Westpac Group FY Profit Climbs; To Buy-back Up To A$3.5 Bln Of Shares

Australia’s Westpac Group (WBC.AX,WBK) reported that its net profit attributable to owners of WBC for fiscal year 2021 was A$5.46 billion, an increase of 138% compared to 2020. The increase in net profit was predominantly due to a credit impairment benefit of A$590 million in 2021 compared to a charge of A$3.18 billion in 2020.

The company has declared a final dividend of 60 cents per share to be paid on 21 December 2021. It has decided to conduct an off-market buy-back of up to A$3.5 billion of shares. This combined with the final dividend for 2021 delivers a return to shareholders of A$5.7 billion.

“Next year we expect to reduce our cost base as we head towards our $8 billion cost target from completion of programs under our Fix priority and realise the benefits from divestments,” the company said.

Cash earnings for fiscal year 2021 were A$5.35 billion, up 105% from the prior year, due to a turnaround in credit impairment charges and lower notable items. Excluding notable items, cash earnings were A$6.95 billion up 33% from the previous year.

The notable items were largely due to the A$965 million write-down of assets in Westpac Institutional Bank (WIB) as its earnings profile could not support the carrying value of its intangible assets. The remaining notables were mostly due to additional costs related to remediation and regulatory actions, and additional costs and write-downs linked to the exit of businesses. In aggregate, notable items were A$1.02 billion lower than in 2020, which were A$2.62 billion.

Net interest income for the year was A$16.86 million up 1% from the prior year.

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