Westpac’s annual statutory profit declined 1 per cent despite growth in lending and deposits. Its net interest margin narrowed and credit impairment charges increased, while profit excluding notable items was broadly unchanged. The Australian bank raised its annual dividend slightly, with business and institutional lending growing more quickly than its overall loan book during the financial year.
Economics & Markets··Evening
Statutory profit slips while the adjusted measure holds
Australian bank Westpac reported a 1 per cent decline in annual statutory net profit for the twelve months ending in September.[1], [2]
Profit reached 6.813 billion Australian dollars, compared with 6.916 billion Australian dollars a year earlier. Excluding notable items, profit moved from 6.972 billion Australian dollars to 6.992 billion Australian dollars. The bank described that small movement as flat in its rounded presentation. This management measure is separate from profit under Australian accounting standards. Loans grew 5 per cent and deposits rose 6 per cent over the financial year.[1]
A narrower interest margin limits income growth
Excluding notable items, net interest income increased 1 per cent, while net interest margin narrowed by 7 basis points. Westpac attributed the contraction partly to lending competition, deposit mix and weaker Treasury revenue; stronger earnings on hedged deposits provided a partial offset. Business lending grew 12 per cent and institutional lending rose 18 per cent. Non-interest income increased 1 per cent as fee and wealth-management income outweighed lower Markets revenue.[1]
Credit charges rise as dividends edge higher
Credit impairment charges represented 10 basis points of average gross loans, compared with 5 basis points in the previous year. The bank cited its revised economic outlook, new portfolio overlays and additional individual provisions. Operating expenses fell 1 per cent, but rose 1 per cent when the previous year’s restructuring charge was excluded. The final dividend was 77 Australian cents per share, taking the annual total to 154 cents from 153 cents a year earlier.[1]
