Westpac profit jumps

SYDNEY - Westpac Banking Corp., Australia's fourth-largest bank, said on Thursday first-half net profit rose 8.2 per cent on stronger business and corporate lending. 

Net profit for the six months to March 31 climbed to A$1.325 billion ($1.034 billion) from A$1.225 billion a year earlier, lagging the average forecast of A$1.351 billion from a Reuters poll of seven analysts.  

Forecasts ranged from A$1.335 billion to A$1.367 billion, but adjusting for a A$40 million accounting treatment of hybrid securities issued in 2004 means the result came within the upper end of expectations.  

Cash earnings per share rose 12 per cent to 75 cents, the top end of market expectations.  

Australian banks have gained from an economy in its 14th year of growth and unemployment at a 28-year low, fuelling demand for credit and keeping bad debts low. But the housing market has cooled as the central bank hiked interest rates to 5.5 per cent. 

Analysts have raised concerns about Westpac's sliding market share in the A$600 billion mortgage market. Westpac has tight lending restrictions, particularly on inner city apartments.  

While Australia's housing credit growth has slowed, business lending, a key focus for Westpac, has picked up. Business credit grew by an annualised 11.4 per cent in March, up from 5.7 per cent. Shares in Westpac were the second worse performing among the country's top five banks in the October-March first half, rising only 7.3 per cent. The broader stock market gained 12.4 per cent. ($1A$1.30)  

- REUTERS