Westpac Banking Corporation has announced that the sale of its RAMS mortgage portfolio will reduce half-year net profit by A$75 million (US$53.2 million).
The Big Four bank also said it faced a more challenging environment due to the impact of the United States war with Iran on crude oil prices.
Westpac (ASX: WBC) said its first half results for the 2026 financial year (H1 FY26) included a notable item related to transaction costs for the sale of its $21.4 billion RAMS portfolio to a consortium including Pepper Money (ASX: PPM), KKR and Pimco.
“This reduced reported net profit after tax by $75 million,” the bank said in an ASX announcement.
It also said geopolitical uncertainty and the associated increase in market volatility had reduced the net interest margin in its Treasury and Markets division to seven basis points in Q2 from 15 basis points in Q1 FY26.
Foreign currency translation from the 6% depreciation in the New Zealand dollar average exchange rate had affected revenue and costs.
Westpac said the revised economic outlook had been reflected in a base case provision scenario, and a new portfolio overlay had been added for energy-intensive sectors, resulting in an increase in credit provisions in H1.
As a result, the ratio of capital to credit risk-weighted assets increased to about 129 basis points, and the bank made a credit impairment charge of 10 basis points of average gross loans.
“With the supply shock from the energy market disruption expected to result in higher inflation and higher interest rates, an expected slowing in economic growth will create a more challenging environment for some customers,” Westpac said.
The bank will issue its H1 FY26 results on Tuesday, 5 May 2026.
