Westpac's interim profit declines amid strategic shift, share buyback continues

Westpac Banking Corporation (NZX:WBC) reported a 9% drop in interim net profit to AUD3.317 billion, while unveiling strategic shifts and balance sheet strategies, and confirming plans to pay an ordinary dividend of 76 cents per share. The interim result, for the six months ended 31 March 2025, reflected declining net interest income and a cost savings program being undermined by higher regulatory and compliance expenses. While overall loans grew, Australian housing loans, excluding the discontinued RAMS product, lagged system growth at 0.9x, while business lending increased by 5%. Customer deposits grew 3%, with the deposit-to-loan ratio rising to 84.5%. The bank continues to improve customer service through its award-winning banking app and to invest in innovative fraud prevention technologies to protect consumers. The company has been active in the market, continuing its previously announced share buyback program, and has thus far repurchased and canceled over 85.8 million shares. This dividend payout represents 75% of net profit. The firm also announced to reduce its outstanding operational risk capital as well by AUD500 million. Westpac's CET1 capital ratio stands at 12.24%. Trading remains strong. Despite the profits, Westpac states that the outlook continues to be uncertain for the company, while it is focused on providing shareholder returns.