Westpac Banking Corp (ASX: WBC) shares are outperforming the market and charging higher on Tuesday.

In morning trade, the banking giant's shares are up almost 1.5% to $26.09.

Investors have been buying the company's shares this morning after Australia's oldest bank released an update on its expectations for the first half of FY 2024.

According to the release, Westpac's reported net profit after tax during the half will take a hit from notable items.

The bank advised that its earnings will be reduced by $164 million.

Management highlights that all notable items relate to unrealised fair value gains and losses on economic hedges and net ineffectiveness on qualifying hedges, which reverse over time.

This is an improvement on its last set of results in November. Ahead of the release of those results, Westpac announced that its reported net profit after tax would be reduced by $173 million due to notable Items. This itself was a massive improvement on FY 2022's notable items of $874 million.

Furthermore, given that this latest earnings hit comes from unrealised fair value gains and losses on economic hedges and net ineffectiveness on qualifying hedges, this could be a sign that the bank is performing well in respect to bad debts. That is despite the cost of living crisis and higher interest rates.

Westpac also took this opportunity to share that it will be making changes to its reporting segments with its upcoming half-year results.

The release reveals that its operating segments have been restated following the establishment of separate Consumer and Business & Wealth operating segments and the dissolution of the Specialist Businesses operating segment.

In addition, other changes to enhance operating segment financial reporting and assessment include funds transfer pricing refinements, revised capital allocations and enhanced operating expense allocations from Enterprise functions.

There will also be changes in the classification of some deposit products from interest bearing to non interest bearing, and revisions to the methodology used to classify credit quality.

Importantly, management notes that these changes do not impact the bank's net profit after tax or the composition of line items at the group level.

Westpac will be releasing its results early next month on 6 May. This is a day before the next Reserve Bank of Australia meeting.

Westpac shares are now up a sizeable 17% over the last 12 months. This compares favourably to a 0.5% gain by the ASX 200 index over the same period.