Westpac Predicts Easing Monetary Policy

Westpac Banking Corp has expressed optimism regarding the future trajectory of monetary policy in Australia, anticipating a potential shift towards less restrictive measures within the next year. This outlook comes amidst a reported drop in the bank’s first-quarter unaudited net profit compared to the previous six-month quarterly average.

Shares of Westpac dipped slightly, down 0.2% at A$24.515 as of 2324 GMT, following a decline of as much as 0.9% earlier in the session.

As Australia’s second-largest mortgage provider, Westpac remains confident in the resilience of the economy, citing low unemployment rates and healthy corporate sector balance sheets.

The Reserve Bank of Australia (RBA) has implemented a series of interest rate hikes totalling 425 basis points since May 2022 in an effort to curb inflation, which continues to exceed the target range of 2-3%.

Westpac’s CEO, Peter King, highlighted the potential for a shift in monetary policy amid an economic slowdown and diminishing inflationary pressures. King stated, “The economic slowdown, combined with abating inflationary pressures, should provide scope for monetary policy to become less restrictive within the next year.”

For the three months ending December 31, the bank reported an unaudited net profit of A$1.5 billion ($978.60 million), marking a 6% decline from the quarterly average of the previous six months.

While facing some profit challenges in the short term, Westpac remains optimistic about the broader economic outlook and the potential for policy adjustments to support continued growth and stability.

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