Westpac Posts $6.8 Billion Profit as Australian Banks Cut Growth Forecasts
Written by AI from abc.net.au's report. Not checked by a person.
Westpac reported a full-year profit of $6.8 billion, with its shares rising 1.0%, even as rival banks downgraded their economic outlooks and the ASX fell ahead of an expected Reserve Bank rate hike.
Westpac reported a full-year profit of $6.8 billion, with its share price gaining 1.0% on the day despite broader market weakness. UBS analyst John Storey noted that weaker-than-expected revenue in the second half of 2026 was cushioned by cost discipline and lower credit impairment charges, while competition was having a "material" impact on margins — shaving 5 basis points off core net interest margins — a pressure he expected to carry into 2027.
The results landed on a difficult day for the wider economy. Commonwealth Bank slashed its mid-2027 GDP growth forecast to 1.0% from a previous estimate of 1.8%, and now expects the unemployment rate to reach 5.1%, up from its earlier forecast of 4.8%. CBA's head of Australian economics, Belinda Allen, said households would bear the brunt of the slowdown. NAB also released an interim update to its own economic forecasts, though details were not fully available.
The ASX 200 closed 0.6% lower at 8,857 points, with miners and banks both selling off, as investors braced for a widely expected 25-basis-point rate rise from the Reserve Bank of Australia the following day. Home values fell for a seventh consecutive month, with capital city prices declining at the fastest pace in four decades. Meanwhile, China's factory PMI edged down slightly to 52.0 in October from 52.1 in September but remained above the 50-point threshold that separates expansion from contraction.
