4 quick ways to assess the WBC share price

Core Viewpoint - Westpac Banking Corp is the second-largest bank in Australia, primarily focused on financing homeowners, investors, and businesses, with a significant emphasis on maintaining a strong workplace culture for long-term success [1][2]. Group 1: Financial Performance - Westpac's net interest margin (NIM) stands at 1.93%, outperforming the ASX banking sector average of 1.78%, indicating better profitability from lending activities [5][6]. - The bank earned 87% of its total income from lending last year, highlighting the importance of NIM as a key profitability measure [6]. - Westpac's return on equity (ROE) is 9.7%, surpassing the sector average of 9.35%, which reflects efficient profit generation relative to shareholder equity [7]. Group 2: Balance Sheet Strength - The common equity tier one (CET1) ratio for Westpac is 12.5%, which is above the sector average, indicating a strong capital buffer to protect against financial instability [8]. Group 3: Valuation Insights - Using a dividend discount model (DDM), the estimated average valuation of Westpac shares is $35.10, with an adjusted valuation based on forecast dividends at $34.05, compared to the current share price of $38.55 [11][12]. - The fair value estimate, considering fully franked dividends, is $48.64, suggesting that the shares may appear expensive under basic DDM but reasonable when accounting for franking credits [12].