Today Westpac (ASX:WBC) reported an annual profit of AU$3.45 billion. It was a 12.5% increase for the firm.
Westpac’s outgoing CEO Dr. David Morgan told investors, “The Australian economy is expected to remain robust, underpinned by continuing strong demand, both domestically and internationally, and historically low unemployment. As a result, demand for credit is expected to remain high with solid housing growth and continuing robust business investment.”
Yes. Selling money is a good business these days. Shares of St. George Bank (ASX:SGB) were up yesterday as the company announced that it too, was making record sums lending money to Australian businesses and individuals. The company reported a 13% rise in net profit to AU$1.16 billion.
With credit growth running at nearly 16% according to the Reserve Bank’s figures published earlier this week, the question is not if rates will rise next week, but by how much. The bank could choose to raise by a quarter point now and a quarter point later. Or could do the deed and raise by half a point now.
Already it appears to be behind the inflation curve, which is surprising, given that its own index of commodity prices, published yesterday, shows that prices are way out of control.
The Daily Reckoning Australia