(Reuters) – Australia’s Westpac Banking Corp plans to return A$5.7 billion ($4.28 billion) to shareholders in the form of a buyback and dividends as the No.2 lender’s annual profit more than doubled with the release of funds set aside to cover the pandemic’s fallout.
Westpac, the best performing bank stock among the “Big Four” this year, said while the economy rebounds and its Australian mortgage lending rose 4% in the second half, margins will be under pressure from low interest rates and competition.
Australia and New Zealand Banking Group acknowledged last week that it had not done enough to capitalise on a pandemic-induced boom in home lending that saw a 20% surge in nationwide home prices.
“Demand for housing is likely to remain elevated but home price increases should moderate to 8% next year,” Chief Executive Officer Peter King said, amid the banking regulator tightening restrictions on home lending.
The bank’s cash earnings came in at A$5.35 billion for the year ended September, just missing a A$5.5 billion Reuters poll estimate. It was higher than the A$2.61 billion reported last year.
The lender plans a A$3.5 billion off-market share buyback, and declared a 60 Australian cents final dividend, totalling A$2.2 billion.
($1 = 1.3326 Australian dollars)
(Reporting by Nikhil Kurian Nainan and Anushka Trivedi in Bengaluru; Editing by Giles Elgood and Diane Craft)
