(4 May 2007 – Australia) Westpac has delivered a A$1.6 billion interim profit driven by a strong performance in wealth management with business banking also contributing strongly.The bank’s result for the half year to 31 March was up 12 percent on the previous year with cash earnings up 11 percent.
Westpac chief executive David Morgan said operating momentum was particularly strong in the second half of 2006 built on strong lending growth of eight percent.
He said the bank managed to trim almost a percentage point from its cost to income ratio despite deploying 400 new front line staff and spending on a major advertising campaign.
“Balance sheet growth was strong with loans up 17 percent and deposits up 15 percent on the first half of 2006, accompanied by a decline in margins consistent with Westpac’s expectations,” Dr Morgan said.
Business and Consumer Banking posted a 12 percent increase in cash earnings with business lending up 14 percent, mortgages up 12 percent, cards up 16 percent, and deposits up 13 percent.
Westpac Institutional Bank also delivered a 12 percent increase in cash earnings.
“WIB has been particularly successful in assisting customers to meet short term financing requirements and then satisfying their longer term needs with capital markets solutions,” the bank said.
BT Financial grew its cash earnings by 22 percent with managed funds increasing by 23 percent.
New Zealand was the big disappointment, described as a “turnaround challenge” by the bank, dropping three percent in cash earnings in the wake of increased delinquencies and higher loan impairment losses.
The bank said it expected both Consumer and Business Banking and WIB to perform strongly over the next six months.