Westpac Declares Fully Franked 4.94% Distribution on Capital Notes 9
Westpac Banking Corporation has announced a fully franked distribution of AUD 1.2463 per Westpac Capital Note 9, reflecting a 4.9447% annualised rate for the quarter ending September 2025.
- Distribution of AUD 1.2463 per Westpac Capital Note 9
- Fully franked dividend at 100% franking credit
- Distribution rate set at 4.9447% per annum
- Ex-date on 11 September 2025, payment on 22 September 2025
- No external approvals required for payment
Westpac’s Latest Distribution Announcement
Westpac Banking Corporation has confirmed a fully franked ordinary distribution of AUD 1.2463 per Westpac Capital Note 9 (WCN 9) for the period from 23 June 2025 to 22 September 2025. This payment reflects an annualised distribution rate of 4.9447%, calculated in line with the terms set out in the WCN 9 prospectus.
How the Distribution Rate is Determined
The distribution rate is derived from the three-month Bank Bill Swap Rate (BBSW) as of 23 June 2025, which stood at 3.6639%, plus a fixed margin of 3.40%. This sum is then adjusted for the Australian corporate tax rate of 30%, resulting in the effective 4.9447% per annum rate. The distribution amount is calculated on a face value of AUD 100 over the 92-day distribution period.
Fully Franked Dividend and Investor Implications
Importantly for investors, the distribution is fully franked, meaning it carries a 30% franking credit. This can provide tax advantages for Australian shareholders, effectively reducing the tax payable on the income received. The ex-date for the distribution is 11 September 2025, with the record date on 12 September and payment scheduled for 22 September 2025.
No Approvals Required and Capital Management Context
Westpac has confirmed that no external approvals, such as security holder, court, or regulatory consents, are required ahead of this distribution payment. This suggests a smooth continuation of Westpac’s capital management strategy, maintaining investor confidence in the bank’s ability to meet its distribution obligations on these hybrid capital instruments.
Looking Ahead
While the distribution is subject to Westpac’s absolute discretion and certain payment conditions, the announcement signals stability in the bank’s capital note returns amid a dynamic interest rate environment. Investors will be watching closely for any future changes to the BBSW rate or margin that could influence upcoming distributions.
Bottom Line?
Westpac’s steady distribution on Capital Notes 9 underscores its ongoing commitment to rewarding investors while navigating evolving market conditions.
Questions in the middle?
- Will future BBSW rate fluctuations impact upcoming distribution rates?
- How might Westpac’s capital management strategy adapt if market conditions shift?
- Are there any risks that could affect the discretionary payment of future distributions?