(Image: AAP/Private Media)

Westpac’s full year results are in, and they’re hard to hear for bank investors.

Retirees relying on Westpac dividends to buy their Bushells tea might be making mugs of hot water after the bank’s profits collapsed in 2019-20.

Of course everything is relative in the world of banks. It is not as if Westpac actually made a loss. It still made billions in profit. Just $6 billion less than usual.

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The biggest single adversary for Westpac this year was not COVID-19 or the recession. Neither was it customers defaulting on their loans. What took the biggest single bite out of their profits was a huge fine from Australia’s money-laundering regulator, AUSTRAC. The government whacked Westpac with a $1.3 billion fine for 23 million breaches of anti-money laundering laws.

Westpac is highly exposed to the property market, but on that front there is some better news. In March the bank forecast property prices to fall 15% this year and 5% next year. Now it believes the fall will be limited to 5.3% this year and just 0.4% next year.