Westpac Banking Corp reported a slight fall in annual profit for the year ended September 30, as higher credit impairment charges countered growth in lending and savings from cost controls. The Australian bank also warned that elevated interest rates and persistent inflation could remain challenges into 2027.
Statutory net profit fell 1% from the previous year to A$6.81 billion. Net profit excluding notable items was broadly unchanged at A$6.99 billion, while pre-provision profit increased 4% to A$10.93 billion.
Net interest income rose 1% to A$19.69 billion. Growth in average interest-earning assets offset a seven-basis-point decline in net interest margin, which stood at 1.87%.
Credit impairment charges more than doubled to A$864 million. Westpac attributed the increase to a revised economic outlook, additional provisions across its portfolios and higher provisions for newly individually assessed exposures.
The bank declared a fully franked final dividend of 77 Australian cents per share, taking the full-year dividend to 154 cents, 1% higher than in 2025.
Chief Executive Anthony Miller said the Australian economy was holding up relatively well, supported by business investment, while credit demand remained strong among business and institutional customers. He added that inflation was still above the Reserve Bank of Australia's target range and that interest rates were likely to remain elevated into 2027.
Westpac's common equity tier-one capital ratio was 12.5%, above the bank's target of 11.25%.
Sources: Investing.com News.