Westpac (ASX: WBC) Announces Stable Profits and $ 8.1 Billion Growth as Customer Compensation Costs Affect

However, he said customer demand for services such as insurance remained strong and his insurance business was working well. He also considered his Panorama investment platform as the "jewel in the crown" that would give him a competitive edge.

The main challenges have been related to financial advice, he said, after the royal commission pointed out the potentially very high costs of compensation when counseling problems arise, along with a "dramatic" increase in compliance costs.

"In fact, the question that remains to be solved is the provision of financial advice," Hartzer said.

When asked if the bank should continue to own consulting firms, he said selling advice was "an option," but that she was considering various possibilities, including greater use of technology or partnerships with other suppliers.

"What we are trying to think, is for different segments of the population, given the nature of what they need, how can we design an approach allowing clients to have access to these tips? , while respecting the principle of sustainability and profitable, "he said.

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In the flagship branch of the Westpac retail bank, profits fell 17% in the six months to March, to stand at $ 3.14 billion. The bank explained that this was due to lower profit margins, higher provisions for customer repayments, and lower revenue from credit card and ATM fees.

BT Financial Group, its wealth management group, posted a 40% drop in profits in the six months to March, to $ 645 million. BT has also been penalized by higher reclamation costs and reduced profit margins. Westpac is the only lender to the four major suppliers that remains fully engaged in the wealth management business, with rivals selling most of their wealth management business.

Across the group, Westpac's operating income increased 2% during the year, which is less than the 5% growth in expenses. But like its rivals ANZ and National Australia Bank last week, the company has benefited from a reduction in charges for bad debts and doubtful.

Depreciation charges decreased by 17 cents during the year to $ 710 million, and the bank said its mortgage portfolio was "fundamentally sound."

Mark Nathan, managing partner of Arnhem Investment Management, said that wealth management was not necessarily a bad deal for Westpac, but it would be "very surprising" if the bank did not consider a range of options for its in-house wealth management operations.

We will probably see profits fall if we enter a negative credit cycle, but nothing indicates that we are there.

Mark Nathan of Arnhem Investment Management

More generally, Nathan said that bank profits could begin to decline if bad debts began to return to more normal levels.

"We will probably see profits fall if we enter a negative credit cycle, but nothing indicates that we are there," Nathan said.

The bank will pay a fully paid dividend of 94 cents per share, to be paid on December 20.

Westpac's Tier 1 common equity ratio, a strong pledge of strength, represented 10.6% of the risk-weighted badets, which exceeded the regulatory minimum. TSF badyst Lim Lim, TS Lim, said the bank's capital ratio and predictions that it would still produce a lot of capital suggested that its dividend would not be reduced.

Westpac shares rose 0.6% to $ 26.65, compared to a 0.5% decline in the ASX 200 index.

At the same time, the MPA's submission to the royal pension board hearings, published on Monday, also defended the vertical integration in the sector as "bbad" in the world, and indicated that this practice did not prevent the directors from acting in the best interest of the clients.