Westpac flags deepest housing downturn in nearly two decades
AUSTRALIA: Australian lender Westpac on Monday warned of a housing market downturn steeper than any seen in nearly two decades and reported a twofold jump in credit impairment charges, while full-year adjusted profit met market expectations.
Australian bank Westpac warned on Monday of an economic downturn in the housing market that is worse than any seen in nearly two decades. The lender reported a doubling of credit impairment charges and net profit excluding notable items of A$6.99 billion for the year ended September 30, meeting market expectations. Westpac projected a 10.9% decline in house prices in the year to March 2027, the sharpest drop since the 2008 housing crisis.
Credit impairment charges for the year rose 104% to A$864 million, while provisions for potential loan losses increased 4.2% to A$5.2 billion. Mortgage and investor credit demand weakened after the government ended tax concessions for property investors earlier in the year. Applications for mortgages in the fourth quarter fell 15% year-over-year.
Deposits and loans grew 6.0% and 5.0%, respectively. Westpac maintained its final dividend at 77 Australian cents per share. The bank's core net interest margin fell 5 basis points to 1.76%, and its CET1 ratio dropped 7 basis points to 12.46%. Westpac's shares rose 2.2% to A$37.61, while the broader ASX200 index declined 0.4%.
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