Westpac Banking Corp (ASX:WBC) Share Price, Dividend and 2026 Outlook After FY25 Results

Updated: 1 December 2025 (based on last ASX close on 28 November 2025)

Key points

Share price near the top of its range: Westpac’s share price last closed at A$37.59, not far below its 52‑week high of A$41.00, after a strong year of gains. ^[1]
Profits solid but not spectacular: FY25 profit came in at roughly A$7.0 billion, slightly down year‑on‑year but ahead of analyst expectations, as loan growth offset margin pressure and rising costs. ^[2]
Analysts broadly cautious: Most major broker and data aggregators now flag Westpac as “Underperform” or “Sell”, with average 12‑month price targets in the mid‑A$30s, implying limited upside – and in many cases modest downside – from current levels. ^[3]

Where the Westpac share price stands on 1 December 2025

Westpac Banking Corp (ASX:WBC) finished trading on Friday, 28 November 2025 at A$37.59. Short‑term technical services note that the stock fell around 0.8% on the day, has lost just over 3% across the last two weeks, and traded between A$36.72 and A$41.00 over the past month. ^[4]

Despite the recent soft patch, 2025 has been kind to shareholders. One analysis puts Westpac’s share price gain for calendar 2025 at around 20%, while another shows a 22.8% year‑to‑date price performance, significantly outpacing the broader market. ^[5] Over the past year, Westpac has beaten both the ASX 200 and the Australian financials sector by several percentage points. ^[6]

That rally has pushed Westpac’s market capitalisation to roughly A$130+ billion, reinforcing its position as one of the largest companies on the ASX and a cornerstone of the Australian banking sector. ^[7]

What FY25 results revealed about Westpac

Profit: solid, but not growing quickly

For the year to 30 September 2025, Westpac reported net profit after tax of about A$6.99 billion, down from A$7.11 billion a year earlier – a fall of roughly 2%, but still ahead of analyst expectations of around A$6.83 billion. ^[8]

Revenue rose roughly 3%, driven by loan growth, particularly in mortgages and agribusiness. The housing loan book grew about 5% to A$497 billion, though that still lagged the growth rates of some major rivals. ^[9]

Westpac’s net interest margin (NIM) – a key measure of lending profitability – slipped by just 1 basis point to 1.94%, reflecting intense competition in mortgages and deposit pricing but not a collapse in profitability. ^[10]

Costs: the problem child

The headline drag on earnings was operating expenses, which jumped roughly 9% to A$11.9 billion. According to independent research, about a third of that increase came from restructuring and Westpac’s large‑scale technology simplification project known as “Unite”, with the rest tied to wage growth and other investment spend. ^[11]

As a result, Westpac’s cost‑to‑income ratio is still a hefty 53%, higher than key peers and materially above the bank’s long‑term ambitions. Analysts following the name expect this to gradually improve as remediation and large tech projects roll off, but the benefits are not expected to really show up until late this decade. ^[12]

Credit quality and capital: a source of strength

On the positive side, credit quality remains robust. Reported impairment charges are still very low, with one investor pack citing impairments at only 4 basis points of average loans and provisions sitting well above base‑case expected loss models. ^[13]

Westpac’s Common Equity Tier 1 (CET1) capital ratio stood at 12.53%, comfortably above its new target of 11.25%, even after dividends and buybacks. Internal documents show A$3.1 billion of capital above the target following the FY25 final dividend, leaving room for ongoing capital management. ^[14]

As part of its ongoing simplification, Westpac also announced the sale of its A$21.4 billion RAMS mortgage portfolio to a consortium including Pepper Money, KKR and PIMCO – another step away from non‑core businesses and towards a cleaner banking franchise. ^[15]

Dividend: generous, fully franked income

For income investors, Westpac’s dividend story remains central.

Final FY25 ordinary dividend: A$0.77 per share
Total ordinary dividend for FY25: A$1.53 per share (A$0.76 interim + A$0.77 final)
Franking: 100% franked at the 30% company tax rate
Payment date for the final dividend: 19 December 2025 ^[16]

At the last close of A$37.59, that full‑year ordinary dividend equates to a cash yield of just over 4%, or roughly 5.8% on a grossed‑up basis for Australian investors who can fully utilise franking credits. (Exact yields will move with the share price.)

Management has maintained a payout ratio of around 75% of underlying profit, at the top of its 65–75% target range, supported by the strong capital position. ^[17]

Westpac is also returning capital via an on‑market share buyback, which has already retired around A$2.48 billion of shares, with the program extended out to November 2026. ^[18]

All of this leaves Westpac positioned as one of the higher‑yielding, fully franked blue‑chip dividends on the ASX – but, as we’ll see, that yield now comes with a valuation premium.

Valuation: why many analysts see limited upside

The strong share‑price run and resilient dividend have pushed Westpac into what many analysts describe as “expensive but high quality” territory.

Premium multiple vs banks globally

One widely cited valuation service notes that Westpac currently trades on a price‑to‑earnings multiple around 19–20 times, compared with about 10 times for the global banking sector and around 18 times for major Australian peers. ^[19]

In the same analysis, Westpac’s discounted cash‑flow (DCF) fair value is estimated at roughly A$32.10, and the consensus analyst price target at about A$33.70 – both below the current share price. ^[20]

Morningstar’s banking team, in a separate piece, recently raised their fair value estimate to A$30.50, but still regard Westpac as “materially overvalued” at current levels. They highlight: ^[21]

The bank’s wide economic moat and strong franchise
Expectations that the cost‑to‑income ratio will fall from 53% to 46% by 2030
A mid‑cycle return on equity (ROE) forecast of around 12%, up from below 10% currently

Even with these improvements, they see the current valuation as demanding given modest forecast growth and execution risks on the tech overhaul.

Consensus: mild downside from here

Across several data platforms, the average 12‑month price target for Westpac sits in the mid‑A$30s:

One consensus set from 13 analysts shows an average target around A$33.9, with a high of A$40 and a low of A$30.5. The average implies roughly 10% downside from A$37.59. ^[22]
Another service that tracks 9 recent broker targets puts the average at A$34.65, with a range of A$31.13 to A$40.17, signalling around 8% downside from current levels. ^[23]

Several brokers have explicitly turned cautious:

Morgan Stanley cut its Westpac target to A$31.60 in September, implying more than 15% downside at the time and arguing that current multiples reflect excessive optimism about earnings and cost execution. ^[24]
A report on latest UBS forecasts cited a target of about A$36, again below the current price. ^[25]

Ratings language varies by firm, but aggregated services now characterise the mean analyst recommendation as “Underperform” or “Sell”, with zero “Buy” ratings in at least one widely used dataset (0 Buy, 5 Hold, 8 Sell). ^[26]

Interestingly, one retail‑focused valuation from Rask Media suggests a dividend‑based “fair value” near the current price – their snapshot compares expected dividend value to a Westpac share price around A$37.41 – implying that for yield‑hunters, the stock might be roughly fairly priced even if growth investors balk. ^[27]

Strategic themes and the 2026 outlook

Tech and simplification: cost pain now, potential gain later

Westpac is halfway through a multi‑year effort to simplify its technology stack and business model:

Large non‑core businesses have been sold or exited, including the RAMS mortgage platform and insurance operations. ^[28]
The Unite project aims to collapse legacy banking systems into more modern platforms so any customer can be serviced from any branch and core products can be delivered more efficiently. ^[29]
A Business & Wealth update in September highlighted that around 76% of simple business deals are now auto‑decisioned, reflecting a heavy use of analytics and automation in credit assessment. ^[30]

External analysis of Westpac’s AI strategy suggests the bank is investing aggressively in machine‑learning tools across risk modelling, customer personalisation, and process automation. The thesis is that gaining an edge in data and AI should both raise customer satisfaction and lower the cost base over time. ^[31]

The flip side is execution risk: if cost savings arrive more slowly than planned, or tech projects overrun, operating expenses could remain elevated longer than the market expects.

Macro and credit cycle: slower growth before stabilisation

Multiple updates point to a challenging macro backdrop:

Westpac flagged that credit growth is likely to slow in 2025 thanks to high interest rates and softer household consumption, with a potential stabilisation pencilled in for 2026. ^[32]
Earlier this year, the bank warned that global trade tensions and margin pressure were weighing on results, and first‑quarter updates showed margin contraction, which led to sharp share‑price reactions. ^[33]

So far, actual credit losses remain low, and arrears have been trending down – but most research assumes impairments will normalise upwards from here as higher interest costs continue to bite households and small businesses over the next few years. ^[34]

Regulation and reputational risks

Late November coverage noted that Westpac’s New Zealand arm was fined by local regulators, contributing to its underperformance versus the broader ASX 200 in that week. ^[35] The fine itself is modest compared with Westpac’s capital base, but it’s a reminder that regulatory and compliance risk remains a permanent feature for the big banks.

Short‑term sentiment and technical signals

Short‑term trading models show a more nuanced picture than the impressive 2025 rally might suggest.

Technical analysis from one popular platform notes that:

Westpac closed at A$37.59 on 28 November 2025
The stock has fallen about 3.1% over the last two weeks
Volume rose on the last down‑day, which the service flags as a potential early warning of increased risk
Their short‑term outlook leans towards elevated volatility and a modest negative bias in the near term ^[36]

Another technical site’s “fair opening price” model projects an opening near A$37.70 for 1 December 2025 – essentially flat relative to the last close, underlining the market’s current indecision. ^[37]

On the fundamental side, some specialist equity research framed the recent results as good but already priced in, with one report asking whether the rally is “over at A$38–39” and citing a consensus price target around A$33. ^[38]

As always, short‑term models are highly uncertain. They do, however, fit the broader narrative: Westpac is no longer obviously cheap, and short‑term upside is likely to depend on either better‑than‑expected cost control or a more favourable macro surprise.

What this setup means for different types of investors

This article is general information only, not personal advice. But the current setup around Westpac does have different implications depending on an investor’s style.

For dividend‑focused investors

A fully franked yield around 4% in cash, closer to 6% grossed‑up, remains attractive relative to term deposits and many other blue‑chips. ^[39]
The payout ratio is at the top of management’s target range, but capital buffers and a CET1 ratio above the new target suggest the dividend is well covered for now, assuming the credit cycle remains benign. ^[40]

The trade‑off is that high yield now comes packaged with a relatively rich valuation. Future returns will depend not just on dividends, but on whether the market continues to pay a premium multiple for Westpac’s income stream.

For value‑oriented investors

Independent research houses with a value lens mostly see limited margin of safety at present prices:

Fair value estimates in the A$30–32 range
Consensus targets clustered around A$34–35
A general view that earnings and revenue growth will trail the broader Australian market over the medium term ^[41]

From that vantage point, a pullback – whether driven by macro worries, regulatory news, or a temporary earnings miss – might be needed before traditional value metrics flash green again.

For growth‑oriented investors

Westpac is unlikely to be a pure growth story:

Earnings growth is expected to be modest, heavily dependent on cost‑out and digital efficiencies rather than rapid loan expansion. ^[42]
Forecasts generally show Westpac’s earnings growth below the Australian market average, even if ROE trends higher as projects complete. ^[43]

That doesn’t make the stock unattractive, but it does suggest its primary role in a portfolio is defensive income and exposure to the Australian banking system, rather than high‑growth compounding.

Bottom line: a quality franchise at a full price

As at 1 December 2025, Westpac Banking Corp sits in an interesting spot:

Balance sheet and credit quality are strong
Dividends and capital returns are generous and well supported
Technology and simplification programs promise structurally better efficiency over the next five years

Yet after a powerful share‑price run and a re‑rating in 2024–25, much of that story appears to be already reflected in the price. The average broker now expects flat to slightly negative total returns over the next year from today’s starting point, even allowing for dividends. ^[44]

For investors, the key questions into 2026 are likely to be:

Does Westpac deliver cost savings faster than currently expected?
Do credit losses stay benign as high interest rates work through the economy?
And does the market remain willing to pay a premium multiple for a slow‑growing but very profitable and highly capitalised bank?

References

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