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.
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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.
