Australian Major Banks Have $15b to $28b Excess Capital says Morgan Stanley

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Westpac chairman says economy ‘robust,’ eyes capital return

Westpac chairman John McFarlane has signalled his confidence in the economy and re-affirmed that the bank is likely to consider returning excess capital to shareholders.

In a letter to shareholders today, Mr McFarlane said the bank was making headway in improving its financial performance, as reflected in its improvement in profits, which were revealed in May.
Westpac chairman John McFarlane.

“The economic environment appears robust, and things do appear generally to be looking up, subject of course to the pandemic,” Mr McFarlane wrote.

All of the major banks are holding billions in excess capital, and Mr McFarlane said it would receive further capital from selling non-core businesses.

“Our excess capital and franking credit position should enable the board, at the appropriate time, to consider a return of capital to shareholders,” he said.

Westpac shares were up 0.4 per cent at $25.93 at 2pm AEST, lagging a 0.6 per cent rise for the broader ASX.