Westpac Banking (WBC) H1 2026 earnings summary

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 deposits both grew 7% year-over-year, with double-digit growth in transaction account sales and proprietary channel lending.

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

• Board declared a fully franked interim dividend of AUD 0.77 per share, payout ratio 75.6–77.1% of profit after tax (excluding notable items).

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

Financial highlights

• Pre-provision profit grew 3–4% year-over-year, driven by revenue outpacing expenses.

• Net interest income increased 4% year-over-year to AUD 9,771 million, but declined 3% sequentially.

• Net profit (excluding notable items) up 1% to AUD 3.5 billion; reported net profit down 1% due to higher credit impairment charges.

• Loan and deposit growth both 7% year-over-year, with business lending up 13% and mortgage balances up 7% (excluding RAMS).

• Credit impairment charges increased to 10 basis points of average gross loans, with provisions to gross loans at 0.58%.

Outlook and guidance

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

• Lending and deposit growth expected to moderate, with business credit growth likely to slow to 5–6%.

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

• Anticipate continued margin pressure, especially in Institutional and higher-rate deposit products.

• Focus on supporting customers, digital investment, and maintaining strong capital and liquidity.