The Westpac Banking Corporation has reported a rise of 27% to around 1.4 billion dollars in its earnings in the third quarter but it has said that despite of the rise in earnings the margins of the company has fallen down and created worries about the outlook.

The cash earnings rose from 1.1 billion dollars of last year to 1.4 billion dollars in the three months to the end of June, which was possible because of a fall in bad debt charges.

The impairment charges for the three months stood at around 300 million dollars, which fell down from 440 million dollars of the previous quarters. This was 800 million dollars per quarter during the fiscal year in 2009.

Westpac has pointed out two reasons for the fall of 2.17% in its net interest margin. It has blamed the higher funding costs and expensive funding for the fall in margin.

Despite of this fall the chief executive of Westpac, Gail Kelly has described the performance of the bank as solid in the third quarter. She has also told that the bank had been reacting very nicely to a challenging financial period.