Westpac (ASX: WBC) has reported its first-half results for FY20. We take a look at the company's headline figures, key commentary and guidance outlook, plus review the share market's reaction across the trading day.

Headline result

Westpac's cash earnings for the first half of FY20 have declined 70% to $993m, or down 44% to $2.28bn if excluding notable items.The bank has managed to retain a Group Common Equity Tier 1 (CET1) ratio of 10.8%.Like ANZ opted to do last week, the company will defer the decision on its interim dividend until later in the year, thereby ensuring that no dividend will be declared or paid in the meantime.

Although shares in Westpac were initially down after the news hit the market, the stock rallied to outperform the broader market, rising 2.8% to close at $15.77.

Key commentary

In terms of statutory profit, Westpac recorded a 62% drop to $1.19bn for the half, while cash earnings per share followed the aforementioned results, plunging 71% to 28 cents per share. Outside of the impact from COVID-19, the result was shaped by higher insurance claims arising from this year's bushfires and a reduction in credit card and mortgage lending.As the company flagged last week, it has set aside a significant sum for impairment charges. In total, the bank is booking $2.24bn in impairments, which include the expected fallout relating to COVID-19, and provisions in relation to the company's AUSTRAC legal issues. Impaired asset provisions relative to impaired assets were sitting at 50% at the end of the March quarter. Elsewhere, $107m was paid to customers during the half as part of the bank's customer remediation program.Although the macroeconomic environment has proven difficult for the company, Westpac managed to increase its net interest margin by 1 basis point to 2.13%.Return on equity came in at 2.9%, or 6.7% if excluding notable items.Amid the impact of the Coronavirus, Westpac has put "on hold" total mortgage loans to the value of $39bn, in addition to business loans across the country to a total loan value of $8.2bn.Although management have described the result as the "most difficult" one reported by the company in many years, they also noted the position of the balance sheet, including an increase in customer deposits by $19bn over the half, loan growth of $5bn and a deposit-to-loan ratio exceeding 75%. At the end of the March quarter, the company's Liquidity Coverage Ratio (LCR) rose to 154% and its Net Stable Funding Ratio (NSFR) increased to 117%.

Guidance outlook

One of the fundamental aspects highlighted by the business moving forward will be the creation of a new Specialist Businesses division, which will be home to businesses where the bank has identified insufficient scale or returns that are insufficient for the risk. These businesses, which will be subject to a strategic review, include wealth platforms, superannuation and retirement products, investments, general and life insurance, auto finance, plus the Westpac Pacific business.

The company anticipates that these businesses will benefit from being under their own division and under the control of new leadership. Management have also suggested that some of the businesses could be assessed as candidates for divestment if they were to be more successful "under different ownership".

Westpac is also prioritising non-financial risk management and hopes to reset the cost base of the business.The bank will "continue to review dividend options over the course of this year", while also assessing "opportunities to improve capital utilisation across the Group".In terms of the economy, Westpac does not expect a rebound until the December quarter. The company maintains the view that unemployment will peak at 9% in June and subside to around 7% by the end of the year.