Westpac 2018 Interim Results Template

ASX
Release


24 April 2018

Westpac Group 2018 Interim Financial Results Template
The Westpac Group has today released the template for its 2018 Interim Financial Results. It
outlines the changes that will be made in the presentation of Westpac’s interim results. An Excel
template detailing how key information in the 2018 Interim Financial Results will be presented
(including providing updated comparative data) is available on the Westpac website at
www.westpac.com.au/investorcentre.
In First Half 2018, Westpac implemented a number of changes to the presentation of its divisional
financial information. These changes have no impact on the Group’s overall results or balance
sheet. Comparative divisional financial information has been restated for these changes.
The changes include updates to the methodologies used to allocate certain costs, revenues and
capital to divisions. These changes can be summarised in four areas:
1. Allocating additional capital from Group Businesses to operating divisions, following
greater clarity from APRA on updates to its capital framework;
2. Updating the Group’s cost of funds transfer pricing methodology, including the allocation of
revenue from balance sheet management activities;
3. Realigning divisional earnings and balance sheet disclosures for recent customer transfers;
and
4. Refining expense allocations to improve the allocation of support costs to divisions.
Other disclosure changes in Westpac’s 2018 Interim Financial Results include:
 Reporting the net stable funding ratio which became effective from 1 January 2018; and
 Revisions to the disclosure of funds under management and funds under administration.
Further details on these changes are provided in Appendix 1. Tables showing updated disclosures
and restated prior periods are provided in Appendix 2.
The Westpac Group is scheduled to announce its 2018 Interim Financial Results on Monday,
7 May 2018. An Excel spreadsheet of the interim financial results will also be published on the
Westpac website on that date.

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
Changes to the presentation of divisional financial information:
1. Allocating additional capital from Group Businesses to operating divisions, following greater
clarity from APRA on updates to its capital framework.
In 2017, APRA provided additional guidance on the level of capital the Australian major banks
need to be considered “unquestionably strong”. Westpac has been building capital in anticipation of
this change, and had been retaining this additional capital in Group Businesses. While APRA’s
capital framework is still to be finalised, more recent updates have provided sufficient clarity to
allocate this capital to divisions. Consumer Bank and Business Bank now hold more capital
(principally due to more capital being allocated to mortgages) and Westpac Institutional Bank sees
a small reduction (relating to lower risk weightings for certain corporate exposures). These
changes impact the disclosure of economic profit and the return on equity by division.
2. Updating the Group’s cost of funds transfer pricing methodology, including the allocation of
revenue from balance sheet management activities.
Westpac’s cost of funds transfer pricing has been updated to better reflect the liquidity value of
deposits within divisions. These changes have principally seen more income recorded in
Consumer Bank and less in Westpac Institutional Bank.
Treasury is responsible for the overall management of the balance sheet and interest rate risk for
the Group. The allocation of revenue from these activities has been revised to better reflect the
drivers of revenue. This has principally resulted in a shift in revenue from Consumer Bank to
Treasury (which is reported in Group Businesses). This change also sees a restatement in the key
metric “Group net interest margin excluding Treasury & Markets”.
3. Realigning divisional earnings and balance sheet disclosures for recent customer transfers.
Two changes have been implemented:
 Some small/micro business customers will now have their lending, deposits and revenues
managed and reported in Consumer Bank rather than in Business Bank. These customers
do not have dedicated business bankers, and are managed through the Consumer Bank
channels; and
 Certain deposit portfolios previously held in Business Bank have been moved to Westpac
Institutional Bank (some larger institutional customers) and to BT Financial Group (mostly
related to deposits held on platforms).

4. Refining expense allocations to improve the allocation of support costs to divisions. 
The Group’s expense allocation methodology has been refined to improve the allocation of support
costs to divisions. This will see a greater proportion of strategy, human resources, finance and risk
management costs allocated to divisions from Group Businesses.
Other disclosure changes in Westpac’s 2018 Interim Financial Results include:

Reporting of the NSFR Section 2.4, reports available and required stable funding
Revisions to the disclosure of
FUM & FUA
Section 2.2.6, better aligns reporting of FUM/FUA
information with how the business is managed.

WESTPAC BANKING CORPORATION ABN 33 007 457 141

Appendix 2:

Divisional cash earnings summary
Revised disclosure of 1H17 results
$m
Consumer
Ba nk
Busine ss
Ba nk
BT Financial
Group
(Australia)
Westpac
Institutional
Ba nk
Westpac
New Zealand
(A$)
Group
Businesses Group
Net interest income
3,6771,9102376567914227,693
Non-interest income
433557894958245(19)3,068
Net operating income
4,1102,4671,1311,6141,03640310,761
Operating expenses
(1,651)(897)(589)(671)(461)(232)(4,501)
Core earnings
2,4591,5705429435751716,260
Impairment charges
(272)(200)(3)(64)3511(493)
Operating profit before tax
2,1871,3705398796101825,767
Income tax expense
(656)(412)(160)(246)(174)(97)(1,745)
Non-controlling interests
- - -(4) -(1)(5)
Cash earnings
1,531958379629436844,017
Economic Profit
1,2165942982671831,910
Expense to income ratio
40.17%36.36%52.08%41.57%44.35%41.83%
Net interest margin
2.27%2.70%2.78%1.56%1.96%2.07%
$bn
Total net loans
360.0146.419.371.670.0
Total deposits
189.9102.329.798.551.9

Previously disclosed 1H17 results
$m
Consumer
Ba nk
Busine ss
Ba nk
BT Financial
Group
(Australia)
Westpac
Institutional
Ba nk
Westpac
New Zealand
(A$)
Group
Businesses Group
Net interest income
3,6311,9902517437902887,693
Non-interest income
424567894957245(19)3,068
Net operating income
4,0552,5571,1451,7001,03526910,761
Operating expenses
(1,629)(911)(578)(657)(461)(265)(4,501)
Core earnings
2,4261,6465671,04357446,260
Impairment charges
(267)(205)(3)(64)3511(493)
Operating profit before tax
2,1591,441564979609155,767
Income tax expense
(648)(433)(167)(275)(174)(48)(1,745)
Non-controlling interests
- - -(4) -(1)(5)
Cash earnings
1,5111,008397700435(34)4,017
Economic Profit
1,2786613253481851,910
Expense to income ratio
40.17%35.63%50.48%38.65%44.39%41.83%
Net interest margin
2.28%2.70%2.94%1.77%1.96%2.07%
$bn
Total net loans
352.2154.319.371.570.0
Total deposits
185.9112.028.693.851.9

WESTPAC BANKING CORPORATION ABN 33 007 457 141

Revised disclosure of 2H17 results

$m
Consumer
Ba nk
Busine ss
Ba nk
BT Financial
Group
(Australia)
Westpac
Institutional
Ba nk
Westpac
New Zealand
(A$)
Group
Businesses Group
Net interest income
3,9611,9752746728382918,011
Non-interest income
380584850749235(14)2,784
Net operating income
4,3412,5591,1241,4211,07327710,795
Operating expenses
(1,727)(921)(610)(680)(442)(224)(4,604)
Core earnings
2,6141,638514741631536,191
Impairment charges
(293)(143)(1)83732(360)
Operating profit before tax
2,3211,495513749668855,831
Income tax expense
(697)(450)(156)(216)(187)(78)(1,784)
Non-controlling interests
---(3)-1(2)
Cash earnings
1,6241,04535753048184,045
Economic Profit
1,2047062672002271,864
Expense to income ratio
39.78%35.99%54.27%47.85%41.27%42.65%
Net interest margin
2.36%2.74%3.03%1.62%2.09%2.10%
$bn
Total net loans
370.4149.420.174.171.1
Total deposits
196.5107.030.792.153.7

Previously disclosed 2H17 results
$m
Consumer
Ba nk
Busine ss
Ba nk
BT Financial
Group
(Australia)
Westpac
Institutional
Ba nk
Westpac
New Zealand
(A$)
Group
Businesses Group
Net interest income
3,8782,0652867648371818,011
Non-interest income
378586850749234(13)2,784
Net operating income
4,2562,6511,1361,5131,07116810,795
Operating expenses
(1,708)(928)(598)(666)(442)(262)(4,604)
Core earnings
2,5481,723538847629(94)6,191
Impairment charges
(274)(162)(1)83732(360)
Operating profit before tax
2,2741,561537855666(62)5,831
Income tax expense
(681)(470)(163)(248)(185)(37)(1,784)
Non-controlling interests
---(3)-1(2)
Cash earnings
1,5931,091374604481(98)4,045
Economic Profit
1,3867973002742361,864
Expense to income ratio
40.13%35.01%52.64%44.02%41.39%42.65%
Net interest margin
2.35%2.74%3.16%1.85%2.08%2.10%
$bn
Total net loans
362.5157.520.174.071.1
Total deposits
191.8115.329.789.453.7

WESTPAC BANKING CORPORATION ABN 33 007 457 141

Section 2.2.1 Net interest income

Revised disclosure
Half yearHalf year
$mSept 2017 March 2017
Net interest income
Net interest income excluding Treasury & Markets7,698 7,283
Treasury net interest income266 386
Market net interest income47 24
Net interest income8,011 7,693
Average interest-earning assets
Loans640,339 627,267
Third party liquid assets96,262 93,798
Other interest-earning assets23,163 23,718
Average interest-earning assets759,764 744,783
Net interest margin
Group net interest margin2.10%2.07%
Group net interest margin excluding Treasury & Markets2.02%1.96%

Previously disclosed
Half yearHalf year
$mSept 2017 March 2017
Net interest income
Net interest income excluding Treasury & Markets7,844 7,432
Treasury net interest income120 237
Market net interest income47 24
Net interest income8,011 7,693
Average interest-earning assets
Loans640,339 627,267
Third party liquid assets96,262 93,798
Other interest-earning assets23,163 23,718
Average interest-earning assets759,764 744,783
Net interest margin
Group net interest margin2.10%2.07%
Group net interest margin excluding Treasury & Markets2.06%2.00%

WESTPAC BANKING CORPORATION ABN 33 007 457 141


Section 2.2.6 Total Group Funds
Revised disclosure
Half yearHalf year
$bnSept 2017 March 2017
Funds
Superannuation36.235.8
Platforms115.3113.3
Packaged Funds36.438.4
Other3.54.0
Westpac Institutional Bank12.511.3
New Zealand (A$)9.38.9
Total Group Funds
213.2211.7
Half YearHalf Year
Sept 17March 17
Average Funds for the Group
213.9203.2

Previously disclosed
Half yearHalf year
$bnSept 2017 March 2017
Funds Under Management (FUM)
BTFG43.642.5
Advance Asset Management9.512.6
Westpac Institutional Bank12.511.3
New Zealand (A$)7.77.1
Group FUM
73.373.5
Funds Under Administration (FUA)
BTFG103.299.3
Asgard35.137.1
New Zealand (A$)1.61.8
Group FUA
139.9138.2
Half YearHalf Year
Sept 17March 17
Average FUM for the Group
73.768.3
Average FUA for the Group
140.2134.9


Section 2.4 Funding and liquidity risk management
Pro-forma Pro-forma
As at 30As at 30
$mSept 2017Mar 2017
Available Stable Funding566,304 557,489
Required Stable Funding521,048 513,904
Net Stable Funding Ratio (NSFR)109%108%

2018 Interim Financial Results
Template

1.1 Reported results
% Mov't% Mov't
$m
Half Year
March 18
Half Year
Sept 17
Half Year
March 17
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Net interest income
7,9037,613
Non-interest income
3,1303,156
Net operating income before operating expenses
and impairment charges
11,03310,769
Operating expenses
(4,801)(4,633)
Net profit before impairment charges and income tax
expense
6,2326,136
Impairment charges
(360)(493)
Profit before income tax
5,8725,643
Income tax expense
(1,787)(1,731)
Net profit for the period
4,0853,912
Net profit attributable to non-controlling interests
(2)(5)
Net profit attributable to owners of Westpac
Banking Corporation
4,0833,907

1.2 Key financial information
% Mov't% Mov't
$m
Half Year
March 18
Half Year
Sept 17
Half Year
March 17
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Shareholder value
Earnings per ordinary share (cents)121.2116.8
Weighted average ordinary shares (millions)3,3663,344
Fully franked dividends per ordinary share (cents)9494
Return on average ordinary equity13.72%13.57%
Average ordinary equity ($m)59,36457,744
Average total equity ($m)59,38057,768
Net tangible asset per ordinary share ($)14.6614.24
Business performance
Interest spread1.90%1.88%
Benefit of net non-interest bearing assets, liabilities and equity
0.17%0.17%
Net interest margin 2.07%2.05%
Average interest-earning assets ($m)759,764744,783
Expense to income ratio43.51%43.02%
Capital, funding and liquidity
Common equity Tier 1 capital ratio
- APRA Basel III 10.56%9.97%
- Internationally comparable16.20%15.34%
Credit risk weighted assets (credit RWA) ($m) 349,258352,713
Total risk weighted assets (RWA) ($m) 404,235404,382
Liquidity coverage ratio (LCR)124%125%
Net stable funding ratio (NSFR)109%108%
Asset quality
Gross impaired assets to gross loans0.22%0.30%
Gross impaired assets to equity and total provisions
2.39%3.15%
Gross impaired asset provisions to gross impaired assets
46.30%52.07%
Total committed exposures (TCE) ($m)1,005,882984,794
Total stressed exposures as a % of TCE
1.05%1.14%
Total provisions to gross loans45bps52bps
Mortgage 90+ day delinquencies0.62%0.63%
Other consumer loans 90+ day delinquencies1.57%1.55%
Collectively assessed provisions to credit RWA76bps77bps
Balance sheet ($m)
Loans684,919666,946
Total assets
851,875839,993
Deposits and other borrowings533,591522,513
Total liabilities790,533780,621
Total equity61,34259,372
Wealth Management
Average Group Funds ($bn)213.9203.2
Life insurance in-force premiums (Australia)1,0681,030
General insurance gross written premiums (Australia)258250

1.3 Cash earnings results
% Mov't% Mov't
$m
Half Year
March 18
Half Year
Sept 17
Half Year
March 17
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Net interest income8,0117,693
Non-interest income2,7843,068
Net operating income10,79510,761
Operating expenses(4,604)(4,501)
Core earnings6,1916,260
Impairment charges(360)(493)
Operating profit before income tax5,8315,767
Income tax expense(1,784)(1,745)
Net profit4,0474,022
Net profit attributable to non-controlling interests(2)(5)
Cash earnings4,0454,017
1.3.1 Key financial information - cash earnings basis
% Mov't% Mov't
$m
Half Year
March 18
Half Year
Sept 17
Half Year
March 17
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Shareholder value
Cash earnings per ordinary share (cents)119.9119.8
Economic profit ($m)1,8641,910
Weighted average ordinary shares (millions)3,3753,352
Dividend payout ratio78.86%78.57%
Cash earnings on average ordinary equity (ROE)13.59%13.95%
Cash earnings on average tangible ordinary equity (ROTE)16.27%16.83%
Average ordinary equity ($m)59,36457,744
Average tangible ordinary equity ($m)49,58247,863
Business performance
Interest spread1.92%1.90%
Benefit of net non-interest bearing assets, liabilities and equity0.18%0.17%
Net interest margin 2.10%2.07%
Average interest-earning assets ($m)759,764744,783
Expense to income ratio42.65%41.83%
Full time equivalent employees (FTE)35,09635,290
Revenue per FTE ($ '000's)307306
Effective tax rate 30.60%30.26%
Impairment charges
Impairment charges to average loans annualised11bps15bps
Net write-offs to average loans annualised25bps19bps

2.2.1 Net interest income
As atAs atAs at% Mov't% Mov't
$m
31 March
2018
30 Sept
2017
31 March
2017
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Net interest income
Net interest income excluding Treasury & Markets
7,6987,283
Treasury net interest income
266386
Market net interest income
4724
Net interest income
8,0117,693
Average interest-earning assets
Loans
640,339627,267
Third party liquid assets
96,26293,798
Other interest-earning assets
23,16323,718
Average interest-earning assets
759,764744,783
Net interest margin
Group net interest margin
2.10%2.07%
Group net interest margin excluding Treasury & Markets
2.02%1.96%

2.2.3 Deposits and other borrowings
As atAs atAs at% Mov't% Mov't
$m
31 March
2018
30 Sept
2017
31 March
2017
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Customer deposits
Australia420,841414,706
At call
224,268217,492
Term
156,249157,730
Non-interest bearing
40,32439,484
New Zealand (A$)53,74651,942
New Zealand (NZ$)
58,40556,812
At call
23,11723,894
Term
30,01427,837
Non-interest bearing
5,2745,081
Other overseas (A$)12,08312,012
Total customer deposits486,670478,660
Certificates of deposit46,92143,853
Australia
37,51531,011
New Zealand (A$)
5461,478
Other overseas (A$)
8,86011,364
Total deposits and other borrowings533,591522,513

2.2.6 Group funds
As atAs atAs at% Mov't% Mov't
$bn
31 March
2018
30 Sept
2017
31 March
2017
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Superannuation
36.235.8
Platforms
115.3113.3
Packaged Funds
36.438.4
Other
3.54.0
Westpac Institutional Bank
12.511.3
New Zealand (A$)
9.38.9
Total Group Funds213.2211.7
Average Group Fund
s213.9203.2

2.4.1 Balance sheet
As atAs atAs at% Mov't% Mov't
$m
31 March
2018
30 Sept
2017
31 March
2017
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Assets
Cash and balances with central banks
18,39715,912
Receivables due from other financial institutions
7,1289,545
Trading securities, other financial assets designated at fair value and
available-for-sale securities
86,03490,929
Derivative financial instruments
24,03324,619
Loans
684,919666,946
Life insurance assets
10,64310,934
Other assets
20,72121,108
Total assets851,875839,993
Liabilities
Payables due to other financial institutions
21,90721,390
Deposits and other borrowings
533,591522,513
Other financial liabilities at fair value through income statement
4,0564,894
Derivative financial instruments
25,37528,457
Debt issues
168,356167,306
Life insurance liabilities
9,0199,158
Loan capital
17,66617,106
Other liabilities
10,5639,797
Total liabilities790,533780,621
Equity
Total equity attributable to owners of Westpac Banking Corporation
61,28859,315
Non-controlling interests
5457
Total equity61,34259,372

3.1 Consumer Bank
% Mov't% Mov't
$m
Half Year
March 18
Half Year
Sept 17
Half Year
March 17
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Net interest income3,9613,677
Non-interest income380433
Net operating income4,3414,110
Operating expenses(1,727)(1,651)
Core earnings2,6142,459
Impairment charges(293)(272)
Operating profit before tax2,3212,187
Tax and non-controlling interests(697)(656)
Cash earnings1,6241,531
Economic profit1,2041,216
Expense to income ratio39.78%40.17%
Net interest margin2.36%2.27%
As atAs atAs at% Mov't% Mov't
$bn
31 March
2018
30 Sept
2017
31 March
2017
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Deposits
Term deposits57.956.3
Other138.6133.6
Total deposits196.5189.9
Net loans
Mortgages357.4346.4
Other13.914.6
Provisions(0.9)(1.0)
Total net loans370.4360.0
Deposit to loan ratio53.05%52.75%
Total assets377.5367.0
TCE432.3421.4
Average interest-earning assets335.1325.1
As atAs atAs at
31 March
2018
30 Sept
2017
31 March
2017
Credit quality
Impairment charges to average loans annualised0.16%0.15%
Mortgage 90+ day delinquencies0.71%0.72%
Other consumer loans 90+ day delinquencies1.64%1.86%
Total stressed assets to TCE0.64%0.66%

3.2 Business Bank
% Mov't% Mov't
$m
Half Year
March 18
Half Year
Sept 17
Half Year
March 17
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Net interest income1,9751,910
Non-interest income584557
Net operating income2,5592,467
Operating expenses(921)(897)
Core earnings1,6381,570
Impairment charges(143)(200)
Operating profit before tax1,4951,370
Tax and non-controlling interests(450)(412)
Cash earnings1,045958
Economic profit706594
Expense to income ratio35.99%36.36%
Net interest margin2.74%2.70%
As atAs atAs at% Mov't% Mov't
$bn
31 March
2018
30 Sept
2017
31 March
2017
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Deposits
Term deposits43.741.7
Other63.360.6
Total deposits107.0102.3
Net loans
Mortgages53.952.5
Business87.986.2
Other8.78.9
Provisions(1.1)(1.2)
Total net loans149.4146.4
Deposit to loan ratio71.62%69.88%
Total assets153.1149.9
TCE199.1196.0
Average interest-earning assets143.9141.6
As atAs atAs at
31 March
2018
30 Sept
2017
31 March
2017
Credit quality
Impairment charges to average loans annualised0.19%0.27%
Mortgage 90+ day delinquencies0.60%0.55%
Other consumer loans 90+ day delinquencies1.68%1.32%
Business: impaired assets to TCE0.47%0.63%
Total stressed assets to TCE2.13%2.29%

3.3 BT Financial Group (Australia)
% Mov't% Mov't
$m
Half Year
March 18
Half Year
Sept 17
Half Year
March 17
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Net interest income274237
Non-interest income850894
Net operating income1,1241,131
Operating expenses(610)(589)
Core earnings514542
Impairment charges(1)(3)
Operating profit before tax513539
Tax and non-controlling interests(156)(160)
Cash earnings357379
Economic profit267298
Expense to income ratio54.27%52.08%
Income on invested capital3036
As atAs atAs at% Mov't% Mov't
$bn
31 March
2018
30 Sept
2017
31 March
2017
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Deposits30.729.7
Net loans
Loans
20.119.3
Provisions
--
Total net loans20.119.3
Deposit to loan ratio152.74%153.89%
Total Funds191.4191.5
Average Funds192.6183.6
Cash earnings% Mov'
t% Mov't
$m
Half Year
March 18
Half Year
Sept 17
Half Year
March 17
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Funds management business
175238
Insurance
173117
Total funds management and insurance
348355
Capital and othe
r
924
Total cash earnings357379

3.3.1 Funds Management business
% Mov't% Mov't

$m
Half Year
March 18
Half Year
Sept 17
Half Year
March 17
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Net interest income268228
Non-interest income537646
Net operating income805874
Operating expenses(549)(535)
Core earnings256339
Impairment charges(2)(1)
Operating profit before tax254338
Tax and non-controlling interests(79)(100)
Cash earnings175238
Expense to income ratio68.20%61.21%
Movement of FUM / FUA
As at
As at
As at% Mov't% Mov't
31 March
2018
Net
Flows
Other
Mov't
30 Sept
2017
31 March
2017
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Superannuation36.235.8
Platforms115.3113.3
Packaged Funds36.438.4
Other3.54.0
Total Funds191.4191.5
3.3.2 Insurance business
% Mov't% Mov't
$m
Half Year
March 18
Half Year
Sept 17
Half Year
March 17
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Net interest income46
Non-interest income285214
Net operating income289220
Operating expenses(49)(50)
Core earnings240170
Impairment (charges) / benefits2(2)
Operating profit before tax242168
Tax and non-controlling interests(69)(51)
Cash earnings173117
Expense to income ratio16.96%22.73%
Cash earnings% Mov't% Mov't

$m
Half Year
March 18
Half Year
Sept 17
Half Year
March 17
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Life Insurance
8476
General Insuranc
e
7318
Lenders Mortgage Insurance
1623
Total cash earnings
173117
Insurance key metric
s
Life Insurance in-force premiums% Mov't% Mov't

$m
Half Year
March 18
Half Year
Sept 17
Half Year
March 17
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Life Insurance in-force premiums at start of perio
d1,030973
Sales / New Business112122
Lapses(74)(65)
Life Insurance in-force premiums at end of period1,0681,030
Claims ratios for Insurance Business% Mov't% Mov't
(%)
Half Year
March 18
Half Year
Sept 17
Half Year
March 17
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Life Insurance3538
General Insuranc
e3571
Lenders Mortgage Insurance277
Gross written premiums% Mov't% Mov't
$m
Half Year
March 18
Half Year
Sept 17
Half Year
March 17
Mar 18 -
Sept 17
Mar 18 -
Mar 17
General Insurance gross written premiu
m258250
Lenders Mortgage Insurance gross written premiu
m109141
$bnInflowsOutflows

3.4 Westpac Institutional Bank
% Mov't% Mov't
$m
Half Year
March 18
Half Year
Sept 17
Half Year
March 17
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Net interest income672656
Non-interest income749958
Net operating income1,4211,614
Operating expenses(680)(671)
Core earnings741943
Impairment (charges) / benefits8(64)
Operating profit before tax749879
Tax and non-controlling interests(219)(250)
Cash earnings530629
Economic profit200267
Expense to income ratio47.85%41.57%
Net interest margin1.62%1.56%
As atAs atAs at% Mov't% Mov't
$bn
31 March
2018
30 Sept
2017
31 March
2017
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Deposits92.198.5
Net loans
Loans
74.472.1
Provisions
(0.3)(0.5)
Total net loans74.171.6
Deposit to loan ratio 124.29%137.57%
Total assets103.1104.0
TCE249.1245.2
Average interest-earning assets82.684.5
Impairment charges to average loans annualised(0.02%)0.18%
Impaired assets to TCE0.07%0.18%
Total stressed assets to TCE0.55%0.59%
Total Funds12.511.3
Revenue contribution
% Mov'
t% Mov't
$m
Half Year
March 18
Half Year
Sept 17
Half Year
March 17
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Lending and deposit revenu
e
785764
Markets, sales and fee income
447504
Total customer revenue1,2321,268
Derivative valuation adjustments
2719
Trading revenu
e
71246
Hastings
6330
Othe
r
2851
Total WIB revenue1,4211,614

3.5 Westpac New Zealand
% Mov't% Mov't
NZ$m
Half Year
March 18
Half Year
Sept 17
Half Year
March 17
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Net interest income899839
Non-interest income252259
Net operating income1,1511,098
Operating expenses(475)(487)
Core earnings676611
Impairment (charges) / benefits4036
Operating profit before tax716647
Tax and non-controlling interests(208)(184)
Cash earnings508463
Economic profit236195
Expense to income ratio41.27%44.35%
Net interest margin2.09%1.96%
As atAs atAs at% Mov't% Mov't
NZ$bn
31 March
2018
30 Sept
2017
31 March
2017
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Deposits
Term deposits30.027.8
Other28.429.0
Total deposits58.456.8
Net loans
Mortgages46.946.2
Business28.628.6
Other2.22.1
Provisions(0.4)(0.4)
Total net loans77.376.5
Deposit to loan ratio75.55%74.25%
Total assets88.387.1
TCE108.8107.0
Third party liquid assets8.78.4
Average interest-earning assets86.085.6
Total Funds10.19.7
As atAs atAs at
31 March
2018
30 Sept
2017
31 March
2017
Credit quality
Impairment charges to average loans annualised(0.10%)(0.09%)
Mortgage 90+ day delinquencies0.12%0.14%
Other consumer loans 90+ day delinquencies0.57%0.58%
Impaired assets to TCE0.18%0.20%
Total stressed assets to TCE2.06%2.41%

3.6 Group Businesses
% Mov't% Mov't
$m
Half Year
March 18
Half Year
Sept 17
Half Year
March 17
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Net interest income291422
Non-interest income(14)(19)
Net operating income277403
Operating expenses(224)(232)
Core earnings53171
Impairment benefits3211
Operating profit before tax85182
Tax and non-controlling interests(77)(98)
Cash earnings884
Treasury% Mov't% Mov't
$m
Half Year
March 18
Half Year
Sept 17
Half Year
March 17
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Net interest income272403
Non-interest income53
Net operating income277406
Cash earnings172264

Note 2. Segment reporting
$m
Consumer
Bank
Business
Bank
BT Financial
Group
(Australia)
Westpac
Institutional
Bank
Westpac
New Zealand
(A$)
Group
Businesses Group
Net interest income
Non-interest income
Net operating income before operating
expenses and impairment charges
Operating expenses
Impairment (charges) / benefits
Profit before income tax
Income tax expense
Profit attributable to non-controlling interests
Cash earnings for the period
Net cash earnings adjustments
Net profit for the period attributable to
owners of Westpac Banking Corporation
Total assets
Total liabilities
$m
Consumer
Bank
Business
Bank
BT Financial
Group
(Australia)
Westpac
Institutional
Bank
Westpac
New Zealand
(A$)
Group
Businesses Group
Net interest income
3,9611,9752746728382918,011
Non-interest income
380584850749235(14)2,784
Net operating income before operating
expenses and impairment charges4,3412,5591,1241,4211,07327710,795
Operating expenses
(1,727)(921)(610)(680)(442)(224)(4,604)
Impairment (charges) / benefits
(293)(143)(1)83732(360)
Profit before income tax2,3211,495513749668855,831
Income tax expense
(697)(450)(156)(216)(187)(78)(1,784)
Profit attributable to non-controlling interests
---(3)-1(2)
Cash earnings for the period1,6241,04535753048184,045
Net cash earnings adjustments
(58)(5)170-(7)(62)38
Net profit for the period attributable to
owners of Westpac Banking Corporation1,5661,040527530474(54)4,083
Total assets
377,457153,07835,237103,08081,285101,738851,875
Total liabilities202,689111,38541,431118,87571,432244,721790,533
$m
Consumer
Bank
Business
Bank
BT Financial
Group
(Australia)
Westpac
Institutional
Bank
Westpac
New Zealand
(A$)
Group
Businesses Group
Net interest income
3,6771,9102376567914227,693
Non-interest income
433557894958245(19)3,068
Net operating income before operating
expenses and impairment charges4,1102,4671,1311,6141,03640310,761
Operating expenses
(1,651)(897)(589)(671)(461)(232)(4,501)
Impairment (charges) / benefits
(272)(200)(3)(64)3511(493)
Profit before income tax2,1871,3705398796101825,767
Income tax expense
(656)(412)(160)(246)(174)(97)(1,745)
Profit attributable to non-controlling interests
---(4)-(1)(5)
Cash earnings for the period1,531958379629436844,017
Net cash earnings adjustments
(58)(5)(10)-(7)(30)(110)
Net profit for the period attributable to
owners of Westpac Banking Corporation1,473953369629429543,907
Total assets
367,008149,94735,279103,95979,605104,195839,993
Total liabilities194,476107,21740,649125,27369,828243,178780,621
Half Year March 18
Half Year September 17
Half Year March 17

Note 1. Interest spread and margin analysis (cash earnings basis)
Half Year
March 18
Half Year
Sept 17
Half Year
March 17
Group
Average interest-earning assets ($m)759,764744,783
Net interest income ($m)8,0117,693
Interest spread1.92%1.90%
Benefit of net non-interest bearing assets, liabilities and equity0.18%0.17%
Net interest margin2.10%2.07%
Analysis by division
Average interest-earning assets ($m)
Consumer Bank335,103325,098
Business Bank143,910141,630
BT Financial Group 18,02817,095
Westpac Institutional Bank82,59884,523
Westpac New Zealand (A$)80,14280,864
Group Businesses99,98395,573
Group total759,764744,783
Westpac New Zealand (NZ$)85,98885,647
Net interest income ($m)
Consumer Bank3,9613,677
Business Bank1,9751,910
BT Financial Group 274237
Westpac Institutional Bank672656
Westpac New Zealand (A$)838791
Group Businesses291422
Group total8,0117,693
Westpac New Zealand (NZ$)899839
Interest margin
Consumer Bank2.36%2.27%
Business Bank2.74%2.70%
BT Financial Group 3.03%2.78%
Westpac Institutional Bank1.62%1.56%
Westpac New Zealand (NZ$)2.09%1.96%
Group Businesses0.58%0.89%
Group total2.10%2.07%

Note 2. Average balance sheet (cash earnings basis)
AverageInteres
tAverageAverageInterestAverageAverageInterestAverage
balance ratebalance ratebalance rate
$m$m%$m$m%$m$m%
Assets
Interest earning assets
Receivables due from other financial institutions7,899591.510,354511.0
Trading securities and other financial assets designated a
t
fair value
26,8832922.224,8512662.1
Available-for-sale securities57,1248813.159,2989143.1
Regulatory deposits with central banks overseas90881.81,16391.6
Loans and other receivables666,95014,6274.4649,11714,1474.4
Total interest earning assets and interest income759,76415,8674.2744,78315,3874.1
Non-interest earning assets
Cash, receivables due from other financial institutions an
d
regulatory deposits
1,7922,209
Derivative financial instruments35,59339,764
Life insurance assets10,96513,937
All other assets59,24560,982
Total non-interest earning assets107,595116,892
Total assets867,359861,675
Liabilities
Interest bearing liabilities
Payables due to other financial institutions19,1661451.518,4981341.5
Deposits and other borrowings489,7074,4331.8479,6924,4351.9
Loan capital17,2173434.017,1993504.1
Other interest bearing liabilities174,0752,9353.4174,2662,7753.2
Total interest bearing liabilities and interest expense700,1657,8562.2689,6557,6942.2
Non-interest bearing liabilities
Deposits and payables due to other financial institutions47,02845,165
Derivative financial instruments39,86745,709
Life insurance policy liabilities9,14811,980
All other liabilities11,77111,398
Total non-interest bearing liabilities107,814114,252
Total liabilities807,979803,907
Shareholders' equity59,36457,744
Non-controlling interests1624
Total equity59,38057,768
Total liabilities and equity867,359861,675
Loans and other receivables
Australia564,43212,5954.5551,26112,1884.4
New Zealand73,0041,7424.872,8721,7284.8
Other overseas29,5142902.024,9842311.9
Deposits and other borrowings
Australia417,3493,6801.8401,7813,6641.8
New Zealand50,2975772.351,7915962.3
Other overseas22,0611761.626,1201751.3
Half Year
31 March 2017
Half YearHalf Year
31 March 201830 September 2017

Note 3. Net interest income (cash earnings basis)
% Mov't% Mov't
$m
Half Year
March 18
Half Year
Sept 17
Half Year
March 17
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Interest income
Cash and balances with central banks14695
Receivables due from other financial institutions5951
Net ineffectiveness on qualifying hedges--
Trading securities and financial assets designated at fair value292266
Available-for-sale securities881914
Loans14,46714,037
Regulatory deposits with central banks overseas89
Other interest income1415
Total interest income15,86715,387
Interest expense
Payables due to other financial institutions(145)(134)
Deposits and other borrowings(4,433)(4,435)
Trading liabilities(964)(934)
Debt issues(1,811)(1,774)
Loan capital(343)(350)
Bank levy(95)-
Other interest expense(65)(67)
Total interest expense(7,856)(7,694)
Total net interest income8,0117,693

Note 4. Non-interest income (cash earnings basis)
% Mov't% Mov't
$m
Half Year
March 18
Half Year
Sept 17
Half Year
March 17
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Fees and commissions
Facility fees671662
Transaction fees and commissions received580613
Other non-risk fee income 78151
Total fees and commissions1,3291,426
Wealth management and insurance income
Life insurance and funds management net operating income794806
General insurance and lenders mortgage insurance net operating
income
13080
Total wealth management and insurance income924886
Trading income
Foreign exchange income401474
Other trading products103239
Total trading income504713
Other income
Dividends received from other entities11
Net gain on disposal of assets-6
Net gain/(loss) on hedging overseas operations--

Net gain/(loss) on derivatives held for risk management purposes(7)(23)
Net gain/(loss) on financial instruments designated at fair value56
Gain on disposal of controlled entities--
Rental income on operating leases1517
Share of associates net profit426
Other910
Total other income2743
Total non-interest income2,7843,068
Wealth management and insurance income reconciliation
% Mov'
t% Mov't
$m
Half Year
March 18
Half Year
Sept 17
Half Year
March 17
Mar 18 -
Sept 17
Mar 18 -
Mar 17
BTFG non-interest income850894
Net commission, premium, fee and banking income(38)(109)
BTFG wealth management and insurance income812785
NZ wealth management and insurance income7771
WIB wealth management income6330
CB and BB wealth management and insurance income(28)-
Total wealth management and insurance income 924886

Note 5. Operating expenses (cash earnings basis)
% Mov't% Mov't
$m
Half Year
March 18
Half Year
Sept 17
Half Year
March 17
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Staff expenses
Employee remuneration, entitlements and on-costs2,0762,022
Superannuation expense186194
Share based payments4865
Restructuring costs3045
Total staff expenses2,3402,326

Occupancy expenses
Operating lease rentals325324
Depreciation of property and equipment8891
Other7262
Total occupancy expenses485477
Technology expenses
Amortisation and impairment of software assets322306
Depreciation and impairment of IT equipment8276
Technology services299340
Software and maintenance and licenses168145
Telecommunications10684
Data processing4238
Total technology expenses1,019989
Other expenses
Professional and processing services417338
Amortisation and impairment of intangible assets55
Postage and stationery109108
Advertising8075
Credit card loyalty programs6884
Non-lending losses3637
Other expenses4562
Total other expenses760709
Operating expenses4,6044,501

6.7.2 Westpac New Zealand division performance (A$ Equivalent to Section 3.5)
% Mov't% Mov't
$m
Half Year
March 18
Half Year
Sept 17
Half Year
March 17
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Net interest income838791
Non-interest income235245
Net operating income1,0731,036
Operating expenses(442)(461)
Core earnings631575
Impairment (charges) / benefits3735
Operating profit before tax668610
Tax and non-controlling interests(187)(174)
Cash earnings481436
Economic profit227183
Expense to income ratio41.27%44.35%
Net interest margin2.09%1.96%
As atAs atAs at% Mov't% Mov't
$bn
31 March
2018
30 Sept
2017
31 March
2017
Mar 18 -
Sept 17
Mar 18 -
Mar 17
Deposits53.751.9
Net loans71.170.0
Deposit to loan ratio75.55%74.25%
Total assets81.379.6
TCE100.197.9
Third party liquid assets8.07.6
Average interest-earning assets80.180.9
Total Funds9.38.9