Unlocking Passive Income: A Dive into Westpac Shares for 2027

As the financial landscape continues to evolve, investors are on the lookout for stable and lucrative opportunities to grow their wealth. For those considering ASX bank shares, Westpac Banking Corp (ASX: WBC) has traditionally been a popular choice, thanks to its perceived stability and dividend yield. But the question remains: if you invest $10,000 in Westpac shares, how much passive income can you expect to receive in 2027?

Historically, Westpac has offered a higher dividend yield compared to its competitors, including Commonwealth Bank of Australia (ASX: CBA) and Macquarie Group Ltd (ASX: MQG). This trend continues, with Westpac's dividend yield also comparable to other major banks like ANZ Group Holdings Ltd (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB). Since 2020, when the bank was forced to reduce its payout, Westpac has made a concerted effort to increase its dividend, providing a welcome boost to investors' pockets.

The latest half-year result for FY26 brought a 1.3% increase in the dividend per share to 77 cents, funded by a 1% rise in underlying net profit after tax (NPAT). This steady growth is a positive sign for investors looking for consistent returns. Looking ahead to the 2027 financial year, projections from Commsec indicate that Westpac is expected to pay an annual dividend per share of $1.55, representing a modest year-over-year increase of less than 1%. While the growth may be modest, it's a step in the right direction for investors seeking passive income.

At the time of writing, this forecast translates to a dividend yield of 4.25% excluding franking credits and a more attractive 6.1% including franking credits. For an investor looking to put $10,000 into Westpac shares, they could potentially purchase 274 shares, with some cash left over. Based on the projected dividend, this investment could yield $424.70 in cash dividends, or a total of $606.71 when including franking credits. This passive income stream could be a valuable addition to any investment portfolio.

However, it's essential to consider the wider market sentiment and analyst opinions. Recent ratings calls from investment professionals have been predominantly negative, with six out of nine calls indicating a 'sell' and three suggesting a 'hold'. The average price target from these analysts is $32.70, implying a potential 10% drop in the Westpac share price over the next year. This projection is not unprecedented, as the share price has dipped to this level as recently as July 2025.

While Westpac shares may offer a stable source of passive income, investors should be aware of the potential risks and market trends. As with any investment, it's crucial to do your research and consider multiple perspectives before making a decision. For those looking for alternative opportunities, there may be more appealing ASX shares on the market, offering a mix of growth potential and dividend yield.

In conclusion, investing $10,000 in Westpac shares could provide a relatively stable source of passive income in 2027, with projected dividend yields ranging from 4.25% to 6.1%. However, investors should be mindful of the current market sentiment and potential risks, weighing these factors against the potential rewards. By doing so, investors can make informed decisions that align with their financial goals and risk tolerance.