(Adds details, comment)
* H2 cash profit up 9 pct to A$3.4 bln
* FY impairment charges up 22 pct to A$1.2 bln
* Says balance sheet strengthened, funding profile improved
* Final dividend of 84 cents
SYDNEY, Nov 5 Westpac Banking Corp,
Australia's third-largest lender by assets, reported a 9 percent
rise in second-half cash profit, beating expectations on tight
costs and said it had improved its balance sheet even as bad
Bad debt provisions, which had fallen sharply for the past
three years for the 'big four' Australian banks -- Westpac,
National Australia Bank, Commonwealth Bank of Australia
and Australia and New Zealand Banking Group
-- have started nudging up as the economy cools, highlighting
the challenge ahead for profit growth.
Australia, among the few developed countries to avoid a
recession during the global financial crisis, is coming under
pressure from slowing Chinese growth, which is weighing on the
mining sector that has so far helped shield its economy.
Westpac, Australia's second-largest mortgage lender, said
second-half net profit came in at A$3.4 billion ($3.5 billion),
compared with A$3.1 billion a year ago and A$3.24 billion
expected by analysts. That took its full-year cash earnings to
A$6.6 billion, marking the third consecutive year of record
"This is a strong result in a lower-growth economic
environment," said Chief Executive Gail Kelly, noting 12 percent
growth in deposits and a 4 percent rise in lending.
Australia's top four banks, which posted a combined annual
net profit of about $25 billion in 2011/12, are facing their
slowest profit expansion in three years and bad debt provisions
are seen rising, hurt by a cooling economy.
Westpac said its full-year impairment charges rose 22
percent to A$1.2 billion.
Its net interest margin, a key measure of core
profitability, fell 5 basis points to 2.17 percent, while Tier I
capital, a measure of a bank's ability to absorb unforeseen
losses, stood at 10.3 percent .
Westpac announced a final dividend of 84 cents.
Westpac shares have risen 25 percent so far this year,
making it the best performer among its peers. The broader market
has climbed 10 percent.
(Reporting by Narayanan Somasundaram and Lincoln Feast; Editing
by Richard Pullin and John Mair)