Westpac posted a bumper annual profit and announced a $1.5 billion share buyback.
The bank announced a Full-year net profit of $7.2 billion, up 26% on the previous financial year.
Westpac’s financial year runs until September 30, as do ANZ and NAB, which will release their annual results soon.
The profit came thanks to a 5% increase in loans to $773 billion and one 2% increase in net interest margin (NIM) — essentially the spread between what the bank pays to borrow money and the rates at which it lends it — at 1.95%.
Excluding one-off movements and financial markets, the “core NIM” on the bank’s loans jumped 12 basis points to 1.87%.
The bank also received a significant boost, with its non-interest income rising 36% to $3.33 billion.
Westpac’s profit improvement comes from a 77% increase in profits of its investment bank division and one 54% increase in profits of its institutional bank.
Benefit from its the consumer banking division fell 7% on reduced margins, while deposits grew 2.5 times faster than loans.
Despite high inflation across the economy, Westpac managed to reduce its costs by 1%.
However, one negative point was a loan impairment charges nearly doubled to $648 millionor 0.09% of loans.
The bank will pay a Final dividend of 72 cents per sharebringing the payment for the full year to $1.42.
The company will also return money to shareholders via buy back $1.5 billion worth of its shares.