By Richard Braddell
WELLINGTON - WestpacTrust has confirmed its position as the country's most profitable bank, reporting a $171 million net profit for the six months to March.
The result, which was up from $150 million in the same period of 1998, is just $1 million higher than that reported for the
same period by the Bank of New Zealand two weeks ago.
The chief executive, Harry Price, said further performance gains could be expected now the "ramming together" of two culturally quite different banks in the Westpac/Trust Bank merger had been completed.
In addition to further back office savings, Mr Price promised WestpacTrust would be a much tougher competitor in the market now it was free to focus on new products such as Internet banking which should be introduced by the first quarter of next year.
In the retail market, WestpacTrust had clawed back a loss in mortgage market share to the extent that its $13.6 billion home lending book was at much the same level as a year ago, he said.
While the bank has pruned back branch numbers to around 200, that is still above the 160 or typical of its peers, a level Mr Price said would be maintained unless it became obvious they were not paying their way.
Although Australian owned, the bank has so far resisted the move by other Australian banks to centralise many of its operations over the Tasman.
Mr Price, who was recently elevated to directly reporting to Westpac's new global chief, David Morgan, said he would be resisting such a move.
Nevertheless, he conceded that some activities would be globalised, but when that happened, he would be pressing for a share of them to be operated out of New Zealand, particularly since this country accounted for 20 per cent of the group.
The bank's cost-to-income ratio, a measure of efficiency, during the period was 56.9 per cent, a respectable figure although still higher than the 53.5 percent for the BNZ.
Mr Price said WestpacTrust's expense ratio had been helped by a healthy interest margin which in turn was driven by hedging in anticipation of interest rates falling during the period.
The bank ended the period with total assets of $29.6 billion, making it just a shade larger than the BNZ with $29.4 billion.
