Australia's Westpac net profit down 25%

Australian banking giant Westpac posted a 25 percent slump in first-half net profits Thursday after last year's result was boosted by tax benefits from acquiring St George Bank. The result in the six months to March 31 came in at Aus$2.97 billion (US$3.06 billion), compared with a record profit of Aus$3.96 billion in the previous corresponding period. While net profit was down at Australia's second largest bank by market capitalisation, its first-half cash earnings, which strip out volatile items, were up one percent from a year earlier at Aus$3.19 billion. "This is a sound result in a challenging environment and reflects continued progress in building a stronger and more productive organisation," chief executive Gail Kelly said. "A highlight of these results is the strong performance of our two largest divisions -- Westpac retail business banking and Westpac institutional bank." The bank said while there had been volatility in the first half because of the European debt crisis, some stability had returned to financial markets, supported by a more positive US growth outlook. But it added that, overall, the global economy remained fragile. And while Australian fundamentals were sound, with low unemployment and controlled inflation, it said consumers remained cautious, preferring to save money and pay off debt. "In conclusion, having come through the global financial crisis in good shape, and while expecting volatile and challenging times to continue, Westpac Group is proactively positioning itself for continued success," it said. On Wednesday, fellow banking giant ANZ announced a first half net profit rise of 10 percent to Aus$2.92 billion.