By Paul McBeth
Nov. 5 (BusinessDesk) - Westpac Banking Corp's New Zealand unit lifted annual earnings 22 percent as it grabbed more market share and squeezed more from its interest margins, marking it as the fastest-growing unit of the Australian lender.
Cash earnings rose to $707 million in the 12 months ended Sept. 30, from $578 million a year earlier, the Sydney-based lender said in a statement. That accounted for about 9 percent of the group's A$5.97 billion net profit.
The New Zealand unit increased net operating income 7 percent to $2.01 billion, and cut its impairment charge for bad loans 21 percent to $191 million. The bank's net interest margin widened 8 basis points to 2.72 percent.
"Despite subdued economic conditions, the business achieved sound balance sheet growth, improved margins, strong wealth and insurance cross-sell and well-managed expenses," the lender said.
Westpac New Zealand increased term deposits 11 percent to $23.1 billion as at Sept. 30, and grew net loans 3 percent to $59.4 billion. Of that, mortgages grew 3 percent to $35.4 billion and business loans rose 4 percent to $21.8 billion.
New Zealand chief executive Peter Clare said agriculture was a strong performer for the bank, which grabbed nearly half a percentage point of market share.
"We remain committed to supporting agriculture in New Zealand our ongoing investment into the sector will see 20 new frontline agri-bankers employed in the next 12 months," he said.
Clare was more upbeat about the prospects for New Zealand's economy, saying it is well-placed for growth compared to international peers.
"The key now is moving from caution to confidence and investing for future growth," he said.
The Australian group lifted cash earnings 5 percent to A$6.6 billion with a 6 percent gain in revenue to A$17.98 billion. The board declared a fully-franked final dividend of 84 Australian cents, with a Nov. 15 record date. That takes the annual payout to A$1.66 per share.
Westpac's dual-listed shares were unchanged at $31.55 on the NZX, ahead of Australia's open.