AUSTRALIA’S Westpac Banking on Monday (Nov 4) reported a fall in annual profit, and said it expects solid demand for housing and business credit in 2025 as the country’s central bank looks to shift to an easing stance.
“Some central banks have shifted to an easing cycle and the RBA (Reserve Bank of Australia) is likely to follow in 2025. This will be good news for many households and businesses,” the bank said.
It also increased its buyback programme by A$1 billion (S$871 million).
The RBA has kept interest rates steady for almost a year after raising the cash rate by 425 basis points to 4.35 per cent since May 2022.
Westpac, Australia’s third largest lender by market value, reported a 3 per cent decline in profit for the year ended Sep 30, to A$7 billion, due to rising costs and intense competition in the mortgage market. It did however beat an LSEG estimate of A$6.5 billion.
The bank’s net interest margin, a key measure of profitability, narrowed to 1.93 per cent from 1.95 per cent the previous year, reflecting competition in mortgage pricing.
Rising interest rates, which increase mortgage repayment costs for borrowers and intensify competition, are pushing Australian retail banks to diversify their revenue streams beyond their traditional focus on home loans.
Westpac declared a higher final dividend of 76 Australian cents per share, compared to 72 Australian cents a year earlier. REUTERS
