So let me start with the key messages from the result.2010 has been another challenging year, and I am pleased with our performance. This is a strong, high-quality result. We've made a number of strategic choices over the past few years that have driven this performance. During 2010 we have in a very focused way improved the sustainability of our earnings and put the business on an improved footing. Starting with customers, this was the year we implemented enterprise-wide reductions in exception fees across both business and personal customers across all brands in both Australia and New Zealand. We remained open for business throughout the crisis, and we have intensified our focus on key relationship segments and grown market share in chosen areas. In home lending, we've materially strengthened the contribution of proprietary channels over third-party channels. This year has seen further significant investment in our people, in our multi-brand distribution platform and in technology. Our multi-brand platform was made possible by our St George merge which has proved to be a highly successful strategic decision. It has provided us with an exciting point of differentiation in our local market. We've enhanced our wealth platforms, where BT and us together ranked number one in market share and number one in share of new business flows. We further embedded wealth into our distribution business with great traction occurring in Super for Life and insurance product sales. We've materially strengthened our capital position and the quality of our funding. We've lengthened the tenor of our short and long-term funding and we focused on retail deposit gathering. This of course has come at a cost as can be seen from the margin outcomes for the year. A feature of the year for us and a highlight has been the low impairment charge, and I'd like to pause and reflect on this just for a moment. Across any major credit risk management metric or ratio, the Westpac Group comes in at the number one position. We came into the crisis in good shape, we managed our way through with less impact to the bottom line than others, and we've emerged more quickly and more strongly.
Our ratio of impaired charges to average gross loans comes in at 0.30 and is lower than our peers. And our provisioning coverage to credit risk-weighted assets at 1.46% remains sector-leading. I dwell on this because not only do we have further upside here but what it says about us is that we are a lower-risk, higher-quality business with a consistency that investors can rely on.Finally, on dividend, you will have seen that with our final dividend of 74 cents, we have restored our dividend growth path. As a half-yearly dividend, this is a new high. Looking at the numbers, a 21% increase in earnings per share to 197.8 cents is a strong performance. Return on equity is a healthy 16.1%, which is a pleasing outcome given the additional goodwill we picked up with the St George merger and our stronger capital base. Cash earnings come in 26% higher and reported net profit after-tax is a very strong outcome, boosted by the tax consolidation related to the merger. Core earnings are down 1% this year, perhaps not surprising given the 19% uplift last year and the rebasing of revenue that has occurred during 2010. I've already referred to our performance with regard to impairment charges, and our expense to income ratio while up on last year remains an important comparative advantage. Looking at the portfolio of business, we see a remarkably strong outcome and uplift from our high-quality institutional bank and material improvements for BT Financial Group and Westpac New Zealand. Our Australian retail and business banks have taken the brunt of the rebasing of customer fees and of the higher funding cost environment. St George earnings were unchanged year-on-year with Westpac Retail and Business Bank down 8%. On Westpac Retail and Business Bank, it's worth recalling that the business was a standout performer in 2009, partly because of its credit quality, and so it's not had a decline in impairments that other business units have benefited from. Its underlying business momentum is pleasing. It has grown market share in home lending and retail deposits. It's grown its customer numbers and strengthened its products for the customer. Its customer retention is at pleasingly high levels, as is its employee engagement. Overall it is a business that has had to adjust to a new funding environment, absorb fee cuts, while position itself for the future.
On Westpac New Zealand, I'm pleased to say that we have a real turnaround in performance occurring. While the economic recovery is slow, we have renewed momentum in our franchise with a reinvigorated network and much strengthened risk management focus. We are winning market share in target segments, both household and business, and margins are starting to improve.A key theme for the Westpac Group is of course sustainability, across all elements of business, our people, our customers, our engagement with the community, this is something we focus on. And in the 2010 year, we've done a number of things to improve the sustainability of our earnings. This slide points to a few. Firstly, and I've already mentioned this, the 300 million reduction in customer fees, we've gone further on this front than many and have effectively rebased our customer fee revenue line. The year has also seen a rebasing of markets and treasury income, down almost 500 million from last year's extraordinary year, and now effectively at a more sustainable level. On productivity, we provided some insights into our approach a few weeks ago. We are underway with this and have a growing trajectory of savings and benefits to come. Read the rest of this transcript for free on seekingalpha.com