# Australia’s Westpac flags $950 million profit hit, led by energy exit costs Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2021-10-12 Category: BUSINESS Category URL: https://financedigest.com/category/business Meta Title: Westpac Banking Corp takes A$1.3 billion charge, cuts outlook Meta Description: Australia's Westpac Banking Corp faces $1.3 billion charge, warns of lower earnings due to exit from energy trading and other factors. Annual results due URL: https://financedigest.com/australias-westpac-flags-950-million-profit-hit-led-by-energy-exit-costshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2021-10-11t232955z1lynxmpeh9a12srtroptp4westpac-results-1736837665728-compressed.jpg) SYDNEY (Reuters) -Australia’s Westpac Banking Corp said on Tuesday it will take a one-off charge of A$1.3 billion ($956 million) against its second-half profit after its institutional banking unit quit energy trading, among other reasons. The country’s second-largest lender by market capitalisation also lowered its earnings outlook, citing “subdued” financial markets. Westpac said the one-off charge included provisions to pay out customers seeking remediation for wrongly charged fees, and costs associated with the sale of its life insurance unit. The company cut the value of its Westpac Institutional Banking (WIB) unit by nearly A$1 billion after “reducing [risk in the division through the exit of energy](https://www.financedigest.com/britains-tax-take-risks-blowing-green-energy-off-target.html "Britain’s tax take risks blowing green energy off target") trading, consolidating our Asian operations and reducing our correspondent banking relationships which have all impacted earnings”, it said in a securities filing. At the same time, medium term expectations of a prolonged low interest rate environment, subdued financial [markets income and elevated compliance expenses have impacted WIB’s earnings](https://www.financedigest.com/tech-earnings-hit-pause-button-on-market-rally.html "Tech earnings hit pause button on market rally") outlook,” the bank added. Payouts and other costs associated with settling customer lawsuits would add another A$172 million to the one-off charges, while selling costs and tax adjustments linked to the sale of its [life insurance](https://www.financedigest.com/types-of-life-insurance.html "Types of Life Insurance") unit would add A$267 million to the one-off items. The [bank is scheduled to report](https://www.financedigest.com/board-report-highlights-complex-decision-making-process-across-banking-and-finance-sector.html "Board Report Highlights Complex Decision-Making Process Across Banking and Finance sector") annual results on Nov. 1, and was [expected to post a cash profit](https://www.financedigest.com/portuguese-airline-tap-swings-to-profit-earlier-than-expected.html "Portuguese airline TAP swings to profit earlier than expected") of A$6.5 billion, according to the average forecast of 13 analysts polled by Refinitiv before the charges were announced, nearly triple the previous year’s result which was impacted by COVID-19 loan repayment freezes and other macroeconomic shocks. Westpac [shares were trading down 0.5% in early trading on Tuesday](https://www.financedigest.com/monte-dei-paschi-to-have-underwriting-consortium-for-share-sale-by-tuesday-source.html "Monte dei Paschi to have underwriting consortium for share sale by Tuesday – source"), against a flat overall stock market. ($1 = 1.3602 [Australian dollars)](https://www.financedigest.com/asian-stocks-make-7-month-highs-australian-dollar-gains-on-hot-inflation.html "Asian stocks make 7-month highs, Australian dollar gains on hot inflation") (Reporting by Byron Kaye;Editing by Chris Reese and Muralikumar Anantharaman) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---