Westpac's Profit Dips Slightly Amid Rising Expenses, Loan Growth

Ticker: WBKCY · Form: 20-F · Filed: Nov 4, 2025 · CIK: 719245

Westpac Banking Corp 20-F Filing Summary
FieldDetail
CompanyWestpac Banking Corp (WBKCY)
Form Type20-F
Filed DateNov 4, 2025
Risk Levelmedium
Pages15
Reading Time18 min
Sentimentmixed

Sentiment: mixed

Topics: Banking, Financial Services, Australia, Earnings, Operating Expenses, Loan Growth, Net Interest Income

Related Tickers: WBKCY, CBA, ANZ, NAB

TL;DR

**Westpac's profit is barely treading water as expenses surge, making its loan growth a high-stakes gamble in a tightening market.**

AI Summary

WESTPAC BANKING CORP reported a slight decrease in net profit attributable to owners of Westpac Banking Corporation (WBC) for the fiscal year ended September 30, 2025, reaching $6,916 million, down from $6,990 million in 2024, a 1.06% decline. Total interest income increased to $55,042 million in 2025 from $54,347 million in 2024, while interest expense also rose to $35,662 million from $35,594 million, resulting in a net interest income of $19,380 million, up from $18,753 million. Non-interest income saw an increase to $3,004 million in 2025 from $2,835 million in 2024, driven by higher net fees of $1,732 million and net wealth management income of $476 million. Operating expenses climbed significantly to $11,916 million in 2025 from $10,944 million in 2024, representing an 8.88% increase. Impairment charges decreased to $424 million from $537 million. Total assets grew to $1,125,356 million in 2025 from $1,077,544 million in 2024, primarily due to an increase in loans to $851,853 million. Total liabilities also increased to $1,052,263 million from $1,005,492 million, with deposits and other borrowings rising to $770,457 million.

Why It Matters

Westpac's slight profit dip and significant rise in operating expenses could signal margin pressure for investors, especially given the competitive Australian banking landscape. The substantial growth in loans to $851,853 million indicates continued market penetration and potential for future interest income, but also increased credit risk if economic conditions deteriorate. For employees, rising operating expenses might suggest increased investment in technology or compliance, but also potential pressure on cost management. Customers could benefit from increased lending capacity, but may face higher fees or less competitive rates if the bank seeks to offset rising costs. The broader market will watch how Westpac, a major player, navigates these cost pressures and maintains profitability against rivals like Commonwealth Bank and ANZ.

Risk Assessment

Risk Level: medium — The risk level is medium due to the 8.88% increase in operating expenses to $11,916 million in 2025, which outpaced the 1.06% decline in net profit, indicating potential margin compression. While impairment charges decreased, the significant growth in the loan portfolio to $851,853 million introduces increased credit risk exposure, especially if economic conditions worsen, despite the overall asset growth.

Analyst Insight

Investors should closely monitor Westpac's future expense management strategies and the quality of its growing loan portfolio. A sustained increase in operating expenses without a corresponding rise in net interest income or non-interest income could erode profitability, warranting a cautious approach.

Financial Highlights

revenue
$22,384M
operating Margin
46.85%
total Assets
$1,125,356M
net Income
$6,916M
revenue Growth
+3.73%

Revenue Breakdown

SegmentRevenueGrowth
Net Interest Income$19,380M+3.34%
Net Fees$1,732M+3.59%
Net Wealth Management$476M+7.94%
Trading Income$717M+1.84%
Other Non-Interest Income$79M+338.89%

Key Numbers

  • $6.916B — Net Profit Attributable to WBC Owners (Decreased by 1.06% from $6.990B in 2024)
  • $55.042B — Total Interest Income (Increased from $54.347B in 2024)
  • $19.380B — Net Interest Income (Increased from $18.753B in 2024)
  • $3.004B — Total Non-Interest Income (Increased from $2.835B in 2024)
  • $11.916B — Operating Expenses (Increased by 8.88% from $10.944B in 2024)
  • $424M — Impairment Charges (Decreased from $537M in 2024)
  • $1.125T — Total Assets (Increased from $1.077T in 2024)
  • $851.853B — Loans (Increased from $806.767B in 2024)
  • $770.457B — Deposits and Other Borrowings (Increased from $720.489B in 2024)
  • 3,420,353,305 — Ordinary Shares Outstanding (As of September 30, 2025)

Key Players & Entities

  • WESTPAC BANKING CORP (company) — Registrant
  • $6,916 million (dollar_amount) — Net profit attributable to owners of WBC in 2025
  • $6,990 million (dollar_amount) — Net profit attributable to owners of WBC in 2024
  • $55,042 million (dollar_amount) — Total interest income in 2025
  • $11,916 million (dollar_amount) — Operating expenses in 2025
  • $10,944 million (dollar_amount) — Operating expenses in 2024
  • $851,853 million (dollar_amount) — Loans in 2025
  • $770,457 million (dollar_amount) — Deposits and other borrowings in 2025
  • SEC (regulator) — Securities and Exchange Commission
  • Bloomberg (company) — Financial news provider

FAQ

What was Westpac Banking Corp's net profit for the fiscal year 2025?

Westpac Banking Corp reported a net profit attributable to owners of Westpac Banking Corporation of $6,916 million for the fiscal year ended September 30, 2025. This represents a slight decrease from the $6,990 million reported in 2024.

How did Westpac's operating expenses change in 2025?

Westpac's operating expenses increased significantly to $11,916 million in 2025, up from $10,944 million in 2024. This marks an 8.88% increase year-over-year.

What was Westpac's total interest income for the year ended September 30, 2025?

For the fiscal year ended September 30, 2025, Westpac's total interest income was $55,042 million. This is an increase from $54,347 million reported in the previous fiscal year.

Did Westpac's loan portfolio grow in 2025?

Yes, Westpac's loan portfolio grew, with total loans reaching $851,853 million as of September 30, 2025. This is an increase from $806,767 million reported at the end of fiscal year 2024.

What were Westpac's total assets at the end of fiscal year 2025?

Westpac's total assets stood at $1,125,356 million as of September 30, 2025. This represents an increase from $1,077,544 million at the end of fiscal year 2024.

How did Westpac's non-interest income perform in 2025?

Westpac's total non-interest income increased to $3,004 million in 2025, up from $2,835 million in 2024. This was primarily driven by higher net fees of $1,732 million and net wealth management income of $476 million.

What is the risk associated with Westpac's increased operating expenses?

The 8.88% increase in operating expenses to $11,916 million in 2025, while net profit declined, indicates potential margin compression. This could negatively impact future profitability if not managed effectively, posing a medium risk to investors.

What is Westpac's strategy regarding its loan portfolio growth?

While the filing doesn't explicitly detail strategy, the increase in loans to $851,853 million suggests a continued focus on expanding its lending activities. This growth, however, also increases credit risk exposure, which the company manages through its impairment charges, which decreased to $424 million in 2025.

How many ordinary shares of Westpac Banking Corp were outstanding as of September 30, 2025?

As of the close of the period covered by the annual report, September 30, 2025, Westpac Banking Corp had 3,420,353,305 fully paid ordinary shares outstanding.

What is the significance of Westpac's net interest income increase?

Westpac's net interest income increased to $19,380 million in 2025 from $18,753 million in 2024. This indicates that the bank earned more from its lending activities than it paid out on deposits and borrowings, which is a positive sign for its core banking operations despite the overall profit dip.

Risk Factors

  • Credit Risk Management [high — financial]: The bank faces credit risk from its loan portfolio, with loans totaling $851,853 million. Effective management of expected credit losses, as detailed in Note 10, is crucial to mitigate potential financial impact from defaults.
  • Operating Expenses Increase [medium — operational]: Operating expenses rose by 8.88% to $11,916 million in 2025 from $10,944 million in 2024. This significant increase requires careful monitoring to ensure it does not erode profitability.
  • Market Risk Exposure [medium — market]: The bank is exposed to market risk through its trading activities and investments, as indicated by trading income of $717 million. Quantitative and qualitative disclosures on market risk are provided in Item 12.
  • Capital Adequacy [high — regulatory]: Maintaining adequate capital is essential for regulatory compliance and financial stability. Note 27 details capital adequacy, a key metric for investor confidence and operational resilience.
  • Liquidity and Funding [high — financial]: Deposits and other borrowings increased to $770,457 million, reflecting the bank's reliance on funding. Managing liquidity risk (Note 21) is vital, especially given the scale of liabilities.
  • Litigation and Legal Proceedings [medium — legal]: While not explicitly detailed in the provided summary, large financial institutions are typically subject to various legal and regulatory proceedings that can result in significant financial penalties or reputational damage.
  • Information Technology and Cybersecurity [high — operational]: As a major financial institution, Westpac is heavily reliant on its IT infrastructure. Risks related to cyber threats, data breaches, and system failures are inherent and require robust security measures.
  • Interest Rate Sensitivity [medium — market]: Fluctuations in interest rates directly impact net interest income. The bank's net interest income of $19,380 million is sensitive to changes in market interest rates, as discussed in Note 3.

Industry Context

Westpac operates in the highly competitive Australian banking sector, alongside other major players like Commonwealth Bank, NAB, and ANZ. The industry is characterized by a strong regulatory environment, increasing digital competition, and evolving customer expectations for seamless banking experiences. Trends include a focus on digital transformation, sustainable finance, and adapting to macroeconomic shifts such as interest rate changes and inflation.

Regulatory Implications

As a systemically important financial institution, Westpac is subject to stringent oversight by regulators like APRA and the RBA. Compliance with capital adequacy requirements (e.g., Basel III/IV), anti-money laundering (AML) regulations, and consumer protection laws is paramount. Recent regulatory focus on conduct, culture, and operational resilience continues to shape the bank's strategic priorities and risk management frameworks.

What Investors Should Do

  1. Monitor operating expense growth: The 8.88% increase in operating expenses to $11,916M warrants close attention to ensure cost management aligns with revenue generation and profitability targets.
  2. Analyze net interest margin trends: While net interest income increased, closely watch the net interest margin given rising interest expenses and potential competitive pressures on lending rates.
  3. Assess loan portfolio quality: Track impairment charges ($424M) and the growth in the loan book ($851,853M) to gauge the health of the bank's core lending business.
  4. Evaluate non-interest income diversification: Observe the performance of segments like net fees ($1,732M) and wealth management ($476M) as indicators of diversified revenue streams.
  5. Review capital adequacy ratios: While not provided in detail, investors should look for disclosures on capital adequacy (e.g., CET1 ratio) to ensure regulatory compliance and financial strength.

Glossary

Net interest income
The difference between the interest income generated by a bank and the interest paid out to its lenders and depositors. (A core measure of profitability for banks, directly impacted by lending and borrowing activities.)
Non-interest income
Revenue generated from sources other than traditional interest-bearing activities, such as fees, commissions, and trading gains. (Diversifies revenue streams and can indicate the breadth of services offered by the bank.)
Operating expenses
Costs incurred in the normal course of running a business, excluding interest expenses and taxes. For banks, this includes salaries, rent, technology, and marketing. (A key indicator of operational efficiency; a significant increase can impact profitability.)
Impairment charges
Charges recognized when the carrying amount of an asset is deemed unrecoverable, often due to credit losses on loans. (Reflects the quality of the loan portfolio and potential losses due to economic downturns or borrower defaults.)
Effective interest method
A method of amortizing or accreting the premium or discount on a financial instrument over its life, recognizing interest income or expense based on the instrument's carrying amount. (Ensures that interest income/expense reflects the effective yield on financial assets and liabilities.)
Net fees
Fees earned from services provided by the bank, such as account maintenance fees, loan origination fees, and transaction fees, net of any related expenses. (Represents a significant component of non-interest income, reflecting customer activity and service charges.)
Net wealth management income
Income generated from providing wealth management services, including investment advice, asset management, and financial planning, net of related costs. (Indicates the bank's performance in the growing wealth management sector.)
Provision for expected credit losses
An accounting estimate of potential future credit losses on loans and other financial assets, based on historical data, current conditions, and forward-looking information. (Crucial for assessing the bank's risk exposure and the adequacy of its loan loss reserves.)

Year-Over-Year Comparison

Westpac Banking Corporation reported a slight decrease in net profit attributable to owners, down 1.06% to $6,916 million in 2025. While total interest income saw a modest increase to $55,042 million, driving net interest income up to $19,380 million, this was overshadowed by a significant 8.88% rise in operating expenses to $11,916 million. Total assets grew to $1.125 trillion, supported by an increase in loans, while impairment charges decreased to $424 million, indicating some improvement in credit quality compared to the prior year.

Filing Stats: 4,479 words · 18 min read · ~15 pages · Grade level 14.9 · Accepted 2025-11-04 06:56:43

Filing Documents

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS 287 Balance sheets 4 ADDITIONAL INFORMATION 289 5 Reading this report 290 Cash flow statements 7 Shareholder Information 302 Notes to the Financial Statements 8 Other Westpac Business Information 321 Statutory Statements 128 Glossary of Abbreviations and Defined Terms 324 EXHIBITS INDEX 136 STRATEGIC REVIEW 144 Strategic review 144 Corporate governance 188 Directors' report 208 Remuneration Report 222

Risk factors

Risk factors 254 Information on Westpac 268 In this Annual Report a reference to Westpac', Group', Westpac Group', we', us' and our' is to Westpac Banking Corporation ABN 33 007 457 141 and its subsidiaries unless it clearly means just Westpac Banking Corporation. For certain information about the basis of preparing the financial information in this Annual Report see Reading this report in Section 3. In addition, this Annual Report contains statements that constitute forward-looking statements' within the meaning of Section 21E of the US Securities Exchange Act of 1934. For an explanation of forward-looking statements and the risks, uncertainties and assumptions to which they are subject, see Reading this report in Section 3. Please consider those important disclaimers when reading the forward-looking statements in this Annual Report. References to the 2025 Risk Factors are to the Risk factors section in this 2025 Annual Report on Form 20-F. Information contained in or accessible through the websites mentioned in this Annual Report does not form part of this report unless we specifically state that it is incorporated by reference and forms part of this report. All references in this report to websites are inactive textual references and are for information only. ii WESTPAC GROUP 2025 ANNUAL REPORT FORM 20-F CROSS-REFERENCE INDEX 20-F item number and description Page Part I Item 1. Identity of directors, senior management and advisers Not applicable Item 2. Offer statistics and expected timetable Not applicable Item 3. Key information Capitalisation and indebtedness Not applicable Reasons for the offer and use of proceeds Not applicable

Risk factors

Risk factors 254-267 Item 4. Information on Westpac History and development of Westpac 144-148 Business overview 144-148 Organisational structure 107-108 Property, plants and equipment 321 Item 4A. Unresolved staff comments Not applicable Item 5. Operating and financial review and prospects Operating results 274-286 Liquidity and capital resources 102-105 Research and development, patents and licences, etc. Not applicable Trend information 274-286 Critical accounting estimates 24, 33, 83, 96 Item 6. Directors, senior management and employees Directors and senior management 208-215, 218-219 Compensation 111-115, 222-252 Board practices 188-207 Employees 276 Share ownership 121, 218-219, 302 Item 7. Major shareholders and related party transactions Major shareholders 302-307 Related party transactions 120-121 Interests of experts and counsel Not applicable iii FORM 20-F CROSS-REFERENCE INDEX 20-F item number and description Page Item 8. Financial information Consolidated statements and other financial information 1-135 Significant changes 268-269 Item 9. The offer and listing Offer and listing details Not applicable Plan of distribution Not applicable Markets Not applicable Selling shareholders Not applicable

Dilution

Dilution Not applicable Expenses of the issue Not applicable Item 10. Additional information Share capital Not applicable Memorandum and articles of association 316-318 Material contracts 321 Exchange controls 312-313 Taxation 313-315 Dividends and paying agents Not applicable Not applicable Documents on display 318 Subsidiary information Not applicable Item 11.

Quantitative and qualitative disclosures about market risk

Quantitative and qualitative disclosures about market risk 81-82 Item 12.

Description of securities other than equity securities

Description of securities other than equity securities Debt securities Not applicable Warrants and rights Not applicable Other securities Not applicable American depositary shares Not applicable Part II Item 13. Defaults, dividend arrearages and delinquencies Not applicable Item 14. Material modifications to the rights of security holders and use of proceeds Not applicable iv WESTPAC GROUP 2025 ANNUAL REPORT FORM 20-F CROSS-REFERENCE INDEX 20-F item number and description Page Item 15.

Controls and procedures

Controls and procedures 129, 323 Item 16A. Audit committee financial expert 198 Item 16B. Code of ethics 201-203 Item 16C. Principal accountant fees and services, PCAOB ID: 1020 ; Auditor Remuneration 119, 205-207 Item 16D. Exemptions from the Listing Standards for audit committees Not applicable Item 16E. Purchases of equity securities by Westpac and affiliated purchasers Not applicable Item 16F. Changes in Westpac's certifying accountant Not applicable Item 16G. Corporate governance 188 Item 16H. Mine safety disclosure Not applicable Item 16I. Disclosure regarding foreign jurisdictions that prevent inspections Not applicable Item 16J. Insider trading policies Not applicable Item 16K. Cybersecurity 272 Part III Items 17. & 18.

Financial statements

Financial statements 1-135 Item 19. Exhibits 136 Consolidated income statements for the years ended 30 September 2025, 2024 and 2023 2 Consolidated balance sheets as at 30 September 2025 and 2024 4 Consolidated statements of comprehensive income for the years ended 30 September 2025, 2024 and 2023 3 Consolidated statements of cash flows for the years ended 30 September 2025, 2024 and 2023 7 Notes to the financial statements 8-124 Management's report on the internal control over financial reporting 129 Report of independent registered public accounting firm 130-133

: Distribution of assets, liabilities and stockholders' equity; interest rates and interest differential

Item 1402: Distribution of assets, liabilities and stockholders' equity; interest rates and interest differential Average balance sheets 17-18 Analysis of net interest earnings 16, 274-275, 284 Interest rate and interest differential analysis 16-20, 274-275, 284 v FORM 20-F CROSS-REFERENCE INDEX 20-F item number and description Page

: Investments in debt securities t II Investment portfolio

Item 1403: Investments in debt securities t II Investment portfolio Weighted average yield of debt securities 63 Calculation of weighted average yield; tax-exempt obligations 63

: Loan Portfolio

Item 1404: Loan Portfolio Maturity and interest rate profile of loan portfolio 32

: Allowances for Credit Losses

Item 1405: Allowances for Credit Losses Credit ratios and material changes 33-43 Allocation of the allowance for credit losses 33-43

: Deposits

Item 1406: Deposits Deposits by category 52-53 Uninsured deposits 52-53 Time deposits 52-53 vi WESTPAC GROUP 2025 ANNUAL REPORT This page has been intentionally left blank. FINANCIAL REPORT EXHIBITS INDEX STRATEGIC REVIEW PERFORMANCE REVIEW EXHIBIT 15.4 ADDITIONAL INFORMATION 1 FINANCIAL REPORT Income statements INTANGIBLE ASSETS, PROVISIONS, COMMITMENTS AND CONTINGENCIES Balance sheets Note 24. Intangible assets Cash flow statements Note 25. Provisions, contingent liabilities, contingent assets and credit commitments NOTES TO THE FINANCIAL STATEMENTS CAPITAL AND DIVIDENDS Note 1.

Financial statements preparation

Financial statements preparation Note 26. Shareholders' equity Note 27. Capital adequacy FINANCIAL PERFORMANCE Note 28. Dividends Note 2. Segment reporting Note 3. Net interest income and average balance sheet and interest rates GROUP STRUCTURE Note 4. Non-interest income Note 29. Investments in subsidiaries and associates Note 5. Operating expenses Note 30. Structured entities Note 6. Impairment charges Note 7. Income tax OTHER Note 8. Earnings per share Note 31. Share-based payments Note 32. Superannuation commitments FINANCIAL ASSETS AND FINANCIAL LIABILITIES Note 33. Auditor's remuneration Note 34. Related party disclosures Lending and credit risk Note 35. Notes to the cash flow statements Note 9. Loans Note 36. Subsequent events Note 10. Provision for expected credit losses Note 11. Credit risk management CONSOLIDATED ENTITY DISCLOSURE STATEMENT Deposits and other funding arrangements STATUTORY STATEMENTS Note 12. Deposits and other borrowings Directors' declaration Note 13. Debt issues Management's report on internal control over financial reporting Note 14. Loan capital Report of Independent Registered Public Accounting Firm Note 15. Securitisation, covered bonds and other transferred assets Limitation on Independent Registered Public Accounting Firm's Liability Report of Predecessor Independent Registered Public Accounting Firm Other financial instrument disclosures Note 16. Trading securities and financial assets measured at fair value through income statement (FVIS) Note 17. Investment securities Note 18. Other financial assets Note 19. Other financial liabilities Note 20. Derivative financial instruments Note 21. Risk management, funding and liquidity risk and market risk Note 22. Fair values of financial assets and financial liabilities Note 23. Offsetting financial assets and financial liabilitie

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