Bankwest, the Perth-based bank now owned by Commonwealth Bank of Australia Ltd, has reported a loss for calendar 2008.

Bankwest made a net loss of $139 million as loan impairment expenses rose by more than nine times.

Its loan impairment expense, including specific and collective provisions, reached $825.3 million, up from $87.8 million in 2007.

“The two primary reasons for the increase were the deteriorating external operating environment, and the need to be fully and appropriately provisioned in these difficult and uncertain times,” Bankwest said in a statement on Thursday.

The increase in provisions was driven by a number of large property exposures in New South Wales and Queensland, and exposures across its business lending business.

Bankwest said since it was acquired by CBA from HBOS plc in December 2008, the bank had returned to profitability.

“Since CBA acquired Bankwest, we have improved our credit underwriting standards in business and retail banking and have a strong focus on prudent and responsible lending,” managing director Jon Sutton said.

Previously, Bankwest had been focussed on growing its market share through an expansion into the eastern states.

Bankwest’s full year operating profit, before loan impairments and tax, was $597.0 million, up 62.1 per cent from 2007.

Costs were up 18.2 per cent to $908.6 million, driven in part by the bank’s east coast expansion.

CBA chief executive Ralph Norris said the bank was pleased with the progress that has been made since at Bankwest since last December.

He said it’s performance in the March quarter “has been good.”

“We have identified many opportunities to improve the performance of Bankwest and we remain confident that this acquisition will create significant value for the group,’ Mr Norris said.

AAP