Westpac Bank Australia Financial Trend Analysis Report 2016-2018

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Table of Contents
Trend analysis..................................................................................................................................1
Overall analysis...............................................................................................................................6
Limitations of trend analysis...........................................................................................................7
References........................................................................................................................................8
1

Trend analysis
 Interest income
The interest income of Westpac Bank has increased to A$m 31,288 (Annual Report, 2016) from
A$m 31,232 from the year 2016 to 2017. In the year 2018, however, the interest income
increased to A$m 32,571. The interest expense has decreased to A$m (15,716) in the year 2017
from A$m (16,674) in the year 2016. This resulted in a net interest income of A$m 15418 in the
year 2016, which increased to A$m 15,516 in the year 2017 and for the year 2018, it was 16,505
(Annual Report, 2018).
2016 2017 2018
30500
31000
31500
32000
32500
33000
interest income (A$m)
interest income (A$m)
 Net operating income before operating expenses and impairment charges
The net operating was A$m 20,985 for the year 2016 which eventually increased A$m 21,802
in the year 2017. In the year 2018, the net operating income increased to A$m 22,133.
2

2016 2017 2018
20,400
20,600
20,800
21,000
21,200
21,400
21,600
21,800
22,000
22,200
22,400
operating income(A$m)
operating income(A$m)
 Profit before income tax
The profit before income tax was has increased to A$m 11,515 in the year 2017 (Annual Report,
2017) from the year 2016 in which the profit was 10,644. The profit further increased to A$m
11,731 in the year 2018.
2016 2017 2018
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Profit before tax(A$m)
Profit before tax(A$m)
 Net profit analysis
3

The net profit for the year 2016 was 7,460 which increased to 11,515 in the year 2017. In the
year 2018, the net profit further increased to 11,731. The trend analysis shows that the net profit
has been increasing consistently for all three years.
2016
2017
2018
0 1000 2000 3000 4000 5000 6000 7000 8000 9000
Net Profit
Net Profit
Trend analysis of Balance Sheet items:
 Total assets
The total assets of Westpac Bank were A$m 839,202 in the year 2016 which increased to A$m
851,875 in the year 2017. The trend of growth in total assets continued in 2018 as well and the
total assets increased to A$m 879,592.
2016
2017
2018
800,000 820,000 840,000 860,000 880,000 900,000
Total assets(A$m )
Total assets(A$m )
4

 Total liabilities
The total liabilities of Westpac bank was A$m 781,021 in the year 2016 which increased to A$m
790,533 in the year 2017. The increase in current liabilities continued in the year 2018 also and
the liabilities amounted to A$m 815,019 (Annual Report, 2018).
2016
2017
2018
760,000
770,000
780,000
790,000
800,000
810,000
820,000
total liablities( A$m)
total liablities( A$m)
 Net assets analysis:
The net assets analysis shows from the balance sheet shows that the net assets for the year 2016
were A$m 58,181 which increased to A$m 61,342 in the year 2017. Further, in the year
5

2018, the net assets increased to A$m 64,573 which is a good sign for the Westpac Bank
Australia.
2016
2017
2018
54,000 56,000 58,000 60,000 62,000 64,000 66,000
net assets(A$m )
net assets(A$m )
 Total equity attributable to owners of Westpac Banking Corporation
The analysis of shareholder’s assets shows that in the year 2016, the total shareholder’s assets
amounted to A$m 58,120 as compared to the year 2017, the equity was A$m 61,288 (Annual
Report, 2017). This shows an increase from 2016 to 2017. Later on, in the year 2018, the
shareholder's equity increased to A$m 64,521. This shows that the company's shareholding has
increased for all three years.
2016
2017
2018
0 20,000 40,000 60,000 80,000
Shareholder's assets (A$m)
Shareholder's assets (A$m)
6

Overall analysis
The overall analysis shows that the firm has taken certain important steps to keep its revenue and
assets growing continuously. The overall analysis of Westpac Bank Australia states that the
Bank's interest income is fairly equal in the year 2016 and 2017 which later on increased which
is a good sign for the firm. As the major part of any bank's revenue comes through its interest
income. The net profit analysis is highly positive as it shows that the net profit has been
continuously increasing for the three the given the year 2016, 2017 and 2018. The total assets
have also been continuously increasing in the three years. The net assets analysis also shows a
sharp growth for all three years. The total liabilities had increased slightly from the year 2016 to
2017 but later on, it increased sharply in the year 2018. The overall analysis shows a good
growth of the firm as the revenues and net assets both increase.
7

Limitations of trend analysis
The analysis for the past three years has been done which only shows growth for the Westpac
Bank in Australia. So, it suffers from the limitation of time constraint as only 3 years
performance is not enough to judge the capability of any financial institution. This trend analysis
is solely based on the items shown in the balance sheet and income and expenses statement.
However, it does not take into account the non-financial factors which also affect a firm's overall
performance. Also, this analysis is limited to Australia and does not take into account the other
countries in which Westpac Bank operates.
8

References
 Annual Report. (2017-18). Westpac Group. Financial statements. Pp 120-124
 Annual Report. (2016-17). Westpac Group. Financial statement. Pp 142-145
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