Finance Watch
May 02 2016 - 12:08PM
Dow Jones News
WESTPAC
Impairment Charges Weigh on Profit
Westpac Banking Corp. reported a modest rise in its half-year
profit but cautioned that it had to increase loan-loss provisions
in its institutional banking arm.
The institutional operation was stung by lower margins and asset
impairments primarily related to four large exposures, which added
252 million Australian dollars (US$191.7 million) to provisions for
the period, Westpac said Monday. Still, the bank said that its
larger consumer division recorded strong home-loan and deposit
growth. Margins remained stable on the business-banking side of the
company.
Westpac said net profit rose 2.5% to A$3.7 billion in the six
months through March, from A$3.61 billion a year earlier.
Cash earnings -- a figure followed by analysts that strips out
certain income and costs -- were up 3.3% at A$3.9 billion. The
median estimate among eight analysts surveyed by The Wall Street
Journal was for a result of A$4 billion.
--Robb M. Stewart
ALLIANZ
Insurer Is on Track For Earnings Goal
Allianz SE, Europe's biggest insurer by revenue, reported a 21%
jump in quarterly profit and said it is on track to meet its
full-year earnings target.
Net profit rose to EUR2.2 billion ($2.51 billion) from EUR1.8
billion in the first three months of last year, in part as a result
of gains in the value of Allianz's investment portfolio. Lower
payouts for claims related to natural disasters and wider profit
margins on new life and health policies also contributed to
Allianz's performance, the insurer said on Monday.
In contrast, third-party assets under management at the group's
asset-management business continued to shrink, evidence that a
turnaround at Allianz's U.S. fund manager Pacific Investment
Management Company LLC, or Pimco, is still around the corner.
Pimco is under pressure this year to prove it can reverse the
substantial net asset outflows seen since co-founder Bill Gross
abruptly left in September 2014. Outflows have eased over the
quarters since Mr. Gross's exit and a management shake-up at
Pimco.
Allianz said third-party assets under management fell 2.7% to
EUR1.242 trillion at March 31 from EUR1.276 trillion a year
earlier.
Revenue was under pressure at the start of the year, falling
6.4% to EUR35.4 billion in the quarter, while operating profit was
down a more modest 3.5% to EUR2.8 billion.
In the asset-management business, third-party assets under
management fell 2.7% from a year earlier to EUR1.242 trillion as of
March 31.
Allianz said it is sticking its full-year guidance for operating
earnings. "We had a strong start to 2016, reinforcing our
confidence that we will be able to reach our outlook for 2016
despite the fact that this is a challenging year for the
financial-services industry," Chief Executive Oliver Bäte said.
"Despite the market volatility and low interest rates, we
continue to expect an operating profit for the full year of EUR10.5
billion, plus or minus EUR500 million."
--Ulrike Dauer
(END) Dow Jones Newswires
May 02, 2016 11:53 ET (15:53 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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