Any productivity savings generated by the banking group have been offset by increased investment costs and higher compliance spending, according to Westpac’s annual report.
But thanks to solid results across the bank’s division, the group’s overall profit of $6.82 billion was up by 14 per cent on the previous year.
Westpac’s Australian financial services businesses contributed $4.48 billion to the group’s $6.82 billion net profit after tax for the full year to 30 September 2013.
Westpac’s retail and business banking arm saw a profit of $2.3 billion for the year ended 30 September, St George made a $1.44 billion profit, and BT Financial Group (BTFG) contributed $737 million – up by nine per cent, 17 per cent and 13 per cent on the previous year, respectively.
The institutional division of the bank recorded a profit of $1.64 billion (up 11 per cent on the year to September 2012) and Westpac New Zealand contributed $634 million (up 16 per cent).
On the lending side of the business, net interest income increased by $349 million to $12.9 billion for the year ended 30 September 2013 – and lending increased by four per cent, or $22 billion.
Impairment charges were $365 million lower (down by 30 per cent) due to rising property and investment markets.
Non-interest income (ie. wealth management, insurance income and trading income) was up by $408 million to $5.9 billion – a seven per cent increase.
The bank’s expense to income ratio was 40.9 per cent, and the cash return on equity was 16 per cent (up by 51 basis points).
