Westpac Banking Corporation (NZX: WBC) 1Q21 UPDATE

Wednesday 17th February 2021

Results snapshot for the December quarter 2021 (1Q21) compared to quarterly average of Second Half 2020 (2H20)

• 1Q21 unaudited statutory net profit $1.70bn, (2H20 quarterly average $550m).

• 1Q21 unaudited cash earnings $1.97bn, up on 2H20 quarterly average of $808m (up 54% excluding notable items).

• Impairment benefit of $501m from improved credit quality, the stronger economic outcomes and a better economic outlook.

• Net interest margin 2.06%, up 3bps from 2H20 (up 2bps excluding notable items).

• Core earnings up 28% (up 3% excluding notable items).

• Common equity tier 1 capital ratio of 11.9% at 31 December 2020, up 74bps over the quarter and 111bps over the year.

Comments from Westpac Group CEO, Peter King

“It has been a good start to the year with higher earnings, a stronger economy, and solid progress on our fix, simplify, perform strategic priorities.

“Westpac’s balance sheet remains strong, with our capital ratio more than a full percentage point higher over the year to 11.9%, while we have retained high credit provision levels to respond to ongoing uncertainties.

“Our first quarter 2021 result was higher than the second half 2020 average, mainly from an impairment benefit reflecting both improved credit quality and a much improved economic outlook.

“While uncertainty remains around the impact of local COVID outbreaks, there is cause for optimism. The economy is recovering, consumer and business confidence is strong, and the labour market has been much more resilient than expected. At the end of December there were 12.9 million employed Australians compared to 13 million in March 2020.

“We are also beginning to improve momentum in mortgages and while the book was little changed over the half, we have processed a significant increase in applications. Low interest rates, rising house prices, new construction, and high consumer confidence all point to continued recovery in home lending activity in 2021.

“Our business portfolio simplification is underway and we have announced the exit of several businesses."

Please see the links below for details:

WESTPAC 1Q21 UPDATE

WESTPAC 1Q21 UPDATE DISCUSSION PACK

Westpac Pillar 3 Report (December 2020)

Source: Westpac Banking Corporation

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