The Westpac Banking Corp (ASX: WBC) share price is going absolutely bonkers today after the final banking Royal Commission report was handed to the public yesterday.
Why The Westpac Share Price Is Going Bonkers
In the final report from the scathing banking and financial services Royal Commission, the big banks like Westpac and Commonwealth Bank of Australia (ASX: CBA) were supposed to get a rude awakening to a new era of unconflicted financial advice and sales tactics.
While ASIC announced it is banning Commonwealth Bank from receiving ongoing fees from financial advice clients, we covered what the story means to CBA here, Westpac and the banks got off virtually scot-free in yesterday’s eagerly awaited report from Commissioner Kenneth Hayne.
Westpac shareholders would have been especially pleased with the report. Here’s what the report said:
“Westpac stands apart from the other three major banks by seeking to maintain at least some aspects of its wealth business,” Commissioner Hayne’s report read, on page 411.
“The challenges for Westpac may therefore differ from those facing the other major banks. And while I do not doubt Mr Hartzer, CEO of Westpac, when he says that Westpac has sought to ‘reset’ its relationship with ASIC, only time will tell whether that proves to be right.”
We covered in detail the losers and winners from yesterday’s report in this article, “Your 30-second guide to the banking Royal Commission report”.
Are Westpac Shares Dirt Cheap?
The Royal Commission turned into a flop for people hoping for positive change in the industry. For shareholders in the banks like Westpac, it was probably as good as they could have expected.
As we wrote last month, however, Westpac shares are still at the riskier end of the banking sector, given their huge exposure to interest-only and investor loans. We even question whether its 5%+ dividend yield is sustainable.
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