Bankwest today announced a $139.0 million loss for the full year to 31 December 2008.
The results largely relate to the period before the Commonwealth Bank of Australia acquired Bankwest from HBOS plc on 19 December 2008.
Loan impairment expense, including specific and collective provisions, reached $825.3 million, up from $87.8 million in 2007.
The two primary reasons for the increase were the deteriorating external operating environment, and the need to be fully and appropriately provisioned in these difficult and uncertain times.
Since Commonwealth Bank assumed ownership, Bankwest has returned to profitability.
The increase in specific provisions was driven by a small number of large property exposures in New South Wales and Queensland, together with a number of small exposures across business lending.
To position Bankwest for sustained future growth, Managing Director Jon Sutton said steps had been taken to implement more prudent credit controls.
"Bankwest had previously been focussed on market share growth," Mr Sutton said.
"Since CBA acquired Bankwest, we have improved our credit underwriting standards in business and retail banking and have a strong focus on prudent and responsible lending."
Bankwest has a AA credit rating, through its parent the Commonwealth Bank of Australia, one of only eight banks worldwide with this high investment grade rating.
Operating Profit before loan impairments and tax was $597.0 million, up 62.1 per cent from $368.3 million for the corresponding 2007 period.
Operating costs were up 18.2 per cent from $769.0 million to $908.6 million driven in part by costs associated with the bank's east coast expansion strategy.
Mr Sutton said the purchase by the Commonwealth Bank of Bankwest had provided the iconic Western Australian financial institution with a secure future.
"Since the Commonwealth Bank's acquisition of Bankwest was announced, our performance has been strong with 38,000 new customers joining Bankwest," Mr Sutton said.
"Bankwest is committed to servicing its customers with market leading home loans and deposit products."
