1Q20 Capital, Funding and Credit Quality Update

ASX Release


19 FEBRUARY 2020

1Q20 Capital, Funding and Credit Quality Update

Westpac Banking Corporation (“Westpac”) today provides the attached 1Q20 Capital,
Funding and Credit Quality Update.







For further information:

David Lording Andrew Bowden
Group Head of Media Relations Head of Investor Relations
0419 683 411 T. (02) 8253 4008 (ext. 24008)
M. 0438 284 863


This document has been authorised for release by Tim Hartin, Group Company Secretary.
Level 18, 275 Kent Street
Sydney, NSW, 2000

CET1 capital
(on APRA Level 2
basis unless
otherwise stated)
•Common equity Tier 1 (CET1) capital ratio 10.8% at 31 December 2019 (10.7% at 30 September 2019). Movement due to:
‒$2.8bn of additional capital raised (63bps) from a $2.0bn institutional placement and a $770m Share Purchase Plan
‒Payment of the 2019 final dividend, net of dividend reinvestment plan (DRP) (-57bps)
‒Risk weighted assets (RWA) increase of $13.7bn (-35bps) mostly from increases in interest rate risk in the banking
book (IRRBB) ($10.5bn) and operational risk ($6.5bn). The increase in operational risk RWA is mainly from the
additional $500 million capital overlay imposed by APRA in response to the issues alleged by AUSTRAC in its
Statement of Claim (increased RWA by $6.3bn). Increases were partly offset by a $6.5bn decrease in credit RWAs
‒1Q20 earnings and other capital movements (38bps)
•Level 1 common equity Tier 1 (CET1) capital ratio 11.1% at 31 December 2019 (11.0% at 30 September 2019)
•Internationally comparable
1
CET1 capital ratio 16.1% at 31 December 2019
Credit quality
•Credit quality sound
•Impaired assets $1.8bn at 31 December 2019 ($1.8bn 30 September 2019)
•Stressed assets to TCE
2
increased 2bps to 1.22%
‒3bps increase in Watchlist due to customer downgrades in WIB, Business and NZ
‒offset by 1bp decrease in Substandard facilities from customer upgrades
•Australian unsecured 90+ day delinquencies increased 5bps to 1.82% mostly from the $0.3bn decline in the portfolio
•Total provision balances up 1.7%, total provisions to gross loans up 1bp. Increase in IAP includes a provision raised for one
large facility >$50m
Australian mortgage
portfolio
•Australian mortgage 90+ day delinquencies 0.86% (down 2bps over the quarter)
•Properties in possession 472 (down 86 over the quarter) as housing conditions continue to improve and some seasonality
Funding/liquidity
position
•1Q20 average liquidity coverage ratio (LCR) 132% (spot LCR 130%), net stable funding ratio (NSFR) 112% – both well above
regulatory minimums
•$12.4bn term funding issued to 31 January 2020
Bushfires and other
•Bushfires have had a significant impact on communities but, as yet, this has only had a small impact on credit quality
•Cost of insurance claims for severe weather events, including bushfires / hail storms, to 14 February 2020 estimated at $140m
(pre-tax)
Westpac Group 1Q20 Capital, Funding and Credit Quality Update
Summary of 1Q20 capital, funding and credit quality
2
Overview
1 Internationally comparable methodology aligns with the APRA study titled ‘International Capital Comparison Study’ dated 13 July 2015. 2 TCE is total committed exposure.

Update to FY20 considerations
Westpac Group 1Q20 Capital, Funding and Credit Quality Update
1 The $80m will be included in cash earnings and treated as notable items.
Additional factors impacting FY20 earnings
A number of factors have emerged since Westpac released its FY19 results on 4
November 2019 which are expected to have an impact on FY20 earnings. These
include:
•The unprecedented bushfires across Australia, and high storm activity early in 2020
•AUSTRAC’s civil penalty proceedings against Westpac, Westpac’s response plan,
subsequent actions from other regulators, and class actions
•Westpac remains committed to materially lifting its approach to risk management. As a
result, we are identifying further issues to address. At the same time, the number of
regulatory investigations and reviews into the Group’s businesses has risen. The Group
expects to incur additional expenses in FY20 associated with this work and will need to
reconsider its current cost growth expectations. We announced in FY19 that FY20
expenses excluding notables were expected to be 1% higher and a further update will be
provided at the Group’s 1H20 results.
In addition to the above, the bushfires, storms and Coronavirus are expected to have an
economic impact which may ultimately affect banking activity and growth. Westpac Economics
recently updated their Australian GDP forecast for calendar year 2020 to 1.9% (down from
2.4% forecast at November 2019). The tourism and education sectors are expected to be
particularly impacted.
•Insurance claims for severe weather
events currently estimated at
approximately $140m (pre-tax) (estimate at
14 February 2020)
•Around 1,500 disaster relief packages
accessed
•Bushfire relief packages and grants
(consumer and businesses) in FY20
estimated to cost approximately $26m (pre-
tax), with most of the costs in 2H20
•Additional expenses in FY20, including
$80m (pre-tax) announced from the
response plan
1
•Increased litigation and regulatory
investigation expenses
•Potential significant civil penalty
AUSTRAC and related matters
Bushfires and storms
3
FY20 considerations

Westpac Group 1Q20 Capital, Funding and Credit Quality Update
1 International Funds Transfer Instructions. 2 The commitments noted here are included in the $80m expenses noted on the previous slide.
Litigation
•Continue to work cooperatively with AUSTRAC
to agree Statement of Agreed Facts and
Admissions
•Second case management hearing scheduled for
2 March 2020
•Not able to reliably estimate penalty and no
provision raised
Regulatory investigations
•Ongoing regulatory investigations from ASIC and
APRA with outcomes of these investigations
unknown
Class actions
•In December, Phi Finney McDonald commenced
a class action against Westpac in Australia
relating to alleged market disclosure issues
connected to Westpac’s monitoring of financial
crime and matters which are the subject of the
AUSTRAC proceeding
•In February, the US based Rosen Law Firm
commenced a class action lawsuit naming
Westpac, former CEO, Brian Hartzerand current
CEO, Peter King, as defendants relating to
similar alleged market disclosure issues
•The damages sought by the claims are
unspecified
•The Group will be defending both claims
•Westpac notes other similar lawsuits may be filed
Progress on response plan
Immediate fixes
•Reported outstanding IFTIs
1
to AUSTRAC
•Closed the relevant Australasian Cash Management Product
•Closed the LitePayproduct
•Lookback screen of customer transactions to further identify suspicious activity to report to AUSTRAC
Lifting our standards
•Board Financial Crime Committee established
•Promontory appointed to provide assurance over Westpac’s assessment of management’s accountability
and the adequacy of Westpac’s Financial Crime Program, review underway
•Independent Advisory Panel for AUSTRAC Accountability Review established, to provide
recommendations on Board risk governance and Board accountability, review underway
•Updated transaction monitoring rules and implemented enhanced governance over monitoring processes
•Implemented priority screening and reporting of transactions indicative of child exploitation to AUSTRAC
within 24 hours
•Elevated the financial crime function to report directly to the Chief Risk Officer
Protecting people
2
•Commenced engagement with key external organisations with details of agreement in progress,
including committed arrangements with
‒SaferKidsPHwith first contribution of $1m made in January 2020. The remainder of $5m to be
completed by end of 2025
‒The International Justice Mission with $18m to be contributed by end of 2022
•Roundtable established, with supporting Advisory Group, to advise on work program to address child
safety and human rights, with $30m funding to be distributed, guided by an impact framework, by end of
2022
Outstanding items
4
Update on AUSTRAC matters
AUSTRAC update

Helping customers through natural disaster – Bushfires
1 Bushfire Recovery Support Packages provided to customers to 14 February 2020. Full details of Bushfire Recovery Support Packages are available at www.westpac.com.au2 Estimated gross cost for Westpac.
5
In 2019/20 Australia faced unprecedented bushfires. The impacts on individuals and communities was
devastating. Westpac supported people, businesses and communities impacted in a number of ways
Supporting communities and customers
•Provided over $3m in emergency cash grants to consumer and business customers
•Donated over $1m to community groups and charities, including $500k to Financial
Counselling Australia; $300k to state-based volunteer fire services, $250k to the
Foundation for Rural and Regional Renewal and $100k to the Victoria Bushfire Appeal
•Collected over $1.7m in donations from customers for the Salvation Army
Received around 500 General Insurance claims
•The total claims from this event currently estimated at $37 million
2
•235 claims finalised
Deployed mobile customer support teams across affected areas and regions
•Set up mobile branches and ATMs
•Provided customers access to cash at a time when networks across the area were
affected and mobile payments were not possible
•Established a central team to support customers’ needs
Service leadership
Supporting our people
•Uncapped paid leave for employees who are emergency services volunteers in
bushfire affected areas
•3 days paid volunteering leave for employees wanting to volunteer in bushfire affected
areas
Provided around 1,500 disaster relief packages
1
to help make it easier for customers to manage their finances, including providing
alternative arrangements such as repayment holidays. This comprised around:
•190 across cards and personal lending (excluding Auto loans)
•620 for home loans
•670 for business banking products (including Auto and equipment finance)
Westpac employees volunteering with BlazeAid
assisting to rebuild fences destroyed by bushfire in
Wingham (335
kmnorth of Sydney)
Westpac Group 1Q20 Capital, Funding and Credit Quality Update

Key capital ratios
Westpac Group 1Q20 Capital, Funding and Credit Quality Update
1 Table may not add due to rounding. 2 Internationally comparable methodology aligns with the APRA study titled ‘International Capital Comparison Study’ dated 13 July 2015.
CET1 capital ratio (%) and CET1 capital ($bn)
(APRA basis)
Capital ratios
1
Capital
6
%Mar-19Sep-19Dec-19
CET1 capital ratio10.610.710.8
Additional Tier 1 capital 2.22.22.1
Tier 1 capital ratio 12.812.812.8
Tier 2 capital1.82.82.7
Total regulatory capital ratio14.615.615.5
Risk weighted assets (RWA)($bn)420429442
Leverage ratio5.75.76.0
Level 1 CET1 capital ratio10.711.011.1
Internationally comparable ratios
2
Leverage ratio (internationally
comparable)
6.46.46.7
CET1 capital ratio (internationally
comparable)
16.215.916.1
38
40
41
43
42
44
44
45
44
45
44
46
48
9.3
10.0
10.0
10.6
10.1
10.5
10.4
10.6
10.4
10.6
10.5
10.7
10.8
0
2
4
6
8
10
12
15
20
25
30
35
40
45
50
55
Dec-16
Mar-17
Jun-17
Sep-17
Dec-17
Mar-18
Jun-18
Sep-18
Dec-18
Mar-19
Jun-19
Sep-19
Dec-19
Westpac CET1 capital (lhs, $bn)
Westpac CET1 capital ratio (rhs, %)
$bn
%

CET1 capital ratio 10.8% at 31 December 2019
Westpac Group 1Q20 Capital, Funding and Credit Quality Update
1 “Revisions to APS 111 Capital Adequacy: Measurement of Capital” released on 15 October 2019. For this purpose equity investments includes Additional Tier 1 and Tier 2 capital.
•Final RBNZ capital review released and confirmed a revised Tier 1
requirement for WNZL of 16%
•Revisions commence from 1 July 2020 and Westpac well placed to
implement the changes within the seven year transitional period
•APRA consulting on changes to the capital treatment of a parent
ADI (“Level 1”), expected to reduce the Level 1 CET1 ratio by
40bps primarily from Westpac's equity investment in WNZL
1
•Further clarity on revised APRA capital framework expected over
2020 including on advanced credit risk RWA and the “capital stack”
•CET1 ratio of 10.8%, up from 10.7% at 30 September 2019
•Over the quarter, the ratio has been impacted by the $2.0bn
institutional share placement, $0.8bn Share Purchase Plan,
payment of the 2019 final dividend and higher RWAs
•RWA up $13.7bn mostly from an operational risk overlay and higher
IRRBB RWA
•Level 1 CET1 ratio of 11.1%, up from 11.0% at 30 September 2019
CET1 capital ratio (%)
Regulatory developments Capital update
7
10.6
10.7
0.6
0.110.8
11.1
(0.6)
Mar-19
APRA
Sep-19
APRA
Final dividend
(net of DRP)
Capital raisingsOtherDec-19
APRA
Dec-19
Level 1 APRA
1Q20 earnings, RWA
movements and other capital
movements
Capital

RWA higher from higher operational risk and interest rate risk in
the banking book
Westpac Group 1Q20 Capital, Funding and Credit Quality Update
8
Risk weighted assets ($bn)
Movement in credit risk weighted assets ($bn)
419.8
428.8
10.5
6.5
3.5442.5
(6.5)
(0.3)
Mar-19Sep-19Credit
risk
Market
risk
IRRBBOperational
risk
OtherDec-19
Up $13.7bn or 3%
362.8
367.9
1.0
361.4
(2.2)
(3.9)
(1.4)
Mar-19Sep-19Volume, quality and
portfolio mix
FX
impacts
Derivatives including
mark-to-market related
credit risk
Model
change
Dec-19
Down $6.5bn or 2%
•Higher IRRBB from:
•Westpac’s implementation of a new IRRBB model more suited to low
interest rates, which will need to be approved by APRA. Until the
model is finalised and approved, Westpac is including an overlay in its
IRRBB RWA. At December 2019 the overlay increased RWA by
$6.3bn ($500m capital); and
•Higher repricing and yield risk and a lower embedded gain from rising
interest rates over the quarter ($4.2bn)
•Operational risk RWA higher mainly from the additional $500m capital
overlay imposed by APRA in response to the issues alleged by
AUSTRAC in its Statement of Claim
•Other RWA increased by $3.5bn mostly from the adoption of AASB16
Leasing from October 2019
Capital

Expected timetable on various regulatory changes
1
1 Regulatory change timeline based on APRA’s papers “Revisions to the capital framework for authorised deposit-taking institutions” (published 12 June 2019) and “APRA’s Policy Priorities” (published 30 January
2020). 2 Implementation 2022 unless otherwise stated. 3 This refers to the review of IRRBB as part of ARPA’s review of the capital framework. Other changes to Westpac’s IRRBB model are on a different timeframe.
9
Westpac Group 1Q20 Capital, Funding and Credit Quality Update
Standardised approach to
credit risk
Consult, additional
quantitative impact
study
FinaliseImplementation
Advanced approachto
credit risk
Consult, additional
quantitative impact
study
FinaliseImplementation
Operational riskConsult and finaliseImplementation
LeverageratioConsultFinaliseImplementation
Measurementof capitalConsult FinaliseImplementation
Capital floorConsultFinaliseImplementation
Interestraterisk in the
banking book
3
FinaliseImplementation
Level 1 equity investments
in subsidiaries
Consultand finaliseImplementation
RBNZ capital frameworkImplementationdate 1 July 2020 with a 7 year transition period
Relatedparty exposures Implementation
Lossabsorbing capacityFurther consultation on 2nd phase
2024
Implementation
Regulatory timeline
2022+
2
Second half
2020
Second half
2021
First half
2021
First half
2020

1
7
5
7
11
22
1
0.6
38
42
48
46
41
30
FY18FY19FY20 YTD
>5years
5 years
4 years
3 years
2 years
1 year
Raised $12.4bn in new term funding FY20 YTD
1
10
Westpac Group 1Q20 Capital, Funding and Credit Quality Update
1 FY20 YTD is 1 October 2019 to 31 January 2020. 2 Based on residual maturity and FX spot currency translation. Includes all debt issuance with contractual maturity greater than 13 months excluding US Commercial Paper and Yankee
Certificates of Deposit. 3 Contractual maturity date for hybrids and callable subordinated instruments is the first scheduled conversion date or call date for the purposes of this disclosure. 4 Perpetual sub-debt has been included in >FY26 maturity
bucket. Maturities exclude securitisation amortisation. 5 Tenor excludes RMBS and ABS. 6 WAM is weighted average maturity.
IssuanceMaturities
Term debt issuance and maturity profile
2,3,4
($bn)
6.5yrs
New term issuance by tenor
3,5
(%)
6.0yrs
WAM
6
New term issuance by type (%)New term issuance by currency (%)
Funding and Liquidity
Chart may not add to 100 due to rounding.
Chart may not add to 100 due to rounding. Chart may not add to 100 due to rounding.
5.2yrs
1Q20 funding and liquidity highlights
•Average LCR for 1Q20 132% (average 132% for
4Q19)
•NSFR 112% at 1Q20 (112% at 4Q19)
•Well progressed on FY20 term funding plan, with
$12.4bn issued at 31 January 2020
•Constructive market conditions at the start of
calendar 2020 provided good opportunities to issue
across a number of products and markets, including
senior unsecured bonds, covered bonds, RMBS and
Tier 2 capital securities
31
42
37
32
34
12
20
33
26
20
25
13
8
21
FY15FY16FY17FY18FY19FY20
YTD
FY20FY21FY22FY23FY24FY25FY26
>FY26
Covered bondHybridSenior/SecuritisationSub debt
73
51
41
13
24
21
5
8
20
5
4
4
13
18
FY18FY19FY20 YTD
Subordinated
debt
Hybrid
Securitisation
Covered bonds
Senior
unsecured
15
7
21
21
32
27
80
32
46
20
FY18FY19FY20 YTD
AUD
USD
EUR
Other

Well provisioned, credit quality remains sound
Westpac Group 1Q20 Capital, Funding and Credit Quality Update
1 Includes provisions for credit commitments.
Mar-19Sep-19Dec-19
Loan provisions
1
to gross loans (bps)565455
Impaired asset provisions to impaired assets (%)464548
Collectively assessed provisions to credit RWA (bps)989599
Movement in stressed exposure categories (bps)
Stressed exposures as a % of TCETotal impairment provisions ($m)
11
Credit quality
0.44
0.27
0.20
0.22
0.15
0.14
0.17
0.17
0.31
0.26
0.25
0.33
0.34
0.39
0.48
0.48
0.85
0.71
0.54
0.65
0.56
0.55
0.55
0.57
1.60
1.24
0.99
1.20
1.05
1.08
1.20
1.22
0.0
1.0
2.0
Sep-13Sep-14Sep-15Sep-16Sep-17Sep-18Sep-19Dec-19
Watchlist and substandard
90+ day past due and not impaired
Impaired
1364
867
669
869
480
422422
433
412
483
2,196
2,225
2,275
2,344
2,316
2,330
3,405
3,333
3,339
3,333
389
389
388
389
323
301
215
229
171
171
3,949
3,481
3,332
3,602
3,119
3,053
4,042
3,995
3,922
3,987
Sep-13Sep-14Sep-15Sep-16Sep-17Sep-18Oct-18Mar-19Sep-19Dec-19
Overlay
Collectively assessed provisions
Individually assessed provisions
1100
5(2)
712000
(1)
3122
Mar-19
Impaired
90+ dpd not
impaired
Substandard
Watchlist
Sep-19
Impaired
90+ dpd not
impaired
Substandard
Watchlist
Dec-19

Australian consumer unsecured lending, 3% of Group loans
Westpac Group 1Q20 Capital, Funding and Credit Quality Update
Australian unsecured portfoliodelinquencies (%)Australian consumer unsecured lending portfolio
12
Mar-19Sep-19Dec-19
Lending $20.7bn$19.5bn$19.2bn
30+ day delinquencies(%)4.083.683.80
90+ day delinquencies(%)1.871.771.82
Consumer unsecured 90+ day delinquencies up 5bps mostly due to portfolio
contraction, and temporary changes to collections operations
Australian unsecured portfolio ($bn)
1
1 Does not include Margin Lending.
9.2
4.4
7.1
20.7
8.7
4.1
6.7
19.5
8.7
4.0
6.5
19.2
Credit cardsPersonal loansAuto loans
(consumer)
Total consumer
unsecured
Mar-19Sep-19Dec-19
Credit quality
Australian unsecured portfolio ($bn)
1
90+ day delinquencies (%)
Australian unsecured portfolio ($bn)
1
Unsecured portfolio ($bn)
0
1
2
3
0
5
10
15
20
25
Dec-17
Feb-18
Apr-18
Jun-18
Aug-18
Oct-18
Dec-18
Feb-19
Apr-19
Jun-19
Aug-19
Oct-19
Dec-19
Unsecured performing loans balance ($bn lhs)
Unsecured 90+ day delinquencies balance ($bn rhs)
0.00
1.00
2.00
3.00
Dec-17Jun-18Dec-18Jun-19Dec-19
Total unsecured consumer lending
1.82%

Australian mortgage portfolio performance
Westpac Group 1Q20 Capital, Funding and Credit Quality Update
Major banks’ total residential mortgage impaired and past
due loans ≥ 90days ($bnand %)
2
Australian mortgages 90+ day delinquencies by State (%)
Australian mortgage portfolio
Australian mortgage portfoliodelinquencies (%)
1 Dec 19 mortgage loss rate is for the 3 months ending annualised. Mar 19 and Sept 19 mortgage loss rates are for the 6 months ending annualised. 2 Source: Pillar 3 Reports, based on APRA Residential Mortgage
classification. Exposure is on and off balance sheet exposure at default. Data for Peer 2 and 3 at 31 December 2019, Peer 1 at 30 September 2019.
13
Mar-19Sep-19Dec-19
30+ day delinquencies(bps)159161161
90+ day delinquencies(bps) (inc.impaired mortgages)828886
Consumer properties in possession482558472
Mortgage loss rate annualised (bps)
1
233
•Small decrease in mortgage delinquencies driven by improvements in all States
•NSW delinquencies lower at 69bps and remains below the portfolio average. WA
delinquencies improved to 179 bps (from 196bps September 2019)
•Properties in possession lower from improved housing conditions and some
seasonality. Properties in possession continue to be mostly in WA and Qld
0.0
0.5
1.0
1.5
2.0
Dec-17Jun-18Dec-18Jun-19Dec-19
90+ day past due total90+ day past due investor
30+ day past due totalLoss rates
0.0
0.5
1.0
1.5
2.0
2.5
Dec-17Jun-18Dec-18Jun-19Dec-19
NSW/ACTVIC/TAS
QLDWA
SA/NTALL
Credit quality
0.91
0.72
0.87
0.74
0.00
0.20
0.40
0.60
0.80
1.00
0
1
2
3
4
5
6
Peer 1Peer 2Peer 3Westpac
Impaired assets
(lhs)
Past due loans ≥90
days (lhs)
Total as a %
residential mortgage
exposures (rhs)
$bn%

Appendix 1: Definitions – Capital and liquidity
Westpac Group 1Q20 Capital, Funding and Credit Quality Update
14
Appendix and Disclaimer
Capital
Capital ratios
As defined by APRA (unless stated otherwise)
Internationally
comparable
ratios
Internationally comparable regulatory capital ratios are Westpac’s
estimated ratios after adjusting the capital ratios determined under APRA
Basel III regulations for various items. Analysis aligns with the APRA study
titled “International capital comparison study” dated 13 July 2015
Leverage ratio
As defined by APRA (unless stated otherwise). Tier 1 capital divided by
‘exposure measure’ and expressed as a percentage. ‘Exposure measure’
is the sum of on-balance sheet exposures, derivative exposures, securities
financing transaction exposures and other off-balance sheet exposures
Risk weighted
assets or RWA
Assets (both on and off-balance sheet) are risk weighted according to each
asset’s inherent potential for default and what the likely losses would be in
case of default. In the case of non-asset-backed risks (i.e. market and
operational risk), RWA is determined by multiplying the capital requirements
for those risks by 12.5
Liquidity
Committed
liquidity facility
(CLF)
The RBA makes available to Australian Authorised Deposit-taking
Institutions a CLF that, subject to qualifying conditions, can be accessed to
meet LCRrequirements under APS210Liquidity
High quality
liquid assets
(HQLA)
Assets which meet APRA’s criteria for inclusion as HQLA in the numerator
of the LCR
Liquidity
coverage ratio
(LCR)
An APRA requirement to maintain an adequate level of unencumbered high
quality liquid assets, to meet liquidity needs for a 30 calendar day period
under an APRA-defined severe stress scenario. Absent a situation of
financial stress, the value of the LCR must not be less than 100%. LCR is
calculated as the percentage ratio of stock of HQLA and CLF over the total
net cash out-flows in a modelled 30 day defined stressed scenario
Net stable
funding ratio
(NSFR)
The NSFR is defined as the ratio of the amount of available stable funding
(ASF) to the amount of required stable funding (RSF) defined by APRA.
The amount of ASF is the portion of an ADI’s capital and liabilities expected
to be a reliable source of funds over a one year time horizon. The amount
of RSF is a function of the liquidity characteristics and residual maturities of
an ADI’s assets and off-balance sheet activities. ADI’s must maintain an
NSFR of at least 100%

Appendix 1: Definitions – Credit quality
Westpac Group 1Q20 Capital, Funding and Credit Quality Update
15
Appendix and Disclaimer
Stage 3
Lifetime ECL –
non-performing
For financial assets that are non-performing a provision for lifetime
expected losses is recognised. Interest revenue is calculated on the
carrying amount net of the provision for ECL rather than the gross carrying
amount
Impaired
assets
Includes exposures that have deteriorated to the point where full collection
of interest and principal is in doubt, based on an assessment of the
customer’s outlook, cashflow, and the net realisation value of assets to
which recourse is held and includes:
•facilities 90 days or more past due, and full recovery is in doubt:
exposures where contractual payments are 90 or more days in arrears
and the net realisable value of assets to which recourse is held may not
be sufficient to allow full collection of interest and principal, including
overdrafts or other revolving facilities that remain continuously outside
approved limits by material amounts for 90 or more calendar days;
•non-accrual assets: exposures with individually assessed impairment
provisions held against them, excluding restructured loans;
•restructured assets: exposures where the original contractual terms
have been formally modified to provide for concessions of interest or
principal for reasons related to the financial difficulties of the customer;
•other assets acquired through security enforcement (includes other real
estate owned): includes the value of any other assets acquired as full
or partial settlement of outstanding obligations through the enforcement
of security arrangements; and
•any other assets where the full collection of interest and principal is in
doubt
Stressed
exposures
Total of watchlist and substandard, 90 days past due and not impaired, and
impaired assets
Total committed
exposures
(TCE)
Represents the sum of the committed portion of direct lending (including
funds placement overall and deposits placed), contingent and pre-
settlement risk plus the committed portion of secondary market trading and
underwriting risk
Watchlist and
substandard
Loan facilities where customers are experiencing operating weakness and
financial difficulty but are not expected to incur loss of interest or principal
90 days past
due and not
impaired
Includes facilities where:
•contractual payments of interest and / or principal are 90 or more
calendar days overdue, including overdrafts or other revolving facilities
that remain continuously outside approved limits by material amounts
for 90 or more calendar days (including accounts for customers who
have been granted hardship assistance); or
•an order has been sought for the customer’s bankruptcy or similar legal
action has been instituted which may avoid or delay repayment of its
credit obligations; and
•the estimated net realisable value of assets / security to which Westpac
has recourse is sufficient to cover repayment of all principal and interest,
or where there are otherwise reasonable grounds to expect payment in
full and interest is being taken to profit on an accrual basis.
These facilities, while in default, are not treated as impaired for accounting
purposes
Collectively
assessed
provisions
(CAP)
Loans not found to be individually impaired or significant will be collectively
assessed in pools of similar assets with similar risk characteristics. The size
of the provision is an estimate of the losses already incurred and will be
estimated on the basis of historical loss experience for assets with credit
characteristics similar to those in the collective pool. The historical loss
experience will be adjusted based on current observable data. Included in
the collectively assessed provision is an overlay provision which is
calculated based on changes that have occurred in sectors of the economy
or in the economy as a whole
Individually
assessed
provisions
(IAP)
Provisions raised for losses that have already been incurred on loans that
are known to be impaired and are assessed on an individual basis. The
estimated losses on these impaired loans is based on expected future cash
flows discounted to their present value and, as this discount unwinds,
interest will be recognised in the income statement
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 expected credit losses is
recognised. Interest revenue is calculated 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
expected losses is recognised. Interest revenue is calculated on the gross
carrying amount of the financial asset

Westpac Group 1Q20 Capital, Funding and Credit Quality Update
Investor Relations Team
16
Contact us
Investor Relations Team
Nicole Mehalski
Director
+61 2 8253 1667
nicole.mehalski@westpac.com.au
Andrew Bowden
Head of Investor Relations
+61 2 8253 4008
andrewbowden@westpac.com.au
Louise Coughlan
Director
+61 2 8254 0549
lcoughlan@westpac.com.au
Jacqueline Boddy
Director (Debt Investor Relations)
+61 2 8253 3133
jboddy@westpac.com.au
Rebecca Plackett
Senior Manager
+61 2 8253 6556
rplackett@westpac.com.au
Danielle Stock
Senior Manager
+61 2 8253 0922
danielle.stock@westpac.com.au
Or email: investorrelations@westpac.com.au
www.westpac.com.au/investorcentre
Annual reports
Presentations and webcasts
5 year financial summary
Prior financial results
Alec Leithhead
Senior Analyst
+61 2 8254 0159
alec.leithhead@westpac.com.au

Westpac Group 1Q20 Capital, Funding and Credit Quality Update
Disclaimer
The material contained in this presentation is intended to be general background information on Westpac Banking Corporation (Westpac) and its activities.
The information is supplied in summary form and is therefore not necessarily complete. It is not intended that it be relied uponas advice to investors or potential investors, who
should consider seeking independent professional advice depending upon their specific investment objectives, financial situationor particular needs. The material contained in
this presentation may include information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the
accuracy, completeness or reliability of the information.
All amounts are in Australian dollars unless otherwise indicated.
Unless otherwise noted, financial information in this presentation is presented on a cash earnings basis. Cash earnings is a non-GAAP measure. Refer to Westpac’s 2019 Full
Year Financial Results (incorporating the requirements of Appendix 4E) for the twelve months ended 30 September 2019 available at www.westpac.com.au for details of the
basis of preparation of cash earnings.
This presentation 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 presentation and include
statements regarding our intent, belief or current expectations with respect to our business and operations, market conditions, results of operations and financial condition,
including, without limitation, future loan loss provisions, financial support to certain borrowers, indicative drivers, forecasted economic indicators and performance metric
outcomes.
We use words such as ‘will’, ‘may’, ‘expect’, ‘intend’, ‘seek’, ‘would’, ‘should’, ‘could’, ‘continue’, ‘plan’, ‘estimate’, ‘anticipate’, ‘believe’, ‘probability’, ‘risk’, ‘aim’, or other similar
words to identify forward-looking statements. These forward-looking statements reflect our current views with respect to future events and are subject to change, certain risks,
uncertainties and assumptions which are, in many instances, beyond our control, and have been made based upon management’s expectations and beliefs concerning future
developments and their potential effect upon us. There can be no assurance that future developments will be in accordance with our expectations or that the effect of future
developments on us will be those anticipated. Actual results could differ materially from those which we expect, depending onthe outcome of various factors. Factors that may
impact on the forward-looking statements made include, but are not limited to, those described in the section titled ‘Risk factors' in Westpac’s 2019 Annual Report for the year
ended 30 September 2019 available at www.westpac.com.au. When relying on forward-looking statements to make decisions with respect to us, investors and others should
carefully consider such factors and other uncertainties and events. We are under no obligation to update any forward-looking statements contained in this presentation,
whether as a result of new information, future events or otherwise, after the date of this presentation.
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