Westpac lifts buyback, pays special dividend as profit slips amid tight mortgage market
Westpac has increased its buyback program and handed investors a special dividend, helping to offset first-half profit that met analyst expectations as competition in mortgages weighed on the Australian lender’s key consumer business.
Net income fell 16 per cent to $3.3 billion from the previous year in the six months ending March 31, the bank said in a statement on Monday.
That compared with the $3.3b average estimate in a Bloomberg survey of analysts. The lender increased its stock buyback by $1b.
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By continuing you agree to our Terms and Privacy Policy.“Overall, the Australian economy is proving resilient,” Westpac chief executive Peter King said in the statement. “We believe the economy is on track for a soft landing.”
Mr King is grappling with an uncertain outlook just as traders and economists reassess the path for Australia’s economy, and expectations move away from more interest cuts to the potential for further hikes. Mr King said it is likely rates will stay higher for longer.
Meantime, analysts have also expressed concern over succession planning for Mr King, who has led the company for more than four years.
The bank will pay a special dividend of 15¢
“While we’ve seen an uptick in stress in our loan books, this is to be expected given the large increase in interest rates, high inflation and taxation,” King said.
Bloomberg
