Will Quebecers be handy at harvesting? Real farmers aren‘t sure
- October 23, 2020
MONTREAL — While the government is confident that students and other Quebecers will take to the land, farmers aren‘t as sure.
AAP Image/Ellen Smith
Westpac Banking Corporation has revealed a massive 70 per cent slump in first half cash profit of $993 million and elected to defer the dividend until greater clarity is known about the economic impact of COVID-19 on bad debts.
Westpac chief executive Peter King sheeted the hit to profits back to the likely cost of settling the AUSTRAC matter, its ongoing response to recommendations from the Hayne royal commission and growing projections of the cost of the virus crisis.
“This is the most difficult result Westpac has seen in many years. It is significantly impacted by higher impairment charges due to COVID-19, as well as notable items including the AUSTRAC provision,” Mr King said in a statement.
The bank stressed that its capital position remained sound following its decision to raise $2.8 billion in December last year but said it felt it was prudent not to make a distribution at this time.
“The board has deferred the decision on determining an interim dividend and no dividend will be paid in June 2020. This was a difficult decision given many retail shareholders rely on
The bank said it had been in constant dialogue with the regulator over stress testing scenarios and it had not expressed any concern about its position. The bank said it would revisit the dividend decision at some point over the year.
“Westpac remains well provisioned and capitalised. Nevertheless, the board recognises the uncertain economic and operating conditions and how these may develop over the next six months.
Westpac has also flagged the sale of several wealth assets including its superannuation and insurance operations and wealth platforms. It has created a new “specialist businesses division”, which will be led by Jason Yetton, a former head of retail banking at Westpac who returns from Commonwealth Bank.
Mr Yetton will lead a strategic review of Westpac’s sub-scale operations across superannuation, wealth platforms, investments, insurance, auto finance and the Pacific.
Mr King said “over the coming months we will conduct a detailed strategic review on the best options for these businesses.
This will include considering whether they would ultimately be more successful under different ownership.
Expectations of shareholders had been softened up in recent weeks with the bank announcing $1.4 billion in provisions including setting aside $900 million for the AUSTRAC matter and a further $2.2 billion for bad and doubtful debts with $1.6 billion set aside for COVID-19.
Before the resumption of trade on Monday morning, Westpac shares were down 49 per cent to $15.34 from their 52 week high of $30.05 reached in September last year.
Shares in the bank have been sold off heavily in the wake of the AUSTRAC money laundering scandal that saw CEO Brian Hartzer step down and brought forward the retirement of chairman Lindsay Maxsted.
The decision to pay no dividend follows a directive from the prudential regulator for banks to materially reduce or defer a decision on making distributions until the impact of the COVID-19 outbreak is better known.
Last week NAB slashed its dividend to 30¢ from 83¢ while ANZ said it would defer the decision entirely.
This story originally appeared in the Australian Financial Review. .