Westpac share price: 3 things to look out for in H1 results
Westpac is due to report its half year earnings on Monday, with analysts pricing in customer remediation charges in their estimates.
1. Westpac H1 results: what to watch out for
Australia’s Westpac bank reported cash earnings in the 2018 December quarter of $2.04 billion, compared with a quarterly average of $1.91 billion in the previous six months.
Westpac's 2019’s H1 earnings are expected to suffer, according to many analysts, largely due to customer remediation paybacks in the wake of the banking royal commission.
Westpac said earlier this week that it would set aside A$510 million to refund customers who had been charged fees for services not rendered.
The company said it seeks to rebuild its image following revelations of misconduct after the investigation.
Westpac is now in the process of giving back 28% of the fees it received for the work of its salaried financial planners. Analysts have said that the bank's re-payments could reach $297 million before tax and $75 million before tax in remediation program costs.
2.Westpac share price
On Friday at time of writing, Westpac share price was at A$19.26 falling 2% respectively. Since the company said it would set aside A$510 million in customer paybacks, its share price took a hit falling 0.5% directly after the bank’s statement release.
‘While it is disappointing that we have needed to make these provisions ... our priority was to deal with any outstanding issues and process payments as quickly as possible,’ Westpac Chief Executive Officer Brian Hartzer said.
3. Westpac’s remediation costs
Remediation costs will see Westpac's H1 earnings by fall by an additional A$359 million, raising the total hit for the half to A$617 million, according to the bank.
Westpac follows National Australia Bank Ltd and ANZ bank, which also added remediation provisions to account for self-employed advisers.
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