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Westpac Banking, Australia's third-biggest lender, forecast a fall in bad debts next year, marking the local banking industry's most confident outlook to date, even as it reported a fall in
profits.
 |
Mark Baker / AP |
Westpac on Wednesday posted a 10.5 percent fall in second-half cash profit, hurt by higher bad-debt charges, but the result came in just above the top of market forecasts and contained an outlook that was far less cautious than its rivals.
"We are right now at the top of the credit cycle," Chief Financial Officer Phil Coffey told a media briefing.
Westpac made a cash profit of A$2.332 billion ($2.11 billion) for the six months ended Sept 30, compared with a pro forma A$2.605 billion a year earlier.
The year-ago figure was adjusted to include earnings from the recently acquired St George bank.
It paid a final dividend of 60 cents a share, with the full-year payout falling 18 percent to 116 cents.
The average forecast of eight analysts surveyed by Reuters was for a cash profit of A$2.24 billion, with the forecasts ranging from A$2.18 billion to A$2.31 billion.
Last week, rivals National Australia Bank and Australia and New Zealand Banking Group both beat market forecasts but warned bad debts could take as long as a further 12 months to peak.
Westpac's total asset-impairment charges were A$1.681 billion for the half-year, more than double the A$664 million booked against profits a year earlier. Overall stressed assets shot up to 3.1 percent of the loan book from just 1.3 percent.
The company's shares have jumped 50 percent so far this year versus a 22 percent gain in the benchmark S&P/ASX 200 index.
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