Chief executive describes profit result as ‘very strong’ and increase in customer stress from interest rates as ‘modest’
Westpac has recorded a dramatic lift in annual net profit to $7.2bn, prompting the major bank to give some of its excess funds to shareholders even as mortgage stress rises among customers.
He said there had been a “modest increase in stress” among customers due to rising interest rates and elevated inflation, with the number of customers in financial hardship now at 13,000. The banking sector has lifted margins through the controversial practice of increasing borrowing rates at a faster pace than deposits. Westpac’s closely watched profitability gauge, net interest margins, increased 9 basis points from a year earlier to 1.96%, excluding notable items.
The percentage of mortgage holders who have fallen more than 90 days behind in repayments increased at Westpac to 0.81%, according to its results for the 12 months to 30 September, however delinquencies are still below pandemic levels.unsettled markets, and fears of widespread loan defaults rose, major Australian companies Westpac, Macquarie and supermarket giant Coles have announced significant buybacks in a show of financial strength.
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