WBC - Westpac Banking Corporation

[AMR]

I'm quite keen to buy in at the moment but I'm worried about what seems to be a slowdown in the housing market according to the latest figures. Also, I'm a bit concerned that I'm buying at the end of a cycle since we've had 4-5 years of very good economic growth.

Any advice appreciated. Thanks.

[Snow Leopard]

quote:Originally posted by xxamr_corpxx

I'm quite keen to buy in at the moment but I'm worried about what seems to be a slowdown in the housing market according to the latest figures. Also, I'm a bit concerned that I'm buying at the end of a cycle since we've had 4-5 years of very good economic growth.

Any advice appreciated. Thanks.

4x

You must first resolve the battle within yourself to achieve unity of body, mind and soul.
Then, and only then, will you be able to see the one true way of the sharebuyer.
You must meditate deeply on each and every one of your emotions and determine its' seed. From there you should seek the truth from the sower of that seed, questioning them as to whether they are your friend or your foe and learn how you may use this knowledge to lead you forward.
Once you have triumphed in this quest then you will know whether to buy WBC or remain still.

Lob Sang Paper Tiger

[kura]

Gee Paper Tiger, I'm impressed, I suspect you have missed out on your true vocation in life !

Silly old me thought a reply would include a comparative PER analysis of the main banks, but Mr 4X did ask for "any advice"

[Snow Leopard]

I can do that as well.

There are three banks listed on the main board of NZSX, but NAB never trades so that leaves ANZ and WBC
The only significant difference between the two is that ANZ's favourite colour is Blue and Westpacs' is Red. Otherwise they trade on about the same P/E and have near identical forward P/Es, similar dividend yields etc.

So pick your favourite colour.

If you want more colour choice then look at to ASX.

[Snoopy]

There are three banks listed on the main board of NZSX, but NAB never trades so that leaves ANZ and WBC
The only significant difference between the two is that ANZ's favourite colour is Blue and Westpacs' is Red. Otherwise they trade on about the same P/E and have near identical forward P/Es, similar dividend yields etc.

So pick your favourite colour.

That post was from thirteen years ago. From today's events, it does look like the answer should have been 'Blue' - or maybe 'Heartland' ;-)

http://nzx-prod-s7fsd7f98s.s3-websit...670/343017.pdf

I did some bank buying myself last year and considered Heartland was the better option. No regrets with that decision so far, even though 'in theory' Heartland is a dodgier bank by credit rating. I had considered topping up with WBC (one of my smaller holdings) at the same time, but i did not like what I saw. We had the 'fees for no service' and 'funding pedophile' scandals in Australia last year. That cost both the Westpac CEO and Chairman their jobs. Just recently WBC combined their 'consumer' and 'business' divisions in Australia which smacked of desperate cost cutting to me. Now they are looking at unloading their NZ arm (the news articles said 'sale' but the press release said 'demerge'). NZ used to be their golden goose! They were publicly shamed in NZ by the Reserve Bank for having insufficient capital and not following their own risk procedures today. Was that 'golden goose' laying eggs of 'fools gold'?

So many Westpac branches have closed over the last couple of years, it is difficult to get personal service outside the main centres. I was stuck on the Kapiti coast during the level 4 lock-down and had to travel 30km to my nearest open branch. Westpac consistently rate as the lowest of the big four banks in NZ on net promoter score for consumers. For businesses they rate a little better I believe, and of course they have the government banking contracts. But I do wonder if all the NZ cost cutting was window dressing the NZ operation up for sale all along. They used to claim NZ was their laboratory for trying out new things that if they worked would be fed into the Australian operation. Will a break up of the remaining assets in Australia be next? Westpac has a proud 200 year history in Australia - I think they are the oldest listed business on the ASX. Yet no company lasts forever. You have to wonder with all the Australian government fines, sales of 'superfluous' business units (like Pendal group) and constant restructuring of what is left, whether the Westpac brand has finally run out of puff and is too toxic to continue.

SNOOPY

[baxter]

I am also most impressed Paper Tiger after years of indecision and finally timidly taking the plunge. As for Westpac I've been with them since they took over trustbank, I ditched half when they shifted from NZ to Aust. They promptly rose by about 40% to where they are today.I don't know the stats but they have been a rewarding share to hold despite the lack of imputation credits. I can't foretell the future but I am holding on to the remainder of mine...I bank with TSB.

[AMR]

A question for Baxter -

According to my research from ASB securities WBC shares gives fully franked dividends. What do you mean when you say they lack imputation credits?

Thanks

[peat]

a review of the first half profit announcement here

http://www.businessspectator.com.au/...cument&src=kgb

when the result is deconstructed it is apparent that the growth in profit was driven almost entirely by a dramatic fall in impairment charges, from $1.61 billion last year to $879 million in the latest March half...

...Thus the result might suggest that Westpac is generating super profits but unless there is some fundamental change in either the structure of its balance sheet or the context for retail banking it is improbable that super profitability can be maintained once the rate of decline in impairment charges flattens.

[777]

xxamr corpxx the franking is only available to Australian tax payers and not NZ tax payers. Imputation on NZ shares is all that is available to NZ residents.

[zyreon]

westpac has good shareholder perks e.g. +/- bps on term investments/loans, fee waivers etc

banks can provide good returns, high ROE re the low use of capital, new BIS rules on capad mean smart banks will get to use less capital too.

both ANZ & WBC have DRIP