Westpac cuts annual dividend as cash earnings plummet 62%

[BENGALURU] Westpac Banking Corp on Monday slashed its annual dividend and reported a 62 per cent plunge in cash earnings due to write-downs and a record A$1.3 billion (S$1.24 billion) fine over a money-laundering case.

The fine to settle a lawsuit accusing Westpac of enabling millions of payments to people exploiting children brought an end to a difficult chapter for Australia's oldest bank, which saw it lose about a third of its value since the bombshell announcement in November last year.

The coronavirus pandemic compounded the bank's woes with its devastating effect on economic growth as the company recorded A$3.18 billion (S$3.05 billion) in impairment charges for the year compared with A$794 million a year earlier.

Australia's second-largest lender reported cash earnings of A$2.61 billion for the year ended Sept 30, significantly lower than A$6.85 billion reported a year ago.

The figure, however, beat an average estimate of A$2.49 billion, according to analysts polled by Reuters.

Westpac, which had elected not to pay an interim dividend earlier this year, declared a 61 per cent lower final dividend of 31 cents per share.

"We are addressing the issues that have impacted performance in our mortgage book and expect to see improvement start to flow in 2021," chief executive Peter King said in a statement.

Mr King added that more than two-thirds of the company's mortgage customers who had deferred repayments in the wake of the pandemic had now restarted those payments.

REUTERS