BENGALURU (Nov 2): Australian lender Westpac on Monday warned of a housing market downturn steeper than any seen in nearly two decades and reported a twofold jump in credit impairment charges, while full-year adjusted profit met market expectations.

Westpac reported net profit excluding notable items of A$6.99 billion (US$4.91 billion) for the year ended Sept 30, in line with a Visible Alpha consensus estimate and marginally above the A$6.97 billion reported in 2025.

Australia's third-largest lender by market value forecasts a 10.9% decline in house prices in the year to March 2027, a deeper drop than in any of the four previous housing downturns since 2008.

Credit impairment charges for the year ended Sept 30 rose 104% to A$864 million. Total provisions for potential loan losses increased 4.2% to A$5.2 billion, reflecting "economic and geopolitical uncertainty".

Mortgage and investor credit demand has weakened since the government scrapped tax concessions for property investors earlier in the year.

Average monthly mortgage applications in the fourth quarter dropped 15% from a year earlier.

Deposits and loans grew 6% and 5%, respectively.

Westpac kept its final dividend unchanged at 77 Australian cents per share.

The Australian bank's core net interest margin, a key measure of profitability, slid five basis points (bps) to 1.76%, while its CET1 ratio, a measure of spare cash, slipped seven bps to 12.46%.

Shares of Westpac were up 2.2% at A$37.61, as of 0108 GMT, compared with a 0.4% decline in the broader ASX200 benchmark index.

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