Westpac (WBC) yesterday confirmed its 3% rise in full-year cash profit of $7.82 billion, first announced last month with the bank’s lift in mortgage rates and capital raising, but the news did nothing to end the slide in bank shares and therefore the wider market.
Westpac released its full-year numbers two weeks ago and yesterday also confirmed a rise in final dividend to 94 cents a share and a full year payout of $1.87, up 3%.
But the news had no impact on the banks’s share price which fell by between 1.7% for the NAB and then 2.4% to $30.61 for Westpac.
The fall in bank shares helped take more than 78 points or 1.4 off the ASX to 5168 yesterday.
Interestingly shares in Macquarie Group (MQG), which have been very strong because of the record first half result and hopes for a strong second half result, fell $3.77 or 4.4% to $81.93.
Westpac CEO Brian Hartzer said yesterday that the banks were facing a lower for longer outlook of low interest rates, strong competition and weak economic activity.
He said that while consumers remain cautious, there were signs of improvement in non-mining related investment as the economy shifts to being more service sector-driven.
"At the same time, with better world economic growth we expect some stability in Australia’s terms of trade and stronger income growth over the medium term," he said.
"For Australian banks, this means we continue to operate in a ‘lower-for-longer’ environment with modest credit growth, intense competition, and some ongoing regulatory uncertainty."
He said housing credit growth was likely to slow down, but there was a pick-up in business borrowing (which the latest private credit data from the Reserve Bank has shown).
Westpac total lending for the financial year ended September 30 rose 7%, housing loans grew 7%, business loans were up 6%, and personal loans rose 5%.
Similar to the other banks, Westpac’s return on equity fell by 0.57% to a still very high 15.8%.
