Commonwealth Bank vs Westpac: which ASX bank is the better buy for resilient passive income?

# Headline overview

# Quick numeric snapshot

• Market cap: CBA $254.92bn, Westpac $119.40bn.
• P/E ratio: CBA 23.48, Westpac 17.22.
• Dividend yield: CBA 3.30% (fully franked), Westpac 4.41% (fully franked).
• EPS: CBA $6.517, Westpac $2.029.
• Dividend per share (last year): CBA $5.05, Westpac $1.54.
• Year-to-date returns (to 21 Sep 2026): CBA -1.6%, Westpac -7.5%.

# What each bank offers

CBA is Australia's largest bank by market cap. It provides retail, business and institutional banking plus funds management, super, insurance and broking across Australia, New Zealand, Asia, the UK and the US. Key selling points for income investors are the high dollar dividend per share ($5.05), 100% franking and a long track record of fully franked dividends.

Westpac is one of Australia's oldest banks and owns brands including St.George, Bank of Melbourne, BankSA and BT. It has a diversified structure across six divisions. Westpac currently trades at a lower P/E than CBA and delivers a higher dividend yield (4.41%) with full franking, which may appeal to yield-focused investors.

# How they compare for income and value

Westpac offers the higher immediate yield (4.41% vs 3.30%). That makes it attractive if your primary objective is current income. CBA pays a much larger dollar dividend per share and has a long history of consistent dividends, which can matter for income growth over time.

Westpac's lower P/E (17.22) suggests the market is pricing more cautious growth expectations or greater risk compared with CBA (P/E 23.48). CBA's EPS of $6.517 is substantially higher than Westpac's $2.029, reflecting stronger current profitability per share.

Through 21 September 2026, CBA has held up better year-to-date (-1.6%) than Westpac (-7.5%). That gap indicates CBA has shown more market resilience so far this year even though it trades at a higher valuation.

# Practical takeaway and choice Both banks offer defensive income and fully franked dividends. If your priority is the highest current yield on a smaller price base, Westpac is the more tempting pick today. If you prioritise size, higher earnings per share, consistent dividend dollar amounts and better recent price performance, Commonwealth Bank is the preferred choice.

The author's view in the original piece leans to CBA. The reasons cited are CBA's dominant market position, stronger EPS and steadier share performance in 2026, which together are judged to offer greater confidence for long-term passive income despite a higher P/E.

# Short checklist for investors

• If you need maximum immediate yield, consider Westpac for the higher percentage payout.
• If you prefer proven earnings power and stability, consider CBA for higher EPS and a stronger year-to-date performance.