Westpac has recorded a cash profit $100 million lower than expected amid warnings it may face a difficult future with intense competition for loans and a slow economy.
The bank foreshadowed a difficult future in its 2015 Interim Results in part due to regulatory uncertainty.
Analysts had expected a $3.88 billion cash profit, and a net profit of $3.609 billion – which was lower than the figure reported last year of $3.622 billion.
Chief executive Brian Hartzer expects growth in the housing market to continue to offset weakness from other parts of the economy, including mining.
“Areas like housing, infrastructure, and agriculture will do relatively well, while other areas such as mining and resource-driven regions and adjacent service providers will find it tough,” he said.
“For Australian banks, this means that credit growth will be modest but positive with housing growing faster than business.”
Mr Hartzer also said competition among lenders would remain intense.
Despite the competition for loans, Westpac kept its net interest margin, the profit it makes on loans, flat at 2.01 per cent.
Australian housing loans increased seven per cent during the half, while net interest income was up four per cent to $6.93 billion.
But the result was weighed down by a 17 per cent slide in earnings from Westpac Institutional Bank.
— with AAP