The big bank announced a $1 billion increase in its share buyback program and a final dividend of 76c a a share, up from 72c.
Outgoing chief executive officer Peter King said the Australian economy had experienced an extended period of below-trend growth but the outlook was improving.
"We expect the Australian economy to improve, with GDP growth increasing from 1.5 per cent to 2.5 per cent in 2025, and recent indicators suggest consumer pessimism has reduced," he said on Monday.
He said these trends were expected to translate into key markets in 2025, with the bank anticipating credit growth of about five per cent in housing and seven per cent in business.
The Australian economy's outlook is improving, Outgoing Westpac chief Peter King says. (Mick Tsikas/AAP PHOTOS)
Expenses rose seven per cent to $10.9 billion, reflecting spending on a major business and technology simplification program as well as inflationary pressures.
The group's net interest margin, the difference between interest income from loans and interest paid on deposits and a key gauge of banking profitability, reached 1.97 per cent in the second half, up eight basis points.
Mr King said a portion of mortgage holders were under pressure from elevated interest rates and inflation but more people had paid ahead in the past six months and offset balances were higher.
"The vast bulk of the (mortgage) book is doing well, but that's not everyone, I acknowledge that, and that's why I say call us early if you need help," he said on the results call on Monday.
Mr King will hand the top job to business banking boss Anthony Miller on December 16.
At midday, Westpac shares were up 0.3 per cent, to $32.18.
NAB and CBA were also higher, up 0.8 per cent and 0.3 per cent respectively, with ANZ down 0.2 per cent.
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