WBC receives APRA response to CGA process

ASX Release

11 JULY 2019

WESTPAC RECEIVES APRA RESPONSE TO ITS CULTURE, GOVERNANCE AND
ACCOUNTABILITY SELF-ASSESSMENT PROCESS

Westpac Group today received APRA’s response to its Culture, Governance and
Accountability (CGA) self-assessment process. In its response, APRA has decided to
apply an additional $500 million to Westpac’s operational risk capital requirement.

This follows APRA concluding that Westpac was required to improve its management
and oversight of non-financial risk. The additional capital requirement will remain in
place until APRA is satisfied that Westpac has completed its action plan.

A summary of the CGA self-assessment’s findings was included in Westpac’s 2019
Interim Results Presentation and Investor Discussion Pack. The summary included key
findings and outlined Westpac’s action plans across five areas: Board and executive
governance, risk and compliance, customer, remuneration and accountability, and
culture.

Westpac’s CGA self-assessment was undertaken by a joint team of Westpac
employees and consultants from global management consulting firm, Oliver Wyman,
and was submitted to APRA in November 2018. Westpac has today released a full
copy of its CGA self-assessment on its website: www.westpac.com.au/about-
westpac/media/

The $500m requirement, to be applied through an increase in risk weighted assets, will
apply from 30 September 2019. This change is expected to reduce Westpac’s Level 2
common equity tier 1 (CET1) capital ratio by approximately 16 basis points. Westpac’s
CET1 capital ratio at 31 March 2019 was 10.64%.

Westpac Group CEO Brian Hartzer, said: “The CGA self-assessment was a valuable
exercise. We acknowledge the need to improve non-financial risk management and
oversight and we are working to resolve the issues raised.

“Our Board and senior executives are committed to addressing the shortfalls identified
in the report and will continue to provide regular updates on our progress.”

Westpac Group Chief Risk Officer, David Stephen, is leading a program of work,
overseen by the Board, to implement the self-assessment’s recommendations. To
date, around 20% of the recommendations have been implemented.

For Further Information
David Lording
Media Relations
M. 0419 683 411

Andrew Bowden
Investor Relations
T. 02 8253 4008
M. 0438 284 863