Westpac Lifts Cash Profit 8% To $7.1 Billion

The last of the Big Four released their results for the financial year ending September 2013 this morning and like the ANZ and NAB, Westpac’s results were strong.

The key highlights are:

  • Statutory profit up 14% to $6.8 billion
  • Cash earnings up 8% to $7.1 billion
  • Expense to income ratio a phenomenal 40.9%
  • CETI of 9.1% – the highest of the majors
  • Final dividend of 88 cents per share
  • An ROE (return on equity) of 16%

Westpac’s CEO Gail Kelly was very pleased with these results and said the results demonstrated “strength, consistency, careful balancing of growth and return and a disciplined execution of our strategy”.

The ability of the majors to deliver these sorts of returns (16% ROE) in an economy with inflation at the bottom end of the RBA’s 2-3% range, with economic growth domestically anaemic and with demand for debt still close to generational lows speaks for the efficiency of Australia’s banks.

It probably also suggests there is room for more competition and all Australians, rather than just shareholders, sharing the spoils.

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