read the following extract from the financial review of may 6th 2010

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Read the

following

extract

from

The Financial Review

of May

6th, 2010

by

Vesna Poljak

.

Westpac sails

to $3 billion

super

profit

Bad debts down,home loans

up

GFCaftershocksa

concern

Westpac BankingCorp chiefexecutive Gail

Kelly

delivereda firsthalfcash profit

of $3

billion, up 30

percent,as bad debts

from

institutional borrowers shrank

dramatically

and earnings

from

wealthmanagement and NewZealand

improved.

However,she warned

that the

impact

of the global

financial

crisis would be felt

by

Australia

for

many

years.

Westpacused the

tail

end

of

the financialcrisis

to

snarea

2

percentage point

increase in

mortgagemarket share

over the

past 18/months,valued

at an

extra

$15billion in

loans

something

Mrs Kelly

estimated

would

havetaken

10

years

to

claw from her

rivals

in

ordinary

times.

The bank now writesmore than one

in four

mortgages,

with

a 27 per cent share

of the

market,and dominates home loans alongside Commonwealth Bank

of Australia.

Mrs Kelly

predicted credit growth

would

improve

for

the remainder

of this

year

and

next, led

by

a turnaround

in

business lending, which

will

swing

from

a contraction

of

3

per cent

to

growth

of 6

per cent

by 2011.

She sought

to

temper the optimism

f

anned

by

the strongresult,

which

puts the

bank

within

striking distance

of

a full-year

cash

profit of

$6

billion.

“W

e

are advocates

for

caution.

I’m

always concerned when people

talk of

the GFCas

being over,

implying

that we’reback

to

normal,” she

said.

“There’

s

no doubt we

will

be

living with

the effectsand the consequences

of

this

crisis

for

manyyears

to come.”

Statutorynet

profit

increased 32 per cent

to

$2.9

billion…….

…..Mrs

Kelly

dampened expectations

for

the bank’s outlook

by

saying that

delivering

cash earnings growth

in

the second

half

wouldbe

challenging.

“Giventhe

f

act

that we had such a

strong first-half

result on such a materialreduction

in

the impairmentcharge,

I

thought

it

was prudent

to

call out that

to

continue growing

of

f

that

kind of

base

will

be quitechallenging,” she said, stressing

this did not

constitute

earnings

guidance……

….Asked

of

the

risk

posed

to

banks

by a tax to mirror that

already seen

with

r

e

gar

d

to

the new proposed

tax on

miningcompanies

r

ecommended

in

the government’s

re-

sponse

to

the Henry

r

e

vie

w

,

Mr

s

Kelly

said the financial services industrywas

already

the highest taxpaying

secto

r

.

W

e

are alreadythe sector that actuallypays

the

highest

effective tax

rate

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