Westpac confirms forecasts, ANZ next

Westpac shares jumped 49c yesterday after chief executive David Morgan told the bank's annual meeting that he maintained the forecast he made last month but noted ``a degree of caution" due to global tensions and economic uncertainties.

``Although the housing cycle is at its peak and lending growth will moderate, we still expect reasonable levels of home lending in 2003," Dr Morgan said. ``Balancing this, a strong pick-up in business investment is likely from the recent historical lows."

One analyst said Westpac had been rewarded for not disappointing the market, as opposed to Commonwealth Bank's lower profit forecast early last month.

But ANZ, whose shares were up 41c to $17.65 but down 5 per cent in the previous five trading days, may have painted itself into a corner with its ongoing 10 per cent earnings per share growth forecasts. ANZ, the darling of the sector in the past year, qualified the prediction at its October result by admitting 10 per cent was a ``stretch" target and initial internal forecasts were actually lower.

Some analysts believe the bank is being conservative while others say investors are set to be disappointed and 10 per cent is not achievable because the cost savings of previous years are not available this year.

A spokesman said the consensus across the big four banks was growth of around 8 per cent, but ANZ had not specified this number as a target.

ANZ holds its annual meeting in Perth today, during which chief executive John McFarlane will address investors.

Dr Morgan also told shareholders that the bank now expected $100 million in synergies, including cost savings and revenue benefits, from buying BT for a one-off cost of $140 million. Westpac had already disclosed the increased targets, including at institutional briefings following last month's results.

He said the first six weeks of the acquisition ``have gone extremely well", despite market concern about fund outflows.

While having reviewed its corporate governance practices in the light of recent corporate collapses, Westpac gave no commitment to scrap its lucrative non-executive directors' retirement schemes. This is despite calls from the Australian Institute of Company Directors this week for the plans to be scrapped.

Emerging corporate governance standards suggest retirement schemes are not necessary because non-executive directors have already benefited from generous payments in most cases as former senior executives.