Westpac New Zealand full year earnings are up strongly, reflecting a large turnaround in provisions for bad debts.
Westpac's core earnings rise 9 percent to $1.33 billion. Photo: RNZ / Nate McKinnon
Acting NZ chief executive Simon Power said strong momentum in the economy had contributed to the bank's net profit, which rose more than two-thirds.
Financials: comparisons for the 12 months ended 30 September 2021, versus the same period last year
- Net profit $931 million, up 69 percent
- Cash earnings of $1,01 billion, up 56 percent
- Core earnings of $1.33b, up 9 percent
- Net operating income of $2,46b, up 8 percent
- Operating expenses of $1,13b, up 7 percent
- Net impairment benefit of $84m, compared with an impairment charge of $320m in the previous comparative period
- Net interest margin 2 percent, up 3 basis points
However, Power said Covid-19 was causing significant strain and uncertainty for parts of the community.
"The Delta variant poses serious health and financial challenges and we're committed to helping customers who have been affected," he said, noting the bank had increased its provisions for bad debts in the last financial year.
"The economy has performed better than expected and, as such, our lending provision levels have reduced to $525m, representing 0.6 percent of our total lending portfolio."
Power said first home buyers had been "very active" in a buoyant housing market.
Mortgages grew 10 percent and customer deposits rose 7 percent over the year.
"It's extremely satisfying that we've been able to help first home buyers to purchase 6,598 homes during the reporting period - a lift of 24 percent on the prior comparable period."
The bank's funds under management in KiwiSaver rose 14 percent to $9.1b, while the average balance increased 16 percent to $23,717.
He said the bank continued to invest in technology as about three quarters of customers chose to bank digitally.
The incoming chief executive Catherine McGrath takes over from Power later this month, following the retirement of David Mclean who stepped down at the end of June.
Board chair Jan Dawson also retired and was replaced by Pip Greenwood.