Australia’s Westpac posts steady Q3 profit, helped by higher capital earnings

(Reuters) – Australia’s Westpac Banking (NYSE:) Corp said on Monday its third-quarter net profit was largely in line with a year ago, as higher earnings on capital and hedged deposits offset rising expenses and bad loans.

Based on the company’s average quarterly performance in the first half of 2024, Westpac’s unaudited net profit showed a 6% increase.

However, decade-high interest rates and growing cost-of-living pressures are impacting households’ ability to repay loans on time, thereby increasing financial stress for Australian banks.

“The cost of living and high interest rates remain a challenge for some customers while many businesses are facing cost pressures and experiencing lower demand,” Westpac said.

The country’s No. 3 lender by market value said unaudited net profit was A$1.8 billion ($1.20 billion) for the three months ended June 30, compared with A$1.8 billion posted a year earlier.

The bank’s net interest margin – the difference between interest earned from lending and paid for deposits – stands at 1.82% compared with 1.86% a year earlier.

($1 = 1.5006 Australian dollars)