Westpac Banking: Consumer update: Path to improvement

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Westpac Banking: Consumer update: Path to improvement

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Westpac Banking

Consumer update: Path to improvement

Maintain Rating: UNDERPERFORM | PO: 31.50 AUD | Price: 35.41 AUD

Consumer update: Room for improvement 11 June 2026

WBC’s Consumer update highlighted three priorities: 1) customer franchise measured by Equity

NPS, 2) customer experience assessed by MFI share, 3) scale from UNITE and lower CTI.

Retail banking headwinds around rates, competition and tax policy changes are Matt Dunger >> Research Analyst

underappreciated. Expectations appear overly optimistic, in our view. Merrill Lynch (Australia)

+61 2 9226 5329

Mortgage applications slow, holding an optimistic outlook matthew.dunger@bofa.com Aida Pita >>

WBC reported mortgage applications fell 10% since the Budget (investor -20%, own-occ Research Analyst

flat), albeit June-26 quarter application volumes are in-line with June-25. WBC economist Merrill+61 2 9226-5066Lynch (Australia)

forecasts for 4.7%/ 5.2% mortgage credit growth are unchanged, which we believe is aida.pita@bofa.com

optimistic and expect 3%/ 4%. See: Credit growth set to slow, cutting EPS.

Opportunity to scale remain longer-dated Stock Data

Catching CBA’s leading c.40% Retail bank CTI requires revenue and cost execution – we

see this as a long-dated target. WBC reports 16% MFI share for c.10m customers, vs Price 35.41 AUD

CBA 33.5% with c.12m retail transaction accounts. WBC’s Consumer bank CTI of 57% in Price Objective 31.50 AUD

1H26 is the highest of the major banks. Cutting the Consumer CTI to 51% (in-line with Date Established 9-Jun-2026

ANZ) would add >$600m pre-tax or c.6% to group earnings. In this context, c.$70m Investment Opinion A-3-7

targeted annual savings from mortgages via UNITE understates the required cost out.