Westpac chief executive, Gail Kelly, says recent times have represented “a turning point” for the Australian banking system. In a letter to shareholders, released this morning, Kelly said the improved economic environment had led to “a stabilisation in asset quality” and a “material reduction” in impairment charges.
“However we remain cautious,” she said. “Events in Europe have highlighted the fragile nature of the recovery and in our view growth is likely to be more moderate across many of Australia’s trading partners.
“These impacts, along with continuing funding cost pressures and new regulatory arrangements, will create headwinds for the period ahead.” In the same letter, chairman, Ted Evans, said the past six months had seen a “marked improvement” in the Australian economy.
“Unemployment remains low, much lower than originally forecast, and the household sector remains particularly resilient,” he said. “Notwithstanding this improving domestic environment, uncertainty continues in global markets, and we have maintained a conservative balance sheet approach.
“We have an even stronger capital position and have also made further improvements in funding, liquidity and provisioning.”