Westpac 3Q26 Unaudited Profit $1.8bn, CET1 at 12.1%

Westpac Banking Corporation (ASX:WBC) released its unaudited Third Quarter 2026 update, reporting statutory net profit of $1.8 billion, up 3% on the 1H26 quarterly average, and net profit excluding Notable Items of $1.8 billion, up 2%. Net operating income of $5.7 billion rose 1%, with a 2% increase in net interest income more than offsetting a 3% decline in non-interest income, while operating expenses increased 1% on salary and wage growth and investment in the business. Pre-provision profit rose 1% to $2.8 billion and return on tangible equity was 11.4%, up 40 basis points. Net interest margin was stable at 1.89%, comprising a core net interest margin of 1.78%, which the company described as stable and up 1 basis point compared with 2Q26, and a Treasury and Markets contribution of 11 basis points, described as steady although up from 7 basis points in 2Q26. Impairment charges were 10 basis points of average gross loans and included an increase in portfolio overlays and an increase in the severity of the downside scenario.

Customer deposits grew 2% and lending increased 2%, with growth across the Australian portfolio of 4% in business, 3% in Institutional and 2% in housing. The CET1 capital ratio was 12.1% at 30 June 2026, above the 11.25% target ratio for normal operating conditions, with the reduction in the quarter reflecting payment of the 2026 interim dividend and growth in risk weighted assets. Westpac said completion of the sale of the RAMS mortgages portfolio on 1 August 2026 added 23 basis points to the CET1 capital ratio and reduced the home loan portfolio by $15.4 billion. Credit impairment provisions were $5.3 billion at 30 June 2026, with provisions above expected losses of the base case economic scenario increasing to $2.0 billion, and stressed exposures increased 3 basis points to 1.19% of total committed exposure. The company said it continues to pursue productivity savings of more than $550 million in FY26. The announcement states that it is unaudited and that measures excluding Notable Items are not defined by Australian Accounting Standards.