Westpac profit misses estimates as loan loss provisions climb
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Westpac Banking (WEBNF)(WBKCY) reported a slight decline in annual profit as higher provisions for potential loan losses offset growth in business lending amid economic uncertainty in Australia.
Net income fell about 1% to A$6.8 billion ($4.8 billion) for the fiscal year ended September, missing analysts’ consensus estimate of A$6.9 billion. Impairment charges more than doubled to A$864 million as the bank accounted for worsening economic risks.
For investors, the results highlight the pressure on Australian banks from elevated borrowing costs, weakening household finances and slowing housing activity. Stronger corporate lending offers some protection, but rising credit risks could weigh on profitability.
Westpac’s institutional banking profit increased 8% to A$2.3 billion, supported by an 18% jump in lending, particularly in energy, infrastructure and resources. Consumer banking profit before provisions rose 5% to A$3.6 billion, while housing loans expanded 7%.
Chief Executive Anthony Miller warned of uneven economic conditions as inflation strains households and businesses. Westpac also continued its technology modernization program, including wider adoption of artificial intelligence and workforce reductions. Miller’s annual compensation rose 21% to A$7.5 million.
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