The bank has announced that first half cash earnings will be reduced by around -$260m amid further customer remediation. This remediation does not include aligned dealer group fee-for-no-service, which is still to come.
Credit Suisse is disappointed, having expected Westpac had moved through the majority of banking-related remediation while the aligned dealer group remediation appears larger than first thought.
The broker maintains a Neutral rating and $28 target.
Target price is $28.00.Current Price is $26.00. Difference: $2.00 – (brackets indicate current price is over target). If WBC meets the Credit Suisse target it will return approximately 7% (excluding dividends, fees and charges – negative figures indicate an expected loss).