Westpac Profit Rises 5% as Wider Margins, Loan Growth Boost Quarter

Westpac Banking Corp reported a net profit of A$1.9 billion for the three months to 30 June, a 5% increase from a year earlier, as stronger lending and wider margins offset higher operating costs. The country’s third-largest lender said business and institutional loan demand underpinned the gain, echoing a broader recovery in credit growth across Australia’s banking sector. Net interest margin widened to 1.99% from 1.92%, helped by a reduction in low-yield liquid assets and a favourable interest-rate environment. Customer deposits rose by A$10 billion during the quarter and gross loans expanded by A$16 billion. Contribution from treasury and markets operations also improved, the bank said in its trading update. Chief Executive Officer Anthony Miller credited recent Reserve Bank of Australia rate cuts totalling 75 basis points and moderating inflation for bolstering household and business resilience, noting that late mortgage repayments fell three basis points year-on-year. Expenses increased as Westpac stepped up investment in its cost-reduction and technology overhaul programme, dubbed UNITE. The result comes a day after Commonwealth Bank of Australia posted record annual earnings and ahead of National Australia Bank’s quarterly update next week, providing investors with further insight into the health of Australia’s major lenders amid a shifting rate cycle.