For income investors tracking the ASX banking calendar, this month is a big one.
Westpac Banking Corp (ASX: WBC) declared its 2026 interim ordinary dividend on 5 May and the ex-dividend date fell earlier this month.
Here is the full picture of what Westpac is paying and what shareholders can expect for the rest of the year.
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What Westpac is paying
Westpac declared a fully franked interim dividend of 77 cents per share, payable on 26 June 2026.
That payment is 100% franked with Australian franking credits at the company tax rate of 30%, and also carries New Zealand imputation credits of NZD 6 cents per share.
Consequently, for Australian taxpayers in higher tax brackets, the effective after-tax yield rises materially above the headline figure once franking credits are grossed up.
Based on Westpac's current share price of approximately $36.40, the interim dividend implies an annualised yield of around 4.2% on a fully franked basis.
The grossed-up yield, including the value of franking credits at the 30% tax rate, brings the grossed-up yield to around 6.0%.
That compares favourably with term deposit rates currently on offer from the major banks, making Westpac a competitive option for income-focused investors who also want exposure to potential capital growth over time.
What about the full year?
Looking further ahead, consensus analyst estimates on CommSec point to a full-year FY2026 dividend of 155 cents per share for Westpac, up from 153 cents in FY2025.
That implies a final dividend of approximately 78 cents per share, payable in December 2026, following the release of Westpac's full-year results in early November.
For retirees in the zero tax bracket, those franking credits translate into additional cash refunds.
What the result showed
The interim dividend reflects a solid first-half result for Westpac.
The bank posted statutory net profit of $3.4 billion for the first half of FY2026, up 3% on the prior corresponding period, alongside total lending and deposit growth of 7% year-on-year.
Management's long-running cost reduction program continues to gain traction.
The bank's capital position also remains well above regulatory minimums.
However, it is worth noting that several major brokers including Macquarie and Morgan Stanley carry underperform or sell ratings on Westpac shares, citing valuation concerns and competitive pressure in the mortgage market.
Foolish takeaway
Westpac offers income investors a reliable, fully franked dividend stream backed by one of the most systemically important banks in the country.
For investors focused on tax-effective passive income rather than capital growth, the upcoming June payment and the promise of a similar final dividend in December would be encouraging.
