St George Bank Ltd says it could reconcile the bullish nature of Tuesday's operational update of its business with its recommendation of a takeover offer from Westpac Banking Corporation.
St George chief executive Paul Fegan acknowledged to investors that the bank's performance had improved since Westpac launched its bid for the group in May.
"It's pretty self evident that the uplift in the second half in terms of EPS [earnings per share] is fundamentally different and stronger than the first half," Mr Fegan told analysts.
St George on Tuesday reaffirmed its annual fiscal 2008 earnings guidance of eight to 10 per cent growth in EPS after its cash profit jumped 12.5 per cent in the first 10 months of the year.
Westpac, which is considered to be the strongest of Australia's banks, on Friday forecast fiscal 2008 EPS growth of six to eight per cent.
Still, Mr Fegan said t was "very clear" that the St George board's recommendation of Westpac's offer was justified.
"They're not mutually exclusive and I've said previously that our job is to run the bank for the interests of St George shareholders," Mr Fegan said.
"The proposal by Westpac is subject to it being in the interests of shareholders and clearly ... we've put that to the market place.
"Westpac would know from its due diligence process the underlying performance of the group and so does the market."
Mr Fegan said Westpac's offer was still in the best interests of St George shareholders.
"And then parallel to that we've also got the independent expert's report being progressed as well," he said.
Mr Fegan said completion of the independent expert's report was some way off.
When asked if St George could ask for a higher offer after the report was tabled, Mr Fegan said: "I can only deal with what I've got at the moment, which is lots of transparency around the business to the market.
"And that Westpac has also seen the visibility of the bank through its due diligence process as well."
