Westpac shares on watch amid $6.99b profit and new buyback

Has the big four bank delivered the goods for investors this year? Let's find out.

| More on:
A man in a suit smiles at the yellow piggy bank he holds in his hand.

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

Westpac Banking Corp (ASX: WBC) shares will be on watch on Monday morning.

That's because the banking giant has just released its full year results.

Westpac shares on watch after results release

Here's a quick summary of its financial performance and key metrics:

  • Net interest income increased 3% to $18.9 billion
  • Net interest margin (NIM), excluding notable items, decreased 1 basis point to 1.95%
  • Non-interest income decreased 15% to $2.84 billion
  • Operating expenses increase 7% to $10.94 billion
  • Net profit down 3% to $6.99 billion
  • Fully franked final dividend of 76 cents per share
  • $1 billion share buyback

What happened during FY 2024?

Westpac had a solid year given the heightened competition in the mortgage market, delivering a net profit of $6.99 billion. This represents a modest 3% decline on the prior corresponding period and is a touch short of what Goldman Sachs was forecasting for the bank.

The main drag on its performance was the Consumer segment. Its net profit decreased 17% to $2.18 billion. This was despite net loans increasing 4% and deposits growing 8%. Management advised that this reflects intense mortgage competition and a 1% increase in operating expenses. Though, it is worth noting that its financial performance recovered in the second half, with net profit up 6% on the prior corresponding period.

The Business & Wealth segment was the star of the show, recording a 13% increase in net profit to $2.36 billion. This reflects net loan growth of 7% with business lending increasing by 9% due to strong growth in its target industries of agriculture, health and professional services. Expenses rose 4% year on year.

Things were also positive across the Tasman with the New Zealand segment posting a 10% increase in net profit to NZ$1.06 billion. A 3% increase in operating income reflected growth in lending and a higher net interest margin, while a 6% increase in operating expenses was driven by increased technology costs, software amortisation and inflationary pressures.

Finally, the Institutional Bank segment recorded a 2% increase in net profit to $1.37 billion. Management advised that a 6% rise in operating income reflects higher lending and deposit revenue, while a 10% rise in operating expenses was due to higher resourcing to support growth, as well as software amortisation from technology investments.

This allowed the Westpac board to declare a fully franked final dividend of 76 cents per share. This brought total dividends for the year to $1.51 per share, which was towards the upper end of its payout range.

Including the special dividend paid with its interim dividend, Westpac rewarded shareholders with a total payout of $1.66 per share. This was well short of Goldman's estimate of $1.80 per share.

Ready for 'growth and success'

Westpac's outgoing CEO, Peter King, was pleased with his final set of results and believes the bank is well-placed for the future. He said:

Our disciplined performance in FY24 has set Westpac up for growth and success. We've significantly improved our customer service, grown in key segments and delivered another financial result built on a solid balance sheet and capital position.

King also revealed that he is going out with a bang, announcing a $1 billion on market share buyback today. This is on top of a dividend increase. He adds:

Westpac's capital position is one of the strongest I've seen, allowing us to further increase the share buyback program by $1 billion. In addition, fully franked ordinary dividends increased by 6% this year with a final dividend of 76 cents per share. Total ordinary dividends for the year were 151 cents per share, towards the upper end of our payout range.

Commenting on his exit, King concludes:

After five years as CEO I'm pleased to hand the bank over in very good shape. Westpac is a simpler, stronger bank and we are better at managing risk. […] Following a period of simplification of the bank, I know our people are excited about the next phase of growth and I thank them for their support. I'm confident Westpac is positioned well for the future as it embarks on a new era under the leadership of Anthony Miller.

Should you invest $1,000 in Westpac Banking Corporation right now?

Before you buy Westpac Banking Corporation shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Westpac Banking Corporation wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 7 February 2025

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. 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 Earnings Results

A man in shirt and tie uses his mobile phone under water.
Share Market News

2 ASX 200 shares sinking on Thursday on earnings results

Investors are bidding down these ASX 200 shares today. But why?

Read more »

Man pointing at a blue rising share price graph.
Earnings Results

2 ASX 300 shares rocketing 6% today

Investors love what these two stocks just reported.

Read more »

A man raises his reading glasses in a look of surprise.
Earnings Results

South32 share price higher on 577% profit jump

This mining giant's profits have surged during the first half.

Read more »

A couple lying down and laughing, symbolising passive income.
Earnings Results

Temple & Webster share price jumps 17% to record high on stunning half-year results

It was another impressive six months for this high flying stock.

Read more »

smiling worker stands before power generator technology
Earnings Results

Origin Energy share price charging higher on growing profits

Origin Energy shares are racing ahead of the benchmark on Thursday.

Read more »

Gold bars and Australian dollar notes.
Earnings Results

Northern Star share price lifts off on record half-year dividend

Up 39% in a year, ASX investors are bidding up Northern Star shares again on Thursday.

Read more »

A young man punches the air in delight as he reacts to great news on his mobile phone.
Earnings Results

Pro Medicus share price storms higher on record-breaking results

Investors are cheering on this tech company's latest results.

Read more »

CA woman sits on her bed wailing and crying with a wine bottle in one hand and a glass in the other.
Earnings Results

Treasury Wine share price sinks 7% on weak FY25 guidance

The Penfolds owner has released its half year results. What did it report?

Read more »