SYDNEY, March 28, 2026, 09:18 AEDT
Westpac Banking Corp shares last traded at A$40.74 on Friday, up 0.69%, after the lender’s latest UNITE overhaul update and alongside a 1 billion euro covered-bond sale into an offshore funding market that is still open for top-rated borrowers. 1
The move matters because Westpac is moving from planning to execution on a program that runs across mortgages, commercial banking and old back-end systems. Capital Brief reported Chief Executive Anthony Miller described UNITE as “on track, on budget and on scope” as the bank began moving commercial customers from St. George, Bank of Melbourne and BankSA onto the main bank. 2
Westpac said the planning phase, known internally as discovery, was complete across 57 initiatives and the program had shifted into delivery through 10 work packages. The bank said it invested A$195 million in the first quarter of fiscal 2026, with 73% of that taken as an expense in the period. 3
The work now touches the businesses investors watch most closely. Westpac said its One Commercial Bank initiative is set to migrate about 75,000 commercial customer accounts to Westpac and complete in fiscal 2028, while mortgage simplification runs through fiscal 2029. 3
Funding markets, for now, are giving the bank some room. Reuters reported Westpac sold a 1 billion euro AAA-rated covered bond on Thursday, while Macquarie Bank launched a U.S. dollar senior deal. A covered bond is bank debt backed by a pool of mortgages, which makes it one of the safer funding instruments in bank capital markets. “Covered bonds are the safest asset class and there is always demand – these are AAA-rated,” CreditSights analyst Pramod Shenoi told Reuters, while Citi’s Daeil Ahn said the market was showing a clear “flight to quality” toward top-rated issuers. 4
But one line item moved the wrong way. Westpac said the expected cost to build a single mortgage technology system had risen to about A$285 million from A$265 million flagged in November, a reminder that the hardest parts of the program can still get more expensive even if the overall envelope does not shift. 5
The backdrop has also become rougher. The Reserve Bank of Australia raised the cash rate to 4.1% this month and warned the Middle East war could add to inflation pressure. Luci Ellis, Westpac’s chief economist, said a follow-up move in May looked “less certain,” though she added that how the conflict evolves would be crucial. 6
Higher rates can help lending spreads for a while, but they also test borrowers and keep deposit competition tight. Miller said on March 16 that arrears, or late payments, and non-performing loans were “as low as we have seen for a very long time” and called it “remarkable how well people are navigating this environment.” 7
Westpac, Australia’s third-largest bank by market value, reported first-quarter unaudited net profit of A$1.9 billion in February, about 5% ahead of Visible Alpha consensus according to Citigroup. It added A$12 billion in deposits and A$22 billion in new loans, while larger rival Commonwealth Bank said earlier that week it had gained share in home loans, business loans and deposits. Investors are now judging Westpac on execution as much as earnings momentum. 8
