Australia's Westpac Banking Corporation says annual cash earnings at its New Zealand subsidiary rose 9% as impairments on loans fell and both loans and deposits grew.
Westpac New Zealand's cash earnings after tax for the year to September 30 rose NZ$63 million to $770 million from $707 million the previous year.
Impairment charges dropped $74 million, or 39%, to $117 million. Net operating income was up $17 million, or 1%, to $2.029 billion, and operating expenses up $4 million, or 0.50%, to $845 million.
Total net loans increased 4% to $61.6 billion, and total customer deposits increased 11% to $46.6 billion.
Westpac NZ's net interest margin dropped 34 basis points to 2.38%, and the bank's expense to income ratio fell 15 basis points to 41.6%.
The big fall in net interest margins was attributed to the transfer of $7.2 billion of liquid assets to Westpac NZ from its parent during the first-half of the 2013 financial year.
Without this Westpac said margins would've been down 10 basis points due to lower lending spreads as borrowers switched to fixed-term mortgages from floating rates, and competition forced a drop in deposit spreads. Westpac said 37% of its mortgage portfolio was on floating rates at September 30, down from 43% at March 31.
| Westpac NZ | 2013 | 2012 |
| Expense to income ratio | 41.6% | 41.8% |
| Net interest margins | 2.38% | 2.72% |
| Return on equity | 19.3% | 19.6% |
| Total stressed assets to total committed exposure* | 2.36% | 2.96% |
| Return on assets* | 1.23% | 1.20% |
*These figures are for the second-half of the 2013 financial year versus the first-half of the 2013 financial year as opposed to 2013 full-year versus 2012 full-year.
Big four post combined $3.69b cash earnings
Westpac's the last of the big four Australian owned banks to issue its annual results. Combined the four - ANZ, ASB, BNZ and Westpac - recorded a $336 million, or 10%, rise in annual cash profit to $3.69 billion.
Meanwhile Westpac NZ's parent Westpac Banking Corporation posted an 8% rise in annual cash earnings to A$7.097 billion, which was slightly ahead of the consensus of analysts' expectations. The group's cash return on equity rose 51 basis points to 16%.
It'll pay a final fully franked ordinary dividend per share of A88 cents a share, taking total ordinary dividends for the year to A$1.74 per share, a 5% increase. Westpac will also pay a final fully franked special dividend of A10c per share, in line with its half-year special dividend.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.