Westpac has posted a 12 per cent rise in net profit to $7.6 billion, with a more modest increase in dividend.

Westpac’s cash earnings were also $7.6 billion, but up a smaller 8 per cent on last year’s result.

The bank’s return on equity, a key profit measure, was up almost half a percentage point to 16.4 per cent.

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Westpac says it managed to maintain or grow its market share in Australian banking across all segments in the latest half-year.

“As a result, customer numbers have grown at their fastest pace in four years,” noted Westpac’s chief executive Gail Kelly in the report.
Mrs Kelly says she expects the bank to maintain its momentum in the current financial year.

“Housing credit growth has increased over 2014 and we expect growth at similar levels to continue through 2015,
driven by strong demand and continued low interest rates,” she added.

However, the increase in customer numbers was partially offset by a 7 basis point decrease in the bank’s net interest margin – that is the gap between what it pays to borrow money and the rate it lends it out at.

Profits were boosted by a further 23 per cent reduction in impairment charges for bad debts, down by $197 million.

Despite the strong rise in profitability, Westpac has elected to lift its dividend by just 5 per cent to $1.82 for the full-year, incorporating a final dividend of 92 cents per share.

In fact, considering that the bank paid two 10-cent special dividends last year, its full-year payouts to shareholders have actually fallen from $1.94.