The Westpac Banking Corp (ASX: WBC) share price is storming higher today and helping to drive the S&P/ASX 200 Index (ASX: XJO) higher.
At the time of writing the banking giant’s shares are up 3% to $17.98.
Why is the Westpac share price storming higher?
Westpac, Commonwealth Bank of Australia (ASX: CBA), and the rest of the big four banks have been pushing higher today after APRA eased restrictions around paying dividends.
APRA notes that it has had the opportunity to review banks’ and insurers’ financial projections and stress testing results.
And while it still wants the banks to retain at least half of their earnings when making decisions on capital distributions, this is not as bad as some feared.
APRA Chair Wayne Byres said the updated guidance balanced the need for banks and insurers to keep supporting households and businesses, while also maintaining a prudent approach in the face of a very sharp and severe economic contraction.
Westpac brings jobs back to Australia.
In other news, this morning Westpac announced that it will be boosting the economy by bringing back 1,000 jobs to Australia.
It is making the move as it seeks to bolster the strength and resilience of its operations and improve support for customers.
The decision follows a surge in demand for customer assistance at the start of the COVID-19 pandemic, which has created challenging conditions for home lending processing and call centres.
Westpac Chief Executive Officer, Peter King, commented: “While we have added additional resourcing to support unprecedented demand following COVID-19, and I thank our teams who have worked tirelessly helping customers, at times our response rates have been too slow.”
“We will also be returning all dedicated voice roles to Australia to enhance the capacity of our existing call centres. This will mean when a customer calls us, it will be answered by someone in Australia.”
“Bringing jobs back to Australia has been made possible with the changing work patterns in response to the COVID-19 pandemic, as well as the upgrade to our technology infrastructure over recent years. Together these have enabled our teams to operate effectively at home or in other locations when needed,” Mr King said.
This will come at a cost, though. While Westpac expects the change to help to improve productivity, the creation of 1,000 roles is expected to initially increase costs by around $45 million per annum by the end of FY 2021.
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Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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