Westpac has grown its full-year net profit by 26 per cent to $7.2 billion and is returning some of that to shareholders with a $1.5 billion share buyback.

Australia’s oldest company also announced on Monday a final dividend of 72c a share, taking its total dividends for 2022/23 to $1.42, up 14 per cent from the year before.

“Over the past year we’ve further strengthened the bank, improved our financial performance and continued to support customers in a rising interest rate environment,” chief executive Peter King said in a letter to shareholders.

“A strong banking sector is vital to for a resilient economy and Westpac’s balance sheet is the strongest I’ve seen in my 29 years at the bank,” he said.

Rising interest rates and the cost-of-living crunch have resulted in more customers calling, but hardship levels remain at half the levels from during COVID and Westpac has not seen significant increases in customers falling behind on their mortgages, Mr King said.

That doesn’t mean they have an easy road, though, he acknowledged.

“From experience we know customers prioritise paying their mortgage while cutting back their spending elsewhere,” he said.

Westpac earned $3.05 billion in profit from its Australian consumer banking operations, down seven per cent from last year.

– AAP