Westpac Banking Corp (ASX: WBC) shares are rising on Tuesday.
At the time of writing, the banking giant's shares are up 2% to $27.38.
This leaves the company's shares trading close to a 52-week high of $27.70.
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Why are Westpac shares rising?
Investors have been fighting to get hold of Westpac and other bank shares this year following a rather successful reporting season and signs that competitive pressures are easing.
In case you missed Westpac's quarterly update, it reported an unaudited net profit of $1.5 billion for the three months. This was down 6% from the second-half average of FY 2023.
However, one-offs weighed heavily on its profits. If you exclude these, Westpac's unaudited net profit would have come in flat against the second-half average at $1.8 billion. This was better than expected thanks largely to lower than forecast costs.
This update went down well with analysts at Goldman Sachs, which feel that there are signs that net interest margin (NIM) pressures could be easing. They said:
Coupled with disclosures in BEN's 1H24 result, there are signs that industry-wide NIM pressures are starting to ease. Beyond this, WBC's performance on costs was better than we had anticipated, and bodes well for when WBC finalises details of its technology simplification initiative (expected before 1H24 result), which was first announced at its FY23 result, and which management believes can be funded within its A$2 bn p.a. of investment spend.
What if I had invested $5,000 at the start of the year?
Investors that tipped $5,000 into Westpac shares at the start of the year would be smiling widely today.
The banking giant's shares closed 2023 at $22.90. This means you would have been able to snap up 218 units for an investment of $4,992.20.
Based on today's share price of $27.38, those shares are now worth $5,968.84. That's a 19.5% or $976.64 return on your original investment. And it's only 12 March!
