The Westpac Banking Corp (ASX: WBC) share price had a month to forget in June.
Over the period, the banking giant's shares lost a disappointing 18% of their value.
This means the Westpac share price is now down 24% since this time last year.
What happened to the Westpac share price in June?
Investors were selling down the Westpac share price last month in response to market volatility and the Reserve Bank's cash rate hike.
While rate hikes are generally good news for the banks as it boosts their interest income, the market wasn't expecting central banks to move as quickly as they appear to be planning.
For example, at June's meeting, the RBA elected to increase rates by 50 basis points to 0.85%. It is now expected to do the same at July's meeting later this week, lifting the cash rate to 1.35%.
But the market doesn't expect Governor Lowe to stop there. Current cash rate futures are indicating that rates will end the year at 3%. Which is incredible when you consider that just a few months ago the cash rate was at a lowly 0.1%.
But with inflation running wild, Philip Lowe and his team are doing everything necessary to bring it under control. This has many fearing that aggressive rate hikes could bring about a recession and cause a spike in bad debts and mortgage defaults, which wouldn't be good news for Westpac and the rest of the big four banks.
Is this a buying opportunity?
One leading broker that doesn't appear overly concerned is Citi. It recently retained its buy rating with a generous $29.00 price target on the bank's shares.
Based on the current Westpac share price, this implies potential upside of almost 50% for investors over the next 12 months.
