The Westpac Banking Corp (ASX: WBC) share price share is down more than 1% after the ASX bank share announced an asset sale.
Westpac shares fall
The ASX bank share announced to the ASX this morning that it has entered into an agreement to sell its auto finance loans and lease receivables to Resimac Group Ltd (ASX: RMC).
The sale is expected to complete in the first half of 2025, with an expected transaction value of between $1.4 billion to $1.6 billion. The ASX bank share said this sale is not expected to have a material impact to Westpac’s financial statements.
Westpac noted this sale will finalise Westpac’s divestment of its auto finance business, after the partial sale in 2021.
Is the ASX bank share an attractive investment?
It has been an interesting year for the major bank, with the Westpac share price up approximately 33% in the 2024 to date. However, since 23 September 2024, Westpac shares have declined by roughly 8%.
Westpac and the big banks of ANZ Group Holdings Ltd (ASX: ANZ), Commonwealth Bank of Australia (ASX: CBA) and National Australia Bank Ltd (ASX: NAB) seem to have suffered from the market selling banks and buying ASX miners like BHP Group Ltd (ASX: BHP) and Fortescue Ltd (ASX: FMG). in the last two weeks.
Despite the reduction of the Westpac share price, I’m not convinced the bank is a good investment for new investors today.
Banking is a challenged sector – all the lenders are competing for the same borrowers and it’s very easy for people to compare financial products these days, whether through a broker or just on the internet. The ‘price’ of loans is one of the main ways that banks can compete, so we’ve seen bank margins reduce over the last several years. I don’t see that dynamic changing, particularly with the growth of competitors like Macquarie Group Ltd (ASX: MQG).
Westpac may continue to generate billions of dollars of profit, but I fear its strongest growth days may be behind it. The new CEO may be able to help improve its outlook. There are other ASX dividend shares I would rather buy.
