WBC-NZ Banking Group Disclosure Statement – 31 Dec 2016

Westpac Banking Corporation
– New Zealand Banking Group
Disclosure Statement
For the three months ended 31 December 2016

Contents
General information and definitions ..............................................................................................................................................................................1
Limits on material financial support by the ultimate parent bank ................................................................................................................................1
General matters .............................................................................................................................................................................................................1
Credit ratings ..................................................................................................................................................................................................................2
Disclosure statements of the Overseas Bank and the financial statements of the Overseas Bank and the Overseas Banking Group ...............2
Guarantee arrangements ..............................................................................................................................................................................................2
Other material matters ...................................................................................................................................................................................................2
Conditions of registration ...............................................................................................................................................................................................2
Directors’ and the Chief Executive Officer, NZ Branch’s statement ...........................................................................................................................3
Income statement ..........................................................................................................................................................................................................4
Statement of comprehensive income ...........................................................................................................................................................................5
Balance sheet.................................................................................................................................................................................................................6
Statement of changes in equity .....................................................................................................................................................................................7
Statement of cash flows ................................................................................................................................................................................................8
Notes to the financial statements ..................................................................................................................................................................................9
Note 1 Statement of accounting policies ................................................................................................................................................................9
Note 2 Non-interest income .....................................................................................................................................................................................9
Note 3 Impairment charges on loans ......................................................................................................................................................................10
Note 4 Trading securities and other financial assets designated at fair value ......................................................................................................10
Note 5 Loans .............................................................................................................................................................................................................10
Note 6 Credit quality, impaired assets and provisions for impairment charges on loans ....................................................................................11
Note 7 Financial assets pledged as collateral ........................................................................................................................................................11
Note 8 Deposits and other borrowings....................................................................................................................................................................11
Note 9 Other financial liabilities at fair value through income statement ..............................................................................................................11
Note 10 Debt issues .................................................................................................................................................................................................12
Note 11 Related entities ...........................................................................................................................................................................................12
Note 12 Fair value of financial instruments .............................................................................................................................................................12
Note 13 Contingent liabilities, contingent assets and credit commitments ...........................................................................................................15
Note 14 Segment information ..................................................................................................................................................................................15
Note 15 Insurance business ....................................................................................................................................................................................16
Note 16 Risk management ......................................................................................................................................................................................17
16.1 Credit risk .................................................................................................................................................................................................17
16.2 Market risk ...............................................................................................................................................................................................17
16.3 Liquidity risk .............................................................................................................................................................................................17
Note 17 Concentration of credit exposures to individual counterparties ..............................................................................................................18
Note 18 Overseas Bank and Overseas Banking Group capital adequacy ...........................................................................................................18
Note 19 Other information on the Overseas Banking Group.................................................................................................................................19

Westpac Banking Corporation - New Zealand Banking Group
1
General information and definitions
Certain information contained in this Disclosure Statement is required by section 81 of the Reserve Bank of New Zealand Act 1989 (‘Reserve
Bank Act’) and the Registered Bank Disclosure Statements (Overseas Incorporated Registered Banks) Order 2014 (‘Order’).
In this Disclosure Statement, reference is made to five main reporting groups:
 Westpac Banking Corporation (otherwise referred to as the ‘Overseas Bank’) – refers to the worldwide business of Westpac Banking
Corporation excluding its controlled entities;
 Westpac Banking Corporation Group (otherwise referred to as the ‘Overseas Banking Group’) – refers to the total worldwide business
of Westpac Banking Corporation including its controlled entities;
 Westpac Banking Corporation New Zealand Branch (otherwise referred to as the ‘NZ Branch’) – refers to the New Zealand Branch of
Westpac Banking Corporation (trading as Westpac);
 Westpac New Zealand Limited (otherwise referred to as ‘Westpac New Zealand’) – refers to a locally incorporated subsidiary of the
Overseas Bank (carrying on the Overseas Bank’s New Zealand consumer, business and institutional banking operations); and
 Westpac Banking Corporation – New Zealand Banking Group (otherwise referred to as the ‘NZ Banking Group’) – refers to the New
Zealand operations of Westpac Banking Corporation Group including those entities whose business is required to be reported in the
financial statements of the Overseas Banking Group’s New Zealand business.
Words and phrases not defined in this Disclosure Statement, but defined by the Order, have the meaning given by the Order when used in
this Disclosure Statement. All amounts referred to in this Disclosure Statement are in New Zealand dollars unless otherwise stated.
Limits on material financial support by the ultimate parent bank
In late 2014, the Australian Prudential Regulation Authority (‘APRA’) initiated a process to reduce Australian bank non-equity exposures to
their respective New Zealand banking subsidiaries and branches, so that these non-equity exposures are minimised during ordinary times. On
19 November 2015, APRA informed the Overseas Bank that its Extended Licensed Entity (‘ELE’) non-equity exposures to New Zealand
banking subsidiaries is to transition to be below a limit of five percent of the Overseas Bank’s Level 1 Tier 1 capital.
The ELE consists of the Overseas Bank and its subsidiary entities that have been approved by APRA to be included in the ELE for the
purposes of measuring capital adequacy.
APRA has allowed a period of five years commencing on 1 January 2016 to transition to be less than the five percent limit. Exposures for the
purposes of this limit include all committed, non-intraday, non-equity exposures including derivatives and off-balance sheet exposures.
Further, APRA imposed two conditions over the transition period – the percentage excess above the five percent limit as at 30 June 2015, is
to reduce by at least one fifth by the end of each calendar year over the transition period, and the absolute amount of routine New Zealand
non-equity exposure is not to increase from the 30 June 2015 level until the Overseas Bank is, and expects to remain, below the five percent
limit. For the purposes of assessing this exposure, the five percent limit excludes equity investments and holdings of capital instruments in
New Zealand banking subsidiaries.
While the limit and associated conditions do not apply to the ELE’s non-equity exposures to the NZ Branch (which is within the ELE), the limit
and associated conditions do apply to the NZ Branch’s non-equity exposures to the rest of the NZ Banking Group other than Westpac New
Zealand Group Limited. As at 31 December 2016, the ELE’s non-equity exposures to New Zealand banking subsidiaries affected by the limit
was approximately 6.9% of Level 1 Tier 1 capital of the Overseas Bank. Non-equity exposure would need to reduce by approximately $0.8
billion from the 31 December 2016 position to comply with the 5% limit. The Overseas Bank expects to achieve compliance with the 5% limit
within the transition period.
APRA has also confirmed the terms on which the Overseas Bank ‘may provide contingent funding support to a New Zealand banking
subsidiary during times of financial stress’. APRA has confirmed that, at this time, only covered bonds meet its criteria for contingent funding
arrangements.
General matters
NZ Banking Group residential mortgages by loan-to-value ratio – note 16.1
The NZ Banking Group has identified that the loan-to-value ratios (‘LVR’) in note 16.1 have not been calculated in compliance with the Order.
They have been calculated by reference to the value of loans at origination rather than the current values as required by the Order. The result
would be expected to be higher and hence more conservative than it would be using the method prescribed by the Order. The correct ratios
will be included in the Disclosure Statement for the period ending 31 March 2017. Refer to Note 16.1 for more information.
Directors
The Directors of the Overseas Bank at the time this Disclosure Statement was signed were:
Lindsay Philip Maxsted, DipBus (Gordon), FCA, FAICD – Chairman
Brian Charles Hartzer, BA, CFA – Managing Director & Chief Executive Officer
Ewen Graham Wolseley Crouch AM, BEc (Hons.), LLB, FAICD
Catriona Alison Deans, BA, MBA, GAICD
Craig William Dunn, BCom, FCA
Robert George Elstone, BA (Hons.), MA (Econ.), MCom
Peter John Oswin Hawkins, BCA (Hons.), SF Fin, FAIM, ACA (NZ), FAICD
Peter Ralph Marriott, BEc (Hons.), FCA

Changes to the Directorate
Elizabeth Blomfield Bryan ceased to be a director on 9 December 2016. There have been no other changes to the composition of the
Overseas Bank’s Board of Directors (the ‘Board’) since 30 September 2016.

Westpac Banking Corporation - New Zealand Banking Group 2

Chief Executive Officer, NZ Branch
Karen Lee Ann Silk, B.Com

Responsible person
All the Directors named above have authorised in writing David Alexander McLean, Chief Executive, Westpac New Zealand to sign this
Disclosure Statement on the Directors’ behalf in accordance with section 82 of the Reserve Bank Act.


Credit ratings
The Overseas Bank has the following credit ratings with respect to its long-term senior unsecured obligations, including obligations payable in
New Zealand in New Zealand dollars, as at the date this Disclosure Statement was signed:
Rating Agency
Current Credit Rating Rating Outlook
Fitch Ratings AA- Stable
Moody’s Investors Service Aa2 Negative
S&P Global Ratings AA- Negative

On 7 July 2016, S&P Global Ratings (‘S&P’) affirmed the Overseas Bank’s credit rating at AA-, however, as a result of S&P revising the
outlook for the Australian sovereign rating to ‘negative’ from ‘stable’, the Overseas Bank’s outlook was also revised to ‘negative’ from ‘stable’.
On 18 August 2016, Moody’s Investors Service (‘Moody’s’) affirmed the Overseas Bank’s credit rating at Aa2, but revised the outlook to
'negative' from 'stable'. The revision in outlook follows Moody’s revision of the Australian Macro Profile to “Very Strong -” from “Very Strong”.
There have been no changes to the Overseas Bank’s credit rating in the two years prior to 31 December 2016.
A credit rating is not a recommendation to buy, sell or hold securities of the Overseas Bank. Such ratings are subject to revision, qualification,
suspension or withdrawal at any time by the assigning rating agency. Investors in the Overseas Bank’s securities are cautioned to evaluate
each rating independently of any other rating.
Disclosure statements of the Overseas Bank and the financial statements of the Overseas Bank and the
Overseas Banking Group
Disclosure Statements of the Overseas Bank for the last five years are available, free of charge, at the internet address www.westpac.co.nz. A
printed copy will also be made available, free of charge, upon request and will be dispatched by the end of the second working day after the
day on which the request is made.
The most recently published financial statements of the Overseas Bank and the Overseas Banking Group are for the year ended 30
September 2016 and can be accessed at the internet address www.westpac.com.au.
Guarantee arrangements
No material obligations of the Overseas Bank that relate to the NZ Branch are guaranteed as at the date this Disclosure Statement was
signed.
Other material matters
Certain matters relating to the business or affairs of the Overseas Bank and the NZ Banking Group have been disclosed on the New Zealand
and/or Australian stock exchanges.

There are no other matters relating to the business or affairs of the Overseas Bank and the NZ Banking Group which are not contained
elsewhere in the Disclosure Statement and which would, if disclosed, materially affect the decision of a person to subscribe for debt securities
of which the Overseas Bank or any member of the NZ Banking Group is the issuer.
Conditions of registration
Changes to conditions of registration
The conditions of registration were amended on 28 September 2016 with effect from 1 October 2016 to revise the high LVR restrictions on
residential mortgage lending. Property investment residential lending at LVRs of greater than 60% must not exceed 5% of the total qualifying
new property investment residential mortgage loans arising during the relevant loan-to-valuation measurement period. Non property-
investment residential mortgage lending with an LVR of more than 80% must not exceed 10% of the total qualifying new non property-
investment residential mortgage loans arising during the relevant loan-to-valuation measurement period.
The Reserve Bank document ‘Framework for Restrictions on High-LVR Residential Mortgage lending’ (BS19) was also revised.

Westpac New Zealand conditions of registration
Westpac New Zealand has disclosed instances of non-compliance with its conditions of registration in Westpac New Zealand’s Disclosure
Statement for the three months ended 31 December 2016. These instances have no impact on the compliance by the Overseas Bank with its
conditions of registration.

Westpac Banking Corporation - New Zealand Banking Group
3
Directors’ and the Chief Executive Officer, NZ Branch’s statement
Each Director of the Overseas Bank and the Chief Executive Officer, NZ Branch, believe, after due enquiry, that, as at the date on which this
Disclosure Statement is signed, the Disclosure Statement:
(a) contains all information that is required by the Order except as disclosed in Note 16.1 and under the heading “NZ Banking Group
residential mortgages by loan-to-value ratio” as noted on page 1; and
(b) is not false or misleading.

Each Director of the Overseas Bank and the Chief Executive Officer, NZ Branch, believe, after due enquiry, that, over the three months ended
31 December 2016:
(a) the Overseas Bank has complied with all conditions of registration imposed on it pursuant to section 74 of the Reserve Bank Act; and
(b) the NZ Branch and other members of the NZ Banking Group had systems in place to monitor and control adequately the material risks of
relevant members of the NZ Banking Group, including credit risk, concentration of credit risk, interest rate risk, currency risk, equity risk,
liquidity risk and other business risks, and that those systems were being properly applied. For this purpose, a relevant member of the
NZ Banking Group means a member of the NZ Banking Group that is not a member of Westpac New Zealand’s banking group, as
defined in Westpac New Zealand’s Disclosure Statement for the three months ended 31 December 2016.


This Disclosure Statement has been signed, on behalf of all of the Directors by David Alexander McLean, Chief Executive, Westpac New
Zealand, and by Karen Lee Ann Silk as Chief Executive Officer, NZ Branch.



David Alexander McLean



Karen Lee Ann Silk

Dated this 27
th
day of February 2017

Westpac Banking Corporation - New Zealand Banking Group 4

Income statement for the three months ended 31 December 2016
Three MonthsThree Months
Year
Ended
EndedEnded
31-Dec-16
31-Dec-1530-Sep-16
$ millionsNote
Unaudited
UnauditedAudited
Interest income1,009
1,0874,172
Interest expense(560)(643)(2,398)
Net interest income449
444
1,774
Non-interest income
2158
139588
Net operating income607
583
2,362
Operating expenses
(247)
(236)(953)
Impairment recoveries/(charges) on loans
3
371
(73)
Profit before income tax expense
397348
1,336
Income tax expense
(112)
(97)(373)
285
251
963
NZ Banking Group
Profit after income tax expense

The above income statement should be read in conjunction with the accompanying notes.

Westpac Banking Corporation - New Zealand Banking Group
5
Statement of comprehensive income for the three months ended 31 December 2016
Three MonthsThree MonthsYear
EndedEndedEnded
31-Dec-1631-Dec-1530-Sep-16
$ millionsUnauditedUnauditedAudited
Profit after income tax expense285251963
Available-for-sale securities:
Net unrealised gains/(losses) from changes in fair value of available-for-sale securities4(7)(21)
Income tax effect(1)26
Cash flow hedges:
Net gains/(losses) from changes in fair value of cash flow hedges51(31)(117)
Transferred to the income statement2835133
Income tax effect(22)(1)(4)
60(2)(3)
Remeasurement of employee defined benefit obligations--(7)
Income tax effect--2
--(5)
Total other comprehensive income/(expense), net of tax60(2)(8)
345249955
Total comprehensive income
Total other comprehensive expense which will not be reclassified
subsequently to the income statement
Total other comprehensive income/(expense) which may be reclassified
subsequently to the income statement
NZ Banking Group
Other comprehensive income/(expense) which may be reclassified
subsequently to the income statement:
Other comprehensive expense which will not be reclassified
subsequently to the income statement:

The above statement of comprehensive income should be read in conjunction with the accompanying notes.

Westpac Banking Corporation - New Zealand Banking Group 6

Balance sheet as at 31 December 2016
31-Dec-1631-Dec-1530-Sep-16
$ millionsNoteUnauditedUnauditedAudited
Assets
Cash and balances with central banks1,8571,7851,472
Due from other financial institutions927509844
Trading securities and other financial assets designated at fair value45,6484,8374,035
Derivative financial instruments3,7553,9824,838
Available-for-sale securities3,7213,3863,790
Loans5, 676,16670,55175,582
Life insurance assets268278269
Due from related entities2,9022,3841,218
Investment in associate10-9
Property and equipment153156161
Deferred tax assets142166166
Intangible assets 648653650
Other assets354382324
Total assets96,55189,06993,358
Liabilities
Due to other financial institutions526475616
Deposits and other borrowings859,99555,53058,791
Other financial liabilities at fair value through income statement9239450576
Derivative financial instruments 5,1016,0696,236
Debt issues1017,89714,06114,727
Current tax liabilities843970
Provisions766799
Other liabilities586611590
Total liabilities excluding related entities liabilities84,50477,30281,705
Due to related entities3,5853,4433,525
Subordinated debentures1,0801,8821,091

Total related entities liabilities4,6655,3254,616
Total liabilities89,16982,62786,321
Net assets7,3826,4427,037
Equity
Head office account
Branch capital1,3001,3001,300
Retained profits660549613
Total head office account1,9601,8491,913
NZ Banking Group equity
Ordinary share capital143143143
Retained profits 5,3244,5545,086
Available-for-sale securities reserve4111
Cash flow hedge reserve(49)(115)(106)
Total equity attributable to owners of the NZ Banking Group5,4224,5935,124
Total equity7,3826,4427,037
Interest earning and discount bearing assets90,63582,73586,427
Interest and discount bearing liabilities77,34370,55373,743
NZ Banking Group


The above balance sheet should be read in conjunction with the accompanying notes.

Westpac Banking Corporation - New Zealand Banking Group
7
Statement of changes in equity for the three months ended 31 December 2016
Available- Cash
Ordinary for-sale Flow
Branch Retained Share Retained Securities Hedge Total
$ millionsCapital Profits Capital Profits Reserve Reserve Equity
As at 1 October 2015 (Audited)1,300 524 143 4,328 16 (118) 6,193
Profit after income tax expense- 25 - 226 - - 251
Net losses from changes in fair value- - - - (7) (31) (38)
Income tax effect- - - - 2 9 11
Transferred to the income statement- - - - - 35 35
Income tax effect
- - - - - (10) (10)
- 25 - 226 (5) 3 249
As at 31 December 2015 (Unaudited)1,300 549 143 4,554 11 (115) 6,442
Profit after income tax expense- 89 - 874 - - 963
Net losses from changes in fair value- - - - (21) (117) (138)
Income tax effect- - - - 6 33 39
Transferred to the income statement- - - - - 133 133
Income tax effect- - - - - (37) (37)
- - - (7) - - (7)
Income tax effect- - - 2 - - 2
- 89 - 869 (15) 12 955
Transactions with owners:
Dividends paid on ordinary shares- - - (111) - - (111)
As at 30 September 2016 (Audited)1,300 613 143 5,086 1 (106) 7,037
Profit after income tax expense- 47 - 238 - - 285
Net gains from changes in fair value- - - - 4 51 55
Income tax effect- - - - (1) (14) (15)
Transferred to income statement- - - - - 28 28
Income tax effect- - - - - (8) (8)
- 47 - 238 3 57 345
As at 31 December 2016 (Unaudited)1,300 660 143 5,324 4 (49) 7,382
NZ Banking Group
NZ BranchOther Members of the NZ Banking Group
Head Office AccountTotal equity attributable to owners of the NZ Banking Group
Remeasurement of employee defined benefit
obligations
Three months ended 31 December 2016
(Unaudited)
Total comprehensive income for the year ended
30 September 2016
Total comprehensive income for the three
months ended 31 December 2016
Three months ended 31 December 2015
(Unaudited)
Year ended 30 September 2016
(Audited)
Total comprehensive income for the three
months ended 31 December 2015

The above statement of changes in equity should be read in conjunction with the accompanying notes.

Westpac Banking Corporation - New Zealand Banking Group 8

Statement of cash flows for the three months ended 31 December 2016
Three MonthsThree MonthsYear
EndedEndedEnded
31-Dec-1631-Dec-1530-Sep-16
$ millions
UnauditedUnauditedAudited
Cash flows from operating activities
Interest income received990 1,091
4,198

Interest expense paid(540)
(683)
(2,403)

Non-interest income received193

83
521
Operating expenses paid
(245)
(234) (838)
Income tax paid(98) (80)

(328)
Cash flows from operating activities before changes in operating assets and liabilities300 177
1,150

Net (increase)/decrease in:
Due from other financial institutions
(92)
(293) (716)
Trading securities and other financial assets designated at fair value(1,698) (846) 53
Loans(602) (1,004) (6,107)
Due from related entities(1,731) 883
1,897

Other assets(6) 1

3
Net increase/(decrease) in:
Due to other financial institutions(90) (362) (221)

Deposits and other borrowings1,204 2,544

5,805
Other financial liabilities at fair value through income statement(337) 171
297
Other liabilities(2)
(8) (4)
Net movement in external and related entity derivative financial instruments206 (362)
(1,915)
Net cash provided by/(used in) operating activities
(2,848) 901 242
Cash flows from investing activities
Purchase of available-for-sale securities- -
(652)
Proceeds from maturities/sale of available-for-sale securities- -
300
Net movement in life insurance assets1 (13)
(4)
Purchase of capitalised computer software(12) (10)
(56)
Purchase of property and equipment(4) (2)
(25)
Net cash used in investing activities(15) (25)
(437)
Cash flows from financing activities
Proceeds from debt issues4,550 1,371
7,840
Repayments of debt issues(1,395) (969) (6,018)
Net movement in due to related entities84 (384) (261)

Redemption of subordinated debentures- - (762)
Dividends paid to ordinary shareholders- - (111)

Net cash provided by financing activities3,239
18 688
Net increase in cash and cash equivalents376 894
493
Cash and cash equivalents at beginning of the period/year
1,530
1,037 1,037
Cash and cash equivalents at end of the period/year1,906
1,931 1,530

Cash and cash equivalents at end of the period/year comprise:
Cash on hand
331
300 253
Cash and balances with central banks
1,526 1,485 1,219
Due from other financial institutions
49 146 58
Cash and cash equivalents at end of the period/year1,906
1,931 1,530
NZ Banking Group

The above statement of cash flows should be read in conjunction with the accompanying notes.

Notes to the financial statements


Westpac Banking Corporation - New Zealand Banking Group
9
Note 1 Statement of accounting policies
Statutory base
In these condensed consolidated interim financial statements (‘financial statements’) reference is made to the following reporting groups:
 Westpac Banking Corporation (otherwise referred to as the ‘Overseas Bank’) – refers to the worldwide business of Westpac Banking
Corporation excluding its controlled entities;
 Westpac Banking Corporation Group (otherwise referred to as the ‘Overseas Banking Group’) – refers to the total worldwide business
of Westpac Banking Corporation including its controlled entities;
 Westpac Banking Corporation New Zealand Branch (otherwise referred to as the ‘NZ Branch’) – refers to the New Zealand Branch of
Westpac Banking Corporation (trading as Westpac);
 Westpac New Zealand Limited (otherwise referred to as ‘Westpac New Zealand’) – refers to a locally incorporated subsidiary of the
Overseas Bank (carrying on the Overseas Bank’s New Zealand consumer, business and institutional banking operations); and
 Westpac Banking Corporation - New Zealand Banking Group (otherwise referred to as the ‘NZ Banking Group’) – refers to the New
Zealand operations of Westpac Banking Corporation Group including those entities whose business is required to be reported in the
financial statements of the Overseas Banking Group’s New Zealand business.
These financial statements have been prepared and presented in accordance with the Reserve Bank of New Zealand Act 1989 (‘Reserve
Bank Act’) and the Registered Bank Disclosure Statements (Overseas Incorporated Registered Banks) Order 2014 (‘Order’).
These financial statements have also been prepared in accordance with Generally Accepted Accounting Practice in New Zealand, as
appropriate for profit-oriented entities, and the New Zealand Equivalent to International Accounting Standard 34 Interim Financial Reporting
and should be read in conjunction with the Disclosure Statement for the year ended 30 September 2016. These financial statements comply
with International Accounting Standard 34 Interim Financial Reporting as issued by the International Accounting Standards Board.
These financial statements were authorised for issue by the Overseas Bank’s Board of Directors (the ‘Board’) on 27 February 2017. The
Board has the power to amend the financial statements after they are authorised for issue.
Basis of preparation
The financial statements have been prepared under the historical cost convention, as modified by applying fair value accounting to available-
for-sale securities and financial assets and financial liabilities (including derivative instruments) measured at fair value through income
statement or in other comprehensive income. The going concern concept and the accrual basis of accounting have been applied. All amounts
are expressed in New Zealand dollars unless otherwise stated.
There were no amendments to the New Zealand Accounting Standards adopted during the reporting period that had a material impact on the
NZ Banking Group.
The same accounting policies and methods of computation have been followed in preparing these financial statements as were used in
preparing the financial statements for the year ended 30 September 2016.
Certain comparative information has been restated to ensure consistent treatment with the current reporting period. Where there has been a
material restatement of comparative information the nature of, and the reason for, the restatement is disclosed in the relevant note.

Note 2 Non-interest income
Three Months
Three MonthsYear
Ended
EndedEnded
31-Dec-16
31-Dec-1530-Se
p-16
$ millionsUnaudited
UnauditedAudited
Fees and commissions
Transaction fees and commissions
46
42189
Lending fees
16
1664
Other non-risk fee income
15
1349
Total fees and commissions77
71302
Wealth mana
gement revenue
Fees from trust and other fiduciary activities
12
1142
Net life insurance income and change in policy liabilities
10
22108
Total wealth management revenue22
33150
Tradin
g income
Foreign exchange trading
31
23106
Other trading products
30
8(2)
Total trading income61
31104
Net ineffectiveness on qualifying hedges(5)
24
Other non-interest income
Share of profit of associate accounted for using the equity method
1
-11
Other
2
217
Total other non-interest income3
228
Total non-interest income158
139588
NZ Banking Group

Notes to the financial statements


Westpac Banking Corporation - New Zealand Banking Group 10

Note 3 Impairment charges on loans
Three Months
Three Months
Year

Ended Ended Ended
31-Dec-16
31-Dec-15 30-Sep-16
$ millionsUnaudited Unaudited Audited
Collectively assessed provisions
(5)

(10)
8
Individually assessed provisions
1
(41)


-


6
Bad debts written off directly to the income statement
9

9
59
Total impairment (recoveries)/charges on loans(37)
(1)
73
NZ Banking Group

1
Individually assessed provisions reduced during the reporting period as a result of recoveries of amounts previously impaired, which exceeded recovery expectations.


Note 4 Trading securities and other financial assets designated at fair value
31-Dec-1631-Dec-1530-Sep-16
$ millions UnauditedUnauditedAudited
Government and semi-government securities3,361 1,465 1,350
Other Debt securities2,082 2,734 2,374
Securities purchased under agreement to resell205 638 311
Total trading securities and financial assets designated at fair value5,648 4,837 4,035
NZ Banking Group


Note 5 Loans
31-Dec-1631-Dec-1530-Sep-16
$ millionsUnauditedUnauditedAudited
Overdrafts1,2441,1971,313
Credit card outstandings1,5621,5811,503
Money market loans1,2631,2911,362
Term loans:
Housing45,57642,51445,126
Non-housing25,68023,18025,425
Other
1,2351,1961,288
Total gross loans76,56070,95976,017
Provisions for impairment charges on loans(394)(408)(435)
Total net loans76,16670,55175,582
NZ Banking Group

As at 31 December 2016, $7,154 million of housing loans were used by the NZ Banking Group to secure the obligations of Westpac Securities
NZ Limited (‘WSNZL’) under Westpac New Zealand’s Global Covered Bond Programme (‘CB Programme’) (31 December 2015: $4,519
million, 30 September 2016: $6,591 million). These housing loans were not derecognised from the NZ Banking Group’s balance sheet in
accordance with the accounting policies outlined in Note 1 to the financial statements included in the Disclosure Statement for the year ended
30 September 2016. As at 31 December 2016, the New Zealand dollar equivalent of bonds issued by WSNZL under the CB Programme was
$3,365 million (31 December 2015: $3,957 million, 30 September 2016: $3,480 million).

Notes to the financial statements


Westpac Banking Corporation - New Zealand Banking Group
11
Note 6 Credit quality, impaired assets and provisions for impairment charges on loans
NZ Banking Group

31-Dec-16

$ millions
Unaudited

Neither past due nor impaired75,064



Past due but not impaired assets:
Less than 90 days past due
1,246



At least 90 days past due
69


Total past due assets not impaired
1,315



Individually impaired assets
181



Total gross loans
76,560



Individually assessed provisions
63



Collectively assessed provisions 363



426



Provision for credit commitments
(32)


Total provisions for impairment charges on loans
394



Total net loans
76,166


Total provisions for impairment charges on loans and credit commitments


Note 7 Financial assets pledged as collateral
The NZ Banking Group is required to provide collateral to other financial institutions, as part of standard terms, to secure liabilities. In addition
to assets supporting the CB Programme (refer to Note 5), the carrying value of these financial assets pledged as collateral is:
31-Dec-1631-Dec-1530-Sep-16
$ millions UnauditedUnauditedAudited
Cash878 363 786
Securities pledged under repurchase agreements
Available-for-sale securities
- - 400
Trading securities and other financial assets designated at fair value
90 279 44
Total amount pledged to secure liabilities (excluding CB Programme)968 642 1,230
NZ Banking Group


Note 8 Deposits and other borrowings
31-Dec-1631-Dec-1530-Sep-16
$ millionsUnauditedUnauditedAudited
Deposits and other borrowings at fair value
Certificates of deposit
1,2681,4071,250
Total deposits and other borrowings at fair value
1,2681,4071,250
Deposits and other borrowings at amortised cost
Non-interest bearing, repayable at call5,0084,3004,621
Other interest bearing:
At call24,73725,02923,741
Term28,98224,79429,179
Total deposits and other borrowings at amortised cost
58,72754,12357,541
Total deposits and other borrowings59,99555,53058,791
NZ Banking Group

The NZ Branch held no retail deposits from individuals as at 31 December 2016 (31 December 2015: nil , 30 September 2016: nil).

Note 9 Other financial liabilities at fair value through income statement
31-Dec-1631-Dec-1530-Sep-16
$ millionsUnauditedUnauditedAudited
Securities sold short150171132
Security repurchase agreements89279444

Total other financial liabilities at fair value through income statement239450576
NZ Banking Group

Notes to the financial statements


Westpac Banking Corporation - New Zealand Banking Group 12

Note 10 Debt issues
31-Dec-1631-Dec-15
30-Sep-16

$ millionsUnaudited
UnauditedAudited

Short-term debt
Commercial paper2,386


2,423
2,410


Total short-term debt
2,386


2,423
2,410
Long-term debt
Non-domestic medium-term notes8,934
4,766
5,616


Covered Bonds
3,365

3,957 3,480

Domestic medium-term notes3,212


2,915 3,221
Total long-term debt15,511

11,638 12,317

Total debt issues17,897 14,061 14,727


Debt issues at amortised cost15,511

11,638 12,317


Debt issues at fair value2,386

2,423
2,410

Total debt issues17,897


14,061 14,727
Movement in debt issues
Balance at beginning of the period/year14,727
14,685 14,685


Issuance during the period/year
4,550
1,371 7,840

Repayments during the period/year(1,395)

(969) (6,018)

Effect of foreign exchange movements during the period/year
101

(1,010)
(1,824)
Effect of fair value movements and amortisation adjustments during the period/year(86)
(16) 44

Balance at end of the period/year
17,897

14,061
14,727

NZ Banking Group


Note 11 Related entities
Controlled entities of the NZ Banking Group as at 30 September 2016 are set out in Note 25 to the financial statements included in the NZ
Banking Group’s Disclosure Statement for the year ended 30 September 2016.
The total liabilities of the NZ Branch, net of amounts due to related entities as at 31 December 2016, amounted to $4,985 million (31
December 2015: $6,493 million, 30 September 2016: $6,189 million).

Note 12 Fair value of financial instruments
Fair valuation control framework
The NZ Banking Group uses a fair valuation control framework where the fair value is either determined or validated by a function
independent of the transaction. This framework formalises the policies and procedures used to achieve compliance with relevant accounting,
industry and regulatory standards. The framework includes specific controls relating to:
 the revaluation of financial instruments;
 independent price verification;
 fair value adjustments; and
 financial reporting.
The method of determining fair value differs depending on the information available.
Fair value hierarchy
A financial instrument’s categorisation within the valuation hierarchy is based on the lowest level input that is significant to the fair value
measurement.
The NZ Banking Group categorises all fair value instruments according to the following hierarchy:
Level 1 instruments
The fair value of financial instruments traded in active markets based on recent unadjusted quoted prices. These prices are based on actual
arm’s length basis transactions.
The valuations of Level 1 instruments require little or no management judgment.
Level 2 instruments
The fair value for financial instruments that are not actively traded are determined using valuation techniques which maximise the use of
observable market inputs. Valuation techniques include:
 the use of market standard discounting methodologies;
 option pricing models; and
 other valuation techniques widely used and accepted by market participants.

Notes to the financial statements


Westpac Banking Corporation - New Zealand Banking Group
13
Note 12 Fair value of financial instruments (continued)
Level 3 instruments
Financial instruments valued where at least one input that could have a significant effect on the instrument’s valuation is not based on
observable market data due to illiquidity or complexity of the product. These inputs are generally derived and extrapolated from other relevant
market data and calibrated against current market trends and historical transactions. These valuations are calculated using a high degree of
management judgment.

Financial instruments measured at fair value
The following table summarises the attribution of financial instruments to the fair value hierarchy based on the measurement basis after initial
recognition:
$ millions
Level 1Level 2
Level 3
1
Total
Financial assets
Trading securities and other financial assets designated at fair value655 4,904895,648
Derivative financial instruments1 3,750
4
3,755
Available-for-sale securities1,582 2,139-3,721


Life insurance assets-
268-
268

Due from related entities- 647
-647

Total financial assets carried at fair value2,238 11,7089314,039


Financial liabilities
Deposits at fair value
-
1,268
-1,268

Other financial liabilties at fair value through income statement150 89-239
Derivative financial instruments-
5,101-5,101
Debt issues at fair value- 2,386
-2,386

Due to related entities- 852-852

Total financial liabilities carried at fair value150 9,696-9,846
NZ Banking Group
31-Dec-16 Unaudited

$ millionsLevel 1Level 2
Level 3
1
Total
Financial assets
Trading securities and other financial assets designated at fair value
1554,638444,837

Derivative financial instruments-3,978
43,982
Available-for-sale securities1,6021,784-3,386

Life insurance assets13265-
278

Due from related entities
-841-
841
Total financial assets carried at fair value1,77011,5064813,324
Financial liabilities
Deposits at fair value-1,407-1,407
Other financial liabilties at fair value through income statement152298-450
Derivative financial instruments-6,069
-6,069
Debt issues at fair value-2,423-2,423
Due to related entities-931-931
Total financial liabilities carried at fair value152
11,128-11,280
NZ Banking Group
31-Dec-15 Unaudited

1
Balances within this category of the fair value hierarchy are not considered material to the total trading securities and other financial assets designated at fair value,
derivative financial instruments balances.

Notes to the financial statements


Westpac Banking Corporation - New Zealand Banking Group 14

Note 12 Fair value of financial instruments (continued)
$ millionsLevel 1Level 2
Level 3
1
Total
Financial assets
Trading securities and other financial assets designated at fair value668
3,268994,035
Derivative financial instruments-
4,83354,838
Available-for-sale securities1,6082,182
-
3,790


Life insurance assets-269-269
Due from related entities
-694-694
Total financial assets carried at fair value2,276
11,24610413,626

Financial liabilities
Deposits at fair value-1,250
-
1,250
Other financial liabilties at fair value through income statement132444
-576


Derivative financial instruments
-6,236
-6,236
Debt issues at fair value-2,410-
2,410

Due to related entities
-881
-881

Total financial liabilities carried at fair value13211,221-
11,353
30-Sep-16 Audited
NZ Banking Group

1
Balances within this category of the fair value hierarchy are not considered material to the total trading securities and other financial assets designated at fair value and
derivative financial instruments balances.
Analysis of movements between fair value hierarchy levels
There were no material amounts of changes in fair value estimated using a valuation technique incorporating significant non-observable inputs
that were recognised in the income statement or the statement of comprehensive income of the NZ Banking Group during the three months
ended 31 December 2016 (31 December 2015: no material changes in fair value, 30 September 2016: no material changes in fair value).
During the period, there were no material transfers between levels of the fair value hierarchy (31 December 2015: nil, 30 September 2016:
nil).
Financial instruments not measured at fair value
The following table summarises the estimated fair value and fair value hierarchy of the NZ Banking Group’s financial instruments not
measured at fair value:
Total Carrying
Estimated Total Carrying Estimated Total Carrying Estimated
$ millionsAmount Fair Value Amount Fair Value Amount Fair Value

Financial assets
Loans76,166

76,311 70,551 70,686 75,582 75,831
Total76,166
76,311 70,551 70,686 75,582 75,831
Financial liabilities
Deposits and other borrowings58,727 58,777
54,123
54,206
57,541 57,597
Debt issues 15,511
15,662
11,638 11,656 12,317
12,473
Subordinated debentures1,080 1,095 1,882

1,865 1,091 1,111

Due to related entities2,733
2,742 2,512 2,524
2,644 2,658

Total78,051
78,276 70,155
70,251 73,593 73,839
31-Dec-16 Unaudited
NZ Banking Group
31-Dec-15 Unaudited30-Sep-16 Audited

For cash and balances with central banks, due from and due to other financial institutions and non-derivative balances due from related
entities which are carried at amortised cost and other types of short-term financial instruments recognised in the balance sheet under ‘other
assets’ and ‘other liabilities’, the carrying amount is equivalent to fair value. These items are either short-term in nature or reprice frequently,
and are of a high credit rating.
A description of how fair value is derived for financial instruments not measured at fair value is disclosed in Note 27 of the NZ Banking
Group’s financial statements for the year ended 30 September 2016.

Notes to the financial statements


Westpac Banking Corporation - New Zealand Banking Group
15
Note 13 Contingent liabilities, contingent assets and credit commitments
31-Dec-16
31-Dec-15

30-Sep-16
$ millionsUnaudited
Unaudited
Audited
Commitments for capital expenditure
12

5


3

Lease commitments
1
One year or less56

56 57

Between one and five years134
141


141


Over five years14

28

16
Total lease commitments204 225
214

Undrawn credit commitments
Letters of credit and guarantees1,058 1,184
1,084


Commitments to extend credit23,910


23,466

23,988
Other commitments200 -


263


Total undrawn credit commitments25,168

24,650


25,335

NZ Banking Group

1
The NZ Banking Group mainly leases commercial and retail premises and related plant and equipment.
In March 2013, litigation funder, Litigation Lending Services (NZ) Limited, announced potential representative actions against five New
Zealand banks in relation to certain fees. Westpac New Zealand is the defendant in proceedings filed on 20 August 2014 by the plaintiff group.
Proceedings have also been filed against three other banks. At this stage the impact of the proceedings against Westpac New Zealand cannot
be determined with any certainty.
The NZ Banking Group has other contingent liabilities in respect of actual and potential claims and proceedings. An assessment of the NZ
Banking Group's likely loss in respect of these matters has been made on a case-by-case basis and provision has been made in these
financial statements, where appropriate.
Additional information relating to any provision or contingent liability has not been provided where disclosure of such information might be
expected to seriously prejudice the position of the NZ Banking Group.

Note 14 Segment information
The NZ Banking Group operates predominantly in the consumer banking and wealth, commercial, corporate and institutional banking, and
investments and insurance sectors within New Zealand. On this basis, no geographical segment information is provided.
The operating segment results have been presented on a management reporting basis and consequently internal charges and transfer pricing
adjustments have been reflected in the performance of each operating segment. Intersegment pricing is determined on a cost recovery basis.
The NZ Banking Group does not rely on any single major customer for its revenue base.
Comparative information for the three months ended 31 December 2015 and the year ended 30 September 2016 has been restated following
customer segmentation changes to the NZ Banking Group’s operating segments in the current reporting period. Comparative information has
been restated to ensure consistent presentation with the current reporting period. The revised presentation has no impact on total profit before
income tax expense for the three months ended 31 December 2015 and the year ended 30 September 2016.
The NZ Banking Group’s operating segments are defined by the customers they serve and the services they provide. The NZ Banking Group
has identified the following main operating segments:
 Consumer Banking and Wealth provides financial services predominantly for individuals;
 Commercial, Corporate and Institutional Banking provides a broad range of financial services for commercial, corporate, property
finance, agricultural, institutional and government customers, and the supply of derivatives and risk management products to the entire
Westpac customer base in New Zealand; and
 Investments and Insurance provides funds management and insurance services.
Reconciling items primarily represent:
 business units that do not meet the definition of operating segments under New Zealand equivalents to International Financial Reporting
Standards 8 Operating Segments;
 elimination entries on consolidation/aggregation of the results, assets and liabilities of the NZ Banking Group’s controlled entities in the
preparation of the aggregated financial statements of the NZ Banking Group; and
 results of certain business units excluded for management reporting purposes, but included within the aggregated financial statements of
the NZ Banking Group for statutory financial reporting purposes.

Notes to the financial statements


Westpac Banking Corporation - New Zealand Banking Group 16

Note 14 Segment information (continued)

ConsumerCommercial,
Investments
Banking and
Corporate andand
Reconciling
$ millionsWealthInstitutionalInsurance
Items Total
Three months ended 31 December 2016 (Unaudited)
Net interest income264
181
-4
449


Non-interest income47
81
32(2)
158


Net operating income311
26232
2
607

Net operating income from external customers
428341
33
(195)607


Net internal interest expense
(117)
(79)(1)
197
-

Net operating income
311262
32
2607


Operating expenses(173)
(63)
(6)(5)(247)

Impairment (charges)/recoveries on loans
(16)
53-
-37
Profit before income tax expense
122
25226
(3)397

Total gross loans
43,27633,245
-
3976,560


Total deposits
33,718
25,009-1,268
59,995


Three months ended 31 December 2015 (Unaudited)
Net interest income/(expense)
254
175(1)
16444
Non-interest income
446632
(3)
139

Net operating income
298241
3113
583

Net operating income from external customers
412346
32(207)583


Net internal interest expense(114)
(105)(1)
220-


Net operating income
29824131
13583


Operating expenses(172)
(62)(6)4
(236)

Impairment (charges)/recoveries on loans(10)
11-
-
1

Profit before income tax expense116
19025
17348

Total gross loans
40,20930,760-
(10)70,959

Total deposits
32,17721,946
-1,40755,530

Year ended 30 September 2016 (Unaudited)
Net interest income/(expense)
1,033717
(4)28
1,774

Non-interest income196
245128
19588

Net operating income1,229962
124472,362

Net operating income from external customers
1,7061,337
129(810)2,362

Net internal interest expense
(477)(375)(5)
857
-

Net operating income
1,229962124
472,362

Operating expenses(673)(247)(26)
(7)(953)

Impairment charges on loans(33)
(28)-(12)(73)

Profit before income tax expense
52368798
281,336

Total gross loans42,69533,288
-3476,017

Total deposits
33,21924,322-1,250
58,791
NZ Banking Group

Note 15 Insurance business
The following table presents the aggregate amount of the NZ Banking Group’s insurance business conducted through one of its controlled
entities, Westpac Life-NZ- Limited calculated in accordance with the Overseas Bank’s (the ‘registered bank’) conditions of registration as at
the reporting date:
31-Dec-16
$ millionsUnaudited
Total assets of life insurance business210
As a percentage of total consolidated assets of the NZ Banking Group0.22%

Notes to the financial statements


Westpac Banking Corporation - New Zealand Banking Group
17
Note 16 Risk management
16.1 Credit risk
The NZ Banking Group’s residential mortgages by loan-to-value ratio (‘LVR’) as at 31 December 2016
The NZ Banking Group has identified that the LVRs in the table below have not been calculated in compliance with the Order. The NZ
Banking Group has been calculating the ratios by reference to the value of loans at origination rather than the current values as required by
the Order. The result would be expected to be higher and hence more conservative than it would be using the method prescribed by the
Order. Due to the timing of discovering the matter the NZ Banking Group has not been able to correct the calculations in the table below. The
Disclosure Statement for the six months ending 31 March 2017 will contain the correct ratios and the NZ Banking Group will re-state the ratios
as at 30 September 2016 at that time. The Reserve Bank is also considering the matter and will determine if further steps are necessary once
the re-stated ratios have been published.
For loans originated from 1 January 2008, the NZ Banking Group utilises its loan origination system. For loans originated prior to 1 January
2008, the origination LVR is not separately recorded and is therefore not available for disclosure. For these loans, the NZ Banking Group
utilises its dynamic LVR process to calculate an origination LVR. Exposures for which no LVR is available have been included in the ‘Exceeds
90%’ category in accordance with the requirements of the Order.
Does notExceeds 80%
LVR range ($ millions) exceed 80%and not 90%Exceeds 90%Total
On-balance sheet exposures38,3605,2271,75545,342
Undrawn commitments and other off-balance sheet exposures8,4274491459,021
Value of exposures 46,7875,6761,90054,363
NZ Banking Group
31-Dec-16 Unaudited

16.2 Market risk
The following table provides a summary of the NZ Banking Group’s notional capital charges by risk type as at the reporting date.
ImpliedNotional
risk-weightedcapital
$ millionsexposurecharge
End-of-period
Interest rate risk3,056245
Foreign currency risk131
Equity risk--
NZ Banking Group
31-Dec-16 Unaudited

16.3 Liquidity risk
Liquid assets
The table below shows the NZ Banking Group’s holding of liquid assets and represents the key liquidity information provided to management.
Liquid assets include high quality assets readily convertible to cash to meet the NZ Banking Group’s liquidity requirements. In management’s
opinion, liquidity is sufficient to meet the NZ Banking Group’s present requirements.
NZ Banking Group
31-Dec-16
$ millionsUnaudited
Cash and balances with central banks1,857

Due from other financial institutions48

Supranational securities1,281
NZ Government securities4,330

NZ public securities1,401
NZ corporate securities1,936
Residential mortgage-backed securities3,992
Total liquid assets14,845

Notes to the financial statements


Westpac Banking Corporation - New Zealand Banking Group 18

Note 17 Concentration of credit exposures to individual counterparties
The following credit exposures are based on actual credit exposures to individual counterparties and groups of closely related counterparties.
The number of individual bank counterparties (which are not members of a group of closely related counterparties), and groups of closely
related counterparties of which a bank is the parent, to which the NZ Banking Group has an aggregate credit exposure or peak end-of-day
aggregate credit exposure that equals or exceeds 10% of the Overseas Banking Group’s equity:
 as at 31 December 2016 was nil; and
 in respect of peak end-of-day aggregate credit exposure for the three months ended 31 December 2016 was nil.
The number of individual non-bank counterparties (which are not members of a group of closely related counterparties), and groups of closely
related counterparties of which a bank is not the parent, to which the NZ Banking Group has an aggregate credit exposure or peak end-of-day
aggregate credit exposure that equals or exceeds 10% of the Overseas Banking Group’s equity:
 as at 31 December 2016 was nil; and
 in respect of peak end-of-day aggregate credit exposure for the three months ended 31 December 2016 was nil.
The peak end-of-day aggregate credit exposure to each individual counterparty (which are not members of a group of closely related
counterparties) or a group of closely related counterparties has been calculated by determining the maximum end-of-day aggregate amount of
actual credit exposure over the relevant three-month period and then dividing that amount by the Overseas Banking Group’s equity as at 31
December 2016.
Credit exposures to individual counterparties (not being members of a group of closely related counterparties) and to groups of closely related
counterparties exclude exposures to the central government of any country with a long-term credit rating of A- or A3 or above, or its
equivalent, or to any bank with a long-term credit rating of A- or A3 or above, or its equivalent. These calculations relate only to exposures
held in the financial records of the NZ Banking Group (excluding exposures booked outside New Zealand) and were calculated net of
individually assessed provisions.

Note 18 Overseas Bank and Overseas Banking Group capital adequacy
The table below represents the capital adequacy calculation for the Overseas Banking Group and Overseas Bank based on the Australian
Prudential Regulation Authority’s (‘APRA’) application of the Basel III capital adequacy framework.
31-Dec-1631-Dec-15
%UnauditedUnaudited
Overseas Banking Group (excluding entities specifically excluded by APRA regulations)
1,2
Common Equity Tier 1 capital ratio9.310.2
Additional Tier 1 capital ratio 1.61.8
Tier 1 capital ratio10.912.0
Tier 2 capital ratio2.51.9
Total regulatory capital ratio13.413.9
Overseas Bank (Extended Licensed Entity)
1,3
Common Equity Tier 1 capital ratio9.410.4
Additional Tier 1 capital ratio1.82.0
Tier 1 capital ratio11.212.4
Tier 2 capital ratio2.82.1
Total regulatory capital ratio 14.014.5

1
The capital ratios represent information mandated by APRA. The capital ratios of the Westpac Group (including defined terms) are publicly available in the Overseas
Banking Group’s Pillar 3 report. This information is made available to users via the Overseas Bank’s website (www.westpac.com.au
).
2
Overseas Banking Group (excluding entities specifically excluded by APRA regulations) comprises the consolidation of the Overseas Bank and its subsidiary entities
except those entities specifically excluded by APRA regulations for the purposes of measuring capital adequacy (Level 2). The head of the Level 2 group is the Overseas
Bank.
3
Overseas Bank (Extended Licensed Entity) comprises the Overseas Bank and its subsidiary entities that have been approved by APRA as being part of a single Extended
Licensed Entity for the purposes of measuring capital adequacy (Level 1).
The Overseas Banking Group is accredited by APRA to apply the Advanced Internal Ratings Based (‘Advanced IRB’) approach for credit
risk, the Advanced Measurement Approach (‘AMA’) for operational risk and the internal model approach for interest rate risk in the banking
book for calculating regulatory capital (known as ‘Advanced Accreditation’) and is required by APRA to hold minimum capital at least equal to
that specified under the Advanced IRB and AMA methodologies.
Under New Zealand regulations this methodology is referred to as the Basel III (internal models based) approach. With this accreditation, the
Overseas Banking Group is required to disclose additional detailed information on its risk management practices and capital adequacy on a
quarterly basis. This information is made available to users via the Overseas Banking Group’s website (www.westpac.com.au). The aim is to
allow the market to better assess the Overseas Banking Group’s risk and reward assessment process and hence increase the scrutiny of this
process.
The Overseas Banking Group (excluding entities specifically excluded by APRA regulations), and the Overseas Bank (Extended Licensed
Entity as defined by APRA), exceeded the minimum capital adequacy requirements as specified by APRA as at 31 December 2016. APRA
specifies a minimum prudential capital ratio for the Overseas Banking Group, which is not made publicly available.

Notes to the financial statements


Westpac Banking Corporation - New Zealand Banking Group
19
Note 19 Other information on the Overseas Banking Group
Other information on the Overseas Banking Group is from the most recently published financial statements of the Overseas Banking Group for
the year ended 30 September 2016.
Profitability
30-Sep-16
Net profit after tax for the year ended 30 September 2016 (A$ millions)7,460
Net profit after tax (for the 12 month period to 30 September 2016) as a percentage of average total assets 0.9%
Total assets and equity
30-Sep-16
Total assets (A$ millions)839,202
Percentage change in total assets over the 12 months ended 30 September 20163.3%
Total equity (A$ millions)58,181
Asset quality
30-Sep-16
Total individually impaired assets
1, 2
(A$ millions)2,159
Total individually impaired assets as a percentage of total assets 0.3%
Total individual credit impairment allowance
3
(A$ millions)1,067
Total individual credit impairment allowance as a percentage of total individually impaired assets49.4%
Total collective credit impairment allowance
3
(A$ millions)
2,733

1
Total individually impaired assets are before allowances for credit impairment loss and net of interest held in suspense. Total individually impaired assets includes
A$551 million of assets which are determined to be impaired, but which are not individually significant, and therefore have been grouped into pools of assets for the
purpose of collectively calculating an impairment provision.
2
Non-financial assets have not been acquired through the enforcement of security.
3
Total individual credit impairment allowance and total collective credit impairment allowance both include A$198 million of credit impairment allowance that has been
calculated collectively on groups of assets which have been determined to be impaired, but which are not individually significant.

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