Westpac Banking Corp.’s shares declined after the Australian lender said mortgage-market competition hurt margins and inflationary pressures are contributing to rising costs.
(Bloomberg) — Westpac Banking Corp.’s shares declined after the Australian lender said mortgage-market competition hurt margins and inflationary pressures are contributing to rising costs.
Unaudited net profit came in at A$1.8 billion ($1.2 billion) for the third quarter, Westpac said in a statement Monday. Unlike some of its peers, the lender opted not to buy back stock. It’s also seeing a modest increase in customer stress, according to the statement.
Resilience in Australia’s economy and housing market has supported a strong backdrop for the nation’s lenders. Still, with sticky inflation that’s driving up staff costs, investors are on the look out for signs that margins may now face further pressure and competition remains fierce for home loans.
Credit quality is resilient and Westpac is well provisioned, according to the statement, despite a modest increase in stress.
Commonwealth Bank of Australia and National Australia Bank Ltd. this month said they are doing stock buybacks.
Westpac shares declined 2% as of 10:33 a.m. in Sydney, extending this year’s loss to more than 10%.
UBS Group AG analyst John Storey said the bank’s decline in net interest margin is slightly worse than its peers.
Read More: Westpac Revenue Strength to Offset Cost, Credit Headwinds: React
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