Westpac – 1Q19 In Review

Westpac WBC reported 1Q19 earnings on Monday and despite the benefit of mortgage re-pricing pushing net interest margins higher, earnings exhibited no growth compared to the same time last year.

1Q19 cash profit came in at $2bn.

All banks, (excluding ANZ & MQG), are under Algo Engine sell conditions and we see little reason in the short term for these negative trends to reverse.



ALGO Sell Signal For Westpac

Our ALGO engine triggered a sell signal for WBC into the ASX close at $27.70.

This “lower high” pattern is referenced to the intraday high of $28.35 posted on September 28th.

WBC will go ex-dividend for 94 cents on Tuesday.

With round 7 of the Royal Commission scheduled to start on November 19th, we remain cautious of the price structures and forward margin growth of the domestic banks.

As such, we see scope for the local banking names to retest the October lows over the near-term.