Banks stocks, so loved by super funds and long term investors because of the stable and strong revenue streams, are being sold off by investors today.
The big four banks dragged on the rest of the market after Westpac posted a flat half year profit result.
A flat first half cash profit result of $3.778 billion was below market expectations of $3.88 billion. Revenue was up 2% to $9.997 billion.
The ANZ and the NAB are also this week due to report results for six months. Commonwealth is reporting quarterly.
Westpac shares were down 3.3% to $35.50, the ANZ 2.58% to $33.27, the NAB 1.54% to $36.24 and the Commonwealth 1.04% to $88.00.
Stan Shamu, market strategist at IG, says today’s Westpac result will be a rude awakening for investors.
“In hindsight, a disappointing round of bank earnings had been well flagged and over the past couple of weeks we had already been seeing some money coming out of the banks,” he says.
“Investors have been shying away from ANZ which reports tomorrow. The bank’s Asia growth strategy had been experiencing some challenges and investors are wary that this will impact earnings. NAB is the one analysts have been most optimistic about but even it is seeing red today.”