Westpac 2020 Full Year Result

Westpac Banking Corporation (NYSE:WBK), (ASX:WBC):

FINANCIAL RESULTS SNAPSHOT1

COVID-19 DEFERRAL SUPPORT3

• Statutory net profit $2,290m, down 66%
• Cash earnings $2,608m, down 62%
• Cash EPS 72.5c, down 63%
• NIM 2.08%, down 4 bps
• ROE 3.83%
• CET1 capital ratio 11.13%
• Excluding notable items², cash earnings, $5,227m, down 34%
• Excluding notable items², ROE 7.69%
• Fully franked final dividend, 31cps

• $16.6bn in Australian home loans in deferral (41,000 mortgage accounts)
• Reduced from $54.7bn provided (146,000 mortgage accounts)
• $1.0bn⁴ in Australian small business loans in deferral (4,300 small business customers)
• Reduced from $10.1bn provided (32,900 small business customers)

 

THE RESULT

Westpac Group CEO, Peter King, said: “2020 has been a particularly challenging year and our financial result is disappointing. Our earnings have been significantly impacted by higher impairment charges, increased notable items and the sharp decline in economic activity. At the same time, we have incurred higher expenses due to increased resourcing to handle unprecedented COVID-19 demands and fixing our compliance issues.

“We have, however, continued to maintain the strength of Westpac’s balance sheet. Our Common Equity Tier 1 capital ratio is at 11.13%. Customer deposits were up 6% over the year, with the deposit to loan ratio now more than 80%.

“While stressed exposures as a percentage of total committed exposures are higher at 1.91%, up 71 basis points compared to 2019, prudence has been maintained with impairment provisions boosted by $2.2 billion to $6.2 billion.

“Excluding notable items, expenses were up 6% this year. This reflected our focus on fixing risk and compliance issues and responding to COVID-19, which involved higher call and processing centre volumes, returning activities to Australia and increased employee and customer safety measures. The increase in expenses was partly offset by productivity savings of more than $400 million.”

^{1 Full Year 2020 compared to Full Year 2019. Reported on a cash earnings basis unless otherwise stated. For a reconciliation of cash earnings to reported results, refer to Section 5, Note 8 of Westpac Group 2020 Full Year Results Announcement. For an explanation of cash earnings, refer to Section 1.3.3.}