Westpac Pillar 3 Report (June 2022)

ASX
Release


15 AUGUST 2022

Pillar 3 Report as at 30 June 2022

Westpac Banking Corporation (“Westpac”) today provides the attached Pillar 3
Report (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

Pillar 3 report
Table of contents


2 | Westpac Group June 2022 Pillar 3 Report

Structure of Pillar 3 report

Executive summary 3
Introduction 5
Group structure 6
Capital overview 8
Leverage ratio 12
Credit risk exposures 13
Securitisation 18
Liquidity coverage ratio 21
Appendix
Appendix I | APS330 Quantitative requirements 22
Disclosure regarding forward-looking statements 23



















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

Pillar 3 report
Executive summary


Westpac Group June 2022 Pillar 3 Report | 3
Key capital ratios


Westpac’s Level 2 common equity Tier 1 (CET1) capital ratio was 10.75% at 30 June 2022. The CET1 capital
ratio was lower than the CET1 capital ratio of 11.33% at 31 March 2022 due to payment of the 2022 interim
dividend, an increase in interest rate risk in the banking book (IRRBB) risk weighted assets (RWA) from
increased market interest rates over the quarter, and higher deductions for capitalised software and other
regulatory deductions. These impacts were partly offset by the contribution of earnings over the quarter.

Risk Weighted Assets

Total RWA increased $18.1 billion or 3.9% over the quarter with most of the increase in non-credit risk RWA.
Non-credit risk RWA were $15.5 billion higher mainly from a $15.8 billion increase in IRRBB RWA over the
quarter. The increase in IRRBB RWA has mainly been driven by the regulatory embedded loss from increased
market interest rates. A regulatory embedded loss occurs as Westpac’s equity is invested over a three-year
investment horizon, compared to the regulatory investment term of one year.
The $2.6 billion increase in credit risk RWA included:
• A $5.1 billion increase from higher lending across residential mortgages, specialised lending and
corporates;
• A $0.4 billion increase for foreign currency translation impacts mostly from the depreciation of the
Australian dollar against the United States dollar;
• A $0.1 billion increase associated with derivative exposures (counterparty credit risk and mark-to-market
related credit risk); partly offset by
• A $3.0 billion decrease from improved credit quality metrics and model changes across corporate and
business lending.

Additional Tier 1 Capital movements for third quarter 2022
On 21 June 2022 Westpac offered a new Additional Tier 1 Capital instrument, Westpac Capital Notes 9 (WCN
9). Westpac also announced that it would redeem $1.31 billion of Westpac Capital Notes 2 (WCN 2) on 23
September 2022. Under the offer, eligible holders of WCN 2 had the opportunity to reinvest their WCN 2 in
WCN 9. At 30 June 2022 the offer had not been completed and had no impact on the Group’s capital ratios.
On 20 July 2022, Westpac issued $1.51 billion of WCN 9. The net impact of the issue of WCN 9 and
redemption of WCN 2 is expected to add around 4 basis points to the Tier 1 capital ratio at 30 September
2022.

Tier 2 Capital movements for third quarter 2022
During the quarter, Westpac issued JPY 26 billion (approximately A$0.3 billion) of Tier 2 capital instruments
which increased the total regulatory capital ratio by 6bps.


%30 June 202231 March 202230 June 2021
Level 2 Regulatory capital structure
Common equity Tier 1 capital ratio 10.75 11.33 12.05
Additional Tier 1 capital ratio 2.02 2.08 2.16
Tier 1 capital ratio 12.77 13.41 14.21
Tier 2 capital ratio4.40 4.30 4.19
Total regulatory capital ratio 17.17 17.71 18.40
APRA leverage ratio 5.35 5.60 5.92
Level 1 Common equity Tier 1 capital ratio 10.59 11.23 12.19
$m30 June 202231 March 202230 June 2021
Risk weighted assets at Level 2
Credit risk362,279359,673358,249
Market risk9,8379,5966,642
Operational risk57,87557,87554,090
Interest rate risk in the banking book43,49827,71012,155
Other 4,5405,1026,263
Total RWA478,029459,956437,399
Total Exposure at Default1,212,7751,183,8121,129,830

Pillar 3 report
Executive summary


4 | Westpac Group June 2022 Pillar 3 Report
Exposure at Default
Exposure at default (EAD) increased $29.0 billion over the quarter primarily due to:
• A $10.2 billion increase in sovereign exposures due to an increase in liquid assets;
• A $8.5 billion increase in corporate exposures mainly from an increase in market-related off-balance
sheet exposures; and
• A $5.1 billion increase from residential mortgages.

Leverage Ratio
The leverage ratio represents the amount of Tier 1 capital relative to exposure
1
. At 30 June 2022,
Westpac’s leverage ratio was 5.35%, down 25 basis points since 31 March 2022. The decrease in the
leverage ratio reflected higher balance sheet exposures and lower Tier 1 capital as a result of payment of
the 2022 interim dividend.

Liquidity Coverage Ratio (LCR)
Westpac’s average LCR for the quarter ending 30 June 2022 was 130% (31 March 2022: 137%)
2
and
continues to be comfortably above the regulatory minimum of 100%. The LCR decrease was mainly driven
by a second reduction to Westpac’s allocation of the Committed Liquidity Facility (CLF).



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

Pillar 3 report
Introduction


Westpac Group June 2022 Pillar 3 Report | 5
Westpac Banking Corporation is an Authorised Deposit-taking Institution (ADI) subject to regulation by APRA.
APRA has accredited Westpac to apply advanced models permitted by the Basel III global capital adequacy
regime to the measurement of its regulatory capital requirements. Westpac uses the Advanced Internal
Ratings-Based approach (Advanced IRB) for credit risk and the Standardised Measurement Approach (SMA)
for operational risk
1
.
In accordance with APS330 Public Disclosure, financial institutions that have received the Advanced IRB
accreditation, including Westpac, are required to disclose prudential information about their risk management
practices on a semi-annual basis. A subset of this information must be disclosed quarterly.
In addition to this report, the regulatory disclosures section of the Westpac website
2
contains the reporting
requirements for:
• Capital instruments under Attachment B of APS330; and
• The identification of potential Global-Systemically Important Banks (G-SIB) under Attachment H of
APS330 (disclosed annually).
Capital instruments disclosures are updated when:
• A new capital instrument is issued that will form part of regulatory capital; or
• A capital instrument is redeemed, converted into CET1 capital, written off, or its terms and conditions are
changed.





1
From 1 January 2022, Westpac has adopted the Standardised Measurement Approach (SMA) to Operational Risk Capital as
permitted by Prudential Standard APS115 Capital Adequacy: Standardised Measurement Approach to Operational Risk.
2
http://www.westpac.com.au/about-westpac/investor-centre/financial-information/regulatory-disclosures/

Pillar 3 report
Group structure


6 | Westpac Group June 2022 Pillar 3 Report
APRA applies a tiered approach to measuring Westpac’s capital adequacy
1
by assessing financial strength
at three levels:
• Level 1, comprising Westpac Banking Corporation and its subsidiary entities that have been approved
by APRA as being part of a single ‘Extended Licensed Entity’ (ELE) for the purposes of measuring capital
adequacy;
• Level 2, the consolidation of Westpac Banking Corporation and all its subsidiary entities except those
entities specifically excluded by APRA regulations. The head of the Level 2 group is Westpac Banking
Corporation; and
• Level 3, the consolidation of Westpac Banking Corporation and all its subsidiary entities.
Unless otherwise specified, all quantitative disclosures in this report refer to the prudential assessment of
Westpac’s financial strength on a Level 2 basis
2
.
The Westpac Group
The following diagram shows the Level 3 conglomerate group and illustrates the different tiers of regulatory
consolidation.


Accounting consolidation
3

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

1
APS110 Capital Adequacy outlines the overall framework adopted by APRA for the purpose of assessing the capital adequacy
of an ADI.
2
Impaired assets and provisions held in Level 3 entities are excluded from the tables in this report.
3
Refer to Note 30 of Westpac’s 2021 Annual Report for further details.
Level 1 Consolidation
Level 2 Consolidation
Level 3 Consolidation
Regulatory
non-consolidated
subsidiaries
Westpac
New Zealand Ltd
Other Westpac Level 2
subsidiaries
Westpac Banking
Corporation
Westpac Level 1
subsidiaries

Pillar 3 report
Group structure


Westpac Group June 2022 Pillar 3 Report | 7
Subsidiary banking entities
Westpac New Zealand Limited (WNZL), a wholly owned subsidiary entity, is a registered bank incorporated
in New Zealand and regulated by the Reserve Bank of New Zealand (RBNZ). WNZL uses the Advanced
IRB approach for credit risk and the Advanced Measurement Approach (AMA) for operational risk. Other
subsidiary banking entities in the Group include Westpac Bank PNG-Limited and Westpac Europe Limited.
For the purposes of determining Westpac’s capital adequacy subsidiary banking entities are consolidated at
Level 2.
Restrictions and major impediments on the transfer of funds or regulatory capital within the Group
Minimum capital (‘thin capitalisation’) rules
Tax legislation in most jurisdictions in which the Group operates prescribes minimum levels of capital that
must be retained in that jurisdiction to avoid a portion of the interest costs incurred in the jurisdiction ceasing
to be tax deductible. Capital for these purposes includes both contributed capital and non-distributed
retained earnings. Westpac seeks to maintain sufficient capital/retained earnings to comply with these rules.
Tax costs associated with repatriation
Repatriation of retained earnings (and capital) may result in tax being payable in either the jurisdiction from
which the repatriation occurs or Australia on receipt of the relevant amounts. This cost would reduce the
amount actually repatriated.
Intra-group exposure limits
Exposures to related entities are managed within the prudential limits prescribed by APRA in APS222
Associations with Related Entities
1
. Westpac has an internal limit structure and approval process governing
credit exposures to related entities. This limit structure and approval process, combined with APRA’s
prudential limits, is designed to reduce the potential for unacceptable contagion risk.
Prudential regulation of subsidiary entities
On 23 March 2021, the RBNZ issued two notices to WNZL under section 95 of the Reserve Bank of New
Zealand Act 1989 (NZ) requiring WNZL to supply two external reviews to the RBNZ (the Risk Governance
Review and the Liquidity Review). These reviews only apply to WNZL and not to Westpac in Australia or its
New Zealand branch.
The Risk Governance Review related to the effectiveness of WNZL’s risk governance, with a focus on the
role played by the WNZL Board. The Risk Governance Review was completed in November 2021. WNZL
has a programme of work underway to address the issues raised. This is being overseen by the WNZL Board.
The Liquidity Review related to the effectiveness of WNZL’s actions to improve liquidity risk management and
the associated risk culture. The Liquidity Review was completed in May 2022. Recommendations for
improvement arising from the review will be implemented as part of WNZL’s continuous improvement activity.
From 31 March 2021, the RBNZ amended WNZL’s conditions of registration, requiring WNZL to discount the
value of its liquid assets by approximately 14% which at 30 June 2022 was NZ$2.8 billion. From 15 August
2022, the overlay has been reduced to approximately 7%. The remaining overlay will remain in place until the
RBNZ is satisfied that control assurance has been completed.

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

Pillar 3 report
Capital overview


8 | Westpac Group June 2022 Pillar 3 Report
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
1,2
;
• Consideration of regulatory 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.
As part of APRA’s revised capital framework effective from 1 January 2023, APRA has set a Total CET1
Requirement for D-SIBs of 10.25%. This requirement includes a CCB of 4.75% applicable to D-SIBs and a
base level for the countercyclical capital buffer of 1.0%. APRA has also indicated
3
that it expects that D-SIBs
(including Westpac) will likely operate with CET1 above 11% in normal operating conditions under the new
framework. Westpac will seek to operate with a CET1 capital ratio of between 11.0% and 11.5% (operating
capital range) in normal operating conditions as measured under the new capital framework from 1 January
2023.































1
Noting that APRA may apply higher CET1 requirements for an individual ADI.
2
If an ADI’s CET1 ratio falls below the Total CET1 Requirement (at least 8%), it faces restrictions on the distribution of earnings,
such as dividends, distribution payments on AT1 capital instruments and discretionary staff bonuses.
3
APRA Prudential Practice Guide APG 110 Capital Adequacy, July 2022.

Pillar 3 report
Capital overview


Westpac Group June 2022 Pillar 3 Report | 9

Westpac’s capital adequacy ratios


Westpac New Zealand Limited’s capital adequacy ratios



%30 June 202231 March 202230 June 2021
The Westpac Group at Level 2
Common equity Tier 1 capital ratio10.7 11.3 12.0
Additional Tier 1 capital2.0 2.1 2.2
Tier 1 capital ratio12.8 13.4 14.2
Tier 2 capital ratio4.4 4.3 4.2
Total regulatory capital ratio17.2 17.7 18.4
The Westpac Group at Level 1
Common equity Tier 1 capital ratio10.6 11.2 12.2
Additional Tier 1 capital2.2 2.2 2.2
Tier 1 capital ratio12.7 13.4 14.4
Tier 2 capital ratio4.7 4.7 4.3
Total regulatory capital ratio17.5 18.1 18.7
%30 June 202231 March 202230 June 2021
Common equity Tier 1 capital ratio11.5 11.3 13.9
Additional Tier 1 capital2.0 2.0 2.8
Tier 1 capital ratio13.5 13.3 16.7
Tier 2 capital ratio1.2 1.2 2.1
Total regulatory capital ratio14.8 14.5 18.8

Pillar 3 report
Capital overview


10 | Westpac Group June 2022 Pillar 3 Report
Capital requirements
This table shows RWA and associated capital requirements
1
for each risk type included in the regulatory
assessment of Westpac’s capital adequacy. More detailed disclosures on the prudential assessment of
capital requirements are presented in the following sections of this report.
123

Total RWA increased $18.1 billion or 3.9% over the quarter with most of the increase in non-credit risk RWA.
Non-credit risk RWA were $15.5 billion higher mainly from a $15.8 billion increase in IRRBB RWA over the
quarter. The increase in IRRBB RWA has mainly been driven by the regulatory embedded loss from increased
market interest rates. A regulatory embedded loss occurs as Westpac’s equity is invested over a three-year
investment horizon, compared to the regulatory investment term of one year.




1
Total capital required is calculated as 8% of total risk weighted assets.
2
Westpac’s standardised risk weighted assets are categorised based on their equivalent IRB categories.
3
Mark-to-market related credit risk is measured under the standardised approach. It is also known as Credit Valuation
Adjustment (CVA) risk.
4
Other assets include cash items, unsettled transactions, fixed assets and other non-interest earning assets.
30 June 2022IRBStandardisedTotal Risk Total Capital
$mApproach
Approach
2
Weighted Assets
Required
1
Credit risk
Corporate70,238 841 71,079 5,686.3
Business lending31,732 726 32,458 2,597
Sovereign2,389 1,658 4,047 324
Bank5,089 104 5,193 415
Residential mortgages147,721 3,069 150,790 12,063
Australian credit cards3,944 - 3,944 316
Other retail7,296 744 8,040 643
Small business14,128 - 14,128 1,130
Specialised lending59,453 395 59,848 4,788
Securitisation6,883 - 6,883 551
Mark-to-market related credit risk
3
5,869 5,869 470
Total348,873 13,406 362,279 28,983
Market risk9,837 787
Operational risk57,875 4,630
Interest rate risk in the banking book43,498 3,480
Other assets
4
4,540
363
Total478,029 38,243
31 March 2022IRBStandardisedTotal Risk Total Capital
$mApproach
Approach
2
Weighted Assets
Required
1
Credit risk
Corporate69,391 870 70,261 5,621
Business lending32,686 687 33,373 2,670
Sovereign2,270 1,393 3,663 293
Bank4,960 91 5,051 404
Residential mortgages146,448 3,276 149,724 11,978
Australian credit cards3,951 - 3,951 316
Other retail7,785 753 8,538 683
Small business14,401 - 14,401 1,152
Specialised lending58,334 380 58,714 4,697
Securitisation6,306 - 6,306 504
Mark-to-market related credit risk
3
- 5,691 5,691 455
Total346,532 13,141 359,673 28,773
Market risk9,596 768
Operational risk57,875 4,630
Interest rate risk in the banking book27,710 2,217
Other assets
4
5,102
408
Total459,956 36,796

Pillar 3 report
Capital overview


Westpac Group June 2022 Pillar 3 Report | 11

1234




1
Total capital required is calculated as 8% of total risk weighted assets.
2
Westpac’s standardised risk weighted assets are categorised based on their equivalent IRB categories.
3
Mark-to-market related credit risk is measured under the standardised approach. It is also known as CVA risk.
4
Other assets include cash items, unsettled transactions, fixed assets, and other non-interest earning assets.
30 June 2021IRBStandardisedTotal Risk Total Capital
$mApproach
Approach
2
Weighted Assets
Required
1
Credit risk
Corporate68,028 849
68,877
5,510
Business lending33,528 783
34,311
2,745
Sovereign2,576 1,232
3,808
305
Bank5,264 120
5,384
431
Residential mortgages143,834 3,934
147,768
11,822
Australian credit cards4,171 -
4,171
334
Other retail8,844 772
9,616
769
Small business16,160 -
16,160
1,293
Specialised lending55,769 377
56,146
4,492
Securitisation5,801 -
5,801
464
Mark-to-market related credit risk
3
- 6,207 6,207 497
Total343,975 14,274 358,249 28,662
Market risk6,642 531
Operational risk54,090 4,327
Interest rate risk in the banking book12,155 972
Other assets
4
6,263
501
Total437,399 34,993

Pillar 3 report
Leverage ratio disclosure


12 | Westpac Group June 2022 Pillar 3 Report
Leverage ratio
The following table summarises Westpac’s leverage ratio. This has been determined using APRA’s definition
of the leverage ratio as specified in APS110 Capital Adequacy.
$ billion30 June 202231 March 202231 December 202130 September 2021
Tier 1 Capital61.1 61.7 63.6 64.0
Total Exposures1,140.4 1,101.4 1,096.7 1,068.3
Leverage ratio5.4%5.6%5.8%6.0%

Pillar 3 report
Credit risk exposures


Westpac Group June 2022 Pillar 3 Report | 13
Summary credit risk disclosure123
Prior period restatement of sovereign EAD
Westpac has restated prior period sovereign EAD. This has arisen due to changes in the calculation of EAD
for collateral posted with central banks. The change relates to a reclassification of the collateral posted
which receives a different treatment under APRA Prudential Standard 112. The restatement increases
sovereign EAD for prior periods and has been corrected for 30 June 2022. It does not have a material
impact on RWA, or capital ratios and no other metrics have been impacted. The EAD for March 2022,
September 2021 and June 2021 below includes the correct approach.




1
Westpac continues to apply a floor of 25% to its residential mortgage portfolio risk weight.
2
Includes regulatory expected losses for defaulted and non-defaulted exposures.
3
March 2022 and June 2021 Sovereign EAD have been restated.
4
Includes mark-to-market related credit risk.

Exposure
at Default
$m
Sovereign
199,457 176,238 161,510 219,219 195,341 180,886
RestatedPreviously reported
31 March
2022
30 September
2021
30 June
2021
31 March
2022
30 September
2021
30 June
2021
Regulatory
ExpectedSpecificActual
RiskRegulatoryLoss forProvisions Losses for
30 June 2022ExposureWeightedExpectednon-defaultedImpairedfor Impairedthe 9 months
$mat Default
Assets
1
Loss
2
exposuresLoansLoansended
Corporate
139,009 70,238 854 322 313 243 303
Business lending54,163 31,732 595 333 320 149 65
Sovereign
3
229,423 2,389 2 2 ---
Bank22,191 5,089 6 6 ---
Residential mortgages590,902 147,721 1,551 1,112 214 64 29
Australian credit cards15,170 3,944 168 129 63 35 78
Other retail9,634 7,296 335 217 217 115 61
Small business28,990 14,128 454 284 315 149 22
Specialised lending72,261 59,453 884 556 76 17 -
Securitisation36,187 6,883 -----
Standardised
4
14,845 13,406 --99 45 -
Total1,212,775 362,279 4,849 2,961 1,617 817 558
Regulatory
ExpectedSpecificActual
RiskRegulatoryLoss forProvisions Losses for
31 March 2022ExposureWeightedExpectednon-defaultedImpairedfor Impairedthe 6 months
$mat Default
Assets
1
Loss
2
exposuresLoansLoansended
Corporate130,511 69,391 839 331 290 208 303
Business lending53,364 32,686 621 350 333 150 34
Sovereign
3
219,219 2,270 2 2 ---
Bank21,257 4,960 6 6 ---
Residential mortgages585,810 146,448 1,615 1,139 226 65 28
Australian credit cards15,193 3,951 169 133 59 33 50
Other retail10,312 7,785 352 232 217 116 36
Small business29,653 14,401 472 297 348 167 14
Specialised lending70,851 58,334 871 545 88 19 (1)
Securitisation33,366 6,306 -----
Standardised
4
14,276 13,141 --92 36 -
Total1,183,812 359,673 4,947 3,035 1,653 794 464

Pillar 3 report
Credit risk exposures


14 | Westpac Group June 2022 Pillar 3 Report
12

1
Includes regulatory expected losses for defaulted and non-defaulted exposures.
2
March 2022 and June 2021 Sovereign EAD have been restated.
3
Includes mark-to-market related credit risk.

Regulatory
ExpectedSpecificActual
RiskRegulatoryLoss forProvisions Losses for
30 June 2021ExposureWeightedExpectednon-defaultedImpairedfor Impairedthe 9 months
$mat DefaultAssets
Loss
1
exposuresLoansLoansended
Corporate127,472 68,028 961 418 675 539 56
Business lending52,922 33,528 680 401 343 179 40
Sovereign
2
180,886 2,576 2 2 ---
Bank21,780 5,264 6 6 ---
Residential mortgages575,339 143,834 1,842 1,103 276 81 54
Australian credit cards16,048 4,171 186 140 76 47 107
Other retail12,130 8,844 420 279 246 141 116
Small business31,658 16,160 579 369 495 207 37
Specialised lending65,995 55,769 877 580 60 16 1
Securitisation29,641 5,801 -----
Standardised
3
15,959 14,274 --68 22 -
Total1,129,830 358,249 5,553 3,298 2,239 1,232 411

Pillar 3 report
Credit risk exposures


Westpac Group June 2022 Pillar 3 Report | 15
Exposure at Default by major type
123







1
Average is based on exposures as at 30 June 2022 and 31 March 2022.
2
March 2022 and June 2021 Sovereign EAD have been restated.
3
The EAD associated with securitisations is for the banking book only.
4
Average is based on exposures as at 31 March 2022, 31 December 2021 and 30 September 2021.
5
Average is based on exposures as at 30 June 2021 and 31 March 2021.
30 June 2022
On balance
Total ExposureAverage
$msheet Non-market relatedMarket relatedat Default
3 months ended
1
Corporate59,748 59,602 19,659 139,009 134,759
Business lending40,659 13,504 -54,163 53,764
Sovereign
2
173,433 1,877 54,113 229,423 214,439
Bank11,342 1,484 9,365 22,191 21,724
Residential mortgages510,792 80,110 -590,902 588,355
Australian credit cards6,216 8,954 -15,170 15,182
Other retail7,045 2,589 -9,634 9,973
Small business22,230 6,760 -28,990 29,322
Specialised lending58,541 13,207 513 72,261 71,556
Securitisation
3
28,181 7,957 49 36,187 34,777
Standardised11,256 989 2,600 14,845 14,561
Total929,443 197,033 86,299 1,212,775 1,188,412
31 March 2022On balanceTotal ExposureAverage
$msheet Non-market relatedMarket relatedat Default
6 months ended
4
Corporate58,276 58,479 13,756 130,511 130,588
Business lending39,268 14,096 -53,364 52,938
Sovereign
2
159,656 1,802 57,761 219,219 192,393
Bank12,134 1,663 7,460 21,257 21,040
Residential mortgages507,070 78,740 -585,810 584,480
Australian credit cards6,097 9,096 -15,193 15,331
Other retail7,596 2,716 -10,312 10,958
Small business22,587 7,066 -29,653 30,254
Specialised lending57,146 12,933 772 70,851 68,777
Securitisation
3
24,743 8,556 67 33,366 31,704
Standardised10,939 1,013 2,324 14,276 15,642
Total905,512 196,160 82,140 1,183,812 1,154,105
30 June 2021On balanceTotal ExposureAverage
$msheet Non-market relatedMarket relatedat Default
3 months ended
5
Corporate52,560 61,160 13,752 127,472 126,020
Business lending39,659 13,263 -52,922 52,987
Sovereign
2
124,106 1,435 55,345 180,886 152,374
Bank12,956 1,949 6,875 21,780 22,592
Residential mortgages496,954 78,385 -575,339 569,069
Australian credit cards6,564 9,484 -16,048 16,254
Other retail9,124 3,006 -12,130 12,355
Small business24,680 6,978 -31,658 31,800
Specialised lending53,087 11,370 1,538 65,995 65,431
Securitisation
3
21,775 7,764 102 29,641 28,970
Standardised12,373 1,060 2,526 15,959 15,630
Total853,838 195,854 80,138 1,129,830 1,093,482
Off-balance sheet
Off-balance sheet
Off-balance sheet

Pillar 3 report
Credit risk exposures


16 | Westpac Group June 2022 Pillar 3 Report
Loan impairment provisions
All Individually Assessed Provisions (IAPs) raised under Australian Accounting Standards (AAS) are
classified as specific provisions in accordance with APS 220 Credit Risk Management. All Collectively
Assessed Provisions (CAPs) raised under AAS are either classified into specific provisions or a General
Reserve for Credit Loss (GRCL).
1



1
Provisions classified according to APRA’s letter dated 4 July 2017 “Provisions for regulatory purposes and AASB 9 financial
instruments”.
30 June 2022Total Regulatory
$mIAPsCAPs Provisions
Specific Provisions
for impaired loans521 296 817
for defaulted but not impaired loans-650 650
for Stage 2-1,990 1,990
Total Specific Provision
1
521 2,936 3,457
General Reserve for Credit Loss
1
-1,087 1,087
Total provisions for expected credit losses521 4,023 4,544
31 March 2022Total Regulatory
$mIAPsCAPs Provisions
Specific Provisions
for impaired loans501 293 794
for defaulted but not impaired loans-696 696
for Stage 2-1,914 1,914
Total Specific Provision
1
501 2,903 3,404
General Reserve for Credit Loss
1
-1,278 1,278
Total provisions for expected credit losses501 4,181 4,682
30 June 2021Total Regulatory
$mIAPsCAPs Provisions
Specific Provisions
for impaired loans868 364 1,232
for defaulted but not impaired loans-908 908
for Stage 2-1,895 1,895
Total Specific Provision
1
868 3,167 4,035
General Reserve for Credit Loss
1
-1,505 1,505
Total provisions for expected credit losses868 4,672 5,540
A-IFRS Provisions
A-IFRS Provisions
A-IFRS Provisions

Pillar 3 report
Credit risk exposures


Westpac Group June 2022 Pillar 3 Report | 17
Impaired and past due loans
The following tables disclose the crystallisation of credit risk as impairment and loss. Analysis of exposures
defaulted not impaired, impaired loans, related provisions and actual losses is broken down by concentrations
reflecting Westpac’s asset categories.
1 2




1
Includes items past 90 days not impaired.

SpecificSpecific Actual
30 June 2022DefaultedImpairedProvisions forProvisions to Losses for the
$m
not impaired
1
Loans Impaired LoansImpaired Loans9 months ended
Corporate144 313 243 78%303
Business lending971 320 149 47%65
Sovereign-----
Bank-----
Residential mortgages3,991 214 64 30%29
Australian credit cards-63 35 56%78
Other retail-217 115 53%61
Small business502 315 149 47%22
Specialised lending557 76 17 22%-
Securitisation-----
Standardised70 99 45 45%-
Total6,235 1,617 817 51%558
SpecificSpecific Actual
31 March 2022DefaultedImpairedProvisions forProvisions to Losses for the
$m
not impaired
1
Loans Impaired LoansImpaired Loans6 months ended
Corporate218 290 208 72%303
Business lending1,008 333 150 45%34
Sovereign-----
Bank-----
Residential mortgages4,229 226 65 29%28
Australian credit cards-59 33 56%50
Other retail-217 116 53%36
Small business496 348 167 48%14
Specialised lending532 88 19 22%(1)
Securitisation-----
Standardised73 92 36 39%-
Total6,556 1,653 794 48%464
SpecificSpecific Actual
30 June 2021DefaultedImpairedProvisions forProvisions to Losses for the
$m
not impaired
1
Loans Impaired LoansImpaired Loans9 months ended
Corporate175 675 539 80%56
Business lending1,068 343 179 52%40
Sovereign-----
Bank-----
Residential mortgages5,031 276 81 29%54
Australian credit cards-76 47 62%107
Other retail-246 141 57%116
Small business604 495 207 42%37
Specialised lending470 60 16 27%1
Securitisation-----
Standardised74 68 22 32%-
Total7,422 2,239 1,232 55%411

Pillar 3 report
Securitisation


18 | Westpac Group June 2022 Pillar 3 Report
Banking book summary of securitisation activity by asset type


For the 3 months ended
30 June 2022AmountRecognised gain or
$msecuritisedloss on sale
Residential mortgages19,110 -
Credit cards--
Auto and equipment finance--
Business lending--
Investments in ABS--
Other--
Total19,110 -
For the 6 months ended
31 March 2022AmountRecognised gain or
$msecuritisedloss on sale
Residential mortgages23,921 -
Credit cards--
Auto and equipment finance--
Business lending--
Investments in ABS--
Other--
Total23,921 -
For the 3 months ended
30 June 2021AmountRecognised gain or
$msecuritisedloss on sale
Residential mortgages17,952 -
Credit cards--
Auto and equipment finance--
Business lending--
Investments in ABS--
Other--
Total17,952 -

Pillar 3 report
Securitisation


Westpac Group June 2022 Pillar 3 Report | 19
Banking book summary of on and off-balance sheet securitisation by exposure type




30 June 2022Off-balanceTotal Exposure
$mSecuritisation retainedSecuritisation purchasedsheetat Default
Securities-7,383 36 7,419
Liquidity facilities--281 281
Funding facilities4,551 -1,697 6,248
Underwriting facilities----
Lending facilities2,545 -
368
2,913
Warehouse facilities13,703 -5,623 19,326
Total20,799 7,383 8,005 36,187
31 March 2022Off-balanceTotal Exposure
$mSecuritisation retainedSecuritisation purchasedsheetat Default
Securities-7,590 37 7,627
Liquidity facilities--295 295
Funding facilities3,132 -1,868 5,001
Underwriting facilities----
Lending facilities1,930 -
371
2,301
Warehouse facilities12,091 -6,051 18,142
Total17,154 7,590 8,623 33,366
30 June 2021Off-balanceTotal Exposure
$mSecuritisation retainedSecuritisation purchasedsheetat Default
Securities-7,353 37 7,390
Liquidity facilities--271 271
Funding facilities3,029 -1,432 4,461
Underwriting facilities----
Lending facilities686 -
374
1,060
Warehouse facilities10,707 -5,752 16,459
Total14,422 7,353 7,866 29,641
On balance sheet
On balance sheet
On balance sheet

Pillar 3 report
Securitisation


20 | Westpac Group June 2022 Pillar 3 Report
Trading book summary of on and off-balance sheet securitisation by exposure type
1






1
EAD associated with trading book securitisation is not included in EAD by major type on page 13. Trading book securitisation
exposure is captured and risk weighted under APS116 Capital Adequacy: Market Risk.
30 June 2022Off-balanceTotal Exposure
$mSecuritisation retainedSecuritisation purchasedsheetat Default
Securities-518 -518
Liquidity facilities----
Funding facilities----
Underwriting facilities----
Lending facilities----
Warehouse facilities----
Credit enhancements----
Basis swaps--34 34
Other derivatives--15 15
Total-518 49 566
31 March 2022Off-balanceTotal Exposure
$mSecuritisation retainedSecuritisation purchasedsheetat Default
Securities-331 -331
Liquidity facilities----
Funding facilities----
Underwriting facilities----
Lending facilities----
Warehouse facilities----
Credit enhancements----
Basis swaps--50 50
Other derivatives--16 16
Total-331 67 398
30 June 2021Off-balanceTotal Exposure
$mSecuritisation retainedSecuritisation purchasedsheetat Default
Securities----
Liquidity facilities----
Funding facilities----
Underwriting facilities----
Lending facilities----
Warehouse facilities----
Credit enhancements----
Basis swaps--89 89
Other derivatives--12 12
Total--101 101
On balance sheet
On balance sheet
On balance sheet

Pillar 3 report
Liquidity coverage ratio


Westpac Group June 2022 Pillar 3 Report | 21
Liquidity Coverage Ratio (LCR)
Westpac’s average LCR for the quarter was 130% (31 March 2022: 137%) and continues to be comfortably
above the regulatory minimum of 100%. The LCR decrease was mainly driven by a second reduction to
Westpac's allocation of the CLF.
Liquid assets included in the LCR comprise High Quality Liquid Assets (HQLA), the Committed Liquidity
Facility (CLF) offered by the Reserve Bank of Australia and additional qualifying RBNZ securities. In
September 2021, APRA announced it expects ADIs subject to the LCR to reduce their CLF usage to zero by
the end of 2022, subject to financial market conditions. The facility reduction is delivered in four phases, with
the first reduction having occurred on 1 January 2022 and the second on 1 May 2022 (reducing by $9.25
billion on each date).
Westpac’s portfolio of HQLA averaged $161.3 billion over the quarter
1
(31 March 2022: $164.7 billion).
Funding is sourced from retail, small business, corporate and institutional customer deposits and wholesale
funding. Westpac seeks to minimise the outflows associated with this funding by targeting customer deposits
with lower LCR outflow rates and actively manages the maturity profile of its wholesale funding portfolio.
Effective 1 January 2021, the Group is required by APRA to increase the value of its net cash outflows by
10% for the purpose of calculating LCR. The overlay to the Group’s net cash outflows has been required by
APRA in response to breaches of liquidity requirements. A program is underway to address APRA’s
requirements which includes APRA mandated reviews. The results of these reviews have been presented to
APRA for consideration.

1
Calculated as a simple average of the daily observations over the quarter.
Total unweighted
value (average)
1
Total weighted
value (average)
1
Total unweighted
value (average)
1
Total weighted
value (average)
1
Liquid assets, of which:
1High-quality liquid assets (HQLA)161,295 164,706
2Alternative liquid assets (ALA)21,335 27,750
3Reserve Bank of New Zealand (RBNZ) securities1,858 4,640

Cash Outflows
4Retail deposits and deposits from small business
customers, of which:
324,546 28,623 321,457 28,127
5Stable deposits158,523 7,926 156,295 7,815
6Less stable deposits166,023 20,697 165,162 20,312
7Unsecured wholesale funding, of which:173,072 79,152 181,535 79,750
8Operational deposits (all counterparties) and
deposits in networks for cooperative banks
73,920 18,398 84,850 21,117
9Non-operational deposits (all counterparties)88,527 50,129 85,159 47,107
10Unsecured debt10,625 10,625 11,526 11,526
11Secured wholesale funding--
12Additional requirements, of which:204,600 26,750 204,876 26,075
13Outflows related to derivatives exposures and other
collateral requirements
10,178 10,178 8,597 8,597
14Outflows related to loss of funding on debt products548 548 1,145 1,145
15Credit and liquidity facilities193,874 16,024 195,134 16,333
16Other contractual funding obligations5,580 3,090 5,113 3,778
17Other contingent funding obligations40,303 3,363 42,700 3,728
18Total cash outflows140,978 141,458

Cash inflows
19Secured lending (e.g. reverse repos)4,719 -4,543 -
20Inflows from fully performing exposures9,713 5,947 8,476 5,035
21Other cash inflows6,249 6,249 5,251 5,251
22Total cash inflows20,681 12,196 18,270 10,286

23Total liquid assets184,488 197,096
24Total net cash outflows141,660 144,289
24.1 Net cash outflows overlay12,878 13,117
25Liquidity Coverage Ratio (%)130%137%
Number of data points used6262
30 June 2022
$m
31 March 2022

Pillar 3 report
Appendix I | APS330 quantitative requirements


22 | Westpac Group June 2022 Pillar 3 Report
The following table cross-references the quantitative disclosure requirements of APS330 to the quantitative
disclosures made in this report.
APS330 reference
• Westpac disclosure
Page
General Requirements
Paragraph 49 Tier 1 capital, total exposures and leverage ratio 12

Attachment C

Table 3:
Capital Adequacy
(a) to (e)
(f)
Capital requirements
Westpac’s capital adequacy ratios
Capital adequacy ratios of major subsidiary banks
10
9
9

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

15
17
16

Table 5:
Securitisation exposures
(a)

(b)

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

18

19

20

Attachment F

Table 20: Liquidity
Coverage Ratio disclosure
template
Liquidity Coverage Ratio disclosure 21




Exchange rates
The following exchange rates were used in this report and reflect spot rates for the period end.

$30 June 202231 March 202230 September 2021
USD0.6890 0.7481 0.7205
GBP0.5666 0.5704 0.5359
NZD1.1077 1.0760 1.0477
EUR0.6584 0.6704 0.6211

Pillar 3 report
Disclosure regarding forward-looking statements

Westpac Group June 2022 Pillar 3 Report | 23
The information contained in this report 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 Westpac’s intent, belief or current expectations with respect to its business and
operations, macro and micro economic and market conditions, results of operations and financial condition.
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 are used to identify
forward-looking statements. These forward-looking statements reflect Westpac’s current views with respect to future
events and are subject to change, certain risks, uncertainties and assumptions which are, in many instances, beyond
Westpac’s control and have been made based upon management’s expectations and beliefs concerning future
developments and their potential effect upon Westpac. There can be no assurance that future developments will be
in accordance with Westpac’s expectations or that the effect of future developments on Westpac will be those
anticipated. Should one or more of the risks or uncertainties materialise, 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 the Directors’ report included in Westpac’s 2022 Interim Financial Results Announcement, as well as the
ongoing impact of COVID-19. When relying on forward-looking statements to make decisions with respect to
Westpac, investors and others should carefully consider such factors and other uncertainties and events. Westpac
is under no obligation, and does 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.