Westpac is "highly likely" to make more provisions on top of the latest $235 million it is setting aside to compensate customers over-charged for financial services, UBS analysts have warned.

The lender has said its full-year cash earnings would take a $235 million hit due to the provision for compensation and litigation, but UBS analysts say more could be on the way next year.

"We believe that more provisions are highly likely," banking analysts Jon Mott, Rachel Finn and Karyn Cao said in a note written after Westpac announced the provision on Thursday.

"The provisions announced today only include salaried financial planners: it does not include the investigation into advice fees and inadequate financial advice by aligned planners, which are expected to be taken in FY19."

They say it is too early to say how large the additional charges could be, but note that Westpac had about the same number of salaried and aligned planners.

UBS downgraded its share price target for Westpac from $26 to $25 - compared to the stock price of $27.61 before Friday's market open - and maintained its 'sell' rating.

"Evidence from overseas suggests that compliance and remediation costs are rarely limited to one year and tend to escalate over time," the UBS analysts wrote.

"We expect housing credit growth to slow (potentially sharply) as the banks tighten underwriting standards ... (and) we maintain our sell rating on WBC and our very cautious view on the Australian banks.

Westpac said on Friday it had finally reached a deal to offload boutique fund manager Ascalon, divesting the business to ASX-listed Generation Development Group.

The bank did not disclose the financial terms of the deal, saying only that GDG would "invest in Ascalon and become its ultimate owner" by March.

The deal is subject to approval from the Securities and Futures Commission of Hong Kong.