Australia’s Westpac Banking Corp beat analyst forecasts for third-quarter profit on Monday and reported improved net interest margin, helped by fewer bad loans and better-than-expected cost controls, sending its shares to a six-year peak.

Based on the lender’s average quarterly performance in the first half of 2024, unaudited net profit of A$1.8 billion ($1.20 billion) for the three months ended June 30 was up 6%, and was 7% higher than Visible Alpha consensus estimates, according to Citi.

Quarterly expenses rose 2% to A$2.7 billion, due to increased technological investments and higher costs for tech services. But the bank’s expenses were still lower than the market’s expectation of A$2.8 billion, suggesting effective cost management.

“We think this will be well received by investors, given the positive differentiation versus peer results last week….we think the market will focus on the positive momentum in core NIM and volumes, which should lead to a better revenue outcome vs peers,” analysts at Citi said in a note.

Bigger peers Commonwealth Bank of Australia and National Australia Bank reported lower profit last week and warned of deteriorating asset quality as customers struggle to repay loans.

Decade-high interest rates and growing cost-of-living pressures are impacting households’ ability to repay loans on time, increasing financial stress for Australian banks.

However, Westpac said its household deposits in Australia grew by 3% on a quarterly annualized basis, as it was able to attract more savings from customers. Shares in Westpac rose as much as 2.6% to their highest level since early March 2018 by 0046 GMT.

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The country’s No. 3 lender by market value also reported 8% growth in Australian housing loans.

The bank’s core NIM - the difference between interest earned from lending and paid for deposits - stands at 1.82%, up 2 basis points over the first half of 2024.