Westpac takes 24% profit hit
Westpac has suffered a 24 per cent first-half profit slump to $3.173 billion, leading its chief executive, Brian Hartzer to describe it as a disappointing result reflecting weaker business conditions and other issues including remediation and the resetting of the bank’s wealth strategy.
Importantly, cash earnings excluding major remediation and restructuring items were down five per cent.
Despite the negativity, the company announced an unchanged fully franked dividend of 94 cents per share.
However, Hartzer said the past six months had been a turning point for the bank and that it was proactively addressing legacy issues while improving the products and services it delivered.
“We are exiting personal financial advice to focus on the parts of our wealth business where we have a competitive advantage and we are delivering significant cost savings by simplifying the business,” he said.
On the big-ticket item of customer remediation costs, the bank confirmed it had provisioned $1,445 million pre-tax over the past three years, including $1,249 million for customer refunds.
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