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Westpac's cash earnings up 3 percent, misses analysts' expectations

Xinhua, May 2, 2016 Adjust font size:

Australia's second largest bank Westpac has lifted its first-half cash profit by 3.3 percent to 3.904 billion Australian dollars (2.969 billion U.S. dollars).

Analysts' had been predicting a cash profit of just over 4 billion Australian dollars (3.04 billion U.S. dollars).

Westpac chief executive Brian Hartzer said in a statement on Monday the company had delivered a sound result in a volatile economic environment with significant regulatory change.

"The quality and value of our franchise continues to grow, with increased customer numbers, deeper customer relationships and strategic technology investments that make it easier for customers to do their banking," Hartzer said.

"At the same time we have continued to focus on controlling costs and delivering sustainable returns."

He noted however that the Westpac Institutional Bank (WIB) was affected by lower net interest margins and significantly higher impairment charges related principally to four large exposures, which added 252 million Australian dollars (191 million U.S. dollars) to provisions.

Westpac's institutional arm is believed to include loans to a number of troubled businesses including Arrium, law firm Slater and Gordon and Coal miner Peabody Energy, according to the ABC.

Westpac's impairment charges for bad debts rose to 667 million Australian dollars (507.18 million U.S. dollars) for the half, up 225 million Australian dollars (171.07 million U.S. dollars) or 62 percent over the past six months.

At 1:40 pm (AEST), Westpac was trading 3.80 percent lower on the ASX. Endit