7 Nov 2016

Westpac full year profit falls marginally

11:46 am on 7 November 2016

Westpac Bank's annual profit has fallen 4 percent as low interest rates and competition squeezed its margins and its expenses rose.

The cash profit for the year ended September was $872 million, a fall from $905m the year before.

Westpac's deposits grew 11 percent compared to a 9 percent rise in its lending.

"Intense competition for new lending and a shift to lower-spread fixed rate mortgages has compressed margins," the bank said in a statement.

The bank's net interest margin - a measure of its profitability - fell to 2.13 percent from 2.25 pct.

Its bad debts grew marginally to $59 million, driven by failures resulting from the slide in dairy prices.

The fall in Westpac's profit mirrors a modest easing in profits for the other main Australian owned banks operating here.

The bank is closing nine branches around the country.