The Westpac Banking Corp (ASX: WBC) share price is down 1.2% in afternoon trading, having recovered from earlier intraday losses of more than 2.5%.
Shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed yesterday trading for $21.49 each. They are currently changing hands for $21.23 apiece.
Like the other ASX-listed banks, and indeed bank stocks the world over, the Westpac share price has been under selling pressure since Thursday's close.
Investors have been lightening their holdings of financial shares in the wake of last week's collapse of United States-based SVB Financial Group (NASDAQ: SIVB).
With Westpac shares now trading below $22, is the ASX bank 200 bank a buy?
Is the ASX 200 bank stock a buy?
Financial shares may remain under some short-term selling pressure as investors eye other potential global bank collapses.
But this week's retrace in the Westpac share price to $21.23 could well represent a good buying opportunity.
Indeed, Morgans' analysts are bullish on the stock.
"We view WBC as having the greatest potential for return on equity [ROE] improvement amongst the major banks if its business transformation initiatives prove successful," the analysts note.
Morgans said the sources of that ROE improvement include "improved loan origination and processing capability, cost reductions (including from divestments and cost-out), rapid leverage to higher rates environment, and reduced regulatory credit risk intensity of non-home loan book".
The broker has an add rating on Westpac shares with a $25.80 price target. That's almost 21% above the current share price.
Morgans also has high dividend expectations from the big bank. Its analysts forecast a fully franked FY23 dividend of $1.53 per share.
At the current Westpac share price, that works out to a heady yield of 7.2%.
Now, not everyone is equally bullish on Westpac.
CEO of Fat Prophets Angus Geddes has a hold recommendation on the bank's shares.
However, Geddes noted that Westpac could benefit from further Reserve Bank of Australia rate hikes (courtesy of The Bull):
The bank's mortgage portfolio is delivering higher yields from increasing interest rates. The company's total Australian mortgage portfolio marginally grew between September 2022 and December 2022. We expect the bank's net interest margin to benefit from any further increases in interest rates.
Westpac share price snapshot
As you can see in the chart below, with the past days' losses factored in, the Westpac share price is now down 9% in 2023.
