Westpac share price charges higher on strong Q3 update

How did the big four bank perform during the three months?

| More on:
Successful group of people applauding in a business meeting and looking very happy.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Westpac Banking Corp (ASX: WBC) share price is charging higher on Monday morning.

In morning trade, the banking giant's shares are up 2.5% to $30.36.

Westpac share price higher on Q3 update

Investors have been bidding the bank's shares higher today after responding positively to its third quarter update.

As we covered here earlier, for the three months ended 30 June, Westpac delivered a 1% increase in net operating income compared to its first half quarterly average. This was driven by higher net interest income thanks to an improved net interest margin (NIM) and strong loan growth.

Commenting on its loan growth, CEO Peter King said:

Operating momentum was positive with customer deposit growth of $15.4 billion and loan growth of $14.7 billion. This includes Australian household deposit growth of 3% and housing loan growth of 8%, which outperformed system.

This ultimately led to the bank reporting a 1% increase in pre-provisioning profit to $2.6 billion and a 6% lift in net profit after tax to $1.8 billion. King adds:

Our unaudited net profit of $1.8 billion was up 6% compared to the first half 2024 quarterly average. Excluding the impact of Notable Items, related solely to hedge accounting which will reverse over time, unaudited net profit increased 2% to $1.8 billion.

Broker reaction

As you might have guessed from the way the Westpac share price is performing today, the broker community appears pleased with the bank's performance during the third quarter.

For example, a note out of Citi reveals that its analysts correctly expected the market to respond positively to the update. Particularly given its improving core NIM, which helped boost revenue. Its analysts commented:

To the extent that management continue to manage costs well, albeit in the context of their technology reinvestment, we think the market will be able to focus on the revenue story at Westpac.

However, it is worth noting that Citi is certainly not tipping the shares of Australia's oldest bank as a buy at this point.

While its analysts have not yet updated their model and recommendation to reflect Westpac's third quarter update, they currently have a sell rating and $24.75 price target on its shares. This implies potential downside of over 18% for investors from current levels over the next 12 months.

Following today's gain, the Westpac share price is now up an impressive 47% since this time last year.

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Earnings Results

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
Earnings Results

Why is the QBE share price racing ahead of the benchmark on Friday?

Investors are bidding up QBE shares today. But why?

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Earnings Results

Macquarie share price leaps higher on rising full-year profits

Macquarie reported its full year FY 2025 results today. Here's why ASX investors are reacting enthusiastically.

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Technology Shares

Guess which ASX 200 tech stock is crashing 14% on results day

This tech stock is having a rough time today. But why?

Read more »

Worried woman calculating domestic bills.
Earnings Results

ANZ share price falls on half-year results

How did the bank perform during the first half? Let's find out.

Read more »

Man looking happy and excited as he looks at his mobile phone.
Bank Shares

NAB share price jumps on solid half year results

Investors have responded positively to the bank's results.

Read more »

Lines of codes and graphs in the background with woman looking at laptop trying to understand the data.
Earnings Results

Westpac share price sinks on half-year results miss

Let's see how the big four bank performed during the first half.

Read more »

Miner looking at a tablet.
Gold

Newmont share price lifts off on first-quarter results

The ASX 200 gold stock is charging higher on Thursday.

Read more »

A man wakes up happy with a smile on his face and arms outstretched.
Healthcare Shares

ResMed shares jump 8% on strong Q3 update

It was yet another strong quarter from this high-quality company.

Read more »