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Westpac home loan activity and profit trends

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2026-08-10 03:51 UTC → 2026-08-10 22:55 UTC · added ~~removed~~

Westpac has reported a 20% decrease in average monthly home loan applications between the May budget and the end of July. This decline follows government decisions to tighten tax concessions for property investors and the impact of higher interest rates. CFO Nathan Goonan suggested that the impact of interest rate hikes from the Reserve Bank of Australia may be equal to or greater than the impact of the budget changes. Despite the slowdown in new lending, the bank reported an unaudited net profit of $1.8 billion for the June quarter, a slight increase over the average quarterly performance of the first half of 2026. The bank's net interest margin remained stable at 1.89%, and its common equity tier 1 capital ratio stands at 12.1%. Westpac projects a moderation in housing credit growth. While the bank previously forecasted expansions of 4.7% in the current financial year and 5.2% in the following year, updated projections suggest total housing credit growth will moderate to 4.7% in 2027, down from 6.8% in 2026. Additionally, investor housing credit growth is expected to drop significantly from 9.1% this fiscal year to approximately 4.5% in 2027. The bank's reported quarterly cash earnings of A$1.8 billion for the period ending June 30 represent a decrease from the A$1.9 billion recorded in the previous year. This downward trend contributed to a decline in Westpac's shares, weighing on the financials sub-index and causing losses for other major lenders, including Commonwealth Bank of Australia, ANZ, and National Australia Bank. While gains in mining stocks such as BHP Group and Rio Tinto provided some support to the S&P/ASX 200, investor focus has shifted toward upcoming Reserve Bank of Australia policy decisions.

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