Westpac on track despite impairments
Westpac chief executive Gail Kelly has signalled that the worst might be over in terms of stressed exposures for the big banking group.
In a quarterly update released to the Australian Securities Exchange (ASX) today, Kelly pointed to a rise in impairment charges for the quarter from $811 million to $865 million, but said these were mainly owed to a continuing deterioration in the commercial sector and in New Zealand.
She said impaired assets had increased 24 per cent, principally from commercial facilities in the institutional bank and in New Zealand.
“Given the improving economic fundamentals and the extensive reviews of our portfolio, we believe that the rate of increase in stressed exposures is unlikely to be repeated in coming months,” Kelly said.
“The third quarter has shown some early encouraging signs of improvement,” she said. “In particular, stronger business and consumer confidence and better than expected growth in China are assisting the Australian economy.
“At the same time, however, we believe it appropriate to remain cautious, recognising the pace of any recovery is likely to be slow and that we will face some challenges, particularly on the unemployment front.”
Drilling down into the banking group’s performance, the ASX announcement said wealth earnings had improved, with funds under management or advice rising 6 per cent over the quarter.
AUTHOR
Mike Taylor
Recommended for you
Money Management examines the share price of financial advice licensees over one year to 31 March, with M&A actions in the final quarter having a positive effect for two licensees.
A $3.5 million settlement for victims of Melissa Caddick has been approved by the Federal Court following an initial agreement last December.
The Reserve Bank of Australia has delivered its first rate decision since the introduction of a new board structure last month.
Digital advice provider Otivo has launched an interactive tool, powered by artificial intelligence and Otivo’s own advice engine, to help answer client questions.
