(Reuters) – Australia’s Westpac Banking (NYSE) Corp posted Monday a 12% increase in cash earnings for the first half. The margins were squeezed further by fierce competition in mortgage lending, low interest rates, certain impairment costs and stiffer competition.

Australia’s Big Four banks experienced a boom of home lending, thanks to low rates and an influx of remote workers that fueled property markets. However, competition has impacted their margins and borrowers have moved to fixed rate loans.

Westpac is also coming out of a difficult turnaround to repair outdated software and convoluted processes. In the first half, net interest margin, a key indicator of profitability, fell by 15 basis points, to 1.91%.

The bank took an impairment charge in excess of A$139million, because it had set aside provision for bad loans due to weather-related risk in Australia and wider global uncertainty.

For the six-months ended March 31, A$3.10 Billion ($2.19 Billion) was reported by the country’s third largest bank. This is compared to A$3.54Billion reported last year. However, it beat Visible Alpha consensus estimate of A$2.83B.

Its peers, Australia and New Zealand Banking Group and National Australian Bank had predicted that they would see a boost in their margins after the central bank raised rates last week and indicated more.

Westpac has declared a dividend at 61 Australiancents per share, up from 58 Australiancents last year.

($1 = 1.4154 Australian dollars)