Asset quality is smoking, the bad debt charge is down and there is barely a second thought about the dividend at Westpac. But the bank is heading for its lowest level of mortgage originations in years.
In a near business as usual release, Westpac's was the stand out result of the industry's profit season. For Westpac and NAB and ANZ these results covered the six months to March 2018, Westpac being the last to report.
A net profit of A$4.2 billion and a return on equity of a flat 14 per cent is a measure of the caution shaping Westpac. Almost too neat.
This season ANZ ranked second on ROE at 11.9 per cent and NAB at 11.4 per cent. NAB also managing a profit of $2.8 billion, $1.4 billion less than that of Westpac.
Westpac's Sydney peer, Commonwealth Bank, reported an ROE of 14.5 per cent for its half-year ending December.
The vitals of the CBA and Westpac and all other profit engines are surmounted in doubt.
Credit growth, the perennial headwind in banker speak: it's flatlining, falling fast from its recent level of six per cent, at least in the case of mortgage funding. Westpac is one major bank speeding up this fall.
"Australian mortgages performing well" was the stale headline on one important slide yesterday.
Over the first half of 2018 Westpac said it originated $5 billion in mortgages. So call that $10 billion over a year, or the same as the bank funded as far back as 2014.
In 2017 the bank funded $18 billion in mortgages and it was $17 billion the year before that.
As for the economy, the bank could only talk up the global story with the local outlook so challenging.
"Consumer spending is constrained by slow income growth" and there are "positive but uneven business conditions", the bank pointed out in its presentation.
The price of deposits and other funding is the immediate bother for all banks.
"If the recent increases in wholesale funding costs persist, banks may be compelled to further reprice upwards to address margin and profit pressure," Tim Dring, Ernst & Young's Oceania Banking and Capital Markets Leader said in a review of sector profits yesterday.
The cacophony ahead for Westpac CEO Brian Hartzer and his crew, the boss summed that up as "scrutiny".
All things Hayne, regulator and Canberra can only worsen for Westpac and every bank. And then there are the class actions over responsible lending, misleading the market and whatever else to dodge as well.
The macro harassment Hartzer minimised at the results presentation yesterday.
"The orderly slow-down in housing is likely to continue," is one way to style things for Westpac, given its own rationing of credit.
The sell-side analyst questions picked yet again at the adequacy of the bank's credit assessment systems over home loans, a favourite topic of the Hayne royal commission, APRA and select analysts.
Peter King, the bank's CFO, insisted that the clamour over its "three-dimensional household expenditure measure" amounted to "a misunderstanding of what we use and how we use it."
The interim dividend Westpac set in a safe zone: 94 cents and a six per cent yield still on its last share price of $29.34.
The bank levy was "equivalent to four cents per share" and cost the bank $91 million this half, Westpac said.
The payout ratio this half - a slight decline to 75.3 per cent - is down from 79 per cent and 80 per cent ratios at times over the last two years.