Westpac reports strong first half but wealth mixed
Westpac Group has reported a strong first-half profit up six per cent to $3,907 million but its wealth division results remain mixed.
The directors declared an interim dividend of 94 cents per share fully franked.
Commenting on the result, Westpac Group chief executive, Brian Hartzer described it as “solid” given the current complex operating environment.
“Our portfolio of businesses has performed well,” he said. “The institutional bank is the standout, benefiting from improved credit quality, increased customer transactions, and a strong result from our markets business.”
Hartzer said the group’s consumer and business banks continued to grow in targeted areas but margins were affected by higher funding costs.’
The mixed nature of the performance in the BT Financial Group (BTFG) wealth management business was evidenced in the fact that while both fund under management (FUM) and funds under administration (FUA) were up 19 per cent and 11 per cent respectively alongside improved insurance premiums, this was offset in other areas.
It said earnings were lower from higher general insurance claims attributed to Cyclone Debbie and that lower advice income had been reported.
It said that there had also been margin impact from migrating to MySuper products and higher regulatory compliance costs.
In a more detailed explanation of divisional costs, the company’s announcement to the Australian Securities Exchange (ASX) also pointed to increased costs resulting from continuing work on the Panorama platform.
Commenting on the outlook for Australia, Hartzer said it remained positive overall.
Referring directly to the financial services industry, he said it continued to experience significant regulatory change but added that due to the strength of the company’s business and balance sheet it remained well placed to respond to any additional regulatory requirements.
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