Westpac Banking Corp (ASX: WBC) has its AGM this week and investors will take a keen interest on proceedings for the following reasons:
- Banking royal commission. Last week the prime minister announced a royal commission to investigate the conduct and culture of the banking and financial services industry. Whilst the commission will conduct its work over the course of next year, Westpac investors will no doubt be on the watch for any commentary that might give more clarity on its impact on the banking sector. Investors in the other banks Commonwealth Bank of Australia (ASX: CBA), Australia and New Zealand Banking Group (ASX: ANZ) and National Australia Bank Ltd. (ASX: NAB) are also equally affected.
- Interest rates. The Reserve Bank of Australia makes its December interest rate announcement this week and whilst most analysts expect official rates to remain on hold, the banks have been making out of cycle rate hikes. Last week NAB hiked its fixed rate home loan for property investors by 30 basis points. This follows recent moves by the banks to tighten lending standards by strengthening income checks and black listing suburbs with an oversupply of apartments.
- Outlook. Investors will be keen to get more information on the quality of Westpac’s loan portfolio and how this could change over time based on management’s outlook of the economy. At their last presentation of their FY 2017 results, Westpac indicated that the outlook for Australia remains positive overall, with GDP growth expected to be slightly above trend at around 2.5% in 2018. They also indicated that the growth outlook will remain mixed across the country. At the time, global growth was expected to consolidate at around 3.5%.
Overall, the banking sector is going through some challenging times and so investing in Westpac might not be option right now. Investors looking for alternatives might want to consider these 3 revolutionary Aussie companies.
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Motley Fool contributor Kevin Gandiya has no position in any of the stocks mentioned.
You can follow Kevin on Twitter @KevinGandiya.
The Motley Fool Australia owns shares of National Australia Bank Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.