In afternoon trade the Westpac Banking Corp (ASX: WBC) share price is on course to finish the day lower.
At the time of writing the banking giant's shares are down 0.5% to $26.30.
Is this a buying opportunity?
Whilst I still have a preference for Australia and New Zealand Banking Group (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB), I believe the Westpac share price is trading at a very attractive level and is well worth considering.
Especially after the bank announced the reset of its wealth strategy on Tuesday.
In case you missed it, Westpac advised that it would be resetting its wealth strategy and making changes to the way it supports customers' wealth and insurance needs.
Changes include:
- Realigning its major BT Financial Group (BTFG) businesses into the Consumer and Business divisions.
- Exiting the provision of personal financial advice by Westpac salaried financial advisers and authorised representatives.
- Moving to a referral model for financial advice by utilising a panel of advisers or adviser firms.
- Entering into a sale agreement as part of the exit with Viridian Advisory, which will see many BT Financial Advice ongoing advice customers offered an opportunity to transfer to Viridian. A number of the Group's salaried financial advisers and support staff will transition to Viridian from the anticipated completion date of 30 June 2019.
- Simplifying the bank's structure and re-organising Group Executive responsibilities.
- Continuing to invest in the BT brand, reflecting its strength and market position, although BTFG will no longer be a standalone division.
- Unlocking value by exiting a high cost, loss-making business.
The reset is expected to impact its profits in FY 2019 but be earnings per share accretive in 2020.
According to the release, the one-off impacts from the transaction and implementation will be spread over FY 2019 and FY 2020, with the costs estimated to be in the range of $250 million to $300 million.
Should you invest?
One broker that appears to have liked what it has seen here is Citi. According to a note out of the broker this morning, its analysts have retained their buy rating and $30.00 price target on the bank's shares.
This price target implies potential upside of 14% for its shares over the next 12 months excluding dividends. If you include the dividend of $1.88 per share that Citi expects the bank to pay in FY 2019, this potential return stretches to a sizeable 21%.
