Westpac shares down on higher expenses

The news: Westpac has reported a solid third-quarter profit despite margins contracting slightly.

The numbers: The lender posted unaudited net profit of $1.8 billion for the three months to 30 June, slightly lower than analyst expectations. Its core net interest margin declined to 1.86%, down 5 basis points compared to the first half of the year. Expenses for the second half to date are up 5%, while stressed assets rose 6 basis points to 1.16% of total committed exposures.

The context: Like other major banks, Westpac has benefited from rising interest rates. However, expenses have outpaced gains in the third quarter, driven by higher supplier costs as well as higher wages and salaries. The lender said the result reflected “resilient operating revenue, assisted by ongoing disciplined margin management”. Westpac did not release a third-quarter update in 2022.