Westpac
(ASX:WBC) has disclosed an unaudited net profit of $1.8 billion for the quarter ending on June 30.
In contrast to its competitors, such as Commonwealth Bank, NAB, and ANZ, Westpac does not provide cash earnings figures. It also refrained from offering any comparison to its performance in the June 2022 quarter, as no data was released a year ago.
"The quarter showcased resilient operating revenue, supported by ongoing disciplined margin management. However, inflationary pressures influenced expenses, reflecting increased supplier costs and salary expenses," Westpac informed the ASX.
The bank noted that mortgages with over 90 days of arrears increased by 0.80% during the June-ended three months for the country.
Westpac reassured its robust financial position, stating that capital, funding, and liquidity exceed regulatory requirements. Credit impairment provisions stood at $5.1 billion as of June 30, 2023, surpassing the expected losses of the base case economic scenario by $1.5 billion.
The net interest margin (NIM) for the quarter experienced a 2-point decline from the March 31 half-year, settling at 1.96%. The core NIM was 1.86%. Westpac attributed this decline to "continuing mortgage competition, partially balanced by enhanced earnings on capital and hedged deposits."
The bank highlighted an improved deposit-to-loan ratio of 84.1% in the third quarter, buoyed by a $8.7 billion growth in customer deposits. Loans expanded by $6.4 billion, predominantly in owner-occupied mortgages and business lending.
"Expenses for the second half of 2023 have risen approximately 5% compared to 1H23. Inflationary pressures, including elevated supplier costs, wages, salaries, and investments in the Group's technological and customer simplification initiatives, drove expense growth. The Group remains dedicated to cost management, with recent actions leading to a reduction of approximately 2% in full-time equivalent employees for the second half of 2023."
Westpac noted that notable items in the second half are projected to include one-off expenses tied to the cost reset program and costs associated with a one-off levy for the Commonwealth's Compensation Scheme of Last Resort.
