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Westpac reported a “solid” start to its financial year, delivering a first-half profit that met market expectations.
The Australian lender remained positive about the outlook for the remainder of the year – but flagged that although it remained upbeat about the domestic housing market, it expected price growth to moderate through the remainder of 2017, which would likely mean housing credit growth will ease.
Westpac booked a 3 per cent rise in cash earnings (a preferred measure of profit for banks in Australia) to A$4.02bn ($3bn) in the six months to March 31. That was in line with analysts’ expectations.
The company described its result as “solid”, noting a “standout” performance from its institutional banking division thanks to improved credit quality and increased customer transactions. Westpac said its consumer and business banking unit continued to “grow in targeted areas” but noted margins were hurt by higher funding costs.
The bank’s common equity tier 1 capital ratio rose 0.5 percentage points to 10 per cent.
Brian Hartzer, Westpac’s chief executive, said the outlook for Australia remained positive overall. On the state of the housing market, he said 90-plus day delinquencies remained low by historical standards and the bank’s home loan book continued to perform well, with more than 70 per cent of customers ahead on their mortgage repayments.