Westpac Reports Lackluster Third Quarter Cash Earnings

Post by Sharat on August 21, 2009 · Under Australian Economy, Business News, Company News, banking · Comment

Australian banking major and the nation’s largest bank by market capitalisation, Westpac Banking Corp posted third quarter cash earnings of $1.1 billion, in line with the previous year.

Deposits for the quarter ending June 30th grew by 2.3 per cent, whilst lending increased by 1.3 per cent compared to the previous quarter. Credit impairment charges grew to $865 million in the quarter up from $811 million, the lender said in a statement to the ASX based on unaudited figures.

Australia’s Big Four lenders continue to remain highly profitable as the economy managed to avoid slipping into recession which has gripped many other parts of the world. Mortgage approvals rose for a record ninth consecutive month in June, as interest rates hit half century lows and cash subsidies from the government helped boost demand from first time buyers.

Westpac said its net interest income had help from increased volume and stable customer net interest margins. The lender said that non-interest income however fell, but that its key Tier 1 capital ratio was 8.2 per cent on June 30th.

“Given the improving economic fundamentals and the extensive reviews of our portfolio we believe that the rate of increase in stressed exposures is unlikely to be repeated in coming months. The third quarter has shown some early encouraging signs of improvement. In particular, stronger business and consumer confidence and better-than-expected growth in China are assisting the Australian economy.” Chief Executive Officer Gail Kelly said.

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