Westpac Posts Fall in 1Q Profit

By Alice Uribe

SYDNEY--Westpac Banking Corp posted a lower first-quarter net profit driven by the impact of notable items, which the company said would reverse over time.

The Australian lender on Monday said that unaudited net profit for the three months through December was 1.5 billion Australian dollars (US$980 million), down 6% on the quarterly average for the prior six months.

Excluding the notable items, which Westpac said related solely to hedge accounting, quarterly net profit was A$1.8 billion, in line with the average of the previous six months.

Chief Executive Peter King said the lender expected the economy to stay resilient, with the support of low unemployment and "healthy" corporate sector balance sheets.

"The economic slowdown, combined with abating inflationary pressures, should provide scope for monetary policy to become less restrictive within the next year," he said.

Westpac's net interest margin for the first quarter was 1.78%, with its core NIM at 1.80%, down 4 basis points on the second half of fiscal 2023.

Westpac said the NIM was "was well managed in light of lending and deposit headwinds."

Australian banks benefited as interest rate moved higher, but intense competition on home loans and customer deposits has weighed on margins, offsetting some of the gains.

Write to Alice Uribe at alice.uribe@wsj.com

(END) Dow Jones Newswires

February 18, 2024 16:18 ET (21:18 GMT)

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