Westpac Reports 8% YoY Decrease in Revenue in H1 2022

Westpac today released its financial figures for the first half year of 2022, revealing a decrease in revenue compared to the same period in 2021.

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First Half 2022 compared to Second Half 2021

• Statutory net profit $3,280m, up 63%

• Cash earnings $3,095m, up 71%

• Cash EPS 85.4 cents, up 73%

• Revenue down 3%

• Costs down 27%

First Half 2022 compared to First Half 2021

• Statutory net profit $3,280m, down 5%

• Cash earnings $3,095m, down 12%

• Cash EPS 85.4 cents, down 12%

• Revenue down 8%

• Costs down 10%

• ROE 8.7%, CET1 ratio 11.3%.

• Fully franked interim dividend 61 cents per share

Peter King, Chief Executive Officer commented, ​"In the first half of 2022, we've made steady progress towards our goals. We're managing through the low-rate environment and making the changes required to become a simpler, stronger bank.

We are tracking well on our strategic priorities. From a Perform perspective, we maintained our return on equity over the prior half, as our cost reset program helped to offset a decline in revenue and an increase in impairments.

The multi-year Customer Outcomes and Risk Excellence (CORE) program is delivering to plan and we resolved a number of significant regulatory matters. Our portfolio simplification saw two more businesses sold, with our focus now on the exit of the BT businesses.

We're investing in improving the customer experience, focusing on making customer service easier and faster, accelerating digital, and building on our banker expertise and capability.

Financially, the Group's results have improved. Cash earnings were higher over the previous half, including a material reduction in notable items. The decline in cash earnings over the year was mostly due to competitive pressures on net interest margins and returning to an impairment charge after having benefits last year.

Asset quality has improved and most credit quality metrics are back to pre-COVID levels, however we increased overlays in our provisions for supply chain issues, inflation, expectations of higher interest rates and recent floods.

I'm pleased with our progress on costs which are down 27%, or 10% excluding notable items, compared to the second half of 2021. This includes a reduction in headcount of more than 4000 as we track towards our target of an $8 billion cost base by FY24.

Our deposit to lending ratio increased to 83.5% as total lending rose $8.8 billion and total deposits grew $20.6 billion over the half.

Our Australian mortgage portfolio grew off the back of owner-occupied mortgages, but we want to lift performance in investor lending. We have built on our momentum in business lending across both Business and WIB.

Our balance sheet is sound, allowing us to successfully complete our off-market share buy-back, reset our capital range and increase the dividend per share. "