Australia’s Westpac has announced a substantial pre-tax restructuring charge of A$273m ($177m) in the second half (H2) of the fiscal year 2025 (FY25).
This restructuring charge relates to the targeted productivity initiatives under its Fit for Growth programme.
Westpac said its Fit for Growth programme delivered modest benefits this financial year, with overall productivity gains expected to cover the programme’s costs.
The bank expects the programme to yield benefits over the subsequent two financial years.
Westpac, which is one of the leading banking and financial services institutions in the country, stated that the related restructuring expense will not be classified as a notable item in the bank’s financial statements.
The bank said in a statement that the expense will be recorded as an operating cost over the six-month period and will not affect the group’s net profit after tax or alter the composition of line items.
The bank also said that its reported net profit after tax for FY25 will be reduced by A$56m due to notable items associated with solely to hedging, which are expected to reverse over time. This compares with a A$123m hit in the previous fiscal year.
It has scheduled the release of its full-year financial results on 3 November 2025.
Meanwhile, the Australian Prudential Regulation Authority (APRA) has stated that Westpac has fulfilled the requirements of a multi-year risk transformation programme.
As a result, APRA will withdraw the additional A$500m capital add-on applied to the bank.
Westpac stated that the removal of this capital add-on would boost its common equity tier 1 (CET1) capital ratio by an estimated 17 basis points, indicating a reduction in risk-weighted assets amounting to A$6.25bn.
After an APRA investigation in 2020, Westpac entered into a Court-Enforceable Undertaking (CEU) with APRA in December of the same year, committing to fix prudential weaknesses in its culture, governance, and accountability and to address their root causes.
Consequently, Westpac launched the Customer Outcomes and Risk Excellence (CORE) Program as well as appointed an independent reviewer.
Before this, APRA had made a pre-emptive imposition of a A$500m capital add-on to Westpac in July 2019, followed by an additional $500m in December 2019.
As APRA advanced its supervisory programme, it removed the first $500m add-on in July 2024, acknowledging Westpac’s progress. APRA stated the remaining add-on would stay in place until Westpac completed its transition activities and APRA conducted further validation to confirm the sustainability of improvements in prudent risk management practices and outcomes.
APRA, now satisfied with the completion of the programme and the resolution of the prudential issues, has removed the remaining capital surcharge of A$500m with immediate effect.
Westpac CEO Anthony Miller said: “Risk management is one of our five priorities and this year we’ve been focused on embedding the improvement to our risk culture. We can never forget the errors of the past and the importance of the work we have done over the past six years.”
“The positive changes in how we manage risk must now be maintained and continually strengthened. I’m grateful to all of our people who have contributed to our substantial improvement in risk management.”
According to a report by The Australian Financial Review (AFR) in September 2025, Westpac plans to eliminate 200 teller roles throughout its branch network and intends to reallocate these resources to bolster its home and business lending operations.
