Westpac NZ makes record profit after AGC sale

Westpac Banking Corporation said today that its New Zealand operations had made a record annual profit, boosted by the sale of its AGC loan book.

The bank posted a profit of $614 million for the year to September 30, an increase of $149 million on the previous year's profit. The AGC sale contributed a one-off gain of $105 million.

Net after tax profit increased 9 per cent excluding the AGC profit, or 32 per cent if the AGC sale was included.

Westpac, which recently changed its name from WestpacTrust, was up 25c on the sharemarket today at $15.10.

The New Zealand figures follow the release of the Westpac group results in Australia, which showed the company's overall profit had risen 15 per cent.

Westpac's full year net profit was A$2.192 billion, after growth in consumer and business banking offset a decline in institutional banking.

Westpac was cautious on the year ahead, saying it expected 7-9 per cent earnings per share growth and double-digit growth for ongoing businesses.

In New Zealand, Westpac's net interest income rose by 11 per cent in 2002, which the bank said reflected strong volume growth in both consumer and business lending and deposits.

Excluding the AGC sale, non-interest income increased by 5 per cent on the previous year.

Bad and doubtful debt dropped by 10 per cent to $41 million.

Westpac acting chief executive officer in New Zealand, Mike Pratt, said the bank was gearing up to implement $100 million worth of improvements, including $60 million in new customer service technology.

A further $40 million would strengthen Westpac's penetration of the Auckland market, where it has moved its head office.

"While one in three New Zealand has a banking relationship with Westpac, we don't enjoy the high market share in Auckland that we've gained throughout the rest of New Zealand," Mr Pratt said.

Westpac had introduced a number of changes including specialist business managers for small to medium-sized enterprises (SMEs) and the purchase of BT to strengthen its wealth management division.

Underlying operating expenses for the bank rose 3 per cent during the year but after allowing for a one-off charge to change its accounting policy and adopt international standards on employee benefits, expenses rose 7 per cent.

- NZPA