Westpac net profit falls 16%, announces additional A$1 billion buyback

Australia’s Westpac Banking Corp reported a 16 per cent drop in its first-half net profit on Monday as intense lending competition and higher costs squeezed its margins.

It also announced an increase of A$1 billion (S$892.90 million) to an existing share buyback programme, taking it up to A$2.5 billion.

A rise in borrowing costs and increased competition for lending have prompted banks to cut rates on loans despite having to pay depositors more interest, squeezing their margins.

As a result, Westpac’s net interest margin for the six months ended March 31 slipped to 1.89 per cent, down 7 basis points from a year ago. Its net profit came in at A$3.34 billion, compared with A$4.00 billion a year earlier.

That slightly missed Visible Alpha consensus estimate of A$3.43 billion compiled by UBS.

It declared an interim dividend of 75 Australian cents per share and a special dividend of 15 cents apiece. AFP