Westpac’s Q3 profit rises on loan growth, flags slower housing credit demand
It said its core net interest margin was broadly stable during the quarter
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AUSTRALIA’S Westpac Banking Corp posted a slightly higher third-quarter cash profit on Monday (Aug 10), helped by growth in customer loans and deposits, but warned mortgage demand had weakened following federal budget changes and pointed to slower housing credit growth ahead.
The bank said average monthly mortgage applications between mid-May and the end of July fell 20 per cent from the quarter ended March 31 to 26,000, after changes announced in the federal budget.
The firm also said housing credit growth was expected to moderate to 4.7 per cent in 2027 from 6.8 per cent in 2026, citing higher interest rates and policy changes.
“The undersupply of housing combined with population growth is expected to partially offset the impact of higher interest rates and recent Federal Government policy changes on the housing market,” said Westpac CEO Anthony Miller.
The lender said households remained under pressure from living costs, though business investment and overall customer resilience continued to support activity.
The outlook for housing demand has come under scrutiny since the Labor government’s policy changes have clouded the housing outlook, with proposed curbs on tax deductions on new residential investments and capital gains tax concessions expected to dampen investor demand and add to a broader cooling in Australia’s property market.
The results come after Westpac flagged in the weeks leading up to the report that federal budget changes in May had triggered a 10 per cent decline in overall mortgage applications.
Westpac said its core net interest margin was broadly stable during the quarter, while its lending and deposit books continued to expand, with lending and deposit growth of 2 per cent, reflecting broad-based growth across the Australian portfolio.
Its common equity tier 1 capital ratio stood at 12.1 per cent, remaining comfortably above regulatory requirements and providing balance sheet flexibility.
Westpac reported cash earnings of A$1.8 billion (US$1.27 billion) for the quarter ended Jun 30, up 2 per cent from the first-half 2026 quarterly average. It reported A$1.9 billion of cash earnings a year ago. REUTERS
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