Australia's Westpac first head net profit flat

Australian banking heavyweight Westpac posted a first-half net profit of Aus$3.61 billion (US2.82 billion) Monday, unchanged from the same period last year with solid mortgage lending growth offset by its institutional arm taking a hit.

The cash profit of Australia's second largest bank, the industry's preferred measure which strips out volatile items, was Aus$3.77 million in the six months to the end of March, also in line with the previous year.

Despite the flat result, which was slightly below expectations, the Sydney-based lender lifted its interim dividend three cents to 93 cents per share.

Chief Executive Brian Hartzer, who took over from Gail Kelly in February, said Westpac's retail and business banking divisions performed well.

"However, the headline result was impacted by derivative adjustments in our Westpac Institutional Bank business and a lower treasury result," he said.

Cash earnings in the institutional arm were down 17 percent, largely due to an Aus$85 million charge relating to derivative valuations.

"Our primary goal is to continue to build the value of our franchise, and the drivers of value are heading in the right direction," he added.

Hartzer said the bank continued to grow its customer base while also delivering Aus$230 million in efficiency gains and reducing stressed assets.

"In our retail and business banking divisions we had solid loan and deposit growth, along with well managed margins," he said.

Westpac said its housing loans in Australia were up seven percent while personal lending jumped eight percent and business lending grew five percent.

Group-wide, customer deposits increased Aus$31.4 billion to Aus$420.3 billion, up eight percent.

Westpac is the first of the big Australian lenders to release half-year earnings with ANZ Bank reporting Tuesday and National Australia Bank on Thursday.

Commonwealth Bank of Australia follows a June year-end compared with September for its three competitors.