Westpac plans $2.6 billion share buyback, profit up

Bloomberg

Westpac Banking Corp shares dropped more than 5% in Sydney trading after delivering a smaller share buyback than many had expected and amid concern margins remain under pressure.
The lender unveiled a record share buyback of up to A$3.5 billion ($2.6 billion), while cash earnings of A$5.35 billion fell short of analyst expectations of A$5.42 billion in the year to September 30, it said in a statement on Monday.
This marks “a much softer than expected result,” Citigroup Inc. analysts including Brendan Sproules wrote in a report. Westpac falls 5.4% in Sydney, paring this year’s gain to 25%. The bank had been topping its rivals for this year through last week’s close.
The bank’s institutional unit was the only business to post a loss as it wrote down assets following an annual impairment test. The division posted a A$670 million loss, compared with a profit of A$332 million a year earlier.
“Consensus’ A$6.4 billion profit for 2022 might be tricky to hit due to normalising provision costs and margin pressure,” said Matt Ingram, senior industry analyst at Bloomberg Intelligence.
Westpac Chief Executive Officer Peter King said he expects Australian economy to recover over the next year despite some lingering uncertainties in the outlook as the country comes out of stringent lockdowns.
“Consumer spending will likely increase significantly as states re-open and pent-up demand is released,” he said in the statement.