- Westpac is still getting growth in lending despite a sweaker housing market.
- CEO Brian Hartzer sees an “orderly slowdown ” in housing.
- And he says credit quality is still good with underlying demand for housing still there.
Westpac CEO Brian Hartzer today predicted an “orderly slowdown” in the housing market, dismissing talk of a credit crunch as the bank posted a lift in half year cash profit on the back of growth in consumer and business banking.
The bank reported a 6% lift in cash profit to $4.25 billion for the six months to March.
Hartzer says the bank’s lending books are performing well despite a cooling in the housing market in recent months.
Cash earnings at Westpac’s Consumer Bank grew 12% to $1.72 billion, supported by a 6% rise in mortgages in the six months to March.
The bank has 23% of the Australian mortgage market. The consumer bank contribute 40% of the bank’s earnings.
“A lot of the tightening (to credit policies) that people refer to has been happening over the last couple of years,” he says.
“That’s continued … but we’re still seeing growth. Credit growth has still been in the 5% to 6% range for home lending. With the changes that have come through in the last year we may see that growth rate fall a bit.
“But what that represents is an orderly slowdown in the housing market, which shouldn’t be confused with a reduction in the housing market. We still think credit quality is good, we think the underlying demand for housing is there.
“If you look at the actual credit performance of the book it’s very strong, we’re talking about as good as it gets when you think about credit provisions overall.
“We don’t have any particular sectors in our business that are giving us undue concern at the moment. That said, when you’re managing a large credit book like ours you can’t afford to be complacent.”
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