The Westpac Banking Corp (ASX: WBC) share price will be one to watch on Monday.
This follows the release of the banking giant's third quarter update this morning.
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Westpac share price on watch following Q3 update
All eyes will be on the Westpac share price at the market open after Australia's oldest bank released an update on its capital, credit quality, and funding.
In respect to its capital, Westpac's CET1 capital ratio stood at 10.75% at the end of June, which is down from 11.33% at the end of March. This reflects a dividend payment (45 basis points), higher risk-weighted assets (RWA) (42 basis points) and higher capital deductions.
The bank's RWA were up $18 billion or 3.9% during the third quarter of FY 2022, mostly from higher interest rate risk in its banking book.
Credit quality remains strong
Potentially giving the Westpac share price a lift today is news that its credit quality remained strong during the third quarter.
The bank revealed that its provision cover was little changed, with total provisions to credit RWAs at 1.25%. This was down 5 basis points over the quarter.
Another positive was that Westpac's stressed assets to total committed exposures (TCE) fell 4 basis points to 1.06%.
The bank's mortgage 90+ day delinquencies also improved, falling 5 basis points to 0.83% in Australia and 2 basis points to 0.28% in New Zealand.
Strong funding and liquidity
Westpac's funding and liquidity was strong with a Liquidity Coverage Ratio (LCR) of 130% and a Net Stable Funding Ratio (NSFR) of 123%.
In addition, the bank revealed that its deposit to loan ratio was 83.1%, down from 83.5% at the end of March.
No details were provided in respect to its profits, margins, or cost cutting during the quarter. Investors may have to wait until its full year results later this year for that unfortunately.
