Westpac posts strong first-half profit: Midday roundup

Westpac has recorded a substantial increase in cash earnings during the first half of the year, the company announced this morning.

For the six months ending March 31, Westpac recorded a 10% increase in cash profit to $3.525 billion, while net profit also increased by 10% to $3.304 billion.

Chief executive Gail Kelly said the company was also able to pay a fully-franked interim dividend of 86 cents, up from the 82 cents paid in the previous corresponding period.

“Reflecting the confidence we have in our capital position, we are also paying a fully franked special dividend of 10 cents to our shareholders, who are mainly Australians holding shares directly or through their superannuation,” she said.

However, Kelly also said she expects the current trading environment to remain challenging.

“However, in line with our strategy, we are actively targeting opportunities in higher growth areas where conditions are more favourable such as deposits, wealth, trade finance and natural resources,” she said.

Services sector shrinks in April

The Australian services industry continued to shrink in April, according to the latest figures from the Australian Industry Group-Commonwealth Bank Australian Performance of Services Index.

The survey showed the sector has now contracted for the past 14 months.

AIG chief executive Innes Willox said cuts to government spending, and weaker growth in the resources industry contributed to the result.

“In the face of general weakness across large sections of the domestic economy, now is not the time to be cutting back on aggregate spending and raising taxes,” Willox said.

Shares rise on modest offshore lead

The Australian sharemarket opened slightly higher this morning, following a modest lead from offshore markets.

The benchmark S&P/ASX200 index was up 34.5 points or 0.7% to 5,164.5 at 11.35 AEST, while in the United States the Dow Jones Industrial Average rose 130.6 points or 0.9% to 14,831.6.