Westpac Banking (WBC) H2 2024 earnings summary

Executive summary

• Statutory net profit for the year was AUD 7.0 billion, down 3% year-over-year, with return on tangible equity at 11.0%; excluding notable items, net profit was AUD 7.1 billion.

• Revenue increased 1% year-over-year to AUD 21,763 million, while expenses rose 7% to AUD 10,944 million.

• Strong balance sheet with CET1 capital ratio at 12.5%, above the top end of the target range.

• Customer service enhancements, digital innovation, and operational improvements underpinned growth and improved customer advocacy.

• Share buyback increased by AUD 1 billion, with ordinary dividends up 6% to 151c per share.

Financial highlights

• Net interest margin (NIM) was 1.95%, down 1bp year-over-year; core NIM at 1.83% at period end.

• Impairment charges reduced to 7bps of loans, reflecting prudent lending and resilient customers.

• Customer deposits grew 3% to AUD 674 billion; net loans increased 3% to AUD 807 billion year-over-year.

• Non-interest income decreased, mainly due to business divestments and softer markets performance.

• Ordinary dividends per share increased 6% to 151c; FY24 payout ratio was 73%.

Outlook and guidance

• System credit growth expected to remain at similar levels into the first half of 2025, with targeted growth in all segments.

• Mortgage competition and deposit trends to persist; NIM outlook sensitive to interest rate timing and wholesale funding markets.

• Expense growth to continue at a similar pace, driven by technology, wage growth, and Unite investment.

• Credit quality expected to remain sound, with manageable further deterioration anticipated.

• GDP growth forecast to rise from 1.5% to 2.5% in 2025; housing credit growth of 5% and business credit growth of 7% anticipated.