Westpac’s losses likely to stay low over next two years: S&P

Success of its “Unite” project will be crucial to support its business franchise and stability.

Westpac Banking Corporation’s losses are expected to stay low over the next two years and remain at pre-pandemic levels.

“We anticipate that Westpac's credit losses will stay low over the next two years, at about pre-pandemic levels of 15 basis points (bps). Our current base case is that asset quality is unlikely to weaken to the extent that we would revise the outlook to negative from stable,” S&P Global Ratings said in a bulletin released on 5 May 2025.

The completion of Westpac's "Unite" technology-enabled simplification project is expected to also support the bank's business franchise and stability, with execution crucial to its success, the ratings agency added.

However, Westpac, alongside other Australian lenders, reportedly remain vulnerable to an increase in credit losses due to high household debt, elevated interest rates and consumer prices, as well as global economic uncertainties.

Westpac’s regulatory capital is expected to remain robust over the next two years, according to S&P.