BT takes a hit in first-half profit while its parent Westpac's earnings jump to $2.2 billion.
Westpac Bank's wealth management arm BT Financial group (BT) announced yesterday its first-half profit fell due to market volatility and higher insurance payouts.
BT's cash earnings, which include BT Wrap and the Super for Life business, declined by $33 million or 10 per cent to $194 million for the six months to March 31.
In the same timeframe funds under management (FUM), which includes BT Investment Management, dipped to $35.3 billion, from $38.7 billion.
Funds under administration (FUA) stumbled to $42.4 billion, from $46.2 billion.
However, annual FUA flows gained 8 per cent with one-third being driven by BT Wrap.
"The investment markets delivered lower returns with equity, property and fixed income all experiencing weakness over the half," BT and Westpac said in a joint statement to the Australian Securities Exchange.
"This impacted BT's earnings through lower investment management fees due to a reduction in lower FUM [and] lower administration fees given reduced FUA.
"Our insurance business also experienced higher insurance claims from storms along Australia's east coast as well as increased life insurance claims."
Overall, Westpac reported overall net income gained by $393 million or 22 per cent to $2.2 billion for the six months to March 31.
The 1817-founded lender cited robust retail deposits, strong lending and substantial profits from spinning off BT Investment Management as profit drivers.
Westpac, also Australia's third-biggest bank by market capitalisation, raised its dividend by 11 per cent to 70c per share.
Last week, Melbourne-based rival ANZ Banking Group, Australia's fourth-biggest bank, said profit fell 7 per cent to $1.96 billion for the six months to March 31 and did not raise its dividend.
Lenders National Australia Bank and St George Bank are due to report first-half results next week.
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