Westpac Banking (WBC) H2 2024 earnings summary

Executive summary

• Statutory net profit for the year was AUD 6.99 billion, down 3% year-over-year; excluding notable items, net profit was AUD 7.1 billion.

• Revenue increased 1% year-over-year to AUD 21.76 billion, while expenses rose 7% to AUD 10.94 billion.

• Return on tangible equity was 11%, down 38bps year-over-year.

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

• Customer service enhancements, digital innovation, and disciplined performance underpinned growth.

Financial highlights

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

• Expenses rose 7% year-over-year, mainly due to higher technology costs and software amortization.

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

• Ordinary dividends increased 6% to AUD 1.51 per share, with a payout ratio of 73%.

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

Outlook and guidance

• System credit growth expected to remain at similar levels, with targeted growth in line with the market across all segments.

• Mortgage competition and deposit mix shift to continue; NIM outlook sensitive to interest rate timing and wholesale funding markets.

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

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

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