Westpac Banking Corporation Ltd has posted a strong lift in full-year cash profit and announced a special dividend as the lender looks ahead to an increase in lending activity on the back of improving confidence.
In the year to September 30, Westpac posted a cash profit of $7.097 billion, an eight per cent increase on the$6.598 billion recorded in the previous corresponding period.
Full-year net profit increased 14 per cent to $6.816 billion, from $6.036 billion in the previous year.
In the same period net operating income was $18.883 billion, a four per cent rise on $18.076 billion.
The group will pay a final dividend of 88 cents, fully-franked, as well as a special dividend of 10 cents, also fully-franked.
The final dividend and special dividend will be paid on December 19 to shareholders on the register at November 14.
Combined with the interim dividend of 86 cents fully-franked, and the interim special dividend of 10 cents, also fully-franked, Westpac paid a total fully-franked ordinary dividend for the year of $1.74, and a total special dividend of 20 cents.
Kelly confident of outlook
Westpac chief executive Gail Kelly flagged a continued discipline from the lender in the year ahead, as it continued to grapple with structural changes underway within the Australian economy, and continued global volatility.
However, Mrs Kelly she was encouraged by signs of improving confidence which was expected to translate into increased lending activity, in particular in New South Wales.
"There is no doubt that domestically we are seeing a pick-up in consumer confidence which we expect will translate to a gradual increase in credit growth," Mrs Kelly said.
Globally, Mrs Kelly said the prospects for the US economy are improving gradually with business and household balance sheets strengthening, while she expected China's growth to continue at its "more recent, sustainable pace".
“Equally encouraging is the recent improvement in business confidence, which is central to businesses being willing to borrow and invest," she added.
“Our businesses are all performing well, we are seeing tangible benefits from the investments we have made in our digital capabilities and distribution network, and our capital position is the strongest in the sector."