Westpac chief executive Peter Clare is confident that the bank’s record profits can continue after a 9% increase on last year brought profit to $770 million.
Rising profits have been attributed to a sharp reduction in bad debts (from $191 million to $117 million). Customer deposits rose 11% to $46.6 billion, outpacing overall lending growth of 4% to $61.6 billion.
BNZ’s statutory net profit to September 30 increased by 19.8% to $695 million, with cash earnings rising 6.3% to $788 million. Its Australian parent, National Australia Bank, posted after-tax profits rose by 33.6% to NZ$6.24 billion and cash earnings of NZ$6.8 billion.
The first half of the financial year has been very good to “Big Four” Australian-owned banks, which have turned in collective cash profits of $1.8 billion in the first half of the financial year. That equates to around $400 for every man, woman and child in New Zealand.
Australia’s second largest bank (which owns the NZ Westpac) unveiled a special 10 cents-a-share dividend payout after posting first-half cash earnings of $NZD4.22 billion.
Michael Bennet, Banking correspondent for the Australian, reported that the high earnings were driven by, “cost-cutting, lower bad debts and a margin boost from holding back some of the official rate cuts from homeowners.”
ANZ was the first major NZ bank to post its half-yearly profit statements, recording before-tax profits of $692 million in the half year to 31 March, up 19% from $578 million on the same period last year.
However despite these profits, net interests income – the difference between what a bank earns from lending out versus how much it pays on deposits – was down four person.
The bank workers’ union says that while no one is arguing banks shouldn’t be making a profit, the extent of the windfall of the four Australian banks off the back of New Zealanders would sit uneasily for many.