Australia’s Westpac hits record net profit

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SYDNEY: Australian banking giant Westpac on Monday posted a six percent rise in full-year net profit to a record Aus$8.01 billion (US$5.7 billion) with retail and business banking driving performance.

The cash profit at Australia’s second largest bank, the measure more closely watched by analysts which strips out volatile items, lifted three percent to Aus$7.82 billion.

“Australian retail and business banking has been the key driver of performance,” said chief executive Brian Hartzer, as Westpac joined other leading banks ANZ and NAB reporting major profits.

“All divisions continued to grow their businesses and are in good shape,” he said.
However, despite strong loan figures, “market headwinds” saw a softer performance in wealth and institutional businesses, Hartzer added.


Westpac reported the same figures in full year preliminary results in mid-October, when it announced a $3.5 billion equity raising to meet tougher regulations on reserves as a buffer
against mortgage risks.

Ric Spooner, chief market analyst for CMC Markets, said the profit result held “few surprises”.

“The potential for slower growth in housing lending will be a negative for banks,” he said.

“The chances are that difficult trading conditions which were a drag on institutional banking profits in the last half will be a temporary phenomenon providing potential to recover in this area during the current year.”

Westpac shares dropped 2.45 percent to Aus$30.61 as the overall ASX 200 market lost 1.41 percent.

The bank has raised $6 billion of new capital this year, which, Hartzer said, puts it in the top quartile of banks globally.

ANZ on Thursday reported annual net profit of a record $7.5 billion, while fellow banking giant NAB lifted annual net profits 19.7 percent to $6.34 billion.

AFP

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