Westpac profit rises

WestpactTrust is bucking the earnings trend. RICHARD BRADDELL reports.

WELLINGTON - WestpacTrust has topped closest rival Bank of New Zealand in the first half earnings stakes, yesterday reporting a net profit of $186.1 million.

The result was $11 million ahead of the BNZ's for the same six months, ending March 31, and was also up from the $170.7 million WestpacTrust earned in the same period of 1999.

WestpacTrust also bucked the trend of declining lending earnings, with a modest $15 million rise in net interest income to $416 million.

Chief executive Tom Gallagher said that though the "flat" interest earnings were in part due to a slowdown in the housing market, they also reflected favourable conditions in the previous period when the Asian crisis boosted foreign exchange and treasury trading gains.

Total assets grew from $29.6 billion to $32.3 billion, helped by strong corporate loan growth and successful home lending campaigns, although no breakdown was given of how those sectors had performed.

Mr Gallagher said the bank had a "raft of initiatives" under way to overcome the slump in customer perceptions that accompanied the nowcompleted merger with Trust Bank.

These included offering practical advice on how home borrowers could save on mortgage repayments through more disciplined approaches - and by taking advantage of many small savings opportunities which in combination could reduce their repayments by 40 per cent.

"It's amazing how many people don't understand because it hasn't been put to them," Mr Gallagher said.

In addition to the steppedup focus on business and corporate banking, which has been promoted by the Westpac group's managing director David Morgan, Mr Gallagher would like to see the bank expand its relatively small agricultural lending business.

WestpacTrust this week launched its internet banking site. But though it has lagged behind the other banks in going online, Mr Gallagher was confident it would emulate Westpac Australia's success in pushing ahead of its competitors "very quickly" after a late start.

Online business banking, initially with WestpacTrust's 1200 to 1500 suppliers, will be a key focus, and electronic interaction with government and business customers will be promoted as fast as the infrastructure is in place.