The Westpac Banking Corp (ASX: WBC) share price has been under pressure in 2020.
Shares in the Aussie bank are down 30.5% to $16.81 per share and are underperforming the S&P/ASX 200 Index (ASX: XJO).
Despite its struggles in recent times, is the ASX bank share in the buy zone at its current price?
Why the Westpac share price could be a buy
The first factor that I see is the heavy share price declines in 2020. The Westpac share price is trading down 30.5% from where it started the year.
Of course, the coronavirus pandemic has hit ASX shares hard. The banks could be especially vulnerable to a recession through lower loan quality and higher impairments.
However, a 30% discount is nothing to sneeze out. If you value the Westpac share price based on future cash flows, a couple of years of lost earnings may not justify a 30% share price drop.
There's also the strong dividends on offer. Westpac shares are currently yielding 10.4% which makes it worth watching.
Of course, that may well change by the time Westpac reports its half-year earnings on 2 November. I think we will see a dividend cut in line with APRA's recommendations, but the banks will continue to churn out big profits.
That could mean the Westpac share price is a cheap buy with solid long-term income prospects.
Foolish takeaway
I think an investor's position on ASX bank shares really comes down to how they see COVID-19 playing out.
If you think we'll see a quicker than expected recovery then I think the Westpac share price is a buy.
However, a long, drawn out recession could be bad news for the banks. I think we'd see more defaults and lower earnings in a low interest rate environment.
