Westpac Banking Corp (ASX:WBC) Trading Outlook
Australian banking giant Westpac on Monday posted a six percent rise in full-year net profit to a record Aus8.01 billion (US5.7 billion) with retail and business banking driving performance.
The cash profit at Australia’s second largest bank, the measure more closely watched by analysts which strips out volatile items, lifted three percent to Aus7.82 billion.
“Australian retail and business banking has been the key driver of performance,” said chief executive Brian Hartzer, as Westpac joined other leading banks ANZ and NAB reporting major profits.
“All divisions continued to grow their businesses and are in good shape,” he said.
WESTPAC FPO closed down -0.770 at 30.610. Volume was 12% below average (neutral) and Bollinger Bands were 13% narrower than normal.
Open High Low Close Volume___
31.330 31.410 30.560 30.610 6,132,099
Technical Outlook
Short Term: Oversold
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 31.36 30.65 33.99
Volatility: 24 41 30
Volume: 7,429,943 7,574,896 6,498,252
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
Summary
WESTPAC FPO is currently 10.0% below its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect volume flowing into and out of WBC.AX at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on WBC.AX and have had this outlook for the last 14 periods. our momentum oscillator has set a new 14-period low while the security price has not. This is a bearish divergence.
However, despite strong loan figures, “market headwinds” saw a softer performance in wealth and institutional businesses, Hartzer added.
Westpac reported the same figures in full year preliminary results in mid-October, when it announced a 3.5 billion equity raising to meet tougher regulations on reserves as a buffer against mortgage risks.
Ric Spooner, chief market analyst for CMC Markets, said the profit result held “few surprises”.
“The potential for slower growth in housing lending will be a negative for banks,” he said.
“The chances are that difficult trading conditions which were a drag on institutional banking profits in the last half will be a temporary phenomenon providing potential to recover in this area during the current year.”
Westpac shares dropped 2.45 percent to Aus30.61 as the overall ASX 200 market lost 1.41 percent.
The bank has raised 6 billion of new capital this year, which, Hartzer said, puts it in the top quartile of banks globally.
ANZ on Thursday reported annual net profit of a record 7.5 billion, while fellow banking giant NAB lifted annual net profits 19.7 percent to 6.34 billion.
Australia’s biggest lender, the Commonwealth, announced a five percent rise in annual net profit to another record 9.06 billion in August.
Despite the hefty profits, markets have been slightly disappointed by the figures which saw net interest margins slip.
Westpac Banking Corporation is a banking organization. The Company provides banking and financial services in markets, including consumer, business and institutional banking and wealth management services. It has three segments: Australian Financial Services (AFS), Westpac Institutional Bank (WIB) and Westpac New Zealand. It provides banking products under the Westpac and WIB brands, and insurance and wealth products under Westpac Life and BT brands. Its other divisions include Westpac Pacific, Group Services, Treasury and Core Support. The AFS segment includes its Australian retail banking, business banking and wealth operations. The WIB segment delivers financial services to commercial, corporate, institutional and government customers. The Westpac New Zealand segment includes sales and service of banking, wealth and insurance products for consumers, business and institutional customers in New Zealand. It offers its services in Fiji, Papua New Guinea, Vanuatu and Solomon Islands
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