Owning Westpac Banking Corp (ASX: WBC) shares normally means receiving a pleasing level of dividend income each year.
The ASX bank share typically has a generous dividend payout ratio and a fairly low price/earnings (P/E) ratio, resulting in a large dividend yield for investors.
In my view, Westpac shares offer investors a fairly similar investment setup as ANZ Group Holdings Ltd (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB). However, Westpac typically generates more of its earnings from lending to households than the other two banks.
All three of the bank majors that I've mentioned have a higher dividend yield than Commonwealth Bank of Australia (ASX: CBA), though that's largely because CBA trades on a higher P/E ratio than the other major banks.
With the above in mind, let's take a look at what analysts are predicting for the ASX bank share in the years ahead.
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FY26
We're now at the end of the Westpac 2026 financial year, which finishes on 30 September 2026. But we'll have to wait a few weeks to see what the ASX bank share actually achieved when it reports.
The latest update we've heard from the bank was the FY26 third-quarter update for the three weeks to June 2026.
It said it generated $1.8 billion of quarterly statutory net profit, which represented a 3% increase on the quarterly average of the FY26 first half. Its underlying net profit also came to $1.8 billion, resulting in a 2% year-over-year increase on the FY26 first half average.
Westpac noted that it continues to focus on simplifying its operations, improving the customer experience, and increasing productivity. The ASX bank share said its program, called UNITE, is progressing.
The ASX bank share also highlighted that its enterprise data has migrated to the cloud, that it has strengthened its data foundations, and that it supports greater use of analytics and artificial intelligence.
For the quarter, its net interest margin (NIM) – the profitability of its lending – was essentially stable, though rose slightly thanks to the higher interest rate environment, offset by competitive pressures in lending, the deposit mix and more savers qualifying for the savings bonus rate.
Westpac also highlighted continued operating momentum drove "strong customer deposit and loan growth". Lending increased by 2%, reflecting broad-based growth across the Australian portfolio including 4% in business, 3% in institutional and 2% in housing.
According to the projection on CMC Invest, the business is forecast to increase its dividend per Westpac share to $1.55. That translates into a FY26 grossed-up dividend yield of 6.3%, including franking credits, at the time of writing.
FY27
The ASX bank share is expected to continue the positive trajectory for the Westpac dividend in the 2027 financial year, along with a slight increase in earnings per share (EPS).
The projection on CMC Invest suggests the annual dividend per share could be hiked slightly to $1.585.
FY28
In the final financial year of this projection series, Westpac is forecast to raise its annual dividend per share to $1.64.
That means the ASX bank share could pay a FY28 grossed-up dividend yield of 6.7%, including franking credits, at the time of writing.
