Westpac will scale back its margin lending activities after its loan activities triggered more than $150 million in impairment charges over the six months to the end of March.

The charges were three times as high as those in the same period of 2008 and relate mainly to several multi-million dollar loans on concentrated portfolios, where a single security made up more than 40 per cent of a customer's portfolio.

"I am disappointed about this business," Westpac chief executive Gail Kelly said.

"We had done several reviews on it last year and we had recognised early on that this business had more credit risk in it than we had understood.

"But towards the end of the year, when the Lehman crisis had occurred and there were frozen redemptions of funds, we found ourselves in a position where we needed to take some impairments."

Westpac reduced its exposure to loans on concentrated portfolios from $1.3 billion in the first half of 2008 to $500 million in the first half of 2009, and will seek to cut this even further.

"It's a pretty unlikely circumstance that we will be doing much of that kind of lending," Westpac chief financial officer Phil Coffey said.

"I think it is fair to say that our emphasis going forward is going to be on the smaller diversified aspects of margin lending."

Westpac has taken the concentrated portfolio loans out of the general margin lending business to work through the problems.

"We understand where the risks are and we have put in place stronger management of this portfolio," Kelly said.

Westpac's total margin loan book decreased by 39 per cent to $4 billion at the end of March this year from $6.6 billion at 31 March 2008.