By Stuart Condie
SYDNEY--Westpac raised its final dividend despite a 1.0% drop in annual profit on higher operating costs and fierce competition for deposits and loans.
Australia's third-largest bank by market capitalization on Monday reported a net profit for the 12 months through September of 6.92 billion Australian dollars, equivalent to about US$4.53 billion. It raised its final dividend to A$0.77 from A$0.76.
Revenue rose by 3.7% to A$22.38 billion, but a contraction in net interest margin and a 9.0% rise in operating expenses hit the bottom line. Costs included those supporting a multiyear technology overhaul, and A$273 million related to what the bank called productivity initiatives.
Net interest margin--a key indicator of lending profitability--fell to 1.94% from 1.95% a year ago. However, it improved over the course of the fiscal year, to 1.95% in the second half from 1.92% in the first.
The average analyst forecast had been for net profit to fall to A$6.86 billion, according to data compiled by Visible Alpha. Consensus was for revenue of A$22.26 billion and a net interest margin of 1.93%.
Mortgage lending grew by 5.0% on-year, slower than the sector as a whole. Westpac said it had agreed to sell the A$21.4 billion home-loan portfolio from its Rams subsidiary to a consortium including U.S. private-equity giant KKR & Co.
However, business lending grew by 15% on-year as Westpac refocused under Chief Executive Anthony Miller, who formerly led Westpac's business and wealth division before taking the helm in December 2024.
Analysts have flagged a broad shift by lenders toward business banking, which is seen as more profitable and less saturated than consumer banking. Westpac's business deposits rose 5.5%.
Write to Stuart Condie at stuart.condie@wsj.com
(END) Dow Jones Newswires
November 02, 2025 17:13 ET (22:13 GMT)
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