Westpac profits hit hard by economy

Westpac New Zealand’s profitablity has been hit by the downturn in the economy.

The bank’s net profit rose 11 percent in the six months ended March over the year earlier, but is down by 11 percent on the previous period ended September 2023.

Key numbers for the six months ended March compared with a year ago:

  • Net profit $477m vs $426m
  • Net impairment charge $23m vs $154m
  • Pre-provision profit $688m vs $750m
  • Net revenue $1.38b vs $1.37b
  • Expenses $695m vs $624m
  • Net interest margin 2.09% vs 2.10%

Westpac’s New Zealand chief executive Catherine McGrath said a drop in its pre-provision profit reflected its support for customers dealing with cost of living challenges and to strengthen its business for the future.

“We have been focused on early and proactive outreach, contacting more than 51,000 home loan customers who were due to re-fix at higher interest rates in the past six months, as well as more than 1800 customers we identified as at most risk of financial stress,” McGrath said.

“We know things are tough for businesses as well, especially in the retail and hospitality sector.

“Overall, we have fewer customers suffering hardship than we’d expected, and most remain well-placed to manage ongoing cost pressures.”

Deposits fell 1 percent to $78.8m, with total loans to businesses up 1 percent to $32.7m and home lending up 3 percent to $67.4m

The Australian-based Westpac Group reported a 16 percent drop in first half net profit to A$3.34 billion, with revenue down 4 percent to A$10.59b.

According to the news on Radio New Zealand

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