Westpac, a holding in the ASX Blue Chip portfolio, has delivered a steady half-year result with reported net profit of A$3.32 billion, right in line with market expectations.
Q3 FY2026 update
Westpac is held in the ASX Blue Chip Portfolio. The bank released its third quarter update on Monday 10 August.
| Metric | Q3 FY26 | 1H26 quarterly average |
| Net profit ex notable items | $1.8bn | +2% |
| Net interest margin | 1.89% | stable |
| Impairment charges | 10bps | stable |
| CET1 ratio | 12.1% | 12.4% at March |
Statutory net profit rose 3 percent to $1.8 billion against the first half quarterly average, and 2 percent excluding notable items. Net operating income rose 1 percent to $5.7 billion, expenses rose 1 percent to $2.9 billion on wages and investment, and pre-provision profit rose 1 percent to $2.8 billion. Return on tangible equity improved 40 basis points to 11.4 percent.
Margins held. Net interest margin was stable at 1.89 percent, with core margin flat at 1.78 percent and treasury and markets contributing 11 basis points, up from 7 in the second quarter. Lending grew 2 percent, led by 4 percent in Australian business and 3 percent in Institutional, and deposits grew 2 percent. Chief financial officer Nathan Goonan said Australian mortgages excluding RAMS grew slightly above system, while flagging that near-term growth will run below system after a cautious response to competition.
Credit quality moved little. Impairment charges held at 10 basis points, though the result included a new overlay for discretionary consumer spending and the addition of manufacturing to the energy-intensive sector overlay. Stressed exposures rose 3 basis points to 1.19 percent of committed exposure, and Australian mortgage 90 day arrears edged up 1 basis point to 0.58 percent.
The forward commentary did the damage. Mortgage applications fell 11 percent on the quarter and about 20 percent from the post-budget run rate, and Westpac Economics cut its FY27 housing credit growth forecast to 4.7 percent from 6.8 percent this year. Goonan told analysts: “it’s hard to paint a picture that it’s going up, in margins”, pointing to lending margin contraction, 86 percent of customers now qualifying for bonus savings rates, and a shift into term deposits. Advertised term deposit rates exceeded savings rates for the first time since December 2023.
CET1 fell to 12.1 percent from 12.4 percent, with 38 basis points of earnings offset by 57 basis points of dividend and 31 basis points of risk-weighted asset growth. The RAMS sale completed on 1 August added 23 basis points and cut the mortgage book by $15.4 billion, roughly offset by 22 basis points from the remaining previously announced buyback.
Shares fell about 4.3 percent on open to $36.30.
