A downgrade by investment bank UBS led to a sharp fall of nearly 4% in the share price of Westpac Banking Corp (ASX: WBC) last week which sent its shares to almost a five-year low. Today the share price was up slightly to close at $28.75. The downgrade by UBS was due to the concerns raised in the royal commission about the quality of the lender's mortgage book.
The other big three banks – Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd. (ASX: NAB) and Australia and New Zealand Banking Group (ASX: ANZ) – were up at the time of writing but to a lesser extent.
The quality of Westpac's total mortgage book of $400 billion, which represents 70% of its loans, is under question as a result of the bank allegedly failing part of the review of its mortgage agreements. This is in addition to other damning evidence relating to the banks that have been raised in the royal commission.
