WestpacTrust profit up strongly

By Phil Boeyen, ShareChat Business News Editor

Friday 3rd November 2000

New Zealand bank WestpacTrust says a bigger share of the corporate banking market has helped to lift its profit more than $70 million dollars.

The New Zealand division of the Australian-based bank has reported a profit of $408 million for year to the end of September, up from $332 million last year.

WestpacTrust boss, Tom Gallagher, says the result is strong, and a bounce-back from last year's result which saw a $10 million drop in overall profits.

Mr Gallagher says WestpacTrust Financial Services had the highest net inflows of any New Zealand fund manager, with funds under management rising to $1.8 billion. It was also the market's number one in term-life insurance sales.

"However, our retail and business operations found it tough going as the domestic economy slowed and interest margins came under increasing pressure in a very competitive environment. This pressure will continue, particularly as the credit cycle gets tougher.

"Customers are benefiting from this increased competition. We have seen our average interest margin reduce by nearly 1%."

WestpacTrust's overall asset base rose by over $5 billion to $35 billion. Net interest income rose $42.1 million to $865.2 million while non-interest income rose $46 million to $458.5 million.

Mr Gallagher says highlights of the year included the performance of WestpacTrust Financial Services, the popularity of Online Banking and the development of new banking packages for customers. AGC also had a very good year.

The Westpac Group of companies overall reported a tax-paid operating profit of A$1.715 billion, up 18% on last year. The bank said the improved result reflected strong revenue growth, improved operating efficiency and sound credit quality.

Mr Gallagher says the more than 30,000 holders of New Zealand class shares in the bank are benefiting from the strong performance across the Westpac Group.

"They are getting a greater yield than predicted with high dividends plus a strong growth in the share price, in what has been a less than buoyant market."

New Zealand shareholders are to receive a fully imputed final dividend equal to the A28 cents a share dividend that Westpac plans to declare on December 14 for payment on January 3rd next year.

The second and final instalment for WestpacTrust Investments Limited shares is due for payment on December 20th.

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