The S&P/ASX 200 (ASX: XJO) rose just three points to begin the week, with a powerful day from the financials sector (+1.4%), which represents some 30% of the index, not enough to overcome broader weakness.
Energy and materials continue to detract amid signs that inflation is being experienced across the construction and consumer sectors; both were down over 1%.
Westpac hikes dividend
All eyes were on Westpac’s dividend, which didn’t disappoint, management confirming a 58 cent per share payout. This pales in comparison to the 94 cents paid as an interim amount in 2019 or the $1.74 paid for the full calendar year.
Revenue increased 1% to $10.7 billion with cash profit nearly tripling, increasing 256% to $3.54 billion. The biggest driver was the low starting point in early 2020 during which each of the major banks increased their bad debt expectations, resulting in short-term losses.
Of more concern for investors should be the fall in Westpac’s net interest margin (NIM) by four basis points to 2.09%, which represents the ‘fee’ it gains from every loan.
The big news was an announcement that the bank would be seeking to cut costs to $8 billion from $12.7 billion with more branch closures and redundancies likely to follow.
The Westpac share price jumped 5.1% on the news, with National Australia Bank Ltd (ASX: NAB) also benefitting, up 2.1%.
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Premier comes to the party
Premier Investments Limited (ASX: PMV) finally bowed to political pressure, declaring it would be repaying $15.6 million received under the JobKeeper program.
The ASX retailer had previously indicated the payments would be used to ensure employees continued to receive full pay despite lockdowns, but with earnings set to meet expectations, it has flipped its decision. Premier Investment shares were down 1.3%.
Job ads continue to surprise
ANZ Job Ads continue to recover, jumping 4.7% in April and whilst a good sign for the economy, it offers growing evidence that Australia lacks willing employees as the labour market tightens; SEEK Limited (ASX: SEK) fell slightly on the news.
Freedom Foods still under pressure
Freedom Foods Group Ltd’s (ASX: FNP) slow turnaround continued, falling 2.4% after announcing another 10.7% fall in revenue in the first quarter, hitting $141.6 million. Plant-based beverages remain the highlight, growing 7.0% on the previous quarter.
Omni Bridgeway hit by insurance
Omni Bridgeway Ltd (ASX: OBL) led the market falls, down 5.6%, after the court approved a $440 million settlement payment over the Wivenhoe dam collapse, with the group likely to receive just $30 million under the deal.
ASX 200 today
Looking ahead, the ASX 200 is expected to open higher on Tuesday following a mixed lead from US markets overnight. For all the latest, check out Rask Media’s US stock market report.