Everything you need to know about the supersized Westpac dividend

Westpac reported its half year results this morning and announced a big dividend boost.

| More on:
A person is weighed down by a huge stack of coins, they have received a big dividend payout.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The interim Westpac Banking Corp (ASX: WBC) dividend was just announced.

The S&P/ASX 200 Index (ASX: XJO) bank stock reported its half-year results for the six months ending 31 March this morning.

And despite slumping profits, management pleased passive income investors with a sizeable increase in the interim Westpac dividend payout.

This sees the Westpac share price up 2.4% at the time of writing on Monday, with shares trading for $27.05 apiece.

Created with Highcharts 11.4.3Westpac Banking Corporation PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

Here's what you need to know.

The supersized Westpac dividend

Amid stiff competition in the banking sector, Westpac reported a 4% year on year decline in net operating income to $10.59 billion.

The ASX 200 bank's net profit declined 16% to $3.34 billion.

But that didn't stop management from declaring a fully franked interim dividend of 75 cents per share as well as a 15 cents per share special dividend, also fully franked.

This brings the interim Westpac dividend to 90 cents per share.

That's up a whopping 28.6% from the 70 cents per share paid out a year ago.

The payout ratio works out to 74%, which is at the upper end of the bank's sustainable payout ratio range of 65% to 75%.

And at the current Westpac share price, it equates to an instant yield of 3.3% from the interim dividend alone.

If you'd like to grab this passive income payout, you'll need to own shares by market close this Wednesday, 8 May. Westpac shares trade ex-dividend on Thursday.

Eligible investors can then expect to see that income hit their bank accounts on 25 June.

Unless, of course, you prefer to reinvest those dividends and put them to work via the magic of compounding.

In that case, Westpac's Dividend Reinvestment Plan (DRP) applies. Management expects to purchase shares on market to satisfy the DRP.

Adding in the 72 cents per share final dividend the bank paid out on 19 December, the big four bank trades on a fully franked yield (partly trailing, partly pending) of 6.0%.

What did management say?

Commenting on the boosted Westpac dividend, CEO Peter King said:

Westpac's balance sheet is in good shape and with the momentum in our business, supports a special dividend of 15 cents per share fully franked and an increase in the buyback program of $1 billion to $2.5 billion.

The interim dividend is 75 cents per share fully franked, up 5 cents per share or 7% on the 2023 interim dividend. Overall, I'm positive about the outlook and confident we will continue to deliver for customers.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the 'five best ASX stocks' for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Dividend Investing

Middle age caucasian man smiling confident drinking coffee at home.
Dividend Investing

Buy BHP, Telstra, and this ASX dividend share

Brokers are tipping these shares as buys for income investors. But why?

Read more »

The letters ETF sit in orange on top of a chart with a magnifying glass held over the top of it
Dividend Investing

Boosting passive income: With a 7.6% yield, is the YMAX ETF a good option?

Is this ETF's yield too good to be true?

Read more »

A man in a business shirt and tie takes a wide leap over a large steel trap with jagged teeth.
Bank Shares

5.75% yield: Are ANZ shares a dividend trap?

ANZ's dividend currently beats out its own term deposits.

Read more »

Man holding out Australian dollar notes, symbolising dividends.
Dividend Investing

Here are 3 buy-rated ASX dividend stocks to beat falling interest rates

Brokers are recommending these stocks to clients.

Read more »

Senior man wearing glasses and a leather jacket works on his laptop in a cafe.
Dividend Investing

Overinvested in BHP shares? Here are two alternative ASX dividend stocks

There are other businesses worth owning for passive income.

Read more »

Happy young couple saving money in piggy bank.
Dividend Investing

3 strong ASX dividend shares to buy instead of CBA

Analysts think these are better options than Australia's largest bank.

Read more »

Male hands holding Australian dollar banknotes, symbolising dividends.
Dividend Investing

Why I'd buy ASX dividend shares now before it's too late

This could be the right time to look at ASX dividend stocks.

Read more »

Three happy office workers cheer as they read about good financial news on a laptop.
Dividend Investing

Beat low interest rates with these ASX dividend shares

As expected, on Tuesday the Reserve Bank of Australia elected to cut the cash rate once again. And with interest…

Read more »