6 May 2009

Westpac's half-year profits drop

2:42 pm on 6 May 2009

Westpac has reported a fall of 15% in its half-year profit in New Zealand, as it trebled the amount of money set aside to cover bad debts.

The bank made $202 million in the six months to the end of March - $37 million lower than a year earlier.

Westpac NZ chief executive George Frazis says the 15% decline reflects an unprecedented set of external circumstance.

A year ago, the bank made provision of $61 million for bad debts and impairment charges - that has trebled in the latest half year as the recession has continued to bite.

Mortgage lending is up 3% and deposits grew by 6%.

Looking ahead, Westpac believes some of the severe stresses in the financial crisis have stabilised, but the bank says the dominant impact on it in this country will now be the size and duration of the recession.

Net profit for the Australasian parent company for the six months to March 31 was $A2.175 billion, down from $A2.202 billion the year before.