(Sazua.com) – Australia’s Westpac Banking Corp saw a slight 1% decrease in its first-half net profit on Monday, with increased operational expenses from tech investments outweighing the growth in overall lending.
Westpac saw an increase in home, business, and institutional lending volumes; however, its operational expenses climbed almost 6% to AU$5.70 billion, largely due to costs associated with their UNITE simplification initiative.
The bank’s net interest margin—the gap between the interest received from loans and what was paid out on deposits—dropped by one basis point compared to the previous year, settling at 1.88%. This decline can be attributed to ongoing competitiveness in both lending practices and term deposit rates.
The core net interest margin was 1.8%, which decreased by three basis points because of reduced loan margins from heightened lending competition along with a move towards lower-margin savings accounts and smaller deposit spreads.
The nation’s second-biggest mortgage provider announced that its net profit following taxation stood at A$3.32 billion ($2.14 billion) for the half-year period ending on March 31, which is slightly lower than the A$3.34 billion recorded in the previous year.
That fell short of the Visible Alpha consensus estimate of A$3.43 billion.
Westpac announced an interim dividend of 76 Australian cents, which is more than the 75 Australian cents reported in the previous year.
(1 Canadian dollar equals 1.5513 Australian dollars)
(Reported by Roshan Thomas and Shivangi Lahiri in Bengaluru; Edited by Marguerita Choy and Rod Nickel)
