Citi 08/12/2009 3 Hold, Medium Risk $25.50 7.4%Citi notes the...

Citi 08/12/2009 3 Hold, Medium Risk $25.50 7.4%
Citi notes the bank has reshuffled the senior management team, with Rob Coombe and Brad Cooper possibly being groomed as potential CEO succession candidates. The broker believes this is a move designed to enhance what it sees as a broadening financial services agenda.

Otherwise, the broker likes the bank's comprehensive approach to local banking and notes St George synergies remain ahead of schedule. Hold maintained.

BA-Merrill Lynch 08/12/2009 3 Neutral, Low Risk $28.70 20.9%
Westpac's update on its merger transition revealed a conglomerate skewed towards retail, the broker notes, and an attempt to improve "customer wallet". But for the broker the highlights were above average business mix, growth momentum and return on equity which justifies a premium for Westpac shares.

Westpac shares have underperformed the market recently, but the broker is remaining at Neutral for now citing the lingering problems the bank has with New Zealand and the old St George business banking book. Both will provide headwinds.

Deutsche Bank 08/12/2009 3 Hold $26.00 9.5%
The broker saw little in the way of financial detail in the bank's merger and transformation update that would require earnings changes. More money will need to be spent, but the bank expects to be able to fund this within its normal business capex.

The broker notes that while from a valuation perspective Westpac is starting to look more attractive at a FY11 PER of 10.9x, the broker still thinks it is too early to be going overweight banks in the near term.

Near term uncertainty around regulatory changes and evidence of near term revenue pressure are cited as reasons. The Hold call is maintained.