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Banks take a little cut of everything we do, so why not get some of it back by owning the shares of your own bank?

Westpac certainly helped itself during the 2011 financial year and proudly announced a cash profit of $6.3 billion. That was a subdued increased of 7.3 per cent compared with bigger increases from its rivals but Westpac looked after its shareholders better in terms of its dividend.

At 10.2 per cent, including franking credits, Westpac's gross dividend yield is not to be sneezed at and easily outpaces the equivalent yield of the broader S&P/ASX200 Index of 6.7 per cent.

For investors who can cope with even a modicum of risk, owning Westpac shares looks far more attractive than placing money in a 12-month term deposit that yields just 5.3 per cent before tax.

The income side of the equation looks compelling. The earnings part is a more complex story as lending growth is slowing and the profit boost from lower bad-debt charges is dissipating. Westpac is already the leanest bank of the big four, with a cost-to-income ratio of 41.5 per cent, but the search for more efficiency doesn't begin and end with headcount.

Westpac has now fully absorbed St George Bank and the quest for greater productivity goes on with several big projects still under way across the group.

Plain old banking is now being supplemented by wealth management products from BT Financial Group. As the superannuation pie continues to grow, Westpac will get a slice of that action.

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Westpac's own balance sheet is robust. It will comfortably meet the new world capital adequacy requirements and has a much smaller exposure to volatile wholesale funding markets than a few years ago. A higher proportion of customer deposits on its loan book is the reason for this. Along with its Australian peers, Westpac maintains a AA credit rating.

At $340 billion, it not only has the largest mortgage book but also has the highest ratio of mortgages to total loans. Westpac reported that 55 per cent of its customers are ahead on their mortgage repayments, with some more than two years ahead.

Even if house prices are static at best, the housing market is looking safe, from the bank's point of view. With shares about $21, investors are paying only 10 times historic earnings and enjoying a substantial dividend yield.