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National Australia Bank vs Westpac

Side-by-side credit pricing comparison from Pillar 3 disclosures.

Last updated: March 2026 · Data source: public Pillar 3 disclosures
Verdict:

On a representative BBB+ EUR 25M 5-year term loan, National Australia Bank is the cheaper lender by 4bp in minimum spread. For a EUR 25M facility, that's EUR 10,150 per year.

Bank profiles compared

Metric National Australia Bank
Australia		 Westpac
Australia
IRB approachMixedMixed
Cost-to-income47.0%53.0%
Effective tax rate30.0%31.0%
Avg corporate PD2.91%2.42%
Avg LGD unsecured43.0%46.0%
Avg LGD secured24.0%27.0%
Funding spread (bp)13bp13bp
Corporate EADEUR 262bnEUR 213bn

Sample RAROC: BBB+ EUR 25M 5Y term loan

Both banks priced on the exact same deal — 150bp spread, 20bp commitment fee, 60-month maturity. Higher RAROC means the bank earns more from this deal. Lower min-spread means the borrower gets a better rate.

Component National Australia Bank Westpac
Annual revenueEUR 385,000EUR 385,000
Operating costEUR 154,000EUR 154,000
Expected lossEUR 28,750EUR 28,750
Capital required (FPE)EUR 2,451,320EUR 2,451,320
RAROC (after tax)6.98%6.88%
Min spread for 12% RAROC267bp271bp
This is just one sample deal.

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National Australia Bank full profile Westpac full profile All banks RAROC methodology

FAQ: National Australia Bank vs Westpac

Which bank is cheaper on corporate credit: National Australia Bank or Westpac?
On a BBB+ EUR 25M 5-year term loan, National Australia Bank requires a minimum spread of 267bp to reach a 12% RAROC hurdle, versus 271bp at the other bank — a difference of 4bp on the same deal.
How do National Australia Bank and Westpac compare on corporate PD?
National Australia Bank reports an EAD-weighted corporate PD of 2.91%, while Westpac reports 2.42%. The gap reflects differences in obligor mix and geography rather than underwriting quality.
How do the two banks differ on IRB approach?
National Australia Bank uses Mixed and Westpac uses Mixed. The IRB approach determines whether internal LGD models or supervisory LGDs apply, which materially affects capital required on every corporate facility.
What deal is used in this comparison?
A single standardised facility: BBB+ rated, EUR 25M drawn on a EUR 30M commitment, 5-year tenor, 150bp spread, 20bp commitment fee. Both banks are priced on this exact deal using their own disclosed Pillar 3 parameters.