Westpac (ASX: WBC) rallies following solid result
Westpac Banking Corp (ASX: WBC) is trading around 1.6% higher today, recovering from an initial 1.3% fall following its FY26 full-year results, as investors looked beyond a modest headline earnings miss.
- Statutory net profit slipped 1.5% to $6.81bn, below consensus expectations of $6.93bn, while underlying cash earnings were broadly flat at $7bn, in line with forecasts.
- Net interest margins contracted 7 basis points to 1.87%, reflecting ongoing competition in the mortgage market, while the final dividend was held steady at 77c per share.
Importantly, the underlying business remains resilient, with lending growth of 5%, deposit growth of 6% and sound credit quality helping offset pressure on margins. The market’s initial disappointment appears to have given way to a more balanced assessment, with analysts generally viewing the result as broadly in line with expectations.
- While margin pressure and limited earnings growth remain challenges, Westpac’s solid balance sheet, stable dividend and improving lending momentum provide some reassurance, helping explain today’s recovery in the share price.
This looks like being “ok” is good enough with expectations fairly muted towards the banks as the macro picture clouds.
MM remains long and cautiously bullish towards WBC, especially for its ~4.3% fully franked yield.
