The Westpac Banking Corp (ASX: WBC) share price is in focus after reporting its FY25 result, announcing the dividend and selling its RAMS mortgage portfolio.
FY25 result
Below are some of the highlights from the ASX bank share‘s result for the 12 months to 30 September 2025:
- Net interest margin (NIM) declined 1 basis point (0.01%) to 1.94%
- Total loans increased 6% to $851.9 billion
- Underlying net profit down 2% to $7 billion
- Net profit down 1% to $6.9 billion
- Final dividend up 1.3% to $0.77 per share
- Total dividend per share up 1% to $1.53
What happened?
The business noted that the NIM, which shows how much profit a bank is making on its lending (including the cost of funding those loans via savings accounts), was impacted by persistent competition in both lending and deposits.
On the positive side of things, Westpac said that the FY25 second half NIM rose 3 basis points compared to the first half of FY25.
Despite that, net interest income increased 3% to $19.47 billion thanks to the average figure for interest-earning assets increasing by 3%. Non-interest income increased 5% to $2.99 billion, with increases in wealth management, markets and higher fee income.
The 6% loan growth was helped by 5% Australian housing loan growth (at 0.8x the growth rate of the loan system), while business lending rose 15% and institutional lending went up 17%.
Customer deposits grew 7% to $723 billion and there was 10% growth in customer deposits.
Operating expenses jumped 9% to $11.9 billion, including restructuring costs of $273 million. Excluding that, exposes rose 6%.
The credit impairment charge was 5 basis points (0.05%) of average loans, down from 7 basis points (0.07%) in FY24. The cost of living pressures on households is easing, while the levels of business stress remain low. The performance of loan quality is key for the Westpac share price, in my view.
RAMS sale
In a separate announcement, Westpac announced it is selling its $21.4 billion RAMS mortgage portfolio to a portfolio that includes Pepper Money Ltd (ASX: PPM), PIMCO and KKR.
The sale is at a “slight premium” to the gross loan value of the portfolio to be transferred at completion. After transaction costs and other adjustments, Westpac expects a loss on the sale.
The Westpac CEO Anthony Miller said:
This transaction will significantly streamline Westpac’s mortgage operations, reduce run costs across the business and provide further strategic flexibility.
Importantly, RAMS customers can continue managing their loans through the RAMS app, website, and call centre and do not need to do anything following today’s announcement.
Outlook for the Westpac share price
The ASX bank share said it remains well positioned for economic uncertainty, with borrowers benefiting from low interest rates.
However, Westpac also noted challenges remain with inflation and unemployment increasing in recent months. This will be a “delicate balance for the RBA to manage”.
Westpac’s loan book is growing at a solid pace, though its expenses are growing too. There are other ASX dividend shares I’d focus on first which could grow more in the next five years than Westpac.
