In a statement to the Australian Securities Exchange, the group reported a drop in statutory net profit to $5,970 million for the 12 months to September 30, as the result of a large one-off tax benefit from its takeover of St George in the 2011 financial year.
However, cash earnings were up 5 per cent compared to the same period last year, reaching $6,598 million.
"This is a strong result in a lower growth economic environment," Westpac chief executive Gail Kelly said.
"Strengthening our balance sheet and improving our funding profile has been a key area of focus in recent years."
The spike in cash earnings was apparent in results from Westpac's wealth arm division BT Financial Group (BTFG), which Ms Kelly said "led the market in net market flows of funds onto its platforms".
BTFG had a strong second half of the year, with cash earnings increasing 17 per cent.
Growth in BTFG's planner network saw the number of aligned advisers increase by 19 per cent, following the launch of BT Select this year to support new advice businesses, and life insurance sales were up 38 per cent.
Despite this, full year cash earnings for the financial group were still lower compared to the 2011 financial year, down 10 per cent to $653 million.
The low full-year earnings were the result of weaker markets, a reduced contribution from the equities business and the de-risking of its lenders mortgage insurance business, BTFG said.
With global markets still unstable, Westpac expected to see modest growth in the rest of the financial year.
"Volatility in global markets is likely to continue and as a result of the structural changes that are now occurring, both overseas and domestically, the operating environment will remain challenging," Ms Kelly said.
"We expect continued modest credit growth and strong savings levels."
