Westpac shares (ASX: WBC) have shed 2.99% to begin the new week almost back where it started 2025. With financial results for H1 missing expectations, the WBC share price is left clinging on to $0.04 (0.12%) in gains YTD. The bank’s reported net profit after tax reached $3.32 billion, falling shy of the $3.43 billion expected, and representing a decline of 1% on the previous period.
Operational expenses saw a rise of 6%, amounting to $5.7 billion. This increase is attributed to the continued implementation of the UNITE transformation program and significant investments in technology services aimed at future-proofing the bank’s infrastructure.
For the period, Westpac maintained a steady interim dividend of 76 cents per share, which represents a payout ratio of 75% of earnings. This decision highlights the bank’s commitment to returning value to its shareholders while maintaining an equitable distribution from its profits.
Westpac CEO Anthony Miller pointed to strategic growth in key lending areas and resilient credit quality as primary drivers of the bank’s solid performance, yet also indicated some potential headwinds, with “Geopolitical uncertainty is a key risk”.
Looking into its service capacity, Westpac has announced the establishment of three new service centres across Australia, located in Moree (NSW), Leongatha (VIC), and Smithton (TAS). This expansion is in line with the bank’s commitment to enhancing its regional outreach.
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Westpac’s capital position remains strong, with a Common Equity Tier 1 (CET1) ratio of 12.2%, exceeding the minimum requirements set by the Australian Prudential Regulation Authority (APRA). This robust capital base reinforces Westpac’s financial stability and regulatory compliance.
The bank continues to hold a strong market share with a 21% stake in both Australian household deposits and mortgages, showcasing its pivotal role in the nation’s banking sector. Despite the current pullback in the share, zooming out of a longer period gives a more bullish perspective. A gain of 19.65% over the past 12 months is a significant outperformance on the 6.19% delivered by the ASX 200 over the same period, with the five year return of 109.22% also more than double that achieved by the blue chip index. Improvements will be desired in periods to come, yet outperformance on the market cannot be overlooked for the time being with volatility remaining high.
