Customers resilient, but war still weighing: big bank
Customers of the big four banks are experiencing less financial stress, but the situation is not yet out of control as the conflict in the Middle East continues.
The economic impact of the war is being felt in Australia this year, with some still facing difficulties as growth slows and fuel costs remain high, Westpac said on Tuesday.
The country’s second-largest bank also warned the federal government must ensure Australia is better prepared for future events, including continued investment in a reliable, sustainable energy system.
“As a country, we must embrace the opportunity for real reform to ensure the nation remains competitive,” banking boss Anthony Miller said a week after the federal budget.
“Our stability sets us apart from others, but this is only possible when combined with more efficient and effective regulations.
“Improving productivity should be the country’s priority, particularly through increasing skills and education, as well as the committed and inclusive adoption of artificial intelligence and other emerging technologies.”
Westpac delivered a slight increase in interim earnings on Tuesday, with headline profit rising three per cent to $3.4 billion in the six months to March 31.
Net profit, excluding major items, rose one percent to $3.5 billion on revenue of $11.3 billion.
“While our customers are resilient and stress levels are decreasing, we have taken a cautious approach and increased our supplies,” Mr. Miller said.
In April, Westpac warned that the conflict, which erupted on February 28 when the US attacked Iran, was hurting earnings in its treasury and markets trading division as global volatility increased.
But more Australians turned to Westpac for their mortgage needs in the first half of the year, with home loans rising by seven per cent year-on-year.
Business loans also increased by 16 percent.
“Westpac is well placed to deal with the impacts of the ongoing conflict,” Mr Miller said.
The bank’s underlying net interest margin, which reflects the profitability of its lending business, decreased slightly as the performance of its treasury division was negatively affected.
Westpac will pay shareholders an interim dividend of 77 cents, up one cent on the previous half.
Australia’s Associated Press is the beating heart of Australian news. AAP is Australia’s only independent national news channel and has been providing accurate, reliable and fast-paced news content to the media industry, government and corporate sector for 85 years. We inform Australia.
