Westpac lifted full-year profit three per cent to $8.062 billion, narrowly missing market expectations after it copped the cost of past mistakes.
The lender on Monday said cash profit for the 12 months to September 30 rose from $7.822 billion a year ago, falling just short of the $8.152 billion analyst consensus.
Non-interest income appeared to be the culprit, falling nine per cent due to lower markets income and a $118 million provision for refunds and other payments to customers.
Westpac took a hit equivalent to 1.5 per cent of its cash profit to superannuation customers who lost out because of disclosure practices, package customers who did not receive benefits to which they were entitled, and others who did not receive on-time advice.
Chief executive Brian Hartzer said Westpac had made changes to ensure there would be no repeat.
"Where we have found issues that we need to put right, we ensure that no customer has been disadvantaged from those past practices," Mr Hartzer said.
Chief financial officer Peter King said Westpac was looking at whether more customers were due refunds, but that most issues had likely been resolved.
"We've dealt with the things we know at the moment so there's nothing that we've got out there," Mr King said.
"We've got through the biggest part of it."
UBS analysts said the weakness in non interest income was concerning, while Citi noted surprisingly soft fees and commissions in markets.
Investors were also unimpressed and Westpac shares fell 82 cents, or 2.5 per cent, to $32.45 by 1350 AEDT.
The bank held its final dividend unchanged at 94 cents for a fully franked full-year payout of $1.88 per security, with Mr Hartzer suggesting the flat return was due to the $66 million post-tax impact of the federal government's bank levy, which took effect this year.
"That's two cents per share that wasn't available to be paid out to shareholders or to invest in customers or our people," Mr Hartzer said.
The consumer division lifted earnings four per cent, boosted by six per cent growth in Australian mortgages - a market in which Westpac has a 23 per cent share.
Net interest margin improved three percentage points to 2.10 per cent over the second half but is likely to come under pressure as more customers switch from interest-only mortgages to lower rate principal and interest loans.
Westpac lifted its capital reservers, boosting its common equity tier one capital ratio to 10.6 per cent and comfortably beating the January 2020 deadline to meet the Australian Prudential Regulation Authority's 10.5 per cent "unquestionably strong" benchmark.
Mr King said future additional capital could be returned to shareholders.
"If we've got good productivity opportunities, we could go after those; if we're seeing better balance sheet growth, we'll support that," Mr King said.
"If we don't, we can give it back to shareholders."
WESTPAC'S FY FIGURES
* Cash profit up 3.1pct to $8.062b
* Net profit up 7.3pct to $7.990b
* Net operating income up 3.9pct to $21.802b
* Final dividend steady at 94 cents, fully franked
