Westpac says it will keep fighting to remove the federal government bank levy.
Chairman Lindsay Maxsted says the introduction of the bank levy in July this year had already impacted both the value and the returns from shareholder investment in the bank.
He described the levy as a "highly inefficient and distortive tax" that places an impost on a small number of Australia's largest taxpayers, adding that Westpac and its shareholders must "continue to agitate for its removal".
"It discriminates against Australian banks relative to global peers and it has impacted the value of your investment and the investments of millions of superannuation holders across Australia," Mr Maxsted said in Westpac's annual report.
Further tightening of credit standards and regulatory limits on elements of mortgage growth, plus a slowdown in Australia's economic growth, will likely lead to slower growth in lending and deposits in the 2018 financial year, he added.
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The levy, which was announced in the 2017 federal budget, applies to the four major banks as well as Macquarie Bank.
Westpac said the tax cost the lender $95 million in the 2017 financial year, and is estimated to cost about $405 million in the 2018 full-year.
"Our financial settings are in good shape but we will be subject to the full period impact of the bank levy in 2018," Mr Maxsted said.
The annual report released on Wednesday also revealed Westpac boss Brian Hartzer received a boost in his annual pay to $5.5 million.
Mr Hartzer took home $4.2 million in salary and cash bonuses in the year to September 30, plus another $1.3 in cash bonuses deferred from previous years.
The chief executive's $5.5 million pay packet is higher than the $4.9 million he took home a year ago, due to a lift in both his awarded and deferred short-term incentives.
