WNZL Disclosure Statement for the 6 months ended 30 Mar ’18

For the six months ended 31 March 2018
Disclosure Statement
Westpac
New Zealand
Limited

Contents
General information 1
Directors’ statement 2
Income statement 3
Statement of comprehensive income 3
Balance sheet 4
Statement of changes in equity 5
Statement of cash flows 6
Notes to the financial statements 7
Note 1 Statement of accounting policies 7
Note 2 Non-interest income 7
Note 3 Impairment charges/(benefits) 7
Note 4 Loans 8
Note 5 Asset quality 9
Note 6 Financial assets pledged as collateral 10
Note 7 Deposits and other borrowings 10
Note 8 Debt issues 10
Note 9 Related entities 10
Note 10 Fair value of financial assets and financial liabiltities 11
Note 11 Credit related commitments, contingent assets and contingent liabilities 14
Note 12 Segment reporting 15
Note 13 Insurance business 16
Note 14 Capital adequacy 16
Note 15 Risk management 20
15.1 Credit risk 20
15.2 Operational risk 24
15.3 Liquidity risk 24
15.4 Market risk 25
Note 16 Concentration of funding 28
Note 17 Concentration of credit exposures 29
Conditions of registration 31
Independent auditor’s review report 32

1
Westpac New Zealand Limited
General information
Certain information contained in this Disclosure Statement is required by the Registered Bank Disclosure Statements (New Zealand Incorporated
Registered Banks) Order 2014 (‘Order’).
In this Disclosure Statement, reference is made to:
–Westpac New Zealand Limited (otherwise referred to as the ‘Bank’);
–Westpac New Zealand Limited and its controlled entities (otherwise referred to as the ‘Banking Group’);
–Westpac Banking Corporation (otherwise referred to as the ‘Ultimate Parent Bank’); and
–Ultimate Parent Bank and its controlled entities (otherwise referred to as the ‘Ultimate Parent Bank Group’).
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
On 19 November 2015, the Australian Prudential Regulation Authority (‘APRA’) informed the Ultimate Parent 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 Ultimate Parent Bank’s Level 1 Tier
1 capital, as part of an initiative to reduce Australian bank non-equity exposure to their respective New Zealand banking subsidiaries and branches.
The ELE consists of the Ultimate Parent 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. For the purposes of assessing this
exposure, the 5% limit excludes equity investments and holdings of capital instruments in New Zealand banking subsidiaries. As at 31 March 2018, 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 Ultimate Parent Bank.
APRA has also confirmed the terms on which the Ultimate Parent 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.
Directors
There have been no changes in the composition of the Board of Directors of the Bank (the ‘Board’) since 30 September 2017.
Credit ratings
The 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 the Directors signed this Disclosure Statement:
Rating Agency Current Credit Rating Rating Outlook
Fitch Ratings AA- Stable
Moody’s Investors Service A1 Stable
S&P Global Ratings AA- Negative
Guarantee arrangements
No material obligations of the Bank are guaranteed as at the date the Directors signed this Disclosure Statement.
Auditor
PricewaterhouseCoopers
PricewaterhouseCoopers Tower
188 Quay Street
Auckland, New Zealand
Other matters
On 3 May 2018 the Financial Markets Authority (‘FMA’) and the Reserve Bank sent a letter to the chief executives of New Zealand’s registered banks
(including the Bank) requesting information on what work had been undertaken in each bank to identify and address any conduct and culture issues.
This was in response to the Australian Royal Commission into misconduct in banking, superannuation and other financial services. The purpose of the
request was to understand how New Zealand banks had obtained assurance that misconduct of the type highlighted in Australia is not taking place in
New Zealand. The Bank responded to this request on 18 May 2018. The FMA and the Reserve Bank sent a similar letter to life insurers on 24 May 2018. The
outcome of these engagements may lead to further scrutiny of the financial services industry in New Zealand.

2Westpac New Zealand Limited
Directors’ statement
Each Director of the Bank believes, 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 Bank believes, after due enquiry, that, over the six months ended 31 March 2018:
(a) the Bank has complied with all conditions of registration imposed on it pursuant to section 74 of the Reserve Bank of New Zealand Act 1989 (‘Reserve
Bank Act’) except as noted in Note 14 to the financial statements and page 31;
(b) credit exposures to connected persons were not contrary to the interests of the Banking Group; and
(c) the Bank had systems in place to monitor and control adequately the Banking Group’s material risks, including credit risk, concentration of
credit risk, interest rate risk, currency risk, equity risk, liquidity risk, operational risk and other business risks, and that those systems were
being properly applied.
This Disclosure Statement has been signed by all the Directors:
Janice Dawson
David McLean
Malcolm Bailey
Peter King
Jonathan Mason
Christopher Moller
Mary Quin
Dated this 24th day of May 2018
Janice Dawson

3
Westpac New Zealand Limited
Income statement for the six months ended 31 March 2018
THE BANKING GROUP
$ millionsNote
Six Months
Ended
31 Mar 18
Unaudited
Six Months
Ended
31 Mar 17
Unaudited
Year
Ended
30 Sep 17
Audited
Interest income1,9711,9473,917
Interest expense(1,066)(1,112)(2,176)
Net interest income9058351,741
Non-interest income2195188405
Net operating income before operating expenses and impairment charges1,1001,0232 ,146
Operating expenses(460)(465)(954)
Impairment (charges)/benefits3(27)3676
Profit before income tax6135941,268
Income tax expense(171)(168)(359)
Net profit for the period/year442426909
The above income statement should be read in conjunction with the accompanying notes.
Statement of comprehensive income for the six months ended 31 March 2018
THE BANKING GROUP
$ millions
Six Months
Ended
31 Mar 18
Unaudited
Six Months
Ended
31 Mar 17
Unaudited
Year
Ended
30 Sep 17
Audited
Net profit for the period/year442 426 909
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Gains/(losses) on available-for-sale securities:
Recognised in equity2 9 11
Gains/(losses) on cash flow hedging instruments:
Recognised in equity(10) (20) (76)
Transferred to income statement29 42 79
Income tax on items taken to or transferred from equity:
Available-for-sale securities reserve(1) (3)(3)
Cash flow hedge reserve(5) (6)-
Items that will be not be reclassified subsequently to profit or loss
Remeasurement of defined benefit obligation recognised in equity (net of tax)(2) 1010
Other comprehensive income for the period/year (net of tax)13 32 21
Total comprehensive income for the period/year455 458 930
The above statement of comprehensive income should be read in conjunction with the accompanying notes.

4Westpac New Zealand Limited
Balance sheet as at 31 March 2018
THE BANKING GROUP
$ millionsNote
31 Mar 18
Unaudited
31 Mar 17
Unaudited
30 Sep 17
Audited
Assets
Cash and balances with central banks 1,974 1,495 1,659
Receivables due from other financial institutions 523 753 407
Other assets 307 235 264
Trading securities 1,847 1,708 1,797
Derivative financial instruments 432 63 220
Available-for-sale securities 3,555 3,818 4,087
Loans 4, 5 79,113 76,542 7 7, 2 6 1
Due from related entities 1,616 1,349 2,017
Property and equipment 140 145 146
Deferred tax assets 167 171 162
Intangible assets 616 589 607
Total assets 90,290 86,868 88,627
Liabilities
Payables due to other financial institutions 294 410 143
Other liabilities 493 434 502
Deposits and other borrowings 7 62,183 58,429 58,998
Other financial liabilities at fair value through income statement 20 10 19
Derivative financial instruments 278 799 484
Debt issues 8 14,970 15,803 16,729
Current tax liabilities 40 16 75
Provisions 82 75 85
Total liabilities excluding related entities liabilities 78,360 75,976 7 7,0 3 5
Due to related entities 2,033 3,066 2 ,126
Loan capital 2,592 1,138 2,616
Total related entities liabilities 4,625 4,204 4,742
Total liabilities 82,985 80,180 81,777
Net assets 7,305 6,688 6,850
Shareholder's equity
Share capital 5,100 3,750 3,750
Reserves (50) (54) (65)
Retained profits 2,255 2,992 3,165
Total shareholder's equity 7,305 6,688 6,850
Interest earning and discount bearing assets 88,698 85,611 8 7, 2 9 4
Interest and discount bearing liabilities 75,922 73,441 74,996
The above balance sheet should be read in conjunction with the accompanying notes.

5
Westpac New Zealand Limited
Statement of changes in equity for the six months ended 31 March 2018
THE BANKING GROUP
Reserves
$ millions
Share
Capital
Available-
for-sale
Securities
Reserve
Cash Flow
Hedge
Reserve
Retained
Profits Total
As at 1 October 2016 (Audited) 3,750 1 (77) 2,886 6,560
Six months ended 31 March 2017 (Unaudited)
Net profit for the period - - - 426 426
Net gains/(losses) from changes in fair value - 9 (20) - (11)
Income tax effect - (3) 6 - 3
Transferred to income statement - - 42 - 42
Income tax effect - - (12) - (12)
Remeasurement of defined benefit obligations - - - 13 13
Income tax effect - - - (3) (3)
Total comprehensive income for the six
months ended 31 March 2017
- 6 16 436 458
Transactions with owners:
Dividends paid on ordinary shares - - - (330) (330)
As at 31 March 2017 (Unaudited) 3,750 7 (61) 2,992 6,688
As at 1 October 2016 (Audited) 3,750 1 (77) 2,886 6,560
Year ended 30 September 2017 (Audited)
Net profit for the year - - - 909 909
Net gains/(losses) from changes in fair value - 11 (76) - (65)
Income tax effect - (3) 22 - 19
Transferred to income statement - - 79 - 79
Income tax effect - - (22) - (22)
Remeasurement of defined benefit obligations - - - 14 14
Income tax effect - - - (4) (4)
Total comprehensive income for the year
ended 30 September 2017
- 8 3 919 930
Transactions with owners:
Dividends paid on ordinary shares - - - (640) (640)
As at 30 September 2017 (Audited) 3,750 9 (74) 3,165 6,850
Six months ended 31 March 2018 (Unaudited)
Net profit for the period - - - 442 442
Net gains/(losses) from changes in fair value - 2 (10) - (8)
Income tax effect - (1) 3 - 2
Transferred to income statement - - 29 - 29
Income tax effect - - (8) - (8)
Remeasurement of defined benefit obligations - - - (3) (3)
Income tax effect - - - 1 1
Total comprehensive income for the six
months ended 31 March 2018
- 1 14 440 455
Transactions with owners:
Share capital issued (refer to Note 9) 1,350 - - - 1,350
Dividends paid on ordinary shares
(refer to Note 9)
- - - (1,350) (1,350)
As at 31 March 2018 (Unaudited) 5,100 10 (60) 2,255 7,305
The above statement of changes in equity should be read in conjunction with the accompanying notes.

6Westpac New Zealand Limited
Statement of cash flows for the six months ended 31 March 2018
THE BANKING GROUP
$ millions
Six Months
Ended
31 Mar 18
Unaudited
Six Months
Ended
31 Mar 17
Unaudited
Year
Ended
30 Sep 17
Audited
Cash flows from operating activities
Interest income received 1,965 1,953 3,902
Interest expense paid (1,118) (1,138) (2,158)
Non-interest income received 181 182 422
Operating expenses paid (443) (414) (844)
Income tax paid (217) (216) (334)
Cash flows from operating activities before changes in operating assets and liabilities 368 367 988
Net (increase)/decrease in:
Receivables due from other financial institutions 228 (33) 313
Other assets (25) 1 (14)
Trading securities (29) 421 312
Loans (1,891) (1,409) (2,103)
Due from related entities 391 572 (281)
Net increase/(decrease) in:
Payables due to other financial institutions 151 395 128
Other liabilities 10 (6) 9
Deposits and other borrowings 3,185 (362) 207
Other financial liabilities at fair value through income statement 1 (390) (381)
Due to related entities
1
109 573 (197)
Net movement in external and related entity derivative financial instruments (69) (489) (627)
Net cash provided by/(used in) operating activities 2,429 (360) (1,646)
Cash flows from investing activities
Purchase of available-for-sale securities - (128) (533)
Proceeds from available-for-sale securities 499 30 162
Purchase of capitalised computer software (30) (25) (61)
Purchase of property and equipment (16) (7) (31)
Net cash provided by/(used in) investing activities 453 (130) (463)
Cash flows from financing activities
Issue of ordinary share capital 1,350 - -
Net movement in due to related entities
1
(158) (97) (287)
Proceeds from debt issues 550 5,644 7,490
Repayments of debt issues (2,615) (4,650) (5,698)
Issue of loan capital (net of transaction fees) - - 1,485
Dividends paid to ordinary shareholders (1,350) (330) (640)
Net cash provided by/(used in) financing activities (2,223) 567 2,350
Net increase/(decrease) in cash and cash equivalents 659 77 241
Cash and cash equivalents at beginning of the period/year 1,659 1,418 1,418
Cash and cash equivalents at end of the period/year 2,318 1,495 1,659
Cash and cash equivalents at end of the period/year comprise:
Cash on hand 1,750 179 179
Balances with central banks 224 1,316 1,480
Receivables due from other financial institutions classified as cash and cash equivalents 344 - -
Cash and cash equivalents at end of the period/year 2,318 1,495 1,659
1
Certain comparatives have been revised for consistency. The reclassification was made to better reflect the 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.

7
Westpac New Zealand Limited
Notes to the financial statements
Note 1 Statement of accounting policies
These condensed consolidated interim financial statements (‘financial statements’) have been prepared and presented in accordance with the
Registered Bank Disclosure Statements (New Zealand Incorporated Registered Banks) Order 2014 (‘Order’) and Generally Accepted Accounting
Practice, 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 financial 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 to the nearest million 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
THE BANKING GROUP
$ millions
Six Months Ended
31 Mar 18
Unaudited
Six Months Ended
31 Mar 17
Unaudited
Year Ended
30 Sep 17
Audited
Fees and commissions 185 189 400
Net ineffectiveness on qualifying hedges 4 (9) (12)
Other non-interest income 6 8 17
Total non-interest income 195 188 405
Note 3 Impairment charges/(benefits)
THE BANKING GROUP
$ millions
Residential
Mortgages
Other
Retail Corporate Other Total
Six months ended 31 March 2018 (Unaudited)
Individually assessed provisions raised 4 1 14 - 19
Reversal of previously recognised impairment charges (1) (1) (2) - (4)
Collectively assessed provisions raised/(released) 1 4 - - 5
Bad debts written-off/(recovered) directly to the income statement (2) 20 (11) - 7
Total impairment charges/(benefits) 2 24 1 - 27
Six months ended 31 March 2017 (Unaudited)
Individually assessed provisions raised 3 1 5 - 9
Reversal of previously recognised impairment charges (2) - (46) - (48)
Collectively assessed provisions raised/(released) 7 (3) (12) - (8)
Bad debts written-off/(recovered) directly to the income statement (1) 13 (1) - 11
Total impairment charges/(benefits) 7 11 (54) - (36)
Year ended 30 September 2017 (Audited)
Individually assessed provisions raised 8 4 6 - 18
Reversal of previously recognised impairment charges (4) (1) (62) - (67)
Collectively assessed provisions raised/(released) 5 (10) (51) - (56)
Bad debts written-off/(recovered) directly to the income statement - 31 (2) - 29
Total impairment charges/(benefits) 9 24 (109) - (76)

8Westpac New Zealand Limited Westpac New Zealand Limited
Notes to the financial statements
Note 4 Loans
THE BANKING GROUP
$ millions
31 Mar 18
Unaudited
31 Mar 17
Unaudited
30 Sep 17
Audited
Overdrafts 1,236 1,184 1,296
Credit card outstandings 1,548 1,492 1,518
Money market loans 1,228 1,362 1,250
Term loans:
Housing 47,909 46,252 46,947
Non-housing 26,778 25,718 25,778
Other 790 932 822
Total gross loans 79,489 76,940 7 7,6 1 1
Provisions for impairment charges on loans (376) (398) (350)
Total net loans 79,113 76,542 7 7, 2 6 1
As at 31 March 2018, $7,539 million of housing loans, accrued interest (representing accrued interest on the outstanding housing loans) and cash
(representing collections of principal and interest from the underlying housing loans), were used by the Banking Group to secure the obligations
of Westpac Securities NZ Limited (‘WSNZL’) under the Bank’s Global Covered Bond Programme (‘CB Programme’) (31 March 2017: $7,539 million,
30 September 2017: $7,535 million). These pledged assets were not derecognised from the 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 March 2018, the New Zealand dollar equivalent of bonds issued by WSNZL under the CB Programme was $5,506 million (31 March 2017: $3,399
million, 30 September 2017: $5,246 million).

9
Westpac New Zealand LimitedWestpac New Zealand Limited
Notes to the financial statements
Note 5 Asset quality
THE BANKING GROUP
31 Mar 18 Unaudited
$ millions
Residential
Mortgages
Other
Retail Corporate Other Total
Neither past due nor impaired 46,952 3,765 26,863 403 77,983
Past due but not impaired assets
Less than 30 days past due 724 143 110 - 977
At least 30 days but less than 60 days past due 96 31 33 - 160
At least 60 days but less than 90 days past due 47 13 11 - 71
At least 90 days past due 63 25 12 - 100
Total past due assets not impaired 930 212 166 - 1,308
Individually impaired assets
1
Balance at beginning of the period 32 5 136 - 173
Additions 16 3 39 - 58
Amounts written off (1) (1) - - (2)
Returned to performing or repaid (20) (2) (9) - (31)
Balance at end of the period 27 5 166 - 198
Total gross loans
2
47,909 3,982 27,195 403 79,489
Individually assessed provisions
Balance at beginning of the period 7 5 36 - 48
Impairment charges/(benefits):
New provisions 4 1 14 - 19
Reversal of previously recognised impairment charges (1) (1) (2) - (4)
Amounts written off (1) (2) 1 - (2)
Interest adjustments - - - - -
Balance at end of the period 9 3 49 - 61
Collectively assessed provisions
Balance at beginning of the period 54 97 181 - 332
Impairment charges/(benefits) 1 4 - - 5
Interest adjustments 1 7 5 - 13
Balance at end of the period 56 108 186 - 350
Total provisions for impairment charges on loans and credit commitments 65 111 235 - 411
Provision for credit commitments - (4) (31) - (35)
Total provisions for impairment charges on loans 65 107 204 - 376
Total net loans 47,844 3,875 26,991 403 79,113
1
The Banking Group had undrawn commitments of $5 million (31 March 2017: $8 million, 30 September 2017: $4 million) to counterparties for whom drawn balances are
classified as individually impaired assets under corporate loans as at 31 March 2018.
2
The Banking Group did not have other assets under administration as at 31 March 2018.

10Westpac New Zealand Limited Westpac New Zealand Limited
Notes to the financial statements
Note 6 Financial assets pledged as collateral
The 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:
THE BANKING GROUP
$ millions
31 Mar 18
Unaudited
31 Mar 17
Unaudited
30 Sep 17
Audited
Cash 177 753 407
Securities pledged under repurchase agreements:
Available-for-sale securities
1
116 603 41
Trading securities 20 - -
Total amount pledged to secure liabilities (excluding CB Programme) 313 1,356 448
1
As at 31 March 2018, $116 million of available-for-sale securities were pledged as collateral to the New Zealand Branch of the Ultimate Parent Bank
(31 March 2017: $603 million, 30 September 2017: $22 million) which is recorded within due to related entities and nil was pledged to third parties
(31 March 2017: nil, 30 September 2017: $19 million) which is recorded as other financial liabilities at fair value through income statement.
Note 7 Deposits and other borrowings
THE BANKING GROUP
$ millions
31 Mar 18
Unaudited
31 Mar 17
Unaudited
30 Sep 17
Audited
Certificates of deposit 555 1,617 593
Non-interest bearing, repayable at call 5,869 5,081 5,274
Other interest bearing:
At call 24,164 23,894 23,117
Term 31,595 2 7,8 3 7 30,014
Total deposits and other borrowings 62,183 58,429 58,998
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 10 for further details.
Note 8 Debt issues
THE BANKING GROUP
$ millions
31 Mar 18
Unaudited
31 Mar 17
Unaudited
30 Sep 17
Audited
Short-term debt
Commercial paper 590 2,398 1,642
Total short-term debt 590 2,398 1,642
Long-term debt
Non-domestic medium-term notes 5,835 6,908 6,628
Covered bonds 5,487 3,386 5,236
Domestic medium-term notes 3,058 3,111 3,223
Total long-term debt 14,380 13,405 15,087
Total debt issues 14,970 15,803 16,729
Debt issues have been prepared under both the historical cost convention and by applying fair value accounting to certain products. Refer to Note 10
for further details.
Note 9 Related entities
Controlled entities of the Bank are set out in Note 24 to the financial statements included in the Disclosure Statement for the year ended 30 September
2017. There have been no changes to the controlled entities during the period.
In November 2017, the Banking Group repaid $200 million of funding owing to the New Zealand Branch of the Ultimate Parent Bank.
On 15 February 2018, the Bank declared and paid a dividend of $1,350 million to its immediate parent company, Westpac New Zealand Group Limited
(‘WNZGL’). An issue of 1,350 million ordinary shares in the Bank to WNZGL was made on the same day of payment of the dividend at a price of $1 per
share and on the same terms of issue as all other ordinary shares on issue to WNZGL.

11
Westpac New Zealand LimitedWestpac New Zealand Limited
Notes to the financial statements
Note 10 Fair value of financial assets and financial liabilities
Fair Valuation Control Framework
The 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 Ultimate Parent Bank 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 Banking Group categorises all fair value instruments according to the hierarchy described below.
Valuation techniques
The 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.
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.
InstrumentBalance sheet categoryIncludes:Valuation technique
Non-asset backed
debt instruments
Trading securities
New Zealand
Government bonds
These instruments are traded in liquid, active markets where
prices are readily observable. No modelling or assumptions
are used in the valuation.
Available-for-sale securities
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.

12Westpac New Zealand Limited Westpac New Zealand Limited
Notes to the financial statements
InstrumentBalance sheet categoryIncludes:Valuation technique
Interest rate
products
Derivative financial instruments
Interest rate swaps,
forwards 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.
Due from related entities
Due to related entities
Foreign exchange
products
Derivative financial instruments
FX swaps – derivative
financial instruments
Derived from market observable inputs or consensus
pricing providers using industry standard models.
Due from related entities
Due to related entities
Non-asset backed
debt instruments
Trading securities
Local authority and
NZ public securities,
other bank issued
certificates of deposit,
commercial paper, other
government securities
and corporate bonds
Security repurchase
agreements and reverse
repurchase agreements
over non-asset backed
debt securities with
related and third parties
Valued using observable market prices which are
sourced from consensus pricing services, broker quotes
or inter-dealer prices.
Available-for-sale securities
Due from related entities
Other financial liabilities at fair
value through income statement
Due to related entities
Deposits and
other borrowings
at fair value
Deposits and other borrowingsCertificates of deposit
Discounted cash flow using market rates offered for
deposits of similar remaining maturities.
Debt issues at fair
value
Debt issuesCommercial 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 Bank’s implied credit worthiness.
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.
The table below summarises the attribution of financial instruments carried at fair value to the fair value hierarchy:
THE BANKING GROUP
31 Mar 18 Unaudited
$ millionsLevel 1Level 2Level 3 Total
Financial assets measured at fair value
Trading securities 7 1,840 - 1,847
Derivative financial instruments - 432 - 432
Available-for-sale securities 1,183 2,372 - 3,555
Due from related entities - 557 - 557
Total financial assets measured at fair value 1,190 5,201 - 6,391
Financial liabilities measured at fair value
Deposits and other borrowings at fair value - 555 - 555
Other financial liabilities at fair value through income statement - 20 - 20
Derivative financial instruments - 278 - 278
Debt issues at fair value - 590 - 590
Due to related entities - 403 - 403
Total financial liabilities measured at fair value - 1,846 - 1,846
Note 10 Fair value of financial assets and financial liabilities (continued)

13
Westpac New Zealand LimitedWestpac New Zealand Limited
Notes to the financial statements
THE BANKING GROUP
31 Mar 17 Unaudited
$ millionsLevel 1Level 2Level 3 Total
Financial assets measured at fair value
Trading securities 593 1,115 - 1,708
Derivative financial instruments - 63 - 63
Available-for-sale securities 1,573 2,245 - 3,818
Due from related entities - 622 - 622
Total financial assets measured at fair value 2,166 4,045 - 6,211
Financial liabilities measured at fair value
Deposits and other borrowings at fair value - 1,617 - 1,617
Other financial liabilities at fair value through income statement - 10 - 10
Derivative financial instruments - 799 - 799
Debt issues at fair value - 2,398 - 2,398
Due to related entities - 917 - 917
Total financial liabilities measured at fair value - 5,741 - 5,741
THE BANKING GROUP
30 Sep 17 Audited
$ millionsLevel 1Level 2Level 3 Total
Financial assets measured at fair value
Trading securities 20 1,777 - 1,797
Derivative financial instruments - 220 - 220
Available-for-sale securities 1,556 2,531 - 4,087
Due from related entities - 587 - 587
Total financial assets measured at fair value 1,576 5,115 - 6,691
Financial liabilities measured at fair value
Deposits and other borrowings at fair value - 593 - 593
Other financial liabilities at fair value through income statement - 19 - 19
Derivative financial instruments - 484 - 484
Debt issues at fair value - 1,642 - 1,642
Due to related entities - 355 - 355
Total financial liabilities measured at fair value - 3,093 - 3,093
Analysis of movements between fair value hierarchy levels
During the period, there were no material transfers between levels of the fair value hierarchy (31 March 2017: no material transfers between levels, 30
September 2017: no material transfers between levels).
Note 10 Fair value of financial assets and financial liabilities (continued)

14Westpac New Zealand Limited Westpac New Zealand Limited
Notes to the financial statements
Financial instruments not measured at fair value
The following table summarises the estimated fair value of the Banking Group’s financial instruments not measured at fair value:
THE BANKING GROUP
31 Mar 18 (Unaudited)31 Mar 17 (Unaudited)30 Sep 17 (Unaudited)
$ millions
Carrying
Amount Fair Value
Carrying
Amount Fair Value
Carrying
Amount Fair Value
Financial assets not measured at fair value
Cash and balances with central banks 1,974 1,974 1,495 1,495 1,659 1,659
Receivables due from other financial institutions 523 523 753 753 407 407
Other assets 242 242 177 177 221 221
Loans 79,113 79,189 76,542 76,558 7 7, 2 6 1 7 7, 2 9 2
Due from related entities 1,059 1,059 727 727 1,430 1,430
Total financial assets not measured at fair value 82,911 82,987 79,694 79,710 80,978 81,009
Financial liabilities not measured at fair value
Payables due to other financial institutions 294 294 410 410 143 143
Other liabilities 403 403 358 358 423 423
Deposits and other borrowings 61,628 61,666 56,812 56,850 58,405 58,450
Debt issues 14,380 14,522 13,405 13,554 15,087 15,259
Due to related entities 1,630 1,640 2 ,149 2,167 1,771 1,786
Loan capital 2,592 2,677 1,138 1,187 2,616 2,688
Total financial liabilities not measured at fair value 80,927 81,202 74,272 74,526 78,445 78,749
A detailed description of how fair value is derived for financial instruments not measured at fair value is disclosed in Note 26 of the financial statements
included in the Disclosure Statement for the year ended 30 September 2017.
Note 11 Credit related commitments, contingent assets and contingent liabilities
THE BANKING GROUP
$ millions
31 Mar 18
Unaudited
31 Mar 17
Unaudited
30 Sep 17
Audited
Letters of credit and guarantees 795 764 772
Commitments to extend credit 25,049 24,626 25,081
Other 10 25 10
Total undrawn credit commitments 25,854 25,415 25,863
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 Banking Group has contingent liabilities in respect of actual and potential claims and proceedings. An assessment of the 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 Banking Group.
Note 10 Fair value of financial assets and financial liabilities (continued)

15
Westpac New Zealand LimitedWestpac New Zealand Limited
Notes to the financial statements
Note 12 Segment reporting
The 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 Banking Group does not rely on any single major customer for its revenue base.
Comparative information for the six months ended 31 March 2017 and the year ended 30 September 2017 has been restated following changes to the
allocation of certain costs and as a result of the Ultimate Parent 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
for the six months ended 31 March 2017 or the year ended 30 September 2017.
The Banking Group’s operating segments are defined by the customers they serve and the services they provide. The 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
–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 of the results, assets and liabilities of the Banking Group’s controlled entities in the preparation of the consolidated
financial statements of the Banking Group;
–results of certain entities included for management reporting purposes, but excluded from the consolidated financial statements of the Banking
Group for statutory financial reporting purposes; and
–results of certain business units excluded for management reporting purposes, but included within the consolidated financial statements of the
Banking Group for statutory financial reporting purposes.
THE BANKING GROUP
$ millions
Consumer
Banking and
Wealth
Commercial,
Corporate and
Institutional
Investments
and
Insurance
Reconciling
ItemsTotal
Six months ended 31 March 2018 (Unaudited)
Net interest income567 344 - (6)905
Non-interest income96 76 69 (46)195
Net operating income before operating expenses and
impairment charges
663 420 69 (52)1,100
Operating expenses(342)(110)(15)7 (460)
Impairment (charges)/benefits(28)1 - - (27)
Profit before income tax293 311 54 (45)613
Total gross loans45,735 33,737 - 17 79,489
Total deposits and other borrowings35,259 26,369 - 555 62,183
Six months ended 31 March 2017 (Unaudited)
Net interest income508 336 1 (10)835
Non-interest income118 77 61 (68)188
Net operating income before operating expenses and
impairment charges
626 413 62 (78)1,023
Operating expenses(366)(111)(14)26 (465)
Impairment (charges)/benefits(20)56 - -36
Profit before income tax240 358 48 (52)594
Total gross loans43,824 33,067 - 49 76,940
Total deposits and other borrowings33,670 23,142 - 1,617 58,429
Year ended 30 September 2017 (Unaudited)
Net interest income1,053 683 1 4 1,741
Non-interest income219 153 131 (98)405
Net operating income before operating expenses and
impairment charges
1,272 836 132 (94)2 ,146
Operating expenses(708)(221)(29)4 (954)
Impairment (charges)/benefits(34)97 - 13 76
Profit before income tax530 712 103 (77)1,268
Total gross loans44,707 32,870 - 34 7 7,6 1 1
Total deposits and other borrowings34,044 24,361 - 593 58,998

16Westpac New Zealand Limited Westpac New Zealand Limited
Notes to the financial statements
Note 13 Insurance business
The Banking Group does not conduct any insurance business (as that term is defined in the Order).
Note 14 Capital adequacy
The information contained in this note has been derived in accordance with the Bank’s conditions of registration which relate to capital adequacy and
the Reserve Bank of New Zealand (‘Reserve Bank’) Capital Adequacy Framework (Internal Models Based Approach) (‘BS2B’), except for the matters
of non-compliance with condition of registration 1B disclosed on page 31. The Bank considers its internal credit model methodologies result in the
retention of an appropriate amount of capital to reflect its credit risk and any effect of the non-compliance with its conditions of registration 1B on the
information relating to capital adequacy is not considered by the Bank to be material.
The Banking Group maintains an actively managed capital base to cover risks inherent in the business. The adequacy of the Banking Group’s capital is
monitored using, among other measures, the rules and ratios established by the Basel Committee on Banking Supervision (‘BCBS’) and adopted by the
Reserve Bank in supervising the Banking Group.
The Banking Group’s capital summary (Unaudited)
THE BANKING GROUP
$ millions31 Mar 18
Tier 1 capital
Common Equity Tier 1 capital
Paid-up ordinary shares issued by the Bank plus related share premium 5,100
Retained earnings (net of appropriations) 2,255
Accumulated other comprehensive income and other disclosed reserves
1
(50)
Less deductions from Common Equity Tier 1 capital
Goodwill (477)
Other intangible assets
2
(156)
Cash flow hedge reserve 60
Deferred tax asset deduction (167)
Expected loss excess over eligible allowance (222)
Total Common Equity Tier 1 capital 6,343
Additional Tier 1 capital
Additional Tier 1 capital instruments
3
1,500
Total additional Tier 1 capital 1,500
Total Tier 1 capital 7,843
Tier 2 capital
Tier 2 capital instruments
3
1,106
Revaluation reserves -
Eligible impairment allowance in excess of expected loss -
Total Tier 2 capital 1,106
Total capital 8,949
1
Accumulated other comprehensive income and other disclosed reserves consist of available-for-sale securities reserve and cash flow hedge reserve as disclosed as
reserves on the balance sheet.
2
Includes capitalised transaction costs on loan capital and debt issues.
3
Excludes capitalised transaction costs.
Capital structure
Ordinary shares
In accordance with BS2B, ordinary share capital is classified as Common Equity Tier 1 capital.
The ordinary shares have no par value. Subject to the constitution of the Bank, each ordinary share of the Bank carries the right to one vote on a poll
at meetings of shareholders, the right to an equal share in dividends authorised by the Board and the right to an equal share in the distribution of the
surplus assets of the Bank in the event of liquidation.

17
Westpac New Zealand LimitedWestpac New Zealand Limited
Notes to the financial statements
Additional Tier 1 loan capital
A summary of the key terms and features of the Additional Tier 1 loan capital (‘AT 1 notes’) is provided below:
$Issue dateCounterpartyInterest rateOptional redemption date
NZ$1,500 million notes
1
22 September 2017NZ BranchNZ 90 day bank bill rate + 3.9594% p.a.21 September 2027 and every fifth
anniversary thereafter
1
The AT1 notes rank equally amongst themselves and are subordinated to the claims of depositors and senior or less subordinated creditors of the Bank.
Interest payable
Quarterly interest payments on the AT1 notes are at the absolute discretion of the Bank and will only be paid if the payment conditions are satisfied,
including that the interest payment will not result in the Bank becoming insolvent immediately following the interest payment; not result in a breach of
the Reserve Bank Prudential Standards; and the payment date not falling on the date of a capital trigger event or non-viability trigger event. Interest
payments are non-cumulative. If interest is not paid in full, the Bank may not determine or pay any dividends on its ordinary shares or undertake a
discretionary buy back or capital reduction of the Bank’s ordinary shares (except in limited circumstances).
Redemption
The Bank may elect to redeem all or some of the AT1 notes for their face value on 21 September 2027 and every fifth anniversary thereafter, subject to the
Reserve Bank’s prior written approval. Early redemption of all of the AT1 notes for certain tax or regulatory reasons is permitted subject to the Reserve
Bank’s prior written approval.
Conversion
If a capital trigger event or non-viability trigger event occurs, the Bank must convert some or all of the AT1 notes into a variable number of ordinary
shares issued by the Bank (calculated with reference to the net assets of the Bank and the total number of ordinary shares on issue at the conversion
date) that is sufficient, in the case of a capital trigger event, to return the Bank’s Common Equity Tier 1 capital ratio to above 5.125% as determined by
the Bank in consultation with the Reserve Bank; or, in the case of a non-viability trigger event, to satisfy the direction of the Reserve Bank or the decision
of the statutory manager of the Bank. A capital trigger event occurs when the Bank determines, or the Reserve Bank notifies in writing that it believes,
the Bank’s Common Equity Tier 1 Capital ratio is equal to or less than 5.125%. A non-viability trigger event occurs when the Reserve Bank or the statutory
manager (appointed pursuant to section 117 of the Reserve Bank Act) directs the Bank to convert or write off all or some of its AT1 notes.
If conversion of the AT1 notes does not occur within five business days of a capital trigger event or a non-viability trigger event, holders’ rights in relation
to the AT1 notes will be immediately and irrevocably terminated.
The Bank is able to elect to convert all the AT1 notes for certain tax or regulatory reasons (or in certain other circumstances).
Tier 2 loan capital
A summary of the key terms and features of the Tier 2 loan capital (‘Tier 2 notes’) is provided below.
$Issue dateCounterpartyInterest rateMaturity DateOptional redemption date
AU$1,040 million
notes
1
8 September 2015London Branch of the
Ultimate Parent Bank
Australian 90 day bank
bill rate + 2.87% p.a.
22 March 202622 March 2021 and every interest
payment date thereafter
1
The Tier 2 notes rank equally amongst themselves and are subordinated to the claims of depositors and senior or less subordinated creditors of the Bank.
Interest payable
Interest payments on the Tier 2 notes are subject to the Bank being solvent at the time of, and immediately following the interest payment.
Early redemption
The Bank may elect to redeem all or some of the Tier 2 notes for their face value together with accrued interest (if any) on 22 March 2021 or any interest
payment date thereafter, subject to the Reserve Bank’s prior written approval. Early redemption of all of the Tier 2 notes for certain tax or regulatory
reasons is permitted on an interest payment date subject to the Reserve Bank’s prior written approval.
Conversion
If a non-viability trigger event occurs, the Bank must convert such number of the Tier 2 notes into a variable number of ordinary shares issued by the
Bank (calculated with reference to the net assets of the Bank and the total number of ordinary shares on issue on the conversion date) that is sufficient
to satisfy the direction of the Reserve Bank or the decision of the statutory manager. A non-viability trigger event occurs when the Reserve Bank or
the statutory manager (appointed pursuant to section 117 of the Reserve Bank Act) directs the Bank to convert or write off all or some of its Tier 2
notes. If conversion of the Tier 2 notes fails to take effect within five business days, holders’ rights in relation to the Tier 2 notes will be immediately and
irrevocably terminated.
Note 14 Capital adequacy (continued)

18Westpac New Zealand Limited Westpac New Zealand Limited
Notes to the financial statements
Reserves
Available-for-sale securities reserve
This comprises the changes in the fair value of available-for-sale financial securities, net of tax. These changes are transferred to non-interest income
in the income statement when the asset is either disposed of or impaired.
Cash flow hedge reserve
This comprises the fair value gains and losses associated with the effective portion of designated cash flow hedging instruments, net of tax.
Capital ratios (Unaudited)
The Basel banking accords (the ‘Accords’) have been developed and strengthened over time by the BCBS to enhance the banking regulatory framework.
The Accords are made up of the different Basel frameworks with the latest being Basel III. Basel III builds on the Basel I and Basel II frameworks, and
seeks to improve the banking sector’s ability to deal with financial and economic stress, improve risk management and strengthen banks’ transparency.
The Basel III framework is built on three mutually reinforcing pillars. Pillar 1 sets out the mechanics for minimum capital adequacy requirements for
credit, market and operational risks. Pillar 2 relates to the internal assessment of capital adequacy and the supervisory review process. Pillar 3 deals
with market disclosure and market discipline.
For the purposes of calculating the capital adequacy ratios for the Bank on a solo basis, wholly-owned and wholly-funded subsidiaries of the Banking
Group are consolidated with the Bank. In this context, wholly-funded by the Bank means there are no liabilities (including off-balance sheet obligations)
to anyone other than the Bank, the Inland Revenue or trade creditors, where aggregate exposure to trade creditors does not exceed 5% of the
subsidiary’s shareholders’ equity. Wholly-owned by the Bank means that all equity issued by the subsidiary is held by the Bank or is ultimately owned
by the Bank through a chain of ownership where each entity is 100% owned by its parent.
The table below is disclosed under the Reserve Bank’s Basel III framework in accordance with Clause 15 of Schedule 11 to the Order and represents the
capital adequacy calculation based on BS2B.
THE BANKING GROUPTHE BANK
%
Reserve Bank
Minimum Ratios
1
31 Mar 1831 Mar 1731 Mar 1831 Mar 17
Common Equity Tier 1 capital ratio6.511.810.79.48.5
Tier 1 capital ratio8.014.610.711.68.5
Total capital ratio10.016.612.813.310.2
Buffer ratio2.55.34.7N/AN/A
1
Changes to the Bank’s conditions of registration, effective from 31 December 2017, have increased the Common Equity Tier 1 capital ratio, Tier 1 capital ratio and Total
capital ratio (‘minimum capital ratios’) by 2% compared to the minimum capital ratios as at 30 September 2017. The increased minimum capital ratios will remain in
place until the Bank has satisfied the Reserve Bank that all existing issues in relation to the matters of non-compliance on page 31 have been resolved.
Banking Group Pillar 1 total capital requirement (Unaudited)
THE BANKING GROUP
31 Mar 18
$ millions
Total Exposure
After Credit
Risk Mitigation
Risk-weighted
Exposure or Implied
Risk-weighted
Exposure
Total Capital
Requirement
Credit risk
Exposures subject to the internal ratings based approach 101,520 40,242 3,219
Equity exposures - - -
Specialised lending subject to the slotting approach 7,758 7,113 569
Exposures subject to the standardised approach 2,815 1,045 84
Total credit risk (scaled)
1
112,093 48,400 3,872
Operational risk N/A 4,514 361
Market risk N/A 924 74
Supervisory adjustment N/A - -
Total 112,093 53,838 4,307
1
The value of the scalar used in determining the credit risk weighted exposure is 1.06 as required by the conditions of registration.
Note 14 Capital adequacy (continued)

19
Westpac New Zealand LimitedWestpac New Zealand Limited
Notes to the financial statements
Capital for other material risks (Unaudited)
The Banking Group’s internal capital adequacy assessment process identifies, reviews and measures additional material risks that must be captured
within the Banking Group’s capital adequacy assessment process. The additional material risks considered are those not captured by Pillar 1 regulatory
capital requirements and include compliance risk, conduct risk, liquidity risk, reputational risk, environmental, social and governance risk, business/
strategic risk, other assets risk, model risk, deferred acquisition cost risk and subsidiary risk.
The Banking Group’s internal capital allocation for ‘other material risks’ is $246 million as at 31 March 2018 (31 March 2017: $83 million).
Ultimate Parent Bank Group Basel III capital adequacy ratios (unaudited)
The table below represents the capital adequacy calculation for the Ultimate Parent Bank and the Ultimate Parent Bank Group based on Australian
Prudential Regulation Authority’s (‘APRA’) application of the Basel III capital adequacy framework.
%31 Mar 1831 Mar 17
Ultimate Parent Bank Group (excluding entities specifically excluded by APRA regulations)
1, 2
Common Equity Tier 1 capital ratio 10.5 10.0
Additional Tier 1 capital ratio 2.3 1.7
Tier 1 capital ratio 12.8 11.7
Tier 2 capital ratio 2.0 2.3
Total regulatory capital ratio 14.8 14.0
Ultimate Parent Bank (Extended Licensed Entity)
1, 3
Common Equity Tier 1 capital ratio 10.4 10.2
Additional Tier 1 capital ratio 2.4 1.8
Tier 1 capital ratio 12.8 12.0
Tier 2 capital ratio 2.1 2.6
Total regulatory capital ratio 14.9 14.6
1
The capital ratios represent information mandated by APRA. The capital ratios of the Ultimate Parent Bank Group are publicly available in the Ultimate Parent Bank
Group’s Pillar 3 report. This information is made available to users via the Ultimate Parent Bank’s website (www.westpac.com.au).
2
Ultimate Parent Bank Group (excluding entities specifically excluded by APRA regulations) comprises the consolidation of the Ultimate Parent 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
Ultimate Parent Bank.
3
Ultimate Parent Bank (Extended Licensed Entity) comprises the Ultimate Parent Bank and its subsidiary entities that have been approved by APRA as being part of a
single Extended Licensed Entity for the purposes of measuring capital adequacy (Level 1).
Under APRA’s Prudential Standards, Australian authorised deposit-taking institutions (‘ADI’), including the Ultimate Parent Bank Group are required
to maintain minimum ratios of capital to risk weighted assets (‘RWA’), as determined by APRA. For the calculation of RWAs, the Ultimate Parent Bank
Group is accredited by APRA to apply advanced models permitted by the Basel III global capital adequacy regime. The Ultimate Parent Bank 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
BCBS, except where APRA has exercised certain discretions.
The Ultimate Parent Bank 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 Ultimate Parent Bank’s website (www.westpac.com.au).
The Ultimate Parent Bank Group (excluding entities specifically excluded by APRA regulations), and the Ultimate Parent Bank (Extended Licensed Entity
as defined by APRA), exceeded the minimum capital adequacy requirements as specified by APRA as at 31 March 2018.
Note 14 Capital adequacy (continued)

20Westpac New Zealand Limited Westpac New Zealand Limited
Notes to the financial statements
Note 15 Risk management
15.1 Credit risk
Credit risk mitigation
The Banking Group uses a variety of techniques to reduce the credit risk arising from its lending activities (refer to Note 35.2 to the financial statements
included in the Disclosure Statement for the year ended 30 September 2017 for further details). This includes the Banking Group establishing that it
has direct, irrevocable and unconditional recourse to collateral and other credit enhancements through obtaining legally enforceable documentation.
The Banking Group includes the effect of credit risk mitigation through eligible guarantees within the calculation applied to Loss Given Default (‘LGD’).
The value of the guarantee is not always separately recorded, and therefore, not available for disclosure, under Clause 7 of Schedule 11 to the Order.
Definitions of PD, LGD and EAD
i. Probability of Default (‘PD’)
The PD is a through-the-cycle assessment of the likelihood of a customer defaulting on its financial obligations within one year.
ii. LGD
The LGD represents an estimate of the expected severity of a loss to the Banking Group should a customer default occur during an economic
downturn.
iii. Exposure at Default (‘EAD’)
EAD represents an estimate of the amount of committed exposure expected to be drawn by the customer at the time of default.
Credit risk exposures by asset class
The Banking Group’s credit risk exposures by asset class as at 31 March 2018 (Unaudited)
Exposure-weighted PD Grade (%)
Weighted
Average
PD
%
EAD
$ millions
Exposure-
weighted
LGD
%
Exposure-
weighted
Risk
Weight
%
Risk-
weighted
Assets
1
$ millions
Minimum
Pillar 1
Capital
Requirement
$ millions
Residential mortgages
0.00 to 0.10 - - - - - -
0.10 to 0.25 0.18 2,729 19.10 7.29 211 17
0.25 to 1.0 0.49 26,603 20.72 17.00 4,794 384
1.0 to 2.5 1.42 21,883 20.09 34.12 7,915 633
2.5 to 10.0 4.46 3,796 22.30 74.31 2,990 239
10.0 to 99.99 - - - - - -
Default 100.00 263 22.21 212.35 592 47
Total 1.59 55,274 20.51 28.17 16,502 1,320
Other retail
0.00 to 0.10 - - - - - -
0.10 to 0.25 0.14 559 40.64 12.83 76 6
0.25 to 1.0 0.36 1,519 62.94 37.45 603 48
1.0 to 2.5 2.22 1,353 68.48 89.74 1,287 103
2.5 to 10.0 5.48 347 84.47 126.69 466 37
10.0 to 99.99 20.72 240 70.60 147.01 374 30
Default 100.00 21 72.42 103.32 23 2
Total 3.12 4,039 64.06 66.08 2,829 226
Small business
0.00 to 0.10 0.03 147 73.76 7.06 11 1
0.10 to 0.25 - - - - - -
0.25 to 1.0 0.30 621 21.45 17.62 116 9
1.0 to 2.5 1.84 1,487 20.92 26.58 419 34
2.5 to 10.0 4.76 301 19.74 29.15 93 7
10.0 to 99.99 15.65 32 21.95 44.22 15 1
Default 100.00 39 21.72 229.80 95 8
Total 3.34 2,627 23.89 26.90 749 60
1
The value of the scalar used in determining the risk weighted assets is 1.06 as required by the conditions of registration.

21
Westpac New Zealand LimitedWestpac New Zealand Limited
Notes to the financial statements
Exposure-weighted PD Grade (%)
Weighted
Average
PD
%
EAD
$ millions
Exposure-
weighted
LGD
%
Exposure-
weighted
Risk
Weight
%
Risk-
weighted
Assets
1
$ millions
Minimum
Pillar 1
Capital
Requirement
$ millions
Corporate/Business lending
0.00 to 0.02 - - - - - -
0.02 to 0.04 0.03 2,686 35.04 11.06 315 25
0.04 to 0.10 0.08 4,121 53.25 29.62 1,294 104
0.10 to 0.50 0.21 8,455 43.76 39.67 3,555 284
0.50 to 3.0 1.56 13,349 35.28 72.79 10,300 824
3.0 to 10.0 3.70 780 34.74 100.15 828 66
10.0 to 99.0 24.82 1,414 39.17 192.68 2,888 231
Default 100.00 132 42.62 213.69 299 24
Total 2.40 30,937 40.17 59.40 19,479 1,558
Sovereign
0.00 to 0.02 0.01 1,432 16.25 2.24 34 3
0.02 to 0.04 0.02 3,173 9.14 1.46 49 4
0.04 to 0.10 0.05 5 25.00 - - -
0.10 to 0.50 - - - - - -
0.50 to 3.0 - - - - - -
3.0 to 10.0 - - - - - -
10.0 to 99.0 - - - - - -
Default - - - - - -
Total 0.01 4,610 11.37 1.70 83 7
Bank
0.00 to 0.02 - - - - - -
0.02 to 0.04 0.03 1,717 15.45 3.96 72 6
0.04 to 0.10 0.05 2,266 54.83 21.19 509 41
0.10 to 0.50 0.13 43 60.00 28.52 13 1
0.50 to 3.0 1.22 5 56.90 94.34 5 -
3.0 to 10.0 3.70 2 10.00 47.17 1 -
10.0 to 99.0 - - - - - -
Default - - - - - -
Total 0.05 4,033 38.10 14.04 600 48
Total credit risk exposures subject to
the internal ratings based approach
101,520 40,242 3,219
1
The value of the scalar used in determining the risk weighted assets is 1.06 as required by the conditions of registration.
The following table summarises the Banking Group’s credit risk exposures by asset class arising from undrawn commitments and other off-balance
sheet exposures. These unaudited amounts are included in the previous tables.
Undrawn Commitments and
Other Off-balance Sheet Amounts
Market Related
Contracts
$ millions Value EAD Value EAD
Residential mortgages 9,933 7,463 --
Other retail 3,222 1,879 --
Small business 858 768 --
Corporate/Business lending 9,616 9,700 --
Sovereign 220 211 --
Bank 811 851 --
Total 24,660 20,872 --
Note 15 Risk management (continued)

22Westpac New Zealand Limited Westpac New Zealand Limited
Notes to the financial statements
The Banking Group’s equity exposures as at 31 March 2018 (Unaudited)
Equity
Total
Exposure
$ millions
Risk
Weight
%
Risk-
weighted
Exposure
1
$ millions
Minimum
Pillar 1
Capital
Requirement
$ millions
Equity holdings (not deducted from capital) that are not publicly traded - 300 - -
All other holdings (not deducted from capital) - 400 - -
1
The value of the scalar used in determining the risk weighted assets is 1.06 as required by the conditions of registration.
The Banking Group’s specialised lending: Project and property finance credit risk exposures as at 31 March 2018 (Unaudited)
Supervisory slotting grade
Total
Exposures
After Credit
Risk Mitigation
$ millions
Risk
Weight
%
Risk-
weighted
Assets
1
$ millions
Minimum
Pillar 1
Capital
Requirement
$ millions
Strong 2,979 70.00 2,212 177
Good 3,823 90.00 3,647 292
Satisfactory 719 115.00 876 70
Weak 143 250.00 378 30
Default 94-- -
Total 7,758 86.50 7,113 569
1
The value of the scalar used in determining the risk weighted assets is 1.06 as required by the conditions of registration.
The following table summarises the Banking Group’s specialised lending: Project and property finance credit risk exposures arising from undrawn
commitments and other off-balance sheet exposures. These amounts are included in the above table.
EAD
$ millions
Average
Risk
Weight
%
Risk-
weighted
Assets
1
$ millions
Minimum
Pillar 1
Capital
Requirement
$ millions
Undrawn commitments and other off-balance sheet exposures 1,200 88.13 1,121 90
1
The value of the scalar used in determining the risk weighted assets is 1.06 as required by the conditions of registration.
The Banking Group’s credit risk exposures subject to the standardised approach as at 31 March 2018 (Unaudited)
Calculation of on-balance sheet exposures
Total
Exposure
After Credit
Risk Mitigation
$ millions
Average Risk
Weight
%
Risk-
weighted
Exposure
1
$ millions
Minimum
Pillar 1
Capital
Requirement
$ millions
Other assets
2
1,846 34.60 677 54
Total on-balance sheet exposures 1,846 677 54
1
The value of the scalar used in determining the risk weighted assets is 1.06 as required by the conditions of registration.
2
Other assets relate to property and equipment, other assets and related parties.
Note 15 Risk management (continued)

23
Westpac New Zealand LimitedWestpac New Zealand Limited
Notes to the financial statements
Calculation of off-balance sheet exposures
Total
Exposure or
Principal
Amount
$ millions
Average
Credit
Conversion
Factor
%
Credit
Equivalent
Amount
$ millions
Average Risk
Weight
%
Risk-
weighted
Exposure
1
$ millions
Minimum
Pillar 1
Capital
Requirement
$ millions
Market related contracts subject to the
standardised approach
Foreign exchange contracts 15,833 N/A 903 20.00 191 16
Interest rate contracts 51,295 N/A 66 20.00 14 1
Credit value adjustment - N/A -- 163 13
Total market related contracts subject to the
standardised approach
67,128 969 368 30
Standardised subtotal (on and off-balance sheet) 2,815 1,045 84
1
The value of the scalar used in determining the risk weighted assets is 1.06 as required by the conditions of registration.
Residential mortgages by loan-to-value ratio (‘LVR’) as at 31 March 2018 (Unaudited)
LVRs are calculated as the current exposure divided by the Banking Group’s valuation of the residential security at origination.
For loans originated from 1 January 2008, the 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 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.
THE BANKING GROUP
31 Mar 18
LVR range
$ millions
Does not
exceed 60%
Exceeds 60%
and not 70%
Exceeds 70%
and not 80%
Exceeds 80%
and not 90% Exceeds 90% Total
On-balance sheet exposures 19,828 11,465 11,956 2,846 1,631 47,726
Undrawn commitments and other off-balance
sheet exposures
5,039 1,223 898 119 184 7,463
Value of exposures 24,867 12,688 12,854 2,965 1,815 55,189
Reconciliation of residential mortgage-related amounts (Unaudited)
The table below provides the Banking Group’s reconciliation between any amounts disclosed in this Disclosure Statement that relate to mortgages on
residential property.
THE BANKING GROUP
$ millions
31 Mar 18
Term loans - Housing (as disclosed in Note 4) and Residential mortgages - total gross loans (as disclosed in Note 5) 47,909
Reconciling items:
Unamortised deferred fees and expenses (166)
Fair value hedge adjustments (17)
Value of undrawn commitments and other off-balance sheet amounts relating to residential mortgages 9,933
Undrawn at default
1
(2,470)
Residential mortgages by LVR 55,189
Accrued interest receivable 85
Residential mortgages - EAD (as disclosed in Credit risk exposures by asset class) 55,274
1
Estimate of the amount of committed exposure not expected to be drawn by the customer at the time of default.
Note 15 Risk management (continued)

24Westpac New Zealand Limited Westpac New Zealand Limited
Notes to the financial statements
15.2 Operational risk
Operational risk capital requirement (Unaudited)
THE BANKING GROUP
31 Mar 18
$ millions
Implied Risk-
weighted Exposure
Total Operational Risk
Capital Requirement
Methodology implemented Advanced Measurement Approach
Operational risk 4,514 361
15.3 Liquidity risk
Liquid assets (Unaudited)
The table below shows the 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 Banking Group’s liquidity requirements. In management’s opinion, liquidity is
sufficient to meet the Banking Group’s present requirements.
THE BANKING GROUP
$ millions
31 Mar 18
Cash and balances with central banks 1,974
Receivables due from other financial institutions 344
Receivables due from the Ultimate Parent Bank 427
Supranational securities 1,458
NZ Government securities 1,574
NZ public securities 1,301
NZ corporate securities 1,432
Residential mortgage-backed securities 3,950
Total liquid assets 12,460
Regulatory Liquidity Ratios (Unaudited)
The Bank calculates liquidity ratios in accordance with the Reserve Bank document entitled ‘Liquidity Policy’ (BS 13) (‘BS 13’). Ratios are calculated
daily and are part of the Bank’s management of liquidity risk (refer to Note 35.4 to the financial statements included in the Disclosure Statement for
the year ended 30 September 2017 for further details). Quarterly, average ratios are produced in line with Reserve Bank rules and guidance.
THE BANKING GROUP
%31 Mar 1831 Dec 17
Average for the three months ended
One-week mismatch ratio 5.72 5.92
One-month mismatch ratio 9.35 9.71
Core funding ratio 83.53 84.27
Contractual maturity of financial liabilities (Unaudited)
The table below presents cash flows associated with financial liabilities, payable at the balance sheet date, by remaining contractual maturity. The
amounts disclosed in the table are the future contractual undiscounted cash flows, whereas the Banking Group manages inherent liquidity risk based
on expected cash flows.
Cash flows associated with financial liabilities include both principal payments as well as fixed or variable interest payments incorporated into the
relevant coupon period. Principal payments reflect the earliest contractual maturity date. Derivative liabilities designated for hedging purposes are
expected to be held for their remaining contractual lives, and reflect gross cash flows over the remaining contractual term.
Derivatives held for trading and certain liabilities classified in other financial liabilities at fair value through income statement are not managed for
liquidity purposes on the basis of their contractual maturity, and accordingly these liabilities are presented in either the on demand or up to 1 month
columns. Only the liabilities that the Banking Group manages based on their contractual maturity are presented on a contractual undiscounted basis
in the following table.
Note 15 Risk management (continued)

25
Westpac New Zealand LimitedWestpac New Zealand Limited
Notes to the financial statements
THE BANKING GROUP
$ millions
On
Demand
Up to
1 Month
Over
1 Month
and Up to
3 Months
Over
3 Months
and Up to
1 Year
Over
1 Year
and Up to
5 Years
Over
5 Years Total
Financial liabilities
Payables due to other financial institutions - 294 - - - - 294
Other liabilities - 88 - - - - 88
Deposits and other borrowings 29,048 5,471 11,637 14,657 2,094 - 62,907
Other financial liabilities at fair value through income statement - 20 - - - - 20
Derivative financial instruments:
Held for hedging purposes (net settled) - 4 3 66 59 2 134
Held for hedging purposes (gross settled):
Cash outflow - 6 14 206 1,881 596 2,703
Cash inflow - - - (159) (1,606) (547) (2,312)
Debt issues - 10 412 1,725 12,708 995 15,850
Due to related entities:
Non-derivative balances 616 116 243 29 769 - 1,773
Derivative financial instruments:
Held for trading 14 - - - - - 14
Held for hedging purposes (net settled) - 14 41 67 69 - 191
Held for hedging purposes (gross settled):
Cash outflow - - 18 54 1,582 60 1,714
Cash inflow - - (16) (48) (1,485) (57) (1,606)
Loan capital - - 14 40 229 2,779 3,062
Total undiscounted financial liabilities 29,678 6,023 12,366 16,637 16,300 3,828 84,832
Total contingent liabilities and commitments
Letters of credit and guarantees 795 - - - - - 795
Commitments to extend credit 25,049 - - - - - 25,049
Other commitments 10 - - - - - 10
Total undiscounted contingent liabilities and commitments 25,854 - - - - - 25,854
15.4 Market risk
Market risk notional capital charges (Unaudited)
The Banking Group’s aggregate market risk exposure is derived in accordance with BS2B and is calculated on a six monthly basis. The end-of-period
aggregate market risk exposure is calculated from the period end balance sheet information.
For each category of market risk, the Banking Group’s peak end-of-day aggregate capital charge is derived by determining the maximum over the six
months ended 31 March 2018 of the aggregate capital charge for that category of market risk at the close of each business day derived in accordance
with BS2B.
Note 15 Risk management (continued)

26Westpac New Zealand Limited Westpac New Zealand Limited
Notes to the financial statements
The following table provides a summary of the Banking Group’s notional capital charges by risk type as at the reporting date and the peak end-of-day
notional capital charges by risk type for the six months ended 31 March 2018:
THE BANKING GROUP
31 Mar 18
$ millions Implied Risk-weighted Exposure Aggregate Capital Charge
End-of-period
Interest rate risk 924 74
Foreign currency risk - -
Equity risk - -
924 74
Peak end-of-day
Interest rate risk 1,314 105
Foreign currency risk - -
Equity risk - -
Note 15 Risk management (continued)

27
Westpac New Zealand LimitedWestpac New Zealand Limited
Notes to the financial statements
Interest rate sensitivity (Unaudited)
The following table presents a breakdown of the earlier of the contractual repricing date or maturity date of the Banking Group’s net asset position as
at 31 March 2018. The Banking Group uses this contractual repricing information as a base, which is then altered to take account of consumer behaviour
to manage its interest rate risk.
THE BANKING GROUP
$ millions
Up to 3
Months
Over 3
Months
and
Up to 6
Months
Over 6
Months
and
Up to
1 Year
Over
1 Year
and
Up to 2
Years
Over
2 Years
Non-
interest
Bearing Total
Financial assets
Cash and balances with central banks 1,750 - - - - 224 1,974
Receivables due from other financial institutions 521 - - - - 2 523
Other assets - - - - - 242 242
Trading securities 1,554 286 7 - - - 1,847
Derivative financial instruments - - - - - 432 432
Available-for-sale securities - - 1,406 761 1,388 - 3,555
Loans 43,093 5,313 11,044 14,454 5,585 (376)79,113
Due from related entities 1,536 - - - - 80 1,616
Total financial assets 48,454 5,599 12,457 15,215 6,973 604 89,302
Non-financial assets 988
Total assets 90,290
Financial liabilities
Payables due to other financial institutions 294 - - - - - 294
Other liabilities - - - - - 403 403
Deposits and other borrowings 40,065 8,227 6,058 1,320 644 5,869 62,183
Other financial liabilties at fair value through income statement 20 - - - - - 20
Derivative financial instruments - - - - - 278 278
Debt issues 4,288 1,327 - 1,617 7,738 - 14,970
Due to related entities 1,673 10 - 23 26 301 2,033
Loan capital 2,592 - - - - - 2,592
Total financial liabilities 48,932 9,564 6,058 2,960 8,408 6,851 82,773
Non-financial liabilities 212
Total liabilities 82,985
On-balance sheet interest rate repricing gap (478)(3,965)6,399 12,255 (1,435)
Net derivative notional principals
Net interest rate contracts (notional):
Receivable/(payable)13,890 (1,421)(6,409)(9,393)3,333
Net interest rate repricing gap 13,412 (5,386)(10)2,862 1,898
Note 15 Risk management (continued)

28Westpac New Zealand Limited Westpac New Zealand Limited
Notes to the financial statements
Note 16 Concentration of funding
THE BANKING GROUP
$ millions
31 Mar 18
Unaudited
Funding consists of
Payables due to other financial institutions 294
Deposits and other borrowings 62,183
Other financial liabilities at fair value through income statement 20
Debt issues
1
14,970
Due to related entities
2
1,732
Loan capital 2,592
Total funding 81,791
Analysis of funding by geographical areas
1
New Zealand 64,553
Australia 1,247
United Kingdom 7,979
United States of America 1,073
Other 6,939
Total funding 81,791
Analysis of funding by industry sector
Accommodation, cafes and restaurants 366
Agriculture 1,370
Construction 1,643
Finance and insurance 30,465
Forestry and fishing 188
Government, administration and defence 2,000
Manufacturing 1,602
Mining 72
Property services and business services 5,793
Services 4,310
Trade 1,787
Transport and storage 848
Utilities 556
Households 25,353
Other 3,706
Subtotal 80,059
Due to related entities
2
1,732
Total funding 81,791
1
The geographic region used for debt issues is based on the nature of the debt programmes. The nature of the debt programmes is used as a proxy for the location of
the original purchaser. Where the nature of the debt programme does not necessarily represent an appropriate proxy, the debt issues are classified as ‘Other’. These
instruments may have subsequently been on-sold.
2
Amounts due to related entities, as presented above, are in respect of deposits and borrowings and exclude amounts which relate to derivatives and other liabilities.
Australian and New Zealand Standard Industrial Classification (‘ANZSIC’) has been used as the basis for disclosing industry sectors.

29
Westpac New Zealand LimitedWestpac New Zealand Limited
Notes to the financial statements
Note 17 Concentration of credit exposures
THE BANKING GROUP
$ millions
31 Mar 18
Unaudited
On-balance sheet credit exposures consists of
Cash and balances with central banks 1,974
Receivables due from other financial institutions 523
Other assets 242
Trading securities 1,847
Derivative financial instruments 432
Available-for-sale securities 3,555
Loans 79,113
Due from related entities 1,616
Total on-balance sheet credit exposures 89,302
Analysis of on-balance sheet credit exposures by industry sector
Accommodation, cafes and restaurants 407
Agriculture 8,166
Construction 507
Finance and insurance 6,117
Forestry and fishing 410
Government, administration and defence 5,528
Manufacturing 2,191
Mining 163
Property 6,556
Property services and business services 1,261
Services 1,790
Trade 1,858
Transport and storage 1,166
Utilities 1,903
Retail lending 49,958
Subtotal 87,981
Provisions for impairment charges on loans (376)
Due from related entities 1,616
Other assets 81
Total on-balance sheet credit exposures 89,302
Off-balance sheet credit exposures consists of
Credit risk-related instruments 25,854
Total off-balance sheet credit exposures 25,854
Analysis of off-balance sheet credit exposures by industry sector
Accommodation, cafes and restaurants 100
Agriculture 544
Construction 645
Finance and insurance 1,715
Forestry and fishing 138
Government, administration and defence 743
Manufacturing 1,651
Mining 168
Property 1,555
Property services and business services 541
Services 685
Trade 2,012
Transport and storage 716
Utilities 1,471
Retail lending 13,170
Total off-balance sheet credit exposures 25,854
ANZSIC has been used as the basis for disclosing industry sectors.

30Westpac New Zealand Limited Westpac New Zealand Limited
Notes to the financial statements
Note 17 Concentration of credit exposures (continued)
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 and non-bank counterparties to which the Banking Group has an aggregate credit exposure or peak end-of-day aggregate
credit exposure that equals or exceeds 10% of the Banking Group’s Common Equity Tier 1 capital (‘CET 1’):
THE BANKING GROUP
31 Mar 18
% of Banking Group’s CET 1
Bank Counterparties
1
Long-term credit rating
A- or A3 and above
Non-bank Counterparties
2
Long-term credit rating
A- or A3 and above
As at 31 March 2018
3
Exceeds 10% and not 15% 1 1
Exceeds 15% and not 20% - 1
Exceeds 20% and not 25% - -
Exceeds 25% and not 30% - -
Peak end-of-day aggregate credit exposure for the
three months ended 31 March 2018
3
Exceeds 10% and not 15% 1 1
Exceeds 15% and not 20% - -
Exceeds 20% and not 25% - -
Exceeds 25% and not 30% - 1
1
A counterparty is a bank counterparty if it is a bank that is not a member of the group of closely related counterparties or it is a group of closely related counterparties
of which a bank is the parent.
2
A counterparty is a non-bank counterparty if it is a non-bank that is not a member of a group of closely related counterparties or it is a group of closely related
counterparties of which a bank is not the parent.
3
There were no individual non-bank counterparties with aggregate credit exposure that equals or exceeds 10% of the Banking Group’s equity and with a long-term credit
rating of at least BBB- or Baa3, or its equivalent, and at most BBB+ or Baa1, or its equivalent.
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 Banking Group’s equity as at the end of the period.
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 connected persons, to the central government or central bank of any country with a long-term credit rating of A-
or A3 or above, or its equivalent, or to any supranational or quasi-sovereign agency 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 Banking Group and were calculated net of individually assessed provisions.

31
Westpac New Zealand Limited
Conditions of registration
Non-compliance with conditions of registration
The Bank underwent a review of compliance with certain aspects of
condition of registration 1B in response to a notice issued by the Reserve
Bank under section 95 of the Reserve Bank Act during the reporting period
(‘Section 95 Review’). Condition of registration 1B requires the Bank to
comply with the Reserve Bank Capital Adequacy Framework (Internal
Models Based Approach) (‘BS2B’).
The Section 95 Review considered the Bank’s compliance with aspects
of BS2B since accreditation in 2008. It found that the Bank had not
complied with aspects of BS2B over that period, and in particular it used
a number of capital models not approved by the RBNZ and failed to meet
requirements around model governance, process and documentation.
The Bank accepts the findings of the Section 95 Review and is committed
to addressing the issues raised. As disclosed in Note 14 to the financial
statements, the Bank considers its current internal credit model
methodologies result in the retention of an appropriate amount of capital
to reflect its credit risk. Any effect of the non-compliance with condition
of registration 1B on the information relating to capital adequacy disclosed
in the financial statements is not considered by the Bank to be material.
During the reporting period, the Bank was non-compliant with condition
of registration 1B in relation to the following matters:
–It has continued to operate versions of the following capital models
which were not approved by the Reserve Bank, in some cases since
December 2008:
> Probability of Default (‘PD’) models for small business and agriculture.
> Loss Given Default (‘LGD’) and Exposure at Default (‘EAD’) models
for credit card exposures.
> PD and LGD models for:
• Banks;
• Sovereigns;
• Corporates; and
• SME Corporates.
> Risk Grade model utilised within expert judgement evaluation for
wholesale property development and investment customers.
> For one obligor, the slotting rule utilised, applied within the
Specialised Lending Income Producing Real Estate asset class, was
not approved by the Reserve Bank.
–In some instances, changes to expert judgement policies,
compositional changes and an asset class segmentation rule within
the Bank’s loan book were not notified to the Reserve Bank as required
under paragraph 1.3A(a) of BS2B.
–The Bank’s Model Compendium required under 1.3B of BS2B is not
accurate as it does not include all models, has unapproved models and
has not been updated to include changes in models.
–It is not fully compliant with paragraph 4.246 of BS2B in that, with
the exception of wholesale property development and investment
customers, non-retail risk grade credit policy overrides are not
captured and monitored.
–It is not fully compliant with paragraph 4.248 of BS2B in that not all
historical origination data for non-retail customers is maintained in
a format that allows easy accessibility to key data used to derive the
original risk rating.
–It is not fully compliant with 4.256 of BS2B in that WNZL management
accountabilities and authorities are not specified in the relevant
framework policies published by the Ultimate Parent Bank.
–For less than one percent of its residential mortgages by loan value, its
use of total committed exposure rather than EAD for calculating loan-
to-value ratio (‘LVR’) for capital adequacy purposes does not meet the
minimum LGD requirements of paragraph 4.150 of BS2B. Additionally,
for less than 5% of accounts by number, the security value utilised
within the calculation of LVR is an updated valuation and not the
origination value as required by that paragraph.
–For credit risk capital purposes, off-balance sheet exposures include
amounts that have been approved but not yet drawn by the customer.
The Bank has identified that, for some loans to commercial and
corporate customers, amounts approved but not yet drawn are not
accurately included in its capital estimates. The aggregate amount is
not assessed to be material.
–The Banking Group has some minor portfolios where risk weights
for these exposures are assessed for capital adequacy under a
standardised approach rather than under BS2B without the Reserve
Bank’s approval.
–For a small number of corporate customers, certain committed credit
facilities have been incorrectly recorded as uncommitted. This has
been corrected and capital calculations adjusted accordingly. The
aggregate amount is not assessed to be material.
–It is not fully compliant with 4.205 and 4.324 of BS2B in that the Bank has
not risk-weighted the residual value of operating leases at 100%. This
has been corrected and the capital calculations adjusted accordingly.
The aggregate amount is not assessed to be material.
–It is not fully compliant with 4.93 of BS2B in that the Bank has not
applied the appropriate facility maturity for drawn amounts for the
lease portfolio (less than 0.4% of total exposure). The aggregate
amount is not assessed to be material.
In addition to the non-compliance described above, the Section 95 Review
noted that the Bank had failed to meet the Reserve Bank’s requirements
in relation to:
–model documentation and associated model documentation
policies;
–internal processes for changes to the Bank’s rating system;
–data maintenance; and
–policies or processes to support incorporating conservatism into
models and estimates.
Changes to conditions of registration
On 19 December 2017, the Reserve Bank advised the Bank on changes to
its conditions of registration to 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) a limit of 5 per cent on new lending carried out in the relevant
measurement period for residential property investment applies
where the LVR is greater than 65 per cent (previously, the required
LVR was 60 per cent), and
(b) a limit of 15 percent (previously, the required limit was 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.

32Westpac New Zealand Limited
PricewaterhouseCoopers, 188 Quay Street, Private Bag 92162, Auckland 1142, New Zealand
T: +64 (9) 355 8000, F: +64 (9) 355 8001, www.pwc.com/nz
Independent auditor’s review report
To the shareholder of Westpac New Zealand Limited
Report on the financial statements
We have reviewed pages 3 to 30 of the Disclosure Statement for the six months ended 31 March 2018 (the
“Disclosure Statement”) of Westpac New Zealand Limited (the “Bank”) and the entities it controlled at 31 March
2018 or from time to time during the period (the “Banking Group”), which includes the financial statements
required by Clause 25 of the Registered Bank Disclosure Statements (New Zealand Incorporated Registered
Banks) Order 2014 (as amended) (the “Order”) and the supplementary information required by Schedules 5,
7, 11, 13, 16 and 18 of the Order. The financial statements comprise the balance sheet as at 31 March 2018, the
income statement, the statement of comprehensive income, the statement of changes in equity and the statement
of cash flows for the six months then ended, and the notes to the financial statements that include a statement of
accounting policies and selected explanatory notes for the Banking Group.
Directors’ responsibility for the financial statements
The Directors of the Bank (the “Directors”) are responsible on behalf of the Bank for the preparation and
presentation of the Disclosure Statement, which includes financial statements prepared in accordance with Clause
25 of the Order and for such internal controls as the Directors determine are necessary to enable the preparation
of financial statements that are free from material misstatement, whether due to fraud or error.
In addition, the Directors are responsible, on behalf of the Bank, for the preparation and presentation of
supplementary information in the Disclosure Statement which complies with Schedules 3, 5, 7, 11, 13, 16 and 18 of
the Order.
Our responsibility
Our responsibility is to express the following conclusions on the financial statements and supplementary
information presented by the Directors based on our review:
• in relation to the financial statements (excluding the supplementary information) whether, in our opinion
on the basis of the procedures performed by us, anything has come to our attention that would cause us to
believe that the financial statements have not been prepared, in all material respects, in accordance with New
Zealand Equivalent to International Accounting Standard 34: Interim Financial Reporting (NZ IAS 34) and
International Accounting Standard 34: Interim Financial Reporting (IAS 34);
• in relation to the supplementary information (excluding the supplementary information relating to capital
adequacy and regulatory liquidity requirements) whether, in our opinion on the basis of the procedures
performed by us, anything has come to our attention that would cause us to believe that the supplementary
information does not fairly state the matters to which it relates in accordance with Schedules 5, 7, 13, 16 and
18 of the Order; and
• in relation to the supplementary information relating to capital adequacy and regulatory liquidity
requirements whether, in our opinion on the basis of the procedures performed by us, anything has come
to our attention that would cause us to believe that the supplementary information is not, in all material
respects, disclosed in accordance with Schedule 11 of the Order.
We conducted our review in accordance with the New Zealand Standard on Review Engagements 2410: Review of
Financial Statements Performed by the Independent Auditor of the Entity (NZ SRE 2410). As the auditor of the
Banking Group, NZ SRE 2410 requires that we comply with the ethical requirements relevant to the audit of the
annual financial statements.

33
Westpac New Zealand Limited
Independent auditor’s review report (continued)
A review in accordance with NZ SRE 2410 is a limited assurance engagement. The auditor performs procedures,
primarily consisting of making enquiries, primarily of persons responsible for financial and accounting matters,
and applying analytical and other review procedures. The procedures performed in a review are substantially
less than those performed in an audit conducted in accordance with International Standards on Auditing
(New Zealand) and International Standards on Auditing. Accordingly, we do not express an audit opinion on the
financial statements and supplementary information.
We are independent of the Banking Group. Our firm carries out other services for the Banking Group in the areas
of other assurance services and agreed upon procedures. In addition, certain partners and employees of our firm
may deal with the Banking Group on normal terms within the ordinary course of trading activities of the Banking
Group. These matters have not impaired our independence as auditor of the Banking Group.
Conclusion
We have examined the financial statements and supplementary information and based on our review, nothing has
come to our attention that causes us to believe that:
a)t he financial statements on pages 3 to 30 (excluding the supplementary information) have not been prepared,
in all material respects, in accordance with NZ IAS 34 and IAS 34;
b)the supplementary information prescribed by Schedules 5, 7, 13, 16 and 18 of the Order, does not fairly state
the matters to which it relates in accordance with those Schedules; and
c)the supplementary information relating to capital adequacy and regulatory liquidity requirements prescribed
by Schedule 11 of the Order, is not, in all material respects, disclosed in accordance with Schedule 11 of the
Order
Emphasis of matter
Without modifying our conclusion, we draw attention to the disclosures in Note 14 of the financial statements
and to the other information on page 31 of the Disclosure Statement, which disclose certain matters of non-
compliance with condition of registration 1B by the Bank. This includes the fact that the Bank continues to
operate versions of certain internal models for credit risk that have not been approved by the Reserve Bank of
New Zealand. However, as disclosed in Note 14 of the financial statements and the other information on page
31 of the Disclosure Statement, the Bank considers its current internal credit model methodologies result in the
retention of an appropriate amount of capital to reflect its credit risk and any effect of the non-compliance with
condition of registration 1B on the information relating to capital adequacy disclosed in the financial statements
is not considered to be material.
Who we report to
This report is made solely to the Bank’s shareholder. Our review work has been undertaken so that we might
state those matters which we are required to state to them in our review report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Bank and the
Bank’s shareholder for our review procedures, for this report, or for the conclusions we have formed.
For and on behalf of:
Auckland
Chartered Accountants
24 May 2018

JN15967-2 04-18
Westpac New Zealand Limited.westpac.co.nz