Westpac reports 3Q earnings of $1.1 billion

Friday August 21, 2009

Westpac has announced today that it has recorded solid third-quarter cash earnings, reportedly around $1.1 billion. This solid result was accompanied, however, by climbs in impaired assets and bad debt charges. The solid performance in cash earnings was attributed to healthy previous quarterly results and Australia's resilient mortgage market, through which Westpac experienced growth of 1.3 per cent in total lending. This would further cement the Westpac's position as Australia's second-biggest lender.

Westpac Banking Corporation Third Quarter Results:

• Cash earnings $1.1 billion
• Bad debt charges up 6 per cent to $865 million
• Impaired assets up by 24 per cent

The increase in bad debt charges of 6 per cent from the second to the third quarter was attributed to the state of the commercial sector, especially the form of credit. Bad debts in New Zealand were also mentioned with one third of the impaired assets coming from across the Tasman.

Australians banks have benefitted from the actions of the Reserve Bank of Australia in cutting interest rates in addition to the Federal Government guarantee on wholesale funding.

Chief Executive Gail Kelly stated that the banking institution has recorded strong revenue that is level with previous quarterly results.

"Westpac continues to perform solidly despite the challenging operating conditions,"

"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," she added.

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