Lending drives Westpac profit hike
Westpac Bank has beaten expectations by lifting its full-year cash profit by eight per cent to $7.63 billion.
The bank also posted a higher-than-expected net profit, which was up 12 per cent to $7.56 billion. The final dividend of 92 cents a share, fully-franked, was up two cents.
The bank said the result was driven by lending and customer deposits growth, up eight per cent and seven per cent, respectively.
Westpac chief executive Gail Kelly said housing credit growth had increased over 2014 and the bank expected similar growth levels through 2015.
“An upswing in home building is also underway,” Kelly said.
While businesses remained cautious, there were signs of improving prospects for non-mining investment and a continued, moderate, pick-up in business credit growth was expected, she said.
Westpac, the country’s second-largest home lender, increased housing loans by seven per cent in the second half, indicating it had not lost market share.
Personal lending rose by 24 per cent and business lending by eight per cent, both of which were boosted by the acquisition of British bank Lloyds.
Revenue was up seven per cent on the previous year to $19.94 billion.
Stay informed, daily
Kelly said the group’s common equity tier one capital ratio of 9.0 per cent was well above regulatory minimums and placed the bank in a strong position to support growth and meet future regulatory requirements.
The outcome of the current Murray Australian financial system inquiry is expected to result in the banks having to hold more equity capital, amid criticism that they are more leveraged than overseas peers.
Westpac said asset quality had improved, with the ratio of stressed assets to total committed exposures falling by 36 basis points to 1.24 per cent.
Impaired assets to gross loans had an even greater decline with the ratio falling 17 basis points to 0.27 per cent, 60 per cent lower than the global financial crisis levels, the bank said.
