Bulletin: Westpac Earnings To Recover Post COVID Pains

MELBOURNE (S&P Global Ratings) Nov. 2, 2020--Australia-based Westpac Banking Corp.'s (Westpac; AA-/Negative/A-1+) earnings capacity remains strong despite significant blows from the COVID-19 pandemic, S&P Global Ratings said today. The bank, one of the four major Australian lenders, announced today that its net profit for the year ended Sept. 30, 2020, fell by 66% compared with the previous financial year. The hits from increased credit loss provisions due to COVID-19 and a recent AUSTRAC settlement were broadly in line with our expectations. In our view, Westpac's earnings metrics should recover as the fallout from the pandemic abates. A recovery to pre-COVID levels is unlikely, however, due to compression in interest margins and a weaker outlook for credit growth. We believe that

...November 1, 2020 MELBOURNE (S&P Global Ratings) Nov. 2, 2020--Australia-based Westpac Banking Corp.'s (Westpac; ##-/Negative/A-1+) earnings capacity remains strong despite significant blows from the COVID-19 pandemic, S&P Global Ratings said today. The bank, one of the four major Australian lenders, announced today that its net profit for the year ended Sept. 30, 2020, fell by 66% compared with the previous financial year. The hits from increased credit loss provisions due to COVID-19 and a recent AUSTRAC settlement were broadly in line with our expectations. In our view, Westpac's earnings metrics should recover as the fallout from the pandemic abates. A recovery to pre-COVID levels is unlikely, however, due to compression in interest margins and a weaker outlook for credit growth. We believe that Westpac--similar to other larger Australian banks--will continue to target cost controls through technology, streamlining operations, and rationalizing its branch network. We expect Westpac's...

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