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.