Westpac’s capital position weaker at quarter-end

WESTPAC Banking Corp on Monday said its capital position at the end of the fiscal third quarter was weaker, hurt by payment of an interim dividend and higher risk weighted assets (RWA) following interest rate hikes over the quarter.

Since May, the Reserve Bank of Australia (RBA) has increased its key cash rate by 175 basis points which the country's "Big Four" lenders have passed on to their customers in full.

Australia's third largest lender said CET1 capital ratio, a measure of spare cash, fell to 10.75 per cent at the end of June from 11.3 per cent at end of March.

Westpac said its total assets with exposure of default at the end of the quarter were A$1.213 trillion, compared to A$1.184 trillion at the end of March.

The lender did not disclose a profit figure for the quarter, but said that cash earnings were partly offset by higher deductions for capitalised software and other regulatory deductions.

Last week, larger rival Commonwealth Bank of Australia warned that spiraling cost-of-living pressures had begun to hit consumer confidence, while National Australia Bank issued yet another warning on increasing costs. REUTERS

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