Westpac New Zealand's half year profit fell as the cost of doing business increased while its margins fell.
Westpac's chief executive said the bank's customers had remained resilient to changing economic conditions, which was reflected in a "solid result". Photo: 123rf
The bank's first half profit fell 5 percent to $497 million from $523m for the six months ended March, reflecting a significant increase in provision for bad debts, which had boosted the year earlier period by $99m.
Westpac chief executive Catherine McGrath said the sale of Westpac Life added a one-off gain of $126m to the financial result.
Overall revenue rose 12 percent, along with the cost of doing business.
Home lending rose 7 percent and deposits rose 6 percent, however, the bank's interest margin dropped 8 basis points on the year earlier.
Operating expenses rose 5 percent to $564m.
McGrath said the bank's customers had remained resilient to changing economic conditions, which was reflected in a "solid result".
"Six months ago the housing market was still reaching its peak, the Omicron variant hadn't emerged and there was peace in Europe," she said.
"We've seen a real shift in trends since then, including significant growth in inflation."
She said the bank was supporting business customers as they "navigated volatile trading conditions".
The bank's funds under management in the Westpac KiwiSaver Scheme increased 8 percent year-on-year, to $9.3 billion.
McGrath said the bank's KiwiSaver members were boosted by 37,000 new default customers.
However, she said the average customer balance fell 1 percent over the period to $22,069, driven, partly by an influx of new default members with generally lower balances.
McGrath said the bank was continuing to focus on risk management, governance and other other issues for identified for improvement by the Reserve Bank.