Two of the major banks have delivered solid third quarter profits with Westpac today reporting a 27 per cent increase in cash profit to $1.4 billion.
Gail Kelly, Westpac Group CEO, said the third quarter had seen “another solid performance” by the bank but she added that the operating environment remained challenging.
“The Australian economy is robust but conditions in Europe and signs of slowing growth in the US continue to create global uncertainty,” she said.
“In these circumstances we believe it is prudent to maintain our very strong capital levels and provisioning coverage.”
Ms Kelly’s words reflected comments from ANZ chief Mike Smith on Friday in conjunction with the release of the bank’s third quarter results.
ANZ delivered a $1.3 billion profit after tax for the three months to June 2010.
“We need to accept that banks around the world are facing permanently higher costs,” Mr Smith said.
“These include continuing pressures on wholesale funding and rates for deposits have never been so high compared to short-term wholesale rates,” he said.
“In a highly competitive environment it means successful banks are going to have to drive productivity and innovation even harder. We need to remove cumbersome structures and do things in new and different ways.”