Westpac profit jumps to $1.9b on home loan strength
The lender said its profits grew as costs fell but revenues largely flat.
Westpac has posted a net profit up 6 per cent to $1.9 billion on revenue that rose 5 per cent to $5.8b for the December quarter, when compared to the average of the prior six-month period.
Australia’s second-largest bank said profits grew faster than revenue partly because it made more home loans itself, rather than through the brokerage channel.
The bank’s operating expenses for the December quarter also fell 5 per cent to $3b versus the prior six-month period.
Sign up to The Nightly's newsletters.
Get the first look at the digital newspaper, curated daily stories and breaking headlines delivered to your inbox.
By continuing you agree to our Terms and Privacy Policy.Chief executive Anthony Miller added that the bank was seeing healthy demand for credit even after the Reserve Bank lifted official interest rates 25 basis points to 3.85 per cent in February.
“We are optimistic on the outlook for the economy and expect demand for both business and household credit to remain resilient,” Mr Miller said.
“Our strong financial foundations provide us with the stability and capacity to support our people, customers, shareholders and the broader economy.”
Expenses, profit margins flat
Westpac’s net interest margin - as a measure of what it makes on what it lends, versus what it pays on what it borrows - slipped one basis point to 1.94 per cent.
The bank said its loan book saw minimal bad debts and that total impairment charges equalled just 6 basis points of average gross loans.
“Overall, a solid result,” said Citi’s banking analyst Thomas Strong. “With costs well managed, asset quality benign, and capital strong, we think the result will be well received, albeit we expect little movement to consensus earnings as a result.”
More to come.
