(Reuters) – Australia’s no.3 lender Westpac Banking Corp on Monday reported a 1.4% drop in annual profit, hurt by competition in its home lending business and a charge related to the sale of its life insurance unit, while raising its cost goal.
Last month, the bank warned of a A$1.3 billion hit to the second-half net profit and money earnings, driven primarily by a loss on the sale of its life insurance business.
While its lending margins within the second half did get well barely from the primary half, full-year margins were still down 13 basis points from last 12 months. Since May, the bank has moved in line with the Reserve Bank of Australia to pass on rate hikes to its customers.
The bank also moved away from its cost goal of A$8 billion by the 2024 financial 12 months, revising it upwards to A$8.6 billion, citing wage increases from a good labour market and regulatory costs.
Money earnings got here in at A$5.28 billion for the 12 months ended September, down from A$5.35 billion a 12 months earlier but beating a Morgan Stanley estimate of A$5.23 billion.
Westpac declared a final dividend of 64 Australian cents per share, compared with 60 Australian cents last 12 months.
($1 = 1.5610 Australian dollars)
(Reporting by Harshita Swaminathan and Savyata Mishra in Bengaluru; editing by David Evans)
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