Westpac cautious in uncertain times: CEO

The second biggest company on the stock exchange, Westpac Banking Corporation, will
act cautiously as it anticipates uncertain economic conditions, chief executive Gail
Kelly says.
On Wednesday, the bank reported that net profit for the six months to March 31 had
declined 1.2 per cent to $2.175 billion from the year before as business lending
impairments more than offset growth in retail lending and deposits.
"Our whole settings of prudent risk management and caution is a very, very important
element," Ms Kelly told ABC1's Inside Business.
"I think it's entirely appropriate right now in this time of the cycle and that's
exactly why we've sought to bolster our balance sheet."
Ms Kelly said the bank's capital raising efforts and provision covering was all
about being conservative.
The company raised $4.7 billion over the last six months.
"I have had analysts and fund managers saying: `Is that because you're seeing a
particularly dire situation in the future?'
"My answer's been: `Really, no. It's about caution, it's about being prudent, it's
about having conservative settings because we don't know just how difficult it might
be'."
Westpac booked impairment charges of $1.611 billion ($1.611 billion) in the first
half, more than tripling from $541 million the year before.
It increased its total provision for impairment charges to almost $4.5 billion.
"Looking ahead, you know I think it's going to be another quite tough six months
and, certainly, we expect to see another period of high impairments," she said.
In a separate interview with the Sky News Sunday Business program, Ms Kelly said if
the Reserve Bank of Australia (RBA) cut interest rates further, Westpac could
guarantee to pass on some of those rate cuts to its customers.
"We will work really hard to pass on as much as we can," she said.
Ms Kelly also said no set target had been set for more job reductions, after the
company shed more than 800 jobs in the first half.
But, she said, that over the next few years, some departments would reduce staff
while others would increase its staffing numbers.