Insights

Westpac (ASX:WBC) share price struggles amid surging customer refunds

Westpac’s refund bill is really adding up, unsettling some investors…
The post Westpac (ASX:WBC) share price struggles amid surging customer refunds appeared first on The Motley Fool Australia. –

The Westpac Banking Corp (ASX: WBC) share price is struggling to stay in the green today. This follows an update from the Australian Securities and Investments Commission (ASIC) revealing a further $561 million in fee for no service refunds made by ASX-listed financial shares.

At the time of writing, shares in Australia’s oldest bank are relatively flat at $24.87 apiece, up just 0.12%.

The Westpac share price is also underperforming its peers so far today, with Commonwealth Bank of Australia (ASX: CBA) shares currently up by 1.14%. Westpac shares have, however, gained almost 50% over the past 12 months.

It comes at a cost

According to the ASIC release, six of Australia’s largest banking and financial services institutions have paid or offered an additional $561 million in compensation because of fees for no service or non-compliant advice. This includes the big four banks, as well as Macquarie Group Ltd (ASX: MQG) and AMP Ltd (ASX: AMP).

As a result, the total tally paid by the banks has swelled to $1.86 billion as at 30 June 2021. A figure that has been growing since the findings of the Hayne banking royal commission.

The corporate regulator’s update shows that Westpac forked out a further $388.6 million in the front half of 2021. This increase means the bank is second only to NAB for the highest amount of compensation paid, currently pegged at roughly $630 million. Certainly not a podium finish that is doing the Westpac share price any favours today.

Intriguingly, the number of customers slated for compensation from Westpac is nearly one-tenth that of the National Australia Bank Ltd. (ASX: NAB). This means the average compensation claim from Westpac customers is much higher.  

Also not helping the Westpac share price

As we covered earlier today, Westpac’s review of its partnership with Afterpay Ltd (ASX: APT) due to the proposed acquisition of Afterpay by Square (NYSE: SQ) might be weighing on the Westpac share price today.

A banker from Westpac said the company will be “thinking through the strategic implications given Square’s interest in merchant acquiring and business loans”.

The Westpac share price is underperforming the broader S&P/ASX 200 Index (ASX: XJO) today. While the bank’s shares are barely breaking even, the index is up 0.22% in afternoon trade.

The post Westpac (ASX:WBC) share price struggles amid surging customer refunds appeared first on The Motley Fool Australia.

Should you invest $1,000 in Westpac right now?

Before you consider Westpac, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Westpac wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of May 24th 2021

More reading

Square might crash the Afterpay (ASX:APT) and Westpac partnership
What is the outlook for the Westpac (ASX:WBC) share price?
5 things to watch on the ASX 200 on Thursday

Westpac (ASX:WBC) share price lower after sale of finance business
Leading brokers name 3 ASX shares to buy today

Motley Fool contributor Mitchell Lawler owns shares of AFTERPAY T FPO, Commonwealth Bank of Australia, and Macquarie Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO and Square. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO and Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!