The Westpac Banking Corporation [ASX:WBC] share price have spiked 5.2% after delivering good news on their first-half report.
Profits up, dividend is on
For the first half of FY21, Westpac delivered a $3.4 billion net profit. That’s a 213% increase when compared to FY20 second half and a 189% jump when compared to the same period last year.
Westpac also reported $3.5 billion in cash earnings, a 256% increase from the same period last year when they reported $993 million in earnings and the company decided to defer their dividend.
Westpac Group CEO, Peter King said:
‘It has been a promising start to the year with increased cash earnings, growth in mortgages and continued balance sheet strength.
‘First half earnings were considerably higher than the prior corresponding period, mainly due to an impairment benefit reflecting improved asset quality and a better economic outlook.
‘Australian mortgages increased $2.6 billion over the past six months, with good growth in owner occupier loans partly offset by lower investor lending. Owner occupier loans increased 3 per cent, with first home buyers making up 13 per cent of new loans.’
The property market is still going strong despite the pandemic, but interest rates are stuck at record lows at 0.10%.
To keep the business competitive through the recovery, Westpac said they are looking to reduce their costs from $10 billion last year to $8 billion by 2024 by increasing digital banking and branch closures.
Westpac has already decreased the number of branches from 971 in March 2019 to 889 in March this year and has increased digital active customers from 4.9 million to 5.15 million in the same period.
What happens next for the WBC Share Price?
With such a jump, Westpac has declared an interim dividend of 58 cents a share.
Share price was trading at $26.25 at time of writing, up from $24.98 at yesterday’s close.
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