Booming house loans boost Westpac half-year profit

1.00pm

The booming property market helped Westpac to a $310 million net profit for the half-year ended March 31, up slightly from the $308 million posted the same period the previous year.

Westpac chief executive Ann Sherry said the profit was driven by housing lending growth, with the bank posting a record $270 million net home loan growth in the month of March.

Ms Sherry said although growth in the housing sector and economy overall is likely to slow throughout the rest of 2004, she is confident Westpac can continue to build on its growth.

Ms Sherry said that net interest income had increased by $42 million or 10 per cent from the equivalent period in 2003, to $463 million, due to higher loan volumes, despite margin compression and strong competition.

She said higher levels of transactions and wealth management income was largely responsible for the $5 million or 1 per cent increase in non-interest income of $368 million.

Bad and doubtful debts expense increased $15 million to $18 million. This included a one-off recovery of $12 million and, with this excluded, the increase in the current period is $3 million.

Internet banking has taken off in popularity, up 80,000 compared to March 2003 levels at 360,000.

Ms Sherry said this was double the levels of March 2002 and represented nearly 50 million log-ins since the service began in April 2000.

Upcoming events for Westpac in the second half of 2004 include the launch of its first Social Impact Report.

"We have been establishing appropriate standards against which to publicly measure ourselves, for our social, environmental and economic impacts," Ms Sherry said.

Ms Sherry also announced that Westpac (NZ) Investments Limited is to conduct a buy-back of approximately 1 million NZX-listed NZ Class Shares, around 2 per cent of the stock on issue.

The buy-back will start around 17 May 2004 and will be conducted over a maximum period of six months. Westpac Investments shares were trading up 5c at $19.80 at 10.30am today shortly after the results were released.

A fully imputed interim dividend equivalent to A42 cents ($49c) per NZ Class Share, together with a supplementary dividend equivalent to A7.411 per NZ Class Share payable to non-New Zealand resident shareholders will be paid on July 2.

The stock has traded between $16.12 and $19.75 over the past 12 months.

- NZPA