The huge turnaround task facing new Bankwest managing director Rob De Luca has been underscored by new figures which show the bank's lending to business fell in the 12 months to July.
Reinvigorated competitors such as Westpac subsidiary St George are snapping at the dominant Bankwest's heels as it completes the run-off of impaired assets lingering from the financial crisis.
Latest Australian Prudential Regulation Authority figures show that even before the latest iron ore-led cooling in the State's economy, Bankwest's lending to business fell about 2 per cent in the year ended July 31. This mirrors the drop in Bankwest's full-year accounts (to June 30) posted last month, indicating no marked improvement to start the financial year.
Outstanding loans to business - excluding those in the finance sector - were $20.53 billion at July 31, down from $20.9 billion a year earlier. Against this, Bankwest posted a big 11 per cent jump in lending to owner-occupiers in the residential market over the corresponding period.
At $47.9 billion, residential lending, including loans to the housing investor market, remains the biggest part of Bankwest's portfolio.
The figures do not provide a geographical breakdown, so it is impossible to tell how much of the fall in business loans relates to WA firms or Bankwest's unwinding of its ill-fated East Coast expansion push before it was acquired by Commonwealth Bank.
A Bankwest spokesman said it remained committed to WA businesses but acknowledged competition among lenders was increasing.
"Bankwest continues to experience good growth in our target markets, including our home State of WA," he said.
"The business lending market remains tight with high levels of competition and subdued demand for borrowing.
The bank has also continued to have some run off from its impaired exposures, which impacts on market share."
Bankwest last month said it increased net cash profit to $524 million in the year to June 30, but banking revenue rose just one per cent to $1.66 billion, including a 4 per cent drop in the June half, and a fall in market share.
Describing the figures as a good result in a tough market, Mr De Luca said last month the bank had cut operating costs, including an unspecified number of staff, by 2 per cent to boost underlying earnings.The new head of Westpac subsidiary St George, George Frazis, told M WestBusiness last week that it was capturing WA market share, off a low base.
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