Westpac’s 2025 Interim Profit Dips 1% Amid Strong Business Lending Surge

Financial Performance Amid Global Uncertainty

Westpac Banking Corporation released its 2025 interim results showing a modest 1% decline in net profit after tax to $3.3 billion compared to the same period last year. Despite this slight dip, the bank’s return on tangible equity (ROTE) improved by 9 basis points to 11.1%, signaling enhanced efficiency and profitability excluding notable items. Earnings per share remained steady at 101 cents, reflecting stable shareholder returns in a competitive environment.

The bank’s Common Equity Tier 1 (CET1) capital ratio stood at a robust 12.2%, down marginally by 31 basis points, but still providing a strong buffer to absorb potential shocks amid ongoing global economic uncertainty. Westpac declared an interim dividend of 76 cents per share, fully franked, maintaining its commitment to delivering shareholder value.

Strategic Growth in Business and Institutional Lending

Westpac’s strategic focus on business and institutional banking is bearing fruit, with Australian business lending rising 14% since the first half of 2024 and institutional lending up 15%. Growth was particularly strong in targeted sectors such as health, professional services, and agriculture, reflecting the bank’s calibrated approach to lending standards and risk management.

Consumer banking also showed positive momentum, with customer satisfaction improving to the second highest Net Promoter Score among major banks. Household deposits grew by 9%, underscoring the franchise’s strength and customer trust. The bank continues to enhance its digital capabilities, adding new features to its award-winning mobile app and launching tools like BizEdge for faster business loan decisions and Westpac One for institutional clients.

Innovation and Risk Management Initiatives

Westpac is investing heavily in technology to improve customer experience and operational efficiency. Scam prevention remains a priority, with innovations such as SafeBlock and SafeCall helping to prevent $115 million in potential customer losses during the half. The bank is also exploring artificial intelligence applications to streamline staff workflows and enhance service delivery.

Cost management efforts continue under the UNITE program, aimed at simplifying products, processes, and systems to improve the cost-to-income ratio over time. Additionally, Westpac is expanding its regional footprint by establishing new Regional Service Centres that integrate retail and business banking services, signaling a commitment to closer customer engagement outside metropolitan areas.

Outlook in a Shifting Economic Landscape

Looking ahead, Westpac acknowledges the challenges posed by disrupted global trade patterns and supply chains. However, the bank remains cautiously optimistic about the Australian and New Zealand economies, which are expected to demonstrate resilience. Australian GDP growth is forecast to accelerate from 1.2% in 2024 to 1.9% in 2025, supported by moderating inflation and easing interest rates. New Zealand’s financial conditions are also expected to improve, bolstering economic activity.

Westpac’s strong capital and liquidity position provide the flexibility to navigate geopolitical uncertainties while continuing to support customers and the broader economy. The bank’s balanced approach to growth, risk, and innovation positions it well for the evolving financial landscape.