Westpac Reports A$7 Billion Annual Profit Despite Intense Mortgage Competition

Australia’s Westpac Banking Corp posted an annual profit of A$7 billion (US$4.55 billion) for the year ended September 30, 2025, slightly lower than last year’s A$7.11 billion but above analyst expectations of A$6.83 billion, according to Visible Alpha. The country’s third-largest lender by market capitalization continues to navigate a challenging environment marked by fierce competition in the home loan market and high interest rates.

Westpac’s net interest margin edged down one basis point to 1.94%, reflecting the tight race among Australian banks for lending and deposit market share. The bank’s shares slipped about 1.2% in early Monday trading, compared with a 0.2% drop in the broader S&P/ASX200 index.

CEO Anthony Miller noted that while Australia’s economy shows some resilience, the path for future interest rate cuts remains uncertain following a spike in core inflation during the September quarter. He cautioned that global economic risks and geopolitical tensions continue to pose threats to growth.

Westpac’s mortgage portfolio grew 5% year-over-year to A$497 billion, although its expansion trailed larger rivals Commonwealth Bank, ANZ Group, and National Australia Bank. Still, credit quality improved, with home loans overdue by more than 90 days falling to 0.83% from 1.05% a year earlier. The share of loans showing early signs of stress also eased to 1.36%.

Operating expenses rose 9% to A$11.9 billion, driven by one-off restructuring costs, increased technology investment, and higher staffing expenses. The bank declared a final dividend of 77 Australian cents per share, bringing the full-year payout to A$1.53, or a 76% payout ratio.

Separately, Westpac announced the sale of its A$21.4 billion RAMS mortgage portfolio to a consortium including Pepper Money, KKR, and PIMCO.