Westpac annual profit declines 3 but beats analysts39; forecasts
Company increases share buyback by A1 bln
Bank declares higher final dividend
Nov 4 Reuters No.2 Australian mortgage lender Westpac said on Monday annual profit dipped as costs associated with a technology overhaul outweighed an improved loan margin, but upped its final dividend and extended a share buyback, nudging its shares up.
The result, which was better than feared, shows a company navigating what it hopes is the final stretch before the Reserve Bank of Australia begins cutting interest rates, which will make it easier for borrowers to service debt and ease upward pressure on costs.
Westpac forecasts the central bank will cut rates in February, which would be the country39;s first in five years.
Profit for Australia39;s oldest bank declined 3 for the year ended Sept. 30 to A6.99 billion 4.61 billion, bettering an LSEG estimate of A6.50 billion.
Its net interest margin NIM a closelywatched metric of takings from loan repayments minus outgoings for interest paid to deposit holders widened to 1.97 from 1.89 from the first half to the second half, even amid fierce competition to sell mortgages.
But spending on a multiyear software overhaul and other inflationary pressures brought a 7 blowout in operating costs, dragging the bottom line result lower. Westpac upped its final dividend and said it would buy back another A1 billion 660 million of stock.
Westpac shares clawed back early declines to…