The bank’s New Zealand division pulled in cash earnings of $445 million for the six months ended March 31, up 2% on the same time the year before.
Lending growth was a big driver of the result, up 8%.
But the squeeze is on as banks compete more and more aggressively for their share of the home loan market and their funding costs show no sign of getting cheaper. Mortgage lending rose 3% over the half to $43.3 billion.
Westpac’s net interest margin dropped from 2.23% to 2.15% in the half.
A report from KPMG showed that was the biggest drop in lending margin of the main banks.
The Australian parent company reported a profit of A$3.9 billion, which was up 3% but did not hit expectations, largely due to an increase in bad debts.
Chief executive Brian Hartzer said it was a solid outcome given a challenging environment.
Lending growth was 6% for the half, and Australian mortgages were up 8%.
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