Westpac reports A$3.4 billion half-year profit amid margin pressure and NZX trading halts

Westpac Banking Corporation has announced its interim financial results for the half-year ending March 31, 2026, revealing a statutory net profit of A$3.4 billion. The result represents a 3% increase compared to the prior corresponding period, though it reflects a 5% decline from the previous half-year ending September 26, 2025. The announcement, made on May 5, 2026, was accompanied by news of trading halts on the NZX and a softening of the bank's share price on the ASX.

The bank's net profit excluding notable items stood at A$3.5 billion, a 1% increase year-on-year but a 1% decline from the prior half. These figures arrived broadly in line with market expectations, supported by robust growth in lending and deposits. However, the results were tempered by a contraction in the net interest margin (NIM), which serves as a key measure of bank profitability. The NIM decreased by 3 basis points to 1.89%, down from 1.92% a year earlier.

Lending Growth and Market Performance

Despite the margin pressure, Westpac Banking Corporation recorded total lending and deposit growth of 7% year-on-year. The Australian mortgage portfolio, excluding RAMS, grew at 1.2 times system, while business lending saw a significant increase of 16%. This growth occurred during a period where the bank also provided updates on its UNITE programme on March 26, 2026, and addressed the impacts of the Middle East conflict and the sale of the RAMS mortgage portfolio on April 14, 2026.

On the ASX, Westpac shares experienced broad softness following the results announcement on May 5, 2026. The stock initially dipped by up to 2.2%, contributing to a 1.0% decline in the S&P/ASX 200 Financials Index, which includes peers such as National Australia Bank and ANZ Group Holdings. Market analysts noted that while the lending volumes were strong, the compression in margins and an increase in credit impairment charges weighed on investor sentiment.

The credit impairment charge for the half-year was A$443 million, a notable increase from the A$250 million charge reported a year ago. This rise reflects the evolving economic landscape and the bank's cautious approach to risk management in the current environment.

Westpac New Zealand Performance

Westpac New Zealand Limited reported a half-year profit of $545 million for the period ending March 31, 2026. This figure represents a 4% increase compared to the same period last year, but a 19% fall compared to the previous six months. The New Zealand division also faced margin challenges, with its net-interest margin sitting at 2.29%, a decline of 0.10% from the last six months.

On the morning of May 5, 2026, trading halts were placed on several Westpac-related securities on the NZX at pre-market open. These included Westpac Banking Corporation equity securities and specific Westpac New Zealand Limited notes, namely WNZ1T2, WNZ2T2, and WNZHA. NZ RegCo oversaw the process, and trading for Westpac Banking Corporation equity shares resumed at 09:43 NZST later that morning.