Westpac 2017 Full Year Results Template

ASX
Release

01 November 2017
Westpac Group 2017 Full Year Financial Results Template
The Westpac Group has today released the template for its 2017 Full Year Financial Results. The
Excel template detailing how key information in the 2017 Full Year Financial Results will be
presented is available on the Westpac website at www.westpac.com.au/investorcentre.
The changes to the Group’s 2017 reporting include:
 In Second Half 2017 the Group changed the accounting treatment for Westpac New
Zealand’s credit card reward points to align with Group practice. This change has no
impact on cash earnings or reported profit but has led to a restatement which increases
both non-interest income and expenses in prior periods. In 2016 the change has added
$33 million to non-interest income and expenses within cash earnings. Components of
reported profit have not been changed.
 During the Second Half a revised methodology for allocating Trading income between
foreign exchange income and other trading products was applied. Comparatives have
been restated for consistency.
 Following a clarification of IFRS accounting standards for intangible assets we have
reduced deferred tax assets by $201 million and increased intangible assets by the same
amount. As a consequence, the calculation of prior period Cash earnings return on
average tangible ordinary equity (ROTE) has been recalculated to reflect the change in
intangible assets.
 With the implementation of the Bank Levy from 1 July 2017, the cost is included in Net
interest income as a component of interest expense.
Appendix 1 details how the changes impact results in prior periods.
Cash earnings treatment of the sell down of BTIM
In Full Year 2017 the gain on the sale of 19% in BT Investment Management Limited (BTIM) -
incorporating both a profit on sale net of costs, and a revaluation gain of the Group’s remaining
10% shareholding, will be included in reported profit but excluded from the calculation of cash
earnings. This is consistent with the treatment of prior gains from the sell down of BTIM.
Westpac has indicated that it may sell the remaining 10% in BTIM at some future point (but not
prior to the announcement of BTIM’s First Half 2018 financial results expected in May 2018.)
Should this sale proceed, any gain or loss on the sale will similarly be excluded from the calculation
of cash earnings.
Westpac Group is scheduled to announce its 2017 Full Year Financial Results on Monday,
6 November 2017. An Excel spreadsheet of the Full Year financial results will also be published on
the Westpac website.

WESTPAC BANKING CORPORATION ABN 33 007 457 141

Ends.

For Further Information

David Lording
Head of Media Relations

M. 0419 683 411


Andrew Bowden
Head of Investor Relations
T. 02 8253 4008
M. 0438 284 863

WESTPAC BANKING CORPORATION ABN 33 007 457 141

Appendix 1

Impact of the changed accounting treatment for Westpac New Zealand’s credit card
reward points
Section 1.3 Cash earnings results



Section 3.5 Westpac New Zealand (NZ$)


Section 5 Note 4. Non-interest income (cash earnings basis)



$m
Half Year
March 17
Full Year
Sept 16
Half Year
March 17
Full Year
Sept 16
Net interest income7,69315,3487,69315,348
Non-interest income3,0685,8883,0505,855
Net operating income10,76121,23610,74321,203
Operating expenses(4,501)(8,931)(4,483)(8,898)
Core earnings6,26012,3056,26012,305
Revised DisclosurePrevious Disclosure
NZ$m
Half Year
March 17
Full Year
Sept 16
Half Year
March 17
Full Year
Sept 16
Net interest income8381,7258381,725
Non-interest income259517240482
Net operating income1,0972,2421,0782,207
Operating expenses(487)(954)(468)(919)
Core earnings6101,2886101,288
Revised DisclosurePrevious Disclosure
$m
Half Year
March 17
Full Year
Sept 16
Half Year
March 17
Full Year
Sept 16
Fees and com m issions
Facility fees6621,2976621,297
Transaction fees and commissions received6131,2105951,177
Other non-risk fee income 151281151281
Total fees and com m issions1,4262,7881,4082,755
Revised DisclosurePrevious Disclosure

WESTPAC BANKING CORPORATION ABN 33 007 457 141

Section 5 Note 5. Operating expenses (cash earnings basis)


Impact of the revised methodology for allocating Trading income
Section 5 Note 4. Non-interest income

$m
Half Year
March 17
Full Year
Sept 16
Half Year
March 17
Full Year
Sept 16
Other expenses
Prof essional and processing services338736338736
Amortisation and impairment of intangible assets512512
Postage and stationery108217108217
Advertising7515675156
Credit card loyalty programs8417766144
Non-lending losses37813781
Other expenses6210062100
Total other expenses7091,4796911,446
Operating expenses4,5018,9314,4838,898
Revised DisclosurePrevious Disclosure
$m
Half Year
March 17
Full Year
Sept 16
Half Year
March 17
Full Year
Sept 16
Trading incom e
Foreign exchange income474974422760
Other trading products239150291364
Total trading incom e7131,1247131,124
Revised DisclosurePrevious Disclosure

WESTPAC BANKING CORPORATION ABN 33 007 457 141

Impact of the revision to intangible assets
Section 4 Consolidated balance sheet
During 2017 the IFRS Interpretations Committee (IFRIC) clarified the tax consequences of
intangible assets with an indefinite useful life.
The IFRIC noted that just because an intangible asset with an indefinite useful life is not amortised
it does not necessarily mean it has infinite life. Further, the entity may only be able to realise this
value via sale and not through use. As a result, the Group has changed its accounting policy for
acquired brands (such as BT and St.George). This change has led to a $201 million reduction in
deferred tax assets and a corresponding increase in intangible assets for the Group. This change
has been applied retrospectively and has no impact on cash earnings, reported profit or other key
metrics including capital ratios.
The change in accounting policy resulted in the following adjustments to the Group’s consolidated
financial statements:

Section 1.2 Key financial information


Section 1.3.1 Key financial information – cash earnings basis

Revised DisclosurePrevious Disclosure
As atAs atAs atAs at
$m
31 March
2017
30 Sept
2016
31 March
2017
30 Sept
2016
Assets
Deferred tax assets9861,3511,1871,552
Intangible assets11,63911,72111,43811,520
Total assets839,993839,202839,993839,202
$m
Half Year
March 17
Full Year
Sept 16
Half Year
March 17
Full Year
Sept 16
Shareholder value
Average ordinary equity ($m)57,74455,89657,74455,896
Average total equity ($m)57,76856,47157,76856,471
Net tangible assets per ordinary share ($)14.2413.9014.3013.96
Revised DisclosurePrevious Disclosure
$m
Half Year
March 17
Full Year
Sept 16
Half Year
March 17
Full Year
Sept 16
Shareholder value
Cash earnings on average ordinary equity (ROE)13.95%13.99%13.95%13.99%
Cash earnings on average tangible ordinary equity (ROTE)16.83%17.06%16.76%16.98%
Average ordinary equity ($m)57,74455,89657,74455,896
Average tangible ordinary equity ($m)47,86345,85848,06346,059
Revised DisclosurePrevious Disclosure