• JUser: :_load: Unable to load user with ID: 46
Cuzz Media

Cuzz Media

Cuzz Media is part of t...



In late 2008 we became vi...

Banking In Australia Today

Banking In Australia Today

Visit Banking in Austra...

Donate Please

Donate Please

At the moment we need y...

Prev Next

Bankwest profit rise hides weak revenue

Bankwest profit rise hides weak revenue

Sean Smith   The West Australian   August 16 2012

Sharply reduced bad loans and lower operating costs offset weak income growth at Bankwest last financial year to help the regional bank to a 13 per cent rise in profit.

The Commonwealth Bank subsidiary increased cash net profit to $524 million in the year to June 30. But the 44 per cent fall in loan impairments to $61 million was the biggest single factor in the result, helping make up for a rise in banking revenue of just 1 per cent to $1.66 billion, including a 4 per cent drop in the June half.

Bottom-line earnings were also helped by a 2 per cent fall in operating expenses, with Bankwest attributing the improvement to lower staff costs flowing from productivity gains related to its call centre and the consolidation of loan processing.

Managing director Rob De Luca described Bankwest's "strong result" - his first at the helm - as "encouraging" given the continued "uncertain and volatile environment".

"Despite these challenging conditions, we achieved positive revenue growth and reduced our cost base via productivity improvements across both retail and business," Mr De Luca said in a statement. He was unavailable for further comment.

The bank's underlying performance was mixed.

Mortgage balances rose 12 per cent to $51 billion, though margins tightened over the year as funding costs increased.

The growth increased Bank- west's share of the national home loan market 30 basis points on 2010-11 to 4 per cent.

Deposit balances also recorded good growth, with retail deposits up 7 per cent to $17 billion as customers continued to seek out the safety of banks given the uncertain economic environment and volatile equity markets. Business deposits were up 5 per cent at $28 billion.

However, business loan balances fell 2 per cent to $20 billion. Bankwest blamed the fall on its continued cleanout of the riskier commercial loans on its books at the time of the bank's purchase by Commonwealth in October 2008.

The rundown of the book sparked claims from customers, aired again at a Senate inquiry last week and denied by Commonwealth, that Bankwest had unfairly terminated loans to reduce its risk profile going into the global financial crisis.
According to data released with results yesterday, Bankwest's share of the business lending market fell from 4.8 per cent over 2011-12 to 4.3 per cent.

Last modified onMonday, 01 July 2013 02:47

Leave a comment

Make sure you enter all the required information, indicated by an asterisk (*). HTML code is not allowed.

back to top


Major Topics

Helpful Resources


About Us