BankWest making headway

Under Commonwealth Bank direction, Bank of Western Australia has become a more profit-oriented outfit. In the December 2009 half year its banking income grew 38 per cent over the previous corresponding period and turned a loss of $110 million a year ago into an interim profit of $64 million.

According to the Commonwealth Bank financial statements released yesterday, the income growth was a result of higher volumes and better margins.

With Commonwealth having put a stop to the costly BankWest branch rollout in the eastern states, the bank's expense growth was held to four per cent and its cost to income ratio came down from 69.5 to 52.2 per cent.

Impairment expenses of $313 million were down only nine per cent on the previous corresponding period. The bulk of the impairments relate to property exposures and are being moved off the books slowly.

BankWest increased retail customer numbers from 919,000 at the end of 2008 to 989,000 at the end of last year.

Commonwealth reported $313 million of BankWest integration costs and confirmed that it was on track to achieve annual expense synergies of $250 million by the 2012 financial year, when the two banking systems will be aligned and processing consolidated.