Westpac will return $3.5 billion in capital to investors through a share buyback, after sharp cut in its bad debt charges caused full-year profits to more than double to $5.4 billion.
The bank’s full-year results on Monday showed the bank’s bottom line had benefited from the reversal of bad debt charges that it took last year, as the economic hit from the COVID-19 pandemic ended up being much less dire than first feared.
Westpac chief Peter King said it had been another challenging year for the bank, but it was making progress in simplifying the business, and credit quality had been “remarkably good.” Credit:Jessica Hromas
Cash earnings rose 105 per cent to $5.35 billion, and the bank is raising its final dividend to 60c a share, from a pandemic-affected 31c a share this time last year.
Following share buybacks from its major rivals, Westpac is also set to launch an off-market buyback, reflecting its view that more capital than it needs for the improved economic outlook.
The result included a previously announced $1.6 billion hit from notable items, including write-downs in its institutional division and charges for customer compensation.
Chief executive Peter King said 2021 had been another challenging year for the bank, but it was making progress in simplifying the business, and credit quality had been “remarkably good.”
“A turnaround in impairment charges and lower notable items were the main drivers of our improved earnings, while we also restored growth in mortgages and have begun to see better momentum in our institutional and business portfolios,” Mr King said.
“While notable items were lower, they remain elevated as we continue to work on fixing our issues and simplifying our business,” he said.
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