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Westpac earnings on the up

Westpac earnings on the up

(2 May 2008 – Australia) Westpac has announced an increase in its first half cash earnings by 10 percent to $1,839 million. The half year cash profit for Westpac rose to $1.84 billion from $1.68 billion a year earlier, which incidentally was above analyst expectations.

The corresponding first half increase from 2006 to 2007 was slightly higher at 11 percent.

Net profit after tax was up 34 percent to $2,202 million for the half, helped in part by the initial public offering by Visa earlier this year.

Westpac chief executive officer, Gail Kelly, said Westpac’s robust profit result demonstrated that the bank is managing the current market volatility well.

She said that this was executed through a conservative balance sheet positioning, a strong risk management culture and a prudent liquidity profile.

Revenue increased by 12 percent, above expense growth of 8 percent. This delivered a reduction in the Bank’s cost to income ratio to 44.4 percent even after adding more than 1,400 additional employees over the year and completing the acquisition of the RAMS franchise distribution business.

Westpac Institutional Bank (WIB) delivered revenue growth of 24 percent, however higher impairment charges from a small number of exposures impacted performance. The bank said that revenue growth was driven by increased lending (up 32 percent) and favourable trading conditions.
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