Westpac 1H profit jumps on rising interest rates, flags 2H margin pressure

Finance


May 8 (Reuters) – Australia’s Westpac Banking Corp (WBC.AX) said on Monday its net profit rose 22% in the first half as margins improved on the back of higher interest rates, but housing He warned that stiff competition for loans would have a negative impact on mortgage margins. Latter half.

Aggressive monetary tightening has boosted bank earnings and margins over the past year. But that could come to an end as inflation, softer house prices and a cooling economy pose risks to credit growth and asset quality.

“Both mortgage and corporate credit growth will slow. Strong competition in mortgages is expected to adversely affect the industry and Westpac’s margins in the second half of the year,” it said.

The country’s third-largest lender said its net profit for the six months ended March 31 was A$4 billion ($2.7 billion).

Net interest spread (the difference between interest earned on loans and interest paid on deposits) increased by 5 basis points year-on-year to 1.96% at the end of March.

Westpac declared an interim dividend of 70 Australian cents per share, compared with 61 Australian cents last year.

($1 = 1.4819 Australian Dollar)

Reported by Roushni Nair, Bangalore.Edited by Lisa Shoemaker

Our standards: Thomson Reuters Trust Principles.



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