Westpac has unveiled a $3.5 billion share buyback after posting a surge in annual earnings on the back of a strong home loans market and lower provisions.
Australia’s second-largest lender on Monday reported full year cash earnings, which strip out items such as hedging impacts and one-off events, doubled to $5.35 billion after it wound back some provisions to cover potential COVID-related loan losses.
Statutory net profit for the 12 months to September 30 was 138 per cent higher at $5.46 billion, despite a challenging period in second half of the year.
“A turnaround in impairment charges and lower notable items were the main drivers of our improved earnings, while we also restored growth in mortgages and have begun to see better momentum in our institutional and business portfolios,” chief executive Peter King said.
He said credit quality had remained remarkably good, with stressed exposures continuing to decline after last year’s peak, while mortgage delinquencies were also significantly lower.
That helped it write back $590 million in provisions.
The bank also announced an off-market share buy-back of up to $3.5 billion after considering the improved economic outlook and its strong capital position after completing a number of asset sales.
Westpac will pay a fully franked final dividend of 60 cents a share.