The Westpac Banking Corp (ASX: WBC) share price is down 3.58% today after the company released an update for the quarter to 30 June 2020. At the time of writing, the Westpac share price had fallen to $16.97 after closing yesterday's trade at $17.60.
What was in the announcement?
Westpac announced unaudited statutory net profit of $1.12 billion in the June quarter of 2020. This was against an average statutory net profit of $595 million in the previous two quarters.
Unaudited cash earnings for the June quarter were $1.32 billion. This was higher than an average of $497 million in the previous two quarters. According to Westpac, this increase was mainly due to lower impairment charges and lower insurance claims following major storms and bushfires in the previous two quarters.
Westpac recorded an impairment charge of $826 million, stating that it was "further increasing provisions and provisioning cover". According to Westpac CEO, Peter King, this was part of a prudent approach to managing impairments.
The bank had a net interest margin of 2.05% in the June quarter.
Westpac had a common equity, tier 1 capital ratio of 10.80% at 30 June 2020 and according to Mr King, the company maintained its strong balance sheet.
The bank's board decided not to pay a dividend for the first half of 2020, stating; "Given Westpac's desire to retain a strong balance sheet and the ongoing uncertainty in the operating environment, the Board has now decided it is prudent not to pay a First Half 2020 dividend." It said that it would consider a dividend when finalising its annual results which, for Westpac, will run until the year ending 30 September 2020.
Mr King commented on the outlook for Westpac, stating, "While there have been some signs that the economy is performing better than early expectations, significant uncertainty remains, particularly given the unpredictability of COVID-19 outbreaks and their local impacts."
About the Westpac share price
Westpac is one of Australia's big four banks and was founded in 1817, making it Australia's oldest bank. Westpac has over 13 million customers and offers consumer banking, business and institutional banking along with wealth management.
In July, Westpac announced a plan to bring 1,000 jobs back to Australia, this came as home lending processes and call centres were strained following the outbreak of the coronavirus.
The Westpac share price is up 25.98% since its 52-week low of $13.47, however, it has fallen 29.85% since the beginning of the year. The Westpac share price is down 39.46% since this time last year.
