The Westpac Banking Corp (ASX: WBC) dividend has just been declared and the bank's FY23 half-year result announced.
The ASX bank share had a pleasing six months to 31 March 2023, with the bank benefiting from slightly lower operating costs and stronger lending profitability. Net profit after tax (NPAT) jumped by 22% to $4 billion.
Westpac's stronger profit allowed the bank to pay a larger dividend to shareholders.
Image source: Getty Images
Westpac dividend
The ASX bank share's board decided to declare a fully franked dividend per share of 70 cents. This represents an increase of 15% year over year. It also represents an increase of 9.4% compared to the final dividend of FY22.
Westpac's dividend has an ex-dividend date of 11 May 2023. This means if investors want to receive the dividend, they need to own the shares before this date. With that cut-off only a few days away, interested investors need to be quick and grab shares before the end of trading on Wednesday, 10 May 2023.
The payment date for the 70 cents per share Westpac dividend is 27 June 2023, so shareholders will only need to wait for about six weeks to get their payout.
If shareholders want to use the dividend reinvestment plan (DRP), the election cut-off date is Monday, 15 May 2023 at 5pm (Sydney time).
Can the payment to shareholders keep growing?
There are a couple of positive signs to forecast the Westpac FY23 final dividend could be bigger than the FY22 final dividend.
The bank's balance sheet is strongly positioned. Its common equity tier 1 (CET1) capital ratio was 12.3%, which was above its target range of 11% to 11.5%. In dollar terms, it has $3.6 billion of capital above the top end of its target range.
This is what the bank said regarding its outlook:
It's been one year since the RBA announced the first rate rise of the current tightening cycle. This has been difficult for many customers and more are calling us to discuss their situation. The bank is in a good position to help.
At a macro level, our loan portfolios remain healthy. Most mortgage customers are ahead on repayments. Offset balances were little changed and mortgage delinquency levels are low.
Interest rates are now closer to their forecast peak, but we are focused on how long they stay high and what this means for household budgets and discretionary spending. We expect to see more stress in the period ahead, particularly in small business.
While the Australian economy remains resilient with low unemployment and high population growth, it is expected to slow over the remainder of 2023. Credit growth – both housing and business – will ease. Intense mortgage competition is expected to negatively impact industry and Westpac's margins in the next half.
Westpac enters this environment from a position of strength. We've set the balance sheet for the tougher outlook. We continue to run the bank conservatively, with the flexibility to support growth and handle the more challenging conditions.
So, while the competitive pressures may be a headwind, Westpac's business continues to be strong, which could be good news for the next Westpac dividend.
