Westpac Maintains Resilience with $6.9B Profit and Strong Capital Base in FY25

About Westpac Banking Corporation

Founded in 1817, Westpac Banking Corporation (ASX: WBC) is Australia’s first and oldest bank and one of the country’s leading financial institutions, serving over 13 million customers across Australia, New Zealand, and select international markets. Headquartered in Sydney, Westpac provides a full suite of retail, business, and institutional banking services.

With more than two centuries of operation, Westpac’s strategy focuses on digital transformation, simplification, and disciplined capital management to drive long-term resilience and sustainable growth. For the year ended 30 September 2025, the bank delivered a solid financial result, maintaining strong earnings and balance-sheet strength while progressing key transformation initiatives. Chief Executive Officer Anthony Miller described FY25 as “a solid year of execution and momentum,” underscoring progress in Westpac’s technology-led growth agenda.

Financial Performance

Westpac reported a net profit after tax of $6.9 billion, down 1% from FY24, while profit excluding notable items was $7.0 billion, down 2%. Net interest income rose 3% to $19.47 billion, supported by loan and deposit growth of 6% and 7% respectively, offset by ongoing competition in mortgages and business banking. The bank’s net interest margin (NIM) was steady at 1.94%, declining just one basis point year-on-year. Non-interest income increased 5% to $2.99 billion, reflecting higher markets and wealth management activity.

Operating expenses rose 9% to $11.9 billion, driven by investment in the UNITE technology program, software amortisation, and higher staff costs linked to customer-facing roles. Excluding restructuring charges of $273 million, expenses rose 6%. The bank’s credit impairment charge fell to 5 basis points of average loans, down from 7 bps in FY24, with cost-of-living pressures on households easing and business stress levels remaining low.

Westpac ended FY25 with a Common Equity Tier 1 capital ratio of 12.5%, an increase of 4 basis points, demonstrating its strong capital position and capacity for strategic flexibility. The bank declared a final dividend of 77 cents per share, bringing the total FY25 ordinary dividend to 153 cents, up 1% from FY24.

Strategic Transformation and Digital Investments

Westpac continued to accelerate its multi-year transformation agenda during FY25. The bank’s UNITE program, a core simplification initiative, aims to standardise products and processes across business units and replace legacy systems with modern, cloud-based technology. Discovery and planning have been completed, with execution now underway.

Complementing this effort, Westpac launched new digital capabilities to enhance efficiency and customer experience. The BizEdge business lending origination platform has reduced average decision times by 45%, while Westpac One, a cloud-based solution for institutional clients, is transforming liquidity, FX and payments management. Together, these platforms form the foundation of Westpac’s goal to be Australia’s most efficient digitally enabled bank.

Portfolio Simplification and the RAMS Sale

In a key strategic move, Westpac announced the sale of its $21.4 billion RAMS mortgage portfolio to a consortium comprising Pepper Money, KKR, and PIMCO for a slight premium to book value. Completion is expected in the second half of FY26, subject to regulatory approval. Following completion, the transaction is forecast to boost Westpac’s CET1 capital ratio by around 20 basis points, simplify its mortgage operations, and reduce run costs across the group.

RAMS customers will continue to manage their loans through existing digital channels without any change to terms or conditions. The sale builds on Westpac’s broader simplification agenda, which has seen non-core divestments and the wind-down of legacy brands to improve efficiency and capital utilisation.

Operational Highlights

During FY25, Westpac achieved growth across its Consumer, Business, and Institutional divisions. Consumer and Institutional deposits rose 10%, business lending grew 15%, and institutional lending expanded 17%. The bank also recorded a 22% increase in its agribusiness portfolio, driven primarily by existing customers and renewed focus on regional Australia. To support this growth, Westpac opened a new service centre in Moree, with plans for additional locations.

Risk, Governance, and Economic Outlook

Westpac made further progress in strengthening risk management and governance practices throughout FY25. The Australian Prudential Regulation Authority (APRA) lifted its enforceable undertaking and removed the additional capital overlay, acknowledging the bank’s enhanced risk culture and controls. Miller emphasised that “strong risk management is not a destination but a discipline — and we intend to make it our differentiator.”

Looking ahead, Westpac expects modest economic recovery as interest-rate relief supports consumer confidence and private demand. However, challenges remain from inflation and recent labour-market softness. The bank believes Australia is well positioned to navigate global geopolitical and trade uncertainties given its stable financial system and strong institutional framework.

Conclusion

Westpac’s FY25 results underscore its resilience and strategic discipline in a competitive banking landscape. With steady profitability, a strong capital position, and ongoing digital investment, the bank is well placed to drive sustainable returns while delivering better outcomes for customers. The RAMS portfolio sale, continued simplification through UNITE, and ongoing regional expansion reinforce Westpac’s commitment to efficiency and growth.