Westpac's chairman hopes bank will return to 'consistent' dividends

The chairman of Westpac Banking Corp said he hopes Australia's No.3 bank will be able to pay more "consistent" dividends in future after payouts were affected by regulatory issues, a record fine and the COVID-19 pandemic.

Many investors rely on dividends in Australia, where around 8% of the population manage their own retirement income, and banks are favoured for their consistency.

"I am conscious how important dividends are to individual shareholders and know how unhappy you have been about the decision not to pay a first-half dividend as well as the lower dividend for the year," Chairman John McFarlane told the bank's annual shareholder meeting.

While dividends at Australia's so-called 'Big Four' banks have been constrained by a regulatory limit imposed in light of the pandemic, Westpac was the only one to not pay an interim dividend earlier this year.

Instead of paying a final cash dividend, it chose to pay shareholders in additional shares via a dividend reinvestment scheme.

Westpac has struggled with shrinking capital levels to account for a record A$1.3 billion ($979 million) fine for enabling millions of illicit payments, including to people exploiting children, large provisions for bad loans and regulatory shortcomings.