The CEO of Westpac, Australia’s second-largest home lender, Anthony Miller, shared an optimistic outlook on the country’s economic recovery, citing reduced mortgage stress and increased demand for corporate buyouts. Speaking at the Macquarie Australia conference in Sydney, Miller highlighted improvements in mortgage stress levels, noting that fewer loans were overdue by more than 90 days. This signals a positive shift in the housing market, and Miller believes it reflects the broader recovery in the economy. At the same time, Westpac has seen a rise in demand for mergers and acquisitions (M&A) financing, signaling a growing interest in corporate deal-making.
Miller expressed confidence that the worst was behind Australia, citing ongoing reductions in stress levels within the business banking sector. He mentioned that Westpac had a solid pipeline of business activity, with increasing interest and growth expected to continue in the latter half of the year. Despite a slight 13.7% drop in corporate buyout activity in the first quarter of 2025 compared to the same period last year, the total deal value reached $20.54 billion, according to LSEG data. Dealmakers remain hopeful that upcoming interest rate cuts will stimulate further M&A activity in the second quarter.
The Reserve Bank of Australia (RBA) cut interest rates by 25 basis points in February, bringing the rate to 4.1%, the first reduction in four years. The market anticipates another rate cut in May, after core inflation dropped to a three-year low in the first quarter. These rate cuts are expected to provide relief for businesses and households, potentially boosting economic activity, including corporate acquisitions.
For Westpac, the first half of the year saw a 1% decline in net profit, reaching A$3.32 billion ($2.14 billion), reflecting a contraction in net interest margins. Despite this, the bank’s results showed low mortgage delinquencies, with fewer home loans in Australia overdue by more than 90 days. As of March, this figure stood at 0.86%, down from 1.12% six months earlier, further signaling improved financial stability in the housing market.
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