Westpac Banking Corp. (AU:WBC), Australia's second biggest lender, said Wednesday that cash earnings for the six months ended March 31 increased 7% from a year earlier to A$3.2 billion. Statutory net profit for the first half rose 38% to A$3.96 billion.
Westpac, the first bank established in Australia, said cash earnings gained to A$3.17 billion in the six months ended March 31 from a year earlier. Westpac said that cash earnings grew 7% and as all divisions recorded growth in cash earnings in the past six months. Impairment charges were down 47%. Lending increased $10 billion or 2% over the year to March 31. Australian mortgages were the key contributor to the increase, rising $18 billion or 6%.
Westpac said in a statement that on an adjusted basis, profit increased 7% to A$3.2 billion. While lending and deposits increased, net interest margins were five basis points lower compared to First Half 2010 as higher funding costs continue to flow through. As a result, net interest income was 1% lower.
Westpac Chief Executive Gail Kelly said "both consumers and businesses remain relatively cautious and while confidence is expected to pick up, lending growth is likely to be moderate in the immediate future.
As to the domestic economic conditions, Ms. Kelly stated, "Key indicators were generally positive during the half with the economy generating good growth, low unemployment and moderate inflation. Despite this, both consumers and businesses remain relatively cautious and while confidence is expected to pick-up, lending growth is likely to be moderate in the immediate future."
Westpac's has advanced 8.6% this year, the second best among Australia's four largest lenders. Australia Bank Ltd. (NAB) gained 11% this year.
Melbourne-based rival Australia & New Zealand Banking Group Ltd. (AU:ANZ) yesterday reported a 23% half-yearly profit increase to A$2.82 billion. This is the smallest half-yearly profit increase for Australia's fourth largest lender in 2 1/2 years.