Westpac cash earnings reach $4.017 billion as mortgage stress among homeowners continues
Westpac has raked in more than $4 billion from cash earnings over the last six months, a 3% increase for the major bank, who announced the results to shareholders today.
The big banks profit announcement comes on the back of its recent out of cycle rate hikes near the end of March, which are set to earn Westpac $1.1 million in additional interest a day, or $478 million a year.
CEO of the Westpac Group, Brian Hartzer, called the bank’s profit performance a “solid result given the current complex operating environment” in a statement today.
“Our portfolio of businesses has performed well. The Institutional Bank is the standout, benefitting from improved credit quality, increased customer transactions, and a strong result from our markets business.”
Presumably referring to APRA’s recent crackdown on investor lending, Hartzer said Westpac was “well placed to respond to any additional regulatory requirements.”
“We have a well-balanced and diverse portfolio, and 40,000 people using technology to deliver great service to our customers. As a result, we’re confident in our ability to deliver our strategy.”
According to the big bank, its home loan books are performing well with over 70% of mortgage customers ahead on their home loan repayments when offset accounts are factored into the equation, excluding equity and line of credit products.
However, a new survey conducted by the Australian National University found 23% of mortgage holders would be in quite a bit, or a lot, of difficulty if interest rates were increased by just 2%.
The research also revealed that around half of homeowners would be willing to see their property stop growing in value, if it would result in improved housing affordability in Australia.
"This may suggest that the issue of housing affordability is acute enough that Australians may accept policy change that could reduce prices or the rate of price growth to allow more equitable access to the housing market,” said ANU co-researcher, associate professor Ben Phillips.
With more rate hikes potentially on the cards, use Mozo’s rate change calculator to get an idea of how a rate increase could affect your budget. Or if you’re looking to see what other lenders in the home loan market are offering visit Mozo’s home loan hub to compare over 500 mortgages side by side.