Bank’s profit falls in uncertain economic environment
A big four bank has posted its first annual profit decline as its chief executive pushes ahead with an ambitious cost-cutting project.
Australia’s second-biggest bank has revealed a one per cent fall in annual profit after recently cutting about 250 jobs amid an uncertain economic backdrop.
Westpac’s net profit dipped to $6.8 billion in fiscal 2026, even as net interest income – the difference between interest earned and interest paid – rose by one per cent to $19.7 billion from a year ago.
But chief executive Anthony Miller said it was a solid result for the bank, which is in the midst of a multi-year transformation program to simplify core systems, cut operating costs, and lift its engagement with artificial intelligence.
“In an uncertain economic environment, we’ve remained focused on supporting our customers,” he said on Monday.
“We’ve improved the customer experience, grown our core businesses and maintained a strong balance sheet.”
Westpac, which ranks second to Commonwealth Bank in size, pointed to strong growth in customer deposits and lending, which rose by six per cent and five per cent respectively, in the year ended September.
“We’ve also increased first-party mortgage origination and this remains a priority,” Miller said, adding the bank had supported more than 190,000 Australians to buy a home.
Westpac is targeting $100 billion in housing-related lending by 2030.
Looking ahead, Miller said the domestic economy was holding up “relatively well”, with strong business investment supporting the medium-term outlook.
“This is evident across our business and institutional customer base, where demand for credit remains strong,” he added.
“However, inflation remains above the Reserve Bank’s target range and interest rates are likely to remain elevated into 2027.”
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The central bank on Monday begins a two-day meeting on monetary policy which is widely expected to end with a decision to hike the key cash interest rate by 0.25 per cent to 4.85 per cent.
Last month, Westpac said it would cut about 250 through voluntary and unplanned redundancies.
The bank declared a final dividend of 77 cents, taking the total payout to shareholders for the year to $1.54.
-with AAP
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