OUTLOOK - Australia's Westpac to report 12 pct increase in FY net cash profit

OUTLOOK - Australia's Westpac to report 12 pct increase in FY net cash profit

	Published : Mon, 29 Oct 2007 06:46 By : Agencies Print this Story

SYDNEY (Thomson Financial) - Australia's fourth-largest bank Westpac Banking Corp is expected to report on Thursday a nearly 12 percent increase in net cash profit for the year to September on strong growth in its personal banking and wealth management divisions.

In his last earnings result as Wespac chief executive, David Morgan is expected to report a net cash profit of 3.442 billion Australian dollars compared to 3.079 billion dollars in the previous financial year, according to the median forecast of analysts surveyed by Thomson Financial.

''The main drivers are pretty much the same for all the banks. All of them are growing quite strongly on the retail side and Westpac is no different from the others,'' said Peter Rice, an analyst at BBY Ltd.

Rice said he will be looking for signs of improvement in Westpac's wealth management unit BT, which has come under renewed focus in the past 12 months.

''There will certainly be an incremental jump in profit contribution from BT this year and that's helped the (overall) growth,'' Rice said.

Westpac's full-year results are not likely to provide any surprises, said TS Lim, an analyst at Southern Cross Equities.

''Retail banks tend to do very well because they have got the retail deposits to offset margin decline. Dr Morgan is very conservative so I wouldn't expect any major issues from the bank,'' Lim said.

Morgan, who has been chief executive of Westpac since March 1999, will be replaced by former St George Bank Ltd boss Gail Kelly in February.

Westpac, which is in the process of taking over troubled Rams Home Loan Group Ltd for 140 million dollars, will be the third major bank to report earnings for the year to September.

ANZ Banking Group Ltd, Australia's third-largest bank, opened the reporting season last week with a lower-than-expected cash net profit of 3.92 billion dollars.

St George Bank Ltd, Australia's fifth-largest bank, is due to report its earnings on Wednesday and may use the occasion to name its new chief executive.

Acting chief executive Paul Fegan, who is the frontrunner for the top job, is expected to deliver a net cash profit of 1.167 billion dollars, more than 14 percent higher than the 1.026 billion dollars recorded last year, according to the median forecast of analysts surveyed by Thomson Financial.

''The strong part of their business has been their SME (small and medium-sized enterprises) business banking side rather than the big end of town, and there's every indication that has continued to go very well in the second half of the year,'' Rice said.

The only area of concern is St George Bank's exposure to the weak housing market in New South Wales, the most populous state in Australia.

(1 US dollar = 1.08 Australian dollars)

allison.jackson@thomson.com

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--- by Allison Jackson ---

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