Westpac boosts half-year profit to $3.3 billion

Big four bank Westpac has recorded a half-year statutory net profit of just under $3.3 billion, up an eye-watering 63 per cent on the six months prior.

The bank also reported a dip in cash earnings compared to the same period last year, down 12 per cent to $3.1 billion.

Overall compared to the first half of 2021 Westpac said it has managed to shed costs by 10 per cent.

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CEO Peter King said the bank had made "steady progress" but was cautious in his outlook for the year ahead.

"The first half of 2022 has been challenging for many customers. Floods, the lingering effects of the pandemic and the impact of the war in Ukraine have set many customers back and created uncertainty," King said.

"However, the Australian economy is robust. Consumer spending may be tempered by higher prices and higher interest rates.

"However, the positives of strong household and business balance sheets, combined with the continued reopening of international borders and local economies, will likely increase economic activity."

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King said the bank expects the economy to grow in 2022 before slowing in 2023, and it was well-placed to weather anticipated multiple rate hikes by the Reserve Bank of Australia.

"Demand for housing has already shown some signs of easing and rising interest rates are expected to contribute to a moderation in house prices next year," he said.

"As the economy moves into the rising rate cycle, it's important to remember that rates are moving from a very low base and we already assess loan applications on higher rates, consistent with regulatory requirements."

The RBA raised rates last Tuesday, lifting them from the historic low of 0.1 per cent to 0.35 per cent.

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Just hours later Westpac announced that it would be passing on the cash rate hike in full to its variable rate mortgage customers, effective from May 17.

"We have made the decision to increase our standard variable rate for home loan and selected consumer deposit customers following today's increase to the official cash rate," Chris de Bruin, Westpac's chief executive of consumer and business banking, said at the time.

"We know many of our customers were able to build-up their savings during the pandemic and 70 per cent of home loan customers are ahead on their repayments, helping put them in a better position to withstand an interest rate rise.

"We are also increasing interest rates on some of our most popular products for savers, which will provide some relief following a period of record low interest rates."

The bank declared a fully franked interim dividend of 61 cents per share.