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Westpac Banking clips dividend payout
(China Daily)
Updated: 2009-05-07 08:06
Westpac Banking Corp, Australia's biggest lender by market value, said first-half profit fell 6 percent and announced its first dividend cut in 17 years after charges for bad debts tripled. Cash earnings dropped to A$2.29 billion ($1.7 billion) in the six months ended March 31 from A$2.44 billion a year earlier, the Sydney-based bank said yesterday, using pro-forma figures adjusted to reflect last year's takeover of St. George Bank Ltd. Bad debts rose to A$1.61 billion from A$541 million. Westpac shares gained 2.4 percent to A$19.96 in Sydney. CEO Gail Kelly, who led the purchase of Australia's No 5 lender St. George shortly after taking over last year, is setting aside more money for future bad debts as the country nears its first recession in 18 years. "In terms of asset quality and provision coverage, Westpac has maintained a quality differential relative to its peers," said Chris Williams, analyst at UBS AG in Sydney. "Reports we have seen in this season have been less about earnings and more about balance sheet and asset quality, and Westpac on those metrics still looks to have an edge on its competitors." Westpac increased provisions for bad and doubtful debts to A$4.14 billion, with A$1.42 billion of that amount for specific loans and the remaining A$3.07 billion in collective provisions. The bank reported net income, which didn't include St. George in the prior year, fell 1.2 percent to A$2.18 billion. Cash earnings exclude hedging costs and other one-off items. Revenue including St. George rose 15 percent to A$8.3 billion, outstripping 4 percent growth in expenses. Deposits grew 8 percent from year ago. The bank will pay a dividend of 56 cents a share, down 20 percent from last year. That's the bank's first payout cut since 1992, according to data compiled by Bloomberg. Bloomberg News
(China Daily 05/07/2009 page16) |
