Bankwest records $552m operating performance
16 February 2017
- Bankwest delivers operating performance of $552 million for the half-year ended 31 December 2016, down 1% on the prior comparative period.
- Operating expenses reduced by 1% on prior comparative period to $388 million due to continued focus on productivity and disciplined expense management.
- Cash net profit after tax (NPAT) of $355 million, down 12% on prior comparative period.
- NPAT reflects higher loan impairment costs and lower net interest income, partly offset by higher other banking income and lower operating expenses.
Commenting on the results, Bankwest Managing Director Rowan Munchenberg said: “In the first half of the financial year we’ve made an important contribution to the communities in which we operate and to the Australian economy.
Our half-year results reflect the impact of economic conditions on our east and west coast portfolios.
The east coast property market remains strong, especially in Sydney and Melbourne, where our business lending portfolio also continues to grow.
Despite the mining and resources industries’ transition from construction to production phase, and the flow on to the WA economy, our arrears rates for home loans and business lending in WA remain within normal levels and we are yet to see any significant deterioration in loan losses.
We remain focused on delivering what matters to our customers and we’ll continue to anticipate and adapt to changing customer needs, competitive and economic conditions.
Year-on-year balance sheet movements included:
- 10% increase in transaction deposits, reflecting a focus on improving customer relationships and experience across all channels.
- 5% home loan growth in a challenging environment.
- 13% lift in other banking income to $110 million.
- 3% growth in core business loans.
- Pressure on margins in a competitive environment with higher funding costs.
- Reduced benefit from the run-off of the troublesome and impaired portfolio.
- A decrease in savings deposits as a result of customer preferences for term investment deposits.
- A decrease in higher risk non-core business lending.
Key drivers of performance:
- Cost-to-income ratio increased by 20 basis points compared to the prior comparative period.
- Loan impairment expense increased to $43 million, driven primarily by a lower level of write-backs and some increases in home loan losses in Western Australia. The quality of the business portfolio has been stable.
- Net interest income of $819 million decreased 3% on the prior comparative period. Balance growth in key product lines was offset by a reduction in net interest margin, particularly in deposit accounts, as a result of the lower cash rate environment.
Notes to editors
Bankwest is committed to making banking easier for customers across all channels by providing award-winning products and service. Highlights included:
- Improved customer mobile payment options with introduction of Android Pay™
- Launch of Home Loan Application tracker, allowing customers to receive real-time, 24/7 updates on the progress of their Bankwest home loan applications.
- Customer adoption of Bankwest Easy Alerts reminders and eStatements via the Mobile Banking app.
Recent awards recognising Bankwest’s commitment to exceptional customer experience included:
- CANSTAR’s Outstanding Value Travel Credit Card1: Bankwest Breeze Platinum MasterCard®.
- Money magazine Best of the Best Award2: Cheapest Business Bank Transaction Account (seven consecutive years) and Mozo Expert’s Choice Award3 for six Bankwest credit cards.
People and culture
- Bankwest launched its cultural diversity network, Mosaic, and celebrated the first anniversary of Unity, its LGBTI and Allies’ network.
- Enhanced parental leave policy providing additional leave for secondary carers, a primary carer return to work bonus and access to ‘Career After Kids’ workshops.
- Bankwest recognised as an Employer of Choice for Gender Equality by the Workplace Gender Equality Agency (WGEA) for the third consecutive year.
- Bankwest continues to progress toward 40% target of women in leadership roles.
Bankwest reaffirmed its commitment to supporting the community with:
- More than half of Bankwest employees volunteering including more than 170 skilled volunteering opportunities and 313 blood donations to the Australian Red Cross Blood Service saving 939 lives.
- Ongoing partnership with the Bankwest Curtin Economics Centre (BCEC), which informs public policy debate and provides robust information to Government, Not-For-Profit and Industry sectors.
- Recipient of the AIM WA WestBusiness Pinnacle Award for Corporate Social Responsibility Excellence, the flagship award in this sector, recognising outstanding results in demonstrating leadership and commitment to excellence in corporate social responsibility.
For more information contact:
Bankwest Senior Manager, Media & Communications
0421 637028 / firstname.lastname@example.org
Bankwest Senior Manager, Media & Communications
0477 329447 / email@example.com
About Bankwest: Bankwest provides personal and business banking solutions for more than 1.1 million retail and business customers across Australia. Bankwest customers enjoy access to an extensive network of stores and business centres, direct and third party distribution channels, agencies and electronic banking facilities, as well as 24-hour telephone and internet banking. Bankwest is a division of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL / Australian credit licence 234945.
1The CANSTAR 5 Star Rating was awarded in September 2016 for Bankwest Breeze Platinum Mastercard for the Outstanding Value Travel Credit Card.
2 Award(s) won at Money magazine's 2011, 2012, 2013, 2014, 2015, 2016, 2017 Consumer Finance Awards.
3 Mozo Experts Choice Awards were awarded in October 2016
4 Australian Red Cross Blood Service