Westpac Banking Corp, one of Australia’s leading financial institutions, has revealed that its reported net profit after tax for fiscal 2023 will experience a significant reduction. The estimated decrease amounts to 173 million Australian dollars (US$109.21 million) and is primarily attributed to various notable items.
The most substantial contributor to the profit decline over the twelve-month period ending in September was the augmentation of provisions for customer refunds, repayments, associated costs, and litigation, totaling A$176 million. Additionally, restructuring expenses incurred from organizational simplification and the discontinuation of specialist businesses led to a loss of A$140 million.
Furthermore, Westpac acknowledged a loss of A$87 million due to asset write-downs and expenses associated with reducing the company’s corporate and branch footprint. Moreover, unrealized fair value gains and losses on economic hedges, along with net ineffectiveness on qualifying hedges, resulted in a loss of A$26 million.
Despite these drawbacks, Westpac experienced a boost of A$256 million from the sale of its Advance Asset Management business during this period.
Westpac acknowledges that the combination of these remarkable items will cause a decline in the Common Equity Tier 1 capital ratio by 4 basis points.
It is worth noting that the notable items for FY 2023 are significantly lower than the FY 2022 Notable Items, which amounted to A$874 million.
