Westpac Banking (WBC) H2 2024 earnings summary

Executive summary

• Statutory net profit for FY24 was AUD 6,990m, down 3% year-over-year; excluding notable items, net profit was AUD 7,113m, with return on tangible equity at 11.0%.

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

• Customer service enhancements included halved mortgage approval times and a 29% reduction in scam losses; digital innovation led to the app being rated number one.

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

• Share buyback program 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 674bn; net loans increased 3% to AUD 807bn year-over-year.

• Non-interest income fell 6%–15% year-over-year, mainly due to lower underwriting and trading income.

• Ordinary dividends per share increased 6% to 151c, with a payout ratio of 73%–74.6%.

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 or modest further deterioration.

• Australian GDP growth forecast to rise from 1.5% to 2.5% in 2025, with housing credit growth of 5%–5.4% and business credit growth of 7%.