• Geopolitical uncertainty and higher inflation impacting results
• Sale of RAMS mortgage portfolio on track for 2H26 completion
• Credit impairment charge of 10 bps of average gross loans expected

Westpac has provided an update on items impacting its 1H26 results. The bank is well positioned to support customers amid ongoing geopolitical uncertainty. In addition to disclosing the accounting treatment of the pending sale of the RAMS mortgage portfolio, Westpac is providing clarity on the initial impacts of the Middle East conflict. 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. A strong financial position during a time of increasing global uncertainty allows Westpac to support customers while accelerating execution of its strategic priorities. This focused execution was reflected in improved operating metrics in the half, including solid lending and deposit growth, stable core NIM, and improved asset quality. However, geopolitical uncertainty and associated market volatility have impacted Treasury and Markets NIM, as well as foreign currency translation. The revised economic outlook has been reflected in Westpac's base case provision scenario and a new portfolio overlay has been added for energy intensive sectors. The associated increase in credit provisions in the half is expected to result in the ratio of CAP to credit RWA increasing to around 129 basis points and a credit impairment charge of 10 basis points of average gross loans. The sale of the RAMS mortgage portfolio to a consortium including Pepper Money, KKR, and PIMCO remains on track for completion in 2H26.

The associated increase in credit provisions in the half is expected to result in: the ratio of CAP to credit RWA increasing to c.129 basis points; and a credit impairment charge of 10 basis points of average gross loans.