In its core business retail and business banking, profits rose 8 per cent, with earnings also rising 9 per cent in St George. Westpac's institutional bank posed a 17 per cent decline in profits compared with a year earlier, stemming from the one-off changes but also tighter margins because of strong competition. Mr Hartzer said he was "positive" about the outlook for the economy, with record low interest rates set to fuel strong conditions in the housing market where Westpac is the second-largest lender after the Commonwealth Bank. "While I'm positive about the outlook, the economy is currently in transition and this means that we expect growth to be uneven across different industry sectors and geographies," Mr Hartzer said. "Areas like housing, infrastructure, and agriculture will do relatively well, while other areas such as mining and resource-driven regions and adjacent service providers will find it tough."