Strategy Update – Westpac Institutional Bank

ASX
Release


14 September 2023

Strategy Update – Westpac Institutional Bank

Westpac Banking Corporation (“Westpac”) today provides the attached 2023 Strategy
Update – Westpac Institutional Bank









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

Strategy Update
Westpac Institutional Bank
September 2023
WESTPAC BANKING CORPORATION ABN 33 007 457 141

Anthony Miller
Group Executive WIB, Business & Wealth

Gaining momentum in our institutional bank
3
44%
35%
21%
CIBFMGTS
WIB Revenue split 1H23
Improved financial performance
Our ambition: To be the banking partner of choice
• Our clients’ key partner for transactional banking, financing and risk
management
• Simplified product and service offering
• Significantly improved risk culture
• Industry expertise and thought leadership
• Attracting and retaining talent
1.2
1.2
1.1
1.4
1.1
1.1
1.2
FY20FY21FY221H23
1H2H
Operating income
1,2
($bn)
1 Excluding Notable Items. 2 Operating income includes net interest income and non-interest income.
Westpac Group September 2023 Strategy Update – Westpac Institutional Bank
52.8
62.6
52.7
43.6
FY20FY21FY221H23
3.9
5.9
8.8
13.8
FY20FY21FY221H23
Return on tangible equity
1
(%)
Cost to income ratio
1
(%)

Nell Hutton
Group Executive WIB from 1 October 2023

Westpac Institutional Bank overview
5Westpac Group September 2023 Strategy Update – Westpac Institutional Bank
SustainabilityTechnologyDigital
Data-driven
insights
Economics &
Research
Global
capabilities
Max Bulloch
Risk management across fixed income,
currencies and commodities
Debt capital markets
Financial
Markets
Alastair Welsh
Lending solutions
Relationship management
Deep industry understanding and
expertise
Corporate &
Institutional Banking
Jeff Byrne
Transactional banking
Liquidity management
Payments services for
Westpac
Global Transaction
Services

A strategy for growth and return
PILLARS
CUSTOMER
care at the
heart
EASY
to do business
with
EXPERT
solutions and
tools
ADVOCATE
for positive
change
VALUES
HelpfulEthical
Leading
Change
PerformingSimple
MEASURES
Market positionReturn on tangible equity
FOUNDATIONS
Strong
balance sheet
Proactive Risk Management
and
Risk Culture
Data-informed insights and
decisioning
Passionate
people who
make a difference
PURPOSECreating better futures together
6
Westpac Group September 2023 Strategy Update – Westpac Institutional Bank

Jeff Byrne
Managing Director, Global Transaction Services

32
61
41
74
39
76
CASOHI
FY21FY221H23
99
117
113
FY21FY221H23
Global Transaction Services (GTS)
8
1 Organisational Health Index (OHI). 2 Customer Advocacy Score (CAS). CAS is provided by Fifth Dimension and calculated as a 6-month rolling average. 3 Anti-money laundering (AML).
Westpac Group September 2023 Strategy Update – Westpac Institutional Bank
Deposits ($bn)
•Strengthened AML
3
systems and processes
•Selected correspondent banking and agency services relationships
•Simplified client, product and service offering (exited ~1,000 low value
clients; reduced product suite by ~50%)
OHI
1
and CAS
2
•Efficiency delivered from portfolio simplification
•Sustained deposit growth
•Improving customer advocacy
•Stronger employee engagement
Gaining momentum
Reset the business

GTS: Meeting clients’ needs today
9Westpac Group September 2023 Strategy Update – Westpac Institutional Bank
P a y To for payers delivered; P a y To for Billers on schedule
Global SWIFT ISO upgrade: Phase-1 delivered; Phase-2 on schedule
Westpac Live FX upgrades
Introduced dynamic virtual cards
Launched new deposit product for Superannuation funds

GTS: Ambition to be a leading digital transaction bank
10Westpac Group September 2023 Strategy Update – Westpac Institutional Bank
• Transforming GTS into a leading,
modern, digital transaction bank
• Radically simplifying the
transaction banking user
experience
• Delivering sophisticated, real time
treasury management capabilities
PAYMENT
CAPABILITIES
DEPOSIT
ACCOUNTS
CASH
MANAGEMENT
TOOLS
SINGLE CUSTOMER
INTERFACE
Real-time clearing and
settlement of domestic
and international
payments
Real-time
cash balances,
receipts and
predictive analytics
Advanced liquidity
solutions for more
control
Intuitive interface
& digital servicing
Transformational investment

Alastair Welsh
Managing Director, Corporate & Institutional Banking

68
85
85
FY21FY221H23
FIPSHREEIRC&IOther
4
50
62
58
75
62
75
CASOHI
FY21FY221H23
Corporate & Institutional Banking (CIB)
12
1 Financial Institutions, Public Sector & Health (FIPSH). 2 Real Estate (RE). 3 Energy, Infrastructure & Resources (EIR). 4 Consumer & Industrial (C&I). 5 Source: Westpac research, project websites and IJ Global League Tables at 30 May 2023. 6 Over
two years Mar-21 to Mar-23.
Westpac Group September 2023 Strategy Update – Westpac Institutional Bank
•

#1 greenfield renewable energy financier in Australia
5
• Customer advocacy scoreincreased
• Loan CAGR of 16% while maintaining risk settings
6
• Uplift in banker engagement since FY21 - OHI moved from 4th to 2nd quartile
• ~3,000 employees completed ESG fundamentals training
Loans ($bn)
• Client focus through industry specialisation
• Improving banker productivity
• Managing business end to end
• ESG capability uplift to support clients’ transition journey
• Data insights and research to support clients’ growth aspirations
CAS and OHI
1
2
3
Stronger foundations
Client driven business

10.8
12.0
FY221H23
Exposure to climate change
solutions
1
($bn, TCE
2
)
CIB: Ambition to be the lead relationship bank
13
1 Climate change solutions activities are defined in the Glossary section in our 2022 Sustainability Index and Datasheet. 2 TCE is total committed exposure.
Westpac Group September 2023 Strategy Update – Westpac Institutional Bank
• Enhancing client experience through simplification and digitisation
• Aiming to be within top 2 lending market share while maintaining risk settings
• Growth aligned with soon to be launched Sustainable Finance Taxonomy
• Expanding NZBA targets
• Achieve top quartile employee engagement
Performance measures of future state
• Simplified & digitised processes making client interactions easier
• Deeper relationships through enhanced WIB product offering
• Supportingour bankers to facilitate more time with clients
• ESG fully integrated into banking operations
• Portfolio diversification balancing risk and returns
Future state
Existing clients
Infrastructure and
renewables
To lead in ESG

Max Bulloch
Managing Director, Financial Markets

Financial Markets (FM)
15
1 #1 market share in bonds and semis, #1 market share in OIS, #1 market share in asset-backed bonds, =#2 market share in investment grade corporate bonds, #3 market share in interest rate swaps – 2022 Peter Lee Associates Fixed Income Survey,
ranking against all banks. 2 Peter Lee Associates Interest Rate Derivatives Survey 2006 to 2022. Ranking against four major domestic banks. 3 Joint lead manager (JLM). 4 Semi-government financial year runs from July 2022 to June 2023. 5
KangaNews Fixed Income Trading and Research Poll 2023. 6 2022 Peter Lee Associates Foreign Exchange – Financial Institutions Survey, ranking against all banks.
Westpac Group September 2023 Strategy Update – Westpac Institutional Bank
• JLM
3
on all semi-government green/sustainability bond issuance in past 2 years
• JLM
3
on 16 of 24 semi-government deals, covering 75% of supply
4
• Ranked #1 in five out of six fixed income secondary trading categories
5
• #2 FX market share with Institutional clients and #1 with funds
6

• Technology uplift to streamline the deal process and enhance risk management
• Deeper client relationships through greater external focus
• Alignment across all teams delivering a consistent, competitive and easy client
experience
• Embarked on a technology and data simplification
Most useful analysis of the
economy
Leading position

across a range of fixed income
markets
1
17 years in a row
2
#1
Australian sustainable bond
league table
#2
$A bond league table
(excluding self-led)
Demonstrated capabilities
Client focused business

FM: Ambition to be #1 FM business in Australia and NZ
16
1 As measured by Peter Lee and East & Partners surveys – Corporate Foreign Exchange, Corporate Interest Rate Derivatives, Foreign Exchange – Financial Institutions, Fixed Income.
Westpac Group September 2023 Strategy Update – Westpac Institutional Bank
• Top 2 market share in core products
1
• Top 2 in league tables for A$ and NZ$ bonds
• Improving growth and return
• Strong employee engagement
• Deepening existing client relationships
• Leveraging market leading systematic pricing capability
• Increasing cross border business
• Using data, technology and insights to enhance the client experience
• Partnering with clients on their climate transition journey
54
59
67
71
72
74
CASOHI
FY21FY221H23
CAS and OHI
Business & Consumer
Cross border flows
Carbon & Commodities
Performance measures for the future
A blueprint for moving forward

Nell Hutton
Group Executive WIB from 1 October 2023

Focus on becoming the leading institutional bank
Westpac Group September 2023 Strategy Update – Westpac Institutional Bank18
Improving
returns &
market position
Client focus
Digital
experience
Expertise
Advocate

Appendix
and Disclaimer

Managing Director
Global Transaction Services
Business structure: GTS
20Westpac Group September 2023 Strategy Update – Westpac Institutional Bank
New Zealand
Chief Operating Office
Global Operations Management, Strategic Business
Transformation, Business Controls and Monitoring
Client Engagement
Transactional Banking Sales, Implementation and Client
Service
Digital
Solutions &
Channels
Qvalent Pty
Ltd
Domestic
Payments
Corporate
Cards
Business and Consumer
Institutional
International
Payments
Liquidity
Management

Managing Director
Corporate & Institutional Bank
Business structure: CIB
21Westpac Group September 2023 Strategy Update – Westpac Institutional Bank
Relationship Management and analytical expertise
Chief Operating Office
Global Operations Management
and Strategic Business
Transformation
Business Controls
& Monitoring
Support and guide the business in
driving risk and compliance
priorities
Debt Products
Highly experienced specialist
teams delivering market-leading
capabilities
Financial
Institutions, Public
Sector & Health
Energy,
Infrastructure &
Resources
Real Estate
Consumer &
Industrial

Managing Director
Financial Markets
Fixed Income,
Currencies &
Commodities
Institutional
Client Group
Debt Capital
Markets,
Syndicate &
Solutions
Systematic
Trading, Analytics
& Quants
Corporate,
Business &
Consumer
Solutions
WIB Digital &
Customer
Platforms
Business structure: FM
22Westpac Group September 2023 Strategy Update – Westpac Institutional Bank
Chief Operating Office –Global Operations Management and Strategic Business Transformation

208
98
109
85
Peer 1Peer 2Peer 3WBC
Peer comparison: institutional banking divisions
1
23
Loans: balances at end-1H23 ($bn)
Westpac Group September 2023 Strategy Update – Westpac Institutional Bank
1 Based on segment disclosure of each bank. The segments are not comparable on a like for like basis. The peer comparison provides an overview of relative size.
278
182
138
113
Peer 1Peer 2Peer 3WBC
Deposits: balances at end-1H23 ($bn)
38.6
47.4
36.2
43.6
30
60
90
120
1H202H201H212H211H222H221H23
Peer 1Peer 2Peer 3Westpac
Expense to income ratio (%)
39.9
36.4
43.9
49.7
20.0
30.0
40.0
50.0
60.0
70.0
1H202H201H212H211H222H221H23
Peer 1Peer 2Peer 3Westpac
Non-interest income/ operating income (%)

League tables
1,2
1 Excluding self-led. 2 Source: Bloomberg, KangaNews. 3 Local issuers.
2020202120222023 YTD
A$ bonds4322
NZ$ bonds3333
A$ securitisation2222
Australian sustainable
bonds
3
3611
Manager, ranking according to market share
Westpac Group September 2023 Strategy Update – Westpac Institutional Bank24

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
25
Justin McCarthy
General Manager, Investor Relations
Arthur Petratos
Manager, Shareholder Services
Rebecca Plackett
Head of Corporate Reporting and ESG
Andrea Jaehne
Head of Investor Relations,
Ratings Agencies and Analysis
Jacqueline Boddy
Head of Debt Investor Relations
westpac@linkmarketservices.com.auinvestorrelations@westpac.com.au
investorcentre.linkmarketservices.com.auwestpac.com.au/investorcentre
1800 804 255+61 2 9178 2977
Investor Relations Team
James Wibberley
Manager, Investor Relations
Catherine Garcia
Head of Investor Relations,
Institutional
Nathan Fontyne
Graduate, Investor Relations
Westpac Group September 2023 Strategy Update – Westpac Institutional Bank

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 upon as 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.
The financial information in this presentation is presented in accordance Australian Accounting Standards (AAS) and is also compliant with International Financial Reporting Standards. In First Half 2023, Westpac ceased
reporting cash earnings and cash earnings excluding Notable Items and now uses net profit attributable to owners of Westpac (net profit) as Westpac’s key measure of financial performance. Refer to Westpac’s 2023
Interim Financial Results (incorporating the requirements of Appendix 4D) for the six months ended 31 March 2023 available at www.westpac.com.au in the section “Results Announcement to the market - Introduction” for
details of the presentation changes and non-AAS financial measures.
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 that are not
historical facts. Forward-looking statements appear in a number of places 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, capital adequacy and risk management, including, without limitation, future loan loss provisions and financial support to certain
borrowers, forecasted economic indicators and performance metric outcomes, indicative drivers, climate- and other sustainability-related statements, commitments, targets, projections and metrics, and other estimated
and proxy data.
We use words such as ‘will’, ‘may’, ‘expect’, ‘intend’, ‘seek’, ‘would’, ‘should’, ‘could’, ‘continue’, ‘plan’, ‘estimate’, ‘anticipate’, ‘believe’, ‘probability’, ‘indicative’, ‘risk’, ‘aim’, ‘outlook’, ‘forecast’, ‘f’cast’, ‘f’, ‘assumption’,
‘projection’, ‘target’, ‘goal’, ‘guidance’, ‘ambition’, or other similar words to identify forward-looking statements, or otherwise identify forward-looking statements. These forward-looking statements reflect our current views
on future events and are subject to change, certain known and unknown risks, uncertainties and assumptions and other factors which are, in many instances, beyond our control (and the control of our officers,
employees, agents and advisors), and have been made based on management’s expectations or beliefs concerning future developments and their potential effect upon Westpac. Forward-looking statements may also be
made, verbally or in writing, by members of Westpac’s management or Board in connection with this presentation. Such statements are subject to the same limitations, uncertainties, assumptions and disclaimers set out
in this presentation. There can be no assurance that future developments or performance will align with our expectations or that the effect of future developments on us will be those anticipated. Actual results could differ
materially from those we expect or which are expressed or implied in forward-looking statements, depending on various factors including, but not limited to, those described in the section titled ‘Risk factors' in our 2023
Interim Financial Results (incorporating the requirements of Appendix 4D) for the six months ended 31 March 2023 available at www.westpac.com.au. 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. Except as required by law, we assume no obligation to revise or update any forward-looking statements
contained in this presentation, whether from new information, future events, conditions or otherwise, after the date of this presentation.
26
Westpac Group September 2023 Strategy Update – Westpac Institutional Bank