Westpac Banking Corporation (ASX:WBC), a constituent of the S&P/ASX 200, provided its Third Quarter 2026 Update on 10 August 2026, reporting unaudited statutory net profit of $1.8 billion, up 3% on the first half 2026 average. Net Interest Margin was stable at 1.89% and the CET1 Capital ratio was 12.1% — well above the target of 11.25%. Separately, Westpac provided a detailed Data, Digital and AI Update on 15 September 2026, outlining the company's strategy for leveraging data, digital capabilities, and artificial intelligence to improve customer engagement, accelerate transformation, and drive operating leverage.

About the Company

Westpac Banking Corporation is one of Australia's four major banks, providing retail banking, Business banking, institutional banking, wealth management, and insurance services. Westpac serves approximately 13 million customers across Australia and New Zealand through the Westpac, St George, Bank of Melbourne, BankSA, and RAMS brands. The bank is executing a major technology transformation program (UNITE) to simplify its operating environment, consolidate legacy platforms, and create a more agile and efficient banking infrastructure.

3Q26 Update and Digital Strategy

3Q26 unaudited statutory net profit was $1.8 billion, up 3% on the 1H26 average. Net profit excluding notable items was $1.8 billion, up 2% on the 1H26 average. Pre-provision profit rose 1%. Net Interest Margin was stable at 1.89%. Core NIM of 1.78% was stable, with benefits from the higher Interest Rate environment and Liquid assets offset by competitive pressures and deposit mix. Revenue increased 1%, with net interest income up 2% and non-interest income down 3%. Operating expenses increased 1%, reflecting salary and wage growth and business investment. Productivity savings target of more than $550 million in FY26 is being pursued. Impairment charges were 10 basis points of average gross loans, including an increase in portfolio overlays and downside scenario severity. CET1 was 12.1%, well above the 11.25% target. Deposit growth of 2% (transaction and term balances). Lending increased 2%, with 4% in business, 3% in institutional, and 2% in housing. Westpac ranked number one for NPS in Business banking and number two in Consumer. UNITE transformation: Commercial Banking customers commenced migration; all Westpac Invoice Finance facilities migrated to the new platform. Enterprise data migration to cloud completed. Sale of RAMS mortgages portfolio completed, further strengthening the balance sheet. Spend and Save offer expanded to customers up to age 40 and balance cap increased from $30,000 to $150,000. 150 regional business bankers added, contributing to growth in agribusiness. Expected housing Credit growth to moderate from 6.8% in FY26 to 4.7% in FY27. Data, Digital and AI strategy: focused on trusted customer and business data, more personalised and secure digital experiences, and generating and deploying customer insights through AI. Key initiatives include Smart Leads, Digital Onboarding, Book a Banker, and Personalised Offers — each using data and AI to deepen customer relationships and improve commercial outcomes.

Index Context

Westpac is a constituent of the S&P/ASX 200 and one of Australia's four major banks. For S&P/ASX 200 investors, WBC provides exposure to Australian retail and business banking dynamics, the NIM environment set by the RBA's cash rate decisions, and the ongoing technology transformation of one of the country's most complex legacy banking platforms. The UNITE transformation program — if executed successfully — is expected to materially reduce Westpac's cost-to-income ratio and improve the consistency of customer digital experiences across its multiple banking brands.

Material Risks and Uncertainties

The UNITE technology transformation is the most significant long-term execution risk for Westpac. Technology transformations of this scale — replacing core banking infrastructure across multiple brands and business units — are inherently complex, expensive, and prone to delays. The impairment charge increase to 10 basis points — including higher portfolio overlays and a more severe downside scenario — reflects growing caution about consumer credit quality as cost-of-living pressures persist. NIM stability at 1.89% is supported by the current rate environment but may come under pressure if deposit competition intensifies or if rate cuts reduce asset yields faster than deposit costs decline. Westpac's housing credit growth expectation of 4.7% in FY27 (down from 6.8% in FY26) reflects deliberate moderation and industry-wide softening, which will reduce Mortgage Volume growth as a top-line driver.

Upcoming Milestones

The UNITE platform migration — with commercial banking customers already migrating and Invoice Finance complete — will continue rolling out in FY27, with each new migration segment a milestone in the transformation's execution. The Data, Digital and AI initiatives (Smart Leads, Book a Banker, Digital Onboarding, Personalised Offers) will be assessed for commercial uplift in customer Acquisition and retention metrics at the FY26 full-year results in October/November 2026. Westpac's FY26 full-year results will provide the first consolidated view of the transformation's financial impact across the full year.