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Australiaâs leading banking group, Westpac Banking Corporation (ASX:WBC) has provided an update on the first quarter of FY 2019, and it also released its Pillar 3 report for December 2018. The bank has reported cash earnings (unaudited) of $2.04 billion in 1Q19 which is 6.9% higher than the 2H18 quarterly average. Further, WBC has earned a net profit after tax (statutory) of $1.95bn in 1Q19.
Westpac has reported Common equity Tier 1 (CET1) capital ratio of 10.4% at 31 Dec 2018 which is down from 10.6% at 30 Sep 2018 as capital generated over the quarter and other capital movements were more than offset by the 2H18 dividend.Â
In the December quarter, the Credit quality metrics remain near cyclical lows; however, the level of impaired assets was stable with no new individual impaired loans over $10 million in the quarter.
The bank implemented AASB 9 from 1 October 2018 which had an immaterial impact on Groupâs capital ratios (2 basis point increase) and components of capital ratios with CET1 capital, down $0.3 billion and risk-weighted assets (RWA), $3.9 billion lower. As the models associated with implementation are still to be finalized, the impact for Westpac of AASB 9 may change. For December quarter, the bank reported LCR (Liquidity coverage ratio) of 128% and NSFR (Net stable funding ratio) of 112%.
In the first quarter of FY 2019, the bank issued $9.1 billion in term funding and in January 2019 it further issued 6.7 billion. As per the companyâs announcement, the majority of 1Q19 new term issuance came in AUD and Euro. Benchmark transactions included A$2.75 billion 5-year senior transaction, A$1.5 billion 3-year senior transactions and A$1.4 billion Additional Tier 1 transaction, as well as â¬1.0bn 2-year senior transaction and â¬1.0 billion 5-year covered bond. On 18 December 2018, the bank issued $1.42 billion of Additional Tier 1 capital of which approximately $0.72 billion comprised reinvestment by the holders of Westpac Capital Notes (WCN). Over the December quarter, exposure at default (EAD) increased $4.7 billion (up 0.5%), mainly due to an increase in corporate exposures of $6.1 billion and residential mortgage exposures of $2.8 billion, partially offset by a decrease in sovereign exposures of $3.6 billion. It is expected that the bank will release its First Half 2019 result on 6 May 2019.
Now, let us have a quick look at WBCâs stock performance and the return it has posted over the last few months. The stock is currently trading at a price of $26.290 with a market capitalization of ~$90.46 billion. The counter opened the day at $26.300 reached the dayâs high of $26.480 and touched the dayâs low of $26.180 with a daily volume of 1,828,054. The stock has provided a YTD return of 7.19% & also posted returns of -13.37%, 3.55% over the past six months and three months period respectively. It has a 52-week high price of $31.400 and touched 52 weeks low of $23.300, with an average volume of 6,785,649.
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