SYDNEY: Australian banking giant Westpac posted a seven percent jump in annual net profit Monday, helped by a fall in bad and doubtful debts with the lender saying it was in “excellent shape”.
Westpac’s Aus$7.99 billion (US$6.11 billion) result in the year to September 30 rounded out annual reporting from three of the nation’s big four banks, with all of them growing their business.
Cash profit, the financial industry’s preferred measure which strips out volatile items, came in three percent higher at Aus$8.06 billion.
Westpac left its dividend unchanged at 94 cents, for a full-year payout of Aus$1.88.
“We have continued to successfully navigate a challenging environment while our strategy builds momentum,” said chief executive Brian Hartzer, describing the bank as in “excellent shape”.
“Our primary goal in 2017 was to carefully balance growth and returns, while meeting all of our new macro-prudential regulatory requirements.
“We achieved the required macro-prudential targets for home lending. The credit quality of our loan portfolio is in great shape with stressed assets reducing during the year.”
The bottom line was helped by a 24 percent fall in charges for bad and doubtful debts to Aus$853 million. Revenue was up 3.9 percent to Aus$21.8 billion, driven by a rise in net interest income on the back of strong growth in loans.
Earnings at its institutional arm and New Zealand operations both jumped.
Westpac’s solid profit capped results from three of Australia’s big four lenders, all of whom are battling higher funding costs and lower interest margins.
They also face a hefty new government levy to raise Aus$6.2 billion over four years through a 0.06 percent charge on the borrowings of the big five banks — ANZ, Commonwealth, Macquarie, NAB and Westpac.
Last week, National Australia Bank posted a Aus$5.28 billion annual net profit, up from just Aus$352 million in the previous corresponding period when writedowns hurt its bottom line.
NAB, which is reshaping for a digital future, also announced 6,000 jobs would be axed, although it would create 2,000 new positions for a net reduction of 4,000.
ANZ Bank saw a 12 percent jump in annual net profit to Aus$6.41 billion the week before, while Commonwealth Bank, Australia’s largest, operates on a different reporting schedule.