Westpac Banking Corp reported a marginal increase in full-year net profit on Monday, supported by growth in deposits and lending, although demand for mortgages slowed during the final quarter of the financial year.
The Australian lender recorded net profit excluding notable items of A$6.99 billion for the year ended September 30, compared with A$6.97 billion a year earlier. The result matched the Visible Alpha consensus estimate.
Deposits increased 6% during the year, while loans grew 5%. Australian housing loans, excluding RAMS, rose 7%, and business lending increased 12%. Institutional lending climbed 18%, driven by credit demand in sectors including energy, infrastructure and resources.
However, average monthly mortgage applications fell 15% in the fourth quarter compared with the same period last year. Westpac said demand for housing mortgages and investor credit had weakened after the government removed tax concessions for property investors earlier in the year.
Westpac declared a final dividend of 77 Australian cents per share, unchanged from the previous year. Its core net interest margin declined by five basis points to 1.76%, while its common equity tier 1 ratio fell seven basis points to 12.46%.
The slowdown in mortgage demand affects Australia’s largest banks, which together account for more than 70% of the country’s mortgage market and depend heavily on home lending for profit.
Sources: Investing.com News.