Westpac FY earnings down 62pc

Westpac has had a 62 per cent dive in full-year cash earnings, largely from the effects of COVID-19 and its $1.3 billion penalty for breaches of money laundering and terror financing laws.

The bank on Monday reported cash earnings of $2.6 billion for the 12 months to September 30.

Chief executive Peter King said 2020 had been a particularly challenging year and the result was disappointing.

The bank’s costs rose by six per cent to handle more calls and requests for support amid the pandemic, ensure staff and customer safety and improve operations to meet regulatory standards.

The Australian Transaction Reports and Analysis Centre’s finding that the bank failed to meet laws preventing money laundering and terror financing on 23 million occasions prompted many changes in technology and training.

Most of the breaches happened between 2013 and 2018.

The final dividend was 31 cents per share, fully franked. This was lower from the 2019 equivalent of 80 cents per share, fully franked.

The dividend was the maximum allowed under regulator guidance from earlier this year for banks to conserve capital during the pandemic.

The Westpac result has continued the big banks’ mixed run of full-year reports. ANZ Bank last month reported a 42 per cent drop in full-year cash profit, while the Commonwealth Bank in August reported a 11.3 per cent dip in full-year cash profit.

Shares were down by 1.51 per cent to $17.63 at 1149 AEDT.

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