Westpac shares tumble on half-year profit miss
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More news: Shares in Westpac have tumbled 2.6% in early trading to $32.57 after the major bank missed half-year profit estimates as higher costs and hedging-related impairments offset growth in lending and deposits.
It reported net profit was down 1% from a year ago to $3.32 billion, below the $3.43 billion expected by analysts
Westpac half-year profit slips on impairment, higher expenses
The news: Banking major Westpac has posted a slip in half-year profit as higher expenses and hedging-related impairments offset growth in lending and deposits.
The numbers: Net profit for the six months to 31 March was down 1% from a year ago to $3.32 billion, and below the 3% increase to $3.43 billion expected by analysts polled by Visible Alpha. Net interest margin was unchanged from a year ago at 1.80%. Excluding notable items, net profit during the half was $3.46 billion, it said.
The lender declared an interim dividend of 76 cents a share, down from a combined 90 cents a year ago, which included a 75 cent ordinary dividend and a 15 cent special dividend. This year's interim payout was also below the 80 cents expected by analysts.
The context: The earnings mark the first half-yearly result delivered under new chief executive Anthony Miller, and comes after the bank last week flagged a $140 million hit to profit due to hedging impacts, which it said would reverse over time.
Westpac said margins remained steady despite persistent competition in lending and deposits, and flagged a 6% increase in operating expenses during the half year due to increased wages, technology costs and spending on its UNITE program.
What they said: “We’re managing margins actively in a competitive environment, achieving sustainable growth in our target areas. In particular, our focus on business and institutional is delivering results with Australian business lending up 14% and institutional lending up 15% over the year,” Miller told investors in a statement.
The source: ASX
