In spite a slight decline in its first quarter earnings by 3 percent to $1.55 billion, Westpac Banking Corp does not intend to follow National Australia Bank's new tact in attracting bank clients.

In a report by the Sydney Morning Herald (SMH), a Westpac officer was quoted criticising NAB's announcement to slash exit fees and promised to cover $700-worth of such.

NAB even went to the extent of advertising nationwide stating it would not want to be associated with Australia's big four banking giants that includes Westpac.

''As you know, the vast majority of Westpac customers don't pay this fee, nor is it a key determinant of which home loan provider they choose,'' said Westpac's general manager of retail banking, Jason Yetton, in the email obtained by BusinessDay and published by SMH.

The nation's four major banks had been heavily criticised by authorities and the public for slapping exorbitant exit fees on mortgage loans.

In an earlier statement, Westpac has reported a 3 percent slide in its first quarter earnings to $1.55 billion as a mitigating impact of the natural disasters that impede business and consumer buying.

Westpac's chief executive officer Gail Kelly said in a statement to the Australian Stock Exchange on Tuesday said the "recent natural disasters had subdued consumer sentiment, thus businesses have remaining cautious."

Westpac, further noted that the impact of Queensland's flooding earlier this year would likely impact on its estimated A$50 million in pre-tax earnings for the quarter due to the insurance claims that could necessarily be higher with the full assessment of the devastated eastern states of Australia.

It earlier said the initial impact of the Queensland floods was about $50 million in pre-tax earnings in the first quarter, composed of an economic overlay of about $40 million and claims costs of $10 million.

Insurance claims were expected to increase as the impact of the December flood was more fully assessed, together with the effects of the Brisbane floods, Victorian floods and Cyclone Yasi.

The bank further said it benefitted from focusing on mortgage distribution through proprietary channels, improving its spreads on deposits and repricing loans to reflect the rise in average funding costs.