On Monday, February 17, Australia's Westpac announced an increase in its first-quarter net profit, driven by growth in deposits and loan volumes. The unaudited net profit for the three months ending on December 31 was A$1.7 billion ($1.08 billion), up from A$1.5 billion a year earlier.
Although profit was down by 9% based on the bank's average quarterly performance in the second half of 2024 due to trends in hedge accounting, Westpac reported a 2% increase in domestic housing loans and a 3% increase in business loans during the period. The ratio of loan repayments more than 90 days late to the total loans decreased to 1.03% by the end of December.
CEO Anthony Miller noted that cost-of-living pressures and high interest rates remain challenging for some customers and businesses, with many facing cost pressures and reduced demand. He expressed optimism about the Reserve Bank of Australia possibly lowering the cash rate, providing relief to households and potentially supporting business activity over time.
Westpac's core net interest margin decreased by 2 basis points to 1.81% compared to the second half of the previous year, attributed to prudent management amidst mortgage competition and a shift towards lower spread savings and term deposits. The bank's common equity tier 1 ratio was 11.9% at the end of the quarter, slightly lower than the 12.3% reported at the same period the previous year.
(1 Australian dollar = $1.5748)