Westpac reported a statutory net profit of A$6.8 billion for the year to September, down 1% on the previous year, while net profit excluding notable items was flat at A$7.0 billion. Mortgage demand weakened: the bank saw a 15% fall in average monthly mortgage applications in the fourth quarter from a year earlier.
A COOLER HOUSING MARKET
Mortgage and investor credit demand has weakened since the government scrapped tax concessions for property investors earlier in the year. Westpac said it expects house prices to fall by 10.9% from March 2026 to March 2027.
Westpac, led by chief executive Anthony Miller, said inflation remains above the Reserve Bank's target range and that interest rates are likely to remain elevated into 2027. The Reserve Bank begins a two-day policy meeting on Monday that is widely expected to end with a 0.25% rise in the cash rate to 4.85%, AAP reported.
SECOND IN A CONCENTRATED MARKET
Westpac ranks second to Commonwealth Bank in size, according to AAP. Of 89 licensed banks in Australia at June 2026, the four majors (Commonwealth Bank, Westpac, National Australia Bank and ANZ) held A$5.13tn of assets, about 73% of the banking total.
Westpac said it helped more than 190,000 Australians buy a home this year and has set a target to facilitate A$100 billion of housing-related lending by 2030. Westpac recently cut about 250 jobs, AAP reported.
CAPITAL, CREDIT AND DIVIDEND
Westpac's CET1 capital ratio came in at 12.5%, above the 11.25% target, equal to A$2.9 billion of capital above target after payment of the 2026 dividend.
Credit impairment provisions rose to A$5.2 billion, with the bank citing economic and geopolitical uncertainty affecting energy-intensive sectors and discretionary spending. The share of mortgage balances in hardship remained low at 0.6%, it said.
The final dividend of 77 cents a share takes the full-year payout to A$1.54, up 1% on the previous year. In New Zealand, Westpac NZ's net profit excluding notables fell 9% to NZ$1,087 million.
THE TGB VIEW
Westpac ranks 21st in the TGB Bank Rankings for Asia-Pacific, with a 9.5% return on equity for the year to September 2025; ANZ, ranked 19th, returned 8.3% and National Australia Bank, ranked 22nd, 10.7%. On its own measure, Westpac's return on average ordinary equity slipped to 9.6% this year, a year in which business lending rose 12% and institutional lending 18% while mortgage applications fell 15% in the fourth quarter. National Australia Bank reports on Thursday and ANZ on 9 November, the next two of the four majors to set their figures beside Westpac's.
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