Westpac Banking (WBC) AI Stock Analysis

Company Guidance

For FY 2027, Westpac expects system growth to slow to 3.8%, system credit growth for business to be in the range of 6%-7% in both FY 2027 and FY 2028, and housing credit growth to slow to below 4%; it anticipates a peak-to-trough decline in house prices to be 11% before recovering in the second half of next year. In the first half of 2027, the replicating portfolio is expected to be a benefit of 2 basis points, liquid assets should provide a 2 basis point benefit, and Westpac expects a 1 basis point benefit from the September RBA rate rise on unhedged deposits, while overall lending margins are expected to edge lower, deposit mix is expected to be less of a drag, and qualification rates are expected to remain high. Expenses are expected to have similar cost growth to FY 2026, structural savings are targeted at more than AUD 600 million in FY 2027, investment spend is expected to be relatively stable, and UNITE is projected to be between AUD 850 million and AUD 950 million; UNITE will not be above AUD 3.5 billion, is planned for delivery at the end of FY 2028, and benefits are expected through the course of FY 2029. The bank is targeting a better-than-peers cost-to-income ratio by FY 2029, and does not expect to have to do the one-offs again for FY 2027 productivity.