Westpac Sees Costs Drop in 2022 Full Year

Westpac, an Australian multinational banking and financial services company, today released its financial results for the full year of 2022, showing its costs drop sharply.

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Full Year 2022 Compared to Full Year 2021

• Statutory net profit $5,694 million, up 4%

• Fully franked final dividend 64 cents per share

• 2022 dividends per share of $1.25, up 6%

• CET1 capital ratio 11.3%

• Cash earnings $5,276m, down 1%

• Cash EPS 148 cents, up 1%

• NIM 1.87% down 17bps

• Costs down 19% (7% ex-notable items)

Peter King, Chief Executive Officer commented: "In 2022, we've delivered a solid financial result and made steady progress on our strategic priorities. We've built positive momentum and positioned the company for the future. I'm pleased with our overall performance. We sharpened our focus on core banking, reduced costs, and improved service to customers. Westpac returned to growth in our key segments of Australian mortgages and business lending.

"After the work of the past two years, Westpac is now a simpler, stronger bank. We're continuing to get our costs down, we're simplifying our operations and our program of co-locating branches in similar locations is removing duplication. At the same time, we are investing in the right places, such as the launch of our digital mortgage and new personal finance management tools in the Westpac app.

"Our year-on-year results are solid and over the past six months in particular we have demonstrated momentum, with core earnings (ex-notable items) up 12% and our net interest income up 7%. Margins increased 5bps in the second half to 1.90% but they remain below historical levels. 

"This year, we've continued the hard work on costs. Our expenses are down by 7%, driven by our simplification program and a reduction in full-time equivalent employees of 2,667. Given the impacts of higher inflation including wage increases from a tight labour market and continuing regulatory spend, we have revised our original FY24 cost target to $8.6bn."