Westpac Banking Corp [NZX:WBC] has plunged by 2.97% in trading today, down to $29.11 at the time of writing.
Currently, Westpac has a market cap of $101 billion.
Why has the [NZX:WBC] share price fallen?
This bearish sentiment comes in the wake of a poorer-than-expected financial result.
Some key takeaways:
- Statutory net profit stands at $6.7 billion, down 16% on the previous year.
- The upcoming dividend payment is 80 cents per share, which is down 15%.
- Westpac went into a two-day trading halt in an attempt to raise $2.5 billion in capital from existing shareholders to bolster its balance sheet.
Where could Westpac go from here?
The current low interest-rate environment, as well as tougher government regulations, has understandably created some jitters in the Australian banking environment.
This isn’t helped by the fact that Westpac’s dividend cut is the first to happenin a decade.
Furthermore, Westpac’s decision to go ahead with the $2.5 billion equity raise will likely create additional softness in the share price. Still, this is a prudent move to lift itself above regulatory benchmarks.
Market sentiment may be negative for the short- to medium-term.