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.
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Mike Taylor
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