As of 2021, 14 million customers are associated with Westpac worldwide, with 40,000 employees. It is one of the trusted and oldest banking institutions, with a net worth of 935.88 billion AUD.
Till September 30, 2021, Westpac Banking’s assets for the past years were:
- For 2015: 812.16 billion AUD
- For 2016: 839.2 billion AUD
- For 2017: 851.88 billion AUD
- For 2018: 879.59 billion AUD
- For 2019: 906.63 billion AUD
- For 2020: 911.95 billion AUD
- For 2021: 935.88 billion AUD
The statistics confirm that the growth of Westpac Banking has grown in the past years. The success of Westpac is attracting an organic audience, and its consistent growth led Westpac to become an Australian banking giant.
Westpac typically gives away dividends twice a year. But the pandemic affected Westpac’s growth and financial statistics too.
Let’s discuss Westpac and its dividend policies in the financial market.
What is Westpac?
Westpac is Australia’s one of the four biggest financial banking giants offering services to their clients. Their services expand to individual clients, businesses, non-profits, and wealth management services.
In 1817, Westpac was under the name Bank of New South Wales. It acquired the Commercial Bank of Australia in 1981 before being named Westpac Banking Corporation in 1982.
Westpac is the portmanteau of “Western” and “Pacific”.
Westpac’s Services.
The services that Westpac offers are customer-centric. They add value to clients’ financial status and portfolios.
The various activities they perform for their clients are:
THEIR ONLINE BANKING: With Westpac’s online banking, you can avail of their
The budget app: has tools to track trends and manage your cash flow by controlling your monthly budget.
Manage from home: it does not require you to move to manage your account and finances.
Guaranteed security: this feature solves your worries about losing your assets. Westpac promises to repay your funds in case of any customer’s account is compromised.
Cards Hub:
is a tool within the Westpac app where you can temporarily lock all your cards, change your pin and access your card.
THEIR TELEPHONE BANKING:
Whether it’s a bill payment, transfer of funds, or just checking up your account, through telephone banking’s easy service, you can do it all.
THEIR ATMs:
Westpac’s ATMs spread nationwide. Their network includes Westpac, St. George, BankSA, and bank of Melbourne ATMs. Find your nearest ATM and access your account.
THEIR BANKING SERVICES:
TAt Westpac, your money spending is transparent. They make sure you only pay for services you are using. It provides complete control and visibility to the client. Their various banking services are:
- Cheques and Bank cheques
- Periodical payments
- Security storage
- Telegraphic transfers
UNCLAIMED MONEY:
If you last attended your account for seven years, Westpac will notify you and tell you to claim the money lying in your bank account.
TRAVEL AND INTERNATIONAL TRANSFERS:
Through this service, you have access to their worldwide wallet that you can use to spend money during travels. Westpac also makes the international money transfer process seamless and effortless.
DAVIDSON INSTITUTE:
Westpac offers various banking and finance courses at their Davidson Institute. Financial education is essential, and Westpac provides it to all its clients.
CURRENCY CONVERTER AND FOREIGN EXCHANGE:
Through Westpac, you can convert any foreign currency into Australian dollars with up-to-date rates. They also give statistics about past foreign exchange rates of different currencies.
Let’s learn about the dividend.
What’s a Dividend?
- Dividends are payments that a company pays to its investors regularly.
- The board of directors of a company decides the price per share.
- The board also decides when the dividends are going to be available.
It’s a profit-sharing method that most companies adopt for their stakeholders. When someone invests in a company’s stock, they get their return in the form of dividends.
Often people buy stocks of a financially successful company to create a regular income stream during rainy times such as inflation.
Dividends also reveal how a company is performing financially.
Why invest in a dividend stock?
People have personal reasons to invest in a dividend stock but let’s discuss what benefits they offer to those who invest in them.
It is a beneficial passive income. Some companies offer high dividend payments regularly and consistently.
They are a safer bet as compared to other investments. It is unlikely when a market crashes, a dividend will lose its value.
They also offer the opportunity to re-invest in the same stock after you have gained your dividend. And it is up to you to either use it for personal expenditure.
You also get the dual benefit of gaining passive income and value-added appreciation in your financial portfolio.
Dividend stocks are inflation’s biggest rivals. When a person invests in a high-return dividend stock, a rise in inflation won’t be a concern for them. If not all, they will help businesses/individuals survive the inflation storm.
We all know how volatile and unpredictable markets are. Dividend stocks are not prone to these market crashes. Prices may move in the market, but dividend stocks will stand stable.
Westpac’s Dividend.
Westpac banking corporations’ dividends are the most in demand amongst Australian investors.
Westpac has been serving Australian clients for years, and their growth has exponentially increased with time. Because of their consistent success in the market and being a top banking service in Australia, investors prefer them over others.
Westpac is open to investors and regularly gives a portion of its profits to those who have bought its dividend stocks.
Westpac provides above-average dividends to its investors, and the good news is they often increase their dividend payments yearly.
Investing in Westpac’s dividends is a profitable business, and investors are encouraged to approach Westpac to have a passive income ready in times of need.
Westpac’s current financial status.
Westpac Banking Corporation (ASX: WBC) generated total revenue of 19.3 billion AUD in 2022, a 12% downfall from 2021.
The net income of Westpac in 2022 is 5.69 billion AUD (a 4.4% rise from the year 2021)
Westpac’s profit margin has been 30%, a 5% rise from 2021, where the profit margin was 25%. The margin increased due to lowered prices.
Westpac’s cash profit and earnings fell due to a loss of 1.1 billion USD because it sold its life insurance arm.
Revenue is likely to grow by 6% per annum, compared with the bank’s industry growth in Australia, whose growth forecast is 4.4%.
Westpac’s dividend forecast.
The Westpac Banking Corporation (ASX: WBC) has announced a high spike in its dividend rates. Last year’s rates were 0.64 AUD for Westpac’s dividend.
Westpac’s annual payment is about average for their industry, as the current stock price is 5.2% of the yearly payment.
Westpac has been distributing dividends for the past ten years and is famous for paying a good amount of its profit share from its earnings to shareholders.
In the last earning report of Westpac, the data shows the company has payout 78 percent of their earnings as a payout to the stakeholders.
It means Westpac will have no problem paying their last dividend and won’t add pressure to their balance sheet.
Going by the EPS (Earnings Per Share) forecast will rise by 39.0% in the next three years. According to Financial Analysts, the future payout ratio could be 70% which is a comfortable amount to pay the dividend forward.
The Volatility of Westpac’s Dividend.
For a long time, Westpac has given stock payments to its stakeholders. But they had cut the dividend price at least once in the last ten years.
The dividend price has gone from an annual total of 1.64 AUD in 2012 to now, which is a total annual payment of 1.25 AUD.
During this period, the dividend has shrunk to around 2.7 percent per year.
The volatile nature of dividend payments shows in the decline of its price, which means the company is facing some challenges financially.
Westpac’s Dividend Growth.
If we look at the financial report of the past five years of Westpac, its EPS has declined to 7.3 percent a year. Growing earnings is one of the factors to consider to analyze the dividend fluctuations in the past.
There is a direct relationship between a decline in the company’s earnings and the low dividend payments, as the profit gets less.
Although Westpac has recovered from its past downfall, and its earnings will grow in the future, we remain cautious in our investments with Westpac.
Westpac dividend dates 2022.
On November 7, 2022, the final ordinary dividend was announced by Westpac and paid on December 20, 2022.
The price is 64 percent per share.
With Australian franking credits, it will be 100% franked at the tax rate of 30% of the company.
The DRP (Dividend Reinvestment Plan) for the 2022 dividend will operate as follows:
It will be satisfied by issuing its shares.
With a market price of 23.86 AUD.
Over ten trading days, it was determined; and began on November 23, 2022.
There is no discount on the issuing of shares.
Westpac’s dividend dates. (For upcoming years)
2022, it was announced on November 7, 2022, and paid on December 20, 2022.
2023, on May 12, 2023, the payment date is June 27, 2023.
2024, on May 6, it will be declared; the payment date is June 21, 2024
2025, May 5 is the declaration date; the payment date is June 20, 2025.
2026, May 4 is the declaration date; the payment date is June 19, 2026.
2027, on May 3, the payment date is June 18, 2027.
Conclusion.
Westpac has built its credibility in the banking industry through its consistent growth rate. It is no denying that investing in Westpac dividend stock is a successful bet.
But the growth is doubtful. Markets are not predictable, and losses can occur at any time. So, the dividend payment rates should be taken with a pinch of salt and go in with caution.