WBC – NZ Banking Group Disclosure Statement – 31 Dec 2017

Westpac Banking
Corporation –
New Zealand
Banking Group
For the three months ended 31 December 2017
Disclosure Statement

Contents
General information ...................................................................................................................................................................................................... 1
Directors’ and the Chief Executive Officer, NZ Branch’s statement .......................................................................................................................... 3
Income statement .......................................................................................................................................................................................................... 4
Statement of comprehensive income ........................................................................................................................................................................... 4
Balance sheet................................................................................................................................................................................................................. 5
Statement of changes in equity ..................................................................................................................................................................................... 6
Statement of cash flows ................................................................................................................................................................................................ 7
Notes to the financial statements .................................................................................................................................................................................. 8
Note 1 Statement of accounting policies ................................................................................................................................................................ 8
Note 2 Non-interest income ..................................................................................................................................................................................... 8
Note 3 Impairment charges/(benefits) ..................................................................................................................................................................... 8
Note 4 Loans ............................................................................................................................................................................................................. 8
Note 5 Asset quality ................................................................................................................................................................................................. 9
Note 6 Financial assets pledged as collateral ....................................................................................................................................................... 9
Note 7 Deposits and other borrowings.................................................................................................................................................................... 9
Note 8 Other financial liabilities at fair value through income statement .............................................................................................................. 9
Note 9 Debt issues ..................................................................................................................................................................................................10
Note 10 Related entities ..........................................................................................................................................................................................10
Note 11 Fair value of financial assets and financial liabilities ...............................................................................................................................10
Note 12 Credit related commitments, contingent assets and contingent liabilities .............................................................................................14
Note 13 Segment reporting .....................................................................................................................................................................................14
Note 14 Insurance business ...................................................................................................................................................................................15
Note 15 Risk management .....................................................................................................................................................................................16
15.1 Credit risk .................................................................................................................................................................................................16
15.2 Market risk ...............................................................................................................................................................................................16
15.3 Liquidity risk ............................................................................................................................................................................................16
Note 16 Concentration of credit exposures to individual counterparties .............................................................................................................16
Note 17 Overseas Bank and Overseas Banking Group capital adequacy ...........................................................................................................17
Note 18 Other information on the Overseas Banking Group ................................................................................................................................18
Note 19 Subsequent events ....................................................................................................................................................................................18
Conditions of registration ...............................................................................................................................................................................................19

Westpac Banking Corporation - New Zealand Banking Group
1
General information
Certain information contained in this Disclosure Statement is required by 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.
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 5% 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 5% 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 5% 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 5% limit. For the purposes of assessing
this exposure, the 5% 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 2017, the ELE’s non-equity exposures to New Zealand banking subsidiaries affected by the limit
were below 5% of Level 1 Tier 1 capital of the Overseas Bank.
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
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
Nerida Frances Caesar, BCom, MBA, GAICD
Ewen Graham Wolseley Crouch AM, BEc (Hons.), LLB, FAICD
Catriona Alison Deans, BA, MBA, GAICD
Craig William Dunn, BCom, FCA
Peter John Oswin Hawkins, BCA (Hons.), SF Fin, FAIM, ACA (NZ), FAICD
Peter Ralph Marriott, BEc (Hons.), FCA

Changes to Directorate
Robert George Elstone ceased to be a director on 8 December 2017. On 7 February 2018, the Overseas Bank announced that Peter Stanley
Nash has been appointed to its Board of Directors (the ‘Board’) effective 7 March 2018. There have been no other changes in the
composition of the Overseas Bank’s Board since 30 September 2017.

Westpac Banking Corporation - New Zealand Banking Group 2

Chief Executive Officer, NZ Branch
Karen Lee 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 of New Zealand Act 1989 (‘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 (‘Moody’s’)
Aa3 Stable
S&P Global Ratings AA- Negative

On 19 June 2017, Moody’s downgraded the Overseas Bank’s credit rating to Aa3. The downgrade followed Moody’s revision of the Australian
Macro Profile to “Strong +” from “Very Strong -”. At the same time, Moody’s revised the outlook to ‘stable’ from ‘negative’.
Disclosure statements of the NZ Banking Group and the financial statements of the Overseas Bank and the Overseas
Banking Group
Disclosure Statements of the NZ Banking Group 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 2017 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.

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 the information that is required by the Order; 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 2017:
(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 2017.

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 Silk, as Chief Executive Officer, NZ Branch.






DA McLean






KL Silk


Dated this 20
th
day of February 2018

Westpac Banking Corporation - New Zealand Banking Group 4

Income statement for the three months ended 31 December 2017
Three MonthsThree Months
Year
EndedEndedEnded
31-Dec-1731-Dec-1630-Sep-17
$ millionsNoteUnauditedUnauditedAudited
Interest income1,0161,0093,981
Interest expense(573)(560)(2,193)
Net interest income4434491,788
Non-interest income2187158625
Net operating income before operating expenses and impairment charges6306072,413
Operating expenses
(252)
(247)(1,006)
Impairment (charges)/benefits3(6)3776
Profit before income tax3723971,483
Income tax expense(104)(112)(424)
2682851,059
NZ Banking Group
Net profit for the period/year

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






Statement of comprehensive income for the three months ended 31 December 2017
Three MonthsThree MonthsYear
EndedEndedEnded
31-Dec-1731-Dec-1630-Sep-17
$ millionsUnauditedUnauditedAudited
Net profit for the period/year268285
1,059
Items that may be reclassified subsequently to profit and loss
Gains/(losses) on available-for-sale securities:
Recognised in equity64
11
Gains/(losses) on cash flow hedging instruments:
Recognised in equity(19)
51(58)
Transferred to income statement
1728104
Income tax on items taken to or transferred from equity:
Available-for-sale securities reserve(2)(1)(3)

Cash flow hedging reserve
1(22)(13)
Items that will not be reclassified subsequently to profit or loss
Remeasurement of defined benefit obligation recognised in equity (net of tax)
--10
Other comprehensive income for the period/year (net of tax)
360
51

Total comprehensive income for the period/year2713451,110

NZ Banking Group
Other comprehensive income

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

Westpac Banking Corporation - New Zealand Banking Group
5
Balance sheet as at 31 December 2017
31-Dec-1731-Dec-1630-Sep-17
$ millionsNoteUnauditedUnauditedAudited
Assets
Cash and balances with central banks1,9761,8571,761
Receivables due from other financial institutions354927471
Other assets362364423
Trading securities and financial assets designated at fair value3,4575,6483,949
Derivative financial instruments3,3333,7553,420
Available-for-sale securities3,6093,7214,087
Loans478,16876,16677,681
Life insurance assets317268304
Due from related entities3,5152,9022,623
Property and equipment143153146
Deferred tax assets139142136
Intangible assets 668648665
Total assets96,04196,55195,666
Liabilities
Payables due to other financial institutions1,1245261,043
Other liabilities619586635
Deposits and other borrowings761,09859,99558,998
Other financial liabilities at fair value through income statement8285239302
Derivative financial instruments 3,7945,1013,475
Due to related entities2,5613,5853,646
Debt issues915,45517,89716,729
Current tax liabilities848488
Provisions767697
Loan capital2,8431,0802,822
Total liabilities87,93989,16987,835
Net assets8,1027,3827,831
Head office account
Branch capital1,3001,3001,300
Retained profits767660740
Total head office account2,0671,9602,040
NZ Banking Group equity
Share capital143143143
Retained profits 5,9535,3245,712
Reserves(61)(45)(64)
Total NZ Banking Group equity
6,0355,4225,791
Total equity attributable to the owners of the NZ Banking Group8,1027,3827,831
Interest earning and discount bearing assets90,31390,63590,225
Interest and discount bearing liabilities76,90977,34377,611
NZ Banking Group


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

Westpac Banking Corporation - New Zealand Banking Group 6

Statement of changes in equity for the three months ended 31 December 2017
Available- Cash
Ordinary
for-sale
Flow
Branch Retained Share
Retained Securities Hedging
Total

$ millionsCapital
Profits
Capital
Profits Reserve Reserve Equity
As at 1 October 2016 (Audited)1,300
613 143 5,086 1 (106)
7,037

Net profit for the period- 47 -
238 - - 285
Net gains/(losses) from changes in fair value-
- - - 4 51 55
Income tax effect-
- - -
(1)
(14) (15)
Transferred to the 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
Net profit for the year
-
127 -
932
-


-
1,059



Net gains/(losses) from changes in fair value-
- -
- 11
(58)
(47)

Income tax effect-

-

- - (3) 16
13
Transferred to the income statement- - - - -
104


104
Income tax effect-
- - -
- (29) (29)
-
-
- 14
- - 14
Income tax effect-
- -
(4) - - (4)
-

127
- 942 8 33 1,110
Transactions with owners:
Dividends paid on ordinary shares
-
- - (316) -
- (316)
As at 30 September 2017 (Audited)1,300 740 143 5,712 9 (73) 7,831
Net profit for the period- 27 - 241 - - 268
Net gains/(losses) from changes in fair value- - -
- 6 (19) (13)
Income tax effect
-
- - -
(2) 5 3
Transferred to income statement-
- - - - 17 17

Income tax effect
-
- -
- - (4) (4)
- 27
- 241 4 (1) 271
As at 31 December 2017 (Unaudited)1,300 767 143 5,953 13
(74) 8,102
NZ Banking Group
NZ BranchOther Members of the NZ Banking Group
Head Office Account
Total equity attributable to owners of the NZ Banking Group
Remeasurement of employee defined benefit
obligations
Three months ended 31 December 2017
(Unaudited)
Total comprehensive income for the year ended
30 September 2017
Total comprehensive income for the three
months ended 31 December 2017
Three months ended 31 December 2016
(Unaudited)
Year ended 30 September 2017
(Audited)
Total comprehensive income for the three
months ended 31 December 2016

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

Westpac Banking Corporation - New Zealand Banking Group
7
Statement of cash flows for the three months ended 31 December 2017
Three Months
Three MonthsYear
EndedEndedEnded
31-Dec-1731-Dec-1630-Sep-17
$ millions
UnauditedUnauditedAudited
Cash flows from operating activities
Interest income received1,001

990 3,968

Interest expense paid
(559) (540)
(2,182)
Non-interest income received193 193 641


Operating expenses paid(260) (245)

(887)

Income tax paid(111) (98) (397)

Cash flows from operating activities before changes in operating assets and liabilities264 300

1,143

Net (increase)/decrease in:
Receivables due from other financial institutions100 (92) 355

Other assets(15)
(6)

(17)

Trading securities and financial assets designated at fair value549


(1,698)

11
Loans(497)
(602) (2,090)
Due from related entities(491) (1,731) (1,689)

Net increase/(decrease) in:
Payables due to other financial institutions
81

(90)

427

Other liabilities29

(2)

7

Deposits and other borrowings2,100

1,204
207

Other financial liabilities at fair value through income statement(17)
(337)
(274)
Due to related entities
1
(874)
114 849
Net movement in external and related entity derivative financial instruments302 206 (902)
Net cash provided by/(used in) operating activities
1,531 (2,734) (1,973)

Cash flows from investing activities
Purchase of available-for-sale securities-
- (533)
Proceeds from maturities/sale of available-for-sale securities475 -

162

Net movement in life insurance assets(13)
1
(35)
Purchase of capitalised computer software(15) (12)
(64)
Purchase of property and equipment(9)
(4) (31)

Net cash provided by/(used in) investing activities
438 (15)
(501)
Cash flows from financing activities
Net movement in due to related entities
1
(216)
(30)


(437)


Proceeds from debt issues- 4,550 7,490
Repayments of debt issues(1,555) (1,395) (5,698)
Issue of loan capital (net of transaction fees)
-
-
1,706
Dividends paid to ordinary shareholders- -
(316)
Net cash provided by/(used in) financing activities(1,771) 3,125
2,745

Net increase/(decrease) in cash and cash equivalents198 376
271
Cash and cash equivalents at beginning of the period/year1,801
1,530 1,530

Cash and cash equivalents at end of the period/year1,999 1,906
1,801

Cash and cash equivalents at end of the period/year comprise:
Cash on hand
311 331
282
Balances with central banks1,665
1,526 1,479

Receivables due from other financial institutions classified as cash and cash equivalents23 49 40
Cash and cash equivalents at end of the period/year1,999 1,906 1,801
NZ Banking Group

1
Certain comparatives have been revised for consistency. The reclassification was made to better reflect the NZ Banking Group's cash flows from operating and financing
activities and has no effect on the balance sheet or income statement.
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 8

Note 1 Statement of accounting policies
These condensed consolidated interim financial statements (‘financial statements’) have been prepared and presented in accordance with
the Order and Generally Accepted Accounting Practice in New Zealand, as appropriate for for-profit 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 2017. These financial statements comply with International Accounting Standard 34 Interim Financial Reporting as
issued by the International Accounting Standards Board.
Basis of preparation
These 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 liabilities (including derivative instruments) measured at fair value through income
statement or in other comprehensive income. The going concern concept has been applied.
All amounts in these financial statements have been rounded in millions of dollars unless otherwise stated.
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 2017.
The areas of judgment, estimates and assumptions in these financial statements, including the key sources of estimation uncertainty, are
consistent with those in the financial statements for the year ended 30 September 2017.
Comparative information has been revised where appropriate to conform to changes in presentation in the current reporting period and to
enhance comparability. 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 MonthsThree Months
Year

Ended
EndedEnded

31-Dec-17
31-Dec-1630-Sep-17

$ millionsUnaudited
UnauditedAudited

Fees and commissions
84
77330


Wealth management and insurance income38
22
130

Trading income
5861
158

Net ineffectiveness on qualifying hedges
5(5)
(10)

Other non-interest income2
3
17

Total non-interest income187
158625

NZ Banking Group

Note 3 Impairment charges/(benefits)
Three Months
Three Months
Year

Ended Ended

Ended

31-Dec-17
31-Dec-16
30-Sep-17

$ millions
Unaudited
Unaudited
Audited
Individually assessed provisions1

(41)

(49)


Collectively assessed provisions
4


(5)

(56)

Bad debts written off directly to the income statement
1

9

29

Total impairment charges/(benefits)6
(37)

(76)

NZ Banking Group


Note 4 Loans
31-Dec-1731-Dec-1630-Sep-17
$ millionsUnauditedUnaudited
Audited
Overdrafts1,1851,2441,296
Credit card outstandings1,5951,5621,518
Money market loans1,2191,2631,250

Term loans:
Housing47,45245,57646,943
Non-housing25,87825,68025,780
Other
1,198
1,2351,244
Total gross loans78,52776,56078,031
Provisions for impairment charges on loans(359)(394)(350)
Total net loans78,16876,16677,681

NZ Banking Group

Notes to the financial statements


Westpac Banking Corporation - New Zealand Banking Group
9
Note 4 Loans (continued)
As at 31 December 2017, $7,539 million of housing loans, accrued interest (representing accrued and unpaid interest on the outstanding
housing loans) and cash (representing collections of principal and interest from the underlying 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 2016: $7,540 million, 30 September 2017: $7,535 million). These pledged assets 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 2017. As at 31 December 2017, the New Zealand dollar
equivalent of bonds issued by WSNZL under the CB Programme was $5,408 million (31 December 2016: $3,373 million, 30 September 2017:
$5,246 million).

Note 5 Asset quality
NZ Banking Group
31-Dec-17
$ millionsUnaudited
Assets at least 90 days past due but not impaired88
Individually impaired assets178
Individually assessed provisions48
Collectively assessed provisions 343


Note 6 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 disclosed in Note 4, the carrying value of these financial assets pledged as collateral is:
31-Dec-1731-Dec-1630-Sep-17

$ millions UnauditedUnauditedAudited
Cash330 878
430
Securities pledged under repurchase agreements
Available-for-sale securities
- - 19
Trading securities and financial assets designated at fair value
73 90
216
Total amount pledged to secure liabilities (excluding CB Programme)
403 968
665
NZ Banking Group


Note 7 Deposits and other borrowings
31-Dec-1731-Dec-1630-Sep-17
$ millionsUnauditedUnauditedAudited
Certificates of deposit1,0201,268593
Non-interest bearing, repayable at call5,8355,008
5,274
Other interest bearing:
At call23,64024,73723,117
Term30,60328,98230,014
Total deposits and other borrowings61,09859,99558,998
NZ Banking Group

The NZ Branch held no retail deposits from individuals as at 31 December 2017 (31 December 2016: nil , 30 September 2017: nil). Deposits
and other borrowings have been prepared under both the historical cost convention and by applying fair value accounting to certain products.
Refer to Note 11 for further details.


Note 8 Other financial liabilities at fair value through income statement
31-Dec-1731-Dec-1630-Sep-17
$ millionsUnauditedUnauditedAudited
Securities sold short21215067
Security repurchase agreements7389235
Total other financial liabilities at fair value through income statement285239302
NZ Banking Group

Notes to the financial statements


Westpac Banking Corporation - New Zealand Banking Group 10

Note 9 Debt issues
31-Dec-1731-Dec-1630-Sep-17

$ millionsUnaudited
UnauditedAudited
Short-term debt
Commercial paper1,022
2,386
1,642

Total short-term debt1,022 2,386
1,642

Long-term debt
Non-domestic medium-term notes5,876

8,934 6,628
Covered bonds5,396 3,365 5,236


Domestic medium-term notes3,161 3,212 3,223
Total long-term debt14,433 15,511 15,087
Total debt issues15,455 17,897 16,729
NZ Banking Group

Debt issues have been prepared under both the historical cost convention and by applying fair value accounting to certain products. Refer to
Note 11 for further details.


Note 10 Related entities
Controlled entities of the NZ Banking Group as at 30 September 2017 are set out in Note 25 to the financial statements included in the
Disclosure Statement for the year ended 30 September 2017.
The total liabilities of the NZ Branch, net of amounts due to related entities as at 31 December 2017, amounted to $6,399 million (31
December 2016: $ 4,985 million, 30 September 2017: $5,981 million).
In November 2017, the NZ Branch repaid $200 million of funding owing to the Overseas Bank.

Note 11 Fair value of financial assets and financial liabilities
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.
A key element of the Framework is the Revaluation Committee, comprising senior valuation specialists from within the Overseas Banking
Group. The Revaluation Committee reviews the application of the agreed policies and procedures to assess that a fair value measurement
basis has been applied.
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 hierarchy described below.
Valuation techniques
The NZ Banking Group applies market accepted valuation techniques in determining the fair valuation of over the counter derivatives. This
includes credit valuation adjustments and funding valuation adjustments, which incorporates credit risk and funding costs and benefits that
arise in relation to uncollateralised derivative positions, respectively.

Notes to the financial statements


Westpac Banking Corporation - New Zealand Banking Group
11
Note 11 Fair value of financial assets and financial liabilities (continued)
The specific valuation techniques, the observability of the inputs used in valuation models and the subsequent classification for each
significant product category are outlined below.
Financial instruments measured at fair value
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.
Instrument Balance sheet
category
Includes: Valuation
Exchange traded
products
Derivative financial
instruments
Exchange traded interest
rate futures - derivative
financial instruments
These instruments are traded in liquid, active markets where prices
are readily observable. No modelling or assumptions are used in the
valuation.

Due from related entities
Due to related entities
Foreign exchange
products
Derivative financial
instruments
FX spot contracts
Non-asset backed
debt instruments
Trading securities and
financial assets
designated at fair value
New Zealand Government
bonds
Available-for-sale
securities
Other financial liabilities at
fair value through income
statement
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 prices. Valuation techniques include:
 the use of market standard discounting methodologies;
 option pricing models; and
 other valuation techniques widely used and accepted by market participants.
Instrument Balance sheet
category
Includes: Valuation
Interest rate
products
Derivative financial
instruments
Due from related entities
Due to related entities
Interest rate swaps and
options - derivative financial
instruments

Industry standard valuation models are used to calculate the expected
future value of payments by product, which is discounted back to a
present value. The model’s interest rate inputs are benchmark interest
rates and active broker quoted interest rates in the swap, bond and
futures markets. Interest rate volatilities are sourced from brokers and
consensus data providers.
Foreign exchange
products
Derivative financial
instruments
FX swaps and FX forward
contracts - derivative
financial instruments
Derived from market observable inputs or consensus pricing providers
using industry standard models. Due from related entities
Due to related entities
Asset backed debt
instruments
Trading securities and
financial assets
designated at fair value
Asset backed securities
Valued using an industry approach to value floating rate debt with
prepayment features. The main inputs to the model are the trading
margin and the weighted average life of the security. These inputs are
sourced from a consensus data provider. If consensus prices are not
available these are classified as Level 3 instruments.
Available-for-sale
securities

Notes to the financial statements


Westpac Banking Corporation - New Zealand Banking Group 12

Note 11 Fair value of financial assets and financial liabilities (continued)
Instrument Balance sheet
category
Includes: Valuation
Non-asset backed
debt instruments
Trading securities and
financial assets
designated at fair value

Available-for-sale
securities

Other financial liabilities
at fair value through
income statement
Local authority and NZ
public securities, other bank
issued certificates of
deposit, commercial paper,
other government securities,
off-shore securities and
corporate bonds
Valued using observable market prices which are sourced from
consensus pricing services, broker quotes or inter-dealer prices.
Security repurchase
agreements and reverse
repurchase agreements
over non-asset backed debt
securities with third parties
Deposits and other
borrowings at fair
value
Deposits and other
borrowings
Certificates of deposit Discounted cash flow using market rates offered for deposits of similar
remaining maturities.
Debt issues at fair
value
Debt issues Commercial paper Discounted cash flows, using a discount rate which reflects the terms
of the instrument and the timing of cash flows adjusted for market
observable changes in the applicable credit rating of Westpac New
Zealand.
Life insurance
assets
Life insurance assets Local authority securities,
investment grade corporate
bonds and units in unlisted
unit trusts
Valued using observable market prices or other widely used and
accepted valuation techniques utilising observable market inputs.
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.
Instrument Balance sheet
category
Includes: Valuation
Asset backed debt
instruments
Trading securities and
financial assets
designated at fair value
Residential mortgage-
backed securities (‘RMBS’)
and certain other asset
backed securities
RMBS are classified as Level 3 as consensus prices are not available
as valuation inputs. Quotes by a third party broker or lead manager
are used to derive the fair value for these instruments.
Interest rate
derivatives
Derivative financial
instruments
Non-vanilla interest rate
(inflation indexed)
derivatives and long-dated
NZD caps
Valued using industry standard valuation models utilising observable
market inputs which are determined separately for each parameter.
Where unobservable, inputs will be set with reference to an
observable proxy.
The table below summarises the attribution of financial instruments measured at fair value on a recurring basis to the fair value hierarchy:
$ millionsLevel 1
Level 2
Level 3
1
Total

Financial assets measured at fair value
Trading securities and financial assets designated at fair value29 3,373
553,457
Derivative financial instruments- 3,333-
3,333
Available-for-sale securities
1,199 2,410-3,609

Life insurance assets- 317-
317
Due from related entities- 816-
816
Total financial assets measured at fair value1,228 10,24955
11,532
Financial liabilities measured at fair value
Deposits and other borrowings at fair value- 1,020
-1,020
Other financial liabilties at fair value through income statement212 73-285
Derivative financial instruments- 3,794-
3,794
Due to related entities- 575-575

Debt issues at fair value- 1,022-1,022
Total financial liabilities measured at fair value212 6,484-
6,696
NZ Banking Group
31-Dec-17 (Unaudited)

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

Notes to the financial statements


Westpac Banking Corporation - New Zealand Banking Group
13
Note 11 Fair value of financial assets and financial liabilities (continued)
$ millionsLevel 1Level 2
Level 3
1
Total

Financial assets measured at fair value
Trading securities and financial assets designated at fair value655
4,90489
5,648


Derivative financial instruments13,7504
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 measured at fair value
2,238
11,7089314,039
Financial liabilities measured at fair value
Deposits and other borrowings 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



Due to related entities
-
852-852
Debt issues at fair value
-2,386
-2,386
Total financial liabilities measured at fair value1509,696-9,846



NZ Banking Group
31-Dec-16 (Unaudited)

1
Balances within this category of the fair value hierarchy are not considered material to the total trading securities and financial assets designated at fair value and
derivative financial instruments balances.
$ millionsLevel 1Level 2
Level 3
1
Total

Financial assets measured at fair value
Trading securities and financial assets designated at fair value
913,800
583,949


Derivative financial instruments1
3,419-
3,420
Available-for-sale securities
1,5562,531-
4,087
Life insurance assets-304
-304


Due from related entities1
409-410

Total financial assets measured at fair value
1,64910,4635812,170

Financial liabilities measured at fair value
Deposits and other borrowings at fair value-593-
593

Other financial liabilties at fair value through income statement
39263-
302

Derivative financial instruments
-3,475-
3,475
Due to related entities1574
-575
Debt issues at fair value-1,642
-1,642

Total financial liabilities measured at fair value406,547-
6,587

30-Sep-17 (Audited)
NZ Banking Group

1
Balances within this category of the fair value hierarchy are not considered material to the total trading securities and financial assets designated at fair value balance.
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 2017 (31 December 2016: no material changes in fair value, 30 September 2017: no material changes in fair value).
Analysis of movements between Fair Value Hierarchy Levels
During the period, there were no material transfers between levels of the fair value hierarchy (31 December 2016: no material transfers
between levels, 30 September 2017: no material transfers between levels).
Financial instruments not measured at fair value
The following table summarises the estimated fair value of the NZ Banking Group’s financial instruments not measured at fair value where the
carrying amount is not equivalent to fair value:
Total Carrying Estimated
Total Carrying Estimated Total Carrying
Estimated
$ millionsAmount Fair Value Amount Fair Value
Amount Fair Value
Financial assets
Loans78,168
78,209 76,166 76,311
77,681 77,717
Total78,168 78,209 76,166
76,311 77,681
77,717
Financial liabilities
Deposits and other borrowings60,078 60,110
58,727 58,777 58,405
58,450
Due to related entities1,986
1,998 2,733 2,742
3,071 3,084
Debt issues 14,433 14,614
15,511 15,662 15,087 15,259

Loan capital
2,843 2,961

1,080 1,095 2,822
2,921
Total79,340 79,683 78,051 78,276
79,385 79,714
31-Dec-17 (Unaudited)
NZ Banking Group
31-Dec-16 (Unaudited)30-Sep-17 (Audited)

Notes to the financial statements


Westpac Banking Corporation - New Zealand Banking Group 14

Note 11 Fair value of financial assets and financial liabilities (continued)
For cash and balances with central banks, due from and due to other financial institutions and balances due from related entities which are
carried at amortised cost and other types of short-term financial instruments recognised on 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 detailed description of how fair value is derived for financial instruments not measured at fair value is set out in Note 27 to the financial
statements included in the Disclosure Statement for the year ended 30 September 2017.

Note 12 Credit related commitments, contingent assets and contingent liabilities
31-Dec-17 31-Dec-16 30-Sep-17
$ millionsUnaudited Unaudited Audited
Letters of credit and guarantees1,081 1,258 1,041
Commitments to extend credit25,296 24,064 25,111
Other11 - 10
Total undrawn credit commitments26,388 25,322 26,162
NZ Banking Group

Contingent assets
The credit commitments shown in the table above also constitute contingent assets. These commitments would be classified as loans on the
balance sheet on the contingent event occurring.
Contingent liabilities
The NZ Banking Group has 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 13 Segment reporting
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 reporting 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 2016 has been restated following customer segmentation changes, as well
as changes to the net interest income in the operating segments, as a result of the Overseas Bank updating its capital allocation framework.
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 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 NZ IFRS 8 Operating Segments (‘NZ IFRS’ refers to
applicable New Zealand equivalents to International Financial Reporting Standards);
 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
15
Note 13 Segment reporting (continued)

ConsumerCommercial,Investments
Banking andCorporate andandReconciling
$ millionsWealthInstitutionalInsuranceItems Total
Three months ended 31 December 2017 (Unaudited)
Net interest income287179-(23)443
Non-interest income50773426187
Net operating income before operating expenses and impairment charges337256343630
Net operating income from external customers44633535(186)630
Net internal interest expense(109)(79)(1)189-
Net operating income before operating expenses and impairment charges337256343630
Operating expenses(177)(65)(7)(3)(252)
Impairment (charges)/benefits(19)13--(6)
Profit before income tax14120427-372
Total gross loans45,35433,150-2378,527
Total deposits34,83325,245-1,02061,098
Three months ended 31 December 2016 (Unaudited)
Net interest income263181-5449
Non-interest income598132(14)158
Net operating income before operating expenses and impairment charges
32226232(9)607
Net operating income from external customers44133933(206)607
Net internal interest expense(119)(77)(1)197-
Net operating income before operating expenses and impairment charges
32226232(9)607
Operating expenses(189)(63)(6)11(247)
Impairment (charges)/benefits (14)53-
(2)
37
Profit before income tax11925226-397
Total gross loans43,27633,245-3976,560
Total deposits33,71825,009-1,26859,995
Year ended 30 September 2017 (Audited)
Net interest income1,063715191,788
Non-interest income220288131(14)625
Net operating income before operating expenses and impairment charges
1,2831,003132(5)2,413
Net operating income from external customers1,7471,323136(793)2,413
Net internal interest expense(464)(320)(4)788
-
Net operating income before operating expenses and impairment charges
1,2831,003132(5)2,413
Operating expenses(709)(250)(29)(18)(1,006)
Impairment (charges)/benefits(34)97-1376
Profit before income tax540850103(10)1,483
Total gross loans44,70733,294-3078,031
Total deposits34,04424,361-59358,998
NZ Banking Group

Note 14 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-17
$ millionsUnaudited
Total assets of life insurance business239
As a percentage of total consolidated assets of the NZ Banking Group0.25%

Notes to the financial statements


Westpac Banking Corporation - New Zealand Banking Group 16

Note 15 Risk management
15.1 Credit risk
The NZ Banking Group’s residential mortgages by loan-to-value ratio (‘LVR’) as at 31 December 2017 (Unaudited)
LVRs are calculated as the current exposure divided by the NZ Banking Group’s valuation of the residential security at origination.
For loans originated from 1 January 2008, the NZ Banking Group utilises data from its loan system. For loans originated prior to 1 January
2008, the origination valuation is not separately recorded and is therefore not available for disclosure. For these loans, the NZ Banking Group
utilises its dynamic LVR process to estimate an origination valuation.
Exposures for which no LVR is available have been included in the ‘Exceeds 90%’ category in accordance with the requirements of the Order.
Does not
Exceeds 80%
LVR range ($ millions)
Exceed 80%and not 90%
Exceeds 90%
Total

On-balance sheet exposures43,465
2,185
1,607
47,257



Undrawn commitments and other off-balance sheet exposures9,384
195
307
9,886



Value of exposures 52,849
2,380
1,914
57,143



NZ Banking Group
31-Dec-17


15.2 Market risk
Market risk notional capital charges (Unaudited)
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 risk3,533283
Foreign currency risk
111
Equity risk--
NZ Banking Group
31-Dec-17


15.3 Liquidity risk
Liquid assets (Unaudited)
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
$ millions
31-Dec-17
Cash and balances with central banks1,976
Receivables due from other financial institutions23

Supranational securities1,492
NZ Government securities
2,427
NZ public securities1,730
NZ corporate securities1,304
Residential mortgage-backed securities3,950
Total liquid assets12,902


Note 16 Concentration of credit exposures to individual counterparties
Unaudited
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 2017 was nil ; and
 in respect of peak end-of-day aggregate credit exposure for the three months ended 31 December 2017 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 2017 was nil ; and

Notes to the financial statements


Westpac Banking Corporation - New Zealand Banking Group
17
Note 16 Concentration of credit exposures to individual counterparties (continued)
 in respect of peak end-of-day aggregate credit exposure for the three months ended 31 December 2017 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 2017.
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.
1
Note 17 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-1731-Dec-16

%
UnauditedUnaudited
Overseas Banking Group (excluding entities specifically excluded by APRA regulations)
1,2
Common equity Tier 1 capital ratio10.1
9.3


Additional Tier 1 capital ratio
2.11.6


Tier 1 capital ratio
12.210.9

Tier 2 capital ratio2.12.5


Total regulatory capital ratio
14.313.4

Overseas Bank (Extended Licensed Entity)
1,3
Common equity Tier 1 capital ratio9.99.4

Additional Tier 1 capital ratio2.21.8

Tier 1 capital ratio12.111.2

Tier 2 capital ratio2.32.8

Total regulatory capital ratio
14.414.0


1
The capital ratios represent information mandated by APRA. The capital ratios of the Overseas Banking Group 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 purpose of measuring capital adequacy (Level 1).
Under APRA’s Prudential Standards, Australian authorised deposit taking institutions (‘ADI’), including the Overseas Banking Group are
required to maintain minimum ratios of capital to risk weighted assets (‘RWA’), as determined by APRA. For the calculation of RWAs, the
Overseas Banking Group is accredited by APRA to apply advanced models permitted by the Basel III global capital adequacy regime. The
Overseas Banking Group uses 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. APRA’s prudential standards are generally consistent with the International Regulatory Framework for Banks, also known as Basel III,
issued by the Basel Committee on Banking Supervision (‘BCBS’), except where APRA has exercised certain discretions.
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 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 2017.

Notes to the financial statements


Westpac Banking Corporation - New Zealand Banking Group 18

Note 18 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 2017.
Profitability
30-Sep-17

Net profit after tax for the year ended 30 September 2017 (A$ millions)7,997

Net profit after tax for the year ended 30 September 2017 as a percentage of average total assets 0.9%
Total assets and equity
30-Sep-17
Total assets (A$ millions)851,875
Percentage change in total assets over the year ended 30 September 20171.5%
Total shareholder's equity (A$ millions)61,342


Asset quality
30-Sep-17
Total individually impaired assets
1, 2
(A$ millions)1,542
Total individually impaired assets as a percentage of total assets 0.2%
Total individual credit impairment allowance
3
(A$ millions)714
Total individual credit impairment allowance as a percentage of total individually impaired assets46.3%
Total collective credit impairment allowance
3
(A$ millions)
2,639


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$686 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$234 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.


Note 19 Subsequent events
On 17 January 2018, Westpac NZ Operations Limited (a wholly owned subsidiary of Westpac New Zealand) entered into an agreement to sell
its 25% shareholding in Paymark Limited (‘Paymark’) to Ingenico Group S.A. The carrying amount of the NZ Banking Group’s investment in
Paymark is included in other assets on the balance sheet. The transaction is subject to regulatory consents.

Westpac Banking Corporation - New Zealand Banking Group
19
Conditions of registration
Westpac New Zealand conditions of registration
Westpac New Zealand has disclosed matters of non-compliance with its conditions of registration in Westpac New Zealand’s Disclosure
Statement for the three months ended 31 December 2017.
These matters have no impact on the compliance by the Overseas Bank with its conditions of registration.

Changes to conditions of registration
On 19 December 2017, the Reserve Bank further advised the Overseas Bank on changes to its conditions of registration that will give effect to
the Reserve Bank’s further changes to the LVR restrictions which ease those restrictions. These changes to the conditions of registration
came into effect from 1 January 2018, being:
(a) the limit of 5 per cent on new lending carried out in the relevant measurement period for residential property investment will apply where
the LVR is greater than 65 per cent (currently, the required LVR is 60 per cent); and
(b) there will be a limit of 15 percent (currently, the required limit is 10 per cent) on new non-residential property investment lending carried
out in the measurement period where the LVR is greater than 80 per cent.