Mortgage advisers account for 53.8% of Westpac's mortgages

While Westpac doesn't provide data on the mortgages originated by advisers, these numbers do show that advisers continue to gain market share.

Westpac's mortgage book grew at a more sedate pace in the second half, adding $505 million in new mortgages after a surge in the first half, taking the annual gain to $1.94 billion and the total book to $67.47 billion.

The proportion of investment property loans fell slightly to 25.6% from 25.9% a year earlier and the proportion on interest-only loans fell a percentage point to 15.5%.

However, Westpac's appetite for riskier loans appears to have risen slightly with 6% of mortgages having loan-to-valuation ratios between 80% and 90%, up a percentage point from a year earlier, and mortgages with LVRs above 90% rising to 2.6% from 2.4%.

The bank's net profit for the year ended September was up 15.8% to $1.23 billion, aided by a 7% increase in net interest income and charges against profit for bad debts falling to $27 million from $135 million in the year-earlier result.

Operating costs rose 5.7% to $1.37 billion.

Net interest margin rose four basis points to 2.17% from a year earlier.

Westpac wrote back $20 million of the year-earlier charges.

However, mortgage delinquencies of more than 90 days rose slightly to 0.49% of the portfolio from 0.33% a year earlier while mortgage deliquencies of more than 30 days rose to 0.96% from 0.71%.

Westpac appeared to want to minimise the profit increase, possibly because of the ongoing parliamentary inquiry into banking, saying that the underlying result was up only 1%.

“We've worked hard to help customers through challenging economic conditions and aw well positioned to support their growth aspirations as the economy improves,” said chief executive Catherine McGrath.

Her bank helped first-home buyers into nearly 5,900 new homes and she said it has seen “a noticeable increase in applications in recent months as consumer confidence grows.”

The Reserve Bank has cut its official cash rate from 5.5% to 4.75% since mid-August.

McGrath said Westpac “acted swiftly” to pass falling interest rates on to customers, cutting its advertised one-year fixed home loan rate by 115 basis points since the start of July while cutting its floating rate in line with the OCR cuts.

“We estimate by the end of the year that more than a quarter of our fixed home loan customers will have rolled onto lower rates and nearly three-quarters by this time next year,” she said.

While Westpac's economists are forecasting a gradual economic recovery and GDP growth of 2.3% in 2025, “the green shoots of recovery we've seen in recent confidence surveys are balanced out by rising unemployment, ongoing geopolitical risks and cost pressures on businesses,” McGrath said.