Westpac’s profits climbed to $1.8 billion in the June quarter, chief executive Peter King revealed, as he noted many businesses were seeing lower demand for their goods as the cost-of-living pressure bites.

While the bank’s revenue was flat and expenses grew 2 per cent, Westpac reported an unaudited net profit of $1.8 billion in the June quarter – a 6 per cent rise on the first half – on the back of lower charges for bad debts.

Net interest margin – a core measure of profitability – rose 3 basis points to 1.92 per cent, while core NIM lifted 2 basis points to 1.82 per cent.

“We continue to prioritise financial strength with capital, funding and liquidity well above regulatory minimums,” King said.

“The cost of living and high-interest rates remain a challenge for some customers while many businesses are facing cost pressures and experiencing lower demand. We encourage customers to call us if they need help.”

Mortgage holders who were 30 days behind their repayments rose to 1.9 per cent of the bank’s home loan portfolio, while those 90 days behind increased to 1.12 per cent. Westpac said 1.42 per cent of its lending book was delinquent, or on a watch list, up 26 basis points in a year.

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Customer deposits and loans grew 3 per cent ($15.4 billion) and 8 per cent ($14.7 billion), respectively.

E&P analyst Azib Khan said Westpac’s flat revenue had been offset by a lower-than-expected credit impairment charge and softer expenses growth.