Westpac Banking (WBC) H2 2025 earnings summary

Executive summary

• Net profit after tax was $6.9bn, down 1% year-over-year, with adjusted net profit at $7.0bn, down 2%; revenue rose 3% to $22.5bn, while expenses increased 9% to $11.9bn, driven by higher investment and staff costs.

• Non-interest income rose 10% for the half, driven by higher card and business lending fees, and increased wealth income.

• Deposit growth was strong at 7% to $723bn, and loan growth was 6% to $856bn, with notable increases in institutional and agribusiness lending.

• Ordinary dividends per share increased to 153c, with a payout ratio of 76%, and CET1 capital ratio at 12.5%, above the new target of >11.25%.

• Credit quality remains sound, with mortgage arrears and stressed exposures declining, and total credit provisions nearly AUD 5bn, 2% lower year-over-year.

Financial highlights

• Net interest margin (NIM) declined slightly to 1.92% for the year, with core NIM down 1bp; non-interest income up 10% for the half; trading and other income up 27%.

• Staff and technology costs increased, offset by AUD 402m in productivity savings; total productivity expected to reach at least AUD 500m in FY26.

• Deposit-to-loan ratio improved to just under 85%.

• Return on tangible equity (ROTE) excluding notable items was 11.0%.

• Cost to income ratio (ex notable items) was 53.0%, up 3 percentage points year-over-year.

Outlook and guidance

• Lending margins expected to edge lower in 1H26, with deposit spread pressure and slight tailwind from wholesale funding.

• Investment spend for FY26 projected at approximately AUD 2bn, with UNITE accounting for nearly half.

• Productivity initiatives are targeted to deliver over $500m in cost savings in FY26.

• Staff costs will rise due to continued banker investment and EBA-driven pay increases; technology expenses remain a headwind.

• Management expects continued loan and deposit growth, with a focus on higher-return segments.