Westpac (ASX:WBC) - CEO, Peter King
CEO, Peter King
Source: Westpac
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  • As fellow Big Four players lined up to release half-yearly reports this week, Westpac (WBC) spruiked a tidy profit in a quarterly results snapshot
  • The Australian banking giant rounded off the first quarter of its 2021 financial year with unaudited cash earnings up 54 per cent on the quarterly average of 2020’s second half, clocking in at $1.97 billion
  • WBC also said it expects to shed a portion of its $11 billion in mortgage deferrals when they expire in the coming months
  • The unaudited figures mark a strong start to the financial year, despite copping a $1.3 billion penalty from the Australian Transaction Reports and Analysis Centre less than six months before
  • The group made no clear mention regarding a dividend for FY21
  • Westpac shares are up 4.75 per cent on the market, trading at $23.58

As fellow Big Four players line up to release half-yearly reports this week, Westpac (WBC) spruiked a tidy profit in a quarterly results snapshot.

The Australian banking and financial services group revealed an unaudited statutory net profit of $1.7 billion for the debutant quarter of its 2021 financial year.

The figure is nearly triple that of its reported quarterly average for the latter half of the 2020 financial year, which came in at $550 million.

Unaudited cash earnings for the same period were also a highlight, up 54 per cent and clocking in at $1.97 billion.

Westpac attributed the cash performance to the likes of higher margins, lower expenses from the phasing of investment spend and an impairment benefit.

It marks an intriguing turn of events for a company that copped a $1.3 billion penalty — the highest civil fine imposed in Australian history — from the Australian Transaction Reports and Analysis Centre less than six months ago.

In a broader context, Westpac Group Chief Executive Officer Peter King said it had been a good start to the new financial year.

“I am particularly proud that our focus on supporting customers has contributed to a high proportion of customers being able to manage the impacts of COVID-19 and return to repayments,” he commented.

“Our first quarter 2021 result was higher than the second half 2020 average, mainly from an impairment benefit reflecting both improved credit quality and a much improved economic outlook,” he added.

By the end of January, Westpac was sitting with roughly $11 billion in Australian mortgage deferrals, which the banking giant expects will roll off when extended deferrals expire in February and March.

Net interest margins — a measurement comparing the net interest income a financial organisation generates with its outgoing interest — came in at 2.06 per cent, up three basis points from 2H20.

The Big Four player made no clear mention regarding a dividend for FY21 after dishing out a final dividend in December last year.

In light of what Westpac describes as an “improved outlook”, the company says it intends to return to its past practice and release its Pillar 3 report and details of credit quality in the first and third quarters.

The group also said it would not outline quarterly earnings.

Westpac shares are up 4.75 per cent on the market, trading at $23.58 at 12:51 pm AEDT.

WBC by the numbers
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