The Westpac Banking Corp (ASX: WBC) share price is in focus after the ASX bank share announced its FY26 result.
Westpac is one of the largest banks in Australia, with a focus on providing loans to households.
FY26 result
The company has reported its result for the 12 months to 30 September 2026. Here are some of the highlights from the report:
- Net operating income grew 1% to $22.7 billion
- Operating expenses declined 1% to $11.7 billion
- Pre-provision profit rose 4% to $10.9 billion
- Impairment charges soared 104% to $864 million
- Net profit before notable items up 0.3% to $6.99 billion
- Statutory net profit down 1% to $6.8 billion
- Final dividend per share of $0.77, flat
- Full-year dividend of $1.54 per share, up 1%
What happened with the income and expenses?
The ASX bank share reported that net interest income climbed 1% to $19.7 billion.
Deposits grew by 6% to $766.2 billion and loans grew 8% to $901.3 billion. Pleasingly, the bank reported that business lending increased 12% and institutional lending increased 18%. Revenue growth was strong in the business and institutional segments, while consumer revenue growth was just 2%.
Westpac said that its Australian household deposit growth was 1x the overall banking system and Australian housing loans (excluding RAMS) increased by 1.1x the overall banking system.
Westpac reported that its overall net interest margin (NIM) – lending profit in margin terms that includes the loan rate and the cost of funding (like savings accounts) – at the second half of FY25 was 1.95%, with a core NIM of 1.82%.
The NIM fell to an overall NIM of 1.89% in the first half of FY26, with a core NIM of 1.78%.
The second half of FY26 saw overall NIM declined to 1.86%, with a core NIM of 1.75%.
Westpac said that the increase in impairment charges was as a result of a revised economic outlook, growth in its lending book balance and portfolio overlays.
In terms of its other expenses, salary increases for bankers represented a rise of $347 million and a $95 million increase of technology costs. But, productivity helped save $581 million in costs, with demand and workforce optimisation, operating model efficiencies and vendor and discretionary savings.
Final thoughts on the Westpac share price
The ASX bank share said that the Australian economy is holding up “relatively well” with strong business investment supporting the medium-term outlook.
Westpac noted that its business and institutional customer base where demand for credit remains “strong”.
But, inflation is above the RBA’s target range and the bank believes that interest rates are likely to remain elevated into FY27. This is presenting challenges for households and businesses, though impacts are being felt unevenly.
I think one of the best things Westpac can do is to continue to grow its percentage of home loans that are coming through its own (proprietary) channels, reducing the reliance on brokers (and losing margin). This percentage increased from 34.8% in the second half of FY25 to 42.4% in the second half of FY26.
Overall, flat profit growth is not exciting and it’s not a business I’d choose to buy today. It’s a solid option for dividends, with a dividend yield of 4.2%, excluding franking credits, but there are plenty of other ASX dividend shares I’d buy first.
