Westpac New Zealand Limited announces likely impact of Christchurch earthquake
Westpac New Zealand Limited (WNZL) today announced the likely impact of the February 2011 Christchurch earthquake on its first half year financial results for the period ending 31 March 2011. On 22 February 2011 Christchurch experienced a 6.3 magnitude earthquake. The extent of the damage is greater than that resulting from the earlier earthquake which affected Christchurch on 4 September 2010.
The precise financial impact is difficult to quantify accurately at this stage as, amongst other things, responses by local and central governments are still being developed and insurance recoveries are being worked through. Credit losses from the event are currently estimated to be between NZ$30m - NZ$100m.
The impact will be reassessed as more information becomes available. This may result in changes to the estimates of loss and thus the provision required. The impact on WNZL’s Tier 1 capital position is not expected to be material as provisioning required can be absorbed within anticipated WNZL operating profit.