"Rise in 90-plus day mortgage delinquencies reflects the tougher economic environment"
Westpac has reported a net profit of $1.5 billion in the first quarter of 2024 – a 6% decline due to notable items related to hedge accounting.
Excluding notable items, the net profit stood at $1.8 billion, consistent with the averages of the second half of 2023.
One of Australia’s Big Four banks, Westpac had a modest growth in pre-provision profit by 1%, with both revenue and expenses increasing by 2%.
The bank experienced positive operational momentum, marked by customer deposit growth of $7.9 billion and loan growth of $5.6 billion. This reflects a system growth of 1.1 times in household deposits and one time in Australian housing loans.
Commenting on the Q1 2024 results, Peter King (pictured), chief executive at Westpac, said that despite challenges in the lending and deposit sectors, the bank’s net interest margin (NIM) was effectively managed – declining by one basis point to 1.93% excluding notable items, with core NIM reducing by four basis points to 1.80%.
King added that the bank’s focus on enhancing its services had led to an improvement in consumer satisfaction and higher rankings in institutional banking across key industry surveys.
“From a credit quality perspective, we saw a reduction in business stress, while a rise in 90-plus day mortgage delinquencies reflects the tougher economic environment,” the bank executive said. “We remain focused on helping those customers facing high cost-of-living pressures and making difficult choices to manage household budgets.”
The bank also had a reduction in business stress, although there was an increase in 90-plus day mortgage delinquencies, reflecting a tougher economic climate.
Read more: Westpac Group reports profit jump for FY2023
Westpac’s impairment charges saw an increase, with the charge to average loans rising by three basis points to 10 basis points, which still remains below the long-term average.
“We expect the economy to remain resilient, supported by low unemployment and healthy corporate sector balance sheets,” King said. “The economic slowdown, combined with abating inflationary pressures, should provide scope for monetary policy to become less restrictive within the next year.
“We continue to prioritise financial strength with capital, funding, and liquidity well above regulatory minimums. Risk management remains a priority.”
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