Westpac Banking Corp. reported a 33% jump in first quarter net income. The first quarter cash earnings of the bank were posted A$1.6 billion. According to the bank, the earnings were a result of reduced impairments and good momentum across all businesses.

The bank has raised its outlook for the year and is very optimistic by the good performance in the first quarter as it is indicating an improving environment all over. The asset impairment charges were reported around A$400 million and declined by 50% over the same period last year. The average cost of funds saw an increase in the first quarter and it impacted the customer margins negatively which reported a decline of 5 basis points.

But the customer deposits rose by 1.4% in the first quarter, mainly in term deposits. At the end of the Q1, Westpac's tier one capital ratio was reported increased by 38 basis points from previous quarter and was posted 8.5%.

Westpac, Australia's second biggest lender reported that its lending grew by 2% in the quarter. The bank raised A$21 billion of term funding in the first quarter, including $2 billion in mortgage securitization, with the average duration of new term funding 4.8 years. The reason behind this is being said that the big banks started regaining people's faith as they are safer.

The Westpac banking group raised its outlook for the year as the bank think that the worst of the global financial crisis has probably left behind.

"Our strong capital position, together with the steps we have taken to manage our funding, will facilitate our continued support of our customers as the economy recovers," Mrs. Kelly, Chief executive of Westpac, said.