Westpac Banking (WBC) H1 2025 earnings summary

Executive summary

• Net profit excluding notable items was AUD 3.5bn, down 1% year-over-year, with reported net profit at AUD 3.3bn, down 9% due to hedging and global uncertainty.

• CET1 capital ratio at 12.2%–12.24%, above target range, supporting stability and ongoing buybacks.

• Ordinary dividend maintained at AUD 0.76 per share, payout ratio at 75% ex notable items.

• Business lending up 14% and institutional lending up 15% year-over-year, reflecting focused growth.

• Service quality, digital innovation, and operational efficiency are improving through transformation programs.

Financial highlights

• Net profit excluding notable items: AUD 3.5bn, down 1% year-over-year; reported net profit: AUD 3.3bn, down 9%.

• Net interest margin declined three basis points to 1.8%; core NIM stable year-over-year.

• Cost-to-income ratio increased by two percentage points to 51.8%.

• Credit impairment charge of AUD 250m, six basis points of average loans, remains below long-run average.

• EPS decreased 3%, less than net profit decline due to buyback.

Outlook and guidance

• Australian loan growth forecast at 5%-6% in 2025; GDP growth expected to recover to 1.9%.

• Expense growth expected to rise in the second half due to increased investment, especially in UNITE.

• Credit quality expected to remain resilient, supported by low unemployment and GDP growth.

• Volatility in funding markets and global trade tensions pose risks to funding costs and margin outlook.

• Management targets improved ROTE and cost-to-income ratio relative to peers, with continued digital investment.