Business lending surges as CEO Miller says bank ‘well positioned to deal with the impacts’ of Middle East conflict
Westpac enjoyed 7% year-on-year growth in home lending in the first half of its financial year – excluding the run-off of its RAMS portfolio – comfortably outpacing the broader market.
The bank lifted the share of proprietary loans, with in‑house lending rising from 32% to 34% of new mortgages. The shift reflects a wider push among the major banks to bring more origination back through their own channels.
Yesterday’s NAB results highlighted a similar trend, with proprietary loans comprising 47.7% of all new drawdowns in the six months to 31 March, up sharply from 41.4% in the previous half.
Westpac’s net interest margin (NIM) narrowed by three basis points over the year to 1.89%, weighed down by intense mortgage competition and softer treasury income.
Credit impairments rose sharply to 10 basis points of average gross loans, compared with just four basis points in the prior interim period and six basis points in the first half of 2025.
Despite this, chief executive Anthony Miller said Westpac “is well positioned to deal with the impacts” of the ongoing conflict in the Middle East.
“Our role is to stay close to customers, back them through current challenges and make sure help is there when it’s needed. While our customers are resilient and stress levels have declined, we've taken a prudent approach and increased our provisions,” he said.
“Growth is solid across lending and deposits, with several highlights,” Miller added. “We grew Australian mortgages, excluding RAMS, in the half at 1.2x system, with the proportion of new first party lending increasing. We are supporting Australian businesses with lending up across both business and institutional over the past year. At the same time we are managing costs, which are down from the prior half.”
Business lending was a standout, rising 16% year-on-year, driven by growth across both the institutional and business and wealth segments.
Westpac has intentionally targeted business lending, having unveiled a multi-year strategy of aggressive banker hiring alongside digital investment late last year. The strategy includes a new business lending origination platform, BizEdge, aimed at getting business approvals out the door quicker.
Business lending was diversified across key sectors including agriculture, health and professional services, with growth supported by deeper client relationships and increased activity from existing customers.
On the top line, group-wide profit after tax added three basis points to $3.42 billion. Westpac announced a 77 cent fully franked ordinary dividend per share.
