Westpac reported cash earnings of A$2.61 billion for the year ended Sept. 30,62% lower than a year ago, hurt by A$3.18 billion ($2.23 billion) in impairment charges because of the economic impact of the COVID-19 pandemic.
SYDNEY: Westpac Banking Corp said on Monday it would resume paying dividends, as it reported a 62% plunge in cash earnings due to write-downs, lower margins and a record fine over a money-laundering case.
The country's second-largest lender, which was the only one of the Big Four lenders that dominate the Australian system to stop shareholder payouts in the first half, said it would pay investors the maximum dividend allowed by the regulator.
Westpac reported cash earnings of A$2.61 billion for the year ended Sept. 30,62% lower than a year ago, hurt by A$3.18 billion ($2.23 billion) in impairment charges because of the economic impact of the COVID-19 pandemic.
The results were also hit by a record $1.3 billion fine to settle a lawsuit accusing Westpac of enabling millions of suspicious payments, including some enabling child exploiters.
The settlement ended a difficult chapter for Australia's oldest bank, which has seen it lose about a third of its value since the regulatory lawsuit was announced in November last year.
The coronavirus pandemic compounded the bank's woes this year with its devastating effect on economic growth, triggering Westpac's decision to sell its wealth management, insurance and banking business in Fiji and Papua New Guinea.
Westpac, which had elected not to pay an interim dividend earlier this year, declared a 31 Australian cents-per-share final dividend, equivalent to 49% of statutory earnings for the half year, the maximum allowed by the banking regulator.
That was 61% lower than the final dividend in 2019.
"We are addressing the issues that have impacted performance in our mortgage book and expect to see improvement start to flow in 2021," Chief Executive Peter King said in a statement.
King added that more than two thirds of the company's mortgage customers who had deferred repayments amid the pandemic had now restarted those payments.
Given the unexpected dividend payout and a 2.03% net interest margin, higher than the 1.63% posted by Australia and New Zealand Banking Group last Thursday, the result should be positively received, analysts said.
($1 = 1.4239 Australian dollars) ($1 = 1.4243 Australian dollars)
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