According to the bank’s results, mortgage lending continued to track broadly in line with system while business lending was higher from the major bank’s Lloyds acquisition.
Business lending increased by 5 per cent, including the contribution from the Lloyds acquisition, which saw Westpac’s lending increase by $7.6 billion.
Westpac Group chief executive Gail Kelly said the Group’s common tier 1 capital ratio of 8.82 per cent is the strongest in the sector.
“We have a market leading capital position that enables us to strike the right balance between providing additional value to shareholders and remaining appropriately conservative to invest in future growth,” Ms Kelly said.
The strength of capital and the quality of Westpac’s half-yearly result enabled the bank to increase the fully franked interim dividend by 4 cents per share on the prior corresponding period and 2 cents per share against the prior half, to 90 cents per share.
Ms Kelly said that while Australian households remain cautious, the pace of their spending growth has lifted somewhat and confidence has trended higher.
“Housing markets have responded well to low interest rates and housing construction is likely to provide a boost to economic activity over the next few years,” she said.