Westpac (ASX:WBC) share price on watch after Q3 update

Australia's oldest bank has updated the market on its third quarter performance…

| More on:
couple having a happy discussion with a banker

Image source; Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Westpac Banking Corp (ASX: WBC) share price will be one to watch closely today.

This follows the release of an update on the banking giant's performance during the third quarter.

What happened in the third quarter?

While no details on its earnings have been provided, Westpac gave investors a picture of its asset and credit quality. At the end of June, Westpac's CET1 ratio stood at 12%. While this was down from 12.3% at the end of March, this was due to its dividend payment and higher risk weighted assets (RWA). The latter increased 2% over the three months to $8.5 billion.

However, on a pro forma basis, Westpac's CET1 ratio is 12.5%. Positively for shareholders and the Westpac share price, its Board have stated that this excess capital (and franking credits) means it will consider a further return of capital. An update on this matter is expected to be made with its FY 2021 results.

Another positive was that its stressed assets to total committed exposures (TCE) reduced during the quarter. It now stands at 1.51%, down 9 basis points over the period. Also falling were its mortgage 90+ day delinquencies, which fell 9 basis points to 1.11% in Australia.

The bank also revealed a relatively small number of new repayment deferrals related to recent lockdowns and an Individually Assessed Provision of $868 million. The latter relates largely to the Forum Finance alleged fraud.

Also of note, was that the bank revealed that its Australian mortgages and Australian business lending grew at 1x system during the quarter.

Finally, looking ahead, management has confirmed key considerations that were indicated with its first half results. This includes its second half margins being lower half on half and its full year expenses being higher year on year excluding notable items.

Westpac share price performance

The Westpac share price has been a very strong performer in 2021. Since the start of the year, the banking giant's shares have risen by a whopping 31%.

This means the Westpac share price has generated more than double the return of the ASX 200 over the same period.

Motley Fool contributor James Mickleboro owns shares of Westpac Banking Corporation. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.
Opinions

2 of my top ASX 200 shares to consider buying before April

I would happily exchange dollars for these two shares right now.

Read more »

Father in the ocean with his daughters, symbolising passive income.
Dividend Investing

I'd spend $8k on these ASX 200 shares today to target a $6,102 annual passive income

I believe these ASX 200 shares will continue rewarding passive income investors for years to come.

Read more »

Three businesspeople leap high with the CBD in the background.
Share Market News

Boom! ASX 200 blasts to new record highs

ASX 200 investors just sent the benchmark index into uncharted territory.

Read more »