Westpac gets APRA capital overlay lifted after risk management improvements

Westpac Banking Corporation confirmed on October 15, 2025, that the Australian Prudential Regulation Authority (APRA) has lifted its enforceable undertaking, acknowledging the bank's improved risk management framework. This decision follows the completion of Westpac's Customer Outcomes and Risk Excellence Program (CORE), marking a period of substantial risk transformation. An independent reviewer, Promontory, noted last year that the program has made Westpac "a simpler, stronger bank" due to profound structural and cultural changes.

The removal of the $500 million capital overlay will positively impact Westpac’s Common Equity Tier 1 (CET1) capital ratio, increasing it by approximately 17 basis points. This enhancement reflects a reduction in risk-weighted assets of $6,250 million, effective immediately. Westpac chief executive Anthony Miller emphasized that risk management remains a top priority, with a focus on embedding improvements to the bank’s risk culture over the past six years.

Miller added that the positive changes in risk management must be maintained and continually strengthened, acknowledging the contributions of all employees to this significant improvement.