Invest
Westpac 1H profits soar post-pandemic
Australia’s improving economic outlook has seen the profits of a big four bank surge, which is said to signal strong dividend gains across the market, an industry expert has revealed.
Westpac 1H profits soar post-pandemic
Australia’s improving economic outlook has seen the profits of a big four bank surge, which is said to signal strong dividend gains across the market, an industry expert has revealed.
In a statement to the market on Monday, Westpac said its cash earnings had risen 256 per cent to $3.5 billion, in what chief executive Peter King called “a promising start to the year”.
The bank said it had recorded a net profit of $3.4 billion for the first half of the 2021 financial year, up 189 per cent on the prior corresponding period.
“First-half earnings were considerably higher than the prior corresponding period, mainly due to an impairment benefit reflecting improved asset quality and a better economic outlook,” Mr King said.
“Importantly, we are beginning to see the benefits of our new operating model through improved performance.”
The big four bank’s cash profits were heavily weighed down last year by provisions for bad loans due to the uncertainty surrounding the COVID-19 pandemic.
With an improving economic outlook the bank revised provisions seeing a surge in profits.
Mr King said the bank’s mortgage book had soared more than $2.6 billion over the past six months due to soaring demand in the property market.
“Owner-occupier loans increased 3 per cent [in the half], with first home buyers making up 13 per cent of new loans,” he said.
Mr King added that the bank still “remained prudent in our impairment positioning” despite the improved economic outlook for the Australian economy.
Following canceled dividend payments last year, Westpac will reward shareholder by paying a fully franked interim dividend of 58¢ a share on 25 June.
Plato’s senior portfolio manager, Dr Peter Gardner, said Westpac’s results and the imminent releases of its big four peers should signal a turning point for dividend investors.
“The half-year results from Westpac support the notion that Australian banks have navigated the COVID-19 crisis exceptionally well, and now we think their Australian investors, particularly the mums, dads and retirees, can breathe a sigh of relief,” Dr Gardner said.
He said the outlook for income investors looks remarkably bright, especially when you consider how things were looking just six months ago.
“While income from cash-backed assets continues to languish, fortunately, we are in the midst of a major turning point for dividend income, buoyed by the strong recovery of financials and also the continued strength of our major miners.
“We project the ASX 200 is on track to return around 5 per cent gross yield in the coming 12 months,” Dr Gardner concluded.
About the author
About the author
Stock market
Super fund investors bid to acquire Sydney Airport
A group of super fund investors has lodged a non-binding takeover bid for Sydney Airport, valuing the company at over $22 billion. ...Read more
Stock market
10 most globally held stocks revealed
Australian investors remain bullish on electric vehicles and technology stocks, according to their long-term held positions, new research has shown. ...Read more
Stock market
How ‘gamer investors’ are pushing a new wave of social responsibility
A new generation of younger retail investors are pushing a new social movement, yielding a distributive impact on the markets, most notably through the GameStop saga, two researchers have revealed. ...Read more
Stock market
ASX tipped for record high despite inflation fears
The market is tipped to shake off fears of rising inflation, with the ASX 200 now tipped to close the year at a new record high, an economist has revealed. ...Read more
Stock market
‘Commission-free propaganda’: Warning issued for retail investors
The phrase “if you’re not paying for it, you’re the product” applies just as much to stock trading apps as it does to social media networks. ...Read more
Stock market
Is the tech sell-off creating opportunities for investors?
A tech sell-off sparked by inflation concerns has seen world markets crash. But is it creating an opportunity for investors to ‘buy the dip’? ...Read more
Stock market
Government opens arms to Wall Street
In its bid to maintain Australia’s global competitiveness, albeit its firmly shut borders, the Australian government has included a measure in its recent budget to allow foreign financial services p...Read more
Stock market
Aussie market falls on US inflation
The Australian sharemarket has fallen on the bell after Wall Street experienced sharp sell-offs overnight due to hotter than expected inflation data. ...Read more
Do lockdowns boost property prices? Are short-sellers levelling the playing field? Did you lodge your tax returns early?
Listen now
Will lockdowns halt the housing boom? Is the metaverse taking over? And the cons of lodging your tax returns early
Listen now
Are you being priced out of the market? Have you got the Tuesday blues? And are you ready for the upcoming super changes?
Listen now
Are property prices set to crash? Should you jump on board the fintok craze? And how to prepare for this tax time
Listen now
Stock market
Super fund investors bid to acquire Sydney Airport
A group of super fund investors has lodged a non-binding takeover bid for Sydney Airport, valuing the company at over $22 billion. ...Read more
Stock market
10 most globally held stocks revealed
Australian investors remain bullish on electric vehicles and technology stocks, according to their long-term held positions, new research has shown. ...Read more
Stock market
How ‘gamer investors’ are pushing a new wave of social responsibility
A new generation of younger retail investors are pushing a new social movement, yielding a distributive impact on the markets, most notably through the GameStop saga, two researchers have revealed. ...Read more
Stock market
ASX tipped for record high despite inflation fears
The market is tipped to shake off fears of rising inflation, with the ASX 200 now tipped to close the year at a new record high, an economist has revealed. ...Read more
Stock market
‘Commission-free propaganda’: Warning issued for retail investors
The phrase “if you’re not paying for it, you’re the product” applies just as much to stock trading apps as it does to social media networks. ...Read more
Stock market
Is the tech sell-off creating opportunities for investors?
A tech sell-off sparked by inflation concerns has seen world markets crash. But is it creating an opportunity for investors to ‘buy the dip’? ...Read more
Stock market
Government opens arms to Wall Street
In its bid to maintain Australia’s global competitiveness, albeit its firmly shut borders, the Australian government has included a measure in its recent budget to allow foreign financial services p...Read more
Stock market
Aussie market falls on US inflation
The Australian sharemarket has fallen on the bell after Wall Street experienced sharp sell-offs overnight due to hotter than expected inflation data. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
