Westpac Banking Corp Reports Annual Profit Decline

(Reuters) – Australia's Westpac Banking (NYSE:WBK) Corp reported a decline in annual profit on Monday and anticipates steady demand for housing and business credit in 2025, as the Reserve Bank of Australia (RBA) shifts to an easing stance.

The bank commented, "Some central banks have shifted to an easing cycle, and the RBA is likely to follow in 2025. This will be good news for many households and businesses." In addition, Westpac has increased its buyback program by A$1 billion.

The RBA has maintained interest rates for nearly a year after raising the cash rate by 425 basis points to 4.35% since May 2022.

As Australia's third-largest lender by market value, Westpac reported a 3% fall in profit for the year ending September 30, totaling A$6.99 billion ($4.62 billion), largely due to rising costs and fierce competition in the mortgage sector. Nonetheless, this figure exceeded the LSEG estimate of A$6.50 billion.

The bank's net interest margin, a crucial profitability metric, decreased to 1.93% from 1.95% the previous year, reflecting mortgage pricing competition.

Due to rising interest rates, which increase mortgage repayment costs and intensify competition, Australian retail banks are pressured to diversify their revenue streams beyond traditional home loans.

Westpac declared a higher final dividend of 76 Australian cents per share, up from 72 Australian cents the previous year.

Note: ($1 = 1.5147 Australian dollars)