Australia’s third largest bank Westpac reported earnings for the full year ended September with statutory net profit up 138% YoY to A$5.46bn ($4.1bn) and cash earnings up 108% YoY to A$5.35bn ($4.01bn). Despite the strong YoY growth, cash earnings missed estimates of A$5.42bn ($4.07bn). The miss coupled with a contraction of net interest margins by 4bp to 2.04% led to an over 6% fall in its stock this morning. Adding to investor woes, Westpac announced a lower-than-expected share buyback of A$3.5bn ($2.6bn). Westpac’s institutional unit posted a loss of A$670mn ($503mn), vs. a profit of A$332mn ($249mn) last year, on the back of an asset writedown following an annual impairment test. CEO Peter King said, “Our underlying results are not where we want them to be, and we recognise we have more to do to become the high-performing company we aspire to be. However, we are making progress.” Westpac’s CET1 ratio stood at 12.32%, up 119bp YoY.

Westpac’s USD 5% Perp has been trending lower from ~108 levels in mid-September to 104.96 currently.

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