Westpac Group CEO Peter King said the bank had set aside Aus$2.24 billion in impairment charges, including Aus$1.6 billion to tackle the impact of the virus and Aus$900 million for a potential penalty from financial intelligence agency AUSTRAC.
The regulator has accused Westpac of committing 23 million breaches of money laundering and counterterrorism rules in “serious and systemic” law-breaking involving more than Aus$11 billion.
“This is the most difficult result Westpac has seen in many years,” King said.
“It is significantly impacted by higher impairment charges due to COVID-19, as well as notable items including the AUSTRAC provision.”
King said Australia was facing a “sharp economic contraction” in 2020 with a rebound not expected until the December quarter.
But he said the bank retained a strong balance sheet and ample liquidity.
It comes after ANZ Bank said its half-year after-tax profits had fallen 50 percent and NAB reported a 25 percent drop in profits.
Like ANZ, Westpac deferred a decision on interim shareholder dividend payments due to the ongoing economic uncertainty.
Westpac said it had also deferred more than 100,000 home loans and 30,000 business loans worth a total of Aus$47 billion, as part of a government programme to ease pressure on Australians during the country’s virus shutdown. ♦
