Westpac first-half profit falls 50pc in downturn

Westpac’s first-half profit result is down 50 per cent compared with the same period in the previous financial year.

The banking group’s New Zealand arm made $256 million in the six months ended in March, compared with $509m in the six months ended in March 2019.

Chief executive David McLean said the pandemic’s effect would be seen in banks’ financial performance.

There was little good news in Westpac’s latest result, he said.

‘‘Our entire outlook changed in the space of a couple of weeks as the country went into lockdown. This half-year result reflects only the early impacts of Covid-19, and our initial assessment of the lending losses we’re likely to see as a result.’’

He said it was ‘‘impossible to say’’ how bad the Covid-19 outbreak would be because there was no example from history to provide guidance. The downturn was sharper than in other crises, he said, and unemployment was expected to increase much more quickly. But the recovery could come quite quickly when the external shock was removed.

Up to the end of April, Westpac had granted mortgage and personal loan relief to 22,118 customers and provided $1.4 billion of new lending to 1129 business customers. The bank had converted $1.4b of business loans for 1560 customers to interest-only or reduced repayments.

It had received more than 600 applications for business support loans, which are offered through the Government’s Business Finance Guarantee Scheme.

Impairment charges lifted to $211m in the half, from $14m.