Westpac Banking Corp shares surged 6% on Thursday to A$36.28, their highest level in more than 10 years, after the lender posted better-than-expected results for its fiscal third quarter. The jump in Westpac’s stock helped lift the ASX 200 index by 0.7%.
For the three months ending June 30, net profit rose 5% to A$1.9 billion. Net interest income increased 4% to A$5 billion, while the bank’s net interest margin, an important measure of profitability, climbed by 7 basis points to 1.99%.
Westpac has been riding the wave of high Australian interest rates. Although the Reserve Bank of Australia has started a gradual rate-cutting cycle after two years of hikes, borrowing costs remain elevated enough to boost banks’ lending margins.
The results were also supported by steady consumer spending and solid credit activity. Lower inflation over the course of the year has given households more breathing room, keeping loan demand and repayment rates healthy.
The strong earnings came just a day after Commonwealth Bank of Australia posted record annual profits. Together, the results underscore how the country’s major banks have been benefiting from resilient economic conditions, pushing their valuations to multi-year highs.