Westpac New Zealand’s annual profit fell 2% as operating expenses surged $128 million. 

Westpac NZ’s September-year net profit after tax, as reported in its general disclosure statement, fell $23 million, or 2%, to $1.203 billion from $1.226 billion in 2024.

The bank’s annual net interest income rose $35 million to $2.874 billion, but its non-interest income fell $11 million to $245 million. Westpac NZ booked impairment benefits of $44 million versus charges of $27 million in the September 2024 year.

Expenses jumped $128 million, or 9%, to $1.493 billion with staff costs, technology and telecoms and software amortisation all higher.

Westpac NZ says it grew home lending by 5% over the year to $71.3 billion, business lending by 2% to $34.2 billion, and deposits by 2% to $81 billion despite a drop in term deposits.

McGrath says customers are starting to rebuild both loan buffers and confidence.

“Our data shows a higher proportion of home loan customers are at least three months ahead on their home loan repayments than six months ago, following nearly three years of decline,” CEO Catherine McGrath says.

“The average customer is nearly 11 months ahead on repayments, with an average ‘buffer’ of almost $12,000. Housing arrears and the number of customers being supported by Westpac’s financial hardship team are also down on the 2024 financial year.”

“We think all this will add up to increasing consumer and business confidence and therefore higher spending to stimulate economic activity as we head into 2026,” McGrath says.

McGrath says the bank invested heavily including in improving digital services and expanding “points of presence” around NZ through community banking initiatives, this includes launching community banking vans, trialling community banker sites, and extending branch opening hours, plus introducing a range of new anti-fraud tools.

Westpac NZ reported a 15 basis points increase, year-on-year, in its net interest margin to 2.32%. The net interest margin is the difference between what the bank borrows money at through the likes of deposits and what it lends it out at.

The bank’s cost-to-income ratio fell 10 basis points to 47.62%.

Westpac NZ’s annual dividends paid on ordinary shares rose $16 million year-on-year to $673 million.

McGrath says Westpac NZ is well positioned to support customers “through what we think will be an economic upturn over the coming year.”

The bank’s provision for expected credit loss dropped $54 million year-on-year to $444 million, and its total capital increased $529 million to $11.864 billion.

Westpac NZ’s press release is here. 

See details of Australian parent Westpac Banking Corporation’s annual results via the links below.

The Westpac group presentation is here, the Westpac group announcement is here, and the Westpac group press release is here.