Westpac Banking (WBC) investor relations material

Executive summary

• Net profit excluding notable items was AUD 3.5 billion for 1H26, steady year-over-year, with statutory net profit at AUD 3.4 billion, down 5% sequentially but up 3% year-over-year, reflecting solid operating momentum amid global uncertainty.

• Lending and deposit growth reached 7% year-over-year, with double-digit growth in transaction account sales and a shift toward proprietary lending channels.

• Return on tangible equity was 11%, and the cost-to-income ratio improved to 51.7%.

• CET1 capital ratio stood at 12.4%, with AUD 2.7 billion surplus capital above target after the interim dividend.

• Board declared a fully franked interim dividend of AUD 0.77 per share, with a payout ratio of 75.6%.

Financial highlights

• Pre-provision profit grew 3–4% year-over-year, driven by higher revenue than expense growth.

• Net interest income increased 4% year-over-year to AUD 9,771 million, with net interest margin declining 4–6 basis points sequentially to 1.78–1.89%.

• Deposits and loans both grew 7% year-over-year to AUD 745–890 billion.

• Credit impairment charges increased to 10 basis points of average gross loans, up from 4 basis points in the prior period.

• Interim ordinary dividends increased 11% year-over-year to 77 cents per share, with a payout ratio of 75.6–77.1%.

Outlook and guidance

• Economic forecasts revised downward: Australian GDP growth for 2026 now at 1.0%, inflation at 4.6%, and cash rate at 4.85%.

• Lending margins anticipated to edge lower; deposit spreads to benefit from prior rate rises but face headwinds from higher rate products.

• FY 2026 guidance for total investment spend remains at approximately AUD 2 billion, with productivity benefits exceeding AUD 550 million.

• Credit quality metrics expected to remain sound, but ongoing monitoring of energy-intensive sectors and geopolitical risks.

• The bank remains focused on supporting customers, investing in digital and operational resilience, and maintaining strong capital and liquidity positions.