Everything you need to know about the Westpac dividend

Owners of Westpac Banking Corp (ASX: WBC) shares will soon be getting their FY23 final dividend payment after the bank released its FY23 report.

It was a successful period for the ASX bank share – the business reported a 26% increase in net profit after tax (NPAT) to $7.2 billion. Its net interest margin (NIM) improved 2 basis points (0.02%) to 1.95% amid the higher interest rate environment and its loans increased by 5% to $773 billion.

Westpac dividend grows again

The Westpac board decided to declare a final dividend of 72 cents per share, which represented an increase of 12.5% compared to the FY22 final dividend.

This brought the full-year dividend to $1.42 per share, which represented an increase of 14% on the prior corresponding period.

Westpac reported that its earnings per share (EPS) went up by 28% to $2.05. Using that metric, the bank has decided on a dividend payout ratio of approximately 69%.

However, it's also launching a $1.5 billion share buyback, so shareholders are getting an even greater return, though that's coming from the excess capital it's holding on the balance sheet.

How big is the dividend yield?

A dividend yield is decided by the size of the dividend and the share price.

At the current Westpac share price of just over $22, the annual $1.42 dividend per share payout represents a cash dividend yield of 6.4% and a grossed-up dividend yield of 9.1%.

Despite the much higher interest rate environment, Westpac shares still offer a much better yield compared to the term deposits on offer.

When will this be paid?

Westpac shares will go ex-dividend on 9 November 2023, which means that investors only have until the end of trading on 8 November 2023 – this Wednesday – to invest in the ASX bank share to gain entitlement to the upcoming dividend.

The payment date is a bit further away, it's on 19 December 2023. So, in less than a month and a half owners of Westpac shares will get their dividend.

If investors want to take part in the dividend reinvestment plan (DRP), where they get new shares rather than a cash payment, the DRP election date cut-off is 13 November 2023 at 5pm.

Westpac share price snapshot

Since the start of 2023, the Westpac share price has fallen over 2%, while the S&P/ASX 200 Index (ASX: XJO) has risen by 0.8%.