Westpac Reports $6.9 Billion Net Profit, Declares 77c Dividend, Advances UNITE

Financial Performance Amid Economic Headwinds

Westpac Banking Corporation’s 2025 financial year results reveal a modest 1% decline in net profit after tax attributable to equity holders, settling at $6.916 billion. This slight dip comes despite a 4% increase in revenue, which rose to $22.4 billion, reflecting disciplined management of net interest margins and balance sheet growth across its business segments.

The bank’s return on tangible equity (ROTE) edged down to 11%, still comfortably above its cost of capital, signaling resilience in a challenging economic environment marked by uneven recovery in Australia and New Zealand. Earnings per share remained stable at 201.9 cents, supported by an ongoing share buyback program.

Capital Strength and Shareholder Returns

Westpac’s capital position remains robust, with a Common Equity Tier 1 (CET1) capital ratio steady at 12.5%, well above regulatory minimums. This strength underpins the bank’s ability to sustain dividends and invest in strategic initiatives. The Board declared a fully franked final dividend of 77 cents per share, bringing the full-year dividend to $1.53 per share and reflecting a payout ratio of 75% of profit after tax excluding notable items.

The bank has completed $2.5 billion of its previously announced $3.5 billion on-market share buyback, demonstrating a commitment to returning surplus capital to shareholders while balancing investment needs.

Strategic Progress and Leadership Renewal

2025 was a pivotal year for Westpac’s strategic direction, marked by the appointment of Anthony Miller as CEO in December 2024. Miller has driven renewed focus on customer-centric growth, operational simplification, and digital innovation. The UNITE program, Westpac’s cornerstone transformation agenda aimed at simplifying products, processes, and systems, delivered 88% of its 2025 priorities, including the rollout of key platforms BizEdge and Westpac One.

Customer experience improvements were evident, with Consumer Net Promoter Score (NPS) rising to equal second among major banks, although Business NPS lagged behind peers, highlighting areas for further focus. The bank also enhanced its risk culture and management, culminating in APRA’s removal of the remaining $500 million operational risk capital overlay, a milestone reflecting significant progress in risk governance.

Sustainability and Community Impact

Westpac continues to embed sustainability into its core strategy, emphasizing climate transition, housing affordability, and regional prosperity. Sustainable finance lending grew 37% to $39 billion, and sustainable bond facilitation increased by 40%, supporting customers’ decarbonization journeys. The bank also advanced its Climate Transition Plan and published a comprehensive Sustainability Report in preparation for mandatory climate disclosures.

Community investment remained strong, with over $199 million directed towards social impact initiatives, including scholarships and financial literacy programs. Westpac’s Indigenous engagement deepened, with increased support for Indigenous customers, suppliers, and employees.

Outlook and Market Implications

While Westpac’s financial performance reflects disciplined management amid macroeconomic uncertainties, the bank’s strategic investments in transformation, technology, and sustainability position it well for future growth. However, challenges remain in improving business customer service and managing elevated operating expenses. Investors will be watching closely how Westpac balances growth ambitions with cost efficiency and risk management in the evolving financial landscape.