Oh to be a banker, raking in the cash regardless of the time of day or year. And so it is for Westpac and its very outgoing CEO, Dr David Morgan. A higher profit today of $1.325 billion for the March half and a higher dividend, but the comments in the prepared statement had that faint ring of hesitation or defensiveness.

The bank didn’t give any guidance on second half earnings, except to speak generally about more of the same. The market, skittish over poor retail sales and a rising number of profit warnings, chewed over the Westpac numbers and comments for an hour or so and then sold the shares down after a small rise when trading started.

The market is in a skittish mood and there must be plenty of grumpy investors around who waded into the stockmarket at the beginning of this year when the market ran up to its all-time peak of more than 4,250 in mid February. Since then the market has dropped 9% (more than 350 points) as profit warnings, higher interest rates and a slow down in retail sales have sapped investor confidence.

Bank stocks, like retailers, are supposed to be a defensive investment. But the big retailers have been pummelled this week, as have their smaller and medium sized competitors, and the banks, like Westpac, have copped a smaller pounding. Westpac is off 4% since its high in February at $20.13. It was down under $19 this morning in the wake of the profit announcement.

Still, we shouldn’t cry for our bankers. The $1.325 billion is still the highest interim profit in the bank’s history, and the 49c-a-share dividend will make shareholders a little happier, despite the drop in the share price.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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