📬 Financial Success: Westpac's Q3 2024 Net Profit Reaches $1.8 Billion

Westpac, one of the largest banks in Australia, announced its strong financial performance for the third quarter of 2024.

The Details:

• Its unaudited net profit went up by $X million against the first half of 2024 due to a slight fall in pre-provision profit, which was offset by a drop in impairment charges. The net interest margin of 1.92% was well-managed, with the core NIM moving 2 basis points higher to 1.82%.

• Operating momentum was strong, with significant customer deposit growth of $15.4 billion and loan growth of $14.7 billion. This includes Australian household deposit growth of 3% and housing loan growth of 8%, which stands higher than system 4. Actions aimed at improving customer experience by introducing new digital services and ensuring customer safety by better cybersecurity have been highlighted in this quarter for Westpac.

• The customer service-oriented approach of the company lent its support to another strong quarter, with the unaudited net profit of this company at $1.8 billion, up 6% compared to the first half 2024 quarterly average.

• The NIM was 1.92 percent, comprising higher earnings on capital and hedged deposits, Treasury, and Markets income of 12 basis points, down 2 basis points, hedging items that will reverse over time deterring 2 basis points.

• NII rose 2% on both higher net interest margin and loan growth. Non-interest income fell 4% on lower financial market revenues, part of the weakness in overall financial performance. Expenses rose 2% on higher investment spend, which is weighted to the second half of 2024, and ongoing inflationary pressures, particularly in technology services. Impairment charges of 4 basis points to average loans were down from 9, while reflecting an improvement in the economic outlook.

• At 30 June 2024, Westpac's CET1 capital ratio stands at 12.0%, above the target operating range. The quarterly average liquidity coverage ratio of X% and net stable funding ratio of Y% remain above regulatory minimums. It raised $36 billion in new long-term wholesale funding, while credit impairment provisions are at $5.1 billion, above expected losses by $1.6 billion. The CAP to credit RWA ratio decreased very slightly to 1.34%.

Why it matters:

Westpac should be able to manage its risks soundly and maintain a strong capital position with the view of ensuring the stability of the bank in the long term and negotiating any future economic uncertainties. Investors need to keep a close eye on the financial condition of Westpac and its risk management practices so as to make well-judged investment decisions.

Bottom Line:

For the long-term stability of the bank and overcoming any future economic uncertainties, good risk management and strong capital position will be imperative for Westpac. Proper investment decisions can only be taken if the investors are on their toes regarding monitoring the financial position of Westpac and its risk management framework.