Westpac “in very good shape” as Peter King delivers final result as CEO

Peter King has delivered his last annual result as Westpac CEO and says the bank is in good shape for the future ahead of December’s change in leadership.

Westpac posted a 3 per cent fall in net profit to $7 billion, while unveiling a final dividend of 76 cents for the half and a $1 billion increase to the existing share buyback programme.

“Our disciplined performance in FY24 has set Westpac up for growth and success,” King said about the result.

“We’ve significantly improved our customer service, grown in key segments and delivered another financial result built on a solid balance sheet and capital position,” he said.

King said the bank’s CET1 capital ratio of 12.5 per cent is one of the strongest he’s seen in 30 years.

Westpac’s net interest margin held, down one basis point excluding notable items to 1.95 per cent year on year.

King and CFO Michael Rowland noted Westpac’s disciplined margin management as a key highlight, with the bank able to grow total loans by 4 per cent and deposits by 5 per cent on FY23, while maintaining margins. 

Net interest income increased 2 per cent year on year, while non-interest income was $2.8 billion, down 15 per cent from the year prior, impacted by the sale of businesses in 2023, along with Financial Markets and wealth management.

The Business & Wealth division, led by incoming Westpac CEO Anthony Miller, was a standout, with net profit up 13 per cent and business lending up 9 per cent.

The Consumer division saw profit down year on year, however momentum built in the second half of FY24, with net profit up 6 per cent on the prior half, amid a competitive mortgage market.

Westpac’s Institutional Bank posted a 2 per cent rise in net profit, while the bank weathered challenging economic conditions in New Zealand to register a 10 per cent profit increase as impairment charges were reduced year on year.

Economic turning point

King said some customers are doing it tough in the current economic climate and he encouraged anyone who needs help to call the bank.

However, some relief could be on the way.

“As we approach 2025, the domestic economy is showing positive signs,” King said.

“Consumer sentiment has risen to a two-and-a-half year high, the labour market is holding up well and inflation is nearing target. 

“Some central banks have shifted to an easing cycle and the RBA is likely to follow in 2025. This will be good news for many households and businesses.”

King said he’s continuing to monitor the global economy.

“The impact of overseas elections and geopolitical uncertainty remain difficult to predict and therefore it makes sense to maintain a strong balance sheet.”

Passing the baton

The 54 year-old steps down as CEO on December 16, handing over to Miller to take the top job.

He’s completed five years in charge at a time of significant change for Westpac including portfolio simplification, a major uplift in risk management capability and a return to growth in key segments.

King said the bank is in “very good shape”.

“Westpac is a simpler, stronger bank and we are better at managing risk.”

He’s also overseen an improvement in employee culture and morale, with the company’s organisational health index—a key staff survey— increasing from 70 per cent to 80 per cent since 2020 and into the top quartile globally. 

“Our people are highly engaged,” he said.

“Following a period of simplification of the bank, I know our people are excited about the next phase of growth and I thank them for their support.

“I’m confident Westpac is positioned well for the future as it embarks on a new era under the leadership of Anthony Miller.”