Westpac will take a $2.23 billion impairment charge, of which $1.6 billion stems from the decline in economic activity related to the COVID-19 pandemic.
However, the bank believes it is “well positioned to absorb this increase”.
“The world is going through a once-in-a-lifetime health and economic crisis and we are committed to assisting as many customers as possible to bridge this shutdown period,” said new CEO Peter King. “Our packages are already providing relief to individual and business customers. It is however unfortunate that some customers will not be able to navigate the financial and economic changes of this crisis and may not reopen.
“Having materially strengthened capital over the last decade, building significant buffers, we are well positioned to absorb this increase and respond to future developments in the environment.”
While the bank’s impairment provisions have begun to increase, the extent of additional charges will depend on the “severity and duration” of the decline in economic activity.
“The group will reassess its provisioning levels as developments unfolds,” Westpac said in a statement.
More to come.
