BT Financial earnings hit by severe weather, sale of BTIM
Westpac-owned BT Financial Group delivered flat cash earnings in FY2015, thanks to the partial sale of BT Investment Management earlier this year and a rise in insurance claims.
In its full-year results, Westpac reported that BT saw its cash earnings increase by less than 1 per cent to $904 million in FY2015.
In addition, funds management cash earnings for BT came in at $555 million, up 7 per cent from the year before. This was driven by higher funds under management and funds under advice related to growth in BT's private wealth business.
"The private wealth division had a particularly strong year with solid growth and improved margins," the report said.
"Expenses were up 1 per cent with increased investment in Panorama and from responding to regulatory change."
However, that growth was offset by lower BTIM income associated with the partial sale of the business. Westpac announced in June it would reduce its majority stake in BTIM from 59 per cent to 31 per cent.
BT's insurance cash earnings also declined by 13 per cent due to a rise in claims deriving from severe weather events, according to the report. A Brisbane hail storm, Cyclone Marcia and a major NSW storm were among the events in FY2015 that resulted in claims being up $65 million on FY2014.
Meanwhile, Westpac's net profit increased by 6 per cent to $8.02 billion in FY2015, thanks to a number of "significant infrequent" items, the report said. These included the partial sale of BTIM, which generated an after-tax gain of $665 million.
Westpac chief executive Brian Hartzer said, "All divisions continue to grow their businesses and are in good shape. However, some market headwinds contributed to softer performance in our wealth and institutional businesses."
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