Westpac Banking (WBC) investor relations material

Executive summary

• Statutory net profit for 3Q26 was $1.8bn, up 3% on the 1H26 quarterly average, with net profit excluding notable items also at $1.8bn, reflecting underlying performance.

• Continued execution of strategic priorities and initiatives led to improved operating performance, customer engagement, and business growth, particularly in regional Australia and agribusiness.

• Net operating income increased 1% quarter-over-quarter, supported by a 2% rise in net interest income and disciplined cost management.

• Loans and deposits both grew by 2% in the quarter, with business and institutional lending up 4% and 3% respectively.

• Mortgage applications declined 11% sequentially and 20% since the budget, with investor applications down 26% and owner-occupier down 18%.

Financial highlights

• Net interest income rose 2% from the 1H26 quarterly average to $5.0bn in 3Q26, offsetting a 3% decline in non-interest income.

• Net interest margin (NIM) was stable at 1.89% in 3Q26; core NIM at 1.78%.

• Operating expenses increased 1%, mainly due to wage growth and business investment, resulting in pre-provision profit growth of 1%.

• Credit impairment charges remained stable at 10 basis points of average gross loans, reflecting increased overlays and downside scenario severity.

• Return on equity (ROE) improved to 10.0% in 3Q26, up 47bps from the 1H26 quarterly average.

Outlook and guidance

• Housing credit growth is expected to moderate from 6.8% in FY26 to 4.7% in FY27 and 5.2% in FY28.

• System deposit growth expected to remain solid in Q4, with seasonal household balance increases and likely reduction in institutional deposits.

• Lending margins are expected to contract further amid heightened mortgage competition, while deposit margin benefits from higher rates will be offset by mix impacts.

• Structural productivity savings of over AUD 550 million targeted for FY 2026; total investment spend expected at approximately AUD 2 billion.

• UNITE program investment to be modestly above the previously guided range.