Bankwest strategy delivers encouraging half year performance

media releases

09 February 2011

Highlights of 2011 Interim Result:

  • Bankwest cash net profit after tax (NPAT) was $224 million, up significantly from $15 million in the prior comparative period(1);
  • Operating performance up 10% to $369 million, from $335 million in the prior comparative period;
  • Loan impairment expenses for the half were down 84% from the same period in 2010 to $49 million, mainly due to the non-recurrence of property related impairments;
  • Operating expenses decreased 3% from the prior comparative period due to a continuing focus on discretionary spending and efficiency gains from integrationof processes with CBA Group;
  • Customer satisfaction scores up 5 percentage points from December 2009 to 83.1% in December 2010(2); and
  • Encouraging performance underpinned by disciplined adherence to key strategic priorities since acquisition by CBA.


Bankwest has announced an NPAT of $224 million for the half year ending 31 December 2010, up from $15 million in the prior comparative period. The improved performance has largely been driven by a lower loan impairment expense of $49 million, down by 84% and a 10% increase in operating performance. Banking income increased 2% to $797 million compared to the same period last year, mainly due to growth in lending and deposit balances. Banking income remained relatively flat compared to the June 2010 half year as growth in home lending and deposit balances was offset by a decline in lending margins. The decrease in operating expenses reflects an ongoing trend, with lower expenses recorded in every half since acquisition by CBA. This has contributed to a steady improvement in the Bank's cost to income ratio from 64% at 30 June 2009 to 54% at 31 December 2010.

Bankwest Retail:

Home loan balances increased 10% over the prior comparative period to $43 billion, driven by demand flowing from the First Home Owners Grant experienced in the prior half, and an innovative product suite and increased number of branches. Lending margins decreased due to higher long-term funding costs which were only partially passed on to customers. Retail deposit balances increased 1% over the prior comparative period reflecting a strategy of carefully managing margins while pricing for growth.

Bankwest Business:

Business lending balances decreased 10% over the prior comparative period to $22 billion due to weaker market demand, particularly in the Bank's core small to medium business market, and exits and reductions of troublesome and impaired assets. In addition, a strategic shift away from property and complex lending has resulted in the non-renewal of higher risk loans, further impacting balances. Business deposit balances increased 19% over the prior comparative period due to strong demand for money market products and a focus on sales.

Customer Satisfaction:


Bankwest retains an absolute focus on customer satisfaction, with a commitment to value, innovation and service. A number of initiatives during the half have supported this vision, including:

  • Further investment in the branch network with three new and twenty branches refurbished;
  • The implementation of a Drought Assistance initiative to support WA rural and regional customers who have been impacted by record low winter rainfalls in 2010;
  • Relaunch of the Bankwest Business's brand and investment in more business bankers; and
  • Reinvigoration of the Bankwest brand in WA.

The success of these initiatives was reflected in:

  • Winning the AFR Smart Investor 'Bank of the Year' Award;
  • Five products received awards in Money Magazine's 2011 Best of the Best Awards, including 'Best Everyday Branch Access account' and 'CheapestBusiness Transaction Account'; and
  • Improved customer satisfaction scores, up 5 percentage points from December 2009 to 83.1% at December 2010.


Commenting on the results, Bankwest Managing Director Jon Sutton said: "It's now more than two years since the acquisition of Bankwest by CBA and the adoption of our current strategy. I believe we are now beginning to see the results of the consistent execution of this strategy.

"Our strategy means understanding and delivering on our customers' needs, striving for operational excellence, seeking quality in new business and a clear focus on WA, while continuing to leverage our investment in the eastern states - all opportunities afforded to us by CBA's ownership and commitment to the stand alone Bankwest brand."

"While there are still some challenges we need to manage - working through remaining legacy issues, managing tighter lending margins and continuing to control costs - we're confident that we've been able to put a strong platform for growth in place over the past two years."

"Overall, our strategy is now beginning to deliver results for both our customers and Bankwest, and with CBA's backing, we're looking forward to continuing on that steady trajectory in future."

For more information contact:
Colin Neathercoat, Head of Corporate Affairs
0459 817 798
Notes to media:
(1) The prior comparative period is 1 July to 31 December 2009.
(2) Customer Satisfaction Survey, completed by Roy Morgan in December

About Bankwest: Bankwest provides personal and business banking solutions for more than one 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. In 2010, Bankwest was chosen as the AFR Smart Investor Blue Ribbon Awards 2010 Bank of the Year. Bankwest is a wholly owned subsidiary of the Commonwealth Bank (Group).



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