PEXA's UK Win With NatWest Meets an Australian Pricing Cut

Fund managers say strong UK progress with NatWest is now competing with a harsher-than-expected regulatory pricing review at home

6 Jul 2026 · 5 min read

Digital property settlement platform PEXA Group spent 2025 winning over sceptics on its UK expansion with major bank NatWest, before an IPART pricing review in 2026 threatened to cut deep into the profitable Australian monopoly that funds that growth.

A NatWest deal validates the UK expansion

Seneca Financial Solutions' July 2025 update reported shares rallying 17 per cent after PEXA signed NatWest, a UK bank larger in scale than Commonwealth Bank, to its digital conveyancing platform, arguing the market had unfairly penalised PEXA for its loss-making UK foray despite a dominant, monopolistic Australian position generating EBITDA margins above 50 per cent. Clime Investment Management's own July update described the NatWest deal as a very positive step in replicating PEXA's Australian success, given NatWest's position as a top-five UK financial institution.

Strong results confirm the UK progress

Perennial Partners' February 2026 update reported PEXA's EBITDA up 19 per cent and net profit after tax and amortisation up 33 per cent, with NatWest due to go live on remortgage settlements in April, and PEXA sitting among the fund's top five active positions. Equity Trustees Asset Management's March 2026 update confirmed the market had priced in little of that UK upside, with the company upgrading FY26 guidance, cutting expected capital expenditure, and divesting its non-core digital solutions business to redeploy capital into its core UK and Australian operations.

PEXA delivered a strong 1HFY26 result in February delivering better than expected margins and strong cashflow growth. In our view, little had been incorporated in the share price for UK upside which they started to deliver on. The UK division saw an uptick in activity and new client onboarding.

— Equity Trustees Asset Management, Quarterly Report, March 2026

A competition overhang lifts, but pricing risk emerges

Lakehouse Capital's April 2026 update reported a genuine positive: ARNECC formally abandoned its long-running interoperability programme that would have introduced competitors to PEXA's electronic settlement monopoly, following independent reviews finding the various models too costly and complex. But attention quickly shifted to a new risk, IPART's methodology paper for reviewing PEXA's regulated exchange fees, with early illustrative examples pointing to potentially significant changes to the pricing structure depending on how much of PEXA's historical investment regulators chose to recognise.

A regulatory de-rate accelerates through the year

Blackwattle Investment Partners exited its position entirely in April 2026, arguing that while PEXA remained a high-quality platform with a genuinely gaining UK opportunity, the range of potential regulatory outcomes from the IPART review had become too wide and long-dated to confidently hold. SG Hiscock & Company's May 2026 update noted modelled scenarios implied revenue cuts of up to 45 per cent under a strict historical capex methodology, compounded by near-term volume softness from Federal Budget changes to negative gearing, even as SG Hiscock retained conviction given PEXA's designation as national critical infrastructure and industry submissions showing little appetite for such drastic cuts.

PEXA (-17.5%) fell in April following the release of a consultation paper by IPART as part of its pricing review process. IPART proposed a new framework for regulating the fees that can be charged by electronic property settlement providers such as PEXA, based on an Initial Asset Base. While the paper is only preliminary, it points toward a potentially more rigid structure controlling PEXA's future pricing, which could have a material impact on the long-term earnings outlook for the company's core Australian Exchange business.

— Blackwattle Investment Partners, Monthly Report, April 2026

A draft ruling delivers a harsher cut than expected

The regulatory risk fully crystallised in July 2026. Pendal Group reported shares fell 16.4 per cent after IPART's draft report recommended a price cut of around 20 per cent, equating to roughly $70 million in lost revenue, from 1 July 2027, materially larger than the more-than-10-per-cent cut the market had assumed ahead of the report. Pendal noted the outcome was particularly poor given the very high fixed cost leverage in the Australian e-conveyancing exchange business, which makes offsetting the revenue loss through cost cuts alone especially difficult, even though the final recommendation remains subject to industry submissions.