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Australia's Westpac says new bank levy will add US$48m in costs

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Rising mortgage delinquencies and repossessions in outback mining towns are starting to bite Australia's banks, with Westpac Banking Corp the latest to report an increase on Monday.

[SYDNEY] Australia's No.2 lender Westpac Banking Corp said on Monday a new bank levy would result in additional costs of A$65 million (S$67.11 million) in the second half of the financial year ending September.

On an annualised basis, that represents about A$260 million after tax, equivalent to around 8 cents per share or 4.3 per cent of dividends paid, Westpac said in a statement.

Westpac posted record first-half cash profit of A$4 billion on May 8. "No company can simply absorb a new tax, so consideration is being given to how we will manage this significant impost on the bank. We plan to consult with stakeholders ... on the levy," it added.

The government announced a six basis-point levy on the deposits of the country's five biggest banks in its annual budget last week. The banks have opposed the idea.

REUTERS

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