A well flagged rise in provisions for a handful of prominent dud loans to major borrowers should not be seen as a pointer to a weakening in the credit cycle - or so Westpac's top management argued at an investor briefing yesterday."It's fairly obvious we are through the best part of the impairment cycle," Brian Hartzer, Westpac's managing director, said in opening remarks to the briefing on the bank's profit for the half year to March 2016."We don't expect a rapid step up in impairments from here," he said.?Even so, Westpac reported a five-fold increase in impaired resources loans over the last six months."We don't see a broad based deterioration in credit quality," Hartzer insisted. "If anything, we expect the opposite as customers use low interest rates to pay down debt."Hartzer did concede that the bank would monitor "some regions, mining and resource construction industries affected by the commodity markets".Asset quality otherwise, he said, remained sound.The bank provided A$272 million in provisions for "a small number of new large" bad debts, assumed to include borrowers such as Slater and Gordon, Peabody and Arrium.The bad debt charges from this strife as well as compressed margins helped slice the economic profit of Westpac Institutional Bank by more than half to A$141 million and drag the return on equity in this division to 10.3 per cent, 400 basis points less than the group ROE. Peter King, the bank's chief financial officer, said that "the value of [credits] upgraded exceeded downgrades, once you take out the impact of these [four most troubled borrowers]."?Westpac highlighted that these provisions were partially offset by a decline of $51 million in the business bank, "as fewer facilities were downgraded to impaired."The bank's sensitivity to lending risks from mining (including oil and gas) is shown by a decline of 20 per cent, $11.8 billion, over the last six months, to this category.Westpac said it graded 3.03 per cent of these loans as "stressed", up from 1.86 per cent at the end of its 2015 financial year.The bank said it considered 1.26 per cent of these loans as impaired, a five-fold increase on 2015.