November 4th 2024.
Westpac, one of Australia's leading banks, faced a slight decrease in post-tax net profit, falling by three per cent to $7 billion. However, the bank remains optimistic about the future as they forecast solid demand in the upcoming year. The latest financial year results, released today, showed a small slip in the bank's net interest margin by one basis point.
Despite the overall decrease in net profit, Westpac's business and wealth sector saw a 13 per cent growth, while the consumer sector experienced a significant decline of 17 per cent. The bank attributed this drop to the intense competition in the mortgage market. Outgoing chief executive Peter King, who will be replaced by a new CEO next year, reassured shareholders that the bank's capital position remains strong and stable.
According to King, this is due to the bank's unwavering focus on providing exceptional customer service. This commitment has resulted in a reduction in the time it takes to approve mortgages by half and a significant decrease of 29 per cent in customer scam losses. King proudly stated, "We have significantly improved our customer service, expanded into key sectors, and delivered another solid financial result, all while maintaining a strong balance sheet and capital position."
Westpac also announced a final dividend of 76 cents and plans to increase its buyback program by $1 billion. In other news, the search for an 11-year-old boy who was swept out to sea during a family trip has resumed. The bank has expressed its sympathies and support for the family during this difficult time.
Looking towards the future, King remains positive about the state of the economy. Inflation has dropped to 2.8 per cent in September, the first time it has reached the two to three per cent target since the height of the COVID-19 pandemic. King stated, "As we approach 2025, the domestic economy is showing positive signs. Consumer sentiment has risen to a two and a half year high, the labor market remains stable, and inflation is nearing the target." However, he also acknowledged that some customers are facing tough decisions.
In light of this, King mentioned that some central banks have begun to ease their policies, and the Reserve Bank of Australia is expected to follow suit in 2025. This is good news for households and businesses, along with the undersupply of housing, population growth, and limited spare capacity in the business sector. As a result, Westpac predicts a strong demand for both housing and business credit in the upcoming year.
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