(Bloomberg) -- Westpac Banking Corp. increased its buyback program and handed investors a special dividend, helping to offset weaker first-half profit as competition in mortgages weighed on the Australian lender’s key consumer business. The shares rose 2%. 

Net income fell 16% to A$3.3 billion ($2.2 billion) from the previous year in the six months ending March 31, the Sydney-based firm said in a statement Monday. That compared with the A$3.3 billion average estimate in a Bloomberg survey of analysts. The firm boosted its stock buyback by A$1 billion. 

“Overall, the Australian economy is proving resilient,” Westpac Chief Executive Officer Peter King said in the statement. “We believe the economy is on track for a soft landing.” 

Read More: Westpac Gains on Buyback, Special Dividend: Street Wrap

King is grappling with an uncertain outlook just as traders and economists reassess the path for Australia’s economy, and expectations move away from more interest cuts to the potential for further hikes. King said it is likely rates will stay higher for longer. Meantime, analysts have also expressed concern over succession planning for King, who has led the company for more than four years. 

The bank will pay a special dividend of 15 Australian cents. The shares were up 2% as of 10:33 a.m. in Sydney, extending this year’s advance to 18%. 

“While we’ve seen an uptick in stress in our loan books, this is to be expected given the large increase in interest rates, high inflation and taxation,” King said. 

What Bloomberg Intelligence Says 

Westpac’s dividend yield tops Australian banks and most Asia peers if its 1H dividend, including special, and additional A$1 billion buyback are incorporated. Profit might still fall more than 10% this year, as margin weakens and costs remain sticky, although credit remains benign. 

— Senior industry analyst Matt Ingram

Read More: Westpac Dividend Yield May Top 9%; Payout Is 1H Surprise: React

Last week, National Australia Bank Ltd. said it plans to buy back A$1.5 billion in its stock. ANZ Group Holdings Ltd. is expected to report results on Tuesday.

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