WBC – NZ Banking Group Disclosure Statement – 30 Sep 2023

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ASX
Release


1 December 2023

Westpac Banking Corporation – New Zealand Banking Group Disclosure
Statement

Westpac Banking Corporation (“Westpac”) today provides the attached Westpac New
Zealand Banking Group Disclosure Statement for the year ended 30 September 2023.










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

Classification: PROTECTED

Classification: PROTECTED

This page has been intentionally left blank

Westpac Banking Corporation - New Zealand Banking Group 3
Contents
Directors’ and the Chief Executive Officer, NZ Branch’s statement
5
Financial statements
Income statement6Note 16 Intangible assets 35
Statement of comprehensive income6Note 17 Deposits and other borrowings
Note 19 Debt issues
36
38
Balance sheet7Note 18 Other financial liabilities37
Statement of changes in equity8Note 19 Debt issues38
Statement of cash flows9Note 20 Provisions39
Note 1 Financial statements preparation10Note 21 Loan capital40
Note 2 Net interest income13Note 22 Related entities42
Note 3 Non-interest income14Note 23 Derivative financial instruments45
Note 4 Operating expenses15Note 24 Fair values of financial assets and financial liabilities51
Note 5 Auditor’s remuneration16Note 25 Offsetting financial assets and financial liabilities
Note 26 Credit related commitments, contingent assets and
contingent liabilities
56
57
Note 6 Impairment charges/(benefits)16
Note 7 Income tax expense17
Note 26 Credit related commitments, contingent assets and
contingent liabilities
57
Note 8 Imputation credit account17Note 27 Segment reporting
Note 28 Securitisation, covered bonds and other transferred
assets
58
60
Note 9 Trading securities and financial assets measured at
FVIS
18
Note 28 Securitisation, covered bonds and other transferred
assets
60
Note 10 Investment securities18Note 29 Structured entities61
Note 11 Loans19Note 30 Capital management63
Note 12 Provision for expected credit losses19
Note 13 Credit risk management27
Note 31 Risk management, funding and liquidity risk and
market risk
64
Note 14 Other financial assets34Note 32 Notes to the statement of cash flows76
Note 15 Deferred tax assets34
Registered bank disclosures
i. General information77
ii. Additional financial disclosures84
iii. Asset quality85
v. Insurance, securitisation, funds management, other
fiduciary activities, and marketing and distribution of
insurance products
88
iv. Credit and market risk exposures and capital adequacy87vi. Risk management policies89
Conditions of registration92
Independent auditor’s report94
Independent assurance report101

Glossary of terms
4 Westpac Banking Corporation - New Zealand Banking Group
Certain information contained in this Disclosure Statement is required by the Registered Bank Disclosure Statements (Overseas Incorporated
Registered Banks) Order 2014 (as amended) (‘Order’).
In this Disclosure Statement, reference is made to five main reporting groups:
–Overseas Bank – refers to Westpac Banking Corporation;
–Overseas Banking Group – refers to the Overseas Bank and all other entities included in the Overseas Bank’s group for the purposes of public
reporting of the group financial statements in Australia;
–NZ Branch – refers to the New Zealand business (as defined in the Order) of the Overseas Bank;
–Westpac New Zealand – refers to Westpac New Zealand Limited; and
–NZ Banking Group – refers to the financial reporting group (as defined in the Order) of the Overseas Bank. Controlled entities of the NZ Banking
Group as at 30 September 2023 are set out in Note 22 Related entities.
Words and phrases not defined in this Disclosure Statement, but defined by the Order, have the meaning given by the Order when used in this
Disclosure Statement.
The Disclosure Statement also uses the following terms as defined below.
ADIAuthorised deposit-taking institution
FVISFair value through income statement
ALCOAsset and Liability CommitteeFVOCIFair value through other comprehensive income
ALMAsset and liability risk managementFXForeign exchange
Group BRiskCOverseas Bank's Board Risk Committee
ANZSIC
Australian and New Zealand Standard Industrial
Classification
GSTGoods and services tax
APRAAustralian Prudential Regulation AuthorityIAPIndividually assessed provisions
AT1Additional Tier 1 capitalIRRBBInterest rate risk in the banking book
AUSTRACAustralian Transaction Reports and Analysis CentreLGDLoss given default
BKBMBank bill benchmark rateLVRLoan-to-value ratio
BoardBoard of DirectorsMARCOMarket Risk Committee
BPRBanking Prudential RequirementMoody'sMoody's Investors Service
BPS ActBanking (Prudential Supervision) Act 1998NaRNet interest income at risk
BRCCBoard Risk and Compliance CommitteeNIINet interest income
BS13Reserve Bank document 'Liquidity Policy'
CAPCollectively assessed provisions
NZ IFRS
New Zealand equivalents to International
Financial Reporting Standards
CCCFACredit Contracts and Consumer Finance Act 2003OCIOther comprehensive income
CGUCash generating unitPDProbability of default
CRGCustomer Risk GradePIEPortfolio investment entities
EADExposure at defaultReserve BankReserve Bank of New Zealand
ECLExpected credit lossesRISKCOExecutive Risk Committee
ELEExtended licensed entityRMBSResidential mortgage-backed securities
ESGEnvironmental, social and governanceRWARisk weighted assets
FCAFinancial Conduct AuthorityS&PS&P Global Ratings
FCSFinancial Claims SchemeSMESmall and medium-sized enterprises
Fidelity LifeFidelity Life Assurance Company LimitedSPPISolely payments of principal and interest
VaRValue-at-risk
Financial
statements
Consolidated financial statements
FMFinancial Markets
Westpac Life
Westpac Life-NZ- Limited (renamed Fidelity
Insurance Limited on 28 February 2022)
FitchFitch Ratings

Directors’ and the Chief Executive Officer, NZ Branch’s statement
Westpac Banking Corporation - New Zealand Banking Group 5
Each Director of the Overseas Bank and the Chief Executive Officer, NZ Branch, believes, after due enquiry, that, as at the date on which this
Disclosure Statement is signed, the Disclosure Statement:
(a) contains all the information that is required by the Order; and
(b) is not false or misleading.
Each Director of the Overseas Bank and the Chief Executive Officer, NZ Branch, believes, after due enquiry, that, over the year ended 30
September 2023:
(a) the Overseas Bank has complied in all material respects with each condition of registration that applied during that period; and
(b) the NZ Branch and other members of the NZ Banking Group had systems in place to monitor and control adequately the material risks of relevant
members of the NZ Banking Group, including credit risk, concentration of credit risk, interest rate risk, currency risk, equity risk, liquidity risk and
other business risks, and that those systems were being properly applied. For this purpose, a relevant member of the NZ Banking Group means a
member of the NZ Banking Group that is not a member of Westpac New Zealand’s banking group, as defined in Westpac New Zealand's Disclosure
Statement for the year ended 30 September 2023. Refer to Note vi. Risk Management Policies – Risk management frameworks on page 89 of
this Disclosure Statement for further detail regarding the entities which had systems in place to monitor and control the material risks of
relevant members of the NZ Banking Group.
The Disclosure Statement has been signed on behalf of all of the Directors by Catherine McGrath, Chief Executive Officer, Westpac New Zealand,
and by Christopher Leuschke as Chief Executive Officer, NZ Branch.
Catherine McGrath
Christopher Leuschke
Dated this 30th day of November 2023

Income statement for the year ended 30 September 2023
6 Westpac Banking Corporation - New Zealand Banking Group
NZ BANKING GROUP
$ millionsNote20232022
Interest income:
Calculated using the effective interest method26,2783,742
Other221882
Total interest income26,4963,824
Interest expense2(3,658)(1,486)
Net interest income2,8382,338
Non-interest income
Net fees and commissions 3197206
Net wealth management and insurance 33763
Trading357183
Other 37132
Total non-interest income298584
Net operating income3,1362,922
Operating expenses4(1,353)(1,186)
Impairment (charges)/benefits6(135)27
Profit before income tax expense1,6481,763
Income tax expense7(464)(465)
Net profit attributable to the owner of the NZ Banking Group1,1841,298
The above income statement should be read in conjunction with the accompanying notes.
Statement of comprehensive income for the year ended 30 September 2023
NZ BANKING GROUP
$ millions20232022
Net profit attributable to the owner of the NZ Banking Group 1,184 1,298
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Gains/(losses) recognised in equity on:
Investment securities
(3) (313)
Cash flow hedging instruments
1
(102) 281
Transferred to income statement:
Cash flow hedging instruments
1
44 219
Income tax on items taken to or transferred from equity:
Investment securities
1 88
Cash flow hedging instruments
16 (140)
Items that will not be reclassified subsequently to profit or loss
Remeasurement of defined benefit obligation recognised in equity (net of tax)
4 6
Net other comprehensive income/(expense) for the year (net of tax)
(40) 141
Total comprehensive income attributable to the owner of the NZ Banking Group
1,144 1,439
1
Comparative amounts have been revised to align to the current year's basis of presentation. The restatement for 2022 comparatives results in a $207 million
increase in transferred to income statement and a corresponding decrease in gains/(losses) recognised in equity in relation to cash flow hedging instruments.
The above statement of comprehensive income should be read in conjunction with the accompanying notes.

Balance sheet as at 30 September 2023
Westpac Banking Corporation - New Zealand Banking Group 7
NZ BANKING GROUP
$ millionsNote20232022
Assets
Cash and balances with central banks32 9,325 11,162
Collateral paid 62 87
Trading securities and financial assets measured at FVIS9 5,007 3,501
Derivative financial instruments 23 5,494 9,383
Investment securities10 6,651 5,623
Loans11, 12 99,711 97,392
Other financial assets14 469 644
Due from related entities22 4,488 6,609
Property and equipment 396 402
Deferred tax assets15 88 68
Intangible assets16 982 834
Other assets 125 75
Total assets 132,798 135,780
Liabilities
Collateral received 614 724
Deposits and other borrowings17 82,196 80,848
Other financial liabilities18 7,222 5,607
Derivative financial instruments 23 4,858 6,777
Due to related entities22 4,666 8,292
Debt issues19 18,597 19,933
Current tax liabilities 184 86
Provisions20 249 257
Other liabilities 332 376
Loan capital21 3,051 2,576
Total liabilities 121,969 125,476
Net assets 10,829 10,304
Head office account
Branch capital 1,300 1,300
Retained profits 1,472 1,324
Total head office account 2,772 2,624
NZ Banking Group equity
Share capital 6,045 6,045
Reserves 94 138
Retained profits 1,918 1,497
Total NZ Banking Group equity 8,057 7,680
Total equity attributable to the owner of the NZ Banking Group 10,829 10,304
The above balance sheet should be read in conjunction with the accompanying notes.
Signed on behalf of the Board of Directors.
DirectorDirector

30 November
2023

30 November 2023

Statement of changes in equity for the year ended 30 September 2023
8 Westpac Banking Corporation - New Zealand Banking Group
NZ BANKING GROUP
NZ BRANCHOTHER MEMBERS OF THE NZ BANKING GROUP
Head Office AccountReserves
InvestmentCash Flow
BranchRetained Share SecuritiesHedgeRetainedTotal
$ millionsCapital ProfitsCapital ReserveReserve
1
ProfitsEquity
As at 30 September 2021 1,300 1,187 488 (60) 63 7,226
10,204
Year ended 30 September 2022
Net profit attributable to the owner of the NZ
Banking Group - 137 - - - 1,161 1,298
Net gains/(losses) from changes in fair value - - - (313) 281 - (32)
Income tax effect - - - 88 (79) - 9
Transferred to income statement - - - - 219 - 219
Income tax effect - - - - (61) - (61)
Remeasurement of defined benefit obligations - - - - - 8 8
Income tax effect - - - - - (2) (2)
Total comprehensive income/(expense) for the
year ended 30 September 2022 - 137 - (225) 360 1,167 1,439
Transactions with owner:
Ordinary share capital issued - - 5,616 - - - 5,616
Ordinary share capital buy-back - - (59) - - - (59)
Dividends paid on ordinary shares (refer to Note 22) - - - - - (6,896) (6,896)
As at 30 September 2022 1,300 1,324 6,045 (285) 423 1,497 10,304
Year ended 30 September 2023
Net profit attributable to the owner of the NZ
Banking Group - 148 - - - 1,036 1,184
Net gains/(losses) from changes in fair value - - - (3) (102) - (105)
Income tax effect - - - 1 29 - 30
Transferred to income statement - - - - 44 - 44
Income tax effect - - - - (13) - (13)
Remeasurement of defined benefit obligations - - - - - 6 6
Income tax effect - - - - -
(2)
(2)
Total comprehensive income/(expense) for the
year ended 30 September 2023 - 148 - (2) (42) 1,040 1,144
Transactions with owner:
Dividends paid on ordinary shares (refer to Note 22) - - - - - (619) (619)
As at 30 September 2023 1,300 1,472 6,045 (287) 381 1,918 10,829
1
Comparative amounts have been revised to align to the current year's basis of presentation. The restatement for 2022 comparatives results in a $207 million
increase in transferred to income statement and a corresponding decrease in net gains/(losses) from changes in fair value.
The above statement of changes in equity should be read in conjunction with the accompanying notes.

Statement of cash flows for the year ended 30 September 2023
Westpac Banking Corporation - New Zealand Banking Group 9
NZ BANKING GROUP
$ millionsNote20232022
Cash flows from operating activities
Interest received 6,467 3,830
Interest paid (3,164) (1,289)
Non-interest income received 501 291
Operating expenses paid (1,240) (1,051)
Income tax paid (371) (352)
Cash flows from operating activities before changes in operating assets and liabilities 2,193 1,429
Net (increase)/decrease in:
Collateral paid 25 120
Trading securities and financial assets measured at FVIS (1,418) 1,046
Loans (2,167) (4,731)
Other financial assets 30 2
Due from related entities (155) (1,941)
Other assets (2) (1)
Net increase/(decrease) in:
Collateral received (110) 404
Deposits and other borrowings 1,348 1,475
Other financial liabilities 953 953
Due to related entities 62 (71)
Other liabilities 10 14
Net movement in external and related entity derivative financial instruments 681 2,563
Net cash provided by/(used in) operating activities32 1,450 1,262
Cash flows from investing activities
Proceeds from investment securities 547 310
Purchase of investment securities (1,633) (1,668)
Proceeds from disposal of a controlled entity - 417
Purchase of intangible assets (209) (172)
Purchase of property and equipment (77) (27)
Net movement in life insurance assets - 60
Net cash provided by/(used in) investing activities (1,372) (1,080)
Cash flows from financing activities
Proceeds from debt issues19 7,827 13,602
Repayments of debt issues19 (9,290) (10,297)
Payments for the principal portion of lease liabilities (47) (62)
Issue of loan capital (net of issue costs)21 592 590
Redemption of loan capital21 - (1,178)
Payment for share buy-back - (59)
Dividends paid to ordinary shareholders22 (619) (1,280)
Net movement in due to related entities (473) 618
Net cash provided by/(used in) financing activities (2,010) 1,934
Net increase/(decrease) in cash and cash equivalents (1,932) 2,116
Cash and cash equivalents at the beginning of the year 11,261 9,145
Cash and cash equivalents at the end of the year32 9,329 11,261
The above statement of cash flows should be read in conjunction with the accompanying notes. Details of the reconciliation of net cash provided
by/(used in) operating activities to net profit are provided in Note 32.

Notes to the financial statements
10 Westpac Banking Corporation - New Zealand Banking Group
Note 1 Financial statements preparation
The Overseas Bank is registered as a public company limited by shares under the Australian Corporations Act 2001 and is entered on the register
maintained under the BPS Act. The Overseas Bank provides a broad range of banking and financial services, including consumer, business and
institutional banking and wealth management services.
The NZ Branch’s head office is situated at Westpac on Takutai Square, 16 Takutai Square, Auckland 1010, New Zealand and the address for service of
process on the NZ Branch is Stephen O’Brien - General Counsel, Westpac on Takutai Square, 53 Galway Street, Auckland 1010, New Zealand.
The financial statements are for the NZ Banking Group.
These financial statements were authorised for issue by the Overseas Bank’s Board of Directors on 30 November 2023. The Board has the power to
amend and reissue the financial statements.
The principal accounting policies are set out below and in the relevant notes to the financial statements. These accounting policies provide details of
the accounting treatments adopted for complex balances and where accounting standards provide policy choices. These policies have been
consistently applied to all the years presented, unless otherwise stated.
a.Basis of preparation
(i) Basis of accounting
These financial statements are general purpose financial statements prepared in accordance with:
the requirements of the Financial Markets Conduct Act 2013; and
the requirements of the Order.
These financial statements comply with Generally Accepted Accounting Practice, applicable NZ IFRS and other authoritative pronouncements of the
External Reporting Board, as appropriate for for-profit entities. These financial statements also comply with International Financial Reporting
Standards, as issued by the International Accounting Standards Board.
All amounts in these financial statements have been rounded to the nearest million dollars unless otherwise stated.
(ii) Historical cost convention
These financial statements have been prepared under the historical cost convention, as modified by applying fair value accounting to financial
assets and financial liabilities (including derivative instruments) measured at FVIS or in FVOCI.
(iii) Comparative revisions
Comparative information has been revised where appropriate to conform to changes in presentation in the current year and to enhance
comparability. Where there has been a material restatement of comparative information the nature of, and the reason for, the restatement is
disclosed in the relevant note.
(iv) Changes in accounting policy
Broker trail commission
During the current financial year, the NZ Banking Group revised its treatment of ongoing trail commission payable to mortgage brokers. The NZ
Banking Group recognised a liability of $132 million within other financial liabilities equal to the present value of the expected future trail commission
payable and a corresponding increase in capitalised brokerage costs in loans. Comparatives have not been revised for this change in accounting
policy as the impact of the change is not material to the financial statements.
(v) Standards adopted during the year ended 30 September 2023
No new accounting standards have been adopted by the NZ Banking Group for the year ended 30 September 2023. There have been no
amendments to existing accounting standards that have a material impact on the NZ Banking Group.
(vi) Business combinations
Business combinations are accounted for using the acquisition method of accounting. Acquisition cost is measured as the aggregate of the fair value
at the date of acquisition of the assets given, equity instruments issued or liabilities incurred or assumed. Acquisition-related costs are expensed as
incurred (except for those costs arising on the issue of equity instruments which are recognised directly in equity).
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured at fair value on the acquisition
date. Goodwill is measured as the excess of the acquisition cost, the amount of any non-controlling interest and the fair value of any previous NZ
Banking Group’s equity interest in the acquiree, over the fair value of the identifiable net assets acquired.
(vii) Foreign currency translation
Functional and presentation currency
The financial statements are presented in New Zealand dollars which is the NZ Banking Group’s functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. FX
gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in the income statement, except when deferred in OCI for qualifying cash flow hedges.

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 11
Note 1 Financial statements preparation (continued)
(viii) Head office account, share capital and reserves
Head office account - Branch capital
Branch capital comprises funds provided by the Overseas Bank. It is non-interest bearing and there is no fixed date for repatriation.
Ordinary shares
Ordinary shares are recognised at the amount paid up per ordinary share, net of directly attributable issue costs.
Investment securities reserve
This comprises the changes in the fair value of debt securities measured at FVOCI (except for interest income, impairment charges and FX gains and
losses which are recognised in the income statement), net of any related hedge accounting adjustments and tax. These changes are transferred to
non-interest income in the income statement when the asset is disposed.
Cash flow hedge reserve
This comprises the fair value gains and losses associated with the effective portion of designated cash flow hedging instruments, net of tax.
b. Basis of aggregation
The NZ Banking Group as at 30 September 2023 has been aggregated by combining the sum of the capital and reserves of the NZ Branch, and the
consolidated capital and reserves of Westpac New Zealand Group Limited, BT Financial Group (NZ) Limited, Westpac Financial Services Group-NZ-
Limited, Westpac Group Investment-NZ-Limited, and their subsidiaries (including structured entities). For New Zealand entities acquired by the
Overseas Banking Group, capital and reserves at acquisition are netted and recognised as capital contributed to the NZ Banking Group.
Subsidiaries are entities over which the members of the NZ Banking Group have control as they are exposed to, or have rights to, variable returns
from its involvement with the entities, and can affect those returns through its power over the entities. All transactions between entities within the
NZ Banking Group are eliminated. Subsidiaries are fully consolidated from the date on which control commences and are de-consolidated from the
date that control ceases.
c.Financial assets and financial liabilities
(i) Recognition
Financial assets and financial liabilities, other than regular way transactions, are recognised when the NZ Banking Group becomes a party to the
terms of the contract, which is generally on the settlement date (the date payment is made or cash advanced). Purchases and sales of financial
assets in regular way transactions are recognised on the trade date (the date on which the NZ Banking Group commits to purchase or sell an asset).
(ii) Derecognition
Financial assets are derecognised when the rights to receive cash flows from the asset have expired, or when the NZ Banking Group has either
transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full under a ‘pass through’
arrangement and transferred substantially all the risks and rewards of ownership.
There may be situations where the NZ Banking Group has partially transferred the risks and rewards of ownership but has neither transferred nor
retained substantially all the risks and rewards of ownership. In such situations, the asset continues to be recognised on the balance sheet to the
extent of the NZ Banking Group’s continuing involvement in the asset.
Financial liabilities are derecognised when the obligation is discharged, cancelled or expires. Where an existing financial liability is replaced by
another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, the exchange or
modification is treated as a derecognition of the original liability and the recognition of a new liability, with the difference in the respective carrying
amounts recognised in the income statement.
The terms are deemed to be substantially different if the discounted present value of the cashflows under the new terms (discounted using the
original effective interest rate) is at least 10% different from the discounted present value of the remaining cash flows of the original financial
liability. Qualitative factors such as a change in the currency the instrument is denominated in, a change in the interest rate from fixed to floating
and conversion features are also considered.
(iii) Classification and measurement basis
Financial assets
Financial assets are grouped into the following classes: cash and balances with central banks, collateral paid, trading securities and financial assets
measured at FVIS, derivative financial instruments, investment securities, loans, other financial assets and due from related entities.
Financial assets are classified based on a) the business model within which the assets are managed, and b) whether the contractual cash flows of
the instrument represent SPPI.
The NZ Banking Group determines the business model at the level that reflects how groups of financial assets are managed. When assessing the
business model the NZ Banking Group considers factors including how performance and risks are managed, evaluated and reported and the
frequency and volume of, and reason for, sales in previous periods and expectations of sales in future periods.
When assessing whether contractual cash flows are SPPI, interest is defined as consideration primarily for the time value of money and the credit
risk of the principal outstanding. The time value of money is defined as the element of interest that provides consideration only for the passage of
time and not consideration for other risks or costs associated with holding the financial asset. Terms that could change the contractual cash flows
so that they may not meet the SPPI criteria include contingent and leverage features, non-recourse arrangements, and features that could modify
the time value of money.

Notes to the financial statements
12 Westpac Banking Corporation - New Zealand Banking Group
Note 1 Financial statements preparation (continued)
Debt instruments
If the debt instruments have contractual cash flows which represent SPPI on the principal balance outstanding they are classified at:
amortised cost if they are held within a business model whose objective is achieved through holding the financial asset to collect these cash
flows; or
FVOCI if they are held within a business model whose objective is achieved both through collecting these cash flows and selling the financial
asset; or
FVIS if they are held within a business model whose objective is achieved through selling the financial asset.
Debt instruments are classified and measured at FVIS where the contractual cash flows do not represent SPPI on the principal balance outstanding
or where it is designated at FVIS to eliminate or reduce an accounting mismatch.
Debt instruments at amortised cost are initially recognised at fair value and subsequently measured at amortised cost using the effective interest
method. They are presented net of provision for ECL determined using the ECL model. Refer to Notes 6 and 12 for further details.
Debt instruments at FVOCI are measured at fair value with unrealised gains and losses recognised in OCI except for interest income, impairment
charges and FX gains and losses, which are recognised in the income statement. Impairment on debt instruments at FVOCI is determined using the
ECL model and is recognised in the income statement with a corresponding amount in OCI. There is no reduction of the carrying value of the debt
security which remains at fair value.
The cumulative gain or loss recognised in OCI is subsequently recognised in the income statement when the instrument is derecognised.
Debt instruments at FVIS are measured at fair value with subsequent changes in fair value recognised in the income statement.
Financial liabilities
Financial liabilities are grouped into the following classes: collateral received, deposits and other borrowings, other financial liabilities, derivative
financial instruments, due to related entities, debt issues and loan capital.
Financial liabilities are measured at amortised cost if they are not held for trading or designated at FVIS, otherwise they are measured at FVIS.
Financial assets and financial liabilities measured at FVIS are recognised initially at fair value. All other financial assets and financial liabilities are
recognised initially at fair value plus or minus directly attributable transaction costs respectively.
Further details of the accounting policy for each category of financial asset or financial liability mentioned above are set out in the note for the
relevant item.
The NZ Banking Group’s policies for determining the fair value of financial assets and financial liabilities are set out in Note 24.
d.Critical accounting assumptions and estimates
Applying the NZ Banking Group’s accounting policies requires the use of judgement, assumptions and estimates which impact the financial
information. The significant assumptions and estimates used are discussed in the relevant notes below.
Note 7Income tax expense
Note 12Provision for expected credit losses
Note 15Deferred tax assets
Note 16Intangible assets
Note 20Provisions
Note 24Fair value of financial assets and financial liabilities
Impact of climate-related risks
The NZ Banking Group has considered the potential risk of climate change on its financial statements. Refer to Note 31 for further details.
e.Future developments in accounting standards
There are no new standards or amendments to existing standards that are not yet effective that are expected to have a material impact on the NZ
Banking Group.

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 13
Note 2 Net interest income
Accounting policy
Interest income and interest expense for all interest earning financial assets and interest bearing financial liabilities at amortised cost or FVOCI,
detailed within the table below, are recognised using the effective interest method. Net income from Treasury’s interest rate and liquidity
management activities are included in net interest income.
The effective interest method calculates the amortised cost of a financial instrument by discounting the financial instrument’s estimated future
cash receipts or payments to their present value and allocates the interest income or interest expense, including any fees, costs, premiums or
discounts integral to the instrument, over its expected life.
Interest income is calculated based on the gross carrying amount of financial assets in stages 1 and 2 of the NZ Banking Group’s ECL model and on
the carrying amount net of the provision for ECL for financial assets in stage 3.
NZ BANKING GROUP
$ millionsNote20232022
Interest income
Calculated using the effective interest method
Cash and balances with central banks 533 162
Collateral paid 4 1
Investment securities 161 92
Loans 5,453 3,470
Due from related entities22 127 17
Total interest income calculated using the effective interest method 6,278 3,742
Other
Trading securities and financial assets measured at FVIS 218 82
Total other 218 82
Total interest income 6,496 3,824
Interest expense
Calculated using the effective interest method
Collateral received 24 4
Deposits and other borrowings 2,523 771
Due to related entities22 86 32
Debt issues 265 167
Loan capital 147 137
Other financial liabilities 236 44
Total interest expense calculated using the effective interest method 3,281 1,155
Other
Deposits and other borrowings 147 58
Debt issues 170 39
Other interest expense
1
60 234
Total other 377 331
Total interest expense 3,658 1,486
Net interest income 2,838 2,338
1
Includes the net impact of Treasury's interest rate and liquidity management activities.

Notes to the financial statements
14 Westpac Banking Corporation - New Zealand Banking Group
Note 3 Non-interest income
Accounting policy
Non-interest income includes net fees and commissions income, net wealth management and insurance income, trading income and other
income.
Net fees and commissions income
When another party is involved in providing goods or services to a NZ Banking Group customer, the NZ Banking Group assesses whether the
nature of the arrangement with its customer is as a principal provider or an agent of another party. Where the NZ Banking Group is acting as an
agent for another party, the income earned by the NZ Banking Group is the net consideration received (i.e. the gross amount received from the
customer less amounts paid to a third party provider). As an agent, the net consideration represents fees and commissions income for facilitating
the transaction between the customer and the third party provider with primary responsibility for fulfilling the contract.
Fees and commissions income
Fees and commissions income is recognised when the performance obligation is satisfied by transferring the promised good or service to the
customer. Fees and commissions income includes facility fees, transaction fees and commissions and other non-risk fee income. Commissions
income includes commissions received for the distribution of general and life insurance products.
Facility fees include certain line fees, annual credit card fees and fees for providing customer bank accounts. They are recognised over the term of
the facility/period of service on a straight line basis.
Transaction fees and commissions are earned for facilitating banking transactions such as FX fees, telegraphic transfers and issuing bank cheques.
Fees and commissions for these one-off transactions are recognised once the transaction has been completed. Transaction fees and commissions
are also recognised for credit card transactions including interchange fees net of scheme charges. These are recognised once the transaction has
been completed, however, a component of interchange fees received is deferred as unearned income as the NZ Banking Group has a future
service obligation to customers under the NZ Banking Group’s credit card reward programmes.
Other non-risk fee income includes advisory and underwriting fees which are recognised when the related service is completed.
Income which forms an integral part of the effective interest rate of a financial instrument is recognised using the effective interest method and
recorded in interest income (for example, loan origination fees).
Fees and commissions expenses
Fees and commissions expenses include incremental external costs that vary directly with the provision of goods or services to customers. An
incremental cost is one that would not have been incurred if a specific good or service had not been provided to a specific customer. Fees and
commissions expenses which form an integral part of the effective interest rate of a financial instrument are recognised using the effective interest
method and recorded in net interest income. Fees and commissions expenses include the costs associated with credit card loyalty programmes
which are recognised as an expense when the services are provided on the redemption of points.
Net wealth management income
Wealth management fees earned for the ongoing management of customer funds and investments are recognised when the performance
obligation is satisfied which is over the period of management.
Net insurance income and change in policy liabilities
Net insurance policy assets relating to life insurance contracts were calculated by using the margin on service methodology in accordance with
New Zealand Society of Actuaries Professional Standard 20 Determination of Life Insurance Policy Liabilities. Under this methodology, planned
profit margins and an estimate of future liabilities were calculated separately for each major product line using applied assumptions at each
reporting date. Profit margins were released in line with the service that was provided.
Life insurance premiums with a regular due date were recognised as revenue on an accrual basis. Premiums with no due date were recognised on
a cash received basis.
Life insurance contract claims were recognised as an expense when the liability was established.
Trading income
Realised and unrealised gains or losses from changes in the fair value of trading assets, liabilities and derivatives are recognised in the period
in which they arise (except day one profits or losses which are deferred, refer to Note 24); and
Net income related to Treasury’s interest rate and liquidity management activities is included in net interest income.

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 15
Note 3 Non-interest income (continued)
NZ BANKING GROUP
$ millions20232022
Net fees and commissions
Facility fees 48 43
Transaction fees and commissions 203 207
Other non-risk fee income 20 22
Fees and commissions income 271 272
Credit card loyalty programmes (35) (35)
Transaction fees and commissions related expenses (39) (31)
Fees and commissions expenses (74) (66)
Net fees and commissions 197 206
Net wealth management and insurance
Net wealth management income 37 37
Net insurance income and change in policy liabilities
1
- 26
Net wealth management and insurance 37 63
Trading 57 183
Other
Net ineffectiveness on qualifying hedges - 3
Net gain on disposal of a controlled entity
1
- 126
Other 7 3
Total other 7 132
Total non-interest income 298 584
1
On 28 February 2022, the sale of Westpac Life (renamed Fidelity Insurance Limited on 28 February 2022) to Fidelity Life was completed. As such, from 1 March 2022,
the NZ Banking Group does not conduct any insurance business.
Deferred income in relation to the credit card loyalty programmes for the NZ Banking Group was $27 million as at 30 September 2023 (30
September 2022: $31 million). This will be recognised as fees and commissions income as the credit card reward points are redeemed.
There were no other material contract assets or contract liabilities for the NZ Banking Group.
Note 4 Operating expenses5967-2 04-18
NZ BANKING GROUP
$ millionsNote20232022
Staff expenses 710 658
Lease expense 24 20
Depreciation 82 88
Technology services and telecommunications 225 155
Purchased services 96 96
Software amortisation costs 60 47
Related entities - management fees22 11 10
Other 145 112
Total operating expenses 1,353 1,186

Notes to the financial statements
16 Westpac Banking Corporation - New Zealand Banking Group
Note 5 Auditor’s remuneration5967-2 04-18
NZ BANKING GROUP
$'000s20232022
Audit and audit related services
Audit and review of financial statements
1
3,7393,587
Other audit related services
2,3
824926
Total remuneration for audit and other audit related services4,5634,513
Other services
4
303-
Total remuneration for non-audit services303-
Total remuneration for audit, other audit related services and non-audit services4,8664,513
1
Fees for the annual audit of the financial statements, the review or other procedures performed on the interim financial statements and Sarbanes-Oxley reporting
undertaken in the role of auditor.
2
Assurance or agreed upon procedures over the issue of comfort letters and debt issuance programmes.
3
As at 30 September 2023, $304,514 out of other audit related services was paid to PwC Australia for the issue of comfort letters and work on Westpac New Zealand’s
debt issuance programme (30 September 2022: $414,366).
4
Fees for system pre-implementation and data migration assessment.
It is the NZ Banking Group’s policy to engage the external auditor on assignments additional to their statutory audit duties only if their independence is
not impaired or seen to be impaired, and where their expertise and experience with the NZ Banking Group is important.
The external auditor also provides audit and non-audit assurance services to non-consolidated entities, including non-consolidated trusts and non-
consolidated superannuation funds or pension funds of which a member of the NZ Banking Group is manager or responsible entity. During the year
ended 30 September 2023, the fees in respect of these services were $505,331 (30 September 2022: $452,897). This amount is not included in the table
above.
Note 6 Impairment charges/(benefits)
Accounting policy
Impairment charges are based on an expected loss model which measures the difference between the current carrying amount and the present value
of expected future cash flows taking into account past experience, current conditions and multiple probability-weighted macroeconomic scenarios for
reasonably supportable future economic conditions. Further details of the calculation of ECL and the critical accounting assumptions and estimates
relating to impairment charges are included in Note 12.
Impairment charges are recognised in the income statement, with a corresponding amount recognised as follows:
Loans at amortised cost: as a reduction of the carrying value of the financial asset through an offsetting provision account (refer to Note 12);
Investment securities: in reserves in OCI with no reduction of the carrying value of the debt security (refer to the statement of changes in equity);
and
Credit commitments: as a provision (refer to Note 20).
Uncollectable loans
A loan may become uncollectable in full or part if, after following the NZ Banking Group’s loan recovery procedures, the NZ Banking Group remains
unable to collect that loan’s contractual repayments. Uncollectable amounts are written off against their related provision for ECL, after all possible
repayments have been received.
Where loans are secured, amounts are generally written off after receiving the proceeds from the security, or in certain circumstances, where the net
realisable value of the security has been determined and this indicates that there is no reasonable expectation of full recovery, write-off may be earlier.
Unsecured consumer loans are generally written off after 180 days past due.
The NZ Banking Group may subsequently be able to recover cash flows from loans written off. In the period which these recoveries are made, they are
recognised in the income statement.
NZ BANKING GROUP
$ millions20232022
Provisions raised/(released):
Performing 78 (38)
Non-performing 46 1
Bad debts written-off/(recovered) directly to the income statement 11 10
Impairment charges/(benefits) 135 (27)
of which relates to:
Loans and credit commitments 135 (27)
Impairment charges/(benefits) 135 (27)
Impairment charges/(benefits) on all other financial assets are not material to the NZ Banking Group.

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 17
Note 7 Income tax expense
Accounting policy
The income tax expense for the year comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it
relates to items recognised directly in OCI, in which case it is recognised in the statement of comprehensive income.
Current tax is the tax payable for the year using enacted or substantively enacted tax rates and laws. Current tax also includes adjustments to tax
payable for previous years.
Goods and services tax
Revenue, expenses and assets are recognised net of GST except to the extent that GST is not recoverable from the New Zealand Inland Revenue.
In these circumstances, GST is recognised as part of the expense or the cost of the asset.
Critical accounting assumptions and estimates
Significant judgement is required in determining the current tax liability. There may be transactions with uncertain tax outcomes and provisions
are determined based on the expected outcomes.
NZ BANKING GROUP
$ millions
20232022
Income tax expense
Current tax:
Current year472454
Prior year adjustments(2)(5)
Deferred tax (refer to Note 15):
Current year (6)11
Prior year adjustments
-5
Total income tax expense
464465
Profit before income tax
1,6481,763
Tax calculated at tax rate of 28% 461494
Other non-assessable items-(34)
Expenses not deductible for tax purposes55
Prior year adjustments(2) -
Total income tax expense
464465
The effective tax rate for the year ended 30 September 2023 was 28.2% (30 September 2022: 26.4%).
Note 8 Imputation credit account
NZ BANKING GROUP
$ millions20232022
Imputation credits available for use in subsequent reporting periods
1861,047
Westpac New Zealand and Westpac Securities NZ Limited ('WSNZL') were previously part of an imputation group ('ICA group') with the
Overseas Bank. On 1 July 2023, Westpac New Zealand and WSNZL exited the ICA group. While the imputation credits of the ICA group continue
to be available for use by the Overseas Bank, those imputation credits are no longer accessible by any New Zealand tax resident members of the
NZ Banking Group. The 2023 imputation credit balance of the ICA group of $802m (not included in the NZ Banking Group balance above) is
available to directly attach to distributions of the Overseas Bank.

Notes to the financial statements
18 Westpac Banking Corporation - New Zealand Banking Group
Note 9 Trading securities and financial assets measured at FVIS
Accounting policy
Trading securities
Trading securities include actively traded debt (government and other) and those acquired for sale in the near term. The instruments are
measured at fair value.
Reverse repurchase agreements
Securities purchased under these agreements are not recognised on the balance sheet, as the NZ Banking Group has not obtained the risks and
rewards of ownership. The cash consideration paid is recognised as a reverse repurchase agreement, which forms part of a trading portfolio that
is measured at fair value.
Fair value gains and losses on these financial assets are recognised in the income statement. Interest earned from debt securities is recognised in
interest income (refer to Note 2).
NZ BANKING GROUP
$ millions20232022
Government and semi-government securities
2,3541,524
Other debt securities
2,166
1,804
Reverse repurchase agreements
487
173
Total trading securities and financial assets measured at FVIS5,0073,501
Note 10 Investment securities
Accounting policy
Investment securities include debt securities (government and other) that are measured at FVOCI. These instruments are classified based on the
criteria disclosed under the heading “Financial assets and financial liabilities” in Note 1.
Debt securities measured at FVOCI
Includes debt instruments that have contractual cash flows which represent SPPI on the principal balance outstanding and they are held within a
business model whose objective is achieved both through collecting these cash flows or selling the financial asset.
These securities are measured at fair value with unrealised gains and losses recognised in OCI except for interest income, impairment charges and
FX gains and losses and fair value hedge adjustments which are recognised in the income statement.
Impairment is measured using the same ECL model applied to financial assets measured at amortised cost. Impairment is recognised in the
income statement with a corresponding amount in OCI with no reduction of the carrying value of the debt security which remains at fair value.
Refer to Note 12 for further details.
The cumulative gain or loss recognised in OCI is subsequently recognised in the income statement when the instrument is disposed.
NZ BANKING GROUP
$ millions20232022
Government and semi-government securities4,0883,656
Other debt securities2,5631,967
Total investment securities6,6515,623

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 19
Note 11 Loans
Accounting policy
Loans are financial assets initially recognised at fair value plus directly attributable transaction costs and fees.
Loans are subsequently measured at amortised cost using the effective interest method where they have contractual cash flows which represent
SPPI on the principal balance outstanding and they are held within a business model whose objective is achieved through holding the loans to
collect these cash flows. They are presented net of any provision for ECL.
Loan products that have both mortgage and deposit facilities are presented gross on the balance sheet, segregating the asset and liability
component, because they do not meet the criteria to be offset. Interest earned on these products is presented on a net basis in the income
statement as this reflects how the customer is charged.
The following table shows loans disaggregated by types of credit exposure:
NZ BANKING GROUP
$ millions20232022
Residential mortgages
1
65,757 63,827
Other retail 2,648 2,829
Corporate 31,619 31,015
Other
194 121
Total gross loans 100,218 97,792
Provision for ECL on loans (refer to Note 12) (507) (400)
Total net loans 99,711 97,392
1
During the current financial year, the NZ Banking Group revised its treatment of ongoing trail commission payable to mortgage brokers. The NZ Banking Group
recognised a liability within other financial liabilities equal to the present value of the expected future trail commission payable and a corresponding increase in
capitalised brokerage costs in loans. The balance as at 30 September 2023 was $132 million for the NZ Banking Group. Refer also to Note 1(iv).
Note 12 Provision for expected credit losses
Accounting policy
Note 6 provides details of impairment charges/(benefits).
Impairment applies to all financial assets at amortised cost, debt securities measured at FVOCI and credit commitments.
The ECL is recognised as follows:
Loans at amortised cost: as a reduction of the carrying value of the financial asset through an offsetting provision account (refer to Note 11);
Investment securities: in reserves in OCI with no reduction of the carrying value of the debt security itself (refer to the statement of changes
in equity); and
Credit commitments: as a provision (refer to Note 20).
Measurement
The NZ Banking Group calculates the provision for ECL based on a three stage approach. The provision for ECL is a probability-weighted estimate
of the cash shortfalls expected to result from defaults over the relevant timeframe. They are determined by evaluating a range of possible
outcomes and taking into account the time value of money, past events, current conditions and forecasts of future economic conditions.
The models use three main components to determine the ECL (as well as the time value of money) including:
PD: the probability that a counterparty will default;
LGD: the loss that is expected to arise in the event of a default; and
EAD: the estimated outstanding amount of credit exposure at the time of the default.
Model stages
The three stages are as follows:
Stage 1: 12 months ECL - performing
For financial assets where there has been no significant increase in credit risk since origination a provision for 12 months ECL is recognised.
Stage 2: Lifetime ECL – performing
For financial assets where there has been a significant increase in credit risk since origination but where the asset is still performing a provision for
lifetime ECL is recognised. The indicators of a significant increase in credit risk are described on the following page.

Notes to the financial statements
20 Westpac Banking Corporation - New Zealand Banking Group
Note 12 Provision for expected credit losses (continued)
Accounting policy (continued)
Stage 3: Lifetime ECL – non-performing
Financial assets in Stage 3 are those that are in default. A default occurs when:
The NZ Banking Group considers that the customer is unable to repay its credit obligations in full, irrespective of recourse by the NZ Banking
Group to action such as realising security. Indicators include a breach of contract with the NZ Banking Group such as a default on interest or
principal payments, a borrower experiencing significant financial difficulties or observable economic conditions that correlate to defaults on
an individual basis; or
The customer is more than 90 days past due on any material credit obligation.
A provision for lifetime ECL is recognised on these financial assets.
Collective and individual assessment
Financial assets that are in Stages 1 and 2 are assessed on a collective basis. This means that they are grouped in pools of similar assets with
similar credit risk characteristics including the type of product and CRG. Financial assets in Stage 3 are assessed on an individual basis and
calculated collectively for those below a specified threshold.
Expected life
In considering the lifetime timeframe for ECL in Stages 2 and 3, the standard generally requires use of the remaining contractual life adjusted,
where appropriate, for prepayments, extension and other options. For certain revolving credit facilities which include both a drawn and undrawn
component (e.g. credit cards and revolving lines of credit), the NZ Banking Group’s contractual ability to demand repayment and cancel the
undrawn commitment does not limit the exposure to credit losses to the contractual notice period. For these facilities, lifetime is based on
historical behaviour.
Movement between stages
Financial assets may move in both directions through the stages of the impairment model. Financial assets previously in Stage 2 may move back to
Stage 1 if it is no longer considered that there has been a significant increase in credit risk. Similarly, financial assets in Stage 3 may move back to
Stage 1 or Stage 2 if they are no longer assessed to be non-performing.
Critical accounting assumptions and estimates
Key judgements include when a significant increase in credit risk has occurred, the estimation of forward-looking macroeconomic information and
overlays. Other factors which can impact the provision include the borrower’s financial situation, the realisable value of collateral, the NZ Banking
Group’s position relative to other claimants, the reliability of customer information and the likely cost and duration of recovering the loan.
Significant increase in credit risk
Determining when a financial asset has experienced a significant increase in credit risk since origination is a critical accounting judgement which is
based on the change in the PD since origination. In determining whether a change in PD represents a significant increase in risk, relative changes
in PD and absolute PD thresholds are both considered based on the portfolio of the exposure.
The NZ Banking Group does not rebut the presumption that instruments that are 30 days past due have experienced a significant increase in
credit risk but this is used as a backstop rather than the primary indicator.
Forward-looking macroeconomic information
The measurement of ECL for each stage and the assessment of significant increase in credit risk consider information about past events and
current conditions as well as reasonable and supportable projections of future events and economic conditions. The estimation of forward-
looking information is a critical accounting judgement. The NZ Banking Group considers three future macroeconomic scenarios including a base
case scenario along with upside and downside scenarios.
The macroeconomic variables used in these scenarios, based on current economic forecasts, include (but are not limited to) unemployment
rates, real gross domestic product growth rates, base interest rates and residential property price indices.
Base case scenario
This scenario utilises the internal Westpac Economic forecasts used for strategic decision making and forecasting.
Upside scenario
This scenario represents a modest improvement on the base case scenario.
Downside scenario
The downside scenario is a more severe scenario with ECL higher than those under the base case scenario. This scenario assumes a
recession with a combination of negative GDP growth, declines in commercial and residential property prices and an increase in the
unemployment rate, which simultaneously impact ECL across all portfolios from the reporting date.

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 21
Note 12 Provision for expected credit losses (continued)
Accounting policy (continued)
The three macroeconomic scenarios are probability weighted and together represent the NZ Banking Group’s view of the forward looking
distribution of potential loss outcomes. The weighting applied to each of the three macroeconomic scenarios takes into account historical
frequency, current trends, and forward-looking conditions.
The macroeconomic variables and probability weightings of the three macroeconomic scenarios are subject to the approval of the NZ Banking
Group’s Chief Financial Officer and Chief Risk Officer with oversight from the Board of Directors (and its Committees).
Overlays
Where appropriate, adjustments will be made to modelled outcomes to reflect reasonable and supportable information not already incorporated
in the models.
Judgements can change with time as new information becomes available which could result in changes to the provision for ECL.
Loans and credit commitments
The following tables reconcile the provisions for ECL on loans and credit commitments by stage for the NZ Banking Group.
NZ BANKING GROUP
20232022
PerformingNon-performingPerformingNon-performing
Stage 1Stage 2Stage 3Stage 3Stage 1Stage 2Stage 3Stage 3
$ millions
CAPCAPCAPIAP
Total
CAPCAPCAPIAP
Total
Provision for ECL on loans
Residential mortgages 37 139 61 10 247 40 87 43 9 179
Other retail 11 34 12 1 58 12 36 13 1 62
Corporate 29 127 34 12 202 35 94 13 17 159
Total provision for ECL on
loans (refer to Note 11)
77 300 107 23 507 87 217 69 27 400
Provision for ECL on credit
commitments
Residential mortgages 5 8 - - 13 6 4 - - 10
Other retail 4 8 - - 12 5 7 - - 12
Corporate 5 14 - - 19 5 12 - - 17
Total provision for ECL on
credit commitments (refer to
Note 20)
14 30 - - 44 16 23 - - 39
Total provision for ECL on
loans and credit commitments
91 330 107 23 551 103 240 69 27 439
Gross loans 76,428 23,019 709 62 100,218 85,810 11,439 483 60 97,792
Credit commitments 25,110 3,748 25 1 28,884 26,783 2,120 25 1 28,929
Gross loans and credit
commitments
101,538 26,767 734 63 129,102 112,593 13,559 508 61 126,721
Coverage ratio on loans (%) 0.10 1.30 15.09 37.10 0.51 0.10 1.90 14.29 45.00 0.41
Coverage ratio on loans and credit
commitments (%)
0.09 1.23 14.58 36.51 0.43 0.09 1.77 13.58 44.26 0.35
Movements in components of loss allowance
The reconciliation of the provision for ECL for loans and credit commitments has been determined by an aggregation of monthly movements over
the year. The key line items in the reconciliation represent the following:
“Transfers between stages” lines represent transfers between Stage 1, Stage 2 and Stage 3 prior to remeasurement of the provision for ECL.
“New financial assets originated” line represents new accounts originated during the year.
“Financial assets derecognised during the period” line represents loans derecognised due to final repayments during the year.
“Other charges/(credits) to the income statement” line represents the impact on the provision for ECL due to changes in credit quality during
the year (including transfers between stages), changes in portfolio overlays, changes due to forward-looking economic scenarios and partial
repayments and additional drawdowns on existing facilities over the year.
Amounts written off represent a reduction in the provision for ECL as a result of derecognition of exposures where there is no reasonable
expectation of full recovery.

Notes to the financial statements
22 Westpac Banking Corporation - New Zealand Banking Group
Note 12 Provision for expected credit losses (continued)
NZ BANKING GROUP
PerformingNon-performing
Stage 1Stage 2Stage 3Stage 3
$ millions
CAPCAPCAPIAP
Total
Provision for ECL on loans and credit commitments as at 30
September 2022
103 240 69 27 439
Transfers to Stage 1 228 (220) (8) - -
Transfers to Stage 2 (17) 51 (33) (1) -
Transfers to Stage 3 CAP - (37) 41 (4) -
Transfers to Stage 3 IAP - (2) (14) 16 -
Reversals of previously recognised impairment charges - - - (9) (9)
New financial assets originated 17 - - - 17
Financial assets derecognised during the year (8) (43) (23) - (74)
Changes in CAP due to amounts written off - - (24) - (24)
Other charges/(credits) to the income statement (232) 341 99 6 214
Total charges/(credits) to the income statement for ECL (12) 90 38 8 124
Amounts written off from IAP - - - (12) (12)
Total provision for ECL on loans and credit commitments as
at 30 September 2023
91 330 107 23 551
NZ BANKING GROUP
PerformingNon-performing
Stage 1Stage 2Stage 3Stage 3
$ millions
CAPCAPCAPIAP
Total
Provision for ECL on loans and credit commitments as at 30
September 2021
102 279 75 69 525
Transfers to Stage 1 141 (122) (19) - -
Transfers to Stage 2 (12) 52 (39) (1) -
Transfers to Stage 3 CAP - (24) 26 (2) -
Transfers to Stage 3 IAP - (7) (6) 13 -
Reversals of previously recognised impairment charges - - - (6) (6)
New financial assets originated 16 - - - 16
Financial assets derecognised during the year (11) (27) (19) - (57)
Changes in CAP due to amounts written off - - (23) - (23)
Other charges/(credits) to the income statement (133) 89 74 3 33
Total charges/(credits) to the income statement for ECL 1 (39) (6) 7 (37)
Amounts written off from IAP - - - (49) (49)
Total provision for ECL on loans and credit commitments as
at 30 September 2022
103 240 69 27 439

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 23
Note 12 Provision for expected credit losses (continued)
Movements in components of loss allowance – by types of credit exposure
The provision for ECL on loans and credit commitments can be further disaggregated into the following types of credit exposure:
NZ BANKING GROUP
PerformingNon-performing
Stage 1Stage 2Stage 3Stage 3
$ millions
CAPCAPCAPIAP
Total
Residential mortgages
Provision for ECL as at 30 September 2022 46 91 43 9 189
Transfers to Stage 1 94 (90) (4) - -
Transfers to Stage 2 (2) 22 (20) - -
Transfers to Stage 3 CAP - (6) 8 (2) -
Transfers to Stage 3 IAP - - (9) 9 -
Reversals of previously recognised impairment charges - - - (5) (5)
New financial assets originated 5 - - - 5
Financial assets derecognised during the year (1) (4) (12) - (17)
Changes in CAP due to amounts written off - - - - -
Other charges/(credits) to the income statement (100) 134 55 4 93
Total charges/(credits) to the income statement for ECL (4) 56 18 6 76
Amounts written off from IAP - - - (5) (5)
Total provision for ECL on loans and credit commitments as
at 30 September 2023
42 147 61 10 260
Other retail
Provision for ECL as at 30 September 2022 17 43 13 1 74
Transfers to Stage 1 69 (66) (3) - -
Transfers to Stage 2 (6) 13 (7) - -
Transfers to Stage 3 CAP - (13) 13 - -
Transfers to Stage 3 IAP - - (1) 1 -
Reversals of previously recognised impairment charges - - - (1) (1)
New financial assets originated 5 - - - 5
Financial assets derecognised during the year (2) (11) (3) - (16)
Changes in CAP due to amounts written off - - (23) - (23)
Other charges/(credits) to the income statement (68) 76 23 - 31
Total charges/(credits) to the income statement for ECL (2) (1) (1) - (4)
Amounts written off from IAP - - - - -
Total provision for ECL on loans and credit commitments as
at 30 September 2023
15 42 12 1 70
Corporate
Provision for ECL as at 30 September 2022 40 106 13 17 176
Transfers to Stage 1 65 (64) (1) - -
Transfers to Stage 2 (9) 16 (6) (1) -
Transfers to Stage 3 CAP - (18) 20 (2) -
Transfers to Stage 3 IAP - (2) (4) 6 -
Reversals of previously recognised impairment charges - - - (3) (3)
New financial assets originated 7 - - - 7
Financial assets derecognised during the year (5) (28) (8) - (41)
Changes in CAP due to amounts written off - - (1) - (1)
Other charges/(credits) to the income statement (64) 131 21 2 90
Total charges/(credits) to the income statement for ECL (6) 35 21 2 52
Amounts written off from IAP - - - (7) (7)
Total provision for ECL on loans and credit commitments as
at 30 September 2023
34 141 34 12 221
The above movements in components of loss allowance table does not include ‘Other’ credit exposures on the basis that the provision for ECL is
nil.

Notes to the financial statements
24 Westpac Banking Corporation - New Zealand Banking Group
Note 12 Provision for expected credit losses (continued)
NZ BANKING GROUP
PerformingNon-performing
Stage 1Stage 2Stage 3Stage 3
$ millions
CAPCAPCAPIAP
Total
Residential mortgages
Provision for ECL as at 30 September 2021 46 70 46 8 170
Transfers to Stage 1 43 (36) (7) - -
Transfers to Stage 2 (2) 28 (26) - -
Transfers to Stage 3 CAP - (3) 3 - -
Transfers to Stage 3 IAP - - (5) 5 -
Reversals of previously recognised impairment charges - - - (1) (1)
New financial assets originated 5 - - - 5
Financial assets derecognised during the year (2) (3) (12) - (17)
Changes in CAP due to amounts written off - - - - -
Other charges/(credits) to the income statement (44) 35 44 - 35
Total charges/(credits) to the income statement for ECL - 21 (3) 4 22
Amounts written off from IAP - - - (3) (3)
Total provision for ECL on loans and credit commitments as
at 30 September 2022
46 91 43 9 189
Other retail
Provision for ECL as at 30 September 2021 21 62 23 1 107
Transfers to Stage 1 84 (76) (8) - -
Transfers to Stage 2 (6) 16 (10) - -
Transfers to Stage 3 CAP - (14) 14 - -
Transfers to Stage 3 IAP - - - - -
Reversals of previously recognised impairment charges - - - - -
New financial assets originated 4 - - - 4
Financial assets derecognised during the year (4) (13) (3) - (20)
Changes in CAP due to amounts written off - - (23) - (23)
Other charges/(credits) to the income statement (82) 68 20 1 7
Total charges/(credits) to the income statement for ECL (4) (19) (10) 1 (32)
Amounts written off from IAP - - - (1) (1)
Total provision for ECL on loans and credit commitments as
at 30 September 2022
17 43 13 1 74
Corporate
Provision for ECL as at 30 September 2021 35 147 6 60 248
Transfers to Stage 1 14 (10) (4) - -
Transfers to Stage 2 (4) 8 (3) (1) -
Transfers to Stage 3 CAP - (7) 9 (2) -
Transfers to Stage 3 IAP - (7) (1) 8 -
Reversals of previously recognised impairment charges - - - (5) (5)
New financial assets originated 7 - - - 7
Financial assets derecognised during the year (5) (11) (4) - (20)
Changes in CAP due to amounts written off - - - - -
Other charges/(credits) to the income statement (7) (14) 10 2 (9)
Total charges/(credits) to the income statement for ECL 5 (41) 7 2 (27)
Amounts written off from IAP - - - (45) (45)
Total provision for ECL on loans and credit commitments as
at 30 September 2022
40 106 13 17 176
The above movements in components of loss allowance table does not include ‘Other’ credit exposures on the basis that the provision for ECL is
nil.

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 25
Note 12 Provision for expected credit losses (continued)
Impact of overlays on the provision for ECL on loans and credit commitments
The following table attributes the provision for ECL on loans and credit commitments between modelled ECL and portfolio overlays.
Portfolio overlays are used to capture risk of increased uncertainty relating to forward-looking economic conditions, or areas of potential risk and
uncertainty in the portfolio, that are not captured in the underlying modelled ECL.
NZ BANKING GROUP
$ millions20232022
Modelled provision for ECL on loans and credit commitments 505 313
Overlays 46 126
Total provision for ECL on loans and credit commitments 551 439
Details of changes related to forward-looking economic inputs and portfolio overlays, based on reasonable and supportable information up to
the date of this disclosure statement, are provided below.
Modelled provision for ECL on loans and credit commitments
The modelled provision for ECL on loans and credit commitments is a probability weighted estimate based on three scenarios which together
represent the NZ Banking Group’s view of the forward-looking distribution of potential loss outcomes. The changes in provisions as a result of
changes in modelled ECL are reflected through the “Other charges/(credits) to the income statement” line in the “Movements in components of
loss allowance” table. A recalibration of a residential mortgage model was performed during the year, increasing the sensitivity from forward-
looking macroeconomic factors, which is included within the change in provision as a result of changes in modelled ECL. Portfolio overlays are
used to capture potential risk and uncertainty in the portfolio that are not captured in the underlying modelled ECL.
The base case scenario uses the following Westpac Economic forecasts:
Key economic assumptions for base
case scenario
30 September 202330 September 2022
Annual GDPForecast growth of
0.8% for calendar year 2023 and
0.2% for calendar year 2024.
Forecast growth of
1.9% for calendar year 2022 and
1.6% for calendar year 2023.
Residential property pricesForecast annual price contraction of
-1.0% for calendar year 2023 and
price appreciation of
+7.7% for calendar year 2024.
Forecast annual price contraction of
-10.0% for calendar year 2022 and
-5.0% for calendar year 2023.
Cash rateForecast cash rate of
5.75% at December 2023 and
5.25% at December 2024.
Forecast cash rate of
4.00% at December 2022 and
4.00% at December 2023.
Unemployment rateForecast rate of
4.3% at December 2023 and
5.2% at December 2024
Forecast rate of
3.4% at December 2022 and
3.8% at December 2023.
The downside scenario is a more severe scenario with ECL higher than the base case. This scenario assumes a recession with a combination of
negative GDP growth, declines in commercial and residential property prices and an increase in the unemployment rate, which simultaneously
impact ECL across all portfolios from the reporting date. The assumptions used in this scenario and relativities to the base case will be monitored
having regard to the emerging economic conditions and updated where necessary. The upside scenario represents a modest improvement to the
base case.
The following sensitivity table shows the reported provision for ECL on loans and credit commitments based on the probability weighted scenarios
and what the provision for ECL on loans and credit commitments would be assuming a 100% weighting is applied to the base case scenario and to
the downside scenario (with all other assumptions held constant).
NZ BANKING GROUP
$ millions20232022
Reported probability-weighted ECL 551 439
100% base case ECL 417 330
100% downside ECL 719 578

Notes to the financial statements
26 Westpac Banking Corporation - New Zealand Banking Group
Note 12 Provision for expected credit losses (continued)
If 1% of the stage 1 gross exposure from loans and credit commitments (calculated on a 12-month ECL) was reflected in stage 2 (calculated on a
lifetime ECL) the provision for ECL on loans and credit commitments would increase by $14 million (30 September 2022: $23 million) based on
applying the average provision coverage ratios by stage to the movement in the gross exposure by stage.
The following table indicates the weightings applied by the NZ Banking Group as at 30 September 2023 and 30 September 2022.
NZ BANKING GROUP
Scenario weightings (%)20232022
Upside55
Base5050
Downside4545
Portfolio overlays
Portfolio overlays are used to address areas of risk, including significant uncertainties that are not captured in the underlying modelled ECL.
Determination of portfolio overlays requires expert judgement and is thoroughly documented and subject to comprehensive internal governance
and oversight. Overlays are continually reassessed and if the risk is judged to have changed (increased or decreased), or is subsequently captured
in the modelled ECL, the overlay will be released or remeasured.
The NZ Banking Group’s total portfolio overlays as at 30 September 2023 were $46 million (30 September 2022: $126 million) and comprise:
$29 million on residential mortgages and other retail portfolios (30 September 2022: $52 million) to reflect the expected, lagged impact of
increasing interest rates. The overlay was decreased due to loans moving onto higher interest rates where the credit outcomes are
considered to be included in the modelled outcome;
$14 million on the corporate portfolio (30 September 2022: $30 million), established to reflect delayed emergence of credit stresses following
COVID disruptions. The quantum of the overlay reflects the estimate of the remaining delayed emergence; and
$3 million (30 September 2022: $4 million) reflecting other related risks.
Other overlays held at 30 September 2022 have been released on the basis that these are considered to be reflected in the modelled outcome.
Impact of changes in gross carrying amount on the provision for ECL
Stage 1 gross carrying amount had a net decrease of $9.4 billion (30 September 2022: increased by $0.8 billion), primarily driven by a model
recalibration for residential mortgages and underlying portfolio movement from the residential mortgages and corporate portfolios,
including derecognitions and repayments, partially offset by new lending during the period and exposures transferred from Stage 2 for
releases in overlays. The Stage 1 ECL decrease is in line with Stage 1 exposure movement to Stage 2, primarily driven by a model recalibration
for residential mortgages, underlying portfolio movements and a more negative economic outlook.
Stage 2 gross carrying amount increased by $11.6 billion (30 September 2022: increased by $3.6 billion), primarily driven by a model
recalibration for residential mortgages and underlying portfolio movement from the residential mortgages and corporate portfolios, partially
offset by exposures transferred to Stage 1 for releases in overlays. Stage 2 ECL increases are driven by a model recalibration for residential
mortgages, underlying portfolio movements and a more negative economic outlook from the residential mortgages and corporate portfolios.
Stage 3 gross carrying amount increased by $0.2 billion (30 September 2022: decreased by $0.1 billion), driven by increases in 90 days past
due exposures from the residential mortgages portfolio and customer downgrades from the corporate portfolio, offset by releases due to
write-offs from the other retail portfolio. Stage 3 ECL increases are in line with the increase in Stage 3 exposures.
Refer to Note iii. Asset quality of the Registered bank disclosures for further details.
Write-offs still under enforcement activity
The amount of current year write-offs which remain subject to enforcement activity was $23 million (30 September 2022: $18 million).

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 27
Note 13 Credit risk management
IndexNote nameNote number
Credit risk management framework13.1
Credit risk ratings system13.2
Credit concentrations and maximum exposure to credit risk13.3
Credit quality of financial assets13.4
Credit risk
The risk of financial loss where a customer or counterparty
fails to meet their financial obligations to the NZ Banking
Group.
Credit risk mitigation, collateral and other credit enhancements13.5
13.1 Credit risk management framework
Please refer to Note 31.1 for details of the NZ Banking Group’s overall Risk Management Framework.
The Overseas Banking Group maintains a Credit Risk Management Framework, a Credit Risk Management Strategy, and a Credit Risk Appetite
Statement, and a number of supporting policies and appetite statements that define roles and responsibilities, acceptable practices, limits
and key controls.
The Overseas Bank’s Credit Risk Management Framework describes the principles, methodologies, systems, roles and responsibilities,
reports and key controls for managing credit risk. Within the Credit Risk Management Framework, the NZ Banking Group has its own credit
approval limits approved by Westpac New Zealand’s Board as delegated by the Overseas Banking Group’s Chief Risk Officer.
Westpac New Zealand’s BRCC, Westpac New Zealand’s RISKCO and Westpac New Zealand’s CREDCO monitor the risk profile, performance
and management of the NZ Banking Group’s credit portfolio on at least a quarterly basis, and the development and review of key credit risk
policies are performed on at least an annual basis; other management reviews occur monthly or more frequently.
Additionally, NZ Branch Risk Committee monitors the risk profile, performance and management of the NZ Branch credit portfolio on a
quarterly basis. Other management reviews occur monthly or more frequently. Group BRiskC oversees the development and review of key
credit risk policies.
The NZ Banking Group’s Credit Risk Rating System Policy describes the credit risk rating system philosophy, design, key features and uses of
rating outcomes.
All models materially impacting the risk rating process are periodically reviewed in accordance with the NZ Banking Group’s model risk
policies.
An annual review is performed of the Credit Risk Rating System for approval by the Overseas Banking Group’s Group Chief Credit Officer and
noting by Group BriskC and Overseas Banking Group CREDCO.
Specific credit risk estimates (including PD, LGD and EAD) are overseen and reviewed annually in line with the Overseas Banking Group’s
Model Risk Policy. Models are approved under delegated authority from the Overseas Banking Group’s Chief Risk Officer. Model Risk is
overseen by the Overseas Banking Group’s Model Risk Committee (a subcommittee of the Group BRiskC).
In determining the provision for ECL, the forward-looking economic inputs and the probability weightings of the forward-looking scenarios as
well as any adjustments made to the modelled outcomes are subject to the approval of the NZ Banking Group’s Chief Financial Officer and
Chief Risk Officer with oversight from the Westpac New Zealand Board (and its Committees).
Policies for delegating credit approval authorities and formal limits for the extension of credit are established throughout the NZ Banking
Group.
Credit policies are established and maintained throughout the NZ Banking Group. They include policies governing the origination, evaluation,
approval, documentation, settlement and ongoing management of credit risks.
Sector policies guide credit extension where industry-specific guidelines are considered necessary (e.g. acceptable financial ratios or
permitted collateral).
The Overseas Banking Group’s Related Entity Risk Management Policy and supporting policies govern credit exposures to related entities to
minimise the spread of credit risk between Overseas Banking Group entities and to comply with prudential requirements prescribed by
APRA.
Climate change-related credit risks are considered in line with the Overseas Banking Group’s Climate Change Position Statement and Action
Plan. Climate change risks are managed in line with the NZ Banking Group’s Risk Management Framework which is supported by the
Overseas Banking Group’s Sustainability Risk Management Framework, Westpac New Zealand’s ESG Credit Risk Policy and Westpac New
Zealand’s and the Overseas Banking Group’s Board Risk Appetite Statements. Where appropriate, these are applied at the portfolio,
customer, and transaction level.
Westpac New Zealand’s CREDCO oversees work to identify and manage the potential impact on credit exposures from climate change-
related transition and physical risks across the NZ Banking Group.
Westpac New Zealand’s ESG Credit Risk Policy details the overall approach to managing ESG risks in the credit risk process for applicable
transactions.

Notes to the financial statements
28 Westpac Banking Corporation - New Zealand Banking Group
Note 13 Credit risk management (continued)
13.2 Credit risk ratings system
The principal objective of the credit risk rating system is to reliably assess the credit risk to which the NZ Banking Group is exposed. The NZ
Banking Group has two main approaches to this assessment:
Transaction-managed customers
Transaction managed customers are generally customers with business lending exposures. They are individually assigned a CRG, corresponding
to their expected PD. Each facility is assigned an LGD. The NZ Banking Group’s risk rating system has a tiered scale of risk grades for both non-
defaulted customers and defaulted customers. Non-defaulted CRGs are mapped to Moody’s and S&P external senior ranking unsecured ratings.
The following table shows the NZ Banking Group’s high level CRG’s for transaction-managed portfolios mapped to the NZ Banking Group’s credit
quality disclosure categories and to their corresponding external rating.
Transaction-managed
Financial Statement DisclosureNZ Banking Group’s CRGMoody’s RatingS&P Rating
StrongAAaa – Aa3AAA – AA-
BA1 – A3A+ – A-
CBaa1 – Baa3BBB+ – BBB-
Good/satisfactoryDBa1 – B1BB+ – B+
NZ Banking Group Rating
WeakEWatchlist
FSpecial Mention
GSubstandard/Default
HDoubtful/Default
Program-managed portfolio
The program-managed portfolio generally includes retail products including mortgages, personal lending (including credit cards) as well as certain
SME lending. These customers are grouped into pools of similar risk. Pools are created by analysing similar risk characteristics that have historically
predicted that an account is likely to go into default. Customers grouped according to these predictive characteristics are assigned a PD and LGD
relative to their pool. The credit quality of these pools is based on a combination of behavioural factors, delinquency trends, PD estimates and loan to
valuation ratio (housing loans only).
Program-managed (‘PM’)
Financial Statement DisclosureAdvanced PM Model
1
Simplified PM Approach
2
StrongStage 1 facilities with PM Risk Grade between 13 and 10-
Good/satisfactoryStage 1 facilities with PM Risk Grade between 9 and 6Stage 1
Stage 2 facilities with PM Risk Grade between 13 and 6Stage 2 and 0 - 29 days past due
WeakAll facilities with PM Risk Grade between 5 and 1Stage 2 and 30 or more days past due
All facilities with PM Risk Grade equal to 0/DefaultStage 3/Default
1
Used for Residential Mortgages, Credit Cards & SME lending.
2
Used for Personal lending.

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 29
Note 13 Credit risk management (continued)
13.3 Credit concentrations and maximum exposure to credit risk
Credit risk is concentrated when a number of counterparties are engaged in similar activities, have similar economic characteristics and thus may
be similarly affected by changes in economic or other conditions.
The NZ Banking Group monitors its credit portfolio to allow it to manage risk concentrations and rebalance the portfolio.
Individual customers or groups of related customers
The NZ Banking Group has large exposure limits governing the aggregate size of credit exposure normally acceptable to individual customers and
groups of related customers. These limits are tiered by CRG.
Specific industries
Exposures to businesses, governments and other financial institutions are classified into a number of industry clusters based on related ANZSIC
codes and are monitored against the NZ Banking Group’s industry risk appetite limits.
Individual countries
The NZ Banking Group has limits governing risks related to individual countries, such as political situations, government policies and economic
conditions that may adversely affect either a customer’s ability to meet its obligations to the NZ Banking Group, or the NZ Banking Group’s ability
to realise its assets in a particular country.
Maximum exposure to credit risk
The maximum exposure to credit risk (excluding collateral received) is represented by the carrying amount of on-balance sheet financial assets
and undrawn credit commitments as set out in the following table.
NZ BANKING GROUP
$ millions
20232022
Financial assets
Cash and balances with central banks
9,325 11,162
Collateral paid
62 87
Trading securities and financial assets measured at FVIS
5,007 3,501
Derivative financial instruments
5,494 9,383
Investment securities
6,651 5,623
Loans
99,711 97,392
Other financial assets
469
644
Due from related entities
4,488 6,609
Total financial assets 131,207 134,401
Undrawn credit commitments
Letters of credit and guarantees
1,015 1,025
Commitments to extend credit
27,869 27,904
Total undrawn credit commitments 28,884 28,929
Total maximum credit risk exposure 160,091 163,330

Notes to the financial statements
30 Westpac Banking Corporation - New Zealand Banking Group
Note 13 Credit risk management (continued)
Concentration of credit exposures
NZ BANKING GROUP
$ millions20232022
Analysis of on-balance sheet credit exposures by geographical areas
New Zealand
1
118,689 118,161
Overseas
1
13,025 16,640
Subtotal 131,714 134,801
Provision for ECL on loans (507) (400)
Total on-balance sheet credit exposures 131,207 134,401
Analysis of on-balance sheet credit exposures by industry sector
Accommodation, cafes and restaurants 384 395
Agriculture 9,113 9,267
Construction 452 500
Finance and insurance 12,812 13,969
Forestry and fishing 439 515
Government, administration and defence 17,241 17,257
Manufacturing 2,306 3,731
Mining 172 227
Property 8,392 8,214
Property services and business services 1,159 1,296
Services 1,607 1,410
Trade 2,582 2,729
Transport and storage 907 1,193
Utilities 2,590 2,213
Retail lending 66,978 65,162
Subtotal 127,134 128,078
Provision for ECL on loans (507) (400)
Due from related entities 4,488 6,609
Other financial assets 92 114
Total on-balance sheet credit exposures 131,207 134,401
Analysis of off-balance sheet credit exposures by geographical areas
New Zealand 28,244 28,421
Overseas 640 508
Total off-balance sheet credit exposures 28,884 28,929
Analysis of off-balance sheet credit exposures by industry sector
Accommodation, cafes and restaurants 55 126
Agriculture 607 626
Construction 551 509
Finance and insurance 2,602 1,880
Forestry and fishing 135 170
Government, administration and defence 834 966
Manufacturing 1,508 1,422
Mining 79 106
Property 1,502 1,648
Property services and business services 522 785
Services 1,138 1,285
Trade 1,531 1,717
Transport and storage 450 790
Utilities 1,761 1,838
Retail lending 15,609 15,061
Total off-balance sheet credit exposures 28,884 28,929
1
Comparatives have been restated to correctly reflect the geographical classification of on-balance sheet credit exposures. The restatement for 2022 comparative
results in a $915 million decrease in New Zealand credit exposures from $119,076 million to $118,161 million and $915 million increase in overseas credit exposure
from $15,725 million to $16,640 million.
ANZSIC has been used as the basis for disclosing industry sectors.

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 31
Note 13 Credit risk management (continued)
13.4 Credit quality of financial assets
The following table shows the credit quality of gross credit risk exposures measured at amortised cost or at FVOCI to which the impairment
requirements of NZ IFRS 9 apply. The credit quality is determined by reference to the credit risk ratings system (refer to Note 13.2) and
expectations of future economic conditions under multiple scenarios:
NZ BANKING GROUP
20232022
$ millions
Stage 1Stage 2Stage 3Total
1
Stage 1Stage 2Stage 3Total
1
Loans - Residential Mortgages
Strong
49,193 - - 49,193 55,768 - - 55,768
Good/satisfactory
1,297 14,591 - 15,888 1,527 6,000 - 7,527
Weak
- 167 509 676 - 172 360 532
Total Loans - Residential Mortgages
50,490 14,758 509 65,757 57,295 6,172 360 63,827
Loans - Other retail
Strong
1,070 - - 1,070 1,124 - - 1,124
Good/satisfactory
793 648 - 1,441 937 573 - 1,510
Weak
1 77 59 137 2 135 58 195
Total Loans - Other retail
1,864 725 59 2,648 2,063 708 58 2,829
Loans - Corporate
Strong
12,118 - - 12,118 12,953 - - 12,953
Good/satisfactory
11,762 6,322 - 18,084 13,378 3,613 - 16,991
Weak
- 1,214 203 1,417 - 946 125 1,071
Total Loans - Corporate
23,880 7,536 203 31,619 26,331 4,559 125 31,015
Loans - Other
Strong
194 - - 194 121 - - 121
Good/satisfactory
- - - - - - - -
Weak
- - - - - - - -
Total Loans - Other
194 - - 194 121 - - 121
Investment Securities
Strong
6,651 - - 6,651 5,623 - - 5,623
Good/satisfactory
- - - - - - - -
Weak
- - - - - - - -
Total Investment Securities
6,651 - - 6,651 5,623 - - 5,623
All other financial assets
Strong
12,484 - - 12,484 14,409 - - 14,409
Good/satisfactory
34 52 - 86 27 17 - 44
Weak
- 4 2 6 - 2 1 3
Total all other financial assets
12,518 56 2 12,576 14,436 19 1 14,456
Undrawn credit commitments
Strong
21,511 4 - 21,515 22,561 6 - 22,567
Good/satisfactory
3,598 3,519 - 7,117 4,211 1,979 - 6,190
Weak
1 225 26 252 11 135 26 172
Total undrawn credit commitments
25,110 3,748 26 28,884 26,783 2,120 26 28,929
Total strong
103,221 4 - 103,225 112,559 6 - 112,565
Total good/satisfactory
17,484 25,132 - 42,616 20,080 12,182 - 32,262
Total weak
2 1,687 799 2,488 13 1,390 570 1,973
Total on- and off-balance sheet
120,707 26,823 799 148,329 132,652 13,578 570 146,800
1
This credit quality disclosure differs to that of credit risk concentration as it relates only to financial assets measured at amortised costs or at FVOCI and
therefore excludes trading securities and financial assets measured at FVIS, and derivative financial instruments.
Details of collateral held in support of these balances are provided in Note 13.5.

Notes to the financial statements
32 Westpac Banking Corporation - New Zealand Banking Group
Note 13 Credit risk management (continued)
13.5 Credit risk mitigation, collateral and other credit enhancements
The NZ Banking Group uses a variety of techniques to reduce the credit risk arising from its lending activities.
This includes the NZ Banking Group having processes in place to ensure that it has direct, irrevocable and unconditional recourse to collateral and
other credit enhancements through obtaining legally enforceable documentation.
Collateral
The table below describes the nature of collateral or security held for each relevant class of financial asset:
Financial assetsNature of collateral
Loans – residential
mortgages
1
Housing loans are secured by a mortgage over property and additional security may take the form of guarantees
and deposits.
Loans – other retail
1
Personal lending (including credit cards and overdrafts) is predominantly unsecured. Where security is taken, it
is restricted to eligible motor vehicles, caravans, campers, motor homes and boats.
SME loans may be secured, partially secured or unsecured. Security is typically taken by way of a mortgage over
property and/or a general security agreement over business assets or other assets.
Loans – corporate
1
Business loans may be secured, partially secured or unsecured. Security is typically taken by way of a mortgage
over property and/or a general security agreement over business assets or other assets.
Other security such as guarantees or standby letters of credit may also be taken as collateral, if appropriate.
Trading securities and
financial assets measured
at FVIS and derivative
financial instruments
These exposures are carried at fair value which reflects the credit risk.
For trading securities, no collateral is sought directly from the issuer or counterparty; however this may be implicit
in the terms of the instrument (such as an asset-backed security). The terms of debt securities may include
collateralisation.
Master netting agreements are typically used to enable the effects of derivative assets and derivative liabilities with
the same counterparty to be offset when measuring these exposures. Additionally, collateralisation agreements
are also typically entered into with major institutional counterparties to avoid the potential build-up of excessive
mark-to-market positions. Derivative transactions are increasingly being cleared through central clearers.
1
This includes collateral held in relation to associated credit commitments.
Management of risk mitigation
The NZ Banking Group mitigates credit risk through controls covering:
Collateral and valuation
management
The Overseas Bank manages collateral under collateralisation agreements centrally for all branches of the
Overseas Bank and Westpac New Zealand.
The estimated realisable value of collateral held in support of loans is based on a combination of:
formal valuations currently held for such collateral; and
management’s assessment of the estimated realisable value of all collateral held.
This analysis also takes into consideration any other relevant knowledge available to management at the time.
Updated valuations are obtained when appropriate.
The NZ Banking Group revalues collateral related to financial markets positions on a daily basis and has formal
processes in place to promptly call for collateral top-ups, if required. These processes include margining for
non-centrally cleared customer derivatives where required under APRA Prudential Standard CPS226. The
collateralisation arrangements are documented via the Credit Support Annex of the International Swaps and
Derivatives Association dealing agreements and Global Master Repurchase Agreements for repurchase
transactions.
Other credit enhancements
The NZ Banking Group only recognises guarantees, standby letters of credit, or credit derivative protection
from entities meeting minimum eligibility requirements (provided they are not related to the entity with which
the NZ Banking Group has a credit exposure) including but not limited to:
Sovereign;
Australia and New Zealand public sector;
Authorised deposit-taking institutions and overseas banks with a minimum risk grade equivalent of A3 / A-;
and
Other entities with a minimum risk grade equivalent of A3 / A-.
Credit Portfolio Management manages the NZ Banking Group’s corporate, sovereign and bank credit portfolios
through monitoring the exposure and any offsetting hedge positions.
Credit Portfolio Management purchases credit protection from entities that meet minimum eligibility
requirements.

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 33
Note 13 Credit risk management (continued)
Offsetting
Creditworthy customers domiciled in New Zealand may enter into formal agreements with the NZ Banking
Group, permitting the NZ Banking Group to set-off gross credit and debit balances in their nominated
accounts. Cross-border set-offs are not permitted.
Close-out netting is undertaken with counterparties with whom the NZ Banking Group has entered into a legally
enforceable master netting agreement for their off-balance sheet financial market transactions in the event of
default.
Further details of offsetting are provided in Note 25.
Central clearing
The NZ Banking Group increasingly executes derivative transactions through central clearing counterparties.
Central clearing counterparties mitigate risk through stringent membership requirements, the collection of
margin against all trades placed, the default fund, and an explicitly defined order of priority of payments in the
event of default.
Collateral held against loans
The NZ Banking Group analyses the coverage of the loan portfolio which is secured by the collateral that it holds. Coverage is measured as follows:
CoverageSecured loan to collateral value ratio
Fully securedLess than or equal to 100%
Partially securedGreater than 100% but not more than 150%
Unsecured
Greater than 150%, or no security held (e.g. can include credit cards, personal loans, and exposure to highly rated
corporate entities)
The NZ Banking Group's loan portfolio has the following coverage from collateral held:
NZ BANKING GROUP
20232022
%
Residential
Mortgages
1
Other
RetailCorporate Other Total
Residential
Mortgages
1
Other
RetailCorporate Other Total
Performing Loans
Fully secured
100 46 70 56 89 100 48 70 53 89
Partially secured
- 2 9 1 3 - 2 11 3 4
Unsecured
- 52 21 43 8 - 50 19 44 7
Total 100 100 100 100 100 100 100 100 100 100
Non-performing loans
Fully secured
94 62 57 - 82 94 66 33 - 77
Partially secured
6 7 28 - 12 6 1 37 - 13
Unsecured
- 31 15 - 6 - 33 30 - 10
Total 100 100 100 - 100 100 100 100 - 100
1
For the purposes of collateral classifications, residential mortgages are classified as fully secured, unless they are non-performing in which case they may be
classified as partially secured. Refer to Note iv. ‘Additional mortgage information’ of the Registered bank disclosures for LVR analysis of residential mortgages.
Details of the carrying value and associated provision for ECL are disclosed in Note 11, Note iii. Asset quality of the Registered bank disclosures
and Note 12 respectively. The credit quality of loans is disclosed in Note 13.4.
Collateral held against financial assets other than loans
NZ BANKING GROUP
$ millions20232022
Cash, primarily for derivatives 614 724
Securities under reverse repurchase agreements
1
482
171
Total other collateral held 1,096 895
1
Securities received as collateral are not recognised on the NZ Banking Group's balance sheet.

Notes to the financial statements
34 Westpac Banking Corporation - New Zealand Banking Group
Note 14 Other financial assets
NZ BANKING GROUP
$ millions20232022
Accrued interest receivable 244 168
Trade debtors 4 2
Securities sold not delivered 129 263
Interbank lending 4 99
Other 88 112
Total other financial assets 469 644
Note 15 Deferred tax assets
Accounting policy
Deferred tax accounts for temporary differences between the carrying amounts of assets and liabilities in the financial statements and their values
for taxation purposes.
Deferred tax is determined using the enacted or substantively enacted tax rates and laws which are expected to apply when the assets will be
realised or the liabilities settled.
Deferred tax assets and liabilities have been offset where they relate to the same taxation authority, the same taxable entity or group and where
there is a legal right and intention to settle on a net basis.
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available to utilise the assets.
Deferred tax is not recognised for the following temporary differences:
the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither the accounting nor
taxable profit or loss; and
the initial recognition of goodwill in a business combination.
Critical accounting assumptions and estimates
On a similar basis to that described in Note 7, determining deferred tax assets and liabilities is considered one of the NZ Banking Group’s critical
accounting assumptions and estimates.
NZ BANKING GROUP
$ millions20232022
Deferred tax assets/(liabilities) comprise the following temporary differences:
Provision for ECL on loans
141 112
Provision for ECL on credit commitments
12 11
Cash flow hedges
(148) (164)
Provision for employee entitlements
21 21
Compliance, regulation and remediation provisions
12 18
Software, property and equipment
(33) (43)
Lease liabilities
64 78
Financial instruments
10 28
Other temporary differences
9 7
Net deferred tax assets
88 68
The deferred tax (charge)/credit in income tax expense comprises the following temporary
differences:
Provision for ECL on loans
29 (21)
Provision for ECL on credit commitments
1 (3)
Provision for employee entitlements
2 -
Compliance, regulation and remediation provisions
(6) (3)
Software, property and equipment
10 5
Lease liabilities
(14) (3)
Financial instruments
(18) 11
Other temporary differences
2 (2)
Total deferred tax (charge)/credit in income tax expense
6 (16)
The deferred tax (charge)/credit in OCI comprises the following temporary differences:
Cash flow hedges
16 (140)
Provision for employee entitlements
(2) (2)
Total deferred tax (charge)/credit in OCI
14 (142)

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 35
Note 16 Intangible assets
Accounting policy
Indefinite life intangible assets
Goodwill
Goodwill acquired in a business combination is initially measured at cost, generally being the excess of:
i. the consideration paid; over
ii. the net fair value of the identifiable assets, liabilities and contingent liabilities acquired.
Subsequently, goodwill is not amortised but rather tested for impairment. Impairment is tested at least annually or whenever there is an
indication of impairment. An impairment charge is recognised when a CGU’s carrying value exceeds its recoverable amount. Recoverable amount
means the higher of the CGU’s fair value less costs to sell and its value-in-use.
The NZ Banking Group’s CGUs represent the smallest identifiable group of assets that generate cash inflows that are largely independent of the
cash inflows from other assets or group of assets. They reflect the level at which the NZ Banking Group monitors and manages its operations.
Finite life intangible assets
Finite life intangibles such as computer software which are recognised initially at cost and subsequently at amortised cost less any impairment.
IntangibleUseful lifeDepreciation method
GoodwillIndefiniteNot applicable
Computer software3 to 5 yearsStraight-line or diminishing balance method (using the Sum of the Years Digits)
Critical accounting assumptions and estimates
Judgement is required in determining the fair value of assets and liabilities acquired in a business combination. A different assessment of fair
values would have resulted in a different goodwill balance and different post-acquisition performance of the acquired entity.
When assessing impairment of intangible assets, significant judgement is needed to determine the appropriate cash flows and discount rates to
be applied to the calculations. The significant assumptions applied to the value-in-use calculations are outlined below.
NZ BANKING GROUP
$ millions20232022
Goodwill525525
Computer software
457309
Total intangible assets
982834
Goodwill has been allocated to the following CGUs:
Consumer Banking and Wealth512512
BT Funds Management (NZ) Limited13
13
Net carrying amount of goodwill
525525
Impairment testing and results
Impairment testing is performed at least once a year, or whenever there is an indication of impairment, by comparing the recoverable amount of
each CGU with the carrying amount. The primary test for the recoverable amount is determined based on value-in-use which refers to the present
value of expected cash flows under its current use.
Impairment testing in the current year confirmed that the NZ Banking Group continues to have considerable headroom when determining whether
goodwill is recoverable, and no impairment should be recognised.

Notes to the financial statements
36 Westpac Banking Corporation - New Zealand Banking Group
Note 16 Intangible assets (continued)
Significant assumptions used in recoverable amount calculations
The assumptions made for goodwill impairment testing for each relevant significant CGU are provided in the following table and are based on past
experience and management’s expectations for the future. In the current year and given the present economic environment, the NZ Banking
Group has reassessed these assumptions and revised them where necessary in order to provide a reasonable estimate of the value-in-use of the
CGUs.
Discount rateCash flows
Equity rate / adjusted pre-tax equity rateForecast period / terminal growth rate
2023202220232022
Consumer Banking and Wealth11.5% / 15.2%10.5% / 13.8%3 years / 2%3 years / 2%
BT Funds Management (NZ) Limited11.5% / 15.2%10.5% / 13.8%3 years / 2%3 years / 2%
The NZ Banking Group discounts the projected cash flows by the adjusted pre-tax equity rate.
The cash flows used are based on management approved forecasts. These forecasts utilise information about current and future economic
conditions, observable historical information and management expectations of future business performance. The terminal value growth rate
represents the growth rate applied to extrapolate cash flows beyond the forecast period and reflects the midpoint of the Reserve Bank’s inflation
target over the medium term.
There are no reasonably possible changes in assumptions for any significant CGU that would result in an indication of impairment or have a
material impact on the NZ Banking Group’s reported results.
Note 17 Deposits and other borrowings
Accounting policy
Deposits and other borrowings are initially recognised at fair value and subsequently either measured at amortised cost using the effective
interest method or at fair value.
Deposits and other borrowings are designated at fair value if they are managed on a fair value basis, reduce or eliminate an accounting mismatch,
or contain an embedded derivative.
Where they are measured at fair value, any changes in fair value (except those due to changes in credit risk) are recognised in the income
statement. The change in the fair value that is attributable to changes in credit risk is recognised in OCI except where it would create an
accounting mismatch, in which case it is also recognised in the income statement.
Interest expense incurred is recognised in net interest income using the effective interest method.
Non-interest bearing relates to instruments which do not carry an entitlement to interest.
NZ BANKING GROUP
$ millions
20232022
Certificates of deposit 2,413 2,939
Non-interest bearing, repayable at call 12,009 14,391
Other interest bearing:
At call 29,302 31,245
Term 38,472 32,273
Total deposits and other borrowings 82,196 80,848
Deposits at fair value 2,413 2,939
Deposits at amortised cost 79,783 77,909
Total deposits and other borrowings 82,196 80,848

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 37
Note 18 Other financial liabilities
Accounting policy
Other financial liabilities include liabilities measured at amortised cost as well as liabilities which are measured at FVIS. Financial liabilities
measured at FVIS include:
trading liabilities (i.e. securities sold short); and
liabilities designated at FVIS (i.e. certain repurchase agreements)
Repurchase agreements
Where securities are sold subject to an agreement to repurchase at a predetermined price, they remain recognised on the balance sheet in their
original category (i.e. trading securities and financial assets measured at FVIS or investment securities).
The cash consideration received is recognised as a liability (repurchase agreements). Repurchase agreements are designated at fair value when
they are managed as part of a trading portfolio, otherwise they are measured on an amortised cost basis.
Where a repurchase agreement is designated at fair value, any changes in fair value (except those due to change in credit risk) are recognised in
the income statement as they arise. The change in fair value that is attributable to credit risk is recognised in OCI except where it would create an
accounting mismatch, in which case it is also recognised in the income statement.
NZ BANKING GROUP
$ millions20232022
Repurchase agreements
1
5,168
4,277
Interbank placements
4628
Accrued interest payable866303
Securities purchased not delivered
232
267
Trade creditors and other accrued expenses
2
213
79
Securities sold short
683
640
Other1413
Total other financial liabilities7,2225,607
Other financial liabilities at fair value
800950
Other financial liabilities at amortised cost6,4224,657
Total other financial liabilities7,2225,607
1
Repurchase agreements include those under the Funding for Lending Programme and Term Lending Facility. Refer to Note 31.2.2 for further details.
2
During the current financial year, the NZ Banking Group revised its treatment of ongoing trail commission payable to mortgage brokers. The NZ Banking Group
recognised a liability within other financial liabilities equal to the present value of the expected future trail commission payable and a corresponding increase in
capitalised brokerage costs in loans. The balance as at 30 September 2023 was $132 million for the NZ Banking Group. Refer also to Note 1(iv).

Notes to the financial statements
38 Westpac Banking Corporation - New Zealand Banking Group
Note 19 Debt issues
Accounting policy
Debt issues are bonds, notes and commercial paper that have been issued by the NZ Banking Group.
Debt issues are initially measured at fair value and subsequently either measured at amortised cost using the effective interest method or at fair
value.
Debt issues are designated at fair value if they reduce or eliminate an accounting mismatch or contain an embedded derivative.
Where they are measured at fair value, any changes in fair value (except those due to changes in credit risk) are recognised in the income
statement. The change in the fair value that is attributable to changes in credit risk is recognised in OCI except where it would create an
accounting mismatch, in which case it is also recognised in the income statement.
Interest expense incurred is recognised within net interest income using the effective interest method.
In the following table, the distinction between short-term (12 months or less) and long-term (greater than 12 months) debt is based on the original
maturity of the underlying security.
NZ BANKING GROUP
$ millions20232022
Short-term debt
Commercial paper 1,471 5,490
Total short-term debt 1,471 5,490
Long-term debt
Non-domestic medium-term notes 8,564 7,515
Covered bonds 4,994 3,563
Domestic medium-term notes 3,568 3,365
Total long-term debt 17,126 14,443
Total debt issues 18,597 19,933
Debt issues at fair value 1,471 5,490
Debt issues at amortised cost 17,126 14,443
Total debt issues 18,597 19,933
NZ BANKING GROUP
$ millions20232022
Movement reconciliation
Balance at beginning of the year 19,933 16,304
Issuances 7,827 13,602
Maturities, repayments, buy-backs and reductions (9,290) (10,297)
Total cash movements (1,463) 3,305
FX translation impact (41) 1,394
Fair value adjustments 9 (10)
Fair value hedge accounting adjustments 59 (1,106)
Other
1
100 46
Total non-cash movements 127 324
Balance at end of the year 18,597 19,933
1
Includes items such as amortisation of issue costs.

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 39
Note 20 Provisions
Accounting policy
Provisions are recognised for present obligations arising from past events where a payment (or other economic transfer) is likely to be necessary
to settle the obligation and can be reliably estimated.
Employee benefits – annual leave and other employee benefits
The provision for annual leave and other employee benefits (including long service leave, wages and salaries, inclusive of non-monetary benefits,
and any associated on-costs (e.g. payroll tax)) is calculated based on expected payments.
Provision for ECL on credit commitments
The NZ Banking Group is committed to provide facilities and guarantees as explained in Note 26. If it is probable that a facility will be drawn and
the resulting asset will be less than the drawn amount then a provision for impairment is recognised. The provision for impairment is calculated
using the same methodology as the provision for ECL (refer to Note 12).
Compliance, regulation and remediation provisions
The compliance, regulation and remediation provisions relate to matters pertaining to the provision of services to our customers identified both as
a result of regulatory action and internal reviews. An assessment of the likely cost to the NZ Banking Group of these matters (including applicable
customer refunds) is made on a case-by-case basis and specific provisions are made where appropriate.
Critical accounting assumptions and estimates
The financial reporting of provisions for compliance, regulation and remediation involves a significant degree of judgement in relation to
identifying whether a present obligation exists and also in estimating the probability, timing, nature and quantum of the outflows that may arise
from past events. These judgements are made based on the specific facts and circumstances relating to the individual events. Specific
judgements in respect of material items are included in the discussion below.
NZ BANKING GROUP
$ millions
Annual
leave and
other
employee
benefits
Provision for
ECL on credit
commitments
(refer to Note
12)
Compliance,
regulation
and
remediation
provisions
Lease
restoration
obligations
Restructuring
provisions
OtherTotal
Balance as at 30 September 2022
102 39 65 33 17 1 257
Additions 95 5 10 - 4 - 114
Utilisation
(85) - (6) (1) (6) - (98)
Reversal of unutilised provisions - - (15) (8) (1) - (24)
Balance as at 30 September 2023 112 44 54 24 14 1 249
Compliance, regulation and remediation provisions
The compliance, regulation and remediation provisions relate to matters pertaining to the provision of services to our customers identified as a
result of regulatory action and internal reviews, including the NZ Banking Group’s review of processes for some products relating to the
requirements of the CCCFA.
All potential claims and other liabilities are assessed on a case-by-case basis. A provision has been recognised where the NZ Banking Group has
conducted an assessment which determines the likelihood of loss as probable and where its potential loss can be reliably estimated.
A number of different estimates and judgements have been applied in measuring the provision at 30 September 2023, including the number of
impacted customers, the refund per customer and the additional costs to run the remediation program. It is possible that the actual outcome for
these matters may differ from the assumptions used in estimating the provision. Remediation processes may change over time as further facts
emerge and such changes could result in a change to the final exposure.
Where a provision has not been recognised, a contingent liability may exist. Refer to Note 26 for further details on contingent liabilities.
Restructuring provisions
The NZ Banking Group carries restructuring provisions for changes in its business, primarily for separation and redundancy costs arising from the
sale of Westpac Life on 28 February 2022.

Notes to the financial statements
40 Westpac Banking Corporation - New Zealand Banking Group
Note 21 Loan capital
Accounting policy
Loan capital is comprised of debt instruments which qualify for inclusion as regulatory capital under either the Reserve Bank BPRs or, in relation to
the Overseas Bank, the APRA Prudential Standards. Loan capital is initially measured at fair value and subsequently measured at amortised cost
using the effective interest method. Interest expense incurred is recognised in net interest income.
NZ BANKING GROUP
$ millions20232022
Additional Tier 1 loan capital - USD AT1 securities 1,879 1,986
Tier 2 loan capital - Subordinated notes
1,172
590
Total loan capital 3,051 2,576
NZ BANKING GROUP
$ millions20232022
Movement reconciliation
Balance at beginning of the year
2,576 2,988
Issuances
1
592 590
Maturities, repayments, buy-backs and reductions
- (1,178)
Total cash movements 592
(588)
FX translation impact (101) 460
Fair value hedge accounting adjustments (22) (284)
Other (amortisation of bond issue costs, etc) 6 -
Total non-cash movements (117) 176
Balance at end of the year 3,051 2,576
1
Consists of $600 million in loan capital issuances (30 September 2022: $600 million) and is net of $8 million in issuance costs (30 September 2022: $8 million) and
nil in loan capital held by related entities (30 September 2022: $2 million).
Additional Tier 1 loan capital
A summary of the key terms and features of the USD AT1 securities is provided below:
$Issue dateInterest rateOptional redemption date
US$1,250 million securities
1
21 September 20175.00% p.a.
2
21 September 2027 and every fifth anniversary thereafter
1
The USD AT1 securities were issued by the Overseas Bank acting through its NZ Branch.
2
Fixed interest rate of 5.00% p.a., until, but excluding 21 September 2027 (the ‘first reset date’). Every fifth anniversary thereafter is a reset date. If the USD AT1
securities are not redeemed, converted or written-off by the first reset date, the interest rate from, and including, each reset date thereafter to, but excluding the
next succeeding reset date, will be a fixed rate per annum equal to the prevailing 5-year USD mid-market swap rate plus 2.888% per annum.
Interest payable
Semi-annual interest payments on the USD AT1 securities are at the absolute discretion of the Overseas Bank and will only be paid if the payment
conditions are satisfied, including that the interest payment will not result in a breach of the Overseas Bank’s capital requirements under APRA’s
prudential standards; not result in the Overseas Bank becoming, or being likely to become, insolvent; and if APRA does not object to the payment.
Broadly, if for any reason an interest payment has not been paid in full on the relevant payment date, the Overseas Bank must not determine or
pay any dividends on Overseas Bank ordinary shares or undertake a discretionary buy-back or capital reduction of Overseas Bank ordinary shares,
unless the unpaid interest is paid in full within 20 business days of the relevant payment date or in certain other circumstances.
Redemption
The Overseas Bank may redeem all (but not some) USD AT1 securities on 21 September 2027 and every fifth anniversary thereafter, or for certain
taxation or regulatory reasons, subject to APRA’s prior written approval.

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 41
Note 21 Loan capital (continued)
Conversion
If a capital trigger event or non-viability trigger event occurs, the Overseas Bank must convert some or all of the USD AT1 securities into a variable
number of Overseas Bank ordinary shares calculated using the formula described in the terms of the USD AT1 securities but subject to a maximum
conversion number. The conversion number of the Overseas Bank’s ordinary shares will be calculated using the outstanding principal amount of
each USD AT1 security translated into Australian dollars and the Overseas Bank ordinary share price determined over the five business day period
prior to the capital trigger event date or non-viability trigger event date and includes a 1% discount. The maximum conversion number is
calculated using the outstanding principal amount of each USD AT1 security translated into Australian dollars at the time of issue and the Overseas
Bank share price which is broadly equivalent to 20% of the Overseas Bank ordinary share price at the time of issue of the USD AT1 securities.
A capital trigger event occurs when the Overseas Bank determines, or APRA notifies the Overseas Bank in writing that it believes, the Overseas
Bank’s Common Equity Tier 1 Capital ratio is equal to or less than 5.125% (on a level 1 or level 2 basis). A non-viability trigger event will occur when
APRA notifies the Overseas Bank in writing that it believes conversion of all or some USD AT1 securities (or conversion or write-down of relevant
capital instruments of the Overseas Banking Group), or public sector injection of capital (or equivalent support), in each case is necessary
because without it, the Overseas Bank would become non-viable. No conversion conditions apply in these circumstances.
If conversion of the USD AT1 securities does not occur within five business days, holders’ rights in relation to the USD AT1 securities will be
immediately and irrevocably terminated.
Tier 2 loan capital
A summary of the key terms and features of the subordinated notes is provided below:
$Issue dateInterest rateMaturity dateOptional redemption date
NZ$600
million
notes
1
16 September
2022
Fixed at 6.19% until 16 September 2027. Resets on 16
September 2027 to a floating rate: New Zealand 90 day
Bank Bill Rate + 2.10% p.a.
16 September
2032
16 September 2027 and every
quarterly interest payment
date thereafter
NZ$600
million
notes
1
14 August 2023
Fixed at 6.73% until 14 February 2029. Resets on 14
February 2029 to a floating rate: New Zealand 90 day
Bank Bill Rate + 2.00% p.a.
14 February
2034
14 February 2029 and every
quarterly interest payment
date thereafter
1
The subordinated notes were issued by Westpac New Zealand.
Common features of subordinated notes
Interest payable
Quarterly interest payments on the subordinated notes are subject to Westpac New Zealand being solvent at the time of, and immediately following,
the interest payment.
Early redemption
Westpac New Zealand may elect to redeem all or some of the 2022 or 2023 subordinated notes for their face value together with accrued interest (if
any) on the first optional redemption date specified above or any interest payment date thereafter, subject to the Reserve Bank’s prior written
approval. Early redemption of all of the 2022 or 2023 subordinated notes for certain tax or regulatory reasons is permitted on an interest payment date
subject to the Reserve Bank’s prior written approval.

Notes to the financial statements
42 Westpac Banking Corporation - New Zealand Banking Group
Note 22 Related entities
Related entities
The NZ Banking Group’s related parties are those it controls or can exert significant influence over. Examples include subsidiaries, associates, joint
ventures and superannuation plans as well as key management personnel and their related parties.
NZ Banking Group
The NZ Banking Group consists of the New Zealand operations of the Overseas Banking Group including the NZ Branch and the following
controlled entities as at 30 September 2023 whose business is required to be reported in the financial statements of the Overseas Banking Group’s
New Zealand business:
Name of entityPrincipal activityNotes
BT Financial Group (NZ) Limited (‘BTFGNZL’)Holding company
BT Funds Management (NZ) Limited (‘BTNZ’)Funds management company
Westpac Financial Services Group-NZ-Limited (‘WFSGNZL’)Holding company
Westpac Nominees-NZ-Limited (‘WNNZL’)Nominee company
Westpac Superannuation Nominees-NZ-Limited (‘WSNNZL’)Nominee company
Westpac Group Investment-NZ-Limited (‘WGINZL’)Holding company
Westpac Holdings-NZ-Limited (‘WHNZL’)Holding company
Westpac Capital-NZ-Limited (‘WCNZL’)Finance company
Westpac Equity Investments NZ LimitedNon-active company
Westpac New Zealand Group Limited (‘WNZGL’)Holding company
Westpac New Zealand LimitedRegistered bank
Westpac NZ Operations Limited (‘WNZOL’)Holding company
Aotearoa Financial Services LimitedNon-active company
Number 120 LimitedFinance company, currently non-active
Red Bird Ventures Limited
1
Corporate venture capital company
The Home Mortgage Company LimitedResidential mortgage company, currently non-active
Westpac New Zealand Staff Superannuation Scheme Trustee
Limited
Trustee company
Westpac (NZ) Investments Limited (‘WNZIL’)Property company
Westpac Securities NZ Limited (‘WSNZL’)Funding company
Westpac Securitisation Management NZ Limited
2
Securitisation Management company
Westpac NZ Covered Bond Holdings Limited (‘WNZCBHL’)Holding company19% owned
3
Westpac NZ Covered Bond Limited (‘WNZCBL’)Guarantor19% owned
3
Westpac NZ Securitisation Holdings Limited (‘WNZSHL’)Holding company19% owned
4
Westpac NZ Securitisation Limited (‘WNZSL’)Funding company19% owned
4
Westpac Cash PIE FundPortfolio investment entityNot owned
5
Westpac Notice Saver PIE FundPortfolio investment entityNot owned
5
Westpac Term PIE FundPortfolio investment entityNot owned
5
1
Red Bird Ventures Limited holds 35.03% diluted (37.1% undiluted) (30 September 2022: 29.6% diluted (31.87% undiluted)) equity in Akahu Technologies Limited, an
associate, which is not a controlled entity.
2
On 14 June 2023, WNZOL acquired all 1,000 shares in Westpac NZ Securitisation No.2 Limited (‘WNZSL2’) from WNZSHL, at which point WNZSL2 became a wholly-
owned subsidiary of WNZOL, and on 15 June 2023, WNZSL2 was renamed Westpac Securitisation Management NZ Limited. Westpac New Zealand was previously
considered to control WNZSL2 based on contractual arrangements in place.
3
The NZ Banking Group, through WNZOL (9.5%) and WHNZL (9.5%), has a total qualifying interest of 19% in WNZCBHL and its wholly-owned subsidiary company,
WNZCBL. Westpac New Zealand is considered to control both WNZCBHL and WNZCBL based on contractual arrangements in place, and as such both WNZCBHL
and WNZCBL are consolidated within the financial statements of the NZ Banking Group.
4
The NZ Banking Group, through WNZOL (9.5%) and WHNZL (9.5%), has a total qualifying interest of 19% in WNZSHL and its wholly-owned subsidiary company,
WNZSL. Westpac New Zealand is considered to control WNZSHL and WNZSL based on contractual arrangements in place, and as such WNZSHL and WNZSL are
consolidated within the financial statements of the NZ Banking Group.
5
Westpac Term PIE Fund, Westpac Cash PIE Fund and Westpac Notice Saver PIE Fund (collectively referred to as the ‘PIE Funds’) were established as unit trusts.
The PIE Funds PIEs, where BTNZ is the manager and issuer. The manager has appointed Westpac New Zealand to perform all customer management and account
administration for the PIE Funds. Westpac New Zealand is the PIE Funds’ registrar and administration manager. Westpac New Zealand does not hold any units in the
PIE Funds, however is considered to control them, and as such the PIE Funds are consolidated in the financial statements of the NZ Banking Group.
Other than as disclosed above, there have been no changes in the ownership percentages since 30 September 2022.
All entities in the NZ Banking Group are 100% owned unless otherwise stated. All the entities within the NZ Banking Group have a balance date of
30 September and are incorporated in New Zealand except the PIE Funds which have a balance date of 31 March.
Other significant related entities of the NZ Banking Group include the Overseas Bank and branches of the Overseas Bank based in London and New
York.

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 43
Note 22 Related entities (continued)
Nature of transactions
The NZ Banking Group has transactions with members of the Overseas Banking Group on commercial terms, including the provision of
management, distribution and administrative services and data processing facilities.
Loan finance and current account banking facilities are provided by the NZ Branch and the Overseas Bank to members of the NZ Banking Group on
normal commercial terms. The interest earned on these loans and the interest paid on deposits are at market rates.
The NZ Banking Group enters into derivative transactions with the Overseas Bank (refer to Note 23). They are accounted for as trading derivatives
except for cross currency swaps in place with the Overseas Bank, which are designated in a cash flow hedge relationship to hedge the currency
risk exposure of funding from the London Branch and Tier 2 loan capital issued to the London Branch up until its redemption on 22 September
2022.
Transactions with related entities
NZ BANKING GROUP
$ millionsNote20232022
Overseas Bank
Interest income2 127 17
Interest expense:
Loan capital
1
- 37
Other
2
2 86 32
Non-interest income - management fees received 2 -
Operating expenses - management fees4 11 10
Other controlled entities of the Overseas Bank
WGINZL dividend paid to Westpac Overseas Holdings Pty Limited - 82
WFSGNZL dividend paid to Westpac Equity Holdings Pty Limited (‘WEHPL’) - 400
BTFGNZL dividend paid to WEHPL
3
7 35
WNZGL dividend paid to Westpac Overseas Holdings No. 2 Pty Limited (‘WOHN2PL’)
4
612 6,379
1
Interest expense paid on the Tier 2 loan capital issued by the NZ Banking Group and held by related parties that was redeemed by the NZ Banking Group on 22
September 2022.
2
Includes interest expense incurred on funding from the Overseas Banking Group.
3
On 29 March 2023, BTFGNZL declared and paid a dividend of $7 million to WEHPL.
4
On 17 February 2023 and 18 August 2023, WNZGL declared and paid dividends of $311 million and $301 million to WOHN2PL. Total imputation credits of $117 million
were attached to the dividend issued on 18 August 2023. (30 September 2022: On 22 February 2022, 16 June 2022 and 22 August 2022, WNZGL declared and paid
dividends of $455 million, $5,616 million (which was settled through the issuance of an equivalent value of ordinary shares on the same day) and $308 million to
WOHN2PL.)
Due from and to related entities
NZ BANKING GROUP
$ millions20232022
Due from related entities
Overseas Bank4,4886,609
Total due from related entities4,4886,609
Due from related entities at fair value
1
1,7684,045
Due from related entities at amortised cost2,7202,564
Total due from related entities4,4886,609
Due to related entities
Overseas Bank4,6658,291
Other controlled entities of the Overseas Banking Group11
Total due to related entities4,6668,292
Due to related entities at fair value
2
3,3006,516
Due to related entities at amortised cost1,3661,776
Total due to related entities4,6668,292
1
Consists of derivative financial instruments of $1,768 million (30 September 2022: $4,044 million) (refer to Note 23) and no trading securities (30 September 2022:
$1 million).
2
Consists of derivative financial instruments of $3,300 million (30 September 2022: $6,516 million) (refer to Note 23).

Notes to the financial statements
44 Westpac Banking Corporation - New Zealand Banking Group
Note 22 Related entities (continued)
Key management personnel compensation
Key management personnel are those who, directly or indirectly, have authority and responsibility for planning, directing and controlling the
activities of the NZ Banking Group. This includes all Executive/Non-Executive Directors and the executive team of Westpac New Zealand, and
other members of the executive team of the NZ Banking Group.
NZ BANKING GROUP
$'000s20232022
Salaries and other short-term benefits 10,210 9,936
Post-employment benefits 725 696
Termination benefits - 684
Share-based payments
1
1,701 1,766
Total key management personnel compensation 12,636 13,082
Loans to key management personnel 1,497 7,675
Deposits from key management personnel 6,140 8,415
Interest income on amounts due from key management personnel 146 111
Interest expense on amounts due to key management personnel 73 56
1
Equity-settled remuneration is based on the amortisation over the performance and vesting period (normally two to four years). It is calculated using the fair value
at the grant date of hurdled and unhurdled share rights granted during the four years ending 30 September 2023.
Where the Directors of the Overseas Bank have received remuneration from the NZ Banking Group, the amounts are included above. Details of
Directors’ remuneration are disclosed in the Overseas Banking Group’s 30 September 2023 Annual Financial Report.
Loans and deposits with key management personnel
All loans and deposits are made in the ordinary course of business of the NZ Banking Group. Loans are on terms that range between variable, fixed
rate up to five years and interest only loans, all of which are in accordance with the NZ Banking Group’s lending policies.
As at 30 September 2023, no amounts have been written off and no individual provision has been recognised in respect of loans given to key
management personnel and their related parties (30 September 2022: nil). These loans have been included within the loan portfolio when
determining collectively assessed provisions.
Other key management personnel transactions
All other transactions with key management personnel, their related entities and other related parties are conducted in the ordinary course of
business. These transactions principally involve the provision of financial, investment and insurance services.

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 45
Note 23 Derivative financial instruments
Accounting policy
Derivative financial instruments are instruments whose values are derived from the value of an underlying asset, reference rate or index and
include forwards, futures, swaps and options. Derivatives with related parties are included in due from/due to related entities.
The NZ Banking Group uses derivative financial instruments for meeting customers’ needs; our ALM activities, and undertaking market making and
positioning activities.
Trading derivatives
Derivatives which are used in our ALM activities but are not designated into a hedge accounting relationship are considered economic hedges.
These derivatives, along with derivatives used for meeting customers’ needs and undertaking market making and positioning activities are
measured at FVIS and are disclosed as trading derivatives.
Hedging derivatives
Hedging derivatives are those which are used in our ALM activities and have also been designated into one of two hedge accounting relationships:
fair value hedge; or cash flow hedge. These derivatives are measured at fair value. These hedge designations and the associated accounting
treatment are detailed below.
For more details regarding the NZ Banking Group’s ALM activities, refer to Note 31.
Fair value hedges
Fair value hedges are used to hedge the exposure to changes in the fair value of an asset or liability.
Changes in the fair value of derivatives and the hedged asset or liability in fair value hedges are recognised in non-interest income. The carrying
value of the hedged asset or liability is adjusted for the changes in fair value related to the hedged risk.
If a hedge is discontinued, any fair value adjustments to the carrying value of the asset or liability are amortised to net interest income over the
period to maturity. If the asset or liability is sold, any unamortised adjustment is immediately recognised in net interest income.
Cash flow hedges
Cash flow hedges are used to hedge the exposure to variability of cash flows attributable to an asset, liability or future forecast transaction.
For effective hedges, changes in the fair value of derivatives are recognised in the cash flow hedge reserve through OCI and subsequently
recognised in net interest income when the cash flows attributable to the asset or liability that was hedged impact the income statement.
For hedges with some ineffectiveness, the changes in the fair value of the derivatives relating to the ineffective portion are immediately recognised
in non-interest income.
If a hedge is discontinued, any cumulative gain or loss remains in OCI. It is amortised to net interest income over the period which the asset or
liability that was hedged also impacts the income statement.
If a hedge of a forecast transaction is no longer expected to occur, any cumulative gain or loss in OCI is immediately recognised in net interest
income.

Notes to the financial statements
46 Westpac Banking Corporation - New Zealand Banking Group
Note 23 Derivative financial instruments (continued)
The carrying values of derivative instruments are set out in the tables below:
NZ BANKING GROUP
2023
TradingHedging
Total derivatives carrying
value
$ millions
AssetsLiabilitiesAssetsLiabilitiesAssetsLiabilities
Interest rate contracts
Swap agreements13,705(13,846)1,152(551)14,857(14,397)
Total interest rate contracts13,705(13,846)1,152(551)14,857(14,397)
FX contracts
Spot and forward contracts1,712(1,693)--1,712(1,693)
Cross currency swap agreements (principal and
interest)1,087(2,350)353(465)1,440(2,815)
Total FX contracts2,799(4,043)353(465)3,152(4,508)
Total of gross derivatives16,504(17,889)1,505(1,016)18,009(18,905)
Impact of netting arrangements(10,747)10,747--(10,747)10,747
Total of net derivatives5,757(7,142)1,505(1,016)7,262(8,158)
Consisting of:
Derivatives held with external counterparties3,989(3,842)1,505(1,016)5,494(4,858)
Derivatives held with related parties1,768(3,300)--1,768(3,300)
NZ BANKING GROUP
2022
TradingHedging
Total derivatives carrying
value
$ millions
AssetsLiabilitiesAssetsLiabilitiesAssetsLiabilities
Interest rate contracts
Swap agreements13,157(13,026)1,303(567)14,460(13,593)
Total interest rate contracts13,157(13,026)1,303(567)14,460(13,593)
FX contracts
Spot and forward contracts5,072(4,829)--5,072(4,829)
Cross currency swap agreements (principal and
interest)3,836(4,508)386(690)4,222(5,198)
Total FX contracts8,908(9,337)386(690)9,294(10,027)
Total of gross derivatives22,065(22,363)1,689(1,257)23,754(23,620)
Impact of netting arrangements(10,327)10,327--(10,327)10,327
Total of net derivatives11,738(12,036)1,689(1,257)13,427(13,293)
Consisting of:
Derivatives held with external counterparties7,694(5,520)1,689(1,257)9,383(6,777)
Derivatives held with related parties4,044(6,516)--4,044(6,516)

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 47
Note 23 Derivative financial instruments (continued)
Hedge accounting
The NZ Banking Group designates derivatives into hedge accounting relationships in order to manage the volatility in earnings and capital that
would otherwise arise from interest rate and FX risks that may result from differences in the accounting treatment of derivatives and underlying
exposures. These hedge accounting relationships and the risks they are used to hedge are described below.
The NZ Banking Group enters into one-to-one hedge relationships to manage specific exposures where the terms of the hedged item significantly
match the terms of the hedging instrument. The NZ Banking Group also uses dynamic hedge accounting where the hedged items are part of a
portfolio of assets and/or liabilities that frequently change. In this hedging strategy, the exposure being hedged and the hedging instruments may
change frequently rather than there being a one-to-one hedge accounting relationship for a specific exposure.
Fair value hedges
Interest rate risk
The NZ Banking Group hedges its interest rate risk to reduce exposure to changes in fair value due to interest rate fluctuations over the hedging
period. Interest rate risk arising from fixed rate debt issuances and fixed rate bonds classified as investment securities at FVOCI is hedged with
single currency fixed to floating interest rate derivatives. The NZ Banking Group also hedges its benchmark interest rate risk from fixed rate foreign
currency denominated debt issuances using cross currency swaps. In applying fair value hedge accounting the NZ Banking Group primarily uses
one-to-one hedge accounting to manage specific exposures.
The NZ Banking Group also uses a dynamic hedge accounting strategy for fair value portfolio hedge accounting of some fixed rate mortgages to
reduce exposure to changes in fair value due to interest rate fluctuations over the hedging period. These fixed rate mortgages are allocated to
time buckets based on their expected repricing dates and the fixed-to-floating interest rate derivatives are designated according to the capacity
in the relevant time buckets.
The NZ Banking Group hedges the benchmark interest rate which generally represents the most significant component of the changes in fair
value. The benchmark interest rate is a component of interest rate risk that is observable in the relevant financial markets, for example, Secured
Overnight Financing Rate (‘SOFR’) for USD interest rates and BKBM for NZD interest rates. Ineffectiveness may arise from timing or discounting
differences on repricing between the hedged item and the derivative. For portfolio hedge accounting, ineffectiveness also arises from prepayment
risk (i.e. the difference between actual and expected prepayment of loans). In order to manage the ineffectiveness from early repayments and
accommodate new originations the portfolio hedges are de-designated and redesignated periodically.
Cash flow hedges
Interest rate risk
The NZ Banking Group’s exposure to the volatility of interest cash flows from customer deposits and loans is hedged with interest rate derivatives
using a dynamic hedge accounting strategy called macro cash flow hedges. Customer deposits and loans are allocated to time buckets based on
their expected repricing dates. The interest rate derivatives are designated according to the gross asset or gross liability positions for the relevant
time buckets. The NZ Banking Group hedges the benchmark interest rate which generally represents the most significant component of the
changes in fair value. The benchmark interest rate is a component of interest rate risk that is observable in the relevant financial markets, for
example, Bank Bill Swap Rate for AUD interest rates, SOFR for USD interest rates and BKBM for NZD interest rates. Ineffectiveness may arise from
timing or discounting differences on repricing between the hedged item and the interest rate derivative. Ineffectiveness also arises if the notional
values of the interest rate derivatives exceed the aggregate notional exposure for the relevant time buckets. The hedge accounting relationship is
reviewed on a monthly basis and the hedging relationships are de-designated and redesignated if necessary.
FX risk
The NZ Banking Group’s exposure to foreign currency principal and credit margin cash flows from fixed rate foreign currency debt issuances is
hedged through the use of cross currency derivatives in a one-to-one hedging relationship to manage the changes between the foreign currency
and NZD. In addition, for floating rate foreign currency debt issuances, the NZ Banking Group hedges from foreign floating to NZD floating interest
rates. Ineffectiveness may arise from timing or discounting differences on repricing between the hedged item and the cross currency derivative.
Economic hedges
As part of the NZ Banking Group’s ALM activities, economic hedges may be entered into to hedge long-term funding transactions for risk
management purposes. These hedges do not qualify for hedge accounting and are therefore not included in the hedging instrument disclosures
below.

Notes to the financial statements
48 Westpac Banking Corporation - New Zealand Banking Group
Note 23 Derivative financial instruments (continued)
Hedging instruments
The following tables show the carrying value of hedging instruments and a maturity analysis of the notional amounts of the hedging instruments in
one-to-one hedge relationships categorised by the types of hedge relationships and the hedged risk.
NZ BANKING GROUP
2023
Notional amounts Carrying value
$ millions
Hedging
instrument Hedged risk
Within
1 year
Over 1 year
to 5 years
Over 5
years TotalAssetsLiabilities
One-to-one hedge relationships
Fair value hedges Interest rate swap
Interest rate risk
5833,0631,7535,399149(224)
Cross currency swap Interest rate risk 3,86710,20245914,528(261)(754)
Cash flow hedges Cross currency swap FX risk3,86710,20245914,528614289
Total one-to-one hedge relationships8,31723,4672,67134,455502(689)
Macro hedge relationships
Portfolio fair value hedges Interest rate swap Interest rate risk N/AN/AN/A20,287143(22)
Macro cash flow hedges Interest rate swap Interest rate risk N/AN/AN/A26,118860(305)
Total macro hedge relationships N/AN/AN/A46,4051,003(327)
Total of gross hedging derivatives N/AN/AN/A80,8601,505(1,016)
Impact of netting arrangements N/AN/AN/AN/A--
Total of net hedging derivatives N/AN/AN/AN/A1,505(1,016)
NZ BANKING GROUP
2022
Notional amounts Carrying value
$ millionsHedging instrument Hedged risk
Within 1
year
Over 1 year to
5 years
Over 5
years TotalAssetsLiabilities
One-to-one hedge relationships
Fair value hedges Interest rate swap
Interest rate risk
3473,190-3,53739(208)
Cross currency swap Interest rate risk 2699,8901,91112,070(196)(876)
Cash flow hedges Cross currency swap FX risk2699,8901,91112,070583186
Total one-to-one hedge relationships88522,9703,82227,677426(898)
Macro hedge relationships
Portfolio fair value hedges Interest rate swap Interest rate risk N/AN/AN/A22,365339(12)
Macro cash flow hedges Interest rate swap Interest rate risk N/AN/AN/A24,548924(347)
Total macro hedge relationships N/AN/AN/A46,9131,263(359)
Total of gross hedging derivatives N/AN/AN/A74,5901,689(1,257)
Impact of netting arrangements N/AN/AN/AN/A--
Total of net hedging derivatives N/AN/AN/AN/A1,689(1,257)

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 49
Note 23 Derivative financial instruments (continued)
The following table shows the weighted average exchange rate related to significant hedging instruments in one-to-one hedge relationships:
NZ BANKING GROUP
Weighted average hedged rate
Hedging instrumentHedged risk Currency pair20232022
Cash flow hedges Cross currency swapFX riskCHF:NZD
0.66130.6730
EUR:NZD
0.59430.5965
HKD:NZD
5.11145.1114
USD:NZD
0.67160.6949
Impact of hedge accounting on the balance sheet and reserves
The following tables show the carrying amount of hedged items in a fair value hedge relationship and the component of the carrying amount
related to accumulated fair value hedge accounting (‘FVHA’) adjustments.
NZ BANKING GROUP
20232022
$ millions
Carrying amount of
hedged item
Accumulated FVHA
adjustment included
in carrying amount
Carrying amount of
hedged item
Accumulated FVHA
adjustment included in
carrying amount
Interest rate risk
Investment securities2,585(93)1,325(57)
Loans
20,095(191)21,979(385)
Debt issues and loan capital
(16,542)1,204(12,960)1,241
There were no accumulated FVHA adjustments (30 September 2022: nil) included in the above carrying amounts relating to hedged items that
have ceased to be adjusted for hedging gains and losses.
The pre-tax impact of cash flow hedges on reserves is detailed below:
NZ BANKING GROUP
20232022
$ millions
Interest rate
riskFX risk Total
Interest rate
risk
1
FX risk
1
Total
Cash flow hedge reserve
Balance at beginning of the year588-588160(72)88
Net gains/(losses) from changes in fair value
209(311)(102)441(160)281
Transferred to net interest income
(219)26344(13)232219
Balance at end of year
578(48)530588-588
1
Comparative amounts have been revised to align to the current year's basis of presentation. The restatement for 2022 comparatives results in a $207 million
increase in transferred to income statement and a corresponding decrease in net gains/(losses) from changes in fair value.
There were no balances remaining in the cash flow hedge reserve (30 September 2022: nil) relating to hedge relationships for which hedge
accounting is no longer applied.

Notes to the financial statements
50 Westpac Banking Corporation - New Zealand Banking Group
Note 23 Derivative financial instruments (continued)
Hedge effectiveness
Hedge effectiveness is tested prospectively at inception and during the lifetime of hedge relationships. For one-to-one hedge relationships this testing uses a
qualitative assessment of matched terms where the critical terms of the derivatives used as the hedging instrument match the terms of the hedged item. In
addition, a quantitative effectiveness test is performed for all hedges which could include regression analysis, dollar offset and/or sensitivity analysis.
Retrospective testing is also performed to determine whether the hedge relationship remains highly effective so that hedge accounting can continue to be
applied and also to determine any ineffectiveness. These tests are performed using regression analysis and the dollar offset method.
The following tables provide information regarding the determination of hedge effectiveness:
NZ BANKING GROUP
2023
$ millions
Hedging
instrument Hedged risk
Change in fair value of
hedging instrument
used for calculating
ineffectiveness
Change in value of
the hedged item
used for calculating
ineffectiveness
Hedge
ineffectiveness
recognised in non-
interest income
Fair value hedges
Interest rate swap Interest rate risk
(172)1808
Cross currency swap Interest rate risk
62(59)3
Cash flow hedges
Interest rate swap Interest rate risk
(22)11(11)
Cross currency swap FX risk
(48)48-
Total
(180)180-
NZ BANKING GROUP
2022
$ millionsHedging instrument Hedged risk
Change in fair value of
hedging instrument used
for calculating
ineffectiveness
Change in value of the
hedged item used for
calculating
ineffectiveness
Hedge
ineffectiveness
recognised in non-
interest income
Fair value hedges
Interest rate swap Interest rate risk
109(118)(9)
Cross currency swap Interest rate risk
(1,103)1,1041
Cash flow hedges
Interest rate swap Interest rate risk
440(429)11
Cross currency swap FX risk
72(72)-
Total
(482)4853

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 51
Note 24 Fair values of financial assets and financial liabilities
Accounting policy
The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.
On initial recognition, the transaction price generally represents the fair value of the financial instrument unless there is observable information
from an active market to the contrary. Where significant unobservable information is used, the difference between the transaction price and the
fair value (day one profit or loss) is recognised in the income statement over the life of the instrument or when the inputs become observable.
Critical accounting assumptions and estimates
The majority of valuation models used by the NZ Banking Group employ only observable market data as inputs. However, for certain financial
instruments, data may be employed which is not readily observable in current markets.
The availability of observable inputs is influenced by factors such as:
product type;
depth of market activity;
maturity of market models; and
complexity of the transaction.
Where unobservable market data is used, more judgement is required to determine fair value. The significance of these judgements depends on
the significance of the unobservable input to the overall valuation. Unobservable inputs are generally derived from other relevant market data and
adjusted against:
standard industry practice;
economic models; and
observed transaction prices.
In order to determine a reliable fair value for a financial instrument, management may apply adjustments to the techniques previously described.
These adjustments reflect the NZ Banking Group’s assessment of factors that market participants would consider in setting the fair value.
These adjustments incorporate bid/offer spreads, credit valuation adjustments and funding valuation adjustments.
Fair Valuation Control Framework
The NZ Banking Group uses a Fair Valuation Control Framework where the fair value is either determined or validated by a function independent of
the transaction. This framework formalises the policies and procedures used to achieve compliance with relevant accounting, industry and
regulatory standards. The framework includes specific controls relating to:
the revaluation of financial instruments;
independent price verification;
fair value adjustments; and
financial reporting.
A key element of the framework is the Revaluation Committee, comprising senior valuation specialists from within the Overseas Banking Group. The
Revaluation Committee reviews the application of the agreed policies and procedures to assess that a fair value measurement basis has been
applied.
The method of determining fair value differs depending on the information available.
Fair value hierarchy
A financial instrument’s categorisation within the valuation hierarchy is based on the lowest level input that is significant to the fair value
measurement.
The NZ Banking Group categorises all fair value instruments according to the hierarchy described below.
Valuation techniques
The NZ Banking Group applies market accepted valuation techniques in determining the fair valuation of over-the-counter derivatives. This includes
credit valuation adjustments and funding valuation adjustments, which incorporate credit risk and funding costs and benefits that arise in relation to
uncollateralised derivative positions, respectively.
The specific valuation techniques, the observability of the inputs used in valuation models and the subsequent classification for each significant
product category are outlined as follows.

Notes to the financial statements
52 Westpac Banking Corporation - New Zealand Banking Group
Note 24 Fair values of financial assets and financial liabilities (continued)
Financial instruments measured at fair value
Level 1 instruments
The fair value of financial instruments traded in active markets is based on recent unadjusted quoted prices. These prices are based on actual
arm’s length basis transactions.
The valuations of Level 1 instruments require little or no management judgement.
InstrumentBalance sheet categoryIncludesValuation
Exchange traded
products
Derivative financial
instruments
Due from related entities
Due to related entities
Exchange traded
interest rate futures -
derivative financial
instruments
FX products
Derivative financial
instruments
FX spot contracts
Debt instruments
Trading securities and
financial assets measured at
FVIS
Investment securities
Other financial liabilities
New Zealand
Government bonds
These instruments are traded in liquid, active markets where
prices are readily observable. No modelling or assumptions
are used in the valuation.
Level 2 instruments
The fair value for financial instruments that are not actively traded is determined using valuation techniques which maximise the use of observable
market prices. Valuation techniques include:
the use of market standard discounting methodologies;
option pricing models; and
other valuation techniques widely used and accepted by market participants.
InstrumentBalance sheet categoryIncludesValuation
Interest rate
products
Derivative financial instruments
Due from related entities
Due to related entities
Interest rate swaps,
forwards and options
– derivative financial
instruments
Industry standard valuation models are used to calculate the
expected future value of payments by product, which is
discounted back to a present value. The model’s interest rate
inputs are benchmark interest rates and active broker quoted
interest rates in the swap, bond and futures markets. Interest
rate volatilities are sourced from brokers and consensus data
providers. If consensus prices are not available, these are
classified as Level 3 instruments.
FX products
Derivative financial instruments
Due from related entities
Due to related entities
FX swaps and FX
forward contracts -
derivative financial
instruments
Derived from market observable inputs or consensus pricing
providers using industry standard models. If consensus
prices are not available, these are classified as Level 3
instruments.
Asset backed
debt
instruments
Trading securities and financial
assets measured at FVIS
Investment securities
Asset backed securities
Valued using an industry approach to value floating rate debt
with prepayment features. The main inputs to the model are the
trading margin and the weighted average life of the security.
These inputs are sourced from a consensus data provider. If
consensus prices are not available, these are classified as Level
3 instruments.

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 53
Note 24 Fair values of financial assets and financial liabilities (continued)
InstrumentBalance sheet categoryIncludesValuation
Non-asset backed
debt instruments
Trading securities and financial
assets measured at FVIS
Investment securities
Other financial liabilities
Local authority and NZ
public securities, other
bank issued
certificates of deposit,
commercial paper,
other government
securities, off-shore
securities and
corporate bonds
Repurchase agreements
and reverse repurchase
agreements over non-
asset backed debt
securities
Valued using observable market prices which are sourced from
independent pricing services, broker quotes or inter-dealer
prices. If prices are not available from these sources, these are
classified as Level 3 instruments.
Deposits and
other borrowings
at fair value
Deposits and other borrowingsCertificates of deposit
Discounted cash flow using market rates offered for
deposits of similar remaining maturities.
Debt issues at fair
value
Debt issuesCommercial paper
Discounted cash flows, using a discount rate which reflects the
terms of the instrument and the timing of cash flows adjusted
for market observable changes in the NZ Banking Group’s
implied creditworthiness.
Level 3 instruments
Financial instruments valued where at least one input that could have a significant effect on the instrument’s valuation is not based on observable
market data due to illiquidity or complexity of the product. These inputs are generally derived and extrapolated from other relevant market data and
calibrated against current market trends and historical transactions.
These valuations are calculated using a high degree of management judgement.
InstrumentBalance sheet categoryIncludes:Valuation
Interest rate
derivatives
Derivative financial instruments
Non-vanilla interest rate
(inflation indexed)
derivatives and long-
dated NZD caps
Valued using industry standard valuation models utilising
observable market inputs which are determined separately
for each parameter. Where unobservable, inputs will be set
with reference to an observable proxy.
Debt
instruments
Trading securities and financial
assets measured at FVIS
Certain debt securities
with low observability,
usually issued via private
placement
These securities are evaluated by an independent pricing
service or based on third party revaluations. Due to their
illiquidity and/or complexity these are classified as Level 3
assets.

Notes to the financial statements
54 Westpac Banking Corporation - New Zealand Banking Group
Note 24 Fair values of financial assets and financial liabilities (continued)
The following table summarises the attribution of financial instruments measured at fair value to the fair value hierarchy:
NZ BANKING GROUP
20232022
$ millionsLevel 1Level 2Level 3
1
TotalLevel 1Level 2Level 3
1
Total
Financial assets measured at fair value on a
recurring basis
Trading securities and financial assets measured at FVIS 699 4,298 10 5,007 335 3,166 - 3,501
Derivative financial instruments 7 5,487 - 5,494 1 9,382 - 9,383
Investment securities 2,287 4,364 - 6,651 1,982 3,641 - 5,623
Due from related entities - 1,768
-
1,768 5 4,040 - 4,045
Total financial assets measured at fair value 2,993 15,917 10 18,920 2,323 20,229 - 22,552
Financial liabilities measured at fair value on a
recurring basis
Deposits and other borrowings at fair value
2
- 2,413 - 2,413 - 2,939 - 2,939
Other financial liabilities
2
630 170 - 800 598 352 - 950
Derivative financial instruments 2 4,854 2 4,858 2 6,773 2 6,777
Due to related entities - 3,300 - 3,300 3 6,513 - 6,516
Debt issues at fair value
2
- 1,471 - 1,471 - 5,490 - 5,490
Total financial liabilities measured at fair value 632 12,208 2 12,842 603 22,067 2 22,672
1
Balances within this category of the fair value hierarchy are not considered material to the total derivative financial instruments balances.
2
There are no differences between the fair values disclosed and the contractual outstanding amount payable at maturity for these financial liabilities measured at
fair value on a recurring basis.
There were no material amounts of changes in fair value estimated using a valuation technique incorporating significant non-observable inputs that
were recognised in the income statement or the statement of comprehensive income of the NZ Banking Group during the year ended 30 September
2023 (30 September 2022: no material changes in fair value).
Analysis of movements between fair value hierarchy levels
The NZ Banking Group considers transfers between levels, if any, to have occurred at the end of the reporting period. During the year, there were no
material transfers between levels of the fair value hierarchy (30 September 2022: no material transfers between levels).
Financial instruments not measured at fair value
For financial instruments not measured at fair value on a recurring basis, fair value has been derived as follows:
InstrumentValuation
Loans
Where available, the fair value of loans is based on observable market transactions; otherwise fair value is estimated
using discounted cash flow models. For variable rate loans, the discount rate used is the current effective interest
rate. The discount rate applied for fixed rate loans reflects the market rate for the maturity of the loan and the
creditworthiness of the borrower.
Deposits and other
borrowings
Fair values of deposit liabilities payable on demand (interest free, interest bearing and savings deposits) approximate
their carrying value. Fair values for term deposits are estimated using discounted cash flows, applying market rates
offered for deposits of similar remaining maturities.
Due to related entities
The carrying value of due to related entities approximates the fair value. These items are either short-term in nature
or re-price frequently and are of a high credit rating.
Debt issues and
loan capital
The fair values of these instruments are calculated based on quoted market prices, where available. Where quoted
market prices are not available, fair values are calculated using a discounted cashflow model. The discount rates
applied reflect the terms of the instruments and the timing of the estimated cash flows and are adjusted for any
changes in the NZ Banking Group’s credit spreads.
All other financial assets
and financial liabilities
For all other financial assets and financial liabilities, the carrying value approximates the fair value. These items are
either short-term in nature or re-price frequently and are of a high credit rating.

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 55
Note 24 Fair values of financial assets and financial liabilities (continued)
The following table summarises the estimated fair value and fair value hierarchy of the NZ Banking Group’s financial instruments not measured at fair
value:
NZ BANKING GROUP
2023
Fair Value
$ millions
Carrying
Amount
Level 1Level 2Level 3Total
Financial assets not measured at fair value
Cash and balances with central banks 9,325 9,325 - - 9,325
Collateral paid 62 62 - - 62
Loans 99,711 - - 98,640 98,640
Other financial assets 469 - 4 465 469
Due from related entities
2,720 - 2,720 -
2,720
Total financial assets not measured at fair value 112,287 9,387 2,724 99,105 111,216
Financial liabilities not measured at fair value
Collateral received 614 614 - - 614
Deposits and other borrowings 79,783 - 78,057 1,741 79,798
Other financial liabilities 6,422 - 6,422 - 6,422
Due to related entities 1,366 - 1,366 -
1,366
Debt issues
1
17,126 - 16,962 - 16,962
Loan capital
3,051 - 2,990 - 2,990
Total financial liabilities not measured at fair value 108,362 614 105,797 1,741 108,152
NZ BANKING GROUP
2022
Fair Value
$ millions
Carrying
Amount
Level 1Level 2Level 3Total
Financial assets not measured at fair value
Cash and balances with central banks 11,162 11,162 - - 11,162
Collateral paid 87 87 - - 87
Loans 97,392 - - 96,041 96,041
Other financial assets 644 - - 644 644
Due from related entities
2,564 - 2,564 -
2,564
Total financial assets not measured at fair value 111,849 11,249 2,564 96,685 110,498
Financial liabilities not measured at fair value
Collateral received 724 724 - - 724
Deposits and other borrowings 77,909 - 75,487 2,408 77,895
Other financial liabilities 4,657 - 4,657 - 4,657
Due to related entities 1,776 - 1,776 -
1,776
Debt issues
1
14,443 - 14,242 - 14,242
Loan capital
2,576 - 2,428 -
2,428
Total financial liabilities not measured at fair value 102,085 724 98,590 2,408 101,722
1
The estimated fair value of debt issues includes the impact of changes in the NZ Banking Group's credit spreads since origination.

Notes to the financial statements
56 Westpac Banking Corporation - New Zealand Banking Group
Note 25 Offsetting financial assets and financial liabilities
Accounting policy
Financial assets and financial liabilities are presented net on the balance sheet when the NZ Banking Group has a legally enforceable right to offset
them in all circumstances and there is an intention to settle the asset and liability on a net basis, or to realise the asset and settle the liability
simultaneously. The gross assets and liabilities behind the net amounts reported on the balance sheet are disclosed in the following table.
Some of the NZ Banking Group’s offsetting arrangements are not enforceable in all circumstances. The amounts in the tables below may not tie
back to the balance sheet if there are balances which are not subject to offsetting or enforceable netting arrangements. The amounts presented in
this note do not represent the credit risk exposure of the NZ Banking Group. Refer to Note 13 for information on credit risk management. The
offsetting and collateral arrangements and other credit risk mitigation strategies used by the NZ Banking Group are further explained in the
‘Management of risk mitigation’ section under Note 13.5.
NZ BANKING GROUP
2023
Amounts Subject to Enforceable Netting Arrangements
Amounts Offset on the Balance SheetAmounts Not Offset on the Balance Sheet
$ millions
Gross
Amounts
Amounts
Offset
Net Amounts
Reported
on the
Balance Sheet
Other
Recognised
Financial
Instruments
Cash
Collateral
Financial
Instrument
CollateralNet Amount
Assets
Reverse repurchase agreements
1
487 - 487 - - (482) 5
Derivative financial instruments
2
16,109 (10,747) 5,362 (2,197) (614) - 2,551
Due from related entities - derivative
financial instruments
3
1,768 - 1,768 (1,768) - - -
Total assets 18,364 (10,747) 7,617 (3,965) (614) (482) 2,556
Liabilities
Repurchase agreements
4
5,168 - 5,168 - - (5,168) -
Derivative financial instruments
2
15,215 (10,747) 4,468 (2,197) (62) (77) 2,132
Due to related entities - derivative
financial instruments
5
3,300 - 3,300 (1,768) - - 1,532
Total liabilities 23,683 (10,747) 12,936 (3,965) (62) (5,245) 3,664
NZ BANKING GROUP
2022
Amounts Subject to Enforceable Netting Arrangements
Amounts Offset on the Balance SheetAmounts Not Offset on the Balance Sheet
$ millions
Gross
Amounts
Amounts
Offset
Net Amounts
Reported
on the
Balance Sheet
Other
Recognised
Financial
Instruments
Cash
Collateral
Financial
Instrument
CollateralNet Amount
Assets
Reverse repurchase agreements
1
173 - 173 - - (171) 2
Derivative financial instruments
2
18,158 (10,327) 7,831 (3,885) (526) - 3,420
Due from related entities - derivative
financial instruments
3
4,044 - 4,044 (4,044) - - -
Total assets 22,375 (10,327) 12,048 (7,929) (526) (171) 3,422
Liabilities
Repurchase agreements
4
4,277 - 4,277 - - (4,277) -
Derivative financial instruments
2
16,282 (10,327) 5,955 (3,885) (37) - 2,033
Due to related entities - derivative
financial instruments
5
6,516 - 6,516 (4,044) - - 2,472
Total liabilities 27,075 (10,327) 16,748 (7,929) (37) (4,277) 4,505
1
Forms part of trading securities and financial assets measured at FVIS (refer to Note 9).
2
$132 million (30 September 2022: $1,552 million) of derivative financial assets and $390 million (30 September 2022: $822 million) of derivative financial liabilities
are not subject to enforceable netting arrangements.
3
Forms part of due from related entities on the balance sheet (refer to Note 22).
4
Forms part of other financial liabilities on the balance sheet (refer to Note 18).
5
Forms part of due to related entities on the balance sheet (refer to Note 22).

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 57
Note 25 Offsetting financial assets and financial liabilities (continued)
Other recognised financial instruments
These financial assets and financial liabilities are subject to master netting agreements which are not enforceable in all circumstances, so they are
recognised gross on the balance sheet. The offsetting rights of the master netting arrangements can only be enforced if a predetermined event
occurs in the future, such as a counterparty defaulting.
Cash collateral and financial instrument collateral
These amounts are received or pledged under master netting arrangements against the gross amounts of assets and liabilities. Financial
instrument collateral typically comprises securities which can be readily liquidated in the event of counterparty default. The offsetting rights of the
master netting arrangement can only be enforced if a predetermined event occurs in the future, such as a counterparty defaulting.
Note 26 Credit related commitments, contingent assets and contingent liabilities
Accounting policy
Undrawn credit commitments
The NZ Banking Group enters into various arrangements with customers which are only recognised on the balance sheet when called upon. These
arrangements include commitments to extend credit, bill endorsements, financial guarantees, standby letters of credit and underwriting facilities.
Contingent assets
Contingent assets are possible assets whose existence will be confirmed only by uncertain future events. Contingent assets are not recognised on
the balance sheet but are disclosed if an inflow of economic benefits is probable.
Contingent liabilities
Contingent liabilities are possible obligations whose existence will be confirmed only by uncertain future events, and present obligations where
the transfer of economic resources is not probable or cannot be reliably measured. Contingent liabilities are not recognised on the balance sheet
but are disclosed unless the outflow of economic resources is remote.
Undrawn credit commitments
Undrawn credit commitments expose the NZ Banking Group to liquidity risk when called upon and also to credit risk if the customer fails to repay
the amounts owed at the due date. The maximum exposure to credit loss is the contractual or notional amount of the instruments disclosed
below. Some of the arrangements can be cancelled by the NZ Banking Group at any time. The actual liquidity and credit risk exposure varies in line
with drawings and may be less than the amounts disclosed. The NZ Banking Group uses the same credit policies when entering into these
arrangements as it does for on-balance sheet instruments. Refer to Note 13 and Note 31 for further details on credit risk management and liquidity
risk.
NZ BANKING GROUP
$ millions
20232022
Letters of credit and guarantees
1
1,0151,025
Commitments to extend credit
2
27,86927,904
Total undrawn credit commitments28,88428,929
1
Standby letters of credit and guarantees are undertakings to pay, against presentation documents, an obligation in the event of a default by a customer.
Guarantees are unconditional undertakings given to support the obligations of a customer to third parties. The NZ Banking Group may hold cash as collateral for
certain guarantees issued.
2
Commitments to extend credit include all obligations on the part of the NZ Banking Group to provide credit facilities. As facilities may expire without being drawn
upon, the notional amounts do not necessarily reflect future cash requirements.
Contingent assets
The credit commitments shown in the table above also constitute contingent assets. These commitments would be classified as loans on the
balance sheet on the contingent event occurring.

Notes to the financial statements
58 Westpac Banking Corporation - New Zealand Banking Group
Note 26 Credit related commitments, contingent assets and contingent liabilities (continued)
Contingent liabilities
All potential claims and other liabilities are assessed on a case-by-case basis. A provision will be recognised where the NZ Banking Group has
conducted an assessment which determines the likelihood of loss as probable and where its potential loss can be reliably estimated. A contingent
liability exists in respect of actual or potential claims where the likely loss is not assessed as probable, where the law is uncertain or, in rare
circumstances, where the outflow of resources cannot be reliably estimated.
The NZ Banking Group is exposed to contingent risks and liabilities arising from the conduct of its business, including: actual and potential disputes,
claims and legal proceedings; investigations, inquiries and reviews (formal and informal) carried out by regulatory authorities; and internal
investigations and reviews, one such internal review being a review of processes for some products relating to the requirements of the CCCFA.
The scope of reviews (internal and external), investigations and inquiries can be wide-ranging and can result in litigation (including class action
proceedings and enforcement proceedings), fines and penalties, customer remediation and/or other sanctions and reputational damage.
The NZ Banking Group has potential exposure relating to warranties, indemnities and other commitments it has provided to Fidelity Life and
Westpac Life in connection to the sale of Westpac Life on 28 February 2022. The warranties, indemnities and other commitments cover a range of
matters and risks, including title, capacity and taxation matters.
Note 27 Segment reporting
Accounting policy
Operating segments are presented on a basis that is consistent with information provided internally to the NZ Banking Group’s chief operating
decision-maker and reflect the management of the business, rather than the legal structure of the NZ Banking Group. The chief operating
decision-maker is the person or group that allocates resources to and assesses the performance of the operating segments of an entity. The NZ
Banking Group has determined that the NZ Banking Group executive team is its chief operating decision-maker.
Inter-segment revenue and costs are eliminated at head office. Income and expenses directly associated with each segment are included in
determining business segment performance.
The NZ Banking Group operates predominantly in the Consumer Banking and Wealth, Institutional and Business Banking, Financial Markets, and
International Trade and Payments sectors within New Zealand. On this basis, no geographical segment reporting is provided.
The operating segment results have been presented on a management reporting basis and consequently internal charges and transfer pricing
adjustments have been reflected in the performance of each operating segment. Intersegment pricing is determined on a cost recovery basis.
The NZ Banking Group does not rely on any single major customer for its revenue base.
An investments and insurance unit provided funds management and insurance services until 28 February 2022 when the sale of Westpac Life to
Fidelity Life was completed. From 1 March 2022, it only provided funds management services. As at 30 September 2023, the investments unit is no
longer reported as a main operating segment and has been included within reconciling items in the table below.
Segment comparative information for the year ended 30 September 2022 has also been restated to ensure consistent presentation with the current
reporting period. This reflects changes to expense allocations between segments during the period.
The NZ Banking Group’s operating segments are defined by the customers they serve and the services they provide. The NZ Banking Group has
identified the following main operating segments:
Consumer Banking and Wealth provides financial services predominantly for individuals;
Institutional and Business Banking provides a broad range of financial services for commercial, corporate, property finance, agricultural,
institutional and government customers; and
Financial Markets provides foreign exchange, interest rate derivatives, government and credit products, commodities, carbon and energy
capabilities. International Trade and Payments provide international trade solutions, payments products and services to consumer, business
and institutional customers.
Reconciling items primarily represent:
business units that do not meet the definition of a reportable operating segment under NZ IFRS
8 Operating Segments;
elimination entries on consolidation/aggregation of the results, assets and liabilities of the NZ Banking Group’s controlled entities in the
preparation of the aggregated financial statements of the NZ Banking Group; and
results of certain business units excluded for management reporting purposes, but included within the aggregated financial statements of
the NZ Banking Group for statutory financial reporting purposes.

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 59
Note 27 Segment reporting (continued)
NZ BANKING GROUP
$ millions
Consumer
Banking and
Wealth
Institutional
and Business
Banking
Financial
Markets,
International
Trade and
Payments
Reconciling
Items
Total
Year ended 30 September 2023
Net interest income1,2001,21648374
2,838
Net fees and commissions
Facility fees27183-
48
Transaction fees and commissions16473(3)(31)
203
Other non-risk fee income62112(19)
20
Fees and commissions expenses(75)--1
(74)
Net fees and commissions12211212(49)197
Other non-interest income--8615
101
Total non-interest income12211298(34)298
Net operating income1,3221,3281463403,136
Operating expenses(734)(508)(42)(69)
(1,353)
Impairment (charges)/benefits(77)(53)-(5)
(135)
Profit before income tax5117671042661,648
As at 30 September 2023
Total gross loans60,00439,911397(94)100,218
Total deposits and other borrowings44,98034,803-2,41382,196
NZ BANKING GROUP
$ millions
Consumer
Banking and
Wealth
Institutional
and Business
Banking
Financial
Markets,
International
Trade and
Payments
Reconciling
Items
Total
Year ended 30 September 2022 (restated)
Net interest income1,1401,0994059
2,338
Net fees and commissions
Facility fees241423
43
Transaction fees and commissions17876(4)(43)
207
Other non-risk fee income71914(18)
22
Fees and commissions expenses(66)---
(66)
Net fees and commissions14310912(58)206
Other non-interest income--82296
378
Total non-interest income14310994238584
Net operating income1,2831,2081342972,922
Operating expenses(625)(436)(37)(88)
(1,186)
Impairment (charges)/benefits324--
27
Profit before income tax661796972091,763
As at 30 September 2022
Total gross loans57,96839,684556(416)97,792
Total deposits and other borrowings43,57434,334-2,94080,848

Notes to the financial statements
60 Westpac Banking Corporation - New Zealand Banking Group
Note 28 Securitisation, covered bonds and other transferred assets
The NZ Banking Group enters into transactions in the normal course of business by which financial assets are transferred to counterparties or
structured entities. Depending on the circumstances, these transfers may result in derecognition of the assets in their entirety, partial
derecognition or no derecognition of the assets subject to the transfer. For the NZ Banking Group’s accounting policy on derecognition of financial
assets, refer to Note 1.
Securitisation
Securitisation is the process of selling a group of assets (or an interest in the assets or the cashflow arising from the assets) to a special purpose entity
which then issues interest bearing debt securities for funding purposes.
Securitisation of its own assets is used by the NZ Banking Group as a funding and liquidity tool.
In October 2008, the NZ Banking Group set up WNZSL as a structured entity for the purpose of structuring assets that are eligible for repurchase by
the Reserve Bank as part of Westpac New Zealand’s internal residential mortgage-backed securitisation programme.
Under the internal residential mortgage-backed securitisation programme, Westpac New Zealand periodically sells the rights (but not the obligations)
under eligible housing loans to WNZSL. The purchase by WNZSL of the housing loans is funded by the proceeds of the issuance of RMBS.
Westpac New Zealand is obliged to repurchase any housing loan sold to and held by WNZSL where the housing loan does not meet the eligibility
criteria of the programme. It is not envisaged that any liability resulting in material loss to the NZ Banking Group will arise from these obligations.
Covered bonds
The NZ Banking Group has a covered bond programme under which it may issue bonds (Covered Bonds). The NZ Banking Group transfers, via
assignment, from time to time housing loans originated by Westpac New Zealand to a bankruptcy remote structured entity, WNZCBL. WNZCBL is a
special purpose entity which holds the rights to, but not the obligations under, the pool of housing loans held by it (the Portfolio). The payments of all
amounts due in respect of the Covered Bonds have been unconditionally guaranteed by Westpac New Zealand. In addition, WNZCBL (the CB
Guarantor) has guaranteed payments of interest and principal under the Covered Bonds pursuant to a financial guarantee which is secured by
WNZCBL granting security over the Portfolio and its other assets. Recourse against the CB Guarantor under its guarantee is limited to the Portfolio and
such assets.
The intercompany loan made by Westpac New Zealand to WNZCBL to fund the initial and all subsequent purchases of eligible housing loans and the
liability representing the intercompany loan from WNZCBL to Westpac New Zealand are fully eliminated in the NZ Banking Group’s financial
statements.
Westpac New Zealand is obliged to repurchase any housing loans sold to and held by WNZCBL (pursuant to Westpac New Zealand’s Global Covered
Bond Programme) in certain circumstances including (but not limited to) where:
it is discovered that there has been a material breach of a sale warranty (or any such sale warranty is materially untrue);
the loan becomes materially impaired or is enforced prior to the second monthly covered bond payment date falling after the assignment of the
loan; or
at the cut-off date relating to the loan, there were arrears of interest and that loan subsequently becomes a delinquent loan prior to the second
monthly covered bond payment date falling after the assignment of the loan.
It is not envisaged that any liability resulting in material loss to the NZ Banking Group will arise from these obligations.
Repurchase agreements
Where securities are sold subject to an agreement to repurchase at a predetermined price, they remain recognised on the balance sheet in their
original category (i.e. trading securities and financial assets measured at FVIS or investment securities). Repurchase agreements are designated at fair
value when they are managed as part of a trading portfolio, otherwise they are measured on an amortised cost basis.
The cash consideration received is recognised as a liability (repurchase agreements). Refer to Note 18 for further details.

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 61
Note 28 Securitisation, covered bonds and other transferred assets (continued)
The following table presents the NZ Banking Group’s assets transferred and their associated liabilities:
NZ BANKING GROUP
For those liabilities that only have recourse to
the transferred assets:
$ millions
Carrying
amount of
transferred
assets
Carrying
amount of
associated
liabilities
Fair value of
transferred
assets
Fair value of
associated
liabilities
Net fair value
position
2023
Securitisation - own assets
1
15,096 15,098 15,105 15,098 7
Covered bonds
2
7,540 5,045 n/an/an/a
Repurchase agreements 6,663 5,168 n/an/an/a
Total 29,299 25,311 15,105 15,098 7
2022
Securitisation - own assets
1
15,075 15,066 15,079 15,066 13
Covered bonds
2
7,528 3,576 n/an/an/a
Repurchase agreements 5,345 4,277 n/an/an/a
Total 27,948 22,919 15,079 15,066 13
1
The most senior rated securities at 30 September 2023 of $13,800 million (30 September 2022: $13,800 million) qualify as eligible collateral for repurchase
agreements with the Reserve Bank. Westpac New Zealand complies with the Reserve Bank’s guidelines for its overnight reverse repurchase agreement facility and
open market operations, which allows banks in New Zealand to offer RMBS as collateral for the Reserve Bank’s repurchase agreements.
2
The difference between the carrying values of the covered bonds and the assets pledged allows for the immediate issuance of additional covered bonds if required.
These additional assets can be repurchased by Westpac New Zealand at its discretion, subject to the conditions set out in the transaction documents. The Portfolio
is comprised of housing loans up to a value of $7,500 million as at 30 September 2023 (30 September 2022: $7,500 million). Over time, the composition of the
Portfolio will include, in addition to housing loans, accrued interest (representing accrued and unpaid interest on the outstanding housing loans) and cash
(representing collections of principal and interest from the underlying housing loans).
Note 29 Structured entities
Accounting policy
Structured entities are generally created to achieve a specific, defined objective and their operations are restricted such as to only purchasing
specific assets. Structured entities are commonly financed by debt or equity securities that are collateralised by and/or indexed to their
underlying assets. The debt and equity securities issued by structured entities may include tranches with varying levels of subordination.
Structured entities are classified as subsidiaries and consolidated if they meet the definition in Note 1. If the NZ Banking Group does not control a
structured entity then it will not be consolidated.
The NZ Banking Group engages in various transactions with both consolidated and unconsolidated structured entities that are mainly involved in
securitisations, asset backed structures and managed funds.
Consolidated structured entities
Securitisation and covered bonds
The NZ Banking Group uses structured entities to securitise its financial assets through the Covered Bond Programme and Westpac New Zealand’s
internal residential mortgage-backed securitisation programme. Refer to Note 28 for further details.
NZ Banking Group managed funds
As disclosed in Note 22, the PIE Funds are consolidated within the financial statements of the NZ Banking Group.
Non-contractual financial support
The NZ Banking Group does not provide non-contractual financial support to these consolidated structured entities.

Notes to the financial statements
62 Westpac Banking Corporation - New Zealand Banking Group
Note 29 Structured entities (continued)
Unconsolidated structured entities
The NZ Banking Group has interests in various unconsolidated structured entities including debt instruments, guarantees, liquidity arrangements,
lending, loan commitments, certain derivatives and investment management agreements.
Interests exclude non-complex derivatives (e.g. interest rate swap agreements) and lending to a structured entity with recourse to a wider
operating entity, not just the structured entity.
The NZ Banking Group’s main interests in unconsolidated structured entities, which arise in the normal course of business, are:
Loans and other
credit commitments
The NZ Banking Group lends to unconsolidated structured entities, subject to the NZ Banking Group’s collateral and
credit approval processes, in order to earn interest and fees and commissions income. The structured entities are
mainly securitisation entities.
Investment
management
agreements
The NZ Banking Group manages funds that provide customers with investment opportunities. The NZ Banking
Group also manages superannuation funds for its employees. The NZ Banking Group earns management fee income
which is recognised in non-interest income.
The following table shows the NZ Banking Group’s interests in unconsolidated structured entities and its maximum exposure to loss in relation to
those interests. The maximum exposure does not take into account any collateral or hedges that will reduce the risk of loss.
For on-balance sheet instruments, including debt instruments in and loans to unconsolidated structured entities, the maximum exposure to loss
is the carrying value; and
For off-balance sheet instruments, including liquidity facilities and loan and other credit commitments and guarantees, the maximum exposure
to loss is the notional amounts.
NZ BANKING GROUP
20232022
$ millions
Financing to
Securitisation
Vehicles
Group Managed
FundsTotal
Financing to
Securitisation
Vehicles
Group Managed
FundsTotal
Assets
Loans 4,368 - 4,368 3,892 - 3,892
Total on-balance sheet
exposures
4,368 - 4,368 3,892 - 3,892
Total notional amounts of
off-balance sheet exposures
1,777 - 1,777 1,322161,338
Maximum exposure to
loss
6,145 - 6,145 5,214165,230
Size of structured entities
1
6,145 11,504 17,649 5,21410,96716,181
1
Represented by the total assets or market capitalisation of the entity, or if not available, the NZ Banking Group’s total committed exposure (for lending
arrangements and external debt holdings) or funds under management (for Group managed funds).
Non-contractual financial support
The NZ Banking Group does not provide non-contractual financial support to these unconsolidated structured entities.

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 63
Note 30 Capital management
The Overseas Bank is a registered bank in New Zealand and conducts business in New Zealand through the NZ Banking Group. The capital held by
the NZ Banking Group comprises of the head office account, NZ Banking Group equity and loan capital.
Most of the NZ Banking Group’s capital is held in, and managed by Westpac New Zealand. Westpac New Zealand’s Board is responsible for
ensuring that capital adequacy of Westpac New Zealand is maintained and complies with the regulatory capital requirements prescribed by the
Reserve Bank.
There are no current regulatory capital requirements that apply specifically to the NZ Branch or the NZ Banking Group. The Overseas Bank’s Board
is responsible for ensuring that capital adequacy of the Overseas Banking Group and the Overseas Bank is maintained. The NZ Banking Group’s
capital is managed as part of the Overseas Banking Group’s Internal Capital Adequacy Process. Westpac New Zealand is also required to maintain
its own Internal Capital Adequacy Process under the Reserve Bank of New Zealand’s capital adequacy requirements.
Under APRA’s Prudential Standards, Australian ADIs, including the Overseas Banking Group and the Overseas Bank are required to maintain
minimum ratios of capital to risk weighted assets, as determined by APRA. The minimum capital ratios are at least equal to those specified under
the Basel III capital framework. For the calculation of risk weighted assets, the Overseas Banking Group and the Overseas Bank are accredited by
APRA to apply advanced models permitted by the Basel III global capital adequacy regime. The Overseas Banking Group and the Overseas Bank
use the Internal Ratings Based approach for credit risk, the Standardised Measurement Approach for operational risk and the internal model
approach for interest rate risk in the banking book for calculating regulatory capital.
APRA’s prudential standards are generally consistent with the International Regulatory Framework for Banks, also known as Basel III, issued by the
Basel Committee on Banking Supervision, except where APRA has exercised certain discretions.
The Overseas Banking Group (excluding entities specifically excluded by APRA regulations), and the Overseas Bank (Extended Licensed Entity as
defined by APRA), exceeded the minimum capital adequacy requirements as specified by APRA as at 30 September 2023.
Effective 1 January 2023, APRA revised its capital framework, including updated prudential standards for capital adequacy and credit risk capital.
The Overseas Banking Group evaluates its approach to capital management through an Internal Capital Adequacy Process, 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 APRA regulatory capital minimums together with the capital conservation buffer and countercyclical buffer are the Total
Common Equity Tier 1 (CET1) Requirement. The Total CET1 Requirement for the Overseas Banking Group is at least 10.25%
1
, based upon an
industry minimum CET1 requirement of 4.5% plus a capital buffer of at least 4.75% and a countercyclical buffer of 1.0%
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.
The Overseas Bank Board has determined that the Overseas Banking Group will target a CET1 operating capital range of between 11.0% and 11.5%, in
normal operating conditions.
1
Noting that APRA may apply higher Common Equity Tier 1 (CET1) requirements for an individual ADI.
2
APRA has currently set a 1.0% default countercyclical buffer for Australian exposures however this may be varied by APRA in the range of 0% to 3.5%. The final
countercyclical capital buffer is ADI specific and dependent on a bank’s international exposures.

Notes to the financial statements
64 Westpac Banking Corporation - New Zealand Banking Group
Note 30 Capital management (continued)
The table below represents the capital adequacy calculation for the Overseas Banking Group and Overseas Bank as at 30 September 2023 based on
APRA’s application of the Basel III capital adequacy framework.
30 Sep 2330 Sep 22
%
UnauditedUnaudited
4
Overseas Banking Group (excluding entities specifically excluded by APRA)
1,2
Common Equity Tier 1 capital ratio 12.4 11.3
Additional Tier 1 capital ratio 2.2 2.1
Tier 1 capital ratio 14.6 13.4
Tier 2 capital ratio 5.9 5.0
Total regulatory capital ratio 20.5 18.4
Overseas Bank (Extended Licensed Entity)
1,3
Common Equity Tier 1 capital ratio 12.6 11.3
Additional Tier 1 capital ratio 2.4 2.2
Tier 1 capital ratio 15.0 13.6
Tier 2 capital ratio 6.5 5.4
Total regulatory capital ratio 21.5 19.0
1
The capital ratios represent information mandated by APRA. The capital ratios of the Overseas Banking Group are publicly available in the Overseas Banking
Group’s Pillar 3 report. This information is made available to users via the Overseas Bank’s website (www.westpac.com.au).
2
Overseas Banking Group (excluding entities specifically excluded by APRA regulations) comprises the consolidation of the Overseas Bank and its
subsidiary entities except those entities specifically excluded by APRA regulations for the purposes of measuring capital adequacy (Level 2). The head of the Level
2 group is the Overseas Bank.
3
Overseas Bank (Extended Licensed Entity) comprises the Overseas Bank and its subsidiary entities that have been approved by APRA as being part of a single
Extended Licensed Entity for the purpose of measuring capital adequacy (Level 1).
4
30 September 2022 ratios have not been restated for APRA's revised capital framework commencing 1 January 2023.
The Overseas Banking Group is required to disclose additional detailed information on its risk management practices and capital adequacy on a
quarterly basis. This information is made available to users via the Overseas Banking Group’s website (www.westpac.com.au).
Note 31 Risk management, funding and liquidity risk and market risk
Financial instruments are fundamental to the NZ Banking Group’s business of providing banking and financial services. The associated financial risks
(including credit risk, funding and liquidity risk and market risk) are a significant proportion of the total risks faced by the NZ Banking Group.
This note details the financial risk management policies, practices and quantitative information of the NZ Banking Group’s principal financial risk
exposures.
Principal risksNote nameNote number
OverviewRisk management frameworks31.1
Credit riskRefer to Note 13 Credit risk management13
Funding and liquidity risk
The risk that the NZ Banking Group cannot meet its payment
obligations or that it does not have the appropriate amount,
tenor and composition of funding and liquidity to support its
assets.
Liquidity modelling
Sources of funding
Assets pledged as collateral
Contractual maturity of financial liabilities
Expected maturity
31.2.1
31.2.2
31.2.3
31.2.4
31.2.5
VaR
Traded market risk
31.3.1
31.3.2
Market risk
The risk of an adverse impact on the NZ Banking Group’s
financial performance or financial position resulting from
changes in market factors, such as FX rates, commodity
prices and equity prices, credit spreads and interest rates.
This includes interest rate risk in the banking book which is
the risk of loss in earnings or economic value in the banking
book as a consequence of movements in interest rates.
Non-traded market risk31.3.3

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 65
Note 31 Risk management, funding and liquidity risk and market risk (continued)
31.1 Risk management frameworks
The Board is responsible for approving the Overseas Banking Group’s Risk Management Framework, Risk Management Strategy and Board Risk
Appetite Statement and monitoring the effectiveness of risk management by the Overseas Banking Group.
The Board has delegated to the Group BRiskC responsibility to:
review and recommend the Overseas Banking Group’s Risk Management Framework, Risk Management Strategy and Board Risk Appetite
Statement to the Board for approval;
review and monitor the risk profile and controls of the NZ Banking Group consistent with the Overseas Banking Group’s Board Risk Appetite
Statement;
approve frameworks, policies and processes for managing risk (consistent with the Overseas Banking Group’s Risk Management Framework
and Board Risk Appetite Statement); and
review and, where appropriate, approve risks beyond the approval discretion provided to management.
For each of its primary financial risks, the NZ Banking Group maintains risk management frameworks and a number of supporting policies that
define roles and responsibilities, acceptable practices, limits and key controls:
RiskRisk management framework and controls
Funding and
liquidity
risk
Westpac New Zealand funding and liquidity risk is measured
and managed in accordance with the policies and processes
defined in the Westpac New Zealand BRCC approved Liquidity
Risk Management Framework.
Responsibility for managing Westpac New Zealand’s liquidity
and funding positions in accordance with the Liquidity Risk
Management Framework is delegated to Westpac New
Zealand Treasury, under the oversight of Westpac New
Zealand’s ALCO and the Financial Markets and Treasury Risk
unit.
Westpac New Zealand Treasury undertakes an annual funding
review that outlines Westpac New Zealand’s balance sheet
funding strategy over a three year period. This review
encompasses trends in global markets, peer analysis,
wholesale funding capacity, expected funding requirements
and a funding risk analysis. This strategy is continuously
reviewed to take account of changing market conditions,
investor sentiment and estimations of asset and liability
growth rates. This review is subsequently submitted to
Westpac New Zealand BRCC for approval.
Daily liquidity risk reports are reviewed by Westpac New
Zealand Treasury and the Westpac New Zealand Financial
Markets and Treasury Risk unit. Liquidity reports are
presented to Westpac New Zealand ALCO monthly and to the
Westpac New Zealand RISKCO and BRCC quarterly.
Westpac New Zealand Treasury also maintains a contingent
funding plan that outlines the steps that should be taken by
Westpac New Zealand in the event of an emerging ‘funding
crisis’. The plan is approved by Westpac New Zealand BRCC.
The NZ Branch funding and liquidity risk is measured and
managed in accordance with the policies and processes
defined in the Group BRiskC approved Liquidity Risk
Management Framework, which is part of the Group’s Board
approved Risk Management Strategy.
Responsibility for managing the NZ Branch liquidity and
funding positions in accordance with the Liquidity Risk
Management Framework is delegated to Group Treasury,
under the oversight of Overseas Banking Group’s ALCO and
Treasury Risk. Group BRiskC oversees the Overseas Banking
Group’s ALCO with regards to APRA APS 210 obligations.
The Overseas Banking Group monitors the composition and
stability of its funding to allow it to remain within its funding
risk appetite. This includes compliance with both the LCR and
NSFR.

Notes to the financial statements
66 Westpac Banking Corporation - New Zealand Banking Group
Note 31 Risk management, funding and liquidity risk and market risk (continued)
RiskRisk management framework and controls
Market risk
The Market Risk Management Framework describes the
Overseas Banking Group’s approach to managing traded and
non-traded market risk and is approved by the Group BRiskC.
Westpac New Zealand operates its own Market Risk
Management Framework that is closely aligned with that of
the Overseas Banking Group. The Westpac New Zealand
Framework is approved by the Westpac New Zealand BRCC.
Traded market risk includes interest rate, foreign exchange,
commodity, credit spread and volatility risks. Non-traded
market risk includes interest rate and foreign exchange risks.
The NZ Banking Group’s framework does not allow for equity
risk to be held.
Market risk is managed using VaR limits, NaR and structural
risk limits (including credit spread and interest rate basis
point value limits) as well as scenario analysis and stress
testing.
The Group BRiskC approves the risk appetite for traded and
non-traded risks through the use of VaR, NaR and specific
structural risk limits.
The Overseas Banking Group’s RISKCO has approved separate
VaR sub-limits for the trading activities of the Overseas
Banking Group’s Financial Markets and Treasury units.
Market risk limits are assigned to business management
based upon the Overseas Banking Group’s risk appetite and
business strategies in addition to the consideration of market
liquidity and concentration of risks.
Market risk positions are managed by the trading and
Treasury desks consistent with their delegated authorities
and the nature and scale of the market risks involved.
Daily monitoring of current exposure and limit utilisation is
conducted independently by Financial Markets and Treasury
Risk unit, which monitors market risk exposures against VaR
and structural risk limits. Oversight of risk specific to the NZ
Banking Group is performed by the Financial Markets and
Treasury Risk unit. Daily VaR position reports are produced by
risk type, by product lines and by geographic region.
Quarterly reports are produced for the Overseas Banking
Group’s MARCO, Overseas Banking Group’s RISKCO and
Group BRiskC.
Daily stress testing and backtesting of VaR results are
performed to support model integrity and to analyse extreme
or unexpected movements. A review of the potential profit
and loss outcomes is also undertaken to monitor any skew
created by the historical data.
The Group BRiskC has approved a framework for profit or loss
escalation which considers both single day and 20 day
cumulative results.
Treasury’s ALM unit is responsible for managing the non-
traded interest rate risk including risk mitigation through
hedging using derivatives. This is overseen by the Financial
Markets and Treasury Risk unit and reviewed by the Group
MARCO, Overseas Banking Group’s RISKCO and Group
BRiskC.
Climate change risk
The NZ Banking Group recognises climate change as a major threat to our collective wellbeing and is committed to transparency and action across
its business to address climate change. While this is not a material financial risk as at 30 September 2023 (30 September 2022: not a material
financial risk), climate change risk is evolving and is expected to have a more significant impact on the NZ Banking Group’s material financial risks in
the future.
The two main sources of financial risks arising from climate change are physical risks and transition risks. Physical risks emanating from climate
change can be event-driven (acute) such as increased severity of extreme weather events (e.g., cyclones, droughts, floods, and fires). They can also
relate to longer-term shifts (chronic) in precipitation and temperature and increased variability in weather patterns or other long-term changes such
as sea level rise. Transition risks are risks associated with the transition to a lower-carbon global economy, the most common of which relate to
policy and legal actions, technology changes, market responses, and reputational considerations.
The NZ Banking Group seeks to understand the potential for climate-related transition and physical risks to impact its business, including their
possible impact on credit risk, regulatory and reporting obligations, and our reputation.
Westpac New Zealand has voluntarily published a Climate Report (formally named Climate Risk report) each year since 2020, based on the
recommendations of the Task Force on Climate-related Financial Disclosures (‘TCFD’). Westpac New Zealand is working to transition current
reporting to the Aotearoa New Zealand Climate Standards issued by the External Reporting Board (‘XRB climate standards’), with a first XRB
climate standards-compliant report to be released for the year ending 30 September 2024. A summary of Westpac New Zealand’s approach to
managing climate change risks against the four TCFD pillars is described below.
Governance:
Westpac New Zealand’s Board is responsible for considering the social, ethical, and environmental impact of Westpac New Zealand’s
activities, and setting standards and monitoring compliance with Westpac New Zealand's sustainability policies and practices. Westpac New
Zealand’s RISKCO oversees material risks, including climate-related risks. Westpac New Zealand’s Credit Risk Committee, a subcommittee of
RISKCO, oversees climate-related risks that present a credit risk to Westpac New Zealand. In October 2023, the charters of the Westpac New
Zealand Board, Board Audit Committee and BRCC were updated to include further governance responsibilities in relation to climate-related
risks and opportunities, disclosures, scenarios and promotion of Westpac New Zealand’s long-term resilience to climate risks.
Westpac New Zealand is also represented on the Overseas Banking Group’s Climate Change Financial Risk Committee which oversees work to
identify and manage the potential impact on credit exposures from climate change-related transition and physical risks across the Overseas
Banking Group and reports to the Overseas Banking Group’s Credit Risk Committee.

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 67
Note 31 Risk management, funding and liquidity risk and market risk (continued)
Strategy:
Westpac New Zealand has integrated climate-related risks and opportunities into its wider business strategy. It focuses on the most relevant
aspects of climate change on its business, and their implications on its customers, communities, and Westpac New Zealand.
During the year ended 30 September 2022, the Overseas Bank joined the United Nations-convened Net Zero Banking Alliance reinforcing its
commitment to the global transition to a net-zero economy by 2050.
Westpac New Zealand commissioned an Agribusiness climate change report, which identified a range of viable options for the agri sector to
decarbonise and adapt to the physical impacts of climate change. During the year ended 30 September 2023, Westpac New Zealand launched
a Sustainable Farm Loan that supports customers to achieve the Westpac Sustainable Farm Standard, an all-of-farm sustainability criteria
designed for Westpac New Zealand by AsureQuality (equivalent to the Sustainable Agriculture Finance Initiative (‘SAFI’) Phase One Guidance
for Livestock). The Sustainable Farm Loan encourages on-farm sustainability and resilience across the whole farm including climate change
mitigation and adaptation and sustainable land management.
As a signatory to the Net Zero Banking Alliance (‘NZBA’), the Overseas Bank has committed to align the Overseas Banking Group’s lending
portfolio with pathways to net zero by 2050 or sooner; and set 2030 emissions reduction targets for certain material, high emitting sectors,
aligned to limiting global warming to 1.5°C above pre-industrial levels by 2100. As a subsidiary of the wider banking Overseas Banking Group,
Westpac New Zealand is covered by the Overseas Bank’s NZBA commitment and targets.
Westpac New Zealand continues to evolve its ability to conduct climate-related scenario analysis.
Risk Management:
Climate change risks are managed in accordance with Westpac New Zealand’s Risk Management Framework which is supported by Westpac
New Zealand’s Sustainability Risk Management Framework (SRMF), Westpac New Zealand’s ESG Credit Risk Policy and Westpac New Zealand’s
and the Overseas Banking Group’s Board Risk Appetite Statements. The SRMF sets out the overall approach to climate risk, defining roles and
responsibilities in accordance with the Three Lines of Defence standard. This framework is reviewed annually and has evolved to meet Westpac
New Zealand’s changing needs and expectations.
Westpac New Zealand regularly reviews its operating environment and maintains an Emerging Risk Landscape. This helps Westpac New
Zealand to understand how emerging risks like Climate Change are evolving, and to determine whether its current responses are sufficient or
require adjustment.
Metrics and Targets:
Westpac New Zealand monitors its climate-related risks through metrics and targets covering its exposure to coastal hazards, sustainable
finance, and its own operational emissions.
Westpac New Zealand’s suite of metrics and targets is evolving as the understanding of risks improves, better data becomes available and
supporting processes and data infrastructure develop. Financed emissions are a particular focus in this area.
In December 2022, the External Reporting Board published climate standards for mandatory climate-related disclosures, taking effect for
accounting periods commencing from 1 January 2023. The standards establish disclosure requirements for selected New Zealand entities, including
large registered banks, and are aligned to the recommendations of the TCFD. A workstream has been initiated to ensure the specific requirements of
the standards are met.
The NZ Banking Group has considered the impact of climate-related risks on its financial position and performance and while the effects of
climate change represent a source of uncertainty, the NZ Banking Group has concluded that climate-related risks do not have a material impact
on the judgements, assumptions and estimates for the year ended 30 September 2023 (30 September 2022: no material impact). Refer to Note
13.1 for further information on how climate change risk is considered as part of credit risk.
For a comprehensive and detailed outline of Westpac New Zealand's approach to climate-related risks, refer to Westpac New Zealand's Risk
Management section of the Climate Report (unaudited) for September 2023 and prior iterations which can be accessed at
www.westpac.co.nz/about-us/legal-information-privacy/disclosure-statements/.

Notes to the financial statements
68 Westpac Banking Corporation - New Zealand Banking Group
Note 31 Risk management, funding and liquidity risk and market risk (continued)
31.2 Funding and liquidity risk
31.2.1 Liquidity modelling
Westpac New Zealand is subject to the conditions specified in the Reserve Bank document ‘BS13 Liquidity Policy.’ The following metrics are calculated
and reported on a daily basis by Westpac New Zealand in accordance with BS13:
the level of liquid assets held;
the one-week mismatch ratio;
the one-month mismatch ratio; and
the one-year core funding ratio.
In addition, the Overseas Banking Group calculates the following liquidity ratios for Westpac New Zealand in accordance with the Overseas Bank’s
liquidity risk framework under APRA Prudential Standard APS 210 Liquidity:
liquidity coverage ratio; and
net stable funding ratio.
31.2.2 Sources of funding
Sources of funding are regularly reviewed to maintain a wide diversification by currency, geography, product and term. Sources include, but are not
limited to:
deposits;
debt issues;
loan capital;
proceeds from sale of marketable securities;
repurchase agreements with central bank;
related entities;
principal repayments on loans;
interest income; and
fees and commissions income.
Term Lending Facility and Funding for Lending Programme
From 26 May 2020 until the extended date of 28 July 2021, the Reserve Bank made available a Term Lending Facility (‘TLF’), to offer loans for a
maximum term of five years at the rate of the Official Cash Rate, with access to the funds linked to banks’ lending under the TLF Scheme. As at 30
September 2023, Westpac New Zealand has a balance of $69 million under the TLF (30 September 2022: $96 million).
On 11 November 2020, the Reserve Bank announced that additional stimulus would be provided through a Funding for Lending Programme (‘FLP’),
commencing in December 2020. The FLP provides funding to banks at the prevailing OCR for a term of three years, secured by high quality collateral.
The size of funding available under the FLP includes an initial allocation of 4% of each bank’s eligible loans (as defined by the Reserve Bank). A
conditional additional allocation of up to 2% of eligible loans is also available, subject to growth in eligible loans, for a total size of up to 6% of eligible
loans. The FLP ran from 7 December 2020 to 6 June 2022 for the initial allocations and ended on 6 December 2022 for the additional allocations. The
FLP term sheet is available on the Reserve Bank’s website. As at 30 September 2023, Westpac New Zealand has a balance of $4,981 million under the
FLP (30 September 2022: $3,871 million).
Liquid assets
The following table shows the NZ Banking Group’s qualifying liquid assets held for the purpose of managing liquidity risk. These assets are eligible
for repurchase agreements with the Reserve Bank and are held in cash, government, local government and highly rated investment grade
securities. The level of liquid asset holdings is reviewed frequently and is consistent with regulatory, balance sheet and market condition
requirements.
NZ BANKING GROUP
$ millions20232022
Cash and balances with central banks9,32511,162
Interbank lending499
Supranational securities2,3351,900
NZ Government securities2,4901,535
NZ public securities3,0592,544
NZ corporate securities2,1711,591
Available liquid assets19,38418,831
In addition, the NZ Banking Group has $6,161 million (30 September 2022: $7,397 million) of own originated loans that are self-securitised via the
Bank’s internal residential mortgage-backed securitisation programme. The AAA rated internal RMBS held are eligible for repurchase with the
Reserve Bank under certain circumstances.

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 69
Note 31 Risk management, funding and liquidity risk and market risk (continued)
Concentration of funding
NZ BANKING GROUP
$ millions20232022
Funding consists of
Collateral received 614 724
Deposits and other borrowings 82,196 80,848
Other financial liabilities
1
5,897 4,945
Due to related entities
2
1,344 1,753
Debt issues
3
18,597 19,933
Loan capital 3,051 2,576
Total funding 111,699 110,779
Analysis of funding by geographical areas
3
New Zealand 89,441 86,665
Australia 1,927 2,124
United Kingdom 10,077 8,822
United States of America 4,895 7,796
China 4,090 3,940
Other 1,269 1,432
Total funding 111,699 110,779
Analysis of funding by industry sector
Accommodation, cafes and restaurants 402 553
Agriculture 1,775 1,821
Construction 2,478 2,645
Finance and insurance
4
41,479 42,164
Forestry and fishing 164 180
Government, administration and defence 3,581 3,204
Manufacturing 1,896 2,297
Mining 55 68
Property services and business services 7,212 7,882
Services 6,223 5,328
Trade 2,232 2,053
Transport and storage 978 750
Utilities 1,085 1,056
Households 36,511 34,917
Other
4,5
4,284 4,108
Subtotal 110,355 109,026
Due to related entities
2
1,344 1,753
Total funding 111,699 110,779
1
Other financial liabilities, as presented above, are in respect of securities sold under agreements to repurchase, securities sold short and interbank placements.
2
Amounts due to related entities, as presented above, are in respect of deposits and borrowings and exclude amounts which relate to derivative financial
instruments and other liabilities.
3
The geographic region used for debt issues is based on the nature of the debt programmes. The nature of the debt programmes is used as a proxy for the location
of the original purchaser. Where the nature of the debt programmes does not necessarily represent an appropriate proxy, the debt issues are classified as 'Other’.
These instruments may have subsequently been on-sold.
4
Comparatives have been restated to correctly reflect funding by industry sector. The restatement for 2022 comparatives results in a $1,728 million increase in
funding from finance and insurance from $40,436 million to $42,164 million and $1,728 million decrease in funding from other industry sector from $5,836 million to
$4,108 million.
5
Includes deposits from non-residents.
ANZSIC has been used as the basis for disclosing industry sectors.

Notes to the financial statements
70 Westpac Banking Corporation - New Zealand Banking Group
Note 31 Risk management, funding and liquidity risk and market risk (continued)
31.2.3 Assets pledged as collateral
The NZ Banking Group is required to provide collateral to other financial institutions, as part of standard terms, to secure liabilities. In addition to
assets supporting the Covered Bond Programme disclosed in Note 28, the carrying value of these financial assets pledged as collateral is:
NZ BANKING GROUP
$ millions20232022
Cash 62 87
Securities pledged under repurchase agreements:
Trading securities and financial assets measured at FVIS 73 347
Investment securities 121 -
Residential mortgage-backed securities
1
6,469 4,998
Total amount pledged to secure liabilities (excluding Covered Bond Programme) 6,725 5,432
1
As at 30 September 2023, the NZ Banking Group has undertaken repurchase agreements with the Reserve Bank, under the Funding for Lending Programme and
Term Lending Facility, using residential mortgage-backed securities. For the Funding for Lending Programme, the repurchase cash amount at 30 September 2023
is $4,981 million (30 September 2022: $3,871 million), which is recorded within other financial liabilities on the balance sheet, with underlying securities to the value
of $6,387 million provided under the arrangement (30 September 2022: $4,883 million). For the Term Lending Facility, the repurchase cash amount at 30
September 2023 is $69 million (30 September 2022: $96 million), which is recorded within other financial liabilities on the balance sheet, with underlying securities
to the value of $82 million provided under the arrangement (30 September 2022: $115 million).
31.2.4 Contractual maturity of financial liabilities
The following table presents cash flows associated with financial liabilities, payable at the balance sheet date, by remaining contractual maturity. The
amounts disclosed in the table are the future contractual undiscounted cash flows, whereas the NZ Banking Group manages inherent liquidity risk based
on expected cash flows.
Cash flows associated with these financial liabilities include both principal payments, as well as fixed or variable interest payments incorporated into the
relevant coupon period. Principal payments reflect the earliest contractual maturity date. Derivative financial instruments designated for hedging
purposes are expected to be held for their remaining contractual lives, and reflect gross cash flows over the remaining contractual term.
Derivatives held for trading and certain liabilities classified in “Other financial liabilities” which are measured at FVIS are not managed for liquidity
purposes on the basis of their contractual maturity, and accordingly these liabilities are presented in either the on demand or up to 1 month columns.
Only the liabilities that the NZ Banking Group manages based on their contractual maturity are presented on a contractual undiscounted basis in the
following table.

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 71
Note 31 Risk management, funding and liquidity risk and market risk (continued)
NZ BANKING GROUP
2023
OverOver
1 Month3 MonthsOver 1
Year
OnUp toand Up toand Up toand Up toOver
$ millions
Demand1 Month3 Months1 Year5 Years5 YearsTotal
Financial liabilities
Collateral received-614----614
Deposits and other borrowings39,7887,25712,70921,8082,014-83,576
Other financial liabilities2772166912,3053,52537,017
Derivative financial instruments:
Held for trading 3,842-----3,842
Held for hedging purposes (net settled)-39164523091565
Held for hedging purposes (gross settled):
Cash outflow-21881,1816,1254907,905
Cash inflow--(11)(903)(5,553)(484)(6,951)
Due to related entities:
Non-derivative balances1,348---18-1,366
Derivative financial instruments:
Held for trading 3,300-----3,300
Debt issues-3547295,58413,69148420,842
Loan capital--19583043,7044,085
Total undiscounted financial liabilities48,5558,50114,38930,08520,4334,198126,161
Total contingent liabilities and commitments
Letters of credit and guarantees1,015-----1,015
Commitments to extend credit27,869-----27,869
Total undiscounted contingent liabilities and
commitments
28,884-----28,884

Notes to the financial statements
72 Westpac Banking Corporation - New Zealand Banking Group
Note 31 Risk management, funding and liquidity risk and market risk (continued)
NZ BANKING GROUP
2022
OverOver
1 Month3 MonthsOver 1 Year
OnUp toand Up toand Up toand Up toOver
$ millions
Demand1 Month3 Months1 Year5 Years5 YearsTotal
Financial liabilities
Collateral received -724 - - - -724
Deposits and other borrowings43,2776,96011,87317,7441,656 -81,510
Other financial liabilities295401640964,296 -5,728
Derivative financial instruments:
Held for trading 5,521 - - - - -5,521
Held for hedging purposes (net settled) -7116993771600
Held for hedging purposes (gross settled):
Cash outflow -33603598,0021,88110,335
Cash inflow - -(11)(35)(7,024)(1,827)(8,897)
Due to related entities:
Non-derivative balances1,751 - - -2411,776
Derivative financial instruments:
Held for trading 6,516 - - - - -6,516
Debt issues -6702,6133,49512,9681,94421,690
Loan capital - -9281492,9923,178
Total undiscounted financial liabilities57,3608,79515,30021,78620,4484,992128,681
Total contingent liabilities and commitments
Letters of credit and guarantees1,025 - - - - -1,025
Commitments to extend credit27,904 - - - - -27,904
Total undiscounted contingent liabilities and
commitments
28,929 - - - - -28,929

Notes to the financial statements
Westpac Banking Corporation - New Zealand Banking Group 73
Note 31 Risk management, funding and liquidity risk and market risk (continued)
31.2.5 Expected maturity
The following table presents the balance sheet based on expected maturity dates. The liability balances in the following table will not agree to the
contractual maturity tables due to the analysis below being based on expected rather than contractual maturities, the impact of discounting and the
exclusion of interest accruals beyond the reporting period. Deposits are presented in the following table on a contractual basis, however as part of our
normal banking operations, the NZ Banking Group expects a large proportion of these balances to be retained.
NZ BANKING GROUP
20232022
Due within
Greater
than
Due withinGreater than
$ millions
12 months12 months
Total
12 months12 months
Total
Assets
Cash and balances with central banks9,325-9,32511,162 - 11,162
Collateral paid62-6287 - 87
Trading securities and financial assets measured at
FVIS
4,0219865,0072,7087933,501
Derivative financial instruments4,2071,2875,4946,9652,4189,383
Investment securities1,4755,1766,6515585,0655,623
Loans15,89283,81999,71114,95382,43997,392
Due from related entities4,470184,4886,520896,609
All other assets6631,3972,0608711,1522,023
Total assets40,11592,683132,79843,82491,956135,780
Liabilities
Collateral received614-614724 - 724
Deposits and other borrowings80,3461,85082,19679,2831,56580,848
Derivative financial instruments3,6731,1854,8584,3802,3976,777
Due to related entities3,5601,1064,6666,8081,4848,292
Debt issues6,16612,43118,5976,54113,39219,933
Loan capital-3,0513,051 - 2,5762,576
All other liabilities4,5583,4297,9872,0914,2356,326
Total liabilities98,91723,052121,96999,82725,649125,476
31.3 Market risk
31.3.1 VaR
The NZ Banking Group uses VaR as one of the mechanisms for controlling both traded and non-traded market risk.
VaR is a statistical estimate of the potential loss in earnings over a specified period of time and to a given level of confidence based on historical
market movements. The confidence level indicates the probability that the loss will not exceed the VaR estimate on any given day.
VaR seeks to take account of all material market variables that may cause a change in the value of the portfolio, including interest rates, FX rates,
price changes, volatility and the correlations between these variables. Daily monitoring of current exposures and VaR and structural concentration
limit utilisation is conducted independently by the Financial Markets and Treasury Risk unit. These limits are supplemented by escalation triggers
for material profit or loss, and stress testing of risks beyond the 99% confidence interval.
The key parameters of VaR are:
Holding period1 day
Confidence level99%
Period of historical data used1 year