WBC - Westpac Banking Corporation

[Sharkman]

Probably had 0% interest in the buy back, what a weird management group.
I like your thinking, the only thing is at 0% I would personally still be putting in a floor price, this is all looking very messy.
$21 + the franking credits still just takes it up to about $26, from my mental arithmatics.

it's not even that, at yesterday's closing price i think it would be only around 24.93 with the franking credits, even with a 0% discount. and the effective price will likely be somewhat lower than that depending on the individual's tax circumstances, as the capital component for tax purposes is usually a bit higher than the capital component you actually receive.

the floor price is quite useless in this case IMHO, the choices are 15.50, 16.50, 17.50 or 18.50. all of those seem way too low in my view. however you do get 4 and a bit days of VWAP data since the observation period goes from 7 feb - 11 feb and the cutoff time is only 7 pm on 11 feb. so probably the better alternative is to hold off right up until the last minute, check the VWAP for an indicative price, and make a decision then.

though if you're planning to re-establish the position immediately afterwards (have to use a risk reversal or some other derivative strategy to do that i think, does the wash sale rule still apply to buybacks?) only the discount really matters, the final price not so much. you'd just have to contend with potential slippage over the weekend, as you won't know how many units got accepted until 14 feb and therefore can't size your risk reversal etc. position correctly if opening the position on 11 feb to avoid slippage.

 

[qldfrog]

it's not even that, at yesterday's closing price i think it would be only around 24.93 with the franking credits, even with a 0% discount. and the effective price will likely be somewhat lower than that depending on the individual's tax circumstances, as the capital component for tax purposes is usually a bit higher than the capital component you actually receive.

the floor price is quite useless in this case IMHO, the choices are 15.50, 16.50, 17.50 or 18.50. all of those seem way too low in my view. however you do get 4 and a bit days of VWAP data since the observation period goes from 7 feb - 11 feb and the cutoff time is only 7 pm on 11 feb. so probably the better alternative is to hold off right up until the last minute, check the VWAP for an indicative price, and make a decision then.

though if you're planning to re-establish the position immediately afterwards (have to use a risk reversal or some other derivative strategy to do that i think, does the wash sale rule still apply to buybacks?) only the discount really matters, the final price not so much. you'd just have to contend with potential slippage over the weekend, as you won't know how many units got accepted until 14 feb and therefore can't size your risk reversal etc. position correctly if opening the position on 11 feb to avoid slippage.

Can i summarise this?
Why bother.....

 

[sptrawler]

Can i summarise this?
Why bother.....

The only reason would be, if you want to get out of WBC, if your buy in price was reasonable.
My position, the shares are in the SMSF, so if I can get what I paid for them with a reasonable franking credit, it is way to just dump the dog.

 

[Sharkman]

Can i summarise this?
Why bother.....

well yes, probably for the majority of investors it should be thrown straight into the virtual wastepaper basket, which is basically what i did with the original offer.

but i do think the revised terms are worth consideration for those who are in lower tax brackets or can access lower tax brackets via trust beneficiaries - if you can snag a low (or even zero) discount and are looking to reacquire the deltas as soon as practicably possible afterwards, that's a good chunk of franking credits for fairly little risk.

eg. if the VWAP turns out to be say 20.85, i can try throwing all of my units in at 0% on feb 11, find out how many were accepted on feb 14, divide that by 100 and immediately slap on a mar 20.50-21.00 risk reversal for that many contracts to dodge the wash sale rule and get my delta back when it expires. i'd get to pocket 4.08 of franking credits, book a capital loss which will come in handy as i've already taken a bit of capital gains this year, and keep my position (give or take) in exchange for slippage risk from feb 11 -> feb 14 and the cost of the risk reversal.

 

[divs4ever]

if i sold my ( very small ) WBC holding would i buy back , after all that holding was a result of still participating in the DRP but selling them ex-div.

i decided to sell the WBC when it was clear to me they were more focused on virtue-signaling than fixing legacy issues , but mistimed the decision ( for a tidy exit )

 

[KevinBB]

This must be the most unloved large cap stock on ASF. I haven't seen a good word written about the company, the directors, or their policies.

So, this is my contrarian selection, and my #2.5 selection (there was a tie for second place with BLD), for the 2022 Full Year Tipping Competition. If no one likes it, it is sure to perform well.

KH

 

[PZ99]

Not much happening at Westpac at the moment

03/02/2022 9:07AM Dow Jones Westpac Initiated with A$25.00/Share Price Target by UBS (headline only)
03/02/2022 9:07AM Dow Jones Westpac Initiated at Buy by UBS (headline only)
03/02/2022 8:37AM Dow Jones Westpac 1Q Profit Up 80%, Unveils Operating Structure Changes -- Update
03/02/2022 8:05AM Dow Jones Westpac 1Q Profit Up 80%, Unveils Operating Structure Changes
03/02/2022 7:51AM Dow Jones WBC Expects Additional Restructuring Charges in FY22 as It Refines Changes, New Roles
03/02/2022 7:51AM Dow Jones Westpac Expects to Incur Small Restructuring Charge in 1H (headline only)
03/02/2022 7:50AM Dow Jones Westpac: David Stephen to Remain in Current Role Until May (headline only)
03/02/2022 7:50AM Dow Jones Westpac: Ryan Zanin Appointed Westpac Group Chief Risk Officer (headline only)
03/02/2022 7:50AM Dow Jones Westpac: Les Vance, Group Executive, Financial Crime, Compliance to Leave Later in Year
03/02/2022 7:49AM Dow Jones Chief Risk Officer Group Exec, Financial Crime, Compliance Roles to Be Combined
03/02/2022 7:49AM Dow Jones Westpac: Chief Risk Officer David Stephen Has Decided to Leave (headline only)
03/02/2022 7:47AM Dow Jones Westpac Says It Will Reduce Corporate Functions Size by Around 20% (headline only)
03/02/2022 7:47AM Dow Jones Westpac Says It Will Restructure Management Team (headline only)
03/02/2022 7:46AM Dow Jones Westpac Says It Will Create Smaller, More Focused Head Office (headline only)
03/02/2022 7:45AM Dow Jones Westpac CFO: Bringing Forward Simplification Plans, Changing Operating Structure
03/02/2022 7:45AM Dow Jones Westpac CFO: Environment Highly Competitive, Continue to See Pressure on Margins
03/02/2022 7:44AM Dow Jones Westpac: Lending Up 0.7% Over 1Q Across Institutional, Mortgages, New Zealand
03/02/2022 7:44AM Dow Jones Westpac Says Asset Quality Metrics Continue to Improve (headline only)
03/02/2022 7:44AM Dow Jones Westpac: 1Q Impairment Charge of A$118M Related to Covid-19 (headline only)
03/02/2022 7:43AM Dow Jones Westpac 1Q Expenses A$2.7B (headline only)
03/02/2022 7:42AM Dow Jones Westpac CET1 Capital Ratio 12.2% at End-Dec (headline only)
03/02/2022 7:42AM Dow Jones Net Interest Margin 1.91%, Down 8 Basis Points on Quarterly Average for 2H21
03/02/2022 7:41AM Dow Jones Westpac 1Q Unaudited Statutory Net Profit A$1.82B (headline only)
03/02/2022 7:37AM ASX Westpac Pillar 3 Report (December 2021) (headline only)
03/02/2022 7:37AM ASX Westpac Pillar 3 Report (December 2021) (23 Pages)

 

[sptrawler]

Not much happening at Westpac at the moment

03/02/2022 9:07AM Dow Jones Westpac Initiated with A$25.00/Share Price Target by UBS (headline only)
03/02/2022 9:07AM Dow Jones Westpac Initiated at Buy by UBS (headline only)
03/02/2022 8:37AM Dow Jones Westpac 1Q Profit Up 80%, Unveils Operating Structure Changes -- Update
03/02/2022 8:05AM Dow Jones Westpac 1Q Profit Up 80%, Unveils Operating Structure Changes
03/02/2022 7:51AM Dow Jones WBC Expects Additional Restructuring Charges in FY22 as It Refines Changes, New Roles
03/02/2022 7:51AM Dow Jones Westpac Expects to Incur Small Restructuring Charge in 1H (headline only)
03/02/2022 7:50AM Dow Jones Westpac: David Stephen to Remain in Current Role Until May (headline only)
03/02/2022 7:50AM Dow Jones Westpac: Ryan Zanin Appointed Westpac Group Chief Risk Officer (headline only)
03/02/2022 7:50AM Dow Jones Westpac: Les Vance, Group Executive, Financial Crime, Compliance to Leave Later in Year
03/02/2022 7:49AM Dow Jones Chief Risk Officer Group Exec, Financial Crime, Compliance Roles to Be Combined
03/02/2022 7:49AM Dow Jones Westpac: Chief Risk Officer David Stephen Has Decided to Leave (headline only)
03/02/2022 7:47AM Dow Jones Westpac Says It Will Reduce Corporate Functions Size by Around 20% (headline only)
03/02/2022 7:47AM Dow Jones Westpac Says It Will Restructure Management Team (headline only)
03/02/2022 7:46AM Dow Jones Westpac Says It Will Create Smaller, More Focused Head Office (headline only)
03/02/2022 7:45AM Dow Jones Westpac CFO: Bringing Forward Simplification Plans, Changing Operating Structure
03/02/2022 7:45AM Dow Jones Westpac CFO: Environment Highly Competitive, Continue to See Pressure on Margins
03/02/2022 7:44AM Dow Jones Westpac: Lending Up 0.7% Over 1Q Across Institutional, Mortgages, New Zealand
03/02/2022 7:44AM Dow Jones Westpac Says Asset Quality Metrics Continue to Improve (headline only)
03/02/2022 7:44AM Dow Jones Westpac: 1Q Impairment Charge of A$118M Related to Covid-19 (headline only)
03/02/2022 7:43AM Dow Jones Westpac 1Q Expenses A$2.7B (headline only)
03/02/2022 7:42AM Dow Jones Westpac CET1 Capital Ratio 12.2% at End-Dec (headline only)
03/02/2022 7:42AM Dow Jones Net Interest Margin 1.91%, Down 8 Basis Points on Quarterly Average for 2H21
03/02/2022 7:41AM Dow Jones Westpac 1Q Unaudited Statutory Net Profit A$1.82B (headline only)
03/02/2022 7:37AM ASX Westpac Pillar 3 Report (December 2021) (headline only)
03/02/2022 7:37AM ASX Westpac Pillar 3 Report (December 2021) (23 Pages)

Obviously 0% interest in the buyback, what a bunch of muppets.
I thought this statement a classic:
 Unaudited cash earnings of $1.58bn were up 74%, excluding notable items, up 1%
The way they are going there will be the three pillars of Australian banking. ?

 

[PZ99]

Obviously 0% interest in the buyback, what a bunch of muppets.
I thought this statement a classic:
 Unaudited cash earnings of $1.58bn were up 74%, excluding notable items, up 1%
The way they are going there will be the three pillars of Australian banking.

You're not wrong.... maybe they'll need a cap raise to deal with inflation and stricter LVR levels ?

So instead of having a cash reserve they tried to give it away by buying their own discounted shares.

If you must throw money away do a special divvy

 

[divs4ever]

Obviously 0% interest in the buyback, what a bunch of muppets.
I thought this statement a classic:
 Unaudited cash earnings of $1.58bn were up 74%, excluding notable items, up 1%
The way they are going there will be the three pillars of Australian banking. ?

??? CBA , BOQ and BEN ?

 

[sptrawler]

You're not wrong.... maybe they'll need a cap raise to deal with inflation and stricter LVR levels ?

So instead of having a cash reserve they tried to give it away by buying their own discounted shares.

If you must throw money away do a special divvy

Shareholders wont be happy.
If the idiots looked after the shareholders, the punters will look after the price, muppets.

 

[peter2]

Has anyone else noticed that WBC has jumped >10% in the last week?

 

[Sharkman]

it's VWAP week for the buyback, can't help but wonder if there's some weird shenanigans related to that going on

 

[frugal.rock]

Yeah... but...

I'm about to end a filthy 35+ year relationship with them.
Over the years, it has been all take.
Total bankers with that big red capital W...

1 update to their broking app over the last 3 years and that was just a charting upgrade to the same as what you get off the ASX page... can't even place a stop loss order with it.
5x branch closures where I've lived over the years. Current location closed now not even with a fee free atm available ! ??

 

[Sharkman]

Yeah... but...

I'm about to end a filthy 35+ year relationship with them.
Over the years, it has been all take.
Total bankers with that big red capital W...

1 update to their broking app over the last 3 years and that was just a charting upgrade to the same as what you get off the ASX page... can't even place a stop loss order with it.
5x branch closures where I've lived over the years. Current location closed now not even with a fee free atm available ! ??

i have mixed feelings about them

the stock's return over the several years i've held them have been lacklustre, with the last few being particularly bad, just one nasty surprise after another

but OTOH they used to provide the prizemoney for one of the Aust schools maths competitions back when i was a kid (maybe they still do), i somehow managed to fluke a few prizes in that comp over my school career, and fortuitously ended up exchanging those winnings for about 200 (pre-split, so about 600 today) CSL shares at the IPO so... as frustrated as i am with the company performing like absolute dogs#$t in recent times, i have to at least give them their dues for sponsoring that comp all those years ago

 

[divs4ever]

i have mixed feelings about them

the stock's return over the several years i've held them have been lacklustre, with the last few being particularly bad, just one nasty surprise after another

but OTOH they used to provide the prizemoney for one of the Aust schools maths competitions back when i was a kid (maybe they still do), i somehow managed to fluke a few prizes in that comp over my school career, and fortuitously ended up exchanging those winnings for about 200 (pre-split, so about 600 today) CSL shares at the IPO so... as frustrated as i am with the company performing like absolute dogs#$t in recent times, i have to at least give them their dues for sponsoring that comp all those years ago

in 2011 i picked WBC as best of the ( BIG 4 ) bunch and bought some more in 2020 , as Sharkman has said they just keep going from stumble to stumble with the odd 'virtue-signal' thrown in.
they have bad enough when they just concentrated on banking , but now they are trying to save the planet as well ( or will that make them only half as bad at banking , as previously )

( i did dabble in ANZ later but they lost their way as well , so are completely exited )

i did intend to exit WBC but mistimed the exit leaving me with a handful of DRP shares ( still DRPed )

will stick with the regional banks as they still have some room to grow ( and hopefully learn to do banking better )

 

[KevinBB]

This must be the most unloved large cap stock on ASF. I haven't seen a good word written about the company, the directors, or their policies.

So, this is my contrarian selection, and my #2.5 selection (there was a tie for second place with BLD), for the 2022 Full Year Tipping Competition. If no one likes it, it is sure to perform well.

Has anyone else noticed that WBC has jumped >10% in the last week?

Yes! It looks like the contrarian bet is working at this very early stage.
KH

 

[peter2]

I tend to agree with @Sharkman 's comment about the trading activity being correlated to the buy-back timing. Very few people were going to sell at the lower price but now that there's an extra 10% it may encourage a few more to participate.

I'm not participating in the buyback as bought them for the oversold rally. I lost a few fingers trying to catch the falling knife (as you may have noticed in my chart). I've had them on ice for a few weeks and this price rally will pay for sewing them back on.

 

[spratty84]

Im a bit annoyed i sold out at 20.5 to free up some cash for other possible opportunities and to diversify ( i have bank exposure with ben nab anz). I was in at low 15 during the covid plunge and did get a few divys in between.

 

[Sharkman]

i'm chucking all my units into the buyback at a 1% discount, just in case the majority go in at 0% due to the stock's poor performance since the buyback announcement (IIRC it was somewhere around $25 at the time, so even with the recent rally it's still well below those levels). but i have absolutely no idea what's going to happen. could miss out entirely, could get them all without scaleback, or anything in-between

this sudden movement does pose a bit of a risk, the VWAP will likely be a fair bit lower than the friday close at this rate, increasing the chance of slippage for the monday risk reversal. but the potential franking credits at a 1% discount are sufficient compensation for that risk i think