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Stock of the day
Westpac
Westpac net profit falls to $6.92 billion amid rising costs and mortgage portfolio sale, as analysts remain neutral.
(AI video summary)
This video was created on 3 November 2025 for IG audiences by ausbiz.
ASX code: WBC
Westpac earnings edged down as costs bite
Westpac's net profit for the year to 30 September fell slightly to $6.92 billion, down 1% on the prior year but just ahead of expectations. Net interest margin (NIM) slipped 1 basis point (bp) to 1.94%, while revenue rose nearly 4%. A 9% increase in operating expenses limited gains. The final dividend was $0.77, taking the fully franked full-year dividend to $1.53.
The bank also sold its $21.4 billion Rams mortgage portfolio to a consortium including KKR and Pimco. Shares rose about 2% following the announcement.
Market perspective and valuation
Westpac is trading near all-time highs, reflecting investor sentiment more than fundamentals. Analysts warned that current bank valuations may be stretched, and suggested investors to consider total returns and tax implications.
Investment outlook
Costs remain elevated, particularly due to technology investment. Earnings growth is expected in the next economic upswing. Capital ratios are strong, with around $3 billion in excess capital, and doubtful debts are stable.
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