Westpac’s first-half profit slips 1%, misses estimates

AUSTRALIA’S Westpac Banking Corp recorded a marginal 1 per cent drop in its first-half net profit on Monday, as a rise in operating costs due to technology investments offset growth in total loans.

Westpac recorded growth in home, business and institutional lending volumes, but its operating expenses rose nearly 6 per cent to A$5.70 billion (S$4.8 billion), driven by costs tied to its Unite simplification programme.

The bank’s net interest margin – the difference between interest earned from lending and paid for deposits – fell one basis point from last year to 1.88 per cent, due to persistent competition in lending and term deposits.

Core net interest margin stood at 1.8 per cent, narrowing by three basis points due to tighter loan spreads from increased lending competition and a shift toward lower-margin savings accounts and narrower deposit spreads.

The country’s second-largest mortgage lender said its net profit after tax was A$3.32 billion (S$2.77 billion) for the six months ended March 31, compared with A$3.34 billion reported a year earlier.

That missed Visible Alpha consensus estimate of A$3.43 billion.

Westpac also declared an interim dividend of 76 Australian cents, higher than 75 Australian cents declared a year earlier. REUTERS