WBC 0.48% $18.60 westpac banking corporation

net profit up 12pc to 3.9bn final div 72c

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    Sydney - Thursday - October 30: (RWE Australian Business News) -
    Westpac Banking Corporation (ASX:WBC) lifted net profit 11.8pc to
    $3.86bn in the 12 months ended September 30 2008 from $3.45bn for 2007.
    Revenue rose 12.3pc to $11.42bn from $10.17bn.
    Basic earnings per share were $2.060, up from $1.869.
    Final dividend has been increased from 68c to 72c, fully
    franked, for shareholders registered November 11.
    This brings total dividends for the year to $1.42, up from
    $1.31.
    The dividend reinvestment plan will be fully underwritten with a
    2.5pc discount on shares issued for the final dividend.

    *****

    Chief executive Mrs Gail Kelly said Westpac had delivered a
    robust result despite the unprecedented dislocation in global banking
    and more difficult economic environment.
    "This result shows the strength and resilience of our franchise
    and our ability to support our customers, as demonstrated through strong
    volume growth and increased market share.
    "I am particularly pleased with the second-half performance,
    with cash earnings up 3pc compared to the first half, revenue up 5pc and
    expenses held to a 2pc increase," Mrs Kelly said.
    "The strength of our AA rating and our prudent approach to
    managing the business over the long term has positioned Westpac well.
    "Our conservative balance sheet, diversified funding base and
    strict risk disciplines have not only helped deliver profitable growth,
    but put us in a strong position to meet the challenges ahead.
    "As a result, we have been able to focus on our customers and
    our next stage of growth.
    "Central to this has been establishing a new customer-focused
    strategic agenda, designed to align our people, processes and products
    around the needs of our customers.
    "The merger with St George [ASX:SGB] provides us with a unique
    opportunity to accelerate and enhance this important work," she said.
    As previously disclosed, Westpac has commenced an investment and
    restructuring program aimed at redesigning product processes and
    operations to better support customers and enhance efficiencies, at a
    cost of $323m ($226m after tax). These costs are non-recurring and have
    been treated as a cash earnings adjustment.
    Other significant items are the partial sale of BT Investment
    Management Ltd, which provided an after-tax gain of $86m, and a $205m
    after-tax gain on the Visa Inc float.

    *****

    On outlook, Westpac said the global financial crisis had
    dominated events in the past year, significantly affecting banks through
    asset writedowns, tighter funding and increased market volatility.
    Through the year the crisis also began to significantly
    influence the global economy.
    More recently, the actions of governments and regulators around
    the world had begun to restore confidence in the financial system and
    improved access to funding, although it was likely to be some time
    before debt markets operated more normally.
    However, these initiatives were considered unlikely to avert a
    more severe and prolonged slowdown in global growth.
    In Australia, growth was slowing, although the fiscal stimulus
    announced earlier this month and the significant policy flexibility of
    the Australian regulators were expected to see GDP growth hold up at
    around 2pc in calendar year 2009.
    Given these conditions, lower loan growth in the year ahead was
    anticipated as consumers and businesses sought to strengthen their
    balance sheets in the tougher operating environment.
    Impairment charges were also expected to continue to rise as
    unemployment moved modestly higher. Market volatility was also likely to
    remain high as financial market uncertainty persisted.
    Mrs Kelly said, "Westpac has performed well through the global
    financial crisis with its proactive management of funding, conservative
    risk profile and healthy capital position.
    "At the same time the implementation of our new strategy to
    significantly improve the customer experience and better support
    customers is under way.
    "This strategy, and the strength of the franchise, have
    positioned the group well for the challenging year ahead."
 
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