Australia's Westpac profits drop 10.7 percent

Australia's Westpac Banking Corp. reports 10.7 percent drop in annual profits due to bad debts

• On 8:02 pm EST, Tuesday November 3, 2009

SYDNEY (AP) -- Westpac Banking Corp., one of Australia's largest banks, said Wednesday its full-year profit dropped 10.7 percent due largely to bad debts amid the global financial crisis, but said it believed the bad debts had peaked.

Net profit for the year ending Sept. 30 was 3.45 billion Australian dollars ($3.1 billion), down from AU$3.86 billion a year ago, the Sydney-based bank said in a statement. The annual results did not include Westpac's acquisition of smaller rival St. George Bank in November 2008.

Pro-forma cash earnings, the bank's preferred measure that treats St. George as part of the group for the past two fiscal years, fell 8 percent to AU$4.63 billion from AU$5.05 billion a year ago.

"Westpac has delivered a sound financial result during a tumultuous year," CEO Gail Kelly said in a statement.

Chief financial officer Phil Coffey told journalists the bank had probably seen the worst of the bad debts.

"The credit cycle is stabilizing," he said. "Bad debts are unlikely to move higher than 2009 levels."

Coffey said Westpac's merger with St. George had been "transformational" and that the bank wasn't actively looking for additional takeover opportunities.

Westpac declared a final dividend of AU$0.60 a share, taking the full-year distribution to AU$1.16 a share, down from AU$1.42 a year ago.

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