Westpac Group said it continued to make progress in rolling out its digital transformation strategy during the 2015 financial year, reflective of the technology expenses that continued to increase.
The bank reported a statutory net profit for the full year of AU$8 billion, up 6 percent over the prior year.
Technology expenses came in at AU$354 million post-tax, up 12 percent compared to the 2014 full year. The bank said the increase in technology expenses was due to higher investment related expenses, including an increase in software amortisation and IT equipment depreciation of AU$118 million, higher software licensing, and increase in telecommunications costs related to branch video conference capability.
"Linked to service leadership, the group has continued to roll out new and innovative technologies that support customers and provide a better experience for customers and our new employees," the bank said.
In September, Westpac committed to bumping up its annual investment spend by 20 percent to AU$1.3 billion to accelerate its digitisation program, while reducing the expense to income ratio to below 40 percent, and to add more than one new million customers in the next three years.
As part of that commitment, the bank reported 36 percent of its branches have now been converted to new smaller, more interactive formats; 34 percent of its Australian ATM networks are now smart ATMs; 99 percent of Westpac branches have installed Connected Now, giving customers immediate video access to business specialists; it completed the migration of Westpac Retail and Business Banking customers to Westpac Live, the bank's online mobile platform; it launched Wonder, an online system for Westpac home loan customers; and it launched online mobile application Westpac One in New Zealand. The bank also made further enhancements to Panorama with new features and making the platform available on a new mobile application.
As result of these enhancements, Westpac boasted that during the year it managed to achieve savings of AU$239 million for the full year. Additionally, the bank saw new accounts opened on mobile devices increase by 60 percent; digital sales contributed 15 percent to total retail sales, up from 10 percent in full year 2014; and over 700,000 requests were made for cardless cash withdrawals at ATMs.
Westpac also reported that it spent a total of AU$1.02 billion during the year on investments, with over half of it spent on growth and productivity initiatives, such as launching a new online lending application for business customers and releasing a new client application process for advisors, and a mobile application process for investors.
Of the total investment spend, AU$125 million went to other technology, which the bank said included projects such as completing the migration of its server infrastructure from 12 datacentres to two, delivering reduced operation expenses, and improved security.
The company also cited capitalised software decreased 20 percent compared to the FY14 to AU$1.7 billion.
Meanwhile, the St George Bank arm of the business reported it continued to build on its customer focused strategy, seeing a 3 percent jump in customer numbers for the full year. It also announced that 62 percent of branches feature Business Connect, St George's video capability to connect SMB customers directly to business banking specialists.
At the same time, St George said operating expenses increased 3 percent in 2H15 due to a rise in continued investment in the rollout of its FreshStart branches and higher restructuring charges.
Westpac CEO Brian Hartzer said while there is mixed global economic conditions, the company continues to remain optimistic about the the growth outlook for the Australian economy, supported by low interest rates and a low Australian dollar.
"We are positive about the future. We're strongly positioned with a number one or two position in all of our key markets; we have a distinct portfolio of brands, a market-leading online and mobile platform, and a high quality management team," he said.