The recently released announcement of losses within BankWest really makes very little sense to me. The entire loss is attributable (according to the release) to costs arising from the East Coast expansion strategy (which will presumably now be stopped) and, more importantly, loan impairments – up from $88m to $825m.

This is a huge jump – and one I simply cannot understand. As they were foreign owned and never had to produce a single Pillar III release under Basel II I cannot work off any real numbers, but looking to a peer comparison they must have been doing something seriously wrong under the old management for them to have had such a jump.

Not a single one of their competitors has reported anything like this increase in impairment provisions over the last year. Not one. The worst (incidentally, CBA) had them roughly triple in the September to December 2008 period – probably the worst of it. Considering the size of BWA’s retail book in WA (certainly better performing than the East Coast) to me at least this would mean that the losses over East must have been astronomical.

I just can’t see it. Feel free to correct me in com

ments, though.