Nov 2 (Reuters) - 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.
Westpac reported net profit excluding notable items of A$6.99 billion ($4.91 billion) for the year ended September 30, in line with a Visible Alpha consensus estimate and marginally above the A$6.97 billion reported in 2025.
• Australia's third-largest lender
by market value forecasts a 10.9% decline in house prices in the year to March 2027, a deeper drop than in any of the four previous housing downturns since 2008
• Credit impairment charges for the year ended September 30 rose 104% to A$864 million. Total provisions for potential loan losses increased 4.2% to A$5.2 billion, reflecting "economic and geopolitical uncertainty"
• Mortgage and investor credit demand has weakened since the government scrapped tax concessions for property investors earlier in the year
• Average monthly mortgage applications in the fourth quarter dropped 15% from a year earlier
• Deposits and loans grew 6% and 5%, respectively
• Westpac kept its final dividend unchanged at 77 Australian cents per share
• The Australian bank's core net interest margin, a key measure of profitability, slid 5 basis points (bps) to 1.76%, while its CET1 ratio, a measure of spare cash, slipped 7 bps to 12.46%
• Shares of Westpac were up 2.2% at A$37.61, as of 0108 GMT, compared with a 0.4% decline in the broader ASX200 benchmark index
($1 = 1.4225 Australian dollars)
(Reporting by Sherin Sunny and Shivangi Lahiri in Bengaluru; Editing by Edmund Klamann, Deepa Babington and Sherry Jacob-Phillips)
