# Westpac Reports $6.8 Billion Profit Amid Forecasts of Declining House Prices Australia's oldest bank anticipates elevated interest rates and significant housing market corrections through 2027. - **Source:** [Sydney Morning Herald - Business](https://www.smh.com.au/rss/business.xml) - **Published:** 2026-11-01 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/e59a79a5-3a1a-4eee-a5a3-eaeda57432a7 ## Annual Profit Performance Westpac reported a $6.8 billion profit for the year ending in September, marking a 1 per cent decline compared to the previous year. Despite this slight dip, the bank maintained stability through strong business and institutional lending growth, which increased by 12 per cent and 18 per cent respectively during the period. ## Housing Market Outlook The bank projects a significant downturn in the housing market, forecasting an 11 per cent decline in national house prices by March 2027. This follows a 5.2 per cent drop from the peak observed in March 2026, reflecting the ongoing impact of sustained high interest rates on residential property valuations across the country. ## Interest Rate Environment Westpac expects interest rates to remain elevated through 2027 as price growth continues to exceed Reserve Bank targets. With the central bank considering a fifth rate hike this year, the financial institution is preparing for a prolonged period of monetary tightening that will continue to challenge both household budgets and business investment strategies. ## Margin Compression Factors The net interest margin, a critical profitability metric, fell by 3 percentage points to 1.86 per cent during the second half of 2026. This contraction was driven by intense competition in the lending market and a higher volume of customer accounts qualifying for savings bonus rates, offsetting gains from corporate loan growth. ## Customer Resilience Metrics Despite cost of living pressures, mortgage hardship remains low at 0.6 per cent. Approximately 86 per cent of customers are currently ahead on their mortgage repayments, with nearly four in ten borrowers maintaining a buffer of more than two years. Only 1 per cent of the bank's total mortgage accounts are currently behind. ## Hardship Support Initiatives Over the past year, Westpac provided more than 42,000 tailored financial hardship and disaster relief packages to its customers. Notably, over 60 per cent of these assisted clients required support for less than three months, suggesting that many households are successfully navigating temporary financial difficulties without needing long-term intervention from the banking institution. ## Credit Impairment Provisions Westpac has increased its credit impairment provisions to $5.2 billion to account for potential loan losses. The bank cited economic and geopolitical uncertainty as primary drivers for this conservative approach, specifically noting risks affecting energy-intensive sectors and a broader decline in discretionary spending patterns observed among the bank's diverse customer base. ## Dividend and Shareholder Value The bank announced a final dividend of 77 cents per share, bringing the total annual payout to $1.54. This represents a 1 per cent increase from the previous year, demonstrating a commitment to shareholder returns despite the challenging macroeconomic environment, rising credit provisions, and the anticipated cooling of the national housing market. ## Sources covering this story - https://www.smh.com.au/business/banking-and-finance/westpac-expects-11-per-cent-house-price-fall-posts-6-8-billion-profit-20261102-p61ah6.html?ref=rss&utm_medium=rss&utm_source=rss_business — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._