Westpac posts solid 2017 results
Westpac has posted a solid result for full year 2017, with a seven per cent rise in statutory net profit to $7,990 million, although BT Financial Group (BTFG) has seen a softer year.
BTFG’s earnings were impacted by some infrequent items and higher claims, including customer refund payments, higher general insurance claims (Cyclone Debbie), lower advice income, margin impact of migrating to MySuper products, and higher regulatory/ compliance costs.
However, BTFG underlying business continued to grow, the company said, with positive trends both in funds under management (FUM) and funds under advice (FUA) which went up by 10 and six per cent respectively, as well as a 10 per cent growth in life insurance in-force premiums.
Westpac Group’s chief executive, Brian Hartzer, said that the group’s portfolio of businesses continued to perform well, with Westpac Institutional Bank (WIB) being the standout while Consumer and Business Banks continued to deliver good earnings growth.
Also, New Zealand operations performed well, mostly benefiting from improved credit quality.
Westpac reported a three per cent growth year-on-year in cash earnings (to $8,062 million) and a two per cent increase in cash earnings per share (239.7 cents).
“Our primary goal in 2017 was to carefully balance growth and returns, while meeting all of our new macro-prudential regulatory requirements,” Hartzer said.
“We’ve continued to improve the functionality and convenience of our digital channels, our wealth system Panorama added around $4 billion funds under administration in FY17, and we’ve originated our first mortgages using our new customer service hub – an important milestone in the modernisation of our technology infrastructure.
The board determined an unchanged final, fully franked dividend of 94 cents per share to be paid and the final dividend represented a payout ratio of 78.7 per cent of cash ratings.
Hartzer also said: “We remain positive about the Australian housing market, although we expect price growth to moderate through 2018.
“Business in Australia is ready to invest, however many of our customers are holding back because of policy uncertainty.”
He added that the outlook for Australia remained positive overall, with GDP growth expected to be slightly above trend at around 2.5 per cent, however the growth outlook would be mixed across the country.
AUTHOR
Oksana Patron
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