Westpac Banking Corporation (ASX:WBC)’s stock declined 3.543 percent in today’s trading at the Australian Stock Exchange even as the bank has reported sound H1 result before the market opened.
Westpac ended the day trading at 29.95 a share, declining 1.10 from last week, with 10.85 million shares exchanging hands.
The stock decline came even as Westpac Group announced H1 2016 statutory net profit of $3.7 billion, up 3 percent over the prior corresponding period.
Westpac CEO Brian Hartzer said the group had delivered a sound result in a volatile economic environment with significant regulatory change.
“The quality and value of our franchise continues to grow, with increased customer numbers, deeper customer relationships and strategic technology investments that make it easier for customers to do their banking. At the same time, we have continued to focus on controlling costs and delivering sustainable returns,” said Hartzer.
Key features of the result compared to the prior corresponding period included:
- Cash earnings of $3,904 million, up 3%
- Cash earnings per share of 118.2 cents, down 2%
- Cash return on equity of 14.2%, down 166 basis points
- Interim, fully franked dividend of 94 cents per share, up 1%
- Common equity Tier 1 capital ratio of 10.5%, up 171 basis points
- Lending and customer deposit growth of 6% and 5%, respectively, and
- Expense to income ratio at 41.6% down from 42.5%
Hartzer added that Westpac’s Consumer Bank delivered strong home loan and deposit growth and well-managed margins.
The Business Bank also recorded sound balance sheet growth, particularly in SME, with margins stable over the period.
Hartzer said despite the mixed global economic conditions, he remained positive about the outlook for the Australian economy and expected another year of sound growth, with GDP increasing by around 2.8 percent in the 2016 calendar year.
“The main threat we see is from global factors, which create fragility in businesses and regions that are more dependent on mining and mining construction. We also see signs of moderating housing investment, although housing fundamentals remain in good shape,” Hartzer said. – BusinessNewsAsia.com