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Westpac Higher on Half-Year Results

The Westpac share price rose higher today after the company reported their half-yearly results and the market has been quite positive.

For the six months ended 31 March, Westpac actually reported an 8% decline in revenue to $10,230 million and a 12% deficit in cash earnings to $3,095 million. Despite these results, the company actually raised their interim dividend to 61 cents per share.

Investment bank, Goldman Sachs expected these numbers to be a little higher but the numbers did not seem to concern investors. Westpac shares were also propped by the better than expected net interest margin (NIM), which came in at 1.85%.

Goldman Sachs stated:

“WBC’s 1H22 NIM was down 14 bp hoh to 1.85% (ex Markets at 1.70%) and was higher than our expectations (GSe, -17 bp to 1.82%).”

However, the major positive factor in their announcement is the bank’s plan to follow through on their cost reduction strategy. Both ANZ & NAB’s cost reduction targets fell through last week, most investors were confident that Westpac would follow the trend of its competitors.

However, this morning management reiterated its target of reducing its cost base down to $8 billion by FY 2024. We can’t say for certain whether this will come about but Westpac has made great progress in the financial year recovering quickly from a lot of the drama that has plagued the company and the industry as a whole over the last 12 months.

Westpac ended the overall red trading day up 3.2% to $24.60 a share.

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