Westpac’s cash earnings soared higher while deferrals continued to decline as Australia exits its economic doldrums.
Westpac’s first quarter of the 2021 financial year cash earnings rose 54 per cent to $1.97 billion due to higher margins, lower expenses from the phasing of investment spend, and an impairment benefit of $501 million from improved credit quality.
“It has been a good start to the year with higher earnings, a stronger economy, and solid progress on our fix, simplify, perform strategic priorities,” said chief executive Peter King.
“I am particularly proud that our focus on supporting customers has contributed to a high proportion of customers being able to manage the impacts of COVID-19 and return to repayments.”
Loan deferrals continued to decline, with $11 billion of Australian mortgage deferrals at 31 January and “significant roll off” expected in February and March. Less than 1 per cent – $400 million – of small-business portfolio remains in deferral.
“While uncertainty remains around the impact of local COVID outbreaks, there is cause for optimism. The economy is recovering, consumer and business confidence is strong, and the labour market has been much more resilient than expected,” Mr King said.
Notable items excluded from the cash earnings included provisions for the AUSTRAC proceedings, refunds, payments, cost and litigation; write-down of intangibles, and asset sales and revaluations.
The pace at which the world is able to vaccinate itself will be more important in determining the ability of the global economy to bounce ba...