Westpac 2023 Interim Results email to shareholders

ASX
Release


8 May 2023

Westpac 2023 Interim Financial Results email to shareholders

Westpac Banking Corporation (“Westpac”) today provides the attached 2023 Interim
Financial Results email to shareholders.









For further information:

Hayden Cooper Justin McCarthy
Group Head of Media Relations General Manager, Investor Relations
0402 393 619 0422 800 321


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



Level 18, 275 Kent Street
Sydney, NSW, 2000

8 MAY 2023

FINANCIAL HIGHLIGHTS

$4,001m
Net profit
1
, up 22% on 1H22

11.3%
ROTE, up 205 bps on 1H22

70 cents
Dividend per share, fully franked
up 15% on 1H22

12.3%
CET1 capital ratio, up 95 bps on 1H22

GOOD RESULT: WELL POSITIONED FOR THE FUTURE
Peter King, Chief Executive Officer
1H23 result overview
Our first half result reflects the progress we’ve made in becoming a simpler, stronger bank.
Disciplined cost and margin management has lifted our return on equity and allowed us to increase
dividends to 70 cents per share.
We’ve grown in a disciplined way in mortgages, performed well in business and institutional
banking and stayed the course on risk management and simplification.
We’ve further strengthened our balance sheet with a CET1 ratio of 12.3% and funding and liquidity
ratios well above regulatory requirements. Our credit quality remains sound with little change in
the level of stressed assets, however we boosted credit impairment provisions this half reflecting
the forecast tougher economic outlook.
Our balance sheet strength sees us well positioned to support customers to grow and navigate
any future economic challenges. Many customers are adjusting to repayment increases and we’re
ready to help those who need time to transition
New strategic phase
We’re now entering a new strategic phase, repositioning the Group’s priorities to focus on the
future. This includes placing customer care at the heart, being easy to do business with, providing
expert solutions and tools, and advocating for positive change.

This half we’ve completed the exit of another two businesses, we’ve recently opened our 50th co-
located branch and we’re seeing the benefits of our investment in risk management as we continue
our Customer Outcomes and Risk Excellence (CORE) program.
The progress we have made sees us in a position to increase our growth aspirations over time in
key markets such as business lending, while managing downside economic scenarios.
Despite high inflation and continued regulatory demands, we’ve reduced our cost base further and
brought our expense to income ratio down to 45.9%. This is a good achievement and reflects more
than $1 billion in savings since commencing our Cost Reset program. In future, we’ll shift our focus
from an absolute expense target to improving the expense to income ratio relative to peers. We’re
making this change due to expected continuing inflation pressure, ongoing and new risk and
regulatory requirements, and our focus on growth.
Outlook
It’s been one year since the RBA announced the first rate rise of the current tightening cycle. This
has been difficult for many customers and more are calling us to discuss their situation. The bank
is in a good position to help.
At a macro level, our loan portfolios remain healthy. Most mortgage customers are ahead on
repayments. Offset balances were little changed and mortgage delinquency levels are low.
Interest rates are now closer to their forecast peak, but we are focused on how long they stay high
and what this means for household budgets and discretionary spending. We expect to see more
stress in the period ahead, particularly in small business.
While the Australian economy remains resilient with low unemployment and high population
growth, it is expected to slow over the remainder of 2023. Credit growth – both housing and
business – will ease. Intense mortgage competition is expected to negatively impact industry and
Westpac’s margins in the next half.
Westpac enters this environment from a position of strength. We’ve set the balance sheet for the
tougher outlook. We continue to run the bank conservatively, with the flexibility to support growth
and handle the more challenging conditions.
IMPROVED SHAREHOLDER RETURNS
Dividend

Our strengthened capital position and good
financial performance supported increased
returns to shareholders.

The Board declared an interim dividend of
70 cents per share, fully franked, an increase of
15% or 9 cents on 1H22.

Return on equity

Return on equity was up 205 basis points to
11.3%. Earnings per ordinary share were 114.2
cents, up 26%.

Net tangible assets per share were $17.67, up
3%.
Dividend (cents)

Return on equity (%)





61
64
70
1H222H221H23
9.3
6.9
11.3
1H222H221H23

2023 interim dividend

• 70 cents per ordinary share, fully franked

• To be paid on 27 June 2023 to shareholders on the register at the record date of
12 May 2023

• The Dividend Reinvestment Plan (DRP) will be neutralised. An equivalent number of
shares are expected to be purchased on market to offset the shares transferred under the
DRP
• No discount will be offered to shareholders who elect to participate in the DRP

• Shareholders resident in, and whose address on the register is in Australia or New
Zealand who wish to update their DRP election, must do so before 5.00pm
(Sydney time) on 15 May 2023

Visit our Investor Centre for DRP terms and conditions and to update your election




More information

Visit our Investor Centre for more on our 2023 interim results, including our webcast
presentation.

For information on your shareholding, including dividends, visit Link’s Investor Centre.
Alternatively, contact Link via email at westpac@linkmarketservices.com.au or telephone on 1800
804 255 (free in Australia).


Yours sincerely,


Westpac Investor Relations team


1. Also referred to as statutory profit, net profit attributable to owners of WBC or net profit after
tax.



This communication does not constitute an offer to sell, or the solicitation of an offer to buy, any securities
in the United States or to persons acting for the account or benefit of persons in the United States. The
shares to be issued in respect of the dividend reinvestment plan referred to in this communication have
not been and will not be registered under the Securities Act of 1933 (the 'Securities Act') or the securities
laws of any state or other jurisdiction in the United States. Accordingly, the shares may not be offered or
sold to persons in the United States or to persons who are acting for the account or benefit of a person in
the United States, unless they have been registered under the Securities Act or are offered and sold in a
transaction exempt from, or not subject to, the registration requirements of the Securities Act and
applicable U.S. state securities laws.

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