Westpac Shares Close At New High: ASX200 Outperformance Continues

Westpac Banking Corporation shares  (ASX:WBC) reached a new high today, driven by strong earnings and strategic divestments, significantly outperforming the broader market. The bank’s recent performance reflects a combination of factors, including interest rate benefits, cost management, and strategic portfolio adjustments.

Westpac shares closed at A$40.42 today, a gain of 1.51%. This upward movement contributes to an impressive year-to-date rally of 24.71%, markedly exceeding the ASX200’s 7.47% increase over the same period. This outperformance signals strong market confidence in Westpac’s strategic direction and financial health.

The bank’s annual net profit after tax was reported at A$6.99 billion for the fiscal year ending September 30, 2025, slightly below the previous year’s A$7.11 billion, but above analyst expectations of A$6.83 billion. This dip was attributed to heightened competition within the mortgage market and a minor contraction in net interest margin to 1.94%. Westpac anticipates moderate credit growth in the near term, projecting stabilization into 2026.

A significant development was the sale of Westpac’s A$21.4 billion RAMS mortgage portfolio to a consortium including Pepper Money, KKR, and PIMCO. While the transaction value is expected to exceed the gross loan value, Westpac anticipates a loss on the sale after accounting for transaction costs and other adjustments. The divestment is a strategic move to streamline operations and concentrate on core banking activities.

The bank’s third-quarter earnings also contributed to the positive sentiment. Net profit for the quarter ending June 30, 2025, rose by 5% to A$1.9 billion, with net interest income increasing by 4% to A$5 billion. Net interest margins also improved by 7 basis points to 1.99%. These results were bolstered by rising Australian interest rates and resilient consumer spending.

Price Targets

Westpac has also been actively engaged in returning value to shareholders through a share buyback program. As of June 30, 2025, the bank had completed 71% of its A$3.5 billion on-market share buyback, underscoring its commitment to shareholder returns and confidence in its financial position.

The outlook for Westpac remains cautiously optimistic. While the bank faces challenges from increased competition and fluctuating interest rates, its strategic divestments and focus on core operations position it for potential future growth.