Westpac posts solid half

Westpac has joined the line-up of major Australian banks reporting solid earnings and profits across the first half of the current financial year, recording a 38 per cent increase in statutory net profit to $3,961 million on the back of solid cash earnings and significantly lower impairment charges.

Westpac chief executive, Gail Kelly (pictured) described the result as “healthy” and a reflection of the building of momentum across the business.

“All divisions delivered improved financial results over the second half of 2010 – something we have not seen since before the global financial crisis,” she said.

“The performance of Westpac Retail and Business Banking was particularly strong with the benefits of our Westpac Local investment clearly emerging. BT Financial Group also performed well, with good flows into our investment platforms lifting wealth income, which more than offset the cost of higher insurance claims relating to natural disasters,” Kelly said.

Drilling down on the company’s direction through the six-month period, the Westpac results announcement made clear that wealth management had been a part of its so-called “multi-brand” strategy and made specific reference to “further extending distribution of wealth and insurance products into St George Bank and independent financial planner networks”.

It said wealth management and insurance income had increased by $44 million, or 6 per cent, as improved results in the funds management and life insurance businesses had been offset by lower general insurance income due to higher claims from natural disasters.

Commenting on the domestic economy, Kelly described the key indicators as being generally positive but said, despite this, both consumers and businesses remained relatively cautious and while confidence was expected to pick up, lending growth was likely to moderate in the immediate future.