In its full-year results released on Monday, the big four bank confirmed a statutory net profit of $5.46 billion, as well as cash earnings of $5.35 billion; an increase of 105 per cent.
Westpac chairman John McFarlane said the improved performance and progress on strategies has allowed the bank to announced the buy-back.
“The board carefully evaluated several options and believes this is the most value-enhancing option to distribute part of the group’s capital and franking credits,” Mr McFarlane said.
The buy-back will open on Wednesday, 17 November for eligible shareholders and close on Friday, 17 December.
Westpac also experienced increases in mortgage lending (up 3 per cent to $14.7 billion), business lending (up 4 per cent), total customer deposits (up 4 per cent to $24.9 billion) and reported a final, fully franked dividend of 60 cents.
Westpac CEO Peter King said the results reflect the bank’s ‘Fix, Simplify and Perform’ strategy, which also includes simplifying its portfolio through the sale of four of its businesses with three more due in 2022.
“Cash earning rose, the balance sheet remains strong and I am pleased with the progress we are making to transform Westpac into a simpler, stronger bank,” Mr King said.
“Credit quality has remained remarkedly good with stressed exposures continuing to decline off last year’s peak, with mortgage 90+ day delinquencies were also significantly lower.”
Mr King is confident that the Australian economy will recover from the COVID-19 pandemic next year and expects customer spending to increase significantly as states re-open and pent-up demand is released.
“We expect the Australian economy to expand by 7.4 per cent in 2022, with credit growth expanding 6.8 per cent,” he said.
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.
