Westpac Banking (WBC) H1 2026 earnings summary

Executive summary

• Statutory net profit for 1H26 was $3.4bn, down 5% from 2H25 but up 3% year-over-year from 1H25; net profit excluding notable items was $3.5bn, down 1% sequentially and up 1% year-over-year, reflecting solid operating momentum amid global uncertainty.

• Revenue from ordinary activities rose 5% year-over-year to $11.3bn, with lending and deposit growth of 7% over the year.

• Interim ordinary dividend declared at 77 cents per share, fully franked, with a payout ratio of 75.6–77.1%.

• Strong balance sheet and capital position maintained, with CET1 capital ratio at 12.4%, $2.7bn above target after dividend.

• Disciplined cost management and continued investment in transformation and digital initiatives.

Financial highlights

• Lending and deposit growth both at 7% year-over-year, with loan book at $890bn and deposit book at $745bn.

• Net interest income increased 4% year-over-year to $9,771 million; net interest margin (NIM) was 1.89%, down 6bps sequentially and 3bps year-over-year.

• Operating expenses decreased 5–6% sequentially, with cost-to-income ratio at 51.7%.

• Credit impairment charges rose to $443 million (10bps of average loans), with provisions to gross loans at 0.58%.

• Return on tangible equity (ROTE) steady at 11%.

Outlook and guidance

• Ongoing global conflict, energy supply disruptions, and inflation are expected to impact economic conditions through the year, with Australian GDP growth forecast at 1.0% and inflation at 4.6% for 2026.

• Lending margins anticipated to edge lower; deposit spreads to benefit from prior rate rises but face headwinds from higher rate products.

• FY26 guidance for total investment spend remains at approximately $2bn, with productivity benefits exceeding $550m.

• CET1 capital ratio targeted above 11.25%, with dividend payout ratio of 65–75%.

• Credit quality metrics expected to remain sound, but ongoing monitoring of energy-intensive sectors and geopolitical risks.