Westpac profit surges 33% to US$1.44 bn

Reduction of bad debts resulting from improving global financial climate caused the US$1.44bn cash profit.

With this development, Westpac chief executive Gail Kelly has confidently declared the worst of the global financial crisis is over.

The result, which emphasises the strength of the domestic banking sector, smashed the market's consensus of A$1.25bn (US$1.13) and put a rocket under Westpac shares, which posted one of their biggest one-day gains, surging 6.18 percent, or $1.44, to $24.74.

It also encouraged strong buying in ANZ and National Australia Bank, which both gained 3 percent on expectations their results will also benefit from an improving economy.

The profit puts Westpac, the nation's second-biggest bank, in line for a first-half result of at least $3bn, which would make it one of the world's most profitable banks, alongside rival Commonwealth Bank, which last week declared a 54 percent rise to A$2.94bln (US$2.65bln) in cash profit for the half year to December 31. CBA shares closed slightly weaker.

The Westpac profit surge was due to the rapid fall in the bank's impaired loans, especially corporate loans, from A$800 million (US$721.18 million) in the first quarter of last year to A$400mln (US$360.52mln). The market expected bad debts of at least A$750mln (US$675.9mln).

View the full story in the Australian.