Yesterday, Westpac Banking Corp (ASX: WBC) released its half-year results, and I think there was plenty for investors to like.
This was not a spectacular result, but it was a solid one. The bank showed lending and deposit growth, strong capital, improving customer metrics, and ongoing progress with its simplification program.
Here are my three key takeaways.
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Growth across the core bank looks healthy
Westpac reported statutory net profit of $3.4 billion, down 5% on the second half of FY25 but up 3% on the prior corresponding period.
That is a fairly steady earnings outcome, but I think the more interesting part is what is happening underneath.
Westpac grew lending and deposits by 7% over the year. Customer deposits increased to $745.2 billion, while loans rose to $890.3 billion.
The mortgage book also looks healthier. Australian mortgage growth, excluding RAMS, was 1.2 times system (industry growth) in the half, and the proportion of first-party lending improved.
I think that is encouraging because Westpac has been working to improve its proprietary mortgage channel. It does not just want growth for the sake of growth. It wants better-quality growth with stronger customer relationships.
Business lending was another bright spot, with Australian business lending up 16% over the year. Growth was supported by areas such as agriculture, health, professional services, and institutional lending.
The balance sheet remains a strength
The second takeaway is that Westpac's financial position still looks strong.
Its CET1 capital ratio was 12.4%, comfortably above its target of 11.25% in normal operating conditions. The bank said this equated to $2.7 billion of capital above target after payment of the first-half dividend.
That gives management flexibility at a time when the economic backdrop is less predictable.
Westpac also declared an interim dividend of 77 cents per share, fully franked. That was supported by its solid financial performance and capital position.
For income investors, I think that is a pleasing outcome.
Credit quality also looked relatively resilient. Stressed exposures as a percentage of total committed exposure fell to 1.16%, down 12 basis points on September 2025 and down 20 basis points on March 2025.
At the same time, Westpac has increased provisions to reflect the revised economic outlook and potential pressure on energy-intensive sectors. In my view, that looks prudent rather than concerning.
Execution is becoming a bigger part of the story
The third key takeaway for me is that Westpac is making progress in its quest to become a simpler, more efficient bank.
The UNITE program is now in the implementation phase. During the half, Westpac completed its first large-scale migration, creating a single wealth platform for advisers on BT Panorama. It is also progressing work on One Commercial Bank.
I think this is important because Westpac has not always been viewed as the cleanest or most efficient of the major banks.
If UNITE can simplify systems, reduce duplication, and improve the customer experience, it could help close some of that gap over time.
There were also encouraging customer and digital signs, with Westpac saying its app was ranked number one for the third year in a row.
Foolish takeaway
Overall, I think Westpac delivered a solid half-year result.
The bank is growing in its core markets, maintaining a strong balance sheet, supporting a fully franked dividend, and making progress on simplification.
The investment question is a little more nuanced after a strong run in the share price. Westpac is clearly a quality bank, but I would be mindful of its valuation before getting too enthusiastic.
For existing shareholders, though, I think this result gives plenty of reasons to stay positive.
