‘Well placed’: Big four bank’s huge Trump call
One of Australia’s big four banks says Australia is well placed to weather the storm coming from US President Donald Trump’s tariff policy.
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Westpac says Australian customers and the broader national economy are well placed to weather any potential fallout from Donald Trump’s tariff policy.
Westpac chief executive Anthony Miller said despite the widespread uncertainty from the US President’s global tariff policies, Australia was in a good place.
“Geopolitical uncertainty is a key risk that’s as high as it has been for a very long time,” he said.
“Changes to global trade policies have impacted markets and funding for the bank.
“Despite the volatility, it’s important that we look through the noise and avoid reacting to the headlines.
“Australia is well placed to handle the instability.”
For the six months through to March 31, Westpac posted a net profit of $3.3bn, down 1 per cent from the prior corresponding period.
Overall, loans rose 5 per cent to $825bn, including housing loan growth of 5 per cent and a 14 per cent jump in business lending growth to $106bn.
Bank deposits also rose in the half, up 7 per cent to $697bn. Australian household deposits jumped 9 per cent.
Mr Trump sent shockwaves through financial markets when he announced reciprocal tariffs on just about every country in the world on April 2.
Initially, Australia faced a 10 per cent tariff on goods and while it fared better than most, Prime Minister Anthony Albanese described it as “unwarranted”.
China received tariffs of up to 145 per cent, while Australia’s other trading partners, including the European Union, Vietnam, Japan and South Korea, faced tariffs ranging from 20 to 52 per cent.
These tariffs were temporarily suspended for 90 days to allow countries other than China time to negotiate with the US.
Mr Miller also flagged Australian households had so far proven resilient to cost-of-living pressures.
“Mortgage delinquencies and impairment charges remain low,” Mr Miller said.
Westpac’s economists are expecting three more interest rate cuts by the end of this year, starting with a 25 basis point reduction in May that is likely to further take the pressure off households.
“This resilience is reflected in the improvement in credit quality metrics, indicating we may have passed the low point in the cycle,” he said.
Westpac said its net interest margin, the difference between interest earnt from lending and what the bank paid for deposits, fell one basis point from last year to 1.88 per cent.
The bank said this was due to persistent competition in lending and term deposits.
Originally published as ‘Well placed’: Big four bank’s huge Trump call
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