US Form 6-K Filing – 2022 Interim Financial Results

10 05 2022
Market Announcements Office
ASX Limited
20 Bridge Street
SYDNEY NSW 2000

Westpac Place
Level 18, 275 Kent Street
Sydney NSW 2000

Dear Sir / Madam
US FORM 6-K (INTERIM FINANCIAL RESULTS ANNOUNCEMENT FOR THE SIX MONTHS ENDED 31
MARCH 2022, PREPARED FOR DISTRIBUTION IN THE UNITED STATES)
Westpac Banking Corporation (Westpac) has filed with the US Securities and Exchange Commission a
Form 6-K, which attaches Westpac’s Interim Financial Results Announcement for the six months ended 31
March 2022, prepared specifically for distribution in the United States (US Interim Financial Results
Announcement). This filing has been prepared to meet US securities law requirements and is necessary
to update Westpac’s US debt issuance programs.
As the US Interim Financial Results Announcement has been prepared to meet US requirements, its
presentation differs in some respects from Westpac’s 2022 Interim Financial Results, incorporating the
requirements of Appendix 4D (lodged with the ASX on 9 May 2022). In particular, the 2022 Interim
Financial Results, incorporating the requirements of Appendix 4D predominately focuses on cash earnings
while the US Interim Financial Results Announcement is focused on Westpac’s consolidated statutory
results.
A copy of the Form 6-K is attached for release to the market.
This document has been authorised for release by Tim Hartin, Company Secretary

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
May 9, 2022
Commission File Number 1-10167
WESTPAC BANKING CORPORATION
(Translation of registrant’s name into English)
275 KENT STREET, SYDNEY, NEW SOUTH WALES 2000, AUSTRALIA
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Incorporation by Reference
The information contained in Exhibit 1 to this Report on Form 6-K (excluding the “Independent auditor’s review report to
the members of Westpac Banking Corporation” on pages 130 and 131 of such Exhibit) and Exhibit 101 to this Report on Form
6-K shall be incorporated by reference in the prospectuses relating to the Registrant’s securities contained in the Registrant’s
Registration Statements on Form F-3 (File Nos. 333-260702 and 333-260703), as such prospectuses may be amended or
supplemented from time to time.
Index to Exhibits
Exhibit
No.Description
12022 Interim Financial Results – prepared for distribution in the United States of America
101.INSXBRL Instance Document
101.SCHXBRL Taxonomy Extension Schema Document
101.CALXBRL Taxonomy Extension Calculation Linkbase Document
101.DEFXBRL Taxonomy Extension Definition Linkbase Document
101.LABXBRL Taxonomy Extension Labels Linkbase Document
101.PREXBRL Taxonomy Extension Presentation Linkbase Document
Disclosure regarding forward-looking statements
The information contained in this Report on Form 6-K contains statements that constitute “forward-looking statements” within
the meaning of section 21E of the U.S. 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 our intent, belief or current expectations with respect to our business and operations, market conditions,
results of operations and financial condition.
We use words such as ‘will’, ‘may’, ‘expect’, ‘indicative’, ‘intend’, ‘seek’, ‘would’, ‘should’, ‘could’, ‘continue’, ‘plan’, ‘aim’,
‘probability’, ‘risk’, ‘forecast’, ‘likely’, ‘estimate’, ‘anticipate’, ‘believe’ 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. Should one or more of the risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results could differ materially from the expectations described in this Report.
Factors that may impact on the forward-looking statements made include, but are not limited to, those described in the section
entitled ‘Risk factors’ in Westpac’s 2022 Interim Financial Results on Form 6-K filed with the U.S. Securities and Exchange
Commission, as well as the ongoing impact of COVID-19. 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, and do not intend, 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.

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
WESTPAC BANKING CORPORATION
(Registrant)
Date: May 9, 2022By:/s/ Yvette Adiguzel
Yvette Adiguzel
Tier One Attorney

Exhibit 1
2022
Interim
Financial
Results
THE INTERIM FINANCIAL RESULTS ANNOUNCEMENT HAS BEEN
PREPARED FOR DISTRIBUTION IN THE UNITED STATES OF AMERICA
Westpac Banking Corporation
ABN 33 007 457 141

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTSii
Results Announcement to the market
Introduction
This Interim Financial Results Announcement has been prepared for distribution in the United States.
Our interim period refers to the six months ended 31 March 2022 (First Half 2022). Throughout this Interim Financial Results Announcement, we
also refer to the six months ended 31 March 2021 (First Half 2021) and the six months ended 30 September 2021 (Second Half 2021).
The selected financial information for First Half 2022, First Half 2021 and Second Half 2021 contained in this Interim Financial Results
Announcement is based on the financial statements contained in the unaudited consolidated Interim Financial Report for Westpac Banking
Corporation (Westpac) and its controlled entities (collectively referred to as 'the Group') for the six months ended 31 March 2022. The Interim
Financial Report has been prepared and presented in accordance with Australian Accounting Standards (AAS) as they relate to interim financial
reports. The Interim Financial Report also complies with International Financial Reporting Standards as issued by the International Accounting
Standards Board (IASB) as they relate to interim financial reports.
All dollar values in this Interim Financial Results Announcement are in Australian dollars unless otherwise noted. References to ‘dollars’, ‘dollar
amounts’, ‘$’, ‘AUD’ or ‘A$’ are to Australian dollars, references to ‘US$’, ‘USD’ or ‘US dollars’ are to United States dollars and references to ‘NZ$’,
‘NZD’ or ‘NZ dollars’ are to New Zealand dollars. Refer to Section 5.7 for information regarding the rates of exchange between the Australian dollar
and the US dollar applied by the Group as part of its operating activities for First Half 2022, Second Half 2021 and First Half 2021.
In addition to discussing the AAS financial information in this Interim Financial Results Announcement, we also discuss the following non-AAS
financial information:
Cash Earnings Policy
Refer to Section 3.0.
Average Ordinary Equity
Average ordinary equity is calculated as the daily average of total equity less average non-controlling interests. Management believes this measure
of average ordinary equity is useful in the calculation of return on equity as it removes the impact of equity attributable to non-controlling interests.
Other companies may use different methodologies to calculate average ordinary equity or similar non-AAS financial measures.
Presentation changes
In First Half 2022, we changed our reporting segments following changes announced in 2021. We have also restated comparatives for changes in
the allocations of certain revenue and expense items across segments to align with the changes in the information presented internally to key
decision makers.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTSiii
Results Announcement to the market
Index
1.0Group results1
1.1 Reported results1
1.2 Key financial information3
1.3 Market share and system multiple metrics5
2.0Review of Group operations6
2.1 Performance overview6
2.2 Review of reported results10
2.3 Credit quality26
2.4 Balance sheet and funding28
2.5 Capital and dividends34
2.6 Sustainability performance40
3.0Segment reporting45
3.1 Consumer and Business Banking
50
3.1.1 Consumer51
3.1.2 Business54
3.2 Westpac Institutional Bank (WIB)57
3.3 Westpac New Zealand60
3.4 Specialist Businesses (SB)64
3.5 Group Businesses68
4.02022 Interim financial report70
4.1 Directors’ report71
4.2 Consolidated income statement92
4.3 Consolidated statement of comprehensive income93
4.4 Consolidated balance sheet94
4.5 Consolidated statement of changes in equity95
4.6 Consolidated cash flow statement96
4.7 Notes to the consolidated financial statements97
4.8 Statutory statements129
5.0Other information132
5.1 Disclosure regarding forward-looking statements132
5.2 References to websites134
5.3 Credit ratings134
5.4 Dividend reinvestment plan134
5.5 Information on related entities134
5.6 Financial calendar and Share Registry details135
5.7 Exchange rates138
5.8 Group earnings reconciliation138
6.0Cash earnings supplementary information143
6.1 Cash earnings adjustments143
7.0Glossary144

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTSiv
Results Announcement to the market
In this Interim Financial Results Announcement (Results Announcement) references to ‘Westpac’, ‘WBC’, ‘Westpac Group’, ‘the Group’, ‘we’, ‘us’
and ‘our’ are to Westpac Banking Corporation and its controlled entities, unless it clearly means just Westpac Banking Corporation.
All references to $ in this Results Announcement are to Australian dollars unless otherwise stated.
Financial calendar
Interim Results Announcement released

9 May 2022
Ex-dividend date for interim dividend19 May 2022
Record date for interim dividend (Sydney)20 May 2022
Interim dividend payable24 June 2022
Final Results Announcement (scheduled)7 November 2022

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS1
Group results
1.0Group results
1.1Reported results
Net profit attributable to owners of Westpac is prepared in accordance with the requirements of Australian Accounting Standards (AAS) and
regulations applicable to Australian Authorised Deposit-taking Institutions (ADIs). Notable items are discussed in Section 3.0.
Half YearHalf YearHalf Year% Mov’t
1
MarchSeptMarchMar 22Mar 22
$m

2022 2021 2021 - Sept 21 - Mar 21
Net interest income

8,288 8,510 8,348 (3) (1)
Net fee income

845 782 700 8 21
Net wealth management and insurance income

401 613 598 (35) (33)
Trading income

343 277 442 24 (22)
Other income

353 354 598 — (41)
Net operating income before operating expenses and impairment charges

10,230 10,536 10,686 (3) (4)
Operating expenses

(5,373) (7,314) (5,997) (27) (10)
Profit before impairment charges and income tax expense 4,857 3,222 4,689 51 4
Impairment (charges)/benefits

(139) 218 372 large large
Profit before income tax expense

4,718 3,440 5,061 37 (7)
Income tax expense

(1,434) (1,422) (1,616) 1 (11)
Net profit for the period

3,284 2,018 3,445 63 (5)
Net profit attributable to non-controlling interests (NCI)

(4) (3) (2) 33 100
Net profit attributable to owners of WBC

3,280 2,015 3,443 63 (5)
Effective tax rate

30.4%41.3%31.9%large (154 bps)
1.Percentage movement represents an increase/(decrease) to the relevant comparative period.
Net profit attributable to owners of Westpac for First Half 2022 was $3,280 million, $163 million or 5% lower than First Half 2021. Compared to
Second Half 2021, net profit was $1,265 million, or 63% higher.
The $163 million decline in Net Profit compared to First Half 2021 was mostly due to a $511 million ($358 million after tax) turnaround in impairment
charges (a charge in First Half 2022 compared to a benefit in First Half 2021).
Profit before impairment charges and income tax expense was 4% higher over First Half 2021 from a 10% reduction in expenses partly offset by 4%
lower operating revenue. This result was supported by lower specific large infrequent items (notable items) which were $276 million lower after tax.
These items are discussed in Sections 2.1, 3.0 and Note 14 in this report and include:
●Provisions for estimated customer refunds, payments, associated costs and litigation;
●The write-down of intangible items, including goodwill; and
●The impact of asset sales and revaluations.
The following is a summary of the movements in the major line items in Net Profit for First Half 2022 compared to First Half 2021.
Net interest income was $60 million lower, with a 7% increase in average interest earning assets more than offset by a 15 basis point (bps)
reduction in net interest margin. The decline in net interest margin was due to:
●Lower spreads on mortgages and business lending, and a shift in our portfolio towards lower spread products (particularly Australian mortgage
fixed rate lending); and
●A significant increase in liquid assets to meet the wind-down in the committed liquidity facility. Liquid assets have lower yields than the portfolio
average; partly offset by
●Higher deposit spreads from repricing and changes in mix; and
●Unrealised gains on fair value economic hedges in First Half 2022 compared to a loss in First Half 2021.
Net interest income and net interest margins are discussed in Section 2.2.1 and Section 2.2.4.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS2
Group results
Non-interest income
1
was $396 million lower compared to First Half 2021, with the movements due to:
●Lower gains from asset sales and revaluations of $300 million;
●Lower contribution from the Life insurance business of $194 million, which was impacted by unfavourable valuations and investment losses;
and
●Businesses sold saw a reduction in revenue of $63 million; partly offset by
●Lower costs of customer remediation of $156 million.
Non-interest income is discussed in Section 2.2.5.
Operating expenses were $624 million, or 10% lower compared to First Half 2021. Movements in the decline included:
●Lower costs associated with the sale of businesses of $222 million;
●A reduction in depreciation and amortisation of assets of $212 million;
●Lower provisions for remediation of $210 million;
●Lower asset write-downs of $82 million;
●Progress on our simplification program contributing to lower technology and professional services costs; these were partly offset by
●Higher staff expenses including salary and superannuation increases and restructuring costs.
Operating expenses are discussed in Section 2.2.8.
Impairment charges were $511 million higher with a charge of $139 million in First Half 2022 compared to an impairment benefit of $372 million in
First Half 2021. Most credit quality metrics improved over First Half 2022. The rise in the impairment charge compared to First Half 2021 reflected a
lower reduction in collectively assessed provisions. In part this reflected an increase in overlays in First Half 2022 in response to uncertainties and
risks from the current environment including the global geopolitical situation, supply chain disruptions, inflationary pressure, expected increases in
interest rates, and the recent severe floods and storms across Australia. Impairment charges and asset quality are discussed further in Section
2.2.9, Section 2.3, and Note 10 and Note 11 of the 2022 Interim Financial Report.
The effective tax rate was 30.4% and close to Australia’s corporate tax rate of 30%. This was lower than the 31.9% effective tax rate in First Half
2021 due to higher non-deductible items in First Half 2021. Income tax expense is discussed in Section 2.2.10.
1.Non-interest income is comprised of net fee income, net wealth management and insurance income, trading income, and other income.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS3
Group results
1.2Key financial information
1
Half YearHalf YearHalf Year% Mov’t
MarchSeptMarchMar 22Mar 22

2022 20212021 - Sept 21 - Mar 21
Shareholder value
Basic earnings per ordinary share (cents)
2

90.5 54.9 94.5 65 (4)
Weighted average ordinary shares (millions)
3

3,622 3,666 3,641 (1) (1)
Fully franked dividends per ordinary share (cents)

61 60 58 2 5
Dividend payout ratio
4
65.06% 109.16% 61.75%large 331
Return on average ordinary equity
5

9.25% 5.57% 9.92% 368 bps (67 bps)
Average ordinary equity ($m)
6

71,073 72,108 69,583 (1) 2
Average total equity ($m)
7

71,130 72,157 69,634 (1) 2
Net tangible assets per ordinary share ($)
8

17.22 16.90 16.60 2 4
Business performance


Interest spread
9

1.86% 1.99% 1.97% (13 bps) (11 bps)
Benefit of net non-interest bearing assets, liabilities and equity
10

0.05% 0.07% 0.09% (2 bps) (4 bps)
Net interest margin
11

1.91% 2.06% 2.06% (15 bps) (15 bps)
Average interest earning assets ($m)

872,075 825,926 812,950 6 7
Expense to income ratio
12

52.52% 69.42% 56.12% large (360 bps)
Capital, funding and liquidity


Common equity Tier 1 capital ratio


- APRA Basel III

11.33% 12.32% 12.34% (99 bps) (101 bps)
- Internationally comparable

17.36% 18.17% 18.08% (81 bps) (72 bps)
Credit risk weighted assets (credit RWA) ($m)

359,673 357,295 347,127 1 4
Total risk weighted assets (RWA) ($m)

459,956 436,650 428,899 5 7
Liquidity coverage ratio (LCR)
13,14

137% 129% 124% large large
Net stable funding ratio (NSFR)
15

125% 125% 123% 6 bps 241 bps
Asset quality
14


Gross impaired exposures to gross loans

0.23% 0.30% 0.30% (7 bps) (7 bps)
Gross impaired exposures to equity and total provisions

2.20% 2.78% 2.67% (58 bps) (47 bps)
Gross impaired exposures provisions to gross impaired exposures
15

48.03% 54.44% 47.03% large 100 bps
Total committed exposures (TCE) ($bn)

1,161 1,125 1,072 3 8
Total stressed exposures as a % of TCE
16

1.10% 1.36% 1.60% (26 bps) (50 bps)
Total provisions to total gross loans

65 bps70 bps 79 bps (5 bps) (14 bps)
Mortgages 90+ day delinquencies

0.82% 0.99% 1.11% (17 bps) (29 bps)
Other consumer loans 90+ day delinquencies

1.62% 1.75% 1.92% (13 bps) (30 bps)
Collectively assessed provisions to credit RWA

116 bps 117 bps 142 bps (1 bps) (26 bps)
Balance sheet ($m)


Loans

719,556 709,784 688,218 1 5
Total assets
17

964,749 935,877 889,419 3 8
Deposits and other borrowings

645,606 626,955 585,401 3 10
Total liabilities

894,416 863,785 817,358 4 9
Total equity
17

70,333 72,092 72,061 (2) (2)
Wealth Management


Average Group Funds ($bn)

241.1 239.2 220.9 1 9
Life insurance in-force premiums (Australia) ($m)
18

960 951 943 1 2

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS4
Group results
1.Averages are based on a six month period.
2.Based on the weighted average number of fully paid ordinary shares outstanding for the relevant six month period. Earnings are calculated as net profit attributable to owners
of WBC.
3.Weighted average number of fully paid ordinary shares listed on the ASX for the relevant period less Westpac shares held by the Group (“Treasury shares”).
4.Excludes the dividend component of the off-market share buy-back in First Half 2022.
5.Calculated as net profit attributable to owners of WBC (adjusted for RSP dividends) divided by average ordinary equity (annualised).
6.Calculated as average total equity less average non-controlling interests.
7.Average total equity is the average balance of shareholders’ equity, including non-controlling interests.
8.Total equity attributable to owners of WBC after deducting intangible assets divided by the number of ordinary shares outstanding, less Treasury shares held.
9.Calculated as the difference between the average yield on all interest earning assets and the average rate paid on all interest bearing liabilities (annualised).
10.Calculated as the difference between net interest margin and interest spread, and represents benefits derived from holdings of the net non-interest bearing component of the
balance sheet (including equity) (annualised).
11.Calculated by dividing net interest income by average interest earning assets (annualised).
12.Calculated as Group operating expenses excluding impairment charges divided by Group net operating income before operating expenses and impairment charges.
13.Liquidity coverage ratio is calculated on a quarterly average basis
14.Includes balances presented as held for sale.
15.Impairment provisions relating to impaired exposures include individually assessed provisions plus the proportion of the collectively assessed provisions that relate to
impaired exposures.
16.Stressed exposures include program managed loans 90 days plus and non-performing transaction managed loans.
17.First Half 2021 has been restated for the accounting policy change in relation to Software-as-a-Service. Refer to Note 1 of the 2021 Annual Report for further details.
18.
Refer to Section 3. 4 Life insurance key metrics for further details.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS5
Group results
1.3Market share and system multiple metrics
1.3.1Market share
As atAs atAs at

31 March30 Sept31 March

2022

2021

2021

Australia
Banking system (Australian Prudential Regulation Authority (APRA))


Housing credit
1

22% 22% 22%
Cards

21% 22% 22%
Household deposits

21% 21% 21%
Business deposits

18% 19% 19%
Financial system (Reserve Bank of Australia (RBA))


Housing credit
1

21% 21% 22%
Business credit

15% 15% 15%
Retail deposits
2

20% 20% 20%
New Zealand (Reserve Bank of New Zealand (RBNZ))
3


Consumer lending

18% 18% 18%
Deposits

18% 18% 18%
Business lending

16% 16% 17%
Australian Wealth Management
4


Platforms (includes Wrap and Corporate Super)

18% 18% 18%
Retail (excludes Cash)

17% 17% 17%
Corporate Super

15% 15% 15
%
1.3.2System multiples
Half YearHalf YearHalf Year
MarchSeptMarch

2022 2021 2021
Australia


Banking system (APRA)


Housing credit
1

0.3 0.9 0.4
Cards
5

0.7 n/a n/a
Household deposits

0.8 0.9 0.6
Business deposits

0.9 0.7 0.2
Financial system (RBA)


Housing credit
1

0.2 1.0 0.4
Business credit
5

0.8 0.9 n/a
Retail deposits
2,5

0.8 1.0 n/a
New Zealand (RBNZ)
3


Consumer lending
6

0.7 1.0 0.9
Deposits

1.0 1.0 1.4
1.Includes securitised loans.
2.Retail deposits as measured by the RBA, financial system includes financial corporations’ deposits.
3.New Zealand comprises New Zealand banking operations.
4.Market Share Australian Wealth Management based on market share statistics from Plan for Life as at 31 December 2021 (for First Half 2022), as at 30 June 2021 (for
Second Half 2021) and as at 31 December 2020 (for First Half 2021).
5.n/a indicates that system growth or Westpac growth was negative.
6.System multiple for Second Half 2021 has been restated following the re-publication of system growth data.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS6
Review of Group operations
2.0Review of Group operations
Section 2 ‘Review of Group operations’ focuses on our Group results and key drivers for movements, with reference to our significant divisions. For
more commentary at the segment level and details on notable items, refer to Section 3 ‘Segment reporting’.
2.1Performance overview
Overview
We have made progress in First Half 2022 with improved net profit attributable to owners of WBC over the prior half, maintaining a sound balance
sheet and clearly delivering on our strategic priorities. We have also lived our purpose of “Helping Australians and New Zealanders succeed” by
supporting customers and communities through devastating floods and by continuing to assist those affected by the ongoing economic impacts of
COVID-19.
Net profit attributable to owners of WBC for First Half 2022 was $3,280 million, up $1,265 million on Second Half 2021. The increase was
predominantly due to lower notable items ($1,313 million lower) and lower expenses (down $570 million excluding notable items). These benefits
were partly offset by a $357 million turnaround in impairments (a charge of $139 million in First Half 2022 compared to a benefit in Second Half
2021 of $218 million), lower net operating income before operating expenses and impairment charges (down $306 million), mainly from a decline in
net interest margins, and a reduction in net profit attributable to owners of WBC following the sale of businesses ($92 million).
Compared to the prior corresponding period, net profit attributable to owners of WBC was 5% lower, mostly due to a $511 million turnaround in
impairment charges and lower net interest margins. These declines were partly offset by lower notable items and a decline in expenses.
The economic environment continued to improve though First Half 2022 with activity climbing, unemployment falling to generational lows and
interest rates remaining at emergency low levels. These conditions have been supportive for our business although they have also contributed to
strong competition. While conditions have been positive some uncertainty remains. In particular, economic activity has been adversely affected by
COVID-19 lockdowns, including supply chain disruptions and labour shortages while the world is also dealing with rising inflation and uncertainty
linked to the war in Ukraine. We have no direct exposure to Ukraine and Russia although as a major bank we are monitoring potential second order
impacts, across customers, sectors and markets. In First Half 2022 we raised additional credit provision overlays, partly in response to these
uncertainties.
Progress on strategic priorities
We are delivering on our purpose through three linked and interdependent strategic priorities that will make us a simpler stronger bank. These
priorities are:
(1)Fix: This priority is about addressing our shortcomings, improving our control environment and responding to regulatory change.
(2)Simplify: In simplifying the business we are focused on three dimensions: a) portfolio simplification – the businesses we operate, with a
particular focus on banking and exiting our wealth and insurance businesses; b) geographic simplification – where we operate, particularly
Australia and New Zealand; and c) banking simplification – how we operate, using digital to transform our operations.
(3)Perform: In a low interest rate and highly competitive banking environment, it is vital that we improve our efficiency and effectiveness to improve
shareholder returns and the sustainability of our dividends. This priority is also about improving the customer experience.
In First Half 2022, developments under each of these priorities has included:
Fix
●Progressing our CORE (Customer Outcomes and Risk Excellence) program which was set up to materially improve our management of
financial and non-financial risks. Over First Half 2022 we submitted 73 activities to the independent reviewer (Promontory Australia) for
assessment. This sees a total of 194 activities out of the CORE program’s 343 activities submitted. We are now into the program’s
implementation phase, which is the focus for 2022. The independent reports on the program’s progress confirm we are on track;
●Largely completed the rectification of our processes and systems designed to better manage the security registers supporting business
customer facilities;
●Further upgrades to our AML/CTF systems including to improve our ability to block transactions in certain jurisdictions and to automate more of
our threshold transaction reporting;
●Agreeing with ASIC to settle a number of outstanding regulatory matters. Refer to Significant Developments Section 4.1 for further details;
●In New Zealand we focused on implementing regulatory change, including the RBNZ’s BS11 requirements, and enhancing our risk governance
and liquidity management; and

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS7
Review of Group operations
●Updates to systems and processes for regulatory change including new design and distribution obligations, anti-hawking legislation, changes to
Basel III risk weighted asset models and CCCFA (Credit Contracts and Consumer Finance Act) legislation in New Zealand.
While making progress, we still have much to do before the changes we are implementing are embedded in our business as usual. At the same
time, some regulatory investigations are still underway that could result in further litigation, fines, penalties or other regulatory action. Our Contingent
liabilities disclosure in Note 14 to the Interim Financial Statements outlines these further.
Simplify
●Under Portfolio Simplification, we completed the sale of two businesses in First Half 2022, Westpac Life-NZ- Limited (NZ Life) and Westpac’s
motor vehicle dealer finance and novated leasing businesses. This brings to six the number of businesses exited. We entered into an
agreement to sell Westpac Life Insurance Services Limited in 2021 and expect this to settle in 2022. For further details refer Note 17 Assets
and Liabilities Held for Sale. Our remaining businesses for exit include our superannuation, platforms and investments operations, and
Westpac Pacific comprising our Papua New Guinea and Fiji businesses where we are reviewing our options.
●Geographic simplification progressed as we consolidate our presence in Asia from 5 locations to a single hub in Singapore. We closed our
branches in Mumbai and Jakarta in 2021 and are working to exit Hong Kong, Shanghai and Beijing.
●Banking simplification:
–Reductions in the number of products and fees has contributed to a 9% decline in complaints;
–In technology, we decommissioned 4% of the applications we planned to remove and increased the number of automated processes to
152 from 98 at 30 September 2021; and
–Launched a new digital mortgage application process, reducing approval times and making it easier for both customers and bankers.
Perform
●Completed the roll-out of the Westpac mobile banking app to customers using android devices following the iOS roll-out in 2021. The new app
is now providing over 2.5 million customers with improved speed and functionality of foundational banking services along with a range of new
functions;
●Further shifted decision making closer to customers by changing our organisational structure to slim down our head office and create shared
services divisions for customer related activity and for corporate services;
●Deploying next generation merchant terminals with enhanced functionality and mobility for our business customers;
●Successfully launched our Banking as a Service model on a new cloud native technology platform; and
●Reduced expenses by 10% (excluding notable items) including through:
–Reduced the number of corporate office sites by 7%;
–Consolidated 72 branches across Australia and New Zealand and reduced the ATM network by a further 8%;
–Reduced headcount by over 4,000; and
–Improving the efficiency of our supplier arrangements.
Community
Much of Eastern Australia has been affected by significant floods late in the half. We launched a $2 million flood support fund to provide emergency
grants to customers, while also offering our natural disaster relief packages. With our Lismore branch directly impacted by the floods, we
transported our “Bank in a Box” (a relocatable branch constructed from a shipping container) to restore critical services to the region when
customers needed it most.
Notable items
Notable items had a small impact on First Half 2022, reducing net profit attributable to owners of WBC by $6 million. This compared to a $1,319
million reduction in Second Half 2021 and $282 million reduction in First Half 2021. While the net impact of notable items in First Half 2022 was
small, they had a larger effect, on individual line items. The main notable items in First Half 2022 included:
●The gain on sale of Westpac Life-NZ- Limited and the Group’s motor vehicle dealer finance and novated leasing business;
●A write-down of goodwill and capitalised software associated with the Group’s superannuation business;
●An increase in provisions for customer refunds, repayments, associated costs and litigation penalties; and
●Other costs associated with divestments.
Details of notable items are in Section 3.0.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS8
Review of Group operations
Financial performance summary (First Half 2022 compared to Second Half 2021)
Net profit attributable to owners of WBC for First Half 2022 was $3,280 million, up $1,265 million on Second Half 2021. Our return on average equity
was 9.25% while earnings per share were 90.5 cents per share.
The higher net profit attributable to owners of WBC was predominantly due to a $1,313 reduction in notable items. Excluding notable items, net
profit attributable to owners of WBC for First Half 2022 was $3,286 million, down $48 million or 1% on Second Half 2021. The decrease was mostly
due to a $357 million turnaround in impairment charges (a charge of $139 million in First Half 2022 compared to an impairment benefit of $218
million in Second Half 2021). Profit before impairment charges and income tax expense, excluding notable items, of $4,853 million were 5% up on
Second Half 2021.
Net interest income of $8,288 million was down 3% over the six months with a 15 basis point decrease in net interest margin partly offset by a 6%
increase in average interest-earning assets. Within average interest-earning assets, average lending increased 2% over the half while average
liquid assets were 22% higher. Lower margins were due to intense competition across mortgages and business lending, and the mix impact of
growing faster in lower spread lending products. The significant increase in liquid assets also impacted margins and was due to the wind-down in
the Reserve Bank of Australia’s committed liquidity facility (“CLF” which is collateralised by self securitised mortgages) which necessitated a
significant increase in high quality liquid assets. Partly offsetting these impacts were margin benefits from deposit repricing and a higher contribution
from Treasury. Net interest income is discussed further in Section 2.2.1.
Non-interest income of $1,942 million was down $84 million over the half. The impact of businesses sold reduced non-interest income by $131
million while notable items added $83 million, a net reduction of $48 million. Excluding these items, non-interest income was down $36 million.
Lower wealth and insurance income from a reduced contribution from the revaluation of life policy liabilities was the key contributor to the decline.
Trading income improved as increased market volatility in the half led to greater customer demand for fixed income and foreign exchange products.
Fee income was also higher as increased economic activity flowed through to higher cards revenue. Non-interest income is discussed further in
Section 2.2.5.
Operating expenses of $5,373 million were $1,941 million, or 27%, lower than Second Half 2021. Excluding notable items, operating expenses were
$570 million, or 10%, lower. This reduction was supported by initiatives to achieve our target $8.0 billion cost base by Full Year 2024 including
organisational redesign, consolidation of our corporate and branch networks and the completion of elements of our Fix agenda. Headcount was
down by 7% as we reduced our use of third-party service providers. Lower software amortisation and lease costs (right of use asset) following the
write-down of certain assets in Second Half 2021, along with greater use of leave provisions also contributed to the decline. Some of the expense
decline was due to timing differences, with investment spending typically higher in the second half of each year. Operating expenses are discussed
further in Section 2.2.8.
First Half 2022 recorded an impairment charge of $139 million compared to an impairment benefit of $218 million in Second Half 2021. Relative to
Second Half 2021, the rise in impairment charges was mostly due to an increase in the downside economic scenario weight, and an increase in
overlay provisions which more than offset the impact of improving credit metrics. The additional overlays respond to increased uncertainty and risks
arising from the current geopolitical environment and the potential for losses from recent climate events (floods) that are not captured in our
modelled expected credit losses. Impairment charges are discussed further in Section 2.2.9.
Balance sheet and credit quality
The Group maintained its strong balance sheet with a common equity tier 1 (CET1) capital ratio of 11.3%, funding and liquidity metrics are all
comfortably above regulatory minimums and most credit quality metrics improved.
Net loans (including held for sale) increased $8.8 billion, or 1%, mostly from an increase in Australian mortgages (up $2.7 billion) and Australian
business loans (up $8.3 billion). Growth in Australian mortgages was concentrated in owner-occupied loans (up $5.2 billion), with investor and line
of credit lending down $2.8 billion. Improved economic conditions and activity supported an increase in business lending, including merger and
acquisition activity and higher utilisation of existing facilities. Lending to the agriculture and property sectors also contributed to the increase. Net
loans in New Zealand increased NZ$1.4 billion (a decrease of $1.0 billion in A$). Loans are discussed further in Section 2.2.2.
Customer deposits increased $20.6 billion, or 4%, over the half, more than double the increase in lending, leading to an almost 2 percentage point
increase in the deposit to loan ratio to 83.5%. Increased liquidity in the financial system supported by government and central bank stimulus
measures has led to an increase in deposits in both Australia and New Zealand. Low interest rates have also seen customers prefer to hold funds in
at call accounts rather than term deposits. In Australia, at call accounts increased $16.2 billion, or 5%, over the half, with term deposits rising $2.1
billion, or 2%. With interest rates beginning to rise in New Zealand, we have begun to see an increased preference for term deposits which
increased NZ$1.7 billion, or 6%, while at call deposits were little changed. Deposits are discussed further in Section 2.2.3.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS9
Review of Group operations
Credit quality continued to improve in First Half 2022 from the success of Government stimulus measures, stronger labour market conditions, low
interest rates and the banking support provided to customers through the major COVID-19 related disruptions.
Impaired assets to gross loans were 23 basis points at 31 March 2022 compared to 30 basis points at 30 September 2021. This was mostly due to
a partial write-off and a reduction in new impaired assets, with no new impaired assets greater than $50 million emerging during the half. Stressed
exposures to total committed exposures ended the six months at 1.10% compared to 1.36% at 30 September 2021. Delinquencies were also lower
with mortgage 90+ day delinquencies down 17 basis points to 0.82% and other consumer 90+ day delinquencies down 13 basis points to 1.62%.
Total provision balances were 6% lower over the half at $4.7 billion. Of the total, individually assessed provisions were lower from low new IAPs and
the partial write-off of one large exposure. Collectively assessed provisions were little changed as the model outcomes from the improved conditions
and outlook, were offset by an increased weight to the downside economic scenario and higher provision overlays. Our ratio of total provisions to
credit risk weighted assets was 1.30% at 31 March 2022 down from 1.40% at 30 September 2021. Our ratio of impaired exposure provisions to
impaired exposures was 48%. Credit quality is discussed further in Section 2.3.
The Group reported a CET1 ratio of 11.3% at 31 March 2022, lower than the 12.3% reported at September 2021, mostly due to our $3.5 billion
share buy-back. Our level of capital is comfortably above regulatory requirements and within our new preferred CET1 capital range of 11.0% to
11.5% that applies from 1 January 2023. Capital is discussed further in Section 2.5.
Our funding and liquidity ratios remained comfortably above regulatory requirements with the average liquidity coverage ratio (LCR) for First Half
2022 of 137% and the net stable funding ratio (NSFR) ending the half at 125%.
In First Half 2022, high quality liquid assets (HQLA) increased as we prepared for the progressive reduction in the CLF over the 2022 calendar year.
This followed the decision by APRA to wind down the facility used by certain Australian banks to meet their LCR requirements. During the half we
also completed a $3.5 billion off-market share buy-back. The additional funding needs of these developments were largely met by customer deposit
growth of 4% which was well above growth in loans of 1%. Funding and liquidity are discussed in Section 2.4.2.
Shareholders
Towards the end of the half, we completed a $3.5 billion off-market share buy-back (4.6% of shares on issue at that time), contributing to a 1%
reduction in average shares on issue in First Half 2022. Our return on equity was 9.25% up 3.7 percentage points from Second Half 2021. Most of
this increase was from the improved earnings, with a small contribution (11 basis points) from lower average equity. Earnings per share of 90.5
cents were up from 54.9 cents for Second Half 2021. Net tangible assets per ordinary share were $17.22 up 2% over the half.
Given our net profit attributable to owners of WBC increase and strong capital levels we have determined to pay a First Half 2022 dividend of 61
cents per share. For further information on dividends refer to Capital and dividends Note 2.5.
Financial performance First Half 2022 – First Half 2021
Net profit attributable to owners of WBC of $3,280 million was down $163 million or 5% over First Half 2021. Excluding notable items, net profit
attributable to owners of WBC was $3,286 million, down $439 million, or 12%. The decrease was principally due to a $511 million movement in
impairment charges ($358 million after tax).
Net interest income was 1% lower over the prior corresponding period, with net interest margin 15 basis points lower. The decline was due to lower
interest rates, loan competition and the mix impact from an increase in lower yielding liquid assets. Average interest-earning assets increased 7%
over the year, mostly from the rise in liquid assets and a 3% increase in average lending.
Total spot lending (including held for sale) was up $29.5 billion, or 4% over the year, with higher mortgage lending in Australia (up $14.7 billion) and
higher New Zealand lending (up NZ$3.5 billion, A$4.3 billion) and a $13.8 billion increase (up 10%) in Australian business lending.
Customer deposits (including held for sale) increased $50.5 billion, lifting the customer deposit to loan ratio to 83.5%. Most of the deposit increase
was in Australian at call and non-interest bearing accounts, which increased $46.4 billion and $5.4 billion respectively. These increases were partly
offset by lower term deposits.
Non-interest income was down $396 million, or 17% lower than the prior corresponding period. Excluding notable items and businesses sold, non-
interest income was $189 million lower, largely from the impact of yield curve movements on the life insurance policyholder liability.
Expenses were down 10% over the prior corresponding period due principally to lower notable items. Excluding notable items, expenses were down
$110 million or 2%. The decrease (excluding notable items) was primarily due to lower software amortisation and reduced third party spending. This
was partly offset by higher employee expenses linked to improving our management of risk.
First Half 2022 recorded an impairment charge of $139 million compared to an impairment benefit of $372 million in First Half 2021. The impairment
charge in First Half 2022 includes an increase in overlay provisions raised to address uncertainty and risks arising from geopolitical tensions and the
potential impacts of recent floods.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS10
Review of Group operations
2.2Review of reported results
2.2.1Net interest income
1
Half YearHalf YearHalf Year% Mov’t
MarchSeptMarchMar 22Mar 22

2022 2021 2021 - Sept 21 - Mar 21
Net interest income ($m)

8,288 8,510 8,348 (3) (1)
Average interest-earning assets ($m)

872,075 825,926 812,950 6 7
Group net interest margin (%)

1.91%2.06%2.06%(15 bps) (15 bps)
First Half 2022 – Second Half 2021
Net interest income decreased $222 million or 3% compared to Second Half 2021. Key features include:
●The Group net interest margin decreased 15 basis points, reflecting a $222 million decrease in net interest income mainly in lending and the
impact of holding additional lower yield liquid assets;
●Average interest-earning assets increased 6% (up $46 billion) with most of the growth ($33 billion) due to increased holdings of liquid assets.
Lending was also 2% higher due primarily to growth in mortgages and business loans. Refer to Section 2.2.2 for detail on loan growth. Other
interest-earning assets decreased mainly due to lower collateral balances. The rise in liquid assets was principally due to the roll-off of the
Committed Liquidity Facility (CLF) which previously allowed banks to meet their liquidity requirements with self-securitised assets as collateral.
Refer to Section 2.4.2 for more details on funding and liquidity.
First Half 2022 – First Half 2021
Net interest income decreased $60 million or 1% compared to First Half 2021. Key features include:
●Group net interest margin decreased 15 basis points, primarily reflecting a decrease in lending revenue and the impact of holding additional
lower yield liquid assets, partly offset by an increased Treasury and Markets revenue contribution primarily driven by fair value movements in
economic hedges;
●Average interest-earning assets increased $59 billion or 7%, from growth in liquid assets (up $44 billion) and a $22 billion increase in lending,
primarily in owner occupied mortgages and in business lending. Other interest earning assets decreased mainly due to lower collateral
balances.
1.Refer to Section 4 Note 3 for reported results breakdown.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS11
Review of Group operations
2.2.2Loans
As atAs atAs at% Mov’t
31 March30 Sept31 MarchMar 22Mar 22
$m

2022 2021 2021 - Sept 21 - Mar 21
Australia

625,464 614,770 598,663 2 4
Housing

458,278 455,604 443,557 1 3
Personal

14,128 14,737 16,458 (4) (14)
Business

156,763 148,453 142,965 6 10
Provisions

(3,705) (4,024) (4,317) (8) (14)
New Zealand (A$)

87,806 88,793 83,486 (1) 5
New Zealand (NZ$)

94,471 93,032 90,923 2 4
Housing

62,166 60,849 58,297 2 7
Personal

1,201 1,231 1,409 (2) (15)
Business

31,517 31,421 31,713 — (1)
Provisions

(413) (469) (496) (12) (17)
Other overseas (A$)

6,286 6,221 6,069 1 4
Total loans

719,556 709,784 688,218 1 5
Loans held for sale
1

— 1,015 1,819 (100) (100)
Total loans (including held for sale)

719,556 710,799 690,037 1 4
1.The sale of Westpac Pacific was terminated in Second Half 2021 and was therefore no longer classified as Held for Sale. For further details on Held for Sale balances, refer
to Section 4, Note 17.
First Half 2022 – Second Half 2021
Total loans (including held for sale loans) increased $8.8 billion, or 1% compared to 30 September 2021. Excluding foreign currency translation
impacts, total loans increased $11.4 billion, or 2%.
Key features of total loan movements were:
●Australian housing loans increased $2.7 billion, or 1%. All of the growth was in owner occupied lending which increased $5.2 billion or 2%,
partly offset by a decline in investor lending of $1.8 billion or 1% which led to below system mortgage growth in aggregate;
●Australian personal lending contracted $0.6 billion primarily due to run off in the Auto Finance portfolio. Auto Finance lending has reduced over
recent years and following our decision to exit the business, we are no longer originating new lending. The decline was partly offset by higher
credit card balances due to increased activity from the easing of COVID-19 restrictions, as well as typical seasonality trends;
●Australian business lending grew $8.3 billion primarily in WIB lending from increased merger and acquisition activity and higher utilisation of
existing facilities. The Business segment grew $2.6 billion from increased demand for working capital and investment as economic activity
improved;
●New Zealand lending increased 2% in NZ$ terms from higher housing lending, partly offset by a modest decline in personal loans. Our
mortgage portfolio increased broadly in line with market with growth easing towards the end of First Half 2022 with the introduction of new
CCCFA regulations and the reintroduction of LVR restrictions; and
●Held for sale assets reduced to zero following completion of the sale of our wholesale Auto dealer portfolio in December 2021.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS12
Review of Group operations
First Half 2022 – First Half 2021
Total loans (including held for sale loans) increased $29.5 billion, or 4% compared to 31 March 2021. Excluding foreign currency translation impacts,
total loans increased $28.3 billion, or 4%.
Key features of total loan movements were:
●Australian housing loans increased $14.7 billion. Growth was stronger in Second Half 2021 supported by competitive pricing and improved
processing times. Whilst we continued to grow in First Half 2022, particularly in owner occupied lending, investor lending declined slowing
overall growth. In aggregate, owner occupied lending was up $20.2 billion or 7%, while investor lending was $4.1 billion or 3% lower;
●Australian personal lending decreased $2.3 billion with lower credit card and personal loan balances, continuing the longer term trend of
decline in these forms of lending, whilst the Auto Finance portfolio is in run off;
●Australian business lending was $13.8 billion higher from increased WIB lending particularly in merger and acquisition financing and higher
utilisation of existing facilities. Growth in the Business segment was across the property, agriculture and diversified commercial sectors;
●New Zealand lending increased 4% in $NZ terms with higher housing lending partly offset by lower business and personal lending; and
●The movement in other overseas lending was due to a decline of $1.2 billion following our decision to consolidate our operations in Asia, offset
by an increase of $1.4 billion relating to the reclassification of Westpac Pacific which was previously recognised as held for sale in First Half
2021.
2.2.3Deposits and other borrowings
1
As atAs atAs at% Mov’t
31 March30 Sept31 MarchMar 22Mar 22
$m

2022 2021 2021 - Sept 21 - Mar 21
Customer deposits
Australia

521,303 501,010 475,155 4 10
At call

361,609 345,416 315,218 5 15
Term

104,865 102,775 110,470 2 (5)
Non-interest bearing

54,829 52,819 49,467 4 11
New Zealand (A$)

72,839 72,462 67,999 1 7
New Zealand (NZ$)

78,369 75,916 74,056 3 6
At call

32,480 32,848 31,608 (1) 3
Term

30,067 28,331 28,739 6 5
Non-interest bearing

15,822 14,737 13,709 7 15
Other overseas (A$)

6,730 6,845 5,095 (2) 32
Total customer deposits

600,872 580,317 548,249 4 10
Customer deposits held for sale
2

— — 2,088 — (100)
Total customer deposits (including held for sale)

600,872 580,317 550,337 4 9
Certificates of deposit

44,734 46,638 37,152 (4) 20
Australia

27,048 31,506 26,273 (14) 3
New Zealand (A$)

2,783 3,293 3,020 (15) (8)
Other overseas (A$)

14,903 11,839 7,859 26 90
Total deposits and other borrowings (including held for sale)

645,606 626,955 587,489 3 10
1.Non-interest bearing relates to instruments which do not carry a rate of interest.
2.The sale of Westpac Pacific was terminated in Second Half 2021 and was therefore no longer classified as Held for Sale. For further details on Held for Sale balances, refer
to Section 4, Note 17.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS13
Review of Group operations
First Half 2022 – Second Half 2021
Total customer deposits increased $20.6 billion, or 4% compared to 30 September 2021. Excluding foreign currency translation impacts, customer
deposits increased $23.2 billion, or 4%. Growth in deposits has continued to be supported by government stimulus measures (in response to
COVID-19) that has injected additional funding to the system. This has seen deposit growth consistently exceed loan growth over recent halves,
contributing to a rise in the customer deposit to loan ratio to 83.5% from 81.6% from six months earlier.
Key features of total customer deposits movements were:
●Australian deposits increased $20.3 billion with growth across transaction, savings, mortgage offset accounts and term deposits. Growth in
term products was in the institutional segment, whilst retail term deposits continued to decline in the low interest rate environment as customers
are less inclined to hold their funds in fixed term accounts; and
●New Zealand customer deposits increased in NZ$ terms with growth in the household segment. As interest rates have started to increase in
New Zealand, we are seeing growth directed into term deposits.
First Half 2022 – First Half 2021
Total customer deposits (including held for sale deposits) increased $50.5 billion, or 9% compared to 31 March 2021. Excluding foreign currency
translation impacts, customer deposits increased $49.5 billion, or 9%. Customer deposit growth exceeded loan growth over the year with the deposit
to loan ratio rising by around 4 percentage points.
Key features of total customer deposits growth were:
●In Australia, customer preference for at call products over term deposits continued with at call accounts increasing by $46.4 billion. Non-interest
bearing deposits also increased $5.4 billion from growth in mortgage offset balances;
●New Zealand customer deposits increased in the household segment with growth spread across term and at call products; and
●Adjusting for Westpac Pacific deposits ($2.1 billion) which were previously classified as held for sale, other overseas deposits decreased as we
continue to consolidate our operations in Asia.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS14
Review of Group operations
2.2.4Net interest margin
Group net interest margin movement (%)
First Half 2022 – Second Half 2021
First Half 2022 – Second Half 2021
●Group net interest margin of 1.91% decreased 15 basis points from Second Half 2021 with key features including:
-
15 basis point decrease from loans primarily due to lower spreads on new mortgage lending in Australia, from both competition and mix
impacts (higher growth in lower spread owner occupied and fixed rate lending). While customer interest rates on fixed rate mortgages
increased through the half, this did not match the rise in funding costs (used to hedge fixed rates) over the same period. Business lending
spreads were also lower due to competition to attract and retain customers. Changes in portfolio mix from reduced balances in higher
spread personal lending also contributed to the net interest margin decline;
-
4 basis point increase from deposits primarily due to repricing and an increase in higher spread at call balances, relative to lower spread
term deposits. These improvements were partly offset by the ongoing impact of low interest rates with a reduction in earnings on hedged
deposits;
-
1 basis point increase from wholesale funding costs as the spreads on new term wholesale funding were lower than the spreads on
maturing facilities;
-
1 basis point decrease from lower benefits in releases of estimated customer refunds and payments provisions; and
-
7 basis point decrease from liquid assets as we increased third-party liquid assets principally to offset the phasing out of the CLF. This is
predominantly a mix impact as liquid assets are lower yielding.
●The contribution from Treasury and Markets increased 3 basis points due to higher Treasury income driven by balance sheet management
activities.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS15
Review of Group operations
Group net interest margin movement (%)
First Half 2022 – First Half 2021
First Half 2022 – First Half 2021
●Group net interest margin of 1.91% decreased 15 basis points from First Half 2021 with key features including:
–26 basis point decrease from loans due to lower spreads on new mortgage lending, competition, and increased volumes of lower spread
products. At the same time rate increases on customer fixed rates mortgage through the half did not match increases in funding costs and
so fixed rate mortgage spreads were lower. Business and Institutional lending spreads also reduced due to competitive pricing to attract
and retain customers, while unfavourable changes in portfolio mix from reduced balances in higher spread personal lending also
contributed to the net interest margin decline;
–9 basis point increase from deposits primarily due to portfolio repricing along with changes in the portfolio mix toward higher spread at call
products. This increase was partly offset by reductions in hedged deposit earnings;
–3 basis point increase from lower wholesale funding costs as Westpac’s Term Funding Facility was fully drawn and new term wholesale
funding was raised at a lower spread to maturing funding;
–2 basis point decrease from capital and other primarily due to reduced earnings on hedged capital balances;
–2 basis point decrease from lower benefits in releases of estimated customer refunds and payments provisions; and
–8 basis point decrease from higher holdings of third-party liquid assets in response to the phasing out of the CLF.
●The contribution from Treasury and Markets increased 11 basis points due to higher Treasury income driven by fair value movements in
economic hedges and balance sheet management activities.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS16
Review of Group operations
2.2.5Non-interest income
1
Half YearHalf YearHalf Year% Mov’t
MarchSeptMarchMar 22Mar 22
$m

2022 2021 2021 - Sept 21 - Mar 21
Net fee income

845 782 700 8 21
Net wealth management and insurance income

401 613 598 (35) (33)
Trading income

343 277 442 24 (22)
Other income

353 354 598 — (41)
Total non-interest income

1,942 2,026 2,338 (4) (17)
Half Year Half Year Half Year % Mov’t
MarchSeptMarchMar 22Mar 22
$m202220212021- Sept 21- Mar 21
Notables
Net fee income — (33) (104) (100) (100)
Net wealth management and insurance income (43) (18) (88) large (51)
Trading income — — — — —
Other income 271 196 564 large (52)
Total non-interest income - Notables 228 145 372 large (39)
Businesses sold
Net fee income — 2 1 (100) (100)
Net wealth management and insurance income 28 153 90 (82) (69)
Trading income — — — — —
Other income — 4 — (100) —
Total non-interest income - Businesses sold 28 159 91 (82) (69)
Non-interest income (Ex Notables and Businesses sold)
Net fee income 845 813 803 4 5
Net wealth management and insurance income 416 478 596 (13) (30)
Trading income 343 277 442 24 (22)
Other income 82 154 34 (47) 141
Non-interest income excluding notable items and Businesses sold 1,686 1,722 1,875 (2) (10)
First Half 2022 – Second Half 2021
Non-interest income of $1,942 million decreased $84 million or 4% compared to Second Half 2021. Excluding notable items and the impact of
businesses sold, non-interest income decreased $36 million or 2% compared to Second Half 2021.
Net fee income
Excluding notable items and the impact of businesses sold, net fee income increased $32 million or 4% due to:
●Higher credit cards income driven by increased domestic spend (up 9%) and international spend (up 21%).
Net wealth management and insurance income
Excluding notable items and the impact of businesses sold, net wealth management and insurance income decreased $60 million or 13% due to:
●Lower life insurance income from the revaluation of life policy liabilities, due to movements in long term interest rates;
●Lower New Zealand funds management income from fee reductions as part of industry changes in default Kiwisaver funds from December
2021.
Trading income
Trading income increased $66 million or 24% due to:
●Increased customer demand across fixed income and foreign exchange products, resulting in increased customer markets income and non-
customer income;
●Gains on derivatives ($41 million) that hedge certain customer products which is mostly offset by corresponding losses in other income; partly
offset by
●Lower contribution from derivative valuation adjustments ($73 million) due to widening counterparty credit spreads.
1.Refer to Section 4, Note 4 for reported results breakdown.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS17
Review of Group operations
Other income
Other income decreased $1 million primarily due to higher notable items compared to Second Half 2021. First Half 2022 included a gain on sale of
the Wholesale Auto finance business ($170 million) and New Zealand Life Insurance ($119 million), partly offset by a post-sale adjustment to earn-
out payments associated with the sale of Vendor Finance ($18 million).
Excluding notable items and the impact of businesses sold, other income decreased by $72 million or 47%, driven by:
●Fair value losses on markets related customer products ($42 million), with the risk associated with these instruments hedged and gains
reported in trading income;
●Lower revaluations of fintech investments; partly offset by
●A one-off payment related to achieving specific milestones under the General Insurance distribution arrangement ($25 million).
First Half 2022 – First Half 2021
Non-interest income of $1,942 million decreased $396 million or 17% compared to First Half 2021. Excluding notable items and impact of
businesses sold, non-interest income decreased $189 million or 10% compared to First Half 2021.
Net fee income
Excluding notable items and the impact of businesses sold, net fee income increased $42 million or 5% due to:
●Higher credit cards fees from increased international spend (up 36%);
●Higher mortgage fees due to increased market activity; partly offset by
●Lower net merchant revenue from higher transaction costs;
●Lower fee income due to the simplification initiatives including the removal of certain account keeping fees.
Net wealth management and insurance income
Excluding notable items and the impact of businesses sold, net wealth management and insurance income decreased $180 million or 30% due to:
●Lower life insurance income driven by the revaluation of life policy liabilities due to movements in long term interest rates;
●Lower wealth income driven by the continued migration of customers from legacy platforms to the lower fee Panorama platform. This was partly
offset by an 5% increase in funds under administration to $230 billion from higher equity markets;
●Lower New Zealand funds management income from fee reductions as part of industry changes in default Kiwisaver funds from December
2021.
Trading income
Trading income decreased $99 million or 22% due to:
●Lower contribution from derivative valuation adjustments ($86 million) due to widening counterparty credit spreads; partly offset by
●Increased customer demand across fixed income and foreign exchange products, resulting in increased customer markets income.
Other income
Other income decreased $245 million or 41% primarily due to lower notable items compared to First Half 2021. First Half 2022 includes a gain on
sale of the Wholesale Auto finance business ($170 million) and New Zealand Life Insurance ($119 million), partly offset by a post-sale adjustment to
earn-out payments associated with the sale of Vendor Finance ($18 million).
Excluding notable items and the impact of businesses sold, other income increased $48 million, driven by a one-off payment related to achieving
specific milestones under the General Insurance distribution arrangement ($25 million), and higher revaluations of fintech investments.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS18
Review of Group operations
2.2.6Group funds
As atAs at% Mov’tAs at% Mov’t
31 MarchNetOther30 SeptMar 2231 MarchMar 22
$bn

2022 Inflows Outflows flows Mov’t 2021 Sept 21 2021 Mar 21
Superannuation

41.8 1.9 (2.9) (1.0) (2.6) 45.4 (8) 42.3 (1)
Platforms

140.2 9.6 (9.5) 0.1 0.8 139.3 1 128.2 9
Packaged Funds

45.9 6.4 (7.4) (1.0) (0.5) 47.4 (3) 45.4 1
Total Australia funds

227.9 17.9 (19.8) (1.9) (2.3) 232.1 (2) 215.9 6
Total NZ funds (A$)

10.9 1.6 (1.5) 0.1 (0.7) 11.5 (5) 10.9 —
Total Group funds

238.8 19.5 (21.3) (1.8) (3.0) 243.6 (2) 226.8 5
Total NZ funds (NZ$)

11.7 1.8 (1.6) 0.2 (0.5) 12.0 (3) 11.9 (2)
Group funds comprises non-superannuation and superannuation regulated products provided to Australian and New Zealand customers through
advised and direct channels. This includes wealth products distributed to Australian and New Zealand customers.
Group funds decreased by $4.8 billion (or 2%) over the First Half 2022, primarily driven by market movements. Inflows of $19.5 billion were offset by
outflows of $21.3 billion.
2.2.7Markets related income
1
Half YearHalf YearHalf Year% Mov’t
MarchSeptMarchMar 22Mar 22
$m

2022 2021 2021 - Sept 21 - Mar 21
Net interest income

52 54 45 (4) 16
Non-interest income

323 355 418 (9) (23)
Total Markets income

375 409 463 (8) (19)
Customer income

370 340 335 9 10
Non-customer income

34 25 75 36 (55)
Derivatives valuation adjustments

(29) 44 53 large large
Total Markets income

375 409 463 (8) (19)
Markets income comprises sales and risk management revenue derived from the creation, pricing and distribution of risk management products to
the Group’s consumer, business, corporate and institutional customers. Dedicated relationship specialists provide product solutions to these
customers to help manage their interest rate, foreign exchange, commodity, credit and structured products risk exposures.
1.Markets income includes WIB, Specialist Businesses and Westpac New Zealand markets.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS19
Review of Group operations
First Half 2022 – Second Half 2021
Total markets income decreased by $34 million, or 8%, compared to Second Half 2021 primarily due to lower contribution from derivative valuation
adjustments as a result of credit spread widening (First Half 2022: $29 million loss; Second Half 2021: $44 million gain), partly offset by higher
customer and non-customer income (up $39 million).
Customer income increased 9% compared to Second Half 2021 from higher customer demand for hedging across fixed income and foreign
exchange.
Non-customer income increased $9 million compared to Second Half 2021, primarily from higher foreign exchange and commodities trading income
reflecting greater market volatility.
First Half 2022 – First Half 2021
Total markets income decreased by $88 million, or 19%, primarily due to a lower contribution from derivative valuation adjustments (down $82
million).
Customer income increased by $35 million as a result from increased customer demand for fixed income hedging and higher foreign exchange
volumes.
Non-customer income decreased by 55%, largely from lower fixed income trading due to widening credit spreads in First Half 2022 compared to
First Half 2021 which benefited from a tightening of credit spreads.
Markets Value at Risk (VaR)
$m

Average High Low
Half Year 31 March 2022

5.0 11.0 3.1
Half Year 30 September 2021

5.7 8.5 4.1
Half Year 31 March 2021

23.5 34.7 4.6
The Components of Markets VaR are as follows:
AverageHalf YearHalf YearHalf Year
MarchSeptMarch
$m

2022 2021 2021
Interest rate risk

3.6 3.5 8.0
Foreign exchange risk

1.3 1.4 1.6
Equity risk

— — 0.4
Commodity risk

2.1 0.9 1.5
Credit and other market risks
1

3.3 4.5 16.9
Diversification benefit

(5.3) (4.6) (4.9)
Net market risk

5.0 5.7 23.5
1.Includes pre-payment risk and credit spread risk (exposures to generic credit rating bonds).

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS20
Review of Group operations
2.2.8Operating expenses
1
Half YearHalf YearHalf Year% Mov’t
MarchSeptMarchMar 22Mar 22
$m

2022 2021 2021 - Sept 21 - Mar 21
Staff expenses

(2,982) (3,263) (2,771) (9) 8
Occupancy expenses

(398) (667) (559) (40) (29)
Technology expenses

(1,125) (1,723) (1,405) (35) (20)
Other expenses

(868) (1,661) (1,262) (48) (31)
Total operating expenses

(5,373) (7,314) (5,997) (27) (10)
Excluding notables
Staff expenses (2,963) (3,055) (2,688) (3) 10
Occupancy expenses (398) (474) (477) (16) (17)
Technology expenses (1,080) (1,251) (1,227) (14) (12)
Other expenses (701) (932) (860) (25) (18)
Total operating expenses excluding notable items

(5,142) (5,712) (5,252) (10) (2)
Full Time Equivalent (FTE) employees
As atAs atAs at% Mov’t
31 March30 Sept31 MarchMar 22Mar 22
Number of FTE

2022 2021 2021 - Sept 21 - Mar 21
Permanent employees

34,637 34,975 33,607 (1) 3
Temporary employees

4,186 5,168 5,140 (19) (19)
FTE

38,823 40,143 38,747 (3) —
First Half 2022 – Second Half 2021
Operating expenses were $1,941 million (or 27%) lower compared to Second Half 2021, with the majority of the decline due to the following notable
items:
●Write-down of intangible items ($989 million lower);
●Asset sales and revaluation ($213 million lower); and
●Costs associated with estimated customer refunds, payments, costs and litigation ($169 million lower).
Excluding these notable items, operating expenses were $570 million (or 10%) lower.
The decline, excluding notable items reflects the execution of our plans to reset our cost base.
The following discussion excludes the impact of notable items.
FTE were 1,320 lower over the half as we continued to implement changes in our organisational structure progressively including the impacts from
businesses sold, and from a reduction in resources required to manage COVID-19 activities. Total headcount including third-party providers and
outsourced partners declined more significantly as a number of Fix strategic priority projects completed including the initial design phase of our
CORE program.
Staff expenses were down by $92 million (or 3%) due to:
●The impact of businesses sold;
●Higher utilisation of leave provisions; and
●These decreases were partly offset by the full period impact from the increase in the superannuation guarantee from 1 July 2021, annual salary
increases from 1 January 2022 and costs associated with our organisational restructure.
Occupancy expenses decreased $76 million (or 16%) from:
●Corporate site rationalisation from consolidation of two CBD sites to one in both Adelaide and Melbourne;
●Lower network costs from branch consolidation and ATM closures (70 branches consolidated and 117 ATMs were closed in Australia, 2
branches consolidated, and 18 ATMs were closed in New Zealand); and
●Lower depreciation from the impact of property lease write-downs in Second Half 2021.
1.Refer to Section 4 Note 5 for reported results breakdown.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS21
Review of Group operations
Technology expenses were $171 million (or 14%) lower. Contributors to the decline were:
●Lower software amortisation following write-downs in Second Half 2021;
●Reduced investment spend, as we complete certain initiatives; and
●Lower third party-spend as we move more services in-house.
Other expenses decreased $231 million (or 25%) including:
●Lower third-party spending from contract renegotiations and more disciplined use of third-party suppliers; and
●A reduction in non-lending losses due to the decline in litigation costs.
First Half 2022 – First Half 2021
Operating expenses were $624 million (or 10%) lower compared to First Half 2021. Notable items include:
●Asset sales and revaluation ($222 million lower);
●Costs associated with estimated customer refunds, payments, costs and litigation ($210 million lower); and
●Write-down of intangible items ($82 million lower).
Excluding these notable items, operating expenses were $110 million (or 2%) lower.
The following discussion excludes the impact of notable items.
Ongoing productivity initiatives and lower software and amortisation costs in Property and Technology are partly offset by the addition of over 500
FTE to support our strategic priorities.
Staff expenses increased $275 million (or 10%) due to:
●Additional resources to improve risk management and compliance, and support our Fix strategic priority;
●Responding to higher mortgage volumes and bringing roles back to Australia;
●The increase in the superannuation guarantee from 1 July 2021, and annual salary increases; and
●Cost associated with our organisational restructure.
Occupancy expenses were $79 million (or 17%) lower with the main components including:
●Corporate site rationalisation;
●Lower network distribution costs; and
●Lower depreciation from property lease write-downs in Second Half 2021.
Technology expenses decreased $147 million (or 12%) from:
●A reduction in software amortisation following asset write-downs in Second Half 2021; and
●Lower third party spend as we move more services in-house.
Other expenses decreased $159 million (or 18%) mainly from lower third-party spend.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS22
Review of Group operations
Investment spend
Half YearHalf YearHalf Year% Mov’t

March Sept March Mar 22 Mar 22
$m202220212021- Sept 21- Mar 21
Expensed

528 720 502 (27) 5
Capitalised software, fixed assets and prepayments

419 443 354 (5) 18
Total

947 1,163 856 (19) 11
Fix

653 859 572 (24) 14
Simplify

153 144 100 6 53
Perform

141 160 184 (12) (23)
Total

947 1,163 856 (19) 11
In First Half 2022 we invested $947 million across the Group, this was $216 million down on Second Half 2021, and $91 million higher than First
Half 2021. The movement in investment spending over recent half years largely reflects the timing of projects and some seasonality (more
investment in the second half of the year) rather than a change in our investment appetite.
Most investment spending (69% in First Half 2022) was directed to our Fix strategic priorities with 16% to Simplify and 15% to Perform. Investment
under our three strategic priorities are described below.
Fix
Under the Fix strategic priority, we are improving our management of financial and non-financial risks and our risk culture. Investment in First Half
2022 included:
●The CORE program includes a total of 82 deliverables and 343 activities. In First Half 2022 we submitted a further 73 activities (submitted to
the independent reviewer for assessment) taking the total number of activities submitted to 194. Work undertaken included:
-
Completed systems and training to establish and document risk accountabilities for senior leaders;
-
We closed 82% of the high rated risk issues which were open at the beginning of Full Year 2021; and
-
Updated our key risk frameworks to ensure we are managing and capturing more risks in a consistent way.
●Further updates to our AML/CTF systems including:
–Improving ability to block transactions in certain jurisdictions to enhance our sanctions controls;
–Automation of more threshold transaction reporting, with enhanced audit trails; and
–Re-engineered 31 financial crime and fraud prevention processes.
●Largely completed the rectification of our electronic security register for around 250,000 Business customers.
●Expanded our open banking capability so it is available to customers across all brands and wealth products.
●System and process updates for various regulatory changes including:
–Design and distribution obligations;
–Anti-Hawking legislation;
–Basel III - new mortgage loss given default models;
–Managing the transition away from LIBOR
1
; and
–Uplifted the quality of our critical data which materially impacts our ability to serve our customers, effectively manage our risks and meet
our regulatory obligations.
1London inter-bank Offered Rate.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS23
Review of Group operations
Simplify
We have increased our simplification investment in First Half 2022 over the prior half with a particular focus on digitising more activity across
Australia and New Zealand. Initiatives over the half included:
●Continue to simplify our offering by rationalising products available and eliminating fees across a number of products.
●We have commenced the development of a new digital mortgage process that will enable the customers to originate a mortgage with no
manual intervention or paper documents. This will make it easier for customers to apply for mortgages, aims to reduce approval times and
supports compliance.
●Launched the Digital Credit Assessment Tool, which makes it easier for our SME, Commercial and Private Wealth customers by significantly
improving the assessment and decisioning processes. The tool aims to save approximately one week of work per year for each banker and will
support compliance.
●Digitised a number of processes across several products including mortgage redraw, consumer card balance transfer with straight through
processing, credit card notices of nominations, credit card product switch and term deposits.
Perform
Launched a range of new products and digital capabilities including:
●Completed the rollout of the new mobile experience with 2.5 million customers actively using across iOS and Android devices;
●Through the acquisition of Money Brilliant in December 2021, and when integrated into our applications, we will continue to accelerate our data
and personal financial management strategy;
●Increased self-serve options for customers including to increase daily payment limits, enabled customers to activate new credit or debit cards
by tapping their card on the back of their phone, and launched the Flex Card, our first digitally originated credit card;
●Deployed next generation merchant terminals. The devices bring a range of new functions to Business customers with more mobility, instant
settlement, the ability send receipts and improved options for the visually impaired. The roll-out has been accompanied with a simpler fee
structure to make banking easier.
Capitalised software
Half YearHalf YearHalf Year% Mov’t
MarchSeptMarchMar 22Mar 22
$m

2022 2021 2021 - Sept 21 - Mar 21
Balance as at beginning of period

1,840 2,171 2,430 (15) (24)
Total additions
1

424 392 348 8 22
Amortisation expense

(283) (371) (384) (24) (26)
Impairment expense

(54) (352) (133) (85) (59)
Other adjustments
2

(6) — (90) — (93)
Balance as at end of period 1,921 1,840 2,171 4 (12)
Average amortisation period (years)

3.1 2.6 3.0 0.5 years 0.1 years
Capitalised software increased $81 million (or 4%) compared to 30 September 2021, and was $250 million lower (or 12%) compared to 31 March
2021. The increase over the half was primarily due to additions exceeding amortisation following the write-down of capitalised software in WIB in
Second Half 2021.
1.
Includes capitalised borrowing costs and card scheme.
2.
Second Half 2021 and First Half 2021 has been restated for the accounting policy change in relation to Software-as-a-Service. Refer to Note 1 of the 2021 Annual Report for
further details.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS24
Review of Group operations
2.2.9Credit impairment (charges)/benefits
Half YearHalf YearHalf Year% Mov’t
MarchSeptMarchMar 22Mar 22
$m 2022 2021 2021 - Sept 21 - Mar 21
Individually assessed provisions (IAPs)
New IAPs

(97) (466) (144) (79) (33)
Write-backs

64 93 62 (31) 3
Recoveries

102 110 132 (7) (23)
Total IAPs, write-backs and recoveries

69 (263) 50 large 38
Collectively assessed provisions (CAPs)


Write-offs

(218) (296) (318) (26) (31)
Other changes in CAPs

10 777 640 (99) (98)
Total new CAPs

(208) 481 322 large large
Total credit impairment (charges)/benefits

(139) 218 372 large large
First Half 2022 impairment charge was $139 million, compared to a Second Half 2021 impairment benefit of $218 million, a $357 million turnaround.
While asset quality metrics have continued to improve and new IAPs were significantly lower than Second Half 2021, we have considered the
operating environment and increased our portfolio overlays and changed the weights applied to our three economic scenarios. This contributed to
the First Half 2022 charge.
More specifically, overlays were increased $489 million through the half to reflect the current uncertainty from supply chain disruption, labour
shortages, and inflation. This includes risks bought about by the more tense geopolitical environment and the lingering economic impacts from
COVID-19 (although some COVID-19 related overlays were partly released). In addition, we added a new overlay for the potential impact on
customers of recent flooding in New South Wales and Queensland. While our exposure to certain flood prone areas has declined over recent years,
flooding in First Half 2022 has been more severe alongside estimated lower levels of insurance coverage.
In reviewing our economic scenarios we have increased the weight to the downside scenario to 45% (from 40%) and decreased the weight to our
base case scenario to 50% (from 55%). The increase in weighting to the downside reflects an elevated level of uncertainty in potential credit losses
driven by new geopolitical and economic headwinds that have emerged associated with the war in Ukraine, supply chain disruptions, capacity
constraints, rising inflation and interest rates.
The following table indicates the weightings applied by the Group at 31 March 2022, 30 September 2021 and 31 March 2021:
As atAs atAs at
31 March30 Sept31 March
Economic scenario weightings (%)

2022 2021 2021
Upside

5 5 5
Base

50 55 55
Downside

45 40 40

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS25
Review of Group operations
First Half 2022 – Second Half 2021
First Half 2022 impairment charge was $139 million, compared to an impairment benefit of $218 million in Second Half 2021.
Total new CAPs was a charge of $208 million compared with a benefit of $481 million in Second Half 2021. The charge was driven by:
●increase in downside economic scenario weight to 45% (from 40%);
●increase in portfolio overlays; partly offset by
●improvement in credit quality metrics, mostly in the mortgage portfolio; and
●lower write-offs, predominately from lower delinquencies and a reduction in our consumer unsecured portfolios.
Total IAPs, write-backs and recoveries were a $69 million benefit, compared to a $263 million charge in Second Half 2021. In First Half 2022 we
recorded very low new IAPs ($97 million) and Second Half 2021 included an IAP related to the Forum Finance exposure.
Write-backs and recoveries were lower in First Half 2022, predominately in New Zealand.
First Half 2022 – First Half 2021
First Half 2022 impairment charge was $139 million compared to an impairment benefit of $372 million in First Half 2021.
Total new CAPs was a charge of $208 million compared with a benefit of $322 million in First Half 2021. The CAPs charge was due to:
●increase in downside economic scenario weight to 45% (from 40%);
●increase in portfolio overlays;
●a moderation of forward looking economic inputs in the provisioning calculation; partly offset by
●lower write-offs, predominately from lower delinquencies and a reduction in our consumer unsecured portfolios.
Total IAPs, write-backs and recoveries was a $69 million benefit, compared to a $50 million benefit in First Half 2021. This reflected low levels of
new IAPs in both periods.
2.2.10Income tax expense
First Half 2022 – Second Half 2021
The effective tax rate of 30.4% in First Half 2022 was significantly lower than the Second Half 2021 effective tax rate of 41.3% mainly due to a
reduction in the non-deductible goodwill impairments, and a number of insurance divestment adjustments recognised in Second Half 2021 that are
not repeated in First Half 2022. The effective tax rate is above the Australian corporate tax rate of 30%.
First Half 2022 – First Half 2021
The effective tax rate of 30.4% in First Half 2022 was lower than the effective tax rate of 31.9% in First Half 2021 mainly due to write-downs in
Westpac Pacific recognised in First Half 2021 that are not repeated in First Half 2022, along with the accounting gain on the sale of our NZ Life
Insurance business that is non-taxable in First Half 2022, and a release of centrally held tax provisions, also in First Half 2022.
2.2.11Non-controlling interests
Non-controlling interests represent results of non-wholly owned subsidiaries attributable to shareholders other than Westpac. These include profits
attributable to the 10.1% shareholding in Westpac Bank-PNG-Limited and the 25% shareholding in St.George Motor Finance Limited that are not
owned by Westpac.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS26
Review of Group operations
2.3Credit quality
Credit quality improved through First Half 2022 with most metrics back to levels experienced pre COVID-19. Stressed exposures as a percentage of
Total Committed Exposures (TCE) were 26 basis points lower at 1.10%. This reduction comprised:
●a 9 basis point reduction in watchlist and substandard exposures, mostly from rating upgrades and refinancing of some higher risk institutional
facilities;
●a 12 basis point reduction in 90 days past due and not impaired exposures, mostly related to mortgages; and
●a 5 basis point reduction in impaired exposures, from low levels of new impaired assets and the partial write-off of the Forum Finance
exposure.
Lower impaired exposures saw the ratio of gross impaired exposures to gross loans reduced 7 basis points over the last six months to 0.23%. The
impaired portfolio was also well provisioned and at 31 March 2022, the ratio of gross impaired provisions to gross impaired exposures was 48%
(down from 54% at 30 September 2021). This reduction was due to the partial write-off of the Forum Finance exposure during the half.
Portfolio segments
The WIB segment has seen a decrease in stress, with stressed exposures to TCE falling 24 basis points, or more than two thirds, over the last six
months to 0.11%. This was predominately driven by a reduction in impaired exposures from the partial write-off of the Forum Finance exposure and
from a reduction in watchlist exposures from upgrades and refinancing.
The Australian business segment, comprising Australian commercial and SME customers, has seen stressed exposures to TCE fall 72 basis points
over the prior half to 4.87%. This was predominately driven by a reduction in watchlist and substandard exposures.
Australian mortgage 90+ day delinquencies were 19 basis points lower than 30 September 2021 at 0.88%. This improvement included a reduction
in the hardship portfolio as facilities completed their serviceability period (remained performing for 6 months after exiting hardship) and as customers
successfully exited COVID-19 assistance packages.
Properties in possession at 31 March 2022 were 201, 21 lower than 30 September 2021 with less properties moving to possession.
Realised Australian mortgage losses were $27 million for First Half 2022 compared to $28 million for Second Half 2021.
Other Australian consumer 90+ day delinquencies were 12 basis points lower compared to 30 September 2021 at 1.64%. The reduction was due to
a 15 basis point decline from the underlying performance of the portfolio, partly offset by a 3 basis point increase related to lower lending. Most of
the reduction in 90+ day delinquencies was in the credit card portfolio, from reductions in hardship.
The New Zealand business portfolio has seen improved credit quality with stressed exposures to TCE 5 basis points lower than 30 September 2021
at 1.14%. This reduction was due to lower impaired exposures including the partial write-off of the Forum Finance exposure.
New Zealand mortgage 90+ day delinquencies were little changed compared to 30 September 2021 at 0.30%, but remain relatively low. New
Zealand other consumer 90+ day delinquencies were 23 basis points lower than 30 September 2021 at 1.42%.
Provisions
Total provisions were $4,682 million at 31 March 2022, $325 million lower than 30 September 2021. CAPs was relatively flat with IAPs driving the
reduction.
The flat CAP outcome was due to improving credit quality offset by increased overlays and a greater weight placed on the downside economic
scenario.
The higher overlays and more conservative economic expectations reflect concerns over geopolitical and economic headwinds that have emerged
from the war in Ukraine and from the lingering economic effects of COVID-19. These include supply chain disruptions, capacity constraints, skilled
labour shortages, increased inflation and inflationary expectations and from the prospect of higher interest rates.
Overlays were also increased for risks associated with Australian floods and storms. In aggregate, overlays increased $489 million. We also
increased the downside economic scenario weight to 45% from 40% increasing CAPs by $184 million.
The ratio of collectively assessed provisions to credit RWA at 31 March 2022 was 1.16%, 1 basis point lower than 30 September 2021.
IAPs were $501 million at 31 March 2022, $331 million lower than 31 September 2021, mostly due to a partial write-off of the Forum Finance
exposure.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS27
Review of Group operations
2.3.1Credit quality key metrics¹
As atAs atAs at

31 March30 Sept31 March


2022 2021 2021

Stressed exposures by credit grade as a % of TCE:
Impaired

0.14% 0.19% 0.19%
90 days past due and not impaired

0.56% 0.68% 0.66%
Watchlist and substandard

0.40% 0.49% 0.75%
Total stressed exposures

1.10% 1.36% 1.60%
Gross impaired exposures to TCE for business and institutional:


Business Australia

0.60% 0.72% 0.88%
Business New Zealand

0.16% 0.20% 0.44%
Institutional

0.07% 0.16% 0.08%
Mortgage 90+ day delinquencies:


Group

0.82% 0.99% 1.11%
Australia

0.88% 1.07% 1.20%
New Zealand

0.30% 0.30% 0.33%
Other consumer loans 90+ day delinquencies:


Group

1.62% 1.75% 1.92%
Australia

1.64% 1.76% 1.92%
New Zealand

1.42% 1.65% 1.91%
Other:


Gross impaired exposures to gross loans

0.23% 0.30% 0.30%
Gross impaired exposure provisions to gross impaired exposures

48.03% 54.44% 47.03%
Total provisions to gross loans

65 bps 70 bps 79 bps
Collectively assessed provisions to credit risk weighted assets

116 bps 117 bps 142 bps
Total provisions to credit risk weighted assets

130 bps 140 bps 159 bps
Impairment charges/(benefits) to average gross loans annualised
2

4 bps (6 bps) (11 bps)
Net write-offs to average gross loans annualised
2

13 bps 8 bps 9 bps
2.3.2Movement in gross impaired exposures
1
Half YearHalf YearHalf Year% Mov’t
MarchSeptMarchMar 22Mar 22
$m
2022 2021 2021 - Sept 21 - Mar 21
Balance as at beginning of period

2,142 2,071 2,779 3 (23)
New and increased - individually managed

222 614 222 (64) —
Write-offs

(566) (405) (431) 40 31
Returned to performing or repaid

(221) (222) (369) — (40)
Portfolio managed - new/increased/returned/repaid

89 65 (104) 37 large
Exchange rate and other adjustments

(13) 19 (26) large (50)
Balance as at end of period

1,653 2,142 2,071 (23) (20)
1.Includes balances presented as held for sale.
2.Averages are based on a six month period.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS28
Review of Group operations
2.4Balance sheet and funding
2.4.1Balance sheet
As atAs atAs at% Mov’t
31 March30 Sept31 MarchMar 22Mar 22
$m

2022 2021 2021 - Sept 21 - Mar 21
Assets
Cash and balances with central banks

102,410 71,353 33,877 44 large
Collateral paid

7,374 4,232 3,917 74 88
Trading securities and financial assets measured at fair value through income statement (FVIS)
and investment securities

94,180 104,518 112,231 (10) (16)
Derivative financial instruments

18,269 19,353 22,373 (6) (18)
Loans

719,556 709,784 688,218 1 5
Life insurance assets

— — 3,416 — (100)
Assets held for sale

2,700 4,188 4,359 (36) (38)
All other assets
1
20,260 22,449 21,028 (10) (4)
Total assets
1

964,749 935,877 889,419 3 8
Liabilities


Collateral received

2,170 2,368 2,504 (8) (13)
Deposits and other borrowings

645,606 626,955 585,401 3 10
Other financial liabilities

51,345 50,309 42,996 2 19
Derivative financial instruments

25,347 18,059 20,303 40 25
Debt issues

133,629 128,779 127,850 4 5
Life insurance liabilities

— — 1,070 — (100)
Loan capital

29,036 29,067 26,294 — 10
Liabilities held for sale

684 837 3,049 (18) (78)
All other liabilities 6,599 7,411 7,891 (11) (16)
Total liabilities

894,416 863,785 817,358 4 9
Equity


Total equity attributable to owners of WBC
1

70,279 72,035 72,012 (2) (2)
NCI

54 57 49 (5) 10
Total equity
1

70,333 72,092 72,061 (2) (2)
Average balances


Total assets

957,833 910,654 901,431 5 6
Loans and other receivables

764,946 702,821 680,286 9 12
Total equity

71,130 72,157 69,634 (1) 2
1.First Half 2021 has been restated for the accounting policy change in relation to Software-as-a-Service. Refer to Note 1 of the 2021 Annual Report for further details.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS29
Review of Group operations
First Half 2022 – Second Half 2021
Total assets increased $28.9 billion to $964.7 billion, or 3%, since September 2021 primarily driven by increased liquid assets (cash and balances
with central banks) and loans. Total liabilities increased $30.6 billion to $894.4 billion, or 4%, since September 2021 mostly from higher deposits and
derivative financial instruments. Equity was lower mostly from the off-market buy-back completed in February 2022.
Liquid assets increased as we prepared for the progressive reduction of the CLF over the 2022 calendar year. This followed the decision by APRA
to wind-down the facility used by certain Australian banks to meet their LCR requirement. During the half we also completed a $3.5 billion off-market
share buy-back. The additional funding needs of these developments were met by strong customer deposit growth, well above loan growth.
Key movements included:
Assets
●Cash and balances with central banks increased $31.1 billion or 44% reflecting higher liquid assets to address the wind-down in the CLF;
●Collateral paid increased $3.1 billion or 74% reflecting higher collateralised derivative balances;
●Trading securities and other financial assets measured at fair value through income statement (FVIS) and investment securities decreased
$10.3 billion or 10% mainly due to the sale of government investment securities;
●Derivative assets decreased $1.1 billion or 6% mainly driven by movements in interest rate and cross currency swaps, partly offset by foreign
currency forward contracts;
●Loans increased $9.8 billion or 1% (including held for sale, loans increased $8.8 billion or 1%). Refer to Section 2.2.2 Loans for further
information;
●Assets held for sale decreased $1.5 billion or 36% reflecting the settlement of the Group’s motor vehicle dealer finance and novated leasing
business and Westpac Life-NZ- Limited; and
●All other assets decreased $2.2 billion or 10% due to reductions in securities sold not delivered, and interbank loans included in other financial
assets, and deferred tax assets.
Liabilities
●Deposits and other borrowings increased $18.7 billion or 3%. Refer to Section 2.2.3 Deposits and other borrowings for further information;
●Other financial liabilities increased $1.0 billion or 2% mainly due to securities sold under agreements to repurchase and interbank deposits,
partly offset by a decrease in securities sold short;
●Derivative liabilities increased $7.3 billion or 40% mainly driven by cross currency swaps and foreign currency forward contracts due to volatility
in exchange rates;
●Debt issues increased $4.9 billion or 4% ($9.7 billion or 8% increase excluding foreign currency impacts). Refer to Section 2.4.2 Funding and
liquidity risk management for further information;
●Liabilities held for sale decreased $0.2 billion or 18% reflecting the settlement of the Group’s motor vehicle dealer finance and novated leasing
business and Westpac Life-NZ- Limited; and
●All other liabilities decreased $0.8 billion or 11% mainly due to provision utilisation and lease liabilities included in other liabilities.
Equity attributable to owners of Westpac Banking Corporation decreased $1.8 billion or 2% mainly attributable to the off-market share buy-back
(refer to Note 15 for the details), partly offset by retained profits.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS30
Review of Group operations
First Half 2022 – First Half 2021
Total assets increased $75.3 billion to $964.7 billion, or 8%, since March 2021 primarily driven by increased liquid assets (cash and balances with
central banks) and loans. Total liabilities increased $77.1 billion to $894.4 billion, or 9%, since March 2021 mostly from higher deposits and
derivative financial instruments. Equity was lower mostly from the off-market buy-back completed in February 2022.
Liquid assets increased as we prepared for the progressive reduction of the CLF over the 2022 calendar year. This followed the decision by APRA
to wind-down the facility used by certain Australian banks to meet their LCR requirement. During the half we also completed a $3.5 billion off-market
share buy-back. The additional funding needs of these developments were met by strong customer deposit growth, well above loan growth and
wholesale funding.
Key movements included:
Assets
●Cash and balances with central banks increased $68.5 billion reflecting higher liquid assets to address the wind-down in the CLF;
●Collateral paid increased $3.5 billion or 88% reflecting higher collateralised derivative balances;
●Trading securities and other financial assets measured at FVIS and investment securities decreased $18.1 billion or 16% mainly due to the
sale of government and semi-government investment securities;
●Derivative assets decreased $4.1 billion or 18% mainly driven by movements in interest rate and cross currency swaps, partly offset by foreign
currency forward contracts;
●Loans increased $31.3 billion or 5% (including held for sale, loans increased $29.5 billion or 4%). Refer to Section 2.2.2 Loans for further
information;
●Life insurance assets decreased $3.4 billion or 100% as the balance was reclassified to assets held for sale;
●Assets held for sale as at 31 March 2022 relate to Westpac Australian Life Insurance business, while the balance as at 31 March 2021 relates
to Westpac General Insurance Limited and Westpac General Insurance Services Limited, Westpac Vendor Finance business, Westpac
Lenders Mortgage Insurance Limited and Westpac Pacific; and
●All other assets decreased $0.8 billion or 4% due to reductions in intangible assets mainly from goodwill impairment, property and equipment
and deferred tax assets, partly offset by an increase in securities sold not delivered included in other financial assets.
Liabilities
●Deposits and other borrowings increased $60.2 billion or 10% (including held for sale, deposits increased $58.1 billion or 10%). Refer to
Section 2.2.3 Deposits and other borrowings for further information;
●Other financial liabilities increased $8.3 billion or 19% mainly due to securities sold under agreements to repurchase, securities sold short,
securities purchased not delivered and interbank deposits;
●Derivative liabilities increased $5.0 billion or 25% mainly driven by cross currency swaps and foreign currency forward contracts, partly offset
by a decrease in interest rate swaps;
●Debt issues increased $5.8 billion or 5% ($6.0 billion or 5% increase excluding foreign currency impacts). Refer to Section 2.4.2 Funding and
liquidity risk management for further information;
●Life insurance liabilities decreased $1.1 billion or 100% as the balance was reclassified to liabilities held for sale;
●Loan capital increased $2.7 billion or 10% due to $3.8 billion net issuance of Additional Tier 1 and Tier 2 instruments, partly offset by $1.1
billion fair value hedge adjustments;
●Liabilities held for sale as at 31 March 2022 relate to Westpac Australian Life Insurance business, while the balance as at 31 March 2021
relates to Westpac General Insurance Limited and Westpac General Insurance Services Limited, Westpac Vendor Finance business, Westpac
Lenders Mortgage Insurance Limited and Westpac Pacific; and
●All other liabilities decreased $1.3 billion or 16% due to a decline in provisions and other liabilities primarily relating to lease liabilities and
reclassification of outstanding life insurance claims to liabilities held for sale in Second Half 2021.
Equity attributable to owners of Westpac Banking Corporation decreased $1.7 billion or 2% mainly attributable to the off-market share buy-back
(refer to Note 15 for the details), partly offset by retained profits.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS31
Review of Group operations
2.4.2Funding and liquidity risk management
Liquidity risk is the risk that the Group will be unable to fund assets and meet obligations as they become due. This risk is inherent for all banks as
intermediaries between depositors and borrowers. The Group has a liquidity risk management framework which seeks to meet our cash flow
obligations under a wide range of market conditions and scenarios, as well as meeting the requirements of the Liquidity Coverage Ratio (LCR) and
Net Stable Funding Ratio (NSFR).
The Group maintained funding and liquidity metrics comfortably above regulatory minimums throughout First Half 2022. The Group’s March 2022
quarterly average LCR was 137% and its NSFR at 31 March 2022 was 125%, both above the 100% regulatory minimums.
Liquidity
The Group has a number of sources of liquidity that provide a buffer against periods of liquidity stress. These include High Quality Liquid Assets
(HQLA) and the Committed Liquidity Facility (CLF), both of which are used to meet the Group’s LCR requirements.
In September 2021, APRA announced that Authorised Deposit-taking Institutions (ADIs) subject to the LCR should reduce their CLF usage to zero
by the end of calendar year 2022, subject to financial market conditions, as APRA and the RBA expect there will be sufficient HQLA for ADIs to
meet their LCR requirements without the need to utilise the CLF. APRA also announced that no ADI should rely on the CLF to meet the minimum
100% LCR requirement from 1 January 2022.
The CLF will be phased out throughout 2022, with the first reduction having occurred on 1 January 2022. Westpac’s CLF allocation at 31 March
2022 was $27.75 billion and will reduce by a further $9.25 billion on 1 May 2022.
In response to the phasing out of the CLF, Westpac increased its holdings of HQLA over the half. At 31 March 2022, Westpac held $161.9 billion in
HQLA (30 September 2021: $148.6 billion). HQLA include cash, deposits with central banks, government and semi-government securities.
The Group also has access to non-HQLA and other assets that are eligible for re-purchase with a central bank under certain conditions. These
include private securities and self-originated AAA-rated mortgage-backed securities.
In March 2020, the RBA announced the establishment of the Term Funding Facility (TFF). The TFF provided fixed rate funding to eligible ADIs for a
maximum of three years. The facility closed to new drawdowns on 30 June 2021, by which time Westpac had fully drawn our total available TFF
allowance of $30 billion. TFF maturities will commence from June 2023 and the Group will manage its refinancing requirements using the full range
of its funding sources.
LCR
The LCR is designed to enhance banks’ short-term resilience, by measuring the level of HQLA, as defined, held against its liquidity needs for a 30
calendar day period under a regulator-defined stress scenario. In addition to HQLA, Australian ADIs including Westpac also have access to the CLF,
as set out above, to meet the requirements of the LCR.
Westpac’s average LCR for the quarter ended 31 March 2022 was 137% (Westpac’s average LCR for the quarter ended 30 September 2021 was:
129%). The lift in the LCR compared to the quarterly average for September 2021 was mainly due to the increase in HQLA.
Westpac’s LCR excluding the CLF as at 31 March 2022 was 118%.
Westpac’s LCR also includes a 10% overlay to net cash outflows. The overlay, effective since 1 January 2021, has been required by APRA in
response to breaches of the prudential standards on liquidity. The overlay reduces the average LCR for the quarter ended 31 March 2022 by 14
percentage points. Further details are set out in the Significant Developments section of the 2022 Interim Financial Results.
NSFR
The NSFR is designed to encourage banks’ longer-term funding resilience. To comply, banks are required to maintain an NSFR of at least 100% at
all times. Westpac’s NSFR was 125% at 31 March 2022 (30 September 2021: 125%).
Funding
The Group monitors the composition and stability of its funding so that it remains within the Group’s funding risk appetite. This includes compliance
with both the LCR and NSFR.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS32
Review of Group operations
Customer deposits
Customer deposits accounted for 65.7% of the Group’s total funding (including equity) at 31 March 2022 (30 September 2021: 65.0%). During the
half, customer deposits increased by $20.6 billion, fully funding the bank’s new lending growth and lifting the Group’s customer deposit to loan ratio
to 83.5% from 81.6% at 30 September 2021.
Long term wholesale funding
Long term funding with a residual maturity greater than 12 months made up 15.2% of the Group’s total funding at 31 March 2022 (30 September
2021: 15.6%).
The Group raised $21.8 billion of long term wholesale funding in the First Half of 2022, bringing forward some planned issuance due to favourable
funding conditions in First Quarter 2022. In First Half 2022, new issuance comprised senior unsecured bonds (64%), covered bonds (17%), Tier 2
capital securities (14%) and securitisation (5%) and was well diversified across tenors and currencies, including USD, AUD, EUR, GBP, NZD and
others.
At 31 March 2022, funding from securitisation accounted for 0.5% of total funding (30 September 2021: 0.6%).
Short term wholesale funding
Wholesale funding with a residual maturity less than 12 months accounted for 11.0% of the Group’s total funding at 31 March 2022 (30 September
2021: 10.8%). This portfolio, including long term to short term scroll
6
, had a weighted average maturity of 144 days (30 September 2021: 138 days).
6.Scroll represents wholesale funding with an original maturity greater than 12 months that now has a residual maturity less than 12 months.
Equity
Funding from equity made up 7.6% of total funding at 31 March 2022 (30 September 2021: 8.0%), with the decrease over the half mainly reflecting
the off-market share buy-back which was completed in February 2022.
Liquidity coverage ratio
QuarterQuarterQuarter% Mov’t
MarchSeptMarchMar 22Mar 22
$m

2022 2021 2021 - Sept 21 - Mar 21
High Quality Liquid Assets (HQLA)
1,3

169,346 136,525 117,759 24 44
Committed Liquidity Facility (CLF)
3

27,750 37,000 37,000 (25) (25)
Term Funding Facility (TFF)
2,3

— — 10,321 — (100)
Total LCR liquid assets

197,096 173,525 165,080 14 19
Cash outflows in a modelled 30-day APRA defined stressed scenario


Customer deposits
1

96,351 89,628 85,282 8 13
Wholesale funding

11,526 10,003 13,024 15 (12)
Other flows
4

36,412 34,447 35,281 6 3
Total

144,289 134,078 133,587 8 8
LCR
1,5

137% 129% 124% large large
Net stable funding ratio
As atAs atAs at% Mov’t
31 March30 Sept31 MarchMar 22Mar 22
$m

2022 2021 2021 - Sept 21 - Mar 21
Available stable funding
1

669,655 651,216 625,185 3 7
Required stable funding

536,022 521,499 510,287 3 5
Net stable funding ratio

125% 125% 123% 6 bps 241 bps
1.Includes balances presented as held for sale.
2.Represents the Group’s average undrawn TFF allowance as per APRA guidance.
3.Refer to Glossary for definition.
4.Other flows include credit and liquidity facilities, collateral outflows and inflows from customers.
5.Calculated on a quarterly average basis.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS33
Review of Group operations
Funding by residual maturity
As at 31 March 2022As at 30 Sept 2021As at 31 March 2021


$m Ratio % $m Ratio % $m Ratio %

Wholesale funding
Less than 6 months

59,044 6.5 54,512 6.1 45,415 5.4
6 to 12 months

15,241 1.6 15,232 1.7 11,951 1.4
Long term to short term scroll
1

26,527 2.9 26,760 3.0 27,631 3.3
Wholesale funding - residual maturity less than 12 months

100,812 11.0 96,504 10.8 84,997 10.1
Securitisation

4,968 0.5 5,000 0.6 6,687 0.8
Greater than 12 months

138,108 15.2 138,817 15.6 124,050 14.8
Wholesale funding - residual maturity greater than 12 months

143,076 15.7 143,817 16.2 130,737 15.6
Customer deposits
2

600,872 65.7 580,317 65.0 550,337 65.7
Equity
3,4

69,244 7.6 71,614 8.0 71,837 8.6
Total funding
4

914,004 100.0 892,252 100.0 837,908 100.0
Deposits to net loans ratio
As at 31 March 2022 As at 30 Sept 2021 As at 31 March 2021


$m Ratio % $m Ratio % $m Ratio %

Customer deposits
2

600,872 580,317 550,337
Net customer loans
2

719,556 83.5 710,799 81.6 690,037 79.8
Funding view of the balance sheet²
Total liquidCustomerWholesaleCustomerMarket
$m

assets deposits funding franchise inventory Total
As at 31 March 2022
Total assets

244,113 — — 667,250 53,386 964,749
Total liabilities

— (600,872) (243,888) — (49,656) (894,416)
Total equity

— — — (69,244) (1,089) (70,333)
Total

244,113 (600,872) (243,888) 598,006 2,641 —
Net loans
5

65,830 — — 653,726 — 719,556
As at 30 September 2021


Total assets

227,553 — — 658,123 50,201 935,877
Total liabilities

— (580,317) (240,321) — (43,147) (863,785)
Total equity

— — — (71,614) (478) (72,092)
Total

227,553 (580,317) (240,321) 586,509 6,576 —
Net loans
5

66,610 — — 644,189 — 710,799
As at 31 March 2021


Total assets
4

195,177 — — 643,492 50,750 889,419
Total liabilities

— (550,337) (215,734) — (51,287) (817,358)
Total equity
4

— — — (71,837) (224) (72,061)
Total
4,5

195,177 (550,337) (215,734) 571,655 (761) —
Net loans
5

60,894 — — 629,143 — 690,037
1.Scroll represents wholesale funding with an original maturity greater than 12 months that now has a residual maturity less than 12 months.
2.Includes balances presented as held for sale.
3.Includes total share capital, share-based payment reserve and retained profits.
4First Half 2021 has been restated for the accounting policy change in relation to Software-as-a-Service. Refer to Note 1 of the 2021 Annual Report for further details.
5.Liquid assets in net loans include internally securitised assets that are eligible for repurchase agreements with the RBA/RBNZ.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS34
Review of Group operations
2.5Capital and dividends
As atAs atAs at% Mov’t
31 March30 Sept31 MarchMar 22Mar 22

2022 2021 2021 - Sept 21 - Mar 21
Level 2 regulatory capital structure
Common equity Tier 1 (CET 1) capital after deductions ($m)

52,126 53,808 52,932 (3) (2)
Risk weighted assets (RWA) ($m)

459,956 436,650 428,899 5 7
CET 1 capital ratio

11.33% 12.32%12.34% (99 bps) (101 bps)
Additional Tier 1 capital ratio

2.08% 2.33%2.21% (25 bps) (13 bps)
Tier 1 capital ratio

13.41% 14.65%14.55% (124 bps) (114 bps)
Tier 2 capital ratio

4.30% 4.21%3.88% 9 bps 42 bps
Total regulatory capital ratio

17.71% 18.86%18.43% (115 bps) (72 bps)
APRA leverage ratio
1

5.6% 5.99%6.27% (39 bps) (67 bps)
Level 1 regulatory capital structure


CET 1 capital after deductions ($m)

48,684 54,314 53,313 (10) (9)
Risk weighted assets ($m)

433,643 431,422 424,656 1 2
Level 1 CET 1 capital ratio

11.23% 12.59%12.55% (136 bps) (132 bps)
APRA announcements on capital
In First Half 2022 APRA made the following announcements relevant to their capital framework:
●On 29 November 2021, APRA released the final revised standards for APS110 Capital Adequacy, APS112 Capital Adequacy: Standardised
Approach to Credit Risk and APS113 Capital Adequacy: Internal Ratings-based Approach to Credit Risk which will become effective from 1
January 2023. Under the revised standards, the capital conservation buffer will be increased from 2.5% to 3.75% and a base level for the
countercyclical capital buffer of 1.0% will be introduced. As a result, the CET1 capital ratio requirement for Domestic Systemically Important
Banks (D-SIBs) will increase from 8% to 10.25% from 1 January 2023.
●On 2 December 2021, APRA announced a requirement for D-SIBs (including Westpac) to increase their total capital requirements by 4.5
percentage points of risk weighted assets (RWA) under the current capital adequacy framework to be met by 1 January 2026. This is a 1.5
percentage point increase on the prior announcement on 9 July 2019. The additional total capital is expected to be met through additional Tier
2 Capital. In Westpac’s funding, this increase in total capital is likely to be offset by a decrease in long-term wholesale funding.
●On 2 December 2021, APRA released two draft prudential standards for consultation. CPS 190 Financial Contingency Planning will require
banks (including Westpac) to develop plans for responding to financial stress and CPS 900 Resolution Planning will require some banks
(including Westpac) to prepare for resolution with limited adverse impacts on the community and financial system, in the event of their failure.
Both standards are proposed to come into effect from 1 January 2024.
Further details of regulatory changes are set out in the Significant Developments section of the 2022 Interim Financial Results.
Capital management strategy
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.
The current regulatory capital minimums together with the capital conservation buffer (CCB) are the Total CET1 Requirement. The Total CET1
Requirement for Westpac is at least 8.0%, based on an industry minimum CET1 requirement of 4.5% plus a capital buffer of at least 3.5%
applicable to D-SIBs
2,3
;
●Consideration of both regulatory and economic capital requirements and the perspectives of external stakeholders including rating agencies as
well as equity and debt investors; and
●A stress testing framework that challenges the capital measures, coverage and requirements including the impact of adverse economic
scenarios.
APRA’s final revised standards for capital, as noted above, indicated that the Total CET1 Requirement for D-SIBs will be 10.25% from 1 January
2023. This requirement includes a CCB of 3.75% and a base level for the countercyclical capital buffer of 1.0%. APRA also indicated
4
that it expects
that D-SIBs (including Westpac) will likely operate with CET1 above 11% under the new framework.
Given the above Westpac will seek to operate with a CET1 capital ratio of between 11.0% and 11.5% (operating capital range) as measured under
the new capital framework from 1 January 2023.
1
Refer to Glossary for definition.
2.Noting that APRA may apply higher CET1 requirements for an individual ADI.
3.If an ADI’s CET1 ratio falls below the Total CET1 Requirement (at least 8%), they face restrictions on the distribution of earnings, such as dividends, distribution payments on
AT1 capital instruments and discretionary staff bonuses.
4.APRA Information paper, An unquestionably strong framework for bank capital, November 2021.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS35
Review of Group operations
CET1 capital ratio movement for First Half 2022 (basis points)
Westpac’s Level 2 Common Equity Tier 1 (CET1) capital ratio was 11.33% at 31 March 2022, 99bps lower than 30 September 2021. Key
movements in the CET1 capital ratio over the half were:
●First Half 2022 NPAT of $3,280 million (71bps increase);
●Payment of the 2021 final dividend (48bps decrease). Shares for the 2021 final dividend DRP were purchased on market so had no impact on
capital ratios;
●A $3.5 billion off-market share buy-back in February 2022 (76bps decrease);
●An increase in RWA (70bps decrease) mostly from higher interest rate risk in the banking book (IRRBB) from increased market volatility (44bps
decrease), an increase in lending (16bps decrease) and higher operational risk following the adoption of the standardised measurement
approach in January 2022 (5bps decrease);
●Capital deductions and other capital movements (10bps increase) from lower deferred tax assets (14bps decrease), and remeasurement of the
defined benefit superannuation obligation (1bp increase). These were partly offset by revaluation of debt securities in other comprehensive
income (5bps decrease);
●Foreign currency impacts from the appreciation of the A$ against the US$ and NZ$ (1bp increase)
1
; and
●Divestment including Westpac Life-NZ- Limited (7bp) and Westpac’s motor vehicle dealer finance and novated leasing business (6bps).
Westpac’s Level 1 CET1 capital ratio was 11.23% at 31 March 2022, 136 basis points lower than 30 September 2021. In addition to the key
movements outlined above, the Level 1 CET1 ratio decreased by 18bps following implementation of the final revised standards for APS111 Capital
Adequacy Measurement of Capital and APS222 Associations with Related Entities from 1 January 2022.
1.Reflecting the net impact of movements in the foreign currency translation reserve and RWA

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS36
Review of Group operations
Additional Tier 1 and Tier 2 capital movement for First Half 2022
On 20 December 2021, we redeemed approximately $0.55 billion of Westpac Capital Notes 4 (WCN 4) that remained on issue
1
, which decreased
Tier 1 capital by 12bps.
During the half, we issued US$2.25 billion (approximately A$3.2 billion) of Tier 2 capital instruments and redeemed A$0.35 billion and JPY 8000
billion (approximately A$0.1 billion) of Tier 2 capital instruments. The net impact was to increase the total regulatory capital ratio by 59bps.
Leverage ratio
The leverage ratio represents the amount of Tier 1 capital relative to exposure
2
. At 31 March 2022, Westpac’s leverage ratio was 5.60%, down
39bps since 30 September 2021 due to a decrease in Tier 1 capital and higher on balance sheet exposures.
Internationally comparable capital ratios
The APRA Basel III capital adequacy requirements are more conservative than those of the Basel Committee on Banking Supervision (BCBS),
leading to lower reported capital ratios when compared to international peers. APRA conducted a study in July 2015 outlining its methodology for
measuring international comparable capital ratios.
The table below calculates the Group’s reported capital ratios consistent with this methodology.
As atAs atAs at% Mov’t
31 March30 Sept31 MarchMar 22Mar 22
%

2022 2021 2021 - Sept 21 - Mar 21
Internationally comparable capital ratios


CET 1 capital ratio

17.36%18.17%18.08%(81 bps) (72 bps)
Tier 1 capital ratio

20.23%21.23%20.98%(100 bps) (75 bps)
Total regulatory capital ratio

26.16%26.61%25.94%(45 bps) 22 bps
Leverage ratio

6.1%6.59%6.87%(49 bps) (77 bps)
1.On 15 September 2021, Westpac issued $1.75 billion of Additional Tier 1 capital (Westpac Capital Notes 8), of which approximately $1.15 billion comprised reinvestment by
the holder of WCN 4. The remaining $0.55 billion of WCN 4 were redeemed on 20 December 2021.
2.As defined under Attachment D of APS110: Capital Adequacy.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS37
Review of Group operations
Risk Weighted Assets (RWA)
As atAs atAs at% Mov’t
31 March30 Sept31 MarchMar 22Mar 22
$m

2022 2021 2021 - Sept 21 - Mar 21
Credit risk:
Corporate
1

69,391 68,715 66,086 1 5
Business lending
2

32,686 32,559 34,061 — (4)
Sovereign
3

2,270 2,508 2,355 (9) (4)
Bank
4

4,960 5,104 5,708 (3) (13)
Residential mortgages

146,448 145,534 133,938 1 9
Australian credit cards

3,951 4,001 4,279 (1) (8)
Other retail

7,785 8,272 9,266 (6) (16)
Small business
5

14,401 15,187 16,097 (5) (11)
Specialised lending: Property and project finance
6

58,334 55,372 55,314 5 5
Securitisation
7

6,306 5,881 5,513 7 14
Standardised

7,450 7,884 8,091 (6) (8)
Mark-to-market related credit risk

5,691 6,278 6,419 (9) (11)
Total credit risk

359,673 357,295 347,127 1 4
Market risk

9,596 6,662 9,490 44 1
Operational risk
8

57,875 55,875 54,090 4 7
Interest rate risk in the banking book (IRRBB)

27,710 11,446 11,998 142 131
Other

5,102 5,372 6,194 (5) (18)
Total risk weighted assets

459,956 436,650 428,899 5 7
Total RWA increased $23.3 billion or 5.3% over the half with most of the increase in non-credit risk RWA.
Non-credit risk RWA was $20.9 billion, higher from:
●IRRBB RWA increased from $11.4 billion to $27.7 billion over the half (up $16.3 billion or 142%). Westpac currently invests its capital over a 3-
year term. Due to the interest rate volatility observed over the half, in particular the more recent significant increases in two and three year
market swap rates, the amount of IRRBB RWA has increased, mainly reflecting the valuation differences to capital invested over a one-year
term;
●A $2.9 billion increase in market risk RWA mainly due to the introduction of an industry-wide overlay for updates required to market risk models
which require regulatory approval; and
●A $2.0 billion increase in operational risk RWA from adopting the standardised measurement approach for calculating operational risk RWA.
The $2.4 billion increase in credit risk RWA included:
●A $5.9 billion increase from specialised lending, residential mortgages and corporate lending;
●Modelling, and methodology and overlay changes
9
, which together increased RWA by $0.7 billion partly offset by;
●Foreign currency translation impacts which reduced RWA by $1.7 billion mostly from the appreciation of the A$ against the US$ and NZ$;
●A $1.4 billion decrease from improved credit quality metrics with lower stressed assets across business lending and specialised lending; and
●A decrease in credit RWA associated with derivative exposures (counterparty credit risk and mark-to-market related credit risk) of $1.1 billion.
1.Corporate – typically includes exposure where the borrower has annual turnover greater than $50 million and other business exposures not captured under the definitions of
either Business lending or Small business.
2.Business lending – includes exposures not captured elsewhere where the borrower has annual turnover less than or equal to $50 million.
3.Sovereign – includes exposures to governments themselves and other non-commercial enterprises that are owned or controlled by them.
4.Bank – includes exposures to licensed banks and their owned or controlled subsidiaries, and overseas central banks.
5.Small business – program managed business lending exposures.
6.Specialised lending – property and project finance – includes exposures to entities created to finance and/or operates specific assets where, apart from the income received
from the assets being financed, the borrower has little or no independent capacity to repay from other activities or assets.
7.Securitisation – exposures reflect Westpac’s involvement in activities ranging from originator to investor and include the provision of securitisation services for clients wishing
to access capital markets.
8.
Operational risk – the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events, including legal risk but excluding
strategic or reputational risk.
9.Modelling changes included updates to model estimates for Australian retail and mortgage PD, credit card LGD and unsecured LGD. The impact of these changes were
partially offset by a reduction in RWA overlays upon implementation of updated model estimates.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS38
Review of Group operations
Capital adequacy
As atAs atAs at
31 March30 Sept31 March
$m

2022 2021 2021
Tier 1 capital
CET 1 capital
Paid up ordinary capital 39,667 41,601 41,604
Treasury shares (708) (663) (660)
Equity based remuneration 1,824 1,753 1,731
Foreign currency translation reserve (445) (266) (519)
Accumulated other comprehensive income 183 402 507
Non-controlling interests - other 54 57 49
Retained earnings
1
28,362 28,813 29,097
Less retained earnings in life and general insurance, funds management and securitisation entities (1,144) (1,118) (1,680)
Deferred fees 265 238 230
Total CET 1 capital 68,058 70,817 70,359
Deductions from CET 1 capital
Goodwill (excluding funds management entities) (7,935) (8,060) (8,529)
Deferred tax assets
1
(1,812) (2,429) (2,260)
Goodwill in life and general insurance, funds management and securitisation entities (209) (209) (451)
Capitalised expenditure (2,013) (1,951) (1,749)
Capitalised software
1
(1,914) (1,840) (2,049)
Investments in subsidiaries not consolidated for regulatory purposes (1,541) (2,044) (2,063)
Regulatory expected downturn loss in excess of eligible provisions (164) (225) (93)
Defined benefit superannuation fund surplus (60) (64) (69)
Equity investments (161) (163) (162)
Regulatory adjustments to fair value positions (123) (24) (1)
Other Tier 1 deductions — — (1)
Total deductions from CET 1 capital (15,932) (17,009) (17,427)
Total CET 1 capital after deductions 52,126 53,808 52,932
Additional Tier 1 capital
Basel III complying instruments 9,566 10,180 9,493
Total Additional Tier 1 capital 9,566 10,180 9,493
Deductions from Additional Tier 1 capital
Holdings of own and other financial institutions Additional Tier 1 capital instruments (25) (25) (25)
Total deductions from Additional Tier 1 capital (25) (25) (25)
Net Additional Tier 1 regulatory capital 9,541 10,155 9,468
Net Tier 1 regulatory capital 61,667 63,963 62,400
Tier 2 capital
Basel III complying instruments 20,147 18,228 16,373
Basel III transitional instruments — 487 462
Eligible general reserve for credit loss 158 51 161
Total Tier 2 capital 20,305 18,766 16,996
Deductions from Tier 2 capital
Investments in subsidiaries not consolidated for regulatory purposes (60) (140) (140)
Holdings of own and other financial institutions Tier 2 capital instruments (445) (221) (199)
Total deductions from Tier 2 capital (505) (361) (339)
Net Tier 2 regulatory capital 19,800 18,405 16,657
Total regulatory capital 81,467 82,368 79,057
Risk weighted assets 459,956 436,650 428,899
CET 1 capital ratio 11.33%12.32%12.34%
Additional Tier 1 capital ratio 2.08%2.33%2.21%
Tier 1 capital ratio 13.41%14.65%14.55%
Tier 2 capital ratio 4.3%4.21%3.88%
Total regulatory capital ratio 17.71%18.86%18.43%
1.First Half 2021 balances have not been restated for the changes in accounting policy in relation to Software-as-a-Service. Refer to Note 1 of the 2021 Annual Report for
further details

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS39
Review of Group operations
Dividends
Half YearHalf YearHalf Year% Mov’t
MarchSeptMarchMar 22Mar 22
Ordinary dividend (cents per share)

2022 2021 2021 - Sept 21 - Mar 21
Interim (fully franked)

61 — 58 — 5
Final (fully franked)

— 60 — (100) —
Total ordinary dividend

61 60 58 2 5
Payout ratio (reported)
1

65.06%109.16%61.75%large 331.00
Adjusted franking credit balance ($m)

3,135 3,857 3,560 (19) (12)
Imputation credit (cents per share - NZ)

8.0 7.0 7.0 14 14
The Board has determined an interim fully franked dividend of 61 cents per share, to be paid on 24 June 2022 to shareholders on the register at the
record date of 20 May 2022. The 2022 interim dividend represents a payout ratio of 65.06%. In addition to being fully franked, the dividend will also
carry NZ$0.08 in New Zealand imputation credits that may be used by New Zealand tax residents.
The Board has determined to satisfy the DRP for the 2022 interim dividend by arranging for the purchase of existing shares by a third party. The
Market Price used to determine the number of shares allocated to DRP participants will be set over the 10 trading days commencing on 25 May
2022 and will not include a discount.
Capital deduction for regulatory expected credit loss
For capital adequacy purposes APRA requires the amount of regulatory expected credit losses in excess of eligible provisions to be deducted from
CET1 capital. The table below shows the calculation of this capital deduction.
As atAs atAs at
31 March30 Sept31 March
$m

2022 2021 2021
Provisions associated with eligible portfolios


Total provisions for expected credit losses

4,682 5,007 5,508
plus provisions associated with partial write-offs

304 40 20
less ineligible provisions
2

(101) (104) (106)
Total eligible provisions

4,885 4,943 5,422
Regulatory expected downturn loss

4,947 5,168 5,419
(Excess)/shortfall in eligible provisions compared to regulatory expected downturn loss

62 225 (3)
CET 1 capital deduction for regulatory expected downturn loss in excess of eligible provisions
3

(164) (225) (93)
1.Payout ratio excludes the dividend component of completed off-market share buy-back announced on 14 February 2022.
2.Provisions associated with portfolios subject to the Basel standardised approach to credit risk are not eligible.
3.Regulatory expected loss is calculated for portfolios subject to the Basel advanced capital IRB approach to credit risk. The comparison between regulatory expected loss and
eligible provisions is performed separately for defaulted and non-defaulted exposures.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS40
Review of Group operations
2.6Sustainability performance
Helping Australians and New Zealanders succeed: Our Sustainability Strategy
Our 2021-2023 Sustainability Strategy is centred around three pillars:
●Helping when it matters most;
●Backing a stronger Australia; and
●Collaborating for impact.
Further information on our Sustainability Strategy is available at westpac.com.au/sustainability. This also includes our annual sustainability
performance reporting and position statements.
Helping when it matters most; Supporting customers and businesses through times of change and hardship, and supporting financial wellbeing.
During First Half 2022, we:
●Supported over 1,500 customers with a natural disaster relief package;
●Approved $1.3 million in payments to almost 450 small business customers impacted by the floods in New South Wales and Queensland, as
part of our dedicated $2 million fund;
●Provided more than 100,000 people with access to our Recovery Hub, which brings together resources to help users manage financial stress;
●Assisted over 12,000 cases through our specialist vulnerability teams;
●Extended our partnership with Head Start Homes, a not-for-profit organisation working to provide secure and stable homes to those living in
community housing;
●Offered a variety of financial education resources, including live events, through Westpac’s Davidson Institute, with those attending reporting a
high level of confidence in being able to apply their learnings
1
; and
●Improved banking accessibility for more than 9,200 Indigenous and remote Australians since the beginning of FY21 through Yuri Ingkarninthi,
our Indigenous Connection Team.
Backing a stronger Australia; Backing people, jobs and ideas that shape Australia’s future, and helping Australians respond to climate change.
During First Half 2022, we:
●Continued support for Indigenous-owned businesses, including spend on carbon credits from savannah fire management projects in Arnhem
Land;
●Westpac Scholars Trust
2
awarded 100 new scholarships;
●Westpac Foundation’s
3
job creation grants to social enterprises helped created 769 jobs for vulnerable Australians;
●Participated in 39 transactions, with a total volume of $35.9 billion, to support Westpac Institutional Bank customers with sustainable finance
solutions
4
. $7.7 billion is attributable in direct lending and capital markets distribution capability;
●Achieved $2.8 billion in new lending to climate change solutions
5
(TCE) since 2020, towards our target of $3.5 billion by 2023;
●Completed a $250m structured auto finance facility to fund electric vehicles and related features such as recharge equipment for consumer
fintech lender, Plenti; and
●Remained on track to reduce scope 1 and 2 emissions by 65% by the end of FY22 and to reduce scope 3 supply chain emissions by 35% by
2030, against 2016 baselines.
1.Average score of 4.5/5, with 5 representing highest level of confidence.
2.Westpac Scholars Trust (ABN 35 600 251 071) is administered by Westpac Scholars Limited (ABN 72 168 847 041) as trustee for the Westpac Scholars Trust. Westpac
Scholars Trust is a private charitable trust and neither the Trust nor the Trustee are part of the Westpac Group. Westpac provides administrative support, skilled volunteering,
and funding for operational costs of Westpac Scholars Trust.
3.Westpac Foundation is administered by Westpac Community Limited (ABN 34 086 862 795) as trustee for Westpac Community Trust (ABN 53 265 036 982). The Westpac
Community Trust is a Public Ancillary Fund, endorsed by the ATO as a Deductible Gift Recipient. None of Westpac Foundation, Westpac Community Trust Limited nor the
Westpac Community Trust are part of Westpac Group. Westpac provides administrative support, skilled volunteering, donations and funding for operational costs of Westpac
Foundation. Jobs created through the Westpac Foundation job creation grants to social enterprises are for the six months ended 31 December 2021.
4.Sustainable finance transactions include green, social, sustainability, sustainability-linked and re-linked loans and bonds.
5.Refer to 2021 Sustainability Appendix for glossary.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS41
Review of Group operations
Collaborating for impact; Respecting human rights, amplifying Indigenous voices and supporting the transition to a climate resilient future. During
First Half 2022, we:
●Published our 2021 Modern Slavery Statement in response to the Australian Modern Slavery Act 2018 (Cth) and the United Kingdom’s Modern
Slavery Act 2015 (UK);
●Completed a Group-wide survey of our employees to better understand the diversity of our workforce, and their experiences of inclusion and
diversity;
●Published our Child Safeguarding Position Statement as we work to embed a child safe culture within our organisation;
●Progressed the development of financing strategies and portfolio targets to support a net zero economy by 2050;
●Engaged agribusiness customers to explore impacts of climate change on farm productivity and the role of adaptation measures to improve
climate resilience;
●Joined the Australian Industry Energy Transitions Initiative convened by Climateworks Centre and Climate-KIC Australia to coordinate learning
and action on net zero emissions supply chains;
●Joined the Taskforce on Nature-related Financial Disclosures (TNFD) Forum to support the development of a nature-related financial disclosure
framework;
●Progressed development of Westpac’s fifth Reconciliation Action Plan (RAP); and
●Partnered with The Economist Impact to publish an inaugural survey of the sustainable finance market in Asia Pacific, which showed that the
issuance of sustainable finance solutions more than doubled over the last few years and that 91% of investors surveyed have begun to
decarbonise, or have plans to decarbonise, one or more portfolios.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS42
Review of Group operations
2.6.1Climate-related financial disclosures
We continue to embed consideration of climate-related risks and opportunities into our business operations. A half-year summary of Westpac
Group’s progress against the four core thematic areas from the recommendations of the Task Force on Climate-related Financial Disclosures
(TCFD) is provided below.
Governance and oversight
The Board has oversight of the Group’s approach to and management of climate change. Our Climate Change Position Statement and Action Plan
(Climate Action Plan) is approved by the Board every three years. Updates on progress are provided at least twice a year.
Implementation and management of the Climate Action Plan is led by Group Executives. The ESG and Reputation Committee oversees the Climate
Action Plan, ESG program and wider sustainability agenda. This Committee meets at least four times a year and is chaired by the CEO, who has
overall responsibility for our Group approach and management of climate change. The Board Risk Committee (BRC) considers and approves
Westpac’s Sustainability Risk Management Framework (SRMF), which includes climate change risk, at least every two years. The Group Head -
Risk Frameworks, Risk Culture & ESG Risk has accountability for the SRMF.
The Climate Change Financial Risk Committee is a management sub-committee of the Group Credit Risk Committee and focuses on identifying and
managing climate-related financial risks, including the potential impact on credit exposures from climate change-related transition and physical risks.
The Committee meets at least three times a year and is chaired by the Group Chief Credit Officer.
Divisional risk committees consider the climate change dimensions of business activities as required. The Westpac Institutional Bank Customer
Transaction and Risk Escalation Committee also considers transactions requiring enhanced ESG due diligence, including climate change risk.
The overall environmental performance of our operations is managed by Group Property, overseen by the General Manager – Property,
Procurement and Protective Services. This includes setting strategies and tracking initiatives to reduce our direct environmental footprint.
Strategy
Climate change response and a focus on net zero has been elevated to a company-wide strategic priority. The Climate Action Plan identifies three
areas where we are expected to direct our attention over the short, medium and long-term:
●help customers and communities respond to climate change;
●improve the climate change performance of our operations; and
●support initiatives and policies to achieve the goals of the Paris Agreement.
The key highlights of our progress during First Half 2022 on our Climate Action Plan are:
●Participated in 39 transactions with a total volume of $35.9 billion to support Westpac Institutional Bank customers with sustainable finance
solutions
1
. $7.7 billion is attributable in direct lending and capital markets distribution capability;
●Continued our analysis to develop Paris-aligned decarbonisation financing strategies and portfolio targets;
●Continued to engage customers in high emitting sectors on their ambitions for climate change mitigation and their transition plans to align with
a 1.5 degrees Celsius scenario;
●Engaged agribusiness customers to explore impacts of climate change on farm productivity and the role of adaptation measures to improve
climate resilience;
●On track to achieve 50% renewable energy sourcing for our operational electricity use by end of FY22; and
●On track to maintain carbon neutrality for our operations for FY22.
Risk management overview
Climate change risks are managed in accordance with the Group’s Risk Management Framework, which is supported by the SRMF, Group ESG
Credit Risk Policy and Board Risk Appetite Statement (RAS) and aligned with the Three Lines of Defence model. We seek to understand the
potential for climate-related transition, physical and litigation risks that impact our business, including their possible impact on credit risk, regulatory
and reporting obligations, and our reputation.
Climate change is included in our Group Risk Taxonomy under the Credit Risk Class, and Reputational and Sustainability Risk Class. The Group
regularly reviews its approach to managing climate change risks, including frameworks, policies, risk taxonomy and RAS measures, to assist with
the integration of the criteria set out in the Group’s Climate Action Plan.
1.Sustainable finance transactions includes green, social, sustainability, sustainability-linked and re-linked loans and bonds.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS43
Review of Group operations
The Climate Action Plan sets out specific climate-related lending criteria, which are applied at the portfolio and customer level where appropriate. If
climate-related risks associated with a transaction are not within appetite then the application of conditions to sufficiently manage the risks will be
considered, or the transaction may be declined. Climate-related risks may be escalated to relevant divisional and Group risk committees in
accordance with the SRMF.
During First Half 2022, we trained 2,985 employees on ESG fundamentals to build climate and ESG risk management capabilities across the
business. We also developed an immersive ESG training program with Monash University and Climateworks Centre, which 209 employees,
including frontline bankers, have completed to date.
In November 2021, APRA released the Prudential Practice Guide – CPG 229 Climate Change Financial Risks. Westpac continues to participate in
APRA’s Climate Vulnerability Assessment (CVA) with four other Australian banks. APRA is expected to publish the CVA findings in 2022. Westpac
will continue to review its climate risk management approach in alignment with CPG 229, incorporating insights from the CVA as they become
available.
Scenario analysis
In line with our Climate Action Plan, we used scenario analysis to inform our identification of industries exposed to climate-related risks over short,
medium and long-term horizons
1
and physical risk analysis in our Australian mortgage book, the summary results of which are shown in the Metrics
and Targets section below. We progressed analysis to further understand material climate-related risks: net-zero pathways for a number of high-
emitting sectors and physical risk in the Australian mortgage and agribusiness portfolios.
Net-zero pathways for high-emitting sectors
In the half year, we continued our analysis to develop Paris-aligned financing strategies and portfolio targets, focusing on a number of sectors
representing the majority of our financed emissions. This required collaboration with customers and industry experts. Our analysis has considered
the IEA’s Net Zero by 2050, A Roadmap for the Global Energy Sector report, the UNEP FI Net Zero Banking Alliance framework and the impact on
the bank and customers, including in hard-to-abate sectors. We will continue to provide annual updates on our progress.
We continue to engage with our customers on climate change risks and opportunities as part of our efforts to support climate adaptation and a
transition towards a net zero economy. In First Half 2022, we continued to collaborate with customers more specifically on their ambitions for climate
change mitigation and their respective transition plans to align with a 1.5 degrees Celsius scenario. We will aim to continue to provide updates on
the progress of this customer engagement.
Physical risk in the Australian mortgage book
This half year, we refreshed the physical risk analysis to assess locations in our residential portfolio
2
. The analysis suggests that while climate
change may drive an ongoing increase in annual average losses over time, Westpac’s exposure in the Australian mortgage portfolio, to locations
identified as likely to be exposed to higher physical risks under an RCP8.5
3
scenario is around 2.7% of the current portfolio, and is projected to
increase to around 3.8% by 2050. Under an RCP2.6
3
scenario, the exposure of the current portfolio is around 2.6% and 3.3% by 2050. We
understand the importance of both climate mitigation and adaptation efforts, including government planning measures, and the benefits of climate-
resilient building characteristics to reduce property damage and impacts on customers and communities.
Physical risk in the Australian Agribusiness portfolio
We recognise the potential impact that systemic changes in climate could have on agribusiness customers. In FY21 a scenario analysis was carried
out to model potential impacts of long-term changes in rainfall and weather conditions due to climate change on farm productivity. The analysis
modelled productivity under different climate change scenarios, both with and without adaptation measures, which farmers may adopt to address
their risks. Modelling work was completed in First Half 2022, and the results show that impacts on productivity, to 2050, are highly dependent on the
extent to which farms adapt to the changing climate. Whilst for some regions the modelling revealed significant productivity upside based on
adaptation measures, for other regions adaptation was found to be crucial to maintaining current productivity levels.
It is already common practice for our agribusiness customers to seek and adopt innovative solutions to adjust to climate challenges and improve the
resilience and long-term viability of their operations. Following from this scenario analysis, we have started to engage with customers across
Australia to discuss the results of the analysis as well as current and emerging adaptation measures. By listening to and consulting with customers,
we will enrich the analysis with a deeper understanding of the reality experienced by agribusinesses in Australia. We will continue to consolidate the
outcomes of this engagement and look to understand how we can help customers in their ongoing adaptation journey. We will continue to provide
annual updates on our progress.
1.Further details explaining the Group’s approach to scenario analysis can be found in our 2021 Sustainability Supplement.
2.The calculation of percentage mortgage portfolio exposed to higher risk locations is based on scenario analysis assessing locations on the portfolio as at 28 February 2022.
The mortgage balances of this portfolio are at 28 February 2022. Details on our approach to physical risk scenario analysis on the Australian mortgages portfolio can be found
in the 2021 Sustainability Supplement.
3.Intergovernmental Panel on Climate Change (IPCC) Representative Concentration Pathways (RCP) represent global warming scenarios to 2100. An RCP2.6 represents a
lower warming scenario and IPCC RCP 8.5 represents a higher warming scenario.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS44
Review of Group operations
Metrics
Metrics Half Year 2022 performance
Support for climate solutions
1

●New lending to climate change solutions (TCE)
●Total lending to climate change solutions (TCE)
●$2.8 billion (cumulative since 2020) vs. 2023 target of $3.5 billion
●$10.7 billion
Energy generation
2

●Emission intensity of electricity generation
portfolio
●Energy mix of electricity generation exposure
(Westpac Institutional Bank only)
●0.26 (tCO2-e/MWh) vs. 2023 target of 0.23 (tCO2-e/MWh)
●79% renewable vs. 21% non-renewables.
Mining and coal exposure
●Lending to mining (TCE)
●Lending to coal mining (metallurgical and
thermal) (TCE)
●Lending to thermal coal mining % of coal
mining
3
●Thermal coal mining portfolio quality thresholds
●Oil and gas extraction (TCE)
●$c TCE
●$0.6 billion lending to coal mining representing 0.05% of Group TCE
●36% of lending to coal mining is to thermal coal mining vs. 2030 target of 0%3
●Coal quality
–Existing projects > 5,700 kCal/kg – Consistent with Climate Action Plan
4
–New projects > 6,300 kCal/kg – Consistent with Climate Action Plan
4
●$2.4 billion lending to oil and gas extraction representing 0.21% of Group TCE
Climate change portfolio resilience –
scenario analysis
Transition risk
5
●1.1% of current Australian Business and Institutional portfolio exposed to sectors which by
2030 may face relatively higher growth constraints under a 1.5 degrees Celsius scenario
●2.4% of current Australian Business and Institutional portfolio exposed to sectors which by
2050 may face relatively higher growth constraints under a 1.5 degrees Celsius scenario
●0.8% of current Australian Business and Institutional portfolio exposed to sectors which by
2030 may face relatively higher growth constraints under a 2 degrees Celsius scenario
●1.9% of current Australian Business and Institutional portfolio exposed to sectors which by
2050 may face relatively higher growth constraints under a 2 degrees Celsius scenario
Physical risk
●3.3% of current Australian mortgage portfolio
6
which by 2050 may be exposed to higher
physical risks under a RCP2.6 scenario
●3.8% of current Australian mortgage portfolio
6
which by 2050 may be exposed to higher
physical risks under a RCP8.5 scenario
Financed emissions – emissions intensity
estimates of top five highest-emitting sectors
7
●Manufacturing
●Utilities
●Mining
●Agriculture
●Trade
●0.257 kgCO2-e per $ lent
●0.248 kgCO2-e per $ lent
●0.227 kgCO2-e per $ lent
●0.151 kgCO2-e per $ lent
●0.094 kgCO2-e per $ lent
1.Refer to 2021 Sustainability Appendix for glossary.
2.Data updated annually. Data as at 30 September 2021.
3.Thermal coal mining exposure as % of coal mining – Westpac Institutional Bank only. We continue to support our existing thermal coal customers, managing our portfolio in
line with a commitment to reduce our exposure to zero by 2030. Existing thermal coal customers include subsidiaries of existing customers, with thermal coal customers
defined as those generating more than 25% of revenues from thermal coal, or in the case of a stand-alone mine, more than 35% of volumes from thermal coal. All other coal
customers or mines are deemed as metallurgical.
4.The Climate Action Plan specifies coal quality criteria of average calorific value on a Gross As Received basis must be at least 5,700 kCal/kg for existing mines; and at least
6,300 kCal/kg Gross As Received for new mines.
5.Excludes retail, sovereign, and bank exposures. Sectors whose medium (2030) and long-term (2050) performance under a scenario deviated by more than one standard
deviation below average GDP growth, were classified as ‘may face relatively higher growth constraints’.
6.Excludes Equity Access. Please see the 2021 Sustainability Supplement for more information. Higher risk were locations where insurance may become more expensive or
unavailable.
7.Data updated annually. Data as at 30 September 2021. Financed emissions is an estimate of emissions attributable to customer loans in our Australian business, institutional
and residential mortgage portfolios (‘financed emissions’). Refer to Westpac 2021 Financed Emissions Methodology on our website for more information.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS45
Segment reporting
3.0Segment reporting
Cash earnings policy
The accounting standard AASB 8 Operating Segments requires segment reporting to be presented on a basis that is consistent with information
provided internally to Westpac’s key decision makers. In assessing financial performance, including segment reporting, the Group currently uses an
adjusted AAS measure of performance referred to as ‘cash earnings’. Cash earnings is viewed as a measure of the level of profit that is generated
by ongoing operations and is therefore typically considered in assessing distributions, including dividends. Cash earnings is neither a measure of
cash flow nor net profit determined on a cash accounting basis, as it includes both cash and non-cash adjustments to statutory net profit.
To determine cash earnings, three categories of adjustments are made to reported results:
●Items that key decision makers at Westpac believe do not reflect our ongoing operations;
●Items that are not typically considered when dividends are recommended, mainly economic hedging impacts; and
●Accounting reclassifications between individual line items that do not impact reported results.
The guidance provided in Australian Securities and Investments Commission (ASIC) Regulatory Guide 230 has been followed when presenting this
information.
In presenting segment reporting on a management reporting basis, internal charges and transfer pricing adjustments are included in the
performance of each segment reflecting the management structure rather than the legal entity (these results cannot be compared to results for
individual legal entities). Where management reporting structures or accounting classifications have changed, financial results for comparative
periods have been revised and may differ from results previously reported.
Our internal transfer pricing frameworks facilitate risk transfer, profitability measurement, capital allocation and business unit alignment, tailored to
the jurisdictions in which we operate. Transfer pricing allows us to measure the relative contribution of our products and segments to the Group’s net
interest margin and other dimensions of performance. Key components of our transfer pricing frameworks are funds transfer pricing for interest rate
and liquidity risk, and allocation of basis and contingent liquidity costs, including capital allocation.
The discussion of our segment reporting and certain data in Sections 3 and 5 are presented on a cash earnings basis, unless otherwise stated.
Cash earnings are not directly comparable to statutory results presented in other parts of this Results Announcement.
Notable items
Over recent years, a number of large infrequent items have impacted results but do not reflect ongoing business performance. We have called
these items “notable items”. Notable items can be divided into the three categories below:
Category
Cash earnings

impact 1H22
$m

Detail
1. Provisions for estimated customer
refunds and payments, associated
costs and litigation costs
$65m

reduction
●Additional provisions for estimated customer refunds in First Half 2022 included:
–remediation for premium increases on certain life insurance products issued by
Westpac Life Insurance Services Limited (WLIS);
–additional wealth related remediation; partly offset by release of provisions for
customer remediation in Westpac New Zealand.
●Additional costs for our customer remediation program.
●Increase in prior litigation provisions following agreement with ASIC to settle six
longstanding matters.
2. The write-down of assets, including
goodwill and capitalised software
$154m

reduction
●Write-down of assets related to our superannuation business in preparation for its exit,
this included all goodwill attributable to the business along with some capitalised
software balances.
3. The impact of asset sales and
revaluations
$213m
benefit
●Gain on the sale of Westpac Life-NZ- Limited;
●Gain on sale of the Group’s motor vehicle dealer finance and novated leasing
business. Partly offset by;
●Post-sale adjustments from earn out payments associated with the sale of the Group’s
Vendor finance business; and
●Other costs associated with the divestment of businesses.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS46
Segment reporting
First Half 2022
Notable items increased net interest income $7 million as some customer remediation provisions in Westpac New Zealand were no longer required.
Notable items increased non-interest income $228 million and comprised:
●A $271 million gain to other incomes from the sale of Westpac Life-NZ- Limited and the Group’s motor vehicle dealer finance and novated
leasing business partly offset by post-sale earn out payments from the sale of Vendor finance. This net benefit was partly offset by;
●A $43 million reduction to net wealth management and insurance income primarily for refunds for premium increases on certain life insurance
products issued by Westpac Life Insurance Services Limited (WLIS) along with additional provisions in relation to wealth related advice
remediation.
Notable items increased expenses $231 million and comprised:
●Staff expenses of $19 million for the implementation of our remediation programs and separation costs related to our divestment of businesses.
●Technology expenses of $45 million from the write-down and impairment of capitalised software associated with our superannuation business;
and
●Other expenses of $167 million including the write-down of goodwill in our superannuation business, costs associated with our divestments and
other costs linked to our remediation programs and litigation matters.
Notable items increased income tax expense and non-controlling interests (NCI) $10 million. This was mainly from tax expenses associated with
gains on sale of divested businesses, partly offset by tax benefits from customer refunds and software impairments.
Second Half 2021
Notable items contributed $56 million to net interest income as some customer remediation provisions were no longer required for business
customers not provided regulated consumer loans. These were partly offset by additional provisions for customer remediation in Westpac New
Zealand Limited.
Notable items increased non-interest income $145 million and comprised:
●A benefit to other income of $196 million for the gain on sale of Westpac General Insurance and post-sale earn-out payments from the sale of
the Group’s Vendor finance business; partly offset by
●A reduction to net fee income of $33 million for additional provisions for salaried advice remediation; and
●An $18 million reduction to net wealth management and insurance income for additional provisions for aligned dealer group advice remediation.
Notable items added $1,602 million to expenses in Second Half 2021 and comprised:
●Staff expenses of $208 million for separation costs related to the sale of Life Insurance and implementation of our remediation programs;
●Occupancy expenses of $193 million related to the write-down of Westpac Institutional Bank (WIB) property leases partly offset by the write-
back of assets in Westpac Pacific following the decision not to proceed with its sale;
●Technology expenses of $472 million, mainly from the write-down and impairment of capitalised software in WIB and costs related to the sale of
Life Insurance; and
●Other expenses of $729 million including the write-down of goodwill in WIB, costs associated with divestments and other costs.
Notable items reduced income tax expense and NCI $82 million. This was mainly from the tax benefit from certain notable expenses, partly offset by
higher tax from the sale of Westpac General Insurance and the write-off of a deferred tax asset in Life Insurance.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS47
Segment reporting
First Half 2021
Notable items contributed $71 million to net interest income as some customer remediation provisions were no longer required.
Notable items added $372 million to non-interest income from:
●A $564 million benefit to other income from a gain on our stake in Coinbase which has now been sold, along with a small gain from finalising
the sale of our holding in Zip Co. Ltd; partly offset by
●A $104 million reduction to net fee income for additional provisions related to salaried advice remediation and for some customers on our
platforms who were not advised of certain corporate actions; and
●An $88 million reduction to net wealth management and insurance income for additional provisions for aligned dealer group advice remediation.
Notable items added $745 million to expenses in First Half 2021 and comprised:
●Staff expenses of $83 million related to implementation of our remediation program;
●Occupancy expenses of $82 million from the write-down of assets in Westpac Pacific, primarily property leases as the business was held for
sale in First Half 2021;
●Technology expenses of $178 million from the write-down and impairment of capitalised software; and
●Other expenses of $402 million including Reinventure performance fees paid that were linked to the divestment of Coinbase, separation costs
for divestments, the write-down of goodwill in Westpac Lenders Mortgage Insurance and other assets in Westpac Pacific. Other expenses also
included costs for completing our remediation programs and provisions for litigation matters.
Notable items reduced income tax expense and NCI by $20 million mainly from the tax benefit of the above items partly offset by tax on the gain on
Coinbase.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS48
Segment reporting
Impact of notable items

Refunds, payments, costs, Write-down of Asset sales and
$mand litigationintangiblesrevaluationsTotal
Half Year March 2022


Net interest income

7 — — 7
Net fee income

— — — —
Net wealth management and insurance income

(43) — — (43)
Trading income

— — — —
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)
Profit before impairment charges and income tax expense

(82) (167) 253 4
Income tax (expense)/benefit and NCI

17 13 (40) (10)
Cash earnings

(65) (154) 213 (6)
Half Year September 2021


Net interest income

60 — (4) 56
Net fee income

(33) — — (33)
Net wealth management and insurance income

(18) — — (18)
Trading income

— — — —
Other income

3 — 193 196
Non-interest income

(48) — 193 145
Staff expenses

(33) — (175) (208)
Occupancy expenses

— (232) 39 (193)
Technology expenses

(2) (414) (56) (472)
Other expenses

(180) (510) (39) (729)
Operating expenses

(215) (1,156) (231) (1,602)
Profit before impairment charges and income tax expense

(203) (1,156) (42) (1,401)
Income tax (expense)/benefit and NCI

31 191 (140) 82
Cash earnings

(172) (965) (182) (1,319)
Half Year March 2021


Net interest income

71 — — 71
Net fee income

(104) — — (104)
Net wealth management and insurance income

(88) — — (88)
Trading income

— — — —
Other income

(7) — 571 564
Non-interest income

(199) — 571 372
Staff expenses

(83) — — (83)
Occupancy expenses

— — (82) (82)
Technology expenses

(1) (165) (12) (178)
Other expenses

(172) (84) (146) (402)
Operating expenses

(256) (249) (240) (745)
Profit before impairment charges and income tax expense

(384) (249) 331 (302)
Income tax (expense)/benefit and NCI

108 50 (138) 20
Cash earnings

(276) (199) 193 (282)

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS49
Segment reporting
Impact of notable items by Segment

Consumer Westpac
andWestpacNew
BusinessInstitutionalZealandSpecialistGroup
$mConsumerBusinessBankingBank(A$)BusinessesBusinessesGroup
Half Year March 2022

Net interest income

— — — — 7 — — 7
Net fee income

— — — — — — — —
Net wealth management and insurance income

— — — — — (43) — (43)
Trading income

— — — — — — — —
Other income

— — — — 119 152 — 271
Non-interest income

— — — — 119 109 — 228
Operating expenses

— — — — — (215) (16) (231)
Profit before impairment charges and income tax expense

— — — — 126 (106) (16) 4
Income tax (expense)/benefit and NCI

— — — — (2) (8) — (10)
Cash earnings

— — — — 124 (114) (16) (6)
Half Year Sept 2021


Net interest income

3 103 106 — (32) (18) — 56
Net fee income

— — — — (7) — (26) (33)
Net wealth management and insurance income

— — — — — (4) (14) (18)
Trading income

— — — — — — — —
Other income

— — — — 1 202 (7) 196
Non-interest income

— — — — (6) 198 (47) 145
Operating expenses

(35) (14) (49) (1,156) (17) (304) (76) (1,602)
Profit before impairment charges and income tax expense

(32) 89 57 (1,156) (55) (124) (123) (1,401)
Income tax (expense)/benefit and NCI

3 (29) (26) 191 13 (119) 23 82
Cash earnings

(29) 60 31 (965) (42) (243) (100) (1,319)
Half Year March 2021


Net interest income

— 74 74 — (3) — — 71
Net fee income

(3) 1 (2) — (5) 8 (105) (104)
Net wealth management and insurance income

— — — — — — (88) (88)
Trading income

— — — — — — — —
Other income

— — — — — (7) 571 564
Non-interest income

(3) 1 (2) — (5) 1 378 372
Operating expenses

(106) (40) (146) (37) (6) (336) (220) (745)
Profit before impairment charges and income tax expense

(109) 35 (74) (37) (14) (335) 158 (302)
Income tax (expense)/benefit and NCI

33 (10) 23 11 4 38 (56) 20
Cash earnings

(76) 25 (51) (26) (10) (297) 102 (282)

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS50
Segment reporting
3.1Consumer and Business Banking

Half Year Half Year Half Year % Mov’t
MarchSeptMarchMar 22 Mar 22
$m202220212021- Sept 21- Mar 21
Net interest income

5,700 6,173 6,300 (8) (10)
Non-interest income

487 437 430 11 13
Net operating income before operating expenses and impairment charges

6,187 6,610 6,730 (6) (8)
Operating expenses

(3,351) (3,687) (3,429) (9) (2)
Profit before impairment charges and income tax expense

2,836 2,923 3,301 (3) (14)
Impairment (charges)/benefits

(131) 400 209 large large
Profit before income tax expense

2,705 3,323 3,510 (19) (23)
Income tax expense and non-controlling interests (NCI)

(820) (1,001) (1,048) (18) (22)
Cash earnings

1,885 2,322 2,462 (19) (23)
Cash earnings adjustments

— — — — —
Net profit after tax

1,885 2,322 2,462 (19) (23)
Cash earnings

1,885 2,322 2,462 (19) (23)
Add back notable items

— (31) 51 (100) (100)
Cash earnings excluding notable items

1,885 2,291 2,513 (18) (25)
Operating expenses to net operating income ratio (cash earnings basis)

54.16%55.78%50.95%(162 bps) 321 bps

As at As at As at % Mov’t
MarchSeptMarchMar 22 Mar 22
$bn202220212021- Sept 21- Mar 21
Customer deposits


Term deposits

75.6 76.5 85.6 (1) (12)
Other

335.3 318.5 292.1 5 15
Total customer deposits

410.9 395.0 377.7 4 9
Net loans


Mortgages

458.4 455.7 443.6 1 3
Business

82.4 79.8 79.5 3 4
Other

9.0 8.8 10.0 2 (10)
Provisions

(3.2) (3.2) (3.8) — (16)
Total net loans

546.6 541.1 529.3 1 3
Total assets

561.0 555.4 544.6 1 3

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS51
Segment reporting
3.1.1Consumer
Consumer provides a range of banking products and services, including mortgages, credit cards, personal loans, and savings and at call deposits to
customers in Australia. Products and services are provided under the Westpac, St.George, BankSA, Bank of Melbourne, and RAMS brands.
Half YearHalf YearHalf Year% Mov’t
MarchSeptMarchMar 22Mar 22
$m

2022 2021 2021 - Sept 21 - Mar 21
Net interest income

4,377 4,722 4,764 (7) (8)
Non-interest income

324 263 255 23 27
Net operating income before operating expenses and impairment charges

4,701 4,985 5,019 (6) (6)
Operating expenses

(2,369) (2,522) (2,376) (6) —
Profit before impairment charges and income tax expense

2,332 2,463 2,643 (5) (12)
Impairment (charges)/benefits

27 82 102 (67) (74)
Profit before income tax expense

2,359 2,545 2,745 (7) (14)
Income tax expense and non-controlling interests (NCI)

(713) (765) (818) (7) (13)
Cash earnings

1,646 1,780 1,927 (8) (15)
Cash earnings adjustments

— — — — —
Net profit after tax

1,646 1,780 1,927 (8) (15)
Cash earnings

1,646 1,780 1,927 (8) (15)
Add back notable items

— 29 76 (100) (100)
Cash earnings excluding notable items

1,646 1,809 2,003 (9) (18)
Operating expenses to net operating income ratio (cash earnings basis)

50.39%50.59%47.34%(20 bps) 305 bps
As atAs atAs at% Mov’t
MarchSeptMarchMar 22 Mar 22
$bn

2022 2021 2021 - Sept 21 - Mar 21
Customer deposits
Term deposits

50.5 50.2 55.5 1 (9)
Other

225.7 216.2 198.5 4 14
Total customer deposits

276.2 266.4 254.0 4 9
Net loans


Mortgages

458.4 455.7 443.6 1 3
Other

9.0 8.8 10.0 2 (10)
Provisions

(1.7) (1.8) (2.0) (6) (15)
Total net loans

465.7 462.7 451.6 1 3
Total assets

479.9 476.9 466.8 1 3

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS52
Segment reporting
Financial performance
First Half 2022 – Second Half 2021
Cash earnings of $1,646 million was $134 million or 8% lower ($163 million or 9% lower excluding notable items) mostly due to lower net interest
income from an 18 basis point reduction in net interest margin and a lower impairment benefit. These were partly offset by a reduction in expenses,
and a rise in non-interest income. There were no notable items in Consumer in First Half 2022, and minimal notable items in Second Half 2021
(mostly in expenses).
Net interest income down $345m, 7% ●Net loans increased $3.0 billion (or 1%) over the half. Mortgages increased $2.7 billion with a 2% increase
in owner occupied mortgages partly offset by a reduction in investor lending. Other lending increased $0.2
billion (or 2%) mostly from credit cards as consumers increased spending over the holiday period and
following the cessation of COVID-19 related lockdowns;
●Deposits increased $9.8 billion (or 4%), with most growth in savings and transaction accounts (including
mortgage offset accounts). Term deposits balances were little changed over the prior half as customers
elected to hold their funds at call; and
●Net interest margin was 18 basis points lower mainly from mortgage competition and growth in lower
spread products (owner occupied, fixed rate mortgage lending) while balances in higher spread products
(investor and interest only lending) declined. Funding costs also contributed to lower margins as loan
interest rate pricing did not keep pace as the yield curve steepened. These declines were partly offset by
higher deposit spreads from both repricing and changes in deposit mix.
Non-interest income up $61m, 23% ●Non-interest income benefitted from a $25 million one-off payment related to achieving a milestone under
the new distribution arrangements for general insurance; and
●Excluding this, non-interest income was up $36 million (or 14%), mostly from higher card fees consistent
with increased economic activity and higher international spending.
Expenses down $153m, 6% ●Expenses excluding notable items were down $118 million (or 5%) mostly from our simplification initiatives
including changes in our organisational structure, and reduced network expenses as we closed 70
branches and 117 ATMs; and
●Costs for programs to improve our management of risk were also lower.
Impairment benefit of $27m
compared to impairment benefit of
$82m
●The lower benefit was driven by an increase in portfolio overlays related to supply chain disruptions, labour
shortages, inflation, and recent flood events in Eastern Australia; and
●Credit quality metrics improved with stressed exposures to TCE down 17 basis points to 0.81%. Mortgage
90+ day delinquencies were down 19 basis points to 0.88%, mainly due to a reduction in the hardship
portfolio as customers completed their serviceability period as well as exiting COVID-19 assistance
packages. Other consumer 90+ day delinquencies were down 12 basis points to 1.48% driven
predominately by an improvement in the cards portfolio.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS53
Segment reporting
First Half 2022 – First Half 2021
Cash earnings of $1,646 million was $281 million or 15% lower mostly due to a decline in net interest income and a lower impairment benefit. These
decreases were offset by higher non-interest income and a small reduction in expenses. Notable items reduced cash earnings by $76 million in First
Half 2021 with almost all the impact in expenses.
Net interest income down $387m,
8%
●Net loans were $14.1 billion (or 3%) higher compared to First Half 2021, with mortgage growth of $14.8
billion partly offset by a $1.0 billion decline in other lending;
●Deposits increased $22.2 billion (or 9%), with all growth in savings and transaction accounts partly
offset by a reduction in term deposits; and
●Net interest margin was 25 basis points lower from mortgage competition and portfolio mix effects
including a decline in relatively higher spread investor mortgages along with lower cards and personal
loan balances. This decline was partly offset by higher deposit spreads from mix changes (switching
from term deposits to at call) and from repricing.
Non-interest income up $69m, 27% ●Non-interest income benefitted from a $25 million one-off payment following achieving milestone under
the new distribution arrangements for general insurance. Excluding this item, non-interest income was
up $44 million (or 17%) mainly due to:
–Higher cards fees from increased transactions and more international activity as COVID-19
restrictions eased; and
–Higher mortgage fees from the increase in lending activity.
●Partly offset by the loss of fee income from the removal of certain account-keeping fees and other
simplification initiatives ($5 million).
Expenses down $7m, flat ●Expenses excluding notable items increased $99 million (or 4%) mostly from:
–Higher spending on risk and compliance programs;
–Additional resources to support customers;
–Annual salary increases; and
–An increase in software amortisation as certain projects became operational.
●Partly offset by cost savings from greater use of digital channels and a reduction in the branch and
ATM network. A net 110 branches and 199 ATMs were closed over the year.
Impairment benefit of $27m
compared to an impairment benefit
of $102m
●Impairment benefit was $75 million lower driven by an increase in portfolio overlays related to supply
chain disruptions, labour shortages, inflation, and recent flood events in Eastern Australia; and
●Credit quality metrics improved with stressed exposures to TCE down 25 basis points to 0.81%. Mortgage
90+ day delinquencies were down 32 basis points to 0.88% and other Consumer 90+ day delinquencies were
down 12 basis points to 1.48% driven predominately by an improvement in the cards portfolio.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS54
Segment reporting
3.1.2Business
Business provides banking services and products to Australian small business, Agribusiness and Commercial businesses generally up to $200
million in exposure. The segment offers savings, transaction and lending products including specialist services such as cash flow finance,
equipment finance and property finance. Business operates under the Westpac, St.George, BankSA, and Bank of Melbourne brands.
Half YearHalf YearHalf Year% Mov’t
MarchSeptMarchMar 22 Mar 22
$m

2022 2021 2021 - Sept 21 - Mar 21
Net interest income

1,323 1,451 1,536 (9) (14)
Non-interest income

163 174 175 (6) (7)
Net operating income before operating expenses and impairment charges

1,486 1,625 1,711 (9) (13)
Operating expenses

(982) (1,165) (1,053) (16) (7)
Profit before impairment charges and income tax expense

504 460 658 10 (23)
Impairment (charges)/benefits

(158) 318 107 large large
Profit before income tax expense

346 778 765 (56) (55)
Income tax expense and NCI

(107) (236) (230) (55) (53)
Cash earnings

239 542 535 (56) (55)
Cash earnings adjustments

— — — — —
Net profit after tax

239 542 535 (56) (55)
Cash earnings

239 542 535 (56) (55)
Add back notable items

— (60) (25) (100) (100)
Cash earnings excluding notable items

239 482 510 (50) (53)
Operating expenses to net operating income ratio (cash earnings basis)

66.08%71.69%61.54%large large
As atAs atAs at% Mov’t
31 March30 Sept31 MarchMar 22 Mar 22
$bn

2022 2021 2021 - Sept 21 - Mar 21
Customer deposits
Term deposits

25.1 26.3 30.1 (5) (17)
Other

109.6 102.3 93.6 7 17
Total customer deposits

134.7 128.6 123.7 5 9
Net loans


Business

82.4 79.8 79.5 3 4
Provisions

(1.5) (1.4) (1.8) 7 (17)
Total net loans

80.9 78.4 77.7 3 4
Total assets

81.1 78.5 77.8 3 4

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS55
Segment reporting
Financial performance
First Half 2022 – Second Half 2021
Cash earnings of $239 million was $303 million or 56% lower than Second Half 2021 ($243 million lower excluding notable items) mostly from a
$476 million turnaround in impairment charges (a benefit to a charge). There were no notable items in First Half 2022 but excluding their impact
from Second Half 2021, core earnings increased $133 million, or 36%, from lower expenses.
Net interest income down $128m,
9%
●Excluding notable items, net interest income was down $25 million (or 2%);
●Net loans were $2.5 billion (or 3%) higher over the half with growth across the commercial property
and agriculture sectors;
●Deposits were up $6.1 billion (or 5%) including a $3.8 billion rise in transaction accounts and $3.5
billion rise in savings accounts as customers elected to hold more funds at call. Term deposits were
$1.2 billion lower; and
●Net interest margin was down 36 basis points (10 basis points excluding notable items as Second Half
2021 included a benefit of $103 million) mostly from competition for new lending and to retain business
and lower returns on hedged deposits. These reductions were partly offset by deposit repricing and
changes in the deposit mix (more transaction balances).
Non-interest income down $11m,
6%
●The decrease was mostly from higher card scheme fees received in Second Half 2021 and lower
merchant fees in First Half 2022.
Expenses down $183m, 16% ●Excluding notable items of $14 million in Second Half 2021, expenses were down $169 million (or
15%). The decline was due to;
–Simplification of our operating structure; and
–Costs for programs to improve our management of risk were also lower.
Impairment charge of $158m
compared to an impairment benefit
of $318m
●The impairment charge was mostly due to an increase in CAP related to supply chain disruptions,
labour shortages, inflation and asset price risks; and
●Credit quality metrics improved with stressed exposures to TCE down 83 basis points to 5.07%, with
significant reduction in stress in accommodation and agricultural sectors.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS56
Segment reporting
First Half 2022 – First Half 2021
Cash earnings of $239 million was $296 million or 55% ($271 million lower excluding notable items) mostly from a $265 million turnaround in
impairment charges (from an impairment benefit in First Half 2021). Excluding notable items, core earnings were $119 million or 19% lower mostly
from the 35 basis point (ex notable items) reduction in net interest margin.
Net interest income down $213m,
14%
●Excluding notable items, net interest income was down $139 million (or 10%);
●Net loans increased $3.2 billion (or 4%) over the year with most growth in commercial property and
agriculture sectors;
●Deposits were up $11.0 billion (or 9%) with a $16.0 billion increase in at call accounts, including a $9.1
billion rise in transaction balances, while term deposits declined $5.0 billion as customers elected to
hold more funds at call; and
●Net interest margin declined 53 basis points (35 basis points lower excluding notable items). The
decline was mostly from lower loan spreads due to competitive pricing and lower returns on hedged
deposits. This was partly offset by higher deposit spreads from repricing and portfolio mix benefits.
Non-interest income down $12m,
7%
●The decline was mainly due to lower payment and merchant related fees including higher interchange
costs and some higher one-off scheme payments in First Half 2021; and
●These declines were partly offset by higher guarantee and overdraft fees.
Expenses down $71m, 7% ●Notable items were $40 million in First Half 2021, excluding this impact, expenses were $31 million
lower driven by simplification initiatives including changes in our organisational structure partly offset
by increased risk and compliance costs and annual salary increases.
Impairment charge of $158m
compared to an impairment benefit
of $107m
●The impairment charge was mostly due to an increase in CAP related to supply chain disruptions,
labour shortages, inflation and asset price risks; and
●Credit quality metrics improved with stressed exposures to TCE down 195 basis points to 5.07%, with
a reduction in stress in the accommodation, agricultural, trade and property sectors.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS57
Segment reporting
3.2Westpac Institutional Bank (WIB)
Westpac Institutional Bank (WIB) delivers a broad range of financial products and services to corporate, institutional and government customers
operating in, or with connections to, Australia and New Zealand. WIB operates through dedicated industry relationship and specialist product teams,
with expert knowledge in financing, transactional banking, and financial and debt capital markets. Customers are supported throughout Australia
and via branches and subsidiaries located in New Zealand, New York, London and Singapore. WIB works with all the Group’s operating segments
in the provision of markets’ related financial needs including foreign exchange and fixed interest solutions.
Half YearHalf YearHalf Year% Mov’t
MarchSeptMarchMar 22 Mar 22
$m

2022 2021 2021 - Sept 21 - Mar 21
Net interest income

481 458 467 5 3
Non-interest income

588 626 687 (6) (14)
Net operating income before operating expenses and impairment charges

1,069 1,084 1,154 (1) (7)
Operating expenses

(577) (1,887) (708) (69) (19)
Profit before impairment charges and income tax expense

492 (803) 446 large 10
Impairment charges

(58) (154) (8) (62) large
Profit before income tax expense

434 (957) 438 large (1)
Income tax expense and NCI

(128) 126 (140) large (9)
Cash earnings

306 (831) 298 large 3
Cash earnings adjustments

— — — — —
Net profit after tax

306 (831) 298 large 3
Cash earnings

306 (831) 298 large 3
Add back notable items

— 965 26 (100) (100)
Cash earnings excluding notable items

306 134 324 128 (6)
Operating expenses to net operating income ratio (cash earnings basis)

53.98%174.08%61.35%large large
As atAs atAs at% Mov’t
31 March30 Sept31 MarchMar 22 Mar 22
$bn

2022 2021 2021 - Sept 21 - Mar 21
Customer deposits

104.7 99.3 92.7 5 13
Net loans


Loans

74.3 68.3 63.4 9 17
Provisions

(0.3) (0.6) (0.3) (50) —
Total net loans

74.0 67.7 63.1 9 17
Total assets

94.0 82.8 75.5 14 25
Revenue contribution
Half YearHalf YearHalf Year% Mov’t
MarchSeptMarchMar 22 Mar 22
$m

2022 2021 2021 - Sept 21 - Mar 21
Lending and deposit revenue 710 673 642 5 11
Markets, sales and fee income

417 400 423 4 (1)
Total customer revenue

1,127 1,073 1,065 5 6
Derivative valuation adjustments

(29) 44 53 large large
Trading revenue

34 25 75 36 (55)
Other
1

(63) (58) (39) 9 62
Total WIB revenue

1,069 1,084 1,154 (1) (7)
1.Includes capital benefit and the Bank Levy.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS58
Segment reporting
Financial performance
First Half 2022 – Second Half 2021
Cash earnings of $306 million were $1,137 million higher than Second Half 2021, primarily due to the absence of notable items. Excluding notable
items in Second Half 2021, cash earnings were $172 million or 128% higher from a 5% increase in customer revenue, lower expenses and a
decline in impairment charges.
Net interest
income up
$23m, 5%
·
Net loans were up 9%, or $6.3 billion with growth across the property and non-bank financial sectors and from
supporting increased merger and acquisition activity. Existing customers also increased utilisation of their credit
facilities, with loans to TCE up 1 percentage point over the half;
·
Deposits were $5.4 billion, or 5% higher largely in corporate term deposits and higher yield at call products,
partly offset by lower government deposits; and
·
Net interest margin declined 7 basis points. The decline was mostly due to the mix impact from growth in market
inventory. Loan and deposit spreads were little changed over the half.
Non-interest
income down
$38m, 6%
·
A significant turnaround in derivative valuation adjustments from a gain of $44 million in Second Half 2021
compared to a loss of $29 million in First Half 2022 as counterparty credit spreads widened, partly offset by;
·
Higher markets income (up $39 million) due to higher market volatility in rates and FX markets. These conditions
resulted in more customer activity including hedging their positions which supported a $30 million increase in
customer markets income mostly across fixed income, and a $9 million increase in non-customer markets
income.
Expenses down
$1,310m, 69%
·
Excluding notable items, expenses decreased $154 million, or 21% reflecting:
-Benefits from international consolidation and simplification initiatives;
-Lower risk and compliance costs as some programs were completed; and
-Lower software amortisation and property costs following the write-down of certain assets in Second
Half 2021.
Impairment
charges down
$96m, 62%
·
The impairment charge was $96 million lower (Second Half 2021 included the Forum Finance IAP). This was
partly offset by higher overlays in First Half 2022; and
·
Credit quality metrics improved with stressed exposures to TCE down 44 basis points to 0.20% mostly due to a
reduction in watchlist and impaired exposures.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS59
Segment reporting
First Half 2022 – First Half 2021
Cash earnings of $306 million were $8 million or 3% higher than First Half 2021. Excluding notable items, cash earnings were $18 million or 6%
lower, primarily from a 7% decline in operating income and an increase in impairment charges. This was partly offset by a 14% reduction in
operating expenses.
Net interest income
up $14m, 3%
·
Net loans increased $10.9 billion, or 17% with growth spread across most sectors;
·
Deposits were up $12.0 billion, or 13%, mostly from increased corporate term deposits and higher yield at call products as
clients sought improved returns in the low rate environment; and
·
Net interest margin was down 9 basis points driven by the impact of low interest rate and mix impact from growth in market
inventory. Improved deposit spreads were offset from a decline in loan spreads due to competition.
Non-interest income
down $99m, 14%
·
A significant turnaround in derivative valuation adjustments from a gain of $53 million in First Half 2021 compared to a loss
of $29 million in First Half 2022 as counterparty credit spreads widened; partly offset by;
·
Excluding this impact, non-interest income was $17 million lower from:
–A $41 million decline in non-customer markets income, mostly from fixed income;
–Lower payments revenue from reduced transaction volumes and from exiting some non-core activities;
–Partly offset by higher customer markets income ($35 million) across fixed income and FX due to higher market volatility;
and
–Increased origination and syndication activity
Expenses down
$131m, 19%
·
Excluding notable items, expenses decreased $94 million, or 14% reflecting:
–Simplification benefits, mostly from the full period benefit of international consolidation, product and process simplification
and operating model changes;
–Lower software amortisation expenses and property costs due to the write-down of certain assets in Second Half 2021;
and
–Partly offset by an increase in staff expenses.
Impairment charges
up $50m, large
·
The impairment charge was $50 million higher, driven by an increase in CAP mainly related to supply chain disruptions,
labour shortages, inflation and asset price risks; and
·
Credit quality metrics improved with stressed exposures to TCE down 36 basis points to 0.20% predominately due to a
reduction in watchlist exposures. Impaired exposures to TCE were flat at 0.14%.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS60
Segment reporting
3.3Westpac New Zealand
Westpac New Zealand provides banking, wealth and insurance products and services for consumer, business and institutional customers in New
Zealand. Westpac conducts its business through: Westpac New Zealand Limited, which is incorporated in New Zealand, and Westpac Banking
Corporation (New Zealand Branch), which is incorporated in Australia. Westpac New Zealand operates through a network of branches and ATMs
across the North and South Islands. Business and institutional customers are also served through relationship and specialist product teams. New
Zealand maintains its own infrastructure, including technology, operations and treasury.
All figures are in NZ$ unless noted otherwise.
Half YearHalf YearHalf Year% Mov’t
MarchSeptMarchMar 22 Mar 22
NZ$m

2022 2021 2021 - Sept 21 - Mar 21
Net interest income

1,102 1,052 1,066 5 3
Non-interest income

287 166 179 73 60
Net operating income before operating expenses and impairment charges

1,389 1,218 1,245 14 12
Operating expenses

(564) (596) (536) (5) 5
Profit before impairment charges and income tax expense

825 622 709 33 16
Impairment (charges)/benefits

10 (15) 99 large (90)
Profit before income tax expense

835 607 808 38 3
Income tax expense and NCI

(200) (177) (225) 13 (11)
Cash earnings

635 430 583 48 9
Cash earnings adjustments

5 — (3) — large
Net profit after tax

640 430 580 49 10
Cash earnings

635 430 583 48 9
Add back notable items

(131) 44 10 large large
Cash earnings excluding notable items

504 474 593 6 (15)
Operating expenses to net operating income ratio (cash earnings basis)

40.6%48.93%43.05%large (245 bps)
As atAs atAs at% Mov’t
31 March30 Sept31 MarchMar 22 Mar 22
NZ$bn

2022 2021 2021 - Sept 21 - Mar 21
Customer deposits
Term deposits

30.1 28.3 28.7 6 5
Other

48.3 47.6 45.4 1 6
Total customer deposits

78.4 75.9 74.1 3 6
Net loans


Mortgages

62.2 60.9 58.4 2 7
Business

31.0 31.0 31.3 — (1)
Other

1.2 1.2 1.4 — (14)
Provisions

(0.4) (0.5) (0.5) (20) (20)
Total net loans

94.0 92.6 90.6 2 4
Total assets

116.5 112.4 107.6 4 8

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS61
Segment reporting
Financial performance (NZ$)
First Half 2022 – Second Half 2021
Cash earnings of $635 million were $205 million or 48% higher, largely from the gain on sale of Westpac Life-NZ- Limited (NZ Life), $126 million,
treated as a notable item in First Half 2022. Excluding notable items, cash earnings increased $30 million, or 6%, from a reduction in expenses and
an impairment benefit.
Net interest income up $50m,
5%
·
Excluding the impact of notable items, net interest income was $10 million higher;
·
Net loans increased $1.4 billion, or 2%, with most growth in mortgages;
·
Deposits were up $2.5 billion, or 3%, with most of the growth in term deposits as customers shift preference in a
rising rate environment; and
●Net interest margin was 4 basis points higher (4 basis points lower excluding notable items). Excluding notable
items, the decline was due to lower spreads on new mortgages and the impact of portfolio mix (more lower
yielding products). This was partly offset by higher deposit spreads from rising interest rates. The 22% increase in
third party liquid assets had less than 1 basis point impact on the net interest margin.
Non-interest income up
$121m, 73%
·
Excluding a $126 million gain (a notable item) on the sale of NZ Life in February 2022, non-interest income was
$12 million lower. Most of the decline was due to lower investment income following repricing of our funds
including KiwiSaver funds and lower banking fee income due to reduced activity. The loss of income following the
divestment of NZ Life was partly offset by distribution fees received.
Expenses down $32m, 5%
·
Excluding notable items, expenses were $15 million, or 3% lower mostly from the timing of risk and compliance
spending with more investment typically in the second half of the year.
Impairment benefit of $10m
compared to an impairment
charge of $15m
·
Asset quality has generally improved with stressed exposures to TCE down 5 basis points and other consumer
90+ day delinquencies down 23 basis points. Mortgage 90+ day delinquencies of 30 basis points were unchanged
over the half; and
·
The impairment benefit mostly reflects lower collectively assessed provisions from improved credit quality metrics.
The Second Half 2021 impairment charge was mostly due to an IAP raised for Forum Finance.

WESTPAC GROUP 2022 INTERIM FINANCIAL RESULTS62
Segment reporting
First Half 2022 – First Half 2021
Cash earnings of $635 million were $52 million or 9% higher than First Half 2021, largely from the gain on sale of NZ Life partly offset by a lower
impairment benefit. Excluding notable items, cash earnings decreased $89 million, or 15%, mostly due to higher spending on risk and compliance
projects and a lower impairment benefit.

Net interest income up $36m,
3%
·
Excluding the impact of notable items, net interest income was $26 million higher;
·
Net loans increased $3.4 billion, or 4%, with $3.8 billion of mortgage growth partly offset by $0.3 billion decrease
in business loans;
·
Deposits increased $4.3 billion, or 6%, fully funding loan growth and lifting the deposit to loan ratio to 83.4%.
Growth in at call accounts was mainly across households, while the increase in term deposits was across
businesses and households; and
·
Net interest margin decreased 8 basis points (11 basis points lower excluding notable items) mostly from lower
lending spreads on new mortgages and portfolio mix changes. This was partly offset by higher deposit spreads
due to repricing and the impact of rising interest rates. The 37% increase in third party liquid assets had less than
1 basis point impact on the net interest margin.
Non-interest income up
$108m, 60%
·
Excluding notable items mostly relating to the gain on the sale of NZ Life in February 2022, non-interest income
decreased $24 million;
·
Investment income was lower from the repricing of our funds including KiwiSaver funds. Lower cards revenue
also contributed to the decline;
·
The loss of income following the divestment of NZ Life was partly offset by distribution fees received; and
·
First Half 2021 included a gain on sale of the Wealth Advisory business ($8 million).
Expenses up $28m, 5%
·
Excluding notable items, expenses increased $34 million, primarily due to increased investment in technology
resilience and data capability along with risk and compliance projects including RBNZ’s BS11 Outsourcing Policy
and Section 95 requirements on liquidity and risk governance. The number of FTE increased by 299 over the
year.
Impairment benefit of $10m
compared to impairment
benefit of $99m
·
Impairment benefit in First Half 2022 was mostly due to improved credit metrics.
·
Stressed exposures to TCE down 42 basis points to 1.14% due to reduction in watchlist exposures. Mortgage 90+
day delinquencies were 3 basis points lower at 0.30%. Other consumer 90+ day delinquencies of 1.42%, down 49
basis points over the half, with most of the decrease due to an improvement in customers in hardship.