Financial Performance of Westpac Banking Corporation

BUSINESS FINANCE

Westpac banking corporation
Abstract
The report is based upon the financial performance of the leading bank of Australia that is the
Westpac Banking Corporation. The financial performance of the bank is ascertained through
appropriate research that uses ratio analysis, share price movement of the company. The
overall structure provides a glimpse that the bank is amidst difficulties as the ratios are not
appealing in nature. ROA and ROE are weak indicating that poor utilization of resources.
Further, the cost of equity has been done with the aid of data provided and the overall study
indicates that the bank is performing under huge pressure. However, considering the overall
proposition and fundamentals it can be said that the shares are available at a cheap price and
is the best time to buy the stock.
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Westpac banking corporation
Contents
1. Introduction...................................................................................................................................4
2. Financial Analysis.........................................................................................................................4
2.1. Westpac Banking Corporation Description................................................................................4
2.2. Computations of financial ratios................................................................................................5
 Profitability ratio...........................................................................................................................5
 Operating efficiency ratio..............................................................................................................6
2.3. Graphs & comparison................................................................................................................7
2.4. Computation of Cost of equity...................................................................................................8
2.5. Identification of the capital structure.........................................................................................9
Conclusion...........................................................................................................................................12
Recommendation.................................................................................................................................12
References...........................................................................................................................................13
Appendix.............................................................................................................................................15
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Westpac banking corporation
1. Introduction
The current report reflects upon the performance of Westpac banking corporation, a pioneer
in the field of banking and listed on the ASX. The financial analysis of a company can be
done with the aid of the financial statements and it helps in taking relevant decisions. The
main aim of the research is to shed light on the performance of the company. The report is
structured in a manner that it provides adequate emphasis on the performance of the company
through the computation of ratios together with the movement of the share price. The
calculated ratio comprises the profitability ratio and efficiency ratio. Further, the equity and
capital structure of the company is discussed and considering its recommendation is chalked
out. The past 2-year share price trend of the company indicates that the price has declined.
Though the fundamental of the company is strong yet there are immense challenges that led
to the decline. The findings further stress that the bank performed amidst a very complicated
climate. It’s been a difficult year for the bank owing to several hurdles.
2. Financial Analysis
2.1. Westpac Banking Corporation Description
Westpac is listed in the top 4 financial institutions of Australia and is also the oldest known
bank in the country. It is also listed as one of the strongest financial institutions in New
Zealand. Westpac offers a series of services in its industry with respect to banking and
finances. The company has a wide customer base owing to its brand value and top-class
services. The services offered by Westpac are incomparable and this is also why the company
has engraved its name in the international domain and has earned a competitive advantage in
the industry over its arch rivals (Westpac Banking Corporation, 2018).
The organization aims at attaining the number one position in its industry by means of
offering top-class services to its consumers and communities. The organization prioritizes its
clients’ satisfaction and thereby, ensures that the consumers deposit their hard earned money
in the same with full confidence and without any worries. The organization worships all its
clients irrespective of their contribution to the growth of the same (Foresight, 2018). Westpac
values all its customers no matter how small or huge investment they make and it is why the
organization currently has a customer base of not less than 13 million people.
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