Westpac's A$3.70 billion (US$2.81 billion) result in the six months to Mar 31 kicked off a week of half-yearly reporting from the nation's top lenders, which all face similar concerns.
Australian banking heavyweight Westpac posts a three per cent rise in
interim net profit on May 2, 2016 despite a volatile environment at a
time of regulatory changes and bad debt fears (Photo: AFP/Saeed Khan)
SYDNEY: Australian banking heavyweight Westpac posted a
three per cent rise in interim net profit on Monday (May 2) despite a
volatile environment at a time of regulatory changes and bad debt fears.
Westpac's A$3.70 billion (US$2.81 billion) result in the six
months to Mar 31 kicked off a week of half-yearly reporting from the
nation's top lenders, which all face similar concerns.
It comes as slumping commodity prices squeeze Australia's
resources companies, causing worries for banks that have lent them
billions of dollars.
The banks are also juggling new rules by the Australian
Prudential Regulation Authority that demand they hold more reserves as a
buffer against mortgages - part of a global effort after the 2008-9
financial crisis.
Westpac's cash profit, the industry's preferred measure
which strips out volatile items, was A$3.90 billion, slightly below
expectations.
Chief executive Brian Hartzer said the result was sound,
given the environment. "Westpac remains well-placed to respond to this
challenging environment," he said.
"We have strengthened our balance sheet and made good
progress implementing our strategy to build one of the world's great
service companies by investing in growth, service, and productivity
initiatives."
In response to the regulatory changes, the bank raised
around A$6.0 billion in equity over calendar 2015 which Hartzer said had
"materially strengthened the group's capital base", but impacted
earnings per share.
"Importantly, on most measures, overall asset quality
remains sound, with the level of stressed assets little changed over the
half," he added.
"There have been a few pockets of stress, mostly related to lower
commodity prices, and an increase in provisions for a small number of
larger exposures, which contributed to a rise in impairment charges."Impairment expenses of A$667 million were noted for the first half, almost double last year's level.
Despite rising bank funding costs and tougher capital rules, Westpac managed to raise its dividend by one cent to 94 cents per share.
ANZ Bank reports its interim profit on Tuesday while National Australia Bank follows on Thursday.
The Commonwealth Bank, the country's biggest lender, follows
a different cycle, and posted a modest two percent rise in first-half
net profit to A$4.62 billion in February.
- AFP/ec
Post a Comment