Westpac Reports AUD 3.3bn Interim Profit, 2% Rise in Net Interest Income

Financial Performance Overview

Westpac Banking Corporation released its interim financial results for the six months ended 31 March 2025, reporting a net profit attributable to equity holders of AUD 3.317 billion. This represents a 1% decline compared to the prior corresponding period and a 9% decrease relative to the preceding half year. Despite this slight dip, the bank sustained its interim dividend at 76 cents per share, fully franked, reflecting confidence in its earnings stability.

Net interest income rose 2% to AUD 9.351 billion, buoyed by loan growth across segments and a largely stable net interest margin. The bank’s average interest-earning assets increased by 3%, with growth particularly evident in business lending and mortgages. Non-interest income remained broadly flat, with higher wealth management fees offset by lower trading income.

Cost and Credit Quality Dynamics

Operating expenses increased 6% to AUD 5.698 billion, driven by higher staff remuneration, wage inflation, and increased investment in technology, notably the UNITE transformation program aimed at simplifying systems and enhancing customer experience. Technology expenses rose 12%, reflecting software amortisation and vendor costs.

Credit impairment charges declined to AUD 250 million, equivalent to 6 basis points of average loans, underscoring the bank’s prudent lending practices and resilient customer base. The provision for expected credit losses remains well-covered, with portfolio overlays adjusted to reflect economic uncertainties, including geopolitical tensions and trade disruptions.

Capital, Funding, and Liquidity Position

Westpac’s Common Equity Tier 1 (CET1) capital ratio stood at 12.24%, down 25 basis points from September 2024. The decline was influenced by dividend payments, risk-weighted asset growth, and on-market share buybacks totaling AUD 2.4 billion during the half. The bank maintains a strong liquidity position, with a Liquidity Coverage Ratio (LCR) of 135% and a Net Stable Funding Ratio (NSFR) of 115%, both comfortably above regulatory minimums.

Customer deposits grew 3% to AUD 696.8 billion, outpacing loan growth of 2%, resulting in an improved deposit-to-loan ratio of 84.5%. The bank raised AUD 15 billion in new long-term wholesale funding, diversifying its funding sources amid a competitive market environment.

Strategic Initiatives and Sustainability Commitments

Westpac continued to advance its digital transformation agenda, enhancing its award-winning Westpac App with new features and launching AI-powered tools such as the Business Lending Virtual Assistant. The bank also introduced SafeBlock, a scam prevention innovation allowing customers to block transactions proactively.

On the sustainability front, Westpac reaffirmed its commitment to becoming a net-zero, climate-resilient bank. It reported progress against its 2030 emission targets, maintained 100% renewable electricity sourcing for Australian operations, and increased sustainable finance lending to AUD 33.3 billion. The bank also launched Australia’s first Social Tailored Deposit product to support lending aimed at social impact.

Governance and Regulatory Environment

Significant leadership changes occurred during the period, including the appointment of Anthony Miller as CEO in December 2024 and several key executive transitions. The bank remains engaged with ongoing regulatory developments, including the implementation of new AML/CTF laws and the upcoming mandatory climate-related financial disclosures.

Westpac continues to navigate a complex risk landscape encompassing cyber security threats, geopolitical uncertainties, and compliance challenges. The bank’s risk governance enhancements, including the completion of the APRA enforceable undertaking transition phase, aim to strengthen resilience and regulatory compliance.