Westpac's major provisioning increase
Westpac has announced new and increased provisioning and asset write-downs totalling around $1,430 million after tax – something the big banking group says will reduce its first half cash earnings and statutory net profit after tax.
In an announcement released to the Australian Securities Exchange (ASX), the company said it was also undertaking detailed analysis to finalise its impairment provisions for the first half and that the impairment charge was expected to include a “significant collective provision increase that will lift the Group’s total provision balance in anticipation of credit losses anticipated from the COVID-19 outbreak”.
Westpac chief executive, Peter King, said that having spent much of the last decade strengthening its capital, Westpac was well-placed to respond to the unfolding environment.
He said the items along with their cash earnings impact included:
- Provisions and costs associated with the AUSTRAC proceedings and response plan of $1,030 million after tax;
- An increase in provisions for customer refunds, repayments and litigation of around $260 million after tax;
- A reduction in the value of several assets cost around $70 million after tax; and
- Costs and changes in the provision of group life insurance of around $70 million after tax.
Recommended for you
Magellan has closed out the financial year with funds under management approaching $40 billion and outlined its estimated performance fees.
First Sentier Investors chief executive, Mark Steinberg, is set to depart the asset manager after seven years.
Metrics Credit Partners has completed the acquisition of Taurus Finance Group and BC Investment Group as it looks to launch consumer lending arm Navalo.
AMP has announced to the ASX that it is being sued by property fund manager Dexus regarding the sale of its real estate and domestic infrastructure equity business.
