Australian banking giant Westpac on Wednesday released its net income for the six months up to March 31, 2010 which showed net profits reaching A$2.88 billion dollar (US$2.62 billion). In a statement, the bank attributed better economic conditions and smaller losses from bad debts as the primary sources of the gains.

Westpac chief executive Gail Kelly said the figure represents a 32 percent rise in net profits compared with $2.18 billion recorded during the same period last year.

He said this is a reflection of "a much improved Australian economy and good momentum across all our businesses."

At the same time, the bank reported a sharp drop from losses from bad debts to $879 million as at end of March from $1.56bn compared with the same period last year.

In related developments, Westpac announced it has expanded its share of the home loan market in Australia to 27 percent.

Kelly said: "Over the past 12 months... we grew our Australian home lending balances by 43 billion dollars and our Australian market share in this strategically important segment by two percentage points to 27 percent."

"This step-up in market share includes providing over 355,000 new mortgages."

However, Kelly remains cautious over the prospects of the Australian banking sector. This despite that four major banks in the country have all registered windfall profits on the back of the global financial meltdown.

He warned that the ongoing debt default crisis in Greece has exposed the weakness of the European Union and other Western countries.

"In Australia, we will continue to see impacts particularly over the next two years, as the transition towards new regulatory arrangements begins and the economy adjusts to post crisis credit costs," he added.