Westpac sells $21b RAMS portfolio to KKR consortium
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More news: Westpac has entered into an agreement to sell its RAMS portfolio to a consortium made up of non-bank lender Pepper Money and global investment managers KKR and PIMCO.
Westpac said the $21.4 billion RAMS portfolio would sell at a slight premium to its gross loan value, with the bank expecting to make a loss on the sale when it completes in the second half of FY26.
The bank shut RAMS to new business in August last year with customers able to continue managing their loan via the app.
KKR’s investment comes from its managed credit funds and forms part of its asset-based finance strategy.
What they said: “This transaction will significantly streamline Westpac’s mortgage operations, reduce run costs across the business and provide further strategic flexibility,” Westpac chief executive Anthony Miller said.
Westpac posts 1% slide in full-year profit, lifts dividend
The news: Westpac has reported a 1% drop in full-year statutory net profit to $6.9 billion, but raised its dividend to $1.53 per share.
The numbers: Westpac posted full-year earnings per share of 204 cents, steady on the year prior, with a final dividend of 77 cents bringing its full-year dividend to 153 cents, up 1% on last year.
Operating expenses jumped 9% to $11.91 billion largely on the back of tech expenses associated with Westpac's long running UNITE program, as well as restructuring costs of $273 million.
Deposits grew 7% to $723 billion and loans were up 6% to $851.9 billion. Net interest margins declined one basis point to 1.94%.
Net interest income increased 3% to $19.47 billion while non-interest income was up 5% to $2.99 billion on the back of growth in the bank's wealth management and market businesses.
Credit impairment charges were down from seven basis points to five basis points, with the bank attributing the change to cost of living pressures easing and a stable Australian economy.
What they said: Chief executive Anthony Miller said it had been a solid year for Westpac with the bank now ready to execute on its planned transformation.
"Westpac has undergone significant change in the past year. Our executive team is now in place, our people are our competitive advantage and we're focused on delivering outstanding results for our customers," he said, noting heightened costs associated with its UNITE program would reduce over time as its investment paid off.
"We’ve also been working to ensure we have the right investment in the right places and the right people in the right seats. This has meant we’ve made some changes to teams to better serve our customers and deliver outcomes. We remain focused on reducing our cost to income ratio over time."
The source: ASX
