Westpac Confirms 77 Cents Dividend with No DRP Discount – What’s Next?

Westpac’s Dividend Update

Westpac Banking Corporation has provided an update to its dividend announcement for the six-month period ending 30 September 2025. The bank confirmed an ordinary dividend of 77 cents per share, fully franked at the corporate tax rate of 30%, payable on 19 December 2025. This dividend reflects Westpac’s ongoing commitment to returning capital to shareholders while maintaining a strong balance sheet.

Dividend Reinvestment Plan Details

Notably, Westpac has set the Dividend Reinvestment Plan (DRP) price at AUD 38.09 per share, calculated as the average volume-weighted price over a 15 trading day period without any discount. This approach signals a conservative stance, foregoing the typical DRP discount that some companies offer to incentivize reinvestment. Participation in the DRP currently stands at 11.3% of shares on issue, with eligibility restricted to shareholders residing in Australia and New Zealand. Shares to satisfy the DRP will be purchased on-market by a third party rather than issued anew, which may have subtle implications for share supply dynamics.

Foreign Currency Payment Options

Westpac also disclosed arrangements for dividend payments in foreign currencies, specifically British Pounds (GBP) and New Zealand Dollars (NZD), catering to its international shareholder base. The exchange rates used for these payments have been specified, with GBP dividends equivalent to approximately 38 pence per share and NZD dividends around 88 cents per share. However, shareholders cannot elect to receive dividends in currencies other than those defaulted based on their registered address.

Implications for Investors

The update provides clarity for investors on the exact dividend yield and reinvestment terms ahead of the payment date. The absence of a DRP discount may influence some shareholders’ decisions to take dividends in cash rather than reinvesting, particularly given the current market price. Meanwhile, the foreign currency payment options underscore Westpac’s recognition of its geographically diverse investor base, although the restrictions on DRP participation limit reinvestment opportunities to local shareholders.

Looking Ahead

As the dividend payment date approaches, market participants will be watching closely to see how the DRP participation evolves and whether the foreign currency payment options affect international investor sentiment. Westpac’s approach reflects a balance between rewarding shareholders and managing capital prudently in a complex economic environment.