Investors pulled back from Westpac on Monday after the bank reported a dip in half-year profit. Shares fell as much as 3.8% in early trading, reflecting market unease despite results landing in line with expectations.
For the six months ending March 31, Westpac reported a net profit of $3.32 billion, in line with forecasts. However, investors appeared concerned about the bank’s outlook as the Reserve Bank of Australia is expected to begin cutting interest rates later this year—moves that could further compress lending margins across the sector.=
Westpac CEO Anthony Miller acknowledged the dual impact of easing monetary policy and cost-of-living pressures: “This resilience is reflected in the improvement in credit quality metrics indicating we may have passed the low point in the cycle.”
Despite these pressures, Westpac grew its total loan book by 5% to $825 billion, with housing, business, and institutional lending all seeing double-digit gains in some segments. But analysts warned that the bank’s strategy—particularly its push in business lending—may face headwinds in a tighter and more competitive funding market.
The bank also reported an increase in expenses, partly driven by ongoing investment in its UNITE technology overhaul. Miller said the program is expected to improve operational efficiency over time, noting that it would “help reduce the cost-to-income ratio,” while also aiming to enhance customer service.
On the asset quality front, Westpac pointed to a drop in mortgage delinquencies and signs of improved financial resilience among borrowers, suggesting potential stabilisation in credit conditions.
The board declared an interim dividend of $0.76 per share.
Just a few months into his role as CEO, Miller also touched on broader economic priorities in the wake of the federal election, where Prime Minister Anthony Albanese’s Labor government is set to return with a stronger mandate.
“We look forward to working with the government and combining our efforts to address key challenges and opportunities, including providing more housing, guaranteeing access to cash with a sustainable long-term model and challenging ourselves as to how we compete as a nation going forward,” Miller said.
