Australia’s Westpac interim net profit up 7%

Sydney (AFP) – Australian banking giant Westpac posted a seven percent jump in interim net profit Monday, helped by improved results across all of its businesses and lower charges for bad debts.

Westpac’s Aus$4.2 billion (US$3.16 billion) result in the six months to March 31 rounded out the half yearly reporting from three of the nation’s big four banks.

Cash profit, the financial industry’s preferred measure which strips out volatile items, came in six percent higher at Aus$4.25 billion, slightly ahead of expectations.

Last week, ANZ Bank also posted a healthy jump in interim net profit, but NAB’s slumped on the back of restructuring costs. Commonwealth Bank, Australia’s largest, operates on a different reporting schedule.

The bank left its dividend unchanged at 94 cents.

Westpac said it added more than 370,000 new customers over the last 12 months, investing Aus$1.3 billion in new services and upgrading its infrastructure.

“Our businesses continue to perform solidly, with the results for the consumer and business banks particularly good,” said chief executive Brian Hartzer.

“All businesses increased core earnings over the prior half. We are pleased there are no one-offs, making it a clean result.”

Revenue grew four percent to Aus$11.15 billion while impairment charges fell 20 percent compared with last year, a sign that fewer customers are defaulting on their loans.

The solid result comes with the country’s major banks — among the developed world’s wealthiest — under increasing scrutiny amid allegations of dodgy financial and life insurance advice and mortgage fraud.

The government launched a royal commission in February to investigate misconduct in the sector.

Hartzer noted the “significant customer and community concern” over the national inquiry and said he recognised that “the process provides a critical opportunity to restore customer trust across the sector”. 

“Westpac is already well advanced in taking steps that will improve customer outcomes,” he added. 

“We have been actively seeking out instances where we’ve got it wrong, and in those cases, putting it right for the customers affected.”