Westpac Banking Corp. reported first-half profit that fell short of analyst expectations, with CEO Anthony Miller warning about the economic fallout from the Middle East conflict weighing on customers. Net income rose 3% to A$3.4 billion ($2.4 billion) in the six months through March 31, compared to the prior year period, according to a statement released on Tuesday.

The result missed the A$3.5 billion average estimate from analysts polled by Bloomberg, highlighting the challenges facing Australia's oldest bank as geopolitical tensions create uncertainty. Miller has flagged the Middle East war as a growing risk factor for both consumer and business customers, potentially pressuring loan performance and asset quality in the coming quarters.

The profit miss signals a difficult start to 2026 for Westpac, which is navigating an increasingly complex operating environment marked by regional conflicts and competitive pressures in the banking sector. Investors will closely monitor upcoming disclosures on provisioning levels and loan growth for signs of further stress.

Westpac shares may come under pressure following the earnings miss, as investors digest the implications of the Middle East conflict on the Australian banking sector and assess the bank's ability to navigate macroeconomic headwinds in the second half of the year. The bank's next quarterly update will provide crucial insights into asset quality trends and management's outlook for the remainder of 2026.