Today is a big day for income investors, with Westpac Banking Corp (ASX: WBC) releasing its full year results and announcing its latest dividend.
But what has the banking giant declared and when is pay day? Let's find out.
Westpac results
Firstly, we will have a quick look at what the big four bank reported this morning.
For the 12 months ended 30 September, Westpac reported a 3% increase in net interest income to $18.9 billion but a 3% decline in net profit to $6.99 billion.
While its Business & Wealth segment delivered strong earnings growth in FY 2024, recording a 13% increase in net profit to $2.36 billion, this was offset by weakness in the Consumer segment.
Westpac's Consumer segment posted a disappointing 17% decline in net profit to $2.18 billion for the 12 months. This was despite the bank revealing that its net loans lifted 4% and its deposits grew 8% through the year.
Management advised that its Consumer business was impacted by intense mortgage competition and a 1% increase in operating expenses.
But there's reason to be optimistic on FY 2025. Management revealed that the Consumer segment's performance had a significant turnaround in the second half. This saw it record net profit growth of 6% on the prior corresponding period.
This brings us onto the Westpac dividend. You might think with its profits on the decline a dividend cut could be coming. But did it?
The Westpac dividend
Despite its weaker profits, the Westpac board elected to increase its dividend in FY 2024.
Westpac declared a fully franked final dividend of 76 cents per share. This brings its ordinary dividends to $1.51 per share in FY 2024, which represents a 6% increase year on year.
The total including its special interim dividend of 15 cents per share is $1.66 per share.
But the returns didn't stop there. Westpac also announced a further $1 billion share buyback.
Commenting on its capital returns, the bank's chair, Steven Gregg, said:
The special dividend declared for the first time since 2013 was 15 cents per share in the First Half of 2024. In addition, ordinary dividends were increased by 6% to $1.51 in fully franked dividends per share for the year, including a final ordinary dividend of 76 cents per share. This equates to a payout ratio of 73% of Profit after Tax, excluding Notable Items. The combination of dividends, both ordinary and special, and share price accretion has led a total shareholder return for the year of 58%.
If you want to receive this dividend when it is paid on 19 December, you will need to own Westpac shares before they trade ex-dividend on 7 November.
