Westpac cash earnings up 7%
(3 November 2011 – Australia) Westpac joined its rivals in reporting a monster profit, with cash earnings up 7 percent to A$6.301 billion, slightly lower than the A$6.34 billion economists had tipped.
Westpac's second-half cash profit, meanwhile, was A$3.1 billion, compared with A$2.93 billion reported a year ago.
Cash profit, a measure that excludes one-offs and non-cash accounting items, is closely watched by investors.
Westpac's net profit rose 10 percent to A$6.991 billion, with the bank saying its business strategy was ‘‘delivering tangible benefits’’.
Westpac chief executive Gail Kelly, the only woman to lead an Australian bank or top-30 company, said it was pleasing to see evidence of the bank’s strategy delivering tangible benefits.
‘‘Deeper customer relationships, measured by customers with four or more products, are a real strength at a time of more subdued economic growth,’’ she said in the statement.
‘‘We are also growing overall customer numbers in each of our major brands.’’
Westpac said bad debts declined 32 percent to A$993 million from a year earlier, helping boost net profit.
Cash earnings at the retail and business banking division gained 11 percent to A$1.949 billion. Cash earnings at the institutional bank declined two percent to A$1.487 billion, while they gained 12 percent at St George Bank to A$1.167 billion.
Cash earnings gained 9 percent at wealth management division BT Financial and surged 41 percent at Westpac New Zealand.
The big four banks may clock up cash earnings of around A$25 billion when ANZ completes the quartet with results due out tomorrow.
Even with today's huge profit though, Westpac shares may drop when they restart trading shortly. Apart from falling slightly short of the numbers analysts had been expecting, Westpac stock may fall along with banks worldwide overnight after Greece's government shocked markets by saying it would put last week's eurozone rescue plan to a referendum, potentially adding months of uncertainty.
Westpac today said it incurred A$90 million in restructuring costs during the year to 30 September and its employee numbers fell by 767 to 37,712 in the year.
The bank’s total lending for the full year was up 4 percent to A$496.6 billion mainly driven by mortgages, which rose by A$17 billion.
Business lending declined by A$2 billion.
Westpac immediately passed on the RBA's rate cut to customers yesterday but today said the reduction in borrowing costs is unlikely to boost loan demand which is near historic lows as customers focus on savings.
'I am not sure if one rate cut can change business and consumer confidence,' Westpac chief financial officer Phil Coffey said.
Westpac said its net interest margin in the second half was 2.21 percent, over the preceding half.
Cash profit, a measure that excludes one-offs and non-cash accounting items, is closely watched by investors.
Westpac's net profit rose 10 percent to A$6.991 billion, with the bank saying its business strategy was ‘‘delivering tangible benefits’’.
Westpac chief executive Gail Kelly, the only woman to lead an Australian bank or top-30 company, said it was pleasing to see evidence of the bank’s strategy delivering tangible benefits.
‘‘Deeper customer relationships, measured by customers with four or more products, are a real strength at a time of more subdued economic growth,’’ she said in the statement.
‘‘We are also growing overall customer numbers in each of our major brands.’’
Westpac said bad debts declined 32 percent to A$993 million from a year earlier, helping boost net profit.
Cash earnings at the retail and business banking division gained 11 percent to A$1.949 billion. Cash earnings at the institutional bank declined two percent to A$1.487 billion, while they gained 12 percent at St George Bank to A$1.167 billion.
Cash earnings gained 9 percent at wealth management division BT Financial and surged 41 percent at Westpac New Zealand.
The big four banks may clock up cash earnings of around A$25 billion when ANZ completes the quartet with results due out tomorrow.
Even with today's huge profit though, Westpac shares may drop when they restart trading shortly. Apart from falling slightly short of the numbers analysts had been expecting, Westpac stock may fall along with banks worldwide overnight after Greece's government shocked markets by saying it would put last week's eurozone rescue plan to a referendum, potentially adding months of uncertainty.
Westpac today said it incurred A$90 million in restructuring costs during the year to 30 September and its employee numbers fell by 767 to 37,712 in the year.
The bank’s total lending for the full year was up 4 percent to A$496.6 billion mainly driven by mortgages, which rose by A$17 billion.
Business lending declined by A$2 billion.
Westpac immediately passed on the RBA's rate cut to customers yesterday but today said the reduction in borrowing costs is unlikely to boost loan demand which is near historic lows as customers focus on savings.
'I am not sure if one rate cut can change business and consumer confidence,' Westpac chief financial officer Phil Coffey said.
Westpac said its net interest margin in the second half was 2.21 percent, over the preceding half.
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