St. George Bank's Profit Climbs to Record, Boosted by Lending

St. George Bank Ltd. reported an 8.2 percent gain in half-year profit, the second Australian bank in a week to post record earnings on increased lending.

Net income for the six months ended Sept. 30 climbed to A$591 million ($543 million), from A$546 million a year earlier, the Sydney-based bank said.

Paul Fegan, who was appointed acting chief executive officer in August following the departure of Gail Kelly to rival Westpac Banking Corp., forecast earnings will grow 10 percent in 2008. St. George joins Australia & New Zealand Banking Group Ltd. in reaping record earnings as the economy enters its 17th year of expansion.

``We're particularly pleased that the acting chief executive isn't straying from his predecessor's habit of providing sound advice about the bank's future earnings,'' said Peter Vann, who helps manage about $1.6 billion at Constellation Capital Management in Sydney, including St.George Bank shares. ``There are no big nasties in this result.''

The bank's shares rose 1.6 percent to A$35.90 as at 11:00 a.m. in Sydney after the company posted full-year profit of A$1.16 billion, inline with the median A$1.17 billion estimate of 13 analysts surveyed by Bloomberg.

Westpac Banking Corp., the No. 4 lender, and National Australia Bank Ltd., the nation's biggest financial institution, may also post record earnings in the next two weeks as the fastest credit growth since 1989 helps insulate banks from higher global funding costs.

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