According to the Westpac Pillar 3 Report March 2026, there is a steady financial strength and regulatory compliance. The bank had Common Equity Tier 1 capital of 56,936 million dollars.
The total capital is 98, 543 million dollars in the quarter. There was moderate growth in risk-weighted assets, where the assets totalled 458,343 million dollars. The CET1 ratio recorded at 12.42%, which is slightly less than the previous quarter.
Nevertheless, it was still very high above the minimum requirements provided by the regulation. Westpac still adheres to Basel III guidelines established by APRA. The report indicates well-managed capital in light of the global economic uncertainties and changes in regulatory grounds.
Westpac headquarters in Sydney, highlighting strong capital performance. [Courtesy: Reuters]
Why the Westpac Pillar 3 Report March 2026 Shows Capital Stability
According to the Westpac Pillar 3 Report, March 2026, the capital buffers are constant in all reporting periods. The CET1 buffer requirement remained at 5.59% of risk-weighted assets. The minimum required CET1 capital of 7.92 was available as CET1 capital.
The half added 74 basis points to the capital ratio as a result of net profit. Capital was lowered by 57 basis points as a result of dividend payments. The asset movements in the form of risk-weighted assets decreased the ratio by 31 basis points.
These shifts depict equal capital expenditure between the dividends distributed to the shareholders and the compliance with the regulations. The bank has a sustained capital level that exceeds internally determined amounts by its board. This helps in investor confidence and financial stability.
How Risk-Weighted Assets Shifted In March 2026
The shift in risk-weighted assets reflects both lending growth and improving asset quality across Westpac’s portfolio. Key movements are outlined below:
- Total risk-weighted assets increased by 2% in March 2026, indicating moderate balance sheet expansion.
- Credit risk assets rose by $2.6 billion, driven by higher residential mortgage and corporate lending volumes.
- Improved credit quality reduced risk exposure by $5.8 billion, reflecting stronger borrower performance.
- Data refinements further lowered risk-weighted assets by $3.6 billion, enhancing reporting accuracy.
- Foreign exchange movements reduced risk assets by $2.7 billion due to currency fluctuations.
- Non-credit risk assets increased by $5.7 billion overall during the period.
- Interest rate risk in the banking book contributed the largest share of the increase.
- Operational risk assets declined following regulatory adjustments and removal of overlays.
Risk-weighted asset composition across key segments. [Courtesy: Navi]
Where Liquidity And Funding Metrics Stand In The Report
In the Westpac Pillar 3 Report, March 2026, liquidity measures were high. The Liquidity Coverage Ratio was reported at 132, which is more than the regulatory minimum of 100.
The total quality liquid assets amounted to 183,143million dollars in the quarter. The net outflows were 138,483 million dollars. The Net Stable Funding Ratio did not change significantly and was at 112%. This too exceeds the mandated minimum of 100%.
Increased deposits by customers helped in maintaining constant levels of funding. Wholesale financing also helped to create liquidity. These ratios represent the good short-term and long-term liquidity status of the bank.
What Regulatory Developments Impact Westpac Pillar 3 Report March 2026
The Westpac Pillar 3 Report March 2026 does indicate continued changes in regulations as dictated by APRA. The regulator will gradually eliminate Additional Tier 1 capital by January 2027.
The AT1 will be substituted with Tier 2 and CET1 capital elements by banks. CET1 requirement will shift to 10.50% as compared to 10.25%. This will not result in any change in total capital requirements overall. APRA also intends to make changes to credit risk and liquidity structures.
The objective of such changes is to match capital requirements to underlying risk profiles. New Zealand regulators are also assessing the capital settings of deposit takers. Such reforms may have an impact on capital structures in the future.
Regulatory framework evolution under Basel III standards. [Courtesy: Legodesk]
When Capital Ratio Movements Occurred During The Period
The Westpac Pillar 3 Report March 2026 indicated significant changes in capital ratios in the half. The CET1 ratio decreased by 11 basis points to 12.42%. Nevertheless, the increase in net profit in terms of quarterly performance was 11 basis points.
The issuance of tier 2 capital contributed 27 basis points to overall capital ratios. The bank had issued 2.5 billion dollars in Tier 2 instruments. It also repurchased 1.25 billion dollars in the period.
The movements in foreign exchange decreased the Tier 2 capital by a few points. Leverage ratio has not changed as it stood at 4.98%. This is way above the regulatory minimum requirement of 3.5%.
How Westpac Manages Capital And Risk Across Operations
According to the Westpac Pillar 3 Report, March 2026, the structured capital management practices are highlighted. The bank has an Annual Internal Capital Adequacy Assessment Process. It aims at a CET1 ratio of more than 11.25% postdividends.
Stress testing is done in unfavourable economic conditions. Capital planning takes into account the expectations of the investors and the regulations. The bank is based in various regions such as Australia and New Zealand.
It is also in line with the requirements of APRA as well as the international Basel standards. Risk management is categorised as credit, market, operational and liquidity risks. This diversified structure aids in long term financial stability and growth.
Also Read: Westpac and Bank of Queensland Face Diverging Verdicts From Morgans
FAQs
Q1: What is the CET1 ratio in the Westpac Pillar 3 Report March 2026?
A1: The CET1 ratio is 12.42%. It remains above regulatory requirements and internal targets.
Q2: How much total capital did Westpac report in March 2026?
A2: Westpac reported total capital of 98,543 million dollars. This reflects stable capital management.
Q3: What is the Liquidity Coverage Ratio reported by Westpac?
A3: The Liquidity Coverage Ratio is 132%. It exceeds the 100% regulatory minimum requirement.
Q4: How much are Westpac’s risk-weighted assets in March 2026?
A4: Total risk-weighted assets are 458,343 million dollars. This represents a 2% increase over the half.
Disclaimer
This article is based on the official Westpac Pillar 3 Report released on 5 May 2026. It is intended for informational purposes only and does not constitute financial advice. Readers should consider independent financial consultation before making investment decisions based on this information.
Sources
- https://data-api.marketindex.com.au/api/v1/announcements/XASX:WBC:2A1669935/pdf/inline/westpac-pillar-3-report-march-2026
- https://www.westpac.com.au/about-westpac/investor-centre/
- https://www.tipranks.com/news/company-announcements/westpac-posts-steady-1h26-profit-and-boosts-regional-banking-push
