Westpac shares tumble on lower Q1 profit, margins
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More news: Shares in Westpac tumbled nearly 6% to $32.70 after the banking major reported a 9% drop in December quarter profit to $1.7 billion and said core net interest margin was down 2 basis points to 1.81%. The lender attributed the decline to a number of one-off notable items in the quarter.
UBS analyst John Storey said the trading update appeared "slightly soft" relative to market expectations, especially on the revenue line.
"Westpac is calling out a provision release in Business Banking in Q4 24 that inflated the base. On this basis, and stripping out hedging, revenue excluding notables is +2%. Overall costs trending better relative to consensus (seasonally lower investment spend) and expected credit losses lower (5bps)," he said in a note.
Westpac posts $1.7b quarterly profit, margins dip
The news: Australia’s second biggest lender Westpac has reported a dip in December quarter profit to $1.7 billion, with cost of living pressures and high interest rates continuing to be a challenge for customers.
The numbers: The lender posted unaudited net profit of $1.7 billion for the three months to December, 9% lower than the quarterly average over the previous 6 months. Its core net interest margin was down 2 basis points to 1.81%, while net interest income decreased 6% to $4.5 billion.
The context: Westpac said excluding one-off notable items, its unaudited net profit was up 3% to $1.9 billion. The bank reported loan growth of $13.4 billion, including home loans up 2%, business loan growth of 3% and institutional loan growth of 6%.
What they said: CEO Anthony Miller said cost of living pressures and high interest rates remain challenging for some customers while many businesses face cost pressures and lower demand. “Encouragingly, inflation has eased and we could see the Reserve Bank of Australia reduce the cash rate as early as tomorrow. This should provide some relief to households and, over time, support business activity,” he said.
The source: ASX
