WBC 3Q22 Capital, Credit Quality & Funding Update

ASX
Release


15 AUGUST 2022

WESTPAC 3Q22 CAPITAL, CREDIT QUALITY AND FUNDING UPDATE

Following is Westpac’s 3Q22 slides covering capital, credit quality and funding for
the three months ended June 2022.



For further information:

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


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



Level 18, 275 Kent Street
Sydney, NSW, 2000

FOR THE 3 MONTHS ENDED 30 JUNE 2022
WESTPAC BANKING CORPORATION
ABN 33 007 457 141
This document should be read in conjunction with Westpac’s June 2022 Pillar 3
Report. Contents principally covers and compares the 3Q22 and 1H22 quarterly
average periods unless otherwise stated. All amounts are in Australian dollars.
3Q22
Capital, Credit Quality
and Funding Update

3Q22 Summary.
Summary
•Provision cover little changed. Total provisions to credit RWAs
1.25%, down 5bps over the quarter
•Credit quality improved, stressed assets to TCE 1.06%, 4bps
lower than Mar-22
•Mortgage 90+ day delinquencies improved – Australia 0.83%
(down 5bps), New Zealand 0.28% (down 2bps)
Funding and liquidity
Capital
Credit quality
•CET1 capital ratio 10.75% at Jun-22 (11.33% at Mar-22) lower
from dividend payment (45 bps), higher risk-weighted assets
(RWA, 42 bps) and higher capital deductions
•RWA up $18.0bn or 3.9% in 3Q22, mostly from higher interest
rate risk in the banking book (IRRBB) RWA
•Pro forma
1
CET1 capital ratio 11.00%
•Funding and liquidity strong. LCR 130% and NSFR 123%
•Deposit to loan ratio 83.1%, compared to 83.5% at Mar-22
2Westpac Group 3Q22 Capital, Credit Quality and Funding Update
1 Reflecting divestments of Westpac Life Insurance, 17bps, (completed 1 August 2022) and Superannuation and Advance Asset Management Limited (AAML) businesses, 8bps, (sales have been announced but are not yet completed).

11.33
0.29
10.75
0.2511.00
(0.45)
(0.42)
Mar-221H22
dividend
RWAOtherJun-22Asset
sales
Pro forma
Jun-22
See details on
following page
CET1 capital ratio 10.75%, pro forma
1
11.00%.
3
Capital
Westpac Group 3Q22 Capital, Credit Quality and Funding Update
Level 2 CET1 capital ratio movements (%)
3Q22 cash earnings partly offset by higher
deductions for capitalised software and
other regulatory deductions
1 Reflecting divestments of Westpac Life Insurance, 17bps, (completed 1 August 2022) and Superannuation and AAML businesses, 8bps, (sales have been announced but are not yet completed).2 The difference between the Level 1 CET1 capital ratio
and Level 2 CET capital ratio is mainly due to APRA’s treatment of the equity investment in Westpac New Zealand Limited under APS111. 3 Internationally comparable methodology aligns with the APRA study titled ‘International Capital Comparison
Study’ dated 13 July 2015.
Key capital ratios (%)
Sep-21Mar-22Jun-22
Level 2 CET1 capital ratio 12.3211.3310.75
Additional Tier 1 capital ratio2.332.082.02
Tier 1 capital ratio14.6513.4112.77
Tier 2 capital ratio4.214.304.40
Total regulatory capital ratio18.8617.7117.17
Risk weighted assets
(RWA)($bn)
437460478
Leverage ratio 5.995.605.35
Level 1 CET1 capital ratio
2
12.5911.2310.59
Internationally comparable ratios
3
Leverage ratio
(internationally comparable)
6.66.15.8
CET1 capital ratio
(internationally comparable)
18.217.417.1
1

357.3
359.7
5.1
0.4
0.1362.3
(3.0)
Sep-21Mar-22ExposuresCredit quality and
model changes
FX translationConterparty credit and
mark-to-market risk
Jun-22
0.2
15.8
436.7
460.0
2.6
-
478.0
(0.6)
Sep-21Mar-22Credit
risk
Market
risk
IRRBBOperational
risk
OtherJun-22
Increased risk weighted assets mostly from higher IRRBB RWA.
4
Risk weighted assets (RWA) ($bn)
Movement in credit risk weighted assets ($bn)
Commentary
Capital
Westpac Group 3Q22 Capital, Credit Quality and Funding Update
Up $2.6bn or 0.7%
Up $18.0bn or 3.9%
• RWA up $18.0bn over 3Q22
• IRRBB RWA up $15.8bn (37bps impact on capital) mainly
from a higher regulatory embedded loss from increased
market interest rates. An embedded loss occurs as
Westpac’s equity is invested over a three year investment
horizon compared to the regulatory investment term of one
year
• Credit RWA increased $2.6bn (6bps impact on capital)
mainly from higher exposures across residential
mortgages, specialised lending and corporates
Growth in mortgages, specialised
lending and corporates
Improved credit quality metrics and
model changes across corporate and
business exposures

Impairment provision coverage remains strong.
At Mar 2022At Jun 2022
Forecast period
202220222023
GDP growth5.5%4.0%2.0%
Unemployment3.8%3.3%3.5%
Residential property price
increase/(decrease)
5
1.6%(5.2%)(7.8%)
Forecasts used in base case economic scenario
4
Provisioning
Total impairment provisions
1
($m)Provision coverage
Mar-21Sep-21Mar-22Jun-22
Provisions to credit RWA159bps140bps130bps125bps
Provisions to TCE51bps44bps40bps38bps
IAP to impaired assets47%54%48%51%
5Westpac Group 3Q22 Capital, Credit Quality and Funding Update
412
832
501
521
943
1,131
989
946
1,578
1,606
1,262
1,441
818
791
794
725
171
647
1,136
911
3,922
5,007
4,682
4,544
Sep-19Sep-21Mar-22Jun-22
Overlay Stage 1 CAP
Stage 2 CAP Stage 3 CAP
Stage 3 IAP
1 Includes provisions for debt securities. 2 CAP is Collectively Assessed Provision. 3 IAP is Individually Assessed Provision. 4 Forecast provided by Westpac Economics as at 7 June 2022. GDP and residential property price growth is annual growth to
December each year. Unemployment rate forecast is at year end. 5 Residential house price assumptions used in our modelling are from Westpac Economics but may not be identical to other published data due to timing and rolling averages.
Lower stage 1 and 3
mainly from improved
credit quality metrics
Higher stage 2 reflecting
changes in modelled
economic scenarios
Overlays reduced as some
factors are now reflected in
modelled economic
scenarios
Small increase, mainly in
institutional lending
2
3

Credit quality metrics improved, stressed exposures
down 4bps.
6
1 Facilities 90 days or more past due date not impaired. These facilities, while in default, are not treated as impaired for accounting purposes. 2 Consumer finance includes personal loans, overdrafts, credit cards and auto loans.
Credit quality
Australian consumer finance delinquencies
2
(%)
Westpac Group 3Q22 Capital, Credit Quality and Funding Update
Stressed exposures as a % of TCE
Australian mortgage delinquencies (%)
0.20
0.22
0.150.15
0.14
0.17
0.17
0.20
0.26
0.19
0.19
0.140.14
0.25
0.33
0.34
0.370.39
0.43
0.48
0.50
0.80
0.66
0.68
0.56
0.53
0.54
0.65
0.56
0.570.55
0.50
0.55
0.62
0.85
0.75
0.49
0.40
0.39
0.99
1.20
1.05
1.09
1.08
1.10
1.20
1.32
1.91
1.60
1.36
1.10
1.06
Sep-15Sep-16Sep-17
Mar-18
Sep-18
Mar-19
Sep-19
Mar-20
Sep-20
Mar-21
Sep-21
Mar-22
Jun-22
Watchlist and substandard
90+ day past due and not impaired
1
Impaired
0.83
1.35
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Jun-19Dec-19Jun-20Dec-20Jun-21Dec-21Jun-22
90+ day delinquencies30+ day delinquencies
1.76
3.16
1.0
2.0
3.0
4.0
5.0
6.0
Jun-19Dec-19Jun-20Dec-20Jun-21Dec-21Jun-22
90+ day delinquencies30+ day delinquencies

New Zealand credit quality stable.
Business stressed exposures as a % of New Zealand business TCE
7
Credit quality
Westpac Group 3Q22 Capital, Credit Quality and Funding Update
0.28
0.0
0.1
0.2
0.3
0.4
0.5
0.6
Jun-14
Dec-14
Jun-15
Dec-15
Jun-16
Dec-16
Jun-17
Dec-17
Jun-18
Dec-18
Jun-19
Dec-19
Jun-20
Dec-20
Jun-21
Dec-21
Jun-22
Mortgage 90+ day delinquencies (%)Unsecured consumer 90+ day delinquencies (%)
1.17
0.0
1.0
2.0
3.0
Jun-14
Dec-14
Jun-15
Dec-15
Jun-16
Dec-16
Jun-17
Dec-17
Jun-18
Dec-18
Jun-19
Dec-19
Jun-20
Dec-20
Jun-21
Dec-21
Jun-22
0.8
0.5
0.30.3
0.1
0.3
0.2
0.1
0.1
0.2
0.0
0.1
0.0
0.1
0.1
0.2
0.20.2
2.4
5.0
4.0
3.0
2.9
2.2
1.6
1.5
1.4
3.4
5.5
4.4
3.3
3.1
2.6
2.0
1.8
1.7
Sep-15Sep-16Sep-17Sep-18Sep-19Sep-20Sep-21Mar-22Jun-22
Watchlist & substandard90+ day past due and not impairedImpaired

42
37
32
34
31
35
34
5
38
40
25
18
22
29
FY16FY17FY18FY19FY20FY21FY22
YTD
FY22FY23FY24FY25FY26FY27
>FY27
Funding for Lending Programme (NZ)Term Funding Facility (Aus)Subordinated debt
Senior/SecuritisationHybridCovered bond
Funding and liquidity remain strong.
Funding and liquidity
8
1 Based on residual maturity and FX spot currency translation. Includes all debt issuance with contractual maturity greater than13 months excluding US Commercial Paper and Yankee Certificates of Deposit. Contractual maturity date for hybrids and
callable subordinated instruments is the first scheduled conversion date or call date for the purposes of this disclosure. Perpetual sub-debt has been included in >FY27 maturity bucket. Maturities exclude securitisation amortisation. 2 Year to date to 30
June 2022. 3Data excludes Funding for Lending Programme.
Key funding and liquidity measures
Westpac Group 3Q22 Capital, Credit Quality and Funding Update
Term debt issuance and maturity profile
1
($bn)
IssuanceMaturities
Term issuance to 30 June 2022
3
(%)
remaining
129
137
130
Sep-21Mar-22Jun-22
81.6
83.5
83.1
Sep-21Mar-22Jun-22
Customer deposits to net loans ratio (%)
Quarterly average
125
125
123
Sep-21Mar-22Jun-22
Net stable funding ratio (%)Liquidity coverage ratio (%)
Regulatory
requirement
100%
56
28
6
10
Senior bonds
Covered bonds
Securitisation
Tier 2 capital
2

For all shareholding enquiries relating to:
•Address details and communication preferences
•Updating bank account details, and participation in the dividend
reinvestment plan
Investor Relations ContactShare Registry Contact
For all matters relating to Westpac’s strategy,
performance and results
9
Contact us.
Andrew Bowden
General Manager Investor Relations
Louise Coughlan
Head of Ratings Agencies and Analysis
Arthur Petratos
Manager, Shareholder Services
Rebecca Plackett
Director, Corporate Reporting and ESG
Andrea Jaehne
Director, Ratings Agencies and Analysis
Jacqueline Boddy
Head of Debt Investor Relations
Contact us
westpac@linkmarketservices.com.au
investorcentre.linkmarketservices.com.au
1800 804 255
investorrelations@westpac.com.au
westpac.com.au/investorcentre
+61 2 8253 3143
Investor Relations Team.
James Wibberley
Senior Analyst Investor Relations
Westpac Group 3Q22 Capital, Credit Quality and Funding Update

Disclaimer.
The material contained in this presentation is intended to be general background information on Westpac Banking Corporation (Westpac) and its activities.
The information is supplied in summary form and is therefore not necessarily complete. It is not intended that it be relied uponas advice to investors or potential investors, who should consider
seeking independent professional advice depending upon their specific investment objectives, financial situation or particular needs. The material contained in this presentation may include
information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the
information.
All amounts are in Australian dollars unless otherwise indicated.
Unless otherwise noted, financial information in this presentation is presented on a cash earnings basis. Cash earnings is a non-GAAP measure. Refer to Westpac’s 2022 Interim Financial Results
(incorporating the requirements of Appendix 4D) for the six months ended 31 March 2022 available at www.westpac.com.au for details of the basis of preparation of cash earnings. Refer to
Westpac’s 2022 Interim Financial Results Presentation and Investor Discussion Pack for an explanation of cash earnings and a reconciliation of reported net profit to cash earnings.
This presentation contains statements that constitute “forward-looking statements” within the meaning of Section 21E of the US Securities Exchange Act of 1934. Forward-looking statements are
statements about matters that are not historical facts. Forward-looking statements appear in a number ofplaces in this presentation and include statements regarding our intent, belief or current
expectations with respect to our business and operations, macro and micro economic and market conditions, results of operations and financial condition, including, without limitation, future loan
loss provisions, financial support to certain borrowers, indicative drivers, forecasted economic indicators and performance metric outcomes.
We use words such as ‘will’, ‘may’, ‘expect’, ‘indicative’, ‘intend’, ‘seek’, ‘would’, ‘should’, ‘could’, ‘continue’, ‘plan’,‘estimate’, ‘anticipate’, ‘believe’, ‘probability’, ‘risk’, ‘aim’, ‘outlook’, ‘forecast’ or
other similar words to identify forward-looking statements. These forward-looking statements reflect our current views with respect to future events and are subject to change, certain risks,
uncertainties and assumptions which are, in many instances, beyond our control, and have been made based upon management’s expectations and beliefs concerning future developments and
their potential effect upon us. There can be no assurance that future developments will be in accordance with our expectations or that the effect of future developments on us will be those
anticipated. Actual results could differ materially from those which we expect, depending on the outcome of various factors. Factors that may impact on the forward-looking statements made
include, but are not limited to, those described in the section titled ‘Risk factors' in Westpac’s 2022 Interim Financial Result s (incorporating the requirements of Appendix 4D) for the six months
ended 31 March 2022 available at www.westpac.com.au. When relying on forward-looking statements to make decisions with respect to us, investors and others should carefully consider such
factors and other uncertainties and events. Except as required by law, we assume no obligation to update any forward-looking statements contained in this presentation, whether as a result of new
information, future events or otherwise, after the date of this presentation.
Disclaimer
10
Westpac Group 3Q22 Capital, Credit Quality and Funding Update