The Westpac Banking Corp (ASX: WBC) share price has not been spared from this ASX bear market in any way. Since March 1, 2020, the Westpac share price has gone from $23.19 to $16.24 (today's share price at the time of writing) – a 29.97% fall over the month. That compares with the S&P/ASX 200 Index (ASX: XJO) tanking by 18.55% over the same period.
So as you can see, Westpac has significantly underperformed during this market crash. In fact, since mid-February (when the ASX 200 last peaked), Westpac has lost 37% of its value, whilst the ASX 200 has lost around 27%.
So this company has (frankly) been dead weight in both investors' portfolios and the broader ASX 200.
But could this be a buying opportunity for the ASX's oldest company?
Why the Westpac share price has tanked in March
Westpac (like all of the ASX banks) has been hit hard by the worries over the coronavirus-induced economic shutdown. Since most of Westpac's profits come from interest on loans such as mortgages and business loans, the risk of these loans defaulting during this time is high.
Furthermore, the government is working with the banks to work out contingency arrangements for landlords, homeowners, and businesses that might be experiencing financial hardship and subsequent difficulty in servicing loans at the current time.
This is likely to lead to a short-term drop in revenue for banks like Westpac, although it should reduce default rates in the medium-to-long-term.
Is this a buying opportunity?
I do think that at the current share price, there could be some value in Westpac shares. We haven't seen this kind of share price for Westpac since the GFC over ten years ago (and before that, 2003).
In saying this, I have serious doubts over the ability for Westpac to maintain its current dividend payouts (which is why most investors own ASX banks in the first place).
There is a lot of uncertainty over Westpac's short-term prospects and even long-term prospects if interest rates stay at zero for an extended period of time. I think most ASX companies will come out the other side of this coronavirus pandemic in fine form, but in Westpac's case, I'm not entirely sure what to expect.
When I'm not sure if a company is fairly priced or at a screaming bargain, it feels too much like a gamble! Therefore, I'm not really comfortable investing in Westpac shares right now, and I think there are better opportunities out there for ASX dividend income today.
