Owners of Westpac Banking Corp (ASX: WBC) shares can usually look forward to a good dividend each year. So, it'll be interesting to see what the next couple of years have in store for shareholders.
Westpac faces a lot of competition in the banking sector from the likes of Commonwealth Bank of Australia (ASX: CBA), ANZ Group Holdings Ltd (ASX: ANZ), National Australia Bank Ltd (ASX: NAB), and Macquarie Group Ltd (ASX: MQG). Those are just the major banks, there are a lot of smaller competitors too.
That's a challenge for both Westpac's market share and margin ambitions. Let's take a look at what's expected of the ASX bank share.
Image source: Getty Images
FY26
We're already more than halfway through the 2026 financial year – Westpac's FY26 finishes in September, whereas many other ASX shares have a financial year that ends in June.
Westpac has already paid its FY26 interim dividend to investors, so new investors would only be entitled to the other half of the FY26 annual dividend when it's reported later this year.
According to the projection on Commsec, the business is forecast to pay an annual dividend per share of $1.54 in FY26. That translates into a potential grossed-up dividend yield of 6.3% including franking credits, or 4.4% excluding franking credits.
That's an attractive and impressive starting dividend yield, though it has been higher in the past. However, the current financial year is not necessarily the highest the dividend is going to go from here, either.
FY27
The other financial year that I wanted to look at in terms of the projected dividend is the 2027 financial year, which starts in just a few months.
I'm not sure how likely it is that the ASX bank share will be able to increase its dividend, but experts do think that Westpac will be able to eke out a little more for shareholders.
According to Commsec's projection, the business is forecast to increase its annual dividend payout to $1.55 per share. That translates into a grossed-up dividend yield of 6.3% (including franking credits) and 4.4% (excluding franking credits).
Those aren't the biggest yields around, but I think they're a solid level considering this business continues growing its loan book at a solid single-digit pace.
Westpac share recommendations
According to the Commsec collation of analyst views on the business, there are currently seven hold ratings on the ASX bank share, with nine sell ratings.
There is clearly some hesitation about the investment's appeal right now, so it could be a better idea to look at other ASX share opportunities.
