In a sign of thee times, Westpac said it expected net interest margins  to decline further through FY22.  The net interest margin for the Decemebr 2021 quarter was 1.91 per cent, down 8 bps from the margin of 1.99 per cent over the second half of FY21.

“The main reasons for this decrease were the rise in the holdings of liquid assets along with competitive pressure in mortgage and business lending and the continuing growth in lower spread fixed rate mortgages,” the bank said in a quarterly trading update. 

Westpac announced an unaudited statutory net profit of $1.82 billion for the December quarter.

Total loans increased 0.7 per cent over the December quarter, well below system, “with growth across Australian mortgages, institutional lending and New Zealand lending.”

This increase was partly offset by a reduction in loans of around $1 billion from the sale of its wholesale vehicle dealer book announced in December 2021.

The $191 million decline in expenses (excluding notable items) over the quarter “reflected the expected results of our cost reset program, including from reducing headcount (FTE and third-party contractors) by more than 1100” the bank said.

 The bank said it remains committed to its $8 billion cost reduction target by FY24.

 Should there not be sufficient demand for the off-market buy-back now underway (And ue to close in 2 weeks) Westpac plans to commence an on-market buy-back to complete the $3.5bn reduction in capital, subject to market conditions and approvals.

Meanwhile, the bank said it selected Ryan  Zanin as its new chief risk officer.

Zanin was CRO of GE Capital group from 3025 and at present is CRO of Fannie Mae in the US.