AlphaCenturian, here is one for your DD.THE MACQUARIE WARRANTS...

AlphaCenturian, here is one for your DD.

THE MACQUARIE WARRANTS DAILY TRADER

Westpac - It's a Stretch

Westpac provided a briefing on the bank’s strategy, including presentations by each of the major business unit executives. Management advised achieving 10% growth in EPS for 2002 would be a ‘stretch’.

Dr David Morgan, MD, appeared to question whether the current level of RoE of 20% would be sustainable, given inflation of just 2-3%. Dr Morgan also indicated a desire to shift the structure of the portfolio towards businesses with a higher sustainable growth rate – these businesses tend to have lower RoE’s.

Westpac believes the quality of loan book is stable, with no material downgrade of large onshore exposures this year.

Westpac reported strong success in its efforts to recapture the business banking market, however the broader retail bank is ‘behind’ in its aspiration to double its economic profits. In combination with previous setbacks at the half year in New Zealand and the Institutional Bank, the apparent slow down in the retail bank’s economic profit generation is a concern.

Macquarie maintains its underperform recommendation on Westpac.

Trading Warrants
WBCWMS - Oct '02 $15.50 Put - Delta -12.6% (Basis $15.25 in WBC) - refer to Offering Circular (17 January 2002) for details