Value Investor: Has Westpac hit the summit?

With provisioning low and earnings growth from core operations looking increasingly limited, Westpac appears to be entering an earnings cycle peak.

While delivering another solid result in the first half of 2014, our view is that Westpac appears to be entering the peak of its current earnings cycle and the bank’s present performance should not be extrapolated into the future.

Provisioning is at cyclical lows and earnings growth from core banking operations appear to be limited by restricted household credit growth and low business confidence and conditions.

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