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While this was partly offset by continued run-off as low rates enable customers to repay faster, Australian housing loans increased $22.5 billion or seven per cent.
Westpac profits increased eight per cent to $7.6 billion for 2014/2015 and the lender maintained a 23 per cent share of the Australian mortgage market.
Bank of Melbourne was a standout performer for the group, achieving 2.4 times mortgage system growth over the year; a further 17 branches were opened over the same period, taking the total network to 94.
Stronger loan growth during the year saw Westpac more active in wholesale funding markets compared to 2013/2014. The group raised $33 billion in wholesale term funding in 2014/2015, with a weighted average maturity of 4.7 years, excluding securitisation.
Westpac chief executive Gail Kelly said that while all divisions performed well, Australian Financial Services (AFS) has had a particularly strong year.
“All businesses in AFS delivered double-digit earnings growth, with well-managed margins and a six per cent increase in banking customers over the year,” Ms Kelly said.
“We provided more than $87 billion in new lending to Australian retail and business customers over the year, while growing in line or above system across all key markets in the second half,” she said.
“Housing credit growth has increased over 2014 and we expect growth at similar levels to continue through 2015, driven by strong demand and continued low interest rates.
“An upswing in homebuilding is also underway.”
According to the Australian Bureau of Statistics, the seasonally adjusted estimate for total dwellings approved fell by 11 per cent in September after rising for two consecutive months.