US Interim Financial Results Announcement on Form 6-K
ASX
Release
7 May 2025
Westpac Banking Corporation US Interim Financial Results Announcement
on Form 6-K (for the six months ended 31 March 2025, prepared for
distribution in the United States)
Westpac Banking Corporation (Westpac) has filed with the US Securities and Exchange
Commission a Form 6-K, which attaches Westpac’s Interim Financial Results
Announcement for the six months ended 31 March 2025, prepared specifically for
distribution in the United States (US Interim Financial Results Announcement). This
filing has been prepared to meet US securities law requirements and is necessary to
update Westpac’s US debt issuance programs.
As the US Interim Financial Results Announcement has been prepared to meet US
requirements, its presentation differs in some limited respects from Westpac’s 2025
Interim Financial Results, incorporating the requirements of Appendix 4D, lodged with
the ASX on 5 May 2025.
A copy of the Form 6-K is attached for release to the market.
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
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
May 6, 2025
Commission File Number 1-10167
WESTPAC BANKING CORPORATION
(Translation of registrant’s name into English)
275 KENT STREET, SYDNEY, NEW SOUTH WALES 2000, AUSTRALIA
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F
☒
Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Incorporation by Reference
The information contained in Exhibit 1 to this Report on Form 6-K (excluding the “Independent auditor’s review report
to the members of Westpac Banking Corporation” on pages 111 and 112 of such Exhibit) and Exhibit 101 to this Report on
Form 6-K shall be incorporated by reference in the prospectuses relating to the Registrant’s securities contained in the
Registrant’s Registration Statements on Form F-3 (File Nos. 333-283007 and 333-283008), as such prospectuses may be
amended or supplemented from time to time.
Index to Exhibits
Exhibit
No.Description
12025 Interim Financial Results – prepared for distribution in the United States of America
101.INSInline XBRL Instance Document
101.SCHInline XBRL Taxonomy Extension Schema Document
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document
101.LABInline XBRL Taxonomy Extension Labels Linkbase Document
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (formatted in inline XBRL and contained in Exhibit 101)
Disclosure regarding forward-looking statements
The information contained in this Report on Form 6-K contains statements that constitute “forward-looking statements” within
the meaning of section 21E of the U.S. Securities Exchange Act of 1934.
Forward-looking statements are statements that are not historical facts. Forward-looking statements appear in a number of
places in this Report and include statements regarding our current intent, belief or expectations with respect to our business
and operations, macro and micro economic and market conditions, results of operations and financial condition and
performance, capital adequacy and liquidity and risk management, including, without limitation, future loan loss provisions and
financial support to certain borrowers, forecasted economic indicators and performance metric outcomes, indicative drivers,
climate- and other sustainability-related statements, commitments, targets, projections and metrics, and other estimated and
proxy data.
Words such as ‘will’, ‘may’, ‘expect’, ‘intend’, ‘seek’, ‘would’, ‘should’, ‘could’, ‘continue’, ‘plan’, ‘estimate’, ‘anticipate’, ‘believe’,
‘probability’, ‘indicative’, ‘risk’, ‘aim’, ‘outlook’, ‘forecast’, ‘assumption’, ‘projection’, ‘target’, ‘goal’, ‘guidance’, ‘objective’,
‘ambition’ or other similar words, are used to identify forward-looking statements. These statements reflect our current views
on future events and are subject to change, certain known and unknown risks, uncertainties and assumptions and other
factors which are, in many instances, beyond our control (and the control of our officers, employees, agents and advisors),
and have been made based on management’s and/or the Board’s current expectations or beliefs concerning future
developments and their potential effect upon Westpac.
Forward-looking statements may also be made, verbally or in writing, by members of Westpac’s management or Board in
connection with this Report. Such statements are subject to the same limitations, uncertainties, assumptions and disclaimers
set out in this Report.
There can be no assurance that future developments or performance will align with our expectations or that the effect of
future developments on us will be those anticipated. Actual results could differ materially from those we expect or which are
expressed or implied in forward-looking statements, depending on various factors including, but not limited to, those
described in the section titled ‘Risk factors’ in Westpac’s 2025 Interim Financial Results on Form 6-K filed with the U.S.
Securities and Exchange Commission. When relying on forward-looking statements to make decisions with respect to us,
investors and others relying on information in this Report should carefully consider such factors and other uncertainties and
events.
Except as required by law, we assume no obligation to revise or update any forward-looking statements in this Report,
whether from new information, future events, conditions, or otherwise, after the date of this Report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
WESTPAC BANKING CORPORATION
(Registrant)
Date: May 6, 2025By:/s/ Esther Choi
Esther Choi
Tier One Attorney
Exhibit 1
INTERIM
FINANCIAL
RESULTS
FOR THE SIX MONTHS ENDED 31 MARCH 2025
Incorporating the requirements of Appendix 4D
Westpac Banking Corporation ABN 33 007 457 141
WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
Westpac Banking Corporation ABN 33 007 457 141
Acknowledgement of Indigenous Peoples
Westpac acknowledges the First Peoples of Australia. We recognise their ongoing role as
Traditional Owners of the land and waters of this country and pay our respects to Elders,
past and present. We extend our respect to Westpac’s Aboriginal and Torres Strait Islander
employees, partners and stakeholders and to the Indigenous Peoples in the other locations
where we operate.
In Aotearoa (New Zealand) we also acknowledge tāngata whenua and the unique
relationship that Indigenous Peoples share with all New Zealanders under Te Tiriti o
Waitangi.
Westpac’s 2025 Interim Financial Results
The information in this report relates to our First Half 2025 reporting period unless stated otherwise.
In this 2025 Interim Financial Results Announcement a reference to ‘Westpac’, ‘WBC’, ‘Westpac Group’, ‘the Group’, ‘we’, ‘us’ and ‘our’ are to Westpac Banking Corporation ABN
33 007 457 141 and its subsidiaries unless it clearly means just Westpac Banking Corporation.
For certain information about the basis of preparing the financial and non-financial information see Introduction (page iii).
In addition, this Results Announcement contains statements that constitute ‘forward-looking statements’ within the meaning of Section 21E of the US Securities Exchange Act of
1934. For an explanation of forward-looking statements and the risks, uncertainties and assumptions to which they are subject, see Introduction (page iii). Please consider those
important disclaimers when reading the forward-looking statements in this Results Announcement.
Information contained in or accessible through the websites mentioned in this Results Announcement does not form part of this Results Announcement unless we specifically state
that it is incorporated by reference and forms part of this Results Announcement. Information on those websites owned by Westpac is current as at the date of this Results
Announcement. Except as required by law, we assume no obligation to revise or update those websites after the date of this Results Announcement. We are not in a position to
verify information on websites owned and/or operated by third parties.
iii
RESULTS ANNOUNCEMENT TO THE MARKET
Introduction
Our interim period refers to the six months ended 31 March 2025 (First Half 2025 or 1H25). Throughout this Interim Financial Results
Announcement (Results Announcement), we also refer to the six months ended 31 March 2024 (First Half 2024, 1H24, or prior corresponding
period), and the six months ended 30 September 2024 (Second Half 2024, 2H24, or prior period).
The selected financial information for First Half 2025, Second Half 2024 and First Half 2024 contained in this Results Announcement is based on
the financial statements contained in the unaudited consolidated Interim Financial Report for Westpac Banking Corporation (Westpac) and its
controlled entities (collectively referred to as ‘the Group’) for the six months ended 31 March 2025. The Interim Financial Report has been prepared
and presented in accordance with Australian Accounting Standards (AAS) as they relate to interim financial reports. The Interim Financial Report
also complies with International Financial Reporting Accounting Standards (IFRS) as issued by the International Accounting Standards Board
(IASB) as they relate to interim financial reports.
This Results Announcement contains certain statements that constitute ‘forward-looking statements’. For an explanation of forward-looking
statements and the risks, uncertainties and assumptions to which they are subject, see Disclosure regarding forward-looking statements (page 114-
115). Please consider those important disclaimers when reading the forward-looking statements in this Results Announcement.
In this Results Announcement references to ‘Westpac’, ‘WBC’, ‘Westpac Group’, ‘the Group’, ‘we’, ‘us’ and ‘our’ are to Westpac Banking
Corporation and its controlled entities, unless it clearly means just Westpac Banking Corporation. Percentage (%) movements are shown as %
unless otherwise stated. This applies to all the tables in this Results Announcement. Unless otherwise stated, average balances represents a daily
average over the relevant half year.
All dollar values in this Results Announcement are in Australian dollars unless otherwise noted. References to ‘dollars’, ‘dollar amounts’, ‘$’, ‘AUD’
or ‘A$’ are to Australian dollars, references to ‘US$’, ‘USD’ or ‘US dollars’ are to United States dollars, references to ‘NZ$’, ‘NZD’ or ‘NZ dollars’ are
to New Zealand dollars and references to ‘GBP’ are to British Pound Sterling. Refer to Exchange Rates (page 121) for information regarding the
rates of exchange between the Australian dollar and the US dollar applied by the Group as part of its operating activities for First Half 2025, Second
Half 2024 and First Half 2024.
Information on terms, acronyms and calculations used in this Results Announcement are provided in the Glossary (pages 124-127) of the
document.
Non-AAS financial measures
Westpac’s statutory results are prepared in accordance with AAS and are also compliant with IFRS.
In assessing Westpac’s performance and that of our operating segments, we use a number of financial measures, including amounts, measures
and ratios that are presented on a non-AAS basis, as described below.
Non-AAS financial measures and ratios do not have standardised meanings under AAS. As such they are unlikely to be directly comparable to
similar measures presented by other companies and should not be viewed in isolation from, or as a substitute for, the AAS results.
ivWESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
RESULTS ANNOUNCEMENT TO THE MARKET
Our non-AAS measures fall within the following categories:
Measure/ratioDescription
Further
information
Performance measures
excluding the impact of
Notable Items
The net interest income, non-interest income, operating expenses and segment reporting
sections of this Results Announcement include performance measures that exclude Notable
Items.
Notable Items are items that management believes are not reflective of Westpac’s ongoing
business performance. Details of Notable Items are included in Impact of Notable Items
(page 9).
Performance measures which are adjusted for one or more of these items include:
●Net interest income
●Non-interest income (including net fee income, net wealth management income, trading
income and other income)
●Net operating income
●Operating expenses (including staff expenses, occupancy expenses, technology expenses
and other expenses)
●Pre-provision profit
●Net profit/(loss)
●Net profit attributable to owners of WBC
●Return on average ordinary equity
●Return on average tangible equity
Management considers this information useful as these measures provide a view that reflects
Westpac’s ongoing business performance.
See pages 2-32,
35-51, and 121-
123.
Pre-provision profitPre-provision profit is net profit/(loss) excluding credit impairment (charges)/benefits and income
tax (expense)/benefit.
This is calculated as net interest income plus non-interest income less operating expenses. This
includes (charges)/benefits relating to provisions and impairment other than from expected credit
losses.
Management considers this information useful as this measure provides readers with a view of
the operating performance of Westpac.
See pages 7,
35-51 and 121-
123.
Basic earnings per share
(excluding Notable
Items) and Diluted
earnings per share
(excluding Notable
Items)
Basic earnings per share (excluding Notable Items) is calculated as net profit attributable to
owners of WBC (adjusted for RSP dividends) excluding Notable Items divided by the weighted
average number of ordinary shares on issue during the period, adjusted for treasury shares.
Diluted earnings per share is calculated by adjusting the basic earnings per share (excluding
Notable Items) by assuming all dilutive potential ordinary shares are converted.
Management considers this information useful as these measures provide a view of the basic
and diluted earnings per share based on the ongoing operating performance of Westpac.
See pages 8
and 121-123.
Core net interest income
and Core net interest
margin (NIM)
Core net interest income is calculated as net interest income excluding Notable Items, and
Treasury and Markets income.
Core NIM is calculated as core net interest income (annualised where applicable) divided by
average interest earning assets.
Management considers this information useful as these measures provide a view of the
underlying performance of Westpac’s net interest income and margin, for lending, deposit and
wholesale funding.
See pages 8
and 10-12.
v
RESULTS ANNOUNCEMENT TO THE MARKET
Measure/ratioDescription
Further
information
Dividend payout ratio
(excluding Notable
Items)
Calculated as ordinary dividend paid/declared on issued shares (net of Treasury shares) divided
by the net profit attributable to owners of WBC (adjusted for RSP dividends) excluding Notable
Items.
Management considers this information useful as it provides a view of the dividend payout ratio
based on the ongoing operating performance of Westpac.
See pages 8, 32
and 121-123.
Expense to income ratio
(excluding Notable
Items)
Calculated as operating expenses excluding Notable Items divided by net operating income
excluding Notable Items.
Management considers this information useful as this measure provides a view of the efficiency
of the ongoing operating performance of Westpac.
See pages 8,
18-20 and 121-
123.
Average tangible
ordinary equity and
Return on average
tangible ordinary equity
(ROTE)
Average tangible ordinary equity is calculated as average ordinary equity less average goodwill
and other intangible assets (excluding capitalised software).
Return on average tangible ordinary equity is calculated as net profit attributable to owners of
WBC adjusted for RSP dividends (annualised where applicable) divided by average tangible
ordinary equity.
Management considers this information useful as these measures are commonly used as a
performance measure by WBC, investors, analysts and others in assessing Westpac’s
application of equity.
See pages 8
and 121-123.
Presentation changes
Certain comparative information has also been revised where appropriate to conform to changes in presentation in the current period to enhance
comparability.
1
Contents
PERFORMANCE REVIEW2
Group performance3
Segment reporting35
DIRECTORS’ REPORT52
Directors’ Report53
2025 INTERIM FINANCIAL REPORT73
Notes to the consolidated financial statements79
Statutory statements110
OTHER INFORMATION113
Other information114
Glossary124
2WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
PERFORMANCE
REVIEW
GROUP PERFORMANCE
Performance overview
Performance summary
Key financial information
Impact of Notable Items
Review of earnings
Credit quality
Balance sheet and funding
Capital and dividends
Sustainability performance
SEGMENT REPORTING
Consumer
Business & Wealth
Westpac Institutional Bank (WIB)
Westpac New Zealand
Group Businesses
3
GROUP PERFORMANCE
Performance overview
1
Financial highlights
9.4%11.1%12.2%76cents
Return on equity
9.8% ex Notable Items
Return on tangible equity
ex Notable Items
CET1 capital ratioInterim ordinary dividend
per share, fully franked
1H25 results overview
Net profit of $3,317 million decreased 9% on the prior period. Excluding Notable Items
2
, net profit decreased 4% to $3,457 million. ROTE excluding
Notable Items decreased 34 basis points to 11.1%.
A strategic tilt to business and institutional banking along with a focus on improving returns in consumer, supports our approach to balancing growth
and return.
The interim ordinary dividend was 76 cents per share. The payout ratio of 75%
3
was at the top of our sustainable payout ratio range of 65% to 75%.
During First Half 2025, we continued to strengthen the Westpac franchise through an emphasis on customer service excellence.
●We added more features to our award-winning banking app and introduced new digital tools to help businesses manage cash flow and
expenses;
●We continue to invest in market-leading scam prevention innovations, announcing SafeBlock which will allow customers to block new
transactions and prevent potential financial loss;
●To support businesses, we improved access to working capital and introduced BizEdge, a platform for faster, simpler loan decisions. We are
piloting a Business Lending Virtual Assistant powered by AI;
●For Institutional clients, we are investing in Westpac One to bring together real-time treasury management, FX, Trade and Lending with powerful
data insights via cloud technology; and
●We continue to invest in our people and presence, increasing bankers across Business and WIB to drive growth in target sectors and segments.
We also unveiled plans for new Regional Service Centres to support regional communities by bringing together retail and business banking
services.
Transformation is key to unlocking benefits of scale and delivering exceptional customer and employee experiences. We are driving our
transformation agenda through enterprise initiatives and UNITE, a business-led, technology-enabled simplification program.
●Of the 60 initiatives, 4 have completed and 41 are in progress. Achievements in the First Half 2025 included streamlining ID verification
processes for new consumer customers and providing eligible mortgage holders with access to multiple offset accounts;
●We are extending the rollout of the single banker platform, Digital Banker, to benefit approximately 20,000 employees across Consumer and
Business. This portal captures all customer interactions and needs, providing better insights and experiences for customers and bankers; and
●We are simplifying mortgages end-to-end by moving to one suite of mortgage products, processes and applications. This supports our strategic
focus on fostering deeper customer relationships and improving the proprietary lending proportion.
1.Unless otherwise stated, all figures relate to the half year ended 31 March 2025, and are compared to figures for the half year ended 30 September 2024.
2.Notable Items are discussed further in Impact of Notable Items (page 9).
3.Excluding Notable Items.
4WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
GROUP PERFORMANCE
Performance overview (Continued)
$5.1bn$5.3bn1.88%1.80%
Pre-provision profit,
down 6% on 2H24
Pre-provision profit
Ex Notable Items,
down 2% on 2H24
NIM, down 9bps on 2H24Core NIM,
down 3bps on 2H24
Pre-provision profit declined by 6% on the prior period. Excluding Notable Items, pre-provision profit decreased by 2% to $5,295 million with net
operating income stable and operating expenses up 3%.
●Net interest income decreased by 3% to $9,351 million. Excluding Notable Items, net interest income of $9,569 million was stable, reflecting
the balancing of margin and volume growth, particularly in mortgages. The 3 basis points contraction in Core net interest margin (NIM) was
offset by the 2% increase in average interest- earning assets.
●NIM was 1.88% and comprised:
–Core NIM of 1.80%, which contracted by 3 basis points from tighter loan spreads due to lending competition along with narrower deposit
spreads and a mix shift towards lower margin savings accounts. Higher earnings on hedged deposits and capital provided an offset;
–Treasury and Markets income of 12 basis points, down 1 basis point; and
–Notable Items related to economic hedges of term funding, reduced NIM by 4 basis points.
●Non-interest income increased 5% to $1,442 million. Excluding Notable Items, non-interest income increased by 3% to $1,424 million due to
higher Markets income.
●Operating expenses increased 3% to $5,698 million reflecting the expected step up in UNITE investment, salary and wage growth along with
increased software amortisation. Cost Reset actions and seasonally lower spend across other investments provided a partial offset.
●Impairment charges of 6 basis points reflect our prudent lending practices and customer resilience across both households and businesses.
Strong balance sheet
We maintained strong financial foundations with capital, funding and liquidity ratios all above regulatory minimums.
CapitalLEVEL 2 CET1 CAPITAL RATIO (%)
The CET1 capital ratio declined by 25 basis points to 12.2%. This reflects the impact of:
●Net profit adding 74 basis points;
●Dividends subtracting 58 basis points;
●Higher Risk Weighted Assets (RWA) subtracting 31 basis points;
●Capital deductions and other items, including FX, adding 3 basis points; and
●On market share buyback of $581 million subtracting 13 basis points.
Funding and liquidity
The March 2025 quarterly average liquidity coverage ratio (LCR) of 135% and the net stable
funding ratio (NSFR) of 115% were both well above regulatory minimums.
The deposit to loan ratio increased to 84.5%, with deposit growth more than funding loan
growth during the half.
The Group raised $15 billion of new long term wholesale funding during the half.
135%
LCR, above 100% regulatory
minimum requirement
5
Performance overview (Continued)
Credit quality sound
We remain appropriately provisioned with credit impairment provisions of $5,072 million,
$1.7 billion above the expected losses of our base case economic scenario.
●Improvements in credit quality metrics reflect the decrease in 90+ day mortgage
delinquencies and an improvement in individual customer circumstances. Stressed
exposures to total committed exposures were 1.36%, a reduction of 9 basis points.
●Credit impairment provisions of $5,072 million were stable with the reduction in CAPs offset
by higher IAPs. The ratio of CAP to credit RWA was 1.26%, a decrease of 4 basis points.
STRESSED EXPOSURES AS A % OF TCE
Loans and customer deposits
Loans grew across all segments, increasing overall by 2%.
Growth in Australian housing loans, excluding RAMS, was 2%, or 0.9x APRA system
1
,
mainly in owner occupied mortgages. Competition in the Australian mortgage market
remains elevated.
Australian business lending increased 5%. Growth in the Business segment was
diversified with strong growth in our target sectors of agriculture, health and professional
services, along with SME. There was strong loan growth in WIB as we deepened
relationships with existing customers and pursued growth in lending to international
customers.
Customer deposits grew by 3%.
Household deposits growth of 1.0x APRA system demonstrates the health of our
consumer franchise. Growth in Australian consumer savings accounts has been supported
by our award winning Westpac App, which for the second consecutive year was ranked
the #1 banking app
2
. The app offers essential everyday banking and money management
tools.
Deposit growth of 2% in New Zealand was mostly in savings accounts as customers
preferred more flexibility.
LOANS ($BN)
CUSTOMER DEPOSITS ($BN)
Shareholder returns
The decline in net profit resulted in a decrease in ROTE to 10.6%. Excluding Notable
Items ROTE reduced by 34 basis points to 11.1% and earnings per ordinary share were
100.8 cents, down 3%.
In the First Half 2025 we bought back $0.6 billion worth of shares on market and
shareholders will receive $2.6 billion through a fully franked interim dividend. The interim
dividend was 76 cents per share.
The payout ratio is 78% on a net profit basis and 75% excluding Notable Items.
The Dividend Reinvestment Plan (DRP) will apply to the interim dividend. No discount will
be offered to shareholders who elect to participate in the DRP. Shares are expected to be
purchased on market to satisfy the DRP.
Net tangible assets per ordinary share were up 1% at $17.97.
ORDINARY DIVIDEND PER ORDINARY SHARE
(CENTS)
1.Growth multiple based on ADI System published by APRA in the Monthly ADI statistics.
2.The Forrester Digital Experience Review: Australian Mobile Banking Apps, Q3 2024.
6WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
GROUP PERFORMANCE
Performance overview (Continued)
Outlook
The Australian economy emerged from a prolonged per capita recession in the final quarter of 2024. Strong population growth partially masked a
difficult period for many households and businesses. Economic growth is expected to recover from 1.2% in 2024 to 1.9% in 2025, with private
demand likely to overtake the public sector as the primary driver of activity. Escalating trade and ongoing geopolitical tensions have created an
increasingly uncertain outlook.
Households began to receive relief from cost of living pressures during 2024 as inflation eased and tax cuts were implemented. Following a rise in
interest rates from 0.10% in November 2020 to 4.35% by November 2023, relief finally arrived late in the First Half 2025 when the RBA cut rates for
the first time in almost five years. Housing credit growth recovered shortly after interest rates peaked. We expect housing credit growth of
approximately 5% in 2025.
Australian business investment has been resilient given the requirement to expand the capacity of the economy to cater for a growing population,
the energy transition and rising demand for technology and innovation. Cost pressures including skilled labour shortages and purchased services
have eased, but remain a challenge. While private sector investment has slowed, total demand for credit has been resilient and is expected to grow
by approximately 6% in 2025.
The New Zealand economy has emerged from a modest recession. The easing of financial conditions due to several interest rate cuts from 5.50%
to 3.5%, combined with a recovery in soft commodity prices, is expected to support an improvement in economic activity during 2025.
The global economy appears set for a challenging period as global trade patterns and supply chains, formed across decades, are significantly
disrupted. Fundamentals of the Australian and New Zealand economies suggest they are better placed than most countries to absorb potential
shocks. Westpac’s strong financial position is underpinned by surplus capital, stable funding, strong liquidity and credit provisioning. This provides
flexibility to withstand geopolitical uncertainty and support customers.
Priorities
We are committed to delivering customer service excellence and
realising our ambition to be our customers’ #1 bank and partner through
life.
To achieve this and deliver long-term value for shareholders, we’re
investing in our people, strengthening risk practices and driving
innovation and transformation. Our five priorities are:
Customer - Striving to be #1 in customer service by adopting a “whole
of bank to whole of customer” approach.
People - Investing in our people and fostering a culture of accountability
and empowerment to create the best workplace.
Risk - Completing the CORE transition, safeguarding customers and
applying risk management as a strategic advantage.
Transformation - Simplifying technology and adopting a “one best way”
approach to enhance customer and employee satisfaction and
operational efficiency.
Performance - Improving Return on Tangible Equity (ROTE) and cost to
income ratio relative to peers, while strengthening our market position.
7
Performance summary
Half YearHalf YearHalf Year% Mov’t
MarchSeptMarchMar 25Mar 25
$m
2025 2024 2024 - Sept 24 - Mar 24
Net interest income
9,351 9,626 9,127 (3) 2
Non-interest income
1,442 1,372 1,463 5 (1)
Net operating income
10,793 10,998 10,590 (2) 2
Operating expenses
(5,698) (5,549) (5,395) 3 6
Pre-provision profit 5,095 5,449 5,195 (6) (2)
Impairment (charges)/benefits
(250) (175) (362) 43 (31)
Profit before income tax expense
4,845 5,274 4,833 (8) -
Income tax expense
(1,520) (1,626) (1,491) (7) 2
Profit after income tax expense
3,325 3,648 3,342 (9) (1)
Profit attributable to non-controlling interests (NCI)
(8)- - - -
Net profit attributable to owners of WBC
3,317 3,648 3,342 (9) (1)
Notable Items (140) 41 (164)large (15)
Effective tax rate
31.37% 30.83% 30.85%54 bps 52 bps
Performance summary excluding Notable Items
Half YearHalf YearHalf Year% Mov’t
MarchSeptMarchMar 25Mar 25
$m
2025 20242024- Sept 24 - Mar 24
Net interest income 9,569 9,565 9,351- 2
Non-interest income
1,424 1,382 1,465 3 (3)
Net operating income 10,993 10,947 10,816- 2
Operating expenses
(5,698) (5,549) (5,395) 3 6
Pre-provision profit
5,295 5,398 5,421 (2) (2)
Impairment (charges)/benefits (250) (175) (362) 43 (31)
Profit before income tax expense 5,045 5,223 5,059 (3)-
Income tax expense
(1,580) (1,616) (1,553) (2) 2
Profit after income tax expense 3,465 3,607 3,506 (4) (1)
Profit attributable to non-controlling interests (NCI)
(8) - -- -
Net profit attributable to owners of WBC
3,457 3,607 3,506 (4) (1)
8WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
GROUP PERFORMANCE
Key financial information
Half YearHalf YearHalf Year% Mov’t
MarchSeptMarchMar 25Mar 25
2025 20242024- Sept 24 - Mar 24
Shareholder value
Basic earnings per ordinary share (cents) 96.7 105.4 95.6 (8) 1
Basic earnings per ordinary share (ex Notable Items) (cents) 100.8 104.2 100.3 (3) -
Diluted earnings per ordinary share (cents) 96.0 102.5 91.6 (6) 5
Diluted earnings per ordinary share (ex Notable Items) (cents) 99.8 101.4 95.8 (2) 4
Weighted average ordinary shares (millions) 3,428 3,457 3,494 (1) (2)
Fully franked ordinary dividends per share (cents) 76 76 75 - 1
Fully franked special dividend per share (cents) - - 15 - (100)
Dividend payout ratio
a
78.39%71.60%77.83%large56 bps
Dividend payout ratio (ex Notable Items)
a
75.22%72.41%74.19%281 bps103 bps
Return on average ordinary equity 9.42%10.24%9.30%(82 bps)12 bps
Return on average ordinary equity (ex Notable Items) 9.81%10.13%9.75%(32 bps)6 bps
Return on average tangible equity (ROTE) 10.63%11.55%10.48%(92 bps)15 bps
ROTE (ex Notable Items) 11.08%11.42%10.99%(34 bps)9 bps
Average ordinary equity ($m) 70,584 71,145 71,841 (1) (2)
Average tangible ordinary equity ($m) 62,519 63,077 63,753 (1) (2)
Average total equity ($m) 70,928 71,214 71,884 - (1)
Net tangible asset per ordinary share ($)
17.97 17.75 17.82 1 1
Business performance
Group
1.88%1.97%1.89%(9 bps) (1 bps)
Core NIM 1.80%1.83%1.80%(3 bps) -
Treasury & Markets impact on NIM 0.12%0.13%0.14%(1 bps)(2 bps)
Notable Items impact on NIM(0.04%)0.01%(0.05%)large1 bps
Average interest earning assets ($m) 996,701 975,402 964,708 2 3
Return on average assets
0.60%0.68%0.64%(8 bps)(4 bps)
Expense to income ratio
52.79% 50.45%50.94%234 bps 185 bps
Expense to income ratio (ex Notable Items)
51.83%50.69%49.88%114 bps 195 bps
Full time equivalent employees (FTE) 35,969 35,240 35,348 2 2
Revenue per FTE ($ ‘000’s)
304 313 300 (3) 1
Capital, funding and liquidity
Level 2 common equity Tier 1 capital ratio
- Australian Prudential Regulation Authority (APRA)
12.24%12.49%12.55%(25 bps) (31 bps)
- Internationally comparable 18.22%18.27%18.55%(5 bps) (33 bps)
Credit RWA ($m)
b
353,233 351,724 344,633 - 2
Total risk weighted assets (RWA) ($m)
449,495 437,430 444,417 3 1
Liquidity coverage ratio (LCR)
135%133%132%255 bps 310 bps
Net stable funding ratio (NSFR)
115%112%114%268 bps 125 bps
Deposit to loan ratio 84.48%83.50%82.94%98 bps 154 bps
Credit quality and impairment charges
Gross impaired exposures to gross loans
0.25%0.24%0.19%1 bps 6 bps
Gross impaired exposures provisions to gross impaired exposures
40.88%41.28%46.60%(40 bps) large
Collectively assessed provisions to credit RWA
b
126 bps130 bps136 bps(4 bps) (10 bps)
Total provisions to credit RWA
b
144 bps145 bps149 bps(1 bps) (5 bps)
Total committed exposure (TCE) ($bn)
1,288 1,252 1,240 3 4
Total stressed exposures as a % of TCE
1.36%1.45%1.36%(9 bps) -
Total provisions to gross loans
61 bps63 bps65 bps(2 bps) (4 bps)
Mortgages 90+ day delinquencies
0.83%1.05%1.00%(22 bps) (17 bps)
Other consumer loans 90+ day delinquencies
1.26%1.40%1.40%(14 bps) (14 bps)
Impairment charges/(benefits) to average loans6 bps4 bps9 bps2 bps (3 bps)
Balance sheet ($m)
Loans
824,808 806,767 784,839 2 5
Total assets
1,098,893 1,077,544 1,052,661 2 4
Customer deposits
696,762 673,615 650,946 3 7
a.Excludes the impact of the special dividend in First Half 2024.
b.Comparatives have been revised to align with current period presentation.
9
Impact of Notable Items
To assist in explaining our financial performance, we report Notable Items, which represent certain items that are not considered to be reflective of
Westpac’s ongoing business performance.
Notable Items broadly fall into the following categories:
●Unrealised fair value gains/(losses) on economic hedges that do not qualify for hedge accounting
●Net ineffectiveness on qualifying hedges
●Large items that are not reflective of the Group’s ordinary operations. In individual reporting periods large items may include:
–Provisions for remediation, litigation, fines and penalties
–The impact of asset sales and revaluations
–The write-down of assets (including goodwill and capitalised software)
–Restructuring costs
In determining dividends, the impact of Notable Items is typically excluded.
The impact of Notable Items (post tax) in First Half 2025 was a reduction to net profit of $140 million (Second Half 2024: $41 million benefit; First
Half 2024: $164 million reduction) and was solely related to economic hedges and hedge ineffectiveness.
Details of Notable Items (post tax) impacting on the First Half 2025 result are:
Category
Net profit impact
First Half 2025 Detail
Unrealised fair value gains
and losses on economic
hedges that do not qualify
for hedge accounting
$92 million
reduction
The unrealised fair value gain/(loss) on hedges of accrual accounted term funding
transactions for the period was $92 million. This represents a timing difference for the
statutory results but does not affect the Group’s profits over the life of the hedges.
Net ineffectiveness on
qualifying hedges
$48 million
reduction
The net ineffectiveness on qualifying hedges of $48 million for the period arises from the
fair value movement in these hedges which reverses over time and therefore does not
affect the Group’s profits over time.
For detailed explanations of Notable Items for Full Year 2024, refer to the 2024 Annual Report.
EconomicHedge
$mhedgesineffectivenessTotal
Half Year March 2025
Net interest income
(149) (69) (218)
Non-interest income
18 - 18
Net operating income
(131) (69) (200)
Operating expenses
- - -
Pre-provision profit (131) (69) (200)
Income tax (expense)/benefit and NCI
39 21 60
Net profit/(loss)
(92) (48) (140)
Half Year Sept 2024
Net interest income
52 9 61
Non-interest income
(10) - (10)
Net operating income
42 9 51
Operating expenses
- - -
Pre-provision profit 42 9 51
Income tax (expense)/benefit and NCI
(7) (3) (10)
Net profit/(loss)
35 6 41
Half Year March 2024
Net interest income
(223) (1) (224)
Non-interest income
(2) - (2)
Net operating income
(225) (1) (226)
Operating expenses
- - -
Pre-provision profit (225) (1) (226)
Income tax (expense)/benefit and NCI
62 - 62
Net profit/(loss)
(163) (1) (164)
10WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
GROUP PERFORMANCE
Review of earnings
Net interest income
Half YearHalf YearHalf Year% Mov’t
MarchSeptMarchMar 25Mar 25
2025 2024 2024 - Sept 24 - Mar 24
Net interest Income ($m)
Net interest income 9,351 9,626 9,127 (3) 2
Core net interest income 8,960 8,940 8,668- 3
Notable Items (218) 61 (224)large (3)
Treasury
a
495 496 560- (12)
Markets 114 129 123 (12) (7)
Average interest earning assets ($m)
Loans 755,530 739,728 725,592 2 4
Housing
b
505,748 504,205 496,471- 2
Personal 10,900 11,423 12,085 (5) (10)
Business 238,882 224,100 217,036 7 10
Liquid assets 209,408 204,192 208,340 3 1
Other interest-earning assets 31,763 31,482 30,776 1 3
Average interest earning assets
996,701 975,402 964,708 2 3
NIM (%)
NIM 1.88% 1.97% 1.89%(9 bps)(1 bps)
Core NIM 1.80% 1.83% 1.80%(3 bps)-
Treasury & Markets impact on NIM 0.12% 0.13% 0.14%(1 bps)(2 bps)
Notable Items impact on NIM
(0.04%) 0.01%(0.05%)large 1 bps
a.Treasury net interest income excludes capital benefit.
b.Net of average mortgage offset balances.
First Half 2025 – Second Half 2024
Net interest income decreased 3% to $9,351 million. Key drivers included:
●Stable core net interest income of $8,960 million, with balance sheet growth largely offset by a lower net interest margin;
●Treasury and Markets income, down 3% to $609 million due to stable Treasury income and a 12% reduction in Markets income; and
●Notable Items reduced income by $218 million compared to an increase of $61 million in the prior period.
Average interest-earning assets increased by 2% to $996.7 billion, including growth of 7% in business loans and a 3% increase in liquid assets. This
was partially offset by the reduction in personal loans, the runoff of RAMS housing loans and the runoff and subsequent sale of the auto finance
portfolio. Average housing loans were stable. Excluding RAMS, average housing loans were up 1%.
First Half 2025 – First Half 2024
Net interest income increased 2% to $9,351 million. Key drivers included:
●Higher core net interest income, up 3% to $8,960 million due to balance sheet growth as net interest margin was flat;
●Treasury and Markets income, down 11% to $609 million due to stronger Treasury performance in the prior corresponding period from interest
rate positioning; and
●Notable Items reduced income by $218 million compared to a reduction of $224 million in the prior corresponding period.
Average interest-earning assets increased by 3% to $996.7 billion. Growth in average loans of 4% reflects 10% growth in business loans and 2%
growth in housing. This was partially offset by the reduction in personal loans, the runoff of RAMS housing loans and the runoff and subsequent sale
of the auto finance portfolio. Average liquid assets increased by 1% while other interest-earning assets grew by 3% due to increased holdings of
trading securities, to facilitate client activity.
11
Review of earnings (Continued)
Net interest margin
First Half 2025 – Second Half 2024
The NIM decreased by 9 basis points to 1.88%. NIM comprised:
●Core NIM of 1.80%, down 3 basis points with key drivers described below;
●Treasury and Markets contribution of 12 basis points, down 1 basis point due to a reduction in Markets income; and
●Notable items from unrealised revaluations on economic hedges of term funding detracted 4 basis points, compared to a benefit of 1 basis point
in the prior period.
The 3 basis point decrease in Core NIM was driven by:
●Loan interest spread: 1 basis point decrease including narrower spreads in business, institutional and Australian mortgage lending due to
competition. Higher spreads on mortgage lending in New Zealand and switching from low spread fixed rate mortgages to higher spread variable
rate mortgages in Australia provided a benefit;
●Deposit interest spread: 2 basis points decrease reflects narrower spreads and a mix shift towards lower margin savings accounts. Earnings on
hedged deposits were higher;
●Wholesale funding: 1 basis point decrease from the impact of higher funding costs, with final Term Funding Facility (TFF) drawdowns maturing
in 2H24; and
●Capital and Other: 1 basis point increase. This includes higher earnings on hedged capital balances, which was partly offset by lower returns on
unhedged capital from reduced balances and the non-repeat of a 1 basis point remediation provision release in the prior period.
12WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
GROUP PERFORMANCE
Review of earnings (Continued)
First Half 2025 – First Half 2024
The NIM decreased by 1 basis points to 1.88%. Group NIM comprised:
●Core NIM of 1.80%, was stable with key drivers described below;
●Treasury and Markets impact of 12 basis points, down 2 basis points primarily due to higher contribution from Treasury in the prior
corresponding period; and
●Notable items from unrealised fair value revaluations on economic hedges of term funding detracted 4 basis points, compared to 5 basis points
in the prior corresponding period.
The stable Core NIM was driven by:
●Loan interest spread: 2 basis points decrease including narrower spreads in business, institutional and Australian mortgage lending due to
competition. Higher spreads on mortgage lending in New Zealand and switching from low spread fixed rate mortgages to higher spread variable
rate mortgages in Australia provided a benefit;
●Deposit interest spread: 1 basis point decrease reflects narrower spreads and a mix shift towards lower margin savings accounts. Earnings on
hedged deposits were higher;
●Liquid Assets: 2 basis point increase as average liquid assets increased less than average lending assets;
●Wholesale funding: 2 basis point decrease as spreads on new term wholesale funding were higher than the spreads on maturing facilities, which
included TFF maturities; and
●Capital and Other: 3 basis point increase with higher earnings on hedged capital balances partly offset by lower returns on unhedged capital
from reduced balances.
13
Review of earnings (Continued)
Loans
As atAs atAs at% Mov’t
31 March30 Sept31 MarchMar 25Mar 25
$m
2025 2024 2024 - Sept 24 - Mar 24
Australia
720,195 704,907 685,810 2 5
Housing
484,582 473,435 461,743 2 5
RAMS (in runoff) 25,600 29,836 33,315 (14) (23)
Personal
9,365 9,403 9,707 - (4)
Business
204,642 194,138 181,985 5 12
Auto finance
a
- 2,116 3,054 (100) (100)
Provisions
(3,994) (4,021) (3,994) (1) -
New Zealand (A$)
94,187 94,137 92,887 - 1
New Zealand (NZ$)
103,614 102,463 101,175 1 2
Housing
69,515 68,011 67,378 2 3
Personal
1,175 1,151 1,178 2 -
Business
33,457 33,802 33,143 (1) 1
Provisions
(533) (501) (524) 6 2
Other overseas (A$)
10,426 7,723 6,142 35 70
Total loans
824,808 806,767 784,839 2 5
a.Portfolio was sold in March 2025. Balances included personal and business auto finance loans.
First Half 2025 – Second Half 2024
Loans increased by 2% to $824.8 billion and comprised the following movements:
●Growth in Australian housing loans, excluding RAMS, of 2% or 0.9x APRA system to $484.6 billion, mainly in variable rate owner occupied
mortgages. New lending with a loan to value ratio of under 80% increased by 2 percentage points to 83% as we targeted growth in this
segment;
●RAMS housing loans were down 14% to $25.6 billion as the portfolio is closed to new business;
●Australian personal lending was flat;
●Growth in Australian business lending of 5% to $204.6 billion. WIB lending balances were up with growth in energy, infrastructure and
institutional property sectors. Business segment growth was diversified, with our target sectors of health, professional services and agriculture
performing well;
●Completion of the sale of the auto finance portfolio in March 2025 reduced lending by $2.1 billion;
●Growth in New Zealand lending of 1% to NZ$103.6 billion with growth in owner occupied mortgages; and
●Growth in other overseas loan balances of 35% to $10.4 billion. This reflected growth in lending to US and Asian customers who have a nexus
to Australia or New Zealand.
First Half 2025 – First Half 2024
Loans increased by 5% to $824.8 billion and comprised the following movements:
●Growth in Australian housing loans, excluding RAMS, of 5% or 0.9x APRA system to $484.6 billion, mainly in variable rate owner occupied
mortgages;
●RAMS housing loans were down 23% to $25.6 billion as the portfolio is closed to new business;
●Australian personal lending was down 4% to $9.4 billion due to higher pay down and subdued new lending;
●Growth in Australian business lending of 12% to $204.6 billion. Growth in WIB lending balances reflected activity in the energy, infrastructure,
institutional property and industrials sectors. Business segment growth was diversified, with our target sectors of health, professional services
and agriculture performing well;
●Runoff from the wind down and subsequent sale of the auto finance portfolio in March 2025 reduced lending by $3.1 billion;
●Growth in New Zealand lending of 2% to NZ$103.6 billion with growth in owner occupied mortgages; and
●Growth in other overseas loan balances of 70% to $10.4 billion. This reflected growth in lending to US and Asian customers who have a nexus
to Australia or New Zealand.
14WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
GROUP PERFORMANCE
Review of earnings (Continued)
Deposits and other borrowings
As atAs atAs at% Mov’t
31 March30 Sept31 MarchMar 25Mar 25
$m
2025
2024
2024
- Sept 24
- Mar 24
Customer deposits
Australia 614,458 593,795 570,488 3 8
Transactions 113,433 110,393 114,120 3 (1)
Savings 209,035 197,415 186,945 6 12
Term 158,944 157,282 148,110 1 7
Non-interest bearing 133,046 128,705 121,313 3 10
New Zealand (A$) 73,586 73,201 72,378 1 2
New Zealand (NZ$) 80,950 79,676 78,837 2 3
Transactions 9,412 9,595 9,133 (2) 3
Savings 20,674 19,433 20,103 6 3
Term 38,836 39,451 37,685 (2) 3
Non-interest bearing 12,028 11,197 11,916 7 1
Other overseas (A$) 8,718 6,619 8,080 32 8
Total customer deposits 696,762 673,615 650,946 3 7
Certificates of deposit 42,488 46,874 51,280 (9) (17)
Australia 27,777 33,215 35,727 (16) (22)
New Zealand (A$) 1,887 1,711 2,414 10 (22)
Other overseas (A$) 12,824 11,948 13,139 7 (2)
Total deposits and other borrowings 739,250 720,489 702,226 3 5
First Half 2025 – Second Half 2024
Customer deposits grew by 3% to $696.8 billion and comprised the following movements:
●Australian deposits grew 3% to $614.5 billion mainly from growth in savings and non-interest bearing accounts. The increase in savings deposits
was predominantly in Consumer. Non-interest bearing deposits increased due to a rise in mortgage offset balances of 7% to $68.0 billion;
●New Zealand deposits increased 2% to NZ$80.9 billion, primarily in savings accounts as customers elected to maintain some flexibility given the
uncertain economic and interest rate environment; and
●Other overseas deposits were up 32% to $8.7 billion, primarily in WIB due to higher offshore term deposits.
The deposit to loan ratio of 84.5% was higher than 30 September 2024, with deposit growth exceeding loan growth during the period.
First Half 2025 – First Half 2024
Customer deposits grew by 7% to $696.8 billion. Growth comprised the following movements:
●Australian deposits were up 8% to $614.5 billion with growth in savings, non-interest bearing and term deposits. The increase in savings
deposits was predominantly in Consumer, and term deposit growth was primarily in WIB. Non-interest bearing deposits were up due to an
increase in mortgage offset balances of 13% to $68.0 billion;
●New Zealand deposits increased 3% to NZ$80.9 billion with growth primarily in term deposits and savings accounts as customers preferences
shifted to higher yielding accounts; and
●Other overseas deposits were up 8% to $8.7 billion, primarily in WIB from higher offshore term deposits.
The deposit to loan ratio of 84.5% increased from 82.9% as at 31 March 2024, as deposit growth outpaced loan growth over the last 12 months.
15
Review of earnings (Continued)
Loan and deposits market share and system multiple metrics
As at
As at
As at
31 March30 Sept31 March
202520242024
Market Share
Australia
ADI System (APRA)
Housing credit
21%21%21%
Personal credit cards22%21%21%
Business credit
a
16%16%15%
Household deposits21%21%21%
Business deposits
b
18%18%18%
New Zealand (Reserve Bank of New Zealand (RBNZ))
c
Consumer lending18%18%18%
Business lending16%16%16%
Deposits
17%17%18%
Half Year
Half Year
Half Year
MarchSeptMarch
202520242024
System Multiples
Australia
ADI System (APRA)
Housing credit
0.5 0.7 1.2
Personal credit cards
d
n/a 0.6 1.0
Business credit
a
1.4 1.7 0.4
Household deposits 1.0 1.1 1.1
Business deposits
b,d
0.9 large 1.1
New Zealand (RBNZ)
c
Consumer lending 0.9 0.4 1.3
Business lending
d
n/alargen/a
Deposits
d
0.5 0.7 n/a
a.Westpac Group’s business credit growth rate and multiples are based on ADI System published by APRA in the Monthly ADI statistics. Business credit includes loans with
Non-Financial businesses, and Community service organisations across all segments. Comparatives may differ from previously reported values to reflect revisions in published
system statistics.
b.Westpac Group’s business deposit growth rate and multiples are based on ADI System published by APRA in the Monthly ADI statistics. Business deposits include deposits
from Non-Financial businesses and Community service organisations across all segments.
c.New Zealand comprises New Zealand banking operations.
d.n/a indicates that system growth and/or Westpac growth was negative.
16WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
GROUP PERFORMANCE
Review of earnings (Continued)
Non-interest income
Half YearHalf YearHalf Year% Mov’t
MarchSeptMarchMar 25Mar 25
$m
2025 2024 2024 - Sept 24 - Mar 24
Net fee income
840 830 842 1 -
Net wealth management income
239 223 218 7 10
Trading and other income
363 319 403 14 (10)
Total non-interest income
1,442 1,372 1,463 5 (1)
Non-interest income is composed of:
Half Year Half Year Half Year % Mov’t
MarchSeptMarchMar 25Mar 25
$m202520242024 - Sept 24 - Mar 24
Non-interest income (Ex Notable Items)
Net fee income
840 830 842 1 -
Net wealth management income
239 223 218 7 10
Trading and other income
345 329 405 5 (15)
Total non-interest income (Ex Notable Items)
1,424 1,382 1,465 3 (3)
Notable Items
Trading and other income 18 (10) (2)largelarge
Total non-interest income - Notable Items
18 (10) (2) large large
Total non-interest income
1,442 1,372 1,463 5 (1)
First Half 2025 – Second Half 2024
Non-interest income increased by 5% to $1,442 million. Excluding Notable Items, non-interest income was up 3% to $1,424 million.
Net fee income increased by 1% to $840 million. Key movements included:
●Higher institutional lending fees of $19 million from increased underwriting activity and fee income from higher average lending balances;
●Higher cards income of $17 million reflecting higher annual credit card and scheme fees;
●Lower New Zealand fees of NZ$15 million, reflecting both lower card scheme and loan establishment fees; and
●Lower Australian merchants income of $8 million, largely due to lower volumes.
Net wealth management income increased by 7% to $239 million with higher funds under administration partly offset by platforms margin
compression.
Trading and other income increased by 14% to $363 million. Excluding Notable Items, trading and other income increased by 5% to $345 million
due to higher credit sales and risk management income, largely in foreign exchange (FX). This was partly offset by a negative derivative valuation
adjustment (DVA) and the net loss on the sale of the auto finance portfolio of $8 million.
First Half 2025 – First Half 2024
Non-interest income declined by 1% to $1,442 million. Excluding Notable Items non-interest income decreased by 3% to $1,424 million.
Net fee income of $840 million was flat. Key movements included:
●Higher card fees of $17 million from higher currency conversion fees reflecting increased international spend and higher annual card fees;
●Higher institutional lending fees of $8 million, primarily from the impact of a larger loan book; and
●Lower Australian merchants income of $24 million, primarily due to lower volumes.
Net wealth management income increased by 10% to $239 million with lower remediation costs and higher funds under administration
partly offset by platforms margin compression.
Trading and other income decreased by 10% to $363 million. Excluding Notable Items, trading and other income decreased by 15% to
$345 million reflecting lower sales and risk management income, a reduction in DVA and the net loss on the sale of the auto finance
portfolio.
17
Review of earnings (Continued)
Markets related income
1
Half YearHalf YearHalf Year% Mov’t
MarchSeptMarchMar 25Mar 25
$m
2025 2024 2024 - Sept 24 - Mar 24
Net interest income
114 129 123 (12) (7)
Non-interest income
336 310 367 8 (8)
Markets income
450 439 490 3 (8)
Sales and risk management income
469 435 502 8 (7)
Derivative valuation adjustment
a
(19) 4 (12) large 58
Markets income
450 439 490 3 (8)
a.Includes the impact of credit valuation adjustment and funding value adjustment.
Markets income comprises sales and risk management revenue derived from the creation, pricing and distribution of risk management products to
Westpac’s customers. Dedicated relationship specialists provide product solutions to these customers to help manage their interest rate, foreign
exchange, commodity, credit and structured products exposures.
First Half 2025 – Second Half 2024
Markets income increased by 3% to $450 million.
Sales and risk management income increased by 8% to $469 million. This was largely driven by higher FX trading income. DVA had a
negative impact of $19 million compared to a $4 million positive contribution in the prior period.
First Half 2025 – First Half 2024
Markets income decreased by 8% to $450 million.
Sales and risk management income decreased by 7% to $469 million. This was driven by lower trading income in fixed income products partly offset
by higher sales revenue.
DVA had a negative impact of $19 million compared to a negative $12 million impact in the prior corresponding period.
1.Markets income includes financial markets income derived by WIB, Business & Wealth and Westpac New Zealand.
18WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
GROUP PERFORMANCE
Review of earnings (Continued)
Operating expenses
Half YearHalf YearHalf Year% Mov’t
MarchSeptMarchMar 25Mar 25
$m
2025 2024 2024 - Sept 24 - Mar 24
Staff expenses
(3,115) (2,968) (2,931) 5 6
Occupancy expenses
(318) (348) (352) (9) (10)
Technology expenses
(1,480) (1,441) (1,323) 3 12
Other expenses
(785) (792) (789) (1) (1)
Total operating expenses
(5,698) (5,549) (5,395) 3 6
Expense to income ratio (Ex Notable Items) 51.83% 50.69% 49.88%114 bps195 bps
Full Time Equivalent (FTE) employees
As atAs atAs at% Mov’t
31 March30 Sept31 MarchMar 25Mar 25
Number of FTE
2025 2024 2024 - Sept 24 - Mar 24
Permanent employees
34,168 33,583 33,395 2 2
Temporary employees
1,801 1,657 1,953 9 (8)
FTE 35,969 35,240 35,348 2 2
Average FTE
35,522 35,171 35,337 1 1
First Half 2025 – Second Half 2024
Total operating expenses increased 3% to $5,698 million reflecting the step up in UNITE investment, salary and wage growth along with increased
software amortisation. Cost Reset actions and seasonally lower spend across other investments provided a partial offset.
Staff expenses increased by 5% to $3,115 million. Key movements included:
●Wages growth and the increase in the superannuation contribution rate to 11.5%;
●Higher average FTE which increased by 1% to support UNITE and the investment in bankers; and
●Benefits from Cost Reset actions.
Occupancy expenses decreased by 9% to $318 million reflecting the reduction of the Group’s corporate and branch footprint.
Technology expenses increased 3% to $1,480 million due to increased costs related to UNITE and software amortisation following the completion
of major projects. Seasonally lower spend across other investments provided a partial offset.
Other expenses decreased 1% to $785 million due to lower litigation and remediation costs. Additional costs related to the closure of RAMS to new
business were lower than Second Half 2024.
First Half 2025 – First Half 2024
Total operating expenses increased 6% to $5,698 million. The increase reflects the step up in UNITE investment, salary and wage growth, higher
costs of third party technology vendors along with increased software amortisation. Cost Reset actions and lower risk and regulatory investment
spend provided a partial offset.
Staff expenses increased 6% to $3,115 million. Key movements included:
●Wages growth and the increase in the superannuation contribution rate to 11.5%;
●Higher average FTE which increased by 1% to support UNITE and the investment in bankers; and
●Benefits from Cost Reset actions.
Occupancy expenses decreased by 10% to $318 million. This reflects the reduction of the Group’s Corporate and branch footprint.
Technology expenses increased 12% to $1,480 million due to higher third-party vendor costs, step up in UNITE investment and increased
software amortisation following the completion of major projects. Lower risk and regulatory investment spend provided a partial offset.
Other expenses decreased 1% or $4 million to $785 million.
19
Review of earnings (Continued)
Investment spend
Half YearHalf YearHalf Year% Mov’t
March Sept March Mar 25 Mar 25
$m202520242024- Sept 24- Mar 24
Expensed
521 578 414 (10) 26
Capitalised software, fixed assets and prepayments
327 442 322 (26) 2
Total
848 1,020 736 (17) 15
UNITE 251 114 33 120large
Growth and productivity
244 339 211 (28) 16
Risk and regulatory
353 567 492 (38) (28)
Total
848 1,020 736 (17) 15
Total investment spend of $848 million was 15% higher than the prior corresponding period. The growth is primarily attributed to the increased
investment in UNITE. Seasonality and the completion of risk and regulatory projects were the main factors in the 17% decline relative to the prior
period.
Of the investment spend, 61% was expensed in the First Half 2025 compared to 57% in the prior period and 56% in the prior corresponding period
of total spend. UNITE projects accounted for 29%, growth and productivity initiatives accounted for 29% and 42% was directed towards risk and
regulatory activities.
UNITE investment spend increased to $251 million with 77% expensed in the First Half 2025. Of the 60 initiatives, 4 have completed and 41 are in
progress.
Key achievements:
●Consolidated 20 Consumer identity verification processes to one;
●Introduced multiple offset accounts for all eligible home loan customers, providing customer greater choice and control over their finances; and
●Consolidated two versions of Asia BankTrade into one best system, simplifying processes while reducing risk and complexity.
Spend in the period focused on prioritised initiatives, including:
●Mortgage simplification to a single suite of products, processes and applications;
●Consolidating deposit origination pathways for Cash and Transaction banking customers;
●Extending Digital Banker capabilities to all bankers;
●Consolidating seven collections systems to one system; and
●Streamlining fraud operations from four workflow systems to one solution.
Growth & Productivity investments included:
●Continued development of BizEdge, the integrated business lending originations platform with the initial rollout to Westpac business bankers in
March 2025;
●The Westpac One Core transaction banking platform achieved New Payments Platform (NPPA) certification, representing significant progress
towards delivering real-time treasury management;
●Launch of a new digital invoice finance solution to help commercial customers manage their cashflow;
●New features in the Westpac App and enhancements to the Westpac New Zealand online banking app;
●Enhancing transactional banking and merchant service experience; and
●Continued development of AI platforms with the launch of Relationship Banker Assistant, FM Virtual Assistant and Financial Crime Coworkers.
Risk and Regulatory spend included:
●Compliance with the 2025 Banking Code of Practice (BCOP), providing additional protections for small business customers, guarantors,
vulnerable customers and customers requiring additional support;
●Continuing to expand scam prevention capabilities to enhance customer protection;
●Upgraded the ageing core platform and migrated domestic high value payments to a new application with more advanced capabilities;
●Achieving ISO 20022 compliance for high value payments;
●Implementing changes to comply with Prudential Standard CPS 230, Operational Risk Management. The new standard requires entities to
better manage operational risks and respond to business disruptions; and
●Continuing to enhance records management systems and processes.
20WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
GROUP PERFORMANCE
Review of earnings (Continued)
Capitalised software
Half YearHalf YearHalf Year% Mov’t
March Sept March Mar 25 Mar 25
$m
202520242024- Sept 24- Mar 24
Balance as at beginning of period
2,675 2,658 2,797 1 (4)
Total additions
347 463 329 (25) 5
Amortisation expense
(485) (447) (442) 9 10
Impairment expense
- - (19) - (100)
Foreign exchange movements
(5) 1 (7) large (29)
Balance as at end of period 2,532 2,675 2,658 (5) (5)
Average amortisation period (years)
2.8 3.0 3.2 (0.2) years (0.4) years
Capitalised software decreased by 5% on both the prior period and the prior corresponding period to $2,532 million. The decrease reflects
increased amortisation due to the completion of key projects such as One Banking Platform, Payments and investment to comply with RBNZ’s
outsourcing policy, BS11. Additions included ongoing investment in payment systems and UNITE. The average amortisation period reduced by 0.4
years to 2.8 years from First Half 2024 and by 0.2 years from Second Half 2024.
Credit impairment charges
Half YearHalf YearHalf Year% Mov’t
March Sept March Mar 25 Mar 25
$m
202520242024- Sept 24- Mar 24
Individually assessed provisions (IAPs)
New IAPs
(251) (210) (213) 20 18
Write-backs
89 63 30 41 197
Recoveries
115 100 90 15 28
Total IAPs, write-backs and recoveries
(47) (47) (93) - (49)
Collectively assessed provisions (CAPs)
Write-offs
(279) (275) (211) 1 32
Other changes in CAPs
76 147 (58) (48) large
Total CAPs
(203) (128) (269) 59 (25)
Total credit impairment (charges)/benefits (250) (175) (362) 43 (31)
Impairment charges/(benefits) to average loans6 bps4 bps9 bps2 bps(3 bps)
Net write-offs to average gross loans
6 bps 6 bps 5 bps - 1 bps
First Half 2025 – Second Half 2024
The credit impairment charge of $250 million remains historically low and represents 6 basis points of average loans, up from 4 basis points. An
increase in the downside scenario weight was the predominant driver of the higher charge.
The CAP charge of $203 million comprised write-offs of $279 million partly offset by a benefit in other changes in CAP of $76 million. The other
changes in CAP were due to:
●A reduction in portfolio overlays of $49 million from the release of the construction sector overlay and a reduction of the Australian mortgages
overlay;
●A reduction from an improved outlook for commercial property prices and interest rates; and
●An increase in the downside scenario weight of 2.5% reflecting a rise in geopolitical instability including deterioration in international trading
relationships.
The IAP charge of $47 million comprised:
●New IAPs of $251 million, mostly in the services and trade sectors;
●Recoveries of $115 million, mostly in credit card and personal loan portfolios; and
●Write-backs of $89 million.
First Half 2025 – First Half 2024
The credit impairment charge of $250 million represents 6 basis points of average loans, down from 9 basis points. The reduction in the impairment
charge was due to a 25% lower CAP charge and 49% lower IAP charge as credit quality metrics have improved.
21
Review of earnings (Continued)
Income tax expense
First Half 2025 – Second Half 2024
The effective tax rate of 31.4% in First Half 2025 was higher than the Second Half 2024 effective tax rate of 30.8%. The increase was primarily due
to prior period tax adjustments.
First Half 2025 – First Half 2024
The effective tax rate of 31.4% in First Half 2025 was higher than the effective tax rate of 30.9% in First Half 2024. The increase was primarily due
to the impact of prior period tax adjustments and higher non-deductible expenses in First Half 2025.
The effective tax rate is above the Australian corporate tax rate of 30%, primarily due to the non-deductibility of distributions paid on hybrid capital
instruments.
Credit quality
Credit quality key metrics
As atAs atAs at
31 March30 Sept31 March
2025 2024 2024
Stressed exposures by credit grade as a % of TCE:
Impaired
0.16%0.16%0.12%
Non performing, 90+ days past due
0.37%0.47%0.46%
Non performing, less than 90 days past due
0.28%0.23%0.24%
Watchlist and substandard0.55%0.59%0.54%
Total stressed exposures
1.36%1.45%1.36%
Gross impaired exposures to TCE for business and institutional:
Business Australia
0.54%0.65%0.47%
Business New Zealand
0.31%0.32%0.38%
Institutional
0.07%0.04%0.03%
Mortgage 90+ day delinquencies:
Group
0.83%1.05%1.00%
Australia
0.86%1.12%1.06%
New Zealand
0.54%0.49%0.47%
Other consumer loans 90+ day delinquencies:
Group
1.26%1.40%1.40%
Australia
1.30%1.47%1.45%
New Zealand
0.95%0.87%0.96%
Other:
Gross impaired exposures to gross loans
0.25%0.24%0.19%
Gross impaired exposure provisions to gross impaired exposures
40.88%41.28%46.60%
Total provisions to gross loans
61 bps 63 bps 65 bps
Collectively assessed provisions to credit risk weighted assets
a
126 bps 130 bps 136 bps
Total provisions to credit risk weighted assets
a
144 bps 145 bps 149 bps
a.Comparatives have been revised to align with current period presentation.
22WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
GROUP PERFORMANCE
Credit quality (Continued)
Movement in gross impaired exposures
Half YearHalf YearHalf Year% Mov’t
MarchSeptMarchMar 25Mar 25
$m
2025 2024 2024 - Sept 24 - Mar 24
Balance as at beginning of period
1,955 1,500 1,302 30 50
New and increased - individually managed
418 417 284 - 47
Write-offs
(364) (343) (277) 6 31
Returned to performing or repaid
(128) (166) (122) (23) 5
Portfolio managed - new/increased/returned/repaid
217 552 318 (61) (32)
Exchange rate and other adjustments
- (5) (5) (100) (100)
Balance as at end of period
2,098 1,955 1,500 7 40
First Half 2025 – Second Half 2024
Stressed exposures as a percentage of total committed exposures decreased by 9 basis points to 1.36%.
The composition and drivers of stressed exposures were:
●Impaired exposures of 16 basis points: no change compared to 30 September 2024;
●Non-performing, 90+ days past due and not impaired exposures of 37 basis points: a 10 basis point reduction reflecting lower mortgage 90+ day
delinquencies;
●Non-performing not 90 days past due and not impaired exposures of 28 basis points: a 5 basis point increase, reflecting a rise in mortgages
categorised as non performing after exiting 90+ days past due;
●Watchlist and substandard exposures of 55 basis points: a 4 basis point reduction mostly within the mining and trade sectors.
Gross impaired exposures to gross loans were 1 basis point higher at 0.25%, with the reduction in impaired exposures in Australian business more
than offset by an increase in WIB, mainly from one customer in the service sector. The provision coverage of the impaired portfolio was stable at
41%. Impaired exposures have an appropriate level of provision cover.
Portfolio segments First Half 2025 – Second Half 2024
Stressed exposures in WIB increased by 2 basis points to 0.78%, driven by higher watchlist exposures in the property sector. Impaired exposures
remained low at 0.12% of TCE with the 7 basis point increase mostly within the services sector.
Australian business stressed exposures decreased by 25 basis points to 4.99% of TCE, driven by lower watchlist exposures in the property and
trade sectors. Impaired exposures to TCE decreased 11 basis points to 0.54% with improvement in the services and agricultural sectors.
Australian mortgage 90+ day delinquencies decreased 26 basis points to 0.86% due to a reduction in hardship and a change to serviceability
treatment.
Properties in possession were 176, a reduction of 25 compared to 30 September 2024 reflecting fewer properties being repossessed and a strong
market resulted in faster inventory sales.
Australian other consumer 90+ day delinquencies decreased 17 basis points to 1.30% driven by the sale of the auto finance portfolio. Excluding the
impact of the sale, other consumer 90+ day delinquencies increased by 7 basis points, mostly within the credit card portfolio.
In New Zealand, stressed exposure to TCE decreased by 10 basis points to 1.63%. This was mostly driven by a reduction in watchlist exposures in
the mining sector.
New Zealand mortgage 90+ day delinquencies were up 5 basis points to 0.54%. Other consumer 90+ day delinquencies were 8 basis points higher
at 0.95%. This reflects the lagged impact of high interest rates, inflation and weakening of the labour market.
23
Credit quality (Continued)
Provisioning First Half 2025 – Second Half 2024
As atAs atAs at% Mov’t
31 March30 Sept31 MarchMar 25Mar 25
$m202520242024- Sept 24- Mar 24
Provision for expected credit losses (ECL) on loans and credit commitments
Collectively assessed provisions
Modelled provision
4,321 4,369 4,400 (1) (2)
Overlays
130 179 260 (27) (50)
Total collectively assessed provisions
4,451 4,548 4,660 (2) (4)
Individually assessed provisions
611 536 461 14 33
Total provision for ECL on loans and credit commitments
5,062 5,084 5,121 - (1)
Provision for ECL on debt securities at amortised cost
4 6 8 (33) (50)
Provision for ECL on debt securities at FVOCI
a
6 6 6 - -
Total provision for ECL
5,072 5,096 5,135 - (1)
a.FVOCI represents fair value through other comprehensive income.
Total provisions of $5,072 million were stable with the reduction in CAPs of $97 million offset by higher IAPs.
The decrease in modelled CAPs of $48 million was due to:
●Sale of the auto finance portfolio; and
●An improved outlook for commercial property prices and interest rates.
This was partly offset by a 2.5% increase in the downside scenario weight reflecting a rise in geopolitical instability, including deterioration in
international trading relationships.
Overlays were $49 million lower. Key movements included:
●Release of the construction sector overlay and a reduction of the Australian mortgages overlay as the expected risks did not materialise or are
reflected in modelled outcomes.
●A new overlay to address risks for the accommodation and trade sectors in certain states.
The $70 million overlay related to the impact of extreme weather events was reviewed following Tropical Cyclone Alfred and the Queensland floods
and remained unchanged.
The increase in IAPs of $75 million was mainly driven by one new IAP in the services sector.
As at
As at
As at
31 March30 Sept31 March
Scenario weightings (%)202520242024
Upside
5.0 5.0 5.0
Base
50.0 52.5 52.5
Downside
45.0 42.5 42.5
24WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
GROUP PERFORMANCE
Balance sheet and funding
Balance sheet
As atAs atAs at% Mov’t
31 March30 Sept31 MarchMar 25Mar 25
$m
2025 2024 2024 - Sept 24 - Mar 24
Assets
Loans
824,808 806,767 784,839 2 5
Housing 573,711 566,081 557,263 1 3
Personal 10,440 11,238 11,951 (7) (13)
Business 245,235 234,016 220,207 5 11
Provision for expected credit losses (4,578) (4,568) (4,582) - -
Liquid assets 204,249 200,682 201,364 2 1
All other assets 69,836 70,095 66,458 - 5
Total assets
1,098,893 1,077,544 1,052,661 2 4
Liabilities
Customer deposits 696,762 673,615 650,946 3 7
Transactions
123,096 119,944 123,354 3 -
Savings
228,929 216,256 206,391 6 11
Term
199,612 197,230 187,625 1 6
Non-interest bearing
145,125 140,185 133,576 4 9
Certificates of deposit
42,488 46,874 51,280 (9) (17)
Debt issues 171,864 169,284 159,781 2 8
Term funding from central banks 2,740 2,777 12,507 (1) (78)
Loan capital
40,703 37,883 37,280 7 9
All other liabilities 71,983 75,059 68,307 (4) 5
Total liabilities
1,026,540 1,005,492 980,101 2 5
Equity
Total equity attributable to owners of WBC
72,015 71,705 72,522 - (1)
Non-controlling interest
338 347 38 (3) large
Total equity
72,353 72,052 72,560 - -
25
Balance sheet and funding (Continued)
Funding and liquidity risk management
Liquidity risk is the risk that a bank will be unable to fund assets and meet obligations as they become due. This risk is inherent for all banks as
intermediaries between depositors and borrowers. Westpac has a Liquidity Risk Management Framework which seeks to ensure we meet our cash
flow obligations under a wide range of market conditions and scenarios, as well as meeting the requirements of the LCR and NSFR.
The Liquidity Risk Management Framework is approved by the Board and sets out the funding and liquidity risk appetite. It also determines the roles
and responsibilities of key people managing funding and liquidity risk, risk reporting and control processes. In addition, it sets out the limits and
targets used to manage Westpac’s balance sheet, including wholesale funding limits, liquidity risk limits and stress testing.
A strong liquidity position and a conservative funding profile were maintained during the half, with strong growth in deposits and key ratios remaining
well above regulatory requirements, which the Group believes is appropriate given the current market backdrop.
LCR
QuarterQuarterQuarter% Mov’t
MarchSeptMarchMar 25Mar 25
$m
2025 2024 2024 - Sept 24 - Mar 24
High Quality Liquid Assets (HQLA)
182,824 172,722 181,530 6 1
Total LCR liquid assets
182,824 172,722 181,530 6 1
Cash outflows in a modelled 30-day APRA defined stressed scenario
Customer deposits
97,841 95,133 95,017 3 3
Wholesale funding
12,264 8,715 13,521 41 (9)
Other flows
a
24,825 26,067 28,570 (5) (13)
Total
134,930 129,915 137,108 4 (2)
LCR
135%133%132%255 bps 310 bps
a.Other flows include credit and liquidity facilities, collateral outflows, inflows from customers and TFF maturities.
The LCR is designed to enhance banks’ short-term resilience, by measuring the level of HQLA, as defined, held against its liquidity needs for a 30
calendar day period under a regulator-defined stress scenario.
The average LCR for the quarter ended 31 March 2025 was 135%, an increase of 255 basis points compared to the quarter ended 30 September
2024. The increase in liquid assets more than offset the impact of the modelled rise in net cash outflows. The ratio was well above the regulatory
minimum of 100% throughout the First Half 2025 and provides flexibility during periods of market disruption.
The average HQLA held in the March 2025 quarter was $183 billion, which provides approximately $48 billion in HQLA above the 100% LCR
minimum. The portfolio of HQLA provides a buffer against periods of liquidity stress, as well as meeting regulatory requirements. HQLA include
cash, deposits with central banks, government and semi-government securities, and are recognised in the LCR calculation at market value.
Derivatives are used to hedge the interest rate risk of the liquid asset portfolio and reduce exposure to changes in fair value. Changes in the fair
value of liquid assets are recognised in Other Comprehensive Income through the relevant equity reserve.
Westpac also has access to non-HQLA and other assets that are eligible for re-purchase with a central bank under certain conditions and provide a
source of additional liquidity. These assets include private securities and self-originated AAA-rated mortgage-backed securities.
26WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
GROUP PERFORMANCE
Balance sheet and funding (Continued)
NSFR
As atAs atAs at% Mov’t
31 March30 Sept31 MarchMar 25Mar 25
$m
2025 2024 2024 - Sept 24 - Mar 24
Available stable funding
767,463 736,202 720,483 4 7
Required stable funding
666,726 654,798 632,775 2 5
Net stable funding ratio
115%112%114%268 bps 125 bps
The NSFR is designed to encourage banks’ longer-term funding resilience. To comply, banks are required to maintain an NSFR of at least 100% at
all times. The NSFR was 115% at 31 March 2025, well above the 100% minimum and above the Group’s normal operating range. There has been
little change to our liquidity risk or structural term profile.
The ratio was up from 112% at 30 September 2024. Available stable funding increased by $31 billion due to growth in customer deposits. This was
greater than the increase in required stable funding of $12 billion from customer lending.
Funding
The composition and stability of the Group’s funding is monitored to comply with its funding risk appetite and the regulatory requirements of both the
LCR and NSFR. A conservative funding profile was maintained during the half with deposits providing the primary funding source for new lending
growth, with wholesale market activities focussed on refinancing wholesale maturities and remaining responsive to balance sheet needs.
Funding by residual maturity
As at 31 March 2025As at 30 Sept 2024As at 31 March 2024
$m Ratio % $m Ratio % $m Ratio %
Customer deposits 696,762 67.5 673,615 66.9 650,946 65.9
Wholesale funding
Short term
82,066 7.9 82,590 8.2 80,289 8.1
Long term - less than or equal to one year residual maturity
a
29,390 2.8 31,790 3.2 44,145 4.5
Long term - more than one year residual maturity
a
145,480 14.2 140,458 13.9 133,895 13.5
Securitisation
6,502 0.6 5,539 0.6 6,097 0.7
Total wholesale funding
263,438 25.5 260,377 25.9 264,426 26.8
Equity
b
72,131 7.0 72,052 7.2 72,407 7.3
Total funding
1,032,331 100.0 1,006,044 100.0 987,779 100.0
a.Comparatives have been revised to align with current period presentation.
b.Includes total share capital, share-based payment reserve and retained profits.
27
Balance sheet and funding (Continued)
Long term wholesale funding
Long term funding with a residual maturity greater than 12 months made up 14.2% of total funding at 31 March 2025, up from 13.9% at 30
September 2024, due to movements in exchange rates. Funding from securitisation accounted for a further 0.6% of total funding.
In total, $15.3 billion of long term wholesale funding was raised in the First Half 2025, including $1.2 billion issued by Westpac New Zealand Limited.
This compares to $19.8 billion in First Half 2024. Growth in household deposits together with lower wholesale funding maturities reduced the bank’s
long-term wholesale funding needs in the First Half 2025.
New term issuance included senior unsecured bonds, RMBS and Tier 2 capital securities and was raised across a range of tenors and currencies.
Short term wholesale funding
Short term wholesale funding accounted for 7.9% of total funding at 31 March 2025, down from 8.2% in 30 September 2024. Long term funding
where the residual maturity is less than one year, reduced to 2.8% at 31 March 2025, from 3.2% at 30 September 2024. The short term wholesale
funding portfolio, including long-term funding with a residual maturity of less than one year, had a weighted average maturity of 157 days, up from
151 days at 30 September 2024.
Deposit to loan ratio
As at 31 March 2025 As at 30 Sept 2024 As at 31 March 2024
$m Ratio % $m Ratio % $m Ratio %
Customer deposits
696,762 673,615 650,946
Loans
824,808 84.48 806,767 83.50 784,839 82.94
Customer deposits
Customer deposits accounted for 67.5% of total funding at 31 March 2025, compared to 66.9% at 30 September 2024. Over First Half 2025,
customer deposits increased by $23.1 billion or 3%, providing the primary funding source for new lending. Loans grew by $18.0 billion or 2% and
this resulted in the deposit to loan ratio increasing to 84.5%, a new high for the Group.
Equity
Funding from equity made up 7.0% of total funding at 31 March 2025, compared to 7.2% at 30 September 2024. This reflects the impact of the on
market share buyback conducted during First Half 2025.
28WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
GROUP PERFORMANCE
Capital and dividends
As atAs atAs at% Mov’t
31 March30 Sept31 MarchMar 25Mar 25
2025 2024 2024 - Sept 24 - Mar 24
Level 2 regulatory capital structure
Common equity Tier 1 (CET1) capital after deductions ($m)
55,007 54,648 55,764 1 (1)
Risk weighted assets (RWA) ($m)
449,495 437,430 444,417 3 1
CET1 capital ratio
12.24%12.49%12.55%(25 bps) (31 bps)
Additional Tier 1 capital ratio
2.31%2.33%2.46%(2 bps) (15 bps)
Tier 1 capital ratio
14.55%14.82%15.01%(27 bps) (46 bps)
Tier 2 capital ratio
7.06%6.56%6.42%50 bps 64 bps
Total regulatory capital ratio
21.61%21.38%21.43%23 bps 18 bps
APRA leverage ratio
5.20%5.30%5.49%(10 bps) (29 bps)
Level 1 regulatory capital structure
CET1 capital after deductions ($m)
51,087 50,454 51,999 1 (2)
Risk weighted assets ($m)
408,792 397,719 406,397 3 1
Level 1 CET1 capital ratio
12.50%12.69%12.80%(19 bps) (30 bps)
Capital management strategy
Westpac’s capital management strategy is reviewed on an ongoing basis, including through an annual Internal Capital Adequacy Assessment
Process (ICAAP). Key considerations include:
●Regulatory capital minimums together with the capital conservation buffer and countercyclical capital buffer comprise the Total CET1
Requirement. The Total CET1 Requirement for D-SIBs, including Westpac, is at least 10.25%
1
;
●Strategy, business mix and operations and contingency plans;
●Perspectives of external stakeholders including rating agencies as well as equity and debt investors; and
●A stress testing framework that tests our resilience under a range of adverse economic scenarios.
The Board has determined a target CET1 operating capital range of between 11.0% and 11.5%, in normal operating conditions.
APRA announcement to phase out Additional Tier 1 (AT1) capital as eligible bank capital
On 9 December 2024, APRA confirmed it will phase out AT1 capital instruments from the bank prudential framework. Under APRA’s proposed
approach, large internationally active banks such as Westpac will replace 1.5% AT1 capital with 1.25% Tier 2 capital and 0.25% CET1 capital which
would see the total CET1 requirement, including regulatory buffers, increase from 10.25% to 10.50%.
APRA intends to finalise changes to relevant prudential standards before the end of 2025, with the updated framework to come into effect from 1
January 2027. In addition, from this date, existing AT1 capital instruments would be eligible to be included as Tier 2 capital, until their first scheduled
call date. All existing AT1 capital instruments issued by an Australian bank would reach their first scheduled call date by 2032 at the latest.
1.Noting that APRA may apply higher CET1 requirements for an individual ADI.
29
Capital and dividends (Continued)
LEVEL 2 CET1 CAPITAL RATIO MOVEMENT FOR FIRST HALF 2025
The Level 2 CET1 capital ratio was 12.24% at 31 March 2025, 25 basis points lower than 30 September 2024. Key movements included:
●First Half 2025 net profit: 74 basis points increase;
●Payment of the 2024 final ordinary dividend: 58 basis points reduction;
●RWA movement: 31 basis points decrease mainly due to higher non-credit RWA;
●Capital deductions and other items: 3 basis points increase mainly due to a decrease in capitalised software and capitalised expenditure
balances; and
●Capital return: 13 basis points reduction comprising approximately $0.6 billion of on market share buybacks.
The Level 1 CET1 capital ratio was 12.50% at 31 March 2025, 19 basis points lower than 30 September 2024 with movements broadly in line with
Level 2.
Tier 2
Westpac issued $3.6 billion of Tier 2 capital instruments and redeemed $2.4 billion over the half. The net impact of these transactions was an
increase in the total regulatory capital ratio of approximately 25 basis points.
Domestic systemically important banks (D-SIBs), including Westpac, have a total capital requirement of 18.25% from 1 January 2026. Westpac’s
total regulatory capital ratio was 21.61% at 31 March 2025.
Leverage ratio
The leverage ratio represents the percentage of Tier 1 capital relative to the Exposure Measure
1
. At 31 March 2025, Westpac’s leverage ratio was
5.20%, down 10 basis point from 30 September 2024. The ratio remains well above APRA’s regulatory minimum requirement of 3.5%. The
decrease in the leverage ratio is mainly due to an increase in total exposures of $34.8 billion from higher lending.
Internationally comparable capital ratios
APRA’s capital adequacy requirements are more conservative than those of the Basel Committee on Banking Supervision, leading to lower reported
capital ratios when compared to international peers.
International comparable capital ratios have been calculated using the methodology outlined in the Australian Banking Association study released
on 10 March 2023.
As atAs atAs at% Mov’t
31 March30 Sept31 MarchMar 25Mar 25
%
2025 2024 2024 - Sept 24 - Mar 24
Internationally comparable capital ratios
CET1 capital ratio
18.22%18.27%18.55%(5 bps) (33 bps)
Tier 1 capital ratio
21.31%21.33%21.83%(2 bps) (52 bps)
Total regulatory capital ratio
30.76%29.93%30.41%83 bps 35 bps
Leverage ratio
5.66%5.78%5.95%(12 bps) (29 bps)
1.As defined under Attachment D of APS 110: Capital Adequacy.
30WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
GROUP PERFORMANCE
Capital and dividends (Continued)
Risk Weighted Assets (RWA)
As atAs atAs at% Mov’t
31 March30 Sept31 MarchMar 25Mar 25
$m
2025 2024 2024 - Sept 24 - Mar 24
Credit risk:
Corporate
30,140 25,976 25,269 16 19
Business lending
26,373 25,033 23,426 5 13
Property finance
31,612 32,196 30,386 (2) 4
Large corporate
20,471 21,035 20,558 (3) -
Sovereign
2,173 2,047 1,919 6 13
Financial institution
15,174 13,694 13,088 11 16
Residential mortgages
116,954 116,228 115,918 1 1
Australian credit cards
3,523 3,565 3,789 (1) (7)
Other retail
3,395 3,995 4,259 (15) (20)
Small business
16,531 17,123 17,378 (3) (5)
Specialised lending
4,588 3,695 3,276 24 40
Securitisation 8,010 7,821 7,317 2 9
Standardised 19,951 25,414 26,668 (21) (25)
New Zealand
a
48,345 48,142 46,490 - 4
Other assets
5,993 5,760 4,892 4 23
Total credit risk
b
353,233 351,724 344,633 - 2
Market risk
8,478 9,555 11,251 (11) (25)
Operational risk
48,521 48,196 54,934 1 (12)
Interest rate risk in the banking book (IRRBB)
39,263 27,955 33,599 40 17
Total risk weighted assets
449,495 437,430 444,417 3 1
a.Includes credit and securitisation exposures regulated under RBNZ prudential requirements.
b.Includes counterparty credit risk, credit valuation adjustment, securitisation exposures in the banking book and settlement risk. Comparatives have been revised to include
RWAs relating to Other assets.
Total RWA increased by 2.8% to $449.5 billion over the half largely due to the increase in non-credit RWA.
Credit RWA increased by $1.5 billion. Key movements included:
●A $9.1 billion increase from higher lending primarily in corporate, business lending, property finance and residential mortgages;
●A $0.3 billion increase from foreign currency translation impacts, predominantly the depreciation of the A$ against the US$;
●A $4.1 billion decrease from data refinements mainly related to property finance and residential mortgages
1
;
●A $2.0 billion decrease from counterparty credit risk and credit valuation adjustments;
●A $1.1 billion decrease mainly due to improvements in residential mortgages delinquency rates; and
●A $1.0 billion decrease from sale of the auto finance portfolio.
Non-credit RWA increased by $10.6 billion. Key movements included:
●IRRBB RWA: $11.3 billion increase from:
–A $13.2 billion increase in repricing and yield curve, basis and optionality risk primarily driven by a $8.8 billion increase in RWA due to the
Group’s decision to extend the duration of its core non-rate sensitive (NRS) hedge from 4 years to 5 years
2
and underlying banking book
positions; and
–A $1.9 billion decrease from lower interest rates resulting in a regulatory embedded gain of $3.1 billion as at 31 March 2025 compared to
$1.3 billion gain as at 30 September 2024.
●Market RWA: $1.1 billion decrease mainly from lower market risk exposures.
1.This includes a $1 billion APRA RWA overlay pending rectification of the usage of a customer risk grade proxy on a small sub-set of non-retail exposures.
2.Westpac is seeking approval from APRA for its revised NRS model to allow the approved profile to move to 5 years from 4 years which, subject to APRA’s approval, would
remove this capital. APRA is reviewing this model and is expected to respond after September 2025 as part of the implementation of the revisions to APS117.
31
Capital and dividends (Continued)
Capital adequacy
As atAs atAs at
31 March30 Sept31 March
$m
2025 2024 2024
Tier 1 capital
CET1 capital
Paid up ordinary capital
37,354 37,958 38,944
Treasury shares
(877) (815) (815)
Equity based remuneration
2,116 2,028 1,994
Foreign currency translation reserve
(385) (471) (332)
Accumulated other comprehensive income
(625) (617) (238)
Non-controlling interests - other
3 8 38
Retained earnings
33,451 32,773 32,179
Less retained earnings in life and general insurance, funds management and securitisation entities
(387) (357) (399)
Deferred fees
356 350 305
Total CET1 capital
71,006 70,857 71,676
Deductions from CET1 capital
Goodwill
(8,066) (8,071) (8,050)
Deferred tax assets
(2,343) (2,377) (2,186)
Capitalised expenditure
(2,289) (2,349) (2,333)
Capitalised software
(2,527) (2,668) (2,658)
Investments in subsidiaries not consolidated for regulatory purposes
(175) (154) (136)
Regulatory expected downturn loss in excess of eligible provisions
- - -
Securitisation (1) (9) (16)
Defined benefit superannuation fund surplus
(211) (215) (146)
Equity investments
(219) (235) (234)
Regulatory adjustments to fair value positions
(168) (131) (153)
Total deductions from CET1 capital
(15,999) (16,209) (15,912)
Total CET1 capital after deductions
55,007 54,648 55,764
Additional Tier 1 capital
Basel III complying instruments
10,413 10,225 10,956
Total Additional Tier 1 capital
10,413 10,225 10,956
Deductions from Additional Tier 1 capital
Holdings of own and other financial institutions Additional Tier 1 capital instruments
(26) (30) (26)
Total deductions from Additional Tier 1 capital
(26) (30) (26)
Net Additional Tier 1 regulatory capital
10,387 10,195 10,930
Net Tier 1 regulatory capital
65,394 64,843 66,694
Tier 2 capital
Basel III complying instruments
31,531 28,293 28,067
Eligible general reserve for credit loss
729 770 896
Total Tier 2 capital
32,260 29,063 28,963
Deductions from Tier 2 capital
Holdings of own and other financial institutions Tier 2 capital instruments
(518) (368) (410)
Total deductions from Tier 2 capital
(518) (368) (410)
Net Tier 2 regulatory capital
31,742 28,695 28,553
Total regulatory capital
97,136 93,538 95,247
Risk weighted assets
449,495 437,430 444,417
CET1 capital ratio
12.24%12.49%12.55%
Additional Tier 1 capital ratio
2.31%2.33%2.46%
Tier 1 capital ratio
14.55%14.82%15.01%
Tier 2 capital ratio
7.06%6.56%6.42%
Total regulatory capital ratio
21.61%21.38%21.43%
32WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
GROUP PERFORMANCE
Capital and dividends (Continued)
Dividends
Half YearHalf YearHalf Year% Mov’t
MarchSeptMarchMar 25Mar 25
2025 2024 2024 - Sept 24 - Mar 24
Ordinary dividend - Interim (cents per share)
76 - 75 - 1
Ordinary dividend - Final (cents per share)
- 76 - (100) -
Total ordinary dividend (cents per share) 76 76 75 - 1
Special dividend (cents per share) - - 15 - (100)
Ordinary dividend payout ratio
78.39%71.60%77.83%large 56 bps
Ordinary dividend payout ratio (ex Notable Items)75.22%72.41%74.19%281 bps103 bps
Adjusted franking credit balance ($m)
3,522 3,504 3,321 1 6
The Board has determined to pay a fully franked 2025 interim ordinary dividend of 76 cents per share, to be paid on 27 June 2025 to shareholders
on the register at the record date of 9 May 2025. The 2025 interim ordinary dividend represents a payout ratio of 78.39%.
In addition to being fully franked, the 2025 interim ordinary dividend will carry NZ$0.06 in New Zealand imputation credits that may be used by New
Zealand tax residents.
The Board has determined to satisfy the DRP for the 2025 interim ordinary dividend by arranging for the purchase of shares in the market by a third
party. The market price used to determine the number of shares to be provided to DRP participants will be set over the 17 trading days commencing
14 May 2025 and will not include a discount.
33
Sustainability performance
Westpac’s sustainability approach
Our Sustainability Strategy is aligned to our Purpose and designed to create better futures for our people, customers, communities and the
environment. It is guided by the UN Sustainable Development Goals and supported by a broad range of policies, procedures, and plans which are
detailed on our website. It has six objectives: enhancing financial inclusion and equality; strengthening data security and protection; becoming a net-
zero, climate resilient bank; becoming a nature positive bank; respecting and advancing human rights; and enabling diversity and inclusion.
Our sustainability disclosures are available on our website, of which most are updated and reported annually. Our Sustainability Index and
Datasheet consolidates most of our sustainability metrics and outlines our alignment with key reporting initiatives including the Global Reporting
Initiative, and initiatives led by the International Sustainability Standards Board.
First Half 2025 highlights
●Elevated the role of the newly appointed Chief Sustainability Officer to report directly to the CEO;
●Included sustainability and climate-related measures in the Group Short Term Variable Reward Scorecard for the CEO and certain Group
Executives;
●Continued engagement via a Sustainability Market Update and a separate Sustainability Town Hall with approximately 4,800 employees
participating;
●Released our 2024 Modern Slavery Statement, outlining our actions to assess and address risks across our operations and supply chain;
●Completed a Human Rights Risk Assessment which reviewed salient human rights risks to help us mitigate possible impacts across our
operations and supply chain;
●Launched a Safety by Design Toolkit, in collaboration with the Australian Banking Association (ABA), to support banks in designing products and
services with safeguards aimed at mitigating financial harms such as hardship, loss or abuse;
●Launched Australia’s first Social Tailored Deposit to help fund lending that seeks to improve specific social issues;
●Provided 278 disaster relief packages to support customers impacted by Ex-Tropical Cyclone Alfred;
●Published our 2024 Westpac New Zealand Climate Report, the first report under the mandatory Aotearoa New Zealand Climate Standards; and
●Released the Westpac New Zealand 2027 Sustainability Commitments which are focused on: supporting a low-emissions, climate-resilient, and
nature positive future; enhancing financial inclusion and independence; and helping customers and local communities thrive.
Climate strategy
Our 2024 Climate Report outlines our ambition to become a net-zero, climate resilient bank, with three areas of focus.
1. Net-zero and climate resilience in our operations
In Full Year 2024 we achieved our 2030 target of a 76% reduction in scope 1 and 2 absolute emissions from our 2021 baseline, six years ahead of
schedule. We also reached our objective of sourcing the equivalent of 100% of our direct operational Australian electricity demand from renewables,
12 months ahead of plan.
First Half 2025 highlights:
●Continued to source the equivalent of 100% of our direct electricity demand from renewables in Australia;
●Helped employees reduce their carbon footprint through the launch of two additional renewable electricity offers in partnership with Flow Power
and Energy Australia;
●Sought to further reduce waste to landfill from our Victoria and New South Wales corporate sites through new collection services for soft plastics
and other hard-to-recycle materials; and
●Retired carbon credits to offset our 2024 residual direct operational emissions as required under the Australian Government’s Climate Active
Carbon Neutral standard for Organisations. Certification for Australia for 2024 is pending. Maintained Toitū Net Carbon Zero certification for our
New Zealand direct operations since 2019.
34WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
GROUP PERFORMANCE
Sustainability performance (Continued)
Progress on direct operational emissions and renewable energy targets
First Half
Full Year 2021
2025 (estimated)Full Year 2024baseline
Market-based direct operational Scope 1 and Scope 2 greenhouse gas (GHG) emissions
a,b
before carbon credits (tCO
2
-e)
3,703 8,565 62,360
Reduction to 2021 baseline (Half Year annualised) (%)
(88) (86) n/a
Share of Australian operational electricity demand sourced from renewables (% equivalent)
b
100 100n/a
Share of global operational electricity demand sourced from renewables (% equivalent, RE100)
b
96 96n/a
a.For our scope 1 & 2 direct operational emissions we are using a market-based accounting method for emissions calculation. The 2021 baseline for this target was adjusted for
COVID-19 pandemic and other impacts.
b.Refer to our 2024 Sustainability Index and Datasheet for metric definition. For our Pacific Island businesses, Westpac surrendered additional large-scale generation certificates
(LGCs) in the Australian market to achieve the equivalent of 100% renewable electricity sourced globally.
2. Supporting customers’ transition to net-zero and to build their climate resilience
We have 13 interim 2030 emission targets across all nine emissions-intensive sectors under our NZBA commitment, as detailed in our 2024 Climate
Report.
First Half 2025 highlights:
●Continued to engage customers on their climate transition plans and refined our engagement approach, focusing more on climate opportunities
and sharing insights;
●Completed ESG risk assessments for more than 5,000 Australian commercial banking customers (circa 3,800 since October 2024), and our 50
largest business customers in Fiji and PNG;
●Increased sustainable finance lending
1
to $33.3 billion at 31 March 2025 (up 16% since September 2024);
●Increased sustainable bond facilitation by $3.2 billion in First Half 2025 (up 20% since 30 September 2024), bringing total facilitation to $19.1
billion since October 2021
2
; and
●Made progress on other sustainable products and services outside our Sustainable Finance Framework including providing 739 loans for
EV/hybrid vehicles to Australian customers totalling $31 million.
Green Tailored Deposits decreased to $1.34 billion at 31 March 2025 ($1.97 billion at 30 September 2024) as customers opted for shorter dated
deposit products. These Deposits are not available for terms less than six months.
3. Collaborate for impact on initiatives towards net-zero and climate resilience
We participated in a range of sustainability discussions and initiatives, including with ABA, ASIC, APRA, ASFI, New Zealand’s FMA, NZBA and
UNEP FI
3
.
1.Total committed exposure, or balance for mortgages, assessed as sustainable finance in accordance with our Sustainable Finance Framework at 31 March 2025.
2.Bond facilitation target and progress is measured as the cumulative sum of our proportionate share of qualifying bonds facilitated from 1 October 2021. Prior years are restated
following data quality reviews which identified additional bonds not previously included.
3.The Australian Banking Association, the Australian Securities and Investments Commission, the Australian Prudential Regulation Authority, the Australian Sustainable Finance
Institute, the New Zealand Financial Markets Authority, the Net-Zero Banking Alliance and the UN Environment Programme Finance Initiative.
35
SEGMENT REPORTING
For reporting purposes, Westpac identifies the impact of Notable Items on income and expenses and includes a subtotal titled “Pre-provision profit”.
Pre-provision profit represents profit before impairment charges and income tax expenses.
Westpac
Westpac
New Zealand
$m
Consumer
Business & Wealth
Institutional Bank
(A$)
a
Group Businesses
Group
Half Year March 2025
Net interest income
3,852 2,697 1,177 1,236 607 9,569
Non-interest income
280 396 619 121 8 1,424
Notable Items
- - - (1) (199) (200)
Net operating income
4,132 3,093 1,796 1,356 416 10,793
Operating expenses
(2,420) (1,368) (791) (665) (454) (5,698)
Total operating expenses
(2,420) (1,368) (791) (665) (454) (5,698)
Pre-provision profit
1,712 1,725 1,005 691 (38) 5,095
Impairment (charges)/benefits
(142) (117) 39 (30) - (250)
Profit before income tax (expense)/benefit
1,570 1,608 1,044 661 (38) 4,845
Income tax (expense)/benefit and NCI
b
(482) (490) (286) (185) (85) (1,528)
Net profit/(loss)
1,088 1,118 758 476 (123) 3,317
Net profit includes impact of:
Notable Items (post tax)
b
- - - (1) (139) (140)
Half Year September 2024
Net interest income
3,861 2,722 1,150 1,217 615 9,565
Non-interest income
273 389 599 135 (14) 1,382
Notable Items
- - - (2) 53 51
Net operating income
4,134 3,111 1,749 1,350 654 10,998
Operating expenses
(2,422) (1,370) (756) (616) (385) (5,549)
Total operating expenses
(2,422) (1,370) (756) (616) (385) (5,549)
Pre-provision profit
1,712 1,741 993 734 269 5,449
Impairment (charges)/benefits
(104) (47) (19) (3) (2) (175)
Profit before income tax (expense)/benefit
1,608 1,694 974 731 267 5,274
Income tax (expense)/benefit and NCI
b
(482) (513) (288) (203) (140) (1,626)
Net profit/(loss)
1,126 1,181 686 528 127 3,648
Net profit includes impact of:
Notable Items (post tax)
b
- - - (2) 43 41
a.Refer to Westpac New Zealand NZ$ segment reporting (page 46) for further details.
b.Includes tax benefit on Notable Items of $60 million in First Half 2025 (Second Half 2024: $10 million expense).
36WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
SEGMENT REPORTING
Westpac
WestpacNew Zealand
$m
Consumer
Business & WealthInstitutional Bank(A$)
a
Group BusinessesGroup
Half Year March 2024
Net interest income
3,771 2,616 1,090 1,171 703 9,351
Non-interest income
255 409 666 122 13 1,465
Notable Items
- - - (6) (220) (226)
Net operating income
4,026 3,025 1,756 1,287 496 10,590
Operating expenses
(2,365) (1,256) (709) (646) (419) (5,395)
Total operating expenses
(2,365) (1,256) (709) (646) (419) (5,395)
Pre-provision profit
1,661 1,769 1,047 641 77 5,195
Impairment (charges)/benefits
(144) (95) (101) (22) - (362)
Profit before income tax (expense)/benefit
1,517 1,674 946 619 77 4,833
Income tax (expense)/benefit and NCI
b
(459) (499) (265) (174) (94) (1,491)
Net profit/(loss)
1,058 1,175 681 445 (17) 3,342
Net profit includes impact of:
Notable Items (post tax)
b
- - - (4) (160) (164)
a.Refer to Westpac New Zealand NZ$ segment reporting (page 46) for further details.
b.Includes tax benefit on Notable Items of $62 million.
37
Consumer
The Consumer segment provides banking products and services to customers in Australia. Products and services are provided through a portfolio of
brands comprising Westpac, St.George, BankSA and Bank of Melbourne using digital channels, call centres, mobile bankers, branches and third-
party brokers. It also includes the RAMS business, which is closed to new business.
Half Year Half Year Half Year % Mov’t
MarchSeptMarchMar 25 Mar 25
$m202520242024- Sept 24- Mar 24
Net interest income
3,852 3,861 3,771 - 2
Non-interest income
280 273 255 3 10
Net operating income
4,132 4,134 4,026 - 3
Operating expenses
(2,420) (2,422) (2,365) - 2
Total operating expenses
(2,420) (2,422) (2,365) - 2
Pre-provision profit
1,712 1,712 1,661 - 3
Impairment (charges)/benefits
(142) (104) (144) 37 (1)
Profit before income tax expense
1,570 1,608 1,517 (2) 3
Income tax expense and NCI
(482) (482) (459) - 5
Net profit
1,088 1,126 1,058 (3) 3
Expense to income ratio
58.57% 58.59% 58.74% (2 bps) (17 bps)
Net interest margin
1.70%1.70%1.69% - 1 bps
As at As at As at % Mov’t
31 March30 Sept31 MarchMar 25 Mar 25
$bn202520242024- Sept 24- Mar 24
Customer deposits
Transactions
46.3 46.6 47.4 (1) (2)
Savings 170.5 159.0 148.0 7 15
Term
66.2 65.6 66.0 1 -
Mortgage offsets
68.0 63.3 59.9 7 14
Total customer deposits
351.0 334.5 321.3 5 9
Loans
Housing
484.6 473.5 461.9 2 5
RAMS (in runoff) 25.6 29.8 33.3 (14) (23)
Other
8.8 8.8 9.0 - (2)
Provisions
(1.8) (1.8) (1.8) - -
Total loans
517.2 510.3 502.4 1 3
Deposit to loan ratio67.86%65.54%63.95%232 bps391 bps
Total assets 529.0 521.8 514.7 1 3
TCE 600.6 594.2 586.4 1 2
Risk weighted assets 165.1 174.4 174.8 (5) (6)
Average interest earning assets 454.9 453.7 446.1 - 2
Average allocated capital 23.3 24.0 24.0 (3) (3)
Credit quality
Impairment charges/(benefits) to average loans0.06%0.04%0.06%2 bps -
Mortgage 90+ day delinquencies0.86%1.12%1.06%(26 bps)(20 bps)
Other consumer loans 90+ day delinquencies1.28%1.23%1.17%5 bps11 bps
Total stressed exposures to TCE
0.99% 1.10% 1.04%(11 bps) (5 bps)
38WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
SEGMENT REPORTING
Consumer (Continued)
First Half 2025 – Second Half 2024
Net profit decreased 3% to $1,088 million.
Pre-provision profit was stable at $1,712 million. Flat operating income reflected a stable net interest margin while flat operating expenses reflected
lower costs from a smaller property footprint and seasonally lower investment spend offset by higher salaries and wages and technology spend
including the step up in UNITE investment.
Net interest income flat
●The net interest margin was stable at 1.70%. Key drivers included:
-Lending competition to both retain and attract new mortgage customers was partly offset by higher
lending spreads as customers switched from lower spread fixed rate mortgages to higher spread
variable rate mortgages;
-A deposit mix shift towards higher interest rate, lower margin savings accounts which was offset by
higher returns on hedged deposits;
-Higher funding costs from the widening of the spread between the bank bill and overnight index swap
rates; and
-Higher returns on hedged capital provided a benefit to margin.
●Net loans increased by 1% to $517.2 billion. Mortgage growth of 1% was below APRA housing system
growth, reflecting the decision to close RAMS to new business. Excluding this impact, mortgages grew 2%,
representing 0.9x system;
●Deposits were up 5% to $351.0 billion representing 1.0x APRA household deposits system growth. Savings
accounts grew by $11.5 billion as customer preference shifted towards higher yielding flexible products.
Mortgage offset balances rose 7% to $68.0 billion, as customers continue to recognise the benefits of offset
accounts; and
●Deposit to loan ratio improved 232 basis points as customer deposit growth exceeded lending growth and
provided the main source of new funding.
Non-interest income up 3%
●Non-interest income was up 3% with higher credit card fees partly offset by lower account keeping and
settlement fees.
Expenses flat
●Operating expenses were flat reflecting:
-Benefits from a simpler operating model and a smaller property footprint, including branches and ATMs;
-The step up in UNITE spend partly offset by seasonally lower spend across other investments;
-Higher salaries and wages and higher technology costs as we responded to additional demand and
delivered new capabilities; and
-Costs related to the closure of RAMS to new business were lower than Second Half 2024.
Impairment charge of $142 million
●Impairment charges to average loans were 6 basis points, up 2 basis points from the prior period. The
charge reflects an increase in the downside scenario weight and write-offs in cards and personal lending,
partly offset by lower underlying delinquencies.
●Stressed exposure to TCE improved by 11 basis points to 0.99% reflecting the continued resilience of
customers. Mortgage 90+ day delinquencies decreased 26 basis points to 0.86% due to a reduction in
hardship and a change to serviceability treatment. Other consumer loan 90+ day delinquencies increased 5
basis points to 1.28%.
39
Consumer (Continued)
First Half 2025 – First Half 2024
Net profit increased 3% to $1,088 million.
Pre-provision profit increased 3% to $1,712 million with operating income up 3% and operating expense growth of 2%. The improvement in
operating income was driven by solid balance sheet growth and a 1 basis point increase in the net interest margin. The rise in operating expenses
reflected higher salaries and wages and technology costs including a step up in UNITE spend partly offset by productivity benefits.
Net interest income up 2%
●The net interest margin increased 1 basis point. Key drivers included:
-Lower lending spreads as competition to both retain and attract new mortgage customers was
partly offset by customers switching from lower spread fixed rate mortgages to higher spread
variable rate mortgages;
-Flat deposit spreads as a mix shift towards higher interest rate, lower margin savings accounts
was offset by higher returns on hedged deposits;
-Higher funding costs primarily due to the widening of the spread between the bank bill and
overnight index swap rates and maturing TFF being replaced with more expensive wholesale
funding; and
-Higher returns on hedged capital balances provided a benefit.
●Net loans increased by 3% to $517.2 billion. Mortgage growth of 5%, excluding RAMS, was mostly
achieved in owner occupied variable rate mortgages. Variable rate mortgages increased from 85% to
95% of the portfolio with most of the $46.6 billion of expiring fixed rate loans being retained and rolling
onto variable rates, coupled with almost all new loans on variable rates;
●Deposits were up 9% to $351.0 billion. Growth was mostly in savings with balances increasing by
$22.5 billion as customers continued to shift towards higher yielding products. Term deposits were flat
as customers largely preferred the flexibility of similar rate saving accounts. Mortgage offset balances
rose by 14% to $68.0 billion, as almost all new loans were to variable rate mortgages with an offset
feature; and
●With deposit growth continuing to exceed loan growth, the deposit to loan ratio improved 391 basis
points to 67.9%.
Non-interest income up 10%
●Non-interest income rose 10% to $280 million driven by higher currency conversion fees from a rise in
overseas card spend and an increase in annual credit card fees.
Expenses up 2%
●Operating expenses increased 2% to $2,420 million. Key drivers included:
–Higher salaries and wages and higher technology costs as we responded to additional demand and
delivered new capabilities;
–Increased UNITE investment spend, that was partly offset by the completion of investments in the prior
corresponding period.
●Expense increases were partly offset by the benefits from a simpler operating model and a smaller
property footprint, including branches and ATMs.
Impairment charge of $142 million
●Impairment charge to average loans of 6 basis points was flat to the prior corresponding period. The
charge reflects an increase in the downside scenario weight and write-offs in cards and personal
lending.
●Stressed exposure to TCE improved by 5 basis points to 0.99%. Mortgage 90+ day delinquencies
decreased 20 basis points reflecting fewer customers needing hardship support and a change to the
serviceability treatment. Other consumer loan 90+ day delinquencies increased 11 basis points.
40WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
SEGMENT REPORTING
Business & Wealth
The Business & Wealth segment provides banking products and services to customers in Business Banking, Wealth Management, Private Wealth
and Westpac Pacific. Business Banking offers lending generally up to $200 million in exposure, merchant services using eCommerce solutions and
transaction banking services. Customers are categorised by commercial businesses, small to medium businesses and agribusiness. The segment
includes Private Wealth, supporting the needs of high-net-worth individuals, as well as BT Financial Group, which provides wealth management
platform services. It also includes Westpac Pacific and for part of the period included our auto finance portfolio, which has been in runoff and was
sold in March 2025. The segment operates under the Westpac, St.George, BankSA, Bank of Melbourne and BT brands.
Half YearHalf YearHalf Year% Mov’t
MarchSeptMarchMar 25Mar 25
$m
2025 2024 2024 - Sept 24 - Mar 24
Net interest income
2,697 2,722 2,616 (1) 3
Non-interest income
396 389 409 2 (3)
Net operating income
3,093 3,111 3,025 (1) 2
Operating expenses
(1,368) (1,370) (1,256) - 9
Total operating expenses (1,368) (1,370) (1,256) - 9
Pre-provision profit
1,725 1,741 1,769 (1) (2)
Impairment (charges)/benefits
(117) (47) (95) 149 23
Profit before income tax expense
1,608 1,694 1,674 (5) (4)
Income tax expense and NCI
(490) (513) (499) (4) (2)
Net profit
1,118 1,181 1,175 (5) (5)
Expense to income ratio44.23%44.04%41.52%19 bps271 bps
Net interest margin
5.09%5.37%5.34%(28 bps) (25 bps)
As atAs atAs at% Mov’t
31 March30 Sept31 MarchMar 25 Mar 25
$bn
2025 2024 2024 - Sept 24 - Mar 24
Customer deposits
Transactions 65.6 65.2 62.9 1 4
Savings
30.5 29.1 30.1 5 1
Term
52.1 50.0 47.6 4 9
Total customer deposits
148.2 144.3 140.6 3 5
Loans
Commercial/SME 105.8 99.1 93.0 7 14
Pacific 1.5 1.3 1.3 15 15
Business lending 107.3 100.4 94.3 7 14
Other 1.4 1.4 1.4--
Auto finance
a
- 2.1 3.1 (100) (100)
Provisions
(1.9) (1.9) (1.9) - -
Total loans
106.8 102.0 96.9 5 10
Deposit to loan ratio138.74%141.48%145.10%(274 bps)large
Total assets 112.1 107.1 102.4 5 9
TCE 141.9 137.8 131.2 3 8
Risk weighted assets 91.3 92.9 89.1 (2) 2
Average interest earning assets 106.2 101.3 98.0 5 8
Average allocated capital 12.0 11.7 11.5 3 4
Total funds 152.1 150.8 147.0 1 3
Credit quality
Impairment charges/(benefits) to average loans0.22%0.09%0.20%13 bps2 bps
Impaired exposures to TCE0.57%0.68%0.54%(11 bps)3 bps
Total stressed exposures to TCE
5.26% 5.56% 5.52% (30 bps) (26 bps)
a.Portfolio was sold in March 2025. Balances included personal and business auto finance loans.
41
Business & Wealth (Continued)
First Half 2025 – Second Half 2024
Net profit decreased 5% to $1,118 million.
Pre-provision profit decreased 1% to $1,725 million reflecting a 1% decline in operating income and flat operating expenses. Excluding a provision
release in Second Half 2024, operating income increased 1% supported by 5% lending growth which was largely offset by a 28 basis point lower net
interest margin. For operating expenses, higher UNITE costs were offset by lower litigation and restructuring costs.
Net interest income down 1%●The net interest margin contracted 28 basis points. This included the impact of provision releases in the
prior period and the completion of the sale of the auto finance portfolio in First Half 2025. These items
detracted 6 basis points. Excluding these items, drivers in descending order were:
-Unfavourable portfolio mix as lending growth outpaced deposit growth, reflected in a lower deposit to
loan ratio;
-The mix shift towards lower margin term deposits and an increase in customers switching to higher
yielding accounts. Higher returns on hedged deposits partly offset these impacts;
-Lower lending spreads reflecting competitive market dynamics; and
-Higher returns on hedged capital balances provided a benefit to margin.
●Net loans increased 5% to $106.8 billion. Business lending grew 7% with growth across most sectors.
Target sectors of health, professional services and agriculture all performed well, growing between 8%
and 12%. This was partly offset by the wind down and subsequent sale of the $2.1 billion auto finance
portfolio; and
●Deposits were up 3% to $148.2 billion. The business grew both term deposits and at-call balances, with
term deposits increasing $2.1 billion and at-call up $1.8 billion. Within the business segment, growth
was in commercial, private wealth and small to medium business. Micro business balances decreased
slightly due to softer economic and trading conditions.
Non-interest income up 2%●Non-interest income increased 2%, including a $8 million net loss on sale of the auto finance portfolio.
Excluding this impact, non-interest income increased 4% reflecting higher platform revenue and lending
volume which was partly offset by lower merchants income reflecting lower customer spend.
Expenses flat●Operating expenses were flat reflecting:
-Lower litigation and restructuring costs;
-The step up in UNITE investment which was partly offset by seasonally lower investment spend
across other projects; and
-Higher salaries and wages including an investment in 73 business bankers to drive growth and
coverage.
Impairment charge of
$117 million
●The impairment charge of 22 basis points of average loans compared to 9 basis points in the prior
period. The charge reflected new IAPs in the trade and property services sectors, a small CAP charge
from an increase in the downside scenario weight and higher overlays.
●Credit quality metrics improved with stressed exposures to TCE decreasing 30 basis points to 5.26%,
mostly within the property and retail trade sectors. The proportion of impaired loans to TCE decreased
11 basis points to 0.57%.
42WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
SEGMENT REPORTING
Business & Wealth (Continued)
First Half 2025 – First Half 2024
Net profit decreased 5% to $1,118 million.
Pre-provision profit decreased 2% to $1,725 million with a 2% increase in operating income more than offset by a 9% rise in operating expenses.
Operating expenses increased reflecting higher investment spend in UNITE, higher wages and third party technology costs and 119 additional
bankers. The rise in operating income from strong lending growth was tempered by a lower net interest margin.
Net interest income up 3%●The net interest margin contracted 25 basis points. Drivers in descending order were:
-Unfavourable portfolio mix as lending growth outpaced deposit growth, reflected in a lower deposit
to loan ratio;
-The mix shift towards lower margin term deposits and an increase in customers switching to higher
yielding accounts. Higher returns on hedged deposits partly offset these impacts;
-Lower lending spreads reflecting competitive market dynamics and the runoff of the higher margin
auto finance portfolio; and
-Higher returns on hedged capital balances provided a benefit to margin.
●Net loans increased by 10% to $106.8 billion. Business lending growth of 14% was diversified with
strong growth in target areas of health, professional services, agriculture and SME. This was partly
offset by the runoff from the wind down and subsequent sale of the auto finance portfolio; and
●Deposits increased 5% to $148.2 billion as the business grew both term deposits and at-call balances.
Within the business segment, growth was in commercial, private wealth and small to medium
business. Micro business balances decreased slightly due to softer economic and trading conditions.
Non-interest income down 3%●Non-interest income decreased 3%. Excluding the impact of the loss on sale of the auto finance
portfolio, income decreased 1% due to lower merchant income reflecting lower customer spend partly
offset by higher platform revenue.
Expenses up 9%●Operating expenses were up 9% reflecting:
-The step up in UNITE investment;
-Higher salaries and wages and third-party technology vendor costs; and
-Investment in 119 additional business bankers to drive growth and coverage.
Impairment charge of $117 million●The impairment charge of 22 basis points of average loans was an increase of 2 basis points from the
prior corresponding period. The charge reflects new IAPs in the trade and property services sectors
and a small CAP charge from an increase in the downside scenario weight and higher overlays.
●Credit quality metrics improved with stressed exposures to TCE decreasing 26 basis points to 5.26%,
mostly due to portfolio growth. The proportion of impaired loans to TCE increased 3 basis points to
0.57%.
Platforms and Investments
BT & Private Wealth platforms funds under administration increased 1% to $152.1 billion over the half reflecting higher equity markets.
43
Westpac Institutional Bank (WIB)
Westpac Institutional Bank (WIB) services predominantly corporate, institutional and government clients through three areas of specialisation:
Corporate & Institutional Banking (CIB); Global Transaction Services (GTS); and Financial Markets (FM). CIB uses dedicated industry relationship
and specialist product teams to support clients’ borrowing needs. GTS provides payments and liquidity management solutions to WIB’s clients and
Westpac’s domestic and international payments infrastructure. FM provides a range of risk management, investment and debt capital markets
solutions to WIB clients and access to financial markets products for consumer and business customers. Clients are supported throughout Australia
and via branches and subsidiaries located in New Zealand, New York, London, Frankfurt and Singapore.
Half Year
Half Year
Half Year
% Mov’t
March
Sept
March
Mar 25
Mar 25
$m
2025
2024
2024
- Sept 24
- Mar 24
Net interest income
1,177 1,150 1,090 2 8
Non-interest income
619 599 666 3 (7)
Net operating income
1,796 1,749 1,756 3 2
Operating expenses
(791) (756) (709) 5 12
Total operating expenses
(791) (756) (709) 5 12
Pre-provision profit
1,005 993 1,047 1 (4)
Impairment (charges)/benefits
39 (19) (101) large large
Profit before income tax expense
1,044 974 946 7 10
Income tax expense and NCI
(286) (288) (265) (1) 8
Net profit
758 686 681 10 11
Expense to income ratio
44.04%43.22%40.38%82 bps 366 bps
Net interest margin
1.76%1.82%1.85%(6 bps) (9 bps)
As at
As at
As at
% Mov’t
31 March
30 Sept
31 March
Mar 25
Mar 25
$bn
2025
2024
2024
- Sept 24
- Mar 24
Customer deposits
Transactions and others
66.5 64.2 66.2 4 -
Savings
10.0 10.4 9.8 (4) 2
Term
45.8 45.2 39.3 1 17
Total customer deposits
122.3 119.8 115.3 2 6
Loans
Loans
107.5 101.0 93.4 6 15
Provisions
(0.5) (0.4) (0.4) 25 25
Total loans
107.0 100.6 93.0 6 15
Deposit to loan ratio
114.35%119.10%124.00%large large
Total assets
140.6 137.2 123.1 2 14
TCE
231.0 216.2 215.7 7 7
Risk weighted assets 86.7 83.0 81.0 4 7
Average interest earning assets
134.2 126.6 117.9 6 14
Average allocated capital
10.3 9.7 9.6 6 7
Credit quality
Impairment charges/(benefits) to average loans
(0.07%)0.04%0.22%large large
Impaired exposures to TCE
0.12%0.05%0.05%7 bps 7 bps
Total stressed exposures to TCE
0.78%0.76%0.63%2 bps 15 bps
44WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
SEGMENT REPORTING
Westpac Institutional Bank (WIB) (Continued)
Net operating income contribution
1
Half Year
Half Year
Half Year
% Mov’t
March
Sept
March
Mar 25
Mar 25
$m
2025
2024
2024
- Sept 24
- Mar 24
Lending and deposit revenue
1,296 1,289 1,272 1 2
Sales and risk management income
421 391 455 8 (7)
DVA
(19) 4 (12) large 58
Other
a
98 65 41 51 139
Net operating income contribution
1,796 1,749 1,756 3 2
a.Includes capital benefit and the Bank Levy.
First Half 2025 – Second Half 2024
Net profit was up 10% to $758 million.
Pre-provision profit increased 1% to $1,005 million, reflecting a 3% increase in operating income which was partly offset by a 5% rise in operating
expenses. The growth in operating income reflects lending growth and higher earnings on capital partly offset by a lower net interest margin. The
5% increase in operating expenses was driven by higher investment spend and software amortisation in addition to higher staffing and third party
vendor costs to support growth.
Net interest income up 2%●The net interest margin decreased 6 basis points, including the benefit from lower trading securities in
Markets. Excluding this, the net interest margin decreased 11 basis points reflecting an increase in funding
costs as lending growth outpaced deposit growth, resulting in a lower deposit to loan ratio, and competitive
market dynamics contracted loan spreads. This was partly offset by higher returns on hedged capital;
●Net loans increased 6% to $107.0 billion from strengthening relationships with existing clients, predominantly
in the energy, infrastructure, and property sectors; and
●Deposits increased 2% to $122.3 billion driven by growth in transactional accounts and term deposits. The
growth reflects a targeted strategy to maintain strength in the public sector, and to deepen customer
relationships.
Non-interest income up 3%●Non-interest income increased 3% to $619 million. Key drivers included:
–Higher sales and risk management income including foreign exchange;
–Higher fee income from increased underwriting activity and a larger loan book; and
–A $21 million reduction from DVA.
Expenses up 5%●Expenses increased 5% to $791 million. Movements reflected:
–Higher salaries and wages and third-party technology vendor costs; and
–Higher investment spend and software amortisation costs from prior investments, in particular payments.
Impairment benefit of
$39 million
●The impairment benefit to average loans was 7 basis points, compared to a 4 basis point charge in the prior
period. The benefit was driven by revisions to economic projections and upgrades to customer risk ratings.
●Stressed exposures to TCE increased 2 basis points to 0.78%, reflecting higher watchlist exposures in the
property sector. The proportion of impaired exposures to TCE increased 7 basis points to 0.12%, mostly in
the services sector.
1.DVA includes Funding Value Adjustment (FVA) and Credit Value Adjustment (CVA). Sales and risk management income includes both customer and non-customer income.
45
Westpac Institutional Bank (WIB) (Continued)
First Half 2025 – First Half 2024
Net profit was up 11% to $758 million.
Pre-provision profit decreased 4% to $1,005 million with a 2% increase in operating income more than offset by operating expense growth of 12%.
The growth in operating income reflects lending and deposit growth and higher earnings on capital. The growth in operating expenses reflects
higher investment spend and software amortisation and higher wages costs including more frontline bankers to support growth.
Net interest income up 8%●The net interest margin was down 9 basis points, including the impact of an increase in trading securities to
support customer activity in Markets. Excluding this, the net interest margin decreased 6 basis points
reflecting an increase in funding costs as lending growth outpaced deposit growth, resulting in a lower
deposit to loan ratio. This was partly offset by the benefit of higher returns on hedged capital;
●Net loans increased 15% to $107.0 billion, driven by strengthening relationships with existing clients,
predominantly in the energy, infrastructure, property, and industrial sectors. Offshore lending where there is a
clear nexus to Australia or New Zealand also contributed to growth; and
●Deposits increased by 6% to $122.3 billion driven by term deposit growth reflecting a strategy to deepen
customer relationships. Transaction and savings accounts were up slightly.
Non-interest income down 7%●Non-interest income declined by 7% to $619 million. Key drivers include:
–Lower sales and risk management income, from lower fixed income trading; and
–A $12 million reduction from DVA.
Expenses up 12%●Expenses increased 12% to $791 million, reflecting:
–Higher investment spend including technology simplification and an increase in software amortisation costs
from prior year investments; and
–Higher salaries and wages costs including an increase of 37 front-line staff to support relationships and
lending growth.
Impairment benefit of
$39 million
●The impairment benefit to average loans was 7 basis points, compared to a 22 basis point charge in the prior
year. The benefit was driven by revisions in economic forecasts and upgrades to customer risk ratings.
●Stressed exposures to TCE increased 15 basis points to 0.78%, mostly from higher substandard exposures
in the trade sector. The proportion of impaired exposures to TCE increased 7 basis points, mostly in the
services sector.
46WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
SEGMENT REPORTING
Westpac New Zealand
Westpac New Zealand provides banking and wealth products and services for consumer, business and institutional customers in New Zealand.
All figures are in NZ$ unless noted otherwise.
Half Year
Half Year
Half Year
% Mov’t
March
Sept
March
Mar 25
Mar 25
NZ$m
2025
2024
2024
- Sept 24
- Mar 24
Net interest income
1,365 1,332 1,258 2 9
Non-interest income
133 148 131 (10) 2
Notable Items
(1) (3) (6) (67) (83)
Net operating income
1,497 1,477 1,383 1 8
Operating expenses
(734) (674) (695) 9 6
Total operating expenses
(734) (674) (695) 9 6
Pre-provision profit
763 803 688 (5) 11
Impairment (charges)/benefits
(33) (4) (23) large 43
Profit before income tax expense
730 799 665 (9) 10
Income tax expense and NCI
(205) (221) (188) (7) 9
Net profit
525 578 477 (9) 10
Notable Items (post tax)
(1) (1) (5) - (80)
Expense to income ratio (Ex Notable Items)
49.00%45.54%50.04%346 bps (104 bps)
Net interest margin (Ex Notable Items)
2.26%2.23%2.11%3 bps 15 bps
As at
As at
As at
% Mov’t
31 March
30 Sept
31 March
Mar 25Mar 25
NZ$bn
2025
2024
2024
- Sept 24
- Mar 24
Customer deposits
Transactions and others
21.4 20.8 21.0 3 2
Savings
20.7 19.4 20.1 7 3
Term
38.8 39.5 37.7 (2) 3
Total customer deposits
80.9 79.7 78.8 2 3
Loans
Mortgages
69.5 68.0 67.4 2 3
Business
33.0 33.4 32.7 (1) 1
Other
1.2 1.2 1.2 - -
Provisions
(0.5) (0.5) (0.5) - -
Total loans
103.2 102.1 100.8 1 2
Deposit to loan ratio
78.39%78.06%78.17%33 bps 22 bps
Total assets
125.3 123.5 123.5 1 1
TCE
153.0 147.3 148.1 4 3
Risk weighted assets 61.1 62.0 60.1 (1) 2
Liquid assets
17.9 17.8 18.6 1 (4)
Average interest earning assets
121.3 119.4 119.1 2 2
Average allocated capital
8.4 8.2 8.1 2 4
Total funds
13.3 13.2 12.6 1 6
Credit quality
Impairment charges/(benefits) to average loans
0.06%0.01%0.05%5 bps 1 bps
Mortgage 90+ day delinquencies
0.54%0.49%0.47%5 bps 7 bps
Other consumer loans 90+ day delinquencies
0.95%0.87%0.96%8 bps (1 bps)
Impaired exposures to TCE
0.17%0.16%0.12%1 bps 5 bps
Total stressed exposures to TCE
1.63%1.73%1.55%(10 bps) 8 bps
47
Westpac New Zealand (Continued)
First Half 2025 – Second Half 2024
Net profit decreased 9% to $525 million.
Pre-provision profit decreased 5% to $763 million, with a 1% increase in operating income more than offset by a 9% increase in operating
expenses. Operating income reflected modest growth in lending balances of 1% and a 3 basis point increase in net interest margin, while operating
expenses were driven by higher staff and technology costs, including software amortisation and investment spend.
Net interest income up 2%
●The net interest margin was up 3 basis points reflecting improved lending spreads and the continued
benefit from prior interest rate increases on capital balances. This was partly offset by competition for
term deposits;
●Net loans increased 1% to $103.2 billion, driven entirely by mortgages. System growth was slower
reflecting a challenging macroeconomic environment reducing demand for credit. Key drivers
included:
–Mortgage growth of 2%, represents 0.9x RBNZ housing system growth. Expectations for the RBNZ
to continue to cut interest rates drove a shift in customers preference to shorter fixed rate tenors and
variable rate loans; and
–Business lending fell 1% reflecting challenged macroeconomic conditions and subdued business
confidence. Agriculture lending fell 3% with farmers deleveraging following record milk prices.
●Deposits increased 2% to $80.9 billion with growth predominantly in savings accounts. Term deposits
decreased as customers elected to maintain some flexibility given the uncertain economic
environment. Growth was primarily in household deposits while business deposits remained stable.
Non-interest income down 10%
●Non-interest income decreased 10% to $133 million reflecting lower cards income and lower business
activity.
Expenses up 9%
●Operating expenses increased 9% to $734 million reflecting:
–Higher staff expenses and third-party technology vendor costs;
–Increase in technology investment to enhance core infrastructure and digital capability; and
–Higher software amortisation.
Impairment charge of $33 million
●Impairment charges to average loans of 6 basis points, up 5 basis points, was driven by a small CAP
charge relating to an increase in the downside scenario weight and weaker economic projections.
●Stressed exposures to TCE decreased 10 basis points to 1.63% mostly due to lower watchlist
exposures. Impaired exposures to TCE increased 1 basis point to 0.17%.
48WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
SEGMENT REPORTING
Westpac New Zealand (Continued)
First Half 2025 – First Half 2024
Net profit increased 10% to $525 million.
Pre-provision profit increased 11% to $763 million, reflecting an 8% increase in operating income, more than offsetting a 6% increase in operating
expenses. Operating income benefited from a higher net interest margin, while operating expenses increased due to higher staff and technology
costs, including software amortisation.
Net interest income up 9%
●The net interest margin was up 15 basis points reflecting improved lending spreads and benefits from
a mix shift to higher margin variable rate lending. Higher returns on capital balances from the impact
of prior interest rate increases also provided a benefit. This was partly offset by competition for, and
customers switching to, higher yielding term deposits;
●Net loans increased 2% to $103.2 billion. Key drivers included:
–Mortgage growth of 3%, mostly to owner occupiers. Expectations for the RBNZ to continue to cut
interest rates drove a shift in customer preference to short-dated fixed rate tenors and variable rate
loans; and
–Business lending growth of 1%, was primarily driven by growth in corporate lending. Agriculture
lending fell 3% with farmers deleveraging following record milk prices.
●Deposits increased 3% to $80.9 billion. Growth was primarily in term deposits and savings accounts
as customers preferences shifted to higher yielding accounts. Term deposit growth was entirely in
Second Half 2024, while growth shifted to savings accounts in First Half 2025 as term deposit rates
declined.
Non-interest income up 2%
●Non-interest income increased 2% to $133 million driven by higher investment income and business
fees which were partly offset by lower cards income.
Expenses up 6%
●Operating expenses increased 6% to $734 million driven by:
–Higher staff and third-party technology vendor costs to enhance digital capabilities; and
–Higher software amortisation.
Impairment charge of $33 million
●Impairment charge to average loans of 6 basis points, up 1 basis point, was driven by a small CAP
charge relating to an increase in the downside scenario weight and weaker economic projections.
●Stressed exposures to TCE increased 8 basis points to 1.63% mostly due to higher non-performing
exposures in the retail and manufacturing sectors. Impaired exposures to TCE increased 5 basis
points to 0.17%.
49
Westpac New Zealand (Continued)
Westpac New Zealand segment performance (A$ Equivalent)
Results have been translated into Australian dollars (A$) at the average exchange rates for each reporting period. First Half 2025: $1.1042 (Second
Half 2024: $1.0932; First Half 2024: $1.0759). Unless otherwise stated, assets and liabilities have been translated at spot rates as at the end of the
period, 31 March 2025: $1.1001 (30 September 2024: $1.0885; 31 March 2024: $1.0892).
Half Year
Half Year
Half Year
% Mov’t
March
Sept
March
Mar 25
Mar 25
$m
2025
2024
2024
- Sept 24
- Mar 24
Net interest income
1,236 1,217 1,171 2 6
Non-interest income
121 135 122 (10) (1)
Notable Items
(1) (2) (6) (50) (83)
Net operating income
1,356 1,350 1,287 - 5
Operating expenses
(665) (616) (646) 8 3
Total operating expenses
(665) (616) (646) 8 3
Pre-provision profit
691 734 641 (6) 8
Impairment (charges)/benefits
(30) (3) (22) large 36
Profit before income tax expense
661 731 619 (10) 7
Income tax expense and NCI
(185) (203) (174) (9) 6
Net profit
476 528 445 (10) 7
Notable Items (post tax)
(1) (2) (4) (50) (75)
Expense to income ratio (Ex Notable Items)
a
49.00%45.54%50.04%346 bps (104 bps)
Net interest margin (Ex Notable Items)
a
2.26%2.23%2.11%3 bps 15 bps
a.Ratios calculated using NZ$.
As atAs atAs at% Mov’t
31 March30 Sept31 MarchMar 25 Mar 25
$bn
2025 2024 2024 - Sept 24 - Mar 24
Customer deposits
73.6 73.2 72.4 1 2
Loans
93.8 93.8 92.6 - 1
Deposit to loan ratio
a
78.39%78.06%78.17%33 bps22 bps
Total assets 113.9 113.5 113.4 - -
TCE 139.0 135.3 136.0 3 2
Risk weighted assets 55.6 56.9 55.1 (2) 1
Liquid assets 16.2 16.3 17.0 (1) (5)
Average interest earning assets
b
109.7 109.3 110.7 - (1)
Average allocated capital
b
7.7 7.5 7.5 3 3
Total funds
12.0 12.1 11.5 (1) 4
a.Ratios calculated using NZ$.
b.Averages are converted at applicable average rates.
50WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
SEGMENT REPORTING
Group Businesses
The segment comprises:
●Treasury, which is responsible for the management of Westpac’s balance sheet including wholesale funding, capital, and liquidity. Treasury also
manages interest rate risk and foreign exchange risk associated with wholesale funding;
●Enterprise services, which include earnings on capital not allocated to segments, certain intra-group transactions and gains/losses from asset
sales, earnings and costs associated with Westpac’s fintech investments; and
●Other costs not directly attributable to segments include Corporate Affairs, a portion of enterprise technology costs related to UNITE in prior
periods, certain customer remediation expenses and enterprise provisions.
Half YearHalf YearHalf Year% Mov’t
MarchSeptMarchMar 25 Mar 25
$m
2025 2024 2024 - Sept 24- Mar 24
Net interest income
607 615 703 (1) (14)
Non-interest income 8 (14) 13large (38)
Notable Items
(199) 53 (220) large (10)
Net operating income
416 654 496 (36) (16)
Operating expenses (454) (385) (419) 18 8
Total operating expenses
(454) (385) (419) 18 8
Pre-provision profit
(38) 269 77 large large
Impairment (charges)/benefits
- (2) - (100) -
Profit before income tax expense
(38) 267 77 large large
Income tax expense and NCI
(85) (140) (94) (39) (10)
Net profit/(loss)
(123) 127 (17) large large
Notable Items (post tax) (139) 43 (160)large (13)
Treasury
Half YearHalf YearHalf Year% Mov’t
MarchSeptMarchMar 25 Mar 25
$m
2025 2024 2024 - Sept 24- Mar 24
Net interest income
502 500 554 - (9)
Non-interest income
6 7 13 (14) (54)
Notable Items
(217) 62 (220) large (1)
Net operating income
291 569 347 (49) (16)
Net profit
117 316 168 (63) (30)
51
Group Businesses (Continued)
First Half 2025 – Second Half 2024
Net loss of $123 million compared to a profit of $127 million in the prior period.
Pre-provision loss of $38 million compared to a profit of $269 million in the prior period. Excluding Notable Items, pre-provision profit was $161
million compared with a $216 million profit in the prior period.
Net operating income down 36% Excluding Notable Items, income was up 2% or $14 million.
Expenses up 18%Operating expenses increased 18% or $69 million driven by an increase in employee and remediation costs
partly offset by a decrease in UNITE spend as all costs are now allocated to divisions.
First Half 2025 - First Half 2024
Net loss of $123 million compared to a loss of $17 million in the prior corresponding period.
Pre-provision loss of $38 million was lower than a profit of $77 million in the prior corresponding period. Excluding Notable Items, pre-provision profit
was $161 million compared with a $297 million profit in the prior corresponding period.
Net operating income down 16%
Excluding Notable Items, income was down 14% or $101 million. Movements included:
●Interest rate volatility positioning during First Half 2024 outperformed First Half 2025; and
●Lower capital income as unallocated balances reduced following the share buyback and special
dividend.
Expenses up 8%Operating expenses increased 8% or $35 million primarily driven by an increase in employee and
remediation costs partly offset by a decrease in UNITE spend as all costs are now allocated to divisions.
52WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
DIRECTORS’
REPORT
DIRECTORS’ REPORT
Directors
Review and results of the Group’s operations
Significant developments
Risk factors
Rounding of amounts
Auditor’s Independence Declaration
Responsibility Statement
53
DIRECTORS’ REPORT
The Directors of Westpac present their report together with the
financial statements of Westpac and its controlled entities (collectively
referred to as ‘the Group’) for the half year ended 31 March 2025.
Review and results of the Group’s operations
Directors
Net profit attributable to owners of Westpac for First Half 2025 was $3,317
million, 1% lower than First Half 2024, with Net operating income up 2%
from higher net interest income and lower impairment expenses, partly
offset by a reduction in Non-interest income largely due to lower gains from
trading activities, and higher operating expenses from rising staff and
technology costs. Compared to Second Half 2024, net profit was 9% lower.
The names of the Directors of Westpac holding office at any time
during, and since the end of, the half year and the period for which
each has served as a Director are set out below:
Name Position
A summary of the movements in the major line items in Net profit for First
Half 2025 compared to First Half 2024 is discussed below.
Net interest income was up 2% at $9,351 million, with a 3% increase in
average interest earning assets and a 1 basis point decline in the net
interest margin. The main contributors to the movement in net interest
margin included:
●Tighter spreads on loans in response to competition;
●The impact of increased costs of deposits and wholesale funding; and
●Higher benefits on capital balances as a result of higher hedge interest
rates.
Non-interest income was 1% lower at $1,442 million compared to First Half
2024, mostly due to:
●Trading income which was down $65 million; partly offset by
●A rise of $21 million from Net wealth management income, reflecting
higher platform revenues; and
●A rise of $25 million from Other income mostly due to fair value gains
on commodities swaps.
Operating expenses were $5,698 million, 6% higher compared to First Half
2024. The increase was mainly due to:
●Staff costs which rose $184 million from wages growth, higher average
FTEs and superannuation rates; and
●Technology costs which rose $157 million from technology services,
and software maintenance and licence costs.
Impairment charges were lower at $250 million compared to $362 million in
First Half 2024, with both individually assessed and collectively assessed
charges down. The reduction in collectively assessed impairment included
the impacts of:
●An increase in the downside scenario weighting, reflecting greater
uncertainty in international trading relations and geopolitical instability;
●An improvement in credit quality;
●Improvement in economic outlook on commercial property prices and
interest rates; and
●The release of certain overlays.
Overall, credit quality remains sound with stressed exposures as a
percentage of TCE stable, and mortgage and consumer delinquency lower
than First Half 2024.
Steven GreggDirector since November 2023 and Chairman
since December 2023.
Anthony MillerManaging Director and Chief Executive Officer
since December 2024.
Tim BurroughsDirector since March 2023.
Nerida CaesarDirector since September 2017.
David CohenDirector since April 2025.
Debra HazeltonDirector since March 2025.
Andy MaguireDirector since July 2024.
Peter NashDirector since March 2018.
Margaret SealeDirector since March 2019.
Michael Ullmer
AO
Director since April 2023.
Peter KingRetired 15 December 2024. Managing Director
and Chief Executive Officer from December 2019.
Audette Exel
AO
Retired 13 December 2024. Director since
September 2021.
Nora
Scheinkestel
Retired 6 November 2024. Director since March
2021.
54WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
DIRECTORS’ REPORT
The effective tax rate of 31.37% was higher compared to the 30.85%
of First Half 2024 with the primary drivers related to tax provision
adjustments for prior periods and higher non-deductible expenses in
First Half 2025.
The Board has determined an interim ordinary dividend of 76 cents
which will be fully franked.
A review of the operations and results of the Group and its segments
for the half year ended 31 March 2025 is set out in Performance
review (see pages 2-51) of this Results Announcement which form
part of the Directors’ Report.
Further information about our financial position and financial results is
included in the financial statements and accompanying notes, which
form part of the 2025 Interim Financial Report.
Significant developments
Westpac significant developments – Australia
Changes to Board of Directors
On 16 December 2024, Anthony Miller commenced as CEO and
Managing Director.
Independent Non-executive Directors, Dr Nora Scheinkestel and Ms
Audette Exel AO, retired from the Board on 6 November 2024 and 13
December 2024, respectively.
Debra Hazelton and David Cohen commenced as Independent Non-
executive Directors of the Board on 4 March 2025 and 1 April 2025,
respectively.
Changes to Executive Team
On 4 February 2025, Westpac announced the appointment of Paul
Fowler as the Chief Executive of Business & Wealth, commencing on
12 May 2025. In the interim, Peter Herbert continues to act in this role.
On 3 March 2025, Peter Herbert commenced as the Chief
Transformation Officer.
On 5 November 2024, Westpac announced the retirement of Christine
Parker, Group Executive of Human Resources and on 2 April 2025,
Westpac announced the appointment of Kate Dee as the new Chief
People Officer, who will commence in the role later this year.
On 17 December 2024, Westpac announced the retirement of Michael
Rowland, Chief Financial Officer, and on 17 March 2025 announced
the appointment of Nathan Goonan as the new Chief Financial Officer,
subject to regulatory approval. Mr Rowland will remain in his role until
Mr Goonan commences in his role.
On 7 March 2025, Westpac announced that Jason Yetton, Group
Executive of Consumer, has decided to leave the bank and on 29 April
2025, Westpac announced the appointment of Carolyn McCann, who
is the current Group Executive of Customer & Corporate Services
(CCS) as Acting Chief Executive, Consumer, while an external search
is underway for a permanent replacement. As a result, Carolyn Hoy,
who is currently the General Manager, Property, Procurement and
Resilience, will act as Group Executive, CCS. These changes will be
effective from 12 May 2025.
On market buyback
As at 31 March 2025, Westpac had completed $2.4 billion of the $3.5
billion on market share buyback previously announced, with 85.9 million
Westpac shares purchased at an average price of $27.87. The shares
bought back were subsequently cancelled. Westpac reserves the right
to vary, suspend or terminate the buyback at any time.
External auditor rotation
Following approval by Westpac’s shareholders at the 2024 AGM on 13
December 2024, KPMG commenced as Westpac’s external auditor for the
2025 financial year.
Regulatory and risk developments
Enforceable undertaking on risk governance remediation,
Integrated Plan and CORE program
Following completion of the Integrated Plan (IP), as committed, in
December 2023 (required under the enforceable undertaking (EU) entered
into with APRA in December 2020 in relation to our risk governance
remediation), Westpac continued to focus on the sustainability and
effectiveness of the IP uplifts via a transition phase. On 31 December
2024, we completed the transition phase, as confirmed by Promontory
Australia (as Independent Reviewer) in February 2025.
APRA releases final Prudential Standard CPS230 Operational
Risk Management
On 17 July 2023, APRA released the final version of Prudential Standard
CPS 230 Operational Risk Management which will come into effect from 1
July 2025. CPS 230 brings new and enhanced requirements for our
operational risk management, material service provider management and
business continuity planning; and we are undertaking a programme of
work to assist in implementing these requirements. Details about
operational risk and the consequences of failing to comply with regulatory
requirements are set out in Risk factors (pages 57-70).
Financial crime
Westpac continues to make progress on improving our financial crime risk
management with significant ongoing work, as we implement a multi-year
program of work (including AML/CTF, Sanctions, Anti-Bribery and
Corruption, the US Foreign Account Tax Compliance Act (FATCA) and
Common Reporting Standard (CRS)). Through this work, we continue to
undertake activities to strengthen and remediate our Financial Crime
Program and to improving regulatory reporting, including in relation to
International Funds Transfer Instructions, Threshold Transaction Reports,
Suspicious Matter Reports (including ‘tipping off’ controls), and FATCA and
CRS reporting and equivalent reports in jurisdictions outside Australia.
On 29 November 2024, the Australian Parliament passed the Anti-Money
Laundering and Counter-Terrorism Financing Amendment Act 2024 (Cth)
(AML/CTF Amendment Act). The AML/CTF Amendment Act and proposed
associated rules modernise and overhaul
55
Significant developments (Continued)
the AML/CTF regime, to ensure Australia continues to effectively
deter, detect and disrupt financial crime. We will make amendments to
our policies, procedures, systems and controls as appropriate and in
accordance with the specified compliance timeframes.
With increased focus on financial crime, further areas of potential non-
compliance have been, and may continue to be identified, and we
continue to liaise with the Australian Transaction Reports and Analysis
Centre (AUSTRAC) and the Australian Taxation Office (ATO) and local
regulators in jurisdictions outside Australia, as appropriate, including to
remediate findings and adopt recommendations from regulators with
significant ongoing programmes of work across the Group. Details
about the consequences of failing to comply with financial crime
obligations are set out in Risk factors (pages 57-70).
Scams
On 21 February 2025, the Scams Prevention Framework Act 2025
(Cth) came into effect. This implements the Scams Prevention
Framework (SPF) through amendment to the Competition and
Consumer Act 2010 (Cth). The SPF outlines the responsibilities of
designated sectors (initially banks, telecommunications, and digital
platform service providers) to prevent, detect, report, disrupt and
respond to scams in Australia. We are considering the potential
impacts of the new legislation, including on our policies, procedures,
systems and controls.
New climate reporting standards
New mandatory climate-related reporting standards were approved in
September 2024 by the Australian Accounting Standards Board and
legislation requiring compliance has been passed by the Australian
Parliament. Westpac will report against these new requirements from
its financial year ending 30 September 2026.
US Securities and Exchange Commission (SEC) rules on the
disclosure of climate-related information expected to apply to Westpac
from FY26 have been stayed following a lawsuit challenging the rules.
On 27 March 2025, the SEC notified the court it was withdrawing its
defence of the rules and on 24 April 2025 the court suspended the
lawsuit until the SEC advises whether it intends to review or
reconsider the rules.
APRA capital requirements
Operational risk capital overlays
In 2019, APRA applied $1 billion of additional capital overlays to our
operational risk capital requirement.
These overlays were applied through an increase in risk weighted
assets (RWA).
On 19 July 2024, APRA announced its decision to reduce Westpac’s
total operational risk capital overlay from $1 billion to $500 million.
The impact of the remaining $500 million overlay on our Level 2
common equity Tier 1 (CET1) capital ratio at 31 March 2025 was a
decrease of 17 basis points.
APRA announcement to phase out AT1 capital as eligible bank
capital
On 9 December 2024, APRA confirmed that it will proceed with its
proposal to phase out AT1 capital instruments from the bank prudential
framework. Further details about this change are set out in Capital and
dividends (pages 28-32).
Westpac significant developments – New Zealand
RBNZ review of overseas bank branches
On 21 August 2024, the RBNZ released the proposed Branch Standard
under the Deposit Takers Act 2023 which will implement decisions made
as part of the review of its policy for branches of overseas banks. The
proposed Branch Standard will require that overseas bank branches only
conduct business with wholesale clients; the total size of an overseas
bank’s branch cannot exceed NZ$15 billion in total assets; and dual-
operating branches (such as Westpac’s New Zealand Branch) only
conduct business with “large” corporate and institutional clients. It is
proposed that “large” means those with consolidated annual turnover of
over NZ$50 million, total assets of over NZ$75 million or total assets under
management of over NZ$1 billion (for funds management entities only).
The implementation date is expected to be in July 2028.
Westpac’s New Zealand Branch currently provides financial markets, trade
finance and international payment products and services to customers
referred by WNZL. We expect the RBNZ’s Branch Standard will require
changes to the activities Westpac’s New Zealand Branch undertakes, and
as a result, WNZL may also make changes to the scope of the activities it
undertakes.
RBNZ review of capital settings for deposit takers
On 31 March 2025, the RBNZ announced that it intends to conduct a
review of the capital settings applicable to New Zealand incorporated
deposit takers (including WNZL). The planned Prudential Capital Buffer
increase of 1% will proceed on 1 July 2025, with the review to be
conducted promptly to allow for any changes prior to the next capital
requirement increase scheduled for 1 July 2026. The review will include:
●an assessment of how New Zealand’s capital settings compare
internationally;
●a reassessment of the appropriate risk appetite for capital settings in
New Zealand;
●reviewing the degree of proportionality in the framework and
considering changes; and
●considering the balance between going concern and gone concern
capital and the role of ‘AT1’ capital.
General regulatory changes affecting our businesses
Cyber security
We continue to work on enhancing our systems and processes to mitigate
cyber security risks, including those related to third parties, and to respond
to changes in regulation, including from the legislation passed by the
Australian Parliament in November 2024, which implemented certain
measures proposed by the
56WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
DIRECTORS’ REPORT
Significant developments (Continued)
Federal Government in its 2023-2030 Australian Cyber Security
Strategy.
Regulators have continued their focus on cyber security following high
profile cyber-related incidents. APRA is seeking to ensure that
regulated entities further strengthen their cyber security practices,
focusing on the effective implementation and ongoing compliance with
Prudential Standard CPS 234 Information Security and Prudential
Standard CPS 230 Operational Risk Management (which, as noted
above, will come into effect from 1 July 2025). Similarly, ASIC is
emphasising strengthened cybersecurity at the companies it regulates
and has indicated a focus on strengthening cyber resilience through
proposed testing strategies. The Australian Signals Directorate and
the Australian Cyber Security Centre are increasingly providing threat
intelligence and tailored guidance to help organisations enhance their
information security measures. We will continue to engage with
regulators and the government more broadly regarding cyber-related
regulation, legislation and policy.
Details about operational risks and information security risks, including
cyberattacks, are set out in Risk factors (pages 57-70).
Revised Banking Code of Practice
On 28 February 2025, the new version of the Australian Banking
Association’s (ABA) Banking Code of Practice (the Code) came into
effect.
The strengthened Code includes uplifts to existing provisions and
additional safeguards and protections for small business customers,
guarantors, vulnerable customers and customers requiring additional
support. These updates include:
●an expanded small business definition that increases the
aggregate borrowing limit from $3 million to $5 million, which is
anticipated to provide up to 10,000 more small businesses with
access to the Code protections;
●a new obligation to take reasonable steps to ensure that a meeting
is held with a guarantor in the absence of the borrower before
signing a guarantee;
●a new obligation to do all things necessary to ensure banking
services under the Code are provided ‘efficiently, honestly and
fairly’;
●an updated vulnerability definition that expands the categories of
vulnerability and recognises that a customer can become
vulnerable at any time;
●updated provisions to improve the process for managing deceased
estates; and
●an uplift of the inclusivity and accessibility provisions to expressly
include LGBTQIA+ persons and a new commitment to organise or
refer customers to free external support services.
Legal proceedings
Our entities are parties to legal proceedings from time to time arising
from the conduct of our business. Certain litigation (including
regulatory proceedings) and class actions are described as required in
Note 13 (pages 101-105) to the financial statements in this Results
Announcement.
57
Risk factors
Our business is subject to risks that can adversely impact our financial performance, financial condition and future performance. Our 2024 Annual
Report sets out the 11 major risk categories that impact our business, our approach to managing risks, as well as key focus areas. This section
provides our investors (and potential investors) with further information in relation to the current and future risks we face, as well as potential
consequences if those risks materialise. The content of this section is current as of the date of publication, and it is important to note that
subsequent developments may impact its relevance. Risks and risk management strategies are inherently dynamic, evolving alongside changes in
the external environment, market conditions and organisational priorities. The risks and uncertainties described below can emerge together or
quickly in succession in a fashion that is uncorrelated with the order in which they are presented below, and they are not the only ones we face.
Additional risks and uncertainties that we are unaware of, or that we currently deem to be immaterial, may also become important factors that affect
us.
If any of the following risks materialise, our business, prospects, reputation, financial performance or financial condition could be materially
adversely affected, which may subsequently cause the price of our securities or the level of dividends to decline and, as a security holder, you could
lose all, or part, of your investment. You should carefully consider the risks described (individually and in combination) and the other information in
this Results Announcement and in our 2024 Annual Report and subsequent disclosures before investing in, or continuing to own, our securities.
Risks relating to our business
We have experienced, and could in the future
experience, information security risks, including
cyberattacks
-Cyber risk
-Cyber attacks
-Operational risk
-Information security risks
-Data breaches
-Third party risk
Our operations depend on the secure processing, storage and transmission of information on our systems and those of external suppliers.
Despite our measures to protect the confidentiality, availability and integrity of our information, our information assets may face security breaches,
unauthorised access, malware, social engineering, denial of service attacks, ransomware, destructive attacks, employee misconduct, human error
or other external and internal threats. These could adversely impact our and others’ confidential information and system availability.
Information security risks are heightened by factors such as new technologies, increased digitisation, larger volumes of sensitive data,
sophisticated cyber crime, supply chain disruptions, remote and hybrid working, targeting of critical infrastructure providers, geopolitical tensions,
terrorism, state sponsored attacks, and the use of AI in cyberattacks (which can increase the speed, complexity and effectiveness of
cyberattacks). These factors could compromise our information assets and interrupt usual operations for us, our customers, suppliers and
counterparties.
Adverse events such as data breaches, cyberattacks, espionage and errors (including human-related), are increasing in frequency and impact,
potentially causing financial instability, reputational damage, service disruption, contagion risk, in addition to economic and non-economic losses
to us, our customers, shareholders, suppliers, counterparties and others. Our systems and processes designed to protect against and respond to
these threats have not always been, and may not always be, effective and human error can occur.
Westpac, our customers and other stakeholders could suffer losses from cyberattacks, information security breaches or ineffective cyber
resilience. Consequences could be severe if customer data is being held in breach of legal or regulatory obligations and that data is compromised
as part of an information security incident. We may not always be able to anticipate and prevent or effectively respond to such incidents, or
effectively respond to and/or rectify the resulting damage. Our suppliers, counterparties, and other parties involved in or who facilitate our
activities, financial platforms and infrastructure as well as our customers’ suppliers and counterparties are also at risk, which could impact us.
As cyberattacks increase globally, the likelihood of regulatory enforcement and legal action for information security failures from customers or
shareholders increases. This could include class action litigation for issues such as information security risk management failures, misleading
statements about our information security practices or for deficiencies in our response to cyberattacks and information security threats (including
any delayed, deficient or misleading notifications).
Consequences of successful attacks could include damage to technology infrastructure, government intervention, service disruptions, loss of
customers and market share, data loss, cyber extortion, customer remediation and/or compensation, breaches of the law, vulnerability to fraud or
scams, litigation, fines, and increased regulatory scrutiny or other enforcement action.
Such outcomes could negatively affect our business, prospects, reputation, financial performance or financial condition. As cyber threats evolve,
we may need to allocate significant resources and incur additional costs to enhance our systems, address vulnerabilities or incidents and respond
to regulatory changes.
58WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
DIRECTORS’ REPORT
Risk factors (Continued)
We could suffer losses due to geopolitical events
-Geopolitical risks
-Conflicts
-Operational risk
-Credit risk
We, our customers and our suppliers operate businesses, engage in trade with and hold assets in different geographic locations. Significant risks
subsist including from geopolitical instability, conflicts, trade tensions, tariffs, sanctions, social disruption, civil unrest, war, terrorist activity, acts of
international hostility, and complicity with or reluctance to take action against certain types of crimes.
Such events or the uncertainty related to the potential for such events are and could continue to directly and indirectly impact our and our
customers’ operations, affect domestic and international economic stability and impact consumer and investor confidence, which in turn could
disrupt industries, businesses, service providers and supply chains and ultimately adversely impact economic activity. This could lead to
shortages of materials and labour, higher energy costs and commodity prices, volatility in markets and damage to property. This in turn could
affect asset values and impact customers’ ability to repay amounts owing to us, and our ability to recover amounts owing. All of these impacts
could adversely affect our business, prospects, financial performance or financial condition. The current global landscape is marked by significant
and prolonged conflicts, increasing protectionist policies (and uncertainties surrounding such policies) and heightened tensions, which have the
potential to further intensify these impacts.
We could be adversely affected by legal or regulatory
change
-Compliance and conduct risk
-Regulators’ expectations
-Legal and regulatory change
-Fines, penalties, other costs and capital overlays
We operate in a highly regulated industry with an environment of sustained legal and regulatory change and ongoing scrutiny of financial services
providers. Our business, prospects, reputation, financial performance and financial condition have been, and could in the future be, adversely
affected by domestic and international changes to laws, regulations, policies, supervisory activities, regulator expectations, and industry codes of
practice, such as the Banking Code of Practice.
Such changes may affect how we operate and have altered, and may in the future alter, the way we provide our products and services, in some
cases requiring us to change, suspend or discontinue our offerings. Industry-wide reviews and inquiries could further reshape laws, regulations,
policy or regulatory expectations. The effects of such reviews and inquiries in the past have included, and could continue to include, limiting our
flexibility, requiring us to incur substantial costs (e.g. system changes, incurring Compensation Scheme of Last Resort levies, liabilities related to
scams, fraud or operational costs relating to scam management or other industry wide issues), absorbing specialist resources, impacting
profitability and requiring us to retain additional capital, which impacts our ability to pursue strategic initiatives or implement other changes,
resulting in us being unable to increase or maintain market share and/or creating pressure on margins and fees.
A failure to manage legal or regulatory changes effectively and in the timeframes required has resulted, and could in the future result, in the
Group not meeting its compliance obligations. It could also result in enforcement actions, penalties, fines, civil litigation, capital impacts, and
ultimately loss of or variations to business licences. Frequent and large volumes of regulatory change also contribute to execution risk, as
technology and system and process updates may not always be successful in keeping pace with such change and there is heightened risk of
flaws, human error or unintended consequences. Managing these changes may require significant management attention, costs and resources,
including the availability of skilled personnel, which may be limited.
There is additional information on certain aspects of regulatory changes affecting the Group in Significant Developments (pages 54-56) and in the
sections ‘Critical accounting assumptions and estimates’ and ‘Future developments in accounting standards’ in Note 1 (pages 79-80) to the
financial statements.
59
Risk factors (Continued)
We have been and could be adversely affected by
failing to comply with laws, regulations or regulatory
policy
-Compliance and conduct risk
-Regulators’ expectations
-Legal and regulatory
-Industry codes
-Fines, penalties and capital overlays
We are responsible for complying with all applicable legal and regulatory requirements and industry codes of practice in the jurisdictions where we
operate or obtain funding.
We are subject to compliance and conduct risks, which are exacerbated by the complexity and volume of regulation, as well as ongoing
regulatory change. These risks increase when there is ambiguity or multiple ways of interpreting our obligations and rights, conflicting laws
between jurisdictions or regimes, or where there is limited industry consultation or a lack of regulatory guidance, particularly with respect to new or
untested regulations.
Our compliance and conduct management system, which is designed to mitigate compliance and conduct risks, has not always been, and may
not always be, effective. Breakdowns have occurred, and may in the future occur due to factors such as poor judgement, flaws in the design or
implementation of controls or processes, or the implementation of new measures. Such issues can lead to non-compliance, including failures to
meet obligations to report or provide information to regulators. Ongoing reviews and change programs continue to identify compliance issues.
Conduct risk has occurred, and could continue to occur, through the provision of products and services that may not meet customer needs or
market or regulator expectations, especially for vulnerable customers, customers in hardship and indigenous customers. This risk has occurred,
and could continue to occur, from deliberate, reckless, negligent, accidental or unintentional conduct of our employees, officers, contractors,
agents, authorised representatives, credit representatives and/or external service providers, resulting in circumvention of, or inadequate
implementation of, controls, processes, policies or procedures. This could occur through a failure to meet professional obligations (including
fiduciary, suitability and responsible lending requirements), human error or weaknesses in risk culture, corporate governance or organisational
culture or poor product design and implementation (including failing in whole or in part to consider customer needs or selling products and
services outside of target markets). Inadequate supervision and oversight of our distribution channels can heighten these risks. Non-compliance
by our people may negatively impact other employees, leading to outcomes including litigation and reputational damage. Additionally, third party
conduct (e.g. where customers misrepresent their position on product applications and we have failed to identify it) may limit our recourse and
regulatory outcomes may not be mitigated by third party culpability.
These factors have resulted, and could continue to result, in poor customer outcomes (including for vulnerable customers and customers in
hardship), failure to meet compliance obligations (or to promptly detect, report and/or remedy non-compliance), impacts which may compromise
the integrity of the markets in which we operate or data we report, reputational damage, increased regulatory surveillance or investigation and
employment disputes. We are currently subject to a number of investigations, reviews and industry inquiries by, and have and continue to respond
to a number of requests from, domestic and international regulators including APRA, ASIC, the ATO, the ACCC, AUSTRAC, BCCC, FINRA,
AFCA, the OAIC, RBNZ, New Zealand Financial Markets Authority, New Zealand Commerce Commission, the Fair Work Ombudsman, the SEC,
BaFin and BPNG’s Financial Analysis and Supervision Unit, involving significant resources and costs (which may divert specialist resources from
other programs of work).
Regulatory reviews and investigations have in the past, and may in the future, result in a regulator taking administrative or enforcement action
against us and/or our representatives. Regulators have broad powers and may issue directions (e.g. for product design and distribution and
remedial action), pursue civil or criminal proceedings, seek substantial fines and penalties, and other compliance or enforcement outcomes.
These risks are heightened (and penalties have been and may be higher) where contraventions are not promptly detected or addressed, where
we fail to meet our obligations (or the expectations of regulators), where there are patterns of behaviour indicating systemic conduct or where
there has been an awareness of contraventions, especially in areas of heightened regulatory focus, such as vulnerable customers, customers in
hardship and indigenous customers. Additionally, regulatory investigations may lead to adverse findings against directors and management,
including potential disqualification. The resources allocated to these reviews and investigations can impede other activities, including change and
remediation programs.
APRA can also require the Group to hold additional capital either through a capital overlay or higher risk weighted assets (including in response to
a failure to comply with prudential standards and/or expectations in relation to, for example, stress testing and liquidity management). Following
the commencement of civil penalty proceedings, APRA imposed a A$500 million Culture, Governance and Accountability Review overlay and a
further A$500 million Risk Governance overlay to our required operational risk capital in 2019. Although APRA reduced the Group’s capital
overlay from A$1 billion to A$500 million in 2024, additional capital overlays could have an adverse impact on our financial performance.
The evolving political and regulatory landscape has seen (and may continue to see) expansion of regulators’ powers, materially increased civil
penalties and fines and increased criminal prosecutions against institutions
60WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
DIRECTORS’ REPORT
Risk factors (Continued)
and/or their employees and representatives (including where there is no fault element). This could also result in reputational damage and impact
the willingness of customers, investors and other stakeholders to deal with us. Given our size and scale of activities, a failure by us may result in
multiple contraventions, which could lead to significant penalties, remedial action and other consequences (e.g. regulatory damage). The
introduction of the Financial Accountability Regime has further intensified these risks through imposing strengthened responsibility and
accountability frameworks.
Regulatory investigations or actions commenced against the Group have exposed, and may in the future expose, the Group to an increased risk
of litigation brought by third parties (including through class action proceedings), which may require us to pay (sometimes substantial)
compensation to third parties and/or to undertake further remediation activities. Market developments suggest there is an expanding scope for
potential claims, including in relation to cyber incidents, financial crime and ESG issues. We have incurred significant remediation costs on a
number of occasions (including compensation payments and costs of correcting issues) and new issues may arise requiring remediation. We
have faced, and may continue to face, challenges in effectively and reliably scoping, quantifying and implementing remediation activities,
including determining how to compensate impacted parties properly, fairly and in a timely way. Investigation of the underlying issue may be
impeded due to the passage of time, technical system constraints, or inadequacy of records. Delays in remediation may occur due to factors such
as the number of affected parties and their responsiveness, ongoing investigations or litigation, and regulatory requirements. Remediation
programs may not prevent regulatory action or investigations, litigation or other proceedings from being pursued, or sanctions being imposed.
Regulatory investigations, inquiries, litigation, fines, penalties, infringement notices, revocation, suspension or variation of conditions of regulatory
licences or other enforcement or administrative action or agreements (such as enforceable undertakings) have and could, either individually or in
aggregate with other regulatory action, adversely affect our business, prospects, reputation, financial performance or financial condition and
increase class action risk.
There is additional information on certain regulatory and other matters that may affect the Group (including class actions) in Significant
Developments (pages 54-56) and in Note 13 (pages 101-105) to the financial statements.
We have suffered, and in the future could suffer, losses
and be adversely affected by the failure to implement
effective risk management
-Risk management
-Controls and processes
-Risk culture
-Risk governance
-Fines, penalties
Our risk management framework has not always been, and may not in the future be, fully effective. The resources we allocate to identifying,
measuring, evaluating, monitoring, reporting, controlling or mitigating material risks may sometimes be inadequate. This may arise due to
inadequacies in the design of the framework or key risk management policies, controls and processes, the design or operation of our
remuneration structures and consequence management processes, technology failures, our corporate structure, incomplete implementation or
embedment, or failure by our people (including contractors, agents, authorised representatives and credit representatives) to comply with or
properly implement our policies and processes. The potential for these types of failings is heightened if we lack sufficiently skilled, trained or
qualified personnel or capacity, including people, processes and technology, to appropriately manage risks.
Although we periodically review our risk management framework to determine if it remains appropriate, all risk management frameworks have
inherent limitations (and may also be ineffective because of weaknesses in risk culture or governance), and some risks may exist or emerge that
we have not anticipated or identified. For example, where there is a lack of awareness of our policies, controls and processes or where they are
not adequately complied with, monitored, audited or enforced. This may result in poor decision-making or risk and control weaknesses not being
identified, escalated or acted upon.
Risks are measured and monitored against our risk appetite, and when outside of appetite, we aim to take steps to bring such risks back into
appetite, including framework and policy design improvements. However, bringing risks back within appetite may be delayed or ineffective, due to
factors including complexity, information technology system enhancement delays, staffing constraints (including where staff are occupied by other
regulatory change or remediation projects), operational failures or external factors beyond our control, resulting in certain risks remaining outside
of appetite for periods of time.
As part of the Enforceable Undertaking with APRA in December 2020 in relation to our risk governance remediation and to support the
strengthening of our risk governance, accountability and culture, we developed the Integrated Plan (IP). As committed, the IP was completed in
December 2023 and in April 2024, Promontory Australia (as Independent Reviewer) confirmed our completion. IP reports issued by Promontory
Australia are published on our website at https://www.westpac.com.au/about-westpac/media/core/. Westpac continued to focus on the
sustainability
61
Risk factors (Continued)
and effectiveness of the uplift delivered by the IP through a transition phase that was completed in December 2024 and confirmed as complete by
Promontory Australia in February 2025.
If any of our governance or risk management processes and procedures prove ineffective or inadequate or are not appropriately implemented or
we fail to bring risks into appetite, we may face sustained or increased regulatory scrutiny and action. While a stronger risk culture fosters early
self-identification and remediation, it may also highlight concerns that trigger further regulatory action. This may result in financial losses,
additional capital requirements, compliance breaches, fines, reputational damage, and/or significant remediation, which could adversely affect our
business, prospects, financial performance or financial condition.
We could suffer losses due to technology failures
-Operational risk
-Information and technology
-Change management
-Technology failure
-Outages
Maintaining the reliability, availability, integrity, confidentiality, security and resilience of our information and technology is crucial to our business.
Despite existing processes to preserve, monitor and facilitate the availability of and recovery of, our systems, there is a risk that our information
and technology systems may be inadequate, could be compromised, fail to operate properly or result in outages, including from events wholly or
partially beyond our control.
A technology failure could lead to failures to meet compliance obligations (such as a requirement to retain records and/or data for a certain period,
or to destroy records and/or data after a certain period, or other risk management, privacy, business continuity management or outsourcing
obligations). Our stakeholders, including employees and customers may be adversely affected, including by being unable to access our products
and services, as a result of privacy breaches, or the loss of personal data. This could result in business disruption, reputational damage,
remediation costs, regulatory investigations and/or action, or others commencing litigation. Technology issues in the financial sector can also
affect multiple institutions, meaning we could impact, or be impacted by, other institutions.
The use of legacy systems, as well as work underway to uplift our technological capabilities, may heighten the risk of a technology failure, change
management issues and the risk of non-compliance with our regulatory obligations or poor customer outcomes. Projects aimed at
simplifying/streamlining our systems (including our UNITE program) will require significant resources (including specialist expertise) and incur
costs. These risks may be heightened while those projects are being undertaken, or post-implementation where there are unanticipated outcomes
or impacts. These projects may also not be completed on time, may not deliver the expected benefits or may require further resources or funding
than anticipated. The success of such projects relies in part on having robust governance arrangements and appropriate oversight at Board and
senior executive level. Shortcomings in these areas could elevate the risk of regulatory non-compliance, poor customer outcomes, delays,
increased costs or demand on resources.
Failure to regularly renew and enhance our technology to deliver new products and services, comply with regulatory obligations and ongoing
regulatory changes, improve automation of systems and controls, meet our customers’ and regulators’ expectations, or to effectively implement
new technology projects, could result in cost overruns, technology failures (including due to human error in implementation), reduced productivity,
outages, operational failures or instability, compliance failures, reputational damage and/or loss of market share.
Climate change and other sustainability factors such as
human rights and natural capital may have adverse
effects on our business
-Climate and nature risks
-Physical and transition risks
-Social and human rights risks
-Credit risk
-Operational risk
-Reputational and sustainability risk
-Compliance and conduct risks
Climate and other sustainability-related risks have had and are likely to have adverse effects on us, our customers, external suppliers, and the
communities in which we operate. Managing these risks is challenging given significant uncertainties in modelling and assessing their impact.
Climate related risks may manifest as physical risks, transition risks, and liability risks.
Physical risks include direct risks to us, as well as those to our customers, suppliers and other stakeholders. These risks could arise from
increases and variability in temperatures, precipitation changes, rising sea levels, loss of
62WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
DIRECTORS’ REPORT
Risk factors (Continued)
natural capital (including biodiversity loss), and more severe and frequent climatic events, including fires, storms, floods and droughts. Such
events could also increase human rights risk and/or increase customer vulnerability. Impacts may arise through damage, disruption or changes to
business activities, operations, asset values and insurability of assets (or insurance availability/affordability), resulting in higher costs and/or
reduced revenues, and, in turn, lower Group income caused by increased default rates, delinquencies, write-offs and impairment charges in the
Group’s portfolios.
Transition risks may arise through the transition to a lower carbon economy, which in turn could impact Westpac through changes such as in
consumer behaviour and market sentiment. These risks could unfold in various ways – gradually and orderly, abruptly and disorderly, or a
combination of both. Impacts could result from climate change mitigation efforts, the obsolescence of certain businesses due to the energy
transition, changes in investor appetite, shifting customer preferences, technology developments and regulatory changes. Such risks could also
emerge through lending to customers facing reduced revenues, asset devaluation and rising costs, thereby increasing our credit risk. Additionally,
Westpac may be indirectly impacted by transition risks, from adverse effects to the broader economy (interest rates, inflation and growth) or
adverse asset pricing and valuations.
Our ambition to become a net-zero, climate resilient bank, has led and will continue to lead to changes in policies and processes which may
present associated execution risk. Our ability to meet our commitments and targets is in part dependent on the orderly transition of the broader
economy to net-zero, which may be impacted by external factors including (but not limited to) government policies, investment levels, electricity
grid capacity, and constraints in the development and supply of technology, infrastructure and skilled labour. Additionally, our ability to transition,
including to meet our targets and commitments, may also be impacted by the challenges faced by our customers in executing their own transition
plans and commitments.
Natural capital loss, referring to the depletion of renewable and non-renewable natural resources that combine to yield a flow of benefits to
people, poses a risk to us, primarily through our exposure to customers that are materially dependent or impact on natural resources. This loss
can contribute to, and be accelerated by, climate change. Increasing recognition and responses to this risk also create heightened regulatory and
stakeholder expectations on Westpac. Our ambition to become a nature-positive bank may lead to changes to policies and processes, which may
present potential execution risk. Our ability to meet those ambitions will also be influenced by external factors beyond our control. As global
standards for natural capital are at an early stage, regulatory risk and uncertainty remain elevated.
We may be exposed to social and human rights risks through our operations, supply chain and in the provision of our products and services.
Failure to identify and manage these risks may cause, contribute to, or be directly linked to adverse social and human rights impacts. This
includes the risk that we provide services to, or rely on services provided by parties involved in human rights abuses or criminal activity, as well as
the potential exploitation of our platforms and products for illicit purpose. Our ability to identify, assess, and mitigate these risks may be
constrained by factors such as the sophistication of perpetrators.
Data relevant to our assessment and management of climate, and other sustainability-related risks continues to mature. Reliance on third party
data (which may not be sufficiently available or reliable), may affect our decision making, target setting and reporting, and affect our ability to meet
our targets and commitments. Associated risks increase where disclosure of data is required by mandatory reporting.
Actual or perceived failure to adapt our strategy, governance, procedures, systems and/or controls to manage or disclose climate and other
sustainability-related risks and opportunities (including, for example, perceived misstatement of, or failure to adequately implement or meet,
sustainability claims, commitments and/or targets) may give rise to business, reputational, legal and regulatory risks. This includes financial and
credit risks that may impact our profitability and outlook, and the risk of regulatory action or litigation (including class actions) against us and/or
our customers.
We may also be subject, from time to time, to legal and business challenges due to actions instituted by activist or other groups. Examples of
areas which have attracted activism and challenges include: the financing of businesses perceived to be at greater risk from climate-related
physical and transition risks and/or perceived not to demonstrate responsible management of climate, human rights or other sustainability issues;
the extent or quality of human rights due diligence that is carried out; and climate and sustainability related disclosures (including net-zero or
emissions reduction strategies, targets and policies).
Scrutiny from regulators, shareholders, activists and other stakeholders on climate-related risk management practices, lending policies, targets
and commitments, and other sustainability products, claims and marketing practices will likely remain high. Applicable legal and regulatory
regimes, policies, and reporting and other standards are also evolving. For example, in Australia, mandatory climate reporting has been
introduced, and there is an increased compliance and enforcement focus by ASIC and the ACCC on a range of issues related to sustainability,
sustainable finance, and monitoring/investigation of related claims. This increases compliance, legal and regulatory risks, and costs.
63
Risk factors (Continued)
For further detail on the identification, assessment and management of these risks, please refer to our 2024 Climate Report, and the Creating
Value for the Community, Creating Value for the Environment, Risk Management and Sustainability Governance sections of the 2024 Annual
Report.
The failure to comply with financial crime obligations
has had, and could have further, adverse effects on our
business and reputation
-Financial crime risk
-Bribery and corruption
-Tax evasion
-Money laundering and terrorism financing
-Economic and trade sanctions
The Group is subject to various laws and rules regarding anti-money laundering and counter-terrorism financing (AML/CTF), anti-bribery and
corruption, economic and trade sanctions and tax transparency across its operating jurisdictions (Financial Crime Laws). Financial Crime Laws
can be complex and, in some circumstances, impose a diverse range of obligations. As a result, regulatory, operational and compliance risks are
heightened. In some jurisdictions (e.g. the Pacific region), financial crime risks are elevated beyond the Group’s risk appetite requiring an
appropriate action plan to reduce risk, and to return within appetite.
Financial Crime Laws require us to report certain matters and transactions to regulators (such as international funds transfer instructions,
threshold transaction reports, suspicious matter reports, Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standard (CRS)
reports) and to ensure that we know who our customers are and that we have appropriate ongoing customer due diligence in place. The failure to
comply with some of these laws has had, and in the future could potentially have, adverse impacts for the Group.
The Group operates within a landscape that is constantly changing, particularly with the emergence of new payment technologies, ongoing
legislative reform impacting Financial Crime Laws, increased regulatory focus on digital assets, and increasing reliance on economic and trade
sanctions to manage issues of international concern. These developments may require updates to the Group’s systems, policies, processes and
controls to address emerging financial crime risks for the Group (as well as other risks including scams, fraud and technology-enabled crime).
There has been, and continues to be, a focus on compliance with financial crime obligations. Regulators globally remain focused on continuing
investigations and taking enforcement actions for identified non-compliance, often seeking significant penalties. Due to our scale of operations,
undetected failures or the ineffective implementation, monitoring or remediation of a system, policy, process or control (including a regulatory
reporting obligation) has resulted, and could in the future result, in a significant number of breaches of AML/CTF or other Financial Crime Laws,
which could lead to significant financial penalties and other adverse impacts for the Group, such as reputational damage and litigation risk.
While the Group has systems, policies, processes and controls in place designed to manage its financial crime obligations (including reporting
obligations), these have not always been, and may not in the future always be, effective, due to reasons such as control deficiencies, technology
failures or changes in financial crime risks or typologies. Our analysis and reviews, in addition to regulator feedback, have highlighted that our
systems, policies, processes and controls are not always operating satisfactorily in a number of respects and require improvement. We continue
to have an increased focus on financial crime risk management and, as such, further issues requiring attention have been identified and may
continue to be identified.
Although the Group provides updates to various regulators on its remediation and other program activities, there is no assurance that those or
other regulators will agree that its remediation and program update activities will be adequate or effectively enhance the Group’s compliance
programs.
Failure to comply with our financial crime obligations has resulted, and could in the future result, in significant regulatory enforcement actions,
reputational risks and other consequences as detailed in other sections of these Risk factors. There is additional information on financial crime
matters in Significant Developments (pages 54-56).
Reputational damage has harmed, and could in the
future harm, our business and prospects
-Reputational and sustainability risk
-Negative customer outcomes
We face reputational risk where our plans, processes, performance and behaviours differ from the expectations, beliefs and perceptions of our
stakeholders.
Our actions or inactions (or those of our customers, employees, suppliers, contractors, agents, authorised representatives, credit representatives,
joint-venture partners, strategic partners or other counterparties) could result in reputational damage when they cause, or are perceived to cause,
a negative outcome for customers, shareholders, the community or other stakeholders. This could arise from, for example, failure or perceived
failure
64WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
DIRECTORS’ REPORT
Risk factors (Continued)
We have and could suffer losses due to litigation
-Compliance and conduct risk
-Enforcement action
-Litigation
-Class actions
-Substantial fines and penalties
Litigation has been, and could in the future be, commenced against us by a range of plaintiffs, such as customers, shareholders, employees,
suppliers, counterparties, activists, receivers and regulators and may, either individually or in aggregate, adversely affect the Group’s business,
operations, prospects, reputation or financial condition.
Recently, there has been an increase in class action proceedings in the broader market, many of which have resulted in significant monetary
settlements. The risk of class actions has been heightened by a number of factors, including regulatory enforcement actions and willingness by
regulators to commence proceedings, increased regulatory investigations and inquiries, media scrutiny, increased prospect of regulatory reforms
(including those that may eliminate any actual or perceived barriers to such litigation), and the growth of third party litigation funding. Class actions
commenced against competitors could also lead to similar proceedings against us, and may also impact attitudes of counterparties to Westpac
proceedings or Westpac’s standing more broadly. There has also been an increase in proceedings related to third party scams and fraud activity,
and the bank has been and may be joined to such proceedings.
Activism strategies directed at financial institutions, particularly related to climate change, sustainability, diversity equity and inclusion initiatives
and energy transition, have also increased globally in recent years. These strategies may involve litigation to highlight issues, enforce legal or
regulatory standards, or influence the target’s operations and activities. We are currently, and may continue to be, exposed to such litigation
and/or activist strategies.
Litigation is subject to many uncertainties and the outcome may not be predicted accurately. Furthermore, the Group’s ability to respond to and
defend litigation may be adversely affected by inadequate record keeping. The Group’s ability to settle litigation on reasonable terms will be
affected by attitudes of counterparties. Costs will be incurred associated with managing, responding to and/or defending litigation.
Depending on the outcome of any litigation, the Group has been, and may in the future be, required to comply with broad court orders, including
compliance orders, adverse publicity orders, enforcement orders or otherwise pay significant damages, fines, penalties or legal costs. The actual
amount paid following a settlement or determination by a Court for any legal proceedings may be materially higher or lower than any relevant
provision (where applicable) or that any contingent liability may be larger than anticipated. There is also a risk that additional litigation or
contingent liabilities arise, all of which could adversely affect our business, prospects, reputation, financial performance or financial condition.
There is additional information on certain legal proceedings that may affect the Group in Significant Developments (pages 54-56) and in Note 13
(pages 101-105) to the financial statements.
We are exposed to adverse funding market conditions
-Market risk
-Volatility and disruption
-Funding and liquidity risk
-Credit risk
We rely on deposits and global funding markets to fund our business and source liquidity. Our funding costs are subject to funding market and
general economic and geopolitical conditions, in addition to our credit profile.
Funding market conditions, and the behaviour of market participants, can shift significantly over very short periods of time, resulting in extreme
volatility, disruption and decreased liquidity. The main risks we face relate to reduced
to adequately monitor, prevent or respond to community, environmental, social and ethical issues or expectations or failure to comply with
regulatory requirements or expectations. We are also exposed to contagion risk from incidents in (or affecting) other financial institutions and/or
the financial sector more broadly (e.g. issues affecting the cash-in-transit industry and the potential for disruption to the availability of cash, as well
as flow on consequences including runs on cash).
Failure, or perceived failure, to address issues that could or do give rise to reputational risk, has created, and could in the future create, additional
legal risk, including regulatory investigations, regulatory enforcement actions, fines and penalties or litigation or other actions brought by third
parties (including class actions), and the requirement to remediate and compensate customers, including prospective customers, investors and
the market. It could also result in losing customers or restricting our ability to efficiently access capital markets. This could adversely affect our
business, prospects, financial performance or financial condition.
65
Risk factors (Continued)
market confidence, market access, appetite for exposure to Westpac; increased cost of funding; and impacts from deterioration in
macroeconomic conditions. Additionally, shifts in investment preferences could result in deposit withdrawals, increasing our reliance on other
funding sources. These other sources may offer lower levels of liquidity at higher costs.
If market conditions deteriorate due to economic, political, regulatory, or other reasons (including those idiosyncratic to Westpac), there may be a
loss of confidence in bank deposits, leading to unexpected withdrawals. These events can transpire quickly and be exacerbated by information
transmission on social media. This could increase funding costs, constrain our liquidity, funding and lending activities and threaten our financial
solvency. In such events, even robust levels of capital may not be sufficient to safeguard Westpac against detrimental loss of funding.
If our current sources of funding become insufficient, we may need to seek alternatives, subject to market conditions, our credit ratings, reputation
and confidence issues, and market capacity. These alternatives may be more expensive or on unfavourable terms. If we are unable to source
appropriate funding, we may be forced to reduce or suspend business activities (e.g. lending) or operate with smaller liquidity buffers. If we are
unable to source funding or generate liquidity for an extended period, we may not be able to pay our debts as and when they fall due or meet
other contractual obligations. These outcomes may adversely affect our financial performance, liquidity, capital resources or financial condition.
We also enter into collateralised derivative obligations, which may require us to post additional collateral based on market movements. This has
the potential to adversely affect our liquidity or ability to use derivatives to hedge interest rate, currency and other financial risks.
We could be adversely affected by the risk of
inadequate capital levels
-Capital adequacy
-Capital risk
-Regulatory capital requirements
The Group is subject to the risk of an inadequate level or composition of capital to support business activities, meet regulatory capital
requirements under normal or stressed conditions, and to maintain our solvency. Even robust levels of capital may not be sufficient to ensure our
ongoing sustainability in the event of a bank run, where depositors quickly withdraw funds because of concerns about bank failure.
Our capital levels are determined by regulation and risk appetite and informed by stress testing. We establish buffers on regulatory requirements
to maintain capital adequacy during stressed periods by considering factors such as our balance sheet, forecasts, portfolio mix, potential capital
headwinds (including real estate valuations, inflation and rising interest rates) and stressed outcomes. Stress testing models and assumptions
may or may not accurately predict the nature and magnitude of particular stress events. The macroeconomic environment, stressed conditions
and/or regulatory framework could result in a material increase to risk weighted assets, impact our capital adequacy, trigger capital distribution
constraints, threaten our financial viability and/or require a highly dilutive capital raising.
Capital distribution constraints apply when an ADI’s Common Equity Tier 1 Capital (CET1) ratio falls within the prudential capital buffer range
(consisting of the Capital Conservation Buffer plus any Countercyclical Capital Buffer). This could impact future dividends and distributions on
Additional Tier 1 (AT1) capital instruments. If AT1 and Tier 2 capital securities we have issued convert into ordinary shares (e.g. where our CET1
ratio falls below a certain level or APRA determines we would become non-viable without conversion of capital instruments or equivalent support),
existing shareholders could face significant value dilution. Additionally, APRA has announced its intention to phase out AT1 capital instruments
(see further discussion in Significant Developments (pages 54-56)).
Our business is substantially dependent
on the Australian and New Zealand
economies, and could be adversely
affected by a material downturn or
shock to these economies or other
financial systems
-Strategic risk
-Macroeconomic risks
-Market disruption
-Domestic and international economic conditions
-Geopolitical risks
-Credit risk
Our revenues and earnings are dependent on domestic and international economic activity, business conditions and the level of financial services
our customers require. Most of our business is conducted in Australia and New Zealand so our performance is influenced by the level and cyclical
nature of activity in these countries. The financial services industry and capital markets have been, and may continue to be, adversely affected by
volatility, global economic conditions (including inflation and rising interest rates), external events, geopolitical instability, political developments,
cyberattacks or a major systemic shock.
66WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
DIRECTORS’ REPORT
Risk factors (Continued)
Market and economic disruptions (or the possibility of interest rates remaining higher for longer than anticipated) could cause consumer and
business spending to decrease, unemployment to rise, demand for our products and services to decline and credit losses to increase, thereby
reducing our earnings. These events could undermine confidence in the financial system, reduce liquidity, impair access to funding and adversely
affect our customers and counterparties. Conversely, an environment with falling interest rates could reduce margins and also impact earnings.
Given Australia’s reliance on exports, a slowdown in economic growth or change in policy settings of Australia’s major trading partners, which
may be caused by their foreign policies (including the adoption of protectionist trade measures such as tariffs or sanctions) could negatively
impact the Australian economy. This could result in reduced demand for our products and services and affect supply chains, the level of economic
activity and the ability of our borrowers to repay their loans.
The nature and consequences of any such events are difficult to predict but each of these factors could adversely affect our business, prospects,
financial performance or financial condition.
Declines in asset markets could adversely
affect our operations or profitability and an
increase in impairments and provisioning could
adversely affect our financial performance or
financial condition
-Market risk
-Decline in asset values
-Impairments
-Credit risk
Declines in Australian, New Zealand or other asset markets, including equity, bond, residential and commercial property markets, have adversely
affected, and could in the future adversely affect, our operations and profitability. Declining asset prices including as a result of change in taxation
policies and potential legislation to restrict rents, could also impact customers and counterparties and the value of security (including residential
and commercial property) we hold. This may impact our ability to recover amounts owing to us if customers or counterparties default. It may also
affect our impairment charges and provisions, in turn impacting our financial performance, financial condition and capital levels. Declining asset
prices could also impact our wealth management business as its earnings partly depend on fees based on the value of securities and/or assets
held or managed.
We establish provisions for credit impairment based on accounting standards using current information and our expectations. If economic
conditions deteriorate beyond our expectations, some customers and/or counterparties could experience higher financial stress, leading to an
increase in impairments, defaults and write-offs, and higher provisioning. Changes in regulatory expectations in relation to the treatment of
customers in hardship could lead to increased impairments and/or higher provisioning. Such events could adversely affect our liquidity, capital
resources, financial performance or financial condition.
Credit risk also arises from certain derivative, clearing and settlement contracts we enter into, and from our dealings in, and holdings of, debt
securities issued by other institutions and government agencies, the financial conditions of which may be affected to varying degrees by economic
conditions in global financial markets.
Sovereign risk may destabilise financial
markets adversely
-Sovereign risk
-Defaults
Potential sovereign contractual defaults, sovereign debt defaults and the risk that governments will nationalise parts of their economy including
assets of financial institutions (such as Westpac) could negatively impact the value of our holdings of assets. Such an event could also destabilise
global financial markets, adversely affecting our liquidity, financial performance or financial condition.
We could be adversely affected by the failure
to maintain our credit ratings
-Availability of funding
-Cost of funding
-Downgrade
Credit ratings are independent opinions on our creditworthiness. Our credit ratings can affect the cost and availability of our funding and may be
important to investors, certain institutional customers and counterparties when evaluating their investments in the Group, our products and
services.
A rating downgrade could be driven by a downgrade of Australia’s sovereign credit rating, a material weakening in our financial performance, or
one or more of the risks identified in this section or by other events including regulatory
67
Risk factors (Continued)
changes or changes to the methodologies rating agencies use to determine credit ratings. A credit rating or rating outlook could be downgraded
or revised where credit rating agencies believe there is a very high level of uncertainty on the impact to key rating factors from a significant event.
A downgrade to our credit ratings could have an adverse effect on our cost of funds, collateral requirements, liquidity, competitive position, our
access to capital markets and our financial stability. The extent and nature of these impacts would depend on various factors, including the extent
of any rating change, differences across agencies (split ratings) and whether competitors or the sector are also impacted.
We face intense competition in all aspects of
our business
-Margins
-Regulatory scrutiny
-Strategic risk
-New entrants
The financial services industry is highly competitive, with a range of firms, including retail and commercial banks, investment banks, other
financial service companies, fintech companies and businesses in other industries with financial services aspirations (including those who are not
subject to the same capital and regulatory requirements or who derive substantial revenue from other markets, which may allow them to operate
more flexibly and with lower costs of funds).
Emerging competitors are also increasingly altering the competitive environment by adopting new business models or seeking to use new
technologies to disrupt existing business models.
The competitive environment may also change due to increased scrutiny by regulators in the sector and other legislative reforms, which will
stimulate competition, improve customer choice and may prompt increased competition from new and existing firms.
Competition in the various markets in which we operate has led, and may continue to lead, to a decline in our margins or market share.
Deposits fund a significant portion of our balance sheet and have been a relatively stable source of funding. If we fail to successfully compete for
deposits, we may face increased funding costs, leading us to seek access to other types of funding, or result in reduced lending.
Our ability to compete depends on our ability to offer products and services that meet evolving customer preferences. Failure to adapt could result
in lost customers, which could negatively impact our business, prospects, financial performance or financial condition. For more detail refer to Our
Operating Environment section in the 2024 Annual Report.
We have suffered, and could continue to suffer,
losses due to operational risk
-Operational risk
-Change execution
-Records management
-Ineffective processes and controls
-Fraud and scams
-Third parties
-AI
Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. It includes,
among other things, model, data, operations, change execution and third party risks. While we have policies, processes and controls to manage
these risks, they have not always been, or may not be, effective.
Ineffective processes and controls (including those of our contractors, agents, authorised representatives and credit representatives, or
inadequate supervision and oversight of their activities) have resulted in, and could continue to result in, adverse outcomes for customers,
employees or other third parties.
Operational breakdowns can occur if measures are implemented too quickly without sufficient validation (or not quickly enough) in response to
external events, potentially leading to financial losses, customer remediation, regulatory scrutiny and intervention, fines, penalties and capital
overlays and, depending on the nature of the failure, litigation, including class action proceedings.
Examples of operational risks include:
●Fraud and scams. We have incurred, and could in the future incur, losses from fraud and scams, including fraudulent applications for loans
(including misrepresentations by customers), or from incorrect or fraudulent
68WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
DIRECTORS’ REPORT
Risk factors (Continued)
payments and settlements. Such losses, including the potential for additional customer compensation and financial penalties, could increase
significantly due to regulatory change. This includes if the Group does not adhere to obligations set out in the Scams Prevention Framework
within the Competition and Consumer Act 2010 (Cth), which was introduced by the Scams Prevention Framework Act 2025 (Cth). Fraudulent
conduct can also arise from external parties seeking to access our systems or customer accounts, the use of mule accounts, the use of
accounts to commit investment scams and where identification records are compromised due to third party cybersecurity events. These risks
are heightened by real-time transaction capability, and we are also exposed to contagion risk from incidents affecting other institutions. If
systems, procedures and protocols for preventing and managing fraud, scams or improper access to our systems and customer accounts fail,
or are inadequate or ineffective, they could lead to losses which could adversely affect our customers, business, prospects, reputation,
financial performance or financial condition. Regulatory and compliance requirements can impede the ability to swiftly identify or respond to a
fraud or scam, or to communicate with affected parties.
●Records management. A failure to adequately implement and monitor effective records management policies and processes could impact our
ability to safeguard information, locate records, respond to regulatory notices, conduct remediation, and meet record retention and destruction
obligations. Where there are inadequacies in implementation of the records management lifecycle in our systems or embedding records
management across the Group, these risks are further heightened. Where records are retained for longer than required this could increase the
impacts of cyber and privacy incidents such as data breaches.
●Artificial Intelligence (AI). As AI adoption to support our customers and business increases, we may become more exposed to risks associated
with the use of this technology, such as lack of transparency, inaccurate data input, unintentional bias, breaches of confidentiality and privacy
obligations, inaccurate outputs and decisions or other unintended consequences that are inconsistent with our policies or values. In addition,
failure or delays in adopting AI could lead to competitive disadvantages or otherwise not leveraging capability that could support management
of risk or improve customer outcomes. Leveraging AI could have financial, regulatory, conduct, reputational and customer impacts.
●Third party. We rely on third parties, both in Australia and overseas, to provide services to us and our customers. Failures by these third
parties, including our authorised representatives and credit representatives, to deliver services as required and in accordance with law,
regulation and regulatory expectations could disrupt our ability to provide products and services and adversely impact our customers,
operations, financial performance or reputation. For example, we rely on third parties to provide cash transport, handling and storage services.
With reduced demand for cash placing pressure on the cash-in-transit (CIT) industry, we are exposed to operational risk including loss of (or
delays in accessing) significant amounts of cash held by CIT providers on our behalf (this risk is exacerbated for us as we currently provide
commercial cash distribution for the industry under an arrangement with one key industry participant which terminates in July 2025), reduced
availability of cash in the system generally (which could lead to a run on cash), potential increased costs (for example, to enable us/third party
providers to meet regulatory requirements or satisfy orders made by a tribunal), and related consequences where we or our customers suffer
loss or damage due to disruptions to CIT services.
●Change execution. We face risks in delivering technology and other change programs, including the risks that a change program fails to
deliver the desired outcomes, or fails to reduce, pre-empt, mitigate and manage the challenges associated with transformation delivery. This
could result in business disruption and delays, technology challenges, financial loss or further regulatory scrutiny. If our technology systems or
financial infrastructure do not operate correctly, this may also cause loss or damage to us or our customers. This can also arise from
complexities in our systems, and the interaction between those systems. This could include, for example, where systems issues result in
incorrect fees or charges being applied to customers, or other poor customer outcomes. This could potentially lead to financial losses,
customer remediation, regulatory scrutiny and intervention, fines, penalties and capital overlays and, depending on the nature of the failure,
litigation, including class action proceedings.
●Insurance coverage. There is a risk that we will not be able to obtain and/or have not obtained appropriate insurance coverage for the risks
that we may be exposed to. This could be due to lack of available or adequate insurance, an increase in the cost of insurance, or failure of the
insurance underwriter. If an insurance policy is not available or does not respond to a loss, we will not have the ability to recover such loss
from an insurance policy.
We could suffer losses due to market volatility
-Market risk
-Geopolitical risks
-Volatility and disruption
-Credit risk
Market risk is the risk of an adverse impact on the Group’s financial performance, financial position, capital and liquidity, resulting from changes in
market factors, such as foreign exchange rates, commodity prices, equity prices, credit spreads and interest rates. Market risk is present in both
banking book and trading book. We are exposed
69
Risk factors (Continued)
to market risk due to our financial markets businesses, asset and liability management, our holdings in liquid asset securities, dependence on
accessing capital markets and our defined benefit plan.
Changes in market factors could be driven by a variety of developments including economic disruption, geopolitical events, trade tensions, market
liquidity or concerns relating to major market participants or sectors. The resulting market volatility could potentially lead to losses and may
adversely affect our financial performance and capital position.
As a financial intermediary, we underwrite listed and unlisted debt securities. We could suffer losses if we fail to syndicate or sell down this risk to
others. This risk is more pronounced in times of heightened market volatility.
Poor data quality could adversely affect our
business and operations
-Operational risk
-Data quality
-Poor customer and risk outcomes
Having accurate, complete and reliable data, supported by appropriate data controls, retention and, destruction methods and access to internal
frameworks and processes, is critical to the effective operation of our businesses. Data plays a key role in determining how we provide products
and services to customers, the effectiveness of our systems and risk management frameworks, strategic planning and our ability to make
effective decisions.
Some of our businesses are, and may continue to be, affected by poor data quality and/or limited data availability due to a number of factors,
including inadequacies across systems, processes and policies, or ineffectively implemented data management frameworks.
This could lead to poor customer service outcomes, adverse risk management outcomes, deficient system outputs and processes. This is
because data quality inadequacies render such data unreliable to assist in making informed business decisions. Deficiencies with internal
systems and processes could negatively impact our decision-making in areas such as the provision of credit to a customer, and the terms on
which a credit facility is provided. The production of accurate data is also critical for other functions across the Group, such as financial and other
reporting (internal and external).
Poor data quality and availability impacts our ability to effectively monitor and manage operations across the Group, comply with production
notices, respond to regulatory notices, defend and respond to litigation and conduct remediation activities. Conflicting data retention or destruction
obligations may increase such risks.
Poor data and/or poor data retention/destruction methods and deficient controls that result in control gaps and weaknesses, could negatively
impact our ability to meet compliance obligations (including regulatory reporting obligations). Previously, this has led to regulatory investigations or
adverse findings and actions against the Group, and such risks remain if we fail to maintain an acceptable level of data quality and effective
oversight practices.
Our data related frameworks and processes must be continuously reviewed, and improved where required, to ensure our data quality and data
management practices remain relevant, fit for purpose and sustainable. This is because outdated or unsustainable practices may lead to
inefficient data management practices and/or poor quality data.
Potential consequences from holding poor quality data and/or having poor data oversight and controls include adverse impacts to the Group’s
ability to effectively operate our existing businesses, securing prospective business from third parties, and our reputation, financial performance
and financial condition.
Certain strategic decisions may have adverse
effects on our business
-Strategic risk
-Warranties and indemnities
-Divestments and acquisitions
-Implementation risk
We evaluate and implement strategic decisions, priorities and objectives including where we can simplify or streamline, diversify or innovate our
business or products. These activities can be complex, costly and may not proceed as planned. For example, we may experience difficulties
completing certain transactions, separating or integrating businesses in the scheduled timeframe or at all, disruptions to operations, diversion of
management resources or higher than expected transaction costs, impacts on third parties, and there may be differing market views about a
strategic choice, which may cause reputational damage.
Any failure to successfully divest businesses may expose us to higher operating costs and higher inherent risks in those businesses. Decisions to
retain businesses may also expose us to the higher inherent risks in those businesses. For example, our Pacific businesses face several risks
including heightened operational, sovereign, financial crime and exchange control risks which could adversely affect our customers, business,
prospects, reputation, financial
70WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
DIRECTORS’ REPORT
Risk factors (Continued)
performance or financial condition. In divesting businesses, we have given (and could in future divestments give) warranties and indemnities in
favour of counterparties relating to certain pre-completion matters and certain other commitments, including in relation to transitional services.
These could result in a liability to make significant payments to these counterparties while these obligations remain on foot. To manage risks
related to conduct and customer redress associated with divestments, we hold additional operational risk capital pursuant to APRA’s published
guidance. These contingent liabilities are described in Note 13 (pages 101-105) to the financial statements.
Acquiring and investing in businesses also comes with risks and costs, including underperformance, assumption of unknown and unaccounted for
liabilities, regulatory risks or overvaluation of a target business.
Operational, cultural, governance, compliance and risk appetite differences between us and an acquired business may lead to longer and costlier
integration.
Internal factors, for example, inadequate funding, resourcing, business capabilities or operating model, or failing to identify, understand or
respond effectively to changes in the external business environment, including economic, geopolitical, regulatory, consumer sentiment,
technological, environmental, social and competitive factors, may hinder successful strategy implementation. This could adversely affect us,
including our ability to increase or maintain market share or resulting pressure on margins and fees.
These risks could negatively impact our business, growth prospects, reputation, engagement with regulators, financial performance or financial
condition.
Other risks
●Failure to recruit and retain key executives, employees and Directors may have adverse effects on our business, prospects, reputation,
financial performance or financial condition. Macro-environmental factors including low unemployment, restricted migration levels, on-shoring
of work and the competitive talent market, may also have an adverse impact on attracting specialist skills for the Group.
●Changes to the critical accounting assumptions and estimates (outlined in Note 1 (pages 79-80) to the financial statements) could
expose the Group to losses greater than those anticipated or recognised, which could adversely affect our financial performance, financial
condition and reputation.
Rounding of amounts
ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 applies to Westpac and in accordance with that Legislative
Instrument all amounts have been rounded to the nearest million dollars unless otherwise stated.
71
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Westpac Banking Corporation
I declare that, to the best of my knowledge and belief, in relation to the review of Westpac Banking Corporation for the half year ended 31 March
2025 there have been:
i.no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the review; and
ii.no contraventions of any applicable code of professional conduct in relation to the review.
KPMGKim Lawry
Partner
Sydney
4 May 2025
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English
company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global
organisation. Liability limited by a scheme approved under Professional Standards Legislation.
72WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
DIRECTORS’ REPORT
Responsibility Statement
The Directors of Westpac Banking Corporation confirm that to the best of their knowledge:
(i)the interim financial statements have been prepared in accordance with AASB 134 Interim Financial Reporting and are in compliance with IAS
34 Interim Financial Reporting issued by the International Accounting Standards Board; and
(ii)the Directors’ report includes a fair review of the information required by DTR 4.2.7 R of the Disclosure Guidance and Transparency Rules of the
United Kingdom Financial Conduct Authority.
The Directors’ report is signed in accordance with a resolution of the Board of Directors.
Steven GreggAnthony Miller
ChairmanManaging Director and Chief Executive Officer
Sydney, Australia
4 May 2025
73
2025 INTERIM
FINANCIAL
REPORT
Consolidated income statement
Consolidated statement of comprehensive income
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated cash flow statement
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Financial statements preparation
Note 2. Segment reporting
Note 3. Net interest income and average balance sheet and interest rates
Note 4. Non-interest income
Note 5. Operating expenses
Note 6. Income tax
Note 7. Earnings per share
Note 8. Loans
Note 9. Provision for expected credit losses
Note 10. Credit quality
Note 11. Deposits and other borrowings
Note 12. Fair values of financial assets and financial liabilities
Note 13. Provisions, contingent liabilities, contingent assets and credit commitments
Note 14. Shareholders’ equity
Note 15. Notes to the consolidated cash flow statement
Note 16. Subsequent events
STATUTORY STATEMENTS
Directors’ declaration
Independent auditor’s review report to the members of Westpac Banking Corporation
74WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
CONSOLIDATED INCOME STATEMENT
Westpac Banking Corporation and its controlled entities
Half YearHalf YearHalf Year% Mov’t
MarchSeptMarchMar 25 Mar 25
$m
Note 2025 2024 2024 - Sept 24 - Mar 24
Interest income:
Calculated using the effective interest method327,10726,88125,85815
Other3977922686642
Total interest income28,08427,80326,54416
Interest expense
3(18,733)(18,177)(17,417)38
Net interest income
9,3519,6269,127(3)2
Non-interest income
Net fees
48408308421-
Net wealth management
4239223218710
Trading4298341363(13)(18)
Other
465(22)40large63
Total non-interest income1,4421,3721,4635(1)
Net operating income
10,79310,99810,590(2)2
Operating expenses
5(5,698)(5,549)(5,395)36
Impairment (charges)/benefits
9(250)(175)(362)43(31)
Profit before income tax expense
4,8455,2744,833(8)-
Income tax expense
6(1,520)(1,626)(1,491)(7)2
Profit after income tax expense
3,3253,6483,342(9)(1)
Net profit attributable to non-controlling interests (NCI)
(8)----
Net profit attributable to owners of Westpac Banking Corporation (WBC)
3,3173,648 3,342 (9)(1)
Earnings per share (cents)
Basic
7 96.7105.4 95.6 (8)1
Diluted
7 96.0102.5 91.6 (6)5
The above consolidated income statement should be read in conjunction with the accompanying notes.
75
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
Westpac Banking Corporation and its controlled entities
Half YearHalf YearHalf Year% Mov’t
MarchSeptMarchMar 25 Mar 25
$m
2025 2024 2024 - Sept 24 - Mar 24
Profit after income tax expense3,3253,6483,342(9)(1)
Other comprehensive income/(expense)
Items that may be reclassified subsequently to profit or loss
Gains/(losses) recognised in equity on:
Debt securities measured at fair value through other comprehensive income (FVOCI)
(9)(557) (31) (98)(71)
Cash flow hedging instruments
(39)49 452 largelarge
Transferred to income statement:
Debt securities measured at FVOCI
(4)4 1 largelarge
Cash flow hedging instruments
21457 20 largelarge
Loss allowance on debt securities measured at FVOCI--1-(100)
Exchange differences on translation of foreign operations (net of associated hedges)
87(138) (162) largelarge
Income tax on items taken to or transferred from equity:
Debt securities measured at FVOCI
5167 12 (97)(58)
Cash flow hedging instruments(53)(35)(147)51(64)
Items that will not be reclassified subsequently to profit or loss
Gains/(losses) on equity securities measured at FVOCI (net of tax)
31(15) 16 large94
Own credit adjustment on financial liabilities designated at fair value (net of tax)
(20)30 (17) large18
Remeasurement of defined benefit obligation recognised in equity (net of tax)
(10)41 (55) large(82)
Net other comprehensive income/(expense) (net of tax)
202(397) 90 large124
Total comprehensive income
3,5273,251 3,432 83
Attributable to:
Owners of WBC
3,5193,252 3,433 83
NCI
8(1) (1) largelarge
Total comprehensive income
3,5273,251 3,432 83
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
76WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
CONSOLIDATED BALANCE SHEET
Westpac Banking Corporation and its controlled entities
As atAs atAs at% Mov’t
31 March30 Sept31 MarchMar 25 Mar 25
$m
Note 2025 2024 2024 - Sept 24 - Mar 24
Assets
Cash and balances with central banks
58,35265,667 95,907 (11)(39)
Collateral paid
6,1906,269 4,671 (1)33
Trading securities and financial assets measured at fair value through income
statement (FVIS)
51,08849,228 33,943 451
Derivative financial instruments
19,34724,109 15,795 (20)22
Investment securities
115,186103,885 90,587 1127
Loans
8 824,808806,767 784,839 25
Other financial assets
7,8865,456 11,266 45(30)
Property and equipment
2,2542,251 2,179 -3
Tax assets
2,0952,160 1,999 (3)5
Intangible assets
10,59910,746 10,708 (1)(1)
Other assets
1,0881,006 767 842
Total assets
1,098,8931,077,544 1,052,661 24
Liabilities
Collateral received
3,7383,078 2,534 2148
Deposits and other borrowings
11 739,250720,489 702,226 35
Other financial liabilities
44,68138,077 54,392 17(18)
Derivative financial instruments
21,52030,974 18,417 (31)17
Debt issues
171,864169,284 159,781 28
Tax liabilities
23569 459 (96)(95)
Provisions
13 2,2542,505 2,414 (10)(7)
Other liabilities
2,5072,633 2,598 (5)(4)
Total liabilities excluding loan capital
985,837967,609 942,821 25
Loan capital
40,70337,883 37,280 79
Total liabilities
1,026,5401,005,492 980,101 25
Net assets
72,35372,052 72,560 --
Shareholders’ equity
Share capital:
Ordinary share capital
14 37,35437,958 38,944 (2)(4)
Treasury shares
14 (820)(758) (758) 88
Reserves
14 2,0301,732 2,157 17(6)
Retained profits
33,45132,773 32,179 24
Total equity attributable to owners of WBC72,01571,70572,522-(1)
NCI1433834738(3)large
Total shareholders’ equity and NCI72,35372,05272,560--
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
77
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Westpac Banking Corporation and its controlled entities
Total
equityTotal
Shareattributableshareholders’
capitalReservesRetainedto ownersequity and
$m
(Note 14) (Note 14) profits of WBC NCI NCI
Balance as at 30 September 2023
39,124 1,935 31,436 72,495 44 72,539
Profit after income tax expense
- - 3,3423,342-3,342
Net other comprehensive income/(expense)
- 163(72)91(1)90
Total comprehensive income/(expense)
- 163 3,270 3,433 (1) 3,432
Transactions in capacity as equity holders
Dividends on ordinary shares
a
- - (2,527) (2,527) - (2,527)
Share buyback
b
(849)--(849)-(849)
Other equity movements:
Share-based payment arrangements
- 59 - 59 - 59
Purchase of shares
(33) - - (33) - (33)
Net acquisition of treasury shares
(56) - - (56) - (56)
Other
- - - - (5) (5)
Total contributions and distributions
(938) 59 (2,527) (3,406) (5) (3,411)
Balance as at 31 March 2024
38,186 2,157 32,179 72,522 38 72,560
Profit after income tax expense
- - 3,6483,648-3,648
Net other comprehensive income/(expense)
- (467)71(396)(1)(397)
Total comprehensive income/(expense)
- (467) 3,719 3,252 (1) 3,251
Transactions in capacity as equity holders
Dividends on ordinary shares
a
- - (3,125) (3,125) - (3,125)
Share buyback
b
(963)--(963)-(963)
Other equity movements:
Share-based payment arrangements
- 37 - 37 - 37
Purchase of shares
(23) - - (23) - (23)
Net acquisition of treasury shares
- - - - - -
Acquisition of minority interest
c
-5-5(30)(25)
Preference shares issued
d
----339339
Other
- - - - 1 1
Total contributions and distributions
(986) 42 (3,125) (4,069) 310 (3,759)
Balance as at 30 September 2024
37,200 1,732 32,773 71,705 347 72,052
Profit after income tax expense
- - 3,3173,31783,325
Net other comprehensive income/(expense)
- 232(30)202-202
Total comprehensive income/(expense)
- 232 3,287 3,519 8 3,527
Transactions in capacity as equity holders:
Dividends on ordinary shares
a
- - (2,614) (2,614) - (2,614)
Share buyback
b
(581)--(581)-(581)
Other equity movements:
Share-based payment arrangements
- 67 - 67 - 67
Purchase of shares
(21) - - (21) - (21)
Net acquisition of treasury shares
(64) - - (64) - (64)
Other
- (1) 5 4 (17) (13)
Total contributions and distributions
(666) 66 (2,609) (3,209) (17) (3,226)
Balance as at 31 March 2025
36,534 2,030 33,451 72,015 338 72,353
a.Relates to fully franked dividends at 30%:
- First Half 2025: 2024 final dividend of 76 cents per share;
- Second Half 2024: 2024 interim dividend of 75 cents per share and special dividend of 15 cents per share; and
- First Half 2024: 2023 final dividend of 72 cents per share.
b.Westpac previously announced its intention to undertake a $3.5 billion on market buyback of WBC ordinary shares. In First Half 2025, Westpac has bought back and cancelled
17,711,952 ordinary shares. A further 497,280 shares were acquired on 31 March 2025 and cancelled on 2 April 2025 (Second Half 2024: 33,223,149, First Half 2024:
34,442,450). The ordinary shares were bought back at an average price of $31.92 (Second Half 2024: $28.99, First Half 2024: $24.65).
c.During 2024, Westpac acquired 8.74% of the non-controlling interest in Westpac Bank-PNG-Limited, which raised its interest to 98.65%.
d.During 2024, Westpac New Zealand Limited issued NZD 375 million (AUD 339 million) of perpetual preference shares that qualified as Additional Tier 1 capital under RBNZ’s
criteria. Westpac recognises this instrument as a non-controlling interest.
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
78WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
CONSOLIDATED CASH FLOW STATEMENT
Westpac Banking Corporation and its controlled entities
Half YearHalf YearHalf Year% Mov’t
MarchSeptMarchMar 25 Mar 25
$m
Note 2025 2024 2024 - Sept 24 - Mar 24
Cash flows from operating activities
Interest received
27,28826,84925,66626
Interest paid
(18,331)(17,457)(16,543)511
Dividends received13-(67)-
Other non-interest income received
3612,3771,937(85)(81)
Operating expenses paid
(5,240)(4,730)(4,949)116
Income tax paid
(2,026)(1,557)(1,812)3012
Cash flows from operating activities before changes in operating assets and
liabilities
2,0535,4854,299(63)(52)
Net (increase)/decrease in:
Collateral paid
555(1,882)(215)largelarge
Trading securities and financial assets measured at FVIS
(1,394)(15,530)(3,464)(91)(60)
Derivative financial instruments
8,256(1,149)313largelarge
Loans
(19,357)(22,346)(12,737)(13)52
Other financial assets
(269)(9)(339)large(21)
Other assets
17(38)4largelarge
Net increase/(decrease) in:
Collateral received
378653(971)(42)large
Deposits and other borrowings
16,83319,76115,482(15)9
Other financial liabilities
4,895(10,842)3,758large30
Other liabilities
25(5)(60)large
Net cash provided by/(used in) operating activities
15 11,969(25,892)6,125large95
Cash flows from investing activities
Proceeds from investment securities
24,66327,979 19,645 (12)26
Purchase of investment securities
(34,850)(40,415) (32,371) (14)8
Purchase of controlled entities and other businesses-(30)-(100)-
Purchase of associates(10)(4)-150-
Proceeds from sale of loans portfolio
a
1,472----
Proceeds from disposal of property and equipment
1240 6 (70)100
Purchase of property and equipment
(142)(145) (90) (2)58
Purchase of intangible assets
(347)(453) (329) (23)5
Net cash provided by/(used in) investing activities
(9,202)(13,028) (13,139) (29)(30)
Cash flows from financing activities
Proceeds from debt issues (net of issue costs)
b
34,10639,606 40,639 (14)(16)
Redemption of debt issues
b
(42,508)(27,226) (39,874) 567
Payments for the principal portion of lease liabilities(200)(208)(208)(4)(4)
Issue of loan capital (net of issue costs)
3,5382,740 3,586 29(1)
Redemption of loan capital
(2,474)(1,945) (12) 27large
Payment for share buyback(565)(963)(849)(41)(33)
Issue of perpetual preference shares (net of issue cost)-339-(100)-
Purchase of shares relating to share-based payment arrangements(21)(23)(33)(9)(36)
Purchase of treasury shares (including RSP and EIP restricted shares)
(64)- (56) -14
Net sale/(purchase) of other treasury shares-----
Payment of dividends
(2,614)(3,125) (2,527) (16)3
Dividends paid to NCI(13)1(5)large160
Purchase of shares from NCI-(25)-(100)-
Net cash provided by/(used in) financing activities
b
(10,815)9,171 661 largelarge
Net increase/(decrease) in cash and balances with central banks
(8,048)(29,749) (6,353) (73)27
Effect of exchange rate changes on cash and balances with central banks
733(491) (262) largelarge
Cash and balances with central banks as at beginning of the period
65,66795,907 102,522 (32)(36)
Cash and balances with central banks as at end of the period
58,35265,667 95,907 (11)(39)
a.The sale of the auto finance loan portfolio to Resimac Group Limited was completed on 1 March 2025. A loss on sale of $8 million is included in Net gain/(loss) on disposal of
assets in Note 4 (page 87).
b.Comparatives for the First Half 2024 were revised to report short-term debt issuances and redemptions that were issued and redeemed within the same period on a gross
basis.
The above consolidated cash flow statement should be read in conjunction with the accompanying notes.
79
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
Note 1. Financial statements preparation
This general purpose Interim Financial Report for the half year ended 31 March 2025 has been prepared in accordance with Australian Accounting
Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001 (Cth) and is also compliant with International Accounting Standard
IAS 34 Interim Financial Reporting.
The Interim Financial Report does not include all the notes of the type normally included in an Annual Financial Report. Accordingly, this Interim
Financial Report is to be read in conjunction with the Annual Financial Report for the year ended 30 September 2024 and any relevant public
announcements made by Westpac during the interim reporting period in accordance with the continuous disclosure requirements of the
Corporations Act 2001 (Cth) and the ASX Listing Rules.
The Interim Financial Report complies with current Australian Accounting Standards (AAS) as they relate to Interim Financial reports.
The Interim Financial Report was authorised for issue by the Board of Directors on 4 May 2025.
All amounts have been rounded in accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, to the
nearest million dollars, unless otherwise stated.
Accounting policies
The accounting policies adopted in the preparation of this Interim Financial Report are consistent with those in the Annual Financial Report for the
year ended 30 September 2024.
Critical accounting assumptions and estimates
In preparing the Interim Financial Report, the application of the Group’s accounting policies requires the use of judgement, assumptions and
estimates. The areas of judgement, assumptions and estimates in the Interim Financial Report, including the key sources of estimation uncertainty,
are consistent with those in the Annual Financial Report for the year ended 30 September 2024 with the exception of the below.
Geopolitical developments in the lead up to 31 March 2025, including in relation to international trade and tariff policies, have led to heightened
uncertainty as to future economic forecasts and potential impacts on the Group and its customers. Responding to this heightened uncertainty, the
Group has increased the weighting of the downside scenario used in the estimate of expected credit losses from 42.5% to 45% (refer to Note 9
(pages 90-94) for further details). These developments have continued following 31 March 2025, and as a result estimates of expected credit losses
are subject to a higher than usual level of uncertainty.
Future developments
(i)Accounting standards
AASB 9 Financial Instruments (AASB 9) became effective for the Group for the financial year ended 30 September 2019. When adopted, as
permitted by the standard, the Group elected to continue to comply with the hedge accounting requirements under AASB 139. The Group intends to
adopt the hedge accounting requirements of AASB 9 prospectively for the financial year beginning 1 October 2025. All the Group’s existing hedge
accounting relationships will continue to qualify for hedge accounting. It is intended to introduce a new hedge accounting relationship under AASB 9
for our foreign currency term funding over cross currency basis risk. This will result in associated costs of hedging being reflected in a new cost of
hedging reserve (COHR) rather than through the income statement. The quantum of the impact of this will be based on the valuation of the
derivatives at the time.
AASB 18 Presentation and Disclosure in Financial Statements (AASB 18) was issued on 7 June 2024 and will be effective for the 30 September
2028 year end unless early adopted. AASB 18 will replace AASB 101 Presentation of Financial Statements. This standard will not change the
recognition and measurement of items in the financial statements, but will impact the presentation and disclosure in the financial statements,
including:
●new categories and subtotals in the income statement to enhance comparability;
●enhancing the disclosure of management defined performance measures; and
●changes to the grouping of information in the financial statements to provide more useful information.
Westpac is continuing to assess the impact of adopting AASB 18.
AASB 2024-2 Amendments to Australian Accounting Standards – Classification and Measurement of Financial Instruments (AASB 2024-2) was
issued on 29 July 2024 and is effective for the 30 September 2027 year end unless early adopted.
The amendments include:
●changes to disclosures for investments in equity instruments designated at fair value through other comprehensive income and additional
disclosures for financial instruments with contingent features that do not relate directly to basic lending risks and costs;
80WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
Note 1. Financial statements preparation (Continued)
●guidance on derecognition of financial liabilities criteria when using an electronic payments system; and
●guidance on assessing contractual cash flow characteristics of financial assets with environmental, social and corporate governance (ESG) and
similar features.
Westpac is continuing to assess the impact of adopting AASB 2024-2.
(ii)Other developments
AASB S1 General Requirements for Disclosure of Sustainability-related Financial Information (AASB S1) and AASB S2 Climate-related Disclosures
(AASB S2) were issued by the AASB on 20 September 2024. AASB S1 is a voluntary standard while AASB S2 is mandatory. Both standards are
effective for the Group for the 30 September 2026 year end unless early adopted.
These standards are Australian Sustainability Reporting Standards which are issued by the AASB and set out the sustainability-related and climate-
related financial disclosures for sustainability reports and general purpose financial reports. The main features of these standards are described
below.
AASB S1
This Standard applies to reporting sustainability-related financial information across a range of possible sustainability topics, including climate-
related financial disclosures that form part of an entity’s general-purpose financial reporting. It sets out general requirements for the presentation of
those disclosures, guidelines for their structure and minimum requirements for their content (including disclosures on governance, strategy, risk
management, and metrics and targets), the location of disclosures, the timing of reporting and disclosures relating to judgements, uncertainties and
errors.
AASB S2
This standard sets out disclosure requirements in general purpose financial reports about climate-related risks and opportunities that could
reasonably be expected to affect the entity’s cash flows, access to finance or cost of capital over the short, medium or long term. The main climate-
related financial disclosure requirements relate to four key areas of governance, strategy, risk management, and metrics and targets. The standard
also requires disclosures on scenario analysis and greenhouse gas emissions (Scope 1, 2 and 3). General requirements such as the conceptual
foundations for reporting such information, the location of disclosures, the timing of reporting and disclosures relating to judgements, uncertainties
and errors are also provided.
The Group is continuing to assess the impact of adopting AASB S1 and AASB S2.
Comparative revisions
Comparative information has been revised where appropriate to conform to changes in presentation in the current period and to enhance
comparability.
81
Note 2. Segment reporting
Operating segments are presented on a basis consistent with information provided internally to Westpac’s key decision makers and reflect the
management of the business, rather than the legal structure of Westpac.
The statutory amount of the net operating income and operating expenses segment line items are separated to show the balances excluding
Notable Items and the total Notable Items for each of these categories. This is consistent with the information provided internally to Westpac’s key
decision makers.
Notable Items are items that management believes are not reflective of Westpac’s ongoing business performance and are grouped into the following
broad categories:
●Unrealised fair value gains and losses on economic hedges that do not qualify for hedge accounting
●Net ineffectiveness on qualifying hedges
●Large items that are not reflective of the Westpac’s ordinary operations. In individual reporting periods large items may include:
-
Provisions for remediation, litigation, fines and penalties
-
The impact of asset sales and revaluations
-
The write-down of assets (including goodwill and capitalised software)
-
Restructuring costs
Internal charges and transfer pricing adjustments have been reflected in the performance of each of operating segment. Inter-segment pricing is
determined on an arm’s length basis.
Reportable operating segments
We are one of Australia’s leading providers of banking and selected financial services, operating under multiple brands, and predominantly in
Australia and New Zealand, with a small presence in Europe, North America, Asia and the Pacific. We operate significant online capability
supported by an extensive branch and ATM network, call centres and relationship bankers. Our operations comprise the following key segments:
●Consumer provides banking products and services to customers in Australia through three lines of business consisting of mortgages, consumer
finance and cash and transactional banking.
●Business & Wealth comprises Business Banking for customers generally up to $200 million in exposure, Wealth Management, Private Wealth
and Westpac Pacific. For part of the period the segment included our auto finance portfolio, which has been in runoff and was sold in March
2025.
●Westpac Institutional Bank (WIB) delivers a broad range of financial products and services to corporate, institutional and government customers.
●Westpac New Zealand provides banking, and wealth products and services for consumer, business and institutional customers in New Zealand.
●Group Businesses includes Treasury, Enterprise services and other costs not directly attributable to segments including Corporate Affairs, a
portion of enterprise technology costs related to UNITE in prior periods, certain customer remediation expenses and enterprise provisions. It
also includes Group-wide elimination entries arising on consolidation.
82WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
Note 2. Segment reporting (Continued)
The following tables present the segment results for Westpac:
WestpacWestpacNotable
Business &InstitutionalNewGroupItemsIncome
$m
Consumer Wealth Bank Zealand (A$) Businesses Total (pre-tax) statement
Half Year Mar 25
Net interest income
3,852 2,697 1,177 1,2366079,569(218) 9,351
Net fee income
271 150 343 80(4)840- 840
Net wealth management income-219-21(1)239-239
Trading income13122820-28018298
Other income8(4)48-1365-65
Notable Items---(1)(199)(200)200-
Net operating income
4,132 3,093 1,796 1,35641610,793- 10,793
Operating expenses
(2,420)(1,368)(791)(665)(454)(5,698)-(5,698)
Total operating expenses(2,420)(1,368)(791)(665)(454)(5,698)-(5,698)
Pre-provision profit1,7121,7251,005691(38)5,095-5,095
Impairment (charges)/benefits
(142)(117)39(30)-(250)-(250)
Profit before income tax expense
1,570 1,608 1,044 661(38)4,845- 4,845
Income tax (expense)/benefit
a
(482)(490)(286)(185)(77)(1,520)-(1,520)
Net profit attributable to NCI
- - - -(8)(8)- (8)
Net profit attributable to owners of WBC
1,088 1,118 758 476(123)3,317- 3,317
Notable Items (post-tax)---(1)(139)(140)
Balance sheet
Loans517,158106,845106,95393,78963824,808
Deposits and other borrowings350,968148,242122,30375,47342,264739,250
Half Year Sept 24
Net interest income
3,861 2,722 1,150 1,2176159,56561 9,626
Net fee income
262 156 318 931830- 830
Net wealth management income-206-20(3)223-223
Trading income-2732220(18)351(10)341
Other income11-(41)26(22)-(22)
Notable Items---(2)5351(51)-
Net operating income
4,134 3,111 1,749 1,35065410,998- 10,998
Operating expenses
(2,422) (1,370) (756) (616)(385)(5,549)- (5,549)
Total operating expenses(2,422)(1,370)(756)(616)(385)(5,549)-(5,549)
Pre-provision profit1,7121,7419937342695,449-5,449
Impairment (charges)/benefits
(104)(47)(19)(3)(2)(175)-(175)
Profit before income tax expense
1,608 1,694 974 7312675,274- 5,274
Income tax (expense)/benefit
a
(482) (513) (288) (203)(140)(1,626)- (1,626)
Net profit attributable to NCI
--------
Net profit attributable to owners of WBC
1,126 1,181 686 5281273,648- 3,648
Notable Items (post-tax)---(2)4341
Balance sheet
Loans510,317101,989100,58293,83346806,767
Deposits and other borrowings334,462144,289119,79574,91247,031720,489
a.Includes tax benefit on Notable Items of $60 million (Second Half 2024: $10 million expense).
83
Note 2. Segment reporting (Continued)
WestpacWestpacNotable
Business &InstitutionalNewGroupItemsIncome
$m
Consumer Wealth Bank Zealand (A$) Businesses Total (pre-tax) statement
Half Year Mar 24
Net interest income
3,771 2,616 1,090 1,1717039,351(224) 9,127
Net fee income
253 185 335 86(17)842- 842
Net wealth management income-189-1910218-218
Trading income-30313202365(2)363
Other income2518(3)1840-40
Notable Items---(6)(220)(226)226-
Net operating income
4,026 3,025 1,756 1,28749610,590- 10,590
Operating expenses
a
(2,365)(1,256)(709)(646)(419)(5,395)-(5,395)
Total operating expenses(2,365)(1,256)(709)(646)(419)(5,395)-(5,395)
Pre-provision profit1,6611,7691,047641775,195-5,195
Impairment (charges)/benefits
(144)(95)(101)(22)-(362)-(362)
Profit before income tax expense
1,517 1,674 946 619774,833- 4,833
Income tax (expense)/benefit
b
(459)(499)(265)(174)(94)(1,491)-(1,491)
Net profit attributable to NCI
- - - ---- -
Net profit attributable to owners of WBC
1,058 1,175 681 445(17)3,342- 3,342
Notable Items (post-tax)---(4)(160)(164)
Balance sheet
Loans502,35496,92392,98392,586(7)784,839
Deposits and other borrowings321,255140,634115,29674,79250,249702,226
a.Impairment of assets (including goodwill and other intangible assets) were insignificant for all segments except for $50 million in Consumer.
b.Includes tax benefit on Notable Items of $62 million.
Half Year Half Year Half Year % Mov’t
MarchSeptMarchMar 25 Mar 25
$m202520242024- Sept 24 - Mar 24
Notable Items after tax
Economic hedges
(92)35(163)large(44)
Hedge ineffectiveness(48)6(1)largelarge
Total Notable Items after tax
(140)41(164)large(15)
84WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
Note 3. Net interest income and average balance sheet and interest rates
Net interest income
Half Year Half Year Half Year % Mov’t
MarchSeptMarchMar 25 Mar 25
$m202520242024- Sept 24 - Mar 24
Interest income
Calculated using the effective interest method
Cash and balances with central banks
1,433 1,830 2,293 (22)(38)
Collateral paid
266 285 362 (7)(27)
Investment securities
2,246 1,899 1,595 1841
Loans
23,153 22,862 21,598 17
Other financial assets
9 5 10 80(10)
Total interest income calculated using the effective interest method27,10726,88125,85815
Other
Net ineffectiveness on qualifying hedges
(69) 9 (1) largelarge
Trading securities and financial assets measured at FVIS
1,046 913 687 1552
Total other
977 922 686 642
Total interest income
28,084 27,803 26,544 16
Interest expense
Calculated using the effective interest method
Collateral received
(152) (141) (176) 8(14)
Deposits and other borrowings
(11,016) (10,983) (10,285) -7
Debt issues
(3,367) (3,105) (2,989) 813
Loan capital
(1,026) (943) (905) 913
Other financial liabilities
(190) (125) (269) 52(29)
Total interest expense calculated using the effective interest method
(15,751) (15,297) (14,624) 38
Other
Deposits and other borrowings
(1,088) (1,170) (1,219) (7)(11)
Trading liabilities
a
(1,536) (1,366) (1,277) 1220
Debt issues
(124) (111) (83) 1249
Bank levy
(191) (185) (172) 311
Other interest expense(43)(48)(42)(10)2
Total other
(2,982) (2,880) (2,793) 47
Total interest expense
(18,733) (18,177) (17,417) 38
Net interest income
b
9,351 9,626 9,127 (3)2
a.Includes net impact of Treasury balance sheet management activities.
b.Included items relating to remediation costs recognised as a $7 million reduction to net interest income (Second Half 2024: $45 million addition, First Half 2024: $2 million
addition). Refer to Note 13 (pages 101-105) for further details.
85
Note 3. Net interest income and average balance sheet and interest rates (Continued)
Average balance sheet and interest rates
Half Year March 2025Half Year Sept 2024Half Year March 2024
Average Interest Average Average Interest Average Average Interest Average
balanceincomeratebalanceincomeratebalanceincomerate
$m$m%$m$m%$m$m%
Assets
Interest earning assets
Loans
Australia
653,74619,8986.1640,39419,4846.1627,15018,3815.9
New Zealand92,1032,9646.592,0863,1396.892,3583,0166.5
Other overseas9,6812916.07,2482396.66,0842016.6
Housing
a
Australia
444,43213,0235.9443,11212,8865.8435,13012,0965.6
New Zealand60,9381,8506.160,7041,8466.160,9161,7155.6
Other overseas37884.238994.642583.8
Personal
Australia9,83449710.110,3755149.910,9935259.6
New Zealand1,059499.31,042489.21,084499.0
Other overseas7--6133.38--
Business
Australia199,4806,3786.4186,9076,0846.5181,0275,7606.4
New Zealand30,1061,0657.130,3401,2458.230,3581,2528.2
Other overseas9,2962836.16,8532296.75,6511936.8
Trading securities and financial assets measured at FVIS
Australia37,8138304.433,2677124.323,9435114.3
New Zealand5,1771134.44,8881275.24,5481245.5
Other overseas4,8801034.23,455744.32,599524.0
Investment securities
Australia101,7932,0854.190,3911,7603.980,0251,4673.7
New Zealand7,1471273.66,5211093.36,619922.8
Other overseas1,797343.81,997303.02,297363.1
Other interest earning assets
b
Australia59,4271,1443.969,3791,4584.289,0731,8824.2
New Zealand
7,8311674.38,1012195.49,1712465.4
Other overseas15,3063284.317,6754525.120,8415365.1
Total interest earning assets and interest income
996,70128,0845.7975,40227,8035.7964,70826,5445.5
Non-interest earning assets
Derivative financial instruments
27,698 16,625 16,947
All other assets
c
79,904 73,653 67,282
Total non-interest earning assets
107,602 90,278 84,229
Total assets
1,104,303 1,065,680 1,048,937
a.Certain portions of loans are non-interest bearing and are presented below in All other assets. The non-interest bearing portion represents the impact of mortgage offset
deposits which are taken into consideration when calculating interest charged on loans.
b.Interest income includes net ineffectiveness on qualifying hedges.
c.Includes property and equipment, intangible assets, deferred tax assets, non-interest earning loans relating to mortgage offset accounts and all other non-interest earning
assets. Mortgage offset balances were $63,511 million in First Half 2025 (Second Half 2024: $58,733 million, First Half 2024: $55,324 million).
86WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
Note 3. Net interest income and average balance sheet and interest rates (Continued)
Half Year March 2025Half Year Sept 2024Half Year March 2024
Average Interest Average Average Interest Average Average Interest Average
balanceexpenseratebalanceexpenseratebalanceexpenserate
$m$m%$m$m%$m$m%
Liabilities
Interest bearing liabilities
Deposits and other borrowings
Australia
505,994 10,2594.1 493,900 10,069 4.1 479,763 9,3443.9
New Zealand64,8451,3774.364,5081,6065.065,6321,6144.9
Other overseas20,3124684.618,2994785.220,4135465.3
Certificates of deposit
Australia30,9157084.633,3177574.533,8797524.4
New Zealand
1,794 424.7 2,236 64 5.7 2,612 775.9
Other overseas13,4163365.012,2943485.713,4403885.8
Transactions
Australia118,4342,0943.5118,8282,1813.7119,9191,9313.2
New Zealand9,1001403.18,9012044.68,7712004.6
Other overseas89371.682671.782061.5
Savings
Australia204,1733,8713.8194,0173,6653.8184,7933,3423.6
New Zealand18,0072342.618,2003103.418,7303253.5
Other overseas1,089122.2999132.6993122.4
Term
Australia152,4723,5864.7147,7383,4664.7141,1723,3194.7
New Zealand35,9449615.435,1711,0285.835,5191,0125.7
Other overseas4,9141134.64,1801105.35,1601405.4
Repurchase agreements
Australia15,9874065.119,6043974.124,4762952.4
New Zealand2,887614.23,7301005.44,9061345.5
Other overseas1,224274.42916.9357105.6
Loan capital
Australia39,7469404.738,3238574.536,1358194.5
New Zealand3,026865.72,961865.83,005865.7
Other overseas---------
Other interest bearing liabilities
a
Australia174,4874,5455.2167,0904,1485.0162,3544,2225.2
New Zealand
22,050 5645.1 20,761 436 4.2 19,507 3323.4
Other overseas
479 -- 681 (1) (0.3) 1,225 152.4
Total interest bearing liabilities and interest expense
851,037 18,7334.4 829,886 18,177 4.4 817,773 17,4174.3
Non-interest bearing liabilities
Deposits and other borrowings
Australia
131,884 124,168 120,371
New Zealand
10,545 10,540 11,242
Other overseas
1,206 1,341 1,325
Derivative financial instruments
28,812 20,618 22,208
All other liabilities
9,891 7,913 4,134
Total non-interest bearing liabilities
182,338 164,580 159,280
Total liabilities
1,033,375 994,466 977,053
Shareholders’ equity70,58471,14571,841
NCI
344 69 43
Total equity
70,928 71,214 71,884
Total liabilities and equity
1,104,303 1,065,680 1,048,937
a.Interest expense includes the net impact of Treasury balance sheet management activities and the bank levy.
87
Note 4. Non-interest income
Half YearHalf YearHalf Year % Mov’t
MarchSeptMarchMar 25 Mar 25
$m202520242024- Sept 24 - Mar 24
Net fees
Facility fees
394 387376 25
Transaction fees
536 556562 (4)(5)
Other non-risk fee income
81 5877 405
Fee income
1,011 1,0011,015 1-
Credit card loyalty programs
(69) (62)(72) 11(4)
Transaction fee related expenses
(102) (109)(101) (6)1
Fee expenses
(171) (171)(173) -(1)
Net fees
840 830842 1-
Net wealth management
239 223 218 710
Trading
298 341 363 (13)(18)
Other
Dividends received from other entities
1 2 1 (50)-
Net gain/(loss) on disposal of assets
(1) 9 (3) large(67)
Net gain/(loss) on hedging of overseas operations
(1) (1) - --
Net gain/(loss) on derivatives held for risk management purposes
a
2 2 5 -(60)
Net gain/(loss) on financial instruments measured at fair value44(42)18large144
Other
20 8 19 1505
Total other
65 (22) 40 large63
Total non-interest income
b
1,442 1,372 1,463 5(1)
a.Income from derivatives held for risk management purposes reflects the impact of economic hedges of earnings.
b.Includes items relating to remediation costs recognised as a $14 million reduction to non-interest income (Second Half 2024: $39 million reduction, First Half 2024: $5 million
reduction). Refer to Note 13 (pages 101-105) for further details.
88WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
Note 5. Operating expenses
Half YearHalf YearHalf Year % Mov’t
MarchSeptMarchMar 25 Mar 25
$m202520242024- Sept 24 - Mar 24
Staff
Employee remuneration, entitlements and on-costs
2,716 2,5932,56756
Superannuation
304 269282138
Share-based payments
54 5245420
Restructuring costs
41 5437(24)11
Total staff
3,115 2,9682,93156
Occupancy
Operating lease rentals
61 516520(6)
Depreciation and impairment of property and equipment
210 232223(9)(6)
Other
47 6564(28)(27)
Total occupancy
318 348352(9)(10)
Technology
Amortisation and impairment of software assets
485 44746195
Depreciation and impairment of IT equipment
56 55702(20)
Technology services
484 472399321
Software maintenance and licences
415 420350(1)19
Telecommunications
40 4743(15)(7)
Total technology
1,480 1,4411,323312
Other
Professional and processing services
338 389409(13)(17)
Postage and stationery
70 6961115
Advertising
91 9185-7
Non-lending losses
123 694278193
Amortisation and impairment of other intangible assets and deferred expenditure1133-(97)
Other expenses
162 173159(6)2
Total other
785 792789(1)(1)
Total operating expenses
a
5,698 5,5495,39536
a.Included items relating to remediation costs recognised as a $1 million addition to operating expenses (Second Half 2024: $9 million reduction, First Half 2024: $10 million
addition). Refer to Note 13 (pages 101-105) for further details.
89
Note 6. Income tax
The following table reconciles income tax expense to the profit before income tax:
Half Year Half Year Half Year % Mov’t
MarchSeptMarchMar 25 Mar 25
$m202520242024- Sept 24 - Mar 24
Profit before income tax
4,8455,2744,833(8)-
Tax at the Australian company tax rate of 30%
1,4541,5821,450(8)-
The effect of amounts which are not deductible/(assessable) in calculating taxable income:
Hybrid capital distributions
677168(6)(1)
Other non-assessable items
-(1)(3)(100)(100)
Other non-deductible items
161510760
Adjustment for overseas tax rates
(12)(11)(16)9(25)
Income tax (over)/under provided in prior periods
13(19)(1)largelarge
Other items
(18)(11)(17)646
Total income tax expense
a
1,5201,6261,491(7)2
Effective income tax rate
31.37%30.83%30.85%54 bps52 bps
a.As the bank levy is not a levy on income, it is not included in income tax. It is included in interest expense in Note 3 (pages 84-86).
International Tax Reform – Pillar Two Model Rules
Pillar Two introduces new ‘top-up’ taxes for multinational enterprises (MNEs) within the scope of the rules to ensure that these MNEs pay a
minimum effective rate of tax of 15% on profits in all jurisdictions.
Pillar Two legislation has been enacted or substantively enacted in certain jurisdictions in which Westpac operates and became effective for the
Group for the financial year beginning 1 October 2024.
The Group does not have Pillar Two top-up tax obligations as at 31 March 2025 and has applied the mandatory temporary exception from
recognising and disclosing Pillar Two deferred taxes under AASB 112.
Note 7. Earnings per share
Basic earnings per share (EPS) is calculated by dividing the net profit attributable to owners of WBC by the weighted average number of ordinary
shares on issue during the period. These numbers are adjusted for treasury shares and dividends related to treasury shares. Diluted EPS is
calculated by adjusting the basic EPS by assuming all dilutive potential ordinary shares are converted.
Half Year March 2025 Half Year Sept 2024 Half Year March 2024
Basic Diluted Basic Diluted Basic Diluted
Net profit attributable to owners of WBC ($m)
3,317 3,317 3,648 3,648 3,342 3,342
Adjustment for restricted share dividends
a
(3) - (5) - (2) -
Adjustment for potential dilution:
Distributions to convertible loan capital holders
b
- 229 - 241 - 235
Adjusted net profit attributable to owners of WBC
3,3143,5463,6433,8893,3403,577
Weighted average number of ordinary shares (# m)
Weighted average number of ordinary shares on issue
3,4333,4333,4623,4623,4993,499
Treasury shares (including RSP and EIP restricted shares)
a
(5)(5)(5)(5)(5)(5)
Adjustment for potential dilution:
Share-based payments
-5-2-3
Convertible loan capital
b
-262-335-408
Adjusted weighted average number of ordinary shares
3,4283,6953,4573,7943,4943,905
Earnings per ordinary share (cents)
96.796.0105.4102.595.691.6
a.Some shares under the RSP and EIP restricted shares have not vested and are not outstanding ordinary shares but do receive dividends. These RSP and EIP dividends are
deducted to show the profit attributable to ordinary shareholders.
b.The Group has issued convertible loan capital which may convert into ordinary shares in the future. These convertible loan capital instruments are potentially dilutive
instruments, and diluted EPS is therefore calculated as if the instruments had been converted at the beginning of the respective period or, if later, the instruments’ issue date.
90WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
Note 8. Loans
As at As at As at % Mov’t
31 March30 Sept31 MarchMar 25 Mar 25
$m202520242024- Sept 24 - Mar 24
Australia
Housing
510,182 503,271495,05813
Personal
9,365 10,17410,863(8)(14)
Business
204,642 195,483183,883511
Total Australia
724,189 708,928689,80425
New Zealand
Housing
63,191 62,48461,85912
Personal
1,068 1,0581,0811(1)
Business
30,413 31,05530,428(2)-
Total New Zealand
94,672 94,59793,368-1
Total other overseas
10,525 7,8106,2493568
Gross loans
829,386 811,335789,42125
Provision for ECL on loans (Note 9)(4,578)(4,568)(4,582)--
Total loans
a,b
824,808 806,767 784,839 25
a.Total loans included Australian securitised residential loans of $6,066 million as at 31 March 2025 (30 September 2024: $5,185 million, 31 March 2024: $5,821 million). The
level of securitised loans excludes loans where Westpac is the holder of related debt securities.
b.Total loans included assets pledged for the covered bond programs of $41,845 million as at 31 March 2025 (30 September 2024: $42,228 million, 31 March 2024: $43,779
million).
Note 9. Provision for expected credit losses
Loans and credit commitments
The following table shows the provision for ECL on loans and credit commitments by stage:
As atAs atAs at% Mov’t
31 March30 Sept31 MarchMar 25 Mar 25
$m
2025 2024 2024 - Sept 24 - Mar 24
Performing - Stage 1
873 761 712 1523
Performing - Stage 2
2,410 2,594 2,713 (7)(11)
Non-performing - Stage 3
1,779 1,729 1,696 35
Total provision for ECL on loans and credit commitments
5,062 5,084 5,121 -(1)
Presented as:
Provision for ECL on loans (Note 8)
4,578 4,568 4,582 --
Provision for ECL on credit commitments (Note 13)
484 516 539 (6)(10)
Total provision for ECL on loans and credit commitments
5,062 5,084 5,121 -(1)
Of which:
Individually assessed provisions
611 536 461 1433
Collectively assessed provisions
4,451 4,548 4,660 (2)(4)
Total provision for ECL on loans and credit commitments
5,062 5,084 5,121 -(1)
Gross loans and credit commitments1,047,1421,023,446999,70525
Coverage ratio on loans (%)0.550.560.58(1 bps)(3 bps)
Coverage ratio on loans and credit commitments (%)0.480.500.51(2 bps)(3 bps)
Movement in provision for ECL on loans and credit commitments
The reconciliation of the provision for ECL tables for loans and credit commitments has been determined by an aggregation of monthly movements
over the period. The key line items in the reconciliation represent the following:
●“Transfers between stages” represents transfers between Stage 1, Stage 2 and Stage 3 prior to remeasurement of the provision for ECL;
91
Note 9. Provision for expected credit losses (Continued)
●“Business activity during the period” represents new accounts originated during the period net of those that were de-recognised due to final
repayments during the period;
●“Net remeasurement of provision for ECL” represents the impact on the provision for ECL due to changes in credit quality during the period
(including transfers between stages), changes in portfolio overlays, changes due to forward-looking economic scenarios and partial repayments
and additional draw-downs on existing facilities over the period; and
●“Write-offs” represents a reduction in the provision for ECL as a result of de-recognition of exposures where there is no reasonable expectation
of full recovery.
PerformingNon-performing
$m
Stage 1 Stage 2Stage 3 Total
Balance as at 30 September 20237062,8081,4164,930
Transfers to Stage 1
a
568(530)(38)-
Transfers to Stage 2
a
(172)393(221)-
Transfers to Stage 3
a
(2)(312)314-
Business activity during the period
a
140(140)(79)(79)
Net remeasurement of provision for ECL
a
(526)498557529
Write-offs--(277)(277)
Exchange rate and other adjustments(2)(4)2418
Balance as at 31 March 20247122,7131,6965,121
Transfers to Stage 1654(635)(19)-
Transfers to Stage 2(143)429(286)-
Transfers to Stage 3(1)(296)297-
Business activity during the period163(188)(214)(239)
Net remeasurement of provision for ECL(623)572566515
Write-offs--(343)(343)
Exchange rate and other adjustments(1)(1)3230
Balance as at 30 September 20247612,5941,7295,084
Transfers to Stage 1684(641)(43)-
Transfers to Stage 2(97)419(322)-
Transfers to Stage 3(2)(310)312-
Business activity during the period152(181)(133)(162)
Net remeasurement of provision for ECL(627)566590529
Write-offs--(364)(364)
Exchange rate and other adjustments2(37)10(25)
Balance as at 31 March 20258732,4101,7795,062
a.The attribution of amounts disclosed in the movement schedule were revised in Second Half 2024 to better reflect the nature of the changes in the provision for ECL.
Comparatives have been revised to align with current period presentation.
The following table provides further details of the provision for ECL on loans and credit commitments by class and stage:
PerformingNon-performing
$mStage 1Stage 2Stage 3Total
Housing
1639266331,722
Personal
83252105440
Business
4661,5359582,959
Balance as at 31 March 2024
7122,7131,6965,121
Housing
169 897 639 1,705
Personal
77 234 99 410
Business
515 1,463 991 2,969
Balance as at 30 September 2024
761 2,594 1,729 5,084
Housing
1998866311,716
Personal
8123691408
Business
5931,2881,0572,938
Balance as at 31 March 2025
8732,4101,7795,062
92WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
Note 9. 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 areas of potential risk and uncertainty in the portfolio, that are not captured in the underlying modelled ECL.
As atAs atAs at
31 March30 Sept31 March
$m
2025 2024 2024
Individually assessed provisions
611536461
Modelled provision for ECL on loans and credit commitments4,3214,3694,400
Overlays
130179260
Total provision for ECL on loans and credit commitments5,0625,0845,121
Details of changes related to forward-looking economic inputs and portfolio overlays 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 Group’s view of the forward-looking distribution of potential loss outcomes. Changes in the modelled provision for ECL are reflected
through the “net remeasurement of provision for ECL” line item. 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 Economics forecasts:
Key economic
assumptions for base
case scenario 31 March 2025 30 September 2024 31 March 2024
Annual GDP:
AustraliaForecast growth of 2.2% for calendar year
2025 and 2.2% for calendar year 2026
Forecast growth of 1.5% for calendar year
2024 and 2.4% for calendar year 2025
Forecast growth of 1.6% for calendar year
2024 and 2.5% for calendar year 2025
New ZealandForecast growth of 2.5% for calendar year
2025 and 3.0% for calendar year 2026
Forecast growth of 0.1% for calendar year
2024 and 2.0% for calendar year 2025
Forecast growth of 0.8% for calendar year
2024 and 2.4% for calendar year 2025
Commercial property
index, Australia
Forecast price increase of 2.0% for calendar
year 2025 and 3.3% for calendar year 2026
Forecast price contraction of 11.5% for
calendar year 2024 and 1.3% for calendar
year 2025
Forecast price contraction of 8.0% for
calendar year 2024 and growth of 1.4% for
calendar year 2025
Residential property
prices:
AustraliaForecast price growth of 3.0% for calendar
year 2025 and 7.0% for calendar year 2026
Forecast price growth of 5.7% for calendar
year 2024 and 4.0% for calendar year 2025
Forecast price growth of 6.0% for calendar
year 2024 and 4.0% for calendar year
2025
New ZealandForecast price growth of 7.2% for calendar
year 2025 and 5.1% for calendar year 2026
Forecast price growth of 0.7% for calendar
year 2024 and 6.4% for calendar year 2025
Forecast price growth of 5.9% for calendar
year 2024 and 6.7% for calendar year
2025
Cash rate, AustraliaForecast cash rate of 3.35% at December
2025 and 3.35% at December 2026
Forecast cash rate of 4.35% at December
2024 and 3.35% at December 2025
Forecast cash rate of 3.85% at December
2024 and 3.10% at December 2025
Unemployment rate:
AustraliaForecast rate of 4.5% at December 2025
and 4.5% at December 2026
Forecast rate of 4.3% at December 2024
and 4.6% at December 2025
Forecast rate of 4.5% at December 2024
and 4.6% at December 2025
New ZealandForecast rate of 5.3% at December 2025
and 4.6% at December 2026
Forecast rate of 5.3% at December 2024
and 5.6% at December 2025
Forecast rate of 5.1% at December 2024
and 5.2% at December 2025
The downside scenario is a more severe scenario with expected credit losses 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 expected credit losses 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 to the base case scenario and to the
downside scenario (with all other assumptions held constant).
93
Note 9. Provision for expected credit losses (Continued)
As atAs atAs at
31 March30 Sept31 March
$m
2025 2024 2024
Reported probability-weighted ECL
5,0625,0845,121
100% base case ECL
3,3153,5593,737
100% downside ECL
7,2357,1957,047
If 1% of Stage 1 loans and credit commitments (calculated on a 12 month ECL) were transferred to Stage 2 (calculated on a lifetime ECL), the
provision for ECL on loans and credit commitments would increase by $102 million (30 September 2024: $93 million, 31 March 2024: $89 million)
for the Group. This estimate applies the average modelled provision coverage ratio by stage to the transfer of loans and credit commitments.
The following table discloses the economic weights applied by the Group. In March 2025, the downside scenario weight was increased by 2.5% and
base case weight decreased by the same value, reflecting greater uncertainty in international trading relations and geopolitical instability:
As atAs atAs at
31 March30 Sept31 March
Scenario weightings (%)
2025 2024 2024
Upside
5.0 5.0 5.0
Base
50.0 52.5 52.5
Downside
45.0 42.5 42.5
The Group’s definition of default is aligned to the regulatory definition of default applied in the calculation of credit risk weighted assets.
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.
Westpac’s total portfolio overlays as at 31 March 2025 were $130 million (30 September 2024: $179 million; 31 March 2024: $260 million) and
comprise:
●$70 million for the expected impact of extreme weather events on customers (30 September 2024: $70 million; 31 March 2024: $70 million);
●$41 million for non-retail credit exposures (30 September 2024: $32 million; 31 March 2024: $31 million). Current period overlays primarily relate
to geographical areas experiencing higher stress not included in modelled outcomes; and
●$19 million for retail credit exposures (30 September 2024: $77 million; 31 March 2024: $159 million). Current period overlays relate to
geographical areas experiencing higher stress and other risks not included in modelled outcomes.
Changes in portfolio overlays are reflected through the “net remeasurement of provision for ECL” line item.
Total provision for ECL
As at As at As at
31 March30 Sept31 March
$m202520242024
Provision for ECL on loans and credit commitments
5,062 5,084 5,121
Provision for ECL on debt securities at amortised cost
a
4 6 8
Provision for ECL on debt securities at FVOCI
b
6 6 6
Total provision for ECL
5,072 5,096 5,135
a.Provision for ECL on debt securities at amortised cost is presented as part of investment securities.
b.Provision for ECL on debt securities at FVOCI forms part of equity reserves.
94WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
Note 9. Provision for expected credit losses (Continued)
Reconciliation of impairment charges
Half YearHalf YearHalf Year
MarchSeptMarch
$m
202520242024
Loans and credit commitments:
Business activity during the period
a
(162)(239)(79)
Net remeasurement of the provision for ECL
a
529515529
Impairment charges for debt securities at amortised cost(2)(1)1
Impairment charges for debt securities at FVOCI--1
Recoveries(115)(100)(90)
Impairment charges/(benefits)250175362
a.The attribution of amounts disclosed in the movement schedule were revised in Second Half 2024 to better reflect the nature of the changes in the provision for ECL.
Comparatives have been revised to align with current period presentation.
Note 10. Credit quality
Credit risk ratings system
The principal objective of the credit risk rating system is to reliably assess the credit risk to which Westpac is exposed. Westpac 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 Customer Risk Grade
(CRG), corresponding to their expected probability of default (PD). Each facility is assigned a loss given default (LGD). Westpac’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 Ratings,
and S&P Global Ratings (S&P) external senior unsecured ratings.
The table below shows Westpac’s high level CRGs for transaction-managed portfolios mapped to Westpac’s credit quality disclosure categories and
to their corresponding external rating.
Transaction-managed
Financial statement disclosure
Westpac CRG Moody’s Rating S&P Rating
Strong
A Aaa – Aa3 AAA – AA–
B A1 – A3 A+ – A–
C Baa1 – Baa3 BBB+ – BBB–
Good/satisfactory
D Ba1 – B1 BB+ – B+
Westpac Rating
Weak
E Watchlist
F Special Mention
G Substandard/Default
H Doubtful/Default
95
Note 10. Credit quality (Continued)
Program-managed portfolio
The program-managed portfolio generally includes retail products such as mortgages, personal lending (including credit cards) as well as certain
small to medium sized enterprise lending. These credit exposures are grouped into pools of similar risk based on the analysis of characteristics that
have historically predicted the likelihood of default, and a PD is assigned relative to the credit exposure’s pool. The exposure is then assigned to
strong, satisfactory or weak by benchmarking that PD against transaction-managed exposures, which are in turn mapped to external ratings per the
above table. In addition, any program-managed exposures that are one or more days past due are classified as weak.
The following table shows the credit quality of loans and undrawn credit commitments.
As at 31 March 2025As at 30 September 2024As at 31 March 2024
$m
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
Loans - housing
Strong
320,12426,370-346,494 311,054 24,975 - 336,029 299,27426,816-326,090
Good/satisfactory
160,21742,624-202,841 159,016 45,242 - 204,258 160,28647,093-207,379
Weak
2,23215,7456,39924,376 2,512 16,389 6,893 25,794 2,16815,2036,42323,794
Total loans - housing
482,57384,7396,399573,711 472,582 86,606 6,893 566,081 461,72889,1126,423557,263
Loans - personal
Strong
3,903113-4,016 4,104 104 - 4,208 4,216100-4,316
Good/satisfactory
4,777822-5,599 5,254 825 - 6,079 5,642882-6,524
Weak
139522164825 191 570 190 951 2536611971,111
Total loans - personal
8,8191,45716410,440 9,549 1,499 190 11,238 10,1111,64319711,951
Loans - business
Strong
96,03311,885-107,918 81,696 19,387 - 101,083 72,54121,771-94,312
Good/satisfactory
88,24039,354-127,594 75,873 47,282 - 123,155 66,21550,872-117,087
Weak
2306,0573,4369,723 200 6,347 3,231 9,778 1875,4543,1678,808
Total loans - business
184,50357,2963,436245,235 157,769 73,016 3,231 234,016 138,94378,0973,167220,207
Undrawn credit
commitments
Strong
147,75211,194-158,946 140,786 14,341 - 155,127 135,66316,733-152,396
Good/satisfactory
43,90312,550-56,453 40,271 14,186 - 54,457 40,62214,848-55,470
Weak
1801,6934842,357 218 1,868 441 2,527 2211,7674302,418
Total undrawn credit
commitments
191,83525,437484217,756 181,275 30,395 441 212,111 176,50633,348430210,284
Total strong
567,81249,562-617,374 537,640 58,807 - 596,447 511,69465,420-577,114
Total good/ satisfactory
297,13795,350-392,487 280,414 107,535 - 387,949 272,765113,695-386,460
Total weak
2,78124,01710,48337,281 3,121 25,174 10,755 39,050 2,82923,08510,21736,131
Total loans and undrawn
credit commitments
867,730168,92910,4831,047,142 821,175 191,516 10,755 1,023,446 787,288202,20010,217999,705
96WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
Note 11. Deposits and other borrowings
As at As at As at % Mov’t
31 March30 Sept31 MarchMar 25Mar 25
$m202520242024- Sept 24- Mar 24
Australia
Certificates of deposit
27,777 33,215 35,727 (16)(22)
Non-interest bearing, repayable at call
133,046 128,705 121,313 310
Other interest bearing - transactions113,433110,393114,1203(1)
Other interest bearing - savings
209,035 197,415 186,945 612
Other interest bearing term
158,944 157,282 148,110 17
Total Australia
642,235 627,010 606,215 26
New Zealand
Certificates of deposit
1,887 1,711 2,414 10(22)
Non-interest bearing, repayable at call
10,934 10,287 10,940 6-
Other interest bearing - transactions8,5568,8158,385(3)2
Other interest bearing - savings
18,793 17,854 18,456 52
Other interest bearing term
35,303 36,245 34,597 (3)2
Total New Zealand
75,473 74,912 74,792 11
Other overseas
Certificates of deposit
12,824 11,948 13,139 7(2)
Non-interest bearing, repayable at call
1,145 1,193 1,323 (4)(13)
Other interest bearing - transactions1,1077368495030
Other interest bearing - savings
1,101 987 990 1211
Other interest bearing term
5,365 3,703 4,918 459
Total other overseas
21,542 18,567 21,219 162
Total deposits and other borrowings
739,250 720,489 702,226 35
Note 12. Fair values of financial assets and financial liabilities
Fair Valuation Control Framework
Westpac 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 Westpac. 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.
97
Note 12. Fair values of financial assets and financial liabilities (Continued)
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.
Westpac categorises all fair value instruments according to the hierarchy described below.
Valuation techniques
Westpac applies market accepted valuation techniques in determining the fair valuation of over the counter (OTC) derivatives. This includes CVA
and FVA, which incorporate credit risk and funding costs and benefits that arise primarily 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:
Level 1 instruments (Level 1)
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 valuation of Level 1 instruments require little or no management judgement.
Instrument Balance sheet category Includes Valuation
Exchange traded productsDerivativesExchange traded interest rate futures
and options and commodity and carbon
futures
All these instruments are traded in
liquid, active markets where prices
are readily observable. No
modelling or assumptions are used
in the valuation.
FX productsDerivativesFX spot and futures contracts
Equity productsDerivatives
Trading securities and financial assets
measured at FVIS
Other financial liabilities
Listed equities and equity indices
Debt instrumentsTrading securities and financial assets
measured at FVIS
Investment securities
Other financial liabilities
Australian Commonwealth and
New Zealand government bonds
Level 2 instruments (Level 2)
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.
Instrument Balance sheet category Includes Valuation
Interest rate productsDerivativesInterest rate and inflation swaps,
swaptions, caps, floors, collars and
other non-vanilla interest rate
derivatives
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 and
actively 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 productsDerivativesFX swaps, FX forward contracts, FX
options and other non-vanilla FX
derivatives
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.
Other credit productsDerivativesSingle name and index credit default
swaps
Valued using an industry standard model that
incorporates the credit spread as its principal input.
Credit spreads are obtained from consensus data
providers. If consensus prices are not available, these
are classified as Level 3 instruments.
98WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
Note 12. Fair values of financial assets and financial liabilities (Continued)
Instrument Balance sheet category Includes Valuation
Commodity productsDerivativesCommodity and carbon derivativesValued using industry standard models.
The models calculate the expected future value of
deliveries and payments and discount them back to a
present value. The model inputs include forward curves,
volatilities implied from market observable inputs,
discount curves and underlying spot and futures prices.
The significant inputs are market observable or
available through a consensus data service. If
consensus prices are not available, these are classified
as Level 3 instruments.
Equity productsDerivativesExchange traded equity options, OTC
equity options and equity warrants
Due to low liquidity, exchange traded equity options are
Level 2.
Valued using industry standard models based on
observable parameters such as stock prices, dividends,
volatilities and interest rates.
Asset backed debt instrumentsTrading securities and financial
assets measured at FVIS
Investment securities
Australian residential mortgage
backed securities (RMBS) and other
asset backed securities (ABS)
Valued using an industry approach to value floating rate
debt with prepayment features. Australian RMBS are
valued using prices sourced from a consensus data
provider. If consensus prices are not available, these
are classified as Level 3 instruments.
Non-asset backed debt
instruments
Trading securities and financial
assets measured at FVIS
Investment securities
Other financial liabilities
State and other government bonds,
corporate bonds and commercial
paper
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.
Loans at fair valueLoansFixed rate bills and syndicated loansDiscounted cash flow approach, using a discount rate
which reflects the terms of the instrument and the timing
of cash flows, adjusted for creditworthiness, or expected
sale amount.
Certificates of depositDeposits and other borrowingsCertificates of depositDiscounted cash flow using market rates offered for
deposits of similar remaining maturities.
Debt issues at fair valueDebt issuesDebt issuesDiscounted 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
Westpac’s implied credit worthiness.
Level 3 instruments (Level 3)
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.
Instrument Balance sheet category Includes Valuation
Debt instrumentsTrading securities and financial
assets measured at FVIS
Investment securities
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.
Equity instrumentsInvestment securitiesStrategic equity investmentsValued using valuation techniques appropriate to the
instrument, including the use of recent arm’s length
transactions where available, discounted cash flow
approach or reference to the net assets of the entity.
Due to their illiquidity, complexity and/or use of
unobservable inputs into valuation models, they are
classified as Level 3 assets.
99
Note 12. 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.
$m
Level 1
Level 2
Level 3
Total
As at 31 March 2025
Financial assets measured at fair value on a recurring basis
Trading securities and financial assets measured at FVIS17,79733,290151,088
Derivative financial instruments2019,321619,347
Investment securities23,03090,601487114,118
Loans-171431
Total financial assets measured at fair value on a recurring basis40,847143,229508184,584
Financial liabilities measured at fair value on a recurring basis
Deposits and other borrowings-42,485-42,485
Other financial liabilities1,69620,457-22,153
Derivative financial instruments1121,503621,520
Debt issues-4,439-4,439
Total financial liabilities measured at fair value on a recurring basis1,70788,884690,597
As at 30 September 2024
Financial assets measured at fair value on a recurring basis
Trading securities and financial assets measured at FVIS15,52233,700649,228
Derivative financial instruments1324,089724,109
Investment securities14,11788,155447102,719
Loans-21015225
Total financial assets measured at fair value on a recurring basis29,652146,154475176,281
Financial liabilities measured at fair value on a recurring basis
Deposits and other borrowings-46,878-46,878
Other financial liabilities89118,428-19,319
Derivative financial instruments1430,955530,974
Debt issues-5,385-5,385
Total financial liabilities measured at fair value on a recurring basis905101,6465102,556
As at 31 March 2024
Financial assets measured at fair value on a recurring basis
Trading securities and financial assets measured at FVIS5,06928,866833,943
Derivative financial instruments2415,7482315,795
Investment securities5,03083,89746089,387
Loans--1414
Total financial assets measured at fair value on a recurring basis10,123128,511505139,139
Financial liabilities measured at fair value on a recurring basis
Deposits and other borrowings-51,273-51,273
Other financial liabilities2,04018,236-20,276
Derivative financial instruments1118,3129418,417
Debt issues-3,406-3,406
Total financial liabilities measured at fair value on a recurring basis2,05191,2279493,372
100WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
Note 12. Fair values of financial assets and financial liabilities (Continued)
Reconciliation of non-market observables
The following table summarises the changes in financial instruments measured at fair value derived from non-market observable valuation
techniques (Level 3).
Half Year March 2025
Trading
securities and
financial assetsInvestmentDerivative andTotal Level 3DerivativeTotal Level 3
$m
measured at FVIS Securities other assets assets liabilities liabilities
Balance as at beginning of period64472247555
Gains/(losses) on assets / (gains)/losses on liabilities recognised in:
Income statement--(1)(1)1010
Other comprehensive income-28-28--
Acquisitions and issues41381010
Disposals and settlements(9)(1)(4)(14)(3)(3)
Transfer into or out of non-market observables-8-8(16)(16)
Foreign currency translation impacts-4-4--
Balance as at end of period14872050866
Unrealised gains/(losses) recognised in the income statement for financial
instrument held as at end of period--1111
Transfers into and out of Level 3 have occurred due to changes in observability in the significant inputs into the valuation models used to determine
the fair value of the related financial instruments. Transfers in and transfers out are reported using the end of period fair values.
Significant unobservable inputs
Sensitivities to reasonably possible changes in non-market observable valuation assumptions would not have a material impact on Westpac’s
reported results.
Day one profit or loss
The closing balance of unrecognised day one profit was nil as at 31 March 2025 (30 September 2024: $1 million, 31 March 2024: nil).
101
Note 12. Fair values of financial assets and financial liabilities (Continued)
Financial instruments not measured at fair value
The following table summarises the estimated fair value of financial instruments not measured at fair value for the Group.
As at 31 March 2025As at 30 Sept 2024As at 31 March 2024
$m
Carrying amount Fair value Carrying amount Fair value Carrying amountFair value
Financial assets not measured at fair value
Cash and balances with central banks58,35258,352 65,667 65,667 95,90795,907
Collateral paid6,1906,190 6,269 6,269 4,6714,671
Investment securities1,0681,0681,1661,1661,2001,200
Loans824,777824,775 806,542 805,776 784,825782,246
Other financial assets7,8867,8865,4565,45611,26611,266
Total financial assets not measured at fair value898,273898,271 885,100 884,334 897,869895,290
Financial liabilities not measured at fair value
Collateral received3,7383,738 3,078 3,078 2,5342,534
Deposits and other borrowings696,765697,583 673,611 674,384 650,953651,550
Other financial liabilities22,52822,528 18,758 18,758 34,11634,116
Debt issues
a
167,425168,065 163,899 164,505 156,375156,705
Loan capital
a
40,70342,17137,88339,39037,28038,544
Total financial liabilities not measured at fair value931,159934,085 897,229 900,115 881,258883,449
a.The estimated fair values of debt issues and loan capital include the impact of changes in Westpac’s credit spreads since origination.
A detailed description of how fair value is derived for financial instruments not measured at fair value is disclosed in Note 22 of the 2024 Annual
Report.
Note 13. Provisions, contingent liabilities, contingent assets and credit commitments
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. Provisions raised by the Group are set out in the table in the “Provisions” section below. Where it
is not probable there will be an outflow of economic resources or where a liability cannot be reliably estimated a contingent liability may exist.
Provisions
As at 31 March 2025
Litigation,
Annual leaveProvision fornon-lending
Longand otherimpairmentLeaseRestructuringlosses and
serviceemployeeon creditrestorationand otherremediation
$m
leave benefits commitments obligations provisions provisions Total
Balance as at beginning of period4778995161632102402,505
Additions4658115377128850
Utilisation(21)(864)-(5)(62)(60)(1,012)
Reversal of unutilised provisions(11)(2)(47)-(20)(9)(89)
Balance as at end of period4916144841612052992,254
102WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
Note 13. Provisions, contingent liabilities, contingent assets and credit commitments
(Continued)
Litigation, non-lending losses and remediation provisions
As at 31 March 2025, these provisions included estimates of:
●Customer refunds associated with matters of potential historical misconduct;
●Costs of completing remediation programs; and
●Potential non-lending losses and costs connected with certain litigation and regulatory investigations.
It is possible that the final outcome could be below or above the provision, if the actual outcome differs 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.
Certain litigation and regulatory matters
As at 31 March 2025, the Group held provisions in respect of potential non-lending losses and costs connected with certain litigation and regulatory
matters, including:
●Civil penalty proceedings commenced by ASIC against Westpac on 4 September 2023, alleging contraventions under the National Credit Code
(Credit Code) and National Consumer Credit Protection Act 2009 (Cth). The proceedings relate to system and operational failures and allege
that Westpac did not respond to 277 online hardship applications between 2015 and 2023 within the time-frames required under the Credit
Code. Westpac self-reported the incidents to ASIC and has remediated impacted customers. ASIC also alleges that Westpac failed to do all
things necessary to ensure that credit activities were engaged in efficiently, honestly and fairly. The proceeding has been listed for a final hearing
on liability and penalty on 26 May 2025;
●A class action commenced against Westpac and St.George Finance Limited (SGF) on 15 July 2020, in the Supreme Court of Victoria in relation
to flex commissions paid to auto dealers from 1 March 2013 to 31 October 2018. It was alleged that Westpac and SGF are liable for the unfair
conduct of dealers acting as credit representatives and engaged in misleading or deceptive conduct. This proceeding was one of several class
actions commenced against lenders in the auto finance industry. Westpac and SGF settled the class action on 14 March 2025 without
admission of liability, subject to Court approval. The settlement amount of $130 million is included in the 31 March 2025 provisions. Westpac has
not paid such flex commissions since 2018; and
●An enforcement investigation by ASIC into Westpac and RAMS Financial Group Pty Limited (RFG) relating to conduct of RAMS authorised
credit representatives (including RAMS franchisees) in connection with the provision of home loan products from 1 January 2019 to 1
September 2023. The current focus of ASIC’s investigation is on general conduct obligations, prohibitions on conducting business with
unaccredited loan referrers and unlicensed persons, conflicts of interest and giving misleading information.
There remains uncertainty as to the expense that may be associated with these matters, including the approach that the relevant counterparty or
Courts may take in relation to these matters, and the Court’s assessment of applicable fines, penalties, loss or damages. It is possible that the
actual aggregate expense to Westpac associated with a Court determined resolution of these matters may be higher or lower than the provision.
Restructuring provisions
Westpac carries restructuring provisions for committed business restructures and branch closures. The provisions held primarily relate to separation
costs and redundancies.
Lease restoration obligations
The lease restoration provision reflects an estimate of the cost of making good leasehold premises at the end of Westpac’s property leases.
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 resource is remote.
Regulatory investigations, reviews and inquiries
Domestic regulators, statutory authorities and other bodies, such as ASIC, the ACCC, APRA, AUSTRAC, BCCC, AFCA, the OAIC, the ATO and the
Fair Work Ombudsman (FWO), as well as certain international regulators and other bodies such as the Reserve Bank of New Zealand, New
Zealand Financial Markets Authority, New Zealand Commerce Commission, BPNG and its Financial Analysis & Supervision Unit, and the SEC, from
time to time conduct investigations, reviews or inquiries (some of which may be industry wide). These activities can cover a range of matters
(including potential contraventions and non-compliance) that involve, or may in the future, involve the Group.
103
Note 13. Provisions, contingent liabilities, contingent assets and credit commitments
(Continued)
These currently include:
●Engagement with the ATO in relation to the remediation and uplift of Westpac’s Common Reporting Standard (CRS) reporting;
●Investigation by the FWO in relation to Westpac’s self-disclosed remediation program regarding employee pay-related entitlements. Westpac
considers enforcement action against it likely, and could include an Enforceable Undertaking; and
●Regulatory investigations, reviews or inquiries into other areas such as risk governance, AML/CTF Program, including Transaction Monitoring
Program and associated processes and procedures, compliance with industry codes, consumer lending conduct, compliance with lending
obligations, consumer credit contracts banking products, hardship processes, and Consumer Data Rights.
It is uncertain what (if any) actions will result following the conclusion of these investigations or matters. No provisions have yet been made in
relation to any financial liability that might arise, or costs that may be incurred in the event proceedings are pursued in relation to the matters
outlined above. Such investigations, reviews or inquiries, or risk-based decisions taken by Westpac regarding relevant businesses, have previously
resulted, and/or may in the future result in litigation (including class action proceedings and criminal proceedings), significant fines and penalties,
infringement notices, enforcement action including enforceable undertakings, requirement to undertake a review, referral to the relevant
Commonwealth or State Director of Public Prosecutions for consideration for criminal prosecution, imposition of capital or liquidity requirements,
licence revocation, suspension or variation, customer remediation or other sanctions or actions being taken by regulators or other parties.
Investigations have in some instances resulted, and could in the future result, in findings of a significant number of breaches of obligations. This in
turn could lead to significant financial and other penalties. Prior penalties and contraventions by Westpac in relation to similar issues can also affect
penalties that may be imposed. Reliance on third parties and any contributing actions of third parties may not mitigate penalties.
Litigation
There are ongoing Court proceedings, claims and possible claims against the Group. Contingent liabilities exist in respect of actual and potential
claims and proceedings, including those listed below.
Class actions
In addition to the class action litigation noted under Provisions, above:
●Westpac is defending a class action proceeding which was commenced in December 2019 in the Federal Court of Australia on behalf of certain
investors who acquired an interest in Westpac securities between 16 December 2013 and 19 November 2019. The proceeding involves
allegations relating to market disclosure issues connected to Westpac’s monitoring of financial crime over the relevant period and matters which
were the subject of the AUSTRAC civil proceedings. The damages sought on behalf of members of the class have not yet been specified.
However, in the course of a procedural hearing in August 2022, the applicant indicated that a preliminary estimate of the losses that may be
alleged in respect of a subset of potential group members exceeded $1 billion. While it remains unclear how the applicant will ultimately
formulate their estimate of alleged damages claimed on behalf of group members, it is possible that the claim may be higher (or lower) than the
amount referred to above. Given the time period and the nature of the claims alleged to be in question, along with the reduction in our market
capitalisation at the time of the commencement of the AUSTRAC civil proceedings, it is likely that any total alleged damages (when, and if,
ultimately articulated by the applicant) will be significant. Westpac continues to deny both that its disclosure was inappropriate and, as such, that
any group member has incurred damage. The matter has not yet been set down for a hearing; and
●Disputes have been raised by franchisees who were exited by RFG, including the commencement of a class action in May 2024. Following a
strategic review by Westpac of the RAMS business, RFG closed the RAMS business to new home loan applications from 6 August 2024.
104WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
Note 13. Provisions, contingent liabilities, contingent assets and credit commitments
(Continued)
Internal reviews and remediation
As in prior periods, Westpac is continuing to undertake a number of reviews to identify and resolve issues that have the potential to impact our
customers, employees, other stakeholders and reputation. These internal reviews continue to identify issues in respect of which we are taking, or
will take, action including so that our customers and employees (as applicable) are not disadvantaged from certain past practices, including by
making compensation/remediation payments and providing refunds where appropriate. These issues include, among other things, consumer
lending conduct; compliance with lending obligations; hardship processes; sufficiency of training, policies, processes and procedures; AML/CTF
Program, including Transaction Monitoring Program and associated processes and procedures; product disclosure; destruction and retention of
personal information; and impacts from inadequate product governance, including the way some product terms and conditions are operationalised.
By undertaking these reviews, we can also improve our processes and controls, including those of our contractors, agents, and authorised credit
representatives. An assessment of the Group’s likely loss has been made on a case-by-case basis for the purpose of the financial statements but
cannot always be reliably estimated. Even where Westpac has remediated or compensated customers, employees or issues, there can still be the
risk of regulators challenging the basis, scope or pace of remediation, taking enforcement action (including seeking enforceable undertakings and
contrition payments), or imposing fines/penalties or other sanctions, including civil or criminal prosecutions. Contingent liabilities may exist in respect
of actual or potential claims or proceedings (which could be brought by customers, employees/ unions, regulators or criminal prosecutors),
compensation/remediation payments and/or refunds identified as part of these reviews.
Contingent levies
The Group is subject to a number of regulatory levies, which may be imposed at the discretion of the relevant regulating body. These include levies
that fund the Financial Claims Scheme and the Compensation Scheme of Last Resort.
Exposures to third parties relating to divested businesses
The Group has potential exposures relating to warranties, indemnities and other commitments it has provided to third parties in connection with
various divestments of entities, businesses and assets. The warranties, indemnities and other commitments cover a range of matters, conduct and
risks. We have made payments under these indemnities and are in discussions with one or more parties in relation to claims made, and potential
claims, under these arrangements. Provisions have been raised for matters where a present obligation exists, and a probable settlement can be
reliably estimated.
Contingent tax risk
Tax and regulatory authorities in Australia and in other jurisdictions review, in the normal course of business, the direct and indirect taxation
treatment of transactions (both historical and present-day transactions) undertaken by the Group. The Group also responds to various notices and
requests for information it receives from tax and regulatory authorities.
These reviews, notices and requests may result in additional tax liabilities (including interest and penalties).
Westpac has assessed these and other taxation matters arising in Australia and elsewhere, including seeking independent advice.
Clearing and settlement obligations
Westpac is subject to the rules governing clearing and settlement activities under which loss sharing arrangements may arise. This includes the
requirements of central clearing houses where the Group has made contributions to a default fund. In the event of a default of another clearing
member, the Group could be required to make additional default fund contributions.
Parent entity guarantees and undertakings to subsidiaries
Consistent with 2024, Westpac Banking Corporation, as the parent entity of Westpac, makes the following guarantees and undertakings to its
subsidiaries:
●Letters of comfort for certain subsidiaries which recognise that Westpac has a responsibility that those subsidiaries continue to meet their
obligations; and
●Guarantees to certain wholly owned subsidiaries which are Australian financial services or credit licensees to comply with legislative
requirements. All but two guarantees are capped at $20 million per year (with an automatic reinstatement for another $20 million) and two
specific guarantees are capped at $2 million (with an automatic reinstatement for another $2 million).
105
Note 13. Provisions, contingent liabilities, contingent assets and credit commitments
(Continued)
Contingent assets
Undrawn credit commitments
Westpac enters into various arrangements with customers that constitute contingent assets. If a specified contingent event occurs, these
commitments will be called upon and recognised on the balance sheet as loans.
Any associated cash outflows expose Westpac to liquidity risk, while the resulting receivable exposes Westpac to credit risk should the counterparty
fail to repay amounts owed as they become due. Westpac’s maximum exposure to credit losses is the contractual or notional amount of the
arrangement, noting that some credit commitments can be cancelled by Westpac at any time, and a significant portion are expected to expire
without being drawn upon. As a result, notional amounts do not necessarily reflect future cash requirements.
Westpac applies the same credit policies when entering into these arrangements as it does for on balance sheet instruments. Refer to Note 11 and
Note 21 of the 2024 Annual Report for further details of credit risk and liquidity risk management, respectively.
Undrawn credit commitments, excluding derivatives, are disclosed in the below table:
●Financial guarantees, letters of credit and other credit substitutes support the financial obligations of customers to third parties. Utilisation of
these contracts is generally dependent on the creditworthiness of the customer. The Group may hold cash as collateral for certain financial
guarantees issued;
●Performance-related contingencies support the non-monetary obligations of customers to third parties, where payment will generally need to be
made if a customer fails to fulfil a non-monetary contractual obligation to that third party;
●Remaining commitments to extend credit mainly comprises various forms of credit facilities.
As atAs atAs at% Mov’t
31 March30 Sept31 MarchMar 25Mar 25
$m
2025 2024 2024 - Sept 24 - Mar 24
Undrawn credit commitments
a
Financial guarantees, letters of credit and other credit substitutes15,79515,22014,74747
Performance-related contingencies6,3005,3934,8351730
Remaining commitments to extend credit
b
195,661191,498190,70223
Total undrawn credit commitments217,756212,111210,28434
a.The composition of undrawn credit commitments has been revised to better reflect the nature of the types of commitments provided. Comparatives have been revised to align
with current period presentation.
b.In addition to the commitments disclosed above, $6.6 billion of credit exposures as at 31 March 2025 (30 September 2024: $6.0 billion, 31 March 2024: $6.8 billion) were
offered and accepted but still revocable. These represent part of Westpac Group’s maximum exposure to credit risk.
106WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
Note 14. Shareholders’ equity
As atAs atAs at
31 March30 Sept31 March
$m
2025 2024 2024
Share capital
Ordinary share capital, fully paid37,35437,95838,944
Treasury shares
a
(820)(758)(758)
Total share capital36,53437,20038,186
Non-controlling interest
Perpetual Preference Shares (PPS)336339-
Other
b
2838
Total non-controlling interests33834738
a.31 March 2025: 5,312,508 unvested RSP and EIP treasury shares held (30 September 2024: 6,173,874, 31 March 2024: 5,645,501).
b.Westpac acquired 8.74% of the non-controlling interest in Westpac Bank-PNG-Limited during Second Half 2024.
Perpetual Preference Shares (PPS)
Westpac New Zealand Limited (WNZL), a wholly-owned subsidiary of Westpac, has NZD375 million of PPS with external investors. The PPS is
recognised as a non-controlling interests to the Group at the amount paid up per share, net of directly attributable issue costs (NZD6 million).
Discretionary distributions on PPS are recognised in equity when paid.
Ordinary Shares
Westpac does not have authorised capital and the ordinary shares have no par value. Ordinary shares entitle the holder to participate in dividends
and, in the event of Westpac winding up, to a share of the proceeds in proportion to the number of and amounts paid on the shares held.
Each ordinary share entitles the holder to one vote, either in person or by proxy, at a shareholder meeting.
Reconciliation of movement in number of ordinary shares
Half YearHalf YearHalf Year
MarchSeptMarch
Number
2025 2024 2024
Balance as at beginning of period3,441,411,3613,474,634,5103,509,076,960
Share buyback
a
(17,711,952)(33,223,149)(34,442,450)
Balance as at end of period3,423,699,4093,441,411,3613,474,634,510
a.Westpac previously announced its intention to undertake a $3.5 billion on market buyback of WBC ordinary shares. In First Half 2025, Westpac has bought back and cancelled
17,711,952 ordinary shares. A further 497,280 shares were acquired on 31 March 2025 and cancelled on 2 April 2025 (Second Half 2024: 33,223,149, First Half 2024:
34,442,450). The ordinary shares were bought back at an average price of $31.92 (Second Half 2024: $28.99, First Half 2024: $24.65).
Ordinary shares purchased on market
Half Year March 2025
Average price
Number ($)
For share-based payment arrangements:
Employee share plan (ESP)807,48031.77
Westpac Equity Incentive Plan (EIP) – Restricted Shares
a
1,782,13132.32
Westpac Performance Plan (WPP) - share rights exercised10,22132.82
Westpac EIP - Unhurdled share rights exercised13,81233.65
Westpac on-market share purchase for future share rights exercises and restricted shares allocations
b
312,15431.35
Net number of ordinary shares purchased on market2,925,798
a.Ordinary shares allocated to employees under the EIP as Restricted Shares are classified as treasury shares until the shares vest.
b.Unallocated shares in the Westpac Employee Equity Plans Trust that are classified as treasury shares.
107
Note 14. Shareholders’ equity (Continued)
Reconciliation of movement in reserves
Half Year Half Year Half Year
MarchSeptMarch
$m2025 2024 2024
Debt securities at FVOCI reserve
Balance as at beginning of period
(568)(182) (165)
Net gains/(losses) from changes in fair value
(13)(557) (34)
Income tax effect
3168 12
Transferred to income statement
(4)4 1
Income tax effect
2(1) -
Loss allowance on debt securities measured at FVOCI--1
Other
4- 3
Balance as at end of period
(576)(568) (182)
Equity securities at FVOCI reserve
Balance as at beginning of period
127142 126
Net gains/(losses) from changes in fair value
29(16) 14
Exchange differences on translation31-
Income tax effect(1)-2
Balance as at end of period
158127 142
Share-based payment reserve
Balance as at beginning of period
2,0792,042 1,983
Share-based payment expense
6737 59
Balance as at end of period
2,1462,079 2,042
Cash flow hedge reserve
Balance as at beginning of period
548477 152
Net gains/(losses) from changes in fair value
(39)49 452
Income tax effect
11(18) (140)
Transferred to income statement
21457 20
Income tax effect
(64)(17) (7)
Balance as at end of period
670548 477
Foreign currency translation reserve
Balance as at beginning of period
(438)(300) (138)
Exchange differences on translation of foreign operations
128(154) (174)
Gains/(losses) on net investment hedges
(41)16 12
Balance as at end of period
(351)(438) (300)
Other reserves
Balance as at beginning of period
(16)(22) (23)
Transactions with owners
(1)6 1
Balance as at end of period
(17)(16) (22)
Total reserves
2,0301,732 2,157
108WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
Note 15. Notes to the consolidated cash flow statement
Reconciliation of net cash provided by/(used in) operating activities to profit after income tax expense for the period is set out below:
Half Year Half Year Half Year % Mov’t
MarchSeptMarchMar 25Mar 25
$m2025 2024 2024- Sept 24- Mar 24
Profit after income tax expense3,3253,6483,342(9)(1)
Adjustments:
Depreciation, amortisation and impairment7527357872(4)
Impairment charges/(benefits)36527545233(19)
Net decrease/(increase) in current and deferred tax(506)69(321)large58
(Increase)/decrease in accrued interest receivable(91)60(287)large(68)
(Decrease)/increase in accrued interest payable115266536(57)(79)
(Decrease)/increase in provisions(251)91(363)large(31)
Unrealised (gain)/loss in trading income(846)1,081534largelarge
Other non-cash items(810)(740)(381)9113
Cash flows from operating activities before changes in operating assets and
liabilities2,0535,4854,299(63)(52)
Net (increase)/decrease in:
Collateral paid555(1,882)(215)largelarge
Trading securities and financial assets measured at FVIS(1,394)(15,530)(3,464)(91)(60)
Derivative financial instruments8,256(1,149)313largelarge
Loans(19,357)(22,346)(12,737)(13)52
Other financial assets(269)(9)(339)large(21)
Other assets17(38)4largelarge
Net increase/(decrease) in:
Collateral received378653(971)(42)large
Deposits and other borrowings16,83319,76115,482(15)9
Other financial liabilities4,895(10,842)3,758large30
Other liabilities25(5)(60)large
Net cash provided by/(used in) operating activities11,969(25,892)6,125large95
109
Note 15. Notes to the consolidated cash flow statement (Continued)
Non-cash financing activities
Half YearHalf YearHalf Year % Mov’t
MarchSeptMarchMar 25Mar 25
$m202520242024- Sept 24- Mar 24
Increase in lease liabilities
149 231 168 (35)(11)
Restricted cash
Certain of our foreign operations are required to maintain reserves or minimum balances with central banks in their respective countries of
operation, totalling $285 million (30 September 2024: $311 million, 31 March 2024: $295 million) which are included in cash and balances with
central banks.
Note 16. Subsequent events
Since 31 March 2025, the Board has determined to pay a fully franked interim ordinary dividend of 76 cents per fully paid ordinary share. The
dividend is expected to be $2,602 million. The dividend is not recognised as a liability at 31 March 2025. The proposed payment date of the dividend
is 27 June 2025.
The Board has determined to satisfy the DRP for the 2025 interim ordinary dividend by arranging for the purchase of shares in the market by a third
party. The market price used to determine the number of shares to be provided to DRP participants will be set over the 17 trading days commencing
14 May 2025 and will not include a discount.
No other matters have arisen since the half year ended 31 March 2025, which are not otherwise dealt with in this 2025 Interim Financial Report, that
have significantly affected or may significantly affect the operations of Westpac, the results of its operations or the state of affairs of Westpac in
subsequent periods.
110WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
STATUTORY STATEMENTS
Directors’ declaration
In the Directors’ opinion
(i)the interim financial statements and notes set out on pages 73-109 are in accordance with the Corporations Act 2001, including that they:
(a)comply with Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
and
(b)give a true and fair view of the Group’s financial position as at 31 March 2025 and of its performance for the six months ended 31 March
2025; and
(ii)there are reasonable grounds to believe that Westpac will be able to pay its debts as and when they become due and payable.
This declaration is made in accordance with a resolution of the Directors.
For and on behalf of the Board
Steven GreggAnthony Miller
ChairmanManaging Director and Chief Executive Officer
Sydney, Australia
4 May 2025
111
Independent Auditor’s Review Report
To the shareholders of Westpac Banking Corporation
Conclusion
We have reviewed the accompanying Interim Financial Report of
Westpac Banking Corporation.
Based on our review, which is not an audit, we have not become aware
of any matter that makes us believe that the Interim Financial Report of
Westpac Banking Corporation does not comply with the Corporations Act
2001, including:
●giving a true and fair view of the Group’s financial position as at 31
March 2025 and of its performance for the half year ended on that
date; and
●complying with Australian Accounting Standard AASB 134 Interim
Financial Reporting and the Corporations Regulations 2001.
The Interim Financial Report comprises:
●Consolidated balance sheet as at 31 March 2025
●Consolidated income statement, Consolidated statement of
comprehensive income, Consolidated statement of changes in
equity and Consolidated cash flow statement for the half year
ended on that date
●Notes 1 to 16 comprising material accounting policies and other
explanatory information
●The Directors’ Declaration.
The Group comprises Westpac Banking Corporation (the Company)
and the entities it controlled at the half year’s end or from time to time
during the half year.
Basis for Conclusion
We conducted our review in accordance with ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity and
ISRE 2410 Review of Interim Financial Information performed by the Independent Auditor of the Entity. Our responsibilities are further described in
the Auditor’s Responsibilities for the Review of the Financial Report section of our report.
We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including
Independence Standards) (the Code) that are relevant to our audit of the annual financial report in Australia. We have also fulfilled our other ethical
responsibilities in accordance with these requirements.
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English
company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global
organisation. Liability limited by a scheme approved under Professional Standards Legislation.
112WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
STATUTORY STATEMENTS
Responsibilities of the Directors for the Interim Financial Report
The Directors of the Company are responsible for:
●the preparation of the Interim Financial Report that gives a true and fair view in accordance with Australian Accounting Standards and the
Corporations Act 2001
●such internal control as the Directors determine is necessary to enable the preparation of the Interim Financial Report that gives a true and fair
view and is free from material misstatement, whether due to fraud or error.
Auditor’s Responsibilities for the Review of the Interim Financial Report
Our responsibility is to express a conclusion on the Interim Financial Report based on our review. ASRE 2410 and ISRE 2410 require us to
conclude whether we have become aware of any matter that makes us believe that the Interim Financial Report does not comply with the
Corporations Act 2001 including giving a true and fair view of the Group’s financial position as at 31 March 2025 and its performance for the half
year ended on that date, and complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations
Regulations 2001.
A review of an interim period financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters,
and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian
Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit opinion.
KPMGKim Lawry
Partner
Sydney
4 May 2025
113
OTHER
INFORMATION
OTHER INFORMATION
Disclosure regarding forward-looking statements
References to websites and other reports
Credit ratings
Dividend reinvestment plan
Information on related entities
Financial calendar and Share Registry details
Exchange Rates
Additional information for Non-AAS financial measures
GLOSSARY
114WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
OTHER INFORMATION
Disclosure regarding forward-looking statements
This Results Announcement contains statements that constitute ‘forward-looking statements’ within the meaning of Section 21E of the US Securities
Exchange Act of 1934.
Forward-looking statements are statements that are not historical facts. Forward-looking statements appear in a number of places in this Results
Announcement and include statements regarding our current intent, belief or expectations with respect to our business and operations, macro and
micro economic and market conditions, results of operations and financial condition and performance, capital adequacy and liquidity and risk
management, including, without limitation, future loan loss provisions and financial support to certain borrowers, forecasted economic indicators and
performance metric outcomes, indicative drivers, climate- and other sustainability-related statements, commitments, targets, projections and
metrics, and other estimated and proxy data.
Words such as ‘will’, ‘may’, ‘expect’, ‘intend’, ‘seek’, ‘would’, ‘should’, ‘could’, ‘continue’, ‘plan’, ‘estimate’, ‘anticipate’, ‘believe’, ‘probability’,
‘indicative’, ‘risk’, ‘aim’, ‘outlook’, ‘forecast’, ‘assumption’, ‘projection’, ‘target’, ‘goal’, ‘guidance’, ‘objective’, ‘ambition’ or other similar words, are
used to identify forward-looking statements. These statements reflect our current views on future events and are subject to change, certain known
and unknown risks, uncertainties and assumptions and other factors which are, in many instances, beyond our control (and the control of our
officers, employees, agents, and advisors), and have been made based on management’s and/or the Board’s current expectations or beliefs
concerning future developments and their potential effect upon Westpac.
Forward-looking statements may also be made, verbally or in writing, by members of Westpac’s management or Board in connection with this
Results Announcement. Such statements are subject to the same limitations, uncertainties, assumptions and disclaimers set out in this document.
There can be no assurance that future developments or performance will align with our expectations or that the effect of future developments on us
will be those anticipated. Actual results could differ materially from those we expect or which are expressed or implied in forward-looking
statements, depending on various factors including, but not limited to:
●information security breaches, including cyberattacks
●geopolitical events, conflicts, trade tensions (including the adoption of protectionist trade measures (including tariffs) or sanctions) or other
changes in countries in which Westpac, its customers or suppliers operate
●the effect of, and changes in, laws, regulations, policies, supervisory activities, regulator expectations and industry codes of practice
●actual or alleged failure to comply with laws, regulations or regulatory policy
●the effectiveness of our risk management, including our framework, policies, processes, practices, governance, accountability and culture
●the reliability and security of Westpac’s technology and risks associated with changes to technology systems that we use or are used in
connection with our business
●climate-related risks (including physical, transition and liability risks) that may arise from changing climate patterns, and risks associated with the
transition to a lower carbon economy (including Westpac’s ambition to become a net-zero, climate resilient bank) or risks from legal and
regulatory action, or risks from other sustainability factors such as human rights and natural capital
●the failure to comply with financial crime obligations (including anti-money laundering and counter-terrorism financing laws, anti-bribery and
corruption laws, sanctions laws and tax transparency laws)
●internal and external events which may adversely impact our reputation
●litigation and other legal proceedings and regulator investigations and enforcement actions (including the liability of Westpac to pay significant
monetary settlements and legal costs in order to resolve a dispute)
●adverse funding market conditions including market volatility, disruptions and decreased liquidity
●inadequate capital levels
●material downturn or shock to the economies of Australia or New Zealand, or a slowdown in economic growth or change in policy settings of
Australia’s major trading partners
●declines in asset markets or an increase in impairments and provisioning
●sovereign risks
●failure to maintain our credit ratings
●the effects of market competition and competition regulatory policy impacting the areas in which we operate
●operational risks resulting from inadequate or failed internal processes, people and systems or from external events
●market risk resulting from changes in market factors, such as foreign exchange rates, commodity prices, equity prices, credit spreads and
interest rates
●poor data quality, data availability, data controls, data retention or data destruction
●evaluation and implementation of strategic decisions, priorities and objectives including to simplify, streamline, diversify, innovate, separate,
divest, retain, acquire, invest and integrate
●failure to recruit and retain key executives, employees and Directors
115
Disclosure regarding forward-looking statements (Continued)
●changes to our critical accounting assumptions and estimates; and
●various other factors including those beyond Westpac’s control.
The above list is not exhaustive. For certain other factors that may impact on forward-looking statements made by Westpac, refer to Risk
Management (page 40) of the 2024 Annual Report and Risk Factors (pages 57-70) in this Results Announcement. When relying on forward-looking
statements to make decisions with respect to Westpac, investors and others relying on information in this Results Announcement should carefully
consider the foregoing factors and other uncertainties and events.
Except as required by law, we assume no obligation to revise or update any forward-looking statements in this Results Announcement, whether
from new information, future events, conditions, or otherwise, after the date of this Results Announcement.
Further important information regarding climate change and sustainability-related statements
This Results Announcement contains forward-looking statements and other representations relating to ESG topics, including but not limited to
climate change, net zero, climate resilience, natural capital, emissions intensity, human rights and other sustainability-related statements,
commitments, targets, projections, scenarios, risk and opportunity assessments, pathways, forecasts, estimated projections and other proxy data.
These are subject to known and unknown risks, and there are significant uncertainties, limitations, risks and assumptions in the metrics and
modelling on which these statements rely.
In particular, the metrics, methodologies and data relating to climate and sustainability are rapidly evolving and maturing, including variations in
approaches and common standards in estimating and calculating emissions, and uncertainty around future climate- and sustainability-related policy
and legislation. There are inherent limits in the current scientific understanding of climate change and its impacts. Some material contained in this
Results Announcement may include information including, without limitation, methodologies, modelling, scenarios, reports, benchmarks, tools and
data, derived from publicly available or government or industry sources that have not been independently verified. No representation or warranty is
made as to the accuracy, completeness or reliability of such information. There is a risk that the estimates, judgements, assumptions, views,
models, scenarios or projections used by Westpac may turn out to be incorrect. These risks may cause actual outcomes, including the ability to
meet commitments and targets, to differ materially from those expressed or implied in this Results Announcement. The climate- and sustainability-
related forward-looking statements made in this Results Announcement are not guarantees or predictions of future performance and Westpac gives
no representation, warranty or assurance (including as to the quality, accuracy or completeness of these statements), nor guarantee that the
occurrence of the events expressed or implied in any forward-looking statement will occur. There are usually differences between forecast and
actual results because events and actual circumstances frequently do not occur as forecast and these differences may be material. Westpac will
continue to review and develop its approach to ESG as this subject area matures.
References to websites and other reports
Information contained in or accessible through the websites or other reports mentioned in this Results Announcement does not form part of this
Results Announcement unless we specifically state that it is incorporated by reference and forms part of this Results Announcement. All references
in this Results Announcement to websites are inactive textual references and are for information only.
Credit ratings
1
Rating agency
Short TermLong Term Outlook
Fitch Ratings
F1+AA- Stable
Moody’s Ratings
P-1Aa2 Stable
S&P Global Ratings
A-1+AA- Stable
1.As at 31 March 2025.
116WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
OTHER INFORMATION
Dividend reinvestment plan
The Board has determined a fully franked 2025 interim ordinary dividend of 76 cents per share to be paid on 27 June 2025 to shareholders on the
register at the record date of 9 May 2025.
Westpac operates a DRP that is available to holders of fully paid ordinary shares who are resident in, or whose address on the register of
shareholders is in Australia or New Zealand. Shareholders can choose to receive their 2025 interim ordinary dividend as cash or reinvest it in
additional shares under the DRP. As noted in Capital and Dividends (pages 28-32), the Board has made certain determinations in relation to the
DRP, including that the DRP will apply for the 2025 interim ordinary dividend and will be satisfied by arranging for the purchase of shares in the
market by a third party. The market price used to determine the number of shares to be provided to DRP participants will be set over the 17 trading
days commencing 14 May 2025 and will not include a discount.
Shareholders who wish to commence participation in the DRP, or to vary their current participation election, must do so by 5.00pm (Sydney time) on
12 May 2025.
Shareholders can provide these instructions:
●Online for shareholders with holdings that have a market value of less than $1,000,000 within their MUFG Corporate Markets portfolio, by
logging into or creating a Portfolio via the Westpac share registry’s website at au.investorcentre.mpms.mufg.com and electing the DRP or
amending their existing instructions online; or
●By completing and returning a DRP application or variation form to Westpac’s share registry. Registry contact details are listed in Section
Financial calendar and Share Registry details (pages 117-120).
Information on related entities
a. Changes in control of Group entities
During the six months ended 31 March 2025 the following controlled entities were acquired, formed, or incorporated:
●Series 2024-2 WST Trust (formed 4 October 2024)
During the six months ended 31 March 2025 the following controlled entities ceased to be controlled:
●Asgard Wealth Solutions Pty Limited (deregistered 3 November 2024)
●Series 2014-2 WST Trust (terminated 3 March 2025)
b.Associates
As at 31 March 2025
Ownership Interest Held (%)
Akahu Technologies Ltd
34.5%
OpenAgent Pty Ltd
22.6%
mx51 Group Pty Ltd22.2%
Lawpath Holdings Pty Ltd15.1%
Safe Will Pty Ltd
12.6%
117
Financial calendar and Share Registry details
Westpac shares are listed on the securities exchanges in Australia (ASX) and New Zealand (NZX). Westpac Capital Notes 5, Westpac Capital
Notes 7, Westpac Capital Notes 8, Westpac Capital Notes 9 and Westpac Capital Notes 10 are listed on the ASX.
Important dates to note are set out below, subject to change. Payment of any distribution, dividend or interest payment is subject to the relevant
payment conditions and the key dates for each payment will be confirmed to the ASX for securities listed on the ASX.
Westpac Ordinary Shares (ASX code: WBC, NZX code: WBC)
Interim results and dividend announcement
5 May 2025
Ex-dividend date for interim dividend8 May 2025
Record date for interim dividend9 May 2025
Interim dividend payable27 June 2025
Financial Year end30 September 2025
Closing date for receipt of director nominations before Annual General Meeting23 October 2025
Final results and dividend announcement3 November 2025
Ex-dividend date for final dividend6 November 2025
Record date for final dividend7 November 2025
Annual General Meeting11 December 2025
a
Final dividend payable19 December 2025
a.Details regarding the location of the meeting and the business to be dealt with will be contained in a Notice of Meeting sent to shareholders in the November before the
meeting.
Westpac Capital Notes 5 (ASX code: WBCPH)
Ex-date for quarterly distribution
12 June 2025
Record date for quarterly distribution13 June 2025
a
Payment date for quarterly distribution23 June 2025
b
Ex-date for quarterly distribution11 September 2025
Record date for quarterly distribution12 September 2025
a
Payment date for quarterly distribution22 September 2025
Ex-date for quarterly distribution11 December 2025
Record date for quarterly distribution12 December 2025
a
Payment date for quarterly distribution22 December 2025
a.Adjusted to immediately preceding business day as record date falls on a non-ASX business day or a date on which banks are not open for general business in Sydney.
b.Adjusted to next business day as payment date falls on a non-ASX business day or a date on which banks are not open for general business in Sydney.
118WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
OTHER INFORMATION
Financial calendar and Share Registry details (Continued)
Westpac Capital Notes 7 (ASX code: WBCPJ)
Ex-date for quarterly distribution
12 June 2025
Record date for quarterly distribution13 June 2025
a
Payment date for quarterly distribution23 June 2025
b
Ex-date for quarterly distribution11 September 2025
Record date for quarterly distribution12 September 2025
a
Payment date for quarterly distribution22 September 2025
Ex-date for quarterly distribution11 December 2025
Record date for quarterly distribution12 December 2025
a
Payment date for quarterly distribution22 December 2025
a.Adjusted to immediately preceding business day as record date falls on a non-ASX business day or a date on which banks are not open for general business in Sydney.
b.Adjusted to next business day as payment date falls on a non-ASX business day or a date on which banks are not open for general business in Sydney.
Westpac Capital Notes 8 (ASX code: WBCPK)
Ex-date for quarterly distribution
12 June 2025
Record date for quarterly distribution13 June 2025
Payment date for quarterly distribution23 June 2025
a
Ex-date for quarterly distribution11 September 2025
Record date for quarterly distribution12 September 2025
b
Payment date for quarterly distribution22 September 2025
a
Ex-date for quarterly distribution11 December 2025
Record date for quarterly distribution12 December 2025
b
Payment date for quarterly distribution22 December 2025
a
a.Adjusted to next business day as payment date falls on a non-ASX business day or a date on which banks are not open for general business in Sydney.
b.Adjusted to immediately preceding business day as record date falls on a non-ASX business day or a date on which banks are not open for general business in Sydney.
Westpac Capital Notes 9 (ASX code: WBCPL)
Ex-date for quarterly distribution
12 June 2025
Record date for quarterly distribution
13 June 2025
a
Payment date for quarterly distribution23 June 2025
b
Ex-date for quarterly distribution11 September 2025
Record date for quarterly distribution12 September 2025
a
Payment date for quarterly distribution22 September 2025
Ex-date for quarterly distribution11 December 2025
Record date for quarterly distribution12 December 2025
a
Payment date for quarterly distribution22 December 2025
a.Adjusted to immediately preceding business day as record date falls on a non-ASX business day or a date on which banks are not open for general business in Sydney.
b.Adjusted to next business day as payment date falls on a non-ASX business day or a date on which banks are not open for general business in Sydney.
119
Financial calendar and Share Registry details (Continued)
Westpac Capital Notes 10 (ASX code: WBCPM)
Ex-date for quarterly distribution
12 June 2025
Record date for quarterly distribution13 June 2025
a
Payment date for quarterly distribution23 June 2025
b
Ex-date for quarterly distribution11 September 2025
Record date for quarterly distribution12 September 2025
a
Payment date for quarterly distribution22 September 2025
Ex-date for quarterly distribution11 December 2025
Record date for quarterly distribution12 December 2025
a
Payment date for quarterly distribution22 December 2025
a.Adjusted to immediately preceding business day as record date falls on a non-ASX business day or a date on which banks are not open for general business in Sydney.
b.Adjusted to next business day as payment date falls on a non-ASX business day or a date on which banks are not open for general business in Sydney.
120WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
OTHER INFORMATION
Financial calendar and Share Registry details (Continued)
Registered Office and Contact
Level 18, 275 Kent Street Sydney NSW 2000 Australia
Telephone: +61 2 9155 7713
Fax: +61 2 9055 3575
International Customers: +61 2 9155 7700
Shareholders: +61 1800 804 255
Website: www.westpac.com.au
Share Registries
AustraliaNew Zealand
Ordinary shares on the main register,
Westpac Capital Notes 5,
Westpac Capital Notes 7,
Westpac Capital Notes 8,
Westpac Capital Notes 9, and
Westpac Capital Notes 10.
MUFG Corporate Markets (AU) Limited
Liberty Place
Level 41
161 Castlereagh Street
Sydney NSW 2000 Australia
Postal Address: Locked Bag A6015,
Sydney South NSW 1235, Australia
Website: au.investorcentre.mpms.mufg.com
Email: westpac@cm.mpms.mufg.com
Telephone: 1800 804 255 (toll free in Australia)
International: +61 1800 804 255
Facsimile: +61 2 9287 0303
Ordinary shares on the New Zealand branch register.
MUFG Pension & Market Services (NZ) Limited
Level 30, PwC Tower
15 Customs Street West
Auckland 1010
New Zealand
Postal Address: P.O. Box 91976,
Auckland 1142, New Zealand
Website: nz.investorcentre.mpms.mufg.com
Email: enquiries.nz@cm.mpms.mufg.com
Telephone: 0800 002 727 (toll free in New Zealand)
International: +64 9 375 5998
121
Exchange Rates
Exchange rates against A$
Six months to/as at
Half Year March 2025 Half Year Sept 2024 Half Year March 2024
Currency
Average Spot Average Spot Average Spot
US$ 0.6405 0.6284 0.6645 0.6929 0.6542 0.6528
GBP 0.5039 0.4849 0.5187 0.5176 0.5215 0.5167
NZ$ 1.1042 1.1001 1.0932 1.0885 1.0759 1.0892
Impact of exchange rate movements on Group results
Half Year March 2025 vsHalf Year March 2025 vs
Half Year September 2024Half Year March 2024
FX impactGrowthFX impactGrowth
Growth($m)ex- FXGrowth($m)ex- FX
Net interest income
(3%)(12) (3%)2% (33) 3%
Non-interest income
5% 3 5%(1%) - (1%)
Net operating income
(2%) (9) (2%)2% (33) 2%
Operating expenses
3% 3 3%6% 14 6%
Pre-provision profit(6%) (6)(6%)(2%) (19)(2%)
Impairment (charges)/benefits
43% - (70%)(31%) 1 (31%)
Profit before income tax expense
(8%) (6) (8%) - (18) 1%
Income tax expense
(7%) 2 (6%)2% 5 2%
Profit after income tax expense
(9%) (4) (9%)(1%) (13) -
Profit attributable to non-controlling interests (NCI)
- - - - - -
Net profit attributable to owners of WBC
(9%) (4) (9%)(1%) (13) -
Exchange rate risk on future NZ$ earnings
Westpac’s policy in relation to the hedging of the future earnings of the Westpac’s New Zealand division is to manage the economic risk for volatility
of the NZ$ against A$. Westpac manages these flows over a time horizon under which up to 100% of the expected earnings for the following twelve
months and 50% of the expected earnings for the subsequent twelve months can be hedged. NZ Future Earnings hedges are only implemented
when AUD/NZD is trading at the low end of the range or is expected to move higher over the next 6 months. As at 31 March 2025, Westpac has
hedges in place covering 3 months of forecasts up to June 2025, for NZD 292 million, with an average all-in rate of NZ$1.1026.
Additional information for Non-AAS financial measures
Calculation of Non-AAS financial measures
Details of the calculation of non-AAS financial measures not disclosed elsewhere are provided below:
Expense to income ratio (excluding Notable Items)
Half Year
Half YearHalf Year
MarchSeptMarch
$m202520242024
Operating expenses
5,698 5,549 5,395
less: Notable Items (operating expenses)
- - -
Operating expenses excluding Notable Items
5,698 5,549 5,395
Net operating income
10,793 10,998 10,590
Add/(less): Notable Items (net interest income)
218 (61) 224
Add/(less): Notable Items (non-interest income)
(18) 10 2
Net operating income excluding Notable Items
10,993 10,947 10,816
Expense to income ratio (excluding Notable Items)
51.83%50.69%49.88%
122WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
OTHER INFORMATION
Additional information for Non-AAS financial measures (Continued)
Average tangible ordinary equity and Return on average tangible ordinary equity (ROTE)
Half Year
Half Year
Half Year
MarchSeptMarch
$m202520242024
Net profit attributable to owners of WBC (adjusted for RSP dividends)
a
3,314 3,643 3,340
Average ordinary equity
70,584 71,145 71,841
less: Intangible assets (average)
(10,646) (10,698) (10,818)
add: Computer software (average)
2,581 2,630 2,730
Average tangible ordinary equity
62,519 63,077 63,753
Return on average tangible ordinary equity (ROTE)
10.63%11.55%10.48%
a.See Note 7 (page 89) to the financial statements for calculations of this profit measure.
Net profit attributable to owners of WBC (adjusted for RSP shares) excluding Notable Items
Half Year Half Year Half Year
MarchSeptMarch
$m202520242024
Net profit attributable to owners of WBC (adjusted for RSP dividends)
3,314 3,643 3,340
Add/(less): Notable Items (post tax)
140 (41) 164
Net profit attributable to owners of WBC (adjusted for RSP dividends) excluding Notable Items
3,454 3,602 3,504
ROE (excluding Notable Items) and ROTE (excluding Notable Items)
Half Year Half Year Half Year
MarchSeptMarch
$m202520242024
Net profit attributable to owners of WBC (adjusted for RSP dividends) excluding Notable Items
3,454 3,602 3,504
Average ordinary equity
70,584 71,145 71,841
Average tangible ordinary equity
62,519 63,077 63,753
Return on average ordinary equity (excluding Notable Items)
9.81%10.13%9.75%
Return on average tangible ordinary equity (excluding Notable Items)
11.08%11.42%10.99%
Pre-provision profit
Half Year
Half Year
Half Year
MarchSeptMarch
$m202520242024
Net interest income
9,351 9,626 9,127
Non-interest income
1,442 1,372 1,463
Operating expenses
(5,698) (5,549) (5,395)
Pre-provision profit
5,095 5,449 5,195
123
Additional information for Non-AAS financial measures (Continued)
Dividend payout ratio (excluding Notable Items)
Half Year
Half Year
Half Year
MarchSeptMarch
$m202520242024
Ordinary dividend paid/declared on issued shares (net of Treasury shares)
2,598 2,608 2,600
divided by: Net profit attributable to owners of WBC (adjusted for RSP dividends) excluding Notable Items
3,454 3,602 3,504
Dividend payout ratio (excluding Notable Items)
a
75.22%72.41%74.19%
a.Dividend used in calculation not subjected to rounding.
Segment pre-provision profit excluding Notable Items
Westpac
WestpacNew Zealand
$m
Consumer
Business & Wealth
Institutional Bank
(A$)
Group Businesses
Group
Half Year March 2025
Pre-provision profit/(loss)
1,712 1,725 1,005 691 (38) 5,095
add/(less): Notable Items
- - - 1 199 200
Pre-provision profit/(loss) excluding Notable Items
1,712 1,725 1,005 692 161 5,295
Half Year Sept 2024
Pre-provision profit/(loss)
1,712 1,741 993 734 269 5,449
add/(less): Notable Items
- - - 2 (53) (51)
Pre-provision profit/(loss) excluding Notable Items
1,712 1,741 993 736 216 5,398
Half Year March 2024
Pre-provision profit/(loss)
1,661 1,769 1,047 641 77 5,195
add/(less): Notable Items
- - - 6 220 226
Pre-provision profit/(loss) excluding Notable Items
1,661 1,769 1,047 647 297 5,421
Earnings per ordinary share (ex Notable Items)
Half Year March 2025 Half Year Sept 2024 Half Year March 2024
BasicDilutedBasicDilutedBasicDiluted
Net profit attributable to owners of WBC (adjusted for RSP
dividends) ($m)
3,314 3,546 3,643 3,889 3,340 3,577
Add/(less): Notable Items ($m)
140 140 (41) (41) 164 164
Adjusted net profit attributable to owners of WBC (adjusted for
RSP dividends) (excluding Notable Items) ($m)
3,454 3,686 3,602 3,848 3,504 3,741
Adjusted weighted average number of ordinary shares ($m)
3,428 3,695 3,457 3,794 3,494 3,905
Earnings per ordinary share (excluding Notable Items) (cents)
100.8 99.8 104.2 101.4 100.3 95.8
124WESTPAC GROUP 2025 INTERIM FINANCIAL RESULTS
GLOSSARY
Shareholder value
Average ordinary equityAverage total equity less average non-controlling interests.
Average tangible ordinary equityAverage ordinary equity less intangible assets (excluding capitalised software).
Average total equityThe average balance of shareholders’ equity, including non-controlling interests.
Dividend payout ratioOrdinary dividend paid/declared on issued shares (net of Treasury shares) divided by the net profit attributable to owners of WBC
(adjusted for RSP dividends)
Earnings per ordinary share●Basic earnings per ordinary share is calculated by dividing the net profit attributable to owners of WBC (adjusted for RSP
dividends) by the weighted average number of ordinary shares on issue during the period, adjusted for treasury shares.
●Diluted earnings per ordinary share is calculated by adjusting the basic earnings per ordinary share by assuming all dilutive
potential ordinary shares are converted.
Fully franked dividends per ordinary
share (cents)
Dividends paid out of retained profits which carry a credit for Australian company income tax paid by Westpac.
Net tangible assets per shareNet tangible assets (total equity less goodwill and other intangible assets less non-controlling interests) divided by the number of
ordinary shares on issue (less Treasury shares held).
Pre-provision profitNet interest income plus non-interest income less operating expenses.
Return on average ordinary equity
(ROE)
Net profit attributable to the owners of WBC adjusted for RSP dividends (annualised where applicable) divided by average ordinary
equity.
Return on average tangible ordinary
equity (ROTE)
Net profit attributable to the owners of WBC adjusted for RSP dividends (annualised where applicable) divided by average tangible
ordinary equity.
Weighted average ordinary sharesWeighted average number of fully paid ordinary shares listed on the Australian Stock Exchange for the relevant period less Westpac
shares held by the Group (‘Treasury shares’).
Productivity and efficiency
Expense to income ratioOperating expenses divided by net operating income.
Expense to income ratio (ex Notable
Items)
Operating expenses excluding Notable Items divided by net operating income excluding Notable Items.
Full time equivalent employees (FTE)A calculation based on the number of hours worked by full and part-time employees as part of their normal duties. For example, the
full time equivalent of one FTE is 76 hours paid work per fortnight.
Revenue per FTETotal operating income divided by the average number of FTE for the period.
Business Performance
AverageWhere possible, daily balances are used to calculate the average balance for the period.
Average interest bearing liabilitiesThe average balance of liabilities owed by the Group that incur an interest expense. Where possible, daily balances are used to
calculate the average balance for the period.
Average interest earning assetsThe average balance of assets held by the Group that generate interest income. Where possible, daily balances are used to calculate
the average balance for the period.
Core NIMCalculated by dividing net interest income excluding Notable Items and Treasury & Markets (annualised where applicable) by average
interest earning assets.
Group NIM/Net interest marginCalculated by dividing net interest income (annualised where applicable) by average interest earning assets.
Net profitNet profit attributable to owners of WBC.
Capital Adequacy
Australian Prudential Regulation
Authority (APRA) leverage ratio
Tier 1 capital divided by ‘exposure measure’ and expressed as a percentage. ‘Exposure measure’ is the sum of on-balance sheet
exposures, derivative exposures, securities financing transaction (SFT) exposures and non-market off- balance sheet exposures.
AT1Additional Tier 1 capital
Common equity tier 1 (CET1) capital
ratio
Total common equity capital divided by risk weighted assets, as defined by APRA.
Internationally comparable capital ratiosInternationally comparable methodology references the ABA study on the comparability of APRA’s capital framework released on 10
March 2023.
Risk weighted assets (RWA)Assets (both on and off-balance sheet) are risk weighted according to each asset’s inherent potential for default and what the likely
losses would be in case of default. In the case of non-asset backed risks (i.e. market, IRRBB and operational risk), RWA is determined
by multiplying the capital requirements for those risks by 12.5.
Credit risk weighted assets (Credit RWA)Credit risk weighted assets represent risk weighted assets (on-balance sheet and off-balance sheet) that relate to credit exposures
and therefore exclude market risk, operational risk, and interest rate risk in the banking book.
Business lendingIncludes credit exposures not captured elsewhere, and where the borrower’s annual turnover is below $75 million.
CorporateExposures to corporate borrowers that do not fall within the definition of Large Corporate, Property Finance, Specialised Lending,
Business Lending or Small Business exposures.
Financial institutionIncludes exposure to entities whose primary dealings relates to management of financial assets, lending, factoring, leasing provision of
credit enhancements, securitisation, investments, financial custody, central counter party services and proprietary trading.
125
Capital Adequacy
Large corporateExposures to counter parties with consolidated annual revenue (of the counterparty or group that the counter party consolidates into)
exceeding $750 million.
New ZealandOverseas banking subsidiary regulated by the RBNZ.
Property financeExposures to borrowers where repayments depend primarily on the cash flows generated by the property or other real estate assets
owned by the borrower.
SecuritisationExposures relating to Westpac’s involvement in securitisation activities range from a seller of its own assets to an investor in third party
transactions and include the provision of securitisation services for its clients.
Small businessProgram-managed business exposures typically below $1.5 million in value. Program-managed exposures are managed on a
statistical basis according to pre-determined objective criteria.
SovereignExposures to Australian and overseas central and sub-national governments, and central banks.
Specialised lendingIncludes exposures to project and object finance lending. Project finance and object finance rely primarily on the revenues generated
by a project, or equipment asset respectively, both as a source of repayment and as security for the loan. Excludes Property Finance
exposures.
Operational riskThe risk of loss resulting from inadequate or failed internal processes, people and systems or from external events, including legal risk
but excluding strategic or reputational risk.
Tier 1 capital ratioTotal Tier 1 capital divided by risk weighted assets, as defined by APRA.
Total regulatory capital ratioTotal regulatory capital divided by risk weighted assets, as defined by APRA.
Funding and liquidity
Deposit to loan ratioCustomer deposits divided by net loans.
High Quality Liquid Assets (HQLA)Assets which meet APRA’s criteria for inclusion as HQLA in the numerator of the LCR.
Liquid assetsHQLA and non LCR qualifying liquid assets, but excludes internally securitised assets that are eligible for a repurchase agreement
with the RBA and the RBNZ.
Liquidity Coverage Ratio (LCR)An APRA requirement to maintain an adequate level of unencumbered high quality liquid assets, to meet liquidity needs for a 30
calendar day period under an APRA-defined severe stress scenario. Absent a situation of financial stress, the value of the LCR must
not be less than 100%. LCR is calculated as the percentage ratio of stock of HQLA, and qualifying RBNZ securities over the total net
cash out-flows in a modelled 30 day defined stressed scenario.
Net Stable Funding Ratio (NSFR)The NSFR is defined as the ratio of the amount of available stable funding (ASF) to the amount of required stable funding (RSF)
defined by APRA. The amount of ASF is the portion of an ADI’s capital and liabilities expected to be a reliable source of funds over a
one year time horizon. The amount of RSF is a function of the liquidity characteristics and residual maturities of an ADI’s assets and
off-balance sheet activities. ADIs must maintain an NSFR of at least 100%.
Term Funding Facility (TFF)A facility that was established by the RBA in March 2020 to provide 3 year term funding to Australian ADIs via repurchase
transactions, subject to qualifying conditions, to help support lending to Australian businesses. The facility closed to new draw downs
in June 2021.
Term funding from central banksTerm funding from central banks includes the drawn balances of the RBA TFF and the RBNZ Funding Lending Program and Term
Lending Facility.
Wholesale fundingWholesale funding includes debt issues, loan capital, certificates of deposit, term funding from central banks and interbank
placements.
Credit quality
Collectively assessed provisions (CAPs)Collectively assessed provisions for expected credit loss under AASB 9 represent the Expected Credit Loss (ECL) which is collectively
assessed in pools of similar assets with similar risk characteristics. This incorporates forward-looking information and does not require
an actual loss event to have occurred for an impairment provision to be recognised.
DefaultCredit exposures that are non-performing.
Exposure at default (EAD)The estimated outstanding amount of credit exposure at the time of the default.
Gross impaired exposures provisions to
gross impaired exposures
Impairment provisions relating to impaired exposures include individually assessed provisions plus the proportion of the collectively
assessed provisions that relate to impaired exposures.
126WESTPAC GROUP 2024 INTERIM FINANCIAL RESULTS
GLOSSARY
Credit quality
Impaired exposuresIncludes exposures that have deteriorated to the point where full collection of interest and principal is in doubt, based on an
assessment of the customer’s outlook, cash flow, and the net realisation of value of assets to which recourse is held:
●Facilities 90 days or more past due, and full recovery is in doubt: exposures where contractual payments are 90 or more days in
arrears and the net realisable value of assets to which recourse is held may not be sufficient to allow full collection of interest and
principal, including overdrafts or other revolving facilities that remain continuously outside approved limits by material amounts for
90 or more calendar days;
●Non-accrual facilities: exposures with individually assessed impairment provisions held against them, excluding restructured loans;
●Restructured facilities: exposures where the original contractual terms have been formally modified to provide for concessions of
interest or principal for reasons related to the financial difficulties of the customer;
●Other assets acquired through security enforcement (includes other real estate owned): includes the value of any other assets
acquired as full or partial settlement of outstanding obligations through the enforcement of security arrangements; or
●Any other facilities where the full collection of interest and principal is in doubt.
Impairment charges/(benefit) to average
loans
Calculated as impairment charges (annualised where applicable) divided by average gross loans.
Individually assessed provisions (IAPs)Provisions raised for losses on loans that are known to be impaired and are assessed on an individual basis. The estimated losses on
these impaired loans is based on expected future cash flows discounted to their present value and, as this discount unwinds, interest
will be recognised in the income statement.
Loss given default (LGD)The loss that is expected to arise in the event of a default.
Non-performing not impaired exposuresIncludes those credit exposures that are in default, but where it is expected that the full value of principal and accrued interest can be
collected, generally by reference to the value of security held.
Performing exposuresCredit exposures that are not non-performing.
Probability of default (PD)The probability that a counter party will default.
Provision for expected credit losses
(ECL)
Expected credit losses (ECL) are a probability-weighted estimate of the cash shortfalls expected to result from defaults over the
relevant time frame. 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.
Stage 1: 12 months ECL - performingFor financial assets where there has been no significant increase in credit risk since origination a provision for 12 months expected
credit losses is recognised. Interest revenue is calculated on the gross carrying amount of the financial asset.
Stage 2: Lifetime ECL - performingFor 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 expected losses is recognised. Interest revenue is calculated on the gross carrying amount of the financial asset.
Stage 3: Lifetime ECL - non-performingFor financial assets that are non-performing a provision for lifetime expected losses is recognised. Interest revenue is calculated on
the carrying amount net of the provision for ECL rather than the gross carrying amount.
Stressed exposuresWatchlist and substandard credit exposures plus non-performing exposures.
Total committed exposure (TCE)Represents the sum of the committed portion of direct lending (including funds placement overall and deposits placed), contingent and
pre-settlement risk plus the committed portion of secondary market trading and underwriting risk.
Watchlist and substandardLoan facilities where customers are experiencing operating weakness and financial difficulty but are not expected to incur loss of
interest or principal.
Other
AASAustralian Accounting Standards
AASBAustralian Accounting Standards Board
ABAAustralian Banking Association
ACCCAustralian Competition and Consumer Commission
ADIAuthorised Deposit-taking Institution
AFCAAustralian Financial Complaints Authority
AGMAnnual General Meeting
AIArtificial intelligence
AMLAnti-money laundering
APRAAustralian Prudential Regulation Authority
APSAustralian Prudential Standard
ASICAustralian Securities and Investments Commission
ASXAustralian Securities Exchange
ATMAutomated Teller Machine
127
Other
ATOAustralian Taxation Office
AUSTRACAustralian Transaction Reports and Analysis Centre
BCCCThe Banking Code Compliance Committee
BPNGBank of Papua New Guinea (PNG)
bpsBasis points
Credit Valuation Adjustment (CVA)CVA adjusts the fair value of over-the-counter derivatives for credit risk. CVA is employed on the majority of derivative positions and
reflects the market view of the counter party credit risk. A Debit Valuation Adjustment is employed to adjust for our own credit risk.
Cost ResetProgram to deliver sustainable cost reductions.
CRSCommon reporting standard
CTFCounter-terrorism financing
Derivative Valuation Adjustment (DVA)DVA includes CVA and FVA.
DRPDividend reinvestment plan
D-SIBDomestic systemically important bank
ESGEnvironment, social and governance
FATCAForeign Account Tax Compliance Act
FINRAFinancial Industry Regulatory Authority
First Half 2024 (1H24)Six months ended 31 March 2024
First Half 2025 (1H25)Six months ended 31 March 2025
Funding Valuation Adjustment (FVA)FVA relates to the funding cost or benefit associated with the uncollateralised portion of the derivative portfolio.
FVISFair value through income statement
FVOCIFair value through other comprehensive income
FWOFair Work Ombudsman
FXForeign exchange
IASBInternational Accounting Standards Board
IPIntegrated plan
IFRSInternational Financial Reporting Standards
IRRBBInterest Rate Risk in the Banking Book
NCINon-controlling interests
Non-interest earning /bearingInstruments which do not carry an entitlement to interest.
NZBANet-Zero Banking Alliance
OAICThe Office of the Australian Information Commissioner
OTCOver the counter
Prior corresponding periodRefers to the six months ended 31 March 2024
Prior periodRefers to the six months ended 30 September 2024
RBAReserve Bank of Australia
RBNZReserve Bank of New Zealand
RSPRestricted Share Plan
RunoffScheduled and unscheduled repayments and debt repayments (from for example property sales and external refinancing), net of
redraws.
SECSecurities and Exchange Commission
Second Half 2024Six months ended 30 September 2024.
Segment reportingSegment reporting are presented on a management reporting basis. Internal charges and transfer pricing adjustments are included in
the performance of each segment reflecting the management structure rather than the legal entity (these results cannot be compared
to results for individual legal entities). Where management reporting structures or accounting classifications have changed, financial
results for comparative periods have been restated and may differ from results previously reported. Overhead costs are allocated to
revenue generating segments.
The Group’s internal transfer pricing frameworks facilitate risk transfer, profitability measurement, capital allocation and segment
alignment, tailored to the jurisdictions in which the Group operates. Transfer pricing allows the Group to measure the relative
contribution of products and segments to the Group’s interest margin and other dimensions of performance. Key components of the
Group’s transfer pricing frameworks are funds transfer pricing for interest rate and liquidity risk and allocation of basis and contingent
liquidity costs, including capital allocation.
SMESmall to medium sized enterprises
WIBWestpac Institutional Bank
WNZLWestpac New Zealand Limited
WESTPAC.COM.AU
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.