Westpac first half cash profit has jumped eight per cent to a record high of $3.77 billion, with solid gains across its divisions, raising its dividend to 90 cents.
The bank’s net profit for the six months to March 31 was $3.62 billion, up from $3.29 billion a year ago.
Westpac lifted its fully-franked interim dividend to 90 cents, from the previous 86 cents. The bank lifted its revenue seven per cent to $9.79 billion for the half year. The bank did not pay a special dividend as it has in previous halves.
Westpac boss Gail Kelly said each of the bank’s divisions had performed well during the half.
“I am pleased with this result and the momentum we have built across the group,” she said.
Cash earnings from Westpac’s Australian Financial services division, which includes St George and BT Financial, lifted 12 per cent to $2.46 billion thanks to lending growth and reduced costs and impairment charges.
Earnings from Westpac’s institutional arm fell four per cent to $752 million, but the bank attributed the decline to significant one-off benefits in 2013.
Meanwhile, earnings from the New Zealand business lifted 17 per cent to $NZ432 million ($A402.18 million).
The bank’s net interest income was up four per cent to $6.68 billion, despite an eight basis point decline in margins to 2.11 per cent.
Mrs Kelly said the outlook was positive for Westpac for the second half of the year.
“Our focus on tilting to growth is delivering, and this is expected to continue into the second half of the year,” she said.
She said the recent strength in the housing market and likely improvements in housing construction would lift household confidence and provide a boost for Westpac over the next few years.
“We have recently seen signs of increased customer activity and expect the economy to gradually improve throughout the remainder of 2014,” Mrs Kelly said.
She said business confidence was also improving despite the slowdown in mining investment and activity in the non-mining sector would increase during the remainder of 2014 and 15.