Westpac flags deepest housing downturn in nearly two decades, impairment charges double

Nov 2 (Reuters) - Australian lender ‌Westpac on ​Monday ​warned of a housing market downturn steeper than any seen in nearly two decades and reported a twofold ‌jump in credit impairment charges, while full-year adjusted profit ⁠met market expectations.

Westpac reported net profit excluding notable items of A$6.99 billion ($4.91 billion) ‌for the year ended ‌September 30, in line with a Visible Alpha consensus estimate and marginally above the A$6.97 billion reported in 2025.

• Australia's third-largest ​lender by market value forecasts a 10.9% decline in house prices in the year to March 2027, a deeper ⁠drop than in any of the four previous housing downturns since 2008

• Credit impairment charges ​for the year ended September 30 rose 104% to A$864 million. Total provisions for potential loan losses ​increased 4.2% to A$5.2 billion, reflecting "economic ‌and geopolitical uncertainty"

• Mortgage and investor credit demand has weakened since the government scrapped tax concessions for ⁠property investors earlier in the year

• Average monthly mortgage applications in the fourth quarter dropped 15% from a year earlier

• Deposits and loans ⁠grew 6% and 5%, respectively

• Westpac kept its final dividend unchanged at 77 ​Australian cents per share

• The Australian bank's core net interest margin, a key measure of profitability, slid 5 basis points (bps) to 1.76%, while its ‌CET1 ratio, a measure of spare cash, slipped 7 bps to 12.46%

• Shares of Westpac were up ‌2.2% at A$37.61, as of 0108 GMT, compared with a 0.4% ⁠decline in the broader ‌ASX200 benchmark index

($1 = 1.4225 ​Australian dollars)

(Reporting by Sherin Sunny and Shivangi Lahiri in Bengaluru; Editing by Edmund Klamann, Deepa Babington and ‌Sherry Jacob-Phillips)

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