwealth Bank of Australia (ASX: CBA), are both up 0.3% and 0.5% respectively.
A more solid bet than Westpac
Although the banks still offer a decent dividend yield, there is limited upside potential in their share prices, given their rally in recent years.