A return on equity of 18.7 per cent in the second half of 2010 puts Westpac well in front in the profit stakes in Australian banking, even if the number relies on a tax gain and so may not deserve to be counted.A 2010 net profit of $6.3 billion beats Commonwealth Bank for a headline grabber by the best part of a billion, and underscores two core elements of Westpac's successful, but short term, financial strategy.Nine months of extra yield on home loans and a whole year of underinvestment in its core business is the cornerstone of the Westpac profit, and a reminder of the weak position the bank is really in.Outside of superannuation, where BT is a bit of a star, Westpac is an unexceptional supplier in an industry where mediocrity is the norm.No doubt this is making investment priorities a tough grind for management, as the recent presentation on the technology plan for Westpac made clear.When the choices are: will we use the Westpac system or the St George system, virtually all decision-makers must keep wondering what will persuade the board to invest seriously in the development of the business?There are improvements in cross-sell ratios the bank can mention (four per customer is the average) and the "deepening" of BT in the Westpac business received some emphasis in the good news section of yesterday's investor briefing.Nor is this the only year Westpac can claim bragging rights to leadership in banking sector profits in Australia.It was only 18 months ago that Boston Consulting named Westpac as the "most profitable" of the world's "universal" banks, with a return on equity in the year to September 2008 of 20.4 per cent.An ROE of 20 per cent may be a stretch in the current climate. On the other hand, there won't be too many banks around the world that can claim a level of profitability equal to that of Westpac this year.Westpac's management was pretty downbeat yesterday on the prospects for improvement with much made of the flat, pre-provision profit over the second half.