Fund Manager Summary on Westpac Banking Corp (ASX:WBC)
In February 2026, Pendal Group commented that Westpac Banking Corp (ASX:WBC) beat consensus Q1 NPAT by 5% and pre-provision profit by 2% but the outperformance was driven by volatile markets/treasury income, margins were broadly stable (down -3bp versus the prior half and -1bp from 4Q to 1Q) and the share price may be trading ahead of fundamentals versus peers. Across fund managers the consensus is cautiously constructive: recent commentary weighs in favor of the company’s strategic reset under new leadership and the UNITE program, while flagging meaningful execution risk and near-term cost pressure; Antares highlighted a revitalised management team, a focused push into higher‑margin business and institutional lending (business lending +14% and institutional +15% in H1 2025), senior appointments in data/digital/AI and planned reductions of over 1,500 roles as structural levers to improve returns, whereas Clime exited citing weaker underlying NIM, accelerating costs before efficiency gains are realised, a flat-at-best dividend and a poor delivery track record despite a ~17% rally over the past year; Pendal’s recent Q1 read underscores that earnings beats can be driven by volatile treasury income, margins are likely to remain a little below peers given a smaller hedging tailwind, and the stock already trades on par with NAB despite a multi‑year ambition to close the returns gap. Actionable considerations are to monitor UNITE execution (cost-out vs transitional spend), delivery of efficiency and system simplification, sustained improvement in underlying margins rather than one‑off market income, the pace of business and institutional lending growth, interest‑rate hedge dynamics that affect relative margin performance, dividend sustainability given payout ratios, and valuation dispersion versus peers which could create opportunities if volatility delivers lower prices or if execution visibly accelerates.
Commentary From The Managers
There are 5 insights from 4 fund managers regarding their investment in Westpac Banking Corp (ASX:WBC) available on Thesis Tracker.
Unlock Updates With ThesisTracker Pro
Don’t let information asymmetry undermine your investment returns. Join other engaged investors on ThesisTracker Pro.
Updates are made available to members within 12 hours of being released. The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Pendal Group
16 Feb 2026
$40.61
Summary
- Pendal Group believes Westpac delivered a resilient quarter and continues to hold because core margin stability and strong business/institutional lending growth support the investment case despite market-driven trading gains and a stretched valuation.
- Q1 results: NPAT beat consensus by +5%; pre-provision profit beat by +2%.
- Pre-provision beat driver: The PPOP beat was entirely due to volatile markets and treasury income, so it has minimal impact on consensus and sentiment.
- Margin trend: Net interest margin fell -3bp versus the prior half and -1bp from 4Q to 1Q — viewed as a solid outcome.
- Lending growth: Encouraging strong growth in business and institutional lending achieved without jeopardising margin.
- Peer gap: Margins likely to remain a little worse than peers due to a smaller tailwind from interest rate hedges.
- Valuation caution: Share price may have gotten ahead — Westpac now trades on the same multiple as NAB despite a four‑year ambition to lift returns into NAB territory.
Antares Capital
30 June 2025
$33.86
Summary
- Antares Capital added Westpac Banking Corporation (WBC) to the portfolio over the quarter.
- The fund manager is attracted to a revitalised leadership team under CEO Anthony Miller.
- Strategic cost management is a key focus, with initiatives to streamline operations.
- Westpac's 'Unite' program aims to reduce over 1,500 roles to enhance operational efficiency.
- Appointment of Dr. Andrew McMullan as Chief Data, Digital, and AI Officer highlights a commitment to technology.
- Financial resilience is evident with a 14% increase in business lending and 15% in institutional lending in H1 2025.
- Engagement with management has reinforced confidence in Westpac's strategic direction and commitment to shareholder value.
- Antares Capital has purchased a modest amount of WBC and remains underweight for now.
- The investment case will evolve, with plans to increase the position as conviction grows or as volatility presents opportunities.
Clime Investment Management
31 May 2025
$32.18
Summary
- Exited Westpac.
- The WBC result was marginally disappointing, with underlying NIM weaker.
- Costs expected to accelerate before efficiency gains are realized.
- The company is spending to benefit from system simplification via UNITE, but its track record is poor.
- The dividend is expected to be flat at best, with the payout ratio at the high end.
- Despite a 17% stock rally over the past year, Westpac is likely to lag behind ANZ and NAB looking forward.
- Clime Investment Management is looking for evidence of long awaited efficiency gains from system rationalisation.
Sterling Managed Investments
28 Feb 2025
$31.81
Summary
- Sterling Managed Investments has further reduced their bank exposure.
- They have taken 1% out of Westpac following a marginally disappointing 1Q25 result.
- Despite a long period of better than expected results, a weaker net interest margin outcome has caused concern among investors.
- As the market enters a rate cutting cycle, bank earnings are perceived to have peaked.
- Valuations for banks are at decade highs, prompting a shift in focus.
- Sterling Managed Investments sees superior value in other areas of the market instead.
- With low growth, high PE, and emerging headwinds, they believe it is not the right time to be over-exposed to Australian banks.
Clime Investment Management
30 June 2024
$27.21
Summary
- 2023 posed challenges for Westpac Banking Corp (WBC), notably with a declining net interest margin (NIM) due to mortgage pricing competition.
- WBC initiated a significant $2 billion capital expenditure to enhance its technology systems, addressing prior lagging investments.
- Recent improvements in NIM as competitors have become more rational in mortgage pricing.
- WBC will benefit from a smaller term funding facility expiring in June 2024, enhancing financial flexibility.
- Cost advantages are expected as one-off redundancies are absorbed, despite rising costs from technology and amortization.
- WBC is outpacing system growth in its core mortgage book, with pricing exceeding its cost of capital.
- Approximately $30 billion in fixed-rate loans at an average rate of 4% are transitioning to variable rates, expected to significantly boost cash earnings.
- While there are execution risks associated with the IT upgrade, WBC's valuation appears attractive.
- WBC offers a dividend yield well above the market and maintains a healthy franking balance, supporting a higher payout ratio for FY24 and FY25.
- Clime Investment Management decided to introduce WBC to its portfolio due to its superior upside potential compared to peers.
The completeness, accuracy or current status of the investments referenced are not guaranteed.
Frequently Asked Questions
Who is investing in Westpac Banking Corp (ASX:WBC)?
Fund managers including Antares Capital, Clime Investment Management, Sterling Managed Investments and Pendal Group have invested in Westpac Banking Corp (ASX:WBC).
Why do fund managers invest in Westpac Banking Corp?
Fund managers invest in Westpac Banking Corp due to its revitalized leadership and strategic initiatives aimed at enhancing profitability. The bank has demonstrated resilience with significant increases in business and institutional lending. The ongoing 'Unite' program focuses on operational efficiency and technological improvements. Additionally, while concerns about stagnant dividends and modest growth exist, some investors see potential in Westpac's transformation and commitment to driving shareholder value. However, views vary, with caution advised regarding high valuations and emerging market challenges.
What happened to Westpac Banking Corp (ASX:WBC)?
There have been no recent updates from fund managers regarding Westpac Banking Corp although fund managers including Antares Capital, Clime Investment Management and Sterling Managed Investments have previously commented.
What is the short interest in Westpac Banking Corp (ASX:WBC)?
The short interest in Westpac Banking Corp (ASX:WBC) is 0.89% which makes it the 218th most shorted stock on the ASX. Of the 3.4B shares that Westpac Banking Corp has on issue, 30.3M have been sold short.
What does Westpac Banking Corp (ASX:WBC) do?
Westpac Banking Corp. engages in the provision of banking and financial services. It operates through the following segments: Consumer, Business, Westpac Institutional Bank, Westpac New Zealand, Specialist Businesses and Group Businesses. The Consumer segment provides banking products, including mortgages, credit cards, personal loans, and savings and deposit products. The Business segment serves the banking needs of SME and commercial customers, including agribusiness and provides banking and advisory services to high net worth individuals through private wealth. The Westpac Institutional Bank segment provides a broad range of financial products and services to corporate, institutional and government customers. The Westpac New Zealand segment provides banking, wealth and insurance products and services for consumer, business and institutional customers in New Zealand. The Specialist Businesses segment comprises the operations that Westpac ultimately plans to exit with agreements in place for the sale of Westpac Life Insurance and motor vehicle dealer finance and notated leasing businesses. The Group Businesses segment includes the results of unallocated support functions such as treasury, chief operating office and core support. It also includes group-wide elimination entries arising on consolidation, centrally raised provisions and other unallocated revenue and expenses. The company was founded in 1817 and is headquartered in Sydney, Australia.