Westpac Scraps Mid-Year Dividend as Margins Decline

By David Winning

SYDNEY--Westpac Banking Corp. scrapped its interim dividend to protect its balance sheet as the coronavirus pandemic creates hardship among business and residential borrowers.

Westpac said its unaudited cash earnings totaled 1.32 billion Australian dollars (US$962 million) in the three months through June, which is the third quarter of its fiscal year. The bank said the result was higher than the quarterly average of A$497 million in its first half.

Westpac reported a third-quarter unaudited net profit was A$1.12 billion, also higher than the quarterly average of A$595 million.

Chief Executive Peter King said the improved result mostly reflected lower impairment charges. "Nevertheless, the impact of the Covid-19 pandemic is clear as activity fell and margins declined," he said.

Westpac, which reported a net interest margin of 2.05% for the third quarter, said it would next consider dividends when finalizing its annual result.

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