Australia's Westpac profit drops 12%, falling costs provide reprieve

:Australia's Westpac Banking Corp on Monday said continued margin pressure from competition in mortgage lending caused its first-half earnings to drop over 12 per cent from a year-ago, but Westpac forecast lower expenses in the second half of the year with its cost reset plan in full swing.

Westpac said net interest margin, a key profitability indicator, fell 15 basis points to 1.91 per cent in the first half. It booked an impairment charge of A$139 million as it set aside more funds to cover bad debts related to recent floods in Australia and broader global uncertainty. However, the country's third-largest bank forecast second-half costs to be flat to 2 per cent lower sequentially, a sign that its bold cost restructuring strategy was beginning to pay off.

Cash earnings fell to A$3.10 billion for the six months ended March 31 from A$3.54 billion reported a year earlier, but beat a Visible Alpha consensus forecast of A$2.83 billion.

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Australia's Westpac first-half cash earnings drop 12% as competition bitesAustralia's Westpac Banking Corp on Monday posted over a 12 per cent drop in first-half cash earnings, as its margins continued to be squeezed by stiff competition in mortgage lending amid record low interest rates and certain impairment charges.Australia's 'Big Four' banks enjoyed a boom in home lending
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