WNZL Disclosure Statement – 31 March 2019
Westpac
New Z ealand
Limited
Disclosure Statement
For the six months ended 31 March 2019
This page has been intentionally left blank
Westpac New Zealand Limited 3
Contents
Westpac New Zealand sustainability performance4
Directors’ statement5
Financial statements
Income statement6Note 6 Provisions for expected credit losses22
Statement of comprehensive income6Note 7 Deposits and other borrowings24
Balance sheet7Note 8 Debt issues24
Statement of changes in equity8Note 9 Related entities24
Statement of cash flows9Note 10 Fair value of financial assets and liabilities25
Note 1 Statement of accounting policies10
Note 2 Net interest income19
Note 11 Credit related commitments, contingent
assets and contingent liabilities
28
Note 3 Non-interest income20Note 12 Segment reporting29
Note 4 Impairment charges/(benefits)21
Note 5 Loans21
Registered bank disclosures
i. General information31
ii. Additional financial disclosures33
v. Concentration of credit exposures to individual
counterparties
52
iii. Asset quality38vi. Insurance business53
iv. Capital adequacy under the internal models
based approach, and regulatory liquidity ratios
41
Conditions of registration54
Independent auditor’s review report56
Glossary of terms
Certain information contained in this Disclosure Statement is required by the Registered Bank Disclosure Statements (New Zealand Incorporated
Registered Banks) Order 2014 (as amended) (‘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.
4 Westpac New Zealand Limited
Westpac New Zealand sustainability performance
Our purpose is to help our customers financially, to grow a better New Zealand
We are committed to creating shared value – for our customers,
our shareholders, our people and our communities. We do this
through our core business, which is focused on helping our
customers grow their financial wellbeing, and more widely by using
our financial and economic expertise to generate positive
economic, social and environmental outcomes for our customers
and New Zealand.
Our 2020 sustainability strategy focuses on:
Growing New Zealanders’ financial wellbeing
Taking action on climate change
Being a responsible business.
Grow New Zealanders’ financial wellbeing
Increased economic participation and inclusive prosperity is
beneficial to all. We want all New Zealanders to be financially
secure and independent, enabling them to reach their full potential.
We are aiming to 1. Grow the financial capability of our communities
and our people by integrating financial capability into everyday
banking, and 2. Grow financial independence by helping New
Zealanders participate in the economy and grow their incomes.
2020 targetsProgress
1.20,000 financial education workshop
participants
10,043
participants
p
2.Introduce a new product or service to
tackle financial exclusion and poverty
Nil
1
3.Provide $300m in lending to social and
affordable housing
$202m
1
New target
In addition to the above results, key highlights in the six months to
31 March 2019 include:
Supporting the Middlemore Foundation’s three-year Mana-ā-
Riki pilot programme, which takes an integrated approach to
reducing inequality and improving health and educational
outcomes in South Auckland.
Entering an agreement to support Dunedin-based microfinance
provider, The Moray Foundation, to expand its services of small
no interest loans to help people who can’t access credit from
mainstream banking.
Our CashNav app continues to help over 85,000 customers
track, categorise and benchmark their spending.
Take action on climate change
We want to lead New Zealand’s transition to a resilient, low-
emissions economy that continues to grow to the benefit of future
generations.
2020 targetsProgress
1.Reduce our operational emissions by
25% (2016 baseline)
14% (FY18)
2.Convert 30% of our car fleet to
electric vehicles or PHeV
1
24%
3.Provide $2 billion in lending to climate
change solutions
$1.5b
1
Plug in Hybrid electric Vehicles
We recognise climate change is a major threat to our environment,
economy and wellbeing. However, it also presents opportunities for
new products and services, technologies and jobs. We believe
business has a major role to play. Our strategy is to actively address
climate change with urgency, reducing and disclosing our own
emissions and exposures and helping our customers manage the
transition to a low carbon economy. We also want to ensure capital
flows to the parts of the economy where it is needed to facilitate
that transition.
In addition to the above results, key highlights in the six months to
31 March 2019 include:
As one of the founding members of the Climate Leaders
Coalition, we are one of 77 New Zealand companies committed
to measuring and reporting our own greenhouse gas emissions,
and working with suppliers to reduce emissions.
In late 2018, we supported the launch of the Aotearoa Circle, a
public-private initiative to halt and reverse the decline of New
Zealand’s natural capital. We co-chair the Sustainable Finance
Forum stream of the Circle.
Launching a carbon calculator for farmers, with Meridian
Energy, developed by Lincoln University’s Agribusiness and
Economics Research Unit (AERU) and Agrilink NZ.
Be a responsible business
We want to act responsibly throughout our business, to enhance
New Zealand’s wellbeing through everything we do.
2020 targetsProgress
1.Raise $3 million for Westpac
Rescue Choppers
$1.7m
2.50% Women in Leadership51.3%
3.Introduce a Supply Chain
Responsible Sourcing Assessment in
100% of Supplier Risk Assessments
81%
In addition to the above results, key highlights in the six months to
31 March 2019 include:
Becoming the first New Zealand bank to become an accredited
Living Wage Employer.
Sole platinum sponsor of Rainbow Excellence Awards,
reflecting our commitment to our LGBTI+ community.
For more information on our approach to sustainability please visit
www.westpacsustainability.co.nz
To read the Westpac Climate Change Impact report, visit:
https://www.westpac.co.nz/climateimpactreport
Westpac New Zealand Limited 5
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 2019:
(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 on page 54;
(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
Philippa Greenwood
Peter King
Jonathan Mason
Christopher Moller
Mary Quin
Dated this 23
rd
day of May 2019
Income statement for the six months ended 31 March 2019
6 Westpac New Zealand Limited
THE BANKING GROUP
Six Months
1,2
Six Months
2
EndedEnded
31 Mar 1931 Mar 18
$ millionsNoteUnauditedUnaudited
Interest income2 2,043 1,971
Interest expense2 (1,060) (1,066)
Net interest income 983 905
Net fees and commissions income3 143 171
Other income3 45 10
Net operating income before operating expenses and impairment charges 1,171 1,086
Operating expenses (468) (446)
Impairment (charges)/benefits4 (14) (27)
Profit before income tax 689 613
Income tax expense (180) (171)
Net profit attributable to the owners of the Banking Group 509 442
1
The income statement for 31 March 2019 reflects the adoption of NZ IFRS 9 Financial Instruments (‘NZ IFRS 9’) and NZ IFRS 15 Revenue from Contracts with
Customers (‘NZ IFRS 15’). Comparatives have not been restated. Refer to Note 1 for further information.
2
In the current period, the Banking Group has disaggregated the non-interest income line on the income statement into two separate lines for net fees and
commissions income and other income. The Banking Group has also reclassified credit card loyalty program expense from operating expenses to net fees and
commissions income. Comparatives have been restated. Refer to Note 1 for further information.
The above income statement should be read in conjunction with the accompanying notes.
Statement of comprehensive income for the six months ended 31 March 2019
THE BANKING GROUP
Six Months
1
Six Months
EndedEnded
31 Mar 1931 Mar 18
$ millions
UnauditedUnaudited
Net profit attributable to the owners of the Banking Group 509 442
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Gains/(losses) recognised in equity on:
Available-for-sale securities - 2
Investment securities (6) -
Cash flow hedging instruments (82) (10)
Transferred to income statement:
Cash flow hedging instruments 21 29
Income tax on items taken to or transferred from equity:
Available-for-sale securities reserve - (1)
Investment securities reserve 2 -
Cash flow hedge reserve 17 (5)
Items that will not be reclassified subsequently to profit or loss
Remeasurement of defined benefit obligation (net of tax) (8) (2)
Other comprehensive income for the period (net of tax) (56) 13
Total comprehensive income attributable to the owners of the Banking Group 453 455
1
The statement of comprehensive income for 31 March 2019 reflects the adoption of NZ IFRS 9 and NZ IFRS 15. Comparatives have not been restated. Refer to Note 1
for further information.
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
Balance sheet as at 31 March 2019
Westpac New Zealand Limited 7
THE BANKING GROUP
31 Mar 19
1,2
30 Sep 18
2
$ millionsNoteUnauditedAudited
Assets
Cash and balances with central banks 2,160 1,353
Collateral paid 294 70
Trading securities 1,265 1,151
Derivative financial instruments 288 585
Available-for-sale securities - 3,810
Investment securities 3,992 -
Loans5 82,058 80,378
Other financial assets 622 225
Due from related entities 1,326 1,319
Property and equipment 135 144
Deferred tax assets 184 156
Intangible assets 621 629
Other assets 59 51
Total assets 93,004 89,871
Liabilities
Collateral received 215 476
Deposits and other borrowings7 65,114 63,102
Other financial liabilities 443 560
Derivative financial instruments 345 181
Debt issues8 14,976 13,725
Current tax liabilities 29 96
Provisions 101 106
Other liabilities 95 82
Total liabilities excluding related entities liabilities 81,318 78,328
Due to related entities 1,795 1,643
Loan capital 2,574 2,622
Total related entities liabilities 4,369 4,265
Total liabilities 85,687 82,593
Net assets 7,317 7,278
Shareholder's equity
Share capital 6,600 5,100
Reserves (99) (51)
Retained profits 816 2,229
Total shareholder's equity 7,317 7,278
1
The balance sheet for 31 March 2019 reflects the adoption of NZ IFRS 9 and NZ IFRS 15. Comparatives have not been restated. Refer to Note 1 for further
information.
2
In the current year, balances from receivables due from other financial institutions and payables due to other financial institutions have been reclassified to line
items of a similar nature on the balance sheet and to collateral paid and collateral received where relevant. Amounts in other assets and other liabilities have been
reclassified to other financial assets and other financial liabilities where relevant. Comparatives have been restated. Refer to Note 1 for further information.
The above balance sheet should be read in conjunction with the accompanying notes.
Statement of changes in equity for the six months ended 31 March 2019
8 Westpac New Zealand Limited
THE BANKING GROUP
Reserves
Available-
for-saleInvestmentCash Flow
Share SecuritiesSecuritiesHedgeRetained
$ millions
Capital ReserveReserveReserveProfitsTotal
As at 1 October 2017 (Audited) 3,750 9 - (74) 3,165 6,850
Six months ended 31 March 2018 (Unaudited)
Net profit attributable to the owners of the Banking Group - - - - 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:
Ordinary share capital issued 1,350 - - - - 1,350
Dividends paid on ordinary shares - - - - (1,350) (1,350)
As at 31 March 2018 (Unaudited) 5,100 10 - (60) 2,255 7,305
As at 30 September 2018 (Audited) 5,100 9 - (60) 2,229 7,278
Impact on adoption of new accounting standards
1
- (9) 9 - (24) (24)
As at 1 October 2018 (Unaudited) 5,100 - 9 (60) 2,205 7,254
Six months ended 31 March 2019 (Unaudited)
Net profit attributable to the owners of the Banking Group - - - - 509 509
Net gains/(losses) from changes in fair value - - (6) (82) - (88)
Income tax effect - - 2 23 - 25
Transferred to income statement - - - 21 - 21
Income tax effect - - - (6) - (6)
Remeasurement of defined benefit obligations - - - - (11) (11)
Income tax effect - - - -
3
3
Total comprehensive income for the six months
ended 31 March 2019 - - (4) (44) 501 453
Transactions with owners:
Ordinary share capital issued (refer to Note 9) 1,500 - - - -
1,500
Dividends paid on ordinary shares (refer to Note 9) - - - - (1,890) (1,890)
As at 31 March 2019 (Unaudited) 6,600 - 5 (104) 816 7,317
1
The statement of changes in equity for 31 March 2019 reflects the adoption of NZ IFRS 9 and NZ IFRS 15. Refer to Note 1 for further information.
The above statement of changes in equity should be read in conjunction with the accompanying notes.
Statement of cash flows for the six months ended 31 March 2019
Westpac New Zealand Limited 9
THE BANKING GROUP
Six Months
1,2
Six Months
2
EndedEnded
31 Mar 1931 Mar 18
$ millionsUnauditedUnaudited
Cash flows from operating activities
Interest received 2,039 1,965
Interest paid (1,096) (1,118)
Non-interest income received 166 167
Operating expenses paid (439) (429)
Income tax paid (243) (217)
Cash flows from operating activities before changes in operating assets and liabilities 427 368
Net (increase)/decrease in:
Collateral paid (224) 230
Trading securities (114) (29)
Loans (1,692) (1,891)
Other financial assets (8) (24)
Due from related entities (74) 391
Other assets (3) (3)
Net increase/(decrease) in:
Collateral received (261) 158
Deposits and other borrowings 2,012 3,185
Other financial liabilities (97) 13
Due to related entities 73 109
Other liabilities 4 (9)
Net movement in external and related entity derivative financial instruments 5 (69)
Net cash provided by/(used in) operating activities 48 2,429
Cash flows from investing activities
Proceeds from available-for-sale securities - 499
Purchase of investment securities (1,535) -
Proceeds from investment securities 1,363 -
Proceeds from disposal of associates 48 -
Purchase of capitalised computer software (21) (30)
Purchase of property and equipment (15) (16)
Proceeds from disposal of property and equipment 3 -
Net cash provided by/(used in) investing activities (157) 453
Cash flows from financing activities
Issue of ordinary share capital 1,500 1,350
Net movement in due to related entities (25) (158)
Proceeds from debt issues 1,721 550
Repayments of debt issues - (2,615)
Dividends paid to ordinary shareholders (1,890) (1,350)
Net cash provided by/(used in) financing activities 1,306 (2,223)
Net increase/(decrease) in cash and cash equivalents 1,197 659
Cash and cash equivalents at beginning of the period 1,353 1,659
Cash and cash equivalents at end of the period 2,550 2,318
Cash and cash equivalents at end of the period comprise:
Cash on hand 210 224
Balances with central banks 1,950 1,750
Interbank lending classified as cash and cash equivalents
3
390 344
Cash and cash equivalents at end of the period 2,550 2,318
1
The statement of cash flows for 31 March 2019 reflects the adoption of NZ IFRS 9 and NZ IFRS 15. Comparatives have not been restated. Refer to Note 1 for further
information.
2
In the current year, balances from receivables due from other financial institutions and payables due to other financial institutions have been reclassified to line
items of a similar nature on the balance sheet and to collateral paid and collateral received where relevant. Amounts in other assets and other liabilities have been
reclassified to other financial assets and other financial liabilities where relevant. Comparatives have been restated. Refer to Note 1 for further information.
3
Interbank lending is included within other financial assets on the balance sheet.
The above statement of cash flows should be read in conjunction with the accompanying notes.
Notes to the financial statements
10 Westpac New Zealand Limited
Note 1 Statement of accounting policies
These condensed consolidated interim financial statements (‘financial statements’) have been prepared and presented in accordance with the
Order and Generally Accepted Accounting Practice, 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 2018. These financial statements comply with International Accounting Standard 34 Interim Financial Reporting as issued by the
International Accounting Standards Board (‘IASB’).
1. Financial statements preparation
These financial statements have been prepared under the historical cost convention, as modified by applying fair value accounting to available-for-
sale securities/investment securities and financial assets and financial liabilities (including derivative instruments) measured at fair value through
income statement (‘FVIS’) or in other comprehensive income (‘FVOCI’). The going concern concept has been applied.
All amounts in these financial statements have been rounded to the nearest million dollars unless otherwise stated.
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.
All policies have been applied on a basis consistent with that used in the financial year ended 30 September 2018, except as set out below.
The areas of judgment, estimates and assumptions in these financial statements, including the key sources of estimation uncertainty, are consistent
with those in the Disclosure Statement for the year ended 30 September 2018, with the exception of those relevant to the Banking Group due to the
adoption of NZ IFRS 9 Financial instruments (September 2014) (‘NZ IFRS 9’). These include the concept of a significant increase in credit risk and the
use of forward looking information as described in the “Amendments to Accounting Standards effective this period – NZ IFRS 9 Financial
Instruments (September 2014) (NZ IFRS 9)” section.
Notes to the financial statements
Westpac New Zealand Limited 11
Note 1 Statement of accounting policies (continued)
2. Voluntary presentation changes
Balance sheet
The following voluntary presentation changes to the balance sheet (and related notes) have been made to improve consistency and provide more
relevant information to the users of the financial statements by reporting balances of a similar nature together in the same place in the balance
sheet. These changes have no effect on the measurement of these items and therefore had no impact on retained earnings or net profit.
These changes are:
the addition of new balance sheet lines for ‘collateral paid’, ‘other financial assets’, ‘collateral received’ and ‘other financial liabilities’;
removal of the balance sheet line ‘receivables due from other financial institutions’ and reclassification to ‘collateral paid’ and ‘other financial
assets’;
removal of the balance sheet line ‘payables due to other financial institutions’ and reclassification to ‘collateral received’ and ‘other financial
liabilities’; and
reclassification of financial assets or financial liabilities included in other assets or other liabilities respectively to other financial assets and
other financial liabilities respectively.
Collateral paid/collateral received includes cash provided to/received from counterparties as collateral over financial liabilities/assets arising from
derivative contracts.
Comparatives have been restated for these voluntary presentation changes and are detailed as follows:
THE BANKING GROUP
30 Sep 18
$ millions
Reported
Presentation
changesRestated
Assets
Receivables due from other financial institutions 70 (70) -
Collateral paid - 70 70
Other financial assets
- 225 225
Other assets 276 (225) 51
All other assets 89,525 - 89,525
Total assets 89,871 - 89,871
Liabilities
Payables due to other financial institutions 497 (497) -
Collateral received - 476 476
Other financial liabilities
- 560 560
Other liabilities 621 (539)
82
All other liabilities
81,475 - 81,475
Total liabilities 82,593 -
82,593
Income statement
The following voluntary presentation changes to the income statement (and related notes) have been made to provide more relevant information to
the users of the financial statements. These changes have no effect on the measurement of these items and therefore had no impact on retained
earnings or net profit.
a. Net interest income
the components of interest income and interest expense relating to the balance sheet reclassifications have been restated accordingly. Note
that there was no net impact to total interest income, total interest expense or to total net interest income. Comparatives have been restated
for these voluntary presentation changes. The details are provided in Note 2.
in addition, to comply with disclosure requirements, interest income derived from financial assets measured at amortised cost and at FVOCI
has been presented separately from other interest income. For consistency, interest expense is presented in the same way. The details are
provided in Note 2.
Notes to the financial statements
12 Westpac New Zealand Limited
Note 1 Statement of accounting policies (continued)
b. Non-interest income and operating expenses
disaggregating the non-interest income line on the income statement into two separate lines for net fees and commissions income and other
income.
separating net fees and commissions income in the non-interest income note into fees and commissions income and fees and commissions
expenses.
reclassifying credit card loyalty program expense from operating expenses to the new fees and commissions expenses category in the non-
interest income note.
Fees and commissions expenses include those expenses that are incremental external costs that vary directly with the provision of goods or services
to customers (excluding expenses which would qualify as transaction costs relating to the issue, acquisition or disposal of a financial asset or a
financial liability which are deferred and included in the effective interest rate and recognised in net interest income).
An incremental cost is one that would not have been incurred if a specific good or service had not been provided to a specific customer.
Comparatives have been restated for these voluntary presentation changes and are detailed in the following table.
THE BANKING GROUP
Six months ended 31 Mar 18
$ millions
Reported
Presentation
changesRestated
Income statement
Net interest income 905 - 905
Non-interest income 195 (195) -
Net fees and commissions income - 171 171
Other income - 10 10
Net operating income before operating expenses and impairment charges 1,100 (14) 1,086
Operating expenses (460) 14 (446)
Impairment (charges)/benefits (27) - (27)
Profit before income tax 613 - 613
Income tax expense (171) - (171)
Net profit attributable to the owners of the Banking Group 442 - 442
Note 3: Non-interest income (extract)
Net fees and commissions income
Facility fees 30 - 30
Transaction fees and commissions 133 12 145
Other non-risk fee income 22 - 22
Fees and commissions income 185 12 197
Credit card loyalty programs - (14) (14)
Transaction fee related expenses - (12) (12)
Fees and commissions expenses - (26) (26)
Net fees and commissions income 185 (14) 171
Notes to the financial statements
Westpac New Zealand Limited 13
Note 1 Statement of accounting policies (continued)
3. Amendments to Accounting Standards effective this period
NZ IFRS 9 Financial Instruments (September 2014) (NZ IFRS 9)
The Banking Group adopted NZ IFRS 9 on 1 October 2018. The adoption of NZ IFRS 9 has been applied by adjusting the opening balance sheet at 1
October 2018, with no restatement of comparatives as permitted by the standard. The adoption of NZ IFRS 9 reduced retained earnings at 1 October
2018 by $27 million (net of tax), primarily due to the increase in impairment provisions under the new standard.
The key changes in accounting policies and the impact of transition are outlined as follows.
a. Impairment
NZ IFRS 9 introduces a revised impairment model which requires entities to recognise expected credit losses (‘ECL’) based on unbiased forward
looking information, replacing the incurred loss model under NZ IAS 39 Financial instruments: Recognition and Measurement (‘NZ IAS 39’) which
only recognised impairment if there was objective evidence that a loss had been incurred. The revised impairment model applies to all financial
assets at amortised cost, investment securities, and credit commitments.
Measurement
The Banking Group calculates the provisions for ECL based on a three stage approach. ECL are a probability-weighted estimate of the cash shortfalls
expected to result from defaults over the relevant timeframe. They are determined by evaluating a range of possible outcomes and taking into
account the time value of money, past events, current conditions and forecasts of future economic conditions.
The models use three main components to determine the ECL (as well as the time value of money) including:
Probability of default (‘PD’): the probability that a counterparty will default;
Loss given default (‘LGD’): the loss that is expected to arise in the event of a default; and
Exposure at default (‘EAD’): the estimated outstanding amount of credit exposure at the time of the default.
i. Model stages
The three stages are as follows:
Stage 1: 12 months ECL - performing
For financial assets where there has been no significant increase in credit risk since origination, a provision for 12 months ECL is recognised.
Interest revenue is calculated based on the gross carrying amount of the financial asset.
Stage 2: Lifetime ECL – performing
For financial assets where there has been a significant increase in credit risk since origination but where the asset is still performing, a provision
for lifetime ECL is recognised.
Determining when a financial asset has experienced a significant increase in credit risk since origination is a critical accounting judgement which
is primarily based on changes in internal customer risk grades since origination of the facility. A change in an internal customer risk grade is
based on both quantitative and qualitative factors. The number of changes in the internal customer risk grade that the Banking Group uses to
represent a significant increase in credit risk is determined on a sliding scale where the number of changes will typically be higher for an
exposure with a lower credit risk grade compared to an exposure with a higher credit risk grade.
The Banking Group does not rebut the presumption that instruments that are 30 days past due have experienced a significant increase in credit
risk but this is used as a backstop rather than the primary indicator.
The Banking Group does not apply the low credit risk exemption which assumes investment grade facilities do not have a significant increase in
credit risk.
Interest revenue is calculated based on the gross carrying amount of the financial asset.
Stage 3: Lifetime ECL – non-performing
For financial assets that are non-performing, a provision for lifetime ECL is recognised. Indicators include a breach of contract with the Banking
Group such as a default on interest or principal payments, a borrower experiencing significant financial difficulties or observable economic
conditions that correlate to defaults on a group of loans.
Interest revenue is calculated based on the carrying amount net of the provision for ECL rather than the gross carrying amount.
Notes to the financial statements
14 Westpac New Zealand Limited
Note 1 Statement of accounting policies (continued)
ii. Collective and individual assessment
Financial assets that are in stages 1 and 2 are assessed on a collective basis as are financial assets in stage 3 below specified thresholds. Those
financial assets in stage 3 above the specified thresholds are assessed on an individual basis.
iii. Expected life
Expected credit losses are determined as a lifetime expected credit loss in stages 2 and 3.
In considering the lifetime timeframe, the standard generally requires use of the remaining contractual life adjusted where appropriate for
prepayments, extension and other options. For certain revolving credit facilities which include both a drawn and undrawn component (e.g. credit
cards and revolving lines of credit), the Banking Group’s contractual ability to demand repayment and cancel the undrawn commitment does not
limit our exposure to credit losses to the contractual notice period. For these facilities, lifetime is based on historical behaviour.
iv. Movement between stages
Assets may move in both directions through the stages of the impairment model. Assets previously in stage 2 may move back to stage 1 if it is no
longer considered that there has been a significant increase in credit risk. Similarly, assets in stage 3 may move back to stage 2 if they are no longer
assessed to be non-performing.
v. Forward looking information
The measurement of ECL for each stage and the assessment of significant increase in credit risk consider information about past events and current
conditions as well as reasonable and supportable projections of future events and economic conditions. The estimation of forward looking
information is a critical accounting judgement. The Banking Group considers three future macroeconomic scenarios including a base case scenario
along with upside and downside scenarios.
The macroeconomic variables used in these scenarios, based on current economic forecasts, include (but are not limited to) unemployment rates,
real gross domestic product growth rates and residential and commercial property price indices.
Base case scenario
This scenario utilises the internal Westpac economics forecast used for strategic decision making and forecasting. This assumes low GDP
growth, declines in residential property price indices and the cash rate.
Upside scenario
This scenario represents a modest improvement on the base case scenario.
Downside scenario
This scenario is used in the Banking Group’s stress testing and represents a moderate recession. In this scenario, the economy weakens with
declines in GDP growth, commercial property prices and more significant declines in residential property prices. It also assumes an increase in
the unemployment rate. In a deteriorating economy there may be times when a more severe downside scenario is required which will be
monitored as part of the governance framework.
The macroeconomic scenarios are weighted based on the Banking Group’s best estimate of the relative likelihood of each scenario. The weighting
applied to each of the three forward looking macroeconomic scenario takes into account historical frequency, current trends, and forward looking
conditions. The macroeconomic variables and probability weightings of the three scenarios are subject to the approval of the Banking Group’s Chief
Financial Officer and Chief Risk Officer with oversight from the Board of Directors (and its Committees). Where appropriate, adjustments are made
to modelled outcomes to reflect reasonable and supportable information not already incorporated in the models.
Recognition
The ECL determined under NZ IFRS 9 are recognised as follows:
Loans at amortised cost: as a reduction of the carrying value of the financial asset through an offsetting provision account (refer to Notes 5 and
6);
Investment securities: in reserves in other comprehensive income with no reduction of the carrying value of the debt security itself (refer to the
statement of changes in equity); and
Credit commitments: as a provision.
Notes to the financial statements
Westpac New Zealand Limited 15
Note 1 Statement of accounting policies (continued)
b. Classification and measurement
NZ IFRS 9 replaced the classification and measurement model in NZ IAS 39 with a new model that categorises financial assets based on a) the
business model within which the assets are managed, and b) whether the contractual cash flows under the instrument represent solely payments of
principal and interest (‘SPPI’).
The Banking Group determines the business model at the level that reflects how groups of financial assets are managed. When assessing the
business model the Banking Group considers factors including how performance and risks are managed, evaluated and reported and the frequency
and volume of, and reason for, sales in previous periods, and expectations of sales in future periods.
When assessing whether contractual cash flows are SPPI, interest is defined as consideration primarily for the time value of money and the credit
risk of the principal outstanding. The time value of money is defined as the element of interest that provides consideration only for the passage of
time and not consideration for other risks or costs associated with holding the financial asset. Terms that could change the contractual cash flows
so that they may not meet the SPPI criteria include contingent and leverage features, non-recourse arrangements, and features that could modify
the time value of money.
Financial assets
i. Debt instruments
If the debt instruments have contractual cash flows that represent SPPI on the principal balance outstanding they are classified at:
amortised cost if they are held with a business model which is achieved through holding the financial asset to collect these cash flows; or
FVOCI if they are held with a business model which is achieved both through collecting these cash flows or selling the financial asset; or
FVIS if they are held with a business model which is achieved through selling the financial asset.
Debt instruments are also measured at FVIS where the contractual cash flows do not represent SPPI on the principal balance outstanding or where it
is designated at FVIS to eliminate or reduce an accounting mismatch.
Debt instruments at amortised cost are initially recognised at fair value and subsequently measured at amortised cost using the effective interest
rate method. They are presented net of provisions for ECL determined using the ECL model described above.
Debt instruments at FVOCI are measured at fair value with unrealised gains and losses recognised in other comprehensive income except for
interest income, impairment charges and foreign exchange gains and losses which are recognised in the income statement.
Impairment on debt instruments at FVOCI is determined using the ECL model described above and is recognised in the income statement with a
corresponding amount in other comprehensive income. There is no reduction of the carrying value of the debt security which remains at fair value.
The cumulative gain or loss recognised in other comprehensive income is subsequently recognised in the income statement when the instrument is
disposed.
Debt instruments at FVIS are measured at fair value with subsequent changes in fair value recognised in the income statement.
ii. Equity securities
Equity securities are measured at FVOCI where they:
are not held for trading; and
an irrevocable election is made by the Banking Group.
Otherwise, they are measured at FVIS.
Equity securities at FVOCI are measured at fair value with unrealised gains and losses recognised in other comprehensive income except for
dividend income which is recognised in the income statement. The cumulative gain or loss recognised in other comprehensive income is not
subsequently recognised in the income statement when the instrument is disposed.
Equity securities at FVIS are measured at fair value with subsequent changes in fair value recognised in the income statement.
Notes to the financial statements
16 Westpac New Zealand Limited
Note 1 Statement of accounting policies (continued)
Financial liabilities
Financial liabilities are measured at amortised cost if they are not held for trading or designated at FVIS otherwise they are measured at FVIS. This
remains unchanged from NZ IAS 39.
In the 2014 financial year, the Banking Group early adopted part of NZ IFRS 9 which relates to the recognition of the changes in fair value of financial
liabilities designated at fair value attributable to the Banking Group’s own credit risk in other comprehensive income (except where it would create
an accounting mismatch, in which case all changes in fair value are recognised in the income statement). As a result, the accounting for this remains
unchanged for the Banking Group.
c. Hedging
NZ IFRS 9 changes hedge accounting by increasing the eligibility of both hedged items and hedging instruments and introducing a more principles-
based approach to assessing hedge effectiveness. Adoption of the new hedge accounting model is optional until the IASB completes its accounting
for dynamic risk management project. Until this time, current hedge accounting under NZ IAS 39 can continue to be applied. The Banking Group has
applied the option to continue hedge accounting under NZ IAS 39, however the Banking Group has adopted the amended NZ IFRS 7 Financial
Instruments: Disclosures hedge accounting disclosures as required.
NZ IFRS 15 Revenue from Contracts with Customers (NZ IFRS 15)
The Banking Group adopted NZ IFRS 15 on 1 October 2018. It replaced NZ IAS 18 Revenue and related interpretations and applies to all contracts with
customers, except leases, financial instruments and insurance contracts. The standard provides a systematic approach to revenue recognition by
introducing a five-step model governing revenue measurement and recognition. This includes:
identifying the contract with customer;
identifying each of the performance obligations included in the contract;
determining the amount of consideration in the contract;
allocating the consideration to each of the identified performance obligations; and
recognising revenue as each performance obligation is satisfied.
The Banking Group has applied NZ IFRS 15 by increasing the opening balance of retained earnings at the date of initial application, 1 October 2018, by
$3 million (net of tax) with no comparatives restatement.
In addition, the Banking Group identified certain income and expenses which were previously reported on a net basis primarily within fees and
commission income which are now being presented on a gross basis.
Finally, certain facility fees have been reclassified from non-interest income to interest income.
Notes to the financial statements
Westpac New Zealand Limited 17
Note 1 Statement of accounting policies (continued)
Transition (NZ IFRS 9 and NZ IFRS 15)
a. Impact of the adoption of NZ IFRS 9 – impairment
The following table shows the impact of the adoption of NZ IFRS 9 on impairment balances.
$ millions
Provision on
loans
Provision for
credit
commitments
Loss allowance
on investment
securities
Provision on all
other financial
assets at
amortised costTotal
30 September 2018 - carrying amount 324 34 - - 358
Increase in provision for impairment 19 18 - - 37
1 October 2018 - NZ IFRS 9 carrying amount
343 52 - - 395
b. Impact of the adoption of NZ IFRS 9 - classification and measurement
Available-for-sale securities / Investment securities
The balance sheet line item previously named Available-for-sale securities has been renamed to Investment securities. Investment securities consist
of debt securities at FVOCI as they have contractual cash flows that represent SPPI and are held with a business model which is achieved both
through collecting these cash flows or selling the instruments.
Basis of measurement
There has been no change in the basis of measurement of financial assets and financial liabilities under NZ IFRS 9 as presented in the following table.
THE BANKING GROUP
30 Sep 20181 Oct 2018
NZ IAS 39 measurement basisNZ IFRS 9 measurement basis
$ millions
Amortised
cost
FVISFVOCITotal
Change in
measurement
basis under
NZ IFRS 9
Amortised
cost
FVISFVOCITotal
Financial assets
Cash and balances with central banks1,353--1,353No1,353--1,353
Collateral paid70--70No70--70
Trading securities-1,151-1,151No-1,151-1,151
Derivative financial instruments-585-585No-585-585
Available-for-sale/Investment securities--3,8103,810No--3,8103,810
Loans80,378--80,378No80,378--80,378
Other financial assets225--225No225--225
Due from related entities761558-1,319No761558-1,319
Total financial assets82,7872,2943,81088,89182,7872,2943,81088,891
Financial liabilities
Collateral received476--476No476--476
Deposits and other borrowings61,8841,218-63,102No61,8841,218-63,102
Other financial liabilities560--560No560--560
Derivative financial instruments-181-181No-181-181
Debt issues13,725--13,725No13,725--13,725
Due to related entities1,392251-1,643No1,392251-1,643
Loan capital2,622--2,622No2,622--2,622
Total financial liabilities80,6591,650-82,30980,6591,650-82,309
Notes to the financial statements
18 Westpac New Zealand Limited
Note 1 Statement of accounting policies (continued)
c.Reconciliation of the opening balance sheet
The table below reconciles the restated 30 September 2018 balance sheet to the 1 October 2018 opening balance sheet on adoption of NZ IFRS 9 and
NZ IFRS 15 showing separately the impact of adjustments relating to reclassification and remeasurement, including the related tax impacts.
THE BANKING GROUP
30 Sep 20181 Oct 2018
NZ IFRS 9 changes
$ millions
Restated carrying
amount
ReclassificationRemeasurement
NZ IFRS 15
changes
Opening
carrying amount
Assets
Cash and balances with central banks
1,353 - - - 1,353
Collateral paid
70 - - - 70
Trading securities
1,151 - - - 1,151
Derivative financial instruments
585 - - - 585
Available-for-sale securities
3,810 (3,810) - - -
Investment securities
- 3,810 - - 3,810
Loans
80,378 - (19) - 80,359
Other financial assets
225 - - - 225
Due from related entities
1,319 - - - 1,319
Property and equipment
144 - - - 144
Deferred tax assets
156 - 10 (1) 165
Intangible assets
629 - - - 629
Other assets
51 - - - 51
Total assets 89,871 - (9) (1) 89,861
Liabilities
Collateral received
476 - - - 476
Deposits and other borrowings
63,102 - - - 63,102
Other financial liabilities
560 - - (4) 556
Derivative financial instruments
181 - - - 181
Debt issues
13,725 - - - 13,725
Current tax liabilities
96 - - - 96
Provisions
106 - 18 - 124
Other liabilities
82
- - -
82
Total liabilities excluding related entities
liabilities
78,328 - 18 (4) 78,342
Due to related entities 1,643 - - - 1,643
Loan capital 2,622 - - - 2,622
Total related entities liabilities 4,265 - - - 4,265
Total liabilities 82,593 - 18 (4) 82,607
Net assets 7,278 - (27) 3 7,254
Shareholder's equity
Share capital
5,100 - - - 5,100
Reserves
(51)
- - -
(51)
Retained profits
2,229
- (27) 3
2,205
Total shareholder's equity 7,278 - (27) 3 7,254
As permitted by NZ IFRS 9 and NZ IFRS 15, comparatives have not been restated. Comparatives have been restated for voluntary presentation
changes as detailed in Section 2 ‘Voluntary presentation changes’ on page 11.
Notes to the financial statements
Westpac New Zealand Limited 19
Note 2 Net interest income5967-2 04-18
THE BANKING GROUP
Six Months
1,2
Six Months
2
EndedEnded
31 Mar 1931 Mar 18
$ millionsUnauditedUnaudited
Interest income
Financial assets measured at amortised cost or FVOCI
Cash and balances with central banks 12 13
Collateral paid 3 1
Available-for-sale securities - 73
Investment securities 78 -
Loans 1,933 1,855
Due from related entities 2 5
Total interest income from financial assets measured at amortised cost or FVOCI 2,028 1,947
Other
Trading securities 14 22
Due from related entities 1 2
Total other 15 24
Total interest income 2,043 1,971
Interest expense
Financial liabilities measured at amortised cost
Collateral received 3 2
Deposits and other borrowings 660 622
Debt issues 141 145
Due to related entities 20 21
Loan capital 71 71
Other interest expense 2 3
Total interest expense from financial liabilities measured at amortised cost 897 864
Other
Deposits and other borrowings 11 8
Debt issues 4 10
Due to related entities 1 -
Other interest expense
3
147 184
Total other 163 202
Total interest expense 1,060 1,066
Total net interest income 983 905
1
Reflects the adoption of NZ IFRS 9 and NZ IFRS 15. Comparatives have not been restated. Refer to Note 1 for further information.
2
In the current year, balances from receivables due from other financial institutions and payables due to other financial institutions have been reclassified to line
items of a similar nature on the balance sheet and to collateral paid and collateral received where relevant. Amounts in other assets and other liabilities have been
reclassified to other financial assets and other financial liabilities where relevant. Comparatives have been restated. Refer to Note 1 for further information.
3
Includes the net impact of treasury's interest rate and liquidity management activities.
Notes to the financial statements
20 Westpac New Zealand Limited
Note 3 Non-interest income5967-2 0 4-18
THE BANKING GROUP
Six Months
1,2
Six Months
2
EndedEnded
31 Mar 1931 Mar 18
$ millions
UnauditedUnaudited
Net fees and commissions income
Facility fees 25 30
Transaction fees and commissions 136 145
Other non-risk fee income 12 22
Fees and commissions income 173 197
Credit card loyalty programs (16) (14)
Transaction fee related expenses (14) (12)
Fees and commissions expenses (30) (26)
Net fees and commissions income 143 171
Other income
Net ineffectiveness on qualifying hedges - 4
Other non-interest income
3
45 6
Total other income 45 10
Total non-interest income 188 181
1
Reflects the adoption of NZ IFRS 15. Comparatives have not been restated. Refer to Note 1 for further information.
2
Comparatives have been restated for presentation changes. Refer to Note 1 for further information.
3
Westpac NZ Operations Limited sold its 25% shareholding in Paymark Limited to Ingenico Group S.A, resulting in a gain on sale of $40 million for the six months
ended 31 March 2019. Refer to Note 9 for details.
Fees and commissions income can be further disaggregated into the following operating segments and is consistent with the segment descriptions
detailed in Note 12:
THE BANKING GROUP
$ millions
Consumer
Banking and
Wealth
Commercial,
Corporate and
Institutional
Investments and
Insurance
Reconciling
ItemsTotal
Six months ended 31 March 2019 (Unaudited)
Fees and commissions income
Facility fees 15 7 - 3 25
Transaction fees and commissions 79 46 - 11 136
Other non-risk fee income 5 7 - - 12
Fees and commissions income 99 60 - 14 173
Fees and commissions expenses (28) - - (2) (30)
Net fees and commissions income 71 60 - 12 143
Six months ended 31 March 2018 (Unaudited)
Fees and commissions income
Facility fees 19 7 - 4 30
Transaction fees and commissions 80 37 - 28 145
Other non-risk fee income 8 8 - 6 22
Fees and commissions income 107 52 - 38 197
Fees and commissions expenses (23) - - (3) (26)
Net fees and commissions income 84 52 - 35 171
Notes to the financial statements
Westpac New Zealand Limited 21
Note 4 Impairment charges/(benefits)
The following table details impairment charges/(benefits) for the six months ended 31 March 2019 based on the requirements of NZ IFRS 9.
THE BANKING GROUP
Six Months
Ended
31 Mar 19
$ millionsUnaudited
Provisions raised/(released):
Performing (8)
Non-performing 14
Bad debts written-off/(recovered) directly to the income statement 8
Impairment charges/(benefits) 14
of which relates to:
Loans and credit commitments 14
Investment securities -
Impairment charges/(benefits) 14
Impairment charges/(benefits) on all other financial assets are not material to the Banking Group.
As comparatives have not been restated for the adoption of NZ IFRS 9, the following table details impairment charges/(benefits) for the six
months ended 31 March 2018 based on the requirements of NZ IAS 39. In subsequent reporting periods, as NZ IFRS 9 will have been effective for
this disclosure for all periods presented in the Disclosure Statement, this table will no longer be required.
THE BANKING GROUP
Six Months
Ended
31 Mar 18
$ millionsUnaudited
Individually assessed provisions raised 19
Reversal of previously recognised impairment charges (4)
Collectively assessed provisions raised/(released) 5
Bad debts written-off/(recovered) directly to the income statement 7
Total impairment charges/(benefits) 27
Note 5 Loans
THE BANKING GROUP
31 Mar 19
1,2
30 Sep 18
2
$ millions
UnauditedAudited
Residential mortgages 49,579 48,893
Other retail 3,807 3,928
Corporate 28,935 27,603
Other
94 278
Total gross loans 82,415 80,702
Provisions for ECL/provisions for impairment charges on loans (357) (324)
Total net loans 82,058 80,378
1
Reflects the adoption of NZ IFRS 9. Comparatives have not been restated. Refer to Note 1 for further information.
2
The Banking Group has changed the presentation of loan categories for consistency with the types of credit exposures disclosed in Section iii Asset Quality of the
Registered Bank Disclosures. This has no effect on the balance sheet or income statement. Comparatives have been restated.
As at 31 March 2019, $7,535 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’) (30 September 2018: $7,533
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 2018. As at 31 March 2019, the New
Zealand dollar equivalent of bonds issued by WSNZL under the CB Programme was $6,198 million (30 September 2018: $5,656 million).18
Notes to the financial statements
22 Westpac New Zealand Limited
Note 6 Provisions for expected credit losses
Loans and credit commitments
The following table reconciles the 31 March 2019 provision for ECL on loans and commitments based on the requirements of NZ IFRS 9.
THE BANKING GROUP
Unaudited
Performing
Non-
performing
$ millions
Stage 1Stage 2Stage 3
Collectively
assessed
provisions
Individually
assessed
provisionsTotal
Provision for impairment charges as at 30 September 2018 - - - 322 36 358
Restatement for adoption of NZ IFRS 9 103 203 89 (322) (36) 37
Restated provision for ECL as at 1 October 2018 103 203 89 - - 395
Net transfers in/(out) of stages
1
29 (33) 4 -
Reversals of previously recognised impairment charges - - (6) (6)
New financial assets originated 7 - - 7
Financial assets derecognised during the period (6) (20) (7) (33)
Changes in collective provisions due to amounts written off - - (22) (22)
Other charges/(credits) to the income statement
2
(30) 45 45 60
Total charges/(credits) to the income statement for ECL - (8) 14 6
Amounts written off from individually assessed provisions - - (2) (2)
Total provision for ECL on loans and credit commitments as
at 31 March 2019
103 195 101 399
Presented as:
Provision for ECL on loans (Refer to Note 5) 84 173 100 357
Provision for ECL on credit commitments 19 22 1 42
Total provision for ECL on loans and credit commitments as
at 31 March 2019
103 195 101 399
1
Represents the transfers between stages prior to remeasurement of the provision for ECL. The remeasurement of the provision for ECL due to transfers between
stages is included in 'other charges/(credits) to the income statement'.
2
Includes the impact on remeasurement of the provision for ECL due to changes in credit quality, which can result in transfers between stages. Refer to Note 1 for
further detail on model stages. Other impacts include net further lending/repayment, changes in the expected life, changes in future forecast economic
assumptions and other changes in models and assumptions.
The following table explains how changes in gross carrying amounts of loans during the period have contributed to changes in the provisions for
ECL on loans.
THE BANKING GROUP
Unaudited
Performing
Non-
performing
$ millions
Stage 1Stage 2Stage 3
Total
Total gross carrying amount at the beginning of the period 76,532 3,707 463 80,702
Net transfers in/(out) of stages (430) 288 142 -
Net further lending/repayment (368) 186 (33) (215)
New financial assets originated 6,662 - - 6,662
Financial assets derecognised during the period (4,381) (271) (58) (4,710)
Amounts written-off - - (24) (24)
Total gross carrying amount as at 31 March 2019 78,015 3,910 490 82,415
Provision for ECL as at 31 March 2019 (84) (173) (100) (357)
Total net carrying amount as at 31 March 2019 77,931 3,737 390 82,058
Notes to the financial statements
Westpac New Zealand Limited 23
Note 6 Provisions for expected credit losses (continued)
The provisions for ECL on loans and credit commitments disaggregated into the types of credit exposures have been disclosed in Section iii Asset
quality of the Registered bank disclosures.
As comparatives have not been restated for the adoption of NZ IFRS 9, the following table reconciles the 30 September 2018 provision for
impairment charges on loans and credit commitments based on the requirements of NZ IAS 39. In subsequent reporting periods, as NZ IFRS 9 will
have been effective for this disclosure for all periods presented in the Disclosure Statement, this table will no longer be required.
THE BANKING GROUP
30 Sep 18
$ millions
Audited
Individually assessed provisions
Balance at beginning of the year 48
Impairment charges/(benefits):
New provisions 28
Reversal of previously recognised impairment charges (18)
Amounts written off (22)
Balance at end of the year 36
Collectively assessed provisions
Balance at beginning of the year 332
Impairment charges/(benefits) (34)
Interest adjustments 24
Balance at end of the year 322
Total provisions for impairment charges on loans and credit commitments 358
Provision for credit commitments (34)
Total provisions for impairment charges on loans (Refer to Note 5) 324
Notes to the financial statements
24 Westpac New Zealand Limited
Note 7 Deposits and other borrowings-2 0 4-18
THE BANKING GROUP
31 Mar 1930 Sep 18
$ millionsUnauditedAudited
Certificates of deposit 896 1,218
Non-interest bearing, repayable at call 6,378 5,903
Other interest bearing:
At call 24,520 23,335
Term 33,320
32,646
Total deposits and other borrowings 65,114 63,102
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
31 Mar 1930 Sep 18
$ millionsUnauditedAudited
Short-term debt
Commercial paper 443 -
Total short-term debt 443 -
Long-term debt
Non-domestic medium-term notes 5,985 6,100
Covered bonds 6,179 5,640
Domestic medium-term notes 2,369 1,985
Total long-term debt 14,533 13,725
Total debt issues 14,976 13,725
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
2018.
On 11 January 2019, Westpac NZ Operations Limited sold its 25% shareholding in Paymark Limited to Ingenico Group S.A, resulting in a gain on sale of
$40 million which is recognised in other non-interest income. Refer to Note 3.
On 15 February 2019, the Bank declared and paid a dividend of $1,890 million to its immediate parent company, Westpac New Zealand Group Limited
(‘WNZGL’). An issue of 1,500 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.
On 5 July 2017, Westpac New Zealand Staff Superannuation Scheme Trustee Limited registered a Change in Financial Reporting Month with the New
Zealand Companies Office changing the balance date from 31 March to 30 September.
Notes to the financial statements
Westpac New Zealand Limited 25
Note 10 Fair value of financial assets and 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 as follows.
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 incorporate 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 as follows.
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
Non-asset
backed debt
instruments
Trading securities
Available-for-sale
securities/Investment
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.
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.
Notes to the financial statements
26 Westpac New Zealand Limited
Note 10 Fair value of financial assets and liabilities (continued)
InstrumentBalance sheet categoryIncludes:Valuation
Interest rate
products
Derivative financial instruments
Due from related entities
Due to related entities
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. If consensus prices are not available, these are
classified as Level 3 instruments.
Foreign exchange
products
Derivative financial instruments
Due from related entities
Due to related entities
FX swaps – derivative
financial instruments
Derived from market observable inputs or consensus pricing
providers using industry standard models.
Non-asset backed
debt instruments
Trading securities
Available-for-sale
securities/Investment
securities
Due from related entities
Due to related entities
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
Valued using observable market prices which are sourced from
independent pricing services, broker quotes or inter-dealer
prices.
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.
Notes to the financial statements
Westpac New Zealand Limited 27
Note 10 Fair value of financial assets and financial liabilities (continued)
The table below summarises the attribution of financial instruments measured at fair value to the fair value hierarchy:
THE BANKING GROUP
31 Mar 19 Unaudited
1
$ millionsLevel 1Level 2Level 3Total
Financial assets measured at fair value
Trading securities - 1,265 - 1,265
Derivative financial instruments - 288 - 288
Investment securities 1,053 2,939 - 3,992
Due from related entities - 509 - 509
Total financial assets measured at fair value 1,053 5,001 - 6,054
Financial liabilities measured at fair value
Deposits and other borrowings at fair value - 896 - 896
Derivative financial instruments - 345 - 345
Debt issues at fair value - 443 - 443
Due to related entities - 383 - 383
Total financial liabilities measured at fair value - 2,067 - 2,067
1
Reflects the adoption of NZ IFRS 9. Comparatives have not been restated. Refer to Note 1 for further information.
THE BANKING GROUP
30 Sep 18 Audited
$ millionsLevel 1Level 2Level 3Total
Financial assets measured at fair value
Trading securities 6 1,145 - 1,151
Derivative financial instruments - 585 - 585
Available-for-sale securities 1,167 2,643 - 3,810
Due from related entities - 558 - 558
Total financial assets measured at fair value 1,173 4,931 - 6,104
Financial liabilities measured at fair value
Deposits and other borrowings at fair value - 1,218 - 1,218
Derivative financial instruments - 181 - 181
Due to related entities - 251 - 251
Total financial liabilities measured at fair value - 1,650 - 1,650
Analysis of movements between fair value hierarchy levels
During the period, there were no material transfers between levels of the fair value hierarchy (30 September 2018: no material transfers between
levels).
Notes to the financial statements
28 Westpac New Zealand Limited
Note 10 Fair value of financial assets and liabilities (continued)
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 19 Unaudited
1,2
30 Sep 18 Audited
2
CarryingCarrying
$ millionsAmount
Fair Value
Amount
Fair Value
Financial assets not measured at fair value
Cash and balances with central banks 2,160 2,160 1,353 1,353
Collateral paid 294 294 70 70
Loans 82,058 82,202 80,378 80,503
Other financial assets 622 622 225 225
Due from related entities
817 817
761 761
Total financial assets not measured at fair value 85,951 86,095 82,787 82,912
Financial liabilities not measured at fair value
Collateral received 215 215 476 476
Deposits and other borrowings 64,218 64,262 61,884 61,923
Debt issues
3
14,533 14,658 13,725 13,845
Other financial liabilities 443 443 560 560
Due to related entities 1,412 1,416 1,392 1,399
Loan capital
3
2,574 2,573
2,622 2,645
Total financial liabilities not measured at fair value 83,395 83,567 80,659 80,848
1
Reflects the adoption of NZ IFRS 9. Comparatives have not been restated. Refer to Note 1 for further information.
2
In the current year, balances from receivables due from other financial institutions and payables due to other financial institutions have been reclassified to line
items of a similar nature on the balance sheet and to collateral paid and collateral received where relevant. Comparatives have been restated. Refer to Note 1 for
further information.
3
The estimated fair value of debt issues and loan capital include the impact of changes in the Banking Group's credit spreads since origination.
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 2018.5967-2 0 4-18
Note 11 Credit related commitments, contingent assets and contingent liabilities
THE BANKING GROUP
31 Mar 1930 Sep 18
$ millions
UnauditedAudited
Letters of credit and guarantees 799 863
Commitments to extend credit 24,888 24,650
Other - 60
Total undrawn credit commitments 25,687 25,573
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.
Notes to the financial statements
Westpac New Zealand Limited 29
Note 12 Segment reporting
The Banking Group’s segment reporting incorporates 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.
Segment comparative information for the six months ended 31 March 2018 has been restated to ensure consistent presentation with the current
reporting period. This includes adjustments for:
–changes to expense allocations and the Ultimate Parent Bank’s capital allocation framework; and
–NZ IFRS 9 and NZ IFRS 15 that were adopted on 1 October 2018. Segment comparatives have been restated as though the standards were adopted
on 1 October 2017, except for ECL provisioning. This resulted in comparative reclassifications between individual line items that do not impact total
results. These adjustments are also reflected as reconciling items and are comprised of:
–facility fees: The Banking Group has reclassified facility fees from non-interest income to net interest income to more appropriately reflect the
relationship with drawn lines of credit;
–other fees and expenses: The Banking Group has restated the classification of a number of fees and expenses which has resulted in the
grossing up of non-interest income and operating expenses; and
–interest carrying adjustments: Interest on performing loans (stage 1 and stage 2 loans) is now measured on the gross loan value. Previously,
interest on performing loans was recognised on the loan balance net of provisions. This adjustment increases interest income and impairment
charges.
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.
Other reconciling items primarily represent:
–business units that do not meet the definition of operating segments under NZ IFRS 8 Operating Segments;
–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 including insurance and investments, 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.
Notes to the financial statements
30 Westpac New Zealand Limited
Note 12 Segment reporting (continued)
THE BANKING GROUP
ConsumerCommercial,Investments
Banking andCorporate andandReconciling
$ millionsWealth InstitutionalInsuranceItemsTotal
Six months ended 31 March 2019 (Unaudited)
Net interest income578398-7
983
Non-interest income
716073(16)188
Net operating income before operating expenses and
impairment charges
64945873(9)1,171
Operating expenses(349)(115)(15)11
(468)
Impairment (charges)/benefits
(19)5--(14)
Profit before income tax281348582689
Six months ended 31 March 2018 (Unaudited) (restated)
Net interest income581373-(49)
905
Non-interest income
845269(24)181
Net operating income before operating expenses and
impairment charges
66542569(73)1,086
Operating expenses(332)(110)(15)11
(446)
Impairment (charges)/benefits
(35)(4)-12(27)
Profit before income tax29831154(50)613
As at 31 March 2019 (Unaudited)
Total gross loans47,11835,237-6082,415
Total deposits and other borrowings37,02427,194-89665,114
As at 30 September 2018 (Audited)
Total gross loans46,60534,068-2980,702
Total deposits and other borrowings36,14725,737-1,21863,102
Registered bank disclosures
Unaudited
Unaudited
Westpac New Zealand Limited 31
This section contains the additional disclosures required by the Registered Bank Disclosure Statements (New Zealand Incorporated Registered
Banks) Order 2014 (as amended).
i. General information
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 2019, 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.
Guarantee arrangements
No material obligations of the Bank are guaranteed as at the date the Directors signed this Disclosure Statement.
Changes in the Bank’s Board of Directors
There have been no changes in the composition of the Board of Directors of the Bank (the ‘Board’) since 30 September 2018 to the six months ending
31 March 2019.
Philippa Mary Greenwood was appointed to the Board as an independent non-executive director effective 1 April 2019.
Auditor
PricewaterhouseCoopers
PricewaterhouseCoopers Tower
188 Quay Street
Auckland, New Zealand
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 AgencyCurrent Credit RatingRating Outlook
Fitch Ratings
Moody’s Investors Service
S&P Global Ratings
AA-
A1
AA-
Stable
Stable
Negative
Registered bank disclosures
Unaudited
Unaudited
32 Westpac New Zealand Limited
i. General information (continued)
Other material matters
Thematic review of Bank Conduct and Culture
In May 2018, the Financial Markets Authority (‘FMA’) and the Reserve Bank of New Zealand (‘Reserve Bank’) commenced thematic reviews into the
conduct and culture at New Zealand’s retail banks and life insurers. These reviews were established to assess whether misconduct of the type
highlighted by the Australian Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry may be taking place
in New Zealand. The thematic review report concerning the retail banks review was released on 5 November 2018 and the thematic review report
concerning the life insurers was released on 29 January 2019. While no widespread instances of misconduct were identified in the reports, the
regulators were critical of the way in which banks and life insurers are managing conduct and culture risks within their organisations and sought
action plans to address the issues (i) from the banks by the end of March 2019; and (ii) from life insurers by the end of June 2019. The Bank provided
its response and action plan by the end of March 2019 and is now awaiting any further feedback from the regulators.
In response to the reviews, the Ministry of Business, Innovation & Employment (‘MBIE’) has also published an options paper on 27 April 2019 which
considers how the conduct of financial institutions could be better regulated. The options outlined in the paper include: the introduction of
overarching duties to govern the conduct of financial institutions; senior management and director accountability for breach of these duties and
measures to address conflicted remuneration, oversight of intermediaries and product suitability. The paper also outlines a range of proposed tools
for enforcing the obligations in the proposed new regime. Submissions on the paper are due on 7 June 2019, with the intention of introducing
legislation to Parliament by the end of 2019.
Reserve Bank Capital Review
The Reserve Bank is undertaking a Bank Capital Adequacy Framework review on the quantum and makeup of bank capital. The Reserve Bank has
now made ‘in principle’ decisions on the risk weighted assets (‘RWA’) framework, including the introduction of dual reporting, a standardised
methodology for operational risk, and capital floors to internal rating models.
On 14 December 2018, the Reserve Bank released a consultation paper to seek the public’s view on a proposal to significantly increase the level of
regulatory capital in the New Zealand system. In the paper, the Reserve Bank proposed to set a Tier 1 capital requirement equal to 16% of RWA for
banks deemed systematically important, such as the Bank. The proposal of a Tier 1 ratio of 6% of RWA as a regulatory minimum is unchanged, and
of this no more than 1.5% of RWA can be contributed by Additional Tier 1 capital or redeemable preference shares. The Reserve Bank have proposed
a five year transition period.
The proposed changes aim to further strengthen the New Zealand banking system to protect the economy and depositors from bank failure.
Meeting the Reserve Bank’s proposed minimum 16% Tier 1 capital ratio would require a further estimated $3.5 - 4 billion of Tier 1 capital if applied at
31 March 2019 (assuming that the existing $1.5 billion Additional Tier 1 capital instrument is not eligible to meet future Tier 1 capital requirements).
The Bank is already strongly capitalised with a Tier 1 capital ratio of 14.5% at 31 March 2019.
Registered bank disclosures
Unaudited
Unaudited
Westpac New Zealand Limited 33
ii. Additional financial disclosures
Additional information on balance sheet
THE BANKING GROUP
31 Mar 1930 Sep 18
$ millions
Unaudited Audited
Interest earning and discount bearing assets 91,189 87,810
Interest and discount bearing liabilities 77,946 75,409
Total amounts due from related entities 1,326 1,319
Total amounts due to related entities 4,369 4,265
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 5, the carrying value of these financial assets pledged as collateral is:
THE BANKING GROUP
31 Mar 1930 Sep 18
$ millions
UnauditedAudited
Cash 294 70
Securities pledged under repurchase agreements:
1
Trading securities 14 -
Available-for-sale securities - 15
Investment securities 31 -
Total amount pledged to secure liabilities (excluding CB Programme) 339 85
1
Securities were pledged as collateral to the New Zealand Branch of the Ultimate Parent Bank which is recorded within due to related entities on the balance sheet.-
Registered bank disclosures
Unaudited
Unaudited
34 Westpac New Zealand Limited
ii. Additional financial disclosures (continued)
Additional information on concentrations of credit risk
THE BANKING GROUP
$ millions31 Mar 19
On-balance sheet credit exposures consist of
Cash and balances with central banks 2,160
Collateral paid 294
Trading securities 1,265
Derivative financial instruments 288
Investment securities 3,992
Loans 82,058
Other financial assets 622
Due from related entities 1,326
Total on-balance sheet credit exposures 92,005
Analysis of on-balance sheet credit exposures by industry sector
Accommodation, cafes and restaurants 433
Agriculture 8,620
Construction 576
Finance and insurance 5,773
Forestry and fishing 449
Government, administration and defence 6,264
Manufacturing 2,343
Mining 169
Property 6,829
Property services and business services 1,320
Services 2,074
Trade 2,037
Transport and storage 1,182
Utilities 1,540
Retail lending 51,350
Subtotal 90,959
Provisions for impairment charges on loans (357)
Due from related entities 1,326
Other financial assets 77
Total on-balance sheet credit exposures 92,005
Off-balance sheet credit exposures consists of
Credit risk-related instruments 25,687
Total off-balance sheet credit exposures 25,687
Analysis of off-balance sheet credit exposures by industry sector
Accommodation, cafes and restaurants 106
Agriculture 596
Construction 488
Finance and insurance 1,544
Forestry and fishing 152
Government, administration and defence 766
Manufacturing 1,501
Mining 164
Property 1,480
Property services and business services 593
Services 679
Trade 1,870
Transport and storage 796
Utilities 1,629
Retail lending 13,323
Total off-balance sheet credit exposures 25,687
Australian and New Zealand Standard Industrial Classification ('ANZSIC') has been used as the basis for disclosing industry sectors.
Registered bank disclosures
Unaudited
Unaudited
Westpac New Zealand Limited 35
ii. Additional financial disclosures (continued)
Additional information on concentrations of funding
THE BANKING GROUP
$ millions31 Mar 19
Funding consists of
Collateral received 215
Deposits and other borrowings 65,114
Other financial liabilities
1
7
Debt issues
2
14,976
Due to related entities
3
1,444
Loan capital 2,574
Total funding 84,330
Analysis of funding by geographical area
2
New Zealand 66,406
Australia 1,284
United Kingdom 8,662
United States of America 882
Other 7,096
Total funding 84,330
Analysis of funding by industry sector
Accommodation, cafes and restaurants 364
Agriculture 1,444
Construction 1,777
Finance and insurance 31,675
Forestry and fishing 207
Government, administration and defence 1,862
Manufacturing 1,489
Mining 71
Property services and business services 6,053
Services 4,208
Trade 1,492
Transport and storage 518
Utilities 435
Households 27,007
Other
4
4,284
Subtotal 82,886
Due to related entities
3
1,444
Total funding 84,330
1
Other financial liabilities, as presented above, are in respect of interbank placements.
2
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 programmes does not necessarily represent an appropriate proxy, the debt issues are classified as 'Other’.
These instruments may have subsequently been on-sold.
3
Amounts due to related entities, as presented above, are in respect of deposits and borrowings and exclude amounts which relate to derivative financial
instruments and other liabilities.
4
Includes deposits from non-residents.
ANZSIC has been used as the basis for disclosing industry sectors.
Registered bank disclosures
Unaudited
Unaudited
36 Westpac New Zealand Limited
ii. Additional financial disclosures (continued)
Additional information on interest rate sensitivity
The following table presents a breakdown of the earlier of the contractual repricing or maturity dates of the Banking Group’s net asset position as at 31
March 2019. 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
31 Mar 19
Over 3Over 6Over 1
Months
and
Months
and
Year andNon-
Up to 3Up to 6Up toUp toOverinterest
$ millionsMonthsMonths1 Year2 Years2 YearsBearingTotal
Financial assets
Cash and balances with central banks1,950----2102,160
Collateral paid294-----294
Trading securities1,19372----1,265
Derivative financial instruments-----288288
Investment securities--7531,4121,827-3,992
Loans43,8335,80213,70414,7814,195(257)82,058
Other financial assets390----232622
Due from related entities983----3431,326
Total financial assets48,6435,87414,45716,1936,02281692,005
Non-financial assets999
Total assets93,004
Financial liabilities
Collateral received215-----215
Deposits and other borrowings40,3528,7797,7511,1676876,37865,114
Other financial liabilities1----442443
Derivative financial instruments-----345345
Debt issues6,1122351011,8006,728-14,976
Due to related entities 1,4291--143511,795
Loan capital2,574-----2,574
Total financial liabilities50,6839,0157,8522,9677,4297,51685,462
Non-financial liabilities225
Total liabilities85,687
On-balance sheet interest rate repricing
gap
(2,040)(3,141)6,60513,226(1,407)
Net derivative notional principals
Net interest rate contracts (notional):
Receivable/(payable)14,096(1,970)(6,143)(9,157)3,174
Net interest rate repricing gap12,056(5,111)4624,0691,767
Registered bank disclosures
Unaudited
Unaudited
Westpac New Zealand Limited 37
ii. Additional financial disclosures (continued)
Additional information on liquidity risk
Contractual maturity of financial liabilities
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 these 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 financial instruments 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” 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 table below.
THE BANKING GROUP
31 Mar 19
OverOver
1 Month3 MonthsOver 1
Year
OnUp toand Up toand Up toand Up toOver
$ millions
Demand1 Month3 Months1 Year5 Years5 YearsTotal
Financial liabilities
Collateral received-215----215
Deposits and other borrowings29,6895,79911,46116,9311,977-65,857
Other financial liabilities61191---126
Derivative financial instruments:
Held for hedging purposes (net settled)-181137913160
Held for hedging purposes (gross settled):
Cash outflow-1112663,065-3,154
Cash inflow---(22)(2,734)-(2,756)
Debt issues-101,6123,16510,32840215,517
Due to related entities:
Non-derivative balances64445751115-1,456
Derivative financial instruments:
Held for trading 2-----2
Held for hedging purposes (net settled)-114084108-243
Held for hedging purposes (gross settled):
Cash outflow--15421,259-1,316
Cash inflow--(13)(37)(1,166)-(1,216)
Loan capital--13361842,6782,911
Total undiscounted financial liabilities30,3416,22813,90320,30313,1273,08386,985
Total contingent liabilities and commitments
Letters of credit and guarantees799-----799
Commitments to extend credit24,888-----24,888
Total undiscounted contingent liabilities and
commitments
25,687-----25,687
Registered bank disclosures
Unaudited
Unaudited
38 Westpac New Zealand Limited
ii. Additional financial disclosures (continued)
Liquid assets
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
$ millions31 Mar 19
Cash and balances with central banks 2,160
Interbank lending 390
Receivables due from the Ultimate Parent Bank 161
Supranational securities 1,652
NZ Government securities 1,189
NZ public securities 1,862
NZ corporate securities 689
Residential mortgage-backed securities 3,950
Total liquid assets 12,053
Reconciliation of mortgage-related amounts
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
$ millions31 Mar 19
Residential mortgages - total gross loans (as disclosed in Note 5 and Section iii.) 49,579
Reconciling items:
Unamortised deferred fees and expenses (169)
Fair value hedge adjustments (60)
Value of undrawn commitments and other off-balance sheet amounts relating to residential mortgages 10,212
Undrawn at default
1
(2,596)
Residential mortgages by LVR (as disclosed in Additional mortgage information in Section iv.)
56,966
Accrued interest receivable 77
Partial write-offs 4
Residential mortgages - EAD (as disclosed in Credit risk exposures by asset class in Section iv.)
57,047
1
Estimate of the amount of committed exposure not expected to be drawn by the customer at the time of default.
iii. Asset quality
Past due assets
THE BANKING GROUP
31 Mar 19
Residential
$ millionsMortgagesOther RetailCorporateOtherTotal
Past due but not individually impaired assets
Less than 30 days past due761144162-1,067
At least 30 days but less than 60 days past due952516-136
At least 60 days but less than 90 days past due32117-50
At least 90 days past due415-10
Total past due but not individually impaired assets892181190-1,263
Registered bank disclosures
Unaudited
Unaudited
Westpac New Zealand Limited 39
iii. Asset quality (continued)
Movements in components of loss allowance
The provisions for ECL on loans and credit commitments can be further disaggregated into the following types of credit exposures:
THE BANKING GROUP
Performing
Non-
performing
$ millions
Stage 1Stage 2Stage 3
Collectively
assessed
provisions
Individually
assessed
provisionsTotal
Residential mortgages
Provision for impairment charges as at 30 September 2018 - - - 54 7 61
Restatement for adoption of NZ IFRS 9 33 25 32 (54) (7) 29
Restated provision for ECL as at 1 October 2018 33 25 32 - - 90
Net transfers in/(out) of stages 6 (3) (3) -
Reversals of previously recognised impairment charges - - - -
New financial assets originated 2 - - 2
Financial assets derecognised during the period (2) (2) (5) (9)
Changes in collective provisions due to amounts written off - - - -
Other charges/(credits) to the income statement (10) 4 14 8
Total charges/(credits) to the income statement for ECL (4) (1) 6 1
Amounts written off from individually assessed provisions - - (1) (1)
Total provision for ECL as at 31 March 2019 29 24 37 90
Other retail
Provision for impairment charges as at 30 September 2018 - - - 99 3 102
Restatement for adoption of NZ IFRS 9 50 64 21 (99) (3) 33
Restated provision for ECL as at 1 October 2018 50 64 21 - - 135
Net transfers in/(out) of stages 22 (28) 6 -
Reversals of previously recognised impairment charges - - (1) (1)
New financial assets originated 2 - - 2
Financial assets derecognised during the period (3) (5) (2) (10)
Changes in collective provisions due to amounts written off - - (22) (22)
Other charges/(credits) to the income statement (25) 33 27 35
Total charges/(credits) to the income statement for ECL (4) - 8 4
Amounts written off from individually assessed provisions - - (1) (1)
Total provision for ECL as at 31 March 2019 46 64 28 138
Corporate
Provision for impairment charges as at 30 September 2018 - - - 169 26 195
Restatement for adoption of NZ IFRS 9 20 114 36 (169) (26) (25)
Restated provision for ECL as at 1 October 2018 20 114 36 - - 170
Net transfers in/(out) of stages 1 (2) 1 -
Reversals of previously recognised impairment charges - - (5) (5)
New financial assets originated 3 - - 3
Financial assets derecognised during the period (1) (13) - (14)
Changes in collective provisions due to amounts written off - - - -
Other charges/(credits) to the income statement 5 8 4 17
Total charges/(credits) to the income statement for ECL 8 (7) - 1
Amounts written off from individually assessed provisions - - - -
Total provision for ECL as at 31 March 2019 28 107 36 171
Registered bank disclosures
Unaudited
Unaudited
40 Westpac New Zealand Limited
iii. Asset quality (continued)
Impacts of changes in gross financial assets on loss allowances
The gross carrying amounts of loans by expected loss allowance can be further disaggregated into the following types of credit exposures:
THE BANKING GROUP
PerformingNon-performing
$ millions
Stage 1Stage 2Stage 3
Total
Residential mortgages
Total gross carrying amount at the beginning of the period 47,254 1,364 275 48,893
Net transfers in/(out) of stages (237) 157 80 -
Net further lending/repayment (602) 15 (4) (591)
New financial assets originated 4,192 - - 4,192
Financial assets derecognised during the period (2,747) (119) (48) (2,914)
Amounts written-off - - (1) (1)
Total gross carrying amount as at 31 March 2019 47,860 1,417 302 49,579
Provision for ECL as at 31 March 2019 (25) (25) (36) (86)
Total net carrying amount as at 31 March 2019 47,835 1,392 266 49,493
Other retail
Total gross carrying amount at the beginning of the period 3,668 208 52 3,928
Net transfers in/(out) of stages (39) 3 36 -
Net further lending/repayment (141) 18 2 (121)
New financial assets originated 286 - - 286
Financial assets derecognised during the period (238) (16) (9) (263)
Amounts written-off - - (23) (23)
Total gross carrying amount as at 31 March 2019 3,536 213 58 3,807
Provision for ECL as at 31 March 2019 (37) (59) (27) (123)
Total net carrying amount as at 31 March 2019 3,499 154 31 3,684
Corporate
Total gross carrying amount at the beginning of the period 25,334 2,133 136 27,603
Net transfers in/(out) of stages (154) 128 26 -
Net further lending/repayment 523 153 (31) 645
New financial assets originated 2,156 - - 2,156
Financial assets derecognised during the period (1,334) (134) (1) (1,469)
Amounts written-off - - - -
Total gross carrying amount as at 31 March 2019 26,525 2,280 130 28,935
Provision for ECL as at 31 March 2019 (22) (89) (37) (148)
Total net carrying amount as at 31 March 2019 26,503 2,191 93 28,787
The above gross carrying amount tables do not include 'Other' credit exposures (refer to Note 5) on the basis that the provision for ECL is not
considered material.
Registered bank disclosures
Unaudited
Unaudited
Westpac New Zealand Limited 41
iii. Asset quality (continued)
Other asset quality information
The Banking Group had undrawn commitments of $22 million (30 September 2018: $4 million) to counterparties for whom drawn balances are
classified as individually impaired assets under corporate loans as at 31 March 2019.
The Banking Group does not have other assets under administration as at 31 March 2019.
iv. Capital adequacy under the internal models based approach, and regulatory liquidity ratios
Capital
The information contained in this note has been derived in accordance with the Banking Group’s conditions of registration which relate to capital
adequacy and the 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 54. 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
THE BANKING GROUP
$ millions
31 Mar 19
Tier 1 capital
Common Equity Tier 1 capital
Paid-up ordinary shares issued by the Bank plus related share premium 6,600
Retained earnings (net of appropriations) 816
Accumulated other comprehensive income and other disclosed reserves
1
(99)
Less deductions from Common Equity Tier 1 capital
Goodwill (477)
Other intangible assets
2
(159)
Cash flow hedge reserve 104
Deferred tax asset deduction (184)
Expected loss excess over eligible allowance
(252)
Total Common Equity Tier 1 capital 6,349
Additional Tier 1 capital
Additional Tier 1 capital instruments
3
1,500
Total additional Tier 1 capital
1,500
Total Tier 1 capital
7,849
Tier 2 capital
Tier 2 capital instruments
3
1,087
Revaluation reserves -
Eligible impairment allowance in excess of expected loss
-
Total Tier 2 capital
1,087
Total capital
8,936
1
Accumulated other comprehensive income and other disclosed reserves consist of investment 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
Classified as debt and excludes capitalised transaction costs.
Registered bank disclosures
Unaudited
Unaudited
42 Westpac New Zealand Limited
iv. Capital adequacy under the internal models based approach, and regulatory liquidity ratios (continued)
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.
Additional Tier 1 loan capital
A summary of the key terms and features of the Additional Tier 1 loan capital (‘AT1 notes’) is provided below:
$Issue dateCounterpartyInterest rateOptional redemption date
NZ$1,500 million
notes
1
22 September 2017NZ Branch of the
Ultimate Parent Bank
NZ 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).
Registered bank disclosures
Unaudited
Unaudited
Westpac New Zealand Limited 43
iv. Capital adequacy under the internal models based approach, and regulatory liquidity ratios (continued)
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.
Reserves
Investment securities at FVOCI reserve
This comprises the changes in the fair value of investment 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.
Registered bank disclosures
Unaudited
Unaudited
44 Westpac New Zealand Limited
iv. Capital adequacy under the internal models based approach, and regulatory liquidity ratios (continued)
Credit risk subject to the Internal Rating Based (‘IRB’) approach
Credit risk exposures by asset class
The Banking Group’s credit risk exposures by asset class as at 31 March 2019
Exposure-Minimum
WeightedExposure-weightedRisk-Pillar 1
AverageweightedRiskweightedCapital
PDEADLGDWeightAssets
1
Requirement
Exposure-weighted PD Grade (%)%$ millions%%$ millions$ millions
Residential mortgages
0.00 to 0.10
------
0.10 to 0.25
0.183,02919.077.2923419
0.25 to 1.0
0.4928,58820.4716.655,046404
1.0 to 2.5
1.4221,19419.9033.757,582607
2.5 to 10.0
4.543,93022.1774.373,098248
10.0 to 99.99
------
Default100.0030621.31134.7343735
Total1.6357,04720.3127.1216,3971,313
Other retail
0.00 to 0.10
------
0.10 to 0.25
0.1455840.4912.85766
0.25 to 1.0
0.361,53262.8237.4460848
1.0 to 2.5
2.221,19068.5589.741,13291
2.5 to 10.0
5.5029583.68125.3639231
10.0 to 99.99
21.1622871.58149.3736129
Default100.002675.7036.28101
Total3.223,82963.5663.542,579206
Small business
0.00 to 0.10
0.0316573.767.43131
0.10 to 0.25
------
0.25 to 1.0
0.3164621.2817.5212010
1.0 to 2.5
1.841,46620.8126.4541132
2.5 to 10.0
4.7831619.2028.36958
10.0 to 99.99
15.883521.9343.13161
Default100.003620.76154.61595
Total3.222,66424.0325.2871457
1
The value of the scalar used in determining the risk weighted assets is 1.06 as required by the conditions of registration.
Registered bank disclosures
Unaudited
Unaudited
Westpac New Zealand Limited 45
iv. Capital adequacy under the internal models based approach, and regulatory liquidity ratios (continued)
Exposure-Minimum
WeightedExposure-weightedRisk-Pillar 1
AverageweightedRiskweightedCapital
PDEADLGDWeightAssets
1
Requirement
Exposure-weighted PD Grade (%)%$ millions%%$ millions$ millions
Corporate/Business lending
0.00 to 0.02
------
0.02 to 0.04
0.033,04241.4618.9261049
0.04 to 0.10
0.084,56546.2626.891,301104
0.10 to 0.50
0.217,48846.0142.703,389271
0.50 to 3.0
1.4814,53435.2473.4611,317905
3.0 to 10.0
3.7084435.18101.4990873
10.0 to 99.0
28.801,28440.22198.672,704216
Default100.008934.24154.7614612
Total2.2831,84640.1460.3620,3751,630
Sovereign
0.00 to 0.02
0.011,65620.774.27756
0.02 to 0.04
0.023,2107.241.20413
0.04 to 0.10
0.06260.00---
0.10 to 0.50
0.19160.0094.341-
0.50 to 3.0
2.32147.1794.341-
3.0 to 10.0
------
10.0 to 99.0
------
Default------
Total0.014,87011.882.291189
Bank
0.00 to 0.02
------
0.02 to 0.04
0.032,24316.415.0512010
0.04 to 0.10
0.051,51453.2319.6331525
0.10 to 0.50
0.13860.0035.383-
0.50 to 3.0
1.45855.78141.51121
3.0 to 10.0
------
10.0 to 99.0
------
Default------
Total0.043,77331.3611.2545036
Total credit risk exposures subject
104,02940,6333,251
to the internal ratings based
approach
1
The value of the scalar used in determining the risk weighted assets is 1.06 as required by the conditions of registration
Registered bank disclosures
Unaudited
Unaudited
46 Westpac New Zealand Limited
iv. Capital adequacy under the internal models based approach, and regulatory liquidity ratios (continued)
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 Market Related
Sheet Amounts Contracts
$ millions
ValueEADValueEAD
Residential mortgages
10,2127,616--
Other retail
3,1901,849--
Small business
892794--
Corporate/Business lending
9,3349,322--
Sovereign
152152--
Bank
868937--
Total 24,64820,670--
Additional mortgage information
Residential mortgages by loan-to-value ratio (‘LVR’) as at 31 March 2019
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 19
Does notExceeds 60%Exceeds 70%Exceeds 80%
LVR range ($ millions)
exceed 60%and not 70%and not 80% and not 90%Exceeds 90%Total
On-balance sheet exposures 21,196 11,860 12,073 2,619 1,602 49,350
Undrawn commitments and other off-balance
sheet exposures 5,286 1,191 830 125 184 7,616
Value of exposures 26,482 13,051 12,903 2,744 1,786 56,966
Registered bank disclosures
Unaudited
Unaudited
Westpac New Zealand Limited 47
iv. Capital adequacy under the internal models based approach, and regulatory liquidity ratios (continued)
Specialised lending subject to the slotting approach
The Banking Group’s specialised lending: Project and property finance credit risk exposures as at 31 March 2019
TotalMinimum
Exposures Risk-Pillar 1
After CreditRiskweightedCapital
Risk MitigationWeightAssets
1
Requirement
Supervisory slotting grade
$ millions%$ millions$ millions
Strong 3,515 70.00 2,608 209
Good 3,671 90.00 3,503 280
Satisfactory 644 115.00 785 63
Weak 181 250.00 479 38
Default
73---
Total 8,084 86.07 7,375 590
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.
Minimum
AverageRisk-Pillar 1
RiskweightedCapital
EADWeightAssets
1
Requirement
$ millions%$ millions$ millions
Undrawn commitments and other off-balance sheet exposures
1,043 90.45 1,000 80
1
The value of the scalar used in determining the risk weighted assets is 1.06 as required by the conditions of registration.
Credit risk exposures subject to the standardised approach
The Banking Group’s credit risk exposures subject to the standardised approach as at 31 March 2019
Calculation of on-balance sheet exposures
Total Minimum
ExposureRisk-Pillar 1
After Credit Average RiskweightedCapital
Risk MitigationWeightExposure
1
Requirement
$ millions%$ millions$ millions
Other assets
2
1,27237.5350640
Total on-balance sheet exposures1,27250640
1
The value of the scalar used in determining the risk weighted assets is 1.06 as required by the conditions of registration.
2
Relate to property and equipment, other assets and related parties.
Registered bank disclosures
Unaudited
Unaudited
48 Westpac New Zealand Limited
iv. Capital adequacy under the internal models based approach, and regulatory liquidity ratios (continued)
Calculation of off-balance sheet exposures
Total
AverageMinimum
Exposure orCreditCreditAverageRisk-Pillar 1
PrincipalConversionEquivalentRiskweightedCapital
AmountFactor AmountWeightExposure
1
Requirement
$ millions%$ millions%$ millions$ millions
Market related contracts subject to the
standardised approach
Foreign exchange contracts14,009N/A68420.00145 12
Interest rate contracts48,773N/A6420.0014 1
Credit value adjustment
-N/A--38 3
Total market related contracts subject to the
standardised approach62,782748197 16
Standardised subtotal (on and off-balance sheet)
2,020703
56
1
The value of the scalar used in determining the risk weighted assets is 1.06 as required by the conditions of registration.
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 2018 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 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. 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. EAD
EAD represents an estimate of the amount of committed exposure expected to be drawn by the customer at the time of default.
Equity risk
The Banking Group’s equity exposures as at 31 March 2019
Minimum
Risk-Pillar 1
TotalRiskweightedCapital
ExposureWeightExposure
1
Requirement
Equity
$ millions%$ millions$ 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.
Registered bank disclosures
Unaudited
Unaudited
Westpac New Zealand Limited 49
iv. Capital adequacy under the internal models based approach, and regulatory liquidity ratios (continued)
Operational risk
Operational risk capital requirement
THE BANKING GROUP
31 Mar 19
Implied Risk-
Total Operational Risk
$ millions
weighted Exposure
Capital Requirement
Methodology implemented Advanced Measurement Approach
Operational risk 4,500 360
Market risk
Market risk notional capital charges
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 2019 of the aggregate capital charge for that category of market risk at the close of each business day derived in
accordance with BS2B.
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 2019:
THE BANKING GROUP
31 Mar 19
$ millions
Implied Risk-weighted ExposureAggregate Capital Charge
End-of-period
Interest rate risk 931 75
Foreign currency risk- -
Equity risk- -
Peak end-of-day
Interest rate risk 1,554 124
Foreign currency risk- -
Equity risk- -
Registered bank disclosures
Unaudited
Unaudited
50 Westpac New Zealand Limited
iv. Capital adequacy under the internal models based approach, and regulatory liquidity ratios (continued)
Total capital requirements
Banking Group Pillar 1 Total Capital Requirement
THE BANKING GROUP
31 Mar 19
Risk-weighted
Total Exposure
Exposure or
Implied
After Credit
Risk-weightedTotal Capital
$ millions
Risk MitigationExposureRequirement
Credit risk
Exposures subject to the internal ratings based approach 104,029 40,633 3,251
Equity exposures - - -
Specialised lending subject to the slotting approach 8,084 7,375 590
Exposures subject to the standardised approach 2,020 703 56
Total credit risk
(scaled)
1
114,133 48,711 3,897
Operational riskN/A4,500 360
Market riskN/A931 75
Total 114,133 54,142 4,332
1
The value of the scalar used in determining the credit risk weighted exposure is 1.06 as required by the conditions of registration.
Capital ratios
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 shareholder’s 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
2
Reserve Bank
Minimum
%
Ratios
1
31 Mar 1931 Mar 1831 Mar 1931 Mar 18
Common Equity Tier 1 capital ratio6.511.711.811.09.4
Tier 1 capital ratio8.014.514.613.611.6
Total capital ratio10.016.516.615.513.3
Buffer ratio2.55.25.3N/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 54 have been resolved.
2
On 26 September 2018 the Reserve Bank confirmed it has no objection to the Bank using the Internal Ratings Based (‘IRB’) approach to assess the risk weighting of
two solo-deconsolidated entities for the purposes of calculating the Bank’s solo capital ratios. On a comparable basis, the Bank’s solo capital ratios as at 31 March 2018
would be Common Equity Tier 1 of 11.0%, Tier 1 capital of 13.7% and Total capital of 15.6%.
Registered bank disclosures
Unaudited
Unaudited
Westpac New Zealand Limited 51
iv. Capital adequacy under the internal models based approach, and regulatory liquidity ratios (continued)
Capital for other material risks
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 $243 million as at 31 March 2019 (31 March 2018: $246 million).
Ultimate Parent Bank Group Basel III capital adequacy ratios
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 1931 Mar 18
Ultimate Parent Bank Group (excluding entities specifically excluded by APRA regulations)
1, 2
Common Equity Tier 1 capital ratio 10.6 10.5
Additional Tier 1 capital ratio 2.2 2.3
Tier 1 capital ratio 12.8 12.8
Tier 2 capital ratio 1.8 2.0
Total regulatory capital ratio 14.6 14.8
Ultimate Parent Bank (Extended Licensed Entity)
1, 3
Common Equity Tier 1 capital ratio 10.7 10.4
Additional Tier 1 capital ratio 2.3 2.4
Tier 1 capital ratio 13.0 12.8
Tier 2 capital ratio 1.8 2.1
Total regulatory capital ratio 14.8 14.9
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 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 2019.
Registered bank disclosures
Unaudited
Unaudited
52 Westpac New Zealand Limited
iv. Capital adequacy under the internal models based approach, and regulatory liquidity ratios (continued)
Regulatory liquidity ratios
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 2018 for further details). Quarterly, average ratios are produced in line with the Reserve Bank rules and guidance.
THE BANKING GOUP
%
31 Mar 1931 Dec 18
Average for the three months ended
One-week mismatch ratio 5.57 4.94
One-month mismatch ratio 9.05 8.34
Core funding ratio
82.12 82.27
v. Concentration of credit exposures to individual counterparties
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:
THE BANKING GROUP
31 Mar 19
Bank Counterparties
1
Non-bank
Counterparties
2
Long-term credit ratingLong-term credit rating
% of Banking Group's Common Equity Tier 1 Capital
A- or A3 and aboveA- or A3 and above
As at 31 March 2019
3
Exceeds 10% and not 15% - 2
Exceeds 15% and not 20% - -
Exceeds 20% and not 25% - 1
Exceeds 25% and not 30% - -
Peak end-of-day aggregate credit exposure for the six months ended 31 March 2019
3
Exceeds 10% and not 15% 1 2
Exceeds 15% and not 20% - -
Exceeds 20% and not 25% - 1
Exceeds 25% and not 30% - -
1
A counterparty is a bank counterparty if it is a 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 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 bank or non-bank counterparties with aggregate credit exposure that equals or exceeds 10% of the Banking Group’s Common Equity
Tier 1 capital and with a long-term credit rating of less than A- or A3, or its equivalent, or unrated.
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 six-month period, and then dividing that amount by the Banking Group’s Common Equity Tier 1 capital as at
31 March 2019.
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.
Registered bank disclosures
Unaudited
Unaudited
Westpac New Zealand Limited 53
vi. Insurance business
The Banking Group does not conduct any insurance business (as that term is defined in the Order).
Conditions of registration
54 Westpac New Zealand Limited
Conditions of registration
Non-compliance with conditions of registration
Since FY17, the Bank has been remediating various issues of non-
compliance with condition of registration 1B in response to a notice
issued by the Reserve Bank under section 95 of the Reserve Bank Act
during FY17 (‘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 Bank accepts the findings of the Section 95 Review and is making
good progress with remediating issues. The issues of non-
compliance with BS2B that remained during the reporting period are
disclosed below.
As disclosed in Note iv. of the Registered bank disclosures, 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 Note
iv. of the Registered bank disclosures 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 various capital models
which were not approved by the Reserve Bank, in some cases
since December 2008. In addition to the unapproved models
disclosed in the Bank’s Disclosure Statement for the year ended
30 September 2018, the Bank has identified that it has also been
using an unapproved PD model for certain corporate exposures.
It failed to meet the Reserve Bank’s requirements in relation to
model documentation and associated model documentation
policies. Since FY17 the Bank has been updating its model
documentation and has been submitting models for approval by
the Reserve Bank.
The Bank’s Model Compendium (‘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. The Compendium will be updated once the
Reserve Bank has delivered its determination on the models that
have been submitted for approval.
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. A new system to
capture relevant non-retail customer credit data is being built
and will address this issue.
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. A new system to capture
relevant non-retail customer credit data is being built and will
address this issue.
During the first quarter of the reporting period, 1 October 2018 to 31
December 2018, the Bank was also non-compliant with condition of
registration 1B in effect during that period in relation to the matters
below. These matters do not result in non-compliance with the
version of condition of registration 1B in effect from 1 January 2019.
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 A 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 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 4.156 of BS2B in that an incorrect
EAD factor of 100% (rather than the approved 20%) is used
within the EAD calculations for the retail SME portfolio. This
results in an over-statement of RWA.
It is not fully compliant with 4.86-4.97 in that for some exposures
where the maturity measure is missing, the default maturity
applied is not a conservative measure. The amount is not
assessed to be material.
The Bank has identified non-compliance with condition of
registration 25, which requires compliance with the Reserve Bank
Outsourcing Policy (‘BS11’). The Bank renewed three existing
outsourcing arrangements (as defined in BS11) for licensing and
support of software applications (and related dedicated hardware for
one application) and did not have in place the required risk mitigants
for the arrangements as required by BS11. Work is underway to
amend the outsourcing arrangements to include the requisite risk
mitigants.
Conditions of registration
Westpac New Zealand Limited 55
Conditions of registration (continued)
Changes to conditions of registration
On 20 December 2018, the Reserve Bank advised the Bank of changes to its conditions of registration. The following changes came into effect on 1
January 2019:
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 70 per cent (previously, the required LVR was 65 per cent);
a limit of 20 percent (previously, the required limit was 15 per cent) on new non-residential property investment lending carried out in the
measurement period where the LVR is greater than 80 per cent;
refers to a revised version of “Framework for Restrictions on High-LVR Residential Mortgage Lending” (‘BS19’), to make a minor amendment
to the construction loan exemption related to Kiwibuild; and
amended the capital adequacy conditions to narrow the scope so that the bank only has to meet the requirements of certain specified parts
of BS2B, rather than the whole policy.
56 Westpac New Zealand Limited
Independent auditor’s review report
To the shareholder of Westpac New Zealand Limited
Report on the Disclosure Statement
We have reviewed pages 6 to 30 and pages 33 to 53 of the Disclosure Statement for the six months ended 31 March
2019 (the “Disclosure Statement”) of Westpac New Zealand Limited (the “Bank”) and the entities it controlled at 31
March 2019 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 on pages 6 to 30 comprise the balance sheet as at 31 March 2019, 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
other explanatory information.
The supplementary information is included within notes 5 and 6 of the financial statements and notes ii to vi of the
registered bank disclosures.
Directors’ responsibility for the Disclosure Statement
The Directors of the Bank (the “Directors”) are responsible, on behalf of the Bank, for the preparation and fair
presentation of the Disclosure Statement, which includes financial statements prepared in accordance with Clause
25 of the Order and for such internal control as the Directors determine is 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 fair presentation of the
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:
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);
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
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.
PricewaterhouseCoopers, 188 Quay Street, Private Bag 92162, Auckland 1142, New Zealand
T: +64 9 355 8000, F: +64 9 355 8001, pwc.co.nz
Westpac New Zealand Limited 57
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.
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 procedures relating to the issuance of comfort letters on debt issuance
programmes and other regulatory and compliance matters. 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)the financial statements (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 that is required to be disclosed under 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 that is
required to be disclosed under 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 note iv of the registered bank disclosures and page 54 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, 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 note iv of the registered bank disclosures 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:
Chartered AccountantsAuckland
23 May 2019
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.
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