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Westpac profits tumble while dividend payments resume

  • November 02 2020
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Invest

Westpac profits tumble while dividend payments resume

By Cameron Micallef
November 02 2020

Westpac has resumed making dividend payments despite the major leader revealing its profits fell by 62 per cent due to the loan deferral payments.

Westpac profits tumble while dividend payments resume

Westpac profits tumble while dividend payments resume

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  • November 02 2020
  • Share

Westpac has resumed making dividend payments despite the major leader revealing its profits fell by 62 per cent due to the loan deferral payments.

Westpac profits tumble while dividend payments resume

The big four bank told the ASX that its full-year cash profits fell to $2.608 billion or $4.247 billion lower than last year.

The result was “significantly affected” by issues stemming from COVID-19, including higher impairment charges and lower income due to low interest rates and fee waivers, as well as the resolution of the AUSTRAC matter.

Westpac Group CEO Peter King told investors it was a poor result.

“2020 has been a particularly challenging year, and our financial result is a disappointment,” Mr King said.

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Among the key issues weighing on the result are the impact of COVID-19, lower income given weak demand for credit and higher costs.

Impairments for bad and doubtful debts, which might sting if borrowers fail to recover from the pandemic, have been raised by $2.2 billion to $6.2 billion.

While pointing out the financial year had not gone to plan, Mr King told shareholders the big four bank is in a strong position.

“Despite the challenging period, our balance sheet remains strong,” Mr King explained.

The bank told investors that it was in a position to pay out a dividend in the second half, noting it’s disappointment in not paying a first half yearly dividend.

Westpac will pay shareholders a final dividend of 3, against expectations that were as low as zero and as high as 35¢. The bank shelved its first-half distribution following APRA’s announcement to cap dividends at no more than 50 per cent of a bank's earnings.

Westpac profits tumble while dividend payments resume
Westpac profits tumble while dividend payments resume
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About the author

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Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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