Westpac New Zealand’s (NZX:WBC) profits rise 12%

Westpac New Zealand (NZX:WBC), announced its full-year results today (7 November 2022). The bank made an annual profit after tax of NZ$1.05 billion, which signifies an increase of 12% over the previous year.

Westpac NZ chief executive Catherine McGrath said that the sale of the life insurance business added  NZ$126 million to the bank’s financial result.

As per the announcement, the company’s net operating income rose 10% to NZ $2.70 billion, while expenses were up 2% to NZ$1.158 billion. The  margin of the bank was flat at 2%.

Westpac New Zealand registered a lending growth as per the announcement, with a rise of 5% to N$96.8 billion, with home lending up 5% to NZ$63.8 billion. Business lending was up 4%, and deposits rose by 3%.

The bank also reported a net impairment benefit of NZ$27million, compared with NZ$84million in the previous financial year (FY21).

McGrath said that Westpac was extending support to customers who were experiencing big mortgage rate increases.

McGrath added that the bank also increased its branch hours and opened a new contact centre at the regional level in Hamilton and extended help to customers who need special care.

Special developments in Westpac NZ

Westpac New Zealand Limited (WNZL) conducted two reviews as per the Reserve Bank of New Zealand guidelines.  The reviews were with regard to risk governance and liquidity  (the Risk Governance Review and the Liquidity Review). These reviews were undertaken by Westpac New Zealand only and not by the parent company.

 The first review was related to the effectiveness of WNZL’s governance, with a focus on the board. The second review was related to WNZL’s effectiveness in improving liquidity risk management. It was done by Deloitte Touche Tohmatsu.

Westpac Australia

Westpac Banking Corporation, the parent company based out of Australia, made a net profit after tax of AU$ 5.69 billion in FY22, signifying a 4% rise over the previous comparable period.

However, the cash earnings of the parent company fell by 1% to AU$5.27 billion. 

Strategic priorities and outlook for FY22

Peter King, Group CEO, spelled out the strategic priorities before the group by saying that the bank seeks to improve customer services in Australia and New Zealand. He added that the bank hopes to focus on performance by simplifying its processes.

He said in an environment of economic uncertainty, Westpac is in a good position to handle the road ahead.

Stock update

On 7 November 2022, the bank’s stock was trading down by 2.33% at NZ$ 25.61, at the time of writing this article.