(Reuters) -Australia’s Westpac posted a rise in its first-quarter net profit on Monday as deposits and loan volumes grew, and said a widely awaited interest rate cut by the central bank should help households and businesses grappling with cost-of-living pressures.
Australia’s No. 2 mortgage lender posted an unaudited net profit of A$1.7 billion ($1.08 billion) for the three months ended December 31, compared with A$1.5 billion posted a year earlier.
However, based on the bank’s average quarterly performance in the second half of 2024, profit was down 9%, reflecting trends in hedge accounting.
Westpac said its domestic housing loans grew 2% during the period and business loans grew 3%.
The ratio of loan repayments more than 90 days late to the bank’s total loans stood at 1.03% at the end of December, down by 9 basis points from end-September.
«Cost-of-living pressures and high interest rates remain challenging for some customers while many businesses face cost pressures and lower demand,» Chief Executive Anthony Miller said.
«Encouragingly, inflation has eased and we could see the Reserve Bank of Australia reduce the cash rate as early as tomorrow. This should provide some relief to households and, over time, support business activity,» he added.
The bank’s core net interest margin – the difference between interest earned from lending and paid for deposits – fell 2 basis points from the second half of last year to 1.81%.
«The modest decline reflects prudent management in the context of ongoing mortgage competition and further deposit mix shift towards lower spread savings and term deposits,» Westpac said in a statement.
Westpac said its common equity tier 1 ratio, an indicator of spare cash, was 11.9% at the end of the quarter, compared with 12.3% at the end of same period last year.
($1 = 1.5748 Australian dollars)
(Reporting by Himanshi Akhand and Rajasik Mukherjee in BengaluruEditing by Marguerita Choy and Leslie Adler)
