Westpac’s H1 profit surged due to increased interest rates, but the bank anticipates margin pressures in the second half.
Westpac Banking Corp Posts 22% Jump in First-Half Net Profits
Australia’s Westpac Banking Corp has reported a 22% increase in first-half net profits, thanks to rising interest rates. However, the bank has warned that tough mortgage competition will negatively impact margins going into the second half. Over the past year, aggressive monetary tightening boosted banks’ earnings and margins, but inflation, softening home prices, and a cooling economy pose risks to credit growth and asset quality.
Net Profit and Dividend
- Net profit: A$4.00 billion ($2.70 billion) for the six months ended March 31, compared with A$3.28 billion a year earlier
- Net interest margin: rose 5 basis points from a year earlier to 1.96% at the end of March
- Interim dividend: 70 Australian cents per share, as compared with 61 Australian cents last year
Westpac has stated that credit growth, both housing and business, will ease, and intense mortgage competition is expected to negatively impact the industry and Westpac’s margins in the next half.
Despite the positive results, the bank is cautious about the future, and investors should keep an eye on the market for any changes.
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