21 Aug 2009

NZ division drags down Westpac profits

6:10 pm on 21 August 2009

Australian bank Westpac says its New Zealand division is proving a drag on profits.

The company says its on track to deliver cash earnings of $A1.1 billion in the three months to the end of June.

However Westpac says impairment assets, where the market value has fallen below book value, rose 24%.

The bank says this was driven by deterioration in the commercial sector and sluggish conditions in its New Zealand operations.

Lending in the bank's New Zealand arm slowed as businesses in this country sought to reduce debt on the balance sheet.

Overall, the group says revenue remained in line with the previous two quarters.