SYDNEY, Aug 11 (Reuters) - Australia's No.3 lender Westpac Banking Corp WBC.AX said on Thursday its level of stressed assets edged up in the three-months to June as a mining downturn led to higher corporate as well as consumer defaults.
Westpac increased its bad debt charges to a six-year high in the first-half in anticipation of a rise in bad debts, but said in a limited third-quarter update that bad debt ratios were still near all-time lows.
It set aside less money for bad debts in the third-quarter, compared to the quarterly average in the first half-ended March. Bad debt charges nearly doubled in the first half to a six-year high of A$667 million.
Westpac, which posted a 3 percent rise in first-half cash earnings to A$3.9 billion ($3.01 billion), did not disclose profit or revenue numbers in its limited third-quarter update.
Non-interest income from fees and commissions during the quarter was 5 percent below the first-half quarterly average due to lower markets-related income and a decline in fees from debt market activity, it said.
Its common equity Tier-1 capital ratio slipped to 10.1 percent at the end of June from 10.5 percent in March. The bank said it expected the ratio to drop by another 110 basis points, thanks to a regulatory change to the treatment of Australian mortgages.
Earlier this week, smaller rival ANZ Banking Group ANZ.AX signalled the need for more capital following the regulatory change. shares were down 2.6 percent in morning trading, compared to a 0.8 percent drop in the broader index .AXJO . ANZ, National Australia Bank NAB.AX and Commonwealth Bank CBA.AX were down 1-1.8 percent. ($1 = 1.2967 Australian dollars)