Westpac U.S. Annual Report on Form 20-F
ASX RELEASE
Westpac Banking Corporation
Level 18, 275 Kent Street
Sydney, NSW, 2000
5 November 2025
Westpac Banking Corporation US Annual Report on Form 20-F
Westpac Banking Corporation (Westpac) has filed with the US Securities and Exchange
Commission an Annual Report on Form 20-F for the financial year ended 30 September
2025 which has been prepared specifically for distribution in the United States (2025
Form 20-F). This filing has been prepared to meet US securities law requirements and is
necessary to update Westpac’s US debt issuance programs.
As the 2025 Form 20-F has been prepared to meet US requirements, its presentation
differs in some limited respects from Westpac’s 2025 Annual Report lodged with ASX
Limited on 3 November 2025.
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.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 20-F
☐
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
Or
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 2025
Or
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Or
☐
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 1-10167
WESTPAC BANKING CORPORATION
Australian Business Number 33 007 457 141
(Exact name of Registrant as specified in its charter)
New South Wales, Australia
(Jurisdiction of incorporation or organization)
275 Kent Street, Sydney, NSW 2000, Australia
(Address of principal executive offices)
Westpac Banking Corporation, New York branch,
575 Fifth Avenue, 39th Floor, New York, New York 10017-2422,
Attention: Branch Manager, telephone number: (212) 551-1800
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act: None
Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: 5.512% Notes due November 17, 2025, Floating Rate Notes due November 17, 2025, 5.200% Notes due April 16, 2026, Floating Rate Notes due April 16, 2026,
2.850% Notes due May 13, 2026, 1.150% Notes due June 3, 2026, Floating Rate Notes due June 3, 2026, 2.700% Notes due August 19, 2026, 4.600% Notes due October 20, 2026, Floating Rate Notes due October 20, 2026, 3.350% Notes due
March 8, 2027, 4.043% Notes due August 26, 2027, 5.457% Notes due November 18, 2027 3.400% Notes due January 25, 2028, 5.535% Notes due November 17, 2028, 1.953% Notes due November 20, 2028, 5.050% Notes due April 16, 2029,
Floating Rate Notes due April 16, 2029, 2.650% Notes due January 16, 2030, 4.354% Notes due July 1, 2030, Floating Rate Notes due July 1, 2030, 2.150% Notes due June 3, 2031, 4.322% Subordinated Notes due November 23, 2031, 5.405%
Subordinated Notes due August 10, 2033, 6.820% Subordinated Notes due November 17, 2033, 4.110% Subordinated Notes due July 24, 2034, 2.668% Subordinated Notes due November 15, 2035, 5.618% Subordinated Notes due November
20, 2035, 3.020% Subordinated Notes due November 18, 2036, 4.421% Subordinated Notes due July 24, 2039, 2.963% Subordinated Notes due November 16, 2040, 3.133% Subordinated Notes due November 18, 2041 and 5.000% Fixed Rate
Resetting Perpetual Subordinated Contingent Convertible Securities
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
Ordinary shares3,420,353,305 fully paid
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☒No ☐
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Yes ☐No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter
period that the registrant was required to submit such files).
Yes ☒No ☐ (not currently applicable to registrant)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and
“emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒Accelerated filer ☐Non-accelerated filer ☐Emerging growth company ☐
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new
or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbannes-
Oxley Act (15 U.S.C. 7262(b)) by the registered public account firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial
statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by any of the registrant’s executive officers during the relevant
recovery period pursuant to §240.10D-1(b) ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP ☐ International Financial Reporting Standards as issued by the International Accounting Standards Board ☒
Other ☐
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
“Item 17” ☐“Item 18” ☐
If this is an annual report, indicate by check mark whether the registrant is a shell company.
Yes ☐No ☒
i
TABLE OF CONTENTS
FORM 20-F CROSS-REFERENCE INDEXii PERFORMANCE REVIEW273
FINANCIAL REPORT1Group performance274
Income statements2Segment reporting279
Statements of comprehensive income3FINANCIAL STATEMENTS287
Balance sheets4ADDITIONAL INFORMATION289
Statements of changes in equity5Reading this report290
Cash flow statements7Shareholder Information302
Notes to the Financial Statements8Other Westpac Business Information321
Statutory Statements128Glossary of Abbreviations and Defined Terms324
EXHIBITS INDEX136
STRATEGIC REVIEW144
Strategic review144
Corporate governance188
Directors’ report208
Remuneration Report222
Risk factors254
Information on Westpac268
In this Annual Report a reference to ‘Westpac’, ‘Group’, ‘Westpac Group’, ‘we’, ‘us’ and ‘our’ is 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 information in this Annual Report see Reading this report in Section 3. In addition, this Annual Report 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 Reading this report in Section 3. Please consider those important disclaimers when reading the forward-looking statements in this
Annual Report.
References to the 2025 Risk Factors are to the Risk factors section in this 2025 Annual Report on Form 20-F.
Information contained in or accessible through the websites mentioned in this Annual Report does not form part of this report unless we specifically state that it is incorporated
by reference and forms part of this report. All references in this report to websites are inactive textual references and are for information only.
ii WESTPAC GROUP 2025 ANNUAL REPORT
FORM 20-F CROSS-REFERENCE INDEX
20-F item number and descriptionPage
Part I
Item 1.Identity of directors, senior management and advisersNot applicable
Item 2.Offer statistics and expected timetableNot applicable
Item 3.Key information
Capitalisation and indebtednessNot applicable
Reasons for the offer and use of proceedsNot applicable
Risk factors254-267
Item 4.Information on Westpac
History and development of Westpac144-148
Business overview144-148
Organisational structure107-108
Property, plants and equipment321
Item 4A.Unresolved staff commentsNot applicable
Item 5.Operating and financial review and prospects
Operating results274-286
Liquidity and capital resources102-105
Research and development, patents and licences, etc.Not applicable
Trend information274-286
Critical accounting estimates24, 33, 83, 96
Item 6.Directors, senior management and employees
Directors and senior management208-215, 218-219
Compensation111-115, 222-252
Board practices188-207
Employees276
Share ownership121, 218-219, 302
Item 7.Major shareholders and related party transactions
Major shareholders302-307
Related party transactions120-121
Interests of experts and counselNot applicable
iii
FORM 20-F CROSS-REFERENCE INDEX
20-F item number and descriptionPage
Item 8.Financial information
Consolidated statements and other financial information1-135
Significant changes268-269
Item 9.The offer and listing
Offer and listing detailsNot applicable
Plan of distributionNot applicable
MarketsNot applicable
Selling shareholdersNot applicable
DilutionNot applicable
Expenses of the issueNot applicable
Item 10.Additional information
Share capitalNot applicable
Memorandum and articles of association316-318
Material contracts321
Exchange controls312-313
Taxation313-315
Dividends and paying agentsNot applicable
Statements by expertsNot applicable
Documents on display318
Subsidiary informationNot applicable
Item 11.Quantitative and qualitative disclosures about market risk81-82
Item 12.Description of securities other than equity securities
Debt securitiesNot applicable
Warrants and rightsNot applicable
Other securitiesNot applicable
American depositary sharesNot applicable
Part II
Item 13.Defaults, dividend arrearages and delinquenciesNot applicable
Item 14.Material modifications to the rights of security holders and use of proceedsNot applicable
iv WESTPAC GROUP 2025 ANNUAL REPORT
FORM 20-F CROSS-REFERENCE INDEX
20-F item number and descriptionPage
Item 15.Controls and procedures129, 323
Item 16A.Audit committee financial expert198
Item 16B.Code of ethics201-203
Item 16C.Principal accountant fees and services, PCAOB ID: 1020; Auditor Remuneration119, 205-207
Item 16D.Exemptions from the Listing Standards for audit committeesNot applicable
Item 16E.Purchases of equity securities by Westpac and affiliated purchasersNot applicable
Item 16F.Changes in Westpac’s certifying accountantNot applicable
Item 16G.Corporate governance188
Item 16H.Mine safety disclosureNot applicable
Item 16I.Disclosure regarding foreign jurisdictions that prevent inspectionsNot applicable
Item 16J.Insider trading policiesNot applicable
Item 16K.Cybersecurity272
Part III
Items 17. & 18.Financial statements1-135
Item 19.Exhibits136
Consolidated income statements for the years ended 30 September 2025, 2024 and 20232
Consolidated balance sheets as at 30 September 2025 and 20244
Consolidated statements of comprehensive income for the years ended 30 September 2025, 2024 and 20233
Consolidated statements of cash flows for the years ended 30 September 2025, 2024 and 20237
Notes to the financial statements8-124
Management’s report on the internal control over financial reporting129
Report of independent registered public accounting firm130-133
Item 1402: Distribution of assets, liabilities and stockholders’ equity; interest rates and interest differential
Average balance sheets17-18
Analysis of net interest earnings16, 274-275, 284
Interest rate and interest differential analysis16-20, 274-275, 284
v
FORM 20-F CROSS-REFERENCE INDEX
20-F item number and descriptionPage
Item 1403: Investments in debt securities t II Investment portfolio
Weighted average yield of debt securities63
Calculation of weighted average yield; tax-exempt obligations63
Item 1404: Loan Portfolio
Maturity and interest rate profile of loan portfolio32
Item 1405: Allowances for Credit Losses
Credit ratios and material changes33-43
Allocation of the allowance for credit losses33-43
Item 1406: Deposits
Deposits by category52-53
Uninsured deposits52-53
Time deposits52-53
vi WESTPAC GROUP 2025 ANNUAL REPORT
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FINANCIAL
REPORTEXHIBITS INDEX
STRATEGIC
REVIEW
PERFORMANCE
REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION1
FINANCIAL
REPORT
Income statements
Statements of comprehensive income
INTANGIBLE ASSETS, PROVISIONS, COMMITMENTS AND
CONTINGENCIES
Balance sheetsNote 24. Intangible assets
Statements of changes in equity
Cash flow statements
Note 25. Provisions, contingent liabilities, contingent assets
and credit commitments
NOTES TO THE FINANCIAL STATEMENTS
CAPITAL AND DIVIDENDS
Note 1. Financial statements preparationNote 26. Shareholders’ equity
Note 27. Capital adequacy
FINANCIAL PERFORMANCENote 28. Dividends
Note 2. Segment reporting
Note 3. Net interest income and average balance sheet and
interest ratesGROUP STRUCTURE
Note 4. Non-interest incomeNote 29. Investments in subsidiaries and associates
Note 5. Operating expensesNote 30. Structured entities
Note 6. Impairment charges
Note 7. Income taxOTHER
Note 8. Earnings per shareNote 31. Share-based payments
Note 32. Superannuation commitments
FINANCIAL ASSETS AND FINANCIAL LIABILITIESNote 33. Auditor’s remuneration
Note 34. Related party disclosures
Lending and credit riskNote 35. Notes to the cash flow statements
Note 9. LoansNote 36. Subsequent events
Note 10. Provision for expected credit losses
Note 11. Credit risk managementCONSOLIDATED ENTITY DISCLOSURE STATEMENT
Deposits and other funding arrangementsSTATUTORY STATEMENTS
Note 12. Deposits and other borrowingsDirectors’ declaration
Note 13. Debt issuesManagement’s report on internal control over financial reporting
Note 14. Loan capitalReport of Independent Registered Public Accounting Firm
Note 15. Securitisation, covered bonds and other
transferred assets
Limitation on Independent Registered Public Accounting Firm’s Liability
Report of Predecessor Independent Registered Public Accounting Firm
Other financial instrument disclosures
Note 16. Trading securities and financial assets measured at
fair value through income statement (FVIS)
Note 17. Investment securities
Note 18. Other financial assets
Note 19. Other financial liabilities
Note 20. Derivative financial instruments
Note 21. Risk management, funding and liquidity risk and
market risk
Note 22. Fair values of financial assets and financial liabilities
Note 23. Offsetting financial assets and financial liabilities
2 WESTPAC GROUP 2025 ANNUAL REPORT
INCOME STATEMENTS
for the years ended 30 September
Westpac Banking Corporation
ConsolidatedParent Entity
$mNote20252024202320252024
Interest income:
Calculated using the effective interest method
3 53,054 52,739 42,515 48,851 48,358
Other
3 1,988 1,608 1,237 2,196 1,571
Total interest income55,04254,34743,75251,04749,929
Interest expense3(35,662)(35,594)(25,435)(34,949)(34,492)
Net interest income
19,380 18,753 18,317 16,098 15,437
Non-interest income
Net fees
4 1,732 1,672 1,645 1,543 1,494
Net wealth management4476441562--
Trading4717704717693637
Other479184041,5461,851
Total non-interest income3,0042,8353,3283,7823,982
Net operating income
22,384 21,588 21,645 19,880 19,419
Operating expenses
5 (11,916) (10,944) (10,692) (10,455) (9,728)
Impairment (charges)/benefits
6 (424) (537) (648) (440) (475)
Profit before income tax expense
10,044 10,107 10,305 8,985 9,216
Income tax expense
7 (3,111) (3,117) (3,104) (2,489) (2,525)
Profit after income tax expense
6,933 6,990 7,201 6,496 6,691
Net profit attributable to non-controlling interests (NCI)
(17) - (6) - -
Net profit attributable to owners of Westpac Banking Corporation (WBC)
6,916 6,990 7,195 6,496 6,691
Earnings per share (cents)
Basic
8 201.9 200.9 205.3
Diluted
8 199.4 191.7 195.2
The above income statements should be read in conjunction with the accompanying notes.
FINANCIAL
REPORTEXHIBITS INDEX
STRATEGIC
REVIEW
PERFORMANCE
REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION3
STATEMENTS OF COMPREHENSIVE INCOME
for the years ended 30 September
Westpac Banking Corporation
ConsolidatedParent Entity
$m20252024202320252024
Profit after income tax expense
6,933 6,990 7,201 6,496 6,691
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)
503 (588) (201) 423 (813)
Cash flow hedging instruments
(233) 501 (635) (154) 873
Transferred to income statement:
Debt securities measured at FVOCI(19)5(125)(19)5
Cash flow hedging instruments
152 77 (309) 154 132
Loss allowance on debt securities measured at FVOCI
- 1 1 (1) 1
Exchange differences on translation of foreign operations (net of associated hedges)(254)(300)36731(134)
Income tax on items taken to or transferred from equity:
Debt securities measured at FVOCI
(141) 179 98 (118) 242
Cash flow hedging instruments
22 (182) 283 - (301)
Items that will not be reclassified subsequently to profit or loss
Gains/(losses) on equity securities measured at FVOCI (net of tax)
24 1 (10) 9 (3)
Own credit adjustment on financial liabilities designated at fair value (net of tax)
(21) 13 (21) (21) 13
Remeasurement of defined benefit obligation recognised in equity (net of tax)10(14)(105)9(12)
Net other comprehensive income/(expense) (net of tax)
43 (307) (657) 313 3
Total comprehensive income
6,976 6,683 6,544 6,809 6,694
Attributable to:
Owners of WBC
6,974 6,685 6,536 6,809 6,694
NCI
2 (2) 8 - -
Total comprehensive income
6,976 6,683 6,544 6,809 6,694
The above statements of comprehensive income should be read in conjunction with the accompanying notes.
4 WESTPAC GROUP 2025 ANNUAL REPORT
BALANCE SHEETS
as at 30 September
Westpac Banking Corporation
ConsolidatedParent Entity
$mNote2025202420252024
Assets
Cash and balances with central banks
35 50,430 65,667 44,782 58,400
Collateral paid
4,590 6,269 4,562 6,199
Trading securities and financial assets measured at fair value through income statement (FVIS)
16 55,841 49,228 53,626 47,014
Derivative financial instruments
20 18,464 24,109 17,534 23,902
Investment securities17117,541103,885109,10095,623
Loans
9 851,853 806,767 755,112 710,043
Other financial assets
18 10,766 5,456 10,126 4,951
Due from subsidiaries
- - 48,830 52,339
Investment in subsidiaries
- - 8,567 9,095
Property and equipment
2,266 2,251 1,805 1,804
Tax assets
7 2,078 2,160 1,843 1,896
Intangible assets
24 10,465 10,746 8,918 9,131
Other assets
1,062 1,006 916 837
Total assets
1,125,356 1,077,544 1,065,721 1,021,234
Liabilities
Collateral received
3,187 3,078 2,364 2,935
Deposits and other borrowings
12 770,457 720,489 696,660 644,481
Other financial liabilities
19 41,488 38,077 38,935 33,917
Derivative financial instruments
20 20,630 30,974 20,492 30,795
Debt issues
13 171,404 169,284 142,622 143,882
Tax liabilities
7 137 569 61 408
Due to subsidiaries
- - 52,566 55,722
Provisions
25 2,612 2,505 2,376 2,271
Other liabilities
2,378 2,633 1,854 2,065
Total liabilities excluding loan capital
1,012,293 967,609 957,930 916,476
Loan capital
14 39,970 37,883 38,891 36,770
Total liabilities
1,052,263 1,005,492 996,821 953,246
Net assets
73,093 72,052 68,900 67,988
Shareholders’ equity
Share capital:
Ordinary share capital
26 37,263 37,958 37,263 37,958
Treasury shares
26 (845) (758) (902) (816)
Reserves
26 1,880 1,732 2,176 1,757
Retained profits
34,468 32,773 30,363 29,089
Total equity attributable to owners of WBC
72,766 71,705 68,900 67,988
NCI
26 327 347 - -
Total shareholders’ equity and NCI
73,093 72,052 68,900 67,988
The above balance sheets should be read in conjunction with the accompanying notes.
FINANCIAL
REPORTEXHIBITS INDEX
STRATEGIC
REVIEW
PERFORMANCE
REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION5
STATEMENTS OF CHANGES IN EQUITY
for the years ended 30 September
Westpac Banking Corporation
Total equityTotal
Shareattributableshareholders’
ConsolidatedcapitalReservesRetainedto ownersNCIequity
$m
(Note 26) (Note 26) profits of WBC (Note 26) and NCI
Balance as at 30 September 2022
39,011 2,378 29,063 70,452 57 70,509
Profit after income tax expense
- - 7,195 7,195 6 7,201
Net other comprehensive income/(expense)
- (533) (126) (659) 2 (657)
Total comprehensive income/(expense)
- (533) 7,069 6,536 8 6,544
Transactions in capacity as equity holders:
Dividends on ordinary shares
a
- - (4,696) (4,696) - (4,696)
Dividend reinvestment plan
192 - - 192 - 192
Other equity movements:
Share-based payment arrangements
- 90 - 90 - 90
Purchase of shares
(32) - - (32) - (32)
Net acquisition of treasury shares
(47) - - (47) - (47)
Other
- - - - (21) (21)
Total contributions and distributions
113 90 (4,696) (4,493) (21) (4,514)
Balance as at 30 September 2023
39,124 1,935 31,436 72,495 44 72,539
Profit after income tax expense
- - 6,990 6,990 - 6,990
Net other comprehensive income/(expense)
- (304) (1) (305) (2) (307)
Total comprehensive income/(expense)
- (304) 6,989 6,685 (2) 6,683
Transactions in capacity as equity holders:
Dividends on ordinary shares
a
- - (5,652) (5,652) - (5,652)
Share buyback
b
(1,812)--(1,812)-(1,812)
Other equity movements:
Share-based payment arrangements
- 96 - 96 - 96
Purchase of shares
(56) - - (56) - (56)
Net acquisition of treasury shares
(56) - - (56) - (56)
Acquisition of minority interest-5-5(30)(25)
Preference shares issued
c
----339339
Other
- - - - (4) (4)
Total contributions and distributions
(1,924) 101 (5,652) (7,475) 305 (7,170)
Balance as at 30 September 2024
37,200 1,732 32,773 71,705 347 72,052
Profit after income tax expense
- - 6,916 6,916 17 6,933
Net other comprehensive income/(expense)
- 69 (11) 58 (15) 43
Total comprehensive income/(expense)
- 69 6,905 6,974 2 6,976
Transactions in capacity as equity holders:
Dividends on ordinary shares
a
- - (5,215) (5,215) - (5,215)
Share buyback
b
(672)--(672)-(672)
Other equity movements:
Share-based payment arrangements
- 94 - 94 - 94
Purchase of shares
(23) - - (23) - (23)
Net acquisition of treasury shares
(87) - - (87) - (87)
Acquisition of minority interest----(4)(4)
Other
- (15) 5 (10) (18) (28)
Total contributions and distributions
(782) 79 (5,210) (5,913) (22) (5,935)
Balance as at 30 September 2025
36,418 1,880 34,468 72,766327 73,093
a. Relates to fully franked dividends at 30%:
- 2025: 2025 interim dividend of 76 cents per share ($2,601 million) and 2024 final dividend of 76 cents per share ($2,614 million);
- 2024: 2024 interim dividend of 75 cents per share and special dividend of 15 cents per share ($3,125 million) and 2023 final dividend of 72 cents per share ($2,527 million); and
- 2023: 2023 interim dividend of 70 cents per share ($2,456 millions) and 2022 final dividend of 64 cents per share ($2,240 million).
b. Westpac previously announced its intention to undertake a $3.5 billion on market buyback of WBC ordinary shares. During 2025, Westpac bought back and cancelled 21,058,056 ordinary shares ($ 672 million) at an average
price of $31.93 (2024: 67,665,599 ordinary shares ($1,812 million) at an average price of $26.78).
c. 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 statements of changes in equity should be read in conjunction with the accompanying notes.
6 WESTPAC GROUP 2025 ANNUAL REPORT
STATEMENTS OF CHANGES IN EQUITY
for the years ended 30 September
Westpac Banking Corporation
Total equity
Shareattributable
Parent EntitycapitalReservesRetainedto owners
$m
(Note 26) (Note 26) profits of WBC
Balance as at 30 September 2023
39,066 1,659 28,049 68,774
Profit after income tax expense
--6,6916,691
Net other comprehensive income/(expense)
-213
Total comprehensive income/(expense)
-26,6926,694
Transactions in capacity as equity holders:
Dividends on ordinary shares
a
- - (5,652) (5,652)
Share buyback
b
(1,812)--(1,812)
Other equity movements:
Share-based payment arrangements
- 96 - 96
Purchase of shares
(56) - - (56)
Net acquisition of treasury shares
(56) - - (56)
Other----
Total contributions and distributions
(1,924) 96 (5,652) (7,480)
Balance as at 30 September 2024
37,142 1,757 29,089 67,988
Profit after income tax expense
--6,4966,496
Net other comprehensive income/(expense)
-325(12)313
Total comprehensive income/(expense)
-3256,4846,809
Transactions in capacity as equity holders:
Dividends on ordinary shares
a
- - (5,215) (5,215)
Share buyback
b
(672)--(672)
Other equity movements:
Share-based payment arrangements
- 94 - 94
Purchase of shares
(23) - - (23)
Net acquisition of treasury shares
(86) - - (86)
Other--55
Total contributions and distributions
(781) 94 (5,210) (5,897)
Balance as at 30 September 2025
36,361 2,176 30,363 68,900
a. Relates to fully franked dividends at 30%:
- 2025: 2025 interim dividend of 76 cents per share ($2,601 million) and 2024 final dividend of 76 cents per share ($2,614 million); and
- 2024: 2024 interim dividend of 75 cents per share and special dividend of 15 cents per share ($3,125 million) and 2023 final dividend of 72 cents per share ($2,527 million).
b. Westpac previously announced its intention to undertake a $3.5 billion on market buyback of WBC ordinary shares. During 2025, Westpac bought back and cancelled 21,058,056 ordinary shares ($672 million) at an average price
of $31.93 (2024: 67,665,599 ordinary shares ($1,812 million) at an average price of $26.78).
The above statements of changes in equity should be read in conjunction with the accompanying notes.
FINANCIAL
REPORTEXHIBITS INDEX
STRATEGIC
REVIEW
PERFORMANCE
REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION7
CASH FLOW STATEMENTS
for the years ended 30 September
Westpac Banking Corporation
ConsolidatedParent Entity
$m
Note 2025 2024 2023 2025 2024
Cash flows from operating activities
Interest received
53,888 52,515 41,970 50,015 48,242
Interest paid
(35,638) (34,000) (22,654) (34,723) (33,039)
Dividends received
2 3 1 987 1,285
Other non-interest income received
2,241 4,314 3,567 2,173 4,274
Operating expenses paid
(10,096) (9,679) (9,856) (9,004) (8,464)
Income tax paid
(3,532) (3,369) (2,439) (3,047) (2,871)
Cash flows from operating activities before changes in operating assets and liabilities
6,865 9,784 10,589 6,401 9,427
Net (increase)/decrease in:
Collateral paid1,945(2,097)1,5451,905(2,057)
Trading securities and financial assets measured at FVIS
(6,107) (18,994) (4,524) (6,054) (19,452)
Derivative financial instruments
5,650 (836) 4,082 1,013 1,358
Loans
(50,182) (35,083) (27,270) (45,997) (32,528)
Other financial assets
(48) (348) 128 (26) (231)
Other assets
(29) (34) 8 2 2
Net increase/(decrease) in:
Collateral received
(5) (318) (2,888) (709) (181)
Deposits and other borrowings
51,853 35,243 24,692 50,803 35,870
Other financial liabilities
(457) (7,084) (17,146) 873 (5,281)
Other liabilities
4 - (12) - (9)
Net cash provided by/(used in) operating activities
35 9,489 (19,767) (10,796) 8,211 (13,082)
Cash flows from investing activities
Proceeds from investment securities
63,356 47,624 36,480 61,168 40,089
Purchase of investment securities(75,810)(72,786)(33,753)(73,463)(65,072)
Net movement in amounts due to/from controlled entities
- - - 3,797 (1,283)
Proceeds from disposal of controlled entities and other businesses, net of cash disposed
35 - - 293 - -
Purchase of controlled entities and other businesses35-(30)---
Net (increase)/decrease in investments in controlled entities
- - - 478 (254)
Purchase of associates
(10) (4) (1) (10) (3)
Proceeds from sale of loans portfolio
a
1,418--1,414-
Proceeds from disposal of property and equipment3346721537
Purchase of property and equipment
(371) (235) (238) (259) (168)
Purchase of intangible assets(776)(782)(1,141)(674)(673)
Net cash provided by/(used in) investing activities
(12,160) (26,167) 1,712 (7,534) (27,327)
Cash flows from financing activities
Proceeds from debt issues (net of issue costs)
68,850 80,245 70,974 59,404 68,438
Redemption of debt issues
(76,010) (67,100) (62,596) (68,590) (58,931)
Payments for the principal portion of lease liabilities(390)(416)(401)(338)(365)
Issue of loan capital (net of issue costs)
5,042 6,326 3,453 5,042 6,326
Redemption of loan capital
(4,122) (1,957) (1,171) (4,127) (1,951)
Payments for share buyback(672)(1,812)-(672)(1,812)
Issue of perpetual preference shares (net of issue cost)-339---
Purchase of shares relating to share-based payment arrangements(23)(56)(32)(23)(56)
Net purchase of treasury shares (including RSP and EIP restricted shares)
(87) (56) (47) (86) (56)
Payment of dividends
(5,215) (5,652) (4,504) (5,215) (5,652)
Dividends paid to NCI
(17) (4) (21) - -
Purchase of shares from NCI35(4)(25)---
Net cash provided by/(used in) financing activities
(12,648) 9,832 5,655 (14,605) 5,941
Net increase/(decrease) in cash and balances with central banks
(15,319) (36,102) (3,429) (13,928) (34,468)
Effect of exchange rate changes on cash and balances with central banks
82 (753) 694 310 (598)
Cash and balances with central banks as at beginning of year
65,667 102,522 105,257 58,400 93,466
Cash and balances with central banks as at end of year
35 50,430 65,667 102,522 44,78258,400
a. The sale of the auto finance loan portfolio to Resimac Asset Finance Pty 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.
The above cash flow statements should be read in conjunction with the accompanying notes.
8 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 1. Financial statements preparation
This financial report of Westpac Banking Corporation (the Parent Entity), together with its controlled entities (the Group or Westpac), for the year ended 30 September 2025, was authorised for
issue by the Board of Directors on 2 November 2025. The Directors have the power to amend and reissue the financial report.
The material accounting policies are set out below and in the relevant notes to the financial statements. The accounting policy for the recognition, derecognition, classification and
measurement basis of financial assets and financial liabilities precedes Note 9. These policies have been consistently applied to all the years presented, unless otherwise stated.
a. Basis of preparation
(i) Basis of accounting
This financial report is a general purpose financial report prepared in accordance with:
●The requirements for an Authorised Deposit-taking Institution (ADI) under the Banking Act 1959 (as amended);
●Australian Accounting Standards (AAS) and Interpretations as issued by the Australian Accounting Standards Board (AASB); and
●The Corporations Act 2001.
Westpac Banking Corporation is domiciled and incorporated in Australia and is a for-profit entity for the purposes of preparing these financial statements.
The financial report also complies with International Financial Reporting Accounting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and Interpretations as
issued by the IFRS Interpretations Committee (IFRIC). It also includes additional disclosures required for foreign registrants by the United States Securities and Exchange Commission (US
SEC).
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.
Westpac has elected to apply ASIC Corporations (Parent Entity Financial Statements) Instrument 2021/195 and has presented both Parent Entity and Group financial statements in the
financial report.
(ii) Historical cost convention
The financial report has been prepared under the historical cost convention, as modified by applying fair value accounting to financial assets and financial liabilities (including derivative
instruments) measured at fair value through income statement (FVIS) or in other comprehensive income (OCI).
(iii) Standards adopted during the year ended 30 September 2025
No new accounting standards have been adopted by the Group for the year ended 30 September 2025. There have been no amendments to existing accounting standards that have had a
material impact to the Group or the Parent Entity.
FINANCIAL
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REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION9
Note 1. Financial statements preparation (Continued)
(iv) Business combinations
Business combinations are accounted for using the acquisition method of accounting. Acquisition cost is measured as the aggregate of the fair value at the date of acquisition of the assets
given, equity instruments issued or liabilities incurred or assumed. Acquisition-related costs are expensed as incurred (except for those costs arising on the issue of equity instruments which
are recognised directly in equity).
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured at fair value on the acquisition date. Goodwill is measured as the excess
of the acquisition cost, the amount of any non-controlling interest and the fair value of any previous Westpac equity interest in the acquiree, over the fair value of the identifiable net assets
acquired.
(v) Foreign currency translation
Functional and presentation currency
The consolidated financial statements are presented in Australian dollars which is the Parent Entity’s functional and presentation currency. The functional currency of offshore entities is usually
the main currency of the economy they operate in.
Transactions and balances
Foreign currency transactions are translated into the functional currency of the relevant branch or subsidiary using the exchange rates prevailing at the dates of the transactions. Foreign
exchange (FX) gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognised in the income statement, except when deferred in OCI for qualifying cash flow hedges and qualifying net investment hedges.
Foreign operations
Assets and liabilities of foreign branches and subsidiaries that have a functional currency other than the Australian dollar are translated at exchange rates prevailing on the balance date.
Income and expenses are translated at average exchange rates prevailing during the year. Equity balances are translated at historical exchange rates.
The resulting exchange differences are recognised in the foreign currency translation reserve in OCI.
Where Westpac hedges the currency translation risk arising from net investments in foreign operations, the gains or losses on the hedging instruments are also reflected in OCI to the extent
the hedge is effective. When all or part of a foreign operation is disposed or borrowings that are part of the net investments are repaid, a proportionate share of such exchange differences is
recognised in the income statement as part of the gain or loss on disposal or repayment of borrowing.
(vi) Comparative revisions
Comparative information has been revised where appropriate to conform to changes in presentation in the current year and to enhance comparability.
10 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 1. Financial statements preparation (Continued)
b. Critical accounting assumptions and estimates
Applying Westpac’s accounting policies requires the use of judgement, assumptions and estimates which impact the financial information. The significant assumptions and estimates used are
discussed in the relevant notes below:
Note 10 Provision for expected credit losses (ECL)
Note 22 Fair values of financial assets and financial liabilities
Note 25 Provisions, contingent liabilities, contingent assets and credit commitments
Geopolitical developments including in relation to international trade and tariff policies, global tensions and continuing global military conflict, 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 47.5% (refer to Note 10 for further details).
Impact of climate-related risks
Westpac has considered the potential risk of climate change on its financial statements including both physical risks and transition risks. Westpac has concluded that based on the information
and methodologies currently used, climate-related risks did not have a material impact on the judgements, assumptions and estimates for the year ended 30 September 2025. This conclusion
also reflects that the most significant impacts of climate change are expected to mostly occur beyond the expected life of our exposures.
Key considerations in reaching this conclusion included assessing Westpac’s exposure to:
●higher transition risk industries as a proportion of overall credit exposures; and
●physical risks that may arise from changing weather patterns and extreme weather events.
Climate change represents a significant source of uncertainty in the medium to long term which may affect our financial statements in the future. Measuring the financial impact of climate
change continues to evolve and Westpac will continue to improve its climate scenario analysis and stress testing modelling to assess these potential impacts.
Details of the provision for ECL, including overlays held in relation to climate-related risks, are provided in Note 10.
c. Future developments
(i) Accounting standards
AASB 9 Financial Instruments: Recognition and Measurement (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
new hedge accounting relationships 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 this impact 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.
FINANCIAL
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STRATEGIC
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PERFORMANCE
REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION11
Note 1. Financial statements preparation (Continued)
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;
●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.
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 S1 is a voluntary standard and provides guidance on the application of AASB S2.
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 progress the implementation of AASB S2 which becomes effective for the Group for the 30 September 2026 year end.
12 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL PERFORMANCE
Note 2. Segment reporting
Accounting policy
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.
Internally, Westpac uses an adjusted AAS measure of performance which excludes Notable Items in assessing the financial performance of its segments.
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 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
The performance of each operating segment reflects internal charges, transfer pricing adjustments and revenue and expenses resulting from inter-segment transactions. These are
eliminated on consolidation in the Group Businesses segment. Inter-segment pricing is determined on an arm’s length basis.
Notable Items presentation
In prior years, Segment information was presented with a separate line item for Notable Items impacting Operating income and Operating expense for each segments. To align with internal
presentation in 2025, Segment results are presented excluding Notable Items, and reconciled at a Group level to the Statutory Profit. Accordingly, prior period presentations have been
reclassified to reflect current presentation.
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.
●Institutional delivers a broad range of financial products and services to corporate, institutional and government customers.
●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, Finance and HR services, a portion of enterprise
technology costs related to UNITE in prior periods, certain customer remediation expenses and enterprise provisions. It also includes Group-wide consolidation entries.
Changes in Segment Composition
In 2025, the following changes to Segment results were applied:
●The merchants services business was transferred from Business & Wealth to Institutional given strategic alignment with the management of payments infrastructure;
●The contribution from the auto finance portfolio, which was sold in March 2025, was transferred from Business & Wealth to Group Businesses; and
●The realignment of Consumer, Business & Wealth and Institutional Human Resources and Finance function expenses to Group Businesses.
FINANCIAL
REPORTEXHIBITS INDEX
STRATEGIC
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PERFORMANCE
REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION13
Note 2. Segment reporting (Continued)
Results for 2025 reflect the new segment composition. As the impact of these changes on segment results were immaterial, comparatives were not revised.
The following tables present the segment results for Westpac.
Business &NewGroupNotableIncome
$m
Consumer Wealth Institutional Zealand (A$) Businesses Total Items Statement
2025
Net interest income
7,863 5,3462,4132,568 1,283 19,473 (93) 19,380
Net fee income
538 256773170 (5) 1,732 - 1,732
Net wealth management income-434-43(1)476-476
Trading income1067577371370413717
Other income13745(4)1879-79
Net operating income
8,424 6,1103,8082,814 1,308 22,464 (80) 22,384
Operating expenses
(4,932) (2,727)(1,647)(1,342) (1,268) (11,916) - (11,916)
Pre-provision profit
3,492 3,3832,1611,472 40 10,548 (80) 10,468
Impairment (charges)/benefits
(217) (245)141 (4) (424) - (424)
Profit before income tax expense
3,275 3,1382,1621,513 36 10,124 (80) 10,044
Income tax (expense)/benefit
(993) (952)(587)(423) (180) (3,135) 24(3,111)
Net profit attributable to NCI
- --- (17) (17) - (17)
Net profit attributable to owners of WBC (excluding
Notable Items)2,282 2,1861,5751,090 (161) 6,972 (56) 6,916
Notable Items (post-tax)
- --(3) (53) (56)
Net profit attributable to owners of WBC2,2822,1861,5751,087(214)6,916
Balance sheet
Loans
525,447115,203117,70493,44356851,853
Deposits and other borrowings
366,299152,312131,37972,80647,661770,457
2024
Net interest income7,632 5,3382,2402,388 1,318 18,916 (163) 18,753
Net fee income515 341653179 (16) 1,672 - 1,672
Net wealth management income-395-397441-441
Trading income-5763540(16)716(12)704
Other income135(23)(1)2418-18
Net operating income
8,160 6,1363,5052,645 1,317 21,763 (175) 21,588
Operating expenses(4,787) (2,626)(1,465)(1,262) (804) (10,944) - (10,944)
Pre-provision profit3,373 3,5102,0401,383 513 10,819 (175) 10,644
Impairment (charges)/benefits(248) (142)(120)(25) (2) (537) - (537)
Profit before income tax expense3,125 3,3681,9201,358 511 10,282 (175) 10,107
Income tax (expense)/benefit(941) (1,012)(553)(379) (284) (3,169) 52(3,117)
Net profit attributable to NCI- --- - - - -
Net profit attributable to owners of WBC (excluding
Notable Items)2,184 2,3561,367979 227 7,113 (123) 6,990
Notable Items (post-tax)- --(6)(117) (123)
Net profit attributable to owners of WBC2,1842,3561,3679731106,990
Balance sheet
Loans510,317101,989100,58293,83346806,767
Deposits and other borrowings334,462144,289119,79574,91247,031720,489
14 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 2. Segment reporting (Continued)
Business &NewGroupNotableIncome
$m
Consumer Wealth Institutional Zealand (A$) Businesses Total Items Statement
2023
Net interest income8,177 4,9921,9262,317 1,002 18,414 (97) 18,317
Net fee income504 360596177 8 1,645 - 1,645
Net wealth management income-425-33114572(10)562
Trading income-4769233(22)750(33)717
Other income201279(3)53161243404
Net operating income8,701 5,8363,2932,557 1,15521,542 103 21,645
Operating expenses
(4,533) (2,459)(1,316)(1,186) (738) (10,232) (460) (10,692)
Pre-provision profit4,168 3,3771,9771,37141711,310(357)10,953
Impairment (charges)/benefits(179)(257)(87)(124) (1) (648) - (648)
Profit before income tax expense3,989 3,1201,8901,247 416 10,662 (357) 10,305
Income tax (expense)/benefit
(1,196) (922)(543)(352) (275) (3,288) 184 (3,104)
Net profit attributable to NCI- (5)-- (1) (6) - (6)
Net profit attributable to owners of WBC (excluding
Notable Items)2,793 2,1931,347895 140 7,368(173)7,195
Notable Items (post-tax)
(148)(107)(10)(7)99 (173)
Net profit attributable to owners of WBC2,6452,0861,3378882397,195
Balance sheet
Loans492,71695,54892,56892,488(66)773,254
Deposits and other borrowings308,342140,536116,05276,54446,694688,168
Notable Items after tax
$m
2025 2024 2023
Economic hedges
(43) (128) (92)
Hedge ineffectiveness
(13) 5 66
Hedging items(56)(123)(26)
Provisions for remediation, litigation, fines and penalties
- - (176)
Asset sales and revaluations
- - 256
The write-down of assets
- - (87)
Restructuring costs
- - (140)
Large items--(147)
Total Notable Items after tax
(56) (123) (173)
FINANCIAL
REPORTEXHIBITS INDEX
STRATEGIC
REVIEW
PERFORMANCE
REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION15
Note 2. Segment reporting (Continued)
Revenue from products and services
Details of revenue from external customers by product or service are disclosed in Note 3 and Note 4. No single customer amounted to greater than 10% of the Group’s revenue.
Geographic segments
Geographic segments are based on the location of the office where the following items were recognised:
202520242023
$m%$m%$m%
Revenue
Australia
48,212 83.1 48,442 84.7 40,222 85.4
New Zealand
8,014 13.8 6,809 11.9 5,053 10.7
Other overseas
a
1,820 3.1 1,931 3.4 1,805 3.9
Total
58,046 100.0 57,182 100.0 47,080 100.0
Non-current assets
b
Australia
11,322 89.0 11,573 89.0 11,782 89.7
New Zealand
1,252 9.8 1,319 10.1 1,282 9.8
Other overseas
a
157 1.2 105 0.9 67 0.5
Total
12,731 100.0 12,997 100.0 13,131 100.0
a. Other overseas included Pacific Islands, Asia, the Americas and Europe.
b. Non-current assets represents property and equipment, and intangible assets.
16 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 3. Net interest income and average balance sheet and interest rates
Net interest income
Accounting policy
Interest income and interest expense for all interest earning financial assets and interest bearing financial liabilities at amortised cost or FVOCI, detailed within the table below, are
recognised using the effective interest method. Net income from treasury’s interest rate and liquidity management activities and the cost of the Bank levy are included in net interest income.
The effective interest method calculates the amortised cost of a financial instrument by discounting the financial instrument’s estimated future cash receipts or payments to their present
value and allocates the interest income or interest expense, including any fees, costs, premiums or discounts integral to the instrument, over its expected life.
Interest income is calculated based on the gross carrying amount of financial assets in stages 1 and 2 of the Group’s ECL model and on the carrying amount net of the provision for ECL for
financial assets in stage 3.
ConsolidatedParent Entity
$m
2025 2024 2023 2025 2024
Interest income
Calculated using the effective interest method
Cash and balances with central banks
2,533 4,123 4,277 2,260 3,651
Collateral paid
468 647 581 467 646
Investment securities
4,587 3,494 2,037 4,274 3,254
Loans
45,451 44,460 35,582 39,617 38,217
Other financial assets
15 15 38 11 13
Due from subsidiaries
- - - 2,222 2,577
Total interest income calculated using the effective interest method53,05452,73942,51548,85148,358
Other
Net ineffectiveness on qualifying hedges(19)894(15)16
Trading securities and financial assets measured at FVIS2,0071,6001,1431,9111,474
Due from subsidiaries
- - - 300 81
Total other
1,988 1,608 1,237 2,196 1,571
Total interest income
55,042 54,347 43,752 51,047 49,929
Interest expense
Calculated using the effective interest method
Collateral received(268)(317)(327)(242)(302)
Deposits and other borrowings(21,121)(21,268)(14,993)(18,743)(18,190)
Debt Issues(6,439)(6,094)(4,667)(5,587)(5,422)
Due to subsidiaries---(2,929)(3,324)
Loan capital(2,041)(1,848)(1,448)(1,967)(1,773)
Other financial liabilities(334)(394)(516)(246)(177)
Total interest expense calculated using the effective interest method(30,203)(29,921)(21,951)(29,714)(29,188)
Other
Deposits and other borrowings
(2,125) (2,389) (1,925) (2,046) (2,248)
Trading liabilities
a
(2,610) (2,643) (653) (2,633) (2,785)
Debt issues
(227) (194) (494) (88) (82)
Bank levy
(393) (357) (332) (390) (357)
Due to subsidiaries
- - - 2 242
Other interest expense
(104) (90) (80) (80) (74)
Total other
(5,459) (5,673) (3,484) (5,235) (5,304)
Total interest expense
(35,662) (35,594) (25,435) (34,949) (34,492)
Net interest income
19,380 18,753 18,317 16,098 15,437
a. Includes net impact of Treasury balance sheet management activities.
FINANCIAL
REPORTEXHIBITS INDEX
STRATEGIC
REVIEW
PERFORMANCE
REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION17
Note 3. Net interest income and average balance sheet and interest rates (Continued)
Average balance sheet and interest rates
The daily average balances of Westpac’s interest earning assets and interest bearing liabilities are shown below along with their interest income or expense.
202520242023
AverageInterestAverageAverageInterestAverageAverageInterestAverage
balanceincomeratebalanceincomeratebalanceincomerate
Consolidated$m$m%$m$m%$m$m%
Assets
Interest earning assets
Loans:
Australia
660,395 39,151 5.9 633,772 37,865 6.0 607,154 30,164 5.0
New Zealand
93,509 5,680 6.1 92,222 6,155 6.7 90,130 5,028 5.6
Other overseas
10,456 620 5.9 6,666 440 6.6 6,548 390 6.0
Housing
a
Australia445,86025,5275.7439,12124,9825.7424,42719,6404.6
New Zealand61,9753,5645.860,8103,5615.959,3192,7024.6
Other overseas374164.3407174.2468183.8
Personal
Australia9,45096910.310,6841,0399.711,9541,0018.4
New Zealand1,0611019.51,063979.11,0941029.3
Other overseas7114.37114.37114.3
Business
Australia205,08512,6556.2183,96711,8446.4170,7739,5235.6
New Zealand30,4732,0156.630,3492,4978.229,7172,2247.5
Other overseas10,0756036.06,2524226.76,0733716.1
Trading securities and financial assets measured at FVIS:
Australia
38,878 1,615 4.2 28,605 1,223 4.3 23,486 843 3.6
New Zealand
5,279 217 4.1 4,718 251 5.3 3,959 201 5.1
Other overseas
4,229 175 4.1 3,027 126 4.2 2,641 99 3.7
Investment securities:
Australia102,5714,1834.185,2083,2273.866,6311,8222.7
New Zealand7,1742653.76,5702013.16,1641482.4
Other overseas
3,524 139 3.9 2,147 66 3.1 2,082 67 3.2
Other interest earning assets:
b
Australia
54,359 2,091 3.8 79,226 3,340 4.2 96,291 3,424 3.6
New Zealand
7,176 271 3.8 8,636 465 5.4 10,496 496 4.7
Other overseas
15,306635 4.1 19,258988 5.1 24,8671,070 4.3
Total interest earning assets and interest income
1,002,856 55,042 5.5 970,055 54,347 5.6 940,449 43,752 4.7
Non-interest earning assets
Derivative financial instruments
24,885 16,786 23,423
All other assets
a,c
83,338 70,468 59,356
Total non-interest earning assets
108,223 87,254 82,779
Total assets
1,111,079 1,057,309 1,023,228
a. Certain portions of loans are non-interest earning and are presented in All other assets. The non-interest earning 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 $65,482 million
(2024: $57,028 million, 2023: $49,702 million).
18 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 3. Net interest income and average balance sheet and interest rates (Continued)
202520242023
AverageInterestAverageAverageInterestAverageAverageInterestAverage
balanceexpenseratebalanceexpenseratebalanceexpenserate
Consolidated$m$m%$m$m%$m$m%
Liabilities
Interest bearing liabilities
Deposits and other borrowings:
Australia
513,451 19,865 3.9 489,693 19,413 4.0 460,149 13,544 2.9
New Zealand
65,233 2,454 3.8 65,070 3,220 4.963,760 2,464 3.9
Other overseas
20,705 927 4.5 19,356 1,024 5.3 20,132 910 4.5
Certificates of deposit
Australia31,926 1,390 4.433,598 1,509 4.531,822 1,128 3.5
New Zealand1,914 78 4.12,424 141 5.82,727 136 5.0
Other overseas13,487 654 4.812,867 736 5.713,338 657 4.9
Transactions
Australia119,953 4,051 3.4122,235 4,112 3.4129,760 3,083 2.4
New Zealand9,136 242 2.68,836 404 4.68,647 322 3.7
Other overseas853 13 1.5823 13 1.6868 7 0.8
Savings
Australia209,812 7,513 3.6189,405 7,007 3.7164,800 4,620 2.8
New Zealand18,540 396 2.118,465 635 3.419,376 537 2.8
Other overseas1,126 26 2.3996 25 2.51,035 25 2.4
Term
Australia151,7606,9114.6144,4556,7854.7133,7674,7133.5
New Zealand35,6431,7384.935,3452,0405.833,0101,4694.5
Other overseas5,2392344.54,6702505.44,8912214.5
Repurchase agreements:
Australia14,0326834.922,0406923.134,5113140.9
New Zealand2,529983.94,3182345.44,9222314.7
Other overseas1,099494.5193115.7219115.0
Loan capital:
Australia
40,130 1,869 4.7 37,229 1,676 4.5 31,895 1,313 4.1
New Zealand
3,021 172 5.7 2,983 172 5.8 2,489 135 5.4
Other interest bearing liabilities:
a
Australia
171,977 8,481 4.9 164,722 8,370 5.1154,859 5,990 3.9
New Zealand
22,636 1,078 4.8 20,134 768 3.8 19,986 464 2.3
Other overseas
594 (14) (2.4) 953 14 1.5 1,854 59 3.2
Total interest bearing liabilities and interest expense
855,407 35,662 4.2 826,691 35,594 4.3 794,776 25,435 3.2
Non-interest bearing liabilities
Deposits and other borrowings:
Australia
134,244 119,408 117,538
New Zealand
10,755 10,891 12,213
Other overseas
1,202 1,333 1,292
Derivative financial instruments
26,751 21,413 26,353
All other liabilities
10,835 6,024 (218)
Total non-interest bearing liabilities
183,787 159,069 157,178
Total liabilities
1,039,194 985,760 951,954
Shareholders’ equity
71,544 71,493 71,229
NCI
341 56 45
Total equity
71,885 71,549 71,274
Total liabilities and equity
1,111,079 1,057,309 1,023,228
a. Interest expense includes the net impact of Treasury balance sheet management activities and the bank levy.
FINANCIAL
REPORTEXHIBITS INDEX
STRATEGIC
REVIEW
PERFORMANCE
REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION19
Note 3. Net interest income and average balance sheet and interest rates (Continued)
Calculation of variances
Net interest income may vary from year to year due to changes in the volume of, and interest rates associated with, interest earning assets and interest bearing liabilities. Changes due to
volume and rates are calculated at the balance sheet line items. Disaggregation into product classification includes the impact of compositional changes (mix) from prior periods. As such,
calculations at a product level will result in a different outcome and will not sum to the balance sheet line item.
The following table allocates the change in net interest income between changes in volume and interest rate for those assets and liabilities:
●Volume changes are determined based on the movements in average asset and liability balances; and
●Interest rate changes are determined based on the change in interest rate associated with those assets and liabilities. Variances that arise due to a combination of volume and interest rate
changes are allocated to interest rate changes.
20252024
ConsolidatedChange due toChange due to
$m
Volume Rate Total Volume Rate Total
Interest earning assets
Loans:
Australia
1,583(297)1,286 1,3376,3647,701
New Zealand
86(561)(475) 1171,0101,127
Other overseas
249(69)180 74350
Housing
Australia1,174(629)5458534,4895,342
New Zealand50(47)365794859
Other overseas9(10)(1)-(1)(1)
Personal
Australia46(116)(70)43(5)38
New Zealand1342(7)(5)
Other overseas1(1)----
Business
Australia3634488114411,8802,321
New Zealand35(517)(482)50223273
Other overseas239(58)18174451
Trading securities and financial assets measured at FVIS:
Australia
448(56)392 185195380
New Zealand
30(64)(34) 381250
Other overseas
50(1)49 151227
Investment securities:
Australia6582989565088971,405
New Zealand184664104353
Other overseas
423173 2(3)(1)
Other interest earning assets:
Australia
(1,057)(192)(1,249) (569)485(84)
New Zealand
(80)(114)(194) (88)57(31)
Other overseas
(201)(152)(353) (245)163(82)
Total change in interest income
1,826(1,131)695 1,3179,27810,595
20 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 3. Net interest income and average balance sheet and interest rates (Continued)
20252024
ConsolidatedChange due toChange due to
$m
Volume Rate Total Volume Rate
Total
Interest bearing liabilities
Deposits and other borrowings:
Australia
956(504)452 9224,9475,869
New Zealand
8(774)(766) 51705756
Other overseas
71(168)(97) (35)149114
Certificates of deposits
Australia54(173)(119)128253381
New Zealand-(63)(63)325
Other overseas51(133)(82)(25)10479
Transactions
Australia192(253)(61)1828471,029
New Zealand2(164)(162)77582
Other overseas1(1)--66
Savings
Australia3351715062782,1092,387
New Zealand1(240)(239)118798
Other overseas1-1(1)1-
Term
Australia375(249)1263341,7382,072
New Zealand5(307)(302)30541571
Other overseas18(34)(16)(9)3829
Repurchase agreements:
Australia(150)141(9)134244378
New Zealand(97)(39)(136)(28)313
Other overseas51(13)38(1)1-
Loan capital:
Australia
13360193 219144363
New Zealand
2(2)- 271037
Other interest bearing liabilities:
Australia
322(211)111 3502,0302,380
New Zealand
78232310 3301304
Other overseas
(22)(6)(28) (41)(4)(45)
Total change in interest expense
1,352(1,284)68 1,6018,55810,159
Change in net interest income:
Australia
371267638 (164)576412
New Zealand
63(110)(47) 247599
Other overseas
40(4)36 (144)69(75)
Total change in net interest income
474153627 (284)720436
FINANCIAL
REPORTEXHIBITS INDEX
STRATEGIC
REVIEW
PERFORMANCE
REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION21
Note 4. Non-interest income
Accounting policy
Non-interest income includes net fee income, net wealth management, trading income and other income.
Net fee income
When another party is involved in providing goods or services to a Westpac customer, Westpac assesses whether the nature of the arrangement with its customer is as a principal provider
or an agent of another party. Where Westpac is acting as an agent for another party, the income earned by Westpac is the net consideration received (i.e. the gross amount received from
the customer less amounts paid to a third-party provider). As an agent, the net consideration represents fee income for facilitating the transaction between the customer and the third-party
provider with primary responsibility for fulfilling the contract.
Fee income
Fee income is recognised when the performance obligation is satisfied by transferring the promised good or service to the customer. Fee income includes facility fees, transaction fees and
other non-risk fee income.
Facility fees include certain line fees, annual credit card fees and fees for providing customer bank accounts. They are recognised over the term of the facility/period of service on a straight-
line basis.
Transaction fees are earned for facilitating banking transactions such as FX fees, telegraphic transfers and issuing bank cheques. Fees for these one-off transactions are recognised once
the transaction has been completed. Transaction fees are also recognised for credit card transactions including interchange fees net of scheme charges. These are recognised once the
transaction has been completed; however, a component of interchange fees received is deferred as unearned income as Westpac has a future service obligation to customers under
Westpac’s credit card reward programs.
Other non-risk fee income includes advisory and underwriting fees which are recognised when the related service is completed.
Income which forms an integral part of the effective interest rate of a financial instrument is recognised using the effective interest method and recorded in interest income (for example, loan
origination fees).
Fee expenses
Fee expenses include incremental external costs that vary directly with the provision of goods or services to customers. An incremental cost is one that would not have been incurred if a
specific good or service had not been provided to a specific customer. Fee expenses which form an integral part of the effective interest rate of a financial instrument are recognised using
the effective interest method and recorded in net interest income. Fee expenses include the costs associated with credit card loyalty programs which are recognised as an expense when
the services are provided on the redemption of points as well as merchant transaction costs.
Net wealth management income
Wealth management fees earned for the ongoing management of customer funds and investments are recognised when the performance obligation is satisfied which is over the period of
management.
Trading income
●Realised and unrealised gains or losses from changes in the fair value of trading assets, liabilities and derivatives are recognised in the period in which they arise (except day one profits
or losses which are deferred, refer to Note 22); and
●Net income related to Treasury’s interest rate and liquidity management activities is included in net interest income.
Other income - dividend income
●Dividends on quoted shares are recognised on the ex-dividend date; and
●Dividends on unquoted shares are recognised when the Company’s right to receive payment is established.
22 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 4. Non-interest income (Continued)
ConsolidatedParent Entity
$m
2025 2024 2023 2025 2024
Net fees
Facility fees
795
763
697
746
709
Transaction fees
1,126
1,118
1,146
944
935
Other non-risk fee income
195
135
154
138
125
Fee income
2,116
2,016
1,997
1,828
1,769
Credit card loyalty programs
(130)
(134)
(153)
(103)
(106)
Transaction fee related expenses
(254)
(210)
(199)
(182)
(169)
Fee expenses
(384)
(344)
(352)
(285)
(275)
Net fees
1,732
1,672
1,645
1,543
1,494
Net wealth management
476441562--
Trading
717
704
717
693
637
Other
Dividends received from subsidiaries
-
-
-
986
1,284
Transactions with subsidiaries
-
-
-
453
564
Dividends received from other entities
2
3
1
1
1
Net gain/(loss) on disposal of assets
1
6
-
1
8
Net gain/(loss) on hedging of overseas operations
-
(1)
-
42
(4)
Net gain/(loss) on derivatives held for risk management purposes
a
12
7
1
12
7
Net gain/(loss) on financial instruments measured at fair value
38
(24)
78
31
(32)
Net gain/(loss) on disposal of controlled entities and other businesses
b
-
-
268
-
-
Other
26
27
56
20
23
Total other79184041,5461,851
Total non-interest income3,0042,8353,3283,7823,982
a. Income from derivatives held for risk management purposes reflects the impact of economic hedges of earnings.
b. 2023 included a $243 million gain on sale of Advance Asset Management Limited.
Deferred income in relation to the credit card loyalty programs for Westpac was $329 million as at 30 September 2025 (2024: $338 million, 2023: $324 million) and $37 million for the Parent
Entity (2024: $35 million). This will be recognised as fee income as the credit card reward points are redeemed.
There were no other material contract assets or contract liabilities for Westpac or the Parent Entity.
FINANCIAL
REPORTEXHIBITS INDEX
STRATEGIC
REVIEW
PERFORMANCE
REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION23
Note 5. Operating expenses
ConsolidatedParent Entity
$m
2025 2024 2023 2025 2024
Staff
Employee remuneration, entitlements and on-costs
5,626
5,160
5,254
4,977
4,540
Superannuation
597
551
521
538
491
Share-based payments
95
97
90
91
94
Restructuring costs
267
91
233
234
75
Total staff
6,585
5,899
6,098
5,840
5,200
Occupancy
Operating lease rentals
127
116
153
109
99
Depreciation and impairment of property and equipment
420
455
474
348
387
Other
105
129
159
97
120
Total occupancy
652
700
786
554
606
Technology
Amortisation and impairment of software assets
1,018
908
629
887
802
Depreciation and impairment of IT equipment
121
125
132
85
99
Technology services
1,052
871
735
942
770
Software maintenance and licences
869
770
603
736
653
Telecommunications
76
90
112
55
69
Total technology
3,136
2,764
2,211
2,7052,393
Other
Professional and processing services
692
798
905
602
696
Postage and stationery
145
130
139
122
109
Advertising
220
176
169
194
150
Non-lending losses
147
111
65
102
88
Amortisation and impairment of other intangible assets and deferred expenditure
2
34
2
1
2
Impairment of investments in subsidiaries
-
-
-
10
117
Other expenses
337
332
317
325
367
Total other
1,543
1,581
1,597
1,356
1,529
Total operating expenses
11,916
10,944
10,692
10,455
9,728
24 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 6. Impairment charges
Accounting policy
Impairment charges are based on an expected loss model which measures the difference between the current carrying amount and the present value of expected future cash flows taking
into account past experience, current conditions and multiple probability-weighted macroeconomic scenarios for reasonably supportable future economic conditions. Further details of the
calculation of ECL and the critical accounting assumptions and estimates relating to impairment charges are included in Note 10.
Impairment charges are recognised in the income statement, with a corresponding amount recognised as follows:
●Loans, debt securities at amortised cost and due from subsidiaries balances: as a reduction of the carrying value of the financial asset through an offsetting provision account (refer to
Note 10);
●Debt securities at FVOCI: in reserves in OCI with no reduction of the carrying value of the debt security (refer to Note 26); and
●Credit commitments: as a provision (refer to Note 25).
Uncollectable loans
A loan may become uncollectable in full or part if, after following Westpac’s loan recovery procedures, Westpac remains unable to collect that loan’s contractual repayments. Uncollectable
amounts are written off against their related provision for ECL, after all possible repayments have been received.
Where loans are secured, amounts are generally written off after receiving the proceeds from the security, or in certain circumstances, where the net realisable value of the security has
been determined and this indicates that there is no reasonable expectation of full recovery, write-off may be earlier. Unsecured consumer loans are generally written off after 180 days past
due.
Westpac may subsequently be able to recover cash flows from loans written off. In the period which these recoveries are made, they are recognised in the income statement.
The following table details impairment charges.
Consolidated Parent Entity
$m
2025 2024 2023 2025 2024
Provisions raised/(released)
Performing
(36)
(150)
274
14(142)
Non-performing
707
877
565
666801
Recoveries
(247)
(190)
(191)
(240)(184)
Impairment charges/(benefits)
424
537
648
440475
of which relates to:
Loans and credit commitments427536647466469
Debt securities at amortised cost(3)--(2)1
Debt securities at FVOCI
-
1
1
(1)1
Due from subsidiaries---(23)4
Impairment charges/(benefits)
424537648440475
Further details are included in Note 10.
FINANCIAL
REPORTEXHIBITS INDEX
STRATEGIC
REVIEW
PERFORMANCE
REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION25
Note 7. Income tax
Accounting policy
The tax expense for the year comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised directly in OCI, in which
case it is recognised in the statement of comprehensive income. 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.
Current tax is the tax payable for the year using enacted or substantively enacted tax rates and laws for each jurisdiction. Current tax also includes adjustments to tax payable for
previous years.
Deferred tax accounts for temporary differences between the carrying amounts of assets and liabilities in the financial statements and their values for taxation purposes.
Deferred tax is determined using the enacted or substantively enacted tax rates and laws for each jurisdiction which are expected to apply when the assets will be realised or the liabilities
settled.
Deferred tax assets and liabilities have been offset where they relate to the same taxation authority, the same taxable entity or group, and where there is a legal right and intention to settle
on a net basis.
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available to utilise the assets.
Deferred tax is not recognised for the following temporary differences:
●The initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither the accounting nor taxable profit or loss;
●The initial recognition of goodwill in a business combination; and
●Retained earnings in subsidiaries which the Parent Entity does not intend to distribute for the foreseeable future.
The Parent Entity is the head entity of a tax consolidated group with its wholly owned Australian subsidiaries. All entities in the tax consolidated group have entered into a tax sharing
agreement which, in the opinion of the Directors, limits the joint and several liabilities in the case of a default by the Parent Entity.
Current and deferred tax are recognised using a ‘group allocation basis’. As head entity, the Parent Entity recognises all current tax balances and deferred tax assets arising from unused
tax losses and relevant tax credits for the tax-consolidated group. The Parent Entity fully compensates/is compensated by the other members for these balances.
26 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 7. Income tax (Continued)
Income tax expense
The following table reconciles income tax expense to the profit before income tax expense.
ConsolidatedParent Entity
$m
2025 2024 2023 2025 2024
Profit before income tax
10,044
10,107
10,305
8,985
9,216
Tax at the Australian company tax rate of 30%
3,013
3,032
3,092
2,696
2,765
The effect of amounts which are not deductible/(assessable) in calculating taxable income:
Hybrid capital distributions
129
139
117
129
139
Dividend adjustments
1
-
3
(295)
(379)
Other non-assessable items
(1)
(4)
(9)
(1)
(3)
Other non-deductible items
24
25
49
16
23
Adjustment for overseas tax rates
(15)
(27)
(25)
6
(4)
Income tax (over)/under provided in prior years
-
(20)
7
-
(13)
Other items
a
(40)
(28)
(130)
(62)
(3)
Total income tax expense
3,111
3,117
3,104
2,489
2,525
Income tax expense comprises:
Current income tax
3,128
3,125
3,009
2,559
2,520
Movement in deferred tax
(17)
12
88
(70)
18
Income tax (over)/under provision in prior years
-
(20)
7
-
(13)
Total income tax expense
3,111
3,117
3,104
2,489
2,525
Total Australia
2,614
2,632
2,637
2,449
2,480
Total Overseas
497
485
467
40
45
Total income tax expense
3,111
3,117
3,104
2,489
2,525
a. 2023 included $86 million (Parent Entity: nil) related to the sale of Advance Asset Management Limited.
The effective tax rate was 30.97% in 2025 (2024: 30.84%, 2023: 30.12%).
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 has recognised a current tax expense for Pillar Two top-up tax obligations of $7 million for the year ended 30 September 2025 which is included in the above total income tax
expense. The Group has applied the mandatory temporary exception from recognising and disclosing Pillar Two deferred taxes under AASB 112.
Tax assets
ConsolidatedParent Entity
$m
2025 2024 2025 2024
Current tax assets20131713
Deferred tax assets
2,058 2,147 1,826 1,883
Total tax assets
2,078 2,160 1,843 1,896
Tax liabilities
ConsolidatedParent Entity
$m
2025 2024 2025 2024
Current tax liabilities
137 569 61 408
Total tax liabilities
137 569 61 408
FINANCIAL
REPORTEXHIBITS INDEX
STRATEGIC
REVIEW
PERFORMANCE
REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION27
Note 7. Income tax (Continued)
Deferred tax assets
The balance comprises temporary differences attributable to:
ConsolidatedParent Entity
$m2025202420252024
Amounts recognised in the income statements and opening retained profits
Provision for ECL on loans and credit commitments
1,481
1,519
1,312
1,314
Provision for long service leave, annual leave and other employee benefits422407405388
Property and equipment190203192192
Other provisions195167172141
Lease liabilities
518
576
456
508
All other liabilities
188
222
173
205
Total amounts recognised in the income statements and opening retained profits
2,994
3,094
2,710
2,748
Amounts recognised directly in OCI
Investment securities8320683206
Total amounts recognised directly in OCI
83
206
83
206
Gross deferred tax assets
3,077
3,300
2,793
2,954
Set-off of deferred tax assets and deferred tax liabilities
(1,019)
(1,153)
(967)
(1,071)
Net deferred tax assets
2,058
2,147
1,826
1,883
Movements
Balance as at beginning of year
2,147
2,095
1,883
1,957
Recognised in the income statements
(100)
(68)
(38)
(74)
Recognised in OCI
(123)
119
(123)
119
Set-off of deferred tax assets and deferred tax liabilities
134
1
104
(119)
Balance as at end of year
2,058
2,147
1,826
1,883
Deferred tax liabilities
The balance comprises temporary differences attributable to:
ConsolidatedParent Entity
$m
2025 2024 2025 2024
Amounts recognised in the income statements and opening retained profits
Finance lease transactions
18 112 12 106
Property and equipment
514 538 464 482
All other assets
233 232 236 232
Total amounts recognised in the income statements and opening retained profits
765 882 712 820
Amounts recognised directly in OCI
Cash flow hedges211233214214
Defined benefit43384137
Total amounts recognised directly in OCI254271255251
Gross deferred tax liabilities
1,019 1,153 967 1,071
Set-off of deferred tax assets and deferred tax liabilities
(1,019) (1,153) (967) (1,071)
Net deferred tax liabilities
- - - -
Movements
Balance as at beginning of year
- - - -
Recognised in the income statements(117)(56)(108)(56)
Recognised in OCI(17)554175
Set-off of deferred tax assets and deferred tax liabilities
134 1 104 (119)
Balance as at end of year
- - - -
28 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 7. Income tax (Continued)
Unrecognised deferred tax balances
The following potential deferred tax balances have not been recognised. The tax effect of the gross balances disclosed below would be based on the corporate tax rates applicable in the
relevant jurisdictions, which range between 15% and 40%.
ConsolidatedParent Entity
$m
2025 2024 2025 2024
Deductible temporary differences
Tax losses on revenue account414422414422
Tax losses on capital account
424
265
380
150
Taxable temporary differences
Retained earnings of subsidiaries that would be subject to withholding tax if distributed
401
402
-
-
Note 8. Earnings per share
Accounting policy
Basic earnings per share (EPS) is calculated by dividing the net profit attributable to owners of WBC by the weighted average number of ordinary shares on issue during the period. These
numbers are adjusted for treasury shares and the dividends related to treasury shares. Diluted EPS is calculated by adjusting the basic EPS by assuming all dilutive potential ordinary
shares are converted. Refer to Note 14 and Note 31 for further information on the potential dilutive instruments.
202520242023
Basic Diluted Basic Diluted Basic Diluted
Net profit attributable to owners of WBC ($m)
6,916
6,916
6,990
6,990
7,195
7,195
Adjustment for restricted share dividends
a
(6)
-
(7)
-
(5)
-
Adjustment for potential dilution:
Distributions to convertible loan capital holders
b
-
442
-
476
-
400
Adjusted net profit attributable to owners of WBC
6,910
7,358
6,983
7,466
7,190
7,595
Weighted average number of ordinary shares (# m)
Weighted average number of ordinary shares on issue
3,427
3,427
3,481
3,481
3,507
3,507
Treasury shares (including RSP and EIP restricted shares)
a
(5)
(5)
(5)
(5)
(5)
(5)
Adjustment for potential dilution:
Share-based payments
-
7
-
6
-
4
Convertible loan capital
b
-
261
-
413
-
385
Adjusted weighted average number of ordinary shares
3,422
3,690
3,476
3,895
3,502
3,891
Earnings per ordinary share (cents)
201.9
199.4
200.9
191.7
205.3
195.2
a. Restricted shares are explained in Note 31. 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 (refer to Note 14 for further details). 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 year, or at the instruments’ issue date, where issuance occurred partway through the year.
FINANCIAL
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REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION29
FINANCIAL ASSETS AND FINANCIAL LIABILITIES
Accounting policy
Recognition
Financial assets and financial liabilities, other than regular way transactions, are recognised when Westpac becomes a party to the terms of the contract, which is generally on settlement
date (the date payment is made or cash advanced). Purchases and sales of financial assets in regular way transactions are recognised on trade date (the date on which Westpac commits
to purchase or sell an asset).
Derecognition
Financial assets are de-recognised when the rights to receive cash flows from the asset have expired, or when Westpac has either transferred its rights to receive cash flows from the asset
or has assumed an obligation to pay the received cash flows in full under a ‘pass through’ arrangement and transferred substantially all the risks and rewards of ownership.
There may be situations where Westpac has partially transferred the risks and rewards of ownership but has neither transferred nor retained substantially all the risks and rewards of
ownership. In such situations, where Westpac retains control of the transferred asset, it will continue to be recognised in the balance sheet to the extent of Westpac’s continuing involvement
in the asset.
Financial liabilities are de-recognised when the obligation is discharged, cancelled or expires. Where an existing financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are substantially modified, the exchange or modification is treated as a derecognition of the original liability and the
recognition of a new liability, with the difference in the respective carrying amounts recognised in the income statement.
The terms are deemed to be substantially different if the discounted present value of the cash flows under the new terms (discounted using the original effective interest rate) is at least 10%
different from the discounted present value of the remaining cash flows of the original financial liability. Qualitative factors such as a change in the currency the instrument is denominated in,
a change in the interest rate from fixed to floating and conversion features are also considered.
Classification and measurement basis
Financial assets
Financial assets are grouped into the following classes: cash and balances with central banks, collateral paid, trading securities and financial assets measured at FVIS, derivative financial
instruments, investment securities, loans and other financial assets.
Financial assets are classified based on a) the business model within which the assets are managed, and b) whether the contractual cash flows of the instrument represent solely payment
of principal and interest (SPPI).
Westpac determines the business model at the level that reflects how groups of financial assets are managed. When assessing the business model Westpac considers factors including
how performance and risks are managed, evaluated and reported and the frequency and volume of, and reason for, sales in previous periods and expectations of sales in future periods.
When assessing whether contractual cash flows are SPPI, interest is defined as consideration primarily for the time value of money and the credit risk of the principal outstanding. The time
value of money is defined as the element of interest that provides consideration only for the passage of time and not consideration for other risks or costs associated with holding the
financial asset. Terms that could change the contractual cash flows so that they may not meet the SPPI criteria include contingent and leverage features, non-recourse arrangements, and
features that could modify the time value of money.
Debt instruments
If the debt instruments have contractual cash flows which represent SPPI on the principal balance outstanding they are classified at:
●Amortised cost if they are held within a business model whose objective is achieved through holding the financial asset to collect these cash flows; or
●FVOCI if they are held within a business model whose objective is achieved both through collecting these cash flows or selling the financial asset; or
●FVIS if they are held within a business model whose objective is achieved through selling the financial asset.
30 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL ASSETS AND FINANCIAL LIABILITIES (Continued)
Debt instruments are classified and measured at FVIS where the contractual cash flows do not represent SPPI on the principal balance outstanding or where it is designated at FVIS to
eliminate or reduce an accounting mismatch.
Equity securities
Equity securities are classified and measured at FVOCI where they:
●Are not held for trading; and
●An irrevocable election is made by Westpac.
Otherwise, they are measured at FVIS.
Financial liabilities
Financial liabilities are grouped into the following classes: collateral received, deposits and other borrowings, other financial liabilities, derivative financial instruments, debt issues and loan
capital.
Financial liabilities are measured at amortised cost if they are not held for trading or designated at FVIS, otherwise they are measured at FVIS.
Financial assets and financial liabilities measured at FVIS are recognised initially at fair value. All other financial assets and financial liabilities are recognised initially at fair value plus or
minus directly attributable transaction costs, respectively.
Further details of the accounting policy for each category of financial asset or financial liability mentioned above are set out in the note for the relevant item.
Westpac’s policies for determining the fair value of financial assets and financial liabilities are set out in Note 22.
FINANCIAL
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PERFORMANCE
REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION31
Lending and credit risk
Note 9. Loans
Accounting policy
Loans are financial assets initially recognised at fair value plus directly attributable transaction costs and fees.
Loans are subsequently measured at amortised cost using the effective interest method where they have contractual cash flows which represent SPPI on the principal balance outstanding
and they are held within a business model whose objective is achieved through holding the loans to collect these cash flows. They are presented net of any provision for ECL.
Loans are subsequently measured at FVIS where they do not have cash flows which represent SPPI, are held within a business model whose objective is achieved by selling the financial
asset, or are designated at FVIS to eliminate or reduce an accounting mismatch.
Refer to Note 22 for balances which are measured at fair value and amortised cost.
Loan products that have both mortgage and deposit facilities are presented gross in the balance sheet, segregating the asset and liability component, because they do not meet the criteria
to be offset. Interest earned on these products is presented on a net basis in the income statement as this reflects how the customer is charged.
The loan portfolio is dis-aggregated by location of booking office and product type, as follows.
ConsolidatedParent Entity
$m
2025 2024 2025 2024
Australia
Housing518,654503,271518,654503,270
Personal9,04310,1749,04310,174
Business221,840195,483219,187193,042
Total Australia749,537708,928746,884706,486
New Zealand
Housing62,67262,484--
Personal1,0431,058--
Business30,55431,055436306
Total New Zealand94,26994,597436306
Total other overseas12,5567,81011,7607,189
Gross loans856,362811,335759,080713,981
Provision for ECL on loans (refer to Note 10)(4,509)(4,568)(3,968)(3,938)
Total loans
a,b
851,853806,767755,112710,043
a. Total loans included Australian securitised residential loans of $5,195 million (2024: $5,185 million) for the Group and $5,988 million (2024: $6,054 million) for the Parent Entity. 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 $35,106 million (2024: $42,228 million) for the Group and $29,762 million (2024: $36,825 million) for the Parent Entity.
32 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 9. Loans (Continued)
The following table shows Westpac’s contractual maturity distribution of all loans as at 30 September 2025.
ConsolidatedOver 1 year toOver 5 years to
$m
Up to 1 year 5 years 15 years Over 15 years Total
Australia
Housing4,66995221,853491,180518,654
Personal6,1452,254644-9,043
Business65,300136,86310,8338,844221,840
Total Australia76,114140,06933,330500,024749,537
New Zealand
Housing1525604,24457,71662,672
Personal8302112-1,043
Business20,05910,275218230,554
Total New Zealand21,04111,0464,46457,71894,269
Total other overseas4,4326,9121,212-12,556
Total loans101,587158,02739,006557,742856,362
The following table shows Westpac’s interest rate segmentation of loans maturing after one year as at 30 September 2025.
Loans atLoans at
Consolidatedvariablefixed
$m
interest rates interest rates Total
Interest rate segmentation of loans maturing after one year
Australia
Housing499,98114,004513,985
Personal1,6441,2542,898
Business152,9543,586156,540
Total Australia654,57918,844673,423
New Zealand
Housing7,68654,83462,520
Personal213-213
Business8829,61310,495
Total New Zealand8,78164,44773,228
Total other overseas7,7513738,124
Total loans maturing after one year671,11183,664754,775
FINANCIAL
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REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION33
Note 10. Provision for expected credit losses
Accounting policy
Note 6 provides details of impairment charges.
Impairment applies to all financial assets at amortised cost, lease receivables, debt securities measured at FVOCI, due from subsidiaries and credit commitments.
The ECL is recognised as follows:
●Loans (including lease receivables), debt securities at amortised cost and due from subsidiaries: as a reduction of the carrying value of the financial asset through an offsetting provision
account (refer to Note 9 and Note 17);
●Debt securities at FVOCI: in reserves in OCI with no reduction of the carrying value of the debt security itself (refer to Note 17 and Note 26); and
●Credit commitments: as a provision (refer to Note 25).
Measurement
Westpac calculates the provision for ECL based on a three-stage approach. The provision for ECL is a probability-weighted estimate of the cash shortfalls expected to result from defaults
over the relevant 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.
The models use three main components to determine the ECL (as well as the time value of money) including:
●Probability of default (PD): the probability that a counterparty will default;
●Loss given default (LGD): the loss that is expected to arise in the event of a default; and
●Exposure at default (EAD): the estimated outstanding amount of credit exposure at the time of the default.
Model stages
The three stages are as follows:
Stage 1: 12 months ECL – performing
For financial assets where there has been no significant increase in credit risk since origination, a provision for 12 months ECL is recognised.
Stage 2: Lifetime ECL – performing
For financial assets where there has been a significant increase in credit risk since origination but where the asset is still performing, a provision for lifetime ECL is recognised. The indicators
of a significant increase in credit risk are described on the following page.
Stage 3: Lifetime ECL – non-performing
Financial assets in Stage 3 are those that are in default. This is aligned to the regulatory definition of default applied in the calculation of credit risk weighted assets. A default occurs when:
●Westpac considers that the customer is unable to repay its credit obligations in full, irrespective of recourse by Westpac to actions such as realising security. Indicators include a breach of
contract with Westpac such as a default on interest or principal payments, a borrower experiencing significant financial difficulties or observable economic conditions that correlate to
defaults on an individual basis; or
●The customer is more than 90 days past due on any material credit obligation.
A provision for lifetime ECL is recognised on these financial assets.
Collective and individual assessment
Financial assets that are in Stages 1 and 2 are assessed on a collective basis. This means that they are grouped in pools of similar assets with similar credit risk characteristics including the
type of product and the customer risk grade. Financial assets in Stage 3 are assessed on an individual basis or calculated collectively for those below a specified threshold.
Expected life
In considering the lifetime time frame for ECL in Stages 2 and 3, the standard generally requires use of the remaining contractual life adjusted, where appropriate, for prepayments, extension
and other options. For certain revolving credit facilities which include both a drawn and undrawn component (e.g. credit cards and revolving lines of credit),
34 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 10. Provision for expected credit losses (Continued)
Westpac’s contractual ability to demand repayment and cancel the undrawn commitment does not limit the exposure to credit losses to the contractual notice period. For these facilities,
lifetime is based on historical behaviour.
Movement between stages
Financial assets may move in both directions through the stages of the impairment model. Financial assets previously in Stage 2 may move back to Stage 1 if it is no longer considered that
there has been a significant increase in credit risk. Similarly, financial assets in Stage 3 may move back to Stage 1 or Stage 2 if they are no longer assessed to be non-performing.
Critical accounting assumptions and estimates
Key judgements include when a significant increase in credit risk has occurred, the estimation of forward-looking macroeconomic information and overlays. Other factors which can impact
the provision include the borrower’s financial situation, the realisable value of collateral, Westpac’s position relative to other claimants, the reliability of customer information and the likely cost
and duration of recovering the loan.
Significant increase in credit risk (SICR)
Determining when a financial asset has experienced a SICR since origination is a critical accounting judgement which is based on the change in the probability of default (PD) since
origination. In determining whether a change in PD represents a significant increase in risk, relative changes in PD and absolute PD thresholds are both considered based on the portfolio of
the exposure.
Westpac does not rebut the presumption that instruments that are 30 days past due have experienced a SICR but this is used as a backstop rather than the primary indicator. In addition,
providing a program-managed customer with a hardship arrangement or downgrading a transaction-managed exposure to a performing but weak credit risk grade of E (watchlist) or worse is
generally treated as an indication of a SICR. Note 11.2 provides further details on the Group’s credit risk rating system.
Forward-looking macroeconomic information
The measurement of ECL for each stage and the assessment of significant increase in credit risk considers information about past events and current conditions as well as reasonable and
supportable projections of future events and economic conditions. The estimation of forward-looking information is a critical accounting judgement. Westpac considers three future
macroeconomic scenarios including a base case scenario along with upside and downside scenarios.
The macroeconomic variables used in these scenarios, based on current economic forecasts, include (but are not limited to) employment to population rates, real gross domestic product
growth rates and residential and commercial property price indices.
●Base case scenario
This scenario utilises the internal Westpac economics forecast used for strategic decision making and forecasting.
●Upside scenario
This scenario represents a modest improvement on the base case scenario.
●Downside scenario
The downside scenario is a more severe scenario with ECL higher than those under the base case scenario. This scenario assumes a recession with a combination of negative GDP
growth, declines in commercial and residential property prices and an increase in the unemployment rate, which simultaneously impact ECL across all portfolios from the reporting date.
The three macroeconomic scenarios are probability weighted and together represent Westpac’s view of the forward looking distribution of potential loss outcomes. The weighting applied to
each of the three macroeconomic scenarios takes into account historical frequency, current trends, and forward-looking conditions.
The macroeconomic variables and probability weightings of the three macroeconomic scenarios are subject to the approval of the Group Chief Financial Officer and Group Chief Risk Officer
with oversight from the Board of Directors (and its Committees).
Overlays
Where appropriate, adjustments will be made to modelled outcomes to reflect reasonable and supportable information not already incorporated in the models.
Judgements can change with time as new information becomes available which could result in changes to the provision for ECL.
FINANCIAL
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STRATEGIC
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PERFORMANCE
REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION35
Note 10. Provision for expected credit losses (Continued)
Loans and credit commitments
The following tables disclose the provision for ECL on loans and credit commitments by stage for Westpac and the Parent Entity.
2025 2024
Non- Non-
PerformingPerformingPerformingPerforming
$mStage 1Stage 2Stage 3TotalStage 1Stage 2Stage 3Total
Consolidated
Provision for ECL on loans
Housing
186 804 615 1,605 162 879 639 1,680
Personal
59 179 84 322 61 207 99 367
Business
538 1,067 977 2,582 405 1,163 953 2,521
Total loans ECL provision (Note 9)
783 2,050 1,676 4,509 628 2,249 1,691 4,568
Provision for ECL on credit commitments
Housing
11 21 - 32 7 18 - 25
Personal
14 20 - 34 16 27 - 43
Business
132 241 30 403 110 300 38 448
Total credit commitments ECL provision (Note 25)
157 282 30 469 133 345 38 516
Total provision for ECL on loans and credit commitments
940 2,332 1,706 4,978 761 2,594 1,729 5,084
Presented as provision for ECL on:
Individually assessed provisions
- - 539 539 - - 536 536
Collectively assessed provisions
940 2,332 1,167 4,439 761 2,594 1,193 4,548
Total provision for ECL on loans and credit commitments
940 2,332 1,706 4,978 761 2,594 1,729 5,084
Gross loans711,230 135,475 9,657 856,362639,900 161,121 10,314 811,335
Credit commitments200,393 20,306 470 221,169181,275 30,395 441 212,111
Gross loans and credit commitments
911,623 155,781 10,127 1,077,531 821,175 191,516 10,755 1,023,446
Coverage ratio on loans (%)0.111.5117.360.530.101.4016.400.56
Coverage ratio on loans and credit commitments (%)
0.10 1.50 16.85 0.46 0.09 1.35 16.08 0.50
36 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 10. Provision for expected credit losses (Continued)
2025 2024
Non- Non-
PerformingPerformingPerformingPerforming
$mStage 1Stage 2Stage 3TotalStage 1Stage 2Stage 3Total
Parent Entity
Provision for ECL on loans
Housing
155 712 540 1,407 136 743 575 1,454
Personal
52 159 77 288 54 184 92 330
Business
472 922 879 2,273 348 968 838 2,154
Total loans ECL provision (Note 9)
679 1,793 1,496 3,968 538 1,895 1,505 3,938
Provision for ECL on credit commitments
Housing
7 16 - 23 6 14 - 20
Personal
12 16 - 28 12 17 - 29
Business
128 223 28 379 105 283 27 415
Total credit commitments ECL provision (Note 25)
147 255 28 430 123 314 27 464
Total provision for ECL on loans and credit commitments
826 2,048 1,524 4,398 661 2,209 1,532 4,402
Presented as provision for ECL on:
Of which:
Individually assessed provisions
- - 459 459 - - 437 437
Collectively assessed provisions
826 2,048 1,065 3,939 661 2,209 1,095 3,965
Total provision for ECL on loans and credit commitments
826 2,048 1,524 4,398 661 2,209 1,532 4,402
Gross loans628,492121,9478,641759,080564,844139,8289,309713,981
Credit commitments177,41417,852438195,704160,41827,033411187,862
Gross loans and credit commitments
805,906 139,799 9,079 954,784 725,262 166,861 9,720 901,843
Coverage ratio on loans (%)0.111.4717.310.520.101.3616.170.55
Coverage ratio on loans and credit commitments (%)
0.10 1.46 16.79 0.46 0.09 1.32 15.76 0.49
FINANCIAL
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STRATEGIC
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PERFORMANCE
REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION37
Note 10. Provision for expected credit losses (Continued)
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 year. 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;
●“Business activity during the year” represents new accounts originated during the year net of those that were de-recognised due to final repayments during the year;
●“Net remeasurement of provision for ECL” represents the impact on the provision for ECL due to changes in credit quality during the year (including transfers between stages), changes in
portfolio overlays, changes due to forward-looking economic scenarios and partial repayments and additional draw-downs on existing facilities over the year; and
●“Write-offs” represents a reduction in the provision for ECL as a result of derecognition of exposures where there is no reasonable expectation of full recovery.
ConsolidatedParent Entity
Non-Non-
PerformingPerforming PerformingPerforming
$m
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
Balance as at 30 September 2023
7062,8081,4164,9306002,4191,2484,267
Transfers to Stage 1
1,222(1,165)(57)-1,088(1,036)(52)-
Transfers to Stage 2
(315)822(507)-(274)724(450)-
Transfers to Stage 3
(3)(608)611-(3)(527)530-
Business activity during the year303(328)(293)(318)267(308)(243)(284)
Net remeasurement of provision for ECL
(1,149)1,0701,1231,044(1,016)9371,016937
Write-offs
--(620)(620)--(573)(573)
Exchange rate and other adjustments
(3)(5)5648(1)-5655
Balance as at 30 September 2024
7612,5941,7295,0846612,2091,5324,402
Transfers to Stage 1
1,386(1,299)(87)-1,214(1,132)(82)-
Transfers to Stage 2
(201)807(606)-(174)720(546)-
Transfers to Stage 3
(4)(596)600-(4)(530)534-
Business activity during the year
306(409)(277)(380)266(385)(229)(348)
Net remeasurement of provision for ECL
(1,304)1,2811,0771,054(1,137)1,2029891,054
Write-offs
--(763)(763)--(705)(705)
Exchange rate and other adjustments
(4)(46)33(17)-(36)31(5)
Balance as at 30 September 2025
9402,3321,7064,9788262,0481,5244,398
38 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 10. Provision for expected credit losses (Continued)
Consolidated Parent Entity
Non- Non-
PerformingPerforming PerformingPerforming
$mStage 1Stage 2Stage 3Total Stage 1 Stage 2 Stage 3Total
Housing
Balance as at 30 September 2023
1581,0525131,7231219204461,487
Transfers to Stage 1
351(345)(6)-311(307)(4)-
Transfers to Stage 2
(41)310(269)-(36)276(240)-
Transfers to Stage 3-(196)196--(183)183-
Business activity during the year59(131)(158)(230)55(123)(143)(211)
Net remeasurement of provision for ECL
(357)209396248(309)174357222
Write-offs
--(57)(57)--(46)(46)
Exchange rate and other adjustments
(1)(2)2421--2222
Balance as at 30 September 2024
1698976391,7051427575751,474
Transfers to Stage 1377(367)(10)-305(295)(10)-
Transfers to Stage 2(46)445(399)-(42)398(356)-
Transfers to Stage 3-(173)173--(152)152-
Business activity during the year81(177)(170)(266)71(160)(141)(230)
Net remeasurement of provision for ECL(385)197409221(314)180342208
Write-offs--(52)(52)--(44)(44)
Exchange rate and other adjustments132529--2222
Balance as at 30 September 2025
1978256151,6371627285401,430
Personal
Balance as at 30 September 2023
82225984056819190349
Transfers to Stage 1358(356)(2)-325(324)(1)-
Transfers to Stage 2(59)106(47)-(56)98(42)-
Transfers to Stage 3-(136)136--(128)128-
Business activity during the year36(9)-2734(8)-26
Net remeasurement of provision for ECL(340)405295360(305)372283350
Write-offs--(394)(394)--(378)(378)
Exchange rate and other adjustments-(1)1312--1212
Balance as at 30 September 2024
77234994106620192359
Transfers to Stage 1342(340)(2)-310(309)(1)-
Transfers to Stage 2(53)92(39)-(51)85(34)-
Transfers to Stage 3-(127)127-(1)(119)120-
Business activity during the year31(15)-1629(15)-14
Net remeasurement of provision for ECL(319)368360409(288)337347396
Write-offs--(461)(461)--(447)(447)
Exchange rate and other adjustments(5)(13)-(18)(1)(5)-(6)
Balance as at 30 September 2025
73199843566417577316
FINANCIAL
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STRATEGIC
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PERFORMANCE
REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION39
Note 10. Provision for expected credit losses (Continued)
ConsolidatedParent Entity
Non-Non-
PerformingPerforming PerformingPerforming
$m
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
Business
Balance as at 30 September 20234661,5318052,8024111,3087122,431
Transfers to Stage 1513(464)(49)-452(405)(47)-
Transfers to Stage 2(215)406(191)-(182)350(168)-
Transfers to Stage 3(3)(276)279-(3)(216)219-
Business activity during the year208(188)(135)(115)178(177)(100)(99)
Net remeasurement of provision for ECL(452)456432436(402)391376365
Write-offs--(169)(169)--(149)(149)
Exchange rate and other adjustments(2)(2)1915(1)-2221
Balance as at 30 September 2024
5151,4639912,9694531,2518652,569
Transfers to Stage 1667(592)(75)-599(528)(71)-
Transfers to Stage 2(102)270(168)-(81)237(156)-
Transfers to Stage 3(4)(296)300-(3)(259)262-
Business activity during the year194(217)(107)(130)166(210)(88)(132)
Net remeasurement of provision for ECL(600)716308424(535)685300450
Write-offs--(250)(250)--(214)(214)
Exchange rate and other adjustments-(36)8(28)1(31)9(21)
Balance as at 30 September 2025
6701,3081,0072,9856001,1459072,652
Total provision for ECL
ConsolidatedParent Entity
$m
2025 2024 2025 2024
Provision for ECL on loans and credit commitments4,9785,0844,3984,402
Provision for ECL on debt securities at amortised cost
a
36-2
Provision for ECL on debt securities at FVOCI
b
6656
Total provision for ECL4,9875,0964,4034,410
a. Provision for ECL on debt securities at amortised cost is presented as part of investments securities.
b. Provision for ECL on debt securities at FVOCI forms part of equity reserves.
Reconciliation of impairment charges
ConsolidatedParent Entity
$m
2025 2024 2025 2024
Loans and credit commitments:
Business activity during the year
(380) (318) (348) (284)
Net remeasurement of the provision for ECL
1,054 1,044 1,054 937
Impairment charges for debt securities at amortised cost
(3) - (2) 1
Impairment charges for debt securities at FVOCI
- 1 (1) 1
Impairment on due from subsidiaries--(23)4
Recoveries
(247) (190) (240) (184)
Impairment charges/(benefits) (Note 6)
424 537 440 475
40 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 10. Provision for expected credit losses (Continued)
Total write-offs net of recoveries to average loans
Consolidated
%
2025 2024
Housing0.010.01
Personal
2.66 2.21
Business0.080.05
Total write-offs net of recoveries to average loans
0.06 0.05
Write-offs still under enforcement activity
Of the amount of current year write-offs, $664 million for the Group (2024: $596 million) and $609 million (2024: $549 million) for the Parent Entity represent balances that the Group was still
entitled to recover.
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 individually assessed and collectively assessed provisions. Collectively assessed provisions are
disaggregated into the modelled ECL provision 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.
ConsolidatedParent Entity
$m
2025 2024 2025 2024
Individually assessed provisions539536459437
Modelled provision for ECL on loans and credit commitments
4,201 4,369 3,691 3,768
Overlays
238179 248 197
Total provision for ECL on loans and credit commitments
4,978 5,084 4,398 4,402
Details of changes related to forward-looking economic inputs and portfolio overlays, based on reasonable and supportable information up to the date of this report, 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. Overlays are used to capture potential risk and uncertainty in the portfolio that are not captured in the underlying modelled ECL. Changes in the
modelled provision for ECL and overlays are reflected through the “net remeasurement of provision for ECL” line item.
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PERFORMANCE
REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION41
Note 10. Provision for expected credit losses (Continued)
The base case scenario uses the following Westpac Economic forecasts:
Key economic assumptions for base
case scenario
30 September 202530 September 2024
Annual GDP:
Australia
Forecast growth of
1.9% for calendar year 2025 and
2.4% for calendar year 2026
Forecast growth of
1.5% for calendar year 2024 and
2.4% for calendar year 2025
New ZealandForecast growth of
1.7% for calendar year 2025 and
3.1% for calendar year 2026
Forecast growth of
0.1% for calendar year 2024 and
2.0% for calendar year 2025
Commercial property index, Australia
Forecast price growth of
0.9% for calendar year 2025 and
3.8% for calendar year 2026
Forecast price contraction of
11.5% for calendar year 2024 and growth of
1.3% for calendar year 2025
Residential property prices:
Australia
Forecast price growth of
5.6% for calendar year 2025 and
9.0% for calendar year 2026
Forecast price growth of
5.7% for calendar year 2024 and
4.0% for calendar year 2025
New ZealandForecast price growth of
0.6% for calendar year 2025 and
5.4% for calendar year 2026
Forecast price growth of
0.7% for calendar year 2024 and
6.4% for calendar year 2025
Cash rate, Australia
Forecast cash rate of
3.35% at December 2025 and
2.85% at December 2026
Forecast cash rate of
4.35% at December 2024 and
3.35% at December 2025
Unemployment rate:
Australia
Forecast rate of
4.4% at December 2025 and
4.5% at December 2026
Forecast rate of
4.3% 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
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.
42 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 10. Provision for expected credit losses (Continued)
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).
Consolidated Parent Entity
$m
2025 2024 2025 2024
Reported probability-weighted ECL
4,978 5,084 4,398 4,402
100% base case ECL
3,031 3,559 2,673 3,089
100% downside ECL
7,143 7,195 6,316 6,221
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 $113 million (2024: $93 million) for Westpac and $97 million (2024: $81 million) for the Parent Entity. If 1% of Stage 2 loans and credit commitments
(calculated on a lifetime ECL) were transferred to Stage 1 (calculated on a 12 month ECL), the provision for ECL on loans and credit commitments would decrease by $20 million (2024: $21
million) for Westpac and $17 million (2024: $18 million) for the Parent Entity. These estimates apply 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 Westpac and the Parent Entity. In 2025, the following changes were applied to scenario weights to reflect greater uncertainty
from geopolitical developments, including in relation to international trade and tariff policies, global tensions and continuing global military conflicts:
●5.0% increase to downside; and
●2.5% decrease to both the upside and base scenarios.
Scenario weightings (%)
2025 2024
Upside
2.5 5.0
Base
50.0 52.5
Downside
47.5 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 30 September 2025 were $238 million (2024: $179 million) for the Group and $248 million (2024: $197 million) for the Parent Entity, and comprise:
●Climate-related risk: $71 million (2024: $70 million) for the Group and $71 million (2024: $70 million) for the Parent Entity for the expected impact of climate-related physical risk and
transition risk to both retail and non-retail portfolios;
●Non-retail portfolios: $159 million (2024: $32 million) for the Group and $146 million (2024: $21 million) for the Parent Entity. Current period overlays primarily relate to portfolio seasoning in
business lending and geographical areas experiencing higher stress not related to modelled outcomes; and
●Retail portfolios: $8 million (2024: $77 million) for the Group and $31 million (2024: $106 million) for the Parent Entity. 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.
Impact of changes in credit exposures on the provision for ECL on loans and credit commitments
●Stage 1 credit exposures increased by $90.4 billion (2024: net increase of $37.4 billion) for Westpac and $80.6 billion (2024: net increase of $35.7 billion) for the Parent Entity, driven by
new lending across the housing and business loan portfolios. This volume growth, along with a deterioration in scenario weights and introduction of certain overlays, drove an increase in
stage 1 ECL.
●Stage 2 credit exposures decreased by $35.7 billion (2024: increased by $0.1 billion) for Westpac and $27.1 billion (2024: increased by $1.6 billion) for the Parent Entity, driven by net
runoff across housing and business portfolios
FINANCIAL
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ADDITIONAL
INFORMATION43
Note 10. Provision for expected credit losses (Continued)
and net transfers to stage 1 in response to improved model economics, partly offset by a deterioration in scenario weights and reassessment of overlays. Overall, this drove a net decrease
in stage 2 ECL.
●Stage 3 credit exposures decreased by $0.6 billion (2024: increased by $2.0 billion) for Westpac and $0.6 billion (2024: increased by $1.9 billion) for the Parent Entity. This was driven by a
slowdown in new mortgage defaults and an increase in mortgages returning to performing, offset by certain downgrades in the business portfolio.
Note 11. Credit risk management
Note
Index
Note name number
Credit riskCredit risk management framework11.1
The risk of financial loss where a customer or counterparty fails to meet their
financial obligations to Westpac.
Credit risk ratings system11.2
Credit risk concentrations and maximum exposure to credit risk11.3
Credit quality of financial assets11.4
Credit risk mitigation, collateral and other credit enhancements11.5
11.1. Credit risk management framework
Please refer to Note 21.1 for details of Westpac’s overall risk management framework.
●Westpac maintains a Credit Risk Management Framework, Credit Risk Management Strategy, Credit Risk Appetite Statement, and a number of supporting policies that define roles and
responsibilities, acceptable practices, limits and key controls.
●The Credit Risk Management Framework describes Westpac’s approach to managing Credit Risk and to deliver fair customer outcomes. It includes the following components: business
strategy, risk identification, risk appetite, stress testing and scenario analysis, people and infrastructure, controls, monitoring and reporting, and governance.
●The BRiskC, Westpac Group Executive Risk Committee (RISKCO) and Westpac Group Credit Risk Committee (CREDCO) monitor the risk profile, performance and management of
Westpac’s credit portfolio and the development and review of key credit risk policies.
●The Credit Risk Rating System Policy applies across the full credit risk ratings and risk estimates lifecycle (i.e. development, implementation, monitoring, validation, use, and independent
review), helping us reliably assess the credit risk to which Westpac may be exposed. A senior management self-assessment is presented for discussion at BRiskC annually. An
independent review is also completed annually.
●Model Risk independently assesses and approves all credit risk models, and periodically reviews these in line with the Group Model Risk Policy and governance. Models are approved
under delegated authority from the Deputy Chief Risk Officer. Model Risk is overseen by Westpac’s Model Risk Committee.
●In determining the provision for ECL, the forward-looking economic inputs and the probability weightings of the forward-looking scenarios as well as any adjustments made to the modelled
outcomes are subject to the approval of the Chief Financial Officer and the Chief Risk Officer with oversight from the Board of Directors (and its Committees).
●Policies are in place for the delegation of credit approval authorities and formal limits for the extension of credit.
●Credit policies are established and maintained throughout Westpac covering the end-to-end credit lifecycle including origination, evaluation, approval, documentation, settlement and
ongoing management of credit risks. Specific policies and limits are in place to manage concentration risks, including to large exposures, industry concentration, and country risk.
●Climate change-related credit risks are considered in line with our Positions, Action Plans, and Sustainability Customer Requirements. Climate change risks are managed in accordance
with the Sustainability Risk Management Framework (SRMF); Climate Risk Policy, Environmental, Social and Governance (ESG) Credit Risk Policy; and Board Risk Appetite Statements
(RAS). The Climate Change Credit Risk Committee oversees work to identify and manage the potential impact on credit exposures from climate change-related transition and physical risks
across Westpac and is a sub-committee of CREDCO.
●Westpac’s ESG Credit Risk Policy details Westpac’s overall approach to managing ESG risks in the credit risk process for applicable customers and transactions in Business & Wealth and
Institutional.
44 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 11. Credit risk management (Continued)
11.2. Credit risk ratings system
The principal objective of the credit risk rating system is to 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 PD.
Each facility is assigned an 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 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
StrongAAaa – Aa3AAA – AA–
BA1 – A3A+ – A–
CBaa1 – Baa3BBB+ – BBB–
Good/satisfactoryDBa1 – B1BB+ – B+
Westpac Rating
WeakEWatchlist
FSpecial Mention
GSubstandard/Default
HDoubtful/Default
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.
11.3. Credit risk concentrations and maximum exposure to credit risk
Credit risk concentrations
Credit risk is concentrated when a number of counterparties are engaged in similar activities, have similar economic characteristics and thus may be similarly affected by changes in economic
or other conditions.
Westpac monitors its credit portfolio to manage risk concentrations and rebalance the portfolio.
Individual customers or groups of related customers
Westpac has large exposure limits governing the aggregate size of credit exposure normally acceptable to individual customers and groups of related customers. These limits are tiered by
customer risk grade.
Specific industries
Exposures to businesses, governments and other financial institutions are classified into a number of industry clusters based on related Australian and New Zealand Standard Industrial
Classification (ANZSIC) codes and are monitored against Westpac’s industry risk appetite limits.
Individual countries
Westpac has limits governing risks related to individual countries, such as political situations, government policies and economic conditions that may adversely affect either a customer’s ability
to meet its obligations to Westpac, or Westpac’s ability to realise its assets in a particular country.
FINANCIAL
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PERFORMANCE
REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION45
Note 11. Credit risk management (Continued)
Maximum exposure to credit risk
The maximum exposure to credit risk (excluding collateral received) is represented by the carrying amount of on-balance sheet financial assets (which comprise cash and balances with central
banks, collateral paid, trading securities and financial assets measured at FVIS, derivative financial instruments, investment securities, loans, other financial assets, and undrawn credit
commitments.
The following tables set out the credit risk concentrations to which Westpac and the Parent Entity are exposed for on-balance sheet financial assets and for undrawn credit commitments.
The balances for trading securities and financial assets measured at FVIS and investment securities exclude equity securities as the primary financial risk is not credit risk.
The credit concentrations for each significant class of financial asset are:
Trading securities and financial assets measured at
FVIS (Note 16)
●58% (2024: 47%) were issued by financial institutions for Westpac;
59% (2024: 48%) for the Parent Entity.
●41% (2024: 50%) were issued by government or semi-government authorities for Westpac;
40% (2024: 49%) for the Parent Entity.
●87% (2024: 82%) were held in Australia by Westpac;
90% (2024: 86%) by the Parent Entity.
Investment securities (Note 17)●14% (2024: 17%) were issued by financial institutions for Westpac;
14% (2024: 17%) for the Parent Entity.
●85% (2024: 82%) were issued by government or semi-government authorities for Westpac;
86% (2024: 83%) for the Parent Entity.
●85% (2024: 91%) were held in Australia by Westpac;
92% (2024: 99%) by the Parent Entity.
Loans (Note 9)The following tables provides a detailed breakdown of loans by industry and geographic classification.
Derivative financial instruments (Note 20)●78% (2024: 81%) were issued by financial institutions for Westpac;
77% (2024: 81%) by the Parent Entity.
●73% (2024: 90%) were held in Australia by Westpac;
76% (2024: 91%) by the Parent Entity.
46 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 11. Credit risk management (Continued)
2025 2024
Total allUndrawnTotal allUndrawn
other oncreditother oncredit
Consolidatedbalancecommit- balancecommit-
$m
Loans sheet ments Total Loans sheet ments Total
Australia
Accommodation, cafes and restaurants
11,517 29 1,681 13,227 9,810 26 1,637 11,473
Agriculture, forestry and fishing
16,640 47 3,102 19,789 13,733 40 2,713 16,486
Construction
8,642 25 4,907 13,574 7,900 33 4,623 12,556
Finance and insurance
31,608 99,150 17,399 148,157 29,484 112,860 13,801 156,145
Government, administration and defence
690 108,516 1,679 110,885 811 99,830 1,558 102,199
Manufacturing
10,483 331 8,065 18,879 9,997 499 8,361 18,857
Mining
3,656 430 3,157 7,243 2,865 415 3,038 6,318
Property
66,631 516 15,006 82,153 60,767 546 13,771 75,084
Property services and business services
15,194 136 8,269 23,599 14,321 149 7,921 22,391
Services
15,215 101 8,426 23,742 13,015 108 8,369 21,492
Trade
17,384 241 9,288 26,913 15,159 366 9,933 25,458
Transport and storage
12,812 691 6,076 19,579 10,289 681 6,313 17,283
Utilities
10,587 754 8,561 19,902 8,175 983 8,373 17,531
Retail lending
527,181 995 82,940 611,116 511,025 1,056 84,006 596,087
Other
1,297 614 1,356 3,267 1,577 592 1,781 3,950
Total Australia
749,537 212,576 179,912 1,142,025 708,928 218,184 176,198 1,103,310
New Zealand
Accommodation, cafes and restaurants
305 3 31 339 313 3 32 348
Agriculture, forestry and fishing
7,838 47 565 8,450 8,352 41 573 8,966
Construction
508 1 528 1,037 385 1 566 952
Finance and insurance
4,066 13,101 1,951 19,118 4,757 11,364 1,838 17,959
Government, administration and defence
183 9,872 712 10,767 210 8,820 812 9,842
Manufacturing
1,846 100 1,424 3,370 1,785 58 1,444 3,287
Mining
91 1 124 216 151 2 125 278
Property
7,835 407 1,362 9,604 7,604 649 1,080 9,333
Property services and business services
972 54 497 1,523 962 121 357 1,440
Services
1,951 42 968 2,961 1,961 45 823 2,829
Trade
2,475 30 1,155 3,660 2,164 32 1,154 3,350
Transport and storage
581 55 521 1,157 661 105 362 1,128
Utilities
1,768 416 2,177 4,361 1,621 557 1,340 3,518
Retail lending
63,738 101 13,877 77,716 63,563 117 14,221 77,901
Other
112 99 146 357 108 77 123 308
Total New Zealand
94,269 24,329 26,038 144,636 94,597 21,992 24,850 141,439
Other overseas
Accommodation, cafes and restaurants
76 - 15 91 85 - 11 96
Agriculture, forestry and fishing
2 - 1 3 2 - 1 3
Construction
35 - 82 117 34 - 73 107
Finance and insurance
6,056 9,000 5,669 20,725 3,656 9,447 4,964 18,067
Government, administration and defence
53 11,034 - 11,087 - 4,389 - 4,389
Manufacturing
1,498 4 2,313 3,815 958 3 1,500 2,461
Mining
38 - 961 999 28 - 931 959
Property
651 2 131 784 472 2 37 511
Property services and business services
962 30 936 1,928 503 35 797 1,335
Services
65 - 556 621 36 - 629 665
Trade
1,324 4 2,575 3,903 909 3 1,813 2,725
Transport and storage
741 17 422 1,180 527 15 108 650
Utilities
644 2 1,495 2,141 232 1 139 372
Retail lending
340 - 22 362 328 - 13 341
Other
71 161 41 273 40 97 47 184
Total other overseas
12,556 20,254 15,219 48,029 7,810 13,992 11,063 32,865
Total gross credit risk
856,362 257,159 221,169 1,334,690 811,335 254,168 212,111 1,277,614
FINANCIAL
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STRATEGIC
REVIEW
PERFORMANCE
REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION47
Note 11. Credit risk management (Continued)
2025 2024
Total allUndrawnTotal allUndrawn
other oncreditother oncredit
Parent Entitybalancecommit- balancecommit-
$m
Loans sheet ments Total Loans sheet ments Total
Australia
Accommodation, cafes and restaurants
11,482 29 1,681 13,192 9,777 26 1,637 11,440
Agriculture, forestry and fishing
16,551 47 3,102 19,700 13,659 40 2,713 16,412
Construction
7,835 24 4,907 12,766 7,188 31 4,623 11,842
Finance and insurance
31,561 143,639 17,399 192,599 29,430 160,947 13,801 204,178
Government, administration and defence
689 108,518 1,679 110,886 809 99,831 1,558 102,198
Manufacturing
10,289 331 8,065 18,685 9,811 496 8,361 18,668
Mining
3,609 430 3,157 7,196 2,816 415 3,038 6,269
Property
66,610 518 15,006 82,134 60,743 548 13,771 75,062
Property services and business services
14,879 135 8,269 23,283 14,013 151 7,921 22,085
Services
14,985 101 8,426 23,512 12,802 107 8,369 21,278
Trade
17,179 241 9,288 26,708 14,962 365 9,933 25,260
Transport and storage
12,424 691 6,076 19,191 9,978 682 6,313 16,973
Utilities
10,556 755 8,561 19,872 8,145 983 8,373 17,501
Retail lending
527,180 995 82,940 611,115 511,023 1,056 84,006 596,085
Other
1,055 559 1,356 2,970 1,330 521 1,781 3,632
Total Australia
746,884 257,013 179,912 1,183,809 706,486 266,199 176,198 1,148,883
New Zealand
Accommodation, cafes and restaurants
- 2 - 2 - 2 - 2
Agriculture, forestry and fishing
- 27 3 30 - 11 4 15
Construction
1 - 38 39 2 - 78 80
Finance and insurance
- 8,207 109 8,316 - 5,969 112 6,081
Government, administration and defence
- 2,529 8 2,537 - 2,087 2 2,089
Manufacturing
29 96 83 208 35 55 82 172
Mining
2 1 - 3 - 1 61 62
Property
- 82 - 82 - 141 - 141
Property services and business services
2 51 18 71 2 21 13 36
Services
- 37 8 45 - 39 6 45
Trade
397 28 237 662 266 28 223 517
Transport and storage
1 56 30 87 1 76 32 109
Utilities
4 300 141 445 - 327 94 421
Retail lending
- - - - - - - -
Other
- 5 1 6 - - 1 1
Total New Zealand
436 11,421 676 12,533 306 8,757 708 9,771
Other overseas
Accommodation, cafes and restaurants
67 - 14 81 74 - 11 85
Agriculture, forestry and fishing
1 - 1 2 1 - 1 2
Construction
23 - 66 89 24 - 66 90
Finance and insurance
6,051 8,926 5,656 20,633 3,648 9,047 4,957 17,652
Government, administration and defence
53 10,051 - 10,104 - 3,288 - 3,288
Manufacturing
1,409 4 2,309 3,722 895 4 1,498 2,397
Mining
15 - 959 974 2 - 928 930
Property
378 1 117 496 241 1 16 258
Property services and business services
894 30 932 1,856 480 35 794 1,309
Services
41 - 554 595 17 - 626 643
Trade
1,121 3 2,543 3,667 768 3 1,787 2,558
Transport and storage
705 17 419 1,141 499 15 103 617
Utilities
639 2 1,495 2,136 228 1 139 368
Retail lending
308 - 22 330 282 - 10 292
Other
55 90 29 174 30 94 20 144
Total other overseas
11,760 19,124 15,116 46,000 7,189 12,488 10,956 30,633
Total gross credit risk
759,080 287,558 195,704 1,242,342 713,981 287,444 187,862 1,189,287
48 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 11. Credit risk management (Continued)
11.4. Credit quality of financial assets
Credit quality disclosures
The following tables show the credit quality of gross credit risk exposures measured at amortised cost or at FVOCI to which the impairment requirements apply. The credit quality is determined
by reference to the credit risk ratings system (refer to Note 11.2) and expectations of future economic conditions under multiple scenarios.
Consolidated
2025 2024
$m
Stage 1 Stage 2 Stage 3 Total
a
Stage 1 Stage 2 Stage 3 Total
a
Loans - housing
Strong
332,203 27,057 - 359,260 311,054 24,975 - 336,029
Good/satisfactory
159,998 40,537 - 200,535 159,016 45,242 - 204,258
Weak
1,939 13,973 5,959 21,871 2,512 16,389 6,893 25,794
Total loans - housing
494,140 81,567 5,959 581,666 472,582 86,606 6,893 566,081
Loans - personal
Strong
3,964 81 - 4,045 4,104 104 - 4,208
Good/satisfactory
4,561 744 - 5,305 5,254 825 - 6,079
Weak
127 465 152 744 191 570 190 951
Total loans - personal
8,652 1,290 152 10,094 9,549 1,499 190 11,238
Loans - business
Strong
108,843 9,453 - 118,296 81,696 19,387 - 101,083
Good/satisfactory
99,300 37,145 - 136,445 75,873 47,282 - 123,155
Weak
295 6,020 3,546 9,861 200 6,347 3,231 9,778
Total loans - business
208,438 52,618 3,546 264,602 157,769 73,016 3,231 234,016
Investment securities
Strong
116,574 - - 116,574 102,721 - - 102,721
Good/satisfactory
- - - - - 71 - 71
Weak
- 494 - 494 - 649 - 649
Total investment securities
b
116,574 494 - 117,068 102,721 720 - 103,441
All other financial assets
Strong
64,722 - - 64,722 76,264 - - 76,264
Good/satisfactory
848 - - 848 899 - - 899
Weak
216 - - 216 229 - - 229
Total all other financial assets
65,786 - - 65,786 77,392 - - 77,392
Undrawn credit commitments
Strong
154,443 8,981 - 163,424 140,786 14,341 - 155,127
Good/satisfactory
45,778 9,984 - 55,762 40,271 14,186 - 54,457
Weak
172 1,341 470 1,983 218 1,868 441 2,527
Total undrawn credit commitments
200,393 20,306 470 221,169 181,275 30,395 441 212,111
Total strong
780,749 45,572 - 826,321 716,625 58,807 - 775,432
Total good/satisfactory
310,485 88,410 - 398,895 281,313 107,606 - 388,919
Total weak
2,749 22,293 10,127 35,169 3,350 25,823 10,755 39,928
Total on and off-balance sheet
1,093,983 156,275 10,127 1,260,385 1,001,288 192,236 10,755 1,204,279
a. This credit quality disclosure differs to that of credit risk concentration as it relates only to financial assets measured at amortised cost or at FVOCI and therefore excludes trading securities and financial assets measured at FVIS,
and derivative financial instruments.
b. Excludes equity instruments. Includes $976 million (2024: $1,172 million) debt securities at amortised cost, of which $482 million (2024: $452 million) were classified as strong, Nil (2024: $71 million) as good/satisfactory and
$494 million (2024: $649 million) as weak.
Details of collateral held in support of these balances are provided in Note 11.5.
FINANCIAL
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PERFORMANCE
REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION49
Note 11. Credit risk management (Continued)
Parent Entity2025 2024
$m
Stage 1 Stage 2 Stage 3 Total
a
Stage 1 Stage 2 Stage 3 Total
a
Loans - housing
Strong
325,333 26,908 - 352,241 304,169 24,829 - 328,998
Good/satisfactory
112,497 34,157 - 146,654 117,339 33,284 - 150,623
Weak
1,661 13,153 5,253 20,067 2,233 15,471 6,235 23,939
Total loans - housing
439,491 74,218 5,253 518,962 423,741 73,584 6,235 503,560
Loans - personal
Strong
3,588 70 - 3,658 3,721 92 - 3,813
Good/satisfactory
4,135 585 - 4,720 4,849 647 - 5,496
Weak
114 413 144 671 178 512 180 870
Total loans - personal
7,837 1,068 144 9,049 8,748 1,251 180 10,179
Loans - business
Strong
96,856 8,462 - 105,318 70,448 18,047 - 88,495
Good/satisfactory
84,140 33,297 - 117,437 61,784 42,132 - 103,916
Weak
168 4,902 3,244 8,314 123 4,814 2,894 7,831
Total loans - business
181,164 46,661 3,244 231,069 132,355 64,993 2,894 200,242
Investment securities
Strong
108,880 - - 108,880 95,346 - - 95,346
Good/satisfactory
- - - - - 71 - 71
Total investment securities
b
108,880 - - 108,880 95,346 71 - 95,417
All other financial assets
Strong
105,946 - - 105,946 119,265 - - 119,265
Good/satisfactory
708 - - 708 731 - - 731
Weak
58 - - 58 71 - - 71
Total all other financial assets
106,712 - - 106,712 120,067 - - 120,067
Undrawn credit commitments
Strong
141,517 8,385 - 149,902 129,379 13,659 - 143,038
Good/satisfactory
35,731 8,259 - 43,990 30,827 11,667 - 42,494
Weak
166 1,208 438 1,812 212 1,707 411 2,330
Total undrawn credit commitments
177,414 17,852 438 195,704 160,418 27,033 411 187,862
Total strong
782,120 43,825 - 825,945 722,328 56,627 - 778,955
Total good/satisfactory
237,211 76,298 - 313,509 215,530 87,801 - 303,331
Total weak
2,167 19,676 9,079 30,922 2,817 22,504 9,720 35,041
Total on and off-balance sheet
1,021,498 139,799 9,079 1,170,376 940,675 166,932 9,720 1,117,327
a. This credit quality disclosure differs to that of credit risk concentration as it relates only to financial assets measured at amortised cost or at FVOCI and therefore excludes trading securities and financial assets measured at FVIS,
and derivative financial instruments.
b. Excludes equity instruments. Includes Nil (2024: $71 million) debt securities at amortised cost which are all classified as good/satisfactory.
Details of collateral held in support of these balances are provided in Note 11.5.
50 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 11. Credit risk management (Continued)
11.5. Credit risk mitigation, collateral and other credit enhancements
Westpac uses a variety of techniques to reduce the credit risk arising from its lending activities. This includes Westpac establishing that it has direct, irrevocable and unconditional recourse to
collateral and other credit enhancements through obtaining legally enforceable documentation.
Collateral
The table below describes the nature of collateral or security held for each relevant class of financial asset.
Loans – housing and personal
a
Housing loans are secured by a mortgage over property and additional security may take the form of guarantees and deposits.
Personal lending (including credit cards and overdrafts) is predominantly unsecured. Where security is taken, it is restricted to eligible motor vehicles, caravans, campers, motor
homes and boats. Personal lending also includes margin lending which is secured primarily by shares or managed funds.
Loans – businessBusiness loans may be secured, partially secured or unsecured. Security is typically taken by way of a mortgage over property and/or a general security agreement over business
assets or other assets.
Other security such as guarantees, standby letters of credit or derivative protection may also be taken as collateral, if appropriate.
Trading securities, financial assets measured at FVIS and
derivatives
These exposures are carried at fair value which reflects the credit risk.
For trading securities, no collateral is sought directly from the issuer or counterparty; however this may be implicit in the terms of the instrument (such as an asset-backed security).
The terms of debt securities may include collateralisation.
For derivatives, master netting agreements are typically used to enable the effects of derivative assets and liabilities with the same counterparty to be offset when measuring these
exposures. Additionally, collateralisation agreements are also typically entered into with major institutional counterparties to avoid the potential build-up of excessive mark-to-market
positions. Derivative transactions are increasingly being cleared through central clearers.
a. This includes collateral held in relation to associated credit commitments.
Management or risk mitigation
Westpac mitigates credit risk through controls covering:
Collateral and valuation management
The estimated realisable value of collateral held in support of loans is based on a combination of:
●Formal valuations currently held for such collateral; and
●Management’s assessment of the estimated realisable value of all collateral held.
This analysis also takes into consideration any other relevant knowledge available to management at the time. Updated valuations are obtained when appropriate.
Westpac revalues collateral related to financial markets positions on a daily basis and has formal processes in place to promptly call for collateral top-ups, if required. These
processes include margining for non-centrally cleared customer derivatives as regulated by Australian Prudential Standard CPS226. The collateralisation arrangements are
documented via the Credit Support Annex of the ISDA dealing agreements and Global Master Repurchase Agreements (GMRA) for repurchase transactions.
In relation to financial markets positions, Westpac only recognises collateral which is:
●Cash, primarily in Australian dollars (AUD), New Zealand dollars (NZD), US dollars (USD), Canadian dollars (CAD), British pounds (GBP) or European Union euro (EUR);
●Bonds issued by Australian Commonwealth, State and Territory governments or their Public Sector Enterprises, provided these attract a zero risk-weighting under Australian
Prudential Standard (APS) 112;
●Securities issued by other sovereign governments and supranationals as approved by an authorised credit officer; or
●Protection bought via credit-linked notes (provided the proceeds are invested in cash or other eligible collateral).
Other credit enhancements
Westpac only recognises guarantees, standby letters of credit, or credit derivative protection from entities meeting minimum eligibility requirements (provided they are not related to
the entity with which Westpac has a credit exposure) including but not limited to:
●Sovereign;
●Australia and New Zealand public sector;
●ADIs and overseas banks with a minimum risk grade equivalent of A3 / A–; and
●Others with a minimum risk grade equivalent of A3 / A–.
Credit Portfolio Management (CPM) manages Westpac’s corporate, sovereign and bank credit portfolios through monitoring the exposure and any offsetting hedge positions. CPM
purchases credit protection from entities that meet minimum eligibility requirements.
OffsettingCreditworthy customers domiciled in Australia and New Zealand may enter into formal agreements with Westpac, permitting Westpac to set-off gross credit and debit balances in
their nominated accounts. Cross-border set-offs are not permitted.
Close-out netting is undertaken with counterparties with whom the Group has entered into a legally enforceable master netting agreement for their off-balance sheet financial market
transactions in the event of default.
Further details of offsetting are provided in Note 23.
Central clearingWestpac executes derivative transactions through central clearing counterparties. Central clearing counterparties mitigate risk through stringent membership requirements, the
collection of margin against all trades placed, the default fund, and an explicitly defined order of priority of payments in the event of default.
FINANCIAL
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REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION51
Note 11. Credit risk management (Continued)
Collateral held against loans
Westpac analyses the coverage of the loan portfolio which is secured by the collateral that it holds. Coverage is measured as follows:
Coverage Secured loan to collateral value ratio
Fully securedLess than or equal to 100%
Partially securedGreater than 100% but not more than 150%
Unsecured
Greater than 150%, or no security held (e.g. can include credit cards, personal loans, and exposure to highly rated corporate entities)
Westpac and the Parent Entity’s loan portfolio have the following coverage from collateral held:
2025 2024
HousingPersonalBusinessHousingPersonalBusiness
%
loans
a
loansloansTotalloans
a
loansloansTotal
Performing loans
Consolidated
Fully secured
100.0 10.2 67.3 88.9 100.0 9.7 68.189.6
Partially secured
- 4.6 14.7 4.6 - 11.1 14.24.2
Unsecured
- 85.2 18.0 6.5 - 79.2 17.76.2
Total
100.0 100.0 100.0 100.0 100.0 100.0 100.0100.0
Parent Entity
Fully secured
100.0 11.3 67.5 89.1 100.0 10.7 68.389.9
Partially secured
- 5.2 14.6 4.5 - 12.2 14.14.1
Unsecured
- 83.5 17.9 6.4 - 77.1 17.66.0
Total
100.0 100.0 100.0 100.0 100.0 100.0 100.0100.0
Non-performing loans
Consolidated
Fully secured
88.8 - 54.6 74.991.5 - 56.779.0
Partially secured
11.2 4.6 27.9 17.2 8.5 23.2 23.413.4
Unsecured
- 95.4 17.5 7.9 - 76.8 19.97.6
Total
100.0 100.0 100.0 100.0 100.0 100.0 100.0100.0
Parent Entity
Fully secured
89.4 - 57.9 76.1 91.8 - 59.780.0
Partially secured
10.6 4.9 26.1 16.3 8.2 24.4 21.712.7
Unsecured
- 95.1 16.0 7.6 - 75.6 18.67.3
Total
100.0 100.0 100.0 100.0 100.0 100.0 100.0100.0
a. For the purpose of collateral classification, housing loans are classified as fully secured, unless they are non-performing in which case they may be classified as partially secured.
Details of the carrying value and associated provision for ECL are disclosed in Note 9 and Note 10, respectively. The credit quality of loans is disclosed in Note 11.4.
Collateral held against financial assets other than loans
Consolidated Parent Entity
$m2025 20242025 2024
Cash, primarily for derivatives
3,188 3,079 2,365 2,936
Securities under reverse repurchase agreements
a
28,269 17,950 28,269 17,950
Securities under derivatives
a
679 112 452 112
Total other collateral held
32,136 21,141 31,086 20,998
a. Securities received as collateral are not recognised in the Group and Parent Entity’s balance sheet.
52 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Deposits and other funding arrangements
Note 12. Deposits and other borrowings
Accounting policy
Deposits and other borrowings are initially recognised at fair value and subsequently either measured at amortised cost using the effective interest method or at fair value.
Deposits and other borrowings are designated at fair value if they are managed on a fair value basis, reduce or eliminate an accounting mismatch or contain an embedded derivative.
Where they are measured at fair value, any changes in fair value (except those due to changes in credit risk) are recognised in the income statement. The change in the fair value that is
attributable to changes in credit risk is recognised in OCI except where it would create an accounting mismatch, in which case it is also recognised in the income statement.
Refer to Note 22 for balances measured at fair value and amortised cost.
Interest expense incurred is recognised in net interest income using the effective interest method.
Non-interest bearing relates to instruments which do not carry an entitlement to interest.
ConsolidatedParent Entity
$m
2025 2024 2025 2024
Australia
Certificates of deposit
33,940 33,215 33,940 33,215
Non-interest bearing, repayable at call
140,842 128,705 140,842 128,705
Other interest bearing - transactions
120,830 110,393 120,830 110,393
Other interest bearing - savings223,216197,415223,216197,415
Other interest bearing term
157,675 157,282 157,675 157,282
Total Australia
676,503 627,010 676,503 627,010
New Zealand
Certificates of deposit
1,593 1,711 - -
Non-interest bearing, repayable at call
10,700 10,287 - -
Other interest bearing - transactions
7,884 8,815 - -
Other interest bearing - savings18,50217,854--
Other interest bearing term
34,128 36,245 - -
Total New Zealand
72,807 74,912 - -
Other overseas
Certificates of deposit
11,953 11,948 11,953 11,948
Non-interest bearing, repayable at call
1,147 1,193 546 503
Other interest bearing - transactions
910 736 729 532
Other interest bearing - savings1,2549871,161892
Other interest bearing term
5,883 3,703 5,768 3,596
Total other overseas
21,147 18,567 20,157 17,471
Total deposits and other borrowings
770,457 720,489 696,660 644,481
FINANCIAL
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PERFORMANCE
REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION53
Note 12. Deposits and other borrowings (Continued)
Uninsured time deposits
Uninsured time deposits are the principal amount of deposits that are not covered by a government based deposit insurance scheme and which have contractual impediments on withdrawal.
For Westpac, this encompass certificates of deposits and term deposits that are in excess of, or ineligible for, the Australian Government’s Financial Claims Scheme (FCS) limit. The table
below shows the time deposits by categories and remaining maturity as at 30 September 2025:
ConsolidatedOver 3 months toOver 6 months to
$m
Up to 3 months 6 months 1 year Over 1 year Total
Certificates of deposit in excess of insured amounts
Australia
15,215 18,210 492 23 33,940
New Zealand
1,392 201 - - 1,593
Other overseas
3,713 4,666 3,574 - 11,953
Total certificates of deposit in excess of insured amounts
20,320 23,077 4,066 23 47,486
Term deposits in excess of insured amounts
Australia
62,513 24,044 30,812 5,615 122,984
New Zealand
13,178 8,660 4,292 2,037 28,167
Other overseas
3,485 906 1,406 84 5,881
Total term deposits in excess of insured amounts
79,176 33,610 36,510 7,736 157,032
Interbank term deposits in excess of insured amounts
a
Australia
1,939 2,326 1,795 7 6,067
Other overseas
270 -- 27 297
Total interbank term deposits in excess of insured amounts
2,209 2,326 1,795 34 6,364
a. Interbank term deposits are included in Note 19.
54 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 13. Debt issues
Accounting policy
Debt issues are bonds, notes, commercial paper and debentures that have been issued by entities in Westpac.
Debt issues are initially measured at fair value and subsequently either measured at amortised cost using the effective interest method or at fair value.
Debt issues are designated at fair value if they reduce or eliminate an accounting mismatch or contain an embedded derivative.
Where they are measured at fair value, any changes in fair value (except those due to changes in credit risk) are recognised in the income statement. The change in the fair value that is
attributable to changes in credit risk is recognised in OCI except where it would create an accounting mismatch, in which case it is also recognised in the income statement.
Refer to Note 22 for balances measured at fair value and amortised cost.
Interest expense incurred is recognised within net interest income using the effective interest method.
In the following table, the distinction between short-term (12 months or less) and long-term (greater than 12 months) debt is based on the original maturity of the underlying security.
ConsolidatedParent Entity
$m
2025 2024 2025 2024
Short-term debt
Own issuances
34,665 32,328 32,252 28,905
Total short-term debt
34,665 32,328 32,252 28,905
Long-term debt
Covered bonds
37,671 39,472 31,911 35,513
Senior
93,489 91,945 78,459 79,464
Securitisation
5,579 5,539 - -
Total long-term debt
136,739 136,956 110,370 114,977
Total debt issues
171,404 169,284 142,622 143,882
Movement reconciliation
Balance as at beginning of year169,284156,573143,882134,957
Issuances68,85080,24559,40468,438
Maturities, repayments, buybacks and reductions(76,010)(67,100)(68,590)(58,931)
Total cash movements(7,160)13,145(9,186)9,507
FX translation impact8,442(5,798)7,295(5,167)
Fair value adjustments(125)283(118)275
Fair value hedge accounting adjustments3964,3382653,659
Other567743484651
Total non-cash movements9,280(434)7,926(582)
Balance as at end of year171,404169,284142,622143,882
FINANCIAL
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ADDITIONAL
INFORMATION55
Note 13. Debt issues (Continued)
Consolidated
$m
2025 2024
Short-term debt
Own issuances:
US commercial paper
25,958 22,507
EUR commercial paper4,0141,048
Senior Debt:
AUD1,1991,900
EUR-483
GBP1,8345,313
USD152-
Other1,5081,077
Total short-term debt
34,665 32,328
Long-term debt (by currency):
AUD
38,398 41,191
CHF
2,853 2,554
EUR
36,605 32,182
GBP
5,705 5,695
JPY
72 78
NZD
3,104 3,483
USD
48,583 50,258
Other
1,419 1,515
Total long-term debt
136,739 136,956
Westpac manages FX exposure from debt issuances as part of its hedging activities. Further details of Westpac’s hedge accounting are in Note 20.
56 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 14. Loan capital
Accounting policy
Loan capital are instruments issued by Westpac which qualify for inclusion as regulatory capital under the standards issued by the prudential regulator in the relevant jurisdiction. Loan capital
is initially measured at fair value and subsequently measured at amortised cost using the effective interest method. Interest expense incurred is recognised in net interest income.
ConsolidatedParent Entity
$m
2025 2024 2025 2024
Additional Tier 1 (AT1) loan capital
Westpac capital notes
6,6978,3766,697 8,376
USD AT1 securities
1,8381,7281,838 1,728
Total AT1 loan capital
8,53510,1048,535 10,104
Tier 2 loan capital
Subordinated notes
31,43527,77930,356 26,666
Total Tier 2 loan capital
31,43527,77930,356 26,666
Total loan capital
39,97037,88338,891 36,770
Movement reconciliation
Balance as at beginning of year37,88333,17636,77032,085
Issuances5,0426,3265,0426,326
Maturities, repayments, buybacks and reductions(4,122)(1,957)(4,127)(1,951)
Total cash movements9204,3699154,375
FX translation impact1,219(1,416)1,267(1,401)
Fair value hedge accounting adjustments(68)1,714(74)1,675
Other16401336
Total non-cash movements1,1673381,206310
Balance as at end of year39,97037,88338,89136,770
Additional Tier 1 loan capital
A summary of the key terms and common features of AT1 instruments is provided below.
Consolidated and Parent Entity
Potential scheduledOptional
$m
Distribution or interest rate conversion date
a
redemption date
b
2025 2024
Westpac capital notes (WCN)
AUD 1,690 million WCN5(3-month BBSW rate + 3.20% p.a.)22 September 202722 September 2025
c
-1,688
x (1 - Australian corporate tax rate)
AUD 1,723 million WCN7(3-month BBSW rate + 3.40% p.a.)22 March 202922 March 20271,7191,716
x (1 - Australian corporate tax rate)
AUD 1,750 million WCN8(3-month BBSW rate + 2.90% p.a.)21 June 203221 September 20291,7421,740
x (1 - Australian corporate tax rate)
AUD 1,509 million WCN9(3-month BBSW rate + 3.40% p.a.)22 June 203122 September 20281,5011,499
x (1 - Australian corporate tax rate)
AUD 1,750 million WCN10(3-month BBSW rate + 3.10% p.a.)22 June 203422 September 20311,7351,733
x (1 - Australian corporate tax rate)
Total WCN
6,697 8,376
USD AT1 securities
USD 1,250 million USD AT1 securities
Fixed 5.00% p.a.
d
n/a 21 September 20271,838 1,728
Total USD AT1 securities
1,838 1,728
a. Conversion is subject to the satisfaction of the scheduled conversion conditions. If the conversion conditions are not satisfied on the relevant scheduled conversion date, conversion will not occur until the next distribution
payment date on which the scheduled conversion conditions are satisfied, if ever.
b. Certain AT1 instruments may have more than one optional redemption date and for the purposes of the table above the first optional redemption date is shown. Westpac may elect to redeem the relevant AT1 instrument on the
optional redemption date or dates, subject to APRA’s prior written approval.
c. On 22 September 2025, Westpac redeemed all Westpac Capital Notes 5 (WCN5) on issue.
d. Until but excluding 21 September 2027 (first reset date). If not redeemed, converted or written-off earlier, from, and including, each reset date to, but excluding, the next succeeding reset date, at a fixed rate p.a. equal to the
prevailing 5-year USD mid-market swap rate plus 2.89% p.a.
FINANCIAL
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REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION57
Note 14. Loan capital (Continued)
Common features of AT1 instruments issued by Westpac Banking Corporation
Payment conditions
Distributions and interest payments on the AT1 instruments are discretionary and will only be paid if the payment conditions are satisfied, including that the payment will not result in a breach
of Westpac’s capital requirements under APRA’s prudential standards; not result in Westpac becoming, or being likely to become, insolvent; and if APRA does not object to the payment.
Broadly, if for any reason a distribution or interest payment has not been paid in full on the relevant payment date, Westpac must not determine or pay any dividends on Westpac ordinary
shares or undertake a discretionary buyback or capital reduction of Westpac ordinary shares, unless the unpaid amount is paid in full within 20 business days of the relevant payment date or in
certain other circumstances.
The AT1 instruments convert into Westpac ordinary shares in the following circumstances:
●Scheduled Conversion
On the scheduled conversion date, provided certain conversion conditions are satisfied, the relevant AT1 instrument
1
will convert and holders will receive a variable number of Westpac
ordinary shares calculated using the face value of the relevant AT1 instrument and the Westpac ordinary share price determined over the 20 business day period prior to the scheduled
conversion date, including a 1% discount.
●Capital Trigger Event or Non-Viability Trigger Event
Westpac will be required to convert some or all AT1 instruments upon the occurrence of:
– A capital trigger event, when Westpac determines, or APRA notifies Westpac in writing that it believes, Westpac’s Common Equity Tier 1 Capital ratio is equal to or less than 5.125%
(on a Level 1 or Level 2 basis
2
); or
– A non-viability trigger event, when APRA notifies Westpac in writing that it believes conversion, write-off or write-down of capital instruments of the Westpac, or public sector injection of
capital (or equivalent support), in each case is necessary because without it, Westpac would become non-viable
For each AT1 instrument converted, holders will receive a variable number of Westpac ordinary shares calculated using the face value of the relevant AT1 instrument and the Westpac
ordinary share price over the five business day period prior to the capital trigger event date or non-viability trigger event date and includes a 1% discount, subject to a maximum conversion
number. The maximum conversion number is based on an ordinary share price broadly equivalent to 20% of the Westpac ordinary share price at the time of issue.
Following the occurrence of a capital trigger event or non-viability trigger event, if conversion does not occur within five business days, holders’ rights in relation to the relevant AT1
instrument will be immediately and irrevocably terminated.
●Conversion in other circumstances
Westpac is able to elect to convert
1
, or may be required to convert
1
, AT1 instruments early in certain circumstances. The terms of conversion are broadly similar to scheduled conversion,
however, the maximum conversion number will depend on the conversion event.
●Early Redemption
Westpac is able to elect to redeem the relevant AT1 instrument on the optional redemption dates or for certain taxation or regulatory reasons, subject to APRA’s prior written approval.
1. Excludes USD AT1 securities.
2. Level 1 comprises Westpac Banking Corporation and its subsidiary entities that have been approved by APRA as being part of an ‘Extended Licensed Entity’ for the purpose of measuring capital adequacy. Level 2 is the
consolidation of Westpac Banking Corporation and all its subsidiary entities except those entities specifically excluded by APRA regulations. The head of the Level 2 group is Westpac Banking Corporation.
58 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 14. Loan capital (Continued)
Tier 2 loan capital
A summary of the key terms and common features of Westpac’s Tier 2 instruments (subordinated notes) is provided below:
Optional
$m Interest rate
a
Maturity date redemption date
b
2025 2024
Subordinated notes issued by Westpac Banking Corporation
USD 100 million Fixed
23 February 2046 n/a 107 110
JPY 20,000 million Fixed
19 May 2026 n/a 204 202
JPY 10,200 million Fixed
2 June 2026 n/a 104 103
JPY 10,000 million Fixed
9 June 2026 n/a 102 101
USD 1,500 million Fixed
23 November 2031 23 November 2026 2,227 2,095
AUD 185 millionFixed24 January 2048n/a184184
AUD 130 millionFixed2 March 2048n/a130130
USD 1,000 millionFixed24 July 2039n/a1,2051,196
USD 1,250 millionFixed24 July 203424 July 20291,7821,686
USD 1,500 millionFixed4 February 20304 February 2025-2,141
USD 1,500 millionFixed15 November 203515 November 20301,9781,854
USD 1,000 millionFixed16 November 2040n/a1,0131,010
AUD 1,250 millionFloating29 January 203129 January 20261,2491,250
EUR 1,000 millionFixed13 May 203113 May 20261,7531,544
USD 1,000 millionFixed18 November 2041n/a1,0541,059
USD 1,250 millionFixed18 November 203618 November 20311,6601,572
JPY 26,000 millionFixed8 June 20328 June 2027262261
USD 1,000 millionFixed10 August 203310 August 20321,4251,368
SGD 450 millionFixed7 September 20327 September 2027544516
AUD 1,500 millionFloating23 June 203323 June 20281,5001,496
AUD 300 millionFixed/Floating23 June 203323 June 2028299300
AUD 1,100 millionFixed/Floating23 June 203823 June 20331,0931,100
AUD 1,500 millionFixed/Floating15 November 2038n/a1,4951,502
USD 750 millionFixed17 November 2033n/a1,1771,148
AUD 650 millionFloating3 April 20343 April 2029648649
AUD 600 millionFixed/Floating3 April 20343 April 2029600593
AUD 1,000 millionFloating10 July 203410 July 20291,000996
AUD 500 millionFixed/Floating10 July 203410 July 2029500500
USD 1,500 millionFixed20 November 203520 November 20342,318-
AUD 850 millionFloating12 February 203512 February 2030843-
AUD 400 millionFixed/Floating12 February 203512 February 2030400-
AUD 1,500 millionFixed/Floating4 June 20404 June 20351,500-
Total subordinated notes issued by Westpac Banking Corporation30,35626,666
Subordinated notes issued by Westpac New Zealand Limited
c
NZD 600 millionFixed/Floating16 September 203216 September 2027525541
NZD 600 millionFixed/Floating14 February 203414 February 2029554572
Total subordinated notes issued by Westpac New Zealand Limited1,0791,113
Total subordinated notes
31,435 27,779
a. Certain subordinated notes have a fixed interest rate for the period up to the optional redemption date and a floating interest rate thereafter.
b. Certain Tier 2 instruments may have more than one optional redemption date and for the purposes of the table above the first optional redemption date is shown. Westpac Banking Corporation may elect to redeem the relevant
Tier 2 instrument on the optional redemption date or dates, subject to APRA’s prior written approval.
c. For subordinated notes issued by Westpac New Zealand Limited, it may elect to redeem all or some of the Tier 2 instruments for their face value together with accrued interest (if any) on the optional redemption date or any
interest payment date thereafter, subject to RBNZ’s prior written approval. Early redemption of all of the Tier 2 instruments for certain tax or regulatory reasons is permitted on an interest payment date subject to the RBNZ’s prior
written approval.
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Note 14. Loan capital (Continued)
Common features of subordinated notes
Issued by Westpac Banking Corporation
Interest payments are subject to Westpac being solvent at the time of, and immediately following, the interest payment.
Non-viability trigger event
The definition of non-viability trigger event is described under AT1 loan capital. Upon the occurrence of a non-viability trigger event, Westpac will be required to convert some or all
subordinated notes into a variable number of Westpac ordinary shares calculated in a manner similar to that described under AT1 loan capital.
Following the occurrence of a non-viability trigger event, if conversion of a Tier 2 instrument does not occur within five business days, holders’ rights in relation to the relevant Tier 2 instrument
will be immediately and irrevocably terminated.
Issued by Westpac New Zealand Limited
Interest payments are subject to Westpac New Zealand Limited being solvent at the time of, and immediately following, the interest payment.
Non-viability trigger event
Tier 2 instruments issued by Westpac New Zealand Limited do not have a non-viability trigger event. These instruments qualify as Tier 2 capital under the RBNZ capital adequacy framework
but not under APRA’s capital adequacy framework.
Note 15. Securitisation, covered bonds and other transferred assets
Westpac enters into transactions in the normal course of business by which financial assets are transferred to counterparties or structured entities. Depending on the circumstances, these
transfers may result in derecognition of the assets in their entirety, partial derecognition or no derecognition of the assets subject to the transfer. For Westpac’s accounting policy on
derecognition of financial assets refer to the Financial Assets and Financial Liabilities.
Securitisation
Securitisation is the transferring of assets (or an interest in either the assets or the cash flows arising from the assets) to a structured entity which then issues the majority of interest bearing
debt securities to third party investors for funding deals and to Westpac for liquidity deals. The Group transfers residential mortgages to these structured entities, however the Group retains the
risks and rewards of the residential mortgages and continues to recognise the mortgages as financial assets.
Securitisation of its own assets is used by Westpac as a funding and liquidity tool. For securitisation structured entities which Westpac controls, as defined in Note 30, the structured entities
are classified as subsidiaries and consolidated. When assessing whether Westpac controls a structured entity, it considers its exposure to and ability to affect variable returns. Westpac may
have variable returns from a structured entity through ongoing exposures to the risks and rewards associated with the assets, the provision of derivatives, liquidity facilities, trust management
and operational services.
Undrawn funding and liquidity facilities of $251 million (2024: $345 million) were provided by Westpac for the securitisation of its own assets.
Covered bonds
Westpac has two covered bond programs relating to Australian residential mortgages (Australian Program) and New Zealand residential mortgages (New Zealand Program). Under these
programs, selected pools of residential mortgages are assigned to bankruptcy remote structured entities which provide guarantees on the payments to bondholders. The Group retains the
majority of the risks and rewards of the residential mortgages and continues to recognise the mortgages as financial assets. Through the guarantees and derivatives with the structured
entities, Westpac has variable returns from these structured entities and consolidates them.
Repurchase agreements
Where securities are sold subject to an agreement to repurchase at a predetermined price, they remain recognised in the balance sheet in their original category (i.e. Trading securities or
Investment securities).
The cash consideration received is recognised as a liability (Repurchase agreements). Refer to Note 19 for further details.
60 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 15. Securitisation, covered bonds and other transferred assets (Continued)
The following tables present Westpac’s assets transferred and their associated liabilities.
For those liabilities that only have
recourse to the transferred assets:
CarryingCarrying
amount ofamount ofFair value ofFair value of
transferredassociatedtransferredtransferredNet fair
$m
assets liabilities assets liabilities value position
Consolidated
2025
Securitisation
a
5,6275,5875,6275,61710
Covered bonds
b
42,89037,671n/an/an/a
Repurchase agreements
15,23014,664n/an/an/a
Total
63,74757,9225,6275,61710
2024
Securitisation
a
5,5805,5395,5755,55223
Covered bonds
b
50,26939,472n/an/an/a
Repurchase agreements
19,93818,848n/an/an/a
Total
75,78763,8595,5755,55223
Parent Entity
2025
Securitisation
a
6,4206,3806,4216,41011
Covered bonds
b
36,26431,911n/an/an/a
Repurchase agreements
13,37913,183n/an/an/a
Total
56,06351,4746,4216,41011
2024
Securitisation
a
6,4496,4076,4436,42023
Covered bonds
b
43,33735,512n/an/an/a
Repurchase agreements
16,20516,071n/an/an/a
Total
65,99157,9906,4436,42023
a. The carrying amount of assets securitised exceeds the amount of notes issued primarily because the carrying amount includes both principal and income received from the transferred assets.
b. The difference between the carrying values of covered bonds and the assets pledged reflects the over-collateralisation required to maintain the ratings of the covered bonds and also additional assets to allow immediate issuance
of additional covered bonds if required. These additional assets can be repurchased by Westpac at its discretion, subject to the conditions set out in the transaction documents.
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Other financial instrument disclosures
Note 16. Trading securities and financial assets measured at fair value through income statement (FVIS)
Accounting policy
Trading securities
Trading securities include portfolios of actively traded debt and equity instruments, pledged instruments and instruments acquired for sale in the near term, including those backed by
government and semi-government securities. The instruments are measured at fair value.
As part of its trading activities, Westpac also lends and borrows securities on a collateralised basis. Securities lent remain on Westpac’s balance sheet and securities borrowed are not
reflected on Westpac’s balance sheet, as the risks and rewards of ownership remain with the initial holder. Where cash is provided as collateral, the amount advanced to or received from
third parties is recognised as a receivable in collateral paid or as a borrowing in collateral received respectively.
Reverse repurchase agreements
Securities purchased under these agreements are not recognised in the balance sheet, as Westpac has not obtained the risks and rewards of ownership. The cash consideration paid is
recognised as a reverse repurchase agreement, which forms part of a portfolio that is measured at fair value.
Other financial assets measured at FVIS
Other financial assets measured at FVIS include:
●Non-trading portfolio securities measured at fair value where this eliminates or significantly reduces an accounting mismatch, or they are part of a group of instruments that are
managed on a fair value basis;
●Non-trading debt securities that do not have contractual cash flows that represent SPPI on the principal balance outstanding; or
●Non-trading equity securities for which we have not made irrevocable designation to be measured at FVOCI.
Fair value gains and losses on these financial assets are recognised in the income statement. Interest earned from debt securities is recognised in interest income (Note 3) while dividends
on equity securities are recognised in non-interest income (Note 4).
ConsolidatedParent Entity
$m
2025 2024 2025 2024
Trading securities
Government and semi-government securities
10,429 24,532 10,429 23,225
Other debt securities
4,124 5,958 4,124 5,089
Other
376 285 376 282
Total trading securities14,92930,77514,92928,596
Reverse repurchase agreements
28,304 17,990 28,304 17,990
Other financial assets measured at FVIS
Government and semi-government securities11,681-10,250-
Other debt securities
927 461 143 428
Equity securities
- 2 - -
Total other financial assets measured at FVIS12,60846310,393428
Total trading securities and financial assets measured at FVIS
55,841 49,228 53,626 47,014
62 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 17. Investment securities
Accounting policy
Investment securities include debt securities and equity securities. It includes debt and equity securities that are measured at FVOCI and debt securities measured at amortised cost. These
instruments are classified based on the criteria disclosed under the heading “Financial assets and financial liabilities” prior to Note 9.
Debt securities measured at FVOCI
Includes debt instruments that have contractual cash flows which represent SPPI on the principal balance outstanding and are held within a business model whose objective is achieved
both through collecting these cash flows or selling the financial asset.
These securities are measured at fair value with unrealised gains and losses recognised in OCI except for interest income, impairment charges, FX gains and losses and fair value hedge
adjustments which are recognised in the income statement.
Impairment is measured using the same ECL model applied to financial assets measured at amortised cost. Impairment is recognised in the income statement with a corresponding amount
in OCI with no reduction of the carrying value of the debt security which remains at fair value. Refer to Note 6 and Note 10 for further details.
The cumulative gain or loss recognised in OCI is subsequently recognised in the income statement when the instrument is disposed.
Debt securities measured at amortised cost
Includes debt instruments that have contractual cash flows which represent SPPI on the principal balance outstanding and are held within a business model whose objective is achieved
through holding the financial asset to collect these cash flows.
These securities are initially recognised at fair value plus directly attributable transaction costs. They are subsequently measured at amortised cost using the effective interest method and
are presented net of any provision for ECL, determined using the ECL model.
Equity securities
Equity securities are measured at FVOCI where they are not held for trading, Westpac does not have control or significant influence over the investee and where an irrevocable election is
made to measure them at FVOCI.
These securities are measured at fair value with unrealised gains and losses recognised in OCI except for dividend income which is recognised in the income statement. The cumulative
gain or loss recognised in OCI is not subsequently recognised in the income statement when the instrument is disposed.
Consolidated Parent Entity
$m2025 2024 2025 2024
Investment securities
Investments securities measured at FVOCI
Government and semi-government debt securities
98,456 83,403 93,639 78,798
Other debt securities
17,636 18,866 15,241 16,548
Equity securities
476 450 220 208
Total investment securities measured at FVOCI
a
116,568 102,719 109,100 95,554
Investment securities measured at amortised cost
Government and semi-government debt securities
976 1,172 - 71
Total investment securities measured at amortised cost
976 1,172 - 71
Provision for ECL on debt securities at amortised cost
(3) (6) - (2)
Total net investment securities measured at amortised cost
973 1,166 - 69
Total investment securities
117,541 103,885 109,100 95,623
a. Impairment is recognised in the income statement with a corresponding amount in OCI (refer to Note 26). There is no reduction of the carrying value of the debt securities which remains at fair value.
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Note 17. Investment securities (Continued)
The following table shows the maturities and the weighted average yield of Westpac’s outstanding investment securities as at 30 September 2025. There are no tax-exempt securities.
Over 1Over 5No
Up to 1year to 5years toOver 10specificWeighted
yearyears10 yearsyearsmaturityTotalaverage
2025
$m % $m % $m % $m % $m % $m %
Carrying Amount
Government and semi-government securities
12,466 3.644,2013.635,0254.47,7375.1--99,4294.0
Other debt securities
4,702 4.812,9345.0------17,6364.9
Equity securities
- -------476-476-
Total by maturity
17,168 57,13535,0257,737476117,541
The maturity profile is determined based upon contractual terms for investment securities.
Note 18. Other financial assets
ConsolidatedParent Entity
$m
2025 2024 2025 2024
Accrued interest receivable
1,921 2,223 1,735 1,987
Securities sold not delivered
7,048 1,716 7,041 1,716
Trade debtors
430 343 255 320
Interbank lending319174246173
Clearing and settlement balances530602474480
Accrued fees and commissions
401 276 258 155
Other
117 122 117 120
Total other financial assets
10,766 5,456 10,126 4,951
64 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 19. Other financial liabilities
Accounting policy
Other financial liabilities include liabilities measured at amortised cost as well as liabilities which are measured at FVIS. Financial liabilities measured at FVIS include:
●Trading liabilities (i.e. securities sold short); and
●Liabilities designated at FVIS (i.e. certain repurchase agreements).
Refer to Note 22 for balances measured at fair value and amortised cost.
Repurchase agreements
Where securities are sold subject to an agreement to repurchase at a predetermined price, they remain recognised in the balance sheet in their original category (i.e. ‘Trading securities’ or
‘Investment securities’).
The cash consideration received is recognised as a liability (‘Repurchase agreements’). Repurchase agreements are designated at fair value where this eliminates or significantly reduces an
accounting mismatch, or they are part of a group of instruments that are managed on a fair value basis. Otherwise they are measured on an amortised cost basis.
Where a repurchase agreement is designated at fair value, any changes in fair value (except those due to changes in credit risk) are recognised in the income statement as they arise. The
change in fair value that is attributable to credit risk is recognised in OCI except where it would create an accounting mismatch, in which case it is also recognised in the income statement.
ConsolidatedParent Entity
$m
2025 2024 2025 2024
Repurchase agreements
14,664 18,848 13,183 16,071
Interbank placements6,4053,6356,4023,631
Accrued interest payable4,2354,9403,6844,094
Securities purchased not delivered7,5742,9667,5742,966
Trade creditors and other accrued expenses2,3632,3751,8871,994
Settlement and clearing balances869934848801
Securities sold short4,2153,2484,2153,248
Other1,1631,1311,1421,112
Total other financial liabilities
41,488 38,077 38,935 33,917
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Note 20. Derivative financial instruments
Accounting policy
Derivative financial instruments are instruments whose values are derived from the value of an underlying asset, reference rate or index and include forwards, futures, swaps and options.
Westpac uses derivative financial instruments for meeting customers’ needs, our Asset and Liability Management (ALM) activities, and undertaking market making and positioning activities.
Trading derivatives
Derivatives which are used in our ALM activities but are not designated into a hedge accounting relationship are considered economic hedges. These derivatives, along with derivatives used
for meeting customers’ needs and undertaking market making and positioning activities, are measured at FVIS and are disclosed as trading derivatives.
Hedging derivatives
Hedging derivatives are those which are used in our ALM activities and have also been designated into one of three hedge accounting relationships: fair value hedge; cash flow hedge; or
hedge of a net investment in a foreign operation. These derivatives are measured at fair value. These hedge designations and the associated accounting treatment are detailed below.
For more details regarding Westpac’s ALM activities, refer to Note 21.
Fair value hedges
Fair value hedges are used to hedge the exposure to changes in the fair value of an asset or liability.
Changes in the fair value of derivatives and the hedged asset or liability in fair value hedges are recognised in interest income. The carrying value of the hedged asset or liability is adjusted
for the changes in fair value related to the hedged risk.
If a hedge is discontinued, any fair value adjustments to the carrying value of the asset or liability are amortised to net interest income over the period to maturity. If the asset or liability is
sold, any unamortised adjustment is immediately recognised in net interest income.
Cash flow hedges
Cash flow hedges are used to hedge the exposure to variability of cash flows attributable to an asset, liability or future forecast transaction.
For effective hedges, changes in the fair value of derivatives are recognised in the cash flow hedge reserve through OCI and subsequently recognised in interest income when the cash
flows attributable to the asset or liability that was hedged impact the income statement.
For hedges with some ineffectiveness, the changes in the fair value of the derivatives relating to the ineffective portion are immediately recognised in interest income.
If a hedge is discontinued, any cumulative gain or loss remains in OCI. It is amortised to net interest income over the period in which the asset or liability that was hedged also impacts the
income statement.
If a hedge of a forecast transaction is no longer expected to occur, any cumulative gain or loss in OCI is immediately recognised in net interest income.
Net investment hedges
Net investment hedges are used to hedge FX risks arising from a net investment of a foreign operation.
For effective hedges, changes in the fair value of derivatives are recognised in the foreign currency translation reserve through OCI.
For hedges with some ineffectiveness, the changes in the fair value of the derivatives relating to the ineffective portion are immediately recognised in non-interest income.
If a foreign operation is disposed of, any cumulative gain or loss in OCI is immediately recognised in non-interest income.
66 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 20. Derivative financial instruments (Continued)
Total derivatives
The carrying values of derivative instruments are set out in the tables below.
Total derivatives
ConsolidatedTradingHedgingcarrying value
$m
Assets Liabilities Assets Liabilities Assets Liabilities
2025
Interest rate contracts
Swap agreements
48,585(51,397)5,301(5,334)53,886(56,731)
Options
256(109)--256(109)
Total interest rate contracts
48,841(51,506)5,301(5,334)54,142(56,840)
FX contracts
Spot and forward contracts
7,141(6,963)83(37)7,224(7,000)
Cross currency swap agreements
5,596(9,460)1,830(104)7,426(9,564)
Options
134(126)--134(126)
Total FX contracts
12,871(16,549)1,913(141)14,784(16,690)
Credit default swaps
Credit protection bought-(408)---(408)
Credit protection sold353---353-
Total credit default swaps353(408)--353(408)
Commodity contracts
151(50)--151(50)
Total of gross derivatives
62,216(68,513)7,214(5,475)69,430(73,988)
Impact of netting arrangements
(45,845)48,218(5,121)5,140(50,966)53,358
Total of net derivatives
16,371(20,295)2,093(335)18,464(20,630)
2024
Interest rate contracts
Swap agreements47,697(49,742)5,619(5,969)53,316(55,711)
Options235(186)--235(186)
Total interest rate contracts47,932(49,928)5,619(5,969)53,551(55,897)
FX contracts
Spot and forward contracts10,887(11,643)20(171)10,907(11,814)
Cross currency swap agreements9,330(14,783)183(373)9,513(15,156)
Options152(135)--152(135)
Total FX contracts20,369(26,561)203(544)20,572(27,105)
Credit default swaps
Credit protection bought-(276)---(276)
Credit protection sold225---225-
Total credit default swaps225(276)--225(276)
Commodity contracts235(85)--235(85)
Total of gross derivatives68,761(76,850)5,822(6,513)74,583(83,363)
Impact of netting arrangements(45,045)46,533(5,429)5,856(50,474)52,389
Total of net derivatives23,716(30,317)393(657)24,109(30,974)
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Note 20. Derivative financial instruments (Continued)
Total derivatives
Parent EntityTradingHedgingcarrying value
$m
Assets Liabilities Assets Liabilities Assets Liabilities
2025
Interest rate contracts
Swap agreements
48,751(51,819)4,960(4,777)53,711(56,596)
Options
256(109)--256(109)
Total interest rate contracts
49,007(51,928)4,960(4,777)53,967(56,705)
FX contracts
Spot and forward contracts
7,179(6,963)45(37)7,224(7,000)
Cross currency swap agreements
6,589(9,457)83(104)6,672(9,561)
Options
133(126)--133(126)
Total FX contracts
13,901(16,546)128(141)14,029(16,687)
Credit default swaps
Credit protection bought-(408)---(408)
Credit protection sold353---353-
Total credit default swaps353(408)--353(408)
Commodity contracts
151(50)--151(50)
Total of gross derivatives
63,412(68,932)5,088(4,918)68,500(73,850)
Impact of netting arrangements
(46,014)48,645(4,952)4,713(50,966)53,358
Total of net derivatives
17,398(20,287)136(205)17,534(20,492)
2024
Interest rate contracts
Swap agreements47,973(50,141)5,186(5,495)53,159(55,636)
Options235(186)--235(186)
Total interest rate contracts48,208(50,327)5,186(5,495)53,394(55,822)
FX contracts
Spot and forward contracts10,887(11,665)20(149)10,907(11,814)
Cross currency swap agreements9,411(14,917)52(135)9,463(15,052)
Options
152(135)--152(135)
Total FX contracts
20,450(26,717)72(284)20,522(27,001)
Credit default swaps
Credit protection bought-(276)---(276)
Credit protection sold225---225-
Total credit default swaps225(276)--225(276)
Commodity contracts
235(85)--235(85)
Total of gross derivatives
69,118(77,405)5,258(5,779)74,376(83,184)
Impact of netting arrangements
(45,323)46,938(5,151)5,451(50,474)52,389
Total of net derivatives
23,795(30,467)107(328)23,902(30,795)
68 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 20. Derivative financial instruments (Continued)
Hedge accounting
Westpac designates derivatives into hedge accounting relationships in order to manage the volatility in earnings and capital that would otherwise arise from interest rate and FX risks that may
result from differences in the accounting treatment of derivatives and underlying exposures. These hedge accounting relationships and the risks they are used to hedge are described below.
Westpac enters into one-to-one hedge relationships to manage specific exposures where the terms of the hedged item significantly match the terms of the hedging instrument. Westpac also
uses dynamic hedge accounting where the hedged items are part of a portfolio of assets and/or liabilities that frequently change. In this hedging strategy, the exposure being hedged and the
hedging instruments may change frequently rather than there being a one-to-one hedge accounting relationship for a specific exposure.
Fair value hedges
Interest rate risk
Westpac hedges its interest rate risk to reduce exposure to changes in fair value due to interest rate fluctuations over the hedging period. Interest rate risk arising from fixed rate debt
issuances and fixed rate bonds classified as investment securities at FVOCI is hedged with single currency fixed to floating interest rate derivatives. Westpac also hedges its benchmark
interest rate risk from fixed rate foreign currency denominated debt issuances using interest rate swaps and cross currency swaps. In applying fair value hedge accounting, Westpac primarily
uses one-to-one hedge accounting to manage specific exposures.
Westpac also uses a dynamic hedge accounting strategy for fair value portfolio hedge accounting of some fixed rate mortgages to reduce exposure to changes in fair value due to interest rate
fluctuations over the hedging period. These fixed rate mortgages are allocated to time buckets based on their expected repricing dates and the fixed-to-floating interest rate derivatives are
designated accordingly to the capacity in the relevant time buckets.
Westpac hedges the benchmark interest rate which generally represents the most significant component of the changes in fair value. The benchmark interest rate is a component of interest
rate risk that is observable in the relevant financial markets, for example, BBSW and AONIA for AUD interest rates, SOFR for USD interest rates and BKBM for NZD interest rates.
Ineffectiveness may arise from timing or discounting differences on repricing between the hedged item and the derivative. For the portfolio hedge accounting ineffectiveness also arises from
prepayment risk (i.e. the difference between actual and expected prepayment of loans). In order to manage the ineffectiveness from early repayments and accommodate new originations the
portfolio hedges are de-designated and re-designated periodically.
Cash flow hedges
Interest rate risk
Westpac’s exposure to the volatility of interest cash flows from customer deposits and loans is hedged with interest rate derivatives using a dynamic hedge accounting strategy called macro
cash flow hedges. Customer deposits and loans are allocated to time buckets based on their expected repricing dates. The interest rate derivatives are designated accordingly to the gross
asset or gross liability positions for the relevant time buckets. Westpac hedges the benchmark interest rate which generally represents the most significant component of the changes in fair
value. The benchmark interest rate is a component of interest rate risk that is observable in the relevant financial markets, for example, BBSW and AONIA for AUD interest rates, SOFR for
USD interest rates and BKBM for NZD interest rates. Ineffectiveness may arise from timing or discounting differences on repricing between the hedged item and the interest rate derivative.
Ineffectiveness also arises if the notional values of the interest rate derivatives exceed the capacity for the relevant time buckets. The hedge accounting relationship is reviewed on a monthly
basis and the hedging relationships are de-designated and re-designated if necessary.
FX risk
Westpac’s exposure to foreign currency principal and credit margin cash flows from fixed and floating rate foreign currency debt issuances is hedged through the use of cross currency and
foreign exchange derivative contracts in a one-to-one hedging relationship to manage the changes between the foreign currency and AUD. In addition, for floating rate foreign currency debt
issuances, Westpac hedges from foreign floating to primarily AUD or NZD floating interest rates. These exposures represent the most significant components of fair value. Ineffectiveness may
arise from timing or discounting differences on repricing between the hedged item and the cross currency derivative.
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Note 20. Derivative financial instruments (Continued)
Net investment hedges
FX risk
Structural FX risk results from Westpac’s capital deployed in offshore branches and subsidiaries, where it is denominated in currencies other than Australian dollars. As exchange rates move,
the Australian dollar equivalent of offshore capital is subject to change that could introduce significant variability to Westpac’s reported financial results and capital ratios.
Westpac uses FX forward contracts when hedging the currency translation risk arising from net investments in foreign operations. Westpac currently applies hedge accounting, predominantly
to its net investment in New Zealand operations which is the most material offshore operation and therefore the hedged risk is the movement of the NZD against the AUD. Ineffectiveness only
arises if the notional values of the FX forward contracts exceed the net investment.
Economic hedges
As part of Westpac’s ALM activities, economic hedges may be entered into to hedge New Zealand future earnings and long-term funding transactions for risk management purposes. These
hedges do not qualify for hedge accounting and therefore are not included in the hedging instrument disclosures below.
Hedging instruments
The following tables show the carrying value of hedging instruments and a maturity analysis of the notional amounts of the hedging instruments in one-to-one hedge relationships categorised
by the types of hedge relationships and the hedged risk.
Notional amounts
ConsolidatedWithin 1Over 1 yearOver 5Carrying value
$m
Hedging instrument Hedged risk year to 5 years years Total Assets Liabilities
2025
One-to-one hedge relationships
Fair value hedgesInterest rate swapInterest rate risk21,31483,61767,516172,4473,766(4,398)
Cross currency swapInterest rate risk3,48415,1271,07919,690(89)(23)
Cash flow hedgesCross currency swapFX risk3,48415,1271,07919,6901,919(81)
Foreign exchange forwards and swapsFX risk3,623--3,6232(37)
Net investment hedgesForward contractsFX risk4,106--4,10681-
Total one-to-one hedge relationships36,011113,87169,674219,5565,679(4,539)
Macro hedge relationships
Portfolio fair value hedgesInterest rate swapInterest rate riskn/an/an/a16,7763(220)
Macro cash flow hedgesInterest rate swapInterest rate riskn/an/an/a607,3431,532(716)
Total macro hedge relationshipsn/an/an/a624,1191,535(936)
Total of gross hedging derivatives n/an/an/a843,6757,214(5,475)
Impact of netting arrangements n/an/an/an/a(5,121)5,140
Total of net hedging derivatives n/an/an/an/a2,093(335)
2024
One-to-one hedge relationships
Fair value hedgesInterest rate swapInterest rate risk21,40082,57155,004158,9753,611(4,858)
Cross currency swapInterest rate risk1,09813,18898115,267(22)(281)
Cash flow hedgesCross currency swapFX risk1,09813,18898115,267205(92)
Foreign exchange forwards and swapsFX risk3,663--3,6632(144)
Net investment hedgesForward contractsFX risk3,631--3,63118(27)
Total one-to-one hedge relationships30,890108,94756,966196,8033,814(5,402)
Macro hedge relationships
Portfolio fair value hedgesInterest rate swapInterest rate riskn/an/an/a16,31735(204)
Macro cash flow hedgesInterest rate swapInterest rate riskn/an/an/a422,9431,973(907)
Total macro hedge relationshipsn/an/an/a439,2602,008(1,111)
Total of gross hedging derivatives n/an/an/a636,0635,822(6,513)
Impact of netting arrangements n/an/an/an/a(5,429)5,856
Total of net hedging derivatives n/an/an/an/a393(657)
70 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 20. Derivative financial instruments (Continued)
Notional amounts
Parent EntityWithin 1Over 1 yearOver 5Carrying value
$m
Hedging instrument Hedged risk
year to 5 years years Total Assets Liabilities
2025
One-to-one hedge relationships
Fair value hedgesInterest rate swapInterest rate risk21,22679,65265,475166,3533,602(4,270)
Cross currency swapInterest rate risk8152137231,751(6)(23)
Cash flow hedgesCross currency swapFX risk8152137231,75189(81)
Foreign exchange forwards and swapsFX risk3,623--3,6232(37)
Net investment hedgesForward contractsFX risk3,107--3,10743-
Total one-to-one hedge relationships29,58680,07866,921176,5853,730(4,411)
Macro hedge relationships
Portfolio fair value hedgesInterest rate swapInterest rate riskn/an/an/a1003-
Macro cash flow hedgesInterest rate swapInterest rate riskn/an/an/a579,7971,355(507)
Total macro hedge relationshipsn/an/an/a579,8971,358(507)
Total of gross hedging derivatives n/an/an/a756,4825,088(4,918)
Impact of netting arrangements n/an/an/an/a(4,952)4,713
Total of net hedging derivatives n/an/an/an/a136(205)
2024
One-to-one hedge relationships
Fair value hedgesInterest rate swapInterest rate risk20,96277,73954,797153,4983,457(4,789)
Cross currency swapInterest rate risk3771,0026592,038(23)(23)
Cash flow hedgesCross currency swapFX risk3771,0026592,03875(112)
Foreign exchange forwards and swapsFX risk3,663--3,6632(144)
Net investment hedgesForward contractsFX risk2,636--2,63618(5)
Total one-to-one hedge relationships28,01579,74356,115163,8733,529(5,073)
Macro hedge relationships
Portfolio fair value hedgesInterest rate swapInterest rate riskn/an/an/a1,79732-
Macro cash flow hedgesInterest rate swapInterest rate riskn/an/an/a398,5191,697(706)
Total macro hedge relationshipsn/an/an/a400,3161,729(706)
Total of gross hedging derivatives n/an/an/a564,1895,258(5,779)
Impact of netting arrangements n/an/an/an/a(5,151)5,451
Total of net hedging derivatives n/an/an/an/a107(328)
The following tables show the weighted average FX rate related to significant hedging instruments in one-to-one hedge relationships.
Weighted average rate
Hedging instrument Hedged risk Currency pair 2025 2024
Consolidated
Cash flow hedgesCross currency swapFX riskEUR:NZD0.58460.5963
USD:NZD0.60710.6252
Foreign exchange swapFX riskUSD:AUD0.66580.6676
Net investment hedgesForward contractsFX riskNZD:AUD1.11131.0984
USD:AUD0.65370.6745
Parent Entity
Cash flow hedgesCross currency swapFX riskEUR:AUD0.66500.6650
JPY:AUD79.644879.6448
CNH:AUD4.74184.7334
HKD:AUD5.59785.6124
Foreign exchange swapFX riskUSD:AUD0.66580.6676
Net investment hedgesForward contractsFX riskNZD:AUD1.11851.0905
USD:AUD0.65370.6745
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ADDITIONAL
INFORMATION71
Note 20. Derivative financial instruments (Continued)
Impact of hedge accounting in the balance sheets and reserves
The following tables show the carrying amount of hedged items in a fair value hedge relationship and the component of the carrying amount related to accumulated fair value hedge accounting
adjustments (FVHA).
20252024
Carrying amount ofCarrying amount of
$m
hedged item FVHA hedged item FVHA
Consolidated
Interest rate risk
Investment securities
a
83,38249465,585(165)
Loans17,23411716,63877
Debt issues and loan capital(102,521)3,421(102,039)3,749
Parent Entity
Interest rate risk
Investment securities
a
78,77128461,775(294)
Loans44212,019(22)
Debt issues and loan capital(83,381)3,341(87,495)3,532
a. The carrying amount of investment securities at fair value through other comprehensive income does not include a fair value hedge adjustment as the hedged asset is measured at fair value. The fair value hedge accounting
adjustment results in a transfer from other comprehensive income to the income statement.
There were nil FVHA gains/losses (2024: Nil) included in the above carrying amounts relating to hedged items that have ceased to be adjusted for hedging gains and losses.
The pre-tax impact of cash flow and net investment hedges on cash flow hedge reserves is detailed below:
20252024
InterestFXInterestFX
$m
rate risk risk Total rate risk risk Total
Consolidated
Balance as at beginning of year978(198) 780249(47) 202
Net gains/(losses) from changes in fair value(364)131 (233)878(377) 501
Transferred to interest income8072 152(149)226 77
Balance as at end of year6945 699978(198) 780
Parent Entity
Balance as at beginning of year852(136) 716(288)(1) (289)
Net gains/(losses) from changes in fair value(305)151 (154)1,049(176) 873
Transferred to interest income12925 1549141 132
Balance as at end of year67640 716852(136) 716
There were nil net gains/losses (2024: net gains $16 million) remaining in the cash flow hedge reserve relating to hedge relationships for which hedge accounting is no longer applied for
Westpac and the Parent Entity.
As disclosed in Note 26, the net gains from changes in the fair value of net investment hedges were $95 million (2024: net gain $28 million) for Westpac and $53 million (2024: net gain $31
million) for the Parent Entity. Included in the foreign currency translation reserve is a loss of $158 million (2024: $158 million loss) for Westpac and $162 million (2024: $162 million loss) for the
Parent Entity relating to discontinued hedges of our net investment in USD operations. This would only be transferred to the income statement on disposal of the related USD operations.
72 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 20. Derivative financial instruments (Continued)
Hedge effectiveness
Hedge effectiveness is tested prospectively at inception and during the lifetime of hedge relationships. For one-to-one hedge relationships this testing uses a qualitative assessment of
matched terms where the critical terms of the derivatives used as the hedging instrument match the terms of the hedged item. In addition, a quantitative effectiveness test is performed for all
hedges which could include regression analysis, dollar offset and/or sensitivity analysis.
Retrospective testing is also performed to determine whether the hedge relationship remains highly effective so that hedge accounting can continue to be applied and also to determine any
ineffectiveness. These tests are performed using regression analysis and the dollar offset method.
The following tables provide information regarding the determination of hedge effectiveness:
Change in fair
value ofChange in
hedgingvalue of theHedge
instrumenthedged itemHedgeineffectiveness
used forused forineffectivenessrecognised
calculatingcalculatingrecognised inin non-
$m
Hedging instrument Hedged risk
ineffectiveness ineffectiveness interest income interest income
Consolidated
2025
Fair value hedges
Interest rate swap Interest rate risk (526) 491 (35) n/a
Cross currency swap Interest rate risk117(120)(3)n/a
Cash flow hedges
Interest rate swap Interest rate risk (249) 268 19 n/a
Cross currency swap FX risk21(21)-n/a
Foreign exchange forwards and swapsFX risk182(182)-n/a
Net investment hedges
Forward contracts FX risk 95 (95) n/a -
Total
(360) 341 (19) -
2024
Fair value hedges
Interest rate swap Interest rate risk 1,845 (1,817) 28 n/a
Cross currency swap Interest rate risk761(765)(4)n/a
Cash flow hedges
Interest rate swap Interest rate risk 698 (714) (16) n/a
Cross currency swap FX risk(25)25-n/a
Foreign exchange forwards and swapsFX risk(126)126-n/a
Net investment hedges
Forward contracts FX risk 28 (28) n/a -
Total
3,181 (3,173) 8 -
Parent Entity
2025
Fair value hedges
Interest rate swap Interest rate risk (455) 420 (35) n/a
Cross currency swap Interest rate risk7(10)(3)n/a
Cash flow hedges
Interest rate swap Interest rate risk (136) 159 23 n/a
Cross currency swap FX risk(6)6-n/a
Foreign exchange forwards and swapsFX risk182(182)-n/a
Net investment hedges
Forward contracts FX risk 53 (53) n/a -
Total
(355) 340 (15) -
2024
Fair value hedges
Interest rate swap Interest rate risk 2,295 (2,274) 21 n/a
Cross currency swap Interest rate risk84(84)-n/a
Cash flow hedges
Interest rate swap Interest rate risk 1,121 (1,126) (5) n/a
Cross currency swap FX risk(9)9-n/a
Foreign exchange forwards and swapsFX risk(126)126-n/a
Net investment hedges
Forward contracts FX risk 31 (31) n/a -
Total
3,396 (3,380) 16 -
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ADDITIONAL
INFORMATION73
Note 21. Risk management, funding and liquidity risk and market risk
Financial instruments are fundamental to Westpac’s business of providing banking and financial services. The associated financial risks (including credit risk, funding and liquidity risk and
market risk) are a significant proportion of the total risks faced by Westpac.
This note details the financial risk management policies, practices and quantitative information of Westpac’s principal financial risk exposures.
Note
IndexNote Namenumber
OverviewRisk management frameworks21.1
Credit riskRefer to Note 11 Credit risk management11
Funding and liquidity risk
The risk that Westpac cannot meet its payment obligations or that it does not
have the appropriate amount, tenor and composition of funding and liquidity to
support its assets.
Liquidity modelling
Sources of funding
Assets pledged as collateral
Contractual maturity of financial liabilities
Expected maturity
21.2.1
21.2.2
21.2.3
21.2.4
21.2.5
Market risk
The risk of an adverse impact on Westpac’s financial performance or financial
position resulting from changes in market factors, such as foreign exchange
rates, commodity prices and equity prices, credit spreads and interest rates.
This includes interest rate risk in the banking book which is the risk of loss in
earnings or economic value in the banking book as a consequence of
movements in interest rates.
Value-at-Risk (VaR)
Traded market risk
Non-traded market risk
21.3.1
21.3.2
21.3.3
21.1. Risk management frameworks
The Board is responsible for approving Westpac’s Risk Management Strategy (incorporating the Risk Management Framework) and Board Risk Appetite Statement and for monitoring the
effectiveness of risk management by Westpac. The Board has delegated to the Board Risk Committee (BRiskC) responsibility to:
●Review and recommend Westpac’s Risk Management Strategy (incorporating the Risk Management Framework) and Board Risk Appetite Statement to the Board for approval;
●Review and monitor Westpac’s risk profile and controls for consistency with the Board Risk Appetite Statement;
●Approve frameworks, policies and processes for managing risk (consistent with the Risk Management Strategy and Board Risk Appetite Statement); and
●Review and, where appropriate, approve risks beyond the approval discretion provided to management.
74 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 21. Risk management, funding and liquidity risk and market risk (Continued)
For each of its material risks, Westpac maintains risk management frameworks and a number of supporting policies that define roles and responsibilities, acceptable practices, limits and key
controls:
RiskRisk management framework and controls
Funding and
liquidity risk
●Funding and liquidity risk is measured and managed in accordance with the policies and processes defined in the Board-approved Liquidity Risk
Management Framework which is part of the Westpac Board-approved Risk Management Strategy.
●Responsibility for managing Westpac’s liquidity and funding positions in accordance with the Liquidity Risk Management Framework is delegated to
Treasury, under the oversight of Group ALCO and Treasury Risk.
●Westpac’s Liquidity Risk Management Framework sets out Westpac’s funding and liquidity risk appetite, roles and responsibilities of key people managing
funding and liquidity risk within Westpac, risk reporting and control processes and limits and targets used to manage Westpac’s balance sheet.
●Treasury undertakes an annual funding review that outlines Westpac’s balance sheet funding strategy over a five year period. This review encompasses
trends in global markets, peer analysis, wholesale funding capacity, expected funding requirements and a funding risk analysis. This strategy is
continuously reviewed to take account of changing market conditions, investor sentiment and estimations of asset and liability growth rates.
●Westpac monitors the composition and stability of its funding so that it remains within Westpac’s funding risk appetite. This includes compliance with both
the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR).
●Westpac holds a portfolio of liquid assets for several purposes, including as a buffer against unforeseen funding requirements. The level of liquid assets
held takes into account the liquidity requirements of Westpac’s balance sheet under normal and stress conditions.
●Treasury maintains a contingent funding plan that outlines the steps that should be taken by Westpac in the event of an emerging ‘funding crisis’. The plan
is aligned with Westpac’s broader Liquidity Crisis Management Policy which is approved annually by the Board.
●Daily liquidity risk reports are reviewed by Westpac’s Treasury and Treasury Risk teams. Liquidity reports are presented to Group ALCO monthly and to the
Board quarterly.
Market risk●The Market Risk Framework describes Westpac’s approach to managing traded and non- traded market risk.
●Traded market risk includes interest rate, FX, commodity, equity price, credit spread and volatility risks. Non-traded market risk includes interest rate and
credit spread risks.
●Market risk is managed using VaR and Stressed VaR (SVaR) limits, Net interest income at risk (NaR) and structural risk limits (including credit spread and
interest rate basis point value limits) as well as scenario analysis and stress testing.
●The BRiskC approves the risk appetite for traded and non-traded risks through the use of VaR, SVaR, NaR and specific structural risk limits. This includes
separate VaR sub-limits for the trading activities of Financial Markets and Treasury and for non-traded ALM activities.
●Market risk limits are assigned to business management based upon the Bank’s risk appetite and business strategies in addition to the consideration of
market liquidity and concentration.
●Market risk positions are managed by the trading desks and ALM unit consistent with their delegated authorities and the nature and scale of the market
risks involved.
●Daily monitoring of current exposure and limit utilisation is conducted independently by Market Risk teams, which monitor market risk exposures against
VaR and structural risk limits. Daily VaR position reports are produced by risk type, by product lines and by geographic region. Quarterly reports are
produced for the Westpac Group Market Risk Committee (MARCO), RISKCO and the BRiskC.
●Daily stress testing and back testing of VaR results are performed to support model integrity and to analyse extreme or unexpected movements, and the
Head of Market, Capital & Liquidity Risk has ratified an approved stress escalation framework.
●The BRiskC has approved a framework for profit or loss escalation which considers both single day and 20 day cumulative results.
●Treasury’s ALM unit is responsible for managing the non-traded interest rate risk including risk mitigation through hedging using derivatives. This is
overseen by the Market Risk unit and reviewed by Treasury Financial Risk Committee (TRFC), MARCO, RISKCO and BRiskC. The Group ALCO provides
additional oversight of non-traded market risk and alignment with Group strategy in reviewing NaR and the durations of capital and non-rate sensitive
deposit hedges.
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ADDITIONAL
INFORMATION75
Note 21. Risk management, funding and liquidity risk and market risk (Continued)
21.2. Funding and liquidity risk
21.2.1. Liquidity modelling
In managing liquidity for Westpac, Treasury utilises balance sheet forecasts and the maturity profile of Westpac’s wholesale funding portfolio to project liquidity outcomes. Local liquidity limits
are also used by Westpac in applicable jurisdictions to ensure liquidity is managed efficiently and prudently.
In addition, Westpac conducts regular stress testing to assess its ability to meet cash flow obligations under a range of market conditions and scenarios. These scenarios inform liquidity limits
and strategic planning.
21.2.2. Sources of funding
Sources of funding are regularly reviewed to maintain a wide diversification by currency, geography, product and term. Sources include, but are not limited to:
●Deposits;
●Debt issues;
●Proceeds from sale of marketable securities;
●Repurchase agreements with central banks;
●Principal repayments on loans;
●Interest income; and
●Fee income.
Liquid assets
Treasury holds a portfolio of high-quality liquid assets as a buffer against unforeseen funding requirements. These assets are held in cash, or are otherwise eligible for repurchase agreements
with the Reserve Bank of Australia or another central bank and include Government, State Government and highly rated investment grade securities. The level of liquid asset holdings is
reviewed frequently and is consistent with both the requirements of the balance sheet and market conditions.
A summary of Westpac’s liquid asset holdings is as follows:
ConsolidatedParent Entity
2025202420252024
$m
Actual Average Actual Average Actual Average Actual Average
Cash
50,157 66,322 65,356 94,46844,607 58,836 58,236 85,384
Trading securities and financial assets measured at FVIS
40,840 31,936 31,717 19,18339,257 29,702 29,538 16,954
Investment securities117,065113,488103,43592,622108,880105,06595,41585,076
Other financial assets319273174199246240173195
Total on-balance sheet liquid assets
208,381 212,019 200,682 206,472192,990 193,843 183,362 187,609
In addition, Westpac has $81,653 million (2024: $70,306 million) and the Parent Entity has $76,094 million (2024: $62,770 million) of loans that are self-originated AAA rated mortgage backed
securities which are eligible for repurchase with the RBA and Reserve Bank of New Zealand under certain circumstances. Average year-to-date balances amount to $76,439 million (2024:
$70,282 million) for Westpac and $70,708 million (2024: $63,975 million) for the Parent Entity.
76 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 21. Risk management, funding and liquidity risk and market risk (Continued)
Westpac’s funding composition
Westpac monitors the composition and stability of its funding so that it remains within Westpac’s funding risk appetite. This includes compliance with both the LCR and NSFR.
%
2025 2024
Customer deposits
68.1 66.9
Wholesale term funding with residual maturity greater than 12 months
12.9 13.9
Wholesale funding with a residual maturity less than 12 months
11.6 11.4
Equity
6.9 7.2
Securitisation
0.5 0.6
Group’s total funding
100.0 100.0
Movements in Westpac’s funding composition in 2025 included:
●Customer deposits increased by $49.4 billion and now account for 68.1% of Westpac’s total funding (including equity) at 30 September 2025, up from 66.9% at 30 September 2024;
●Long-term funding with a residual maturity greater than 12 months accounted for 12.9% of Westpac’s total funding at 30 September 2025. Funding from securitisation accounted for a
further 0.5% of total funding. Westpac raised $28.1 billion of long-term wholesale funding in 2025, supported by constructive conditions in global capital markets. This was lower than prior
financial years reflecting strong growth in customer deposits and lower wholesale funding maturities to be refinanced;
●Wholesale funding with a residual maturity less than 12 months accounted for 11.6% of Westpac’s total funding at 30 September 2025, up from 11.4% at 30 September 2024. This portfolio,
including long-term funding with a residual maturity less than one year, had a weighted average maturity of 153 days; and
●Funding from equity increased by $1.0 billion in 2025 and made up 6.9% of total funding at 30 September 2025, down from 7.2% at 30 September 2024, reflecting the impact of the on-
market share buyback.
Borrowings and outstanding issuances from existing debt programs at 30 September 2025 can be found in Note 12, Note 13, Note 14 and Note 19.
Funding for Lending Programme (FLP)
On 11 November 2020, the Reserve Bank of New Zealand (RBNZ) announced a stimulus through the FLP commencing in December 2020. The FLP provided funding to New Zealand banks
at the prevailing OCR for a term of three years secured by high quality collateral. The size of the funding available under the FLP included an initial allocation of 4% of each bank’s eligible
loans. A conditional additional allocation of up to 2% of eligible loans was also available, subject to growth in eligible loans, for a total size of up to 6% of eligible loans. The programme started
on 7 December 2020 and ran until 6 December 2022. During the year, Westpac New Zealand Limited has made scheduled repayments on the programme and as at 30 September 2025 the
amount outstanding totalled NZ$1,110 million (30 September 2024: NZ$2,981 million).
Credit ratings
As at 30 September 2025 the Parent Entity’s credit ratings were:
2025
Short-term Long-term Outlook
Fitch Ratings
F1+AA-Stable
Moody’s Ratings
P-1Aa2Stable
S&P Global Ratings
A-1+AA-Stable
FINANCIAL
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ADDITIONAL
INFORMATION77
Note 21. Risk management, funding and liquidity risk and market risk (Continued)
21.2.3. Assets pledged as collateral
Westpac and the Parent Entity are required to provide collateral (predominantly to other financial institutions), as part of standard terms, to secure liabilities. In addition to assets supporting
securitisation and covered bond programs disclosed in Note 15, the carrying value of these financial assets pledged as collateral is:
ConsolidatedParent Entity
$m
2025 2024 2025 2024
Cash4,5906,2694,5626,199
Securities (including certificates of deposit)
2,535 1,721 2,307 1,721
Securities pledged under repurchase agreements
15,230 19,938 13,379 16,205
Securities pledged on contingent liabilities
119 56 119 56
Total amount pledged to secure liabilities/contingent liabilities
22,474 27,984 20,367 24,181
21.2.4. Contractual maturity of financial liabilities
The following tables present cash flows associated with financial liabilities, payable at the balance sheet date, by remaining contractual maturity. The amounts disclosed in the table are the
future contractual undiscounted cash flows, whereas Westpac manages inherent liquidity risk based on expected cash flows.
Cash flows associated with financial liabilities include both principal payments as well as fixed or variable interest payments incorporated into the relevant coupon period. Principal payments
reflect the earliest contractual maturity date. Derivative liabilities designated in hedge accounting relationships and used as economic hedges are expected to be held for their remaining
contractual lives, and reflect gross cash flows over the remaining contractual term.
Derivatives held for trading (excluding economic hedges) and certain liabilities classified in “Other financial liabilities” which are measured at FVIS are not managed for liquidity purposes on the
basis of their contractual maturity, and accordingly these liabilities are presented in the up to 1 month column. Only the liabilities that Westpac manages based on their contractual maturity are
presented on a contractual undiscounted basis in the following tables.
78 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 21. Risk management, funding and liquidity risk and market risk (Continued)
Consolidated Over 1 month Over 3 months Over 1 year to
$mUp to 1 monthto 3 monthsto 1 year5 yearsOver 5 yearsTotal
2025
Financial liabilities
Collateral received
3,194 - - - - 3,194
Deposits and other borrowings
564,053 77,359 125,412 9,924 62 776,810
Other financial liabilities
30,5752,4454,7248-37,752
Derivative financial instruments:
Held for trading
15,915 - - - - 15,915
Held for hedging purposes (net settled)
18 (39) (42) 239 391 567
Held for hedging purposes (gross settled):
Cash outflow
15,370 19,254 56,774 103,183 40,431 235,012
Cash inflow
(14,750) (17,974) (56,043) (100,546) (38,150) (227,463)
Debt issues
3,401 10,307 57,360 102,381 16,597 190,046
Total financial liabilities excluding loan capital
617,776 91,352 188,185 115,189 19,331 1,031,833
Loan capital
56 456 1,433 7,874 48,506 58,325
Total undiscounted financial liabilities
617,832 91,808 189,618 123,063 67,837 1,090,158
Total contingent liabilities and commitments
Financial guarantees, letters of credit and other credit substitutes
15,721 - - - - 15,721
Performance-related contingencies
6,709 - - - - 6,709
Remaining commitments to extend credit198,739----198,739
Total undiscounted contingent liabilities and commitments
221,169 - - - - 221,169
2024
Financial liabilities
Collateral received
3,092 - - - - 3,092
Deposits and other borrowings
518,458 69,841 129,864 10,056 50 728,269
Other financial liabilities
25,7591,8514,5931,049533,257
Derivative financial instruments:
Held for trading
23,158 - - - - 23,158
Held for hedging purposes (net settled)
(18) (198) (269) (381) 36 (830)
Held for hedging purposes (gross settled):
Cash outflow
13,556 20,755 39,009 92,784 44,267 210,371
Cash inflow
(11,622) (16,220) (38,699) (91,167) (41,207) (198,915)
Debt issues
5,609 12,192 47,472 105,035 18,327 188,635
Total financial liabilities excluding loan capital
577,992 88,221 181,970 117,376 21,478 987,037
Loan capital
62 332 889 9,650 42,891 53,824
Total undiscounted financial liabilities
578,054 88,553 182,859 127,026 64,369 1,040,861
Total contingent liabilities and commitments
Financial guarantees, letters of credit and other credit substitutes
15,220 - - - - 15,220
Performance-related contingencies5,393 - - - - 5,393
Remaining commitments to extend credit191,498----191,498
Total undiscounted contingent liabilities and commitments
212,111 - - - - 212,111
FINANCIAL
REPORTEXHIBITS INDEX
STRATEGIC
REVIEW
PERFORMANCE
REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION79
Note 21. Risk management, funding and liquidity risk and market risk (Continued)
Parent Entity Over 1 month Over 3 months Over 1 year to
$mUp to 1 monthto 3 monthsto 1 year5 yearsOver 5 yearsTotal
2025
Financial liabilities
Collateral received
2,371 - - - - 2,371
Deposits and other borrowings
519,315 66,463 108,989 7,295 62 702,124
Other financial liabilities28,9101,8044,7038-35,425
Derivative financial instruments:
Held for trading
15,915 - - - - 15,915
Held for hedging purposes (net settled)
18 (39) (46) 143 353 429
Held for hedging purposes (gross settled):
Cash outflow
15,370 19,254 56,774 103,183 40,431 235,012
Cash inflow
(14,750) (17,974) (56,043) (100,546) (38,150) (227,463)
Debt issues
2,425 8,961 50,517 79,968 15,381 157,252
Due to subsidiaries
16,022 572 2,957 10,337 41,308 71,196
Total financial liabilities excluding loan capital
585,596 79,041 167,851 100,388 59,385 992,261
Loan capital
56 439 1,382 7,633 47,295 56,805
Total undiscounted financial liabilities
585,652 79,480 169,233 108,021 106,680 1,049,066
Total contingent liabilities and commitments
Financial guarantees, letters of credit and other credit substitutes
15,254 - - - - 15,254
Performance-related contingencies
6,484 - - - - 6,484
Remaining commitments to extend credit173,966----173,966
Total undiscounted contingent liabilities and commitments
195,704 - - - - 195,704
2024
Financial liabilities
Collateral received
2,949 - - - - 2,949
Deposits and other borrowings
472,586 59,872 109,208 7,816 50 649,532
Other financial liabilities25,2171,8512,8298-29,905
Derivative financial instruments:
Held for trading
23,158 - - - - 23,158
Held for hedging purposes (net settled)
(23) (187) (287) (322) 43 (776)
Held for hedging purposes (gross settled):
Cash outflow
13,566 20,885 39,202 98,148 44,600 216,401
Cash inflow
(11,622) (16,288) (38,924) (96,397) (41,544) (204,775)
Debt issues5,245 11,104 42,214 85,150 16,935 160,648
Due to subsidiaries
12,301 651 3,114 13,039 55,010 84,115
Total financial liabilities excluding loan capital
543,377 77,888 157,356 107,442 75,094 961,157
Loan capital
62 315 836 9,375 41,551 52,139
Total undiscounted financial liabilities
543,439 78,203 158,192 116,817 116,645 1,013,296
Total contingent liabilities and commitments
Financial guarantees, letters of credit and other credit substitutes
14,642 - - - - 14,642
Performance-related contingencies5,369 - - - - 5,369
Remaining commitments to extend credit
167,851----167,851
Total undiscounted contingent liabilities and commitments
187,862 - - - - 187,862
80 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 21. Risk management, funding and liquidity risk and market risk (Continued)
21.2.5. Expected maturity
The financial liability balances in the following tables will not agree to the contractual maturity tables (Note 21.2.4) due to the impact of discounting and the exclusion of interest accruals
beyond the reporting period. Assets and liabilities that have no specific maturity (such as equity securities) are generally included in the ‘Greater than 12 months’ column. Loans and deposits
are presented in the following table on a contractual basis, however the behavioural life may differ. Loans may be repaid earlier than their contractual maturity and Westpac would expect a
large proportion of deposit balances to be retained.
20252024
Consolidated Due withinGreater thanDue within Greater than
$m
12 months 12 months Total 12 months 12 months Total
Assets
Cash and balances with central banks
50,430-50,43065,667-65,667
Collateral paid
4,590-4,5906,269-6,269
Trading securities and financial assets measured at FVIS
43,74212,09955,84133,09016,13849,228
Derivative financial instruments15,9832,48118,46421,9782,13124,109
Investment securities17,168100,373117,54120,93082,955103,885
Loans (net of provisions)
100,242751,611851,85397,010709,757806,767
Other financial assets
10,66310310,7665,3551015,456
All other assets
1,01614,85515,87192115,24216,163
Total assets
243,834881,5221,125,356251,220826,3241,077,544
Liabilities
Collateral received
3,187-3,1873,078-3,078
Deposits and other borrowings
761,0639,394770,457711,0769,413720,489
Other financial liabilities
41,481741,48837,0241,05338,077
Derivative financial instruments
17,1373,49320,63025,3905,58430,974
Debt issues
66,785104,619171,40459,911109,373169,284
All other liabilities
2,4092,7185,1272,7322,9755,707
Total liabilities excluding loan capital
892,062120,2311,012,293839,211128,398967,609
Loan capital
3,41236,55839,9703,82934,05437,883
Total liabilities
895,474156,7891,052,263843,040162,4521,005,492
Net assets/(liabilities)
(651,640)724,73373,093(591,820)663,87272,052
FINANCIAL
REPORTEXHIBITS INDEX
STRATEGIC
REVIEW
PERFORMANCE
REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION81
Note 21. Risk management, funding and liquidity risk and market risk (Continued)
20252024
Parent Entity Due withinGreater thanDue within Greater than
$m
12 months 12 months Total 12 months 12 months Total
Assets
Cash and balances with central banks
44,782-44,78258,400-58,400
Collateral paid
4,562-4,5626,199-6,199
Trading securities and financial assets measured at FVIS
42,28411,34253,62631,73615,27847,014
Derivative financial instruments15,9791,55517,53421,9761,92623,902
Investment securities15,69993,401109,10018,74876,87595,623
Loans (net of provisions)
79,253675,859755,11276,274633,769710,043
Other financial assets
10,02310310,1264,8501014,951
Due from subsidiaries
12,28636,54448,8308,73543,60452,339
Investment in subsidiaries-8,5678,567-9,0959,095
All other assets
82112,66113,48271912,94913,668
Total assets
225,689840,0321,065,721227,637793,5971,021,234
Liabilities
Collateral received
2,364-2,3642,935-2,935
Deposits and other borrowings
689,7226,938696,660637,0887,393644,481
Other financial liabilities
38,928738,93533,8833433,917
Derivative financial instruments
17,1303,36220,49225,3925,40330,795
Debt issues
58,59084,032142,62253,98289,900143,882
Due to subsidiaries
17,67834,88852,56613,49242,23055,722
All other liabilities
2,1052,1864,2912,3572,3874,744
Total liabilities excluding loan capital
826,517131,413957,930769,129147,347916,476
Loan capital
3,41235,47938,8913,82932,94136,770
Total liabilities
829,929166,892996,821772,958180,288953,246
Net assets/(liabilities)
(604,240)673,14068,900(545,321)613,30967,988
21.3. Market risk
21.3.1. Value-at-Risk
Westpac uses VaR as one of the mechanisms for controlling both traded and non-traded market risk.
VaR is a statistical estimate of the potential loss in earnings over a specified period of time and to a given level of confidence based on historical market movements. The confidence level
indicates the probability that the loss will not exceed the VaR estimate on any given day.
VaR seeks to take account of all material market variables that may cause a change in the value of the portfolio, including interest rates, FX rates, price changes, volatility and the correlations
between these variables. Daily monitoring of current exposures and VaR and structural concentration limit utilisation is conducted independently by the Market Risk unit. These limits are
supplemented by escalation triggers for material profit or loss, and stress testing of risks beyond the 99% confidence interval.
The key parameters of VaR are:Traded market riskNon-traded market risk
Holding period
1 day 1 year
Confidence level
99%99%
Period of historical data used
1 year6 years
82 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 21. Risk management, funding and liquidity risk and market risk (Continued)
21.3.2. Traded market risk
The following table depicts the aggregate VaR, by risk type:
Consolidated and Parent Entity202520242023
$m
High Low Average High Low Average High Low Average
Interest rate risk
16.7 4.3 8.6 21.2 5.4 10.8 21.8 7.2 11.0
FX risk
4.4 1.1 2.1 7.3 0.9 2.4 14.2 1.1 4.3
Equity risk
0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.0
Commodity risk
1.2 0.3 0.5 1.7 0.6 1.2 3.5 0.9 2.0
Other market risks
a
7.4 2.3 4.3 10.1 1.9 5.4 9.4 3.2 6.0
Diversification effect
n/a n/a (5.8) n/a n/a (6.9) n/a n/a (8.1)
Net market risk
17.9 6.6 9.7 23.4 6.8 12.9 31.8 8.8 15.2
a. Includes prepayment risk and credit spread risk (exposure to movements in generic credit rating bands).
21.3.3. Non-traded market risk
Non-traded market risk includes Interest Rate Risk in the Banking Book (IRRBB) – the risk to net interest income or the economic value on banking book items as a result of interest rate
changes.
Net interest income (NII) sensitivity is monitored using the Net interest income-at-Risk (NaR) model. The NaR model combines the underlying balance sheet data with assumptions about
runoffs, new business, and expected repricing behaviour. This simulates a series of potential NII outcomes, over a one year time horizon subject to 100 basis point shift up and down from the
current market interest rates in Australia and New Zealand.
Net interest income-at-Risk
The following table depicts potential NII outcomes assuming a worst case outcome between a 100 basis point rate shock up or down with a 12 month time horizon (expressed as a percentage
of reported NII):
20252024
MaximumMinimumAverageMaximumMinimumAverage
% (increase)/decrease in NII
As at exposure exposure exposure
As at exposure exposure exposure
Consolidated
1.05 1.63 0.57 1.23
1.84 1.84 0.97 1.42
Parent Entity0.46 1.21 0.16 0.80
1.40 1.43 0.59 1.03
Value at Risk - IRRBB
The table below depicts internal VaR for IRRBB
1
:
20252024
$m
As at High Low Average As at High Low Average
Consolidated
96.2 101.7 67.5 85.7 77.7 80.6 37.5 50.0
As at 30 September 2025 the Value at Risk – IRRBB for the Parent Entity was $104 million (2024: $77 million).
Risk mitigation
IRRBB stems from the ordinary course of banking activities, including structural interest rate risk (the mismatch between the duration of assets and liabilities) and capital management.
Westpac hedges its exposure to such interest rate risk using derivatives. Further details on Westpac’s hedge accounting are discussed in Note 20.
The same controls used to monitor traded market risk allow management to monitor and manage IRRBB.
Structural FX risk
Structural FX risk results from the generation of foreign currency denominated earnings and from Westpac’s capital deployed in offshore branches and subsidiaries, where it is denominated in
currencies other than Australian dollars. As exchange rates move, the Australian dollar equivalent of offshore earnings and capital is subject to change that could introduce significant variability
to the Bank’s reported financial results and capital ratios.
Note 20 includes details on the net investment hedges related to structural FX risk and economic hedges of New Zealand future earnings.
1. Based on a 1 day holding period and 1 year of historical data to allow comparison to the traded market risk results, noting IRRBB is managed to a longer holding period.
FINANCIAL
REPORTEXHIBITS INDEX
STRATEGIC
REVIEW
PERFORMANCE
REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION83
Note 22. Fair values of financial assets and financial liabilities
Accounting policy
The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date.
On initial recognition, the transaction price generally represents the fair value of the financial instrument unless there is observable information from an active market to the contrary. Where
unobservable information is used, the difference between the transaction price and the fair value (day one profit or loss) is recognised in the income statement over the life of the instrument
or when the inputs become observable.
Critical accounting assumptions and estimates
The majority of valuation models used by Westpac employ only observable market data as inputs. However, for certain financial instruments data may be employed which is not readily
observable in current markets.
The availability of observable inputs is influenced by factors such as:
●Product type;
●Depth of market activity;
●Maturity of market models; and
●Complexity of the transaction.
Where unobservable market data is used, more judgement is required to determine fair value. The significance of these judgements depends on the significance of the unobservable input to
the overall valuation. Unobservable inputs are generally derived from other relevant market data and adjusted against:
●Standard industry practice;
●Economic models; and
●Observed transaction prices.
In order to determine a reliable fair value for a financial instrument, management may apply adjustments to the techniques previously described. These adjustments reflect Westpac’s
assessment of factors that market participants would consider in setting the fair value.
These adjustments incorporate bid/offer spreads, credit valuation adjustments (CVA) and funding valuation adjustments (FVA).
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.
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:
84 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 22. Fair values of financial assets and financial liabilities (Continued)
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 valuations 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
FX productsDerivativesFX spot and futures contracts
Equity productsDerivatives
Trading securities and financial
assets measured at FVIS
Other financial liabilities
Listed equities and equity indices
All these instruments are traded in liquid, active markets where prices are readily observable.
No modelling or assumptions are used in the valuation.
Debt instrumentsTrading securities and financial
assets measured at FVIS
Investment securities
Other financial liabilities
Australian government and semi-
government bonds, New Zealand
government bonds, US Treasury Securities
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 swapsValued 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.
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.
FINANCIAL
REPORTEXHIBITS INDEX
STRATEGIC
REVIEW
PERFORMANCE
REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION85
Note 22. Fair values of financial assets and financial liabilities (Continued)
Instrument
Balance sheet category Includes
Valuation
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 instrumentsTrading 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.
86 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 22. Fair values of financial assets and financial liabilities (Continued)
The following tables summarise the attribution of financial instruments measured at fair value to the fair value hierarchy.
20252024
$m
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Consolidated
Financial assets measured at fair value on a recurring basis
Trading securities and financial assets measured at FVIS
17,43138,408255,84115,52233,700649,228
Derivative financial instruments
16 18,442 6 18,464 13 24,089 7 24,109
Investment securities77,04439,049475116,56814,11788,155447102,719
Loans
- 51 15 66 - 210 15 225
Total financial assets measured at fair value on a recurring basis
94,491 95,950 498 190,939 29,652 146,154 475 176,281
Financial liabilities measured at fair value on a recurring basis
Deposits and other borrowings
a
- 47,514 - 47,514 - 46,878 - 46,878
Other financial liabilities
b
3,74014,143 - 17,883 89118,428 - 19,319
Derivative financial instruments
7 20,619 4 20,630 14 30,955 5 30,974
Debt issues
c
- 4,478 - 4,478 - 5,385 - 5,385
Total financial liabilities measured at fair value on a recurring basis
3,747 86,754 4 90,505 905 101,646 5 102,556
Parent Entity
Financial assets measured at fair value on a recurring basis
Trading securities and financial assets measured at FVIS17,19636,428253,62615,09131,918547,014
Derivative financial instruments
16 17,512 6 17,534 13 23,883 6 23,902
Investment securities73,58935,291220109,10011,16684,18220695,554
Loans
- 51 - 51 - 210 1 211
Due from subsidiaries-806-806-1,044-1,044
Total financial assets measured at fair value on a recurring basis
90,801 90,088 228 181,117 26,270 141,237 218 167,725
Financial liabilities measured at fair value on a recurring basis
Deposits and other borrowings
a
- 45,920 - 45,920 - 45,167 - 45,167
Other financial liabilities
b
3,740 13,659 - 17,399 891 18,428 - 19,319
Derivative financial instruments
7 20,481 4 20,492 14 30,776 5 30,795
Debt issues
c
- 2,064 - 2,064 - 1,961 - 1,961
Due to subsidiaries-1,190-1,190-344-344
Total financial liabilities measured at fair value on a recurring basis
3,747 83,314 4 87,065 905 96,676 5 97,586
a. The contractual outstanding amount payable at maturity was $47,838 million (2024: $47,328 million) for the Group and $46,239 million (2024: $45,603 million) for the Parent Entity.
b. The contractual outstanding amount payable at maturity for the Group is $20,032 million (2024: $19,320 million) and $19,548 million for the Parent Entity (2024: $19,320 million).
c. The contractual outstanding payable at maturity was $4,877 million (2024: $5,678 million) for the Group and $2,446 million (2024: $2,226 million) for the Parent Entity. The cumulative change in the fair value of debt issues
attributable to changes in Westpac’s own credit risk was $37 million decrease (2024: $58 million decrease) for the Group and Parent Entity.
$48,184 million of assets and $274 million of liabilities for the Group and Parent Entity have been transferred from Level 2 to Level 1 in 2025. This followed a detailed review of the levelling of
certain US Treasury securities and certain Australian semi-government bonds using additional granular data sourced from independent pricing services, which confirmed that observable prices
in an active market are available for the securities transferred. Transfers in and transfers out are reported using the end of period fair values.
FINANCIAL
REPORTEXHIBITS INDEX
STRATEGIC
REVIEW
PERFORMANCE
REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION87
Note 22. Fair values of financial assets and financial liabilities (Continued)
Reconciliation of non-market observables
The following tables summarise the changes in financial instruments measured at fair value derived from non-market observable valuation techniques (Level 3).
Trading
securities and
financial assets
measuredInvestmentDerivative andTotal LevelDerivativeTotal Level
$mat FVISsecuritiesother assets3 assetsliabilities3 liabilities
Consolidated
Balance as at 30 September 202327441415091515
Gains/(losses) on assets/(gains)/losses on liabilities recognised in:
Income statements
(1)-(28)(29)22
OCI-(11)-(11)--
Acquisitions and issues
921231261308308
Disposals and settlements
(11)(5)(220)(236)(311)(311)
Transfer into or out of non-market observables(18)-(2)(20)(9)(9)
Foreign currency translation impacts
-1-1--
Balance as at 30 September 2024
64472247555
Gains/(losses) on assets/(gains)/losses on liabilities recognised in:
Income statements--1177
OCI-25-25--
Acquisitions and issues814131414
Disposals and settlements(12)(1)(4)(17)(3)(3)
Transfer into or out of non-market observables--(1)(1)(19)(19)
Foreign currency translation impacts-3(1)2--
Balance as at 30 September 202524752149844
Unrealised gains/(losses) recognised in the income statements for financial instruments held
as at:
30 September 2024-- 5 51 1
30 September 2025
-- 1 1(2) (2)
88 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 22. Fair values of financial assets and financial liabilities (Continued)
Trading
securities and
financial assets
measuredInvestmentDerivative andTotal LevelDerivativeTotal Level
$mat FVISsecuritiesother assets3 assetsliabilities3 liabilities
Parent Entity
Balance as at 30 September 2023
26202292571515
Gains/(losses) on assets/(gains)/losses on liabilities recognised in:
Income statements(1)-(28)(29)22
OCI
-(13)-(13)--
Acquisitions and issues
916228253308308
Disposals and settlements
(11)-(220)(231)(311)(311)
Transfer into or out of non-market observables
(18)-(2)(20)(9)(9)
Foreign currency translation impacts-1-1--
Balance as at 30 September 2024
5206721855
Gains/(losses) on assets/(gains)/losses on liabilities recognised in:
Income statements--1177
OCI-10-10--
Acquisitions and issues812111414
Disposals and settlements(11)-(3)(14)(3)(3)
Transfer into or out of non-market observables--(1)(1)(19)(19)
Foreign currency translation impacts-3-3--
Balance as at 30 September 20252220622844
Unrealised gains/(losses) recognised in the income statements for financial instruments held
as at:
30 September 2024-- 5 5 1 1
30 September 2025
-- 1 1 (2) (2)
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 for both Westpac and the Parent Entity as at 30 September 2025 was $2 million (2024: $1 million).
Financial instruments not measured at fair value
For financial instruments not measured at fair value on a recurring basis, fair value has been derived as follows:
Instrument
Valuation
LoansWhere available, the fair value of loans is based on observable market transactions, otherwise fair value is estimated using discounted cash flow models. For variable rate loans, the discount rate
used is the current effective interest rate. The discount rate applied for fixed rate loans reflects the market rate for the maturity of the loan and the credit worthiness of the borrower.
Investment securitiesThe carrying value approximates the fair value. The balance principally relates to government securities from illiquid markets. Fair value is monitored by reference to recent issuances.
Deposits and other borrowingsFair values of deposit liabilities payable on demand (non-interest bearing, interest bearing and savings deposits) approximate their carrying value. Fair values for term deposits are estimated
using discounted cash flows, applying market rates offered for deposits of similar remaining maturities.
Debt issues and loan capitalFair values are calculated using a discounted cash flow model. The discount rates applied reflect the terms of the instruments, the timing of the estimated cash flows and are adjusted for any
changes in Westpac’s credit spreads.
All other financial assets and
liabilities
For all other financial assets and liabilities, the carrying value approximates the fair value. These items are either short-term in nature, re-price frequently or are of a high credit rating.
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ADDITIONAL
INFORMATION89
Note 22. Fair values of financial assets and financial liabilities (Continued)
The following tables summarise the estimated fair value and fair value hierarchy of financial instruments not measured at fair value.
Estimated fair value
ConsolidatedCarrying
$m
amount Level 1 Level 2 Level 3 Total
2025
Financial assets not measured at fair value
Cash and balances with central banks
50,430 50,430 - - 50,430
Collateral paid
4,590 4,590 - - 4,590
Investment securities
973 - 482 491 973
Loans
851,787 - - 852,108 852,108
Other financial assets
10,766 - 10,766 - 10,766
Total financial assets not measured at fair value
918,546 55,020 11,248 852,599 918,867
Financial liabilities not measured at fair value
Collateral received
3,187 3,187 - - 3,187
Deposits and other borrowings
722,943 - 720,311 3,360 723,671
Other financial liabilities
23,605 - 23,605 - 23,605
Debt issues
a
166,926 - 165,969 1,762 167,731
Loan capital
a
39,970 - 41,731 - 41,731
Total financial liabilities not measured at fair value
956,631 3,187 951,616 5,122 959,925
2024
Financial assets not measured at fair value
Cash and balances with central banks
65,667 65,667 - - 65,667
Collateral paid
6,269 6,269 - - 6,269
Investment securities1,166 - 452 714 1,166
Loans
806,542 - - 805,776 805,776
Other financial assets
5,456 - 5,456 - 5,456
Total financial assets not measured at fair value
885,100 71,936 5,908 806,490 884,334
Financial liabilities not measured at fair value
Collateral received
3,078 3,078 - - 3,078
Deposits and other borrowings
673,611 - 670,515 3,869 674,384
Other financial liabilities
18,758 - 18,758 - 18,758
Debt issues
a
163,899 - 162,750 1,755 164,505
Loan capital
a
37,883 - 39,390 - 39,390
Total financial liabilities not measured at fair value
897,229 3,078 891,413 5,624 900,115
a. The estimated fair values of debt issues and loan capital include the impact of changes in Westpac’s credit spreads since origination.
90 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 22. Fair values of financial assets and financial liabilities (Continued)
Estimated fair value
Parent EntityCarrying
$m
amount Level 1 Level 2 Level 3 Total
2025
Financial assets not measured at fair value
Cash and balances with central banks
44,782 44,782 - - 44,782
Collateral paid
4,562 4,562 - - 4,562
Loans755,061 - - 755,074 755,074
Due from subsidiaries
a
47,242 - 6,528 40,714 47,242
Other financial assets
10,126 - 10,126 - 10,126
Total financial assets not measured at fair value
861,773 49,344 16,654 795,788 861,786
Financial liabilities not measured at fair value
Collateral received2,364 2,364 - - 2,364
Deposits and other borrowings
650,740 - 649,873 1,522 651,395
Other financial liabilities
21,536 - 21,536 - 21,536
Debt issues
b
140,558 - 141,181 - 141,181
Due to subsidiaries
51,376 - 2,541 48,835 51,376
Loan capital
b
38,891 - 40,623 - 40,623
Total financial liabilities not measured at fair value
905,465 2,364 855,754 50,357 908,475
2024
Financial assets not measured at fair value
Cash and balances with central banks
58,400 58,400 - - 58,400
Collateral paid6,199 6,199 - - 6,199
Investment securities
69 - - 69 69
Loans
709,832 - - 709,048 709,048
Due from subsidiaries
a
50,517 - 4,683 45,834 50,517
Other financial assets
4,951 - 4,951 - 4,951
Total financial assets not measured at fair value
829,968 64,599 9,634 754,951 829,184
Financial liabilities not measured at fair value
Collateral received2,935 2,935 - - 2,935
Deposits and other borrowings
599,314 - 598,587 1,405 599,992
Other financial liabilities
14,598 - 14,598 - 14,598
Debt issues
b
141,921 - 142,427 - 142,427
Due to subsidiaries
55,378 - 3,505 51,873 55,378
Loan capital
b
36,770 - 38,240 - 38,240
Total financial liabilities not measured at fair value
850,916 2,935 797,357 53,278 853,570
a. Due from subsidiaries excluded $782 million (2024: $778 million) of long-term debt instruments with equity-like characteristics which are part of the total investment in subsidiaries.
b. The estimated fair values of debt issues and loan capital include the impact of changes in Westpac’s credit spreads since origination.
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Note 23. Offsetting financial assets and financial liabilities
Accounting policy
Financial assets and liabilities are presented net in the balance sheet when Westpac has a legally enforceable right to offset them in all circumstances and there is an intention to settle the
asset and liability on a net basis, or to realise the asset and settle the liability simultaneously. The gross assets and liabilities behind the net amounts reported in the balance sheet are
disclosed in the following tables.
Some of Westpac’s offsetting arrangements are not enforceable in all circumstances. The amounts in the tables below may not tie back to the balance sheet if there are balances which are not
subject to offsetting or enforceable netting arrangements. The amounts presented in this note do not represent the credit risk exposure of Westpac or Parent Entity. Refer to Note 11 for
information on credit risk management. The offsetting and collateral arrangements and other credit risk mitigation strategies used by Westpac are further explained in the ‘Management of risk
mitigation’ section of Note 11.5.
Amounts subject to enforceable netting arrangements
Effects of offsettingAmounts subject to enforceable
in the balance sheetnetting arrangements but not offset
Net amountsOther
reported inrecognisedFinancial
ConsolidatedGrossAmountsthe balancefinancialCashinstrument
$m
amounts offset sheet instruments collateral
a,b
collateral Net amount
2025
Assets
Collateral paid
c
5,014(4,994)20---20
Derivative financial instruments
d
67,954(50,966)16,988(11,320)(3,068)(679)1,921
Reverse repurchase agreements
e
30,453(2,149)28,304-(120)(28,184)-
Loans
f
26,809(26,784)25---25
Total assets
130,230(84,893)45,337(11,320)(3,188)(28,863)1,966
Liabilities
Collateral received2,684(2,603)81---81
Derivative financial instruments
d
72,525(53,358)19,167(11,320)(4,256)(2,535)1,056
Repurchase agreements
g
16,813(2,149)14,664-(17)(14,647)-
Deposits and other borrowings
f
52,146(26,784)25,362---25,362
Total liabilities
144,168(84,894)59,274(11,320)(4,273)(17,182)26,499
2024
Assets
Collateral paid
c
4,532(4,474)58---58
Derivative financial instruments
d
73,247(50,474)22,773(17,071)(3,065)(112)2,525
Reverse repurchase agreements
e
19,898(1,908)17,990-(14)(17,950)26
Loans
f
23,218(23,147)71---71
Total assets
120,895(80,003)40,892(17,071)(3,079)(18,062)2,680
Liabilities
Collateral received2,562(2,559)3---3
Derivative financial instruments
d
80,776(52,389)28,387(17,071)(5,870)(1,721)3,725
Repurchase agreements
g
20,756(1,908)18,848-(57)(18,791)-
Deposits and other borrowings
f
49,007(23,147)25,860---25,860
Total liabilities
153,101(80,003)73,098(17,071)(5,927)(20,512)29,588
a. $3,187 million (2024: $3,078 million) of cash collateral on derivative financial assets and reverse repurchase agreements, is disclosed as collateral received in the balance sheet. The remainder is included in term deposits
recognised in deposits and other borrowings within Note 12.
b. $4,273 million (2024: $5,927 million) of cash collateral, subject to enforceable netting arrangements with derivative financial liabilities and repurchase agreements, forms part of collateral paid as disclosed in the balance sheet.
The remainder of collateral paid, as disclosed in the balance sheet, consists of $317 million (2024: $342 million) in futures margin that does not form part of this column.
c. Gross amounts consist of variation margin held directly with central clearing counterparties. Where variation margin is receivable it is reported as part of collateral paid. Where variation margin is payable it is reported as part of
collateral received. Amounts offset relate to variation margin.
d. $1,476 million (2024: $1,336 million) of derivative financial assets and $1,463 million (2024: $2,587 million) of derivative financial liabilities are not subject to enforceable netting arrangements.
e. Reverse repurchase agreements form part of trading securities and financial assets measured at FVIS in Note 16.
f. Gross amounts consist of debt and interest set-off accounts which meet the requirements for offsetting as described above. These accounts form part of business loans in Note 9 and part of deposits and other borrowings in Note
12.
g. Repurchase agreements form part of other financial liabilities in Note 19.
92 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 23.Offsetting financial assets and financial liabilities (Continued)
Amounts subject to enforceable netting arrangements
Effects of offsettingAmounts subject to enforceable
in the balance sheetnetting arrangements but not offset
Net amountsOther
reported inrecognisedFinancial
Parent EntityGrossAmountsthe balancefinancialCashinstrument
$m
amounts offset sheet instruments collateral
a,b
collateral Net amount
2025
Assets
Collateral paid
c
5,014(4,994)20---20
Derivative financial instruments
d
67,025(50,966)16,059(11,199)(2,245)(452)2,163
Reverse repurchase agreements
e
30,453(2,149)28,304-(120)(28,184)-
Loans
f
26,809(26,784)25---25
Total assets
129,301(84,893)44,408(11,199)(2,365)(28,636)2,208
Liabilities
Collateral received2,684(2,603)81---81
Derivative financial instruments
d
72,391(53,358)19,033(11,199)(4,228)(2,307)1,299
Repurchase agreements
g
15,332(2,149)13,183-(17)(13,166)-
Deposits and other borrowings
f
52,146(26,784)25,362---25,362
Total liabilities
142,553(84,894)57,659(11,199)(4,245)(15,473)26,742
2024
Assets
Collateral paid
c
4,532(4,474)58---58
Derivative financial instruments
d
73,041(50,474)22,567(16,971)(2,922)(112)2,562
Reverse repurchase agreements
e
19,898(1,908)17,990-(14)(17,950)26
Loans
f
23,218(23,147)71---71
Total assets
120,689(80,003)40,686(16,971)(2,936)(18,062)2,717
Liabilities
Collateral received2,562(2,559)3---3
Derivative financial instruments
d
80,595(52,389)28,206(16,971)(5,800)(1,721)3,714
Repurchase agreements
g
17,979(1,908)16,071-(57)(16,014)-
Deposits and other borrowings
f
49,007(23,147)25,860---25,860
Total liabilities
150,143(80,003)70,140(16,971)(5,857)(17,735)29,577
a. $2,364 million (2024: $2,935 million) of cash collateral on derivative financial assets and reverse repurchase agreements, is disclosed as collateral received in the balance sheet. The remainder is included in term deposits
recognised in deposits and other borrowings within Note 12.
b. $4,245 million (2024: $5,857 million) of cash collateral, subject to enforceable netting arrangements with derivative financial liabilities and repurchase agreements, forms part of collateral paid as disclosed in the balance sheet.
The remainder of collateral paid, as disclosed in the balance sheet, consists of $317 million (2024: $342 million) in futures margin that does not form part of this column.
c. Gross amounts consist of variation margin held directly with central clearing counterparties. Where variation margin is receivable it is reported as part of collateral paid. Where variation margin is payable it is reported as part of
collateral received. Amounts offset relate to variation margin.
d. $1,475 million (2024: $1,335 million) of derivative financial assets and $1,459 million (2024: $2,589 million) of derivative financial liabilities are not subject to enforceable netting arrangements.
e. Reverse repurchase agreements form part of trading securities and financial assets measured at FVIS in Note 16.
f. Gross amounts consist of debt and interest set-off accounts which meet the requirements for offsetting as described above. These accounts form part of business loans in Note 9 and part of deposits and other borrowings in Note
12.
g. Repurchase agreements form part of other financial liabilities in Note 19.
Other recognised financial instruments
These financial assets and liabilities are subject to master netting agreements which are not enforceable in all circumstances, so they are recognised gross in the balance sheet. The offsetting
rights of the master netting arrangements can only be enforced if a predetermined event occurs in the future, such as a counterparty defaulting.
Cash collateral and financial instrument collateral
These amounts are received or pledged under master netting arrangements against the gross amounts of assets and liabilities. Financial instrument collateral typically comprises securities
which can be readily liquidated in the event of counterparty default. The offsetting rights of the master netting arrangement can only be enforced if a predetermined event occurs in the future,
such as a counterparty defaulting.
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INTANGIBLE ASSETS, PROVISIONS, COMMITMENTS AND CONTINGENCIES
Note 24. Intangible assets
Accounting policy
Indefinite life intangible assets
Goodwill
Goodwill acquired in a business combination is initially measured at cost, generally being the excess of:
(i) The consideration paid; over
(ii) The net fair value of the identifiable assets, liabilities and contingent liabilities acquired.
Subsequently, goodwill is not amortised but rather tested for impairment. Impairment is tested at least annually or whenever there is an indication of impairment. An impairment charge is recognised
when a cash generating unit’s (CGU) carrying value exceeds its recoverable amount. Recoverable amount means the higher of the CGU’s fair value less costs to sell and its value-in-use.
Westpac’s CGUs represent the smallest identifiable group of assets that generate cash inflows that are largely independent of the cash inflows from other assets or groups of assets. They reflect the
level at which Westpac monitors and manages its operations.
Brand names
Brand names acquired in a business combination, including St.George, BT and BankSA, are initially recognised at cost. As these assets have been assessed as having indefinite useful lives they are
not amortised but tested for impairment at least annually or whenever there is an indication of impairment. The useful life of each brand name intangible asset is also reviewed each period to determine
whether events and circumstances continue to support the indefinite useful life assessment.
Finite life intangible assets
Finite life intangibles, such as computer software, are recognised initially at cost and subsequently at amortised cost less any impairment.
IntangibleUseful lifeDepreciation method
GoodwillIndefiniteNot applicable
Brand namesIndefiniteNot applicable
Computer software3 to 10 yearsStraight-line or the diminishing balance method (using the Sum of the Years Digits)
94 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 24. Intangible assets (Continued)
ConsolidatedParent Entity
$m
2025 2024 2025 2024
Goodwill
Balance as at beginning of year
7,433 7,419 6,253 6,253
Additions
a
-21--
Other adjustments
(20) (7) - -
Balance as at end of year
7,413 7,433 6,253 6,253
Computer software
Balance as at beginning of year
2,675 2,797 2,242 2,371
Additions
776 792 674 673
Impairment
(23) (19) (23) (19)
Amortisation
(995) (889) (864) (783)
Other adjustments
(19) (6) - -
Balance as at end of year
2,414 2,675 2,029 2,242
Cost
8,705 8,856 7,303 7,493
Accumulated amortisation and impairment
(6,291) (6,181) (5,274) (5,251)
Carrying amount
2,414 2,675 2,029 2,242
Brand names638638636636
Total intangible assets10,46510,7468,9189,131
Goodwill has been allocated to the following CGUs:
Consumer4,8294,8294,4844,484
Business & Wealth
b
2,1222,1221,7691,769
New Zealand462482--
Total goodwill7,4137,4336,2536,253
Brand names has been allocated to the following CGUs:
Consumer350350350350
Business & Wealth288288286286
Total brand names
638 638 636 636
a. Related to the acquisition of HealthPoint.
b. The Business and Wealth segment comprises individual CGUs (Business, Platforms, Margin Lending and HealthPoint) to which goodwill has been allocated. The carrying amount of goodwill for Business was $1,812m as at 30
September 2025 and 30 September 2024. The carrying amount of goodwill allocated to the remaining individual CGUs in this segment is not significant compared to total Group goodwill.
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INFORMATION95
Note 24. Intangible assets (Continued)
Impairment testing and results
Impairment testing is performed at least once a year, or whenever there is an indication of impairment, by comparing the recoverable amount of each CGU with the carrying amount. For assets
other than goodwill management also assess whether there is any indication that an impairment loss recognised in prior periods may no longer exist or may have decreased. If any such
indication exists, the recoverable amount of the asset is estimated. The primary test for recoverable amount is determined based on value-in-use which refers to the present value of expected
cash flows under its current use. Fair value less costs to sell is also considered for those CGUs where value-in-use is lower than carrying value. In the current year, this was not required to be
considered.
Significant assumptions used in recoverable amount calculations
The assumptions made for the impairment testing of indefinite life of intangibles for each relevant significant CGU are provided in the following table and are based on past experience and
management’s expectations for the future. In the current year and given the present economic environment, Westpac has reassessed these assumptions and revised them where necessary in
order to provide a reasonable estimate of the value-in-use of the CGUs and Group.
Discount rate Cash flows
Post-tax rate/Pre-tax rateForecast period/terminal growth rate
2025 2024 2025 2024
Australian CGUs
a
9% / 11.8%-12.8%9% / 11.7%-11.9%5 years / 2%5 years / 2%
New Zealand
9% / 11.4%9% / 11.4%-11.7%5 years / 2%5 years / 2%
a. Australian CGUs comprise Consumer and the CGUs within Business & Wealth.
Westpac discounts the projected cash flows by its adjusted pre-tax equity rate.
The cashflows used are based on approved forecasts. These forecasts utilise information about current and future economic conditions, observable historical information and management
expectations of future business performance. The terminal growth rate represents the growth rate applied to extrapolate cash flows beyond the forecast period and reflects the lower end of the
RBA’s target long-term inflation rate band. For all CGUs tested, the recoverability of goodwill is not reliant on any one particular assumption. There are no reasonably possible changes in
assumptions for any significant CGU that would result in an indication of impairment or have a material impact on Westpac’s reported results.
96 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 25. Provisions, contingent liabilities, contingent assets and credit commitments
Accounting policy
Provisions
Provisions are recognised for present obligations arising from past events where a payment (or other economic transfer) is likely to be necessary to settle the obligation and can be reliably
estimated.
Employee benefits – long service leave provision
Long service leave is granted to certain employees in Australia and New Zealand. The provision is calculated based on the expected payments. When payments are expected to be more
than one year in the future, the provision is discounted to present value using assumptions for expected employee service, utilisation and average salary increases.
Provisions carried for long service leave are supported by an independent actuarial report.
Employee benefits – annual leave and other employee benefits provision
The provision for annual leave and other employee benefits (including wages and salaries, inclusive of non-monetary benefits, and any associated on-costs (e.g. payroll tax)) is calculated
based on expected payments.
Provision for ECL on credit commitments
Westpac is committed to provide facilities and guarantees as explained below. The provision for ECL is calculated using the methodology described in Note 10.
Compliance, Regulation and Remediation provisions
The compliance, regulation and remediation provisions relate to matters of potential misconduct in providing services to customers identified both as a result of regulatory action and internal
reviews. An assessment of the likely cost of these matters to Westpac (including applicable customer refunds) is made on a case-by-case basis and specific provisions are made where
appropriate.
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 in the balance sheet but are disclosed unless the outflow of economic resources is remote.
Undrawn credit commitments
Westpac enters into various arrangements with customers which are only recognised in the balance sheet when called upon. These arrangements include commitments to extend credit, bill
endorsements, financial guarantees, standby letters of credit and underwriting facilities.
Contingent assets
Contingent assets are possible assets whose existence will be confirmed only by uncertain future events. Contingent assets are not recognised in the balance sheet but are disclosed if an
inflow of economic benefits is probable.
Critical accounting assumptions and estimates
The financial reporting of provisions for litigation and non-lending losses and for compliance, regulation and remediation matters involves a significant degree of judgement in relation to
identifying whether a present obligation exists and also in estimating the probability, timing, nature and quantum of the outflows that may arise from past events. These judgements are
made based on the specific facts and circumstances relating to individual events.
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Note 25. Provisions, contingent liabilities, contingent assets and credit commitments (Continued)
Provisions
Litigation,
Annual leaveProvision for non-lending
and otherimpairmentLeaseRestructuringlosses and
Long serviceemployeeon creditrestorationand otherremediation
$mleavebenefitscommitmentsobligationsprovisionsprovisionsTotal
Consolidated
Balance as at 30 September 2024
477 899 516 163 210240 2,505
Additions
90 1,200 49 6 369189 1,903
Utilisation
(56) (1,167) - (8) (225)(90) (1,546)
Reversal of unutilised provisions(17) (2) (96) (2) (71)(62) (250)
Balance as at 30 September 2025
494 930 469 159 283277 2,612
Parent Entity
Balance as at 30 September 2024
465 824 464 141 198179 2,271
Additions
89 1,161 49 4 336142 1,781
Utilisation
(55) (1,128) - (6) (203)(70) (1,462)
Reversal of unutilised provisions
(17)(2)(83)(2)(66)(44)(214)
Balance as at 30 September 2025
482 855 430 137 265207 2,376
Legislative liabilities
Westpac had the following assessed liabilities as at 30 September 2025:
●$26 million (2024: $22 million) based on an actuarial assessment as a self-insurer under the Workers’ Compensation Act 1987 and the Workplace Injury Management and Workers’
Compensation Act 1998 (New South Wales);
●$7 million (2024: $7 million) based on actuarial assessment as a self-insurer under the Accident Compensation Act 1985 (Victoria);
●$7 million (2024: $7 million) based on actuarial assessment as a self-insurer under the Workers’ Rehabilitation and Compensation Act 1986 (South Australia);
●$2 million (2024: $2 million) based on an actuarial assessment as a self-insurer under the Workers’ Compensation and Rehabilitation Act 2003 (Queensland);
●Nil (2024: nil) based on an actuarial assessment as a self-insurer under the Workers’ Compensation Act 1951 (Australian Capital Territory);
●Nil (2024: nil) based on an actuarial assessment as a self-insurer under the Return to Work Act 1986 (Northern Territory);
●$1 million (2024: $1 million) based on an actuarial assessment as a self-insurer under the Workers’ Compensation and Injury Management Act 1981 (Western Australia); and
●$2 million (2024: $2 million) based on an actuarial assessment as a self-insurer under the Workers’ Rehabilitation and Compensation Act 1988 (Tasmania).
Appropriate provision has been made for these liabilities in the provision for annual leave and other employee benefits above.
98 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 25. Provisions, contingent liabilities, contingent assets and credit commitments (Continued)
Provisions
Litigation, non-lending losses and remediation provisions
Provisions for the financial year 2025 include 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 30 September 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 Court’s judgment is reserved following the 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. Westpac and SGF settled the class action on 14 March 2025 without admission of liability. On 27 August 2025, the Court approved the settlement
amount of $130 million.
●Agreed civil penalty proceedings between ASIC and RAMS Financial Group Pty Limited (RFG) relating to RFG’s oversight of conduct of RAMS third-party franchisees and franchisee
employees who were authorised credit representatives of RFG between 3 June 2019 to 30 April 2023. On 24 October 2025, the Court delivered its judgement and imposed a penalty of
$20 million plus costs.
Where matters have not been resolved, 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 staff 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.
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ADDITIONAL
INFORMATION99
Note 25. Provisions, contingent liabilities, contingent assets and credit commitments (Continued)
Contingent liabilities
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, Reserve Bank of Fiji, 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.
These currently include:
●An 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 the AML/CTF Program and associated processes and procedures, compliance with industry codes, monitoring of
certain consumer transactions, consumer lending conduct, responsible lending and compliance with lending obligations, consumer credit contracts, banking products and services, and
hardship processes.
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 30 June 2014 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 Court has made orders for a hearing to
commence on 5 April 2027 with an estimated duration of six weeks; and
●Disputes have been raised by franchisees who were exited by RFG, including the commencement of a class action in May 2024. The class action and an additional proceeding
commenced by an exited franchisee have been listed for hearing to commence on 31 August 2026.
100 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 25. 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 us, our customers, employees, other stakeholders
and our reputation. These internal reviews continue to identify issues, in respect of which, we are taking, or will take, action so that Westpac, 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; responsible lending and compliance with lending obligations; hardship processes; sufficiency of training, policies, processes and procedures; AML/CTF Program
and associated processes and procedures; use of our products or services for an improper purpose; product disclosure; protection and destruction 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, individuals, 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
Westpac Banking Corporation, as the parent entity of Westpac, provides letters of comfort in respect of certain subsidiaries in the normal course of business. These recognise that Westpac
has a responsibility that those subsidiaries continue to meet their obligations.
Previously the parent entity also provided guarantees to certain wholly-owned subsidiaries which are Australian financial services or credit licensees to comply with legislative requirements. All
but two of these guarantees were capped at $20 million per year and two specific guarantees were capped at $2 million. In 2025, these guarantees have been either replaced by a professional
indemnity insurance policy or have been cancelled.
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ADDITIONAL
INFORMATION101
Note 25. Provisions, contingent liabilities, contingent assets and credit commitments (Continued)
Contingent assets
The credit commitments shown in the following table also constitute contingent assets. These commitments would be classified as loans in the balance sheet on the contingent event occurring.
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 2025 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.
ConsolidatedParent Entity
$m
2025 2024 2025 2024
Undrawn credit commitments
a
Financial guarantees, letters of credit and other credit substitutes
15,721 15,220 15,254 14,642
Performance-related contingencies
6,709 5,393 6,484 5,369
Remaining commitments to extend credit
b
198,739 191,498 173,966 167,851
Total undrawn credit commitments
221,169 212,111 195,704 187,862
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. Commitments to extend credit include all obligations on the part of the Group to provide credit facilities. As facilities may expire without being drawn upon, the notional amounts do not necessarily reflect future cash requirements.
In addition to the commitments disclosed above, $7.4 billion (2024: $6.0 billion) for the Group and $6.3 billion (2024: $5.1 billion) for the Parent Entity of credit exposures were offered and accepted but still revocable. These
represent part of Westpac Group’s maximum credit exposure to credit risk.
102 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
CAPITAL AND DIVIDENDS
Note 26. Shareholders’ equity
Accounting policy
Share capital
Ordinary shares are recognised at the amount paid up per ordinary share, net of directly attributable issue costs. Treasury shares are shares in the Parent Entity, purchased by the Parent
Entity or other entities within Westpac. These shares are adjusted against share capital as the net of the consideration paid to purchase the shares and, where applicable, any consideration
received from the subsequent sale or reissue of these shares.
Non-controlling interests
Non-controlling interests represent the share in the net assets of subsidiaries attributable to equity interests that are not owned directly or indirectly by the Parent Entity.
Reserves
Foreign currency translation reserve
Exchange differences arising on translation of Westpac’s foreign operations, and any offsetting gains or losses on hedging the net investment are reflected in the foreign currency translation
reserve. A cumulative credit balance in this reserve would not normally be regarded as being available for payment of dividends until such gains are realised and recognised in the income
statement on sale or disposal of the foreign operation.
Debt securities at FVOCI reserve
This reserve comprises the changes in fair value of debt securities measured at FVOCI (except for interest income, impairment charges and FX gains and losses which are recognised in the
income statement), net of any related hedge accounting adjustments and tax. These changes are transferred to the income statement when the asset is disposed.
Equity securities at FVOCI reserve
This reserve comprises the changes in fair value of equity securities measured at FVOCI, net of tax. These changes are not transferred to the income statement when the asset is disposed.
Cash flow hedge reserve
This comprises the fair value gains and losses associated with the effective portion of designated cash flow hedging instruments, net of tax.
Share-based payment reserve
This comprises the fair value of equity-settled share-based payments recognised as an expense.
Other reserves
Other reserves for the Parent Entity relate to certain historic internal group restructurings performed at fair value. The reserve is eliminated on consolidation.
Other reserves for Westpac consist of transactions relating to changes in the Parent Entity’s ownership of a subsidiary that do not result in a loss of control.
The amount recorded in other reserves reflects the difference between the amount by which NCI are adjusted and the fair value of any consideration paid or received.
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ADDITIONAL
INFORMATION103
Note 26. Shareholders’ equity (Continued)
ConsolidatedParent Entity
$m
2025 2024 2025 2024
Share capital
Ordinary share capital, fully paid37,26337,95837,26337,958
Treasury shares
a
(845)(758)(902)(816)
Total share capital36,41837,20036,36137,142
Non-controlling interest
Perpetual Preference Shares324339--
Other38--
Total non-controlling interests327347--
a. 2025: 5,789,312 unvested RSP and EIP treasury shares held (2024: 6,173,874).
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
Consolidated and Parent Entity
(number)
2025 2024
Opening balance
3,441,411,361 3,509,076,960
Share buyback
a
(21,058,056)(67,665,599)
Closing balance
3,420,353,305 3,441,411,361
a. Westpac previously announced its intention to undertake a $3.5 billion on market buyback of WBC ordinary shares. During 2025 Westpac has bought back and cancelled 21,058,056 ordinary shares ($672 million) at an average
price of $31.93.
Ordinary shares purchased on market
2025
Consolidated and Parent Entity
Number Average Price ($)
For share-based payment arrangements:
Employee share plan (ESP)807,48031.77
Westpac Equity Incentive Plan (EIP) - Restricted Shares
a
1,913,82832.26
Westpac Performance Plan (WPP) - share rights exercised43,92431.58
Westpac Equity Incentive Plan (EIP) - Unhurdled share rights exercised21,34532.75
Westpac on-market share purchase for future share rights exercises and restricted shares allocations
b
752,52236.91
Long Term Variable Reward (LTVR) Plan – share rights exercised3,83531.10
Total number of ordinary shares purchased on market3,542,934
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.
For details of the share-based payment arrangements refer to Note 31.
104 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 26. Shareholders’ equity (Continued)
Reconciliation of movement in reserves
ConsolidatedParent Entity
$m
2025 2024 2025 2024
Debt securities at FVOCI reserve
Balance as at beginning of year(568)(165)(462)103
Net gains/(losses) from changes in fair value500(591)423(813)
Income tax effect(147)180(124)243
Transferred to income statements(19)5(19)5
Income tax effect6(1)6(1)
Loss allowance on debt securities measured at FVOCI-1(1)1
Other33--
Balance as at end of year(225)(568)(177)(462)
Equity securities at FVOCI reserve
Balance as at beginning of year127126(18)(15)
Net gains/(losses) from changes in fair value25(2)10(5)
Exchange differences on translation212-
Income tax effect(3)2(3)2
Balance as at end of year151127(9)(18)
Share-based payment reserve
Balance as at beginning of year2,0791,9831,9701,874
Share-based payment expense94969496
Balance as at end of year2,1732,0792,0641,970
Cash flow hedge reserve
Balance as at beginning of year548152501(203)
Net gains/(losses) from changes in fair value(233)501(154)873
Income tax effect68(158)46(262)
Transferred to income statements15277154132
Income tax effect(46)(24)(46)(39)
Balance as at end of year489548501501
Foreign currency translation reserve
Balance as at beginning of year(438)(138)(275)(141)
Exchange differences on translation of foreign operations(349)(328)(22)(165)
Gains/(losses) on net investment hedges95285331
Balance as at end of year(692)(438)(244)(275)
Other reserves
Balance as at beginning of year(16)(23)4141
Transactions with owners-7--
Balance as at end of year(16)(16)4141
Total reserves1,8801,7322,1761,757
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ADDITIONAL
INFORMATION105
Note 27. Capital adequacy
APRA is the prudential regulator of ADIs including Westpac. APRA measures an ADI’s regulatory capital using the following measures:
Level of capitalDefinition
Common Equity Tier 1 (CET1) CapitalComprises the highest quality components of capital that consists of paid-up share capital, retained profits and certain reserves,
less certain intangible assets, capitalised expenses and software, and investments and retained profits in insurance and funds
management subsidiaries that are not consolidated for capital adequacy purposes.
Tier 1 CapitalThe sum of CET1 and Additional Tier 1 (AT1) Capital. AT1 Capital comprises high quality components of capital that consists of
certain securities not included in CET1, but which include loss absorbing characteristics. AT1 instruments convert into equity and
absorb losses when certain triggers are met.
Total CapitalThe sum of Tier 1 Capital and Tier 2 Capital. Tier 2 Capital includes subordinated instruments and other components of capital that,
to varying degrees, do not meet the criteria for Tier 1 Capital, but nonetheless contribute to the overall strength of an ADI and its
capacity to absorb losses when certain triggers are met.
Leverage ratioThe leverage ratio is defined by APRA as Tier 1 capital divided by the “Exposure measure” and is expressed as a percentage.
“Exposure measure” includes on- balance sheet exposures, derivatives exposures, securities financing transaction (SFT)
exposures, and other off-balance sheet exposures.
Under APRA’s Prudential Standards, Australian ADIs, including Westpac, are required to maintain minimum Prudential Capital Requirements expressed as a percentage of total risk weighted
assets as follows:
●CET1 Capital ratio of at least 4.5%;
●Tier 1 Capital ratio of at least 6.0%; and
●Total Capital ratio of at least 8.0%.
APRA may also require ADIs, including Westpac, to meet Prudential Capital Requirements above the industry minimum. APRA does not allow the Prudential Capital Requirements for
individual ADIs to be disclosed. APRA also requires ADIs to hold additional CET1 buffers comprising of:
●A capital conservation buffer of 4.75% that includes a 1% surcharge for ADIs designated by APRA as D-SIBs. APRA has determined that Westpac is a D-SIB; and
●Countercyclical capital buffer of 1.0%. The countercyclical buffer is set on a jurisdictional basis and APRA is responsible for setting the requirement in Australia. The countercyclical buffer
requirement is currently set to the default of 1.0% for Australian exposures, however this may be varied by APRA in the range of 0% to 3.5%.
Collectively, the above buffers are referred to as the “Capital Buffer”. Should the CET1 capital ratio fall within the capital buffer range, restrictions on the distribution of earnings will apply. This
includes restrictions on the amount of earnings that can be distributed through dividends, AT1 Capital distributions and discretionary staff bonuses.
The Total CET1 Requirement for Westpac is at least 10.25%, (based on an industry minimum CET1 requirement of 4.5% plus a Capital Buffer of at least 5.75% applicable to D-SIBs), the Tier
1 Capital Ratio requirement is at least 11.75% and the Total Capital Ratio requirement is at least 13.75%
1
.
In addition, APRA’s capital framework also requires an ADI to maintain a minimum leverage ratio of 3.5%. APRA may also vary the minimum leverage ratio for an individual ADI.
Westpac’s capital adequacy was compliant with APRA’s requirements throughout 2025.
APRA has announced changes to banks’ capital requirements with effect from 1 January 2027. This includes changes to CET1, Tier 1, Total capital and the Leverage ratio.
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 features include:
●The development of a capital management strategy, including consideration of regulatory capital minimums, capital buffers and contingency plans;
●Consideration of regulatory capital requirements and the perspectives of external stakeholders including rating agencies as well as equity and debt investors; and
●A stress testing framework that tests our resilience under a range of adverse economic scenarios.
The Board has determined a target post dividend CET1 capital ratio of above 11.25% in normal operating conditions. This target includes consideration of APRA’s increase in the minimum
CET1 ratio of 0.25% to 10.50% effective 1 January 2027 and replaces the previous CET1 capital operating range of between 11.00% and 11.50%.
1. Noting that APRA may apply higher requirements for an individual ADI.
106 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 28. Dividends
ConsolidatedParent Entity
$m20252024202320252024
Dividends not recognised at year end
Since year end the Directors have proposed the following dividends:
Final dividend 77 cents per share (2024: 76 cents, 2023: 72 cents) all fully franked at 30%2,634 2,615 2,527 2,634 2,615
Total dividends not recognised at year end
2,634 2,615 2,527 2,634 2,615
The Board has determined a final fully franked dividend of 77 cents per share, to be paid on 19 December 2025 to shareholders on the register at the record date of 7 November 2025.
Shareholders can choose to receive their dividends as cash or reinvest their dividend in additional shares under the Dividend Reinvestment Plan.
The Board has determined to satisfy the Dividend Reinvestment Plan (DRP) for the 2025 final 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 provided to DRP participants will be set over the 15 trading days commencing 12 November 2025 and will not include a discount.
Details of dividends recognised during the year are provided in the statement of changes in equity.
Australian franking credits available to the Parent Entity for subsequent years are $3,714 million (2024: $3,504 million, 2023: $3,520 million). This is calculated as the year end franking credit
balance, adjusted for the Australian current tax liability and the proposed 2025 final dividend.
New Zealand imputation credits
New Zealand imputation credits of NZ$0.06 (2024: NZ$0.06, 2023: NZ$0.07) per share will be attached to the proposed 2025 final dividend. New Zealand imputation credits available to the
Parent Entity for subsequent years are NZ$332 million (2024: NZ$374 million, 2023: NZ$557 million). This is calculated on the same basis as the Australian franking credits but using the New
Zealand current tax liability.
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INFORMATION107
GROUP STRUCTURE
Note 29. Investments in subsidiaries and associates
Accounting policy
Subsidiaries
Westpac’s subsidiaries are entities which it controls and consolidates as it is exposed to, or has rights to, variable returns from the entity, and can affect those returns through its power over
the entity.
When Westpac ceases to control a subsidiary, any retained interest in the entity is remeasured to fair value, with any resulting gain or loss recognised in the income statement.
Changes in Westpac’s ownership interest in a subsidiary which do not result in a loss of control are accounted for as transactions with equity holders in their capacity as equity holders.
In the Parent Entity’s financial statements, investments in subsidiaries are initially recorded at cost and are subsequently held at the lower of cost and recoverable amount.
All transactions between Westpac entities are eliminated on consolidation.
Associates
Associates are entities in which Westpac has significant influence, but not control, over the operating and financial policies. Westpac accounts for associates using the equity method. The
investments are initially recognised at cost (except where recognised at fair value due to a loss of control of a subsidiary), and increased (or decreased) each year by Westpac’s share of the
associate’s profit (or loss). Dividends received from the associate reduce the investment in the associate.
Overseas companies predominantly carry on business in the country of incorporation. For unincorporated entities, ‘Country of incorporation’ refers to the country where business is carried on.
The financial years of all controlled entities are the same as that of Westpac unless otherwise stated. From time to time, Westpac consolidates a number of unit trusts where Westpac has
variable returns from its involvement with the trusts, and has the ability to affect those returns through its power over the trusts. These unit trusts are excluded from the table.
A complete list of controlled entities can be found in the Consolidated Entity Disclosure Statement. The following table includes the material controlled entities of Westpac as at
30 September 2025.
Country Country
Nameof incorporationNameof incorporation
Asgard Capital Management Ltd
Australia Westpac Equity Holdings Pty Limited Australia
BT Portfolio Services Limited
Australia Westpac Financial Services Group Pty Limited Australia
Capital Finance Australia Limited
Australia Westpac New Zealand Group Limited New Zealand
Crusade trust No.2P of 2008
Australia Westpac New Zealand Limited New Zealand
Series 2008-1M WST Trust
Australia Westpac NZ Covered Bond Limited
a
New Zealand
Series 2022-1P WST Trust
Australia Westpac NZ Securitisation Limited
a
New Zealand
Series 2024-1 WST TrustAustralia Westpac Overseas Holdings No. 2 Pty LimitedAustralia
Series 2024-2 WST TrustAustralia Westpac Securities NZ LimitedNew Zealand
Sixty Martin Place (Holdings) Pty LimitedAustralia Westpac Securitisation Holdings Pty LimitedAustralia
Westpac Bank - PNG - LimitedPapua New Guinea Westpac Term Pie FundNew Zealand
Westpac Covered Bond TrustAustralia
a. The Group indirectly owns 19% of these entities, however, due to contractual and structural arrangements both these entities are considered to be controlled entities within the Group.
The following controlled entities have been granted relief from compliance with the balance date synchronisation provisions in the Corporations Act 2001:
●Westpac Cash PIE Fund;
●Westpac Notice Saver PIE Fund; and
●Westpac Term PIE Fund.
108 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 29. Investments in subsidiaries and associates (Continued)
Non-controlling interests
The following material controlled entities are not wholly owned:
Percentage Owned
2025 2024
Westpac Bank - PNG - Limited
98.7%89.9%
Westpac NZ Covered Bond Limited
19.0%19.0%
Westpac NZ Securitisation Limited
19.0%19.0%
Details of the balance of NCIs are set out in Note 26. There are no NCIs that are material to Westpac.
Significant restrictions
There were no significant restrictions on the ability to transfer cash or other assets, pay dividends or other capital distributions, provide or repay loans and advances between the entities within
Westpac. There were also no significant restrictions on Westpac’s ability to access or use the assets and settle the liabilities of Westpac resulting from protective rights of NCIs.
Associates
There are no associates that are material to Westpac.
Changes in ownership of subsidiaries or other businesses
Businesses acquisitions
During the year ended 30 September:
2025
●Westpac Banking Corporation acquired 58,000 shares from a minority shareholder of Westpac Bank - PNG - Limited (WPNG) which will raise its controlling interest to 99.73%. As at the
reporting date, the registration of the share transfer was pending. On behalf of the Parent Entity, the acquisition cost of PGK8 million was paid by WPNG to the minority shareholder, in lieu
of the Parent Entity receiving unpaid dividends and as a result was a non-cash transaction for the Parent Entity.
2024:
●Westpac Banking Corporation acquired 8.74% of shares from minority shareholders of WPNG, raising its controlling interest to 98.65%. On behalf of the Parent Entity, the acquisition cost
of PGK66 million to minority shareholders, in lieu of the Parent Entity receiving unpaid dividends and as a result was a non-cash transaction for the Parent Entity; and
●The business of HealthPoint Claims Pty Ltd on 6 April 2024.
2023 - no businesses were acquired.
Businesses disposals
During the year ended 30 September:
2025 - no businesses were sold.
2024 - no businesses were sold.
2023 - Westpac sold its interest in Advance Asset Management Limited on 31 March 2023.
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ADDITIONAL
INFORMATION109
Note 30. Structured entities
Accounting policy
Structured entities are generally created to achieve a specific, defined objective and their operations are restricted such as only purchasing specific assets. Structured entities are commonly
financed by debt or equity securities that are collateralised by and/or indexed to their underlying assets. The debt and equity securities issued by structured entities may include tranches with
varying levels of subordination.
Structured entities are classified as subsidiaries and consolidated if they meet the definition in Note 29. If Westpac does not control a structured entity then it will not be consolidated.
Westpac engages in various transactions with both consolidated and unconsolidated structured entities that are mainly involved in securitisations, asset backed and other financing structures
and managed funds.
Consolidated structured entities
Securitisation and covered bonds
Westpac uses structured entities to securitise its financial assets, including two covered bond programs, to assign pools of residential mortgages to bankruptcy remote structured entities. Refer
to Note 15 for further details.
Westpac managed funds
Westpac acts as the responsible entity and/or fund manager for various investment management funds. As fund manager, if Westpac is deemed to be acting as a principal rather than an agent
then it consolidates the fund. The principal versus agent decision requires judgement of whether Westpac has sufficient exposure to variable returns.
Non-contractual financial support
Westpac does not provide non-contractual financial support to these consolidated structured entities.
Unconsolidated structured entities
Westpac has interests in various unconsolidated structured entities including debt or equity instruments, guarantees, liquidity and other credit support arrangements, lending, loan
commitments, certain derivatives and investment management agreements.
Interests exclude non-complex derivatives (e.g. interest rate or currency swaps), instruments that create, rather than absorb, variability in the entity (e.g. credit protection under a credit default
swap), and lending to a structured entity with recourse to a wider operating entity, not just the structured entity.
Westpac’s main interests in unconsolidated structured entities, which arise in the normal course of business, are:
Trading securitiesWestpac actively trades interests in structured entities and normally has no other involvement with the structured entity. Westpac earns interest
income on these securities and also recognises fair value changes through trading income in non-interest income.
Investment securitiesWestpac holds mortgage-backed securities for liquidity purposes and Westpac normally has no other involvement with the structured entity. These
assets are highly-rated, investment grade and eligible for repurchase agreements with the RBA or another central bank. Westpac earns interest
income and net gains or losses on selling these assets are recognised in the income statements.
Loans and other credit commitmentsWestpac lends to unconsolidated structured entities, subject to Westpac’s collateral and credit approval processes, in order to earn interest and fee
income. The structured entities are mainly property trusts, securitisation entities and those associated with project and property financing transactions.
Investment management agreementsWestpac manages funds that provide customers with investment opportunities. Westpac earns management fee income which is recognised in non-
interest income.
Westpac may also retain units in these investment management funds. Westpac earns fund distribution income and recognises fair value movements
through non-interest income.
110 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 30. Structured entities (Continued)
The following tables show Westpac’s interests in unconsolidated structured entities and its maximum exposure to loss in relation to those interests. The maximum exposure does not take into
account any collateral or hedges that will reduce the risk of loss.
●For on-balance sheet instruments, including debt and equity instruments in and loans to unconsolidated structured entities, the maximum exposure to loss is the carrying value.
●For off-balance sheet instruments, including liquidity facilities, loan and other credit commitments and guarantees, the maximum exposure to loss is the notional amounts.
Investment in third
party mortgageFinancing to
Consolidatedand other asset-securitisationGroupInterest in other
$mbacked securities
a
vehiclesmanaged fundsstructured entitiesTotal
2025
Assets
Trading securities and financial assets measured at FVIS
795-16,4837,279
Investment securities
9,162---9,162
Loans
-28,274-27,60255,876
Other financial assets
1-57-58
Total on-balance sheet exposures
9,95828,2745834,08572,375
Total notional amounts of off-balance sheet exposures
-10,355-9,84820,203
Maximum exposure to loss
9,95838,6295843,93392,578
Size of structured entities
b
102,94638,62916,31843,933201,826
2024
Assets
Trading securities and financial assets measured at FVIS
1,055-28,2419,298
Investment securities8,881---8,881
Loans
-27,786-23,87151,657
Other financial assets
2-53-55
Total on-balance sheet exposures
9,93827,7865532,11269,891
Total notional amounts of off-balance sheet exposures
-7,638-9,14516,783
Maximum exposure to loss
9,93835,4245541,25786,674
Size of structured entities
b
90,86435,42415,81141,257183,356
a. The Group’s interests in third-party mortgages and other asset-backed securities are senior tranches of notes and are investment grade rated.
b. Represents either the total assets or market capitalisation of the entity, or if not available, the Group’s total committed exposure (for lending arrangements and external debt and equity holdings), funds under management (for
Group managed funds) or the total value of notes on issue (for investments in third-party asset-backed securities).
Non-contractual financial support
Westpac does not provide non-contractual financial support to these unconsolidated structured entities.
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REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION111
OTHER
Note 31. Share-based payments
Accounting policy
Westpac enters into various share-based payment arrangements with its employees as a component of overall compensation for services provided. Share-based payment arrangements
comprise rights to receive shares for free (share rights) and restricted shares (issued at no cost). Share-based payment arrangements typically require a specified period of continuing
employment (the service period or vesting period) and may include performance targets (vesting conditions). Specific details of each arrangement are provided below.
Share-based payments must be classified as either cash-settled or equity-settled arrangements. Westpac’s significant arrangements are equity-settled, as Westpac is not obliged to settle in
cash.
Share rights
Share rights are equity-settled arrangements. The fair value is measured at grant date and is recognised as an expense over the service period, with a corresponding increase in the share-
based payment reserve in equity.
The fair values of share rights are estimated at grant date using a binomial/Monte Carlo simulation pricing model which incorporates the vesting and market-related performance targets of
the grants. The fair value of share rights excludes non-market vesting conditions such as employees’ continuing employment by Westpac. The non-market vesting conditions are instead
incorporated in estimating the number of share rights that are expected to vest and are therefore recognised as an expense. At each reporting date the non-market vesting assumptions are
revised and the expense recognised each year takes into account the most recent estimates. The market-related assumptions are not revised each year as the fair value is not re-estimated
after the grant date.
Up to 1 January 2023 share rights were issued under the Westpac Long Term Variable Reward Plan (LTVR) and Westpac Performance Plan (WPP). From 1 January 2023 share rights have
been issued under the Equity Incentive Plan (EIP). Refer below for further details.
Restricted shares
Restricted shares are accounted for as an equity-settled arrangement. The fair value of shares allocated to employees for nil consideration is recognised as an expense over the vesting
period with a corresponding increase in the share-based payments reserve in equity. The fair value of ordinary shares issued to satisfy the obligation to employees is measured at grant date
and is recognised as a separate component of equity.
Up to 1 January 2023 restricted shares were issued under the Restricted Share Plan (RSP). From 1 January 2023 restricted shares have been issued under the Equity Incentive Plan (EIP).
Refer below for further details.
Equity Incentive Plan (EIP)
The Equity Incentive Plan (EIP) was introduced effective 1 January 2023 and is a consolidated plan that replaced the RSP, WPP and LTVR plans. Existing allocations under the RSP, WPP
and LTVR continue to be governed by their respective plan rules, however, all grants from 1 January 2023 are made under the EIP. Securities issued under the EIP include restricted shares,
unhurdled share rights, performance rights and restricted rights. The underlying terms of the EIP are similar to RSP, WPP and LTVR and are accounted for as equity-settled arrangements in
line with the share rights and restricted shares specified above.
In respect of the above mentioned plans, the Board has discretion to adjust unvested allocations, including to zero, in specified circumstances. Clawback may also apply to vested awards, to
the extent legally permissible and practicable.
Employee share plan (ESP)
The value of shares expected to be allocated to employees for nil consideration is recognised as an expense over the financial year and provided for as other employee benefits. The fair
value of any ordinary shares purchased on market or issued to satisfy the obligation to employees is recognised in equity.
112 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 31. Share-based payments (Continued)
Scheme name
Westpac Long Term Variable Reward
Plan (LTVR)/ EIP LTVR – Performance
Rights and Restricted Rights
Westpac Performance Plan (WPP)/ EIP
- Unhurdled Share Rights
Restricted Share Plan
(RSP)/ EIP -
Restricted SharesEmployee Share Plan (ESP)
Type of share-based paymentShare rights (allocated at no cost).Share rights (allocated at no cost).Westpac ordinary shares (allocated at no
cost).
Westpac ordinary shares (allocated at
no cost) of up to $1,000 per employee
per year.
How it is usedAligns executive remuneration and accountability
with shareholder interests over the long term.
Primarily used for mandatory deferral of a
portion of short-term variable reward for New
Zealand employees and key employees based
outside Australia.
Primarily used to reward key employees
and for mandatory deferral of a portion of
short-term variable reward for certain
Australian employees and some other
offshore jurisdictions.
To reward eligible Australian
employees (unless they have already
been provided instruments under
another scheme for the previous year).
Exercise priceNil Niln/an/a
Performance conditions
a
Awards from 2022 to 2023: TSR over a four-year
performance period.
Awards from 2024 onwards: 50% of the award is
measured against Relative Total Shareholder
Return (TSR) over a four-year performance period
(performance rights) and the remaining 50% is
measured against risk culture and other internal
measures (restricted rights). After the testing
period, further deferral periods are applicable for
performance rights granted to all participants and
for restricted rights granted to the CEO.
None
b
NoneNone
Service conditionsContinued employment throughout the vesting
period or as determined by the Board.
Continued employment throughout the vesting
period or as determined by the Board.
Continued employment throughout the
restriction period or as determined by the
Board.
Shares must normally remain within
the ESP for three years from granting
unless the employee leaves Westpac.
Vesting period (period over which
expenses are recognised)
c
Awards for 2022 to 2023: 4 years
Awards from 2024 onwards:
CEO performance rights: 6 years
GE performance rights: 5 years
CEO restricted rights: 50% over 4 years and 50%
over 5 years
GE restricted rights: 4 years
Defined period set out at time of grant
c
Defined period set out at time of grant1 year
Treatment at end of termAutomatically exercised at the end of the term.Automatically exercised at the end of the term. Shares are released at the end of the
restriction period.
Shares are released at the end of the
restriction period or when the
employee leaves Westpac (whichever
occurs first).
Does the employee receive dividends
and voting rights during the vesting
period?
d
NoNoYesYes
a. The Board has discretion to adjust the number of restricted shares, unhurdled share rights, performance rights and restricted rights downwards, including to zero, in specified circumstances including serious misconduct, if serious
circumstances or new information come to light which mean that in the Board’s view all or part of the award was not appropriate, or where required by law or prudential standards. The Board will typically apply the adjustment to
unvested LTVR where an adjustment to current and deferred STVR is considered insufficient or unavailable. Clawback may also apply to vested LTVR, to the extent legally permissible and practicable.
b. Excluding the UNITE Award that is granted as share rights under the EIP and is subject to internal performance measures.
c. Vested share rights granted after July 2015 under the 2020 to 2023 LTVR awards and unhurdled WPP/EIP awards may be exercised up to a maximum of 15 years (generally 10 years for NZ) from their commencement date.
Vested share rights under the 2024 and 2025 LTVR award (performance rights and restricted rights) are exercisable up to 2 years after the vesting date.
d. For LTVR restricted rights, dividend equivalent payments (DEP) are accrued for the vesting period. For LTVR performance rights, DEP are only accrued for the further deferral period after the performance period. These DEP are
calculated by multiplying the number of LTVR restricted or performance rights eligible to vest by the declared dividend price on each respective record date during the applicable period. The calculation excludes franking credits.
They are paid at the end of the deferral period.
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REVIEWEXHIBIT 15.4
ADDITIONAL
INFORMATION113
Note 31. Share-based payments (Continued)
Each share-based payment scheme is quantified below.
i. Westpac Equity Incentive Plan (EIP) - Unhurdled Share Rights
Outstanding
Outstanding asand exercisable
at beginning Granted during Exercised Lapsed during Outstanding as as at end
of year the year during the year the year at end of year of year
2025
Share rights
One-year vesting period111,45873,11288,6571,16494,74927,527
Two-year vesting period89,54257,4391,9845,342139,6553,210
Three-year vesting period32,44634,829--67,275-
Four-year vesting period81,76168,775-8,273142,263-
Five-year vesting period15,270313,268-79,573248,965-
Six-year vesting period9,6614,377--14,038-
Seven-year vesting period10,2504,599--14,849-
Total share rights350,388556,39990,64194,352721,79430,737
Weighted average remaining contractual life13.8 years13.3 years
2024
Share rights
24,698 334,167 836 7,641 350,388 -
The weighted average fair value at grant date of EIP service-based share rights issued during the year was $27.13 (2024: $20.65).
ii. Westpac Equity Incentive Plan (EIP) Long Term Variable Reward (LTVR) - Performance Rights and Restricted Rights
Outstanding
Outstanding asand exercisable
at beginningGranted duringExercisedLapsed duringOutstanding asas at end
of year the year during the year the year at end of year of year
2025
Share rights
898,756 574,717 - - 1,473,473 -
Weighted average remaining contractual life
5.8 years 5.2 years
2024
Share rights
- 898,756 - - 898,756 -
The weighted average fair value at grant date of EIP LTVR Performance Rights and Restricted Rights issued during the year was $22.94 (2024: $18.00).
iii. Westpac Long-Term Variable Reward Plan (LTVR)
Outstanding
Outstanding asand exercisable
at beginningGranted duringExercisedLapsed duringOutstanding asas at end
of yearthe yearduring the yearthe yearat end of yearof year
2025
Share rights
3,383,798-630,069687,8082,065,92153,460
Weighted average remaining contractual life11.9 years 11.5 years
2024
Share rights4,028,972--645,1743,383,798-
No LTVR share rights were issued in the year ending 30 September 2025 following the introduction of the EIP from 1 January 2023.
114 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 31. Share-based payments (Continued)
iv. Westpac Performance Plan (WPP)
Outstanding
Outstanding asand exercisable
at beginningGranted duringExercisedLapsed duringOutstanding asas at end
of yearthe yearduring the yearthe yearat end of yearof year
2025
Share rights
One-year vesting period64,336 -26,586 1,533 36,217 36,217
Two-year vesting period98,511 -50,107 3,508 44,896 41,127
Three-year vesting period37,645-13,932-23,7134,661
Four-year vesting period213,798-87,43020,168106,200-
Five-year vesting period6,927---6,927-
Six-year vesting period6,576 -- - 6,576 -
Seven-year vesting period6,977 -- - 6,977 -
Total share rights434,770-178,05525,209231,50682,005
Weighted average remaining contractual life11.7 years 10.8 years
2024
Share rights809,018-317,17357,075434,770111,078
No WPP share rights were issued in the year ending 30 September 2025 following the introduction of the EIP from 1 January 2023.
v. Westpac Equity Incentive Plan (EIP) - Restricted Shares
Outstanding as atGranted duringForfeited duringOutstanding as at
Allocation date
beginning of year the year Released the year end of year
20252,550,4722,083,370838,759121,4263,673,657
2024
310,6492,393,902115,75238,3272,550,472
The weighted average fair value at grant date of EIP restricted shares issued during the year was $32.46 (2024: $23.14).
vi. Restricted Share Plan (RSP)
Outstanding as atGranted duringForfeited duringOutstanding as at
Allocation date
beginning of year the year Released the year end of year
20252,738,389-1,382,4926,3961,349,501
2024
4,916,346-2,085,41792,5402,738,389
No RSP shares were issued in the year ending 30 September 2025 following the introduction of the EIP from 1 January 2023.
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ADDITIONAL
INFORMATION115
Note 31. Share-based payments (Continued)
vii. Employee Share Plan (ESP)
Average number
Number of shares allocatedTotal number ofMarket price
Allocation date of participants per participant shares allocated per share
a
Total fair value
202520 November 202426,91630807,480 $32.82 $26,501,494
2024
23 November 202327,549471,294,803 $21.20 $27,449,824
a. The market price per share for the allocation is based on the five day volume-weighted average price up to the grant date.
The 2024 ESP award was satisfied through the purchase of shares on market.
The liability accrued for the ESP at 30 September 2025 was $28 million (2024: $28 million) and was provided for as other employee benefits.
viii. Other plans
Westpac also provides share-based plans for small, specialised parts of the Group. The benefits under these plans are directly linked to growth and performance of the relevant part of the
business. The plans, individually and in aggregate, are not material to Westpac in terms of expenses and dilution of earnings.
The names of all persons who hold share options and/or rights currently on issue are entered in Westpac’s register of option holders which may be inspected at MUFG Corporate Markets (AU)
Limited, Liberty Place, Level 41, 161 Castlereagh Street, Sydney, New South Wales.
ix. Fair value assumptions
The fair value of share rights have been independently calculated at their respective grant dates.
The fair value of share rights with performance targets based on relative TSR takes into account the average TSR outcome determined using a Monte Carlo simulation pricing model.
The fair value of share rights without TSR based performance targets (i.e. unhurdled share rights and restricted rights) have been determined with reference to the share price at grant date. A
discount rate reflecting the expected dividend yield over their vesting periods also applies to unhurdled share rights and LTVR performance rights.
Other significant assumptions include:
●Risk-free rates of return of 3.3%-3.8% applied to TSR-hurdled grants;
●The dividend yield on Westpac shares applied to TSR-hurdled grants ranged from 4.0%-5.0% for those issued under the LTVR and for those issued under the EIP;
●Volatility in Westpac’s TSR of 20%-21%, applied to TSR-hurdled grants; and
●Volatilities of, and correlation factors between, TSR of the comparator group and Westpac for TSR-hurdled grants.
116 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 32. Superannuation commitments
Accounting policy
Westpac recognises an asset or a liability for its defined benefit schemes, being the net of the defined benefit obligations and the fair value of the schemes’ assets. The defined benefit
obligation is calculated as the present value of the estimated future cash flows, discounted using high-quality long dated corporate bond rates.
The superannuation expense is recognised in operating expenses and remeasurements are recognised through OCI.
Westpac had the following defined benefit plans at 30 September 2025:
Date of last actuarial assessment of
Name of plan
Type Form of benefit the funding status
Westpac Group Plan (WGP)
Defined benefit and accumulation Indexed pension and lump sum 30 June 2023
Westpac New Zealand Superannuation Scheme (WNZS)
Defined benefit and accumulation Indexed pension and lump sum 30 June 2023
Westpac Banking Corporation UK Staff Superannuation Scheme (UKSS)Defined benefitIndexed pension and lump sum5 April 2024
Westpac UK Medical Benefits Scheme
Defined benefit Medical benefits n/a
The defined benefit sections of the schemes are closed to new members. Westpac has no obligation beyond the annual contributions for the accumulation or defined contribution sections of
the schemes.
The WGP is Westpac’s principal defined benefit plan and is managed and administered in accordance with the terms of its trust deed and relevant legislation in Australia. Its defined benefit
liabilities are based on salary and length of membership for active members and inflation in the case of pensioners.
The defined benefit schemes expose Westpac to the following risks:
●Discount rate – reductions in the discount rate would increase the present value of the future payments;
●Inflation rate – increases in the inflation rate would increase the payments to pensioners;
●Investment risk – lower investment returns would increase the contributions needed to offset the shortfall;
●Mortality risk – members may live longer than expected extending the cash flows payable by Westpac;
●Behavioural risk – higher proportion of members taking some of their benefits as a pension rather than a lump sum would increase the cash flows payable by Westpac; and
●Legislative risk – legislative changes could be made which increase the cost of providing defined benefits.
Investment risk is managed by setting benchmarks for the allocation of plan assets between asset classes. The long-term investment strategy will often adopt relatively high levels of equity
investment in order to:
●Secure attractive long-term investment returns; and
●Provide an opportunity for capital appreciation and dividend growth, which gives some protection against inflation.
Funding recommendations for the WGP, WNZS and the UKSS are made based on actuarial valuations. The funding valuations of the defined benefit plans are based on different assumptions
to the calculation of the defined benefit surplus/deficit for accounting purposes. Based on the most recent valuations, the defined benefit plan assets are adequate to cover the present value of
the accrued benefits of all members with a combined surplus of $161 million (2024: $140 million). Current contribution rates are as follows:
●WGP – contributions are made to the WGP at the rate of 16.9% of members’ salaries;
●WNZS – contributions are made to the WNZS at the rate of 17.4% of members’ salaries; and
●UKSS – not required to make contributions under the 2024 actuarial assessment.
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ADDITIONAL
INFORMATION117
Note 32. Superannuation commitments (Continued)
Contributions
ConsolidatedParent Entity
$m
2025 2024
2025 2024
Employer contributions
29 30 28 30
Member contributions
6 7 6 7
Expected employer contributions for the year ending 30 September 2026 were $23 million.
Expense recognised
Consolidated Parent Entity
$m
2025 2024 2023 2025 2024
Current service cost
23 27 26 23 26
Net interest cost on net benefit liability
(9) (11) (14) (10) (10)
Total defined benefit expense
14 16 12 13 16
Defined benefit balances recognised
ConsolidatedParent Entity
$m
2025 2024 2025 2024
Benefit obligation as at end of year
2,282 2,218 2,238 2,169
Fair value of plan assets as at end of year
2,525 2,424 2,481 2,380
Net surplus/(deficit)
243 206 243 211
Defined benefit surplus included in other assets
247 215 247 215
Defined benefit deficit included in other liabilities
(4) (9) (4) (4)
Net surplus/(deficit)
243 206 243 211
The average duration of the defined benefit obligation is 12 years (2024: 12 years).
Significant assumptions
20252024
Consolidated and Parent Entity
Australian funds Overseas funds Australian funds Overseas funds
Discount rate
5.4% 4.2%-5.7%5.6% 4.3%-5.0%
Salary increases
3.4% 3.0%-4.0%3.5% 3.0%-3.9%
Inflation rate (pensioners received inflationary increase)
2.4% 2.0%-3.1%2.5% 2.0%-3.2%
Life expectancy of a 60-year-old male
32.1 27.7-27.931.9 27.6-27.8
Life expectancy of a 60-year-old female34.6 29.5-29.834.5 29.6
118 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 32. Superannuation commitments (Continued)
Sensitivity to changes in significant assumptions
The following table shows the impact of changes in assumptions on the defined benefit obligation for the WGP. No reasonably possible changes in the assumptions of Westpac’s other defined
benefit plans would have a material impact on the defined benefit obligation.
Increase in obligation
$m
2025 2024
0.5% decrease in discount rate
136 136
0.5% increase in annual salary increases
2 3
0.5% increase in inflation rate (pensioners receive inflationary increase)
133 131
1 year increase in life expectancy
48 46
Asset allocation
The table below provides a breakdown of the schemes’ investments by asset class.
20252024
AustralianAustralian
%
funds Overseas funds funds Overseas funds
Cash
5%4%5%3%
Equity instruments
44%9%43%9%
Debt instruments
26%5%26%5%
Property
8%1%8%2%
Other assets
17%81%18%81%
Total
100%100%100%100%
Equity and debt instruments are mainly quoted assets while property and other assets are mainly unquoted. Other assets include infrastructure funds and private equity funds.
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ADDITIONAL
INFORMATION119
Note 33. Auditor’s remuneration
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.
The fees payable to the auditor in Australia and overseas firms belonging to the network of firms were:
ConsolidatedParent Entity
2025 2024 2025 2024
$’000
KPMG PwC KPMG PwC
Audit and audit-related fees
Audit fees
Australia
23,97728,035 23,60527,673
Overseas
5,1975,429 708689
Total audit fees
29,17433,464 24,31328,362
Audit-related fees
Australia
2,2212,888 2,2212,888
Overseas
464279 10230
Total audit-related fees
2,6853,167 2,3232,918
Total audit and audit-related fees
31,85936,631 26,63631,280
Tax fees
Overseas395-300-
Total tax fees395-300-
Other fees
Overseas-69--
Total other fees-69--
Total audit and non-audit fees
32,25436,700 26,93631,280
Fees payable to the auditor have been categorised as follows:
AuditThe year end audit, half-year review and comfort letters associated with debt issues and capital raisings.
Audit-relatedConsultations regarding accounting standards and reporting requirements, regulatory compliance reviews and assurance related to debt and capital offerings.
TaxTax compliance services.
OtherVarious services including systems assurance, compliance advice and controls reviews.
It is Westpac’s policy to engage KPMG on assignments additional to its statutory audit duties only if its independence is not impaired or seen to be impaired and where its expertise and
experience with Westpac is important. All services were approved by the Board Audit Committee in accordance with Westpac’s Pre-Approval of Engagement of the External Auditor for Audit or
Non-Audit Services Policy.
KPMG also received fees of $0.2 million and PwC of $6.4 million (2024 PwC: $6.6 million) for various entities which are related to Westpac but not consolidated. These non-consolidated
entities include entities sponsored by Westpac, trusts of which a Westpac entity is trustee, manager or responsible entity, superannuation funds and pension funds.
120 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 34. Related party disclosures
Related parties
Westpac’s related parties are those it controls or can exert significant influence over. Examples include subsidiaries, associates, joint ventures and superannuation plans as well as key
management personnel and their related parties.
Key management personnel (KMP)
Key management personnel are those persons who have the authority and responsibility for planning, directing and controlling the activities of Westpac, directly or indirectly, including any
director (whether executive or otherwise).
Parent Entity
Westpac Banking Corporation is the ultimate parent company of the Group.
Subsidiaries - Note 29
The Parent Entity has the following related party transactions and balances with subsidiaries:
Type of transaction/balance
Details disclosed in
Balances due to/from subsidiariesBalance Sheet
Dividend income/Transactions with subsidiariesNote 4
Interest income and Interest expenseNote 3
Tax consolidated group transactions and undertakingsNote 7
Guarantees and undertakingsNote 25
The balances due to/from subsidiaries include a wide range of banking and other financial facilities.
The terms and conditions of related party transactions between the Parent Entity and subsidiaries are sometimes different to commercial terms and conditions. Related party transactions
between the Parent Entity and subsidiaries eliminate on consolidation.
Associates - Note 29
Westpac provides a wide range of banking and other financial facilities and funds management activities to its associates on commercial terms and conditions.
Superannuation plans
Westpac contributed $583 million (2024: $535 million) to defined contribution plans and $29 million (2024: $30 million) to defined benefit plans. Refer to Note 32.
Remuneration of KMP
Total remuneration of the KMP was:
Post
Short-employmentOther long-TerminationShare-
$
term benefitsbenefitsterm benefitsbenefitsbased paymentsTotal
Consolidated
202522,058,824731,736362,3164,518,63223,176,81450,848,322
202422,085,122613,423175,780-15,481,11438,355,439
Parent Entity
202520,825,040603,850362,3164,518,63222,059,46648,369,304
202420,907,779493,529175,780-14,569,56536,146,653
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ADDITIONAL
INFORMATION121
Note 34. Related party disclosures (Continued)
Other transactions with KMP
KMP receive personal banking and financial investment services from Westpac in the ordinary course of business. The terms and conditions, for example interest rates and collateral, and the
risks to Westpac are comparable to transactions with other employees and did not involve more than the normal risk of repayment or present other unfavourable features.
Details of loans provided and the related interest charged to KMP and their related parties are as follows:
Interest payable Closing Number of KMP
$
for the yearloan balancewith loans
20251,003,14315,815,27811
20241,030,28032,064,18410
Share rights holdings
For compliance with SEC disclosure requirements, the following table sets out certain details of the performance share rights, restricted share rights and unhurdled share rights held at 30
September 2025 by the CEO and other key management personnel (including their related parties):
Latest Date of ExerciseNumber of Share Rights
Managing Director and Chief Executive Officer
Anthony Miller
Ranges from 15 November 2029 to 1 October 2037368,811
Group Executives
a
Scott Collary
Ranges from 15 November 2029 to 1 October 2037337,165
Paul FowlerRanges from 13 May 2031 to 13 May 203219,044
Peter HerbertRanges from 15 November 2030 to 15 November 203124,224
Nell Hutton
Ranges from 15 November 2029 to 15 November 2031140,020
Carolyn McCannRanges from 15 November 2029 to 1 October 2037241,195
Catherine McGrathRanges from 1 October 2026 to 1 October 2037282,641
Michael Rowland
Ranges from 15 November 2029 to 1 October 2037261,748
Ryan ZaninRanges from 15 November 2029 to 1 October 2037299,764
Former Group Executives
Peter KingRanges from 15 November 2029 to 1 October 2037448,117
Christine ParkerRanges from 15 November 2029 to 1 October 2037225,269
Jason YettonRanges from 15 November 2029 to 1 October 2037326,680
a. References to Group Executives are only to those who are KMP.
Westpac has not issued any options during the year and there are no outstanding options as at 30 September 2025.
122 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 35. Notes to the cash flow statements
Accounting policy
Cash and balances with central banks include cash held at branches and in ATMs, balances with overseas banks in their local currency and balances with central banks including accounts
with the RBA and accounts with overseas central banks.
Reconciliation of net cash provided by/(used in) operating activities to net profit for the year is set out below.
ConsolidatedParent Entity
$m
2025 2024 2023 2025 2024
Profit after income tax expense
6,9336,9907,201 6,4966,691
Adjustments:
Depreciation, amortisation and impairment
1,5611,5221,237 1,3311,407
Impairment charges/(benefits)
671727839 680659
Net decrease/(increase) in current and deferred tax
(421)(252)665 (558)(346)
(Increase)/decrease in accrued interest receivable
302(227)(730) 252(207)
(Decrease)/increase in accrued interest payable
(705)8022,400 (410)757
(Decrease)/increase in provisions
107(272)(173) 105(272)
Unrealised (gain)/loss in trading income(498)1,615280(498)1,596
Other non-cash items
(1,085)(1,121)(1,130) (997)(858)
Cash flows from operating activities before changes in operating assets and liabilities
6,8659,78410,589 6,4019,427
Net (increase)/decrease in:
Collateral paid1,945(2,097)1,5451,905(2,057)
Trading securities and financial assets measured at FVIS
(6,107)(18,994)(4,524) (6,054)(19,452)
Derivative financial instruments5,650(836)4,0821,0131,358
Loans
(50,182)(35,083)(27,270) (45,997)(32,528)
Other financial assets(48)(348)128(26)(231)
Other assets
(29)(34)8 22
Net increase/(decrease) in:
Collateral received(5)(318)(2,888)(709)(181)
Deposits and other borrowings
51,85335,24324,692 50,80335,870
Other financial liabilities(457)(7,084)(17,146)873(5,281)
Other liabilities
4-(12) -(9)
Net cash provided by/(used in) operating activities
9,489(19,767)(10,796) 8,211(13,082)
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INFORMATION123
Note 35. Notes to the cash flow statements (Continued)
Details of the assets and liabilities over which control ceased
In 2025 and 2024, there were no changes in the Group or Parent’s ownership interest in entities which resulted in a loss of control.
Details of the entity over which control ceased in 2023 are provided in Note 29.
Consolidated
$m
2023
Assets
Cash and balances with central banks
18
Other financial assets
18
Intangible assets55
Total assets
91
Liabilities
Other financial liabilities22
Provisions1
Total liabilities
23
Total equity attributable to owners of WBC
68
Cash proceeds received (net of transaction costs)
311
Total consideration
311
Gain/(loss) on disposal
243
Reconciliation of cash proceeds from disposal:
Cash proceeds received (net of transaction costs)
311
Less: Cash deconsolidated
(18)
Cash consideration (paid)/received (net of transaction costs and cash held)
293
Non-cash investing activities
There were no material non-cash investing activities in 2025.
On 21 December 2023, WNZL issued two classes of AT1 Perpetual Preference Shares to the Parent Entity, Westpac Banking Corporation Limited, totalling NZD1,000 million. The transactions
were settled through the redemption of NZD1,000 million AT1 loan capital notes and as a result no cash was transferred. As WNZL is a wholly owned subsidiary of the Parent Entity, these
transactions eliminate on consolidation.
Non-cash financing activities
ConsolidatedParent Entity
$m
20252024 2023 2025 2024
Shares issued under the dividend reinvestment plan
--192 --
Increase in lease liabilities
223399235 181319
On 10 September 2025, Westpac Bank - PNG - Limited (WPNG) paid PGK8 million to minority shareholders, on behalf of the Parent Entity, to acquire 1.09% in WPNG. This was in lieu of the
Parent Entity receiving unpaid dividends from WPNG and as a result was a non-cash transaction for the Parent Entity.
On 11 September 2024, WPNG paid PGK66 million to minority shareholders, on behalf of the Parent Entity, to acquire 8.74% in WPNG. This was also in lieu of the Parent Entity receiving
unpaid dividends from WPNG and as a result was a non-cash transaction for the Parent Entity.
On 18 December 2023, $802 million of WCN6 were transferred to the WCN6 nominated party for $100 each pursuant to the WCN10 reinvestment offer. Those WCN6 were subsequently
redeemed and cancelled by Westpac. On 31 July 2024, Westpac redeemed the remaining outstanding WCN6.
124 WESTPAC GROUP 2025 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 35. Notes to the cash flow statements (Continued)
Cash and balances with central banks
The following table provides the breakdown of cash and cash balances with central banks.
ConsolidatedParent Entity
$m
2025 2024 2025 2024
Cash and cash at bank
10,141 9,320 9,805 8,961
Exchange settlement accounts
40,017 56,036 34,802 49,276
Regulatory deposits with central banks
272 311 175 163
Total cash and balances with central banks
50,430 65,667 44,782 58,400
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 $273 million (2024: $311 million)
for Westpac and $175 million (2024: $164 million) for the Parent Entity which are included in cash and balances with central banks.
Note 36. Subsequent events
Since 30 September 2025, the Board has determined to pay a fully franked final dividend of 77 cents per fully paid ordinary share. The dividend is expected to be $2,634 million. The dividend
is not recognised as a liability at 30 September 2025. The proposed payment date of the dividend is 19 December 2025.
The Board has determined to satisfy the DRP for the 2025 final 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 provided to DRP participants will be set over the 15 trading days commencing 12 November 2025 and will not include a discount.
No other matters have arisen since the year ended 30 September 2025 which are not otherwise dealt with in this 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.
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INFORMATION125
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
The following table includes details of the controlled entities of Westpac. The entity’s role as a trustee, partner or participant in a joint venture (if applicable), of an entity within the Group is
disclosed in ‘Type of entity’. Overseas companies predominantly carry on business in the country of incorporation. For unincorporated entities, ‘Country of incorporation’ refers to the country
where business is carried on. Where the tax residency of an entity is foreign (as defined in the Income Tax Assessment Act 1997), the relevant country of tax residency is disclosed.
% of share
capital
Name of entityType of entity heldCountry of incorporationTax residency
1925 (Commercial) Pty Limited
Body Corporate 100 Australia Australia
1925 (Industrial) Pty Limited
Body Corporate 100 Australia Australia
1925 Advances Pty Limited
Body Corporate 100 Australia Australia
Altitude Administration Pty Limited
Body Corporate, trustee 100 Australia Australia
Altitude Rewards Pty Limited
Body Corporate 100 Australia Australia
Asgard Capital Management Ltd
Body Corporate 100 Australia Australia
Bill Acceptance Corporation Pty Limited
Body Corporate 100 Australia Australia
BT (Queensland) Pty. Limited
Body Corporate 100 Australia Australia
BT Financial Group (NZ) Limited
Body Corporate 100 New Zealand Foreign - New Zealand
BT Financial Group Pty Limited
Body Corporate 100 Australia Australia
BT Funds Management (NZ) Limited
Body Corporate 100 New Zealand Foreign - New Zealand
BT Funds Management Limited
Body Corporate 100 Australia Australia
BT Funds Management No. 2 Limited
Body Corporate 100 Australia Australia
BT Portfolio Services Ltd
Body Corporate 100 Australia Australia
BT Securities Ltd
Body Corporate 100 Australia Australia
Capital Finance Australia Limited
Body Corporate 100 Australia Australia
CBA Pty Limited
Body Corporate 100 Australia Australia
Challenge Pty Limited
Body Corporate 100 Australia Australia
Crusade Trust No.2P of 2008
Trust N/A Australia Australia
General Credits Pty Limited
Body Corporate 100 Australia Australia
GIS Private Nominees Pty Limited
Body Corporate 100 Australia Australia
HealthPoint Claims Pty. Limited
Body Corporate 100 Australia Australia
Hyde Potts Insurance Services Pte. Limited
Body Corporate 100 Singapore Foreign - Singapore
Mortgage Management Pty Limited
Body Corporate 100 Australia Australia
Net Nominees Pty Limited
Body Corporate 100 Australia Australia
Number 120 Limited
Body Corporate 100 New Zealand Foreign - New Zealand
Pendal Short Term Income Fund
Trust N/A Australia Australia
Qvalent Pty Ltd
Body Corporate 100 Australia Australia
RAMS Financial Group Pty Limited
Body Corporate 100 Australia Australia
Red Bird Ventures Limited
Body Corporate 100 New Zealand Foreign - New Zealand
Reinventure Fund, I.L.P.
Limited Partnership N/A Australia Australia
Reinventure Fund II I.L.P.
Limited Partnership N/A Australia Australia
Reinventure Fund III I.L.P.
Limited Partnership N/A Australia Australia
Reinventure Special Purpose Investment Unit Trust
Trust N/A Australia Australia
RMS Warehouse Trust 2007-1
Trust N/A Australia Australia
Securitor Financial Group Pty Limited
Body Corporate 100 Australia Australia
126 WESTPAC GROUP 2025 ANNUAL REPORT
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
% of share
capital
Name of entityType of entity heldCountry of incorporationTax residency
Series 2008-1M WST Trust
Trust N/A Australia Australia
Series 2019-1 WST Trust
Trust N/A Australia Australia
Series 2020-1 WST Trust
Trust N/A Australia Australia
Series 2021-1 WST Trust
Trust N/A Australia Australia
Series 2022-1P WST Trust
Trust N/A Australia Australia
Series 2023-1P WST Trust
Trust N/A Australia Australia
Series 2024-1 WST Trust
Trust N/A Australia Australia
Series 2024-2 WST Trust
Trust N/A Australia Australia
Sixty Martin Place (Holdings) Pty Ltd
Body Corporate 100 Australia Australia
St.George Finance Holdings Pty Limited
Body Corporate 100 Australia Australia
St.George Finance Pty Limited
Body Corporate 100 Australia Australia
St.George Motor Finance Pty Limited
Body Corporate 75 Australia Australia
The Home Mortgage Company Limited
Body Corporate 100 New Zealand Foreign - New Zealand
Value Nominees Pty. Limited
Body Corporate 100 Australia Australia
Westpac (NZ) Investments Limited
Body Corporate 100 New Zealand Foreign - New Zealand
Westpac Administration 2 Pty Limited
Body Corporate 100 Australia Australia
Westpac Administration 3 Pty Limited
Body Corporate 100 Australia Australia
Westpac Administration 4 Pty. Limited
Body Corporate 100 Australia Australia
Westpac Administration Pty. Limited
Body Corporate 100 Australia Australia
Westpac Altitude Rewards Trust
Trust N/A Australia Australia
Westpac Americas Inc.
Body Corporate 100 United States Foreign - United States
Westpac Bank - PNG - Limited
a
Body Corporate 98.65 Papua New Guinea Foreign - Papua New Guinea
Westpac Banking Corporation
Body Corporate, partner N/A Australia Australia
Westpac Capital - NZ - Limited
Body Corporate 100 New Zealand Foreign - New Zealand
Westpac Capital Markets Holding Corp.
Body Corporate 100 United States Foreign - United States
Westpac Capital Markets LLC
Body Corporate100 United States Foreign - United States
Westpac Cash PIE Fund
b
TrustN/ANew ZealandForeign - New Zealand
Westpac Covered Bond Trust
Trust N/A Australia Australia
Westpac Equity Holdings Pty Ltd
Body Corporate 100 Australia Australia
Westpac Equity Investments NZ Limited
Body Corporate 100 New Zealand Foreign - New Zealand
Westpac Europe GmbH
Body Corporate 100 Germany Foreign - Germany
Westpac Financial Services Group Pty Limited
Body Corporate 100 Australia Australia
Westpac Financial Services Group-NZ-Limited
Body Corporate 100 New Zealand Foreign - New Zealand
Westpac Financial Services Limited
Body Corporate 100 Australia Australia
Westpac Group Investment-NZ-Limited
Body Corporate 100 New Zealand Foreign - New Zealand
Westpac Holdings - NZ - Limited
Body Corporate 100 New Zealand Foreign - New Zealand
Westpac Investment Capital Corporation
Body Corporate 100 United States Foreign - United States
Westpac New Zealand Group Limited
Body Corporate 100 New Zealand Foreign - New Zealand
Westpac New Zealand Limited
Body Corporate 100 New Zealand Foreign - New Zealand
Westpac New Zealand Staff Superannuation Scheme Trustee Limited
Body Corporate 100 New Zealand Foreign - New Zealand
Westpac Notice Saver PIE Fund
b
Trust N/A New Zealand Foreign - New Zealand
Westpac NZ Covered Bond Holdings Limited
c
Body Corporate 19 New Zealand Foreign - New Zealand
Westpac NZ Covered Bond Limited
c
Body Corporate 19 New Zealand Foreign - New Zealand
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% of share
capital
Name of entityType of entityheldCountry of incorporationTax residency
Westpac NZ Operations Limited
Body Corporate 100 New Zealand Foreign - New Zealand
Westpac NZ Securitisation Holdings Limited
c
Body Corporate 19 New Zealand Foreign - New Zealand
Westpac NZ Securitisation Limited
c
Body Corporate 19 New Zealand Foreign - New Zealand
Westpac Overseas Holdings No. 2 Pty Limited
Body Corporate 100 Australia Australia
Westpac Overseas Holdings Pty Ltd
Body Corporate 100 Australia Australia
Westpac Properties Pty Limited
Body Corporate 100 Australia Australia
Westpac Securities Limited
Body Corporate 100 Australia Australia
Westpac Securities NZ Limited
Body Corporate 100 New Zealand Foreign - New Zealand
Westpac Securitisation Holdings Pty Limited
Body Corporate 100 Australia Australia
Westpac Securitisation Management NZ Limited
Body Corporate 100 New Zealand Foreign - New Zealand
Westpac Securitisation Management Pty Limited
Body Corporate 100 Australia Australia
Westpac Term PIE Fund
b
Trust N/A New Zealand Foreign - New Zealand
a. Refer to Note 29 for further details.
b. The Group has funding agreements in place with these entities and is deemed to have exposure to the associated risks and rewards. These entities are consolidated where the Group is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
c. The Group indirectly owns 19% of these entities, however, due to contractual and structural arrangements these entities are considered to be controlled entities within the Group.
128 WESTPAC GROUP 2025 ANNUAL REPORT
STATUTORY STATEMENTS
Directors’ declaration
In the Directors’ opinion:
(a) the financial statements and notes set out in ‘Financial report’ for the year ended 30 September 2025 are in accordance with the Corporations Act 2001, including:
(i) complying with Australian Accounting Standards, the Corporations Regulations 2001 (Cth) and other mandatory professional reporting requirements; and
(ii) giving a true and fair view of Westpac Banking Corporation and the Group’s financial position as at 30 September 2025 and of their performance for the financial year ended on that
date.
(b) The Consolidated Entity Disclosure Statement included in ‘Financial report’ as at 30 September 2025 has been prepared in accordance with the Corporation Act 2001 and is true and
correct.
(c) there are reasonable grounds to believe that Westpac will be able to pay its debts as and when they become due and payable.
Note 1(a) includes a statement that the financial report also complies with International Financial Reporting Accounting Standards as issued by the International Accounting Standards Board.
The Directors have been given the declaration by the Chief Executive Officer and the Chief Financial Officer required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Directors.
For and on behalf of the Board.
Steven Gregg
Chairman
Sydney
2 November 2025
Anthony Miller
Managing Director and Chief Executive Officer
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Management’s report on internal control over financial reporting
The following report is required by rules of the US Securities and Exchange Commission.
The management of Westpac is responsible for establishing and maintaining adequate internal control over financial reporting for Westpac as defined in Rule 13a - 15(f) under the Securities
Exchange Act of 1934, as amended. Westpac’s internal control system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with applicable accounting standards.
Westpac’s internal control over financial reporting includes policies and procedures that: pertain to the maintenance of records that in reasonable detail accurately reflect the transactions and
dispositions of the assets of Westpac and its consolidated entities; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with applicable accounting standards, and that receipts and expenditures of Westpac are being made only in accordance with authorizations of management and directors of
Westpac and its consolidated entities; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the assets of Westpac and
its consolidated entities that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are
subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Westpac management, with the participation of the CEO and CFO, assessed the effectiveness of Westpac’s internal control over financial reporting as of 30 September 2025 based on the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in its 2013 Internal Control Integrated Framework. Based on this assessment,
management has concluded that Westpac’s internal control over financial reporting as of 30 September 2025 was effective.
The effectiveness of Westpac’s internal control over financial reporting as of 30 September 2025 has been audited by KPMG, an independent registered public accounting firm, as stated in its
report which is included herein.
130 WESTPAC GROUP 2025 ANNUAL REPORT
STATUTORY STATEMENTS
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of Westpac Banking Corporation
Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting
We have audited the accompanying consolidated balance sheet of Westpac Banking Corporation and its subsidiaries (the Company) as of September 30, 2025, the related consolidated income statement, statement of
comprehensive income, statement of changes in equity, and cash flow statement for the year then ended and the related notes (collectively, the ‘consolidated financial statements’). We also have audited the
Company’s internal control over financial reporting as of September 30, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of
the Treadway Commission.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of September 30, 2025, and the results of its operations and its
cash flows for the year then ended, in conformity with Australian Accounting Standards as issued by the Australian Accounting Standards Board and IFRS Accounting Standards as issued by the International
Accounting Standards Board. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, 2025, based on criteria established in Internal
Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control
over financial reporting, included in Management’s report on internal control over financial reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on
the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required
to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audit of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the
amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered
necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
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INFORMATION131
Supplemental Information
The parent entity only information on the face of the consolidated financial statements and other parent entity only disclosures in the notes to the financial statements (the ‘supplemental information’) have been
subjected to audit procedures performed in conjunction with the audit of the Company’s consolidated financial statements. The supplemental information is the responsibility of the Company’s management. Our audit
procedures included determining whether the supplemental information reconciles to the consolidated financial statements or the underlying accounting and other records, as applicable, and procedures to test the
completeness and accuracy of the information presented in the supplemental information. The supplemental information, which is prepared for purposes of additional analysis, is presented on a basis that differs from
the consolidated financial statements and is not a required part of the consolidated financial statements presented in accordance with Australian Accounting Standards as issued by the Australian Accounting Standards
Board and IFRS Accounting Standards as issued by the International Accounting Standards Board. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the consolidated
financial statements as a whole.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and
directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the
financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee
and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical
audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the
critical audit matter or on the accounts or disclosures to which it relates.
132 WESTPAC GROUP 2025 ANNUAL REPORT
STATUTORY STATEMENTS
Provisions for expected credit losses on loans and credit commitments (ECL)
As discussed in Note 10 to the consolidated financial statements, the provision for ECL was $4,978 million for the Company at 30 September 2025. The Company uses models that estimate ECL using three main
components: probability of default (PD), loss given default (LGD) and exposure at default (EAD). The Company applies forward-looking economic scenarios and associated probability weights to its models when
determining an ECL estimate.
We identified the assessment of the provision for ECL as a critical audit matter. A high degree of audit effort, including specialised skills and knowledge, was required because of the significant measurement
uncertainty involved in the Company’s estimation of ECL. Subjective and complex auditor judgement was required to assess the following:
●the Company’s modelled estimations of ECL due to the inherently judgmental and complex nature of the models, namely those used to derive the PD, LGD and EAD, and key associated model assumptions.
Certain models and model assumptions are the key drivers of complexity and measurement uncertainty, and minor changes to the model assumptions could have a significant effect on the Company’s calculation
of the provision for ECL; and
●the Company’s economic judgements, including the severity of the forward-looking downside economic scenario and the probability weightings used in the models.
The following are the primary procedures we performed to address this critical audit matter:
●We evaluated the design and tested the operating effectiveness of certain internal controls related to the ECL estimation process. This included certain controls relating to:
‒model validation and monitoring;
‒credit reviews that determine customer risk grades (CRGs); and
‒the selection of the downside economic scenario and probability weightings.
●We involved our credit risk professionals with specialised skills and knowledge who assisted in evaluating the Company’s models and associated model assumptions as follows:
‒evaluating the Company’s methodology used in the models to derive the PD, LGD and EAD and associated model assumptions against criteria in the accounting standards and industry practice;
‒inspecting model code for the calculation of certain model components to assess its consistency with the Company’s modelling methodology;
‒reperforming the model output for a selection of models using the Company’s documented methodology and comparing our output with the Company’s outputs; and
‒reperforming model monitoring for a selection of the current models to evaluate the models’ performance.
●For a selection of customers in the business portfolios, we challenged the Company’s assessment of CRGs using relevant information in the loan file, including the customer’s financial position, to inform our
overall assessment of the CRG against the Company’s policies.
●We involved our economic and credit risk professionals with specialised skills and knowledge, who assisted in challenging the macroeconomic variable forecasts against external economic data, evaluating the
severity of the downside economic scenario and evaluating the probability weights.
We have served as the Company’s auditor since 2025.
KPMG
Sydney, Australia
2 November 2025
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INFORMATION133
Limitation on Independent Registered Public Accounting Firm’s Liability
The liability of KPMG in relation to the performance of their professional services provided to Westpac including, without limitation, KPMG's audits and reviews of Westpac's financial
statements, is limited under the Chartered Accountants Australia and New Zealand Scheme approved by the New South Wales Professional Standards Council or such other applicable
scheme approved pursuant to the Professional Standards Act 1994 (NSW) (the "Professional Standards Act"), as amended from time to time (the "Accountants Scheme"). Specifically, the
Accountants Scheme limits the liability of an accountant to a maximum amount of AU$75 million for audit. The Accountants Scheme does not limit liability for a breach of trust, fraud or
dishonesty.
134 WESTPAC GROUP 2025 ANNUAL REPORT
STATUTORY STATEMENTS
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Westpac Banking Corporation
Opinion on the Financial Statements
We have audited the consolidated balance sheet of Westpac Banking Corporation and its subsidiaries (the “Company”) as of September 30, 2024, and the related consolidated income
statements, statements of comprehensive income, statements of changes in equity and cash flow statements for each of the two years in the period ended September 30, 2024, including the
related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial
position of the Company as of September 30, 2024, and the results of its operations and its cash flows for each of the two years in the period ended September 30, 2024 in conformity with
Australian Accounting Standards as issued by the Australian Accounting Standards Board and International Financial Reporting Standards as issued by the International Accounting Standards
Board.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s consolidated financial statements
based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with
respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also
included evaluating
PricewaterhouseCoopers, ABN 52 780 433 757
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GPO BOX 2650 SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
pwc.com.auLiability limited by a scheme approved under Professional Standards Legislation.
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ADDITIONAL
INFORMATION135
the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our
audits provide a reasonable basis for our opinion.
Supplemental Information
The parent entity only information on the face of the consolidated financial statements and other parent entity only disclosures in the notes to the financial statements (the “supplemental
information”) have been subjected to audit procedures performed in conjunction with the audit of the Company’s consolidated financial statements. The supplemental information is the
responsibility of the Company’s management. Our audit procedures included determining whether the supplemental information reconciles to the consolidated financial statements or the
underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. The
supplemental information, which is presented for purposes of additional analysis, is presented on a basis that differs from the consolidated financial statements and is not a required part of the
consolidated financial statements presented in accordance with Australian Accounting Standards as issued by the Australian Accounting Standards Board and International Financial Reporting
Standards as issued by the International Accounting Standards Board. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the consolidated
financial statements as a whole.
PricewaterhouseCoopers
Sydney, Australia
November 3, 2024
We served as the Company's auditor from 1968 to 2024
136 WESTPAC GROUP 2025 ANNUAL REPORT
ITEM 19. EXHIBITS INDEX
1. Constitution (as amended) incorporated by reference to our Form 6-K filed on 15 December 2021
4(c).2Form of Access and Indemnity Deed between Westpac Banking Corporation and Director, incorporated by reference to our Annual Report on Form 20-F for the year ended
30 September 2008
4(c).3Indemnity Deed Poll dated 10 September 2009, of Westpac Banking Corporation, incorporated by reference to our Annual Report on Form 20-F for the year ended 30
September 2009
8.List of controlled entities – refer to Note 29 to the financial statements in this Annual Report
11(b)Westpac Group Securities Trading Policy, incorporated by reference to our Annual Report on Form 20-F for the year ended 30 September 2024
12.Certifications pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934
13.Certifications pursuant to 18 U.S.C. Section 1350
15.1KPMG’s consent dated 4 November 2025
15.2PricewaterhouseCoopers' consent dated 4 November 2025
15.3Westpac Group 2025 Annual Report on Form 20-F
15.4Cybersecurity management and governance disclosure
101.INSInline XBRL Instance Document – The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL 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 Label Linkbase Document
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
Copies of any instrument relating to the long-term debt of Westpac Banking Corporation that is not being attached as an exhibit to this Annual Report on Form 20-F and which does not exceed
10% of the total consolidated assets of Westpac Banking Corporation will be furnished to the SEC upon request.
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INFORMATION137
Signatures
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorised the undersigned to sign this Annual Report on its behalf.
WESTPAC BANKING CORPORATION
By: /s/ Michael Clayton
Michael Clayton
General Counsel – Corporate, Treasury and WIB
Dated 4 November 2025
Exhibit 12
142 WESTPAC GROUP 2025 ANNUAL REPORT
EXHIBIT 12
SECTION 302 CERTIFICATION
I, Anthony James Miller, certify that:
1. I have reviewed this annual report on Form 20-F of Westpac Banking Corporation (“the company”);
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the company as of, and for, the periods presented in this report;
4. The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report
is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles;
(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially
affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
5. The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit
committee of the company’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
company’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
Date: 2 November 2025
/s/ Anthony James Miller
Anthony James Miller
Managing Director and Chief Executive Officer
FINANCIAL REPORTEXHIBITS INDEX
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INFORMATION143
EXHIBIT 12
SECTION 302 CERTIFICATION
I, Nathan Laurence Goonan, certify that:
1. I have reviewed this annual report on Form 20-F of Westpac Banking Corporation (“the company”);
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the company as of, and for, the periods presented in this report;
4. The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report
is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles;
(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially
affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
5. The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit
committee of the company’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
company’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
Date: 2 November 2025
/s/ Nathan Laurence Goonan
Nathan Laurence Goonan
Chief Financial Officer
Exhibit 13
144 WESTPAC GROUP 2025 ANNUAL REPORT
EXHIBIT 13
SECTION 906 CERTIFICATIONS
Pursuant to 18 U.S.C. § 1350
I, Anthony James Miller, certify that the Annual Report on Form 20-F for the year ended 30 September 2025 of Westpac Banking Corporation (the “issuer”) fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the report fairly presents, in all material respects, the financial
condition and results of operations of the issuer.
Date: 2 November 2025
/s/ Anthony James Miller
Anthony James Miller
Managing Director and Chief
Executive Officer
I, Nathan Laurence Goonan, certify that the Annual Report on Form 20-F for the year ended 30 September 2025 of Westpac Banking Corporation (the “issuer”) fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the report fairly presents, in all material respects, the financial
condition and results of operations of the issuer.
Date: 2 November 2025
/s/ Nathan Laurence Goonan
Nathan Laurence Goonan
Chief Financial Officer
Exhibit 15.1
FINANCIAL REPORTEXHIBITS INDEX
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EXHIBIT 15.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the registration statements (Nos. 333-283007 and 333-283008) on Form F-3 of our report dated 2 November 2025, with respect to the
consolidated financial statements of Westpac Banking Corporation and the effectiveness of internal control over financial reporting.
/s/ KPMG
Sydney, Australia
4 November 2025
Exhibit 15.2
146 WESTPAC GROUP 2025 ANNUAL REPORT
EXHIBIT 15.2
Consent of Independent Registered Public Accounting Firm
We hereby consent to the incorporation by reference in the Registration Statements on Form F-3 (Nos. 333-283007 and 333-283008) of Westpac Banking Corporation of our report dated
3 November 2024 relating to the financial statements, which appears in this Form 20-F.
/s/ PricewaterhouseCoopers
Sydney, Australia
4 November 2025
FINANCIAL REPORT EXHIBITS INDEX STRATEGIC REVIEW PERFORMANCE REVIEW EXHIBIT 15.4
ADDITIONAL INFORMATION 143 EXHIBIT 15.3 Exhibit 15.3 Westpac Group 2025 Annual Report on Form 20-F
Section 1 144 Strategic review 144 Corporate governance 188 Directors’ report 208 Remuneration report 222
Risk factors 254 Information on Westpac 268 Section 2 Financial statements 287 Section 3 289 Reading this
report 290 Shareholder information 302 Other Westpac business information 321 Glossary of abbreviations and
defined terms 324
Exhibit 15.3
144 WESTPAC GROUP 2025 ANNUAL REPORT ABOUT WESTPAC As Australia's first bank, we've been taking
action to support people, businesses and communities for more than 200 years. Established in New South Wales
in 1817, Westpac has grown to be one of Australia’s largest companies and employers. We’re proud to contribute
to the prosperity of Australia and New Zealand. We support 13 million customers with a range of banking
products and services, including helping them into homes, starting and growing businesses and supporting large
corporates with their banking needs. We help foster stronger, more inclusive communities by promoting financial
inclusion and literacy, investing in regional banking services and respecting human rights. Since founding our first
charity in 1879, we've broadened our social impact through the independent Foundations and Trusts1 . These
have contributed more than $100 million in the past decade to create meaningful change in people’s lives. For
our 35,000 employees, we strive to create a workplace where they feel valued, inspired and motivated to reach
their potential. As part of our environmental commitment, we support businesses in transitioning to a low-carbon
future and adapting to climate change, while continuing to reduce our operational emissions and build climate
resilience. This year, we paid $6.6 billion in salaries, $5.2 billion in shareholder dividends, $3.5 billion in taxes and
levies and spent $4.74 billion with suppliers inside Australia2 . As we evolve, we're inspired by customers, their
needs and our purpose of taking action now to create a better future. Market share AUSTRALIA NEW ZEALAND
Household depositsaa 21% Consumer lendingb 18% Mortgagesa 21% Depositsb 17% Business lendinga 16%
Business lendingb 16% a. APRA Banking Statistics, September 2025. b. RBNZ, September 2025. 1. In FY25,
Westpac Group provided support to the Westpac Community Trust and the Westpac Buckland Fund (known as
the Westpac Foundation), Westpac Scholars Trust and the St George Foundation Trust (known as St George
Foundation, BankSA Foundation and the Bank of Melbourne Foundation). While Westpac was involved in
establishing these foundations, they are non-profit organisations that are separate to the Westpac Group. The
trustee of St George Foundation Trust (St George Foundation Limited) is a related body corporate of Westpac. 2.
Refer to the 2025 Sustainability Index and Datasheet for details.
FINANCIAL REPORT EXHIBITS INDEX STRATEGIC REVIEW PERFORMANCE REVIEW EXHIBIT 15.4
ADDITIONAL INFORMATION 145 OPERATING ENVIRONMENT1 Australian economy recovering despite
productivity challenges The Australian economy is showing signs of improvement after a sustained period of
below trend growth. However, the transition from the public to the private sector as the dominant driver of activity
has been more challenging than expected. GDP growth is improving and expected to rise to 2.4% in 2026.
Stronger growth should be underpinned by rising real wages, falling interest rates and a robust labour market.
Productivity growth remains elusive with improvement requiring a coordinated response across both public and
private sectors. Households navigate uneven recovery After an extended period of cost-of-living pressures,
Australian households have begun to experience some relief. Real disposable incomes are rising, supported by
easing inflation, declining interest rates and steady wage growth. Spending has recovered yet consumers remain
cautious. Mortgage stress remains evident but has started to decline. Both demand and supply side factors are
contributing to housing under-supply. This structural imbalance is expected to persist with house prices and credit
demand expected to increase by 9% and 6.5% respectively in 2026. Business conditions improve as SMEs show
green shoots Australian businesses have begun to emerge from a period of subdued activity, supported by
easing inflation and interest rates. A recovery is underway though it remains uneven as the economy transitions
from public to private sector led growth. Larger businesses have fared better than small and medium-sized
businesses (SME). However, the share of SMEs experiencing an improvement in cash flows has risen for the
third consecutive quarter in 2025 to its highest level since 2022. While private sector investment has moderated,
total business credit demand remains strong and is expected to grow by 7.2% in 2026. New Zealand economy
slows amid policy support New Zealand’s economic recovery has been slower than anticipated, despite the
Reserve Bank of New Zealand delivering 300 basis points of monetary easing since mid 2024 to stimulate the
economy. Export activity has been dampened by global trade uncertainty and broad-based industry weakness.
Household spending remains constrained by elevated living costs, labour market softness and the delayed
impact of rate cuts due to the prevalence of fixed rate mortgages. While the recovery in economic activity has
been delayed, lower interest rates has supported housing demand with credit growth expected to rise to 5.7% in
2025 and 6.3% in 2026. Monetary easing supports a balanced global outlook The global economic backdrop
remains mixed. Inflation is broadly within target ranges across most advanced economies, enabling a gradual
easing in monetary policy. This has supported modest global growth, with GDP expected to expand by around
3% in both 2025 and 2026. However, risks to the outlook remain elevated. These include ongoing global trade
tensions, geopolitical uncertainties and lingering inflationary pressures, all of which continue to weigh on
sentiment and investment. 1. All dates refer to calendar years unless otherwise stated. Forecasts by Westpac
Economics and Westpac NZ Economics.
146 WESTPAC GROUP 2025 ANNUAL REPORT OUR STRATEGY Our refreshed strategy outlines five priorities
that will help us achieve our ambition: To be our customers' number one bank and partner through life.
PERFORMANCE CUSTOMER TRANSFORMATION PEOPLE RISK For customers, we are focused on delivering
a seamless banking experience across every channel; in branch, digitally and by phone. A whole-of-bank
approach seeks to bring our people together, to offer the full breadth of our products with more timely,
personalised service. This, combined with digital innovation and investment in platforms such as BizEdge,
Westpac One and Digital Banker, supports our ambition to lead in Consumer and Business Net Promoter Score
(NPS1 ) and for Institutional, to achieve the number one position in the Relationship Strength Index (RSI2 ). For
our people, we recognise we must provide a market-leading employee proposition to deliver superior customer
experiences. To sustain high engagement and attract and retain the best talent, we’re committed to equipping our
people with future-ready skills and creating a more rewarding, supportive work environment. Proactive risk
management is central to Westpac's strength and resilience. Through the completion of the CORE program,
we’ve taken steps to significantly transform our risk culture, governance and management practices. Sustaining
and continuously strengthening these improvements across Westpac remains a priority. Transformation is critical
to our future success. Our cornerstone program UNITE aims to unlock long-term value simplifying products,
processes and systems to help deliver improved customer experience, make work easier for our people and
reduce operating costs. Complementing UNITE are two flagship digital innovations, BizEdge and Westpac One.
We measure performance by market position and return on tangible equity (ROTE). We are pursuing growth that
delivers sustainable returns, focusing on areas where we can differentiate Westpac's customer offering.
Maintaining cost discipline remains important, with simplification through UNITE expected to play a key role in
reducing our cost base and closing our cost to income gap relative to peers. 1. Refer to the Glossary (pages 324-
327) for more information on NPS. 2. Coalition Greenwich Voice of Client 2025 Australia Large Corporate
Relationship Banking Study.
FINANCIAL REPORT EXHIBITS INDEX STRATEGIC REVIEW PERFORMANCE REVIEW EXHIBIT 15.4
ADDITIONAL INFORMATION 147 Foundations for sustainable growth BALANCE SHEET STRENGTH
DIVERSIFIED PORTFOLIO EMPLOYEE ENGAGEMENT Capacity to invest and grow for the long term Enviable
portfolio mix across four business segments Top quartile of workplaces globally (OHI) Our business segments
Segment Who we serve Key execution focus areas Consumer Helping more Australians into their home, save for
the future and manage their money through a range of banking products and services offered through the
Westpac, St.George, BankSA and Bank of Melbourne brands. • Elevate experiences through personalised, digital
first service; • Deepen relationships and expand in priority segments; and • Grow proportion of proprietary
lending. Business & Wealth Serving the needs of small to medium businesses, commercial and agribusiness
customers across Australia. The segment includes Private Wealth, supporting high-net-worth individuals, as well
as BT Financial Group, which provides wealth management platform services. It also includes Westpac Pacific,
operating in Fiji and Papua New Guinea. • Continue lending momentum through BizEdge; • Deepen relationships
and enhance transaction banking capability; and • Expand banker presence, training and expertise. Institutional
Delivering financial services to corporate, institutional and government clients through three areas of
specialisation: Corporate & Institutional Banking, Global Transaction Services and Financial Markets. Clients are
supported throughout Australia and via branches and subsidiaries located in New Zealand, New York, London,
Frankfurt and Singapore. • Rollout Westpac One and payments innovation; • Deepen client relationships and
grow share of FX and commodities; and • Invest in expert bankers enabled by data, analytics and AI. New
Zealand Providing banking and wealth services for consumer, business and institutional customers in New
Zealand, through the Westpac New Zealand, Westpac Life and BT Funds Management (NZ) brands. • Target
growth in business lending; • Invest in digital capability; and • Improve market position and returns.
148 WESTPAC GROUP 2025 ANNUAL REPORT Top and emerging risks We regularly assess our operating
environment to identify changes, emerging risks and opportunities. The factors1 below may affect Westpac’s
ability to create value over the short, medium or long term. For further information, refer to Risk Management
(pages 180-187) and 2025 Risk Factors. Geopolitical risk Uncertainty around world trade policy remains a key
global risk, with potential impacts on trade, supply chains and investor confidence. Combined with broader
geopolitical tensions and ongoing global conflicts, these factors may influence export demand, commodity prices
and inflation not only in Australia and New Zealand but also in other markets where Westpac operates. Our
response Credit markets where Westpac operates remain resilient, supported by strong domestic fundamentals
and a stable financial system. Westpac’s capital position and balance sheet remain strong. We will continue to
monitor developments closely and, as part of our origination process, assess all known risks at the time of
origination to help manage risk whilst meeting customer needs. Refer to Credit Risk and Market Risk (pages 182-
187). Technology risk Technology remains a key priority for Westpac, enhancing our ability to create long term
value for stakeholders. The adoption of AI is progressing rapidly within the financial services industry. AI will have
positive impacts such as improving operational efficiency however it is important to ensure its safe and
responsible use. Our response Westpac continues to invest in technology and has introduced Responsible AI
Principles and an AI Risk Management Standard, which is designed to support effective management of AI-
related risks. Its implementation is supported by awareness campaigns and training programs aimed at
strengthening overall risk management capabilities. Refer to Strategic Risk (pages 182-187). Cyber risk The
cyber threat landscape poses a risk to financial stability by targeting critical infrastructure, undermining public
trust, and exposing institutions to operational, legal and reputational harm. High levels of interconnectedness and
dependence on third party suppliers, combined with rapid technological change, such as the adoption of AI and a
rise in international threats, are contributing to increased cyber risk. Our response We continually assess and
strengthen our cyber resilience to defend against increasingly sophisticated and capable threat actors. We also
actively work with government, regulators, and industry stakeholders to bolster Australia’s cyber defences,
including through threat intelligence sharing and support for cyber security reforms. Refer to Cyber Risk and
Operational Risk (pages 182-187). Culture and capability Managing and responding to expectations from
customers, regulators and the community requires strong risk management. Poor conduct, negative customer
experience, or failing to adequately respond to risks such as scams can impact our integrity and the trust of our
stakeholders. Our response Risk is one of our top five strategic priorities. We regularly assess our risk culture
and have strengthened our risk management and governance through the successful delivery of the CORE
program. We aim to build on these improvements by ensuring our people and processes are aligned to deliver
our purpose and strategy. Refer to Reputational and Sustainability Risk and Compliance and Conduct Risk
(pages 182-187). Competition Competition in the lending market remains elevated, driven by financial institutions
and non-bank lenders seeking to expand market share. At the same time the increasing share of brokers is
placing pressure on returns. The potential for regulatory arbitrage between bank and non-bank lenders is
reshaping the lending landscape, influencing how lenders compete across risk, capital and service delivery. Our
response We actively manage the impact of external changes that may affect our ability to deliver on our strategy.
Continued simplification, innovation, and investment in technology are critical to delivering more consistent high
quality customer service, products and value at scale and maintaining operational resilience in a competitive
environment. Refer to Credit Risk and Strategic Risk (pages 182-187). 1. Not exhaustive. Refer to Risk
Management (pages 180-187) for full table of material risk categories.
FINANCIAL REPORT EXHIBITS INDEX STRATEGIC REVIEW PERFORMANCE REVIEW EXHIBIT 15.4
ADDITIONAL INFORMATION 149 Our approach to sustainability At Westpac, sustainability is about creating
long-term value for our stakeholders. By identifying what matters most to them, we aim to ensure their priorities
and concerns are considered in our decision-making, helping to strengthen our long-term value. Our approach is
anchored in our Sustainability Strategy which aligns with our corporate strategy and refreshed purpose. It outlines
how we will embed sustainability across the strategic pillars and the focus areas of climate transition, housing
affordability and regional prosperity. The Chief Sustainability Officer (CSO) reports directly to the CEO and is
responsible for developing and overseeing the Sustainability Strategy and a suite of supporting policies, positions
and plans. Progress on how we manage, implement and deliver our strategy, frameworks and initiatives is
regularly reviewed through Board and executive-level governance forums. External engagement with our
stakeholders also plays an important role by bringing wider perspectives to inform our approach. This supports
our decision making and the annual materiality assessment. Our Sustainability Strategy is available on our
website. Sustainability-related disclosures Westpac’s sustainability reporting aims to provide stakeholders with
insights into performance over time and against key benchmarks. It covers progress on climate action, natural
capital, human rights and support for Indigenous Australians, providing details of our impact and connection with
global standards. This includes the Sustainability Report and Sustainability Index and Datasheet, available on our
website. Sustainability Report The 2025 Sustainability Report details Westpac’s strategy, targets, and approach
for managing climate-related risks and opportunities. The report also provides updates on our efforts to reduce
emissions, assist customers in their transition and improve climate resilience. Replacing Westpac’s previous
Climate Report, the document prepares us for mandatory climate reporting from next year. Climate Transition
Plan This year marked the end of the 2023-2025 Climate Change Position Statement and Action Plan. This has
been replaced by a Climate Transition Plan (CTP). Built on stakeholder feedback, the CTP outlines our targets
and approach to achieving our climate ambition of becoming a net-zero, climate resilient bank. Our sustainability
disclosures can be found on the website. Material sustainability topics Our method for determining material topics
is guided by the Global Reporting Initiative (GRI) Universal Standards. We report on material topics throughout
this report. For detailed information on how we engage with our stakeholders, identify and assess these topics,
please visit our website. Financial Performance Compliance and Regulation Technology Simplification (UNITE)
Refer to pages 152- 159 Vulnerable customers Data Privacy and Security Financial Inclusion Housing
affordability and security Fraud and scams Refer to pages 160-165 Employee engagement Health and safety
Diversity, equity and inclusion Communities Indigenous peoples Refer to pages 166-169 Human rights and
modern slavery Sustainable supply chain Tax transparency Refer to pages 170-173 Climate Change Natural
Capital Refer to pages 174-177 Artificial Intelligence, Cybersecurity and Data Refer to page 179 Ethics and
business conduct Refer to page 188 Anti-money laundering/ Counter-Terrorism Financing Refer to page 268
HOW WE CREATE VALUE • 208-year heritage • Customer needs • Competition • Regulatory environment •
Technology and artificial intelligence (AI) • Geopolitical and climate risks • Financial strength • Customer
relationships • 35,000 motivated people • Proactive risk management • Digital and physical infrastructure •
Diverse partnerships Provide financial products and services to 13 million customers in our core markets of
Australia and New Zealand, focusing on five priorities: What shapes us What we do What we rely on Customer:
Customer obsessed People: Best team, trusted experts Transformation: Brilliant at delivery Risk: Safe and Strong
Performance: Execution Excellence Our purpose TAKING ACTION NOW TO CREATE A BETTER FUTURE 150
WESTPAC GROUP 2025 ANNUAL REPORT
The value we create Shareholders Deliver sustainable returns and disciplined growth. Customers Support
customers and businesses to achieve their financial goals. Our People Develop engaged, empowered and
accountable people, working as a team. Community Foster financial inclusion and prosperity while advancing
human rights. Environment Support the energy transition, manage our climate risk and reduce our carbon
footprint. 29% Refer to pages 153 to 159 total shareholder return 13M Refer to pages 160 to 165 Customers 80
Refer to pages 166 to 169 OHI score $199M Refer to pages 170 to 173 in community investment1 37% Refer to
pages 174 to 177 increase in sustainable finance lending2 1. Figure includes commercial sponsorships and
foregone fee revenue. 2. Refer to 2025 Sustainability Report for definitions and detail. FINANCIAL REPORT
EXHIBITS INDEX STRATEGIC REVIEW PERFORMANCE REVIEW EXHIBIT 15.4 ADDITIONAL INFORMATION
151
Jordan Mobile Lending Manager Broadbeach, QLD 152 WESTPAC GROUP 2025 ANNUAL REPORT
CREATING VALUE FOR SHAREHOLDERS By maintaining a strong balance sheet and focusing on service
excellence, we aim to strengthen our market position and deliver long-term value for shareholders. Related
material topics (refer to page 149) • Financial performance • Compliance and regulation • Technology
simplification (UNITE) Key highlights 153c FULL YEAR ORDINARY DIVIDENDS PER SHARE 29% TOTAL
SHAREHOLDER RETURN 201.9c BASIC EARNINGS PER SHARE 12.5% CET1 CAPITAL RATIO
FINANCIAL REPORT EXHIBITS INDEX STRATEGIC REVIEW PERFORMANCE REVIEW EXHIBIT 15.4
ADDITIONAL INFORMATION 153 Shareholder returns To create value for our 571,800 shareholders we aim to
sustainably improve returns. The modest decline in net profit resulted in an 11 basis point reduction in ROE to
9.7% and a 24 basis points decrease in ROTE, excluding Notable Items, to 11.0%. Basic earnings per ordinary
share were 201.9 cents, up 1 cent on 2024. Our total shareholder return (TSR) was 29%. ROE (%) 9.8 9.7 FY24
FY25 ROTE, EXCLUDING NOTABLE ITEMS(%) 11.2 11.0 FY24 FY25 Dividends This year, shareholders will
receive $5.2 billion through fully franked ordinary dividends. Ordinary dividends were up 2 cents per share, or
1%. This year’s payout ratio is 76% on a net profit basis and the adjusted dividend payout ratio was 75%.
Dividends per share increased to $1.53. In 2024, in addition to ordinary dividend we returned $0.5 billion of
capital through a 15 cent special dividend. ORDINARY DIVIDEND PER ORDINARY SHARE (CENTS) 142 151
153 70 75 76 72 76 77 Interim Final FY23 FY24 FY25 We are focused on building stronger customer
relationships while investing to improve our market position to deliver long term value for shareholders. Deeper
relationships With a large customer base and an extensive product and service offering, we have a significant
opportunity to deepen relationships with customers to meet the full breadth of their needs. To support this, we
have adopted a whole-of-bank approach to help deliver personalised, seamless and secure banking experiences.
We have also expanded our presence with more bankers and new regional service centres. Our banking apps,
extensive branch network, virtual teams and dedicated Customer Care reflect our commitment to meeting
customers where they prefer ‒ digitally, in-person and by phone. Stronger relationships will support more
customers choosing us as their main financial institution. Refer to Creating value for customers (pages 160-165)
for more. Investing for the future We are transforming the company through our ‘One Best Way’ philosophy,
driving simplification, consistency, efficiency and innovation to help make banking easier and more effective. Total
investment spend was $1.9 billion. The UNITE program accounted for 34%, growth and productivity initiatives
were 30% and 36% was directed towards risk and regulatory activities. The UNITE program aims to unlock long-
term value by addressing structural legacy issues that have hindered our progress for more than a decade. It is
focused on simplifying products, processes and systems to help deliver improved customer experience, make
work easier for our people and reduce operating costs. Other strategic imperatives that remain critical to our
transformation agenda include – WestpacOne and BizEdge. Refer to Transformation (page 178) for more. Unless
otherwise stated, all figures in the Creating value for shareholders section relate to the year ended 30 September
2025 with comparative period the year ended 30 September 2024. Certain amounts, measures and ratios are not
defined by Australian Accounting Standards (AAS). These non-AAS measures are identified and described in
Non-AAS financial measures (refer to pages 292- 298).
154 WESTPAC GROUP 2025 ANNUAL REPORT Growth in our core markets Deposits and loans grew by 7%
and 6% respectively, reflecting solid deposit growth across all segments and momentum in Business and
Institutional lending. Australian household deposits growth of 1.0x APRA system demonstrates the health of our
franchise. Business deposits increased 6% primarily in transaction balances driven by new account openings and
retention. Growth in Australian housing loans, excluding RAMS1 , of 5%, or 0.8x APRA housing system, was
mainly in owner occupied mortgages. The proportion of investor lending increased over the year reflecting our
targeted strategy. Total Australian housing loans growth was 3%. In Business, lending was up 15%. This included
strong loan growth in our target sectors of agriculture, health and professional services performing well.
Institutional lending growth of 17% reflected activity in the infrastructure, resources, energy and property sectors.
New Zealand deposits grew by 2% with solid growth of 0.3x RBNZ system in household deposits partly offset by
a strategic decrease in Institutional term deposits which have a lower liquidity value compared to other sources of
funding. Loans increased by 4% due to growth in housing and business lending. CUSTOMER DEPOSITS ($BN)
673.6 723.0 Sep-24 Sep-25 GROSS LOANS ($BN) 811.3 856.4 Sep-24 Sep-25 1. RAMS was closed to new
business from August 2024.
FINANCIAL REPORT EXHIBITS INDEX STRATEGIC REVIEW PERFORMANCE REVIEW EXHIBIT 15.4
ADDITIONAL INFORMATION 155 Solid financial results $6.9BN Statutory net profit, down 1% on FY24 $7.0BN
Net profit excluding Notable Items, down 2% on FY24 Net profit was delivered through disciplined management
of net interest margins and balance sheet growth across our businesses. The rise in operating income reflected
our strategy of balancing growth and returns. The increase in operating expenses included a restructuring charge
of $273 million in the Second Half of 2025 to support targeted productivity initiatives under our Fit for Growth
program. Excluding this charge, the growth in operating expenses was driven by the ramp up in UNITE
investment, wage growth and higher software amortisation. The low level of impairment charges reflected credit
quality improvements across all segments. Statutory net profit table $m Full Year 2025 Full Year 2024 Full Year
2023 % Mov't 2025-2024 Statutory net profit 6,916 6,990 7,195 (1) Net operating income 22,384 21,588 21,645 4
Operating expenses (11,916) (10,944) (10,692) 9 Pre-provision profit 10,468 10,644 10,953 (2) Impairment
charges/(benefits) to average loans 5 bps 7 bps 9 bps (2 bps) $m Full Year 2025 Full Year 2024 Full Year 2023 %
Mov't 2025-2024 Statutory net profit 6,916 6,990 7,195 (1) Notable Items (56) (123) (173) (54) Excluding Notable
Items: Net profit 6,972 7,113 7,368 (2) Net operating income 22,464 21,763 21,542 3 Operating expenses
(11,916) (10,944) (10,232) 9 Pre-provision profit 10,548 10,819 11,310 (3) Impairment charges/(benefits) to
average loans 5 bps 7 bps 9 bps (2 bps) Performance measures excluding the impact of Notable Items are non-
AAS measures used by management as they better reflect underlying performance. Pre-provision profit is also a
non-AAS measure which management consider useful as it provides a view of the operating performance of the
Group. The definitions and a reconciliation to the statutory equivalent are provided on pages 292- 298.
156 WESTPAC GROUP 2025 ANNUAL REPORT Net operating income Net interest income increased 3%. Key
drivers included: • Higher core net interest income due to balance sheet growth; and • Notable Items reduced
income by $93 million compared to a reduction of $163 million in the prior year. The NIM was 1.93% and
comprised: • Core NIM of 1.81%, down 1 basis point, with slightly lower lending and deposit spreads more than
offsetting benefits from higher earnings on capital and hedged deposits; • Treasury and Markets, contribution of
13 basis points; and • Notable Items from hedging items including unrealised revaluations of economic hedges of
term funding detracted 1 basis point. Average interest-earning assets increased by 3% to $1,003 billion, including
growth of 11% in business and 2% in housing loans. $19.4bn Net interest income FY24 $18.8bn 1.93% Net
interest margin (NIM) FY24 1.93% Non-interest income increased by 6%. Key movements included: • Fee
income increased reflecting higher Institutional lending and cards fees. • Trading and other income increased
mainly due to higher foreign exchange income and favourable derivative value adjustments. Notable Items
increased income by $13 million compared to a reduction of $12 million in the prior year. • Net wealth
management income increased from higher funds under administration. $3.0bn Non-interest income FY24
$2.8bn The above commentary is on a statutory reporting basis.
FINANCIAL REPORT EXHIBITS INDEX STRATEGIC REVIEW PERFORMANCE REVIEW EXHIBIT 15.4
ADDITIONAL INFORMATION 157 Net operating income excluding Notable Items Net interest income increased
3% driven by growth in average interest earning assets. The NIM was 1.94% and comprised: • Core NIM of
1.81%, down 1 basis point, with slightly lower lending and deposit spreads more than offsetting benefits from
higher earnings on capital and hedged deposits. • Treasury and Markets, contribution of 13 basis points. Average
interest-earning assets increased by 3% to $1,003 billion, including growth of 11% in business and 2% in housing
loans. Non-interest income increased by 5%. Key movements included: Fee income increased by 4% mainly
reflecting higher Institutional lending and cards fees. Trading and other income increased by 7% mainly due to
higher foreign exchange income and favourable derivative value adjustments. Net wealth management income
increased by 8% from higher funds under administration. $19.5bn Net interest income FY24 $18.9bn 1.94% Net
interest margin (NIM) FY24 1.95% $3.0bn Non-interest income FY24 $2.8bn Performance measures above
exclude the impact of Notable Items. These measures together with Core net interest income and Core NIM are
non-AAS measures used by management as they better reflect underlying performance. The definitions and a
reconciliation to the statutory equivalent are provided on pages 292- 298. Operating expenses Operating
expenses increased 9%. The increase included a restructuring charge of $273 million in the Second Half of 2025
to support targeted productivity initiatives under our Fit for Growth program. Excluding this cost, operating
expenses increased by 6%. Key movements included: Staff expenses increased by 7%a mainly due to wage
growth, UNITE and the investment in bankers. Average FTE increased by 1% with the increase to support UNITE
and the investment in bankers more than offsetting reductions from productivity initiatives. Occupancy expenses
decreased by 7% with further reductions in the Group's corporate and branch footprint. Technology expenses
were up 13% due to higher costs related to the UNITE program, an increase in software amortisation related to
projects completed in prior years and higher software maintenance and licensing costs. Other Expenses
decreased by 3%a due to lower professional and servicing costs and higher costs in the prior year from the
closure of RAMS, partly offset by higher litigation and remediation costs, and advertising spend. Fit for Growth
restructuring expenses to support targeted productivity initiatives were $273 million in the Second Half of 2025.
The expense to income ratio increased to 53.2% and excluding Notable Items the ratio increased to 53.0%.
$11.9bn Operating expenses FY24 $10.9bn 53.2% Expense to income ratio FY24 50.7% 53.0% Expense to
income ratio excluding Notable Items FY24 50.3% a. Excluding the impact of the Fit for Growth restructuring
expenses. There were no Notable Items impacting operating expenses in FY25 or FY24. The expense to Income
ratio excluding Notable Items is a non-AAS financial performance measures used by management as it better
reflects underlying performance. The definition of these items is provided on pages 292- 293.
158 WESTPAC GROUP 2025 ANNUAL REPORT Credit quality sound, strong balance sheet Credit quality
improved and we maintained a strong financial position with capital, funding and liquidity all above regulatory
minimums. Credit quality Credit impairment charges represented 5 basis points of average gross loans compared
to 7 basis points in the prior year. The low level of impairment charges was driven by our prudent lending
practices and customer resilience across both households and businesses. The improvement in credit quality
metrics reflects a more favourable operating environment and the reduction in household cost of living pressures
as inflation has eased and interest rates have declined in both Australia and New Zealand. We remain
appropriately provisioned with credit impairment provisions of $4,987 million, $1.9 billion above the expected
losses of our base case economic scenario. Over the year provisions decreased by 2% with an overall
improvement in portfolio credit quality more than offsetting an increase in the downside scenario weight and
higher overlays. STRESSED EXPOSURES AS A % OF TCE 1.45 1.28 Sep-24 Sep-25 Capital The CET1 capital
ratio of 12.5% is above our target ratio of 11.25% in normal operating conditions. This equates to $3.1 billion of
capital above the target after payment of the second half 2025 dividend. The CET1 capital ratio increased 4 basis
points as net profit was largely offset by the payment of dividends and increases in Risk Weighted Assets (RWA).
CET1 CAPITAL RATIO 12.5 12.5 18.3 18.3 APRA basis Internationally comparable Sep-24 Sep-25 Funding and
liquidity The September quarterly average liquidity coverage ratio (LCR) and the net stable funding ratio (NSFR)
were both above regulatory minimums. The deposit to loan ratio increased slightly, with deposit growth broadly
funding loan growth during the year. The Group raised $28 billion of new long term wholesale funding. Long term
wholesale funding needs in 2025 were lower compared to recent financial years, reflecting growth in household
deposits and lower wholesale funding maturities. The bank maintained stable short term wholesale funding
balances, with movement mainly driven by changes in FX rates. Long term wholesale funding where the residual
maturity is less than one year increased. LCR AND NSFR (%) 133 112 137 113 LCR NSFR 84.9% Deposit to
loan ratio, up 137bps on Sep-24
FINANCIAL REPORT EXHIBITS INDEX STRATEGIC REVIEW PERFORMANCE REVIEW EXHIBIT 15.4
ADDITIONAL INFORMATION 159 Segment performance Our operating segments including Group Businesses
contribute to Group performance. For descriptions of Consumer, Business & Wealth, Institutional and New
Zealand refer to page 147. Group Businesses includes Treasury, Enterprise services and other costs not directly
attributable to segments. In 2025, the composition of our segments was revised to improve operational
alignment. Prior year comparatives have not been restated. The key changes included: • The merchants services
business was transferred from Business & Wealth to Institutional given strategic alignment with management of
payments infrastructure; • The contribution from the auto finance portfolio which was sold in March 2025 was
transferred from Business & Wealth to Group Businesses; and • Centralisation of Finance and Human Resources
into Group Businesses. The impact of Notable Items on net profit, income and expenses have been excluded
from the Segment Performance section. These measures are used by Westpac for management reporting and is
consistent with the disclosure in Note 2. Consumer Net profit increased 4% to $2,282 million and pre-provision
profit increased 4% to $3,492 million. Segment composition changes had a minimal impact, with pre-provision
profit also rising 3%. Operating income rising 4% and operating expenses increasing 4%. The increase in
operating income reflected 3 basis points of net interest margin expansion with disciplined growth in mortgages
and strong deposit growth. Expense growth was driven by a step up in UNITE spend and inflationary pressures,
partly offset by benefits from productivity initiatives. Impairment charges to average loans were 4 basis points,
compared to 5 basis points in the prior year. The decrease reflects the improvement in credit quality metrics. 33%
Contribution to Group net profit Business & Wealth Net profit decreased 7% to $2,186 million and pre-provision
profit fell 4% to $3,383 million. Excluding the impact of segment composition changes, pre-provision profit fell 1%
with a 3% increase in operating income more than offset by a 10% increase in operating expenses. Operating
income reflected strong growth in lending balances, partly offset by a lower net interest margin, while operating
expenses increased due to the step up in UNITE spend and investment in front line bankers. Impairment charges
to average loans were 23 basis points, compared to 14 basis points in the prior year. The increase reflects an
increase in the downside scenario weight and higher overlays, while credit quality metrics improved. 31%
Contribution to Group net profit Institutional Net profit increased 15% to $1,575 million and pre-provision profit
increased 6% to $2,161 million. Excluding the impact of segment composition changes, pre-provision profit rose
2%, with a 5% rise in operating income more than offsetting an 11% increase in operating expenses. The growth
in operating income reflects lending growth and higher earnings on capital. The 11% increase in operating
expenses was driven by increased investment spend, including the step up of UNITE and higher software
amortisation, in addition to an increase in bankers to support growth. The impairment benefit of $1 million,
compared to a 13 basis point charge of $120 million in the prior year. The decrease reflects the improvement in
credit quality metrics. 23% Contribution to Group net profit New Zealand Net profit increased 13% to NZ$1,197
million and pre-provision profit increased 8% to NZ$1,618 million, reflecting an 8% increase in operating income
which more than offset a 7% increase in operating expenses. Operating income reflected growth in lending and a
higher net interest margin, while operating expenses were driven by higher staff expenses, third party vendor
costs, software amortisation and higher investment spend. The impairment benefit was 4 basis points of average
loans, compared to a charge of 3 basis points in the prior year. The decrease reflects the improvement in credit
quality metrics. 16% Contribution to Group net profit Group Businesses Net loss of $161 million compared to a
net profit of $227 million. Excluding the impact of segment composition changes pre-provision profit also
decreased 92%, reflecting an 11% decrease in operating income and a 34% increase in operating expenses. The
decrease in operating income reflects lower income on surplus capital, while operating expense growth reflects
the restructuring charge as part of the targeted productivity initiates through the Fit for Growth program.
160 WESTPAC GROUP 2025 ANNUAL REPORT CREATING VALUE FOR CUSTOMERS By adopting a whole-
of-bank approach, we are creating more personalised, seamless and secure banking experiences that build long-
term trust and value. Related material topics (refer to page 149) • Vulnerable customers • Data privacy and
security • Financial inclusion • Housing affordability and security • Fraud and scams Key highlights 13M
CUSTOMERS # 1 MOBILE BANKING APP1 21% AUSTRALIAN MORTGAGE MARKET SHARE2 #2
CONSUMER NPS3 RANKED EQUAL SECOND 1. The Forrester Digital Experience Review: Australian Mobile
Banking Apps, Q3 2025. 2. APRA Banking Statistics, September 2025. 3. Refer to the Glossary (pages 324-327)
for more information on NPS.
FINANCIAL REPORT EXHIBITS INDEX STRATEGIC REVIEW PERFORMANCE REVIEW EXHIBIT 15.4
ADDITIONAL INFORMATION 161 Australia’s best banking app Westpac’s banking app continues to set the
benchmark for digital banking in Australia, ranked #1 for a third consecutive year1 . To recognise and reward
customer loyalty, we launched a dedicated Westpac Rewards hub. This is designed to make it easy for
customers to find, track and redeem rewards across multiple channels. Customers received more than $159
million in rewards value across multiple loyalty channels, including our market first partnerships with ShopBack
and Woolworths Everyday Rewards. Westpac customers can access essential everyday banking features
alongside valuable money management tools, such as Cashflow and Smart Search, which support decision
making and financial goal setting. The Savings Finder feature analyses annual spending on subscriptions and
recurring expenses to identify potential savings opportunities, enhancing customer value and engagement.
Across all digital channels, an average of 1.1 million customers each month use money management tools to
budget, track spending and understand their financial position. To support safe digital banking, we expanded our
market-leading security features designed to protect customers from scams and fraud. Westpac SafeCall and
SafeBlock are our latest Australian-first innovations. Refer to Innovating to protect customers (page 163) for more
information on our suite of digital innovations. Enhancing financial literacy We are committed to improving the
financial wellbeing of customers and the community through free financial education initiatives. We have a long-
standing partnership with Year13, an online financial literacy platform designed for young Australians. The
program offers engaging and practical content to build lasting financial habits. We connect with this important
demographic through relatable examples and interactive content, such as videos, quizzes and self-paced
modules, delivered via the social channels they use most. We also invest in digital tools and youth engagement
programs. Our banking app’s Pocket Money and Chores feature supports parents in teaching children about
saving and spending in a fun, engaging way. An online Financial Literacy Hub offers tailored learning resources
for kids, teens and school leavers. In a new collaboration with an online influencer, we produced a 12-part series
called Financial Fresh Start, focused on building good financial habits and awareness, along with steps
customers can take with support from their bank. In New Zealand, 12,206 people participated in Managing Your
Money workshops, representing a 9% increase on the previous year. These were delivered alongside targeted
seminars through our partnerships with Chambers of Commerce. In the Pacific, we deliver culturally relevant
financial education in Fiji and Papua New Guinea, reaching thousands of people and small business owners
through webinars and workshops such as Financial Basics for My Business. 1. The Forrester Digital Experience
Review: Australian Mobile Banking Apps, Q3 2025. SECURE LIVE CHAT SUPPORT Customers now enjoy
secure conversations with bankers via the Westpac Live app, with the ability to access chat history for up to 30
days and receive push notifications. All conversations are encrypted through Westpac’s secure messaging
network. This enhancement, delivered under UNITE, involved consolidating two chat platforms into one and
migrating approximately 8 million customers to a single live person chat system. The initiative cost $7.3 million
and is expected to deliver $3.7 million in annual expense savings.
162 WESTPAC GROUP 2025 ANNUAL REPORT CREATING VALUE FOR CUSTOMERS Delivering service
excellence Exceptional customer experiences depend on many factors, including ensuring our people, systems
and processes work together seamlessly to deliver timely, consistent and personalised service. We are focusing
on connecting the full breadth of our capabilities, across every operating segment and customer touchpoint, to
bring the whole bank to customers. This integrated approach aims to remove customer pain points, strengthen
advocacy and build deeper relationships over time. Through mapping, measuring and improving more than 15
critical customer journeys across our Australian operations, we are helping teams to walk in customers’ shoes
and drive cross-functional collaboration. This also provides us with better insights to help customers achieve their
financial goals. While the program is a recent initiative, early feedback indicates customers are engaging with a
broader range of our products and services. In addition, we are extending the rollout of the single banker
platform, Digital Banker, to support approximately 20,000 employees across Consumer and Business. This portal
captures customer interactions and needs, providing better insights and experiences for customers and bankers.
Prioritising safety in products and services We were proud to develop Australia’s first Safety by Design Toolkit for
financial institutions, placing customer safety and rights at the centre of product and service design. In
collaboration with the Australian Banking Association, the toolkit includes customer vulnerability personas, lived
experience videos and mandatory eLearning for product managers. It has been shared with peer organisations to
help support more Australians, regardless of who they bank with. Westpac remains committed to sector-wide
reform, advocating for Safety by Design across banking and beyond, so customer safety is built-in from the start.
Providing support in tough times We understand that anyone can fall on tough times so our Assist team provide a
range of tailored solutions to help customers regain financial stability. This can include short-term options such as
payment pauses and reduced repayments, as well as longer-term assistance plans designed to support recovery.
We also connect customers with our wider network of external partners, extending support into wellbeing and
financial empowerment. By collaborating with respected organisations, we hope to help strengthen families and
communities, break cycles of disadvantage and build lasting financial confidence. We supported customers with
46,485 tailored hardship assistance and disaster relief packages, giving customers financial reprieve and the
chance to get back on track. At the end of the financial year, 10,870 accounts remained in hardship. Through
UNITE's collections migration, we are consolidating multiple legacy systems into a single platform to support
customers and reduce complexity. It includes new tools to help teams respond to customers in hardship with
greater consistency and care. Resolving complaints Complaints are a second chance for us to make things right
for customers. Our monthly average resolution time is stable, with 94% of complaints resolved without need for
escalation. Our Customer Advocate also provides advice, while recommending policy changes and supporting
vulnerable customers. Listening to feedback helps us to continuously improve our products and services.
Importantly, we are using complaints as a key input into the customer journeys initiative, ensuring we have a
genuine view of pain points and the end to end customer experience. For example, through UNITE, we
introduced the option for eligible Westpac home loan customers to set up multiple offset accounts with no
additional fee – providing more choice and control in how they manage their finances. More than 35,000 offset
accounts have been set up since February. Listening to customers We proactively and continuously seek
customer feedback, using insights from Net Promoter Score (NPS)1 surveys, complaints and direct feedback
which helps us to measure progress and identify areas for improvement. To be Australia’s best bank, we
recognise there is more work needed to lift customer and brand advocacy. In Consumer, NPS1 improved during
the year, despite intense competition. We are currently ranked equal second in Consumer NPS1 . In Business,
we hold an NPS1 score of minus one and have established clear leadership in the SME and Commercial sub-
segments. We are prioritising improvements in our service offering for small business customers, recognising the
importance of this segment to our Business & Wealth strategy. For our Institutional customers, we aim to be their
bank of choice, supporting all their banking needs through strong relationships and comprehensive solutions. Our
Relationship Strength Index (RSI2 ) rose by 19 points, marking our highest score in a decade. While we are
currently in equal third position, our focus on deepening relationships positions us well for continued growth in
this segment. 1. Refer to the Glossary (pages 324-327) for more information on NPS. 2. Coalition Greenwich
Voice of Client 2025 Australia Large Corporate Relationship Banking Study.
FINANCIAL REPORT EXHIBITS INDEX STRATEGIC REVIEW PERFORMANCE REVIEW EXHIBIT 15.4
ADDITIONAL INFORMATION 163 Innovating to protect customers We continue to play a critical role in
safeguarding customers from the growing risk of cyber threats and financial crime. Through digital innovation, AI
and a multi-layered security approach, we continuously enhance our real-time protections. We were the first
Australian bank to offer the benefits of SaferPay and more recently SafeCall, which verifies Westpac calls for
customers directly through the app. SafeBlock was also launched along with Confirmation of Payee, which builds
on our existing Verify technology and has been adopted industry-wide. Our suite of digital innovations helped to
further reduce reported customer losses by 21% and prevented $360 million in potential losses. This outcome
reflects our commitment to supporting customers’ financial wellbeing by helping them stay safe in a complex
digital environment. WESTPAC SAFECALL Customers receive calls via the banking app that are Westpac
branded, verified by Optus and show a reason for the call to remove uncertainty about who is contacting them.
WESTPAC SAFEBLOCK Allows customers to instantly lock their eligible accounts and cards, including blocking
outgoing payments, transfers, and purchases, if they suspect fraud or a scam, while allowing deposits and
scheduled payments to continue. CONFIRMATION OF PAYEE Alerts customers when there is a potential
account name mismatch by checking if the account name entered by a payer matches the details held by the
receiving bank, further reducing the risk of misdirected payments. Educating and empowering customers
Prevention and detection go hand in hand, which is why we work proactively to keep customers informed about
emerging threats. Our Cyber Response Playbook and Scam Spot video series inform customers and the
community on new tactics. To empower customers, our app offers additional security tools including the Security
Wellbeing Check, Westpac Protect SMS Code, Dynamic CVC and biometric authentication to help customers
safeguard their accounts. Providing timely support Fraud and scams can have devastating and widespread
impacts. While we make every effort to recover funds sent to scammers, this is unfortunately not always possible.
Our dedicated Fraud and Scams team, supported by AI and automation, detect suspicious patterns and risks to
support customers in critical moments. We launched a new feature in the app that enables customers to report
scams, fraud, or mistaken payments quickly and securely. Our Online Banking Security Guarantee 1 and Fraud
Money Back Guarantee 1 continue to offer peace of mind in certain situations. Advocating for change We
continue to advocate for a whole-of-ecosystem approach to scam prevention. We supported the development of
the new Scams Prevention Framework Act 2025, which requires all parties, including banks, telcos, and social
media platforms, to take preventative steps to protect consumers. We continue to work closely with industry
peers to inform policy and regulatory settings under this new legislation. SAFERPAY PROTECTS RETIREES
FROM INVESTMENT SCAM An elderly couple attempted to transfer $500,000 to what they believed was a
legitimate high-interest term deposit. The offer came from scammers posing as financial advisers, complete with
official-looking documentation. Their online transactions triggered real-time SaferPay prompts that exposed
inconsistencies. Our team intervened immediately, preventing any financial loss. The customers were incredibly
relieved that SaferPay had stepped in to protect them. 1. Refer to Online Banking Terms and Conditions and
relevant Card Terms and Conditions.
164 WESTPAC GROUP 2025 ANNUAL REPORT CREATING VALUE FOR CUSTOMERS Maintaining
community presence We recognise that many customers prefer face-to-face support, particularly when making
important financial decisions. We provide trusted support across 621 branches which includes 125 co-located
branches. This represents the second-largest branch network in Australia, with more than 37% of these located
in regional areas. We have the largest fee-free ATM network in the country. Complementing our branch network
is a Virtual Banking team, providing secure, expert support via phone, video, and chat. From early 2026,
customers will also have access to a new Book a Banker tool, facilitating appointments with lenders when it suits
them. Our long-standing partnership with Australia Post offers another face-to-face banking option through 3,300
Bank@Post outlets nationwide. Supporting Indigenous customers Westpac supports Indigenous customers
across multiple channels including a dedicated Indigenous Call Centre with translators to support Indigenous
languages. On-the-ground teams in remote areas of every State and Territory work in partnership with community
groups to help empower Indigenous customers and support their banking needs. Promoting regional prosperity
Regional Australia plays a vital role in the nation’s success and we believe unlocking its full potential is key to
driving sustainable economic growth. This is a focus of our refreshed sustainability strategy, which aims to
support regional business growth, local employment and positive community and environmental outcomes. In
response to the unique needs of regional communities, we listened to customer and community feedback by
reflecting on how we could improve our service offering. We have introduced a new regional banking model
through integrated service centres that bring retail and business banking under one roof. This model delivers a
more personalised and comprehensive banking experience, which helps to build trust and stronger, more
enduring relationships over time. We committed to three service centres in new locations, with more planned in
the future. This was bolstered by our growing business banking and agribusiness team with deep industry
expertise. Our pledge to keep regional branches open has been extended to mid-2027, providing greater
certainty for customers, employees and communities. Importantly, our focus isn’t limited to financial support and
services. A resilient and stronger future for regional and rural Australia also relies on unlocking potential through
innovation. Our agri-tech investments combined with agriculture-related sponsorships, scholarships and
partnerships are fostering the next generation of farmers, helping them to solve critical industry issues. Faster
lending decisions Following our operational improvements last year to reduce time to decision for home loan
customers, we’ve continued to simplify mortgages end-to-end by streamlining policies and processes and
accelerating automation. We have also improved our home loan same-day settlement performance, now ranked
number one among Australia’s major banks1 . This supports our strategic focus on improving service and
fostering deeper customer relationships. We halved documentation requirements for self-employed applicants
through the introduction of a one-year income assessment option. This is helping to make the home-buying
journey simpler for self-employed Australians. In addition, we commenced the roll-out of a simplified digital
experience for personal loans. The initiative aims to reduce manual processing and improve turnaround times for
both new and existing customers. ANNUAL MEDIAN HOME LOAN TIME TO DECISION (DAYS)a 5.6 5.2 4.6 9.7
5.8 5.0 1st Party 3rd Party FY23 FY24 FY25 a. Prior periods have been restated Driving efficiency for businesses
In March we launched BizEdge, a new digital platform that simplifies and accelerates loan decisions. This
streamlines the end-to-end lending process and reducing manual effort for bankers and customers alike. Since
launch, it has facilitated $4.8 billion in business lending applications. (Refer to page 178) We were the first
Australian bank to activate Mastercard’s mobile virtual card solution to simplify business payments for corporate
and government clients. This capability replaces manual processes with faster, safer payments, real-time visibility
and automated reconciliation. To support our ambition to restore Institutional to number one, we're investing in
our people and fostering enduring client relationships through expert, personalised service across all channels.
Our bankers and product specialists bring deep sector expertise and long-standing partnerships, helping clients
to navigate complexity and unlock opportunities. Meanwhile, our investment in Westpac One aims to bring
together real-time treasury management, foreign exchange, trade and lending with powerful data insights. (Refer
to Modernising technology on page 178) 1. According to Property Exchange Australia (PEXA) data as at
September 2025.
FINANCIAL REPORT EXHIBITS INDEX STRATEGIC REVIEW PERFORMANCE REVIEW EXHIBIT 15.4
ADDITIONAL INFORMATION 165 Inclusive and accessible banking Inclusive and accessible design is part of
how we serve and support customers. Our new Access & Inclusion Plan 2025-2028 outlines how we’ll continue to
enhance banking so every customer can engage in a way that suits their needs. We are committed to meeting
diverse accessibility needs by, for example: • Providing space for assisted devices and personal support in
branches; • Promoting awareness of assistive technologies such as screen readers, chatbots and text-to-speech
functionality; • Supporting customers who wear a Hidden Disabilities Sunflower accessory; • Offering multiple
communication options including interpreters, translation services, AUSLAN and the National Relay Service; •
Delivering cultural awareness training for staff; and • Providing training and resources to support non-binary and
gender-affirming customers. Responsible marketing and advertising We regularly review and enhance our
policies, procedures, and processes to ensure they consistently support positive customer outcomes. This
commitment also applies to how we market our products and services towards suitable customers, as detailed in
our Responsible Marketing and Advertising policy on our website. Safeguarding data and privacy Earning and
maintaining customer trust is essential to our long-term success. All employees complete mandatory annual
training on data privacy and cybersecurity. Our Privacy Statement outlines how we protect personal information,
while our Cybersecurity Statement details our alignment with global and ISO standards. We continue to invest in
secure-by-design policies and infrastructure to meet evolving expectations and requirements. Supporting female
entrepreneurs We have doubled our commitment to supporting women in business, increasing this to $1 billion to
help more women overcome the challenges of starting or growing a business. Since launching the initiative two
years ago, we have helped more than 1,800 women in a range of industries, including retail, healthcare, creative
services and hospitality. Assisting vulnerable customers We continue to strengthen protections for vulnerable
customers through specialist support teams and proactive monitoring of payment descriptions and power of
attorney accounts to identify potential misuse. We also offer self-serve product features such as gambling blocks
and parental controls. To respond to threats and improve safeguards, we work closely with community
organisations and law enforcement. Customers with eligible government concession cards can also open a basic
bank account, which has no monthly account keeping or overdrawn fees. Our teams are trained and equipped to
identify and support vulnerable customers, and to connect them with external partners where additional
assistance is needed. PRACTICAL PATHWAYS TO HOME OWNERSHIP Westpac is proud to be the founding
partner of Head Start Homes, supporting more Australians into safe and stable housing through practical
pathways to home ownership. This partnership supports First Nations and single-parents to become proud
homeowners through bespoke services such as savings plans and home-buying guidance. Head Start Homes
has supported more than 225 households to begin their journey to home ownership while helping to free up
social housing for other families in need. Learn more about Kamini (pictured) on the Head Start Homes website.
Brittany Mobile Home Finance Manager Broadbeach, QLD 166 WESTPAC GROUP 2025 ANNUAL REPORT
CREATING VALUE FOR OUR PEOPLE We strive to be Australia’s best workplace, where people feel valued,
supported and inspired to deliver for customers and reach their potential. Related material topics (refer to page
149) • Employee engagement • Health and safety • Diversity, equity and inclusion Key highlights 80
ORGANISATIONAL HEALTH INDEX 49% WOMEN IN SENIOR LEADERSHIP1 $6.3BN PAID IN SALARIES
35,236 EMPLOYEES2 1. Senior Leadership includes Executive Team, General Managers and their direct reports
(excluding administrative or support roles). 2. Refers to Full-Time Equivalent as at 30 September 2025.
FINANCIAL REPORT EXHIBITS INDEX STRATEGIC REVIEW PERFORMANCE REVIEW EXHIBIT 15.4
ADDITIONAL INFORMATION 167 190,000 employee recognition moments AMPLIFY new employee listening
platform 3,600 employees participated in AI Shark Tank Creating a culture where people thrive To become
Australia’s best workplace, we are shaping a high-performance culture where people feel supported,
accountability is clear, positive behaviours are recognised and it is safe to speak up. Receiving the ‘Employer of
Choice’ award for large organisations at the Australian HR Awards recognises the progress we’ve made in
making Westpac a great place to work. We are building on this momentum under the guidance of a new Chief
People Officer, while executing UNITE to help make our working environment simpler and more rewarding for our
people. With a renewed Purpose, our values were updated in July to three clear, actionable commitments:
Always deliver, safely; Make an impact; and Own it. We are embedding these into processes to align
expectations and shape a service mindset. We’re actively supporting our leaders to help shape our culture. One
way we do this is by embedding skill boost sessions into weekly team rhythms. These activities encourage open
conversations around positive risk behaviours such as speaking up, admitting mistakes and taking initiative. In
June 2025, our final Voice+ survey including the Organisational Health Index (OHI) was completed. The score
remained at 80, reinforcing Westpac's position in the top quartile of organisations globally. This reflects our
progress in recent years to reset culture and strengthen risk practices through the CORE program, which is now
complete. For more detail, refer to page 181. Listening and acting on feedback Feedback is essential to building
a culture of trust and continuous improvement. It ensures people feel heard, empowered to act, and aligned to
our purpose. To capture more dynamic employee insights and drive further improvement, we’ve transitioned from
Voice+ to a new Amplify platform. Amplify enables leaders at all levels to act on team feedback, strengthening
engagement and risk management. Insights help leaders and teams agree on priorities and turn feedback into
measurable change, supporting our goal of becoming the best place to work. We also engaged with our people to
understand how they want to use AI to work more effectively and provide better service to customers. Our
inaugural CEO-sponsored AI Shark Tank program drew significant engagement, with 3,600 employees
participating and 1,200 ideas submitted. It highlighted a keen interest in embracing AI across the company. 10
standout opportunities were selected by Executives for implementation. We also responded to employee
feedback through our continuous improvement platform Ignite, which uncovered valuable ways to boost
productivity, improve customer experience and reduce risk. In addition, leaders have regular conversations with
their team members to provide performance and development feedback to engage and motivate our people.
RECOGNISING GREAT OUTCOMES The recognition of our people is embedded in our culture. We have formal
mechanisms in place to encourage and recognise high performance, including those linked to excellent risk
outcomes. The Great Employee Moments (GEM) platform captured 190,000 recognition moments, which
informed our award winners. The annual CEO Awards (pictured) at the end of each calendar year are the
pinnacle of our recognition framework, celebrating individuals and teams who exemplify excellence, leadership
and impact across the business. Each quarter, the Board directly recognise individuals who demonstrate positive
risk outcomes, exceptional courage, innovation or leadership beyond the expectations of their role.
168 WESTPAC GROUP 2025 ANNUAL REPORT CREATING VALUE FOR OUR PEOPLE Attracting and
retaining talent Attracting and retaining talent sparks innovation and builds a workforce that reflects the diversity
and capability needed to deliver great results. We are advancing this through several targeted strategies.
Onboarding and Orientation: We introduced a refreshed onboarding and orientation program for new talent,
featuring customer immersion sessions, hands-on activities and engagement with our Executive team. Graduate
Program: We rank in the top ten of Australian Financial Review 'Top Grad Employers for 2025’ for our award-
winning graduate program. We hired 135 graduates, comprising 58% female and 52% from a STEM background.
Licensed to recruit: A new Licenced to Recruit training program is strengthening the capability of People Leaders
making hiring decisions. To date, more than 1,500 leaders have completed face-to-face training across Australia.
Internal talent mobility: We saw a second consecutive year of improvement in internal talent mobility, which is up
5% from FY23. This was driven by the launch of a new Internal Careers site with enhanced employee tools and
the introduction of the Westpac Talent Community. We continue to support redeployed employees through job-
matching tools and reporting dashboards that help identify opportunities and track outcomes. Diverse hiring: We
maintained our commitment to diverse hiring, with 49% overall female representation, even as recruitment efforts
pivoted towards male dominated technology-focused roles. Notably, MobTech welcomed 11 new Indigenous
cadets. Our dedicated female talent initiative, EmPOWERUp, creates a pathway for women to reignite their
careers after an extended leave break. It continues to build a strong candidate pool across all levels and
disciplines, with approximately 1,300 women engaged to date. Developing leadership capability People leaders
are critical to our success. They shape our culture, drive performance and role model the behaviours that enable
teams to thrive. We have three signature leadership programs to develop leaders at all levels. The Horizon
program for executive leaders resumed with its fourth cohort. This is part of a broader leadership development
strategy aimed at strengthening executive capability and driving cultural transformation. To further align broader
leadership behaviours with performance outcomes, we launched the Westpac Leadership Qualities framework,
which will be reinforced in a new Executive Leadership Group1 Scorecard from FY26. We introduced two new
leadership programs designed to strengthen capability for more than 4,000 employees through to FY27. Elevate
supports our senior leadership cohort, while LEAD is tailored for mid-level and emerging leaders. These
programs focus on executive coaching and developing adaptive leadership, high-performance and an enterprise
mindset. We are committed to supporting the development and progression of women at Westpac. This includes
accelerating the impact of programs such as Illuminate, our female sponsorship initiative and Step-Up, a new
career development program. Refer to page 169 for more information. Investing in skills for the future Equipping
our people with future skills and capabilities is at the heart of our learning and talent strategy. It encompasses
both mandatory and optional training, leadership development as well as addressing capability gaps across the
organisation. Mandatory training is completed by all employees and covers compliance, privacy and data
protection, risk awareness, identifying hazards and conflicts of interest. We expanded optional learning in
emerging areas such as AI, sustainability and cybersecurity. More than 10,000 employees completed training in
generative AI through our Microsoft 365 Copilot rollout. See Data, Digital and AI on page 179 for more
information. In Business & Wealth, we relaunched The Business Performance Academy, offering targeted training
to 3,000 employees to build confidence and advance their careers. This is complemented by learning programs
designed to build confidence in discussing sustainability matters with customers. A new self-directed leadership
program, IMPROVE, was developed by the NeuroLeadership Institute and is designed to enhance feedback skills
for leaders using contemporary research. Our people also accessed degree programs and certification training,
supported by paid study leave. 1. Includes approximately 190 senior leaders, including Group Executive direct
reports (General Managers (GM) and Chief of Staffs) and key GM1 roles.
FINANCIAL REPORT EXHIBITS INDEX STRATEGIC REVIEW PERFORMANCE REVIEW EXHIBIT 15.4
ADDITIONAL INFORMATION 169 11,000+ employee advocacy group members 135 new graduates joined
Westpac 10,600 Microsoft 365 Copilot licences Strengthening diversity, equity and inclusion We are a proudly
inclusive employer, committed to fostering a workplace where our people feel valued, respected and safe. One
way we advance inclusion is through 10 employee advocacy groups, connecting more than 11,000 people who
champion diversity across areas such as gender, disability, LGBTQ+ communities and cultural backgrounds. We
also refreshed the Access and Inclusion Plan, marking a 25 year commitment. We have a zero-tolerance
approach to sexual harassment and related unlawful conduct, encouraging respectful behaviour and
accountability. We encourage our people to be upstanders and speak up against inappropriate behaviours. Our
policy includes training, dedicated reporting channels, a no-bystander rule and investigation and support
processes. We also delivered training to the Board and Executive Team on their positive duty obligations under
recent legislative reforms. We continue to champion gender diversity, with women holding 49% of senior
leadership roles. To build on this, we aim to achieve a 40:40:20 balance at all levels by FY30, with 40% women,
40% men and 20% of any gender. In a submission to the Workplace Gender Equality Agency (WGEA), we
reported an overall average gender pay difference of 2% based on similar roles or levels. The median gender pay
gap reduced by 1.2% to 28.1% and this figure is heavily influenced by the composition of our workforce, with
many women employed in contact centres, operations and branches. Our new gender diversity target is designed
to help address this. The Illuminate program supported 82 aspiring female leaders through GM sponsorship, with
more than 35% advancing to new or expanded roles. As the first bank to join Diversity Council Australia’s RISE
Project, we are supporting 20 women from diverse racial and cultural backgrounds to advance their leadership
careers. We are investing in specialised programs to recruit, retain and develop Aboriginal and Torres Strait
Islander people, supported by a dedicated First Nations Engagement Manager. Refer to page 173 for more
information. Prioritising health, safety and wellbeing We recognise health, safety and wellbeing play a vital role in
how our people show up at work. We are committed to fostering a safe, secure and supportive environment,
focused on protecting people from physical and psychological harm, supporting mental health and providing a
respectful and inclusive workplace. The mental health strategy is shaped by our Chief Mental Health Officer.
Reviews of each segment were conducted, which helped develop targeted action plans to address psycho-social
risks and better understand the factors influencing wellbeing at work. This was complemented by mental health
training in partnership with the Black Dog Institute. For our Retail bankers' safety, we delivered face to face de-
escalation training to 157 branches and psychological first aid training to 375 Consumer leaders. Wellbeing
remains a core part of our employee value proposition. We launched a new mobile Wellbeing App with
personalised content and holistic wellbeing assessments to encourage healthy living. This complements our
other health initiatives including fitness incentives, access to 24/7 counselling and free flu vaccinations. Flexible
working arrangements support a healthy work-life balance. In addition, our latest EVP introduced new leave
benefits including doubling Culture, Lifestyle and Wellbeing Leave to four days, increasing Compassionate Leave
from three to five days per occasion, as well as five days leave to support employees to attend appointments
related to fertility treatment, surrogacy, adoption and foster care. We also make superannuation payments during
unpaid parental leave, rather than waiting until employees return to work. We offer market-leading banking
benefits for employees, contractors and their families. Eligible employees receive a Salary Continuance
Insurance benefit, also known as Income Protection Insurance, in case of illness and injury. In addition, a
MyDiscounts employee portal continues to offer exclusive offers and discounts from leading brands. BUILDING
STRONGER CUSTOMER CONNECTIONS We believe it’s essential for our people to understand how their roles
contribute to better customer outcomes. We created opportunities for all teams, including business functions like
risk, legal and compliance, to connect with customer experiences supported by Customer Obsession Learning
and Service Mindset sessions attended by 1,000 people. Additionally, 2,500 people completed Immersion training
and 600 participated in Customer Journey Bootcamps. We're building a workplace where everyone feels
empowered to deliver great customer outcomes.
170 WESTPAC GROUP 2025 ANNUAL REPORT CREATING VALUE FOR THE COMMUNITY We are
determined to make a meaningful difference in the community by empowering our people and the organisations
we support. Related material topics (refer to page 149) • Communities • Indigenous peoples • Human rights and
modern slavery • Sustainable supply chain • Tax transparency Photo: Ngutu child Thelma with her educator
Melissa at Ngutu College, supported by BankSA Foundation. 100 SCHOLARSHIPS AWARDED EVERY YEAR1
65,538 HOURS VOLUNTEERED BY WESTPAC EMPLOYEES $199M IN COMMUNITY INVESTMENT2 $56.1M
SPENT WITH DIVERSE SUPPLIERS3 1. By Westpac Scholars Trust which is supported by Westpac Group but
operates independently as a non-profit organisation. 2. Figure includes commercial sponsorships and foregone
fee revenue. 3. Refer to the 2025 Sustainability Index and Datasheet for definition.
FINANCIAL REPORT EXHIBITS INDEX STRATEGIC REVIEW PERFORMANCE REVIEW EXHIBIT 15.4
ADDITIONAL INFORMATION 171 Since establishing our first charity in 1879, we have remained committed to
building stronger, more inclusive communities. Our approach continues to evolve and is guided by where we can
deliver the greatest impact for customers and their communities. Westpac offers a range of community
investment initiatives that encourage employees to contribute their time, skills and experience to causes they are
passionate about. These initiatives also help to foster trust and deeper connections with the communities we
serve. Australian employees receive one day of paid volunteer leave each year. This offers valuable opportunities
for personal and professional development while delivering meaningful benefits to the community. Our people
contributed 65,538 hours to initiatives ranging from volunteer firefighting to mentoring social enterprises. In
addition, 140 people also participated in Jawun secondments, the Community Ambassador and Westpac Board
Observer programs. Through our workplace giving initiative, Westpac matched $1.6 million in employee
donations to 200 charities. New chapter, stronger commitment We spent time assessing how to maximise our
impact for current and future generations. To align with Australia’s national education and productivity goals, from
2026 the Westpac and Regional Foundations and our community initiatives will unite next year behind a single,
critical objective: improving literacy and numeracy outcomes for children facing disadvantage. We believe every
child should have the tools to unlock their potential, regardless of background or the challenges they face. Refer
to our 2025 Foundations Impact Report for more information. Westpac Foundation1 The Westpac Foundation
awarded $2.2 million to 8 new social enterprise partners to support job creation. It has positively impacted
hundreds of communities in the past 20 years by providing meaningful employment opportunities for people
facing barriers to work, achieving its ambitious goal to create 10,000 jobs by 2024. Regional Foundations1 The
Regional Foundations have helped to lay the groundwork for our focus on education, with 40% of grants since
2023 supporting inclusive education. They awarded $3.3 million this year to programs that boost educational and
wellbeing outcomes for young people facing disadvantage (refer to case study). Westpac Scholars Trust1 The
Trust's landmark pledge is to award 100 scholarships a year, forever. The Trust awarded $5.1 million to scholars
this year, bringing its collective impact to $50 million since 2015. Te Waiu O Aotearoa Trust2 The Trust awarded
$5,000 scholarships to eight Māori recipients across Aotearoa to support their tertiary studies in business,
banking and finance. Investing in local communities Since 2014, we have supported Little Wings, a children’s
charity providing free aeromedical transport for seriously ill children in regional and remote communities.
Operating from Bankstown, Cessnock and Brisbane airports, Little Wings completes more than 2,300 missions
annually. Our partnership, formalised in 2020, helps fund its Medical Wings program, which brings city-based
specialists to regional clinics each month. Building on the success of our existing partnership with National Rugby
League, we announced a new sponsorship with Cricket Australia. Our support directly contributes to initiatives
that elevate participation and visibility of both sports, from grassroots clubs to elite competition. This includes
pathway and development programs for schools, young females and First Nations talent to grow the next
generation of players and leaders. BUILDING BRIGHT FUTURES Country Education Foundation of Australia
(CEF) is a volunteer led organisation helping thousands of young people in regional, rural and remote
communities to pursue education and training after school. Operating through 49 local foundations across five
states and territories, CEF is powered by more than 400 dedicated volunteers who fundraise, award grants and
mentor students, ensuring that distance and disadvantage don’t stand in the way of opportunity. St.George
Foundation has awarded a three-year, $300,000 Inspire grant to CEF to help students like Piper (pictured)
continue their studies and build bright futures. 1. In FY25, Westpac Group provided support to the Westpac
Community Trust and the Westpac Buckland Fund (known as the Westpac Foundation), Westpac Scholars Trust
and the St George Foundation Trust (known as St George Foundation, BankSA Foundation and the Bank of
Melbourne Foundation). While Westpac was involved in establishing these foundations, they are non-profit
organisations that are separate to the Westpac Group. The trustee of St George Foundation Trust (St George
Foundation Limited) is a related body corporate of Westpac. 2. Westpac New Zealand provides administrative
support and skilled volunteering to Te Waiu O Aotearoa Trust, which is a charitable trust and not part of the
Westpac Group.
172 WESTPAC GROUP 2025 ANNUAL REPORT CREATING VALUE FOR THE COMMUNITY Respecting and
advancing human rights We recognise that our activities and relationships can affect the human rights of our
people, customers and communities. We are committed to respecting these rights and actively seek opportunities
to support and advance them. We have a long-standing commitment to social impact and human rights
leadership, having introduced our first Human Rights Position Statement and Action Plan a decade ago. We
continue to progress and update our approach where appropriate, to ensure it remains relevant, aligned to our
purpose and reflects expectations and standards. The current Human Rights Position Statement and Action Plan
sets out our stance on respecting and advancing human rights and the actions we are taking. We also support
the UN Guiding Principles on Business and Human Rights, which informs the way we identify, assess and
address human rights and modern slavery risks and impacts across our operations and supply chain. The
outcomes of customer and supplier assessments are published each year in the 2025 Sustainability Index and
Datasheet. More information on Westpac's approach to human rights due diligence, grievance mechanisms and
remedy can be found on the Human Rights section of our website and in the Modern Slavery Statement. We are
making good progress on the actions outlined in the Human Rights Position Statement and Action Plan, with
delivery expected by May 2026 across five strategic priorities. Strategic focus areas FY25 Progress Addressing
our salient human rights issues Completed the final phase of our Human Rights Risk Assessment (HRRA). This
identified eleven salient human rights issues that represent our most significant areas of human rights risk. Refer
to the 2025 Sustainability Index and Datasheet for detailed results. Strengthening grievance mechanisms and
approach to remedy Developed a grievance mechanism to respond to human rights concerns from people
impacted by our lending to large businesses, incorporating feedback from human rights experts, investors and
civil society. We expect to pilot the mechanism in FY26. Supporting and advancing human rights through a just
and inclusive transition Developed principles and three action areas to guide our approach to a just transition as
we support those more impacted by extreme weather events and the transition to a net-zero economy. Refer to
the Climate Transition Plan for more information. Strengthening a focus on child safeguarding Launched a Safety
by Design Toolkit for free use by the banking sector, in partnership with the Australian Banking Association. The
Toolkit provides guidance on designing products and services to better safeguard customers from financial harm,
including children and young people. Strengthening the foundations of our human rights approach Developed an
approach to deliver enterprise-wide human rights and modern slavery training and capability improvements. We
also finalised a monitoring framework to track and report on our salient human rights risks. SAFEGUARDING
CHILDREN Since 2020, Westpac’s Safer Children, Safer Communities (SCSC) Program has committed more
than $80 million to more than 50 organisations across Australia and Asia. While funding under the SCSC initiative
is now fully allocated, our commitment to child safeguarding continues through our participation in the On Us:
Australian Business Coalition for Safeguarding Children and associated Child Safeguarding Business Principles,
which guide businesses in recognising and managing their potential or actual risks on children’s safety and
wellbeing. The Principles align with national efforts led by the Australian Government to improve child safety
across industries and provide a clear, actionable framework for embedding child safety into business operations,
risk management and culture.
FINANCIAL REPORT EXHIBITS INDEX STRATEGIC REVIEW PERFORMANCE REVIEW EXHIBIT 15.4
ADDITIONAL INFORMATION 173 Ensuring reliable access to cash Maintaining access to cash in communities
across Australia carries significant cost. We continue to balance these costs against our responsibility to ensure
financial inclusion, particularly for vulnerable customers and regional communities. Our total cost of supplying
cash services to Australians was approximately $350 million. This included our continued financial support for
Armaguard to help maintain the stability of the national cash distribution system. We are working with
government, regulators and industry partners to shape a long-term, sustainable solution for Australia's wholesale
cash supply. For information on the other ways we're supporting regional Australia, refer to page 164. Maintaining
a sustainable and diverse supply chain We aim to build a stronger, more inclusive society by supporting
businesses that create positive change. Through our Supplier Inclusion and Diversity program, we support
Indigenous-owned businesses, social enterprises, Australian Disability Enterprises, women-owned businesses
and B Corporations - companies certified for their high standards of social and environmental performance,
transparency and accountability. We spent $56.1 million with diverse suppliers1 , an increase of $18.2 million
from last year. Please refer to the table below for information on how we support Indigenous-owned businesses.
Supporting Reconciliation and Indigenous peoples Our vision for reconciliation is an Australia where Aboriginal
and Torres Strait Islander peoples have equitable opportunity for economic participation and financial wellbeing.
We seek to achieve this through a focus on creating impact for Indigenous customers, employees and
communities. The outcomes of the 2022-2025 RAP set out below demonstrate our ongoing commitment to
achieving our vision. Our new 2026-2028 Reconciliation Action Plan (RAP) signifies a sharper focus across five
priority areas, including Indigenous banking, supporting suppliers, home ownership, Westpac careers and Free,
Prior and Informed Consent (FPIC). RAP FOCUS AREA FY25 PROGRESSa Valuing culture: building
relationships based on trust and respect; valuing cultures and histories and recognising the importance of self-
determination. • Maintained cultural capability with 99.8% of employees completing mandatory learning. •
Celebrated and supported Indigenous culture by hosting more than 30 events internally and externally for
National Reconciliation Week and NAIDOC Week. • Platinum Sponsor of Garma, a major event celebrating
Indigenous culture. • 20 Westpac staff completed a Jawun secondment this year, bringing the total to 100
secondments since April 2022. Meaningful careers: investing in Indigenous careers through dedicated programs
to recruit, retain and develop Aboriginal and Torres Strait Islander people. • Aboriginal and Torres Strait Islander
workforce representation rose to 1.15% though retention challenges have slowed progress towards our 1.5%
target. To address this, we’ve appointed a First Nations Engagement Manager to develop and implement a
retention and development strategy for Indigenous employees. • We recruited 11 new cadets through MobTech,
all of whom secured permanent roles at Westpac. Better banking experiences: making it easier for Indigenous
customers to do business with us and improving financial inclusion and economic participation. • 18,008 unique
customers have been supported through our Indigenous call centre since April 2022. • Since 2022, we’ve
delivered 14
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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.