Westpac profits rebound as it unveils cost-cutting plan

Westpac’s half-year profits rebounded 256 per cent from the depressed levels of a year ago to $3.5 billion, as the lender also lifted its dividend and announced a major plan to slash its cost base.

In its results on Monday morning, chief executive Peter King vowed to cut Westpac’s cost base by more than $2 billion over the next three years, as it sells businesses, ramps up a digital transformation program, and responds to long-term pressures on returns.

Westpac’s cash profits for the March half, which were weighed down heavily last year by provisions for bad loans due to COVID-19, rebounded by 256 per cent to $3.5 billion compared with a year ago, or 119 per cent from the September half. Westpac will pay an interim dividend of 58c a share, after it axed the interim payment last year in response to the pandemic.

“It has been a promising start to the year with increased cash earnings, growth in mortgages and continued balance sheet strength,” Mr King said.

“First half earnings were considerably higher than the prior corresponding period, mainly due to an impairment benefit reflecting improved asset quality and a better economic outlook.”

More to come