The big-four bank reaped a $28 million increase in net profit compared to the previous year. The bank said home lending had risen by 5%, while customer deposits rose by 4% over the year.
Westpac's mortgage book grew from $48.9 billion in 2018 to $51.5 billion this year. Business loans grew from $29.8 billion to $31.3 billion over the year, while net loans jumped from $80.4 billion to $84.2 billion.
Net operating income grew to $2.4 billion, a 2% increase on the prior year.
Westpac NZ chief executive David McLean said the low interest rate environment would continue to boost home buyers.
“We’ve never seen interest rates this low in New Zealand. It helps with housing affordability and business investment, and presents a great opportunity for existing borrowers to pay down debt," McLean said.
The lender says two thirds of its customers are ahead in their mortgage repayments by a median average of eight months, or an average of $8,652, at September 30, 2019. Westpac said low rates had also reduced returns for deposit savers over the period.
Overall, McLean was bullish on the outlook for the bank.
“Although significant risks exist globally, the local economy remains in reasonable health, our business is fundamentally sound and our balance sheet continues to be well managed,” he added.
The bank received the all-clear from the Reserve Bank today after an 18-month inspection of its capital modelling processes. RBNZ deputy governor Geoff Bascand said the lender is now operating "with peer-leading processes, capabilities and risk models in a number of areas".
Following Westpac's clearance by the Reserve Bank, the bank will no longer be subject to a 2% regulatory capital overlay.
| « ANZ pulling affordability lever on home loans rather than price | Westpac NZ annual profit rises 3%; RBNZ releases it from capital purgatory » |
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