Why this matters: the profit barely moved, but Westpac's warning of an 11% house-price fall — a day before the Reserve Bank decides on rates — is the number borrowers and investors will be watching.
November 2, 2026 — Westpac Banking Corporation has reported a statutory net profit of A$6.8 billion for the financial year ended September 30, 2026, down 1% on the previous year, as higher bad-debt charges and thinner lending margins offset solid growth in loans and deposits.
Image: A stylised modern bank tower beside rows of suburban houses under a dusky sky, with a large soft downward arrow above the rooftops symbolising falling house prices. Credit: Red Eye Eagle News / AI illustration.
Editor's Highlight: The headline profit is the least interesting number in this result. The real story is the combination underneath it: lending is growing, but it is earning less per dollar, more borrowers are showing strain, and the bank now expects house prices to fall 11% from peak to trough.
Table of Contents
- The headline numbers
- Where the growth came from
- The two pressure points: margins and bad debts
- The housing warning
- What it means for borrowers and shareholders
- What to watch next
- Bottom Line
- FAQ
- Sources
Key Facts
| Detail | Information |
|---|---|
| Company | Westpac Banking Corporation (ASX: WBC) |
| Reporting period | Financial year ended September 30, 2026 |
| Statutory net profit | A$6.8 billion, down 1% year on year |
| Profit excluding notable items | A$7.0 billion, broadly flat |
| Credit impairment charges | A$864 million, up from A$424 million |
| Net interest margin | 1.87%, down 7 basis points |
| Final dividend | 77 Australian cents per share, fully franked |
| Capital strength | Common equity tier 1 ratio of 12.5% |
ABC News finance report on the day of the result, covering Westpac's profit fall and its 11% house-price forecast.
The headline numbers
Westpac released its full-year result to the Australian Securities Exchange on Monday, November 2, 2026.
The statutory result — the audited bottom line — was A$6.813 billion, about 1% lower than the previous year.
Strip out notable items, and the picture is flatter still: net profit excluding notable items was A$6.992 billion, broadly unchanged from A$6.972 billion in fiscal 2025.
That steadiness came despite growth in the underlying business. Net operating income excluding notable items rose 1% to A$22.7 billion, while operating expenses fell 1% to A$11.8 billion.
Pre-provision profit — earnings before the bank sets money aside for bad loans — increased 4% to approximately A$10.9 billion.
Newsroom Focus: When pre-provision profit rises 4% but net profit falls, the gap usually sits in one place: credit costs. That is exactly what happened here, and it is the thread running through the whole result.
| Measure | FY26 | Change |
|---|---|---|
| Statutory net profit | A$6.8 billion | Down 1% |
| Profit excl. notable items | A$7.0 billion | Broadly flat |
| Net operating income excl. items | A$22.7 billion | Up 1% |
| Pre-provision profit excl. items | A$10.9 billion | Up 4% |
| Credit impairment charges | A$864 million | More than doubled |
| Net interest margin | 1.87% | Down 7 basis points |
Where the growth came from
The balance sheet expanded on both sides. Customer deposits grew 6% to A$766.2 billion, and total loans grew 5% to A$901.3 billion.
Business lending was the standout, rising 12%, while institutional lending jumped 18%.
Chief executive Anthony Miller said the bank had delivered "a solid result while investing in Westpac's transformation".
That transformation, known as UNITE, is the bank's multi-year program to simplify its systems and cut costs. According to the company, all key fiscal 2026 milestones for the program were delivered.
The bank also said 95% of employees now use artificial-intelligence tools monthly, and it set a target of facilitating A$100 billion of housing-related lending by 2030.
Analysis Note: Strong lending growth that does not turn into profit growth is a familiar pattern in a competitive, high-rate market. Banks fight hard for loans and deposits, and that competition shows up as thinner margins rather than in the loan totals.
The two pressure points: margins and bad debts
The first pressure point is the net interest margin — the difference between what a bank earns on loans and what it pays for funding, expressed as a percentage of interest-earning assets.
Westpac's margin fell 7 basis points to 1.87%, from 1.94% a year earlier. Its core margin fell 5 basis points to 1.76%.
Net interest income still rose 1% to A$19.7 billion, because the loan book grew. But each dollar of lending earned slightly less.
The second pressure point is credit quality. Credit impairment charges — money set aside for loans that may not be repaid in full — rose from A$424 million to A$864 million, more than doubling.
That is a sharp rise, though the bank reported stressed exposures declined to 1.17% of total committed exposures.
And on mortgages specifically, just 0.67% of mortgagors were more than 90 days behind on payments at September 30 — the same level as a year earlier, according to AAP's report of the result.
Practical Takeaway: The doubling of impairment charges is a warning light, not yet a breakdown. Arrears are steady, but the bank is provisioning for tougher conditions ahead rather than reporting losses already incurred.
The housing warning
The most consequential number in the result may not be a profit figure at all. Westpac's economists expect Australian house prices to fall 11% over the current cycle, from peak to trough.
Management flagged on the earnings call that it anticipates a peak-to-trough decline of 11% before prices recover in the second half of next year, according to market coverage of the call.
The downturn is already under way: national home prices are down about 4.3% from their March peak, according to REA Group, which says the downturn is in its seventh month and running into 2027.
Mortgage demand is cooling too. Westpac said the average number of monthly mortgage applications in the September quarter was down 15% on a year earlier, although still 4% above the five-year average.
The bank also expects interest rates to remain elevated into 2027, and it pointed to continuing cost-of-living pressure for households and businesses.
Analysis Note: An 11% peak-to-trough fall would be steeper than any housing downturn in nearly two decades, according to Kalkine's coverage of the result.
What it means for borrowers and shareholders
For borrowers, the message is two-sided: arrears remain low, suggesting most households are still coping, but with mortgage applications falling and another rate decision imminent, conditions are unlikely to ease soon.
For shareholders, the dividend held up. The board declared a fully franked final dividend of 77 cents per share, taking the full-year payout to $1.54 per share, 1% higher than in fiscal 2025.
Capital strength supports that payout. Westpac finished the year with a common equity tier 1 ratio of 12.5%, comfortably above its 11.25% target in normal operating conditions.
On the share market, Westpac's shares recovered from an early dip to end the day higher, standing out from the other big banks, which finished lower, according to Kalkine's market report.
Newsroom Focus: A flat profit with a rising dividend is sustainable only while capital stays strong. At 12.5%, Westpac has room — but a deeper housing downturn or further impairment rises would test that buffer.
What to watch next
The timing of this result matters. Westpac reported a day before the Reserve Bank of Australia's decision on Tuesday, November 3.
A Reuters poll shows a fifth rate hike this year is expected, taking the cash rate to 4.85% — which would be the highest since December 2008, according to Kalkine's report of the poll.
Westpac itself believes there could be a sixth hike in early 2027, according to AAP's coverage of the bank's briefing.
The rest of the big-bank season will fill in the picture. NAB reports its full-year result on Thursday, November 5, and ANZ follows on Monday, November 9.
| Date | Event |
|---|---|
| September 30, 2026 | Westpac's financial year ends |
| November 2, 2026 | Westpac reports FY26 results |
| November 3, 2026 | Reserve Bank of Australia rate decision |
| November 5, 2026 | NAB full-year result due |
| November 9, 2026 | ANZ full-year result due |
Bottom Line
Westpac's FY26 result is a study in contrasts: a bigger loan book, a steady dividend and strong capital on one side; thinner margins, doubled bad-debt charges and a stark housing warning on the other.
Watch the Reserve Bank's decision on November 3, the NAB and ANZ results that follow, and any change in arrears or impairment charges in the December quarter. Those will determine whether this was a cautious bank provisioning prudently — or an early signal of a harder year ahead.
FAQ
What profit did Westpac report for FY26?
Statutory net profit of A$6.8 billion, down 1% on the previous year. Excluding notable items, profit was A$7.0 billion, broadly flat.
Why did profit fall if lending grew?
Loans grew 5% and deposits 6%, but the net interest margin fell to 1.87% and credit impairment charges more than doubled, from A$424 million to A$864 million, absorbing the benefit of balance-sheet growth.
What dividend will shareholders receive?
A fully franked final dividend of 77 Australian cents per share, taking the full-year dividend to $1.54 per share, 1% higher than in fiscal 2025.
What is Westpac forecasting for house prices?
Westpac's economists expect Australian house prices to fall 11% from peak to trough over the current cycle, with a recovery expected in the second half of next year, according to management's earnings-call comments.
When are the next big-bank results and the rate decision?
The Reserve Bank of Australia decides on rates on November 3, 2026, with a fifth hike this year widely expected according to a Reuters poll. NAB reports on November 5 and ANZ on November 9.
Sources
- Motley Fool Australia — Westpac FY26 results analysis, profit, margin, dividend and lending detail
- ad-hoc-news — Westpac FY26 profit report based on the bank's ASX release
- Kalkine — Westpac FY26 adjusted profit, market reaction and RBA decision context
- AAP News — mortgage arrears, rate outlook and CEO briefing coverage
- Morningstar / Dow Jones — flat annual profit, margin detail and 11% house-price forecast
- ABC News (YouTube) — Westpac predicts 11pc fall in house prices, miners drag ASX lower | Finance Report
- Red Eye Eagle News / AI illustration — original illustration for this article
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