The ASX bank share Westpac Banking Corp (ASX: WBC) has seen a lot of volatility over the past few years, as the chart below shows. It's now time to ask whether the bank can continue growing earnings in the coming years.
The bank recently reported its FY25 result. Broker UBS notes that the bank generated $3.6 billion of net profit in the second half of FY25 and this was in line with what market analysts were expecting. That net profit represented an increase of 9% half over half.
UBS also noted that the bank reported the core net interest margin (NIM) improved 2 basis points half over year, driven by a reduction in trading securities. It also revealed that gross loans and advances (GLAs) improved by around 3% half over half, which was largely supported by business lending.
The broker also noted that excluding the $272 million restructuring charge, costs increased by 6% half over half due to UNITE investment spending and higher staff costs.
On the positive side of things, its loan quality was a pleasing surprise for UBS. Its solid capital position should mean the business can sustain dividends despite the cost headwinds, according to the broker.
After seeing those developments, UBS decided to increase its cash net profit forecast by 0.7% for FY26, but reduce profit expectations for FY27 by 2.7% and for FY28 by 1.5%, with higher loan growth expectations and flat lending profitability to underpin volume expansion. Operating expenses forecasts were also increased.
Let's take a look at what net profit UBS is expecting owners of Westpac shares to see in the coming years.
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FY26
UBS expects the bank to deliver ongoing profitable growth, helping the bottom line climb in the 2026 financial year.
The broker predicts that the ASX bank share could achieve $7.1 billion of net profit in FY26.
UBS said:
Westpac will need to continue balancing cost and revenue/lending growth, in the context of their substantial multiyear technology transformation and simplification program.
Underlying franchise momentum in 3 of the 4 divisions was very strong (+7.0% HoH) while the mkt remains sceptical on the consumer division (32% of group profits). Our analysis shows RoTE upside from the strategic pivot to business & institutional banking.
FY27
The broker's earnings forecast suggests the bank's bottom line could improve by another $200 million
In FY27, UBS projects that Westpac's net profit could reach $7.3 billion.
FY28
UBS currently believes that the 2028 financial year could see a significant increase of profitability for the bank of more than $550 million.
The ASX bank share's earnings could rise to around $7.9 billion in FY28.
FY29
The bank could see another sizeable increase in profitability in the 2029 financial year.
UBS projects that the bank could achieve a net profit of $8.5 billion in FY29.
FY30
The final year of this series of projections could be the best year of all for the owners of Westpac shares.
UBS predicts that the business could generate net profit of $9.2 billion in FY30, representing a potential increase of around $700 million year over year.
Overall, UBS is suggesting the Westpac net profit could rise by 29% between FY26 to FY30.
