Bulletin: Capital And Asset Quality Shelter Westpac From Earnings Headwinds

MELBOURNE (S&P Global Ratings) Nov. 4, 2019--Westpac Banking Corp. (Westpac; AA-/Stable/A-1+) remains a strong bank by global comparison, in S&P Global Ratings' view, despite earnings headwinds, underscored by a 16% decline in the bank's net statutory profit for fiscal 2019 (ended Sept. 30, 2019). Westpac's strong capital levels and asset quality, in conjunction with solid earnings, continue to afford a good buffer for an unforeseen rise in credit losses, in our opinion. In line with our expectations for Westpac and the Australian banking sector, low interest rates, subdued credit growth, and customer remediation costs (about A$1.0 billion post-tax costs for fiscal 2019, compared with a net profit of A$6.8 billion) have contributed to the drop in earnings that Westpac announced

...November 3, 2019 MELBOURNE (S&P Global Ratings) Nov. 4, 2019--Westpac Banking Corp. (Westpac; ##-/Stable/A-1+) remains a strong bank by global comparison, in S&P Global Ratings' view, despite earnings headwinds, underscored by a 16% decline in the bank's net statutory profit for fiscal 2019 (ended Sept. 30, 2019). Westpac's strong capital levels and asset quality, in conjunction with solid earnings, continue to afford a good buffer for an unforeseen rise in credit losses, in our opinion. In line with our expectations for Westpac and the Australian banking sector, low interest rates, subdued credit growth, and customer remediation costs (about A$1.0 billion post-tax costs for fiscal 2019, compared with a net profit of A$6.8 billion) have contributed to the drop in earnings that Westpac announced today. We foresee subdued earnings for the industry in the next two years in light of the difficult operating conditions. Westpac also announced today its plan to raise about A$2.5 billion in common...

Bulletin