Westpac hits headwinds
Westpac hit what it described as more challenging market conditions in the December quarter to report a statutory net profit of approximately $1.4 billion on the back of flat operating income and while absorbing a $200 million reduction in markets and treasury income.
In a quarterly update filed with the Australian Securities Exchange today, the big banking group described operating conditions as having deteriorated in the December quarter with slowing global growth and an escalation in the European sovereign debt crisis.
It said this had led to high market volatility and increased business and consumer caution.
Westpac chief executive Gail Kelly said the result had reflected the more challenging operating environment.
Looking at its wealth management divisions, the bank's announcement said that wealth income in the quarter had declined as administration and management fees were impacted by lower average funds under management and funds under administration balances from weaker asset markets.
However, it said new platform flows had continued to be strong relative to the market, but that insurance earnings were lower, reflecting a rise in claims in line with seasonal factors and higher reinsurance costs.
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