Westpac targets institutional banking business expansion

The lender wants to capitalize on expected corporate lending boom by expanding institutional banking.

Australian banking major Westpac is hoping that M&A activity will rebound in 2011 at it seeks to expand its institutional banking business and raise its level of lending to the mining industry.

Rob Whitfield, who heads up Westpac’s institutional banking group on Tuesday said that the number of potential deals in the pipeline were growing, which was likely to enable the business to maintain its level of earnings for the year.

Institutional banking is a major contributor to Westpac’s bottom line, accounting for 26 per cent of the lenders overall earnings, which was $3.29 billion in revenue and $1.5 billion in cash earnings.

According to Mr. Whitefield, corporate lending is set to rebound despite the thaw in corporate issuance in debt capital markets, and an rash of equity recapitalizations.

Westpac is one of the largest corporate lenders in Australia, however it plays second fiddle to rival National Australia Bank which has the most profitable business banking division in the country.

Westpac’s institutional banks has a loan portfolio valued at $189.9 billion, which is primarily composed of finance, insurance and property sector loans.

View the full story in Money AU.