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St George on course to meet profit forecasts

St George on course to meet profit forecasts

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Date Published : Tuesday, August 12, 2008

Australia's fifth-largest bank St George is on track to meet its earnings per share (EPS) growth target of between eight per cent and ten per cent, the bank has said.

In a trading update released this week, the lender said it is on course to meet EPS growth forecasts for the 12 months ending September 30th, ahead of its planned merger with Westpac.

The bank also reported that its unaudited cash profit for the ten months leading up to July 31st 2008 was up 12.5 per cent year-on-year to A$1.01 billion.

Commenting on the results, chief executive Paul Fegan said: "Against the backdrop of a challenging operating environment St George continues to perform well with strong growth across its core businesses and product lines, sound asset quality and effective cost control."

Mr Fegan added that the bank has sourced all of its wholesale funding requirements for 2008 and has raised A$3.3 billion of the estimated A$12 billion that will be required for 2009.

St George confirmed that it intends to recommend the A$18.1 billion Westpac merger proposal which, according to Blooomberg, will forge Australia's largest mortgage provider.

Pursuant to the merger proposal Westpac is offering 1.31 of its own shares for each St George share. The proposal will go to shareholders for approval at the beginning of November with finalisation expected for late November of this year.

On the back of the results St George's shares climbed 3.47 per cent to close the day at A$31.28. The bank's full-year results for fiscal 2008 are scheduled to be released on October 29th.

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