Westpac’s half-year profit rises 10% to $525 million

Monday, 5 May 2025

Westpac’s half-year profit is up, but was lower than it was in 2022.

Westpac’s half-year net profit after tax has jumped 10%.

It rose to $525 million in the six-month period to the end of March, from $477m in the same period last year.

The news comes just days after the bank announced it would pay a penalty of $3.25m for misleading customers entitled to advertised discounts as well as overcharging some of its business customers.

In total 24,621 customers were impacted by the errors between 2012 and 2021.

During the six-month period under review today, Westpac grew its loan book by $1 billion.

Chief executive Catherine McGrath said growth came in a highly competitive environment, and amid falling interest rates.

McGrath touched many of the talking points that have come out of Parliament’s banking inquiry, where bank profitability, their treatment of farmers, and their speed of passing on cuts to the official cash rate (OCR) to mortgage borrowers came under the spotlight.

“We’ve cut some variable business lending rates by 2.10% since last July – more than the 2.00% the OCR has fallen in that time – to encourage them to invest and grow,” McGrath said.

“We estimate farmers and growers are saving an average of around $46,500 a year each in interest costs due to interest rate falls since last July. Our Agri bankers increased their proactive calls and outreach by 12% on the previous year, to help them manage issues like on-farm inflation and plan for the future,” she said.

McGrath said uncertainty in the economy and living costs remained elevated.

The bank’s disclosure statement showed households and businesses paid Westpac just short of $3.6b in interest on their loans, marginally down on the same six-month period last year.

Bank branch numbers continue to fall, which has also led to criticism that it is putting up a barrier to some rural, vulnerable, and less digitally enabled portions of the population.

McGrath sought to portray Westpac as having strategies to reduce the impact of reduced access to branches.

“As branch usage declines, we’re exploring other ways to meet community needs,” McGrath said.

“This month we’re launching our first mobile community banker service – a van that will travel between Invercargill, Te Anau and Winton to help Southlanders do their banking. We’re also continuing our community banker model in Wairoa following a successful trial there.”

Last month, Westpac started piloting a new “basic” bank account, something politicians and financial regulators hope will reduce the number of people who are “unbanked”, especially ex-prisoners and young people.

Westpac chief executive Catherine McGrath and chair Pip Greenwood at a banking inquiry hearing in Parliament.

Banks have also come under fire for having been slow to develop anti-fraud and scam systems, but McGrath sought to highlight the bank’s efforts to keep customers safe.

She said new technology such as biometric software had led to an 11% increase in fraud prevention compared with the same time last year, helping reduce customer losses to fraud and scams by 14%.

“For every $10 of known fraud and scams that touched Westpac’s systems in the last six months, the bank prevented, recovered or reimbursed $9,” she said.

In March Westpac rolled out digital credit and debit cards for customers with dynamic security codes - which have been available to Westpac customers in Australia since 2022 - reducing the chance of fraudulent activity on their card if their details were stolen.

“We’re the first New Zealand bank to offer a dynamic security code feature alongside instant issuance for debit cards,” McGrath said.

Westpac expects New Zealand’s economy to grow 2.6% this year and 3% in 2026, but there are risks it could grow more slowly.

“Although the geopolitical outlook and global trade environment continues to change week to week, our economists currently think the impact of tariffs to New Zealand’s economy will be manageable,” McGrath said.

“Domestically, the picture is mixed. GDP growth in the December 2024 quarter was stronger than expected and many higher-frequency indicators have shown improvement, such as business confidence and housing market and manufacturing activity.

“But consumer spending has faltered recently. Economic growth is not yet broad-based, with urban areas lagging rural areas that have benefited from improving tourism and strong commodity prices, particularly in the dairy and meat sectors,” she said.