Westpac (ASX:WBC) - CEO, Peter King
CEO, Peter King
Source: Westpac
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  • Westpac (WBC) half-yearly profits drop 12 per cent to just under $3.1 billion compared to the first half of 2021
  • The company says the dip is due to competitive pressures on net interest margins and returning to an impairment charge after having benefits last year
  • However, the bank says it is making progress towards its goals: the profit result, while weaker year-on-year, marks a 71 per cent increase compared to the second half of 2021
  • Westpac has lifted its interim dividend to 61 cents, fully franked, to be paid on June 24
  • Westpac last traded at $23.83 per share on May 6

Banking giant Westpac (WBC) has seen half-yearly profits drop 12 per cent to just under $3.1 billion compared to the first half of 2021.

The bank said the drop was due to competitive pressures on net interest margins and returning to an impairment charge after having benefits last year.

Yet, while the profit result is weaker than this time last year, it marks a 71 per cent increase compared to the second half of 2021.

Westpac reported a statutory net profit of $3.28 billion — down five per cent on this time last year and up 63 per cent from the second half of 2021.

“In the first half of 2022, we’ve made steady progress towards our goals. We’re managing through the low-rate environment and making the changes required to become a simpler, stronger bank,” CEO Peter King said.

“We are tracking well on our strategic priorities. From a Perform perspective, we maintained our return on equity over the prior half, as our cost reset program helped to offset a decline in revenue and an increase in impairments.”

In light of the results, Westpac lifted its interim dividend to 61 cents per share, fully franked, to be paid on June 24.

Mr King said the first half of 2022 had been “challenging” for many customers due to the floods, the pandemic and the uncertainty around the war in Ukraine. However, he said the Australian economy was “robust.”

“Consumer spending may be tempered by higher prices and higher interest rates. However, the positives of strong household and business balance sheets, combined with the continued reopening of international borders and local economies, will likely increase economic activity,” he told the market.

“We expect the Australian economy to expand by 4.5 per cent in 2022 but slow to 2.5 per cent in 2023. Credit growth is forecast to be a strong 5.7 per cent in 2022 slowing to 4.3 per cent in 2023.”

Mr King also gave his insight into the housing market, saying that the demand for houses had already shown some “signs of easing”, and higher interest rates were expected to contribute to a moderation in house prices next year.

Westpac last traded at $23.83 per share on May 6.

WBC by the numbers
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