WBK - Westpac Banking: Market's Focus On Cost Reset Program And Dividends

• Westpac's 1H FY 2021 cash earnings beat market expectations, thanks to net interest margin expansion and a significant credit impairment benefit.
• The bank's earnings growth outlook in the medium term is dependent on the success of its new cost reset program which is targeting annualized expense reductions of around A$2 billion.
• There are also expectations of higher dividends for Westpac in FY 2021 and FY 2022, due to the good 1H FY 2021 results and the bank's high CET1 ratio.
• Westpac trades at 1.35 times trailing P/B and 15.3 times consensus forward FY 2022 (YE September 30) P/E.

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