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Westpac Australia records 189% jump in net profit after challenging 2020; NZ boss retires

Westpac has reported a "promising" jump in interim cash earnings in Australia due to a better economic outlook, a stronger balance sheet and increased loan activity.

Westpac bank (file picture). Source: istock.com

Cash earnings, which strips out items like hedging impacts and one-off events, rose 256 per cent to AU$3.5 billion (NZ$3.76 billion) in the first half of 2020/21, from the same period in the previous year.

Bottom line net profit was 189 per cent higher at AU$3.4 billion (NZ$3.6 billion), after a challenging period in 2020 due to the Covid-19 pandemic.

"It has been a promising start to the year with increased cash earning, growth in mortgage and continued balance sheet strength," CEO Peter King said today.

"While the economic outlook is more positive there is still some uncertainty."

King said Westpac's Australian mortgage book expanded by AU$2.6 billion (NZ$2.8 billion) in the six months, with growth in owner-occupier loans partly offset by lower lending to investors.

Owner-occupier loans rose by three per cent, with first home buyers making up 13 per cent of new loans.

King noted housing prices have been rising but believes the rate of price growth will moderate in the months ahead.

Westpac's New Zealand arm announced today chief executive David McLean is retiring, after 22 years in various roles in the bank. He has been CEO since 2014.

“It’s the right time, both for the business and for me personally. The industry is going through a period of change and now is an appropriate time for a new leader to take the helm, and guide the organisation into the future," McLean said in a statement.