Westpac Pillar 3 Report (June 2019)

December
JUNE 2019

Pillar 3 report
Table of contents


2 | Westpac Group June 2019 Pillar 3 Report

Structure of Pillar 3 report

Executive summary 3
Introduction 4
Group structure 6
Capital overview 8
Leverage ratio 11
Credit risk exposures 12
Securitisation 16
Liquidity coverage ratio 19
Appendix
Appendix I | APS330 Quantitative requirements 20
Disclosure regarding forward-looking statements 21




















In this report references to ‘Westpac’, ‘Westpac Group’, ‘the Group’, ‘we’, ‘us’ and ‘our’ are to Westpac
Banking Corporation and its controlled entities (unless the context indicates otherwise).
In this report, unless otherwise stated or the context otherwise requires, references to ‘$’, ‘AUD’ or ‘A$’ are
to Australian dollars.
Any discrepancies between totals and sums of components in tables contained in this report are due to
rounding.
In this report, unless otherwise stated, disclosures reflect the Australian Prudential Regulation Authority’s
(APRA) implementation of Basel III.
Information contained in or accessible through the websites mentioned in this report does not form part of
this report unless we specifically state that it is incorporated by reference and forms part of this report. All
references in this report to websites are inactive textual references and are for information only.

Pillar 3 report
Executive summary


Westpac Group June 2019 Pillar 3 Report | 3
$m
30 June 201931 March 201930 June 2018
The Westpac Group at Level 2
Common equity Tier 1 capital ratio %10.5 10.6 10.4
Additional Tier 1 capital %2.2 2.2 2.2
Tier 1 capital ratio %12.7 12.8 12.6
Tier 2 capital %1.8 1.8 2.2
Total regulatory capital ratio %
14.5 14.6 14.8
APRA leverage ratio %
5.7 5.7 5.6
Level 1 common equity Tier 1 capital ratio (CET1) %
10.5 10.7 10.2

Westpac’s common equity Tier 1 (CET1) capital ratio was 10.5% at 30 June 2019. The CET1 ratio was
lower than the 10.6% reported in March 2019 consistent with the normal quarterly movement in the CET1
capital ratio associated with the payment of the 2019 interim dividend. The quarterly movement in the
CET1 capital ratio was impacted by:
 relatively modest risk weighted asset (RWA) growth over the quarter (up 0.6%); and
 participation in the dividend reinvestment plan (DRP), which was 35.8% following the 1.5% discount
being placed on the DRP market price.

$m
30 June 201931 March 201930 June 2018
Risk weighted assets at Level 2
Credit risk366,701 362,762 361,558
Market risk8,037 8,338 8,672
Operational risk41,266 38,641 30,850
Interest rate risk in the banking book2,745 7,076 13,064
Other3,415 3,002
3,399
Total RWA
422,164 419,819 417,543
Total Exposure at Default
1,033,702 1,029,817 1,024,015

Total RWA increased $2.3 billion or 0.6% this quarter with most of the rise due to an increase in the
operational risk RWA overlay of $2.4bn to align Westpac’s operational risk capital to the standardised
approach. Other movements in RWA largely offset each other with credit RWA increasing $3.9bn while
non-credit RWA (excluding the operational risk capital increase indicated above) decreased by $4.2bn.
The $3.9 billion increase in credit risk RWA included:
 Portfolio growth of $0.8 billion in RWA mainly driven by mortgage growth;
 Changes to credit quality, which increased RWA by $2.0 billion, mostly due to higher mortgage
delinquencies; and
 An increase in mark-to-market related credit risk RWA of $1.1 billion, mostly due to lower interest rates
over the quarter.
The $4.2 billion decrease in non-credit RWA (excluding the movement in operational risk RWA) was mostly
due to a $4.3 billion fall in interest rate risk in the banking book RWA as a result of lower interest rates.
Exposure at Default
Exposure at default (EAD) increased $3.9 billion (up 0.4%) over the quarter, primarily due to growth in
residential mortgage exposures of $3.9 billion.
Leverage Ratio
The leverage ratio represents the amount of Tier 1 capital relative to exposure
1
. At 30 June 2019,
Westpac’s leverage ratio was 5.7% (31 March 2019: 5.7%).
Liquidity Coverage Ratio (LCR)
Westpac’s average LCR for the quarter ending 30 June 2019 was 137%
2
. Spot LCR at 30 June 2019 was
128% (31 March 2019: 138%).
Future capital developments
On 11 July 2019 Westpac Group received the Australian Prudential Regulation Authority’s (APRA)
response to its Culture, Governance and Accountability (CGA) self-assessment. As part of its response,
APRA has decided to apply an additional $500 million to Westpac’s operational risk capital requirement

1
As defined under Attachment D of APS110: Capital Adequacy
2
Calculated as a simple average of the daily observations over the 30 June 2019 quarter.

Pillar 3 report
Executive summary


4 | Westpac Group June 2019 Pillar 3 Report
reflecting a need to improve its management of non-financial risks. The $500 million requirement will apply
at 30 September 2019 and will remain until APRA is satisfied that Westpac has completed the action plan
set out in the CGA self-assessment. This change is expected to reduce Westpac’s Level 1 and Level 2
CET1 capital ratio by approximately 16 basis points.
In addition, the following capital developments are expected to emerge in the near future:
 New derivative standard from 1 July 2019, expected to reduce CET1 capital ratio by approximately 20
basis points;
 AASB
1
16 Leasing standard from 1 October 2019 (no impact in FY19), expected to reduce CET1
capital ratio by approximately 8 basis points;
 APRA unquestionably strong benchmark for CET1 capital ratio of at least 10.5% commences 1 January
2020 (based on current RWA methodology);
 Reserve Bank of New Zealand (RBNZ) capital announcement expected to be finalised late 2019; and
 APRA advised that it will be reviewing its current approach to risk-weighting Authorised Deposit-taking
Institution’s (ADI) equity exposures to subsidiaries (including NZ subsidiaries) at Level 1 later in 2019.
The CET1 capital ratio at 30 September 2019 will depend on 4Q19 earnings, which may be impacted by the
risks described in Westpac’s 2019 Interim Results announcement (including changes in remediation
provisions or potential fines and penalties).


1
Australian Accounting Standards Board.

Pillar 3 report
Introduction


Westpac Group June 2019 Pillar 3 Report | 5
Westpac Banking Corporation is an ADI subject to regulation by the APRA. APRA has accredited Westpac
to apply advanced models permitted by the Basel III global capital adequacy regime to the measurement of
its regulatory capital requirements. Westpac uses the Advanced Internal Ratings-Based approach
(Advanced IRB) for credit risk and the Advanced Measurement Approach (AMA) for operational risk.
In accordance with APS330 Public Disclosure, financial institutions that have received this accreditation,
such as Westpac, are required to disclose prudential information about their risk management practices on
a semi-annual basis. A subset of this information must be disclosed quarterly.
In addition to this report, the regulatory disclosures section of the Westpac website
1
contains the reporting
requirements for:
 Capital instruments under Attachment B of APS330; and
 The identification of potential Global-Systemically Important Banks (G-SIB) under Attachment H of
APS330 (disclosed annually).
Capital instruments disclosures are updated when:
 A new capital instrument is issued that will form part of regulatory capital; or
 A capital instrument is redeemed, converted into CET1 capital, written off, or its terms and conditions
are changed.





1
http://www.westpac.com.au/about-westpac/investor-centre/financial-information/regulatory-disclosures/

Pillar 3 report
Group structure


6 | Westpac Group June 2019 Pillar 3 Report
Westpac seeks to ensure that it is adequately capitalised at all times. APRA applies a tiered approach to
measuring Westpac’s capital adequacy
1
by assessing financial strength at three levels:
 Level 1, comprising Westpac Banking Corporation and its subsidiary entities that have been approved
by APRA as being part of a single 'Extended Licensed Entity' (ELE) for the purposes of measuring
capital adequacy;
 Level 2, the consolidation of Westpac Banking Corporation and all its subsidiary entities except those
entities specifically excluded by APRA regulations. The head of the Level 2 group is Westpac Banking
Corporation; and
 Level 3, the consolidation of Westpac Banking Corporation and all its subsidiary entities.
Unless otherwise specified, all quantitative disclosures in this report refer to the prudential assessment of
Westpac’s financial strength on a Level 2 basis
2
.
The Westpac Group
The following diagram shows the Level 3 conglomerate group and illustrates the different tiers of regulatory
consolidation.
Level 1 Consolidation
Level 2 Consolidation
Level 3 Consolidation
Regulatory
non-consolidated
subsidiaries
Westpac
New Zealand Ltd
Other Westpac Level 2
subsidiaries
Westpac Banking
Corporation
Westpac Level 1
subsidiaries


Accounting consolidation
3

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries (including
structured entities) controlled by Westpac. Westpac and its subsidiaries are referred to collectively as the
‘Group’. The effects of all transactions between entities in the Group are eliminated. Control exists when the
parent entity is exposed to, or has rights to, variable returns from its involvement with an entity, and has the
ability to affect those returns through its power over that entity. Subsidiaries are fully consolidated from the
date on which control commences and they are no longer consolidated from the date that control ceases.
Group entities excluded from the regulatory consolidation at Level 2
Regulatory consolidation at Level 2 covers the global operations of Westpac and its subsidiary entities,
including other controlled banking, securities and financial entities, except for those entities involved in the
following business activities:
 insurance;
 acting as manager, responsible entity, approved trustee, trustee or similar role in relation to funds
management;
 non-financial (commercial) operations; or
 special purpose entities to which assets have been transferred in accordance with the requirements of
APS120 Securitisation.
Retained earnings and equity investments in subsidiary entities excluded from the consolidation at Level 2
are deducted from capital, with the exception of securitisation special purpose entities.

1
APS110 Capital Adequacy outlines the overall framework adopted by APRA for the purpose of assessing the capital
adequacy of an ADI.
2
Impaired assets and provisions held in Level 3 entities are excluded from the tables in this report.
3
Refer to Note 35 of Westpac’s 2018 Annual Report for further details.

Pillar 3 report
Group structure


Westpac Group June 2019 Pillar 3 Report | 7
Subsidiary banking entities
Westpac New Zealand Limited (WNZL), a wholly owned subsidiary entity, is a registered bank incorporated
in New Zealand and regulated by the Reserve Bank of New Zealand. WNZL uses the Advanced IRB
approach for credit risk and the AMA for operational risk. Other subsidiary banking entities in the Group
include Westpac Bank-PNG-Limited and Westpac Europe Limited. For the purposes of determining
Westpac’s capital adequacy subsidiary banking entities are consolidated at Level 2.
Restrictions and major impediments on the transfer of funds or regulatory capital within the Group
Minimum capital (‘thin capitalisation’) rules
Tax legislation in most jurisdictions in which the Group operates prescribes minimum levels of capital that
must be retained in that jurisdiction to avoid a portion of the interest costs incurred in the jurisdiction ceasing
to be tax deductible. Capital for these purposes includes both contributed capital and non-distributed
retained earnings. Westpac seeks to maintain sufficient capital/retained earnings to comply with these rules.
Tax costs associated with repatriation
Repatriation of retained earnings (and capital) may result in tax being payable in either the jurisdiction from
which the repatriation occurs or Australia on receipt of the relevant amounts. This cost would reduce the
amount actually repatriated.
Intra-group exposure limits
Exposures to related entities are managed within the prudential limits prescribed by APRA in APS222
Associations with Related Entities
1
. Westpac has an internal limit structure and approval process governing
credit exposures to related entities. This limit structure and approval process, combined with APRA’s
prudential limits, is designed to reduce the potential for unacceptable contagion risk.
Prudential regulation of subsidiary entities
Certain subsidiary banking, insurance and trustee entities are subject to local prudential regulation in their
own right, including capital adequacy requirements and investment or intra-group exposure limits. Westpac
seeks to ensure that its subsidiary entities are adequately capitalised and adhere to regulatory requirements
at all times. There are no capital deficiencies in subsidiary entities excluded from the regulatory
consolidation at Level 2.
On 15 November 2017, the RBNZ advised WNZL of changes to its conditions of registration resulting from
its review of WNZL’s compliance with the RBNZ’s ‘Capital Adequacy Framework’ (Internal Models Based
Approach) (BS2B). The changes to WNZL’s conditions of registration came into effect on 31 December
2017 and increase the minimum Total Capital ratio, Tier 1 Capital ratio and Common Equity Tier 1 Capital
ratio of WNZL and its controlled entities by 2%. WNZL has also undertaken to the RBNZ to maintain the
Total Capital ratio of WNZL and its controlled entities above 15.1%. WNZL and its controlled entities retain
an appropriate amount of capital to comply with the increased minimum ratios.


1
For the purposes of APS222, subsidiaries controlled by Westpac, other than subsidiaries that form part of the ELE, represent
‘related entities’. Prudential and internal limits apply to intra-group exposures between the ELE and related entities, both on an
individual and aggregate basis.

Pillar 3 report
Capital overview


8 | Westpac Group June 2019 Pillar 3 Report
Capital management strategy
Westpac’s approach to capital management seeks to ensure that it is adequately capitalised as an ADI.
Westpac evaluates its approach to capital management through an Internal Capital Adequacy Assessment
Process (ICAAP), the key features of which include:
 the development of a capital management strategy, including consideration of regulatory minimums,
capital buffers and contingency plans;
 consideration of both regulatory and economic capital requirements;
 a stress testing framework that challenges the capital measures, coverage and requirements including
the impact of adverse economic scenarios; and
 consideration of the perspectives of external stakeholders including rating agencies and equity and
debt investors.
In light of APRA’s announcement on ‘unquestionably strong’ capital benchmarks on 19 July 2017, Westpac
will seek to operate with a CET1 capital ratio of at least 10.5% in March and September as measured under
the existing capital framework. This also takes into consideration:
 current regulatory capital minimums and the capital conservation buffer (“CCB”), which together are the
total CET1 requirement. In line with the above, the total CET1 requirement for Westpac is at least 8.0%,
based upon an industry minimum CET1 requirement of 4.5% plus a capital buffer of at least 3.5%
applicable to domestic systemically important banks (D-SIBs)
1
;
 stress testing to calibrate an appropriate buffer against a downturn; and
 quarterly volatility of capital ratios due to the half yearly cycle of ordinary dividend payments.
Should the CET1 ratio fall below the total CET1 requirement, restrictions on the distribution of earnings will
apply. This includes restrictions on the amount of earnings that can be distributed through dividends,
Additional Tier 1 capital distributions and discretionary staff bonuses.
Westpac will revise its target capital levels once APRA finalises its review of the capital adequacy
framework.
Total regulatory capital developments
On 9 July 2019 APRA announced that it will require the major banks (including Westpac) to lift Total Capital
by three percentage points of RWA by 1 January 2024 in order to boost loss absorbing capacity and
support orderly resolution. APRA also confirmed that its overall long term target of an additional four to five
percentage points of loss absorbing capacity remains unchanged, and that it will consider the most feasible
alternative method of sourcing the remaining one to two percentage points, taking into account the
particular characteristics of the Australian financial system.
Westpac’s capital adequacy ratios
% 30 June 201931 March 201930 June 2018
The Westpac Group at Level 2
Common equity Tier 1 capital ratio10.5 10.6 10.4
Additional Tier 1 capital2.2 2.2 2.2
Tier 1 capital ratio12.7 12.8 12.6
Tier 2 capital1.8 1.8 2.2
Total regulatory capital ratio14.5 14.6 14.8
The Westpac Group at Level 1
Common equity Tier 1 capital ratio10.5 10.7 10.2
Additional Tier 1 capital2.3 2.3 2.3
Tier 1 capital ratio12.8 13.0 12.5
Tier 2 capital1.9 1.8 2.3
Total regulatory capital ratio14.7 14.8 14.8


Westpac New Zealand Limited’s capital adequacy ratios
% 30 June 201931 March 201930 June 2018
Westpac New Zealand Limited
Common equity Tier 1 capital ratio12.0 11.7 12.2
Additional Tier 1 capital2.7 2.8 2.8
Tier 1 capital ratio 14.7 14.5 15.0
Tier 2 capital2.0 2.0 2.1
Total regulatory capital ratio16.7 16.5 17.1


1
Noting that APRA may apply higher CET1 requirements for an individual ADI.

Pillar 3 report
Capital overview


Westpac Group June 2019 Pillar 3 Report | 9
Capital requirements
This table shows risk weighted assets and associated capital requirements
1
for each risk type included in
the regulatory assessment of Westpac’s capital adequacy. More detailed disclosures on the prudential
assessment of capital requirements are presented in the following sections of this report.
234

30 June 2019
IRBStandardisedTotal Risk Total Capital
$m
Approach
Approach
2
Weighted Assets
Required
1
Credit risk
Corporate73,728 1,720
75,448
6,036
Business lending35,921 969
36,890
2,951
Sovereign1,899 1,074
2,973
238
Bank7,317 44
7,361
589
Residential mortgages134,702 5,155
139,857
11,189
Australian credit cards5,741 -
5,741
459
Other retail12,898 917
13,815
1,105
Small business16,331 -
16,331
1,307
Specialised lending53,887 446
54,333
4,347
Securitisation5,749 -
5,749
460
Mark-to-market related credit risk
3
- 8,203 8,203 656
Total348,173 18,528 366,701 29,337
Market risk8,037 643
Operational risk41,266 3,301
Interest rate risk in the banking book2,745 220
Other assets
4
3,415
273
Total422,164 33,774
31 March 2019
IRBStandardisedTotal Risk Total Capital
$m
Approach
Approach
2
Weighted Assets
Required
1
Credit risk
Corporate73,551 1,737
75,288
6,023
Business lending35,294 982
36,276
2,902
Sovereign1,653 1,042
2,695
216
Bank7,066 31
7,097
568
Residential mortgages132,133 5,273
137,406
10,992
Australian credit cards5,910 -
5,910
473
Other retail13,082 944
14,026
1,122
Small business16,092 -
16,092
1,287
Specialised lending54,833 446
55,279
4,422
Securitisation5,583 -
5,583
447
Mark-to-market related credit risk
3
- 7,110 7,110 569
Total345,197 17,565 362,762 29,021
Market risk8,338 667
Operational risk38,641 3,091
Interest rate risk in the banking book7,076 566
Other assets
4
3,002
240
Total419,819 33,585



1
Total capital required is calculated as 8% of total risk weighted assets.
2
Westpac’s Standardised risk weighted assets are categorised based on their equivalent IRB categories.
3
Mark-to-market related credit risk is measured under the standardised approach. It is also known as Credit Valuation
Adjustment (CVA) risk.
4
Other assets include cash items, unsettled transactions, fixed assets and other non-interest earning assets.

Pillar 3 report
Capital overview


10 | Westpac Group June 2019 Pillar 3 Report
30 June 2018
IRBStandardisedTotal Risk Total Capital
$m
Approach
Approach
2
Weighted Assets
Required
1
Credit risk
Corporate70,539 1,811
72,350
5,788
Business lending35,402 984
36,386
2,911
Sovereign1,616 962
2,578
206
Bank6,482 48
6,530
522
Residential mortgages129,827 5,481
135,308
10,825
Australian credit cards6,464 -
6,464
517
Other retail14,213 1,011
15,224
1,218
Small business16,144 -
16,144
1,292
Specialised lending57,299 432
57,731
4,618
Securitisation5,932 -
5,932
475
Mark-to-market related credit risk
3
- 6,911
6,911
553
Total343,918 17,640 361,558 28,925
Market risk8,672 694
Operational risk30,850 2,468
Interest rate risk in the banking book13,064 1,045
Other assets
4
3,399
272
Total417,543 33,404
1234




1
Total capital required is calculated as 8% of total risk weighted assets.
2
Westpac’s Standardised risk weighted assets are categorised based on their equivalent IRB categories.
3
Mark-to-market related credit risk is measured under the standardised approach. It is also known as Credit Valuation
Adjustment (CVA) risk.
4
Other assets include cash items, unsettled transactions, fixed assets and other non-interest earning assets.

Pillar 3 report
Leverage ratio disclosure


Westpac Group June 2019 Pillar 3 Report | 11
Leverage ratio
The following table summarises Westpac’s leverage ratio. This has been determined using APRA’s
definition of the leverage ratio as specified in APS110 Capital Adequacy.
$ billion30 June 201931 March 201931 December 201830 September 2018
Tier 1 Capital53.7 53.9 53.6 54.4
Total Exposures946.7 942.4 936.0 931.1
Leverage ratio5.7%5.7%5.7%5.8%

Pillar 3 report
Credit risk exposures


12 | Westpac Group June 2019 Pillar 3 Report
Summary credit risk disclosure12
Regulatory
ExpectedSpecificActual
RiskRegulatoryLoss forProvisions Losses for
30 June 2019
ExposureWeightedExpectednon-defaultedImpairedfor Impairedthe 9 months
$m
at DefaultAssets
Loss
1
exposuresLoansLoansended
Corporate
134,686 73,728 554 468 161 75 (5)
Business lending55,274 35,921 646 428 294 160 33
Sovereign80,171 1,899 2 2 ---
Bank26,224 7,317 8 8 ---
Residential mortgages562,101 134,702 1,708 1,139 422 119 87
Australian credit cards18,493 5,741 355 283 116 74 235
Other retail16,375 12,898 619 448 310 169 246
Small business33,429 16,331 504 347 399 164 53
Specialised Lending63,525 53,887 780 554 108 41 11
Securitisation26,169 5,749 -----
Standardised
2
17,255 18,528 --62 17 2
Total1,033,702 366,701 5,176 3,677 1,872 819 662
Regulatory
ExpectedSpecificActual
RiskRegulatoryLoss forProvisions Losses for
31 March 2019
ExposureWeightedExpectednon-defaultedImpairedfor Impairedthe 6 months
$m
at DefaultAssets
Loss
1
exposuresLoansLoansended
Corporate
135,502 73,551 561 468 176 79 (3)
Business lending54,299 35,294 642 424 279 161 23
Sovereign79,572 1,653 2 1 ---
Bank25,471 7,066 8 8 ---
Residential mortgages558,161 132,133 1,649 1,106 391 126 52
Australian credit cards18,850 5,910 363 292 101 63 150
Other retail16,583 13,082 640 459 297 173 162
Small business33,280 16,092 497 345 374 148 33
Specialised Lending64,781 54,833 798 562 118 44 10
Securitisation25,929 5,583 -----
Standardised
2
17,389 17,565 --13 6 1
Total1,029,817 362,762 5,160 3,665 1,749 800 428
Regulatory
ExpectedSpecificActual
RiskRegulatoryLoss forProvisions Losses for
30 June 2018
ExposureWeightedExpectednon-defaultedImpairedfor Impairedthe 9 months
$m
at DefaultAssets
Loss
1
exposuresLoansLoansended
Corporate
129,145 70,539 555 455 115 49 20
Business lending54,185 35,402 631 427 316 182 54
Sovereign82,167 1,616 2 2 ---
Bank24,985 6,482 8 8 ---
Residential mortgages551,333 129,827 1,211 998 309 94 73
Australian credit cards19,522 6,464 365 312 95 48 203
Other retail17,418 14,213 614 477 294 137 266
Small business33,021 16,144 454 333 174 80 77
Specialised Lending67,388 57,299 846 599 170 68 2
Securitisation26,815 5,932 -----
Standardised
2
18,036 17,640 --22 12 1
Total1,024,015 361,558 4,686 3,611 1,495 670 696


1
Includes regulatory expected losses for defaulted and non-defaulted exposures.
2
Includes mark-to-market related credit risk.

Pillar 3 report
Credit risk exposures


Westpac Group June 2019 Pillar 3 Report | 13
Exposure at Default by major type
123
30 June 2019
On balance
Total ExposureAverage
$m
sheet Non-market relatedMarket relatedat Default
3 months ended
1
Corporate63,514 59,650 11,522 134,686 135,094
Business lending43,029 12,245 -55,274 54,787
Sovereign76,109 1,518 2,544 80,171 79,872
Bank16,609 2,236 7,379 26,224 25,848
Residential mortgages488,220 73,881 -562,101 560,131
Australian credit cards9,477 9,016 -18,493 18,672
Other retail12,974 3,401 -16,375 16,479
Small business26,622 6,807 -33,429 33,355
Specialised lending51,704 10,503 1,318 63,525 64,153
Securitisation
2
20,619 5,354 196 26,169 26,049
Standardised13,451 1,149 2,655 17,255 17,322
Total822,328 185,760 25,614 1,033,702 1,031,766
31 March 2019
On balance
Total ExposureAverage
$m
sheet Non-market relatedMarket relatedat Default
6 months ended
3
Corporate66,944 57,852 10,706 135,502 135,502
Business lending41,345 12,954 -54,299 54,299
Sovereign75,685 1,487 2,400 79,572 79,572
Bank16,034 2,184 7,253 25,471 25,471
Residential mortgages482,670 75,491 -558,161 558,161
Australian credit cards9,575 9,275 -18,850 18,850
Other retail13,145 3,438 -16,583 16,583
Small business26,246 7,034 -33,280 33,280
Specialised lending52,780 10,918 1,083 64,781 64,781
Securitisation
2
20,767 4,997 165 25,929 25,929
Standardised13,641 1,195 2,553 17,389 17,389
Total818,832 186,825 24,160 1,029,817 1,029,818
30 June 2018
On balance
Total ExposureAverage
$m
sheet Non-market relatedMarket relatedat Default
3 months ended
4
Corporate61,514 54,850 12,781 129,145 129,505
Business lending41,181 13,004 -54,185 53,968
Sovereign78,106 1,845 2,216 82,167 79,242
Bank14,660 1,783 8,542 24,985 24,426
Residential mortgages475,193 76,140 -551,333 549,507
Australian credit cards9,671 9,851 -19,522 19,581
Other retail13,851 3,567 -17,418 17,557
Small business26,177 6,844 -33,021 32,963
Specialised lending53,400 13,060 928 67,388 67,191
Securitisation
2
21,966 4,724 125 26,815 26,689
Standardised13,945 1,216 2,875 18,036 18,060
Total809,664 186,884 27,467 1,024,015 1,018,685
Off-balance sheet
Off-balance sheet
Off-balance sheet



1
Average is based on exposures as at 30 June 2019 and 31 March 2019.
2
The EAD associated with securitisations is for the banking book only.
3
Average is based on exposures as at 31 March 2019, 31 December 2018, and 30 September 2018.
4
Average is based on exposures as at 30 June 2018 and 31 March 2018.

Pillar 3 report
Credit risk exposures


14 | Westpac Group June 2019 Pillar 3 Report
Loan impairment provisions
APS220 Credit Quality requires that Westpac report specific provisions and a General Reserve for Credit
Loss (GRCL). All Individually Assessed Provisions (IAP) raised under Australian Accounting Standards
(AAS) are classified as specific provisions. All Collectively Assessed Provisions (CAP) raised under AAS
are either classified into specific provisions or a GRCL.
1

30 June 2019 AAS ProvisionsGRCLTotal Regulatory
$m
IAPsCAPsTotalAdjustment Provisions
Specific Provisions
for impaired loans438 381 819 NA819
for defaulted but not impaired loansNA573 573 NA573
For Stage 2NA1,281 1,281 NA1,281
Total Specific Provision
1
438 2,235 2,673 NA2,673
General Reserve for Credit Loss
1
NA1,394 1,394 NA1,394
Total provisions for Expected Credit Losses438 3,629 4,067 NA4,067
31 March 2019 AAS ProvisionsGRCLTotal Regulatory
$m
IAPsCAPsTotalAdjustment Provisions
Specific Provisions
for impaired loans433 367 800 NA800
for defaulted but not impaired loansNA558 558 NA558
For Stage 2NA1,264 1,264 NA1,264
Total Specific Provision
1
433 2,189 2,622 NA2,622
General Reserve for Credit Loss
1
NA1,375 1,375 NA1,375
Total provisions for Expected Credit Losses433 3,564 3,997 NA3,997
30 June 2018 AAS ProvisionsGRCLTotal Regulatory
$m
IAPsCAPsTotalAdjustment Provisions
Specific Provisions
for impaired loans437 233 670 NA670
for defaulted but not impaired loansNA201 201 NA201
Total Specific Provision437 434 871 NA871
General Reserve for Credit LossNA2,235 2,235 355 2,590
Total provisions for impairment charges437 2,669 3,106 355 3,461


1
Provisions classified according to APRA’s letter dated 4 July 2017 “Provisions for regulatory purposes and AASB 9 financial
instruments”.

Pillar 3 report
Credit risk exposures


Westpac Group June 2019 Pillar 3 Report | 15
Impaired and past due loans
The following tables disclose the crystallisation of credit risk as impairment and loss. Analysis of exposures
defaulted not impaired, impaired loans, related provisions and actual losses is broken down by
concentrations reflecting Westpac’s asset categories.
SpecificSpecific Actual
30 June 2019
DefaultedImpairedProvisions forProvisions to Losses for the
$m
not impairedLoans Impaired LoansImpaired Loans9 months ended
Corporate95 161 75 47%(5)
Business lending423 294 160 54%33
Sovereign-----
Bank-----
Residential mortgages3,872 422 119 28%87
Australian credit cards-116 74 64%235
Other retail-310 169 55%246
Small business331 399 164 41%53
Specialised lending315 108 41 38%11
Securitisation-----
Standardised65 62 17 27%2
Total5,101 1,872 819 44%662
SpecificSpecific Actual
31 March 2019
DefaultedImpairedProvisions forProvisions to Losses for the
$m
not impairedLoans Impaired LoansImpaired Loans6 months ended
Corporate108 176 79 45%(3)
Business lending380 279 161 58%23
Sovereign-----
Bank-----
Residential mortgages3,376 391 126 32%52
Australian credit cards-101 63 62%150
Other retail-297 173 58%162
Small business310 374 148 40%33
Specialised lending314 118 44 37%10
Securitisation-----
Standardised34 13 6 46%1
Total4,522 1,749 800 46%428
SpecificSpecific Actual
30 June 2018
DefaultedImpairedProvisions forProvisions to Losses for the
$m
not impairedLoans Impaired LoansImpaired Loans9 months ended
Corporate78 115 49 43%20
Business lending264 316 182 58%54
Sovereign-----
Bank-----
Residential mortgages3,145 309 94 30%73
Australian credit cards-95 48 51%203
Other retail-294 137 47%266
Small business165 174 80 46%77
Specialised lending292 170 68 40%2
Securitisation-----
Standardised24 22 12 55%1
Total3,968 1,495 670 45%696

Pillar 3 report
Securitisation


16 | Westpac Group June 2019 Pillar 3 Report
Banking book summary of securitisation activity by asset type
For the 3 months ended
30 June 2019AmountRecognised gain or
$m
securitisedloss on sale
Residential mortgages4,137 -
Credit cards--
Auto and equipment finance305 -
Business lending--
Investments in ABS--
Other--
Total4,442 -
For the 6 months ended
31 March 2019AmountRecognised gain or
$m
securitisedloss on sale
Residential mortgages17,444 -
Credit cards--
Auto and equipment finance295 -
Business lending--
Investments in ABS--
Other--
Total17,739 -
For the 3 months ended
30 June 2018
AmountRecognised gain or
$m
securitisedloss on sale
Residential mortgages10,002 -
Credit cards--
Auto and equipment finance567 -
Business lending--
Investments in ABS--
Other--
Total10,569 -

Pillar 3 report
Securitisation


Westpac Group June 2019 Pillar 3 Report | 17
Banking book summary of on and off-balance sheet securitisation by exposure type
30 June 2019Off-balanceTotal Exposure
$m
Securitisation retainedSecuritisation purchasedsheetat Default
Securities-8,817 34 8,851
Liquidity facilities--356 356
Funding facilities2,388 -1,483 3,871
Underwriting facilities----
Lending facilities8 -
298
306
Warehouse facilities9,409 -3,376 12,785
Total11,805 8,817 5,547 26,169
31 March 2019Off-balanceTotal Exposure
$m
Securitisation retainedSecuritisation purchasedsheetat Default
Securities-8,746 34 8,780
Liquidity facilities--299 299
Funding facilities2,577 -1,168 3,745
Underwriting facilities----
Lending facilities9 -
8
17
Warehouse facilities9,435 -3,653 13,088
Total12,021 8,746 5,162 25,929
30 June 2018
Off-balanceTotal Exposure
$m
Securitisation retainedSecuritisation purchasedsheetat Default
Securities-9,102 32 9,134
Liquidity facilities--266 266
Funding facilities5,157 -1,932 7,089
Underwriting facilities----
Lending facilities505 -
24
529
Warehouse facilities7,178 -2,619 9,797
Total12,840 9,102 4,873 26,815
On balance sheet
On balance sheet
On balance sheet

Pillar 3 report
Securitisation


18 | Westpac Group June 2019 Pillar 3 Report
Trading book summary of on and off-balance sheet securitisation by exposure type
1

30 June 2019Off-balanceTotal Exposure
$m
Securitisation retainedSecuritisation purchasedsheetat Default
Securities-14 -14
Liquidity facilities----
Funding facilities----
Underwriting facilities----
Lending facilities----
Warehouse facilities----
Credit enhancements----
Basis swaps--59 59
Other derivatives--13 13
Total-14 72 86
31 March 2019Off-balanceTotal Exposure
$m
Securitisation retainedSecuritisation purchasedsheetat Default
Securities-30 -30
Liquidity facilities----
Funding facilities----
Underwriting facilities----
Lending facilities----
Warehouse facilities----
Credit enhancements----
Basis swaps--48 48
Other derivatives--7 7
Total-30 55 85
30 June 2018Off-balanceTotal Exposure
$m
Securitisation retainedSecuritisation purchasedsheetat Default
Securities-150 -150
Liquidity facilities----
Funding facilities----
Underwriting facilities----
Lending facilities----
Warehouse facilities----
Credit enhancements----
Basis swaps--51 51
Other derivatives--36 36
Total-150 87 237
On balance sheet
On balance sheet
On balance sheet




1
EAD associated with trading book securitisation is not included in EAD by major type on page 13. Trading book securitisation
exposure is captured and risk weighted under APS116 Capital Adequacy: Market Risk.

Pillar 3 report
Liquidity coverage ratio


Westpac Group June 2019 Pillar 3 Report | 19
Liquidity Coverage Ratio
The Liquidity Coverage Ratio (LCR) requires banks to hold sufficient high-quality liquid assets, as defined
by APRA, to withstand 30 days under a regulator-defined acute stress scenario. Westpac’s LCR as at 30
June 2019 was 128%
1
(31 March 2019: 138%) and the average LCR for the quarter was 137%
2
(31 March
2019: 134%).
Liquid assets included in the LCR comprise High Quality Liquid Assets (HQLA), the Committed Liquidity
Facility (CLF) from the Reserve Bank of Australia and additional qualifying Reserve Bank of New Zealand
securities. Westpac received approval from APRA for a CLF of $54.0 billion for the calendar year 2019
(2018 calendar year: $57.0 billion). Westpac maintains a portfolio of HQLA and these averaged $82.7 billion
over the quarter
2
.
Funding is sourced from retail, small business, corporate and institutional customer deposits and wholesale
funding. Westpac seeks to minimise the outflows associated with this funding by targeting customer
deposits with lower LCR outflow rates and actively manages the maturity profile of its wholesale funding
portfolio. Westpac maintains a buffer over the regulatory minimum of 100%.
3

Total unweighted
value (average)
2
Total weighted
value (average)
2
Total unweighted
value (average)
3
Total weighted
value (average)
3
Liquid assets, of which:
1High-quality liquid assets (HQLA)82,684 78,869
2Alternative liquid assets (ALA)47,992 46,948
3Reserve Bank of New Zealand (RBNZ) securities4,756 4,601

Cash Outflows

4Retail deposits and deposits from small business
customers, of which:
237,242 21,658 233,942 21,398
5Stable deposits114,136 5,707 112,686 5,634
6Less stable deposits123,106 15,951 121,256 15,764

7Unsecured wholesale funding, of which:120,209 58,863 120,609 60,613
8Operational deposits (all counterparties) and deposits
in networks for cooperative banks
44,529 11,062 42,567 10,572
9Non-operational deposits (all counterparties)64,785 36,906 65,914 37,913
10Unsecured debt10,895 10,895 12,128 12,128
11Secured wholesale funding1 2

12Additional requirements, of which:198,241 28,040 198,647 26,569
13Outflows related to derivatives exposures and other
collateral requirements
10,843 10,843 10,368 10,368
14Outflows related to loss of funding on debt products1,536 1,536 34 34
15Credit and liquidity facilities185,862 15,661 188,245 16,167

16Other contractual funding obligations1,367 1,367 728 728
17Other contingent funding obligations46,488 4,196 44,213 3,981

18Total cash outflows114,125 113,291

Cash inflows

19Secured lending (e.g. reverse repos)5,704 -5,345 -
20Inflows from fully performing exposures19,522 12,592 19,323 12,538
21Other cash inflows2,671 2,671 3,476 3,476
22Total cash inflows
27,897
15,263
28,144
16,014
23Total liquid assets135,432 130,418
24Total net cash outflows98,862 97,277
25Liquidity Coverage Ratio (%)137%134%
Number of data points used6263
$m
31 March 2019 30 June 2019

1
Calculated as total liquid assets divided by total net cash outflows for 30 June 2019.
2
Calculated as a simple average of the daily observations over the 30 June 2019 quarter.
3
Calculated as a simple average of the daily observations over the 31 March 2019 quarter.

Pillar 3 report
Appendix I | APS330 quantitative requirements


20 | Westpac Group June 2019 Pillar 3 Report
The following table cross-references the quantitative disclosure requirements outlined in Attachment C of
APS330 to the quantitative disclosures made in this report.
APS330 reference
 Westpac disclosure
Page
General Requirements
Paragraph 49 Summary leverage ratio 11

Attachment C

Table 3:
Capital Adequacy
(a) to (e)
(f)
Capital requirements
Westpac’s capital adequacy ratios
Capital adequacy ratios of major subsidiary banks
9
8
8

Table 4:
Credit Risk - general
disclosures
(a)
(b)
(c)
Exposure at Default by major type
Impaired and past due loans
General reserve for credit loss

13
15
14

Table 5:
Securitisation exposures
(a)

(b)

Banking Book summary of securitisation activity by asset type
Banking Book summary of on and off-balance sheet
securitisation by exposure type
Trading Book summary of on and off-balance sheet
securitisation by exposure type

16

17

18

Attachment F

Table 20: Liquidity
Coverage Ratio disclosure
template
Liquidity Coverage Ratio disclosure 19




Exchange rates
The following exchange rates were used in this Westpac Pillar 3 report, and reflect spot rates for the period
end.
$30 June 201931 March 201930 June 2018
USD0.7014 0.7092 0.7387
GBP0.5534 0.5425 0.5635
NZD1.0461 1.0439 1.0911
EUR0.6168 0.6313 0.6347

Pillar 3 report
Disclosure regarding forward-looking statements

Westpac Group June 2019 Pillar 3 Report | 21
This report contains statements that constitute ‘forward-looking statements’ within the meaning of Section 21E of
the US Securities Exchange Act of 1934.
Forward-looking statements are statements about matters that are not historical facts. Forward-looking statements
appear in a number of places in this report and include statements regarding Westpac’s intent, belief or current
expectations with respect to its business and operations, market conditions, results of operations and financial
condition, including, without limitation, future loan loss provisions and financial support to certain borrowers. Words
such as ‘will’, ‘may’, ‘expect’, ‘intend’, ‘seek’, ‘would’, ‘should’, ‘could’, ‘continue’, ‘plan’, ‘estimate’, ‘anticipate’,
‘believe’, ‘probability’, ‘risk’, ‘aim’ or other similar words are used to identify forward-looking statements. These
forward-looking statements reflect Westpac’s current views with respect to future events and are subject to
change, certain risks, uncertainties and assumptions which are, in many instances, beyond Westpac’s control, and
have been made based upon management’s expectations and beliefs concerning future developments and their
potential effect upon Westpac. There can be no assurance that future developments will be in accordance with
Westpac’s expectations or that the effect of future developments on Westpac will be those anticipated. Actual
results could differ materially from those expected, depending on the outcome of various factors, including, but not
limited to:
 the effect of, and changes in, laws, regulations, taxation or accounting standards or practices and government
policy, particularly changes to liquidity, leverage and capital requirements;
 regulatory investigations, and other actions, inquiries, litigation, fines, penalties, restrictions or other regulator
imposed conditions, including as a result of our actual or alleged failure to comply with laws (such as financial
crime laws), regulations or regulatory policy;
 internal and external events which may adversely impact Westpac's reputation;
 information security breaches, including cyberattacks;
 reliability and security of Westpac's technology and risks associated with changes to technology systems;
 the stability of Australian and international financial systems and disruptions to financial markets and any
losses or business impacts Westpac or its customers or counterparties may experience as a result;
 market volatility, including uncertain conditions in funding, equity and asset markets;
 adverse asset, credit or capital market conditions;
 an increase in defaults in credit exposures because of a deterioration in economic conditions;
 the conduct, behaviour or practices of Westpac or its staff;
 changes to Westpac's credit ratings or to the methodology used by credit rating agencies;
 levels of inflation, interest rates, exchange rates and market and monetary fluctuations;
 market liquidity and investor confidence;
 changes in economic conditions, consumer spending, saving and borrowing habits in Australia, New Zealand
and in other countries in which Westpac or its customers or counterparties conduct their operations and
Westpac's ability to maintain or to increase market share, margins and fees, and control expenses;
 the effects of competition, including from established providers of financial services and from non-financial
service entities in the geographic and business areas in which Westpac conducts its operations;
 the timely development and acceptance of new products and services and the perceived overall value of these
products and services by customers;
 the effectiveness of Westpac's risk management policies, including internal processes, systems and
employees;
 the incidence or severity of Westpac insured events;
 the occurrence of environmental change (including as a result of climate change) or external events in
countries in which Westpac or its customers or counterparties conduct their operations;
 changes to the value of Westpac's intangible assets;
 changes in political, social or economic conditions in any of the major markets in which Westpac or its
customers or counterparties operate;
 the success of strategic decisions involving diversification or innovation, in addition to business expansion
activity, business acquisitions and the integration of new businesses; and
 various other factors beyond Westpac's control.
The above list is not exhaustive. For certain other factors that may impact on forward-looking statements made by
Westpac refer to ‘Risk factors’ in Westpac’s 2019 Interim Financial Results Announcement. When relying on
forward-looking statements to make decisions with respect to Westpac, investors and others should carefully
consider the foregoing factors and other uncertainties and events.
Westpac is under no obligation to update any forward-looking statements contained in this report, whether as a
result of new information, future events or otherwise, after the date of this report.