Westpac announces $583m profit, up 98pc
Westpac has almost doubled its halfyear profit, compared with the same time last year, as it pares back its provisions for bad loans.
The bank – which its parent is considering selling, among other options – made $583 million in the six months to March 31, compared with $297m a year earlier. Chief executive David McLean said that while the Covid-19 pandemic was far from over, the effect on New Zealand had been less than feared.
‘‘A year ago the outlook was very uncertain, with health, social and economic outcomes hanging in the balance.
‘‘Thankfully, New Zealand has so far avoided the worst effects of the global pandemic, largely thanks to decisive leadership from the Government, and we are now cautiously optimistic. Westpac NZ’s balance sheet is sound and we are wellpositioned to support the economic recovery, and the needs of households and businesses.’’
The profit after tax is up 98 per cent on the same time a year ago, driven by a significant change in loan impairments.
‘‘In the past year we made impairment provisions that allowed for a severe financial impact of Covid-19. That was a prudent approach, given the outlook at the time,’’ McLean said.
‘‘We still expect a softening of economic conditions during the remainder of 2021 but, based on our current economic outlook, we are writing back $99m of the credit provisions which were taken last year, as they are no longer forecast to be needed,’’ McLean said.
Lending increased 4 per cent over the half year. McLean said Westpac had lent money to firsthome buyers of 3512 homes, up 35 per cent year-on-year.
McLean said Westpac NZ was working closely with Westpac Banking Corporation on its review of its New Zealand businesses.
‘‘It is wise for all companies to regularly review the way business operations are structured and that is what Westpac Group is doing.
‘‘The key thing for our customers to know is that Westpac NZ remains very much open for business and that will be the case as we move forward, regardless of the ownership model.’’
McLean said Westpac NZ was prioritising independent reviews of its liquidity risk management and risk governance, as required by the Reserve Bank of New Zealand.
‘‘A team has been established to work solely on these reviews. We have been focusing on these areas for some time and are now adding
even more resources.’’
McLean announced his retirement yesterday, to take effect from June 25.
‘‘I have been in this role for nearly seven years ... It is 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.
‘‘One of the things that I have found most satisfying in my time at Westpac is seeing the successful achievements of so many of our customers, and knowing that we have a played a small part in helping them achieve that success.
‘‘I am also proud, in my time as chief executive, of the work we have done championing diversity and inclusion; publishing our gender pay gap; embedding a new focus on culture and conduct; becoming the first New Zealand bank to be Living Wage accredited; and for rallying together to help the economy through the darkest days of the Covid-19 pandemic.’’
‘‘A year ago the outlook was very uncertain.’’ David McLean Westpac NZ