Westpac Bank New Zealand’s full-year profit rose 13% with increased revenue and a big drop in bad debts.
“This result positions us well to support customers through what we think will be an economic upturn over the coming year, and we are investing heavily in our business to deliver better services for customers and communities,” Westpac NZ chief executive Catherine McGrath said.
- Net profit down $1.197b vs $1.061b
- Net income $3.089b vs $$2.869b
- Expenses $1.471b vs $1.369b
- Impairment charge $44m vs -$27m (an improvement of $71m)
- Net interest margin 2.32% vs 2.17%
“Our focus on growth in key customer segments has helped drive our result. For example, we’ve increased our lending to small and medium businesses nearly five times faster than the market, highlighted by $770 million of new business lending in the September quarter – one of our strongest ever quarters of growth,” McGrath said.
Customer deposits rose 2% while loans rose 4%, with mortgages up 5% and business loans up 2%.
The bank also reported an improvement in the percentage of long-dated debt mortgage and consumer loans arrears, alongside a 2% increase in average interest earnings.
“We know the economy has struggled through most of 2025 and households and businesses are still grappling with high costs, however our data suggests some of those pressures are now easing,” she said.
“Our focus on growth in key customer segments has helped drive our result. For example, we’ve increased our lending to small and medium businesses nearly five times faster than the market, highlighted by $770m of new business lending in the September quarter – one of our strongest ever quarters of growth.
New ways of banking in communities
McGrath said the bank was increasing its investment in technology and customer services.
“Examples of that investment include improving digital services and expanding our points of presence around New Zealand through innovative new face to face community banking initiatives.
“We’ve also introduced a range of new tools that have helped increase our fraud prevention rates by 27% over the past year.”
A gradual return to growth
Westpac NZ economists forecast economic growth of 1.2% for 2025, rising to 3.0% in 2026 and 3.4% in 2027, as the full effects of interest rate reductions flow through to households and businesses.
Around 40% of all fixed rate home loans are coming up for repricing in the next six months.
“Business and consumer confidence remains subdued following the contraction of GDP in the June quarter,” McGrath said.
“However, indicators suggest that the economy has returned to growth in recent months. That growth remains uneven, with strong commodity prices boosting the regions while the urban centres struggle with sluggish construction and service industries.
“However, the threat of tariffs and geopolitical tensions is still causing uncertainty. The good news is demand for our exports remains strong, and farmers and growers are feeling upbeat.
“Despite the economic gloom through much of 2025, we think next year will be a better year. We’ll continue to support households and businesses with competitive pricing, expert personalised guidance, and products and services that better meet their needs.”
