Banking News

Mixed profits for SGB

Mixed profits for SGB

(7 May 2008 – Australia) St George bank has released a positive underlying profit result for the first half of 2008 which has been dragged down by global credit turmoil. The net profit for the bank showed a decrease in profits by 10.1 percent, to $514 million from $572 million one year earlier.

The cash profit however, which shows the smoothed performance of the business without significant items and other volatility actually recorded a rise of 6.2 percent to $603 million from $568 million.

Even this was not quite to market expectations, with many analysts expecting cash profits to be $16 million higher at $619 million for the first half.

The bank said that while overall credit quality across all lending portfolios remains strong, a small number of the bank’s middle market and margin lending clients have been significantly impacted by market volatility and international credit turmoil.

St George has recognised $93 million of significant items for the half. This comprises a $54 million gain from the sale of Visa, a $30 million restructuring charge, and a $117 million tax expense.

Total provisions and reserves for loan impairment rose by 21.7 per cent to $550 million.

Underlying performance is strong, as retail deposits grew on an annualised basis by 14 percent to $51.1 billion, while loans for the Middle Market business grew by an annualised 31 percent.
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