Owning Westpac Banking Corp (ASX: WBC) shares has been a typical ASX blue-chip share pick for investors seeking passive income.
The ASX bank share typically trades on a relatively low price/earnings (P/E) ratio valuation and has a fairly generous dividend payout ratio.
Westpac has a lot of competition in the banking space. There are numerous ASX-listed competitors, and plenty more not listed on the ASX. Some of the largest ASX-listed banking competitors are Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB), ANZ Group Holdings Ltd (ASX: ANZ), Macquarie Group Ltd (ASX: MQG), Bank of Queensland Ltd (ASX: BOQ), MyState Ltd (ASX: MYS), Bendigo and Adelaide Bank Ltd (ASX: BEN) and Pepper Money Ltd (ASX: PPM).
Even though there is all of that competition, the bank still makes billions of net profit each year, which helps fund the company's solid dividend.
For an investor who wants $10,000 of annual passive income, let's take a look at what level of passive income Westpac is projected to pay in FY26.
Image source: Getty Images
ASX bank share dividend forecast
Westpac's financial year ends in September, so we have just passed the three-quarters mark of the 2026 financial year. It will be a few months until the annual report is revealed and show what the profit figures are.
Until we know for sure what the numbers are, we can refer to what analysts have forecast the ASX bank share may be able to deliver.
According to the projection on Commsec, the ASX bank share could pay an annual dividend per Westpac share of $1.54 in FY26.
At the time of writing, that translates into a dividend yield of 4.3%, excluding franking credits.
That means, to generate $10,000 of annual passive income from Westpac in FY26, an investor would need 6,494 Westpac shares to receive that much in dividends.
Excitingly for shareholders, the bank is projected to see a 0.6% rise in its dividend per share to $1.55 in FY27.
If we focus on the forecast amount, an investor would only need 6,452 Westpac shares for $10,000 of annual passive income, excluding franking credits.
Is this a good time to invest in Westpac shares?
There are a lot of competitors that want to take market share from Westpac. It's normal to see margins under pressure when there are challengers wanting to grow, such as Macquarie. It's possible that Westpac's margins could decrease in the coming years, as well as its market share, given how rapidly Macquarie is growing.
According to Commsec's collation of analyst opinions on the business, there are currently no buy ratings, seven hold ratings and nine sell ratings.
It seems analysts are pessimistic about the ASX bank share's future prospects right now, but I think there are opportunities out there today that could grow earnings over the the long-term.
