Highlights

  • Net profit excluding notable items rose 6% to AUD 1.9 billion in 1Q26.
  • Jefferies issued a Hold rating with a AUD 35.66 target price.
  • Refinitiv consensus rating stands at Sell with a AUD 34.95 average target.

Westpac Banking Corporation (ASX:WBC) has reported a 6% rise in first-quarter net profit excluding notable items, with earnings reaching AUD 1.9 billion. Shares were trading at AUD 41.01 at 10:50am on 13 February 2026, up 0.024% for the session. Meanwhile, broker Jefferies has issued a Hold rating with a target price of AUD 35.66, while Refinitiv data shows a consensus rating of Sell with an average target of AUD 34.95.

Broker Ratings Signal Caution

Jefferies maintained a Hold recommendation on Westpac and set a target price of AUD 35.66. Based on the current share price of AUD 41.01, the target implies downside relative to prevailing levels.

According to Refinitiv data, the broader analyst consensus rating on Westpac stands at Sell, with an average target price of AUD 34.95. The consensus target also sits below the current market price.

The broker positioning comes as investors assess margin pressures, revenue trends and capital management settings in the current interest rate environment.

Profit Rises, Margin Narrows

Westpac reported unaudited statutory net profit of AUD 1.9 billion for the first quarter of FY26, up 5% on the 2H25 quarterly average. Net profit excluding notable items also reached AUD 1.9 billion, increasing 6%.

Net operating income rose 1% to AUD 5.8 billion. Net interest income increased 2%, supported by balance sheet growth and Treasury performance, while non-interest income declined 4% due to lower Markets revenue.

Net Interest Margin (NIM) eased by 1 basis point to 1.94%. Core NIM declined 3 basis points to 1.79%, reflecting competitive pressures and the lower interest rate environment. Treasury and Markets contributed 15 basis points, up from 13 basis points in the prior period.

Operating expenses were stable excluding restructuring charges in 2H25. Pre-provision profit increased 7% to AUD 2.8 billion.

Balance Sheet and Capital Position

Lending grew by AUD 22 billion during the quarter, with institutional lending up 7% and Australian housing and business lending each up 3%. Deposits increased by AUD 12 billion, including 3% growth in household deposits and 4% growth in business transactional deposits.

The CET1 capital ratio stood at 12.3% as at 31 December 2025, above the target ratio of 11.25%. Impairment charges were 6 basis points of average gross loans.

Westpac also confirmed it had entered into an agreement to sell the RAMS mortgage portfolio, representing AUD 19.6 billion as at 31 December 2025, subject to regulatory approvals.

Westpac’s first-quarter update showed higher profit, modest revenue growth and a CET1 ratio above target levels. Net interest margin narrowed slightly amid competitive and rate environment pressures. While shares traded at AUD 41.01, broker targets from Jefferies and the broader Refinitiv consensus sit below current levels, indicating a more cautious outlook among analysts.

F&Q

  1. What was Westpac’s net profit for 1Q26?
    Net profit excluding notable items was AUD 1.9 billion, up 6% on the 2H25 quarterly average.
  2. What is Jefferies’ rating on Westpac?
    Jefferies has a Hold rating with a target price of AUD 35.66.
  3. What is the consensus target price for Westpac?
    According to Refinitiv data, the consensus rating is Sell with an average target price of AUD 34.95.