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May 8, 2017updated 18 May 2017 11:19am

Westpac cash earnings up 3% in H1

By Meghna Mukerjee

Australian banking group Westpac has reported cash earnings of AUD4.01bn for the first half of fiscal year 2017, up 3% compared to AUD3.90bn reported a year ago.

The bank attributed the rise in cash earnings to 1% increase in core earnings (profit before impairments charges and tax) and a 26% decline in impairment charges.

The banking group’s statutory net profit for the period ended 31 March 2017 was AUD3.90bn, an increase of 6% compared to AUD3.70bn in corresponding year ago period.

On a reported basis, net interest income rose 2% to AUD7.61bn from AUD7.47bn a year earlier, while non-interest income increased 5% year-on-year to AUD3.15bn.

The banking group’s common equity Tier 1 capital ratio increased to 10% as at 31 March 2017 from 9.5% six months ago.

BT Financial Group (Australia), the Australian wealth management and insurance arm of Westpac, posted cash earnings of AUD397m for the first half of fiscal year 2017, down 11% from AUD448m a year earlier. The unit’s net operating income dipped 5% year-on-year to AUD1.14bn.

Compared to the prior year, the division’s funds under management (FUM) increased 19% to AUD55.1bn and funds under administration (FUA) rose 11% to AUD136.4bn at the end of March 2017.

Westpac CEO Brian Hartzer said: “This is a solid result given the current complex operating environment. We have been disciplined in balancing growth and returns, with cash earnings up 3% over both the previous half and the same period last year. At 14%, our return on equity is at the upper end of the range we are seeking to achieve, and we held costs flat over the last 6 months.

“We continue to strengthen our balance sheet, with our CET1 capital ratio now at 10.0% and with customer deposit growth well above loan growth.”

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