COMPANY NEWS & UPDATES
Greater automation should not only reduce costs , but help improve the loan application and approval process . Some of the cost savings associated with reducing branch numbers and the physical space and staff headcount at branches is simply being driven by customers doing more and more online . Other cost savings will come from the bank completely exiting its specialist businesses , with include Westpac Life Insurance , Auto Finance , and BT Financial Group by 2024 . In addition to the direct costs associated with these businesses , management sees opportunities to lower corporate overheads with a more simplified organizational structure .
We forecast loan impairment expenses to gross loans of around 0.12 % and 0.15 % over FY22 and 2023 , before increasing to a more mid-cycle level of 0.17 % by FY24 . In the 10 years prior to FY20 , loan impairment expenses to loans averaged 0.17 %. The release of $ 640 million in collective loan loss provisions taken in FY20 is a key contributor to the stronger-thanexpected first half result . In September , the bank forecast 2021 unemployment at 7.5 % and house prices to decline 0.4 %, compared to the current base case of 6 % and a 10 % increase . Loan deferrals were also a large area of concern but have performed better as well . At one point , Westpac had over $ 55 billion in mortgage balance temporarily deferred , but when the program ended in March 2021 , only $ 4 billion entered hardship . This represents around 0.43 % of the mortgage book . The bank ' s provisions of $ 5.5 billion now represent 1.59 % of credit risk weighted assets , up from 1.09 % in September 2019 .
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