Westpac 2018 Full Year Results Template

ASX
Release


02 November 2018
Finalisation of provisions for customer payments in FY18 and Westpac
Group Full Year Financial Results template
Westpac Group has today confirmed that there will be no material changes to the composition of its
financial results for Full Year 2018. Westpac is providing an update on two items.

1. On the 27 September 2018, Westpac announced an estimate of provisions for customer
payments and related costs that will impact its Full Year 2018 results. Following additional
analysis and further regulatory engagement, the provisions/costs have now been finalised.
They will reduce cash earnings in Full Year 2018 by $281 million. This is $46 million higher
than estimated in the Group’s initial release.
The following provisions will be reflected in the Group’s income statement:
Line items
Consumer
Bank
BTFG Other
Total
Net interest income ($99m) - ($6m) ($105m)
Non-interest income ($6m) ($146m) ($11m) ($163m)
Operating expenses ($39m) ($55m) ($18m) ($112m)
Core earnings ($144m) ($201m) ($35m) ($380m)
Income tax expense $34 $60m $5m $99m
Cash earnings ($110m) ($141m) ($30m) ($281m)

2. In Westpac’s First Half 2018 results, the Group indicated its intention to exit its infrastructure
funds management business, Hastings Funds Management (Hastings). The exit has a small
impact on cash earnings but a more significant impact on key line items.

The table below details the contribution of Hastings in 2018. It includes all revenue and expenses,
including the costs/benefits of exiting Hastings.
Line item First Half 2018 Second Half 2018 Full Year 2018
Net interest income - $1m $1m
Non-interest income $23m $180m $203m
Operating expenses ($37m) ($121m) ($158m)
Core earnings ($14m) ($60m) $46m
Income tax expense $12m ($41m) ($29m)
Cash earnings ($2m) $19m $17m

Template

In addition to the above, in Westpac’s First Half 2018 results the Group implemented a number of
changes to the presentation of divisional financial information. This included updating the Group’s
cost of funds transfer pricing methodology, allocating additional capital from Group Businesses to
operating divisions, and realigning divisional earnings. These changes have no impact on the
Group’s overall results or balance sheet. Today’s template provides restated FY17 disclosures.

WESTPAC BANKING CORPORATION ABN 33 007 457 141


Westpac is scheduled to announce its Full Year 2018 Financial Results on 5
th
November which will
be available on the Westpac website at www.westpac.com.au/investorcentre.

Ends.

For Further Information
David Lording
Head of Media Relations

M. 0419 683 411
Andrew Bowden
Head of Investor Relations
T. 02 8253 4008
M. 0438 284 863

2018 Full Year Financial Results
Template

1.1 Reported results
% Mov't% Mov't
$m
Half Year
Sept 18
Half Year
March 18
Sept 18 -
Mar 18
Full Year
Sept 18
Full Year
Sept 17
Sept 18 -
Sept 17
Net interest income
8,27815,516
Non-interest income
2,8756,286
Net operating income before operating expenses
and impairment charges
11,15321,802
Operating expenses
(4,725)(9,434)
Net profit before impairment charges and income tax
expense
6,42812,368
Impairment charges
(393)(853)
Profit before income tax
6,03511,515
Income tax expense
(1,835)(3,518)
Net profit for the period
4,2007,997
Net profit attributable to non-controlling interests
(2)(7)
NET PROFIT ATTRIBUTABLE TO OWNERS OF
WESTPAC BANKING CORPORATION
4,1987,990

1.2 Key financial information
% Mov't% Mov't
$m
Half Year
Sept 18
Half Year
March 18
Sept 18 -
Mar 18
Full Year
Sept 18
Full Year
Sept 17
Sept 18 -
Sept 17
Shareholder value
Earnings per ordinary share (cents)123.7238.0
Weighted average ordinary shares (millions)3,3923,355
Fully franked dividends per ordinary share (cents)94188
Return on average ordinary equity13.79%13.65%
Average ordinary equity ($m)61,05158,556
Average total equity ($m)61,06558,576
Net tangible asset per ordinary share ($)15.0014.66
Business performance
Interest spread2.00%1.89%
Benefit of net non-interest bearing assets, liabilities and equity
0.16%0.17%
Net interest margin 2.16%2.06%
Average interest-earning assets ($m)767,011752,294
Expense to income ratio42.37%43.27%
Capital, funding and liquidity
Common equity Tier 1 capital ratio
- APRA Basel III 10.50%10.56%
- Internationally comparable16.13%16.20%
Credit risk weighted assets (credit RWA) ($m) 361,391349,258
Total risk weighted assets (RWA) ($m) 415,744404,235
Liquidity coverage ratio (LCR)134%124%
Net stable funding ratio (NSFR)112%109%
Asset quality
Gross impaired assets to gross loans0.22%0.22%
Gross impaired assets to equity and total provisions
2.33%2.39%
Gross impaired asset provisions to gross impaired assets
45.54%46.30%
Total committed exposures (TCE) ($m)1,023,0171,005,882
Total stressed exposures as a % of TCE
1.09%1.05%
Total provisions to gross loans45bps45bps
Mortgage 90+ day delinquencies0.65%0.62%
Other consumer loans 90+ day delinquencies1.64%1.57%
Collectively assessed provisions to credit RWA75bps76bps
Balance sheet ($m)
Loans701,393684,919
Total assets
871,855851,875
Deposits and other borrowings547,736533,591
Total liabilities809,190790,533
Total equity62,66561,342
Wealth Management
Average Group Funds ($bn)217.3208.4
Life insurance in-force premiums (Australia)1,2761,068
General insurance gross written premiums (Australia)251508

1.3 Cash earnings results
% Mov't% Mov't
$m
Half Year
Sept 18
Half Year
March 18
Sept 18 -
Mar 18
Full Year
Sept 18
Full Year
Sept 17
Sept 18 -
Sept 17
Net interest income8,30115,704
Non-interest income2,8505,852
Net operating income11,15121,556
Operating expenses(4,654)(9,105)
Core earnings6,49712,451
Impairment charges(393)(853)
Operating profit before income tax6,10411,598
Income tax expense(1,851)(3,529)
Net profit4,2538,069
Net profit attributable to non-controlling interests(2)(7)
Cash earnings4,2518,062
1.3.1 Key financial information - cash earnings basis
% Mov't% Mov't
$m
Half Year
Sept 18
Half Year
March 18
Sept 18 -
Mar 18
Full Year
Sept 18
Full Year
Sept 17
Sept 18 -
Sept 17
Shareholder value
Cash earnings per ordinary share (cents)125.0239.7
Economic profit ($m)2,0493,774
Weighted average ordinary shares (millions)3,4003,364
Dividend payout ratio75.28%78.71%
Cash earnings on average ordinary equity (ROE)13.96%13.77%
Cash earnings on average tangible ordinary equity (ROTE)16.60%16.55%
Average ordinary equity ($m)61,05158,556
Average tangible ordinary equity ($m)51,34448,725
Business performance
Interest spread2.00%1.91%
Benefit of net non-interest bearing assets, liabilities and equity0.17%0.18%
Net interest margin 2.17%2.09%
Average interest-earning assets ($m)767,011752,294
Expense to income ratio41.74%42.24%
Full time equivalent employees (FTE)35,72035,096
Revenue per FTE ($ '000's)315613
Effective tax rate 30.32%30.43%
Impairment charges
Impairment charges to average loans annualised11bps13bps
Net write-offs to average loans annualised13bps22bps

2.2.1 Net interest income
% Mov't% Mov't
$m
Half Year
Sept 18
Half Year
March 18
Sept 18 -
Mar 18
Full Year
Sept 18
Full Year
Sept 17
Sept 18 -
Sept 17
Net interest income
Net interest income excluding Treasury & Markets7,84214,981
Treasury net interest income396652
Market net interest income6371
Net interest income8,30115,704
Average interest-earning assets
Loans651,943633,821
Third party liquid assets93,35795,033
Other interest-earning assets21,71123,440
Average interest-earning assets767,011752,294
Net interest margin
Group net interest margin2.17%2.09%
Group net interest margin excluding Treasury & Markets2.05%1.99%

2.2.6 Group funds
As atAs atAs at% Mov't% Mov't
$bn
30 Sept
2018
31 March
2018
30 Sept
2017
Sept 18 -
Mar 18
Sept 18 -
Sept 17
Superannuation
37.436.2
Platforms
118.6115.3
Packaged Funds
38.036.4
Other
3.73.5
New Zealand (A$)
9.79.3
Total Group funds (excluding Westpac Institutional Bank)
207.4200.7
Westpac Institutional Bank
6.612.5
Total Group funds
214.0213.2
Average funds for the Group (excluding Westpac
Institutional Bank)
207.6201.9
Westpac Institutional Bank
9.712.0
Average funds for the Group
217.3213.9

2.4.1 Balance sheet
As atAs atAs at% Mov't% Mov't
$m
30 Sept
2018
31 March
2018
30 Sept
2017
Sept 18 -
Mar 18
Sept 18 -
Sept 17
Assets
Cash and balances with central banks
21,58018,397
Receivables due from other financial institutions
3,9777,128
Trading securities, other financial assets designated at fair value and
available-for-sale securities
85,48486,034
Derivative financial instruments
26,90424,033
Loans
701,393684,919
Life insurance assets
10,48110,643
Other assets
22,03620,721
Total assets
871,855851,875
Liabilities
Payables due to other financial institutions
19,07321,907
Deposits and other borrowings
547,736533,591
Other financial liabilities at fair value through income statement
5,5904,056
Derivative financial instruments
24,06625,375
Debt issues
174,138168,356
Life insurance liabilities
8,7639,019
Loan capital
18,33317,666
Other liabilities
11,49110,563
Total liabilities
809,190790,533
Equity
Total equity attributable to owners of Westpac Banking Corporation
62,61561,288
Non-controlling interests
5054
Total equity
62,66561,342

3.1 Consumer Bank
% Mov't% Mov't
$m
Half Year
Sept 18
Half Year
March 18
Sept 18 -
Mar 18
Full Year
Sept 18
Full Year
Sept 17
Sept 18 -
Sept 17
Net interest income4,0407,638
Non-interest income377813
Net operating income4,4178,451
Operating expenses(1,730)(3,378)
Core earnings2,6875,073
Impairment charges(233)(565)
Operating profit before tax2,4544,508
Tax and non-controlling interests(737)(1,353)
Cash earnings1,7173,155
Economic profit1,2662,420
Expense to income ratio39.17%39.97%
Net interest margin2.37%2.31%
As atAs at% Mov'tAs atAs at% Mov't
$bn
30 Sept
2018
31 March
2018
Sept 18 -
Mar 18
30 Sept
2018
30 Sept
2017
Sept 18 -
Sept 17
Deposits
Term deposits58.157.9
Other141.3138.6
Total deposits199.4196.5
Net loans
Mortgages366.0357.4
Other13.613.9
Provisions(0.9)(0.9)
Total net loans378.7370.4
Deposit to loan ratio52.65%53.05%
Total assets386.0377.5
TCE441.1432.3
Average interest-earning assets341.6330.1
As atAs atAs atAs at
30 Sept
2018
31 March
2018
30 Sept
2017
31 March
2017
Credit quality
Impairment charges to average loans annualised0.12%0.16%0.15%
Mortgage 90+ day delinquencies0.73%0.71%0.72%
Other consumer loans 90+ day delinquencies1.65%1.64%1.86%
Total stressed assets to TCE0.65%0.64%0.66%

3.2 Business Bank
% Mov't% Mov't
$m
Half Year
Sept 18
Half Year
March 18
Sept 18 -
Mar 18
Full Year
Sept 18
Full Year
Sept 17
Sept 18 -
Sept 17
Net interest income2,0213,885
Non-interest income5891,141
Net operating income2,6105,026
Operating expenses(930)(1,818)
Core earnings1,6803,208
Impairment charges(137)(343)
Operating profit before tax1,5432,865
Tax and non-controlling interests(463)(862)
Cash earnings1,0802,003
Economic profit7171,300
Expense to income ratio35.63%36.17%
Net interest margin2.78%2.72%
As atAs at% Mov'tAs atAs at% Mov't
$bn
30 Sept
2018
31 March
2018
Sept 18 -
Mar 18
30 Sept
2018
30 Sept
2017
Sept 18 -
Sept 17
Deposits
Term deposits45.043.7
Other63.363.3
Total deposits108.3107.0
Net loans
Mortgages54.753.9
Business89.587.9
Other8.68.7
Provisions(1.1)(1.1)
Total net loans151.7149.4
Deposit to loan ratio71.39%71.62%
Total assets155.0153.1
TCE199.8199.1
Average interest-earning assets145.8142.8
As atAs atAs atAs at
30 Sept
2018
31 March
2018
30 Sept
2017
31 March
2017
Credit quality
Impairment charges to average loans annualised0.18%0.19%0.27%
Mortgage 90+ day delinquencies0.64%0.60%0.55%
Other consumer loans 90+ day delinquencies1.81%1.68%1.32%
Business: impaired assets to TCE0.48%0.47%0.63%
Total stressed assets to TCE2.48%2.13%2.29%

3.3 BT Financial Group (Australia)
% Mov't% Mov't

$m
Half Year
Sept 18
Half Year
March 18
Sept 18 -
Mar 18
Full Year
Sept 18
Full Year
Sept 17
Sept 18 -
Sept 17
Net interest income285511
Non-interest income8981,744
Net operating income1,1832,255
Operating expenses(601)(1,199)
Core earnings5821,056
Impairment charges(3)(4)
Operating profit before tax5791,052
Tax and non-controlling interests(175)(316)
Cash earnings404736
Economic profit332565
Expense to income ratio50.80%53.17%
Income on invested capital2566
As atAs at% Mov'tAs atAs at% Mov't

$bn
30 Sept
2018
31 March
2018
Sept 18 -
Mar 18
30 Sept
2018
30 Sept
2017
Sept 18 -
Sept 17
Deposits31.730.7
Net loans
Loans
20.820.1
Provisions
--
Total net loans20.820.1
Deposit to loan ratio152.40%152.74%
Total funds197.7191.4
Average funds198.2188.0
Cash earnings% Mov't% Mov't

$m
Half Year
Sept 18
Half Year
March 18
Sept 18 -
Mar 18
Full Year
Sept 18
Full Year
Sept 17
Sept 18 -
Sept 17
Funds Management business
253413
Insurance
133290
Total Funds Management and Insurance
386703
Capital and other
1833
Total cash earnings
404736

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

$m
Half Year
Sept 18
Half Year
March 18
Sept 18 -
Mar 18
Full Year
Sept 18
Full Year
Sept 17
Sept 18 -
Sept 17
Net interest income281496
Non-interest income6311,183
Net operating income9121,679
Operating expenses(544)(1,084)
Core earnings368595
Impairment charges(4)(3)
Operating profit before tax364592
Tax and non-controlling interests(111)(179)
Cash earnings253413
Expense to income ratio59.65%64.56%
Movement of FUM / FUA
As atAs at% Mov'tAs at% Mov't
30 Sept
2018
Net
Flows
Other
Mov't
30 Sept
2017
Sept 18 -
Sept 17
31 March
2018
Sept 18 -
Mar 18
Superannuation
36.237.4
Platforms
115.3118.6
Packaged funds
36.438.0
Other
3.53.7
Total funds191.4197.7
3.3.2 Insurance business
% Mov't% Mov't
$m
Half Year
Sept 18
Half Year
March 18
Sept 18 -
Mar 18
Full Year
Sept 18
Full Year
Sept 17
Sept 18 -
Sept 17
Net interest income310
Non-interest income243499
Net operating income246509
Operating expenses(55)(99)
Core earnings191410
Impairment (charges) / benefits--
Operating profit before tax191410
Tax and non-controlling interests(58)(120)
Cash earnings133290
Expense to income ratio22.36%19.45%
Cash earnings% Mov't% Mov't

$m
Half Year
Sept 18
Half Year
March 18
Sept 18 -
Mar 18
Full Year
Sept 18
Full Year
Sept 17
Sept 18 -
Sept 17
Life Insurance
75160
General Insuranc
e
4391
Lenders Mortgage Insurance
1539
Total cash earnings
133290
Insurance key metrics
Life Insurance in-force premiums% Mov't% Mov't

$m
Half Year
Sept 18
Half Year
March 18
Sept 18 -
Mar 18
Full Year
Sept 18
Full Year
Sept 17
Sept 18 -
Sept 17
Life Insurance in-force premiums at start of period1,068973
Sales / New Business283234
Lapses(75)(139)
Life Insurance in-force premiums at end of period1,2761,068
Claims ratios for Insurance Business% Mov't% Mov't
(%)
Half Year
Sept 18
Half Year
March 18
Sept 18 -
Mar 18
Full Year
Sept 18
Full Year
Sept 17
Sept 18 -
Sept 17
Life Insurance4437
General Insurance5453
Lenders Mortgage Insurance2017
Gross written premiums% Mov't% Mov't
$m
Half Year
Sept 18
Half Year
March 18
Sept 18 -
Mar 18
Full Year
Sept 18
Full Year
Sept 17
Sept 18 -
Sept 17
General Insurance gross written premium251508
Lenders Mortgage Insurance gross written premium90250
$bnInflowsOutflows

3.4 Westpac Institutional Bank
% Mov't% Mov't
$m
Half Year
Sept 18
Half Year
March 18
Sept 18 -
Mar 18
Full Year
Sept 18
Full Year
Sept 17
Sept 18 -
Sept 17
Net interest income6751,328
Non-interest income7491,707
Net operating income1,4243,035
Operating expenses(675)(1,351)
Core earnings7491,684
Impairment (charges) / benefits17(56)
Operating profit before tax7661,628
Tax and non-controlling interests(215)(469)
Cash earnings5511,159
Economic profit224467
Expense to income ratio47.40%44.51%
Net interest margin1.58%1.59%
As atAs at% Mov'tAs atAs at% Mov't
$bn
30 Sept
2018
31 March
2018
Sept 18 -
Mar 18
30 Sept
2018
30 Sept
2017
Sept 18 -
Sept 17
Deposits98.992.1
Net loans
Loans
76.474.4
Provisions
(0.3)(0.3)
Total net loans76.174.1
Deposit to loan ratio 129.96%124.29%
Total assets104.8103.1
TCE251.2249.1
Average interest-earning assets85.983.6
Impairment charges / (benefits) to average loans annualised(0.05%)0.08%
Impaired assets to TCE0.04%0.07%
Total stressed assets to TCE0.52%0.55%
Total funds6.612.5
Revenue contribution
% Mov't% Mov't
$m
Half Year
Sept 18
Half Year
March 18
Sept 18 -
Mar 18
Full Year
Sept 18
Full Year
Sept 17
Sept 18 -
Sept 17
Lending and deposit revenue
7901,549
Markets, sales and fee income
451951
Total customer revenue
1,2412,500
Derivative valuation adjustments
-46
Trading revenue
161317
Hastings
2393
Other
(1)79
Total WIB revenue
1,4243,035

3.5 Westpac New Zealand
% Mov't% Mov't
NZ$m
Half Year
Sept 18
Half Year
March 18
Sept 18 -
Mar 18
Full Year
Sept 18
Full Year
Sept 17
Sept 18 -
Sept 17
Net interest income9221,738
Non-interest income244511
Net operating income1,1662,249
Operating expenses(468)(962)
Core earnings6981,287
Impairment (charges) / benefits(27)76
Operating profit before tax6711,363
Tax and non-controlling interests(189)(392)
Cash earnings482971
Economic profit207431
Expense to income ratio40.14%42.77%
Net interest margin2.15%2.03%
As atAs at% Mov'tAs atAs at% Mov't
NZ$bn
30 Sept
2018
31 March
2018
Sept 18 -
Mar 18
30 Sept
2018
30 Sept
2017
Sept 18 -
Sept 17
Deposits
Term deposits31.630.0
Other30.028.4
Total deposits61.658.4
Net loans
Mortgages47.946.9
Business29.528.6
Other2.12.2
Provisions(0.4)(0.4)
Total net loans79.177.3
Deposit to loan ratio77.88%75.55%
Total assets89.888.3
TCE111.7108.8
Third party liquid assets8.68.7
Average interest-earning assets86.085.8
Total funds10.310.1
As atAs atAs atAs at
30 Sept
2018
31 March
2018
30 Sept
2017
31 March
2017
Credit quality
Impairment charges / (benefits) to average loans annualised0.07%(0.10%)(0.09%)
Mortgage 90+ day delinquencies0.16%0.12%0.14%
Other consumer loans 90+ day delinquencies0.86%0.57%0.58%
Impaired assets to TCE0.21%0.18%0.20%
Total stressed assets to TCE1.86%2.06%2.41%

3.6 Group Businesses
% Mov't% Mov't
$m
Half Year
Sept 18
Half Year
March 18
Sept 18 -
Mar 18
Full Year
Sept 18
Full Year
Sept 17
Sept 18 -
Sept 17
Net interest income437713
Non-interest income13(33)
Net operating income450680
Operating expenses(289)(456)
Core earnings161224
Impairment (charges) / benefits(13)43
Operating profit before tax148267
Tax and non-controlling interests(90)(175)
Cash earnings5892
Treasury% Mov't% Mov't
$m
Half Year
Sept 18
Half Year
March 18
Sept 18 -
Mar 18
Full Year
Sept 18
Full Year
Sept 17
Sept 18 -
Sept 17
Net interest income406675
Non-interest income68
Net operating income412683
Cash earnings269436

Note 2. Segment reporting
$m
Consumer
Bank
Business
Bank
BT Financial
Group
(Australia)
Westpac
Institutional
Bank
Westpac
New Zealand
(A$)
Group
Businesses Group
Net interest income
Non-interest income
Net operating income before operating
expenses and impairment charges
Operating expenses
Impairment (charges) / benefits
Profit before income tax
Income tax expense
Net profit attributable to non-controlling interests
Cash earnings for the period
Net cash earnings adjustments
Net profit for the period attributable to
owners of Westpac Banking Corporation
Total assets
Total liabilities
$m
Consumer
Bank
Business
Bank
BT Financial
Group
(Australia)
Westpac
Institutional
Bank
Westpac
New Zealand
(A$)
Group
Businesses Group
Net interest income
4,0402,0212856758434378,301
Non-interest income
377589898749224132,850
Net operating income before operating
expenses and impairment charges
4,4172,6101,1831,4241,06745011,151
Operating expenses
(1,730)(930)(601)(675)(429)(289)(4,654)
Impairment (charges) / benefits
(233)(137)(3)17(24)(13)(393)
Profit before income tax
2,4541,5435797666141486,104
Income tax expense
(737)(463)(175)(212)(173)(91)(1,851)
Net profit attributable to non-controlling interests
---(3)-1(2)
Cash earnings for the period
1,7171,080404551441584,251
Net cash earnings adjustments
(15)(2)--10(46)(53)
Net profit for the period attributable to
owners of Westpac Banking Corporation
1,7021,078404551451124,198
Total assets
385,959154,96935,806104,76684,285106,070871,855
Total liabilities
203,801111,48642,058124,13073,801253,914809,190
$m
Consumer
Bank
Business
Bank
BT Financial
Group
(Australia)
Westpac
Institutional
Bank
Westpac
New Zealand
(A$)
Group
Businesses Group
Net interest income
Non-interest income
Net operating income before operating
expenses and impairment charges
Operating expenses
Impairment (charges) / benefits
Profit before income tax
Income tax expense
Net profit attributable to non-controlling interests
Cash earnings for the period
Net cash earnings adjustments
Net profit for the period attributable to
owners of Westpac Banking Corporation
Total assets
Total liabilities
$m
Consumer
Bank
Business
Bank
BT Financial
Group
(Australia)
Westpac
Institutional
Bank
Westpac
New Zealand
(A$)
Group
Businesses Group
Net interest income
7,6383,8855111,3281,62971315,704
Non-interest income
8131,1411,7441,707480(33)5,852
Net operating income before operating
expenses and impairment charges
8,4515,0262,2553,0352,10968021,556
Operating expenses
(3,378)(1,818)(1,199)(1,351)(903)(456)(9,105)
Impairment (charges) / benefits
(565)(343)(4)(56)7243(853)
Profit before income tax
4,5082,8651,0521,6281,27826711,598
Income tax expense
(1,353)(862)(316)(462)(361)(175)(3,529)
Net profit attributable to non-controlling interests
---(7)--(7)
Cash earnings for the period
3,1552,0037361,159917928,062
Net cash earnings adjustments
(116)(10)160-(14)(92)(72)
Net profit for the period attributable to
owners of Westpac Banking Corporation
3,0391,9938961,159903-7,990
Total assets
377,457153,07835,237103,08081,285101,738851,875
Total liabilities
202,689111,38541,431118,87571,432244,721790,533
Half Year Sept 18
Half Year March 18
Full Year Sept 18
Full Year Sept 17

Note 1. Interest spread and margin analysis (cash earnings basis)
Half Year
Sept 18
Half Year
March 18
Full Year
Sept 18
Full Year
Sept 17
Group
Average interest-earning assets ($m)767,011752,294
Net interest income ($m)8,30115,704
Interest spread2.00%1.91%
Benefit of net non-interest bearing assets, liabilities and equity0.17%0.18%
Net interest margin2.17%2.09%
Analysis by division
Average interest-earning assets ($m)
Consumer Bank341,604330,114
Business Bank145,822142,773
BT Financial Group 18,37117,563
Westpac Institutional Bank85,91183,558
Westpac New Zealand (A$)78,77480,502
Group Businesses96,52997,784
Group total767,011752,294
Westpac New Zealand (NZ$)86,03985,818
Net interest income ($m)
Consumer Bank4,0407,638
Business Bank2,0213,885
BT Financial Group 285511
Westpac Institutional Bank6751,328
Westpac New Zealand (A$)8431,629
Group Businesses437713
Group total8,30115,704
Westpac New Zealand (NZ$)9221,738
Interest margin
Consumer Bank2.37%2.31%
Business Bank2.78%2.72%
BT Financial Group 3.11%2.91%
Westpac Institutional Bank1.58%1.59%
Westpac New Zealand (NZ$)2.15%2.03%
Group Businesses0.91%0.73%
Group total2.17%2.09%

Note 2. Average balance sheet (cash earnings basis)
AverageInterestAverageAverageInterestAverage
balance ratebalance rate
$m$m%$m$m%
Assets
Interest earning assets
Receivables due from other financial institutions5,934491.7
Trading securities and other financial assets designated at
fair value
23,8602752.3
Available-for-sale securities61,0239303.1
Regulatory deposits with central banks overseas95891.9
Loans and other receivables675,23614,8404.4
Total interest earning assets and interest income767,01116,1034.2
Non-interest earning assets
Cash, receivables due from other financial institutions and
regulatory deposits
2,459
Derivative financial instruments34,130
Life insurance assets10,753
All other assets61,643
Total non-interest earning assets108,985
Total assets875,996
Liabilities
Interest bearing liabilities
Payables due to other financial institutions19,5711531.6
Deposits and other borrowings494,8714,3681.8
Loan capital17,9353764.2
Other interest bearing liabilities176,3992,9053.3
Total interest bearing liabilities and interest expense708,7767,8022.2
Non-interest bearing liabilities
Deposits and payables due to other financial institutions47,978
Derivative financial instruments36,916
Life insurance policy liabilities9,013
All other liabilities12,248
Total non-interest bearing liabilities106,155
Total liabilities814,931
Shareholders' equity61,051
Non-controlling interests14
Total equity61,065
Total liabilities and equity875,996
Loans and other receivables
Australia574,35712,7794.5
New Zealand72,8071,7364.8
Other overseas28,0723252.3
Deposits and other borrowings
Australia419,7863,5801.7
New Zealand50,2725772.3
Other overseas24,8132111.7
Half YearHalf Year
30 September 201831 March 2018

AverageInterestAverageAverageInterestAverage
balance ratebalance rate
$m$m%$m$m%
Assets
Interest earning assets
Receivables due from other financial institutions9,1231101.2
Trading securities and other financial assets designated at
fair value
25,8705582.2
Available-for-sale securities58,2081,7953.1
Regulatory deposits with central banks overseas1,035171.6
Loans and other receivables658,05828,7744.4
Total interest earning assets and interest income752,29431,2544.2
Non-interest earning assets
Cash, receivables due from other financial institutions and
regulatory deposits
2,000
Derivative financial instruments37,673
Life insurance assets12,447
All other assets60,111
Total non-interest earning assets112,231
Total assets864,525
Liabilities
Interest bearing liabilities
Payables due to other financial institutions18,8332791.5
Deposits and other borrowings484,7138,8681.8
Loan capital17,2086934.0
Other interest bearing liabilities174,1705,7103.3
Total interest bearing liabilities and interest expense694,92415,5502.2
Non-interest bearing liabilities
Deposits and payables due to other financial institutions46,099
Derivative financial instruments42,780
Life insurance policy liabilities10,560
All other liabilities11,586
Total non-interest bearing liabilities111,025
Total liabilities805,949
Shareholders' equity58,556
Non-controlling interests20
Total equity58,576
Total liabilities and equity864,525
Loans and other receivables
Australia557,86524,7834.4
New Zealand72,9383,4704.8
Other overseas27,2555211.9
Deposits and other borrowings
Australia409,5867,3441.8
New Zealand51,0421,1732.3
Other overseas24,0853511.5
Full YearFull Year
30 September 201830 September 2017

Note 3. Net interest income (cash earnings basis)
% Mov't% Mov't
$m
Half Year
Sept 18
Half Year
March 18
Sept 18 -
Mar 18
Full Year
Sept 18
Full Year
Sept 17
Sept 18 -
Sept 17
Interest income
Cash and balances with central banks140241
Receivables due from other financial institutions49110
Net ineffectiveness on qualifying hedges--
Trading securities and financial assets designated at fair value275558
Available-for-sale securities9301,795
Loans14,67828,504
Regulatory deposits with central banks overseas917
Other interest income2229
Total interest income16,10331,254
Interest expense
Payables due to other financial institutions(153)(279)
Deposits and other borrowings(4,368)(8,868)
Trading liabilities(564)(1,898)
Debt issues(2,088)(3,585)
Loan capital(376)(693)
Bank levy(186)(95)
Other interest expense(67)(132)
Total interest expense(7,802)(15,550)
Total net interest income8,30115,704

Note 4. Non-interest income (cash earnings basis)
% Mov't% Mov't
$m
Half Year
Sept 18
Half Year
March 18
Sept 18 -
Mar 18
Full Year
Sept 18
Full Year
Sept 17
Sept 18 -
Sept 17
Fees and commissions
Facility fees6791,333
Transaction fees and commissions received5531,193
Other non-risk fee income 116229
Total fees and commissions1,3482,755
Wealth management and insurance income
Life insurance and funds management net operating income8231,600
General insurance and lenders mortgage insurance net operating
income
106210
Total wealth management and insurance income9291,810
Trading income5071,217
Other income
Dividends received from other entities12
Net gain on disposal of assets106
Net gain/(loss) on hedging overseas operations--

Net gain/(loss) on derivatives held for risk management purposes14(30)
Net gain/(loss) on financial instruments designated at fair value2611
Net gain/(loss) on disposal of controlled entities(9)-
Rental income on operating leases1432
Share of associates net profit(3)30
Other1319
Total other income6670
Total non-interest income2,8505,852
Wealth management and insurance income reconciliation
% Mov't% Mov't
$m
Half Year
Sept 18
Half Year
March 18
Sept 18 -
Mar 18
Full Year
Sept 18
Full Year
Sept 17
Sept 18 -
Sept 17
BTFG non-interest income8981,744
Net commission, premium, fee and banking income(78)(147)
BTFG wealth management and insurance income8201,597
NZ wealth management and insurance income77148
WIB wealth management income3293
CB and BB wealth management and insurance income-(28)
Total wealth management and insurance income 9291,810

Note 5. Operating expenses (cash earnings basis)
% Mov't% Mov't
$m
Half Year
Sept 18
Half Year
March 18
Sept 18 -
Mar 18
Full Year
Sept 18
Full Year
Sept 17
Sept 18 -
Sept 17
Staff expenses
Employee remuneration, entitlements and on-costs2,1194,098
Superannuation expense197380
Share based payments48113
Restructuring costs3475
Total staff expenses2,3984,666

Occupancy expenses
Operating lease rentals319649
Depreciation of property and equipment85179
Other71134
Total occupancy expenses475962
Technology expenses
Amortisation and impairment of software assets303628
Depreciation and impairment of IT equipment73158
Technology services341639
Software and maintenance and licenses185313
Telecommunications102190
Data processing3880
Total technology expenses1,0422,008
Other expenses
Professional and processing services385755
Amortisation and impairment of intangible assets1810
Postage and stationery95217
Advertising93155
Credit card loyalty programs70152
Non-lending losses4073
Other expenses38107
Total other expenses7391,469
Operating expenses4,6549,105