WBC 1H22 Notable Items and segment changes

ASX
Release


21 April 2022

Westpac’s First Half 2022 (1H22) notable items and segment structure changes
Westpac today announced that its reported net profit and cash earnings in 1H22 is
expected to have a minimal impact from notable items with a net reduction of $6m (after
tax). Of the notable items, a $4m benefit was recognised and announced in the first quarter
2022 (1Q22) with the remainder recognised in the second quarter 2022 (2Q22). The
notable items (after tax) include:
 The gain on sale of Westpac Life-NZ-Limited (NZ Life) of $119m (NZ$126m)
following completion of the transaction in February 2022. There is no tax expense
from this item in 1H22;
 Gains on sale of $119m related to the Group’s Motor vehicle dealer finance and
novated leasing business following completion in the half;
 The write-down of goodwill and capitalised software associated with the Group’s
superannuation business of $154m as part of preparations to exit this business;
 An increase in provisions for customer refunds, repayments, associated costs and
litigation penalties of $65m; and
 A $25m impact from costs associated with divestments and a post-sale adjustment
to earn-out payments associated with the sale of the Vendor Finance business.
In aggregate, these items have a small impact on the Group’s CET1 capital ratio (adds 3
basis points). Details of notable items in First Half 2022 are in Appendix 1 and a summary
of line item impacts is in Appendix 2.

Segment structure changes in Westpac’s 1H22 Results
As outlined in our 1Q22 update, we are making changes to align our segment reporting to
our lines of business operating structure. These changes have no impact on the Group’s
consolidated financial results and associated metrics in prior periods but do impact profit
and loss and balance sheet items of our reporting segments. The new structure and
changes are summarised in Appendix 3.
In addition, certain customers previously managed in Business are now being managed by
Westpac Institutional Bank (WIB) and their contribution will be reported in that segment.
In preparing the platforms business for sale we have decided to retain our share broking
and margin lending businesses given the demand from consumer and private wealth
clients. The share broking business will now be reported in Consumer, previously in the
Specialist Businesses segment (with comparative periods restated). Margin lending will
continue to be reported in Specialist Businesses and will be moved to Consumer in a
subsequent period once we finalise its separation from our wealth businesses.
Appendix 4 provides prior period data under these segment changes in the same way they
will be presented in 1H22.

Level 18, 275 Kent Street
Sydney, NSW, 2000

Restatement of APRA Monthly ADI Statistics (MADIS)
Following revisions to Westpac’s reporting models used to classify owner occupied and
investment property housing loans under APRA’s Economic Financial Statistics definitions
we are changing the reporting of these loan balances.
The changes will result in a reclassification of $14 billion
1
in the MADIS dataset, increasing
owner occupied lending (~1% market share) with a corresponding decrease in investment
property loans (~2% market share). Total outstanding housing lending is unchanged.
Restated data is expected to be published in APRA’s MADIS data release on 29 April 2022
and will be restated back to March 2021. The changes better align our MADIS statistics
with existing management and external reporting.
This restatement has no impact on Westpac’s reporting of housing lending in our Investor
Discussion Pack and other management reporting documents.

We are scheduled to announce our First Half 2022 results on Monday, 9 May 2022.

For further information:

Hayden Cooper Andrew Bowden
Group Head of Media Relations Group Head of Investor Relations
0402 393 619 0438 284 863


This document has been authorised for release by Tim Hartin, Company Secretary.


1
At 28 February 2022.
Page 2 of 13

Appendix 1 – Details of items affecting Westpac’s 1H22 Financial Results

This table details how the notable items will be described in our 1H22 Financial Results.

Summary 1H22 Cash
earnings
(after tax)
Detail (pre tax)
Write-down
of goodwill
and other
assets
$154m
reduction
In preparation for the exit of our superannuation business, the carrying
value of our superannuation intangible assets was reviewed and found
to be no longer supportable. This included:
 $122m of goodwill, which is all the goodwill attributable to this
business; and
 $45m of capitalised software.
Additional
provisions
for customer
refunds
payments,
associated
costs and
litigation
provisions
$65m
reduction
The ongoing review of customer remediation, litigation and regulatory
investigations has led to the following changes in provisions:
 Revenue: $36m decrease for additional remediation related to
wealth products, partly offset by the release of some provisions in
Westpac New Zealand; and
 Expenses: $46m increase for additional costs related to our
remediation programs and for litigation matters, including an
increase to prior provisions following agreement with ASIC to settle
six longstanding matters announced on 30 November 2021.
Asset sales
and
revaluations
$213m
increase
 Revenue increase of $271m from a gain on sale of $119m from NZ
Life and $170m from the Group’s Motor vehicle dealer finance and
novated leasing business, partly offset by an $18m post-sale
adjustment to earn-out payments associated with the sale of the
Vendor Finance business;
 Expenses associated with asset sales and revaluations of $18m;
and
 Tax expense and non-controlling interest impact of $40m. The low
effective tax rate of these collective items reflects that the tax impact
for the sale of NZ Life was largely recorded in prior periods.





Page 3 of 13

Appendix 2 – Summary of 1H22 notable items


1H22 ($m)
Consumer Business WIB
New
Zealand
(in $A)
Specialist
Businesses
Group
Businesses
Total
Net interest
income
- - - 7 - - 7
Net fee income - - - - - - -
Net wealth
management &
insurance income
- - - - (43) - (43)
Other income - - - 119 152 - 271
Non-interest
income
- - - 119 109 - 228
Operating
expenses
- - - - (215) (16) (231)
Core earnings - - - 126 (106) (16) 4
Income tax benefit/
(expense)
- - - (2) (8) - (10)
NCI - - - - - - -
Cash earnings - - - 124 (114) (16) (6)

1H22 ($m)
Provisions for
refunds, payments,
costs & litigation
Write-down of
goodwill and other
assets
Asset sales /
revaluations
Total
Net interest income 7 - - 7
Net fee income - - - -
Net wealth
management &
insurance income
(43) - - (43)
Other income - - 271 271
Non-interest income (43) - 271 228
Staff expenses (10) - (9) (19)
Occupancy expenses - - - -
Technology expenses - (45) - (45)
Other expenses (36) (122) (9) (167)
Operating expenses (46) (167) (18) (231)
Core earnings (82) (167) 253 4
Income tax
benefit/(expense)
17 13 (40) (10)
NCI - - - -
Cash earnings (65) (154) 213 (6)







Page 4 of 13

Appendix 3
–
Summary of segment reporting changes


Page 5 of 13

Appendix 4 – Selected comparative disclosures


3.0 Notable Items
Westpac Westpac New
InstitutionalZealandSpecialistGroup
$mConsumer Business
Bank(A$) Businesses BusinessesGroup
Half Year March 2022
Net interest income---7--7
Net fee Incom e------
-
Net wealth m anagem ent and ins urance incom e----(43)-
(43)
Trading Income------
-
Other Incom e---119152-
271
Non-interest income---119109-228
Operating expens es----(215)(16)
(231)
Core earnings---126(106)(16)4
Incom e tax (expens e) / benefit and NCI---(2)(8)-
(10)
Cash earnings
---124(114)(16)(6)
Half Year Sep 2021
Net interest income3103-(32)(18)-56
Net fee Incom e---(7)-(26)
(33)
Net wealth m anagem ent and ins urance incom e----(4)(14)
(18)
Trading Income------
-
Other Incom e---1202(7)
196
Non-interest income---(6)198(47)145
Operating expens es(35)(14)(1,156)(17)(304)(76)
(1,602)
Core earnings(32)89(1,156)(55)(124)(123)(1,401)
Incom e tax (expens e) / benefit and NCI3(29)19113(119)23
82
Cash earnings
(29)60(965)(42)(243)(100)(1,319)
Half Year March 2021
Net interest income-74-(3)--71
Net fee Incom e(3)1-(5)8(105)
(104)
Net wealth m anagem ent and ins urance incom e-----(88)
(88)
Trading Income------
-
Other Incom e----(7)571
564
Non-interest income(3)1-(5)1378372
Operating expens es(106)(40)(37)(6)(336)(220)
(745)
Core earnings(109)35(37)(14)(335)158(302)
Incom e tax (expens e) / benefit and NCI33(10)11438(56)
20
Cash earnings
(76)25(26)(10)(297)102(282)
Page 6 of 13

3.1 Consumer and Business Banking
Half Year Half Year Half Year% Mov't% Mov't
MarchSeptMarchMar 22 - Mar 22 -
$m
202220212021Sep-21Mar-21
Net interest income6,1736,300
Non-interest income437430
Net operating income6,6106,730
Operating expenses(3,687)(3,429)
Core earnings2,9233,301
Impairment (charges)/benefits400209
Profit before income tax expense3,3233,510
Income tax expense and NCI(1,001)(1,048)
Cash earnings2,3222,462
Add back notable items(31)51
Cash earnings excluding notable items2,2912,513
Expense to income ratio55.78%50.95%
Net interest margin2.49%2.59%
As atAs atAs at% Mov't% Mov't
MarchSeptMarchMar 22 - Mar 22 -
$bn202220212021Sep-21Mar-21
Customer deposits
Term deposits76.585.6
Other318.5292.1
Total customer deposits395.0377.7
Net loans
Mortgages455.7443.6
Business79.879.5
Other8.810.0
Provisions(3.2)(3.8)
Total net loans541.1529.3
Deposit to loan ratio73.0%71.4%
Total assets555.4544.6
TCE653.9642.0
Average interest earning assets493.9487.7
Average allocated capital33.033.0
Credit Quality
As atAs atAs at
March30 Sept 31 March
%202220212021
Impairment charges/(benefits) to average loans annualised(0.15%)(0.08%)
Mortgage 90+ day delinquencies1.07%1.20%
Other consumer loans 90+ day delinquencies1.60%1.60%
Business: Impaired exposure to TCE0.72%0.87%
Total stressed exposure to TCE1.74%2.01%
Page 7 of 13

3.1.1 Consumer
Half Year Half Year Half Year% Mov't% Mov't
MarchSeptMarch Mar 22 - Mar 22 -
$m
202220212021Sep-21Mar-21
Net interest income4,7224,764
Non-interest income263255
Net operating income4,9855,019
Operating expenses(2,522)(2,376)
Core earnings2,4632,643
Impairment (charges)/benefits82102
Profit before income tax expense2,5452,745
Income tax expense and NCI(765)(818)
Cash earnings1,7801,927
Add back notable items2976
Cash earnings excluding notable items1,8092,003
Expense to income ratio50.59%47.34%
Net interest margin2.27%2.34%
As atAs atAs at% Mov't% Mov't
MarchSeptMarch Mar 22 - Mar 22 -
$bn202220212021Sep-21Mar-21
Customer deposits
Term deposits50.255.5
Other216.2198.5
Total customer deposits266.4254.0
Net loans
Mortgages455.7443.6
Other8.810.0
Provisions(1.8)(2.0)
Total net loans462.7451.6
Deposit to loan ratio57.6%56.3%
Total assets476.9466.8
TCE551.8540.0
Average interest earning assets415.4408.0
Average allocated capital24.824.8
Credit Quality
As atAs atAs at
MarchSeptMarch
%202220212021
Impairment charges/(benefits) to average loans annualised(0.04%)(0.05%)
Mortgage 90+ day delinquencies1.07%1.20%
Other consumer loans 90+ day delinquencies1.60%1.60%
Total stressed exposure to TCE0.98%1.06%
Page 8 of 13

3.1.2 Business
Half Year Half Year Half Year% Mov't% Mov't
MarchSeptMarch Mar 22 - Mar 22 -
$m
202220212021Sep-21Mar-21
Net interest income1,4511,536
Non-interest income174175
Net operating income1,6251,711
Operating expenses(1,165)(1,053)
Core earnings460658
Impairment (charges)/benefits318107
Profit before income tax expense778765
Income tax expense and NCI(236)(230)
Cash earnings542535
Add back notable items(60)(25)
Cash earnings excluding notable items482510
Expense to income ratio71.69%61.54%
Net interest margin3.69%3.86%
As atAs atAs at% Mov't% Mov't
MarchSeptMarch Mar 22 - Mar 22 -
$bn202220212021Sep-21Mar-21
Customer deposits
Term deposits26.330.1
Other102.393.6
Total customer deposits128.6123.7
Net loans
Business79.879.5
Provisions(1.4)(1.8)
Total net loans78.477.7
Deposit to loan ratio164.0%159.2%
Total assets78.577.8
TCE102.1102.0
Average interest earning assets78.579.7
Average allocated capital8.28.2
Credit QualityAs atAs atAs at
MarchSeptMarch
%202220212021
Impairment charges/(benefits) to average loans annualised0.80%0.27%
Business: Impaired exposure to TCE0.72%0.87%
Total stressed exposure to TCE5.90%7.02%
Page 9 of 13

3.2 Westpac Institutional Bank
Half Year Half Year Half Year% Mov't% Mov't
MarchSeptMarch Mar 22 - Mar 22 -
$m202220212021Sep-21Mar-21
Net interest income458467
Non-interest income626687
Net operating income1,0841,154
Operating expenses(1,887)(708)
Core earnings(803)446
Impairment charges(154)(8)
Profit before income tax expense(957)438
Income tax expense and NCI126(140)
Cash earnings(831)298
Add back notable items96526
Cash earnings excluding notable items134324
Expense to income ratio174.08%61.35%
Net interest margin1.24%1.26%
As atAs atAs at% Mov't% Mov't
MarchSeptMarch Mar 22 - Mar 22 -
$bn202220212021Sep-21Mar-21
Customer deposits99.392.7
Net loans
Loans68.363.4
Provisions(0.6)(0.3)
Total net loans67.763.1
Deposit to loan ratio146.6%146.8%
Total assets82.875.5
TCE179.7174.7
Average interest earning assets73.774.1
Average allocated capital7.58.1
Impairment charges to average loans annualised0.48%0.03%
Impaired exposures to TCE 0.29%0.14%
Total stressed exposures to TCE0.64%0.56%
Revenue Contribution
Half Year Half Year Half Year% Mov't% Mov't
MarchSeptMarch Mar 22 - Mar 22 -
$m202220212021Sep-21Mar-21
Lending and deposit revenue673642
Markets, sales & fee income400423
Total Customer Revenue1,0731,065
Derivative valuation adjustments4453
Trading revenue2575
Other(58)(39)
Total WIB Revenue1,0841,154
Page 10 of 13

3.4 Specialist Businesses
Half Year Half Year Half Year% Mov't% Mov't
MarchSeptMarch Mar 22 - Mar 22 -
$m202220212021Sep-21Mar-21
Net interest income246248
Non-interest income790665
Net operating income1,036913
Operating expenses(738)(740)
Core earnings298173
Impairment (charges)/benefits(13)79
Profit before income tax expense285252
Income tax expense and NCI(240)(135)
Cash earnings45117
Add back notable items243297
Cash earnings excluding notable items288414
Expense to income ratio71.24%81.05%
Net interest margin3.15%3.06%
As atAs atAs at% Mov't% Mov't
MarchSeptMarch Mar 22 - Mar 22 -
$bn202220212021Sep-21Mar-21
Deposits8.76.7
Net loans
Loans14.014.9
Provisions(0.4)(0.4)
Total net loans13.614.5
Deposit to loan ratio64.5%46.1%
Total funds227.4211.7
TCE18.119.2
Average allocated capital4.64.6
Average funds223.8205.6
Page 11 of 13

3.5 Group Businesses
Half Year Half Year Half Year% Mov't% Mov't
MarchSeptMarch Mar 22 - Mar 22 -
$m202220212021Sep-21Mar-21
Net interest income377458
Non-interest income(15)381
Net operating income362839
Operating expenses(428)(604)
Core earnings(66)235
Impairment (charges)/benefits(2)-
Profit/(loss) before income tax expense(68)235
Income tax expense and NCI(58)(120)
Cash earnings(126)115
Add back notable items100(102)
Cash earnings excluding notable items(26)13
Treasury
Half Year Half Year Half Year% Mov't% Mov't
MarchSeptMarch Mar 22 - Mar 22 -
$m202220212021Sep-21Mar-21
Net interest income376462
Non-interest income-8
Net operating income376470
Cash earnings223298
Page 12 of 13

4.7. Note 2. Segment Reporting
Consumer and
Westpac
Westpac
New
Business InstitutionalZealandSpecialistGroup
$mConsumer BusinessBankingBank(A$) Businesses BusinessesGroup
Half Year Sept 2021
Net interest income
4,7221,4516,1734589912463778,245
Net fee income
2321724043126725(26)782
Net wealth management and insurance income
25-25-69536(19)611
Trading income
---2291518-262
Other income
62885521130339
Net operating income before operating expenses and
impairment (charges)/benefits
4,9851,6256,6101,0841,1471,03636210,239
Operating expenses
(2,522)(1,165)(3,687)(1,887)(562)(738)(428)(7,302)
Impairment (charges)/benefits
82318400(154)(13)(13)(2)218
Profit before income tax (expense)/benefit
2,5457783,323(957)572285(68)3,155
Income tax (expense)/benefit
(765)(236)(1,001)126(167)(235)(60)(1,337)
Net profit attributable to NCI
-----(5)2(3)
Cash earnings
1,7805422,322(831)40545(126)1,815
Net cash earnings adjustments
----1-199200
Net profit attributable to owners of WBC
1,7805422,322(831)40645732,015
Balance sheet
Loans
462,69978,385541,08467,74988,40912,550(8)709,784
Deposits and other borrowings
266,445128,550394,99599,34975,7568,74448,111626,955
Half Year March 2021
Net interest income
4,7641,5366,3004679962484588,469
Net fee income
2171733903027340(105)700
Net wealth management and insurance income
27-27-44609(85)595
Trading income
---379431516453
Other income
11213671555582
Net operating income before operating expenses and
impairment (charges)/benefits
5,0191,7116,7301,1541,16391383910,799
Operating expenses
(2,376)(1,053)(3,429)(708)(500)(740)(604)(5,981)
Impairment (charges)/benefits
102107209(8)9279-372
Profit before income tax (expense)/benefit
2,7457653,5104387552522355,190
Income tax (expense)/benefit
(818)(230)(1,048)(140)(210)(138)(115)(1,651)
Net profit attributable to NCI
-----3(5)(2)
Cash earnings
1,9275352,4622985451171153,537
Net cash earnings adjustments
----(3)-(91)(94)
Net profit attributable to owners of WBC
1,9275352,462298542117243,443
Balance sheet
Loans
451,59577,662529,25763,12583,15112,687(2)688,218
Deposits and other borrowings
254,025123,654377,67992,69271,0194,59839,413585,401
Page 13 of 13