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SYDNEY - St.George Bank, Australia's fifth-biggest bank, said second-half profit climbed 26 per cent to a record on higher lending to small and medium-sized businesses, and increased wealth-management earnings.
Net income rose to A$546 million ($631.5 million) in the six months ended September 30. That beat a A$516 million estimate of five analysts surveyed by Bloomberg.
Chief executive Gail Kelly lifted lending to companies by 19 per cent to A$23.9 billion during the year as demand for credit from businesses in Australia increased at the fastest annual pace since 1989. Kelly has added about 200 bankers for business customers in the past two years.
"In business lending they are going great guns, encroaching on the patch of the other big banks," said Peter Vann, at Constellation Capital Management. "The result looks very good."
St.George Bank will pay a second-half dividend of A77c a share, up from A70c a year earlier. Full-year earnings-per-share rose to A$1.96 from A$1.73.
"We go into the 2007 year with excellent momentum," said Kelly, forecasting earnings-per-share growth of 10 per cent in 2007 and 2008.
St.George rose A14c to A$32.55. The stock is up 10 per cent in 2006, lagging a 14 per cent gain for the eight-member S&P/ASX 200 Banks Index.
"What is particularly pleasing is that Kelly is giving the 10 per cent EPS guidance," said Vann. "She is the boldest of the top five banks by doing that."
- BLOOMBERG
