Westpac Q3 2026 slides: steady profit growth as margin pressure looms

Westpac Banking Corporation (ASX:WBC) disclosed its Q3 fiscal 2026 financial results on August 9, 2026, indicating steady operations despite increasing competitive pressures in Australia's banking industry. The bank reported a net profit of $1.8 billion, excluding notable items, up 2% from the first-half average. However, management highlighted intensifying competition in mortgages and deposits as a significant challenge for upcoming quarters.

The stock experienced a 1.56% drop to $37.93 following the update, as investors expressed caution over the margin outlook, even though the underlying performance remained solid. The bank's core net interest margin increased slightly to 1.89%, and average interest-earning assets reached $1,056 billion. Mortgage application volumes declined by 11% to an average of 26,000 per month, signaling potential headwinds for mortgage growth.

Consumer spending exhibited marginally slower growth, with discretionary spending down to 5.9% from 6.4% and non-discretionary spending (excluding fuel) at 5.5% from 7.1%. Fuel spending turned negative at -0.3%, contrasting with 13.6% growth in previous periods. Despite the challenges, Westpac's economics team projects housing credit growth of 6.8% for fiscal 2026, slowing to 4.7% in fiscal 2027 before recovering to 5.2% in fiscal 2028.