Westpac Reports $1.7bn Profit Amid Economic Challenges

1

Alongside its financial results for the first quarter, Westpac highlighted a potential rise in unemployment, expecting it to reach 4.5% by mid-year, up from the current 4%. The economic environment remains challenging, with high cost-of-living pressures and subdued business demand affecting both consumers and businesses.

CEO Anthony Miller expressed concerns over economic challenges but noted positive signs, such as easing inflation. He suggested that this could lead to the Reserve Bank of Australia lowering the cash rate, providing some relief to households and potentially boosting business activity. Miller emphasised the bank's readiness to support customers facing financial strain.

In terms of loans, Westpac's lending activity has increased by 5% to a total of $820 billion, while deposits have grown by over 6% to $688 billion. The bank is also seeing an improvement in mortgage repayment health, with delinquent mortgages reducing slightly from $5.35 billion in September to $5.1 billion by December.

The bank's performance is a critical indicator of the broader Australian economy's health. Westpac's profitability and financial standing suggest stability, though concerns about rising unemployment and household financial pressures underline ongoing economic vulnerabilities. Furthermore, any potential interest rate changes by the Reserve Bank of Australia could have far-reaching implications for both consumers and the housing market.

Australia's economic climate remains uncertain. The projected rise in unemployment could temper consumer spending and business investment, affecting financial performance across various sectors. Expert insights will focus on monitoring inflation trends and policy changes, particularly interest rate adjustments, which might influence future financial strategies for both consumers and businesses. Investors will also be watching Westpac's share price performance closely following a notable dip post-results, despite a strong annual uptick of 33%.

Published:Tuesday, 18th Feb 2025
Source: Paige Estritori

Share this news item:

Finance News

Telstra Boosts Dividend and Announces $750 Million Share Buy-back 20 Feb 2025: Paige Estritori Telstra, Australia's leading telecommunications giant, has unveiled a significant financial move with an increase in its dividend and plans for a substantial share buy-back initiative. Following a notable 7.1% rise in first-half profit, the company aims to allocate up to $750 million for repurchasing shares. - read more

Victoria's Land Tax Shift: A Boon for First-Time Home Buyers Amidst Investor Retreat 20 Feb 2025: Paige Estritori In recent findings by Ray White, reports indicate a notable retraction of property investors from Victoria due to increased land tax rates introduced by the state government. The data highlights that investors owned over one-third of Melbourne homes auctioned by Ray White in the past year and 32.2% of regional Victorian homes. - read more

Softer Employment Figures Could Ease Inflation Concerns 20 Feb 2025: Paige Estritori In light of recent economic indicators, Australia's central bank may find comfort in softer job growth numbers. Despite earlier concerns over potential interest rate hikes, the Reserve Bank of Australia (RBA) could see current trends as easing pressure on inflation. - read more

FAAA Questions Significant Rise in AFCA Claims Handling Costs 20 Feb 2025: Paige Estritori The Financial Advice Association of Australia (FAAA) is pressing the Australian Financial Complaints Authority (AFCA) to justify projections indicating a substantial increase in its claims handling costs. According to an actuarial report, these costs are expected to jump from $12,450 per claim in 2024/25 to $21,334, a surge that raises concerns among financial advisors and industry stakeholders. - read more

NAB's Quarterly Profit Decline Amid Industry Competition and Rising Costs 19 Feb 2025: Paige Estritori National Australia Bank (NAB) has reported a $1.7 billion net profit for the final quarter of 2024, reflecting a 1 percent decrease compared to the average of the prior two quarters. The dip in profits is attributed to intensified competition within the financial sector and escalated costs associated with financial crime prevention and internal wages. - read more

Westpac Reports $1.7bn Profit Amid Economic Challenges 18 Feb 2025: Paige Estritori Westpac, Australia's oldest banking institution, announced a quarterly net profit of $1.7 billion, marking a 9% decline compared to the average of the previous two quarters. Despite this decline, the bank remains profitable due to increased consumer deposits and lending activity over the year. - read more

Revamped Education Pathway: New Age for Financial Advisers 18 Feb 2025: Paige Estritori The landscape for financial adviser education is set for a transformation as Treasury unveils its revised standards, heralding a new direction for the industry. These changes are poised to broaden the appeal and accessibility of financial advising as a career path. - read more

RBA's Looming Decision: A Double-Edged Sword for Homeowners? 18 Feb 2025: Paige Estritori As the nation awaits the Reserve Bank of Australia's (RBA) crucial decision on interest rates, homeowners brace for potentially contrasting outcomes. While a segment of financial observers predicts a rate cut, providing much-needed relief, others foresee a possible pause, sparking a mixture of anticipation and anxiety. - read more

RBA's Rate Cut Offers Mortgage Relief: What You Need to Know 18 Feb 2025: Paige Estritori After enduring a prolonged period of rising interest rates, Australian mortgage holders finally have something to celebrate. The Reserve Bank of Australia (RBA) has announced a reduction in the official cash rate from 4.35% to 4.1%, marking a turning point in a rigorous rate-hiking regime aimed at curbing inflation. This 25 basis-point cut signals potential financial relief for homeowners and represents a vital adjustment following a significant climb from the pandemic-induced low of 0.1% in May 2022 to 4. - read more