Steady Growth Lifts WestpacTrust Result

2 May 2002

Improvements in customer satisfaction have lead to a steady increase in WestpacTrust’s half-year result, lifting profits by 7% to $231 million for the six months ended 31 March 2002.

WestpacTrust Chief Executive Tom Gallagher said ”activity levels over the last six months are the best we’ve ever seen and are a direct result of aligning our business to better meet our customers’ needs.

”This has allowed WestpacTrust to improve its result despite operating in a highly competitive environment where margin pressure has been intense.”

Interest margins have declined from 2.56% in the equivalent period last year to 2.48% in the current period.

Non-interest income increased by 6% reflecting WestpacTrust’s continued success in insurance sales and retail funds inflows. WestpacTrust retained its number one position for the net retail managed funds inflows for the six months and captured 64% of the market in the December quarter. This demonstrates WestpacTrust’s commitment to supporting our customers’ wealth management needs and increased focus on this area.

“WestpacTrust continues to demonstrate its support of the business community through its investment in this important customer group including the development of a new centre for SME (Small and Medium Enterprise) customers in Auckland. Increasing the level of banking expertise available to our business customers has seen a significant increase in business customer satisfaction and is paying real dividends through increased market share.

“The WestpacTrust business excellence awards which are held throughout New Zealand and our sponsorship of the prestigious WestpacTrust NZMP Farmer of the Year Award have also proved valuable in demonstrating the importance of these customers to WestpacTrust.”

Non-interest expenses increased by only 2%, reflecting the continued focus on costs and the expense to income ratio of 48% is 1% lower than the prior year period.

Bad debt expenses increased by $11 million representing a prudently managed loan book. “We’re very comfortable with the level of bad debts. Last year’s figure for the same period was artificially low as a result of a one-off write back,” said Mr Gallagher.

Westpac Institutional Bank (WIB) performed very well in all areas making a strong contribution to the bank’s overall New Zealand result. “WIB was recently voted by the corporate market as the best service provider and ranked number one on the prestigious Greenwich Quality Index.”

“There is no doubt that WestpacTrust’s success depends on delivering cost-effective financial solutions that meet our customers’ needs. This includes providing choice and convenience in the way our customers can do business with us.

“During the year, WestpacTrust launched Elect, an account specially designed for high eftpos users. This market-leading account has the lowest fee in the market and is specifically aimed at customers who choose to do most of their banking electronically.”

Online banking continued to grow with the number of registered users doubling over the last year to 177,000 registered users. WestpacTrust online banking offers many unique features, including account history going back five years and the ability to pay tax.

The successful joint venture, The Warehouse Financial Services Ltd, was profitable in its first half-year reporting period.

ENDS

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