Australia's Westpac Bank interim net profit up 6%

Australian banking heavyweight Westpac posted a six percent rise in interim net profit to Aus$3.90 billion (US$2.89 billion) Monday on the back of a strong performance from institutional operations.

The lender's cash profit in the six months to March 31, the financial industry's preferred measure which strips out volatile items, came in three percent higher at Aus$4.01 billion.

Westpac left its dividend unchanged at 94 cents.

The result capped six-monthly reporting by three of the nation's top lenders over the past week, with ANZ enjoying a 23 percent spike in cash profit while NAB's cash earnings rose 2.3 percent.

The Commonwealth Bank -- Australia's biggest -- uses a different reporting schedule and posted a record interim cash profit of Aus$4.91 billion in February.

Chief executive Brian Hartzer cited a 26 percent fall in impairment charges as helping Westpac's earnings, with all divisions performing well.

"This is a solid result given the current complex operating environment," he said.

"Our portfolio of businesses has performed well. The institutional bank is the standout, benefiting from improved credit quality, increased customer transactions, and a strong result from our markets business.

"Our consumer and business banks continued to grow in targeted areas but margins were affected by higher funding costs."

Cash earnings from institutional banking jumped 34 percent while they were up five percent from consumer banking and two percent from business banking.

All of Australia's big banks are battling higher funding costs and lower interest margins, with rules now demanding they hold more reserves as a buffer against mortgages and fears over rising bad loans.

Source: AFP