On Monday, 9 May, Westpac reported cash earnings of $3.1 billion; a 71 per cent increase on the prior corresponding period (pcp).
Statutory net profit also surged on pcp by 63 per cent to reach $3.28 billion.
When addressing the decline in cash earnings over the year, Westpac CEO Peter King attributed the drop to “competitive pressures on net interest margins and returning to an impairment charge after having benefits last year”.
“I’m pleased with our progress on costs which are down 27 per cent, or 10 per cent excluding notable items, compared to the second half of 2021,” Mr King said.
“This includes a reduction in headcount of more than 4,000 as we track towards our target of an $8 billion cost base by FY243.
“Our deposit to lending ratio increased to 83.5 per cent as total lending rose $8.8 billion and total deposits grew $20.6 billion over the half.”
Revenue was also down by 3 per cent for the first half of 2022 and 8 per cent on the first half of 2021.
Westpac reported a fully franked dividend of 61 cents per share.
Moving forward, Mr King said Westpac predicts the Australian economy to expand by 4.5 per cent this year and slow to 2.5 per cent in 2023.
“As the economy moves into the rising rate cycle, it’s important to remember that rates are moving from a very low base and we already assess loan applications on higher rates, consistent with regulatory requirements,” he said.
“We will continue to deliver on our Fix, Simplify and Perform priorities. The CORE program is delivering to plan and improving our risk management capability. Our portfolio simplification is making the bank simpler.
“The next big step is exiting super and platforms and we are well progressed. To improve performance, we are digitising customer journeys, improving customer service, growing in our core markets and resetting the cost base. Together, these things are critical to delivering for our people, customers and shareholders."
Neil Griffiths
Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.
Neil is also the host of the ifa show podcast.
