Rejuvenated BT boosts Westpac profit

The fortunes of Westpac Banking Corporation continue to climb after it delivered a record profit of $2,818 million for the year ended September 30, 2005, representing an 11 per cent increase on last year’s result.

The record result comes on the back of a 10 per cent rise in revenues from ordinary activities for the year to $8,805 million, with all of the bank’s business units making a positive contribution.

Cash earnings also rose, experiencing a boost of 12 per cent to a total of $2,874 million for the past 12 months.

The bank’s wealth management arm continued its strong performance, with BT Financial Group producing a lift in cash earnings of 48 per cent. The fund manager also achieved revenue growth of 23 per cent while containing the increase in its costs to 4 per cent.

“Our investment in BT has proved to be the winner we were always confident it would be,” Westpac chief executive David Morgan said.

Apart from BT, Westpac’s funds management business performed well on the whole, reporting a profit on operations of $173 million — a 27 per cent increase on the previous financial year’s figure of $136 million.

The combination of funds under administration (FUA) and funds under management (FUM) for the business grew as well, reaching $73.5 billion, an increase of 17 per cent on the previous year. This rise includes $20 billion in FUA generated by wrap and corporate super platforms which has experienced a $6 billion jump from the time the bank acquired BT three years ago.

While Westpac’s financial performance was particularly strong in 2004-05, the company considered outlining specific earnings guidance for the year ahead inappropriate, due to factors such as the introduction of International Financial Reporting Standards and their effect on the volatility of earnings.