Westpac Banking (WBC) Q1 2026 earnings summary

Executive summary

• Statutory net profit for the quarter was $1.9bn, up 5% compared to the 2H25 average, with net profit excluding notable items up 6% over the same period, reflecting disciplined execution and strategic focus.

• Revenue increased 1% year-over-year, with net interest income up 2% and non-interest income down 4% due to lower markets revenue.

• Pre-provision profit grew 7% (6% excluding restructuring), and operating expenses decreased by 5% compared to the 2H25 average.

• Customer deposits grew by $12bn, with household deposits up 3% and business transactional deposits up 4%.

• Loans increased by $22bn, led by 7% growth in institutional lending and 3% in Australian mortgages (excluding RAMS) and business.

Financial highlights

• Net interest margin (NIM) decreased 1 basis point to 1.94%; core NIM declined 3 basis points to 1.79%.

• Return on equity (ROE) improved to 10.4%, up 46bps from the 2H25 average.

• Treasury and markets contributed 15 basis points to NIM, up from 13 basis points.

• Operating expenses (excluding restructuring) stable at $3bn; including restructuring, expenses fell 5%.

• Credit impairment charges remained low at 6 basis points of average gross loans, though up 44% sequentially.

Outlook and guidance

• Deposit growth expected to remain strong through FY26, with institutional lending growth anticipated to moderate.

• Productivity savings of over $500m targeted for FY26, expected to largely offset expense growth.

• Economic scenarios for credit loss provisioning assume GDP growth of 2.2% in 2025 and 2.4% in 2026, with unemployment rising to 4.6%.

• Residential property prices forecast to decline 6% in 2025 and 27% in downside scenarios over two years.

• RAMS transaction expected to settle by mid-year, reducing mortgages by $16bn and providing a 22 basis point CET1 benefit.