Westpac Banking (WBC) Q1 2025 earnings summary

Executive summary

• Net profit for 1Q25 was $1.7bn, down 9% from the 2H24 average; excluding notable items, net profit was $1.9bn, up 3%.

• Pre-provision profit grew 3% excluding notable items, with revenue up 2% and expenses up 1%.

• Customer deposits increased by $14.4bn and loans by $13.4bn, with growth across housing, business, and institutional segments.

• Enhanced customer service initiatives included new SME bankers, digital tools, and fraud prevention measures.

• Reappointed as primary banking partner to the NSW Government and appointed a new Chief Sustainability Officer.

Financial highlights

• Net interest income was $4.5bn, down 6% from the 2H24 average; excluding notable items, it increased 1% with higher average interest earning assets.

• Non-interest income rose 12%; excluding notable items, up 9% due to higher financial markets revenue.

• Net operating income was $5.3bn, down 4%; operating expenses increased 1% due to wage growth.

• Pre-provision profit fell 9% to $2.5bn; impairment charges increased 9% but remain low at 5bps of average loans.

• Return on equity was 9.4%, down 88bps; return on tangible equity was 10.6%, down 98bps.

Outlook and guidance

• Economic scenarios assume 2025–2026 GDP growth of 2.2% and unemployment at 4.7%–4.5%; downside scenarios consider a peak unemployment of 11%.

• Inflation has eased, and a potential RBA cash rate cut could provide relief to households and support business activity.

• Annual wage rises effective from January 2025 and increased UNITE investment expected.