Time to repeat this exercise for FY2019.
Westpac Business Unit Revenues FY2019 (from AR2019 p156) Consumer Bank $9,083m Business Bank $6,556m BT Financial Group $0m Westpac Institutional Bank $2,735m Group Business -$2m Total Australian Revenues $18,372m
Westpac Business Unit Cash Earnings FY2019 (from AR2019 p156) Consumer Bank $3,288m Business Bank $2,431m BT Financial Group $0m Westpac Institutional Bank $1,014m Group Business -$869m Total Australian Cash Earnings $5.864m
Rather unusually for the 'Group Business', this business unit has suffered a very significant loss adding up to hundreds of millions of dollars. This has 'distorted' Group Business profitability for reasons described in AR2019 p155
"Following the Group's decision to restructure the Wealth operating segment and to exit the advice business in March 2019, the remaining Advice business (including associated remediation) and support functions have been transferred to Group Business"
Westpac is facing several lawsuits in Australia, and compensation claims against in house wealth management advisors. Some compensation has been put on the books in anticipation of settlements, The actual dollars set aside can be found in an earlier post of mine on this thread (Post 139 titled: An unorchestrated 'litigation lot' of liabilities: Part 2).
Real and necessary as the total $1,130m after tax provision is, these matters are not designed as a 'go forward' part of Westpac's new business development strategy. It will therefore be necessary to remove this 'litigation compensation' and 'refund of fees' effect from any normalised earnings that we wish to derive for the FY2019 period.
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