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Westpac Banking Corporation recorded a marginal fall in its annual profit to AUD 6.99 billion (USD 4.54 billion) for the year ended September, compared to AUD 7.11 billion a year earlier, though the result surpassed analyst expectations of AUD 6.83 billion. The bank continues to face strong competition in the home-lending market, with its mortgage growth trailing major rivals. Despite this, credit quality improved as home-loan arrears declined and stressed loans eased. Operating expenses rose 9% due to restructuring, technology and wage costs, while the bank maintained steady margins and declared a final dividend of AUD 0.77 per share.
Westpac Banking Corporation reported a slight decline in its full-year profit, with net earnings after tax reaching AUD 6.99 billion (USD 4.54 billion) for the financial year ended September. The figure was marginally lower than last year's AUD 7.11 billion but still exceeded analyst expectations of around AUD 6.83 billion. The performance reflected the bank's resilience in a competitive environment where rising rates and slower consumer spending are influencing housing demand. Advertisement
The lender, Australia's third-largest by market value, indicated that credit growth is expected to slow through 2025 and stabilise in 2026 as higher interest rates and weaker consumption moderate the housing market. However, the bank noted that strong employment levels and accumulated household savings continue to limit defaults and arrears.
Westpac's home-loan book expanded by 5% to AUD 497 billion over the year, though the pace remained slower than competitors such as Commonwealth Bank, National Australia Bank and ANZ Group. The bank's consumer division, which includes its mortgage portfolio, contributed roughly one-third of total profits, reaffirming the segment's importance to Westpac's overall earnings.
Chief Executive Officer Anthony Miller said the slower growth was deliberate, adding that the bank is focused on improving customer service, streamlining loan approvals and hiring more bankers. He explained that Westpac aims to rely less on mortgage brokers to strengthen its profit margins and build direct relationships with borrowers. Miller emphasised that the goal is sustainable and well-targeted growth rather than simply matching market averages.
The bank's net interest margin (NIM) remained broadly stable, slipping only one basis point to 1.94%, as lending and deposit competition stayed intense. Westpac's shares rose nearly 3% after the announcement, while the broader S&P/ASX 200 index remained largely flat.
Credit quality remained strong throughout the year. Home loans overdue by more than 90 days fell to 0.83% from 1.05%, while the share of loans showing early signs of stress eased to 1.36%. Lower bad-debt provisions also supported the overall result. Investors viewed these figures positively, with analysts noting that Westpac's solid capital position was strengthened by the sale of its AUD 21.4 billion RAMS mortgage portfolio.
Operating expenses increased 9% to AUD 11.9 billion, reflecting higher wage costs, technology upgrades, transformation spending and AUD 273 million in one-off restructuring charges. The bank continues to invest in digital improvements and process simplification as part of its broader efficiency agenda.
Westpac declared a final dividend of AUD 0.77 per share, bringing its full-year dividend to AUD 1.53 a payout ratio of about 76%, slightly higher than last year.
Source Reuters
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