Westpac posts 10.7% drop in profit
Westpac Banking Corporation (WBC) posted a full year result its CEO described as “sound” during what was a tumultuous year. The company reported a 10.7% drop in net profit compared to the previous year to $3.45 billion.
Westpac said pro forma cash earnings of $4.63 billion, was down 8% for the year ended 30 September 2009.
CEO, Gail Kelly, said the company remained strong through uncertain times by being well capitalised, well funded and well provisioned.
The company also declared a final dividend of 60c per share, fully franked, with the total dividend for the year being down 18% on the previous year.
“We finished the year with a significantly stronger balance sheet and funding profile, a set of clearly positioned and strong brands and an improving reputation with customers,” Mrs Kelly said.
“The St George integration has also progressed very smoothly, adding strength and capability to the Group overall.”
The company reported a 13% increase in revenue to $16.76 billion, with impairment charges $2.1 billion higher than the previous year.
Mrs Kelly said customer numbers have grown for both St George and Westpac since the merger.
"Our multi-brand flexibility has enabled dedicated focus on different market segments including first home buyers, the self-employed and small business owners,” Mrs Kelly said.
Looking ahead, Westpac said there is continued uncertainty in global markets and recovery is likely to be gradual.
“From a sector perspective, credit growth is expected to remain relatively subdued as the impacts from the financial crisis continue,” the company said.
“Average funding costs are expected to continue to increase as the intense competition for retail deposits remains, and as wholesale funding is sourced at a cost well above pre-crisis levels.”
In addition, Westpac said as Government fiscal support begins to be scaled back and interest rates move upwards, ongoing caution is likely to be applied to consumer and business budgets.
However, the company said it enters the 2010 financial year with solid business momentum, with a strengthened balance sheet and excellent provisioning cover.
At the close of trade yesterday, Westpac shares were trading at $25.43.
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