WESTPAC
2024
ANNUAL
REPORT
WESTPAC 2024 ANNUAL REPORT
Acknowledgement of Indigenous Peoples
Westpac acknowledges the First Peoples of Australia. We recognise
their ongoing role as Traditional Owners of the land and waters of
this country and pay our respects to Elders, past and present. We
extend our respect to Westpac’s Aboriginal and Torres Strait Islander
employees, partners and stakeholders and to the Indigenous Peoples in
the other locations where we operate.
In Aotearoa (New Zealand) we also acknowledge tāngata whenua and
the unique relationship that Indigenous Peoples share with all New
Zealanders under Te Tiriti o Waitangi.
Westpac’s reporting suite
Our 2024 Annual Report is our primary report to shareholders. Guided by the Integrated Reporting Framework
principles, it brings together financial and non-financial performance, strategic progress and the value created for
stakeholders. Within this report, we cover our sustainability priorities which are also included on the Sustainability
page on our website.
The information in this report relates to our 2024 (FY24) reporting period unless stated otherwise.
Our Annual Report forms part of our broader 2024 reporting suite, which comprises financial, non-financial, risk and
sustainability performance for the year. The 2024 reporting suite includes:
•
Financial Results Presentation and Investor Discussion Pack;
•
Second Half Performance Review;
•
Climate Report;
•
Pillar 3 Report;
•
Notice of Meeting;
•
Corporate Governance Statement; and
•
Risk Factors.
Our 2024 Sustainability Index and Datasheet is the reporting hub for many of our sustainability metrics. It provides
a glossary and details of our alignment with key reporting standards.
Our full suite is available online at westpac.com.au/2024annualreport.
In this 2024 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 and non-financial information in this Annual Report see Reading this report
(page 100).
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 (page 100). Please consider those important disclaimers when reading the forward-looking statements in
this Annual Report.
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. Information on those websites owned by Westpac is current as
at the date of this report. Except as required by law, we assume no obligation to revise or update those websites after the date of this report. We
are not in a position to verify information on websites owned and/or operated by third parties.
Westpac Banking Corporation ABN 33 007 457 141
Cover image: Rita Ngo, Lending Manager, Queensland
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Contents
STRATEGIC REVIEW
4
How we create value
4
Chairman’s report
6
CEO’s report
8
About Westpac
10
Our strategy
12
Our operating environment
14
Creating value for shareholders
16
Creating value for customers
20
Creating value for our people
26
Creating value for the community
30
Creating value for the environment
34
Technology
38
Risk Management
40
Corporate Governance
48
Sustainability Governance
52
Directors’ Report
54
Board of Directors
54
Executive Team
58
Remuneration Report
68
Information on Westpac
96
PERFORMANCE REVIEW
99
Reading this report
100
Group performance
104
Segment reporting
130
FINANCIAL STATEMENTS
142
Income statements
143
Statements of comprehensive income
144
Balance sheets
145
Statements of changes in equity
146
Cash flow statements
148
Notes to the Financial Statements
149
Consolidated Entity Disclosure Statement
268
Statutory Statements
271
SHAREHOLDER INFORMATION
280
Shareholding Information
281
Additional Information
290
Glossary of Abbreviations and Defined Terms
298
Contact Us
303
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WESTPAC 2024 ANNUAL REPORT
HOW WE CREATE VALUE
OUR FOUNDATIONS
OUR BUSINESS
Passionate people
who make
a difference
Data-informed
insights and
decision making
Proactive risk
management
and risk culture
Strong balance
sheet
a.
Comparisons are to the 12 months ended 30 September 2023, unless otherwise stated.
b.
Includes $1.0 billion announced in May 2024 and $1.0 billion announced in November 2024.
c.
Senior Leadership includes the Executive Team, General Managers and their direct reports (excluding administrative or support roles).
d.
Based on the ATO's Corporate Tax Transparency Report for the 2021-22 Income Year, published in November 2023.
e.
Figure includes commercial sponsorships and foregone fee revenue.
f.
Total committed exposure for lending assessed as sustainable finance in line with our Sustainable Finance Framework – movement in balance over FY24.
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THE VALUE WE CREATEa
Shareholders
Delivering improved returns to shareholders (pages 16-19)
151C
15C
$2.0BN
ordinary
dividends
per share
special
dividend
per share
total share
buyback
announcedb
Customers
Building enduring customer relationships (pages 20-25)
$807BN
$674BN
13M
in lending
in customer
deposits
customers served
Our people
Being a place where the best people want to work
(pages 26-29)
80
$5.9BN
49%
Organisational
Health Index
paid to our
people
women in senior
leadershipc
Community
Being a leader in the community (pages 30-33)
$3.5BN
$177M
$21.1M
taxes paid globally,
including the bank levy
and 5th largest tax
payer in Australiad
in community
investmente
spent with
Indigenous-
owned suppliers
Environment
Contributing to the net-zero transition (pages 34-37)
$10BN
86%
13
increase in sustainable
finance lendingf
reduction in scope 1 and
2 emissions from our
2021 baseline
targets in all
9 NZBA emissions
intensive sectors
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WESTPAC 2024 ANNUAL REPORT
CHAIRMAN’S
REPORT
The Board is building on
Westpac’s strong financial and risk
foundations, guiding the organisation
through its next strategic growth
phase to achieve sustainable
shareholder returns.
Dear fellow shareholders,
In my first year as Chairman, I am proud of the
progress we have made in supporting our customers
and shareholders. We are beginning to see the benefits
of several crucial years spent simplifying the bank and
strengthening our risk practices and culture.
Performance
By focusing on our core banking markets, we grew
the business while navigating a year of below trend
economic growth in Australia and New Zealand. The
economy was impacted by higher interest rates, elevated
cost of living and inflationary pressures along with
geopolitical uncertainty.
Our balance sheet remained strong and the financial
performance was steady. Profit after tax was $7.0 billion,
a decline of 3% on a statutory basis. This resulted in a
modest decline in return on tangible equity (ROTE) to 11%,
which remains well above our cost of capital.
Importantly, our capital position, funding and liquidity all
remain above regulatory minimums.
This strong capital position allowed us to announce
additional capital returns through a combination of
$2.0 billion of share buybacks, following the $1.5 billion
previously announced buyback and a $500 million special
dividend. The special dividend declared for the first time
since 2013 was 15 cents per share in the First Half of 2024.
In addition, ordinary dividends were increased by 6%
to $1.51 in fully franked dividends per share for the
year, including a final ordinary dividend of 76 cents
per share. This equates to a payout ratio of 73% of
Profit after Tax, excluding Notable Items. The combination
of dividends, both ordinary and special, and share
price accretion has led a total shareholder return for the
year of 58%.
Our elevated cost-to-income ratio to peers is intended
to be addressed through the UNITE program to create
a sustainable, cost efficient technology environment to
support long term value. The program requires significant
investment with benefits expected over the medium term.
Please see Technology on page 38 for more information.
The Board recognises the critical importance of open and
constructive dialogue with government and regulators.
We are dedicated to maintaining strong relationships to
not only meet our obligations but to support our shared
goal of maintaining the resilience and stability of the
Australian financial system. This commitment is reflected
in the positive risk outcomes and progress achieved
through Westpac’s Integrated Plan delivered under the
Customer Outcomes and Risk Excellence (CORE) program.
We believe this has been pivotal in restoring trust
and facilitating the reduction in the operational risk
capital overlay.
CEO appointment
In September, I was delighted to announce that the Board
appointed Anthony Miller as Managing Director and CEO
of Westpac, effective 16 December 2024. Anthony is an
experienced banking executive who possesses a strong
customer mindset, proven record of performance and
deep understanding of the Australian market.
Since joining Westpac in 2020, Anthony has held two
leadership positions, including leading the Westpac
Institutional Bank (WIB) and Business & Wealth segments
which he restored to growth. Prior to Westpac, he spent
four years as CEO of Australia/New Zealand at Deutsche
Bank and 16 years at Goldman Sachs in Australia and Asia.
His knowledge of Westpac and the industry, combined
with his strong performance, gives the Board confidence
in his ability to deliver our strategy. Internal succession
also supports a smooth transition to build on our
operating momentum.
I would like to thank Peter King for his significant
contribution to Westpac over the past 30 years. During
his five years as CEO, Peter has steered the organisation
through the impacts of COVID-19 and led a comprehensive
overhaul of its risk management and governance. This is a
key part of Peter’s legacy.
Peter also dramatically simplified Westpac by divesting
10 businesses to set a clear focus on growing our core
banking segments. He led important advocacy work
to protect customers from scams and made significant
improvements in our digital technology for customers and
our people. He also led the commencement of UNITE, an
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important milestone aimed at delivering better outcomes
for customers, our people and shareholders. In addition to
these achievements, Peter’s leadership has positioned the
business for future success by attracting a talented team
and fostering an engaged workforce.
Strategic progress
The Board is building on Westpac’s strong financial
and risk foundations, guiding the organisation through
its next strategic growth phase to achieve sustainable
shareholder returns.
Our ambition is to be our customers’ number one bank
and partner through life. To achieve this, we are enhancing
our products and services through digital transformation,
introducing new tools that make banking more convenient
and accessible. As scams become more prevalent, we
are protecting and advocating for our customers by
developing industry-leading innovations in digital banking
and increasing collaboration with industry, government
and the community.
We have also significantly invested in Business &
Wealth and WIB by improving products, enhancing
digital transaction services and increasing our operational
resilience. To help improve our market position, we are
attracting top talent and fostering a strong risk culture to
provide better service to businesses.
The advent of Artificial Intelligence (AI) technologies
introduces both opportunities and challenges. We are
actively piloting several test use cases safely and
responsibly to improve our operations and service
to customers.
Engaging with our people
Board engagement with our people is essential for
effective leadership. This helps us to understand our
people’s views, address risks early and align goals to
maintain performance. One way we achieve this is by
having employees present an ‘Operational Excellence
Moment’ at the start of each Board meeting. During these
moments, employees from all areas of the organisation
share their progress on various customer initiatives,
allowing us to recognise their achievements.
The dedication, skills and perspectives of our people are
critical to delivering on our ambition. We are making
significant investments in their development and wellbeing
to ensure our people feel engaged and have opportunities
to grow. This includes several award-winning programs to
enhance workforce diversity and inclusion.
Sustainability priorities
We are deeply committed to our environmental, social
and governance (ESG) initiatives. Our sustainability
strategy is designed to create better futures for our
people, customers, communities and the environment.
This includes enhancing our hardship processes to
support customers while also improving financial literacy
and education.
Climate change is an increasingly important issue. We are
committed to supporting global efforts towards net-zero
by 2050. We are dedicated to reducing greenhouse gas
emissions and building resilience against climate change.
A key focus of our climate strategy, which is overseen
by the Board, involves supporting our customers as they
transition on this journey.
Our purpose is clearly reflected in our community
involvement through workplace giving, volunteering and
support of inspiring individuals, community organisations
and social enterprises. The Westpac Scholars Trust
exemplifies this commitment by awarding 100 new
scholarships annually to exceptional undergraduate and
postgraduate students who are passionate about driving
positive change.
Board renewal
In recent years, the Board has undergone substantial
renewal, bringing together a diverse mix of skills
and experience. We welcomed Andy Maguire in July.
With extensive global banking experience, Andy brings
valuable and timely expertise in digital transformation
and technology infrastructure as we deliver on our UNITE
program. He will stand for election at the Annual General
Meeting (AGM) with the support of the Board.
Additionally, current Non-executive Directors Nerida
Caesar, Audette Exel, Nora Scheinkestel and Margie Seale,
who have all made commendable contributions, will stand
for re-election with the Board’s support.
Looking ahead
While growth is expected to remain below trend, there
are signs of a modest economic recovery. With our strong
balance sheet and capital position, we are well-placed to
navigate the environment and deliver on our priorities.
Our people are aligned on the critical importance of
our business-led technology program, UNITE. As one of
Westpac’s largest transformation projects to date, the
Board appreciates the dedication and investment required
to complete it over the next four years. We will seek to
strike the right balance between prioritising its completion
and investing in our core operating segments to support
sustainable growth and shareholder returns.
The completion of the Integrated Plan under CORE
has set a foundation for continuous improvement in
culture, governance and risk management. As we continue
to embed these improvements, we will address other
priorities including our cost structure and investing in our
people and sustainability initiatives to ensure Westpac
remains an industry leader.
This year has brought significant achievements and
progress for Westpac. I thank our people for their
dedication, our customers for their trust and loyalty and
our shareholders for their continued support.
Yours sincerely,
Steven Gregg
CHAIRMAN,
WESTPAC
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WESTPAC 2024 ANNUAL REPORT
CEO’S REPORT
Our ambition is to be our
customers' #1 bank and partner
through life, helping them to
navigate life’s challenges and
achieve their financial goals.
Dear shareholders,
This year our disciplined performance has positioned us
well for continued growth and success. We delivered
a sound financial result while navigating a competitive
market, along with high inflation and below trend real
GDP growth.
Our focus was on supporting customers, growing in all our
key markets and disciplined margin management. While
we reported a modest increase in stress, credit quality
outcomes were better than expected. We delivered a
return on tangible equity above 11%.
Solid performance in a competitive market
Net profit of $6,990 million for full year 2024 was
down 3% on the prior year. Operating income was
little changed with solid loan growth constrained by a
modest decline in margins and lower non-interest income,
mostly reflecting the impact of businesses we sold in
2023. The rise in operating expenses reflected higher
technology costs and inflationary pressures, while the low
level of impairment charges reflected our prudent lending
practices and customer resilience across both households
and businesses.
Our balance sheet and capital position remained strong
with a Common Equity Tier 1 (CET1) capital ratio of 12.5%,
putting us in the top quartile of banks globally.
With $2.7 billion in capital above our target range
after announced buybacks, we balanced the reinvestment
of capital across simplification initiatives and lending
growth, while returning some of the surplus capital to
shareholders. The Chairman’s report outlines our capital
management decisions in more detail.
Our strategic focus on growth and generating sustainable
shareholder returns is measured by our market
position and the improvement in return on tangible
equity. Improvements in the customer experience and
productivity initiatives are aimed at improving our market
position. The simplicity and consistency of everyday
banking offers has supported above system household
deposit growth. Improvements in mortgage servicing
capabilities have been critical in stabilising our share
in home lending. In Business & Wealth, innovations in
merchant and other payments capabilities, along with
investments in people and simplification, have driven
momentum. In WIB, we are focused on deepening client
relationships and enhancing products and services.
Improving return is a medium-term proposition as our
market position strengthens and we aim to reduce our
cost base relative to peers. Further simplification is
required to improve efficiency. UNITE, our business-led
technology simplification program, which is expected to
run through to 2028, is critical to achieving this goal in
the medium term. While most of the year was dedicated
to planning, many UNITE initiatives were underway by the
end of FY24. Further detail is in Technology on page 38.
Delivering for customers
Our ambition is to be our customers' #1 bank and partner
through life, helping them to navigate life’s challenges
and achieve their financial goals. To support this, we are
innovating and investing in technology to make banking
simpler, more personalised and secure for customers.
Our Westpac banking app, which was named #1 in
Australia by Forrester for the second year in a row, is
helping customers manage their finances through money
management tools. More than 1.2 million customers used
these tools in the last quarter.
Westpac Rewards was recognised as the best overall
loyalty program1, with ShopBack helping customers earn
$24 million in cashback from 4,000 retailers. We launched
Pay with Points, an Australian-first that allows credit card
holders to use their reward points for purchases.
By streamlining our home loan operations through
technology, we’ve seen substantive improvements in
processing. Our average loan decision times have
improved to less than five days and we have increased
on-day settlements by four percentage points.
Reliable and flexible payments technology is crucial for
businesses to drive customer satisfaction and growth. Last
year, we introduced EFTPOS Air and have since extended
it to more businesses. Building on this, we launched
1.
Westpac Rewards was named Best Overall Loyalty Program in Financial Services at the 2023/2024 Asia Pacific Loyalty Awards.
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EFTPOS Flex, a high-speed, cost-effective terminal that
integrates with more than 500 point-of-sale systems.
Our WIB team expanded as we brought on more
relationship managers to provide deeper support and
expertise to large businesses. This strategic growth
enhances our ability to continue offering tailored
solutions and proactive service, helping to restore our
leadership position.
Most customers prefer digital banking, but branches and
cash remain important. We have 626 branches in Australia
and will keep regional branches open until at least 2027.
We play a crucial role in cash circulation in Australia, with
an annual supply cost of $330 million. We’re working with
industry and government on a sustainable cash solution.
Risk transformation
Over the past four years, we have significantly improved
our risk culture and governance through the CORE
program. The Group is currently in the transition phase
to demonstrate the sustainability and effectiveness of
changes made following the completion of the Integrated
Plan in December 2023. CORE has helped our people to
build a focus on identifying and addressing risks early,
which is becoming part of our culture. In recognition
of our progress, the Australian Prudential Regulation
Authority (APRA) reduced the total operational risk
capital overlay from $1 billion to $500 million.
New scams protection
We’re using our scale, technology and data to both
protect customers and help them avoid scams. Over the
past two years, we’ve invested more than $100 million
in scam prevention initiatives, contributing to a 29%
reduction in reported customer scam losses this year.
With most customers opting to bank online, we
have focused on enhancing safety by developing
and implementing industry-leading scam detection and
prevention measures. Westpac Saferpay helped customers
by challenging 200,000 payments, preventing $150 million
from being transferred to potential scammers.
Westpac Verify prevented more than 400 payments from
being made to incorrect accounts each day. Additionally,
we partnered with Optus to develop Westpac SafeCall.
This feature, set to be operational by the end of the
year, seeks to provide customers with peace of mind by
allowing secure calls through their banking app.
Despite our efforts, preventing scams remains a challenge.
We will continue to advocate for our customers by
working with industry and government to make
Australia a harder target.
Workplace of choice
Our people are energised and focused on delivering for
customers. Our OHI
1 improved five points this year to
80, placing us in the global top quartile. Our leaders
are encouraging behaviours that lead to great customer
outcomes and proactive risk management.
We are attracting and retaining talent by investing in our
people’s careers, whether it be new capabilities, leadership
skills or rewarding excellence. A flexible, safe and healthy
workplace is central to our people strategy with tailored
solutions for mental health and wellbeing developed from
this year’s wellbeing review.
We continue to strengthen diversity, equity and inclusion.
Women make up 49% of senior leadership roles2 and
50% of the Executive team. Our Illuminate program is
supporting more than 80 aspiring female leaders.
Progressing sustainability
We have a role to play in creating positive change in
communities and acting on climate change.
Supporting customers facing hardship is a key focus of
our sustainability strategy. We provided 47,500 hardship
and disaster support packages to our customers and
businesses during the year to help them get back on track.
Approximately 19,000 accounts remained in hardship as
we entered the new financial year.
We are advancing our climate strategy on our journey
towards becoming a net-zero, climate resilient bank. With
more than 99% of our carbon footprint coming from
financed emissions associated with our lending, it is
important to support customers on their transition plans.
We have 13 targets across all nine sectors under our Net
Zero Banking Alliance (NZBA) commitment to guide our
emission reduction efforts.
Highlights this year included achieving our 2030 emission
reduction target for scope 1 and 2 emissions six years
ahead of target and sourcing the equivalent of 100% of
our electricity demand from renewables.
Thank you
On behalf of the executive team, I extend my heartfelt
thanks to our people. In my five years as CEO, they
have embraced change, making us a stronger and simpler
bank. Our approach to risk culture and risk management
has been transformed, although there is still more to
do. Simplification has been extensive. We’ve exited 10
businesses and reduced our geographic footprint. The
benefits of this are reflected in our balance sheet, which
is the strongest it has been in my 30 years at the bank, as
well as improved customer advocacy and market position.
I also extend my gratitude to Chairman Steven Gregg,
along with current and former Board Members and
Executives, for their unwavering support. I am delighted
to hand the reins to Anthony Miller, who I am confident
will be an outstanding leader and will achieve progress
towards our ambition to be our customers’ #1 bank and
partner through life.
The cornerstone of Westpac’s 207 year success has been
the support of our customers and shareholders. It has
been my pleasure to spend time with many of you and
a privilege to serve you as CEO.
Yours sincerely,
Peter King
CEO
1.
OHI refers to Organisational Health Index.
2.
Senior Leadership includes Executive Team, General Managers and their direct reports (excluding administrative or support roles).
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WESTPAC 2024 ANNUAL REPORT
ABOUT WESTPAC
Established in 1817, Westpac provides
banking and other financial services in
Australia and New Zealand.
As one of Australia’s largest companies and employers,
we recognise the important role we play to improve
social, environmental and economic outcomes for
Australians and New Zealanders. We are dedicated
to serving our 13 million customers, helping them to
build strong financial futures and navigate periods
of change.
We have a long-standing commitment to the community,
including a 51 year partnership with the Westpac Lifesaver
Rescue Helicopter Service. We are proud of our
involvement in establishing the Westpac and St.George
Foundations and Trusts. These separate non-profit
organisations have contributed $90 million in the past
decade to create meaningful change in people’s lives.
We are working towards becoming a net-zero, climate
resilient bank. Our 2024 Climate Report details our
efforts to reduce our emissions, assist customers in their
transition and advocate for positive change.
We are proud to contribute to the nation’s prosperity
through $5.9 billion in salaries, $5.7 billion in shareholder
dividends, $3.5 billion in cash taxes and levies and
$4.4 billion spent with suppliers inside Australia1.
As we evolve, we draw inspiration from our customers,
their needs and our purpose. Our values guide our actions
to create better futures.
Our values
•
Helpful – Passionate about providing a great
customer experience
•
Ethical – Trusted to do the right thing
•
Leading Change – Determined to make it better
and be better
•
Performing – Accountable to get it done
•
Simple – Inspired to keep it simple and easy
Market share
Australia
Household depositsaa
21%
Mortgagesa
21%
Business lendinga
16%
New Zealand
Consumer lendingbb
18%
Depositsb
17%
Business lendingb
16%
a.
APRA Banking Statistics, September 2024.
b.
RBNZ, September 2024.
1.
Refer to the 2024 Sustainability Index and Datasheet for details.
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Our four operating segments
Consumer
Business & Wealth
Westpac Institutional
Bank (WIB)
Westpac New Zealand
Helping more Australians
into their home, save for
the future and manage
their money with a range
of banking products under
the brands of Westpac,
St.George, BankSA and
Bank of Melbourne.
Serving the needs
of small to
medium businesses
and commercial and
agribusiness customers
across Australia. This
segment also includes
Private Wealth and BT
Financial Group, along
with our operations in Fiji
and Papua New Guinea.
Delivering a broad range
of financial services to
corporate, institutional
and government
customers operating in,
and with connections
to, Australia and
New Zealand.
Providing banking and
wealth services to
consumer, business and
institutional customers
in New Zealand.
Our foundations
Passionate people
who make
a difference
Data-informed
insights and
decisioning
Proactive risk
management and
risk culture
Strong
balance
sheet
The value we create
Shareholders
Customers
People
Community
Environment
Delivering
sustainable returns
to more than
585,000
shareholders
Creating better
futures for the
13 million customers
we serve
Helping over 35,000
people in our
workforce to reach
their potential
Investing to create
stronger, more
inclusive
communities
Supporting global
efforts towards
net-zero by 2050
Pages 16-19
Pages 20-25
Pages 26-29
Pages 30-33
Pages 34-37
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WESTPAC 2024 ANNUAL REPORT
OUR STRATEGY
Our strategy for growth and return is guided by our purpose and supports our
ambition to be our customers' #1 bank and partner through life.
Built on four pillars, it focuses on developing strong customer relationships to drive growth in target markets and
improve returns. In turn, this helps us to create positive change and better futures by using our influence to support
communities, the economy and the environment.
Customer
Easy
Expert
Advocate
Customers are at the
heart of what we do.
We value the entire
customer relationship
and are working hard
to anticipate their
needs, including through
delivering personalised
experiences, offers and
insights. Transaction
accounts and payments
are at the centre of
our customer relationships,
enabling us to build early
and deeper connections.
We’re making banking
easier, more intuitive and
digital. We’re simplifying
our bank – solving
pain points, removing
manual processes, making
banking safer and
automating workflows.
We’re aiming to
create a seamless
customer experience
across our channels.
We deliver expert
solutions and tools to
guide customers in
making better decisions.
We help them manage
their money every day as
well as plan ahead by
sharing our insights. Our
people work alongside
customers to tackle some
of the issues, including
managing the cost of
living and transitioning
to net-zero.
We advocate for
positive change and
speak up for what’s
right. We’re advocating
for financial inclusion,
greater accountability for
social media platforms
promoting scams, on
climate and safer
digital services across
our business, industry
and communities.
Measures
Return on tangible equity (ROTE)
Market position
Sustainability
Aligned with our purpose and the pillars of our strategy, our sustainability approach is shaped by key material topics
and guided by the UN Sustainable Development Goals. Detailed information about our sustainability strategy, including
metrics from our 2024 Sustainability Index and Datasheet, is available on our website.
Following the Global Reporting Initiative (GRI) Universal Standards, we annually identify the most significant
sustainability topics to guide our strategy and focus on areas with the greatest impact on our stakeholders. The process
and details of these material topics are also outlined on our website.
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A STRATEGY FOR GROWTH AND RETURN: PROGRESS
The strength of our customer relationships is crucial to our long term success. By enhancing products and services, we
are creating exceptional banking experiences that help to drive growth. Combined with initiatives that intend to reduce
our costs relative to peers, we aim to improve our market position and ROTE, the key measures of the strategy.
Shareholders
Delivering improved returns to shareholders
See
pages
16-19
There was a modest decline in ROTE however we grew our businesses and
maintained a strong financial position. This was reflected in higher fully franked
ordinary dividends along with $2.3 billion of capital returned to shareholders
comprising a $0.5 billion in special dividend and the purchase of $1.8 billion of
sharesa through an on market buyback.
a.
As at 30 September 2024.
Customers
Building enduring customer relationships
See
pages
20-25
We have enhanced customer experiences and protections against scams through
digital innovation. This has helped make banking easier, safer and more
personalised for customers. Consistent and simple everyday banking offers
resulted in higher deposits, while improved processing times stabilised our share
of home loans. New convenient payments and merchant technology saw us
attract new business customers in Australia and New Zealand. Business lending
grew above system.
People
Being a place where the best people want to work
See
pages
26-29
Our Organisational Health Index (OHI) improved by five points to 80, placing us
in the top quartile globally. We attract and retain talented people by investing in
training and career development while supporting wellbeing. We are a proudly
inclusive employer, committed to fostering a safe and inclusive workplace.
Community
Being a leader in the community
See
pages
30-33
Our success is intrinsically linked with the success of the economy and
communities. We have a proud legacy of community support through workplace
giving, volunteering, community initiatives and the separate Westpac Foundation,
St.George Foundationa and Trusts. We helped to keep cash circulating in society
and made progress against our objectives for advancing human rights and
supporting reconciliation.
a.
Includes BankSA Foundation and Bank of Melbourne Foundation.
Environment
Contributing to the net-zero transition
See
pages
34-37
We made progress on our climate strategy, shifting our focus to supporting
customers with their transition plans. Our Scope 1 and 2 emissions have reduced
by 86% from our 2021 baseline, achieving our 2030 targeta. With 13 targets
across the 9 most emission-intensive sectors under the NZBA framework, we are
engaging our customers to help them move towards lower emission practices.
a.
Refer to the 2024 Sustainability Index and Datasheet for more information.
14
WESTPAC 2024 ANNUAL REPORT
OUR OPERATING
ENVIRONMENT1
Australian economic growth was subdued
The Australian economy has experienced an extended period of below trend
growth, particularly in the private sector. Government spending has provided
some support, alongside a tight labour market and elevated terms of trade.
However, strong population growth has masked the weakest period of per capita
growth in decades. Australian economic growth is projected to recover from 1.5%
this year to 2.5% in 2025.
Households absorbed squeeze to incomes
Real household incomes have faced the negative shocks of high interest rates,
cost of living pressures and higher taxes. This has translated into pessimism
and weaker consumption. The impact has been uneven with younger and lower
incomes households disproportionately affected. Mortgage stress, while rising
during the year, remains low. Some relief has arrived in the form of declining
inflation and tax cuts. The undersupply of housing and continued house price
growth has resulted in a recovery in housing credit growth from an annualised
trough below 4% to more than 5% through the year. System credit growth of
approximately 5% is expected for 2025.
Strong business growth exceeded expectations
Australian businesses have navigated challenging operating conditions of weaker
demand and cost pressures. Profitability has eased to levels consistent with
the decade prior to COVID-19. Smaller businesses, particularly those exposed to
consumer discretionary sectors, experienced a more difficult trading environment.
Strong financial positions, high capacity use and population growth have boosted
credit demand, especially in infrastructure, health, education and technology
investments. While overall business investment has slowed, credit demand is
expected to grow by approximately 6% in 2025.
The New Zealand economy weakened
New Zealand’s economy stagnated due to significant monetary tightening aimed
at combating inflationary pressures. The Reserve Bank of New Zealand began
lowering interest rates in August 2024 in response to weaker economic activity,
rising unemployment and receding inflation. The easing of financial conditions is
expected to result in improved economic activity into 2025.
Global economy on track for a soft landing
Global economic prospects have improved with inflation, which is under control
across major developed economies, declining from more than 8% in 2022
to below 3% by mid-2024. This allowed G7 central banks, except Japan, to
ease monetary policy. The downside risk posed by weakness of the Chinese
economy is expected to be mitigated by the announcement of significant stimulus
measures. Notwithstanding the structural challenges that China will be required
to address in the medium term, its activity will be supported in the short term.
Global economic growth is expected to exceed 3% in 2025.
1.
All references are to calendar years unless otherwise stated.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
15
We regularly review our operating environment to identify changes, emerging risks and opportunities. This helps us
to evolve our strategy and approach to current and future key risks. Below are some of the factors1 that could affect
Westpac’s ability to create value in the short, medium or long term. Our major risk categories, mitigation strategies and
areas of focus are detailed in Risk Management (page 40). For further information, see 2024 Risk Factors.
Rising threat: Scams and fraud become more sophisticated
Fraud and scams are increasing with more sophisticated methods targeting a
wider range of individuals and businesses. Over the past two years, Westpac
invested more than $100 million in new prevention and detection measures
to support customers, such as Westpac SaferPay and Westpac Verify. We
are working closely with government and industry to further strengthen our
defences and make Australia a harder target for scammers.
See Operational Risk, Cyber Risk and
Creating value for customers (page 20)
Supporting financial stability: Prudent lending and customer assistance
Maintaining prudent lending practices and policies are critical to safeguarding
our financial stability and profitability. Our Customer and Business Assist teams
in Australia provided 47,500 hardship and disaster support packages. Factors
including cost of living pressures and higher interest rates contributed to this
increase. We continue to provide a range of support to help customers get back
on track.
See Credit Risk and Creating value for customers (page 20)
Rising to the challenge: Expectations in addressing climate change
Climate change continues to have significant global impacts. Banks play an
important role in supporting the transition and helping customers become more
climate resilient. New mandatory climate-related reporting requirements will
require companies to disclose climate-related risks, opportunities and emissions
across their value chain. We are strengthening our approach to managing
climate change, as outlined in our 2024 Climate Report.
See Credit Risk, Reputational and Sustainability Risk and
Creating value for the environment (page 34)
Navigating competition: The importance of strategic customer focus
Nearly one hundred banks, including many foreign ones, now operate in
Australia. Westpac is one of four major banks and has been serving customers
for more than 200 years. The landscape is evolving and competition has
intensified, particularly in mortgages. We are investing in technology and our
people, leveraging the advantages and scale that come with being a major bank,
to deliver great service and benefits to our customers.
See Strategic Risk and Creating value for customers (page 20)
Protecting reputation: Strong risk management for better outcomes
Managing and responding to expectations from 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. Through the Integrated Plan of the CORE
Program, we have strengthened our risk governance, accountability and risk
culture to drive better customer outcomes.
See Reputational and Sustainability Risk and
Compliance and Conduct Risk (page 42)
1.
Not exhaustive. See Risk Management (page 40) for full table of risk categories.
16
WESTPAC 2024 ANNUAL REPORT
CREATING
VALUE FOR
SHAREHOLDERS
We are committed to
delivering long term value
for shareholders by focusing
on providing great customer
service, maintaining a strong
balance sheet and delivering
sustainable returns above our
cost of capital.
Key highlights
151c
FULL YEAR
ORDINARY DIVIDENDS 58%
TOTAL
SHAREHOLDER RETURN
15c
SPECIAL DIVIDEND $2.0BN
TOTAL SHARE
BUYBACK ANNOUNCED1
1.
$1.0 billion announced in May 2024 and $1.0 billion announced in
November 2024.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
17
Solid financial result1
Our financial performance demonstrates the continued focus on the delivery
of sustainable returns for shareholders while growing our businesses and
maintaining a strong financial position.
$7.0BN
Net profit,
down 3% on FY23
1.93%
Net interest margin,
down 2bps on FY23
7bps
Impairment charges to average
loans, down 2bps on FY23
Net profit was delivered through disciplined management
of net interest margins and growth across our businesses.
Pre-provision profit declined by 3% on the prior year.
Excluding Notable Items, pre-provision profit was down
4% with the 1% increase in operating income more than
offset by a 7% increase in operating expenses.
Operating income reflected solid loan growth constrained
by a modest decline in the net interest margin. The
increase in operating expenses was driven by higher
software amortisation and technology costs along with
the impact of closing RAMS to new business.
Net interest margin (NIM)
The modest contraction in NIM reflected competition
for mortgages and customers preferencing higher yield
deposits which more than offset the benefits from higher
earnings on capital and hedged deposits, in addition to a
larger contribution from Treasury.
Impairment charges and credit quality
The low level of impairment charges reflects our prudent
lending practices and customer resilience across both
households and businesses.
The modest deterioration in credit quality metrics was due
to the impacts of the decline in real household disposable
income and weaker demand and cost pressures on
business customers. We remain appropriately provisioned
with credit impairment provisions of $5,096 million,
$1.5 billion above the expected losses of our base case
economic scenario.
$m
Full Year
2024
Full Year
2023
% Mov't
2024-2023
Net operating income
21,588
21,645
-
Operating expenses
(10,944)
(10,692)
2
Pre-provision profit
10,644
10,953
(3)
Net profit
6,990
7,195
(3)
For more see Performance Review (page 104).
Solid growth in our core markets
Loans increased by 4% reflecting growth across all segments: Consumer;
Business & Wealth; WIB; and New Zealand.
Growth in Australian housing loans, excluding RAMS, of 5%, or 1.2x APRA
housing system, mainly in owner occupied mortgages was supported by
faster and more consistent decision times and enhancements to our single
mortgage platform. Total Australian housing loans growth was 4%. See
Faster lending decisions (page 23) for more information.
Australian business lending was up 8%. This reflected strong loan growth
in WIB as we deepened relationships with existing customers and selective
growth in lending to international customers. Growth in the Business
segment was well diversified with strong growth in our target industries of
agriculture, health and professional services.
Customer deposits grew by 5% with strong growth in the Consumer and WIB
segments. Household deposits growth of 1.1x APRA system is testament to
the health of our consumer franchise.
LOANS ($BN)
739.6
773.3
806.8
Sep-22
Sep-23
Sep-24
CUSTOMER DEPOSITS ($BN)
612.8
641.0
673.6
Sep-22
Sep-23
Sep-24
1.
Unless otherwise stated, all figures relate to the year ended 30 September 2024 with comparative period the year ended 30 September 2023.
Certain amounts, measures and ratios are not defined by Australian Accounting Standards (AAS). These non-AAS measures are identified and
described in Reading this report (page 100). Notable Items are discussed further on page 106.
18
WESTPAC 2024 ANNUAL REPORT
CREATING VALUE FOR SHAREHOLDERS
Strong financial position
We maintained a strong financial position with capital, funding and liquidity all
above regulatory minimums.
Capital
CET1 capital ratio of 12.5% compares to the target
operating range of 11.0% to 11.5% in normal operating
conditions equating to $4.3 billion of capital above the
top end of the target range.
The CET1 capital ratio increased slightly. Solid organic
capital generation and reductions in Risk Weighted
Assets (RWA), in addition to the return of $500 million
in operational risk capital overlay, were offset by the
payment of dividends and the on market share buyback.
CET1 CAPITAL RATIO
11.3
12.4
12.5
17.6
18.7
18.3
APRA basis
Internationally comparable
Sep-22
Sep-23
Sep-24
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 $41.9 billion of new long term wholesale funding.
83.5%
Deposit to loan ratio,
up 61bps on Sep-23
Simplifying banking
To deliver long term value for shareholders, we are focused on providing great
customer service.
Better outcomes for customers and our people
We made progress on initiatives to improve customer
experience. Highlights during the year included giving
businesses new and more flexible payments technology,
improving the Westpac banking app and creating
Australian-first scam protections for customers.
Our people are key to our success and we are investing in
their capability.
We mobilised UNITE, our business-led, technology-
enabled transformation, that is laying the foundations
for our future by aiming to simplify our processes
and technology.
For more on our progress, refer to:
Creating value for customers (page 20)
Creating value for our people (page 26)
Technology (page 38)
Substantially improving risk management capability
Over the past four years we delivered a program of
risk culture and risk management uplift. The CORE
Integrated Plan activities were completed in December
2023 and Promontory assessed the program as complete
in May 2024.
We are now completing a transition phase to continue to
embed the improvements we've made for the long term.
Subsequently, APRA reduced the $1.0 billion operational
risk capital overlay by $500 million in July 2024.
Refer to Risk Management (page 40) for more.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
19
Improved shareholder returns
To create value for our 585,000 shareholders, we aim to deliver sustainable
returns above our cost of capital.
Shareholder returns
The decline in net profit resulted in a 38 basis points
decrease in ROTE to 11.0% and earnings per ordinary
share were 201 cents, down 2%.
Over the year our share price rose 50%, contributing to a
58% increase in total shareholder return (TSR). The S&P
ASX All Ordinaries accumulation index rose 22% over the
same period.
Ordinary dividends
This year, shareholders will receive $5.2 billion through
fully franked ordinary dividends. Ordinary dividends were
up 9 cents per share, or 6%.
This year’s payout ratio is 75% on a net profit basis and
73% excluding Notable Items.
ROTE (%)
9.2
11.4
11.0
FY22
FY23
FY24
ORDINARY DIVIDEND PER ORDINARY SHARE (CENTS)
125
142
151
61
70
75
64
72
76
Interim
Final
FY22
FY23
FY24
Returning surplus capital to shareholders
We bought back $1.8 billion of shares on market and we returned $0.5 billion
through a special dividend.
With $4.3 billion of capital above the target operating range and confidence
in the medium-term economic outlook, the on market share buyback was
increased by a further $1.0 billion in November 2024.
$2.0bn total share
buybacks announced1
15c special dividend
For more on shareholder value, refer to:
Chairman’s report (page 6)
CEO’s report (page 8)
1.
$1.0 billion announced in May 2024 and $1.0 billion announced in November 2024.
20
WESTPAC 2024 ANNUAL REPORT
CREATING
VALUE FOR
CUSTOMERS
Delivering great customer
service motivates our people
and brings our purpose to life.
Through better products and
services, technology and fraud
and scams protection, we're
supporting customers through
life's challenges to help them
realise their financial goals.
Key highlights
13M
CUSTOMERS
#1
BANKING APP1
21%
AUSTRALIAN MORTGAGE
MARKET SHARE2
+4
CONSUMER NPS3
RANKED THIRD AMONG
MAJOR PEERS
1.
The Forrester Digital Experience Review: Australian Mobile Banking
Apps, Q3 2024.
2.
APRA Banking Statistics, September 2024.
3.
Source: Fifth Dimension for September 2024, 6MR. MFI customers.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
21
Number one banking app
Our banking app won awards for its simple design
and rich functionality, including #1 mobile app by
Forrester1. As one of our customers' preferred banking
channels, we have continued to invest in its capabilities
to make it simpler, secure and more personalised,
directly contributing to long term customer satisfaction
and loyalty.
Our banking app offers essential everyday banking and
money management tools. More than 1 million customers2
are using money management features such as Net
Worth view and Financial Wellbeing to help them budget,
manage their finances and understand their financial
position. The Savings Finder automatically calculates a
customer’s annual spending on subscriptions and regular
bills, helping to identify those that could be reduced or
cancelled. Other features include Smart Search and a
Cards Hub where customers can manage their debit and
credit cards.
Customers can easily switch between personal and
business banking within the app to manage their finances
in one place.
Westpac SaferPay and Westpac SafeCall are new
Australian-first innovations we designed to help customers
avoid scams. To further enhance digital card security,
dynamic CVC refreshes every 24 hours, reducing fraud and
unauthorised access.
See Protecting customers and preventing crime
(page 25) for more information
Building financial literacy
We are committed to supporting our customers and the
broader community in building financial confidence. This
helps customers to manage their finances more effectively
which builds trust and ultimately drives the sustained
growth of our business.
In addition to the money management features, we
introduced a Pocket Money and Chores feature in our
banking app. Parents or guardians can use this to set up
regular or one-off Pocket Money payments to a child's
account to manage chores, develop their money skills and
encourage saving. This helps to teach children the value
of money and how to spend and save responsibly. We
also saw positive momentum in use of the savings account
features, in particular the safety features available within
the Youth Debit card.
We launched a new Property Dashboard in our digital
banking channels, offering customers a snapshot of their
property portfolio linked to Westpac loans. This provides
valuable insights such as estimated property values
and home equity to help customers understand their
financial position.
To further build financial confidence and wellbeing, we
offer a range of resources to customers, employees and
the community. Through Westpac Master Your Money
and the Finlit program, designed for younger adults,
we provide interactive webinars, online learning modules,
articles and tools.
In New Zealand, more than 12,000 people participated
in Managing Your Money workshops, alongside targeted
seminars for businesses and corporate customers,
including through our partnership with key Chambers of
Commerce across the country.
1.
The Forrester Digital Experience Review: Australian Mobile Banking Apps, Q3 2024.
2.
In the 90 days to 30 September 2024.
WESTPAC SAFERPAY:
MULTI-LAYERED PROTECTION
After researching investment opportunities, a
Queensland couple transferred $350,000 to an account
to invest in government bonds. The transfer, made
on a Friday afternoon, was flagged by our SaferPay
technology as a high scam risk.
Fortunately, SaferPay placed a 24-hour hold on the
transfer, protecting the couple’s funds. After speaking
with the couple, our Fraud and Scams Operations Team
was able to cancel the transaction for the customer.
22
WESTPAC 2024 ANNUAL REPORT
CREATING VALUE FOR CUSTOMERS
Listening to our customers
We actively gather feedback from customers and
employees to improve our services. Insights from Net
Promoter Score (NPS) and complaints help us to create
better solutions, measure improvements and promote a
customer-first culture.
We improved in Consumer NPS to +4 and in Business
NPS to -3. We have strengthened our leadership in
Branch NPS and have seen positive progress in Business
Lending, though our overall scores that reflect broader
customer experience are not where we'd like them to be.
For our institutional customers, we aim to be their
bank of choice and cater for all their banking needs.
Customers who consider us to be their main financial
institution more than doubled over the year, improving
our position from #3 to #2.
Resolving complaints
Complaints are a second chance for us to make
things right for our customers and apologise for any
inconvenience. Through our customer-first approach, we
aim to resolve each customer complaint objectively,
fairly, efficiently and with empathy. We are improving
how we manage complaints by enhancing banker
training, increasing responsiveness and improving
classification and escalation processes. Our average
resolution time is stable, with 93% resolved without need
for escalation.
Our Customer Advocate advises the complaints
team, recommends policy changes and supports
vulnerable customers.
Listening to feedback helps us to continuously improve
our products and services. For example, we improved the
digital experience for customers reordering cards, which
has led to a reduction in related complaints.
Maintaining community presence
While customer preferences are increasingly digital,
we have 626 branches across Australia including 111
co-located branches which support multiple brands.
Our customers have access to the largest fee-free
ATM network in the country and our agreement
with Australia Post’s Bank@Post service provides an
additional 3,400 points of presence for customers to
access our banking services.
Our Virtual Banking team provides additional support
through secure phone, video and chat services. We
recognise there is more work to do to support regional
communities across Australia. We listened to customer
and community feedback to better understand the
unique challenges faced by many customers who
live outside major cities. We have since pledged
to keep regional branches open until at least 2027,
providing greater certainty to our customers, people
and communities.
The opening of our 100th co-located branch in Menai,
New South Wales
Promoting financial inclusion
We are focused on delivering products and services that
are accessible to customers with disabilities, illnesses,
injuries or who are neurodivergent. Our Access and
Inclusion Plan guides our efforts, such as creating more
inclusive and accessible workplaces, branches, services
and collateral. We have also improved our digital services.
Backing female entrepreneurs: We helped more than
726 women to start or grow their business and settled
$274 million under our $500 million commitment1 to
support more female-led businesses. We partnered with
The University of New South Wales Founders’ 10X
Accelerator Program, providing funding for three $20,000
scholarships designed to support women to balance work
and personal commitments. New banker training helps our
people better understand the barriers faced by female
business owners.
Supporting Indigenous customers: Westpac supports
Indigenous customers across multiple channels including
a dedicated Indigenous Call Centre where translators are
available 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 with their banking needs.
Putting home ownership within reach: Housing
affordability and rental supply challenges have made
home ownership less accessible. We are providing
ways for people to fast-track their home ownership
ambitions and our lenders are available to help customers
choose the best level of support. For 23 professional
occupations, including nurses and midwives, we offer
Lenders Mortgage Insurance waivers. This benefited
13,300 customers while 4,000 customers used our Family
Security Guarantee. We have extended the Housing
Australia Home Guarantee Scheme to all our brands,
settling $5.2 billion in loans under the Scheme to help
customers with a smaller deposit.
Westpac New Zealand pledged NZ$1 billion in lending
over the next three years to help more people secure
homes through variety of social and affordable housing
options, such as shared equity and leasehold projects,
through loans to scheme providers and home buyers.
1.
As of September 2024, we have helped 726 women since June 2023. $500 million has been ring fenced for lending to women in business,
however the Business Loans for Start Up and Business Loans for Scale Up are available to people of any gender.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
23
Supporting customers
How we support customers facing financial difficulties is
a true reflection of our values. We understand that tough
times can impact anyone, whether due to higher cost of
living, illness, relationship breakdowns, reduced business
cash flow or natural disasters.
This is why we have more than 400 skilled professionals
in our Customer and Business Assist teams to provide
a range of options to help customers, such as deferring
loan repayments. Over the year, we provided 47,500
hardship and disaster support packages to customers and
businesses to help them get back on track. By the end of
the year, 19,000 accounts remained in hardship.
Based on feedback, we also found other ways to support
our customers. In an Australian-first, we gave customers
the flexibility and freedom to use their Altitude Rewards
points on everyday items1. Additional in-app savings
prompts helped 193,000 customers earn an average of
$324 in additional total interest2. Through the Westpac
Rewards’ ShopBack program, we helped customers earn
more than $24 million in cashback from purchases at
4,000 retailers. Westpac Rewards was recognised as the
Best Overall Loyalty Program in financial services3.
We participated in ASIC’s Better Banking for Indigenous
Consumers Project and supported our customers
receiving ABSTUDY and those in project postcodes. This
included refunding account keeping, debit interest and
overdrawn fees dating back to July 2019 for eligible
customers. We also expanded access to our basic
bank account to customers who receive an Australian
Government benefit payment that makes them eligible
to hold a concession or healthcare card. Our basic bank
account has no account keeping fees, overdrawn fees or
debit interest.
Faster lending decisions
We have made the home loan experience more
efficient for customers by optimising our operations and
technology. This has reduced average home loan decision
times to approximately five days and increased on-day
settlements to an industry leading level. This has led
to a significant 41-point increase in Broker NPS4 and
improved sentiment over the past two years. Additionally,
we are piloting a new AI-driven method to further
streamline assessments.
HOME LOAN APPLICATION TIME TO DECISION (DAYS)
6.3
5.9
5.2
8.1
7.1
4.8
Proprietary
Broker
Sep-22
Sep-23
Sep-24
In business lending, more than $1 billion in applications
have been approved using our simplified pathway since its
launch in April last year. This lets businesses borrow up to
$3 million and gives customers quick access to their most
recent financial information from their business activity
statements. Business loan processing times take 9 days
and this should improve as we continue to digitise the
entire process over the next few years.
1.
Pay with Points is a way of redeeming Altitude Reward points for eligible purchases under the Altitude Reward Terms & Conditions.
2.
From January to September 2024.
3.
Westpac Rewards received the award for Best Overall Loyalty Program in Financial Services at the 2023/2024 Asia Pacific Loyalty Awards.
4.
Internal Broker NPS survey Sep24 - spot brand NPS for combined brands. Brokers that have settled a loan with Westpac Group in the previous
6 months invited to participate (10,459 invitations sent, 1,399 responses / 13% response rate).
BEST OVERALL
LOYALTY
PROGRAM
111
CO-LOCATED BRANCHES
SUPPORTING MULTIPLE BRANDS
#1
$A BOND LEAGUE TABLE
BUILDING SUSTAINABLE FUTURES
In response to growing customer demand for more energy efficient and climate
resilient homes, we launched the Sustainable Upgrades home and investor
loans product, becoming the first bank to be backed by the Clean Energy
Finance Corporation.
This loan offers existing customers a reduced interest rate on loans up to
$50,000 to make upgrades that improve their property's energy efficiency and
resilience to natural disasters.
24
WESTPAC 2024 ANNUAL REPORT
CREATING VALUE FOR CUSTOMERS
Driving efficiency for businesses
Small businesses make a significant contribution to our
economy, representing 97% of all Australian businesses1.
We offer a range of working capital solutions to give
customers confidence, whether they’re starting up or
growing their business. In response to customer feedback,
we established a dedicated Bank Guarantee Specialist
Team that allows customers to obtain a bank guarantee
in less than 24 hours.
We have continuously enhanced our merchant technology
for businesses since launching Australia’s first EFTPOS
machine 40 years ago. Our latest high-speed, cost-
effective merchant terminal, EFTPOS Flex integrates with
more than 550 Point of Sale systems. We offered EFTPOS
Air to more customers, allowing businesses to accept
instant payments through their phone or tablet.
We are working to make it safer for businesses to manage
their recurring payments through real-time control over
payment agreements, reducing the risk of errors and
fraud. We extended this benefit to our commercial and
institutional customers. The acquisition of HealthPoint,
which offers instant e-health claiming to small business
and commercial customers, recognises the growth of the
healthcare sector as the population ages.
To make employee spending easier and more secure for
large businesses, new Dynamic Virtual Cards can be issued
to their people on the go. This removes the need to
issue physical cards or cash while enabling control and
transparency over spending.
To support our ambition to restore our institutional bank
to the number one position, we have employed more
bankers to provide deeper support to new and existing
customers. Our financial markets franchise continues
to perform, with a leading position in fixed income
markets
2 and #1 rank on the $A bond league table
3.
We were joint lead manager on the Australian Office
of Financial Management’s (AOFM) first green bond
issuance. Please see Collaborating for impact (page 37)
for more information.
Combating financial abuse
We stand against financial abuse and our specialist
teams are trained to support customers experiencing
vulnerability, including domestic and family violence,
financial abuse and problem gambling. We continue to
embed Safety by Design principles into our product
design and provided customer safety training to
an additional 1,200 employees. See Respecting and
advancing human rights (page 32) for more information.
We enhanced our protection measures to include:
•
Education and Awareness: Westpac partnered with
Legal Aid NSW and OurWatch to enhance the
education on the Westpac website relating to financial
abuse, elder financial abuse and gambling.
•
Gambling Block: Customers can apply an instant
block on certain gambling-related transactions through
Westpac’s mobile or online banking.
•
Parental controls and child education: To help young
people learn how to manage their money safely
- while giving parents the opportunity to act as
banking ‘safety nets’ - we’ve added push notifications,
restrictions on online payments and daily payment
limits of $50 for under 14 years olds to our Choice
Youth everyday account and Bump Savings account.
•
Power of attorney account monitoring: While the
vast majority of attorneys act in the best interests of
account holders, sadly this is not always the case. We
have added an extra layer of transaction monitoring
to flag unusual transactions from these accounts. This
allows our specialist teams to step in and support
customers and their attorneys regarding their rights
and obligations.
•
Updated Terms & Conditions for savings, transaction,
personal loan and credit card products highlight to
customers that we have a zero-tolerance for products
being misused for financial abuse.
1.
Source: Australian Bureau of Statistics, describing small business as those with less than 20 employees.
2.
#1 market share in bonds and semis, #1 market share in investment grade corporate bonds, =#1 market share in interest rate swaps, #1 market
share in OIS, #1 market share in asset-backed bonds – 2023 Peter Lee Associates Fixed Income Survey, ranking against all banks.
3.
Bloomberg Australian Bonds League table (excluding self-led issuance), YTD as at 27 September 2024.
CUSTOMER SPOTLIGHT:
SLOANEBUILT
Sloanebuilt, based in Western Sydney, has been a leading manufacturer of heavy
vehicle trailers for more than three decades. CEO Fred Marano attributes the
company’s success to two core values: producing high-quality products and
delivering first-class customer service.
After visiting Sloanebuilt's operations, Anthony Miller, Chief Executive of
Business & Wealth (pictured), said: “It’s a real privilege for Westpac to
support a business like Sloanebuilt. They are a significant local employer in
Western Sydney, committed to training and hiring many apprentices. Their
dedication to employees and contribution to Australia’s manufacturing industry
is truly commendable.”
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Protecting customers and
preventing crime
We play a critical role in safeguarding customers from
fraud, scams, cyber threats and financial crime. We have
invested more than $100 million in scam prevention
initiatives over the past two years, contributing to a 29%
reduction in reported customer scam losses this year.
Our fraud detection systems screen approximately
30 million banking interactions daily, using a combination
of Artificial Intelligence (AI) and human intelligence to
spot unusual activity and issue 24/7 customer alerts. We
block payments to reported scam and fraud accounts and
work around-the-clock to detect and take down phishing
websites and threats that target customers.
WESTPAC VERIFY
Alerts customers when there is a
potential account name mismatch
when they’re adding a new payee
using a BSB and account number
WESTPAC SAFERPAY
Presents customers with a series
of questions in instances where a
payment is considered a high risk
of being a scam
WESTPAC SAFECALL
Will provide customers with calls
via the banking app that are
Westpac branded, verified by
Optus and show a reason for
the call
Strengthening customer awareness
As we intensify our efforts to safeguard customers, we focus on keeping customers informed and equipped to protect
themselves. Our Cyber Response Playbook provides current scam information and videos. The Westpac banking app
includes advanced security features such as Security Wellbeing Check, Westpac Protect SMS code and biometric
authentication. We issue digital and social alerts on new scams and raise awareness through our Scam Spot video series
and actively participate in Scams Awareness Week.
Supporting affected customers
Fraud and scams can have devastating effects on customers and businesses. Our Online Banking Security Guarantee1
and Fraud Money Back Guarantee1 provide peace of mind in certain situations. Whilst we make every effort to retrieve
funds sent to scams, this is unfortunately not always possible. We work closely with affected customers and offer free
support through our partnership with IDCARE, Australia and New Zealand’s National Identity & Cyber Support Service
and a free trial of McAfee for enhanced online protection.
Advocating for change
Combating scams and fraud requires a combined, multi-stakeholder approach. We liaise with industry, regulators,
government and law enforcement to identify threats to make Australia a harder target for scammers. Recognising that a
significant number of scams are found on social media platforms, we are also advocating for the operators of these
platforms to be held accountable through stricter regulation.
1.
Refer to Online Banking Terms and Conditions and relevant Card Terms and Conditions.
BANKER SAVES CUSTOMER FROM $1.8M LOSS
Marlena Karbowski (pictured) assisted a customer who wanted to make a
significant funds transfer to buy a property. As a Personal Banking Specialist of
19 years, she took care in listening to the customer's request.
During their conversation, she spotted a number of red flags. Marlena acted
on her instincts and worked with her Bank Manager to stop $1.8 million being
transferred to a romance scam. She then helped the customer report it to
the Police.
Marlena was recognised in our Scam and Fraud Busters employee
recognition awards.
26
WESTPAC 2024 ANNUAL REPORT
CREATING
VALUE FOR
OUR PEOPLE
Our people are key to
our success.
We are investing in their
careers and building an
inclusive and diverse
workplace, with strong
leadership and
opportunities to grow.
Key highlights
80
ORGANISATIONAL
HEALTH INDEX
49%
WOMEN IN
SENIOR LEADERSHIP1
$5.9BN
PAID IN SALARIES
35,240
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 2024.
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~3,000
Leaders participated in
Leader Forums
11,200
People in Employee
Advocacy Groups
138
New graduates joined Westpac
Embedding cultural change
We have made significant progress in improving our
culture and the way we manage risk. This progress is
reflected in both the final independent report of our CORE
program and positive engagement results from our annual
employee survey, Voice+.
As role models, our leaders continue to play a critical
role in embedding positive change. Our senior leaders are
encouraging behaviours that focus on:
•
consistent, high-quality customer experiences;
•
excellent performance; and
•
confidently managing risks.
At our Leader Forums, our Executives engaged
approximately 3,000 leaders to share views on practical
ways to drive positive customer and risk outcomes. Our
third cohort of General Managers completed the Horizon
Leadership Program and we launched a Better Leaders
Program for our broader leadership group.
We reinforce desired risk behaviours through our regular
‘Skill Boosts’ learning modules. Meanwhile, our 200
volunteer Culture Champions act as internal ambassadors,
promoting a proactive risk and customer-focused culture
with their peers.
Our performance management framework ensures our
employees understand what is expected of them. It
also motivates our employees through clear goal setting
and regular feedback. All employees have defined risk
goals and 621 employees received additional variable
reward for achieving great risk outcomes. Individuals and
teams were also recognised by their peers or leaders via
our recognition platform, with nearly 115,000 actions to
recognise positive risk management and risk behaviours.
Our employee survey Voice+ provides a holistic picture
of employee engagement and includes the Organisational
Health Index (OHI) global benchmarking measure. This
year's results showed a significant improvement to 80 (+5)
which places Westpac in the global top quartile.
It also showed an improvement in our risk culture. These
results reflect the positive impact of our organisation’s
strategic direction, as well as customer, cultural and
employee initiatives that have been implemented
throughout the year.
Building future skills
Equipping our people with the skills and capabilities
needed for both today and tomorrow is central to our
learning and talent strategy. We are focusing on upskilling
our organisation in critical skills areas such as data, digital
and AI.
An additional 2,300 employees completed the Data and
Digital Capability Program, bringing the total to more
than 6,200 individuals who have earned external badge
qualifications in the past two years. 98% of participants
reported that the program provided them with skills,
knowledge and tools they'll find useful for the next
three years.
Our skills based strategy helps us define the skills needed
to meet workforce demand and identify specific pathways
in critical areas such as relationship management,
sustainability, cyber security and data management. All
employees complete mandatory cyber awareness, data
protection and cyber threat training. Meanwhile, new
learning modules on generative AI are helping our people
to learn and build confidence with emerging technologies.
INVESTING IN CAREERS
We are future-proofing the skills of our people
to support careers and improve customer service.
We provided online sustainability training to 1,155
employees in wholesale and institutional banking,
covering climate transition plans, sustainable finance
and sustainability reporting.
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WESTPAC 2024 ANNUAL REPORT
CREATING VALUE FOR OUR PEOPLE
Attracting and recognising talent
We are committed to creating better futures for our
people by ensuring they thrive, feel inspired to do
their best work and have opportunities to advance
their careers. Our refreshed employer brand - Passionate
people who make a difference - positions Westpac as a
great place to work.
We are proud to have attracted 138 bright minds through
our industry-recognised1 graduate program of which more
than 40% have degrees in STEM fields. Our commitment
to diversity and inclusion is reflected in this year’s cohort,
with 57% graduates being women.
We have continued to invest in hiring engineering and
data professionals, welcoming more than 350 engineers
and 130 data specialists to the organisation. Our award-
winning2 Mob Tech program offers an alternative pathway
for First Nations people to gain comprehensive training
in cloud computing, security, data analytics and web
development. The program has been highly successful,
with all 28 participants from the pilot cohort transitioning
into ongoing technology roles at Westpac.
We continue to invest in our people to help them achieve
their career and learning goals. We expanded our Career
Planning resources which now provides guidance to 11,600
individuals on their potential next role and pathways to
success. Additionally, 384 permanent full-time and part-
time employees utilised our study and graduation leave
options. Updating our recruitment policies resulted in a
28% increase in the visibility of internal opportunities,
encouraging our top talent to stay and grow their careers.
Promoting employee wellbeing
Fostering a flexible, safe and healthy workplace is a core
part of our people strategy. We know that enhancing
our employees’ work experience and supporting positive
mental health are fundamental to creating an environment
where everyone can thrive.
Our Chief Mental Health Officer leads the strategy
to support our people's mental health, focusing
on prevention, early intervention and connected
care. We conduct workplace assessments and offer
targeted resources, support and education to promote
employee wellbeing.
This year, we completed a comprehensive review of
factors that may influence wellbeing. This enabled us
to provide tailored solutions to support our people's
mental health and wellbeing, as well as their broader
experience at work. To ensure successful implementation.,
we leveraged the expertise of psychologists and
safety specialists.
Employees have access to 24/7 confidential counselling
support and other resources for both personal and
professional support. Our workplace flexibility, wide range
of leave options, banking benefits and private health
care discounts further support employee wellbeing. For
example, we offer parental leave (including support
for those who experience pregnancy loss), cultural,
wellbeing and lifestyle leave, uncapped domestic and
family violence support leave, gender affirmation leave
and Sorry Business leave.
EMPOWERING WOMEN
The EmPOWERUP Tech Returnship program
provides a pathway for women to reignite
their technology careers. We proudly welcomed
37 talented women to Westpac, offering them
extensive support and training during their first
24 weeks. With more than 1,000 applicants, this
program continues to strengthen our female talent
pipeline. EmPOWERUP fosters individual growth,
flexible working and networking opportunities while
enriching our workplace with diverse perspectives
and skills.
1.
2024 Australian HR Awards – Best Graduate Development Program.
2.
2024 Women in Banking and Finance Awards – Winner of the Inclusive Workplace of the Year.
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3,000+
Leaders completed
inclusive
leadership training
24/7
COUNSELLING
SUPPORT
Supporting positive
mental health
1.08%
First nations people in
our workforce
UPSTANDER
INITIATIVE
Speaking up and
acting against racism
and discrimination
Strengthening diversity, equity and inclusion
Westpac is a proudly inclusive employer, committed to fostering a safe and inclusive workplace for everyone, regardless
of background, gender or identity. We want our people to feel valued, respected and safe to be themselves at work. We
have 10 Employee Advocacy Groups that connect more than 11,200 people on matters they are passionate about.
Our zero tolerance approach to all forms of discrimination and harassment is reinforced through our Code of
Conduct and Discrimination, Bullying and Harassment policy. Our commitment is supported by training for leaders and
employees, dedicated reporting channels, investigation and support processes. This year, more than 5,000 employees
participated in the Upstander initiative, which encourages our people to speak up against inappropriate behaviours.
Our industry-recognised1 programs and initiatives are informed by the views of our people, captured in the annual
Inclusion and Diversity survey. Examples included:
Learning and development to support marginalised groups. We have introduced mandatory training for
leaders to provide the necessary tools and capabilities to support people with diverse views, experiences
and backgrounds.
Prioritising cultural diversity and increasing culturally diverse leaders. Our partnerships with the Asian
Leadership Project and Dr. John Yu Fellowship offer future leaders through networking, mentorship and
career development opportunities.
Helping First Nations people to build meaningful careers. As outlined in our Reconciliation Action Plan
(RAP), we are committed to helping First Nations People build meaningful careers. This year, we improved
representation to 1.08% and aim to increase this to 1.5% next year. Refer to Creating value for the community
(page 30) for more information.
Providing inclusive career opportunities for candidates with disability. As the first financial institution in
Australia to obtain Disability Confident Recruiter accreditation, we ensure equitable hiring processes for
individuals with disability, including neurodivergent candidates. We have also partnered with People with
Disability Australia to launch a program advancing women with disability, a first for Westpac.
Taking action to support women to advance their careers. We support the 40:40 Vision and are proud to
have 49% women in senior leadership positionsa. The Illuminate program supports 82 aspiring female leaders
in Australia, Fiji, PNG, Singapore and New Zealand through General Manager sponsorship. We are also the
first bank to join Diversity Council Australia’s RISE Project, helping culturally diverse women to advance their
leadership careers. Our EmPOWERUp program creates a pathway for women to reignite their careers after
an extended leave break (see Empowering Women case study on page 28).
We are committed to paying our people fairly and equitably. However, we recognise there is more work to
do. As reported to the Workplace Gender Equality Agency, we have a median gender gap of 29.3%. For
more information on this gap and our strategy to increase women's representation in key roles refer to our
Gender Pay Statement on our website.
a.
Senior Leadership includes Executive Team, General Managers and their direct reports (excluding administrative or support roles).
Further information is set out in the 2024
Sustainability Index and Datasheet.
1.
Global recognition of Westpac's diversity, inclusion and equity practices includes Equileap’s 2024 report, the Australian Workplace Equality
Index (AWEI), the Australian Disability Network INDEX and the Australian Defence Force Reserves and Employer Support Awards.
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WESTPAC 2024 ANNUAL REPORT
CREATING
VALUE FOR
THE COMMUNITY
We are determined to
create meaningful impact
by supporting people,
community organisations
and social enterprises that
are building better futures
for Australians.
#1
BANK FOR
CORPORATE GIVING1 73,000
HOURS VOLUNTEERED BY
WESTPAC EMPLOYEES
$177M
IN
COMMUNITY INVESTMENT2$37.9M
SPENT WITH
DIVERSE SUPPLIERS3
1.
Westpac was named the #1 Bank for Corporate Giving in 2024 by
Forbes Australia.
2.
Figure includes commercial sponsorships and foregone
fee revenue.
3.
Refer to the 2024 Sustainability Index and Datasheet for definition.
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Doing good is in our DNA
As one of Australia’s largest organisations, we have a
proud legacy of supporting local communities by investing
in change that matters. Since our first charity was formed
in 1879, we have built one of the strongest community
offerings in corporate Australia1 through our employee
workplace giving programs, the Westpac and St.George
Foundations and the Westpac Scholars Trust2.
Our people dedicate their time and energy to support
causes they are passionate about. This year, our people
volunteered more than 73,000 hours to create positive
change and value in the community. In addition, our
people participated in programs such as the Community
Ambassador, the Westpac Board Observer and the
Jawun Programs.
We reinvigorated our workplace giving initiative, leading
to a 16% increase in employee participation. Our
people donated more than $2.4 million to not-for-profit
organisations which Westpac matched.
See our 2024 Foundations Impact Report
Strong community partnerships
In our 51 year partnership with the Westpac Lifesaver
Rescue Helicopter Service, more than 100,000 community
missions have been performed, including search and
rescue and hospital emergencies. We also support Little
Wings, a children’s charity providing free transport for
seriously ill children in rural areas to access vital city
medical services. Our rugby league program supports and
promotes both the National Rugby League and Women’s
National Rugby League competitions, including pathway
and development programs for young females. Westpac
is also proud to be the major sponsor of the New
South Wales and Queensland men’s and women’s State of
Origin teams.
Westpac Foundation2
Investing in job creation and social enterprises to help
build a stronger, more inclusive Australia.
This year, Westpac Foundation awarded $2.8 million to 45
social enterprise partners. It also achieved a significant
milestone by surpassing its goal of 10,000 jobs by 2030
through helping its partners to create 10,141 jobs for
Australians facing barriers to employment since 2015.
Westpac Scholars Trust2
Investing in the next generation of Australian leaders
focused on creating a more sustainable, inclusive or
globally connected Australia.
Through 100 scholarships annually, Westpac Scholars
Trust supports university students, researchers and social
entrepreneurs. This year, it awarded $4.9 million to 100
scholars who are undertaking varied and meaningful
pursuits, bringing the total since 2015 to more than
$45 million awarded to 824 scholars.
St.George Foundation2
Investing in small, local charities to provide children
and young people with access to education and
wellbeing initiatives.
More than $3 million was awarded to 51 charities across
Australia, supporting initiatives that make a real difference
to young lives.
Te Waiu O Aotearoa Trust3
Investing in the education and advancement of Māori in
the general business, banking and finance industries.
Each year, Māori recipients throughout Aotearoa are each
awarded a $5,000 scholarship so support their tertiary
study costs.
The Foundations and Trusts we support awarded
$11 million to more than 200 new and returning grant
partners and recipients in 2024.
1.
Westpac was named the #1 bank for Corporate Giving by Forbes Australia in 2024.
2.
Westpac Group provides 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.
3.
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.
CHAMPIONING INCLUSIVE EMPLOYMENT
Nestled in the village of Mount Victoria in the Blue Mountains,
Hotel Etico is Australia’s first social enterprise hotel, leading
the way in disability employment within the hospitality industry.
Co-founder and CEO Andrea Comastri provides live-in
accommodation for employees with disability, helping them
develop hospitality and life skills. In recognition of his work,
Andrea was awarded a $50,000 Social Change Fellowship from
the Westpac Scholars Trust to enhance his leadership skills and
support Hotel Etico and its employees in reaching their full potential.
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WESTPAC 2024 ANNUAL REPORT
CREATING VALUE FOR THE COMMUNITY
Respecting and advancing human rights
We are committed to respecting human rights. Our Human Rights Position Statement (HRPS) and Action Plan outlines
our commitments, approach, areas of focus and support for the UN Guiding Principles on Business and Human Rights.
Our goal is to undertake human rights due diligence to identify, prevent, mitigate and address human rights risks and
impacts, including those arising from our business relationships. Our processes include ESG risk assessments, transaction
monitoring, Responsible Sourcing assessments, employee and third-party due diligence and customer care protocols.
We enhanced our ESG tools, leading to 164 customer escalations for further review on human rights and modern slavery
risks. We worked with suppliers to close more than 100 priority action plans addressing potential gaps in their modern
slavery approaches. We assessed our grievance mechanisms and identified improvements for handling human rights
grievances. Additionally, we piloted a monitoring framework to track and report on the impact of our human rights
efforts, focusing on 14 indicators related to modern slavery. For more details, refer to our Modern Slavery Statement.
Creating safer communities for children and young people
Our Safer Children, Safer Communities (SCSC) program has made good progress since its inception. Since 2020 we
have granted more than $77 million to 50+ child safeguarding organisations in Australia and Asia. This year, the funding
has helped our partners reach more than 69,0001 children, young people and adults through various programs. One
example is The Benevolent Society which is supporting seven local organisations across three states to improve child
safety outcomes. We also made progress on the commitments in our Child Safeguarding Supplement. The SCSC Impact
Report has more detail.
Strengthening risk management
The first stage of our Human Rights Risk Assessment (HRRA) provided insights into our salient human rights issues
across our lending and supply chain. Salient issues are those with the most severe impacts on people connected to
our activities. Future assessments will cover our financial products, services, employment practices and community
partnerships. While we can’t control all issues, we aim to reduce adverse outcomes and have identified actions to
strengthen our response and seek improvement opportunities.
Salient human rights issues
Our role as a bank
As a lender to business,
corporates and institutions
As a lender
to individuals
As a purchaser of
goods and services
SALIENT ISSUE
OUR ROLE
DESCRIPTION
Health, safety
and wellbeing
Impacts to the health, safety and wellbeing of workers, consumers and communities in both our own
and our customers' operations and supply chains.
Modern slavery and
labour exploitation
Modern slavery and exploitative labour practices in both our own and our customers' operations or
supply chain. Examples include slavery, servitude, human trafficking, forced labour, debt bondage,
deceptive recruitment, child labour and forced marriage.
Conflict and
security practices
Customer connections to, or exacerbation of, local conflict and/or the harmful use of security
practices against local communities or workers.
Land rights
and livelihoods
Customer connections to land rights violations, Free, Prior and Informed Consent (FPIC) or adverse
impacts to communities and their livelihoods associated with land use and compensation practices.
Climate vulnerability
and resilience
Our role in supporting customers and communities vulnerable to or affected by climate change,
helping to build climate resilience and financing climate mitigation and adaptation projects.
Customer hardship
and exploitation
Our role in supporting and avoiding impacts to customers in times of hardship, vulnerability,
exploitation or abuse, including situations of fraud, scams, financial abuse, coercion, or domestic
and family violence.
Housing affordability
and inclusivity
Our role in supporting customers and communities to access affordable, inclusive and
adequate housing.
Financial inclusion
and wellbeing
Our role in supporting diverse customers, fostering equitable access to finance and promoting
financial wellbeing so that customers and communities can meet their basic needs.
Privacy and
data protection
Protection and respect for the privacy of our customers and their data.
1.
Data is from 1 October 2023 to 31 March 2024 and includes children, young people and adults directly and indirectly reached through funded
programs across Australia, the Philippines, Thailand and Cambodia.
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Keeping cash flowing in communities
Cash is important for many customers. Looking ahead, we are committed to engaging with industry and government
to develop a sustainable, long term solution to maintain cash services in our communities. Westpac, in collaboration
with other major banks and retailers, committed almost $50 million to support Armaguard to maintain cash availability
in the community. This funding took Westpac's total cost of supplying cash services to Australians for the year to
approximately $330 million.
Diverse suppliers
We aim to build a stronger, more inclusive society by supporting businesses that drive positive change. Through
our Supplier Inclusion and Diversity program, we collaborate with 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). This year, we spent $37.9 million
with diverse suppliers1, an increase of $10 million from last year. This includes $21.1 million spent with Indigenous-
owned businesses.
Supporting Reconciliation
Our vision for reconciliation is an Australia where Aboriginal and Torres Strait Islander peoples have equitable
economic participation and financial wellbeing. Our 2022-2025 Reconciliation Action Plan (RAP) outlines our
commitment and actions to achieve this vision through our roles as a lender, employer, purchaser, community
supporter and corporate voice. As we approach the final year of our RAP, we continue to make progress in our
four focus areas.
Respect for self-determination and a deeper understanding of Free, Prior and Informed Consent (FPIC)
Our RAP sets out our Free, Prior and Informed Consent (FPIC) project, which aims to further develop our
understanding of FPIC, work with stakeholders, improve our capability and share our learnings as widely as we can.
See our RAP for more information.
This year, we continued our community consultations to better understand our role as a bank and lender and refined
our risk assessment tools for institutional customers.
RAP FOCUS AREA
FY24 PROGRESSa
Valuing culture: building
relationships based on trust and
respect; valuing cultures and
histories and recognising the
importance of self-determination.
•
Celebrated and supported Indigenous culture by hosting more than 30 events internally
and externally for National Reconciliation Week and NAIDOC Week.
•
30 Westpac staff completed a Jawun secondment, contributing more than 6,800 hours
to community organisations across 8 regions.
•
Maintained cultural capability with 100% of employees completing mandatory learning.
Meaningful careers: investing
in Indigenous careers through
dedicated programs to recruit,
retain and develop Aboriginal and
Torres Strait Islander people.
•
Increased our Aboriginal and Torres Strait Islander workforce representation to 1.08%,
exceeding our 2024 target of 0.9%.
•
Recruited 28 cadets through the MobTech program with all gaining permanent roles at
Westpac. See Building future skills (page 27) for more detail.
•
Expanded leadership development opportunities through our Echo leadership and
coaching programs and our Indigenous employee Summit, Bayala Djurali.
Better banking experiences:
making it easier for Indigenous
customers to do business with us
and improving financial inclusion
and economic participation.
•
Supported more than 12,867 uniquea customers through our Indigenous call centre
since 2022.
•
Simplified our customer onboarding process, allowing remote customers to onboard
without visiting a branch.
•
New scam and fraud dedicated phone line to improve support for impacted customers.
Backing Indigenous enterprise:
helping more Aboriginal and
Torres Strait Islander people
to grow their businesses
as customers, suppliers
and partners.
•
Spent $21.1 million with Indigenous-owned suppliers this year, bringing the total
since April 2022 to $32.6 million. This exceeds our RAP target to spend a
cumulative $8 million with Indigenous-owned suppliers between 1 April 2022 and
30 September 2025.
•
Supported 11 Indigenous-owned organisations through our Skilled Volunteering Network.
a.
Refer to the 2024 Sustainability Index and Datasheet for definition.
1.
Refer to the 2024 Sustainability Index and Datasheet for definition.
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WESTPAC 2024 ANNUAL REPORT
CREATING
VALUE FOR
THE ENVIRONMENT
We are committed to global
efforts in achieving
net-zero by 2050 through
our operations, helping
customers to transition and
collaborating for impact.
Key highlights
1
13
TARGETS IN ALL
9 NZBA EMISSIONS-
INTENSIVE SECTORS2 86%
REDUCTION IN SCOPE
1 AND 2 EMISSIONS
SINCE 2021
$29BN
IN SUSTAINABLE
FINANCE LENDING (TCE) $13.7BN
IN BOND FACILITATION
SINCE THE START OF FY22
1.
Refer to our 2024 Climate Report for definitions and detail.
2.
Westpac joined the Net-Zero Banking Alliance (NZBA) in 2022.
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In line with our purpose of creating better futures
together, we are progressing our climate transition
plan with the ambition to become a Net-Zero, climate
resilient bank.
Our approach to climate change, detailed in our Climate
Report, guides our carbon footprint reduction efforts
across the organisation.
We've continued to make progress against our three
action areas. Further details on our targets and plans are
available in our 2024 Climate Report.
1. Net-zero, climate resilient
operations
We are committed to reducing the climate change impacts
of our operations through the reduction of our scope 1, 2
and scope 3 upstream emissions.
This year, we reduced our total operational emissions
(scope 1, 2 and scope 3 upstream) by a further 19% largely
due to meeting our renewable energy goals ahead of
schedule. Our scope 1 and 2 emissions are now 86% lower
than our 2021 baseline1 which surpasses our 2030 target
of a 76% reduction, six years ahead of schedule. To further
reduce our scope 1 emissions, we have installed electric
vehicle (EV) charging stations in more workplaces and
commenced including EVs in our fleet.
Scope 3 upstream emissions are now 41% lower than our
2021 baseline1, positioning us well against our 2030 target
for a 50% reduction. We developed a new program which
will support employees reduce their home emissions by
switching to renewable electricity contracts with retailers.
WESTPAC'S OPERATIONAL EMISSIONS
(Tonnes of CO2 equivalent)
7,851
7,297
6,559
6,262
53,981
36,734
14,489
2,303
71,738
63,377
61,044
57,655
Scope 1 emissions
Scope 2 emissions
Scope 3 upstream emissions
2021¹
2022
2023
2024
2. Supporting customers’ transition
to net-zero and to build their
climate resilience
More than 99% of our carbon footprint is derived from
financed emissions, which are the emissions associated
with the activities of the customers we lend to. Reducing
the emissions intensity of our loan portfolio by mobilising
capital to support customers in their transition is one of
the most significant roles we can play as a bank. This
supports the transition to a net-zero economy and helps
us to reduce our financed emissions.
To guide our efforts, we joined the NZBA and have set
2030 targets for some of the most emissions intensive
sectors in our lending.
We made progress last year with an improved emissions
profile in 11 of our 12 sectors where we have targets.
This year, we introduced a new aluminium sector target,
bringing us to a total of 13 targets across emissions
intensive sectors under our NZBA commitment. Up to 54%
of our estimated scope 3 financed emissions from the
scope 1 and 2 emissions of our customers at a Group level
for FY23 relate to customers and industries captured in
our NZBA sector targets.
We engaged just over 150 institutional customers on their
climate transition plans and found that 84% of customers
had a public transition plan. As part of our engagement,
we provided insights on industry best practice, climate
strategy and ESG trends.
Other areas of progress include:
•
Launching the Sustainable Upgrades home and
investor loans with the support of the Clean Energy
Finance Corporation’s $1 billion Household Energy
Upgrades Fund, for customers to install new features
or technology to improve the energy efficiency or
climate resilience of their properties.
•
Building on the success of New Zealand’s Sustainable
Farm Loan and Sustainable Finance Business Loan
launched last year, we introduced a new Sustainable
Equipment Finance Loan. This initiative supports more
businesses in reducing their climate impacts through a
range of sustainable assets, such as electric vehicles.
•
We reviewed our loans and bond facilitation activities
against our Sustainable Finance Framework. At
30 September 2024 we had $29 billion in lending
while the cumulative total of bond facilitation since
the start of FY22 was $13.7 billion. This puts us on
track to meet our 2030 targets of $55 billion and
$40 billion respectively.
Refer to the 2024 Climate Report for further
information about our financed emissions at an
industry level
1.
The 2021 baselines for these targets is different from what is in this figure as data was adjusted for COVID-19 pandemic and other impacts.
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WESTPAC 2024 ANNUAL REPORT
CREATING VALUE FOR THE ENVIRONMENT
GROUP FINANCED EMISSIONS AND PROGRESS ON OUR NZBA SECTOR TARGETS
Financed emissions are our estimated share of customers’ scope 1, 2 and, for certain sectors, scope 3 emissions -
collectively referred to as our scope 3 financed emissions. In FY23, the financed emissions for our portfolio were
estimated at 26.2 MtCO2-e (customers' scope 1 and 2), up 6% over FY22 partly due to a 3% rise in TCE over the year.
Our NZBA sector targets are set over subsets of the sectors in our portfolio. The progress metrics for these targets
are calculated using different methodologies to those used to calculate our Group financed emissions. Calculations
typically rely on more granular data, including customer or related asset emissions. Given the complexity of the
calculations and the time needed to collect customers' information, our estimated Group portfolio financed emissions
and progress of our NZBA sector targets are reported one year in arrears, for the period ended 30 September 2023,
unless otherwise indicated.
The below table summarises our progress on our NZBA sector targets. See our 2024 Climate Report for
more information.
PROGRESS ON OUR NZBA SECTOR TARGETS
NZBA SECTOR
WESTPAC SECTOR
TYPE OF
TARGET
CUMULATIVE CHANGE IN EMISSIONS
FROM BASELINE YEAR (%)a
PROGRESS FY22
PROGRESS FY23
IMPLIED
2030 TARGET
Power
generation
Power
Generation
Intensity
-12
-23
-62
Cement
Cement
Production
Intensity
0
-5
-14
Oil and Gas
Upstream Oil
and Gas
Absolute
-18
-45
-23
Coal
Thermal
Coal Mining
Absolute
-23
-81
-100
Transport
Aviation
(Passenger
Aircraft
Operations)
Intensity
-18
-45
-60
Iron and Steel
Steel Production
Intensity
In FY23, we are on track to achieve our 2030 target
and progress remains below our emissions pathway. Given
the small number of customers, this information is not
publicly disclosed.
Aluminium
Aluminiuma
Intensity
The baseline year for this target is 2023. Given the
small number of customers, this information is not
publicly disclosed.
Commercial
and Residential
Real Estate
Commercial Real
Estate (Offices)a
Intensity
NA - baseline year
is 2022
-18
-59
Residential Real
Estate
(Australia)a
Intensity
NA - baseline year
is 2022
-11
-56
Agriculture
Australia Beef
and Sheep
Intensity
+4
+4
-9
Australia Dairy
Intensity
-7
-8
-10
New Zealand
Beef and Sheep
Intensity
-1
-4
-9
New
Zealand Dairy
Intensity
+4
-7
-10
a.
Baseline year for Commercial Real Estate and Residential Real Estate targets is 2022. Baseline year for Aluminium is 2023. Baseline year for all
other NZBA sector targets is 2021. Baseline and progress metrics for Residential Real Estate target are as at 31 August.
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3. Collaborating for impact
Transitioning to net-zero requires collaboration across all
sectors of the global economy. We collaborate with
governments, industry associations, NGOs, communities
and international bodies while participating in the
initiatives of several standard setting bodies. This included:
•
participating in consultations for the AASB climate-
related disclosures standards and the Climate Active
program through our Australian Banking Association
(ABA) membership;
•
participating in the development of the Australian
Sustainable Finance Taxonomy through our Australian
Sustainable Finance Institute (ASFI) membership; and
•
co-chairing the Banking Board of the United Nations
Environment Programme Finance Initiative (UNEP FI)
which oversees the Principles for Responsible Banking
(PRBs) and being involved in steering and principals groups that govern the NZBA.
We’ve committed to invest in a new fund by Virescent Ventures focused on in early-stage climate technologies. This
investment, alongside the Clean Energy Finance Corporation, will provide insights into emerging technologies and help
us to assist customers, especially in hard-to-abate sectors, as they progress their transition plans.
SUPPORTING THE TRANSITION TO A
SUSTAINABLE FUTURE
Westpac supported the Australian Office of Financial
Management (AOFM) as Joint Lead Manager, with their
first 10-year A$7 billion Green Treasury Bond. AOFM
manages the Australian Government’s debt portfolio.
The green bond’s proceeds will be allocated to projects
that drive Australia’s transition to net-zero by 2050
and aim to deliver lower greenhouse gas emissions,
increases in renewable energy production and bolstering
biodiversity conservation, restoration and adaptation
NATURAL CAPITAL
The world’s natural capital is under threat as natural
resources decline and critical habitats are placed under
pressure. As with climate change, we have a role to play
in supporting customers to conserve nature and reduce
natural capital loss.
We released our Natural Capital Position Statement
(NCPS) last year and are working to further build our
understanding of nature-related dependencies, impacts,
risks and opportunities. According to the Task Force on
Nature-related Financial Disclosures (TNFD)’s reference
sectors, we estimate that more than 13% of our lending
is to sectors with significant nature-related dependencies
and impacts.
We are further developing our geospatial capabilities
and piloting TNFD LEAP (Locate, Evaluate, Assess and
Prepare) assessments for material sectors. This is helping
to set the baselines for additional work.
As our customers and investors become more aware
of nature-related risks and opportunities, we continue
to engage with them to support their journey and
deepen our understanding of these impacts. In FY24, we
supported the Australian Sustainable Finance Institute’s
(ASFI) Valuing Natural Capital program as part of their
Natural Capital Advisory Group.
We are developing foundational training for front line
bankers and participation in external learning, such as
workshops by the Principles for Responsible Banking.
Next year, we aim to foster greater awareness amongst
other employees, management and the Board on nature-
related topics.
EXPOSURE TO TNFD REFERENCE SECTORS
TNFD REFERENCE SECTORSa
2024
% OF
GROUP TCEb
Automobiles and Components
0.07
Consumer Durables & Apparel
0.34
Consumer Services, Consumer Staples
Distribution and Retail
1.71
Energy
0.62
Food & Beverage
2.74
Household & Personal Products
0.01
Materials
1.12
Pharmaceuticals & Biotechnology
0.09
Real Estate Management & Development,
Equity Real Estate Investment Trusts
(REITs), Home building and Capital Goods
2.83
Semiconductors &
Semiconductor Equipment
0.13
Transportation
2.09
Utilities, Commercial and
Professional Services
1.54
Total
13.29
a.
Reference sectors set out within Annex 1 of the TNFD Sector
guidance, Additional guidance for financial institutions Version
2.0 June 2024. Refer to the glossary of the 2024 Sustainability
Index and Datasheet for further details.
b.
Represents the TCE for customers in each reference sector,
excluding exposures for the committed portion of secondary
market trading and underwriting risk, as a percentage of TCE
for Westpac.
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WESTPAC 2024 ANNUAL REPORT
TECHNOLOGY
SIMPLIFY
MODERNISE
INNOVATE
Accelerating simplification
We are taking significant steps to rationalise our
technology and reduce costs.
UNITE, our business-led, technology-enabled
transformation program, aims to simplify our processes
and systems to build a strong foundation for
future growth.
The multi-year program intends to deliver progressive
benefits to customers, employees and shareholders by
reducing the number of our technology platforms and
business complexity in the longer term.
Our objective is to have an efficient technology
environment, allowing us to be faster in responding to
customer needs and technological changes.
We have begun 39 initiatives under UNITE, including
streamlining the way we verify customer identification
(see case study). We are giving our bankers and
lenders across St.George, Bank of Melbourne and BankSA
a new Customer Relationship Management system to
improve service. We have decommissioned more than
200 applications and are well-progressed on launching a
unified platform to provide better support to collections
and hardship customers.
We undertook other major simplification projects,
including one that halved our data centres and
consolidated nine networks into one, earning recognition
as Australia’s best technology project.1
Technology simplification will remain a priority for
Westpac, driving operational efficiency and enhancing our
ability to create long term value for stakeholders.
STREAMLINED ID VERIFICATION
We are consolidating 22 customer verification
processes into a single digital identification
solution, which includes biometrics.
Customers will be able to verify their identity
through the Westpac App or Online Banking using
acceptable forms of ID such as an Australian
driver’s licence, passport, or Medicare card.
This will help make the crucial ID verification step
faster, easier and more secure for new customers.
UNITE objectives
Better
customer experience
UNITE aims to deliver all customers
Westpac’s best experience, including
access to Australia’s best banking app
leading to
improved customer experience,
NPS and customer loyalty.
Improved
employee experience
UNITE aims to give us one best way
to serve and support our customers
across the entire bank
leading to
more time with customers,
fewer systems to navigate,
easier processes and increased
employee engagement.
Increased
shareholder return
UNITE aims to reduce business
complexity leading to lower run costs
and spend on transformation
leading to
close the cost to income
ratio gap to peers.
1.
2024 Australian Institute of Project Management National Awards.
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Modernising for superior experiences
While simplifying our technology, we are also modernising
to deliver market-leading products and experiences to
customers.
•
Our online banking app was rated #1 by Forrester for
the second year, with enhanced security and features
such as Westpac SaferPay and Westpac Verify. See
Creating value for customers (page 20) for more
information.
•
BT Panorama won best wealth management platform
at the Australian Wealth Management Awards.
•
Robotic automation across consumer, business and
institutional lending saved bankers 20,000
administration hours to focus on customer service.
•
Our new Digital Banker platform will enable our
bankers to better support and service customers.
•
Westpac Mesh, our world-class technology
development platform, grew from 85 million in daily
transactions in FY23 to more than 120 million. Our Mesh
engineers rank in the top 20% globally for productivity1.
•
We strengthened our defences against customer fraud, scams and cyber-attacks by investigating over 11,000 alerts
and using a combination of Artificial Intelligence and automation to detect suspicious patterns and risks.
Innovating to drive intelligent banking
Our emphasis on AI, data analytics and advanced workforce practices is making Westpac a more efficient, insights-
driven bank, capable of delivering more personalised customer experiences and efficient operations.
LEVERAGING THE POWER OF AI
We are using AI to develop new capabilities that deliver benefits to our customers, people and organisation. Our
new AI platform is the foundation of our progress, hosting multiple AI-based solutions and enabling the seamless
integration of new applications.
Advanced AI models are used in home lending to verify customer income and expense information, making the home
loan process more efficient for customers, brokers and our people by reducing rework.
Our use of AI assists thousands of our software engineers, boosting their productivity by between 10 and 25% in
coding output and quality. AI powers our Everyday Banking chatbots, providing 24/7 support and resolving 70%
of customer queries without escalation. We are also trialling new internal chatbots for financial market dealers and
mortgage lenders.
Other opportunities include using ‘AI agents’ that are capable of executing multi-step actions to drive operational
efficiencies and improved service to our customers. We are committed to the responsible use of AI, ensuring our
initiatives align with our principles, policies, values and Code of Conduct.
Data: The foundation of intelligent banking
Data is critical to every aspect of our business, empowering informed decision-making. We have made significant
progress in migrating our data to the cloud, a major milestone in simplifying Westpac’s data ecosystem, reducing risk
and enabling our team to create value at scale through data products. Our customer insights platform continues to
evolve, offering a comprehensive view of our customers and delivering hyper-personalised experiences. We have defined
our approach to information security, including our alignment with international and industry standards, in our
Cybersecurity Statement.
Investing in our technology workforce
To drive our technology ambitions, we’re investing in our people. Over the course of the year, we brought on close to
1,000 engineers2 and we’re upskilling our team while attracting new talent through initiatives like EmPOWERUP and
MobTech. For more details, please see Creating value for our people (page 26).
1.
BlueOptima software development metrics.
2.
Figure includes all employment types, including contractors.
40
WESTPAC 2024 ANNUAL REPORT
RISK MANAGEMENT
Proactive risk management and risk culture are fundamental to our bank. They underpin our strength and resilience,
shape the way we operate and provide clear parameters for decision-making. Strengthening risk management remains a
priority as the nature of the risks we face may change and evolve.
We manage risks through a Risk Management Framework (Framework) which is centred around customers, a strong
risk culture and the Three Lines of Defence (3LoD) model. These are surrounded by nine elements that work together
to guide how we manage risk and deliver fair customer outcomes. We regularly review these elements to ensure
the Framework operates effectively. The Framework is approved by the Board and implemented through our Risk
Management Strategy, which is supported by our risk class frameworks, policies and risk appetite statements.
To manage sustainability risks, the Framework is supported by a Sustainability Risk Management Framework (SRMF) and
related policies to guide how we manage risks such as climate change and human rights across our operations, lending
and supply chain. For further information on risks we face, see 2024 Risk Factors.
RISK MANAGEMENT FRAMEWORK COMPONENTS
Governance and
Management Control
Business Strategy
Risk Identification
Risk Appetite
Stress and
Scenarios Analysis
People and
Infrastructure
Control Definition and
Effectiveness
Monitoring and
Reporting
Actions and
Response
Westpac’s business plans
are shaped considering the
risks associated with its
strategic objectives
Identifying
existing and
emerging risks in
our business
from internal and
external
environments
Setting risk
appetite to
provide clarity on
the level of risk
we are prepared
to take
Performing stress tests and
scenario analysis to assess
potential impacts that changes
to existing and emerging risks
may have on the Group,
including on our capital
Having appropriate capability, people,
data and systems to support effective risk
management and decision making
Embedding appropriate
Frameworks, policies,
standards and controls to
manage the risks we take
Risks are
assessed
through ongoing
monitoring,
management,
reporting
and assurance
Appropriate
action plans
are
implemented
to improve
our risk
profile
Ensuring that appropriate data,
analysis and recommendations flow to
appropriate people and forums on a
timely basis to support decision making
Customers
R
i
s
k
Cu
lt
u
r
e
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Strengthening risk management
We implemented a comprehensive Integrated Plan (IP), through the CORE program, to strengthen risk management
practices. The completion of the three year plan on 31 December 2023, marked a significant milestone in strengthening
our risk culture, governance and accountability. Promontory Australia, the independent reviewer of our IP, have noted the
progress in its final report. Subsequently, APRA reduced Westpac’s total operational risk capital overlay from $1 billion
to $500 million. We are now completing a transition phase to continue to embed the improvements we've made for the
long term and demonstrate their sustainability and effectiveness.
Three Lines of Defence
The 3LOD work together to make sound risk-based decisions through:
•
Strong and proactive engagement, communication, trust and collaboration;
•
Management information that is reliable, coherent and transparent; and
•
Alignment of activities across the 3LOD to avoid unnecessary duplication, overlap or gaps.
WESTPAC THREE LINES OF DEFENCE
Embedded sustainability practices
Dedicated ESG specialists are integrated within our Business & Wealth, WIB and Westpac New Zealand
operating segments.
The ESG Risk team, as a second line of defence, performs independent monitoring and oversight of risk profiles to
ensure that risk and control assessments accurately reflect our sustainability risks.
Our approach to managing climate-related risks and opportunities, including assessing physical and transition climate
risks, is outlined in the 2024 Climate Report.
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WESTPAC 2024 ANNUAL REPORT
RISK MANAGEMENT
Risk assessment
In line with our Risk Management Framework, we regularly assess the risks that could impact Westpac’s strategic
objectives. This process involves workshops with first and second line defence teams to identify potential risks, assess
their impact and outline how we manage, monitor and report them with the controls in place. Emerging risks and
changes to the external environment are considered as part of the assessment. For material non-financial risks, we
generate a risk profile which enables each risk to be rated from ‘Low’ to ‘Very high’. Each risk is also assessed for its
financial, customer, staff, regulatory, reputation, social and environmental impact.
Major risk categories
We have identified 11 major risk categories, among other potential risks, that could impact Westpac. Sustainability risks,
including climate change, have the potential to affect the company in various ways with the main impacts classified
under the material risks of Credit Risk (as a financial risk) and Reputation and Sustainability Risk (as a non-financial risk).
1
Capital
Adequacy
2
Funding
and
Liquidity
Risk
3
Credit
Risk
4
Market
Risk
5
Strategic
Risk
6
Risk
Culture
7
Operational
Risk
8
Compliance
& Conduct
Risk
9
Financial
Crime Risk
10
Cyber
Risk
11
Reputational
and
Sustainability
Risk
For each major risk category, the Board establishes a risk appetite which is articulated in the Board Risk Appetite
Statement (RAS). The RAS lists our major risks, along with the measures and tolerances used to monitor each risk. Most
of these measures are monitored by 'green', ‘amber’ and ‘red’ tolerances which indicate when risks are close to, or over,
the Board’s approved appetite. The following table provides more detail on the major risk categories.
MAJOR RISK CATEGORIES
1
Capital Adequacy
The risk that Westpac has an
inadequate level or composition
of capital to support its
normal business activities
and to meet its regulatory
capital requirements.
Risk Appetite and Mitigation
We aim to maintain a strong balance sheet including under
stressed scenarios.
We evaluate capital management through our Internal Capital Adequacy
Assessment Process, features of which include:
•
Capital management strategy
•
Considering economic and regulatory requirements and
stakeholder perspectives
•
Stress-testing considerations
•
Target operating range for key capital ratios.
Areas of focus include:
•
Continuous monitoring of capital forecasts
•
Considerations of capital headwinds
•
Actively monitoring the economic outlook and credit risk arising from
higher interest rates and cost-of-living pressures.
Example of a Risk Appetite measure
•
CET1 capital ratio – a measure which shows a bank’s capacity to
absorb losses.
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2
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.
Risk Appetite and Mitigation
We aim to manage our balance sheet such that we:
•
Maintain a diversified, stable and cost-effective funding base
•
Can source funding as and when needed
•
Have sufficient securable assets to meet our funding and repurchase
agreement requirements
•
Fund lending growth with stable funding sources.
Further information on funding and liquidity risk management is in Note 21
(page 215).
Areas of focus include:
•
Executing the wholesale funding plan to support balance sheet growth
and refinance maturing debt
•
Managing liquidity risk to meet regulatory requirements and Westpac’s
liquidity needs in line with market conditions.
Examples of a Risk Appetite measure
•
Net Stable Funding Ratio (NFSR)
•
Liquidity Coverage Ratio (LCR).
3
Credit Risk
The risk of financial loss where a
customer or counterparty fails to
meet their financial obligations
to Westpac.
Risk Appetite and Mitigation
We manage credit risk using either a Program-managed approach for high-
volume homogeneous credit risk or Transaction-managed approach for
individual customers.
These approaches include:
•
Setting boundaries to guide appropriate credit risk conscious strategic
choices, including for changes in the operating environment
•
A range of policies, processes, systems, risk-delegated authorities and
Board-approved credit risk limits.
Further information on credit risk management and provisioning is in Note
10 (page 175) and Note 11 (page 185) to the financial statements and in the
September 2024 Pillar 3 report.
Areas of focus include:
•
Responding to heightened credit risk from the rapid interest rate
tightening cycle, ongoing geopolitical risks, an uncertain economic
environment and inflationary pressures
•
Stress testing our credit portfolio for climate change including the
transition to net-zero emissions
•
Assessing the impact of any external events that may impact our
credit portfolio (i.e. geopolitical events, industry specific events), on the
adequacy of the overall expected credit loss provision.
Example of a Risk Appetite measure
•
Top 10 exposures to Corporates and Non-Bank Financial Institutions as a
% of Total Committed Exposure.
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WESTPAC 2024 ANNUAL REPORT
RISK MANAGEMENT
4
Market Risk
The risk of an adverse impact
on our financial performance
or financial position resulting
from changes in market factors,
such as foreign exchange rates,
commodity prices, equity prices,
credit spreads and interest rates.
This includes interest rate risk in
the banking book.
Risk Appetite and Mitigation
We have appetite for market risk in approved products within our limit
framework. We manage market risk through the employment of prudent risk
management strategies and active monitoring of Board-approved metrics
that capture the potential risk of adverse movements in financial markets.
The Board has approved a risk appetite for traded and non-traded risks via
the measurement of Value at Risk (VaR), Stressed VaR (SVaR), Net Income
at Risk (NaR) and risk sensitivities to interest rates for capital hedges and to
credit spreads for the liquid securities portfolio. The management of market
risk is supported by the Market Risk Management Framework and associated
policies, limits, processes, systems and delegated authorities.
Further information on market risk management is in Note 21 (page 215).
Areas of focus include:
•
Upgrading/replacing market risk systems and supporting infrastructure
•
Implementing regulatory change related to prudential market
risk standards.
Example of a Risk Appetite measure
•
Value at Risk (VaR), a statistic that quantifies the extent of possible
financial losses arising from the Bank’s Financial Markets business.
5
Strategic Risk
The risk that Westpac makes
inappropriate strategic choices,
does not implement its strategies
successfully, or does not respond
effectively to changes in
the environment.
Risk Appetite and Mitigation
We aim to grow through well-considered initiatives aligned to our strategy
and risk appetite. We aim to manage the impact of threats from changes in
the environment, which could significantly impact our ability to implement
our strategies. We continually evaluate our performance against plans and in
light of changes, we must respond to such factors in a timely manner.
Areas of focus include:
•
Accelerating technology simplification and transformation agenda
•
Appropriate funding, resourcing and delivery of regulatory commitments
•
Continuing to invest in digital and data journey, improving the
customer experience.
Example of a Risk Appetite measure
•
Actual ROTE against the Target ROTE.
6
Risk Culture
The risk that our culture does
not promote and reinforce
behavioural expectations and
structures to identify,
understand, discuss and act
on risks.
Risk Appetite and Mitigation
We promote a risk culture that supports our purpose, strategy and values
and our ability to manage risk effectively. We regularly assess our risk
culture and undertake initiatives to continually improve.
Areas of focus include:
•
Maintaining and continuing to review and improve our tools and
processes to support risk culture
•
Supporting improved capability across key behavioural change areas,
including decision making, ownership, challenge and reinforcement and
maturing action planning to drive behavioural change
•
Continuing to align to the broader organisational culture plan to support
driving change at all levels.
Example of a Risk Appetite measure
•
Internal Voice+ survey results – % of respondents who feel safe calling
out risks and/or concerns.
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7
Operational Risk
The risk of loss resulting from
inadequate or failed internal
processes, people and systems
or from external events.
Risk Appetite and Mitigation
We aim to be resilient to operational risk and minimise risk through robust
processes and controls. We aim to quickly and effectively remediate material
operational issues and incidents.
Areas of focus include:
•
Maturing our Operational Risk Management Framework and practices to
continuously strengthen risk management across the organisation
•
Strengthening the control environment, including risk prevention
and automation
•
Strengthening our operational resilience and adopting a cross-
organisation view of events to fully understand underlying issues. Areas
of focus include data, records management and third-party risk.
Example of a Risk Appetite measure
•
% of key controls assessed as ‘Unsatisfactory’.
8
Compliance and Conduct Risk
The risk of failing to abide by
compliance obligations required
of us, or otherwise failing to have
behaviours and practices that
deliver suitable, fair and clear
outcomes for customers and that
support market integrity.
Risk Appetite and Mitigation
We establish robust controls and systems to manage compliance and
conduct risk. We aim to promptly own, investigate and remediate incidents
of non-compliance. We aim to eliminate:
•
Any breaches of regulatory requirements
•
Conduct that causes unsuitable, unfair or unclear customer outcomes or
adversely impacts the integrity of markets
•
Complicated systems or processes that could lead to systemic or
material breaches of regulatory requirements.
Areas of focus include:
•
Strengthening the management of our conflicts of interest, product
governance and privacy risks
•
Improving our tools and processes to support alignment of our business
practices to fair customer outcomes and market integrity
•
Applying the Code of Conduct including our ‘Should We?’ Test to deliver
better outcomes for our customers, our communities and each other.
Example of a Risk Appetite measure
•
Average calendar days to complete all Compliance Assessments
46
WESTPAC 2024 ANNUAL REPORT
RISK MANAGEMENT
9
Financial Crime Risk
The risk that Westpac fails
to prevent financial crime
and/or fails to comply with
applicable global financial crime
regulatory obligations.
Financial Crime includes
bribery and corruption, money
laundering, sanctions and export
control violations, tax evasion,
fraud and scams, terrorist
financing and proliferation.
Risk Appetite and Mitigation
Westpac helps prevent financial crime by proactively identifying, assessing,
mitigating and reporting financial crime risks and complying with all
applicable global and local financial crime regulatory obligations. This means
that our financial crime risks must be managed through robust controls and
systems and that we must promptly own, investigate and remediate financial
crime incidents where they do occur.
Areas of focus include:
•
Simplification and embedding strategic capabilities, improving detection
and surveillance capabilities and expanding the use of network analytics
•
Collaboration through involvement in Public and Private sector
partnerships and other intelligence bodies to disrupt financial crime
•
Continued Know your Customer (KYC) identity checks, including
remediation of pre-commencement customers and enhancing
customer lifecycle management through digital capabilities and
automated controls. Pre-commencement customers are customers
who were onboarded before KYC requirements came into effect on
12 December 2007.
Example of a Risk Appetite measure
•
Number of high rated Issues which haven’t been remediated within the
initially agreed timeframe.
10
Cyber Risk
The risk that Westpac’s or its
third parties’ data or technology
are inappropriately accessed,
manipulated or damaged from
cyber threats or vulnerabilities.
Risk Appetite and Mitigation
We proactively manage our cyber risk exposure, to ensure that we are
resilient to cyber threats and vulnerabilities. In managing our cyber risk, we
aim to ensure that:
•
We manage our risks within the appropriate regulatory frameworks
•
We do not undermine our strategic, financial, reputational or
regulatory standing
•
We implement cyber controls commensurate to the cyber threats we
respond to.
We recognise that cyber events may occur, however incidents must be
managed timely and effectively to limit impact and future likelihood.
Areas of focus include:
•
Enhancing cybersecurity capability including data security controls,
application protection controls, identity and access management and
strengthening our network perimeters
•
Embedding a consistent cyber risk management framework.
Examples of a Risk Appetite measure
•
Control effectiveness against external cyber threats
•
Supplier security assessment outcomes.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
47
11
Reputational and
Sustainability Risk
The risk of failing to recognise or
address environmental, social or
governance (ESG) issues as well
as the risk that an action, inaction,
transaction, investment or event
will reduce trust in Westpac’s
integrity and competence.
Risk Appetite and Mitigation
We aim to maintain the confidence of all stakeholders by fostering trust
in our integrity and competence. Our approach aims to balance the
commercial aspects of decisions with stakeholder expectations, while
considering potential impacts on people, communities or the environment.
We recognise that ESG issues can involve complex, interconnected and
sometimes competing considerations.
In our lending
The ESG Credit Risk Policy supports the SRMF and forms part of our credit
risk assessment process. ESG risk assessment tools are used within the
business and institutional banking teams to assess ESG risks associated
with customers, transactions and the activity being supported. These
assessments are performed for new-to-bank opportunities and for existing
customers as part of periodic risk reviews or where there are major
changes to facilities. When potential ESG risks remain, they are escalated
to a Customer and Transaction Risk Escalation Committee for additional
review in the relevant business unit. The Climate Change Credit Risk
Committee provides portfolio oversight, informing accountable individuals
in making appropriate climate-related credit risk decisions.
In our supply chain
We require suppliers to adhere to Westpac’s Responsible Sourcing Code
of Conduct by completing an assessment that outlines our standards for
ethical, social and environmental business practices.
Areas of focus include:
•
Improving tools and processes to understand sustainability risks
associated with our lending and supply chain
•
Building our understanding of the nature-related risks, consistent with
our Natural Capital Position Statement
•
Embedding findings of our salient human rights risk assessment into
risk management processes. See page 32 for more information.
Examples of a Risk Appetite measure
•
Reputation ranking from RepTrak (a firm providing an independent
assessment of a company’s reputation, brand and ESG)
•
Progress against our NZBA targets.
48
WESTPAC 2024 ANNUAL REPORT
CORPORATE
GOVERNANCE
Our approach to governance
Corporate governance is the framework of systems,
policies and processes by which we operate and through
which our people are empowered and accountable for
making decisions.
Our approach to corporate governance is based on
a set of values and behaviours that underpin our
day-to-day activities. Our values and behaviours are
designed to promote transparency, fair dealing and
the protection of stakeholder interests, including our
customers, shareholders, employees and the community.
We aspire to the highest standards of corporate
governance, which Westpac sees as fundamental to the
sustainability of our business and performance.
Our corporate governance framework establishes the roles
and responsibilities of Westpac’s Board, management
team, employees and suppliers. It provides the systems,
policies and processes for monitoring and evaluating
Board and management performance. It also establishes
the practices for corporate reporting, disclosure,
remuneration, risk management and engagement of
security holders.
The Westpac Board is comprised of nine independent
Non-executive Directors and the Managing Director and
Chief Executive Officer (CEO).
WESTPAC’S BOARD AND BOARD COMMITTEE STRUCTURE
BOARD COMMITTEES
Provide relevant periodic assurances
and reports (as appropriate)
Provide assurance
on the remuneration
disclosures in the
Remuneration Report
Provide assurance on
risk components of
the annual report and
interim financial results
announcement
Delegation
Assurance,
Oversight through
Reporting
Accountability
Accountability
Delegation
Delegation
Board Committees will refer matters to the Board or other Board Committees where appropriate.
Specific reporting as shown above
BOARD
Independent Assurance and Advice
External
Auditors
Group
Audit
Independent
Assurance and
External Advice
Chief Executive Officer
Group Executives
Remuneration
Audit
Nominations
& Governance
Risk
Board areas of focus in FY24
This year the Board (including with assistance from its
Board Committees) has focused on overseeing:
•
our UNITE program which is focused on making
our processes, systems and technology simpler and
improving service to customers;
•
the Group’s financial and operating performance,
including progress in improving the Group’s financial
performance relative to peers;
•
ongoing initiatives that are designed to support
customers experiencing hardship and to help
protect customers from scams;
•
completion of the Integrated Plan under the CORE
program, as well as the transition phase that
is focused on sustainably embedding changes
implemented through the CORE program;
•
management of current and emerging risks arising
from the evolving economic, geopolitical, regulatory
and competitive environment;
•
Westpac's capital position and various capital
management initiatives;
•
consideration and assessment of the resilience of
the Group’s systems and response to potential cyber
incidents and data breaches;
•
priorities outlined in our Sustainability Strategy and
our Climate Change Position Statement and Action
Plan; and
•
ongoing consideration of Board and senior
executive succession, as well as Board
Committee composition.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
49
Role of the Board and Board Committees
The role of the Board is to provide leadership and strategic guidance for Westpac and its related bodies corporate, in
addition to overseeing the sound and prudent management of the Westpac Group. The Board Charter outlines the roles
and responsibilities of the Board. The Board Charter is available on our website.
Key Board responsibilities
•
approving and overseeing management’s
implementation of the strategic direction of the
Group, its business plan and significant corporate
strategic initiatives;
•
appointing the CEO and Chief Financial Officer, and
approving the appointment of Group Executives, the
General Manager of Group Audit and any other
person the Board determines;
•
overseeing culture across the Group by setting the
tone from the top, approving the Group’s Code of
Conduct and Values and receiving reporting on the
Group’s culture;
•
assessing and reviewing the performance of the
Board, its Board Committees, the CEO and the
Group Executives;
•
providing oversight of the Group’s technology
strategy and the implementation of key
technology initiatives;
•
approving the Group Remuneration Policy;
•
approving, in accordance with the Group
Remuneration Policy, remuneration arrangements,
variable remuneration outcomes and adjustments to
variable remuneration where appropriate for Group
Executives, other employees who are accountable
persons under the Financial Accountability Regime,
any person performing a role specified by the
Australian Prudential Regulation Authority and any
other person the Board determines;
•
approving the annual financial targets and financial
statements, and monitoring financial performance
against forecast and prior periods;
•
determining dividend policy and the amount, nature
and timing of dividends to be paid;
•
approving the Internal Capital Adequacy Assessment
Process, including reviewing Group stress testing
outcomes/scenarios, and approving recovery and
resolution plans;
•
considering and approving our overall risk
management framework for managing financial
and non-financial risk; approving the Group
Risk Management Framework, the Group Risk
Management Strategy and the Board Risk Appetite
Statement and monitoring the effectiveness of risk
management by the Group;
•
forming a view of our risk culture and overseeing
the identification of, and steps taken to address any
desirable changes to risk culture;
•
considering the social, ethical and environmental
impact of our activities including the effects
of climate change, and setting standards and
monitoring compliance with our sustainability policies
and practices;
•
overseeing and monitoring workplace health and
safety (WHS) issues in the Group and considering
appropriate WHS reports and information; and
•
meeting with representatives from our principal
regulators on a regular basis.
BOARD RISK COMMITTEE
BOARD AUDIT COMMITTEE
BOARD REMUNERATION
COMMITTEE
BOARD NOMINATIONS &
GOVERNANCE COMMITTEE
Assists the Board to
consider and approve
the risk management
framework, oversee risk
culture, the risk profile
for material risks and risk
appetite. The Committee
also considers and
recommends key risk
policies and frameworks to
the Board for approval.
Assists the Board by
having oversight of the
integrity of financial
statements, financial
reporting systems and
corporate reporting.
The Committee also
oversees the external
auditor engagement and
the performance of
Group Audit.
Assists the Board to
discharge its
responsibilities in
relation to remuneration
matters, including by
overseeing the design,
operation and
monitoring of the
remuneration
framework.
Assists the Board by
overseeing that the
Board and boards of
related bodies corporate
comprise individuals who
are best able to discharge
their role as Directors.
The Committee also
oversees that corporate
governance arrangements
are appropriate.
50
WESTPAC 2024 ANNUAL REPORT
CORPORATE GOVERNANCE
Board skills and experience
Westpac seeks to maintain a Board of Directors with a broad range of relevant financial and other skills, knowledge, and
experience necessary to guide the business of the Group. The Board uses a skills matrix to illustrate the key skills and
experience the Westpac Board is seeking to achieve in its membership collectively and the number of Directors with
each skill and experience.
The skills matrix also assists to identify focus areas for the continuing education and professional development of
Directors. For example, in FY24 these focus areas included cyber risk, technology developments, crisis management and
key environmental, social and governance topics (amongst others). The skills matrix also assists to identify areas where it
may be desirable for specialist external expertise to be retained to supplement the Board’s skills and experience.
BOARD SKILLS, EXPERIENCE AND ATTRIBUTES AS AT 30 SEPTEMBER 2024
SKILLS AND EXPERIENCE
DESCRIPTION
NUMBER OF DIRECTORS
Customer
focus
Experience in developing and overseeing the embedding of a strong
customer-focused culture in large and complex organisations, and a
demonstrable commitment to achieving customer outcomes
Strategy
An ability to define strategic objectives, constructively question
business plans, oversee the implementation of strategy using
commercial judgement and bring a global perspective to bear
Financial
services
Experience working in, or advising, the banking and financial
services industry with strong knowledge of its economic drivers and
global business perspectives
Financial
acumen
Highly proficient in accounting or related financial management and
reporting for businesses of significant size
Risk
Experience in anticipating, recognising and managing risks,
including financial, non-financial and emerging risks, and monitoring
risk management frameworks and controls
Technology,
digital and
data
Experience in developing or overseeing the application of
technology in large and complex businesses, with particular
reference to technology- innovation, disruptive technologies, data,
cyber-security, digital transformation and customer experience
Governance
Experience as a Director of a listed entity, with detailed knowledge
of governance issues, with particular reference to the legal,
compliance, regulatory and voluntary frameworks applicable to
listed entities and highly regulated industries
Environment
and social
Experience in understanding and identifying potential risks and
opportunities arising from environmental and social issues, including
the transition to a climate resilient future, management of
biodiversity, and addressing human rights and modern slavery
within supply chains
People and
culture
Experience in people matters including workplace health and safety,
cultures, morale, inclusion and diversity, management development,
succession, remuneration and talent retention initiatives
Executive
leadership
Having held a CEO or a similar senior leadership role in a large
complex organisation, and having experience in managing the
business through periods of significant change and delivering
desired business outcomes
Deep experience and knowledge
General working experience and knowledge
Limited working experience and knowledge
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
51
Board diversity
A diverse group of skilled Directors helps us be a stronger
organisation that makes better decisions. We achieved our
2024 objective of 40% women, 40% men and 20% any
gender for the composition of the Board. We will focus on
maintaining alignment with this objective.
NUMBER OF FEMALE DIRECTORS ON THE BOARD
(4 OUT OF 10)
40%
FEMALE DIRECTORS
Female
Male
Board tenure
The average Board tenure as at 30 September 2024 is
set out below. The length of service of each Director is
outlined in the Directors’ Report (pages 54-95).
AVERAGE BOARD TENURE
3.5 YEARS
AVERAGE BOARD TENURE
0-3 years 40%
3-6 years 40%
6-9 years 20%
Refer to our 2024 Corporate Governance Statement for more information on our corporate governance
framework, policies and practices at 4 November 2024. The Statement, along with the Board and Committee
Charters, principles and policies are available at westpac.com.au/corpgov.
Ethical decision making across
Westpac and Key Group policies
Ethical and responsible decision making is critical to
decision making at Westpac. Our Purpose, Values and
Behaviours, together with our Code of Conduct and
related policies and frameworks, are focused on instilling
and reinforcing an ethical and responsible decision-
making culture across the Group. We also have policies
that seek to manage our regulatory compliance and
human resource requirements and are subject to a range
of external industry codes, such as the Banking Code of
Practice and the ePayments Code.
Code of Conduct
Our Code of Conduct (Code) sets out a consistent
standard and establishes the expectations of our people
to do what is right. The Code goes beyond an obligation
to comply with laws and policies and is a key aspect of
improving conduct to seek to ensure fair outcomes for
customers, communities and each other.
Supporting the Code are numerous frameworks and
policies which outline our commitment to sustainable
business practices and behaviours. These include our
Purpose, Values and Behaviours, policies, and position
statements addressing human rights, climate change and
other environmental and social impacts.
Anti-Bribery and Corruption
We have no tolerance for any form of bribery or
corruption and have an Anti-Bribery and Corruption
Policy (ABC Policy) and related bribery and corruption
prevention standards, procedures and systems. Material
breaches of the ABC Policy are reported to the Board
Risk Committee.
Concern reporting and whistleblower protection
Our Speaking Up Policy encourages employees,
contractors, secondees, former employees, brokers,
service providers and suppliers to raise any concerns
about our activities or behaviours that may be unlawful
or unethical. Concerns can be raised anonymously by
using our reporting system ‘Concern Online’ and our
Whistleblower Hotline. The Board Audit Committee, in
conjunction with the Board Risk Committee, oversees
our Whistleblower Program. The Board Risk Committee
receives regular reporting on whistleblowing.
Conflicts of interest
Our conflicts of interest framework is designed to
identify and manage actual, potential and perceived
conflicts of interest. The conflicts of interest framework
includes the Group Conflicts of Interest Policy, along with
supporting policies, standards and procedures.
52
WESTPAC 2024 ANNUAL REPORT
SUSTAINABILITY GOVERNANCE
The Board is responsible for considering the social, ethical and environmental impact of our activities. The Board
helps to set Westpac's strategic priorities for Sustainability by approving key policies such as the Climate Change
Position Statement and Human Rights Position Statement. It monitors progress against our Net-Zero Banking Alliance
commitment, as well as overseeing risks and opportunities.
The Board Risk Committee reviews and approves the Sustainability Risk Management Framework every two years
and reviews the monitoring of reputation and sustainability risk performance. See Risk Management (page 40) for
more information.
In relation to Board skills, the ‘Environment & Social’ category in the Board skills matrix in Corporate Governance
(page 48) reflects four directors with deep experience and knowledge and five with general working experience
and knowledge.
The Board and its Committees receive regular reports on climate-related matters from the CEO, Group Executives, and
other functions. The Board and Committee charters are available on our website.
Key sustainability-related agenda items for the Board and its Committees in FY24
Board
•
Provided oversight of the sustainability strategy, including receiving updates on
sustainability-related strategic initiatives;
•
Approved the Climate Report;
•
Approved Board Risk Appetite Statement which includes measures related to ESG scores
by sustainability rating agencies;
•
Received updates on progress against NZBA sector targets; and
•
Received training on environmental and social topics, including climate change and
human rights.
Board
Risk Committee
•
Reviewed and recommended the Board Risk Appetite Statement to the Board for
approval, which included measures related to climate change risk; and
•
Reviewed and monitored the Credit Risk and Reputation and Sustainability risk classes,
including measures related to climate risk.
Board
Audit Committee
•
Received updates on sustainability reporting and standards (including climate
standards); and
•
Provided oversight of the Climate Report, including recommending the Climate Report to
the Board for approval.
Board Remuneration
Committee
•
Recommended a new climate change measure for the Group Short Term Variable
scorecard (STVR).
Role of management
The day-to-day management of Westpac’s approach to sustainability is the responsibility of the CEO and is delegated
to Group Executives and senior management where appropriate. The CEO and senior management work to integrate the
risks and opportunities of sustainability, including climate change, into our operations and ensure our people understand
their role in supporting the Group’s sustainability ambitions.
Several management committees help assess climate-related matters and support Executive management in their
decision making. These are summarised in the following chart.
Climate measures in executive remuneration
The Group STVR Scorecard includes a climate-related measure for the CEO and certain Group Executives, aimed at
delivering the climate transition plan. This measure is part of the broader ‘Strategic Execution’ key priority.
2024 progress is assessed using three measures:
1.
The number of 2030 targets set for NZBA carbon-intensive sectors;
2.
The number of top emitters engaged on transition plans; and
3.
Performance against our annual plan of the 2030 Sustainable Finance Target.
Refer to the Remuneration Report (page 68) for information on performance against these measures.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
53
Sustainability Governance Structure
KEY
Flow of information relating to climate change-related targets and strategies.
Flow of information relating to climate-related disclosures.
Flow of information relating to the climate change-related risk management.
Participating Group departments in committees (including papers)
BOARD LEVEL
Board
Approves material sustainability positions (CCPS, NCPS, HRPS)
Approves Board Risk Appetite Statement (Board RAS), RMF, RMS
ESG & Reputation Committee
Meets at least 5 times per year.
Chaired by CEO
Supports decision making on significant sustainability and reputation
related matters, including monitoring of NZBA targets.
Approves our key sustainability positions
Group Executive Risk Committee
Meets at least 7 times per year.
Chaired by Chief Risk Officer
Review RMF, RMS, SRMF and Board RAS
Oversee the implementation and performance of the SRMF and key
supporting policies / controls and actions
MANAGEMENT LEVEL
Board Risk Committee
Approves Sustainability Risk Management
Framework (SRMF) and Credit Risk Management
Framework (CRMF) at least biennially
Reviews Board RAS, RMF, RMS annually
ESG Council
Chaired by divisional
Chief Executive
Supports coordination and
prioritisation of group-wide
ESG priorities
Group Credit Risk
Committee
Chaired by Deputy
Chief Risk Officer
Review and provide input on the
CRMF and Credit Risk Appetite
Statement (CRAS) for inclusion
in the Board RAS
ESG Risk
Line 2 risk function, Risk Class
Owner of Reputation and
Sustainability Risk.
Oversight and challenge the
management of sustainability
risk. Sets the Group’s approach
for sustainability risks, including
related frameworks and policies
such as the SRMF
ESG Disclosure
and Reporting
Under Group Finance.
Leads the Climate Report and
external sustainability
reporting. Works to improve
the Group’s alignment with
ESG related standards.
Calculate and report Group
financed emissions.
Divisions
Manage sustainability risk and
opportunities. Set NZBA targets
and baselines and reports on
progress.
Lead customer engagement
and assess risk and
opportunities in transactions
Group
Sustainability
Develops and maintains the
Group Sustainability Strategy,
Group Position Statements,
Sustainable Finance Taxonomy
and Modern Slavery Statement.
Leads the Group approach for
Climate, Nature and Human
Rights and leads external
engagement on sustainability
matters.
Group Property,
Procurement and
Protective Services
Manages the environmental
performance of the Group’s
operations. Works to reduce
the Group’s direct
environmental footprint.
Supports key suppliers with
sustainability strategies
Divisional Risk
Committees
Chaired by divisional
Chief Executive
Considers material sustainability
risks for division, including risk
profile assessments, and risk
appetite
Board Audit Committee
Reviews the sustainability disclosures in the
Annual Report and Climate Report and
recommends their approval to the Board
Executive Team
(CEO / divisional Chief Executives). Oversee Sustainability Strategy implementation
Board Remuneration Committee
Assists the Board by overseeing the design,
operation and monitoring of the remuneration
framework
GROUP DEPARTMENTS WITH SUSTAINABILITY RESPONSIBILITIES
Informs
Customer & Transaction Risk
Escalation Committee
Chaired by divisional Chief Executive.
Meets weekly (WIB) or as required (B&W)
– to escalate key transactions to relevant
executives for ESG review and decision
Climate Change Credit Risk Committee
Chaired by Deputy Chief Risk Officer
Review and provide input to the Group’s risk appetite
measures and thresholds related to climate-related
risk in CRAS and Board RAS
54
WESTPAC 2024 ANNUAL REPORT
DIRECTORS’
REPORT
Our Directors present their report
together with the financial statements
of the Group for the financial year
ended 30 September 2024.
Directors
The names of the persons who have been Directors,
or appointed as Directors, during the period since
1 October 2023 and up to the date of this report are:
Steven Gregg (appointed as a Director on 7 November
2023 and appointed Chairman on 14 December 2023),
Peter King, John McFarlane (appointed as a Director on
17 February 2020, appointed as Chairman on 2 April
2020 and retired as Chairman and as a Director on
14 December 2023), Tim Burroughs, Nerida Caesar,
Audette Exel AO, Andy Maguire (appointed as a Director
15 July 2024), Christopher Lynch (appointed as a Director
on 1 September 2020 and retired as a Director on
14 December 2023), Peter Nash, Nora Scheinkestel,
Margaret Seale and Michael Ullmer AO. Particulars of
the skills, experience, expertise and responsibilities of
the Directors at the date of this report, including
all directorships of other listed companies held by a
Director at any time in the three years immediately
before 30 September 2024, and the period for which
each directorship has been held, are set out in the
following pages.
Board Committee Member Key
Chair of each Committee is noted with a red icon.
Board Audit
Board Nominations & Governance
Board Remuneration
Board Risk
Board of Directors
Steven Gregg
BCom
Age: 63
CHAIRMAN AND INDEPENDENT
NON-EXECUTIVE DIRECTOR
Appointed: Director since November
2023 and Chairman since
December 2023.
Board Committees: Chairman
of the Board Nominations &
Governance Committee.
Experience: Steven has more than 35
years' experience in global financial
services, strategy consulting and
professional services across Australia,
Asia, Europe and the US. Steven has
extensive experience in global investment
banking, including through senior roles
with ABN Amro, Chase Manhattan,
Lehman Brothers and AMP Morgan
Grenfell. His most recent executive role
was as a partner at McKinsey & Company
where he advised clients in Financial
Services and other sectors, primarily in
Australia and Asia.
Steven has served as Chairman and
Director for companies across various
sectors and is currently Chairman of
Ampol Limited and the Lorna Hodgkinson
Foundation (and a Director of Unisson
Disability Limited). Steven is also a
Director of William Inglis & Son Limited.
Steven was formerly the Chairman
of The Lottery Corporation, Tabcorp
Holdings Limited, Goodman Fielder
Limited and Austock Group Limited, and
formerly a Non-executive Director at
Challenger Limited.
Directorships of listed entities over the
past three years: Ampol Limited (since
October 2015), The Lottery Corporation
Limited (May 2022 to March 2024),
Challenger Limited (October 2012 to
October 2023) and Tabcorp Holdings
Limited (July 2012 to May 2022).
Other principal directorships and
interests: Chairman of the Lorna
Hodgkinson Foundation (and a Director
of Unisson Disability Limited).
Board Committees:
STRATEGIC
REVIEW
PERFORMANCE
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FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
55
Peter King
BEc, FCA
Age: 54
MANAGING DIRECTOR AND
CHIEF EXECUTIVE OFFICER
Appointed: Director since
December 2019.
Board Committees: Nil.
Experience: Peter was appointed
Westpac Group Chief Executive Officer in
April 2020. Peter previously held this role
on an acting basis between December
2019 and March 2020.
Since joining the Westpac Group in
1994, Peter also held senior finance roles
including Chief Financial Officer with
responsibility for Westpac’s Finance, Tax,
Treasury and Investor Relations functions.
He has worked in senior finance roles
across the Group including in Group
Finance, Business and Consumer Banking,
Business and Technology Services,
Treasury and Financial Markets.
Peter commenced his career at Deloitte
Touche Tohmatsu. He has a Bachelor of
Economics from Sydney University and
completed the Advanced Management
Programme at INSEAD. He is a Director of
the Australian Banking Association (ABA)
and also a Fellow of the Institute of
Chartered Accountants.
Directorships of listed entities over the
past three years: Nil.
Other principal directorships and
interests: Director of the Australian
Banking Association Incorporated,
Director of the Institute of International
Finance, Director of Financial Markets
Foundation for Children and Director
of Jawun.
Board Committees:
Nil.
Tim Burroughs
MA (Hons), B Psy (Hons), FCA, FAICD
Age: 70
INDEPENDENT NON-
EXECUTIVE DIRECTOR
Appointed: Director since March 2023.
Board Committees: Member of the Board
Remuneration and Board Risk Committee.
Experience: Tim has over 40 years'
experience in finance, international
banking and mergers and acquisitions.
Tim was formerly Chairman of Investment
Banking at Goldman Sachs Australia,
where he worked for 11 years. Prior to
this, Tim held senior positions at Merrill
Lynch including Chairman of Mergers and
Acquisitions. From 1993 to 1997, Tim was
Principal at Centaurus Corporate Finance,
a leading independent advisory firm.
Over the course of his career, Tim
has specialised in providing strategic
financial advice to major corporations and
their boards. He has advised on capital
restructures, capital raisings and more
than 100 public company acquisitions.
Tim has an engineering degree from
Cambridge University and is a Fellow of
the Institute of Chartered Accountants.
Tim has also studied and taught
Psychology at Macquarie University.
Directorships of listed entities over the
past three years: Nil.
Other principal directorships and
interests: Panel member of Adara
Partners (Australia) Pty Ltd.
Board Committees:
Nerida Caesar
BCom, MBA, GAICD
Age: 60
INDEPENDENT NON-
EXECUTIVE DIRECTOR
Appointed: Director since
September 2017.
Board Committees: Member of the Board
Audit Committee.
Experience: Nerida has over 38 years of
broad ranging commercial and business
management experience, with particular
depth in technology-led businesses.
Nerida was Group Managing Director and
Chief Executive Officer, Australia and New
Zealand, of Equifax (formerly the ASX-
listed Veda Group Limited) and was also
a former director of Genome One Pty Ltd
and Stone and Chalk Limited.
Before joining Equifax, Nerida held several
senior management roles at Telstra,
including Group Managing Director,
Enterprise and Government and Group
Managing Director, Wholesale. Nerida
also held several executive and senior
management positions with IBM within
Australia and internationally, including
as Vice President of IBM’s Intel Server
Division for the Asia Pacific region.
Directorships of listed entities over the
past three years: Nil.
Other principal directorships and
interests: Co-Chair of Good2Give and its
subsidiaries Workplace Giving Australia,
Good2Give Research & Technology Fund
and ShareGift. Director of NBN Co
Ltd, Director of CreditorWatch and
Director of O’Connell Street Associates
Pty Ltd. Advisor to startups in the
technology sector.
Board Committees:
56
WESTPAC 2024 ANNUAL REPORT
DIRECTORS’ REPORT
Audette Exel AO
BA, LLB (Hons)
Age: 61
INDEPENDENT NON-
EXECUTIVE DIRECTOR
Appointed: Director since
September 2021.
Board Committees: Chair of the Board
Risk Committee, Member of the Board
Audit Committee.
Experience: Audette has more than
35 years' experience in the global
financial services markets as a senior
executive, a non-executive director and
as a social entrepreneur. Audette was
formerly the Managing Director of BSX-
listed Bermuda Commercial Bank (1993
to 1996), Chair of the Bermuda Stock
Exchange (1995 to 1996) and a Director
and Chair of the Investment Committee
of the Bermuda Monetary Authority
(1999 to 2005). She was a Director and
Chair of the Investment Committee of
Steamship Mutual (1999 to 2017). She
began her career as a lawyer specialising
in international finance. Audette is the
founder and Chair of the Adara Group, a
pioneering social enterprise which exists
to support people living in extreme
poverty and is the Chief Executive Officer
of its corporate advice businesses. She
is the recipient of numerous awards,
including an honorary Order of Australia
for service to humanity.
Directorships of listed entities over the
past three years: Nil.
Other principal directorships and
interests: Founder and Chair of
Adara Development Australia, Adara
Development USA, Adara Development
Bermuda, Adara Development UK and
Adara Development Uganda. CEO
and Director of Adara Advisors Pty
Limited and Adara Partners (Australia)
Pty Limited.
Board Committees:
Andy Maguire
BA, BAI
Age: 58
INDEPENDENT NON-
EXECUTIVE DIRECTOR
Appointed: Director since July 2024.
Board Committees: Nil.
Experience: Andy has more than 35
years' experience in financial services
and began his career in banking at
Lloyds Banking Group. From 2014 to
2020, he was Group Chief Operating
Officer at HSBC Holdings plc with
responsibility for operations, technology,
real estate, change and transformation
and operational resilience.
Previously he spent 16 years with the
Boston Consulting Group, where he
became Managing Partner of the London
office covering the UK and Ireland, and
a member of the firm’s global executive
committee, as well as formerly serving as
Global Head of Retail Banking.
Andy is currently Chairman of UK banking
software fintech Thought Machine Group.
He is also an independent Non-executive
Director of AIB Group plc, a financial
services group operating predominantly
in the Republic of Ireland and the UK.
Andy previously held Chair positions with
RegTech compliance company Napier AI
and IT service management provider CX
Holdings (Cennox Group).
Directorships of listed entities over the
past three years: AIB Group plc (since
March 2021).
Other principal directorships and
interests: Chairman of Thought
Machine Group.
Board Committees:
Nil.
Peter Nash
BCom, FCA, F Fin
Age: 62
INDEPENDENT NON-
EXECUTIVE DIRECTOR
Appointed: Director since March 2018.
Board Committees: Chair of the Board
Audit Committee. Member of the
Board Risk and Board Nominations &
Governance Committees.
Experience: Peter was formerly a Senior
Partner with KPMG, having been admitted
to the Australian partnership in 1993. He
served as the National Chairman of KPMG
Australia and served on KPMG’s Global
and Regional Boards.
His previous positions with KPMG
included Regional Head of Audit
for Asia Pacific, National Managing
Partner for Audit in Australia and
head of KPMG Financial Services. Peter
has worked in geographically diverse
and complex operating environments
providing advice on a range of
topics including business strategy, risk
management, internal controls, business
processes and regulatory change. He has
also provided financial and commercial
advice to many State and Federal
Government businesses.
Peter is a former member of the Business
Council of Australia and its Economic and
Regulatory Committee.
Directorships of listed entities over the
past three years: Johns Lyng Group
Limited (Chairman since October 2017),
Mirvac Group (since November 2018) and
ASX Limited (since June 2019).
Other principal directorships and
interests: Director of the General Sir John
Monash Foundation.
Board Committees:
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57
Nora Scheinkestel
LLB (Hons), PhD, FAICD
Age: 64
INDEPENDENT NON-
EXECUTIVE DIRECTOR
Appointed: Director since March 2021.
Board Committees: Chair of the Board
Remuneration Committee. Member of the
Board Risk Committee.
Experience: Nora is an experienced
company director with a background as
a senior banking executive in international
and project financing. Nora has served
as Chairman and Director in a range
of companies across various industry
sectors and in the public, private and
government arena. Previously, Nora was
a director of a number of other major
ASX-listed companies, was formerly a
member of the Takeovers Panel and was
an Associate Professor in the Melbourne
Business School at Melbourne University.
In 2003, Nora was awarded a centenary
medal for services to Australian society in
business leadership.
Directorships of listed entities over the
past three years: Qantas Airways Limited
(since March 2024), Brambles Limited
(since June 2020), Origin Energy Limited
(since March 2022), Telstra Corporation
Limited (August 2010 to October 2022)
and AusNet Services Ltd (November 2016
to February 2022).
Other principal directorships and
interests: Nil.
Board Committees:
Margaret (Margie) Seale
BA, FAICD
Age: 64
INDEPENDENT NON-
EXECUTIVE DIRECTOR
Appointed: Director since March 2019.
Board Committees: Member of the Board
Remuneration and Board Nominations &
Governance Committees.
Experience: Margie has more than 25
years' experience in senior executive
roles in Australia and overseas, including
in consumer goods, global publishing,
sales and marketing, and the successful
transition of traditional business models
to digital environments. Prior to her
non-executive career, Margie was the
Managing Director of Random House
Australia and New Zealand and President,
Asia Development for Random House
Inc. Margie was a Director and then
Chair of Penguin Random House Australia
Pty Limited, and a Director of Telstra
Corporation Limited, Ramsay Health Care
Limited, Bank of Queensland Limited
and the Australian Publishers’ Association.
She also served on the Boards of
Chief Executive Women (chairing its
Scholarship Committee), the Powerhouse
Museum, and the Sydney Writers Festival.
Directorships of listed entities over
the past three years: Scentre Group
Limited (since February 2016) and
Telstra Corporation Limited (May 2012 to
October 2021).
Other principal directorships and
interests: Director of Westpac Scholars
Limited, Seaborn Broughton & Walford
Pty Limited, Pinchgut Opera Limited and
Jana Investment Advisers Pty Ltd.
Board Committees:
Michael Ullmer AO
BSc, FAICD, FCA, SF Fin
Age: 73
INDEPENDENT NON-
EXECUTIVE DIRECTOR
Appointed: Director since April 2023.
Board Committees: Member of the Board
Audit and Board Risk Committees.
Experience: Michael has more than 40
years' experience in international banking,
finance and professional services. Michael
was formerly the Deputy Group Chief
Executive Officer of the National Australia
Bank (NAB) from 2007 until he retired
from the Bank in August 2011. He
joined NAB in 2004 as Finance Director
and held a number of key positions
including Chairman of the subsidiaries
Great Western Bank (US) and JB
Were. Prior to NAB, Michael was at
Commonwealth Bank of Australia, initially
as Group Chief Financial Officer and then
Group Executive with responsibility for
Institutional and Business Banking. Before
that, he was a Partner at accounting firms
KPMG (1982 to 1992) and Coopers &
Lybrand (1992 to 1997).
From a philanthropic perspective,
throughout his career Michael has been
heavily involved in supporting the Arts
and Education sectors.
Directorships of listed entities over the
past three years: Lendlease Corporation
Limited (Director since December 2011
and Chairman since November 2018) and
Woolworths Limited (January 2012 to
October 2021).
Other principal directorships and
interests: Member of the National Gallery
of Victoria Foundation Board.
Board Committees:
58
WESTPAC 2024 ANNUAL REPORT
DIRECTORS’ REPORT
Executive Team
Peter King
BEc, FCA
Age: 54
MANAGING DIRECTOR AND
CHIEF EXECUTIVE OFFICER,
WESTPAC GROUP
Peter was appointed Westpac
Group Chief Executive Officer
in April 2020, after holding
the role on an acting basis
between December 2019 and
March 2020.
Since joining Westpac in
1994, Peter has held
senior finance roles including
Chief Financial Officer with
responsibility for Westpac’s
Finance, Group Audit, Tax,
Treasury and Investor Relations
functions. He has worked in
senior finance roles across
the Group including in
Group Finance, Business and
Consumer Banking, Business
and Technology Services,
Treasury and Financial Markets.
Peter commenced his career
at Deloitte Touche Tohmatsu.
He has a Bachelor of
Economics from Sydney
University and completed
the Advanced Management
Programme at INSEAD.
Peter is a Director of the
Australian Banking Association
(ABA) and he is also a
Fellow of the Institute of
Chartered Accountants.
Scott Collary
BA, Humanities
Age: 60
GROUP CHIEF INFORMATION
OFFICER, TECHNOLOGY
Scott was appointed as the
Group’s Chief Information
Officer in August 2023. Prior to
this, he held the role of Group
Executive, Customer Services
& Technology after joining
Westpac as Chief Operating
Officer in November 2020.
Scott has over 37 years'
global banking experience,
with a breadth of
expertise across technology,
operations, risk mitigation and
commercial functions.
Before joining Westpac, Scott
was Chief Information &
Operations Officer for North
America Consumer, Business,
Wealth and Global Asset
Management Businesses at
Bank of Montreal, Canada.
Prior to that, Scott held
senior executive positions at
a number of multinational
financial institutions including
ANZ, Citibank, Fifth Third Bank
and Bank of America.
Scott holds a Bachelor’s
Degree from the University of
Maryland, College Park in the
United States.
Shannon Finch
BA (Hons), LLB (Hons), FGIA
Age: 54
GROUP GENERAL COUNSEL
Shannon joined Westpac
in November 2021 and
leads Westpac’s legal
function globally.
Shannon has nearly 30 years
legal experience including
with the Commonwealth
Attorney General’s
Department Corporations Law
Simplification Unit, Mallesons
Stephen Jaques (now King &
Wood Mallesons) in Canberra,
London and Sydney, including
as head of the Sydney office,
and as a senior partner of
global corporate law firm
Jones Day.
Shannon is a member of the
Business Law Executive of
the Law Council of Australia,
the Advisory Committee to
the Australian Law Reform
Commission’s Review of the
Legislative Framework for
Corporations and Financial
Services Regulation and
the Australian Institute of
Company Directors (AICD)
Law Committee.
Shannon has experience as
a Non-executive Director, is
a member of the AICD and
Chief Executive Women, and
is a Fellow of the Governance
Institute of Australia. Shannon
has a Bachelor of Arts
(Hons) and Bachelor of Laws
(Hons) from the Australian
National University.
Nell Hutton
BCom (Hons), MPhil, GAICD
Age: 48
CHIEF EXECUTIVE, WESTPAC
INSTITUTIONAL BANK
Nell was appointed
Chief Executive, Westpac
Institutional Bank in October
2023. The Institutional Bank
provides a range of banking
services to Commercial,
Corporate, Institutional and
Public Sector customers with
connections to Australia, New
Zealand, Asia, Europe and
US markets.
Nell first joined Westpac in
February 2021 as Managing
Director, Financial Markets,
after 21 years at Goldman
Sachs in London and Australia,
most recently as Head of
the Global Markets division in
Australia and New Zealand.
She holds a Master of
Philosophy in Finance and
Economics from Cambridge
University and a Bachelor
of Commerce (First Class
Honours) from the University
of Sydney.
Nell is Deputy Chair of the
Australian Financial Markets
Association, and a member
of the AICD and Chief
Executive Women.
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Carolyn McCann
BBus (Com), BA,
GradDipAppFin, GAICD
Age: 52
GROUP EXECUTIVE, CUSTOMER
& CORPORATE SERVICES
Carolyn has been part of
the Westpac Group Executive
team since 2018 and is
currently Group Executive,
Customer & Corporate
Services, responsible for
operations and customer
support services. The division
brings together customer
solutions, fraud prevention,
customer operations, property,
procurement and protective
services, corporate affairs, HR
and Finance Services. Carolyn
has more than 27 years’
experience in financial services.
Carolyn joined Westpac in
2013, as General Manager,
Corporate Affairs and
Sustainability. Prior to joining
Westpac, Carolyn spent 13
years at Insurance Australia
Group in various positions,
including Group General
Manager, Corporate Affairs and
Investor Relations. She began
her career in consulting in
financial services.
Carolyn has a Bachelor of
Arts from The University of
Queensland, a Bachelor of
Business from Queensland
University of Technology,
and a Graduate Diploma
of Applied Finance and
Investment from the Securities
Institute of Australia. She is
a member of the Australian
Institute of Company Directors
(AICD) and Chief Executive
Women (CEW).
Catherine McGrath
LLB/BCom
Age: 53
CHIEF EXECUTIVE OFFICER,
WESTPAC NEW ZEALAND
Catherine was appointed
Chief Executive Officer of
Westpac New Zealand in
November 2021.
She has more than 25 years'
experience working in financial
services, spanning business,
operational and people
leadership roles to which she
has driven significant people,
structural, technology and
strategic change.
Prior to joining Westpac,
Catherine led large-scale
transformations at some of
the world’s best known banks
including Barclays Group
and Lloyds TSB in the
UK. This included various
positions such as Head of
Channels, Managing Director
of Transaction Products and
Payments, and Transaction
Banking Director. Earlier in her
career she worked at BNZ,
ASB and the Prudential Group.
Catherine was raised in New
Zealand. She graduated from
Canterbury University with
a Bachelor of Law and a
Bachelor of Commerce.
Anthony Miller
LLB (Hons), BA
Age: 54
CHIEF EXECUTIVE, BUSINESS
& WEALTH1
Anthony Miller first joined
Westpac Group in 2020 and
was appointed Chief Executive,
Business & Wealth in August
2023. He has responsibility for
providing a range of banking
and wealth services for small
to medium and commercial
sized businesses, merchants,
private wealth, sustainability,
Westpac’s Pacific banking
business and BT.
Previously he was the
Chief Executive of Westpac’s
Institutional Bank.
Before joining Westpac Group,
Anthony was CEO of Australia
& New Zealand and Co-Head
of Investment Bank, Asia
Pacific at Deutsche Bank
from 2017.
Prior to Deutsche Bank,
Anthony was a partner
at Goldman Sachs based
in Hong Kong within the
investment banking division
and previously held several
roles at Goldman Sachs in
Australia and New Zealand
having joined the organisation
in 2001. Before joining
Goldman Sachs, Anthony
worked at Credit Suisse.
Anthony holds a Bachelor
of Law (Honours) from
Queensland University of
Technology, and Bachelor of
Arts (Japanese Language,
Modern Asian Studies) from
Griffith University.
Christine Parker
BGDipBus (HRM)
Age: 64
GROUP EXECUTIVE,
HUMAN RESOURCES
Christine was appointed to
Westpac Group’s Executive
Team in October 2011.
Christine holds leadership
responsibility for the Human
Resources function across
the Westpac Group. She is
responsible for the Westpac
Group’s human resources
strategy and management,
including reward and
recognition, safety, learning
and development, careers and
talent, employee relations and
employment policy.
Christine is also responsible
for the office of the Financial
Accountability Regime (FAR)
and supports the CEO and
Board on culture and conduct.
Since joining Westpac in
2007, Christine has held a
variety of senior leadership
roles including Group General
Manager, Human Resources
and General Manager, Human
Resources for Westpac New
Zealand Limited.
Before joining Westpac,
Christine held senior HR
roles in a number of high
profile organisations and
across a range of industries,
including Carter Holt Harvey
and Restaurant Brands New
Zealand. Christine is currently
Chair of the St.George
Foundation and a Director
of Westpac New Zealand.
Previously, Christine was a
Director of Orygen Youth
Mental Health Foundation
and Women’s Community
Shelters and a member of
the Veterans’ Employment
Industry Advisory Committee.
1.
On 9 September 2024, Westpac announced that Anthony Miller will succeed Peter King as CEO and Managing Director. Mr Miller's
appointment will commence on 16 December 2024 following Mr King's retirement as CEO and Managing Director. Commencing on
5 November 2024, Peter Herbert, the Chief Operating Officer, Business & Wealth, will become the Acting Chief Executive, Business & Wealth.
60
WESTPAC 2024 ANNUAL REPORT
DIRECTORS’ REPORT
Michael Rowland
B.Comm, FCA
Age: 63
CHIEF FINANCIAL OFFICER
Michael joined Westpac
Group as Chief Financial
Officer in September 2020.
He is responsible for
Westpac’s Finance, Group
Audit, Investor Relations, Tax,
Treasury, Group Business
Controls and Management
and Corporate and Business
Development functions.
Before joining Westpac,
Michael was a Partner in
Management Consulting at
KPMG. Before that he held
a number of senior executive
positions at ANZ from 1999
to 2013. These included CFO
Institutional Banking, CFO
Wealth, CFO New Zealand,
CFO Personal Financial
Services, and business
leadership roles as CEO
Pacific, Managing Director
Mortgages and General
Manager, Transformation.
Michael commenced his career
at KPMG, where he was
promoted to become a Tax
Partner in 1993.
Michael holds a Bachelor of
Commerce from the University
of Melbourne and a Graduate
Diploma of Taxation Law
from Monash University. He
is a Fellow of the Institute
of Chartered Accountants in
Australia and New Zealand.
Jason Yetton
B.Comm (Finance &
Mktg), GradDipAppFin
Age: 53
CHIEF EXECUTIVE, CONSUMER
Jason was appointed Chief
Executive, Consumer in
August 2023.
The Consumer segment
provides a full range
of banking products and
services including mortgages,
credit cards, personal loans
and deposits to customers
in Australia.
Previously he led the Group’s
Specialist Businesses Division
overseeing a number of
investments and business
divestments to create a
simpler, stronger bank. He
has also held a number
of Group Executive roles
with Westpac at different
times for more than 20
years including Group Strategy,
Westpac Retail and Business
Banking, and senior positions
in BT Financial Group.
Outside of Westpac, Jason
has been Chief Executive
Officer NewCo, CBA, where
he was appointed to lead
the demerger of its wealth
management and mortgage
broking businesses. Prior to
that, he was Chief Executive
Officer and Managing
Director, SocietyOne, an early
financial services disrupter
and consumer finance
marketplace lender.
Jason holds a Bachelor of
Commerce (Marketing and
Finance) from the University
of New South Wales and a
Graduate Diploma in Applied
Finance and Investment
from the Securities Institute
of Australia.
Ryan Zanin
CFA
Age: 62
CHIEF RISK OFFICER
Ryan was appointed Chief
Risk Officer in April 2022.
Ryan is responsible for
risk management across
the Group, which includes
credit risk, operational risk,
financial crime, compliance
and conduct.
Ryan has over 30 years
experience in financial
services specialising in risk
management. Prior to joining
Westpac Group, Ryan was
Executive Vice President and
Chief Risk Officer at Fannie
Mae overseeing the company’s
governance and strategy for
global risk management.
Prior to Fannie Mae, Ryan held
senior positions at GE Capital,
Wells Fargo & Company and
Deutsche Bank. Ryan has
also been on the Board
of Fannie Mae and General
Electric Capital Corporation.
A Canadian, Ryan began his
career at the Bank of Montreal
before taking on various roles
across Citibank and Bankers
Trust Company.
Ryan is a Chartered
Financial Analyst.
Tim Hartin
LLB (Hons.)
Age: 49
COMPANY SECRETARY
Tim was appointed Company
Secretary in November 2011.
Before that appointment, Tim
was Head of Legal – Risk
Management & Workouts,
Counsel & Secretariat and
prior to that, he was Counsel,
Corporate Core.
Before joining Westpac in
2006, Tim was a Consultant
with Gilbert + Tobin,
where he provided corporate
advisory services to ASX-listed
companies. Tim was previously
a lawyer at Henderson Boyd
Jackson W.S. in Scotland and
in London in Herbert Smith’s
corporate and corporate
finance division.
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61
Executive Team
POSITION
YEAR JOINED GROUP
YEAR APPOINTED
TO POSITION
Peter King
Managing Director & Chief Executive Officer
1994
2020
Scott Collary
Group Chief Information Officer, Technology
2020
2023
Shannon Finch
Group General Counsel
2021
2021
Nell Hutton
Chief Executive, Westpac Institutional Bank
2021
2023
Carolyn McCann
Group Executive, Customer & Corporate Services
2013
2023
Catherine McGrath
Chief Executive Officer, Westpac New Zealand
2021
2021
Anthony Miller
Chief Executive, Business & Wealth
2020
2023
Christine Parker
Group Executive, Human Resources
2007
2011
Michael Rowland
Chief Financial Officer
2020
2020
Jason Yetton
Chief Executive, Consumer
2020
2023
Ryan Zanin
Chief Risk Officer
2022
2022
62
WESTPAC 2024 ANNUAL REPORT
DIRECTORS’ REPORT
Operating and financial review
Principal activities
The principal activities of the Group during the financial year ended 30 September 2024 were the provision of financial
services including lending, deposit taking, payments services, investment platforms, leasing finance, general finance,
interest rate risk management and foreign exchange services.
There have been no significant changes in the nature of the principal activities of the Group during 2024.
Operations and financial performance
Net profit for 2024 was $6,990 million, a decrease of 3% compared to 2023, which reduced basic earnings per share
by 2%.
The decrease in net profit reflects lower income and higher expenses partly offset by a decrease in credit
impairment charges.
The following is a summary of the movements in major line items in net profit for 2024 compared to 2023.
Net interest income increased by $436 million or 2% driven by growth in average interest earning assets of 3%, which
was tempered by a 2 basis point contraction in net interest margin. Key movements in net interest margin included:
•
Lower spreads on loans mainly reflecting competition for mortgages;
•
Benefits from the investment of capital in a rising rate environment; and
•
The impact of higher unrealised losses of $171 million (2023: $113 million) on fair value movements of non-hedge
accounted economic hedges.
Non-interest income was $493 million or 15% lower. The key movements included:
•
Lower contribution from our wealth management business following business sales in 2023, with businesses sold
contributing $140 million in 2023;
•
No gains on sales of controlled entities and other businesses, compared to gains of $268 million in 2023; and
•
Adverse market movements impacted the value of financial instruments measured at fair value in 2024 by
$24 million, compared to a gain of $78 million in 2023.
Operating expenses were $252 million or 2% higher. The key movements included:
•
A $279 million increase in amortisation and impairment of software assets from projects completed; and
•
A $136 million increase in technology services expenses from inflationary pressure and the impact of our UNITE
program; partly offset by
•
Reduced employee costs of $199 million mainly from lower restructuring costs.
Credit impairment charges of $537 million represented 7 basis points of average gross loans compared to 9 basis points
of average gross loans in 2023. The decrease primarily reflected lower collectively assessed provisions.
The effective tax rate was 30.84% in 2024 was slightly higher than the Australian corporate tax rate of 30%, due to
certain non tax deductible expenses.
A review of the operations of the Group and its segments and their results for the financial year ended
30 September 2024 is set out in the sections Group performance (pages 104-129) and Segment reporting (pages
130-141), which form part of this Directors' report. Further information about our financial position and financial results
is included in the Financial Statements (pages 143- 279) which form part of this Directors' report.
Dividends
Westpac has announced a final ordinary dividend of 76 cents per Westpac ordinary share, totalling approximately
$2,615 million. The dividend will be fully franked and will be paid on 19 December 2024.
In 2024, an interim ordinary dividend of 75 cents and a special dividend of 15 cents per Westpac ordinary share totalling
$3,125 million was paid as a fully franked dividend on 25 June 2024 (2023: 70 cents totalling to $2,456 million was paid
as interim ordinary dividend).
For the year ended 30 September 2023, a fully franked final dividend of 72 cents per ordinary share totalling
$2,527 million was paid on 19 December 2023.
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Significant changes in state of affairs and events during and since the end of the 2024 financial year
Significant changes in the state of affairs of the Group during the financial year ended 30 September 2024, or that have
occurred since that date, were:
•
On 14 December 2023, at the conclusion of the AGM, Steven Gregg succeeded John McFarlane as Chairman of the
Board following Mr McFarlane’s retirement.
•
The announcement that Anthony Miller will succeed Peter King as CEO and Managing Director, effective following Mr
King’s retirement as CEO and Managing Director.
•
The commencement of UNITE, a multi-year programme of work to accelerate our technology and
business simplification.
•
The announcement by APRA on 19 July 2024 of its decision to reduce Westpac’s total operational risk capital overlay
from $1 billion to $500 million.
•
The delivery of the CORE program and completion of the Integrated Plan required by the 2020 enforceable
undertaking with APRA in relation to our risk governance remediation, and supporting the strengthening of our
risk governance, accountability, and culture. We are continuing to focus on the sustainability and effectiveness of the
uplift delivered by the Integrated Plan through a transition phase.
For a discussion of these changes and other significant developments, please refer to Significant developments (pages
96-98) which forms part of this Directors' report.
The Directors are not aware of any other matter or circumstance that has occurred since 30 September 2024 that has
significantly affected or may significantly affect the operations of the Group, the results of these operations or the state
of affairs of the Group in subsequent financial years.
Business strategies, developments and expected results
Our business strategies, prospects and likely major developments in the Group’s operations in future financial years
and the expected results of those operations are discussed in the Strategic Review (pages 4- 98) and in Significant
developments (pages 96-98) which forms part of this Directors' report.
Further information on our business strategies and prospects for the future financial years and likely developments in our
operations and the expected results of operations have not been included in this report because the Directors believe it
would be likely to result in unreasonable prejudice to Westpac.
Risks to our financial performance, position and our operations
Our financial position, our future financial results, our operations and the success of our strategy are subject to a range
of risks. These risks are set out and discussed in the Risk Management section (pages 40-47) which forms part of the
Directors' report. For additional information on risks relating to Westpac, refer to "2024 Risk Factors" as disclosed on the
ASX on the same date as this report.
64
WESTPAC 2024 ANNUAL REPORT
DIRECTORS’ REPORT
Directors’ interests
Directors’ interests in securities
The following particulars for each Director are set out in the Remuneration Report (pages 68- 93) of the Directors’
report for the year ended 30 September 2024 and/or in the table below:
•
Their relevant interests in our shares or the shares of any of our related bodies corporate;
•
Their relevant interests in debentures of, or interests in, a registered scheme made available by us or any of our
related bodies corporate;
•
Their rights or options over shares in, debentures of, or interests in, any registered scheme made available by us or
any of our related bodies corporate; and
•
Any contracts:
–
To which the Director is a party or under which they are entitled to a benefit; and
–
That confer a right to call for or deliver shares in, debentures of, or interests in, a registered scheme made
available by us or any of our related bodies corporate.
Directors’ interests in Westpac and related bodies corporate as at 3 November 2024
Number of Relevant Interests
in Westpac Ordinary Shares
Number of Westpac
Share Rights
Westpac Banking Corporation
Current Directors
Steven Gregg
75,208
-
Peter King
262,333a
541,684b
Tim Burroughs
67,302
-
Nerida Caesar
13,583
-
Audette Exel
11,952
-
Andy Maguire
-
-
Peter Nash
15,260
-
Nora Scheinkestel
17,225
Margaret Sealec
10,438
-
Michael Ullmerd
12,570
-
Former Directors
John McFarlanee
45,000
Chris Lynchf
13,090
-
a.
Peter King’s interest in Westpac ordinary shares includes 24,403 restricted shares held under the Equity Incentive Plan.
b.
Share rights issued under the Long Term Variable Reward Plan and Equity Incentive Plan.
c.
Margaret Seale and her related bodies corporate also hold relevant interests in 100 Westpac Capital Notes 7 (ASX: WBCPJ).
d.
Michael Ullmer and his related bodies corporate also hold relevant interests in 800 Westpac Capital Notes 5 (ASX:WBCPH), 300 Westpac
Capital Notes 9 (WBCPL) and 1,000 Westpac Subordinated Notes.
e.
Figure displayed is as at John McFarlane’s retirement date of 14 December 2023.
f.
Figure displayed is as at Chris Lynch’s retirement date of 14 December 2023. In addition, Chris Lynch and his related bodies corporate also held
relevant interests in 1,137 Westpac Capital Notes 5 (ASX:WBCPH) as at his retirement date of 14 December 2023.
Note: Certain subsidiaries of Westpac offer a range of registered schemes. The Directors may from time to time invest
in these schemes and are required to provide a statement to the ASX when any of their interests in these schemes
change. ASIC has exempted each Director from the obligation to notify the ASX of a relevant interest in a security that
is an interest in BT Cash Management Trust (ARSN 087 531 539), BT Premium Cash Fund (ARSN 089 299 730), BT
Investor Choice Cash Management Trust (formerly Westpac Cash Management Trust) (ARSN 088 187 928) or Advance
Cash Multi-Blend Fund (ARSN 094 113 050).
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
65
Indemnities and insurance
Under the Westpac Constitution, unless it is forbidden or would be made void by statute, we indemnify any person who
is or has been a Director or Company Secretary of Westpac and of each of our related bodies corporate (except related
bodies corporate listed on a recognised stock exchange), any person who is or has been an employee of Westpac or our
subsidiaries (except subsidiaries listed on a recognised stock exchange), and any person who is or has been acting as
a responsible manager under the terms of an Australian Financial Services Licence of any of Westpac’s wholly-owned
subsidiaries against every liability (other than a liability for legal costs) incurred by each such person in their capacity
as director, company secretary, employee or responsible manager, as the case may be; and all legal costs incurred in
defending or resisting (or otherwise in connection with) proceedings, whether civil or criminal or of an administrative or
investigatory nature, in which the person becomes involved because of that capacity.
Each of the Directors named in this Directors’ report and the Company Secretary of Westpac has the benefit of
this indemnity.
Consistent with shareholder approval at the 2000 Annual General Meeting, Westpac has entered into a Deed of Access
and Indemnity with each of the Directors, which includes indemnification in identical terms to that provided in the
Westpac Constitution.
Westpac also executed a deed poll in September 2009 providing indemnification equivalent to that provided under the
Westpac Constitution to individuals who are or have been acting as:
•
statutory officers (other than as a director) of Westpac;
•
directors and other statutory officers of wholly-owned subsidiaries of Westpac; and
•
directors and statutory officers of other nominated companies as approved by Westpac in accordance with the terms
of the deed poll and Westpac’s Contractual Indemnity Policy.
Some employees of Westpac’s related bodies corporate and responsible managers of Westpac and its related bodies
corporate are also currently covered by a deed poll that was executed in November 2004, which is on similar terms to
the September 2009 deed poll.
The Westpac Constitution also permits us, to the extent permitted by law, to pay or agree to pay premiums for contracts
insuring any person who is or has been a Director or Company Secretary of Westpac or any of its related bodies
corporate against liability incurred by that person in that capacity, including a liability for legal costs, unless:
•
we are forbidden by statute to pay or agree to pay the premium; or
•
the contract would, if we paid the premium, be made void by statute.
Under the September 2009 deed poll, Westpac also agrees to provide directors’ and officers’ liability insurance to
Directors of Westpac and Directors of Westpac’s wholly-owned subsidiaries (except wholly-owned subsidiaries listed on
a recognised stock exchange).
For the year ended 30 September 2024, the Group has insurance cover which, in certain circumstances, will provide
reimbursement for amounts which we have to pay under the indemnities set out above. That cover is subject to the
terms and conditions of the relevant insurance, including but not limited to the limit of indemnity provided by the
insurance. The insurance policies prohibit disclosure of the premium payable and the nature of the liabilities covered.
Share rights outstanding
As at the date of this report there are 4,291,291 share rights outstanding in relation to Westpac ordinary shares, held by
99 holders. The latest dates for exercise of the share rights range between 17 December 2024 and 1 October 2038.
Holders of outstanding share rights in relation to Westpac ordinary shares do not have any rights under the share rights
to participate in any share issue or interest of Westpac or any other body corporate.
Proceedings on behalf of Westpac
No application has been made and no proceedings have been brought or intervened in, on behalf of Westpac under
section 237 of the Corporations Act.
66
WESTPAC 2024 ANNUAL REPORT
DIRECTORS’ REPORT
Environmental disclosure
The Westpac Group’s environmental disclosure is summarised in this Annual Report and detailed in our 2024 Climate
Report and our 2024 Sustainability Index and Datasheet.
Additional disclosure on environmental matters includes our Climate Change Position Statement and Action Plan and
our Natural Capital Position Statement, which looks at how we are considering the risks and opportunities associated
with climate and nature.
We participate in a number of sustainability initiatives and standards including: the Global Reporting Initiative (GRI), the
Equator Principles, the Principles for Responsible Banking, the Net-Zero Banking Alliance, the United Nations Global
Compact, the RE100, the Sustainability Accounting Standards Board (SASB), International Sustainability Standards
Board (ISSB) Sustainability Disclosure Standards, the Taskforce on Nature-related Financial Disclosures (TNFD) and the
Australian Government Climate Active Carbon Neutral Standard for Organisations.
In Australia we report our scope 1 and 2 greenhouse gas emissions, energy consumption and production under the
National Greenhouse and Energy Reporting (NGER) scheme for the period 1 July through 30 June each year.
The Financial Markets Conduct Act 2013 (New Zealand) sets disclosure requirements for 'climate reporting entities',
including large, registered banks and large listed issuers, for accounting periods commencing from 1 January 2023.
The External Reporting Board (XRB) published Aotearoa New Zealand Climate Standards ('NZCS') for mandatory
climate-related disclosures.
Westpac is a climate reporting entity and is therefore required to prepare climate-related disclosures that comply with
NZCS. It has relied on the exemptions in clause 8 and clause 10 of the Financial Markets Conduct (Climate-related
Disclosures for Foreign Listed Issuers) Exemption Notice 2024. These exemptions allow Westpac to produce a climate
report only for the Group's New Zealand business other than Westpac New Zealand Limited and BT Funds Management
(NZ) Limited, each of which are climate reporting entities and prepare their own climate-related disclosures.
Westpac Group will also need to comply with the new climate related disclosure standard AASB S2 by FY26 and work is
underway to meet the new requirements.
We are not aware of the Group incurring any material liability (including for rectification costs) under any environmental
legislation. Westpac’s environment disclosures are available in the Creating value for the environment (pages 34-37)
section of this Annual Report, and in our 2024 Climate Report.
Westpac's climate-related disclosures for its New Zealand business for the year ended 30 September 2024 will be
published by 31 January 2025 and, when published, will be available at https://www.westpac.co.nz/about-us/legal-
information-privacy/disclosure-statement/.
The climate reports prepared by Westpac New Zealand Limited and BT Funds Management (NZ) Limited also
contain information about the climate-related risks and opportunities of the Westpac Group's New Zealand
businesses. The Climate Statements for BT Funds Management (NZ) Limited's three schemes for the scheme
year ended 31 March 2024 are available at https://www.westpac.co.nz/kiwisaver-investments/investor-document-
centre/filter?tags%5b%5d=climate-statements. Westpac New Zealand Limited's Climate Report for the year ended
30 September 2024 will be published by 31 January 2025 and, when published, will be available at https://
www.westpac.co.nz/about-us/legal-information-privacy/disclosure-statements/.
Human rights disclosure
Our Human Rights Position Statement and 2026 Action Plan sets out Westpac Group's commitments and approach to
respecting and advancing human rights. It outlines the actions we are taking across our roles as a financial services
provider, lender, purchaser of goods and services, employer, and supporter of communities, as well as integrating our
position on child safeguarding.
Under the Modern Slavery Act 2018 (Cth) and Modern Slavery Act 2015 (UK), Westpac is required to prepare an annual
statement describing the risks of modern slavery across our operations and supply chain, and the actions taken to
address the risks. Westpac published a joint statement for FY23 on behalf of itself and certain reporting entities that
addressed the requirements of both Acts.
For more information, see the Westpac Group’s 2023 Modern Slavery Statement, published in March 2024.
We will release the Group’s FY24 Modern Slavery Statement in March 2025.
Rounding of amounts
Westpac is an entity to which ASIC Corporations Instrument 2016/191 dated 24 March 2016, relating to the rounding of
amounts in directors’ reports and financial reports, applies. Pursuant to this Instrument, amounts in this Directors’ report
and the accompanying financial report have been rounded to the nearest million dollars, unless indicated to the contrary.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
67
Political engagement
In line with Westpac policy, no cash donations were made to political parties during the financial year ended
30 September 2024.
Westpac does participate in political engagement activities assessed as directly relevant to the bank and or the
banking industry. Such activities include business observer programs attached to annual party conferences, policy
dialogue forums and other political engagement activities, such as speeches and events with industry participants.
Westpac attends these events to put forward its position on policy matters of importance to our customers, suppliers,
shareholders and our employees.
Political expenditure on these events in Australia for the financial year ended 30 September 2024 was $172,513. In
New Zealand, political expenditure for the financial year ended 30 September 2024 was NZ$ 3,000.
Directors’ meetings
The Westpac Banking Corporation Board met 15 times during the financial year ended 30 September 2024. In addition,
Directors attended Board strategy sessions and special purpose committee meetings during the financial year.
The following table includes:
•
Names of the Directors that held office at any time during, or since the end of, the financial year.
•
The number of Board and Board Committee meetings held during the financial year that each Director, as a member
of the Board or Board Committee, was eligible to attend, and the number of meetings attended by each Director.
The table excludes the attendance of those Directors who attended meetings of Board Committees of which they are
not a member.
Board
Committees
Scheduled
meetings
Unscheduled
meetingsa
Risk
Audit
Remuneration
Nominations
& Governance
Heldb
Attendedc
Heldb
Attendedc
Heldb
Attendedc
Heldb
Attendedc
Heldb
Attendedc
Heldb
Attendedc
Director
Steven Greggd
8
7
5
5
n/a
n/a
n/a
n/a
n/a
n/a
3
3
Peter King
10
10
3
3
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Tim Burroughse
10
10
5
5
8
8
n/a
n/a
4
4
n/a
n/a
Nerida Caesarf
10
10
5
5
n/a
n/a
5
5
n/a
n/a
n/a
n/a
Audette Exelg
10
10
5
5
8
8
5
5
n/a
n/a
n/a
n/a
Andy Maguireh
2
1
4
4
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Peter Nashi
10
10
5
5
8
8
5
5
n/a
n/a
4
4
Nora Scheinkestelj
10
9
5
5
8
7
n/a
n/a
8
7
n/a
n/a
Margaret Sealek
10
10
5
5
n/a
n/a
n/a
n/a
8
8
4
4
Michael Ullmerl
10
10
5
5
8
8
5
5
n/a
n/a
n/a
n/a
Former Director
John McFarlanem
4
4
0
0
n/a
n/a
n/a
n/a
n/a
n/a
1
1
Chris Lynchm
4
4
0
0
n/a
n/a
1
1
4
4
n/a
n/a
a.
Out of cycle meetings normally called for a special purpose that do not form part of the Board’s forward agenda.
b.
The number of meetings held during the time the Director was a member of the Board or Board Committee and that the Director was eligible
to attend as a member.
c.
The number of Board Committee meetings that the Director attended as a member.
d.
Appointed as a Director on 7 November 2023 and appointed Chairman of the Board and Chair of the Board Nominations & Governance
Committee following completion of the 2023 Annual General Meeting on 14 December 2023.
e.
Member of the Board Risk Committee. Appointed as a member of the Board Remuneration Committee with the appointment taking effect
following completion of the 2023 Annual General Meeting on 14 December 2023.
f.
Member of the Board Audit Committee.
g.
Chair of the Board Risk Committee and member of the Board Audit Committee.
h.
Appointed as a Director on 15 July 2024.
i.
Chair of the Board Audit Committee and member of the Board Risk Committee and Board Nominations & Governance Committee.
j.
Chair of the Board Remuneration Committee and member of the Board Risk Committee.
k.
Member of the Board Nominations & Governance Committee and Board Remuneration Committee.
l.
Member of the Board Audit Committee and the Board Risk Committee.
m.
Retired as a Director following the completion of the 2023 Annual General Meeting on 14 December 2023.
68
WESTPAC 2024 ANNUAL REPORT
DIRECTORS’ REPORT
Remuneration Report
LETTER FROM
THE CHAIR
of the Board Remuneration
Committee
Dear shareholders,
Group performance
In 2024, Westpac made good progress on all our key
priorities. We delivered against our financial targets in a
competitive market while maintaining a strong balance
sheet and capital position. Our investment in customer
experience and our focus on supporting customers
continued. This was reflected in above system household
and business deposit growth and improved customer
advocacy metrics, albeit not at the level we aspire to.
We achieved growth in our key markets while also
managing margins with net interest margin (NIM),
excluding Notable Items, down 1 basis point and above
target. Expenses were higher than target, mostly due to
the wind down of the RAMS business and technology
costs. The commencement of the UNITE program, our
business led technology simplification program, will be
critical in reducing the cost of complexity across the
Group and, in turn, reducing the cost to income gap to
peers over time.
Impairments were lower than target due to better
than expected key economic indicators and outcomes.
Credit quality remained resilient, despite a rise in
stressed exposures.
We delivered value to shareholders with dividends at the
upper end of the payout range, the announcement of
$2 billion in on market share buybacks and a 1H24 special
dividend of 15 cents per share.
Importantly, we delivered a significant uplift in risk
management, completing the three year Customer
Outcomes and Risk Excellence (CORE) program. Westpac
delivered all activities under the CORE program within the
timeframes committed to. All activities and deliverables
were assessed and independently reviewed and confirmed
as complete by Promontory Australia. In recognition of
this progress, APRA reduced the operational risk capital
overlay by $500 million.
We continue this year in a transition phase with
independent reviews by Promontory Australia, to ensure
that our risk management capabilities are embedded as
part of business as usual. This work is on track to complete
by end of calendar year 2024.
Executive performance and remuneration outcomes
Having introduced our new remuneration framework
for 2024, including the addition of a restricted rights
component in the Long Term Variable Reward (LTVR)
plan, the main focus for the Remuneration Committee
and Board this year was on assessing performance to
determine Short Term Variable Reward (STVR) outcomes.
The 2024 STVR Scorecard focused on five key priority
areas: Financial performance, Risk management, Strategic
execution, Serving customers and People. Details of the
assessment are shown in Section 3.3.
The Board assessed Group performance at 101% of target
and the CEO's STVR outcome at 104% of his target
opportunity and 83% of maximum opportunity. This was
in recognition of Peter King's leadership in completing the
CORE program and setting up the organisation to execute
the UNITE program. His STVR will be paid 50% in cash and
50% will be deferred over one and two years.
For Group Executives, STVR outcomes ranged from
87% to 110% of target opportunity or 70% to 88%
of maximum opportunity, reflecting the differentiation
of performance outcomes for their respective divisions
and individual performance, including assessments of
leadership behaviours.
The 2021 LTVR was tested against a relative TSR measure
compared to our financial services comparator group.
The Group delivered a TSR of 113% over the 4 year
performance period resulting in a 50th percentile ranking
relative to the comparator group. As a result, the CEO
and all eligible Group Executives received 50% of their
award. It is pleasing that improved performance has led to
a return to vesting of the LTVR.
The Board granted the incoming CEO and all Group
Executives their allocation of 2025 LTVR restricted rights
under the revised LTVR plan, having completed the pre-
grant assessment and assessed our risk culture maturity as
having been maintained.
CEO transition
In September 2024, we announced that Anthony Miller,
currently Chief Executive, Business & Wealth, will be
appointed as the Managing Director & CEO commencing
16 December 2024. Anthony will succeed Peter King who
will retire after a 30 year career at Westpac, including five
years as CEO.
Anthony has a vision to return Westpac to a position of
leadership and build on the foundational work of the past
five years. As an internal appointment Anthony knows
what needs to be done and will move at pace, ensuring
a seamless transition.
Anthony's remuneration package will be the same as the
current CEO's remuneration package. Upon retirement,
Peter will receive remuneration in line with his contract
and relevant variable reward plans.
Please refer to the ASX release dated 9 September
2024 for further details. The 2025 Remuneration Report
will contain further details of Anthony's and Peter's
remuneration for 2025.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
69
Remuneration for our people
Risk and remuneration
In 2025, we will increase the capped variable reward
opportunity for home finance manager roles from 50% to
80% of fixed pay in response to the change made by CBA
and NAB. We need to remain competitive in our markets,
attract talent and reward for outperformance. Before
making this decision, we carefully considered our risk and
conduct management maturity and controls framework.
Good risk management, including embedded controls and
processes to manage conduct risk, is central to our culture
and a fundamental consideration in how we structure and
manage remuneration and reward. We continue to work
hard to ensure that our controls are appropriate, and that
we can manage and keep our people and customers safe.
We continue to look for ways to reinforce our risk,
compliance and conduct expectations. This year, while
ensuring that appropriate action is taken when required
to adjust remuneration for adverse outcomes, we looked
to enhance how we recognise great risk behaviours.
We provide a platform for our people to recognise their
peers when they make a positive impact on Westpac
and our customers through their risk management and
risk behaviours. Our people recorded nearly 115,000
recognition actions this year and Board Directors also
personally recognised over 60 people.
Enterprise Agreement
We were pleased to conclude a new Enterprise Agreement
with our people this year, subject to Fair Work
Commission approval. We listened to and consulted with
our people to put together a comprehensive range of
benefits and arrangements that builds on our current
Enterprise Agreement. 87% of employees who voted
supported the proposal. We thank the Finance Sector
Union for their constructive engagement.
Gender pay
We are committed to paying our people fairly and
equitably. Our overall average difference (by level,
weighted by number of people) for gender pay equity
is less than 2%. Where we identify a pay difference that
cannot be explained by individual skills, experience or
performance, we take action. We have more work to do
on our gender pay gap. As reported to the Workplace
Gender Equality Agency, we have a median gender pay
gap of 29.3%. This is the difference between the median
total remuneration of men compared to that of women.
We have strategies to increase women's representation in
key cohorts and we have set clear objectives to reduce the
gap. For more information on this gap and our strategies,
please refer to the 'Creating value for our people' section
of the Annual Report.
Looking ahead
2025 LTVR performance rights comparator group
During the year, we reviewed the relative TSR comparator
group for the LTVR performance rights taking into
account market practice, external feedback and our
assessment of the comparator group’s continued
relevance. We decided to make two changes for the 2025
LTVR performance rights.
First, we will reduce the current comparator group to
a streamlined group of five companies that are focused
on the banking market in Australia. The five companies
in the banking comparator group will be ANZ, Bank of
Queensland, Bendigo & Adelaide Bank, CBA and NAB.
Secondly, we will introduce an additional general
ASX comparator group comprising the 20 largest
companies on the ASX by market capitalisation, excluding
resource companies, to reflect a broader benchmark of
performance. The companies will be determined at the
start of each performance period. The LTVR performance
rights will be tested against the two comparator groups,
equally weighted and tested independently.
2025 total target remuneration
The Board reviewed total target remuneration packages
for the Executive Team against market benchmarks.
Reflecting market comparisons and role accountabilities,
we awarded increases for four Group Executives
for 2025, ranging from approximately 2% to 10%.
Further information will be provided in the 2025
Remuneration Report.
We hope you find the report informative and always
welcome your feedback.
Nora Scheinkestel
CHAIR
BOARD REMUNERATION COMMITTEE
CONTENTS
1.
Snapshot of remuneration for 2024
70
5.
Further detail on executive
remuneration arrangements
81
2.
Key Management Personnel
72
6.
Non-executive Director remuneration
85
3.
2024 remuneration outcomes and alignment
to performance
73
7.
Statutory remuneration details
86
4.
Remuneration governance
79
70
WESTPAC 2024 ANNUAL REPORT
DIRECTORS’ REPORT
1. Snapshot of remuneration for 2024
OUR REMUNERATION STRATEGY AND PRINCIPLES
Our remuneration strategy is to attract and retain talented employees. We reward them for achieving high performance
and delivering superior long term results for our customers and shareholders.
Promote our
purpose, values
and behaviours
Align with our
strategy and
create sustainable
shareholder value
Offer market
competitive and
equitable pay
Reward financial and
non-financial performance
including customer outcomes
and risk excellence
Reinforce our risk
and conduct
expectations
OUR EXECUTIVE REMUNERATION FRAMEWORK
A revised executive remuneration framework was introduced effective from 1 October 2023. It is designed to align with
our strategy, market practice, investor expectations and compliance with CPS 511.
Component
Purpose
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
FIXED
REMUNERATION
100% cash (including
superannuation)
Provide market
competitive
remuneration
reflecting role scope
and accountabilities
Salary and
superannuation
Vesting point
Performance assessment and grant
SHORT TERM
VARIABLE REWARD
50% cash
50% restricted shares
Reward executives
for delivering financial
and non-financial
annual objectives
Performance
assessed
against a
balanced
scorecard
100% of cash is paid at Year 1
50% restricted shares vesting at Year 2
50% restricted shares vesting at Year 3
Pre-grant assessment
Pre-vest assessment
LONG TERM
VARIABLE REWARD
50% restricted rights
Reward executives for
sustainable risk culture
and for creating
shareholder value over
the long term
Performance assessed against risk culture at grant and at Year 4
CEO: 50% vesting
at Year 4 and 50%
at Year 5
Group Executives:
100% vesting at
Year 4
Grant
Performance assessment
LONG TERM
VARIABLE REWARD
50% performance rights
Reward executives for
creating shareholder
value over the long
term
Performance assessed against relative total shareholder return (TSR)
at Year 4
CEO: 100% vesting at Year 6
Group Executives: 100% vesting at Year 5
cash
shares
shares
rights
rights
rights
rights
Minimum shareholding requirement is equivalent to two times fixed remuneration for the CEO and one times fixed
remuneration for the Group Executives. Refer to Section 5.5 for further details.
REMUNERATION MIX
The remuneration mix is designed with a significant proportion of variable reward at risk and based on performance.
The graphic below sets out the maximum remuneration mix1 showing the relative proportion of each component in the
executive remuneration framework as a percentage of total maximum opportunity. Refer to Section 5 for further details
of executive remuneration arrangements.
FIXED
REMUNERATION
30%
STVR
28%
LTVR
RESTRICTED RIGHTS
21%
LTVR
PERFORMANCE RIGHTS
21%
94% of fixed
remuneration
44% cash
56% equity
70% of fixed
remuneration
70% of fixed
remuneration
At risk performance based variable remuneration (70%)
1.
The mix shown in the graphic above applies to 7 of 10 KMP roles. The remaining 3 roles (Chief Financial Officer, Chief Risk Officer and the
Group Executive, Human Resources) are on a similar maximum remuneration mix comprised of 33% fixed remuneration, 31% maximum STVR,
18% LTVR restricted rights and 18% LTVR performance rights. The remaining 3 roles will transition to the above remuneration mix over time.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
71
PERFORMANCE SNAPSHOT
Financial
performance
$7,113m NPAT
Excluding Notable Items.
11.21% ROTE
Excluding Notable Items.
Risk
management
100% CORE completion
Integrated Plan activities and
deliverables assessed and closed.
$500m capital release
Reduction to the $1bn total operational
risk capital overlay.
Strategic
execution
Significant
transformation delivery
Significant progress on transaction and
payments capability, mobilised UNITE.
$9.6bn sustainable
finance lending
And $4.9bn in bond facilitation.
Over 150 customers engaged on
transition plans.
Serving
customers
+1 in Consumer NPS
Relative to the major bank
average increase.
+1 in Business NPS
Relative to the major bank
average increase.
People
80 OHI (+5)
Up from 75 in 2023. Above top quartile
globally (76).
49% women in
senior leadership
In line with target of 50% +/- 2.
Performance achieved
Target
Further detail on performance against all measures of the Group STVR Scorecard is set out in Section 3.3.
REMUNERATION OUTCOMES
104%
CEO's 2024 STVR
outcome
as a % of target,
or 83% as a % of maximum.
87% to 110%
Group Executive
STVR outcomes
Range of STVR outcomes
as a % of target,
or 70% to 88% as % of maximum.
50%
LTVR vesting
outcome
2021 LTVR vesting outcome.
Reflects a TSR of 113% over the four
year performance period.
72
WESTPAC 2024 ANNUAL REPORT
DIRECTORS’ REPORT
2. Key Management Personnel
The remuneration of KMP is disclosed in this Report. Disclosures related to former KMP that ceased prior to 1 October
2023 are included in the 2023 Remuneration Report. KMP are defined as those persons that have the authority and
responsibility for planning, directing and controlling the activities of an entity, directly or indirectly, including any director
(whether executive or otherwise) of that entity.
Name
Position
Term as KMP
Managing Director & Chief Executive Officer
Peter King
Managing Director & Chief Executive Officer
Full Year
Group Executivesa
Scott Collary
Chief Information Officer
Full Year
Nell Hutton
Chief Executive, Westpac Institutional Bank
Full Year
Carolyn McCann
Group Executive, Customer & Corporate Services
Full Year
Catherine McGrath
Chief Executive Officer, Westpac New Zealand
Full Year
Anthony Miller
Chief Executive, Business & Wealth
Full Year
Christine Parker
Group Executive, Human Resources
Full Year
Michael Rowland
Chief Financial Officer
Full Year
Jason Yetton
Chief Executive, Consumer
Full Year
Ryan Zanin
Chief Risk Officer
Full Year
Current Non-executive Directors
Steven Gregg
Chair
Commenced as Non-executive Director and Chair-Elect on
7 November 2023 and as Chair on 14 December 2023
following completion of the 2023 Annual General Meeting
Tim Burroughs
Director
Full Year
Nerida Caesar
Director
Full Year
Audette Exel AO
Director
Full Year
Andy Maguire
Director
Commenced on 15 July 2024
Peter Nash
Director
Full Year
Nora Scheinkestel
Director
Full Year
Margaret Seale
Director
Full Year
Michael Ullmer AO
Director
Full Year
Former Non-executive Directors
John McFarlane
Chair
Retired on 14 December 2023 following completion of the
2023 Annual General Meeting
Chris Lynch
Director
Retired on 14 December 2023 following completion of the
2023 Annual General Meeting
a.
References to Group Executives in this Report refer to Group Executives who are in KMP roles.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
73
3. 2024 remuneration outcomes and alignment to performance
3.1. Group performance
The table below summarises variable reward outcomes and Group performance over the last five years.
Years ended 30 September
2024
2023
2022
2021
2020
CEO STVR outcome (% of maximum)a
83%
60%
52%
47%
0%
CEO STVR outcome (% of target)b
104%
90%
78%
70%
0%
Average Group Executive STVR outcome (% of maximum)a
82%
60%
53%
48%
0%
Average Group Executive STVR outcome (% of target)b
102%
89%
79%
73%
0%
LTVR outcome (% vested)
50%
0%
0%
0%
0%
Net profit after tax attributable to owners of WBC ($m)
6,990
7,195
5,694
5,458
2,290
Net profit after tax (excluding Notable Items) ($m)c
7,113
7,368
6,568
6,953
5,227
Return on tangible equity (ROTE) (statutory basis)
11.01%
11.39%
9.17%
8.82%
3.92%
Return on tangible equity (ROTE) (excluding Notable Items)c
11.21%
11.67%
10.58%
11.23%
8.95%
TSR – four years
113.10%
(9.27%)
(11.15%)
(1.95%)
(27.28%)
TSR – five years
34.24%
(4.05%)
(13.82%)
10.34%
(27.87%)
Total ordinary dividend (cents per share)
151
142
125
118
31
Special dividend (cents per share)
15
0
0
0
0
Share price – close
$31.72
$21.15
$20.64
$26.00
$16.84
a.
From 2024, maximum STVR opportunity was reduced from 150% to 125% of target STVR.
b.
From 2024, target STVR opportunity was reduced from approximately 100% to 75% of fixed remuneration for business roles, and maintained
at 75% for functional roles.
c.
Refer to the 'Additional information for non-AAS financial measures' section of the Annual Report for a reconciliation of this measure.
3.2. 2021 LTVR vesting outcome
We tested the 2021 LTVR on 1 October 20241. Our TSR for the 4 year performance period was 113% resulting in a 50th
percentile ranking relative to the comparator group. This resulted in 50% of the 2021 LTVR award vesting.
Performance range
Performance
hurdle
Performance
start date
Test date
Threshold
Maximum
Outcome
%
Vested
%
Lapsed
TSR (100% of
award)
1 October
2020
1 October
2024
Percentile ranking is
at the median
Percentile ranking is at the
75th percentile or higher
50th percentile ranking relative
to the comparator group
50%
50%
NPAT (EXCLUDING NOTABLE ITEMS) AND
CEO STVR OUTCOME
NPAT (excluding
Notable Items)
($m)
CEO STVR (%)
NPAT (excluding Notable Items) ($m)
CEO STVR outcome (% of target)
CEO STVR outcome (% of maximum)
2020
2021
2022
2023
2024
0
2,000
4,000
6,000
8,000
0
40
80
120
ROTE (EXCLUDING NOTABLE ITEMS) AND
CEO STVR OUTCOME
ROTE
(excluding
Notable Items)
(%)
CEO STVR (%)
ROTE (excluding Notable Items)
CEO STVR outcome (% of target)
CEO STVR outcome (% of maximum)
2020
2021
2022
2023
2024
0
4
8
12
0
40
80
120
TSR
TSR (%)
WBC
Peer 1
Peer 2
Peer 3
2021
2022
2023
2024
0
80
160
40
120
TSR AND LTVR VESTING OUTCOME
(percentile rank over the prior 4 year period)
TSR over 4
years
(percentile
rank)
LTVR award
(% vested)
TSR over 4 years (percentile rank)
LTVR award (% vested)
2020
2021
2022
2023
2024
0
40
80
20
60
100
0
40
80
20
60
100
1.
In addition, we tested the pro rata 2020 LTVR award granted to Jason Yetton and tested additional 2020 LTVR awards granted to Peter King,
Carolyn McCann and Jason Yetton for changes to their total target remuneration. The awards were granted on the same terms and conditions
as the 2020 LTVR. The awards lapsed in full as they were tested on 1 April 2024 and did not meet the TSR performance condition.
74
WESTPAC 2024 ANNUAL REPORT
DIRECTORS’ REPORT
3.3. 2024 Group STVR Scorecard
The Group’s priorities are set out in the Group STVR Scorecard, which forms part of the CEO’s Scorecard. Common
elements appear in Group Executive Scorecards together with individual objectives reflecting Divisional measures.
A summary of the performance assessment is provided below and is designed to be read over two pages. Where
appropriate, individual measures have been assessed against a 'Threshold', 'Target' and 'Stretch' rating scale as outlined
in the key. Each priority has also been assessed in totality using the same key.
Key priority
Measure
Outcome
Outcome commentary
Key:
Threshold
50-99%
Stretch
101-125%
Target
100%
Financial
performance
(45%)
Deliver current year
financial performance:
•
Net profit after tax (excluding
Notable Items)a
-5%
$7,013m
+5%
$7,113m result was above target. The only Notable
Items in 2024 were from the timing impact of hedge
accounting items.
•
Pre-provision profit (excluding
Notable Items)a
-5%
$10,949m
+5%
$10,819m result was below target.
•
Return on tangible equity
(excluding Notable Items)a
-5%
11.0%
+5%
11.21% result was above target.
Risk
management
(20%)
Deliver the Customer Outcomes and
Risk Excellence (CORE) program and
embed and sustain improvements
in risk management, capability
and culture
-
Target
-
All activities and deliverables in the CORE
Integrated Plan were assessed and closed by
Promontory Australia.
Practices and improvements in risk management,
governance and culture sustained post end of the
CORE program evidenced by Promontory Australia
reports and internal measures.
Strategic
execution
(15%)
Deliver the significant change
initiatives to transform the bank
-
Target
-
Delivered transformation change initiatives in line
with targets. Significant delivery of payments
capability including delivery of PayTo, international
payment processor migration, corporate cash
management platform and improving payments
for merchants. Mobilised UNITE technology
simplification plan.
Deliver the climate transition plan
-
Target
-
2030 targets set in 9 NZBA carbon intensive sectors.
Engaged over 150 institutional customers on their
climate transition plans. Above target on sustainable
finance measures for the year.
Serving
customers
(10%)
Improve customer advocacy of
Westpac Group (measured in
points relative to major bank
average change)
0
+2
+4
Consumer NPS was +1 relative to the major bank
average change, which was below our target.
0
+1
+2
Business NPS was +1 relative to the major bank
average change, which was in line with our target.
Grow market share in key segments
compared to system growth
0.8x
1.0x
1.2x
Growth in Australian mortgages was 0.8x of ADI
financial system growth, which was below target.
Growth in Australian business lending was 1.3x of ADI
financial system growth, which was at stretch.
People
(10%)
Improve organisational health as
measured through the Organisational
Health Index (OHI)
75
76
77
Westpac Group OHI was 80, which was at stretch and
up from 75 last year.
a.
Refer to the 'Additional information for non-AAS financial measures' section of the Annual Report for a reconciliation of this measure.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
75
KEY CHANGES TO THE 2024 GROUP STVR SCORECARD
Given the progress on the Customer Outcomes and Risk Excellence program, we reviewed the Scorecard weightings
for 2024. We decided to reduce the weighting to Risk management by 10% and increase the weighting to Financial
performance and Strategic execution by 5% each.
Performance assessment
We delivered our financial targets in a competitive market. NPAT (excluding Notable Items) was $7,113m which was above target. Pre-provision
profit was $10,819m which was below target. ROTE (excluding Notable Items) was 11.21% which was above target.
We achieved growth in our key markets while also managing margins with net interest margin (NIM), excluding Notable Items, down 1 basis
point and above target. Expenses were higher than target, mostly due to the wind down of the RAMS business and technology costs. The
commencement of the UNITE program, our business led technology simplification program, will be critical in reducing the cost of complexity
across the Group and, in turn, reducing the cost to income gap to peers over time.
Impairments were lower than targeted due to key economic indicators being better than forecast and lower individual provisions. Credit quality
remained resilient, notwithstanding a rise in stressed exposures.
We assessed Financial performance at just above target.
Focus remained on uplifting our risk management with achievement of the major milestone of the completion of the CORE program, on time and
assessed by Promontory Australia as complete. APRA recognised the progress and improvements we have made and partially reduced the level of
our operational risk capital overlay from $1 billion to $500 million.
With CORE complete, we are now focused on completion of the transition to business as usual which is progressing to plan. Delivery of the UNITE
program will be critical to further reducing the risk of complexity across the Group.
We assessed Risk management at target.
We made good progress across the Group’s transformation agenda. Highlights during the year included mobilising UNITE, tangible delivery across
our payments and transaction banking capability and extending scam protection for our customers.
We made demonstrable progress in improving our capabilities including PayTo for Billers, extending PayTo for business customers, launching
Pay with Points, launching EFTPOS Flex, extending EFTPOS Air coverage, tracking well to deliver international payment processor migration and
progressing well in the implementation of the corporate cash management platform (Westpac One Core program in Westpac Institutional Bank).
The UNITE program comprises circa 60 initiatives of which 39 have commenced and 2 have been completed as at 30 September 2024. On
delivering our climate transition plan, we finished the year with 13 targets in all 9 emission-intensive sectors under the NZBA framework. We have
focused on operationalising our sector targets. We engaged with over 150 institutional customers on their climate transition plans and found that
84% had a public transition plan.
We have increased our sustainable finance lending and bond facilitation this year by $9.6bn and $4.9bn respectively and are on track to meet our
2030 targets.
We assessed Strategic execution at above target.
Our Australian Consumer NPS score increased over the year but not at the pace we want. We have seen improvements in product and channel
NPS, however these are yet to flow through to the overall brand NPS measures.
In Australian Business, our score increased over the year and achieved target. We have more work to do on customer journeys and servicing
customers. Our Institutional customers remain strong advocates. WNZL Consumer NPS remains #5 and grew in line with the market average.
We have progressed in other areas of customer service such as progressing well on consolidating 22 customer verification processes into a single
digital identification solution, being recognised by Forrester as the #1 mobile banking app (second year in a row) and improving security features,
such as SafeCall and SaferPay. Customer losses from scams are down almost 30% year-on-year. Our average customer complaint resolution time is
stable with 93% resolved by our people in the moment without the need for escalation.
From a market share perspective, we have maintained momentum with growth across the business. We grew in deposits, critical to customer
primacy and relationship banking. Growth in Australian mortgages was 0.8x of ADI financial system growth, which was below target. Growth in
Australian business lending was 1.3x of ADI financial system growth, which was at stretch.
We assessed Serving customers at below target.
We continue to invest in our people and their development. Our people are more engaged with the OHI score up 5 points over the year to 80,
which now sees us in the top quartile globally. We improved OHI in all large divisions.
We continue to develop our leaders and enhance our executive bench strength. All Group Executive and critical General Manager roles were
mapped with at least one emergency successor. Women in senior leadership is at 49% at the end of 2024, within the 48-52% target range.
We assessed People at above target.
OVERALL GROUP STVR SCORECARD PERFORMANCE ASSESSMENT
101% OF TARGET
81% OF MAXIMUM
The STVR Scorecard has a modifier that allows the Board to take into account risk and reputation, people management and any other matters as
determined by the Board. Refer to Section 3.5 for further detail on individual outcomes.
76
WESTPAC 2024 ANNUAL REPORT
DIRECTORS’ REPORT
3.4. Total realised remuneration – Chief Executive Officer and Group Executives
The table below details the actual remuneration paid and equity1 that vested or lapsed in 2024 and 2023 related to
KMP roles. It does not include termination payments and buy out awards. This table is not prepared in accordance with
Australian Accounting Standards which differs from the disclosure in Section 7.
Fixed
remuneration
Cash
STVR payments
Vesting of prior
year deferred
STVR awards
Vesting of
prior year
LTVR awards
Total realised
remuneration
Prior year
LTVR lapsed
Name
$
$
$
$
$
$
Managing Director & Chief Executive Officer
Peter King, Managing Director & Chief Executive Officer
2024
2,502,920
975,000
1,442,898
2,990,401
7,911,219
3,314,178
2023
2,507,497
1,125,000
861,964
-
4,494,461
1,878,389
Group Executives
Scott Collary, Chief Information Officera
2024
1,293,976
508,500
706,444
1,927,412
4,436,332
1,927,412
2023
1,234,741
508,500
458,147
-
2,201,388
-
Nell Hutton, Chief Executive, Westpac Institutional Bank
2024
1,278,338
502,000
-
-
1,780,338
-
2023
--------------------- Not a KMP in 2023 ---------------------
Carolyn McCann, Group Executive, Customer & Corporate Services
2024
1,062,447
437,500
484,098
1,149,441
3,133,486
1,269,346
2023
1,019,918
380,000
289,602
-
1,689,520
743,801
Catherine McGrath, Chief Executive Officer, Westpac New Zealand
2024
981,129
311,189
502,028
-
1,794,346
-
2023
890,307
350,356
152,519
-
1,393,182
-
Anthony Miller, Chief Executive, Business & Wealthb
2024
1,277,944
478,000
706,795
1,925,462
4,388,201
1,925,462
2023
1,198,066
611,000
384,960
-
2,194,026
-
Christine Parker, Group Executive, Human Resources
2024
1,041,206
417,000
513,821
1,459,709
3,431,736
1,459,677
2023
1,007,812
392,000
321,423
-
1,721,235
1,104,203
Michael Rowland, Chief Financial Officer
2024
1,274,390
500,500
577,773
1,588,668
3,941,331
1,588,636
2023
1,263,779
446,500
381,624
-
2,091,903
-
Jason Yetton, Chief Executive, Consumer
2024
1,277,944
443,000
782,285
2,009,165
4,512,394
3,432,493
2023
1,198,066
611,000
548,354
-
2,357,420
-
Ryan Zanin, Chief Risk Officerc
2024
1,699,186
674,000
504,105
-
2,877,291
-
2023
1,691,361
503,500
102,432
-
2,297,293
-
a.
In addition, Scott Collary had 45,879 restricted shares vest in December 2023 in relation to a buy out award.
b.
In addition, Anthony Miller received a deferred cash payment of $1,003,290 in March 2024 and had 46,798 restricted shares vest in March 2024
in relation to a buy out award.
c.
In addition, Ryan Zanin received deferred cash payments of $196,839 in January 2024, $64,623 in April 2024 and $64,623 in June 2024 in
relation to a buy out award.
Explanation of total realised remuneration
Component
Explanation
Fixed remuneration
Represents salary and superannuation paid during the financial year.
Cash STVR payments
Represents the cash portion of the STVR outcome for the financial year. This represents 50% of the overall STVR
outcome as the remaining 50% is deferred and vests in equal portions over two years.
Vesting of prior year
deferred STVR awards
Represents the portions of STVR that were deferred in prior years and vested during the financial year.
Vesting of prior year
LTVR awards
Represents the LTVR that was deferred in prior years and vested during the financial year, if the performance
conditions were met.
Total realised remuneration
Sum of the above components.
Prior year LTVR lapsed
Represents the LTVR from prior years that lapsed or was determined to be lapsed.
1.
Equity that vested in October 2024 is included in the 2024 figures. Equity that vested in October 2023 is included in the 2023 figures. The
value of deferred STVR is based on the number of restricted shares or share rights multiplied by the five day volume weighted average price
(VWAP) up to and including the scheduled date of vesting. The value of LTVR is based on the number of share rights multiplied by the five day
VWAP up to and including the scheduled date of testing. The value of equity differs from the disclosure in Section 7.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
77
3.5. Variable reward awarded for 2024
The table below shows the variable reward awarded1 to the CEO and Group Executives for 2024, including:
•
STVR outcomes for 2024 (including the cash and deferred equity components); and
•
equity granted as 2024 LTVR in January 2024. The 2024 LTVR grants shown at face value in the table below will be
tested on 1 October 2027.
For the CEO, the Board assessed his Scorecard at 104% (+3% on the Group STVR Scorecard) of his target STVR
opportunity. This was in recognition of Peter King's leadership in completing the CORE program and setting up the
organisation to execute the UNITE program.
In addition, the Board made a downward adjustment to the 2024 STVR outcome for a Group Executive based on an
assessment of leadership behaviours. There were no risk related adjustments for the CEO or Group Executives.
2024 STVR award
2024 LTVR award
Name
Target
STVR
opportunity
($)
Maximum
STVR
opportunity
($)
STVR
outcome
(% of
target)
STVR
outcome
(% of
maximum)
STVR
outcome
($)
Maximum
STVR
foregone
($)
Restricted
rights
($)a
Performance
rights
($)a
Managing Director & Chief
Executive Officer
Peter King
1,875,000
2,343,750
104%
83%
1,950,000
393,750
1,750,000
1,750,000
Group Executives
Scott Collary
Chief Information Officer
968,600
1,210,750
105%
84%
1,017,000
193,750
904,000
904,000
Nell Hutton
Chief Executive, Westpac
Institutional Bank
956,250
1,195,313
105%
84%
1,004,000
191,313
892,500
892,500
Carolyn McCann
Group Executive, Customer &
Corporate Services
795,000
993,750
110%
88%
875,000
118,750
742,000
742,000
Catherine McGrath
Chief Executive Officer, Westpac
New Zealand
715,734
894,667
87%
70%
622,377
272,290
668,018
668,018
Anthony Miller
Chief Executive, Business & Wealth
956,250
1,195,313
100%
80%
956,000
239,313
892,500
892,500
Christine Parker
Group Executive, Human Resources
779,300
974,125
107%
86%
834,000
140,125
571,500
571,500
Michael Rowland
Chief Financial Officer
953,600
1,192,000
105%
84%
1,001,000
191,000
699,300
699,300
Jason Yetton
Chief Executive, Consumer
956,250
1,195,313
93%
74%
886,000
309,313
892,500
892,500
Ryan Zaninb
Chief Risk Officer
1,271,500
1,589,375
106%
85%
1,348,000
241,375
932,400
932,400
Average Group Executive STVR outcome
102%
82%
a.
The face value is calculated by multiplying the number of rights by the five day VWAP up to the commencement of the performance period.
The five day VWAP was $21.09 for awards made in January 2024.
b.
In addition, Ryan Zanin was awarded a grant of restricted shares of $500,000 on 19 January 2024. The award recognises the importance of
his role in completing a critical risk management and risk culture transformation, and increases alignment with shareholders through greater
equity holdings. The award is subject to service conditions and remuneration adjustments. It will vest in three tranches in January 2026,
January 2028 and January 2029.
1.
The final value of equity received will depend on the share price at the time of vesting and the number of restricted shares or share rights that
vest subject to performance conditions (where applicable), service conditions and remuneration adjustments. The value of equity differs from
the disclosure in Section 7 which provides the annualised accounting value for unvested equity awards prepared in accordance with Australian
Accounting Standards.
78
WESTPAC 2024 ANNUAL REPORT
DIRECTORS’ REPORT
2024 LTVR restricted rights pre-grant assessment
We awarded the 2024 LTVR restricted rights, outlined in Section 3.5 above, following the pre-grant assessment which
was completed in October 2023. The Board determined that no adjustment was required. Further details are available in
the 2023 Remuneration Report.
2025 LTVR restricted rights pre-grant assessment
The pre-grant assessment for the 2025 LTVR restricted rights was completed in October 2024. The Board determined
that no adjustment was required and the 2025 LTVR restricted rights will be granted in full.
The prudential soundness gate was satisfied by reviewing the key capital and liquidity ratios, including CET1, LCR and
NSFR. The ratios are all above minimum prudential requirements.
Group risk culture maturity was assessed as 'Maintained'. The Board had regard to the Group level rating arising from
the annual Risk Culture Self-Assessment which was stable at ‘Systematic’, improved results in risk culture questions
as indicated through our annual employee survey, Voice+, and other evidence points informing the CPS 220 Risk
Management Declaration including risk management framework maturity, root cause analyses, prudential attestations,
audit and assurance findings and regulatory reviews.
There were no significant risk outcomes or serious misconduct issues that arose that were not sufficiently
addressed elsewhere.
The LTVR restricted rights remain subject to the pre-vest assessment after the four year performance period ending
30 September 2028. The restricted rights also remain subject to remuneration adjustments during and after this period.
Pre-grant assessment
Outcome
Step 1: Assessment
Prudential soundness gate: Has Westpac remained safe and secure, taking into account capital position and liquidity?
Met
Group risk culture: Has Group risk culture maturity been maintained or improved, considering both executive actions
or inactions?
Maintained
Significant risk outcomes: Have risk outcomes arisen that have a significant and material impact on the Group, not
sufficiently addressed elsewhere?
No adjustment
Serious misconduct: Has Westpac suffered from a serious misconduct issue, not sufficiently addressed elsewhere?
No adjustment
Step 2: Consider Board discretion
No adjustment
Overall pre-grant assessment
Grant in full
STRATEGIC
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79
4. Remuneration governance
4.1. Group remuneration policy
The Group remuneration policy sets out information in relation to remuneration design, arrangements and outcomes
across Westpac. The policy is supported by an established governance structure, plans and frameworks. The policy
supports our compliance with legal and regulatory requirements.
Remuneration strategy
Our remuneration strategy is to attract and retain talented employees. We reward them for achieving high performance and delivering
superior long term results for our customers and shareholders.
Remuneration principles
•
Promote our purpose, values and behaviours;
•
Align with our strategy and create sustainable shareholder value;
•
Offer market competitive and equitable pay;
•
Reward financial and non-financial performance, including customer outcomes and risk excellence; and
•
Reinforce our risk and conduct expectations.
4.2. Group remuneration governance
The Board has overall accountability for the remuneration framework and its application. As set out in the Board Charter (and as
supported by the Board Remuneration Committee Charter), without limiting its role the Board approves (following recommendation
from the Board Remuneration Committee): the Group remuneration policy; the size of the annual Group variable reward pool;
performance objectives and remuneration outcomes for the CEO; remuneration arrangements and outcomes for accountable persons,
specified roles and any other person the Board determines; and equity-based plans.
The Board has the discretion to defer, adjust or withdraw aggregate and individual variable reward. Further detail is contained in
the Board and Committee Charters which are available on Westpac’s website: https://www.westpac.com.au/about-westpac/westpac-
group/corporate-governance/constitution-board/
The Board Remuneration Committee assists the Board to discharge its responsibility by overseeing the design, operation and
monitoring of the remuneration framework. Members of the Board Remuneration Committee are independent Non-executive
Directors. The Board and the Board Remuneration Committee have free and unfettered access to internal and external personnel
in carrying out their respective duties. Further detail is contained in the Board Remuneration Committee Charter which is available on
Westpac’s website: https://www.westpac.com.au/about-westpac/westpac-group/corporate-governance/constitution-board/
The Board and the Board Remuneration Committee receive
support from internal groups and committees including, but
not limited to, the Group Remuneration Oversight Committee
and business specific remuneration oversight committees.
The Board or the Board Remuneration Committee may engage
a remuneration consultant to directly provide specialist
information on remuneration for key management personnel.
The Chair of the Board Remuneration Committee oversees the
engagement and associated costs.
The Board Remuneration Committee seeks feedback from
and considers matters raised by other Board Committees
(as appropriate) with respect to remuneration outcomes,
adjustments to remuneration in light of relevant matters and
alignment of remuneration with the risk management framework.
Cross membership of the Board Remuneration Committee and
the Board Risk Committee also supports alignment between risk
and remuneration.
Independent input is received from the Chief Risk Officer on risk,
compliance and conduct matters that may need to be considered
in remuneration outcomes.
Use of remuneration consultants: In 2024, the Board engaged Ernst & Young to provide market benchmarking
information on Non-executive Director and Group Executive remuneration. Ernst & Young did not provide any
remuneration recommendations as prescribed under the Corporations Act 2001 (Cth) (Corporations Act) in 2024.
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4.3. Our approach to remuneration adjustments
Remuneration adjustment is one of the ways we reinforce our risk, compliance and conduct expectations. This includes
downward adjustments for adverse outcomes, as well as upward adjustment to reward positive risk behaviours.
Significant risk, compliance or conduct matters
We have guidelines in place to support the consistent application of proportionate adjustments for significant risk,
compliance or conduct matters.
SEVERITY OF IMPACT BASED ON:
Customer
People
Reputation
Regulatory
Financial
ACCOUNTABILITY
Action or inaction of the individual
Quantum of adjustment
Indicative order of downward adjustments
1. Current year STVR
2. Unvested deferred STVR (malus)
3. Unvested LTVR (malus)
4. Unvested retention awards (malus)
5. Unvested buy out awards (malus)
6. Vested or paid VR (clawback)
We apply judgement to consider whether the
size of the adjustment is proportionate and fair,
taking into consideration the severity of the matter
and level of individual accountability and any
mitigating factors, such as the context of the
matter and how the individual responded.
The quantum of the remuneration adjustment
increases with the severity of impact and
individual accountability.
To ensure remuneration adjustments are
proportionate to accountability, we consider
various facts specific to the matter including
(but not limited to) the individual’s contribution
and proximity to the direct and root causes
of the matter, time in role, relative level of
influence, findings of previous reviews and previous
adjustments for related matters.
Other risk, compliance or conduct matters
In addition to assessing significant matters, we also assess other matters including less material risk, compliance or
conduct matters and can apply remuneration adjustments and non-financial consequences for conduct that does not
meet our expectations.
We set conduct standards expected of our people through our code of conduct. Our expectations are in place to
support our people, culture and good conduct outcomes. They are non-negotiable and our people must comply with
these, regardless of their role or responsibilities.
Recognising positive risk behaviours and outcomes
We recognise and reward our people who role model positive risk behaviours and outcomes. This reinforces the
behaviour we expect of all of our people. We do this through a number of ways including through our recognition
platform or an upward adjustment to variable reward.
An upward adjustment in variable reward may be considered for exceptional risk performance not already reflected in
the delivery of agreed performance objectives.
In addition, Directors can recognise people who have demonstrated positive risk behaviours and outcomes. We have a
mechanism in place to provide the Board and each Committee with regular visibility of people who have demonstrated
positive risk behaviours.
Adjustment and consequence outcomes during 2024
Senior leadersa that received downward remuneration adjustments
2
Senior leaders that received upward remuneration adjustments
9
Employees identified as not having met risk expectations during performance assessments
1,538
Employees that received downward remuneration adjustments
235
Employees leaving due to consequence outcomes
160
Actions to recognise positive risk management and risk behaviours through our recognition platform
114,350
Employees that received an additional variable reward for achieving great risk outcomes
621
a.
These employees are the most senior leaders of Westpac, defined as the Chief Executive Officer, Group Executives and General Managers.
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5. Further detail on executive remuneration arrangements
5.1. Fixed remuneration
The table below sets out the key design features of fixed remuneration.
Fixed remuneration
Purpose
Provide market competitive remuneration reflecting role scope and accountabilities.
Opportunity
and benchmarking
Set with reference to market benchmarks in the financial services industry and large corporates in Australia as appropriate.
We also consider the size, responsibilities and complexity of the role, and the skills and experience of the executive.
5.2. Short term variable reward
The table below sets out the key design features of the 2024 STVR.
Short term variable reward
Purpose
Reward executives for delivering financial and non-financial annual objectives.
Structure
and delivery
50% of STVR is awarded in cash and 50% is deferred into equity in the form of restricted shares (or unhurdled share rights
for the Group Executive based outside of Australia).
One restricted share provides the holder with one Westpac ordinary share at no cost subject to trading restrictions until
the time of vesting. One unhurdled share right entitles the holder to one ordinary share at the time of vesting with no
exercise cost. Dividends are paid on restricted shares from the grant date.
Target and
maximum
opportunity
The target opportunity for the CEO and Group Executives is expressed as a percentage of fixed remuneration and is set at
75% of fixed remuneration (inclusive of superannuation as at 1 October 2023). The target opportunity is set considering a
range of factors including market competitiveness.
Target STVR: awarded for the delivery of agreed targets for financial and non-financial measures. A reduced outcome can
be determined for threshold performance.
Maximum STVR: up to 125% of target STVR, awarded in circumstances where outcomes are achieved over and
above target.
Performance
measures
STVR awards are determined based on meeting minimum behaviour and risk and compliance gate openers, and
performance against a scorecard designed to align with shareholder interests. The STVR Scorecard comprises
three components:
•
Values and behaviours assessment: Demonstration of behaviours in line with Westpac's values of 'Helpful, Ethical,
Leading change, Performing and Simple';
•
Focus areas: Performance is assessed against a balance of financial and non-financial measures that support the
effective execution of Westpac’s strategy; and
•
Modifier: The modifier allows adjustment upwards or downwards (including to zero), for risk and reputation and
people management considerations and any other matters as determined by the Board.
Further information on the 2024 Group STVR Scorecard is provided in Section 3.3.
Deferral period
50% of STVR is deferred into equity for a period of up to two years, which aligns executive remuneration with shareholder
interests and acts as a retention mechanism. Deferred STVR vests in equal portions after one and two years, subject to
service conditions and adjustment.
Delayed vesting
Refer to Section 5.4 for further information.
Treatment
of awards
on cessation
of employment
Refer to Section 5.4 for further information.
Remuneration
adjustments
Refer to Section 5.4 for further information.
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5.3. Long term variable reward
LTVR is comprised of two components, which are equally weighted, comprising LTVR restricted rights and LTVR
performance rights. The tables below set out the key design features of the 2024 LTVR awarded in January 2024,
as determined by the Board in October 2023.
5.3.1. Long term variable reward restricted rights for 2024
Long term variable reward restricted rights
Purpose
Reward executives for sustainable risk culture and for creating shareholder value over the long term.
Structure
and delivery
50% of the LTVR is awarded in restricted share rights (known as restricted rights). For the CEO, 50% vest after four years
and 50% vest after five years. For Group Executives, 100% vest after four years.
One restricted right provides the holder with one Westpac ordinary share at the time of vesting with no exercise cost.
Executives receive dividend equivalent payments as outlined below.
Award opportunity
The value of LTVR restricted rights awarded to the CEO and Group Executives is expressed as a percentage of fixed
remuneration. The value of LTVR restricted rights is set considering a range of factors including market competitiveness.
The face value of the 2024 LTVR restricted rights opportunity for the CEO and Group Executives in business roles is
70% of fixed remuneration (inclusive of superannuation as at 1 October 2023). The face value of the LTVR restricted
rights opportunity for Group Executives in functional roles is 55% of fixed remuneration (inclusive of superannuation as at
1 October 2023).
Allocation
methodology
The number of restricted rights each executive receives will be determined by dividing the dollar value of the LTVR
restricted rights award by the face value of a restricted right. The face value of a restricted right is the five day VWAP up to
the commencement of the performance period (which is 1 October 2023 for the 2024 LTVR grant).
Performance
condition
The restricted rights are subject to performance conditions which are assessed prior to the grant and prior to vesting.
These assessments are known as the pre-grant assessment and the pre-vest assessment.
The assessment is focused on maintaining or improving Group risk culture. The assessment will be primarily based on the
assessment of collective Group risk culture as part of the Board’s annual attestation to APRA required under Prudential
Standard CPS 220 Risk Management, which is a multi factorial, evidence based process. A prudential soundness gate
applies. The Board will also consider if there have been any significant risk outcomes or any serious misconduct that have
not been sufficiently addressed through performance management or STVR outcomes.
Step 1: Assessment of risk factors
1.
Prudential soundness gate: Has Westpac remained safe and secure, taking into account capital position and liquidity?
Prudential soundness is measured through the common equity tier 1 capital ratio, liquidity coverage ratio and the
net stable funding ratio.
2.
Group risk culture: Has Group risk culture maturity been maintained or improved, considering both executive actions or
inactions? The risk culture assessment involves a series of inputs, a review process and a Board assessment of Group
risk culture.
3.
Significant risk outcomes: Have risk outcomes arisen that have a significant and material impact on the Group, not
sufficiently addressed elsewhere?
4.
Serious misconduct: Has Westpac suffered from a serious misconduct issue, not sufficiently addressed elsewhere?
Step 2: Consider Board discretion
Considerations to guide the application of discretion and the overall assessment include:
•
The materiality of the adverse impact on Westpac’s financial position, or reputation, or customers, or shareholders, or
employees or regulatory standing.
•
Whether the outcome was specific to Westpac, the banking industry or the broader market.
•
The extent to which performance and reward outcomes are already impacted (e.g. through remuneration adjustments),
at a collective or individual level.
•
Whether any adjustment should be made on a collective or individual basis.
Given the focus on maintaining or improving Group risk culture over the performance period, adjustments are unlikely at
the pre-grant assessment and any potential adjustment is more likely at the pre-vest assessment.
Assessment of
performance
outcomes
LTVR restricted rights are assessed against risk culture at grant and following a four year performance period. The
assessment of performance includes an assessment of risk factors and considers Board discretion.
Dividend
equivalent
payments
Dividend equivalent payments are payable to the extent that LTVR vests. For LTVR restricted rights, these are accrued for
the performance period and the further deferral period after the performance period (if applicable), and paid at the end
of the deferral period. Dividend equivalent payments are calculated by multiplying the number of LTVR restricted rights
eligible to vest by the declared dividend price on each respective record date during the applicable period. The calculation
excludes franking credits.
Exercise period
Vested rights may be exercised up to a maximum of two years from the vesting date of the award and will be auto-
exercised if not exercised within the period. The exercise price for the rights is zero.
No re-testing
There is no re-testing. Awards that have not vested after the peformance period are lapsed.
Early vesting
Unvested awards may vest (unless prevented by law) before the performance test date in the event of a change of control
in Westpac as determined at the discretion of the Board or where employment ceases due to death or disability.
Delayed vesting
Refer to Section 5.4 for further information.
Treatment
of awards
on cessation
of employment
Refer to Section 5.4 for further information.
Remuneration
adjustments
Refer to Section 5.4 for further information.
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5.3.2. Long term variable reward performance rights for 2024
Long term variable reward performance rights
Purpose
Reward executives for creating shareholder value over the long term.
Structure and
delivery
50% of the LTVR is awarded in performance share rights (known as performance rights) which vest after six years for the CEO
and five years for Group Executives.
One performance right provides the holder with one Westpac ordinary share at the time of vesting with no exercise cost.
Executives receive dividend equivalent payments as outlined below.
Award
opportunity
The value of LTVR performance rights awarded to the CEO and Group Executives is expressed as a percentage of fixed
remuneration. The value of LTVR performance rights is set considering a range of factors including market competitiveness.
The face value of the 2024 LTVR performance rights opportunity for the CEO and Group Executives in business roles is
70% of fixed remuneration (inclusive of superannuation as at 1 October 2023). The face value of the LTVR performance
rights opportunity for Group Executives in functional roles is 55% of fixed remuneration (inclusive of superannuation as at
1 October 2023).
Allocation
methodology
The number of performance rights each executive receives will be determined by dividing the dollar value of the LTVR
performance rights award by the face value of a performance right. The face value of a performance right is the five day
VWAP up to the commencement of the performance period (which is 1 October 2023 for the 2024 LTVR grant).
Performance
condition
LTVR performance rights are subject to a relative TSR performance condition that aims to achieve long term growth in
shareholder value and support alignment between executive reward and shareholder interests. Relative TSR is a measure of the
total return delivered to shareholders over the performance period assuming dividends are reinvested, relative to that of peers.
The performance condition measures Westpac’s TSR performance against eight Australian financial services companies using a
percentile ranking vesting schedule as outlined below.
Westpac’s TSR performance
Indicative vesting percentage
At the 75th percentile or higher
100%
Between the median and the 75th percentile
Pro-rata vesting between 50% and 100%
At the median
50%
Below the median
0%
The comparator group of companies comprise: AMP Limited, Australia & New Zealand Banking Group Limited, Bank of
Queensland Limited, Bendigo and Adelaide Bank Limited, Commonwealth Bank of Australia, Macquarie Group Limited, National
Australia Bank Limited and Suncorp Group Limited. The Board retains discretion to amend the comparator group and
determine the overall vesting outcome as appropriate.
Assessment of
performance
outcomes
LTVR performance rights are subject to relative TSR performance following a four year performance period.
The relative TSR result is calculated independently to ensure external objectivity before being provided to the Board to
determine the vesting outcome. The Board may exercise discretion in determining the final vesting outcome.
Dividend
equivalent
payments
Dividend equivalent payments are payable to the extent that LTVR vests. For LTVR performance rights, these are only accrued
for the further deferral period after the performance period and paid at the end of the deferral period. Dividend equivalent
payments are calculated by multiplying the number of LTVR performance rights eligible to vest by the declared dividend price
on each respective record date during the applicable period. The calculation excludes franking credits.
Exercise period
Vested rights may be exercised up to a maximum of two years from the vesting date of the award and will be auto-exercised if
not exercised within the period. The exercise price for the rights is zero.
No re-testing
There is no re-testing. Awards that have not vested after the performance period are lapsed.
Early vesting
Unvested awards may vest (unless prevented by law) before the performance test date in the event of a change of control in
Westpac as determined at the discretion of the Board or where employment ceases due to death or disability.
Delayed
vesting
Refer to Section 5.4 for further information.
Treatment of
awards on
cessation of
employment
Refer to Section 5.4 for further information.
Remuneration
adjustments
Refer to Section 5.4 for further information.
5.4. Common design features for variable reward
Delayed
vesting
The Board has discretion (subject to law) to delay vesting of variable reward if the individual is under investigation for adverse
risk or conduct events including misconduct, is the subject of or implicated in legal or regulatory proceedings, if the Board
considers it reasonable to delay vesting, or if delayed vesting is otherwise required by law.
Treatment of
awards on
cesssation of
employment
Unvested variable reward lapses where the CEO or a Group Executive resigns or otherwise leaves the Group (except for the
reasons listed below) before vesting occurs unless the Board determines that some of the unvested variable reward should
remain on foot.
If the CEO or a Group Executive ceases employment because of death or total and permanent disability, all unvested variable
reward immediately vests or becomes exercisable unless prevented by law.
If the CEO or a Group Executive ceases employment because they retire, are retrenched or cease employment by agreed
separation, unvested variable reward stays on foot subject to applicable performance conditions and subject to any reduction
determined by the Board.
Remuneration
adjustments
The Board has discretion to adjust variable reward (including current year STVR) 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 deferred STVR where an adjustment to current year STVR is
considered insufficient or unavailable, followed by an adjustment to unvested LTVR where an adjustment to current and
deferred STVR is considered insufficient or unavailable. Clawback may also apply to vested variable reward, to the extent
legally permissible and practicable.
Refer to Section 4.3 for further information on our approach to remuneration adjustments.
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5.5. Executive minimum shareholding requirements and current compliance
The CEO and Group Executives are required to build and maintain a significant Westpac shareholding to strengthen
alignment with shareholder interests. LTVR restricted rights and LTVR performance rights are not included in the
calculation of shareholdings until performance conditions are met.
At 30 September 2024, the CEO and Group Executives comply with or are on track to meet the requirements.
Aspect of the requirements
Description
Requirement level
CEO: Two times fixed remuneration including superannuation.
Group Executives: One times fixed remuneration including superannuation.
Sale restrictions
Executives are restricted from selling vested equity, other than for the purpose of meeting tax obligations,
as follows:
•
For LTVR awards granted from 1 October 2021 onwards, until the required shareholding level is met; and
•
For STVR awards, where the required shareholding level is not met at the end of the accumulation period.
Accumulation period
Within five years of 1 October 2022 (i.e. by 1 October 2027), or appointment to their role, whichever is later. The
Board Remuneration Committee retains discretion to make adjustments in exceptional circumstances.
Calculation
of shareholdings
Unvested LTVR (including restricted rights and performance rights) is not included in the calculation of
shareholdings until performance conditions are met. Other shareholdings are recognised. This includes:
•
Shares held in an employee share plan (including deferred STVR);
•
Shares held outright in the individual’s name either solely or jointly with another person; and
•
Shares held in a family trust or a self-managed superannuation fund.
5.6. Hedging policy
Participants in Westpac’s equity plans are prohibited from entering, either directly or indirectly, into hedging
arrangements for unvested awards. No financial products may be used to mitigate the risk associated with these awards.
Any attempt to hedge awards will result in forfeiture and the Board may consider other disciplinary action. These
restrictions satisfy the requirements of the Corporations Act which prohibits hedging of unvested awards.
5.7. Employment agreements
The remuneration and other terms of employment for the CEO and Group Executives are formalised in their employment
agreements. Each agreement provides for the payment of fixed remuneration (including superannuation contributions),
variable reward and other benefits such as death and disablement insurance cover.
The table below details the key terms including termination provisions of the employment agreements for the CEO and
Group Executives.
Term
Conditions
Duration of agreement
Ongoing until notice given by either party.
Notice (by the
executive or the Group)
to terminate employment
12 months.a
Termination payments on
termination without causeb
Deferred STVR (which may be awarded on a pro rata basis for the part year served) and unvested LTVR will be
treated in accordance with the applicable equity plan rules, and will remain subject to remuneration adjustments if
the award is retained.
Termination for cause
Occurs immediately for misconduct. Deferred STVR and LTVR is forfeited, noting the Board has discretion to
determine otherwise.
Post-employment restraints
CEO: 12 months non-compete and non-solicitation restraints.
Group Executives: 6 months non-compete and 12 months non-solicitation restraints.
a.
Payment in lieu of notice may in certain circumstances be approved by the Board for some or all of the notice period.
b.
The maximum aggregate liability for termination benefits in respect of notice periods for the CEO and Group Executives at 30 September
2024 was $12.5 million (2023: $11.0 million).
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6. Non-executive Director remuneration
6.1. Structure and policy
Non-executive Director fees are not related to Westpac’s results. Fees are paid in cash and no discretionary payments
are made for performance. Non-executive Directors are required to build and maintain a minimum shareholding from
their own funds to align their interests with those of shareholders (refer to Section 6.3 for further details).
The table below sets out the components of Non-executive Director remuneration.
Non-executive Director remuneration
Base fees
Relate to service on the Westpac Banking Corporation Board. The base fee for the Chair covers all responsibilities,
including for Board Committees.
Committee fees
Additional fees are paid to Non-executive Directors (other than the Board Chair) for chairing or being a member of
Board Committees, other than the Board Nominations & Governance Committee.
Employer superannuation
contributions
Reflects statutory superannuation contributions which are capped at the superannuation maximum contributions
base as prescribed under the superannuation guarantee legislation.
6.2. Non-executive Director remuneration in 2024
The table below sets out the annual Board and standing Committee fees (exclusive of superannuation). Changes in
Board and Committee composition during the year are set out in the overview of Directors' meetings in Section 9 of the
Directors' report.
For 2024, $3.3 million (72%) of the fee pool was used. The fee pool of $4.5 million per annum was approved by
shareholders at the 2008 Annual General Meeting and includes employer superannuation contributions.
The members of the Nominations & Governance Committee do not receive any additional fees for their roles on
the Committee.
Base and Committee fees
Annual fee $ (exclusive of superannuation)
Chair
823,000
Other Non-executive Directors
215,000
Committee Chair fees
Board Audit Committee
69,000
Board Risk Committee
69,000
Board Remuneration Committee
59,000
Committee membership fees
Board Audit Committee
31,000
Board Risk Committee
31,000
Board Remuneration Committee
28,000
During the year, we benchmarked Non-executive Director fees. As a result, we increased all Committee fees to $34,000.
We also increased the Board Remuneration Committee Chair fee to $69,000 to align to market, reflecting increased
regulatory complexity in financial services remuneration oversight. Both changes are effective from 1 October 2024.
Non-executive Directors may also receive fees for additional duties which are paid at a per meeting rate of $2,000
for Committee members and $4,000 for Committee Chairs (excluding superannuation). During the reporting period,
Peter Nash received additional fees of $12,000 for responsibilities and participation in a Due Diligence Committee and
Margaret Seale received additional fees of $20,000 for assistance in recruitment of the new Chair.
In addition, to support the technology transformation being delivered through the UNITE program, a UNITE Oversight
Group was established in May 2024 comprising three Non-executive Directors (Nerida Caesar, Andy Maguire and Peter
Nash). To recognise the additional workload, these Non-executive Directors each receive an additional fee of $34,000
(excluding superannuation) per annum effective from 1 June 2024.
6.3. Non-executive Director minimum shareholding requirement
Non-executive Directors are required to build and maintain a holding in Westpac ordinary shares with a value not less
than the Board base fee (and in case of the Chair, the Chair's fee), within five years of appointment to the Board.
At 30 September 2024, all Non-executive Directors comply with or are on track to meet the requirement.
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7. Statutory remuneration details
7.1. Details of Non-executive Director remuneration
The table below details Non-executive Director remuneration.
Short-term benefits
Post-employment
benefits
Westpac Banking
Corporation Board
feesa
Non-
monetary
benefitsb
Superannuation
Total
Name
$
$
$
$
Current Non-executive Directors
Steven Gregg, Chairc
2024
680,727
5,893
30,017
716,637
2023
--------------------- Not a KMP in 2023 ---------------------
Tim Burroughs
2024
269,410
-
28,054
297,464
2023
138,123
-
14,163
152,286
Nerida Caesar
2024
258,208
-
27,674
285,882
2023
240,392
-
24,901
265,293
Audette Exel AO
2024
316,232
-
28,211
344,443
2023
302,177
-
26,020
328,197
Andy Maguirec
2024
53,631
-
6,168
59,798
2023
--------------------- Not a KMP in 2023 ---------------------
Peter Nash
2024
339,478
-
28,316
367,795
2023
316,177
-
25,851
342,028
Nora Scheinkestel
2024
340,346
-
-
340,346
2023
306,951
-
25,076
332,027
Margaret Seale
2024
263,977
-
26,459
290,436
2023
270,731
-
25,452
296,183
Michael Ullmer AO
2024
300,846
-
8,214
309,060
2023
134,764
-
6,323
141,087
Former Non-executive Directors
John McFarlanec
2024
170,927
1,756
4,761
177,444
2023
824,177
8,335
25,909
858,421
Chris Lynchc
2024
56,904
-
6,155
63,059
2023
275,177
-
25,846
301,023
Total fees
2024
3,050,685
7,649
194,029
3,252,364
2023d
3,082,704
8,335
210,822
3,301,861
a.
Includes base fees, Committee fees and any other fees.
b.
Non-monetary benefits are determined on the basis of the cost to the Group including associated fringe benefits tax (FBT) where applicable
and includes bank funded car parking.
c.
The information relates to the period the individual was a KMP. Refer to Section 2 for further details.
d.
Total fees for 2023 shown as reported in the 2023 Annual Report. The total fees for 2023 include individuals that are not KMP in 2024 and
therefore their individual remuneration is not included in the above table.
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7.2. Statutory remuneration details – Chief Executive Officer and Group Executives
The table below details remuneration for the CEO and Group Executives prepared and audited in accordance with
Australian Accounting Standards.
Short term benefits
Post-
employment
benefits
Other
long term
benefits
Share-based payments
Fixed
remunerationa
Cash
STVR
awardb
Non-
monetary
benefitsc
Other
paymentsd
Superannuation
benefitse
Long
service
leave
Restricted
sharesf
Restricted
rightsg
Performance
rightsg
Totalh
$
$
$
$
$
$
$
$
$
Managing Director & Chief Executive Officer
Peter King, Managing Director & Chief Executive Officeri
2024
2,418,943
975,000
20,823
-
48,249
22,024
1,198,595
728,328
1,521,487
6,933,449
2023
2,437,773
1,125,000
30,873
-
45,676
37,773
982,267
-
1,084,059
5,743,421
Group Executives
Scott Collary, Chief Information Officer
2024
1,300,753
508,500
8,333
-
34,739
21,537
563,784
241,512
740,674
3,419,832
2023
1,187,292
508,500
19,658
-
33,161
18,593
806,081
-
631,647
3,204,932
Nell Hutton, Chief Executive, Westpac Institutional Bank
2024
1,230,101
502,000
5,359
-
35,046
17,352
1,132,285
238,441
105,932
3,266,516
2023
------------------------------------------------------- Not a KMP in 2023 -------------------------------------------------------
Carolyn McCann, Group Executive, Customer & Corporate Services
2024
1,038,679
437,500
5,359
-
36,479
15,727
398,684
198,233
482,393
2,613,054
2023
1,014,216
380,000
5,631
-
29,927
21,684
329,981
-
449,375
2,230,814
Catherine McGrath, Chief Executive Officer, Westpac New Zealand
2024
857,768
311,189
8,386
-
119,894
-
-
523,182
388,367
2,208,786
2023
816,255
350,356
11,050
-
114,168
-
-
281,725
308,247
1,881,801
Anthony Miller, Chief Executive, Business & Wealth
2024
1,279,390
478,000
3,315
166,277
37,898
19,056
684,787
238,441
717,728
3,624,892
2023
1,195,992
611,000
4,489
404,713
35,432
21,539
851,380
-
610,124
3,734,669
Christine Parker, Group Executive, Human Resources
2024
1,045,623
417,000
3,315
-
32,976
16,896
401,268
152,684
524,412
2,594,174
2023
995,877
392,000
3,306
-
30,305
15,183
353,590
-
534,136
2,324,397
Michael Rowland, Chief Financial Officer
2024
1,249,398
500,500
3,315
-
34,007
18,870
465,327
186,823
579,245
3,037,485
2023
1,207,072
446,500
4,888
-
31,278
19,038
404,955
-
494,888
2,608,619
Jason Yetton, Chief Executive, Consumer
2024
1,200,082
443,000
3,315
-
38,009
19,050
539,012
238,441
770,574
3,251,483
2023
1,175,407
611,000
4,489
-
35,495
22,119
559,508
-
702,392
3,110,410
Ryan Zanin, Chief Risk Officer
2024
1,663,065
674,000
151,817
116,682
2,097
25,268
730,310
249,101
541,063
4,153,403
2023
1,737,772
503,500
81,424
594,277
9,482
25,453
319,974
-
429,219
3,701,101
a.
Fixed remuneration is the total cost of cash salary, salary sacrificed benefits and an accrual for annual leave. Superannuation in excess of the
maximum contribution base that is paid as cash is also included.
b.
The cash STVR award is typically paid in December following the end of the financial year. A downward adjustment was applied to the cash
and deferred portions of the 2024 STVR award for one Group Executive based on an assessment of leadership behaviours.
c.
Non-monetary benefits are determined on the basis of the cost to the Group (including associated FBT, where applicable) and may include
annual health checks, provision of taxation advice, bank funded car parking, executive life insurance as well as relocation costs and travel
allowances. Cash relocation allowances are recognised as an expense from the commencement date as a KMP to the end of a clawback period.
d.
Includes payments on termination or other contracted amounts for current KMP. The cash portion of buy out arrangements is recognised as an
expense from commencement date as a KMP to the end of the deferral period. For Anthony Miller, the cash buy out arrangement was agreed
on 25 March 2021, 29% of the cash portion of the buy out was paid in 2024 and the remaining cash portions of the award are due to be paid
through to March 2025. For Ryan Zanin, the cash buy out arrangement was agreed on 30 August 2022, 31% of this award was paid in 2024 and
the remaining portions of the award are due to be paid through to December 2024.
e.
Includes Group life and salary continuance insurance cover provided at no cost to the individual. Superannuation benefits have been calculated
consistent with AASB 119 Employee Benefits.
f.
The amortisation approach for restricted shares commences from the service period when the award was earned through to the end of the
deferral period. A portion of the restricted shares held by Scott Collary, Nell Hutton and Anthony Miller represent an allocation made to
compensate them for remuneration foregone from their previous employer on resignation to join Westpac. The restricted shares replicate the
deferral periods of the equity foregone.
g.
Equity-settled remuneration is based on the amortisation over the performance and the deferral period. It is calculated using the fair value
at the grant date of hurdled and unhurdled share rights granted during the financial year up to 30 September 2024. Fair value is calculated
88
WESTPAC 2024 ANNUAL REPORT
DIRECTORS’ REPORT
using an external valuation based on the invitation opt out date. The 2024 value for Catherine McGrath includes 38% attributed to deferred
STVR awards.
h.
The table includes remuneration details of individuals that are KMP for 2024, whereas the totals presented in Note 34 to the financial
statements includes former KMP who ceased as KMP in 2023. The percentage of total remuneration which is performance related (i.e. cash
STVR plus share-based payments) was: Peter King 64%, Scott Collary 60%, Nell Hutton 61%, Carolyn McCann 58%, Catherine McGrath 55%,
Anthony Miller 58%, Christine Parker 58%, Michael Rowland 57%, Jason Yetton 61% and Ryan Zanin 53%. The percentage of total remuneration
delivered in the form of share rights was: Peter King 32%, Scott Collary 29%, Nell Hutton 11%, Carolyn McCann 26%, Catherine McGrath 41%,
Anthony Miller 26%, Christine Parker 26%, Michael Rowland 25%, Jason Yetton 31% and Ryan Zanin 19%.
i.
Peter King intends to retire as CEO on 15 December 2024. His 2024 statutory remuneration includes $3,448,410 related to the amortisation of
share-based payments. As a result of his intention to retire on 15 December 2024, the amortisation of these share-based payments (restricted
shares, restricted rights and performance rights) is being recognised over an accelerated vesting period. This resulted in additional accounting
amortisation of $850,382 recognised in 2024 across all share-based payments. The remaining accounting amortisation relating to these
awards will be recognised in 2025. The full value will be recognised for these awards over this accelerated vesting period regardless of whether
the awards ultimately vest. The awards remain subject to the existing performance conditions and may or may not vest subject to meeting
these performance conditions. Refer to the ASX release dated 9 September 2024 for further information of Peter King’s exit arrangement.
In addition, in July 2024, Peter King received the standard service recognition award of $3,000 for when an employee reaches 30 years of
service at Westpac.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
89
7.3. Movement in equity-settled instruments during the year
The table below shows the movements in the number and value of equity instruments for the CEO and Group Executives
during 2024.
Name
Type of equity-based instrument
Number
granteda
Number
vestedb
Number
exercisedc
Value granted
$d
Value
exercised
$e
Value forfeited
or lapsed
$e
Managing Director & Chief Executive Officer
Peter King
Restricted shares
48,806
40,821
-
1,132,299
-
-
Restricted rights
82,977
-
-
1,925,066
-
-
Performance rights
82,978
-
-
1,062,948
-
2,228,805
Group Executives
Scott Collary
Restricted shares
22,060
67,576
-
511,792
-
-
Restricted rights
42,863
-
-
994,422
-
-
Performance rights
42,864
-
-
549,088
-
-
Nell Hutton
Restricted shares
54,229
8,983
-
1,258,113
-
-
Restricted rights
42,318
-
-
981,778
-
-
Performance rights
42,319
-
-
542,106
-
-
Carolyn McCann
Restricted shares
16,485
13,715
-
382,452
-
-
Restricted rights
35,182
-
-
816,222
-
-
Performance rights
35,183
-
-
450,694
-
873,728
Catherine McGrath
Unhurdled share rights
16,597
7,223
-
360,951
-
-
Restricted rights
31,670
-
-
734,744
-
-
Performance rights
31,670
-
-
405,693
-
-
Anthony Miller
Restricted shares
26,507
65,029
-
614,962
-
-
Restricted rights
42,318
-
-
981,778
-
-
Performance rights
42,319
-
-
542,106
-
-
Christine Parker
Restricted shares
17,006
15,222
-
394,539
-
-
Restricted rights
27,098
-
-
628,674
-
-
Performance rights
27,098
-
-
347,125
-
1,107,043
Michael Rowland
Restricted shares
19,370
18,073
-
449,384
-
-
Restricted rights
33,157
-
-
769,242
-
-
Performance rights
33,158
-
-
424,754
-
-
Jason Yetton
Restricted shares
26,507
25,969
-
614,962
-
-
Restricted rights
42,318
-
-
981,778
-
-
Performance rights
42,319
-
-
542,106
-
1,519,196
Ryan Zanin
Restricted shares
43,534
4,851
-
1,009,989
-
-
Restricted rights
44,210
-
-
1,025,672
-
-
Performance rights
44,211
-
-
566,343
-
-
a.
Restricted rights and performance rights granted to the CEO are approved by shareholders at the Annual General Meeting each year under
ASX Listing Rule 10.14. We do not grant options. We award deferred STVR in the form of restricted shares (or unhurdled share rights for KMP
in New Zealand). 2023 deferred STVR was awarded on 19 January 2024 for the CEO and Group Executives, the deferral period commenced
on 1 October 2023, 50% of the award vested on 1 October 2024 and 50% will vest on 1 October 2025 (subject to service conditions and
remuneration adjustments).
b.
No performance rights granted in 2019 vested in October 2023 when assessed against the relative TSR performance condition. 100% of the
deferred STVR due to vest in 2023 vested at the end of the deferral period. For Scott Collary, 45,879 of the 67,576 restricted shares that vested
were in relation to a buy out award which represents 61% of the total number of shares allocated for that award which has now vested in full.
For Anthony Miller, 46,798 of the 65,029 restricted shares that vested were in relation to a buy out award which represents 38% of the total
number of shares allocated for that award and the remaining portions of the award are due to vest through to March 2025. For Nell Hutton, the
restricted shares that were granted relate to awards for her prior role before becoming a KMP.
c.
Vested share rights granted prior to September 2023 may be exercised up to a maximum of 15 years from their commencement date. Vested
share rights granted after September 2023 may be exercised up to two years following the vesting date, otherwise the share rights will be
auto-exercised at the end of the term.
d.
For performance rights, the value granted represents the number of securities granted multiplied by the fair value per instrument as set
out in the table in the sub-section titled ‘Overview of unvested equity awards’. For restricted shares and restricted rights, the value granted
represents the number of rights granted multiplied by the closing price of a Westpac ordinary share on the date the awards were granted
($23.20). These values, which represent the full value of the equity-based awards made to the CEO and Group Executives in 2024, do not
reconcile with the amount shown in the table in Section 7.2 which shows the amount amortised in the current year. The minimum total value
of the grants for future financial years is zero and an estimate of the maximum possible total value in future financial years is the fair value, as
shown above. This includes Ryan Zanin’s additional grant of restricted shares and their estimated maximum possible total value is the fair value
of $500,000.
e.
The value of each share right exercised, forfeited or lapsed is calculated based on the closing price of a Westpac ordinary share on the date of
exercise (or forfeiture or lapse). The overall values reflect forfeitures or lapses as a result of a failure to meet performance conditions.
90
WESTPAC 2024 ANNUAL REPORT
DIRECTORS’ REPORT
7.3.1 Overview of unvested equity awards
The table below outlines key details of unvested STVR and LTVR as at 30 September 2024 awarded to the CEO and
Group Executives while in KMP roles1. All awards are subject to service conditions, performance conditions (where
applicable), deferral periods and remuneration adjustments. Further details of the awards can be located in prior
Annual Reports.
Fair values
Fair values are determined in accordance with the requirements of AASB 2 Share-based Payment.
For STVR and LTVR restricted rights, the fair value is calculated using the closing price of the grant date, which for
accounting purposes is the invitation opt out date.
For LTVR performance rights, fair values are independently calculated by PFS Consulting at the grant date (which is the
invitation opt out date) using a Monte Carlo simulation pricing model.
Allocation values
The value granted to executives for remuneration purposes differs from the fair value used for accounting purposes.
For STVR grants, the allocation is determined by dividing the dollar value of the STVR award by the five day VWAP up to
the grant date. Refer to Section 5.2 for further details of STVR.
For LTVR grants, the allocation is determined by dividing the dollar value of the LTVR awards by the face value of a
share right. The face value of a share right is the five day VWAP up to the commencement of the performance period.
Refer to Section 5.3 for further details of LTVR.
Award name
Grant date
Performance
period start
date
Performance
period end
date
Deferral period end date
Expiry
Fair value
Performance
conditions
2023 STVR
19 Jan 2024
1 Oct 2022
30 Sep 2023
1 Oct 2024 (tranche
one) and 1 Oct 2025
(tranche two)
N/A
$23.20
Service (noting
STVR Scorecard
assessment
was completed)
2022 STVR
15 Dec 2022
1 Oct 2021
30 Sep 2022
1 Oct 2024
(tranche two)
N/A
$23.50
Service (noting
STVR Scorecard
assessment
was completed)
2024 LTVR
performance
rights
19 Jan 2024
1 Oct 2023
30 Sep 2027
CEO: 15 Nov 2029
Group Executives: 15
Nov 2028
CEO: 15 Nov 2031
Group Executives: 15
Nov 2030
$12.81
Relative TSR
2024 LTVR
restricted
rights
19 Jan 2024
1 Oct 2023
30 Sep 2027
CEO: 50% on 15 Nov
2027 (tranche one) and
50% on 15 Nov 2028
(tranche two)
Group Executives: 15
Nov 2027
CEO: 15 Nov 2029
(tranche one) and 15
Nov 2030 (tranche two)
Group Executives: 15
Nov 2029
$23.20
Pre-vest
assessment of
risk culture
(noting a pre-
grant assessment
was completed)
2023 LTVR
performance
rights
15 Dec 2022
1 Oct 2022
30 Sep 2026
25 Oct 2026
1 Oct 2037
$11.90
Relative TSR
2022 LTVR
performance
rights
CEO: 16 Dec
2021
Group
Executives:
15 Dec 2021
1 Oct 2021
30 Sep 2025
1 Nov 2025
1 Oct 2036
CEO: $5.81
Group
Executives:
$5.82
Relative TSR
2021 LTVR
performance
rightsa
CEO: 16 Dec
2020
Group
Executives:
11 Dec 2020
1 Oct 2020
30 Sep 2024
31 Oct 2024
1 Oct 2035
CEO: $6.35
Group
Executives:
$6.40
Relative TSR
a.
We tested the 2021 LTVR performance rights on 1 October 2024. Our TSR for the 4 year performance period was 113% resulting in a 50th
percentile ranking relative to the comparator group. This resulted in 50% of the 2021 LTVR award vesting.
1.
In addition, Anthony Miller was granted a buy out award on 8 April 2021 at a fair value of $18.73 that will vest in March 2025. Carolyn
McCann was granted an additional 2022 LTVR award on 4 March 2022 to recognise an expanded role at a fair value of $8.05. Ryan Zanin's
pro rata 2022 LTVR award was granted on 17 May 2022 at a fair value of $9.32 given his commencement date with Westpac was in April
2022, which was after the grant of 2022 LTVR to other Group Executives in December 2021. Ryan Zanin was awarded a grant of restricted
shares of $500,000 on 19 January 2024 at a fair value of $23.20. The award recognises the importance of his role in completing a critical risk
management and risk culture transformation, and increases alignment with shareholders through greater equity holdings. The award is subject
to a service condition until January 2026 and remuneration adjustments and scheduled to vest in three tranches on January 2026, January
2028 and January 2029.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
91
7.4. Details of Westpac equity holdings of Non-executive Directors
The table below sets out details of relevant interests in Westpac ordinary shares held by Non-executive Directors
(including their related parties) during the year ended 30 September 20241.
Number held at
start of the year
Changes
during the year
Number held at
end of the year
Current Non-executive Directors
Steven Gregga
n/a
-
75,208
Tim Burroughs
67,302
-
67,302
Nerida Caesar
13,583
-
13,583
Audette Exel AO
11,562
390
11,952
Andy Maguirea
n/a
-
-
Peter Nash
15,360
-
15,360
Nora Scheinkestel
14,874
2,351
17,225
Margaret Sealeb
26,158
-
26,158
Michael Ullmer AOc
12,570
-
12,570
Former Non-executive Directors
John McFarlanea
50,000
-
n/a
Chris Lyncha,d
13,090
-
n/a
a.
The information relates to the period the individual was a KMP. Refer to Section 2 for further details.
b.
In addition to holding ordinary shares, Margaret Seale and her related parties held interests in 100 Westpac Capital Notes 7 (ASX: WBCPJ) at
year end.
c.
In addition to holding ordinary shares, Michael Ullmer AO and his related parties held interests in 800 Westpac Capital Notes 5 (ASX: WBCPH),
300 Westpac Capital Notes 9 (ASX: WBCPL) and 1,000 Westpac Subordinated Notes at year end.
d.
In addition to holding ordinary shares, Chris Lynch and his related parties held interests in 1,137 Westpac Capital Notes 5 (ASX: WBCPH) as at
his retirement date of 14 December 2023.
1.
Other than as disclosed above, no share interests include non-beneficially held shares.
92
WESTPAC 2024 ANNUAL REPORT
DIRECTORS’ REPORT
7.5. Details of Westpac equity holdings of executive Key Management Personnel
The table below details Westpac equity held and movement in that equity by the CEO and Group Executives (including
their related parties) for the year ended 30 September 20241.
Name
Type of equity-
based instrument
Number
held at
start of
the yeara
Number
granted
during the
year as
remuneration
Received
on exercise
and/or
exercised
during the
year
Number
forfeited or
lapsed
during the
yearb
Other
changes
during the
year
Number held
at end of the
year
Number vested
and exercisable at
end of the year
Managing Director & Chief Executive Officer
Peter King
Ordinary shares
213,527
48,806
-
-
-
262,333
-
Restricted rights
-
82,977
-
-
-
82,977
-
Performance rights
570,644
82,978
-
(101,348)
-
552,274
-
Group Executives
Scott Collary
Ordinary shares
118,483
22,060
-
-
-
140,543
-
Restricted rights
-
42,863
-
-
-
42,863
-
Performance rights
315,956
42,864
-
-
-
358,820
-
Nell Hutton
Ordinary shares
119,814
54,229
-
-
(8,983)
165,060
-
Restricted rights
-
42,318
-
-
-
42,318
-
Performance rights
-
42,319
-
-
-
42,319
-
Carolyn McCann
Ordinary shares
94,606
16,485
-
-
-
111,091
-
Restricted rights
-
35,182
-
-
-
35,182
-
Performance rights
230,274
35,183
-
(39,815)
-
225,642
-
Catherine McGrath
Ordinary shares
-
-
-
-
-
-
-
Unhurdled share rights
14,874
16,597
-
-
-
31,471
7,223
Restricted rights
-
31,670
-
-
-
31,670
-
Performance rights
133,483
31,670
-
-
-
165,153
-
Anthony Miller
Ordinary shares
159,756
26,507
-
-
-
186,263
-
Restricted rights
-
42,318
-
-
-
42,318
-
Performance rights
307,152
42,319
-
-
-
349,471
-
Christine Parker
Ordinary shares
53,401
17,006
-
-
-
70,407
-
Restricted rights
-
27,098
-
-
-
27,098
-
Performance rights
279,248
27,098
-
(52,293)
-
254,053
-
Michael Rowland
Ordinary shares
36,146
19,370
-
-
-
55,516
-
Restricted rights
-
33,157
-
-
-
33,157
-
Performance rights
250,480
33,158
-
-
-
283,638
-
Jason Yetton
Ordinary shares
51,939
26,507
-
-
-
78,446
-
Restricted rights
-
42,318
-
-
-
42,318
-
Performance rights
366,861
42,319
-
(54,471)
-
354,709
-
Ryan Zanin
Ordinary shares
9,702
43,534
-
-
-
53,236
-
Restricted rights
-
44,210
-
-
-
44,210
-
Performance rights
150,934
44,211
-
-
-
195,145
-
a.
Ordinary shares held at the start of the year have been revised to reflect updated balances during the current reporting period for two KMP.
b.
Forfeitures or lapses during the year are as a result of a failure to meet performance conditions.
1.
The highest number of shares held by an individual in the table is 0.0076% of total Westpac ordinary shares outstanding as at
30 September 2024.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
93
7.6. Loans to Non-executive Directors and executive Key Management Personnel
Financial instrument transactions are provided in the ordinary course of business. These transactions are at arm's-length
on terms and conditions as they apply to all employees.
The table below details loans to Non-executive Directors, the CEO and Group Executives (including their related parties)
of the Group.
Balance at start of
the year
$a
Interest paid and
payable for the year
$
Interest not charged
during the year
$
Balance at end of
the year
$
Number in Group at
end of the year
Non-executive Directors
4,507,501
191,280
-
3,012,367
3
CEO and Group Executives
30,377,545
839,000
-
29,051,817
7
Total
34,885,046
1,030,280
-
32,064,184
10
a.
Balances at start of the year have been revised for updated balances during the reporting period.
The table below details KMP (including their related parties) with aggregate loans above $100,000 during 2024.
Balance at start of
the year
$a
Interest paid and
payable for the year
$
Interest not charged
during the year
$
Balance at end of
the year
$
Highest indebtedness
during the year
$
Non-executive Directors
Peter Nash
2,364,821
149,359
-
2,498,978
3,023,589
Nora Scheinkestel
n/a
-
-
100,000
1,600,000
Margaret Seale
620,442
29,989
-
413,389
655,094
Former Non-executive Directors
Chris Lynchb
1,522,238
11,932
-
n/a
1,522,238
CEO and Group Executives
Peter King
1,158,000
10,492
-
1,158,000
1,159,175
Scott Collary
2,294,958
40,606
-
2,166,513
2,289,315
Nell Hutton
14,441,500
303,040
-
14,432,940
14,471,500
Carolyn McCann
3,396,296
121,040
-
3,250,672
3,401,353
Anthony Miller
2,277,513
8,591
-
1,389,164
3,716,759
Christine Parker
5,434,278
269,863
-
5,396,236
5,471,019
Jason Yetton
1,375,000
85,368
-
1,258,292
1,425,371
a.
Balances at start of the year have been revised for updated balances during the reporting period.
b.
The information relates to the period the individual was a KMP. Refer to Section 2 for further details.
Other transactions relating to KMP
Accrual for dividend equivalent payments
The non-current liability owing as a result of dividend equivalent payments that have been accrued for the 2024
LTVR restricted rights was $381,700 as at 30 September 2024. Details of the LTVR restricted rights can be found in
Section 5.3.1.
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Auditor
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act is below:
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Auditor’s Independence Declaration
As lead auditor for the audit of Westpac Banking Corporation for the year ended 30 September 2024,
I declare that to the best of my knowledge and belief, there have been:
(a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b)
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Westpac Banking Corporation and the entities it controlled during the
period.
Colin Heath
Sydney
Partner
PricewaterhouseCoopers
3 November 2024
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Non-audit services
We may decide to engage PwC on assignments additional to their statutory audit duties where their expertise or
experience with Westpac or a controlled entity is important.
Details of the non-audit service amounts paid or payable to PwC for non-audit services provided during the 2024 and
2023 financial years are set out in Note 33 (page 262) to the financial statements.
PwC also provides audit and non-audit services to non-consolidated entities, non-consolidated trusts of which a
Westpac Group entity is trustee, manager or responsible entity and non-consolidated superannuation funds or pension
funds. The fees in respect of these services were approximately $6.6 million in total (2023: $8.7 million). PwC may also
provide audit and non-audit services to other entities in which Westpac holds a minority interest and which are not
consolidated. Westpac is not aware of the amount of any fees paid to PwC by those entities.
Westpac has a policy on engaging PwC, details of which are set out in its 2024 Corporate Governance Statement in the
section ‘Engagement of the external auditor’.
The Board has considered the position and, in accordance with the advice received from the Board Audit Committee,
is satisfied that the provision of the non-audit services during 2024 by PwC is compatible with the general standard
of independence for auditors imposed by the Corporations Act. The Directors are satisfied, in accordance with advice
received from the Board Audit Committee, that the provision of non-audit services by PwC, as set out above, did not
compromise the auditor independence requirements of the Corporations Act for the following reasons:
•
all non-audit services provided by PwC for the year have been reviewed by the Board Audit Committee, which is of
the view that they do not impact the impartiality and objectivity of PwC; and
•
based on Board quarterly independence declarations made by PwC to the Board Audit Committee during the
year, none of the services undermine the general principles relating to auditor independence including reviewing
or auditing PwC’s own work, acting in a management or a decision-making capacity for the company, acting as
advocate for the company or jointly sharing economic risk and rewards.
Responsibility statement
The Directors of Westpac Banking Corporation confirm that to the best of their knowledge:
•
the consolidated financial statements for the financial year ended 30 September 2024, which have been prepared
in accordance with the accounting policies described in Note 1 (page 149) to the consolidated financial statements,
being in accordance with Australian Accounting Standards (AAS), give a true and fair view of the assets, liabilities,
financial position and profit of the Group; and
•
the Annual Report from the section entitled About Westpac (page 10) to and including the section entitled Segment
Reporting (page 130) and the subsection entitled 'Other Westpac business information' in the section entitled
Additional Information (page 290) includes a fair review of the information required by the Disclosure Guidance and
Transparency Rules 4.1.8R to 4.1.11R of the United Kingdom Financial Conduct Authority, together with a description
of the principal risks and uncertainties faced by the Group.
The Directors’ Report is signed in accordance with a resolution of the Board of Directors.
Steven Gregg
Chairman
3 November 2024
Peter King
Managing Director &
Chief Executive Officer
3 November 2024
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Significant developments
Westpac significant developments – Australia
Changes to Chairman, CEO and Board of Directors
On 14 December 2023, at the conclusion of the AGM, Mr
Steven Gregg succeeded Mr McFarlane as Chairman of the
Board following Mr McFarlane’s retirement.
On 9 September 2024, Westpac announced that Anthony
Miller will succeed Peter King as CEO and Managing
Director, effective 16 December 2024 following Mr King’s
retirement as CEO and Managing Director.
Independent Non-executive Director Chris Lynch retired
from the Board at the conclusion of the AGM on
14 December 2023.
On 15 July 2024, Mr Andy Maguire commenced as an
independent Non-executive Director of the Board.
On market buyback
As at 30 September 2024, Westpac had completed
$1.8 billion of the $2.5 billion on-market share
buyback previously announced, with 67.7 million Westpac
shares purchased at an average price of $26.78. The
shares bought back were subsequently cancelled. On
4 November 2024, Westpac announced an increase in
the amount of Westpac shares it intends to buyback
by up to a further $1.0 billion, to an aggregate total
buyback amount of up to $3.5 billion of Westpac shares.
Westpac reserves the right to vary, suspend or terminate
the buyback at any time.
External auditor rotation
On 8 March 2024, Westpac announced that KPMG was
the preferred firm to be appointed as Westpac’s external
auditor for the 2025 financial year, beginning 1 October
2024. This appointment is subject to the approval of
Westpac shareholders at the 2024 AGM.
Technology simplification
On 27 March 2024, Westpac provided an update on
its technology simplification project, UNITE, a multi-year
program of work commenced in FY24.
Closure of RAMS to new business
On 6 August 2024, Westpac announced that it had
completed its strategic review of RAMS Financial Group
Pty Limited (RAMS) and would close RAMS to new home
loan applications. Existing RAMS customers continue to be
serviced, and their loans remain in place.
Regulatory and risk developments
Enforceable undertaking on risk governance
remediation, Integrated Plan and CORE program
In December 2023, Westpac completed the Integrated
Plan (IP) required under the enforceable undertaking
(EU) entered into with APRA in December 2020
in relation to our risk governance remediation and
supporting the strengthening of our risk governance,
accountability and culture. In its final report issued
30 April 2024, the Independent Reviewer (Promontory
Australia) confirmed that Westpac has successfully
completed the IP. Promontory Australia’s final report,
along with reports issued previously, are available on our
website at https://www.westpac.com.au/about-westpac/
media/core/. Westpac is continuing to focus on the
sustainability and effectiveness of the uplift delivered by
the IP through a transition phase.
APRA releases final Prudential Standard CPS 230
Operational Risk Management
On 17 July 2023, APRA released the final version
of the Prudential Standard CPS 230 Operational Risk
Management which will come into effect from 1 July
2025. CPS 230 brings new and enhanced requirements
for our operational risk management, material service
provider management and business continuity planning;
and we are undertaking a programme of work to
assist in implementing these requirements. Details about
operational risk and the consequences of failing to comply
with regulatory requirements are set out in the 2024
Risk Factors.
Financial crime
We continue to make progress on improving our financial
crime risk management with significant ongoing work, as
we implement a multi-year program of work (including
AML/CTF, Sanctions, Anti-Bribery and Corruption, the
US Foreign Account Tax Compliance Act (FATCA) and
Common Reporting Standard (CRS)).
Through this work, we continue to undertake
activities to strengthen our AML/CTF Program,
including our Transaction Monitoring Program, and
remediate and improve our financial crime controls in
multiple areas including: initial, enhanced and ongoing
customer due diligence and associated record keeping;
upgrading customer and payment screening, enhancing
transaction monitoring and associated processes;
improving Electronic Funds Transfer Instruction processes;
establishing data reconciliations and checks to ensure
the completeness of data feeding into our financial
crime systems; and improving regulatory reporting,
including in relation to International Funds Transfer
Instructions, Threshold Transaction Reports, Suspicious
Matter Reports (including ‘tipping off’ controls), and
FATCA and CRS reporting and equivalent reports in
jurisdictions outside Australia.
On 11 September 2024, the Anti-Money Laundering and
Counter-Terrorism Financing Amendment Bill 2024 was
introduced into Parliament. The Bill seeks to modernise
and overhaul the AML/CTF regime, to ensure Australia
continues to effectively deter, detect and disrupt financial
crime. We are considering the potential impacts of the
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proposed Bill, including on our policies, procedures,
systems and controls.
With increased focus on financial crime, further areas of
potential non-compliance have been, and may continue
to be identified, and we continue to liaise with AUSTRAC
and the ATO and local regulators in jurisdictions
outside Australia, as appropriate, including to remediate
findings and adopt recommendations from regulators
with significant ongoing programmes of work across
the Group. Details about the consequences of failing to
comply with financial crime obligations are set out in the
2024 Risk Factors.
Scams
In September 2024, the Australian Government released
draft legislation to implement the Scams Prevention
Framework (SPF). The SPF outlines the responsibilities
of designated sectors (initially banks, telecommunications,
and digital platform service providers) to prevent, detect,
report, disrupt and respond to scams in Australia. We are
considering the potential impacts of the SPF if adopted
as drafted, including on our policies, procedures, systems
and controls.
New climate reporting standards
New mandatory climate-related reporting standards have
been finalised by the Australian Accounting Standards
Board and legislation requiring compliance has been
passed by the Australian Parliament. Westpac will report
against these new requirements from its financial year
ending 30 September 2026.
As of 4 April 2024, new SEC rules in relation to
the disclosure of climate-related information that were
expected to apply to Westpac from FY26 have been
stayed pending the outcome of a lawsuit challenging
the rules in the United States Court of Appeals for the
Eighth Circuit.
APRA capital requirements
Operational risk capital overlays
In 2019 APRA applied $1 billion of additional capital
overlays to our operational risk capital requirement.
These overlays were applied through an increase in risk
weighted assets (RWA).
On 19 July 2024, APRA announced its decision to reduce
Westpac’s total operational risk capital overlay from
$1 billion to $500 million.
The impact of the $500 million overlay reduction on
our Level 2 common equity Tier 1 (CET1) capital ratio at
30 September 2024 was an increase of 18 basis points.
APRA Discussion Paper on Replacement of Additional
Tier 1 Capital
On 10 September 2024, APRA released a discussion paper
titled “A more effective capital framework for a crisis”
(APRA Discussion Paper) outlining potential amendments
to APRA’s prudential framework and seeking feedback
on a proposal for banks to phase out Additional Tier 1
(AT1) capital and replace it with greater amounts of Tier
2 capital and CET1 capital. The APRA Discussion Paper
follows APRA’s September 2023 discussion paper relating
to improving the effectiveness of AT1 capital instruments.
APRA’s proposed approach (applicable to large,
internationally active banks such as Westpac) would
replace the existing 1.5% AT1 capital with 0.25% CET1
and 1.25% Tier 2 capital, which would see the total
minimum CET1 requirement (including regulatory buffers)
increase from 10.25% to 10.50%. This includes increasing
the minimum CET1 requirement from 4.5% to 6.0% but
offsetting this increase by removing the Advanced portion
of the capital conservation buffer (CCB) of 1.25% in
order to maintain a minimum Tier 1 capital ratio of
6.0% and a minimum 2.5% CCB in line with the Basel
minimum standards.
The proposed changes, if implemented as set out in the
APRA Discussion Paper, would commence from 1 January
2027. In addition, from this date existing AT1 instruments
would be eligible to be included as Tier 2 capital, until
their first scheduled call date. All existing AT1 instruments
(issued by any Australian bank) would reach their first
scheduled call date by 2032 at the latest.
APRA is seeking feedback on the APRA Discussion Paper
by 8 November 2024 and intends to provide an update on
the consultation process in late 2024 and formally consult
on any proposed amendments to APRA’s prudential
framework in 2025.
Westpac significant developments – New Zealand
RBNZ review of overseas bank branches
On 21 August 2024 the RBNZ released the proposed
Branch Standard under the Deposit Takers Act 2023
which will implement decisions made as part of the
review of its policy for branches of overseas banks. The
proposed Branch Standard will require that overseas bank
branches only conduct business with wholesale clients;
the total size of an overseas bank’s branch cannot exceed
NZ$15 billion in total assets; and dual-operating branches
(such as Westpac’s New Zealand Branch) only conduct
business with “large” corporate and institutional clients. It
is proposed that “large” means those with consolidated
annual turnover of over NZ$50 million, total assets of over
NZ$75 million or total assets under management of over
NZ$1 billion (for funds management entities only). The
implementation date is expected to be in July 2028.
Westpac’s New Zealand Branch currently provides
financial markets, trade finance and international payment
products and services to customers referred by WNZL.
We expect the RBNZ’s Branch Standard will require
changes to the activities Westpac’s New Zealand Branch
undertakes, and as a result, WNZL may also make changes
to the scope of the activities it undertakes.
General regulatory changes affecting our businesses
Cyber security
Regulators have continued their focus on cyber
security due to high profile cyber-related incidents.
APRA is seeking to ensure that regulated entities
improve their cyber security practices, focusing on
the effective implementation of ongoing compliance
with Prudential Standard CPS 234 Information Security.
APRA has been actively communicating with entities to
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WESTPAC 2024 ANNUAL REPORT
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emphasise the importance of cyber resilience, including
releasing two letters in June and August 2024 to
regulated entities highlighting expectations about the
effective implementation of cyber controls including
data backups, security in configuration management,
privileged access management, and security testing.
Similarly, ASIC is emphasising improved cybersecurity
at the companies it regulates and has indicated a
focus on improving cyber resilience through proposed
testing strategies. The Australian Signals Directorate and
the Australian Cyber Security Centre are increasingly
providing threat intelligence and tailored guidance to
help organisations enhance their information security
measures. We will continue to engage with regulators
and the government more broadly regarding cyber-related
regulation, legislation and policy.
We continue to work on enhancing our systems and
processes to mitigate cyber security risks, including those
related to third parties, and to respond to changes in
regulation. Details about operational risks and information
security risks, including cyberattacks, are set out in the
2024 Risk Factors.
Artificial Intelligence
On 5 September 2024 the Australian
Government published:
•
a voluntary AI Safety Standard, implementing
risk- based guardrails for how Australian organisations
should safely and responsibly use AI; and
•
a consultation for introducing mandatory guardrails on
how to use AI safely and responsibly when developing
and deploying AI in Australia in high-risk settings
(consultation submissions closed 4 October 2024).
We continue to work on enhancing our systems and
processes to mitigate risks that may be amplified by
AI and collaborating with industry and government to
shape development of AI regulation, including by making
a submission as part of the consultation. Details about
operational risks and information security risks, including
AI, are set out in the 2024 Risk Factors. Details about
how we are leveraging the power of AI are outlined in the
Technology section (page 38).
Reforms to the Privacy Act
On 12 September 2024, the Federal Attorney-General
introduced into Parliament the Privacy and Other
Legislation Amendment Bill 2024 (Cth) which implements
the first tranche of agreed recommendations from the
Australian Government’s Privacy Act Review.
Key changes introduced by the first tranche include
the following:
•
a new statutory tort for serious invasions of privacy;
•
greater transparency for individuals regarding the use
of their personal information in automated decisions
that impact them;
•
new criminal offences for the malicious release of
personal data (known as doxxing); and
•
enhanced enforcement powers and new civil penalties
which can be tailored according to the seriousness of a
privacy breach.
A number of proposed reforms from the Privacy Act
Review have been deferred, with the expectation that a
draft Tranche 2 will be developed for consultation at a
later stage.
Revised Banking Code of Practice
On 27 June 2024, ASIC approved a new version of
the Australian Banking Association’s Banking Code of
Practice (the Code) with an implementation date of
28 February 2025 for each bank that has adopted the
Code (including Westpac).
The strengthened Code reflects the consultations both the
ABA and ASIC conducted with stakeholders, consumer
representatives and the BCCC, and includes uplifts to
existing provisions and additional protections for small
business customers, guarantors, vulnerable customers
and customers requiring additional support. These
updates include:
•
an expanded small business definition that increases
the borrowing limit from $3 million to $5 million which
is anticipated to provide up to 10,000 more small
businesses with access to the Code protections;
•
a new obligation to ensure that a meeting is held with
a guarantor in the absence of the borrower before
signing a guarantee;
•
an updated vulnerability definition that expands the
categories of vulnerability and recognises that a
customer can become vulnerable at any time;
•
updated provisions for managing deceased
estates; and
•
an uplift of the inclusivity and accessibility provisions
to expressly include LGBTQIA+ persons and a new
commitment to organise or refer customers to free
support services.
Legal proceedings
Our entities are parties to legal proceedings from time
to time arising from the conduct of our business. Certain
litigation (including regulatory proceedings) and class
actions are described as required in Note 25 to the
financial statements (page 238).
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PERFORMANCE
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GROUP PERFORMANCE
Performance summary
Key financial information
Impact of Notable Items
Review of earnings
Credit quality
Balance sheet and funding
Capital and dividends
SEGMENT REPORTING
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Disclosure regarding forward-looking statements
This 2024 Annual Report contains statements that constitute ‘forward-looking statements’ within the meaning of Section
21E of the US Securities Exchange Act of 1934.
Forward-looking statements are statements that are not historical facts. Forward-looking statements appear in a number
of places in this 2024 Annual Report and include statements regarding our current intent, belief or expectations with
respect to our business and operations, macro and micro economic and market conditions, results of operations
and financial condition and performance, capital adequacy and liquidity and risk management, including, without
limitation, future loan loss provisions and financial support to certain borrowers, forecasted economic indicators and
performance metric outcomes, indicative drivers, climate- and other sustainability-related statements, commitments,
targets, projections and metrics, and other estimated and proxy data.
Words such as ‘will’, ‘may’, ‘expect’, ‘intend’, ‘seek’, ‘would’, ‘should’, ‘could’, ‘continue’, ‘plan’, ‘estimate’, ‘anticipate’,
‘believe’, ‘probability’, ‘indicative’, ‘risk’, ‘aim’, ‘outlook’, ‘forecast’, ‘assumption’, ‘projection’, ‘target’, ‘goal’, ‘guidance’,
‘objective’, ‘ambition’ or other similar words, are used to identify forward-looking statements. These statements reflect
our current views on future events and are subject to change, certain known and unknown risks, uncertainties and
assumptions and other factors which are, in many instances, beyond our control (and the control of our officers,
employees, agents, and advisors), and have been made based on management’s current expectations or beliefs
concerning future developments and their potential effect upon Westpac.
Forward-looking statements may also be made, verbally or in writing, by members of Westpac’s management or
Board in connection with this 2024 Annual Report. Such statements are subject to the same limitations, uncertainties,
assumptions and disclaimers set out in this document.
There can be no assurance that future developments or performance will align with our expectations or that the effect of
future developments on us will be those anticipated. Actual results could differ materially from those we expect or which
are expressed or implied in forward-looking statements, depending on various factors including, but not limited to:
•
information security breaches, including cyber attack events
•
the effect of, and changes in, laws, regulations, regulatory policy, taxation or accounting standards or practices, and
government and central bank monetary policies, including changes to liquidity, leverage and capital requirements
•
regulatory investigations, reviews (including industry reviews) and other actions, inquiries, litigation, fines, penalties,
restrictions or other regulator-imposed conditions, including from our actual or alleged failure to comply with laws,
regulations or regulatory policy
•
the effectiveness of our risk management practices, including our framework, policies, processes, systems
and employees
•
the reliability and security of Westpac’s technology and risks associated with changes to technology systems
•
geopolitical events or other changes in countries in which Westpac or its customers or counterparties operate
•
climate-related risks (including physical, transition and liability risks) that may arise from changing climate patterns,
and risks associated with the transition to a lower carbon economy (including Westpac’s ambition to become a
net-zero, climate resilient bank) or risks from legal and regulatory action, or risks from other sustainability factors
such as human rights and natural capital
•
the failure to comply with financial crime obligations (including anti-money laundering and counter-terrorism
financing laws, anti-bribery and corruption laws, sanctions laws and tax transparency laws), which has had, and could
further have, adverse effects on our business and reputation
•
internal and external events which may adversely impact our reputation
•
litigation and other legal proceedings and regulator investigations and enforcement actions (including the liability of
Westpac to pay significant monetary settlements and legal costs in order to resolve a dispute)
•
market volatility and disruptions, including uncertain conditions in funding, equity and asset markets and any losses
or business impacts we or our customers or counterparties may experience
•
the incidence of inadequate capital levels
•
changes in economic conditions, consumer or business spending, saving and borrowing habits in Australia, New
Zealand and other countries in which we or our customers or counterparties operate and our ability to maintain or to
increase market share, margins and fees, and control expenses
•
adverse asset, credit or capital market conditions or an increase in defaults, impairments and provisioning because of
a deterioration in economic conditions
•
sovereign risks, including the risk that governments will default on their debt obligations, fail to perform contractual
obligations, or be unable to refinance their debts
•
changes to Westpac’s credit ratings or the methodology used by credit rating agencies
•
the effects of market competition and competition regulatory policy impacting the areas in which we operate
•
operational risks resulting from ineffective processes and controls
•
levels of inflation, changes to interest rates, exchange rates and market and monetary fluctuations and volatility
•
poor data quality, data availability or data retention
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Disclosure regarding forward-looking statements (Continued)
•
strategic decisions including diversification, innovation, retention, divestment, acquisitions, expansion activity,
integration and decisions to shut down some operations
•
failure to recruit and retain key executives, employees and Directors
•
changes to our critical accounting assumptions and estimates and changes to the value of our intangible assets; and
•
various other factors including those beyond Westpac’s control.
The above list is not exhaustive. For certain other factors that may impact on forward-looking statements made by
Westpac, refer to Risk Management (page 40) and the 2024 Risk Factors. When relying on forward-looking statements
to make decisions with respect to Westpac, investors and others relying on information in this 2024 Annual Report
should carefully consider the foregoing factors and other uncertainties and events.
Except as required by law, we assume no obligation to revise or update any forward-looking statements in this 2024
Annual Report, whether from new information, future events, conditions, or otherwise, after the date of this 2024
Annual Report.
Further important information regarding climate change and sustainability-related statements
This 2024 Annual Report contains forward-looking statements and other representations relating to ESG topics,
including but not limited to climate change, net zero, climate resilience, natural capital, emissions intensity, human
rights and other sustainability-related statements, commitments, targets, projections, scenarios, risk and opportunity
assessments, pathways, forecasts, estimated projections and other proxy data.
These are subject to known and unknown risks, and there are significant uncertainties, limitations, risks and assumptions
in the metrics and modelling on which these statements rely.
In particular, the metrics, methodologies and data relating to climate and sustainability are rapidly evolving and
maturing, including variations in approaches and common standards in estimating and calculating emissions, and
uncertainty around future climate- and sustainability-related policy and legislation. There are inherent limits in the
current scientific understanding of climate change and its impacts. Some material contained in this 2024 Annual Report
may include information including, without limitation, methodologies, modelling, scenarios, reports, benchmarks, tools
and data, derived from publicly available or government or industry sources that have not been independently verified.
No representation or warranty is made as to the accuracy, completeness or reliability of such information. There is a risk
that the estimates, judgements, assumptions, views, models, scenarios or projections used by Westpac may turn out to
be incorrect. These risks may cause actual outcomes, including the ability to meet commitments and targets, to differ
materially from those expressed or implied in this 2024 Annual Report and the 2024 Risk Factors. The climate- and
sustainability-related forward-looking statements made in this 2024 Annual Report and the 2024 Risk Factors are not
guarantees or predictions of future performance and Westpac gives no representation, warranty or assurance (including
as to the quality, accuracy or completeness of these statements), nor guarantee that the occurrence of the events
expressed or implied in any forward-looking statement will occur. There are usually differences between forecast and
actual results because events and actual circumstances frequently do not occur as forecast and these differences may be
material. Westpac will continue to review and develop its approach to ESG as this subject area matures.
Currency of presentation, exchange rates and certain definitions
In this Annual Report, ‘financial statements’ means our audited consolidated balance sheets as at 30 September 2024
and 30 September 2023 and income statements, statements of comprehensive income, changes in equity and cash flows
for each of the years ended 30 September 2024, 2023 and 2022 together with accompanying notes which are included
in this Annual Report.
Our financial year ends on 30 September. As used throughout this Annual Report, the financial year ended
30 September 2024 is referred to as 2024 and other financial years are referred to in a corresponding manner.
All dollar values in this report are in Australian dollars unless otherwise noted or the context otherwise requires,
references to ‘dollars’, ‘dollar amounts’, ‘$’, ‘AUD’ or ‘A$’ are to Australian dollars. References to ‘US$’, ‘USD’ or ‘US
dollars’ are to United States dollars, references to ‘NZ$’, ‘NZD’ or ‘NZ dollars’ are to New Zealand dollars and references
to 'GBP' are to British Pound Sterling. Refer to Exchange rates (page 290) for information regarding the rates of
exchange between the Australian dollar and the US dollar applied by Westpac as part of its operating activities for
2024, 2023 and 2022.
Any discrepancies between totals and sums of components in tables contained in this Annual Report are due to
rounding. Percentage (%) movements are shown as % unless otherwise stated to all the tables in this document and
represent the percentage change between 2024 and 2023.
Information on terms, acronyms and calculations used in this report are provided in the Glossary of Abbreviations and
Defined Terms (pages 298-301).
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Selected consolidated financial and operating data
We have derived the following selected financial information, as of, and for the financial years ended,
30 September 2024, 2023 and 2022 from our consolidated financial statements and related notes, except for certain
data such as market share information, and other regulatory information which are derived from filings with our
regulators and are unaudited.
This information should be read together with our audited consolidated financial statements and the accompanying
notes included elsewhere in this Annual Report.
Only the Financial Statements are audited
PricewaterhouseCoopers has audited the financial statements, accompanying notes and the Consolidated Entity
Disclosure Statement contained within the Financial Statements (pages 143- 279 ) of this Annual Report and has
issued an unmodified audit report. All other sections of the Annual Report have not been subject to audit by
PricewaterhouseCoopers. The financial information contained in this Annual Report includes information extracted from
the audited financial statements together with information that has not been audited.
Presentation changes
In 2024, we have made changes to both the composition of our segments and the measurement of segment
performance. Comparatives have been restated to align to the current period presentation. Refer to Segment Reporting
(pages 130-141) for further details.
Certain comparative information has also been revised where appropriate to conform to changes in presentation in the
current period to enhance comparability.
Non-AAS financial measures
Westpac’s statutory results are prepared in accordance with AAS and are also compliant with IFRS.
In assessing Westpac’s performance and that of our operating segments we use a number of financial measures,
including amounts, measures and ratios that are presented on a non-AAS basis, as described below.
Non-AAS financial measures and ratios do not have standardised meanings under AAS. As such they are unlikely to be
directly comparable to similar measures presented by other companies and should not be viewed in isolation from, or as
a substitute for, the AAS results.
Our non-AAS measures fall within the following categories:
MEASURE/RATIO
DESCRIPTION
FURTHER
INFORMATION
Performance
measures
excluding the
impact of
Notable Items,
businesses
sold
The net interest income, non-interest income, operating expenses and
segment reporting sections of this report include performance measures
that exclude Notable Items, businesses sold and/or held-for-sale.
Notable Items are items that management believes are not reflective of
Westpac’s ongoing business performance. Details of Notable Items are
included in Impact of Notable Items (page 106).
Businesses sold reflect the contribution to Westpac’s results in the period
sold prior to their sale. It also includes any gains/ losses related to their
sale but excludes items that have been identified as Notable Items.
Performance measures which are adjusted for one or more of these
items include:
•
Net interest income
•
Non-interest income (including net fee income, net wealth
management and insurance income, trading income and other income)
•
Operating expenses (including staff expenses, occupancy expenses,
technology expenses and other expenses)
•
Pre-provision profit
•
Net profit
•
Net profit attributable to owners of WBC
•
Return on average ordinary equity
•
Return on tangible ordinary equity
Management considers this information useful as these measures provide a
view that reflects Westpac’s ongoing business performance.
See pages 6-7, 8-9,
12-13, 16-19, 68-93,
104-129, 130-141,
and 293-294.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
103
Non-AAS financial measures (Continued)
MEASURE/RATIO
DESCRIPTION
FURTHER
INFORMATION
Pre-provision
profit
Pre-provision profit is net profit/(loss) excluding credit impairment
(charges)/benefits and income tax (expense)/benefit.
This is calculated as net interest income plus non-interest income less
operating expenses. This includes (charges)/benefits relating to provisions
and impairment other than from expected credit losses.
Management considers this information useful as this measure provides
readers with a view of the impact of the operating performance
of Westpac.
See pages 16-19,
104-129, 130-141,
and 293-294.
Basic earnings
per share
(excluding
Notable Items)
and Diluted
earnings per
share
(excluding
Notable Items)
Basic earnings per share (excluding Notable Items) is calculated as
net profit attributable to owners of WBC (adjusted for RSP dividends)
excluding Notable items divided by the weighted average number of
ordinary shares on issue during the period, adjusted for treasury shares.
Diluted earnings per share is calculated by adjusting the basic earnings per
share (excluding Notable Items) by assuming all dilutive potential ordinary
shares are converted.
Management considers this information useful as these measures provide
a view of the basic and diluted earnings per share based on the ongoing
operating performance of Westpac.
See pages 105
and 293-294
Core net
interest
income and
core net
interest margin
(NIM)
Core net interest income is calculated as net interest income excluding
Notable Items, and Treasury and Markets income.
Core NIM is calculated as core net interest income (annualised where
applicable) divided by average interest earning assets.
Management considers this information useful as these measures provide a
view of the underlying performance of Westpac’s net interest income and
margin, for lending, deposit and wholesale funding.
See pages 16-19,
105 and 108.
Dividend
payout ratio
(excluding
Notable Items)
Calculated as ordinary dividend paid/declared on issued shares
(net of Treasury shares) divided by the net profit attributable to owners
of WBC excluding Notable Items.
Management considers this information useful as it provides a view of
the dividend payout ratio based on the ongoing operating performance
of Westpac.
See pages 105
and 293-294.
Expense to
income ratio
(excluding
Notable Items)
Calculated as operating expenses excluding Notable Items divided by net
operating income excluding Notable Items.
Management considers this information useful as this measure provides a
view of the efficiency of the ongoing operating performance of Westpac.
See pages 16-19,
105, 116-117
and 293-294.
Average
tangible
ordinary
equity and
Return on
average
tangible
ordinary
equity (ROTE)
Average tangible ordinary equity is calculated as average ordinary
equity less average goodwill and other intangible assets (excluding
capitalised software).
Return on average tangible ordinary equity is calculated as net profit
attributable to owners of WBC adjusted for RSP dividends (annualised
where applicable) divided by average tangible ordinary equity.
Management considers this information useful as these measures are
commonly used as a performance measure by WBC, investors, analysts
and others in assessing Westpac's application of equity.
See pages 6-7,
12-13, 16-19, 105
and 293-294.
References to websites
Information contained in or accessible through the websites mentioned in this Annual Report does not form part of this
Annual Report unless we specifically state that it is incorporated by reference and forms part of this Annual Report.
104
WESTPAC 2024 ANNUAL REPORT
GROUP PERFORMANCE
Performance summary
$m
2024
2023
2022
% Mov't
2024 - 2023
Net interest income
18,753
18,317
17,161
2
Non-interest income
2,835
3,328
2,445
(15)
Net operating income
21,588
21,645
19,606
-
Operating expenses
(10,944)
(10,692)
(10,802)
2
Pre-provision profit
10,644
10,953
8,804
(3)
Impairment (charges)/benefits
(537)
(648)
(335)
(17)
Profit before income tax expense
10,107
10,305
8,469
(2)
Income tax expense
(3,117)
(3,104)
(2,770)
-
Profit after income tax expense
6,990
7,201
5,699
(3)
Profit attributable to non-controlling interests (NCI)
-
(6)
(5)
(100)
Net profit attributable to owners of WBC
6,990
7,195
5,694
(3)
Notable Items
(123)
(173)
(874)
(29)
Effective tax rate
30.84%
30.12%
32.71%
72 bps
Performance Summary excluding Notable Items
$m
2024
2023
2022
% Mov't
2024 - 2023
Net interest income
18,916
18,414
16,606
3
Non-interest income
2,847
3,128
3,299
(9)
Net operating income
21,763
21,542
19,905
1
Operating expenses
(10,944)
(10,232)
(10,181)
7
Pre-provision profit
10,819
11,310
9,724
(4)
Impairment (charges)/benefits
(537)
(648)
(335)
(17)
Profit before income tax expense
10,282
10,662
9,389
(4)
Income tax expense
(3,169)
(3,288)
(2,816)
(4)
Profit after income tax expense
7,113
7,374
6,573
(4)
Profit attributable to non-controlling interests (NCI)
-
(6)
(5)
(100)
Net profit attributable to owners of WBC
7,113
7,368
6,568
(3)
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
105
Key financial information
2024
2023
2022
% Mov't
2024 - 2023
Shareholder value
Basic earnings per ordinary share (cents)
200.9
205.3
159.9
(2)
Basic earnings per ordinary share (ex Notable Items) (cents)
204.4
210.3
184.5
(3)
Diluted earnings per ordinary share (cents)
191.7
195.2
152.4
(2)
Diluted earnings per ordinary share (ex Notable Items) (cents)
194.8
199.6
174.9
(2)
Weighted average ordinary shares (millions)
3,476
3,502
3,559
(1)
Fully franked ordinary dividends per share (cents)
151
142
125
6
Fully franked special dividend per share (cents)
15
-
-
-
Dividend payout ratioa
74.62%
69.20%
76.79%
large
Dividend payout ratio (ex Notable Items)a
73.32%
67.57%
66.57%
large
Return on average ordinary equity
9.77%
10.09%
8.10%
(32 bps)
Return on average ordinary equity (ex Notable Items)
9.94%
10.34%
9.34%
(40 bps)
Return on average tangible equity (ROTE)b
11.01%
11.39%
9.17%
(38 bps)
ROTE (ex Notable Items)
11.21%
11.67%
10.58%
(46 bps)
Average ordinary equity ($m)
71,493
71,229
70,268
-
Average tangible ordinary equity ($m)
63,415
63,117
62,078
-
Average total equity ($m)
71,549
71,274
70,323
-
Net tangible asset per ordinary share ($)
17.75
17.58
17.18
1
Business performance
Group NIM
1.93%
1.95%
1.94%
(2 bps)
Core NIMb
1.82%
1.86%
1.76%
(4 bps)
Treasury & markets impact on NIMb
0.13%
0.10%
0.12%
3 bps
Notable Items impact on NIM
(0.02%)
(0.01%)
0.06%
(1 bps)
Average interest-earning assets ($m)c
970,055
940,449
886,205
3
Return on average assets
0.66%
0.70%
0.58%
(4 bps)
Expense to income ratio
50.69%
49.40%
55.10%
129 bps
Expense to income ratio (ex Notable Items)
50.29%
47.50%
51.15%
279 bps
Full time equivalent employees (FTE)
35,240
36,146
37,476
(3)
Revenue per FTE ($'000's)
612
577
508
6
Capital, funding and liquidity
Level 2 common equity Tier 1 capital ratio:
- Australian Prudential Regulation Authority (APRA)
12.49%
12.38%
11.29%
11 bps
- Internationally comparable
18.27%
18.73%
17.57%
(46 bps)
Credit RWA ($m)
345,964
339,758
362,098
2
Total risk weighted assets (RWA) ($m)
437,430
451,418
477,620
(3)
Liquidity coverage ratio (LCR)
133%
134%
132%
(59 bps)
Net stable funding ratio (NSFR)
112%
115%
121%
(261 bps)
Deposit to loan ratio
83.50%
82.89%
82.85%
61 bps
Credit quality and impairment charges
Gross impaired exposures to gross loans
0.24%
0.17%
0.20%
7 bps
Gross impaired exposures provisions to gross impaired exposures
41.28%
43.47%
47.95%
(219 bps)
Collectively assessed provisions to credit RWA
132 bps
135 bps
116 bps
(3 bps)
Total provisions to credit RWA
147 bps
145 bps
128 bps
2 bps
Total committed exposure (TCE) ($bn)
1,252
1,218
1,186
3
Total stressed exposures as a % of TCE
1.45%
1.26%
1.07%
19 bps
Total provision to gross loans
63 bps
63 bps
62 bps
-
Mortgages 90+ day delinquencies
1.05%
0.81%
0.69%
24 bps
Other consumer loans 90+ day delinquencies
1.40%
1.28%
1.56%
12 bps
Impairment charges/(benefits) to average loans
7 bps
9 bps
5 bps
(2 bps)
Balance sheet ($m)
Loans
806,767
773,254
739,647
4
Total assets
1,077,544
1,029,774
1,014,198
5
Customer deposits
673,615
640,951
612,834
5
a.
Excludes the impact of special dividends and the dividend component of the off-market share buyback in 2022.
b.
Comparatives have been revised to align with current period presentation.
c.
Net of average mortgage offset balances.
106
WESTPAC 2024 ANNUAL REPORT
GROUP PERFORMANCE
Impact of Notable Items
To assist in explaining our financial performance, we report Notable Items, which represent certain items that are not
considered to be reflective of Westpac's ongoing business performance.
Notable Items broadly fall into the following categories:
•
Unrealised fair value gains/(losses) on economic hedges that do not qualify for hedge accounting
•
Net ineffectiveness on qualifying hedges
•
Large items that are not reflective of 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
In determining dividends, the impact of Notable Items is typically excluded.
Notable Items reduced net profit after tax in 2024 by $123 million (2023: $173 million, 2022: $874 million).
Details of Notable Items (post tax) impacting on 2024 and 2023 results are presented below:
Category
Net profit impact
Detail
2024
Unrealised fair value gains/
(losses) on economic hedges
that do not qualify for
hedge accounting
$128 million
reduction
The unrealised fair value loss on hedges of accrual accounted term funding transactions for
the year was $128 million. This represents a timing difference for the statutory results but
does not affect profits over the life of the hedge.
Net ineffectiveness on
qualifying hedges
$5 million
benefit
The net ineffectiveness on qualifying hedges of $5 million for the period arises from the fair
value movement in these hedges which reverses over time and therefore does not affect
profits over time.
Total Notable Items
$123 million
reduction
2023
The impact of asset sales
and revaluations
$256 million
benefit
Gain on the sale of Advance Asset Management Limited of $243 million. This also includes a
tax refund related to transaction and separation costs.
Provision for remediation,
litigation, fines and penalties
$176 million
reduction
Net operating income - $103 million
•
Decrease in revenue due to additional repayments to institutional, business and
superannuation customers.
Expenses - $132 million
•
An increase in provisions for costs associated with customer remediation programs,
regulatory investigations and litigation of $90 million.
•
Estimated costs for the one-off levy for the Commonwealth’s Compensation Scheme of
Last Resort of $42 million.
Restructuring costs
$140 million
reduction
Costs associated with accelerating organisation simplification and the discontinuance of
specialist businesses.
The write-down of assets
$87 million
reduction
The write-down of property assets and costs related to the reduction in corporate office
space and accelerated consolidation of branches.
Unrealised fair value gains/
(losses) on economic hedges
that do not qualify for
hedge accounting
$92 million
reduction
The unrealised fair value loss on hedges of accrual accounted term funding transactions for
the year was $92 million. This represents a timing difference for the statutory results but does
not affect profits over the life of the hedge.
Net ineffectiveness on
qualifying hedges
$66 million
benefit
The net ineffectiveness on qualifying hedges of $66 million for the period arises from the
fair value movement in these hedges which reverses over time and therefore does not affect
profits over time.
Total Notable Items
$173 million
reduction
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
107
Impact of Notable Items (Continued)
A summary of 2024, 2023 and 2022 Notable Items is presented below:
$m
Economic
hedges
Hedge
ineffectiveness
Provisions for
remediation,
litigation,
fines and
penalties
Asset sales
and
revaluations
The write-
down of
assets
Restructuring
costs
Total
2024
Net interest income
(171)
8
-
-
-
-
(163)
Non-interest income
(12)
-
-
-
-
-
(12)
Net operating income
(183)
8
-
-
-
-
(175)
Operating expenses
-
-
-
-
-
-
-
Pre-provision profit
(183)
8
-
-
-
-
(175)
Income tax (expense)/benefit and NCI
55
(3)
-
-
-
-
52
Net profit/(loss)
(128)
5
-
-
-
-
(123)
2023
Net interest income
(113)
94
(78)
-
-
-
(97)
Non-interest income
(18)
-
(25)
243
-
-
200
Net operating income
(131)
94
(103)
243
-
-
103
Operating expenses
-
-
(132)
-
(126)
(202)
(460)
Pre-provision profit
(131)
94
(235)
243
(126)
(202)
(357)
Income tax (expense)/benefit and NCI
39
(28)
59
13
39
62
184
Net profit/(loss)
(92)
66
(176)
256
(87)
(140)
(173)
2022
Net interest income
633
(77)
(1)
-
-
-
555
Non-interest income
39
-
(52)
(841)
-
-
(854)
Net operating income
672
(77)
(53)
(841)
-
-
(299)
Operating expenses
-
-
(126)
(144)
(351)
-
(621)
Pre-provision profit
672
(77)
(179)
(985)
(351)
-
(920)
Income tax (expense)/benefit and NCI
(202)
25
46
109
68
-
46
Net profit/(loss)
470
(52)
(133)
(876)
(283)
-
(874)
108
WESTPAC 2024 ANNUAL REPORT
GROUP PERFORMANCE
Review of earnings
Pages 108 to 129 provides a comparative discussion of Westpac’s performance for the financial year ended
30 September 2024 compared to 2023, unless otherwise specified. Factors that relate primarily to a single business
segment are discussed in more detail in Segment Reporting (pages 130-141).
Net interest income
2024
2023
2022
% Mov't
2024 - 2023
Net interest Income ($m)
Net interest income
18,753
18,317
17,161
2
Core net interest incomea
17,608
17,519
15,532
1
Notable Items
(163)
(97)
555
68
Treasurya,b
1,056
729
951
45
Marketsa
252
166
123
52
Average interest earning assets ($m)c
Loans
732,660
703,832
676,469
4
Housinga,d
500,338
484,214
469,492
3
Personal
11,754
13,055
15,043
(10)
Business
220,568
206,563
191,934
7
Liquid assets
206,266
210,960
191,749
(2)
Other interest-earning assets
31,129
25,657
17,987
21
Average interest earning assets
970,055
940,449
886,205
3
NIM (%)
NIM
1.93%
1.95%
1.94%
(2 bps)
Core NIMa
1.82%
1.86%
1.76%
(4 bps)
Treasury & Markets impact on NIMa
0.13%
0.10%
0.12%
3 bps
Notable Items impact on NIM
(0.02%)
(0.01%)
0.06%
(1 bps)
a.
Comparatives have been revised to align with current period presentation.
b.
Treasury net interest income excludes capital benefit.
c.
Includes assets held for sale.
d.
Net of average mortgage offset balances.
Net interest income increased 2% to $18,753 million. Key drivers included:
•
Higher core net interest income, up 1% to $17,608 million, due to balance sheet growth which was partly offset by
lower net interest margin;
•
Notable Items reduced income by $163 million compared to a reduction of $97 million in the prior year; and
•
Treasury and Markets income, up 46% to $1,308 million due to stronger performance by Treasury which was well
positioned for interest rate volatility.
Average interest-earning assets increased by 3% to $970.1 billion, including growth of 7% in business and 3% in
housing loans respectively. This was partially offset by the reduction in Personal loans which included auto finance
loan runoff. Average liquid assets declined by 2% while other interest-earning assets increased by 21% due to increased
holdings of trading securities, mainly relating to holdings of reverse repurchase agreements in Markets to facilitate
client transactions.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
109
Review of earnings (Continued)
Net interest margin
T&M2
(1bps)
0.09
0.11
1.82
2024
Notable Items
1.86
2023
(10bps)
(1bp)
Deposits
2bps
Loans
Liquid Assets
WSF1
3bps
1.95
1.93
(2bps)
7bps
Capital & Other
NIM down 2bps
Net interest margin movement (%)
Full Year 2023 – Full Year 2024
Core NIM down 4bps
1. Wholesale Funding Cost.
2. Treasury & Markets contribution.
Notable Items, Treasury & Markets
Core NIM
•
The NIM decreased by 2 basis points to 1.93%. NIM comprised:
–
Core NIM of 1.82%, down 4 basis points with key drivers described below;
–
Treasury and Markets added 13 basis points, up 3 basis points due to a higher Treasury contribution from
favourable positioning for interest rate volatility; and
–
Notable Items from unrealised fair value losses for accounting purposes related to economic hedges of term
funding detracted 2 basis points, having detracted 1 basis point in the prior year.
•
The 4 basis points decrease in Core NIM comprised the following movements:
–
Loan interest spread: 10 basis point decrease mainly from tighter spreads on mortgage lending in Australia due
to competition for new and existing customers. Spreads on credit cards and business loans also contributed to
margin decline. The contraction slowed through the period, with loan interest spreads down 1 basis point in the
Second Half 2024;
–
Wholesale funding: 2 basis point decrease as spreads on new term wholesale funding were higher than maturing
facilities, which included the Term Funding Facility (TFF);
–
Deposit interest spread: 1 basis point decrease included the impacts of a mix shift towards lower spread savings
and term deposit accounts. Earnings on hedged deposits were higher;
–
Liquid Assets: 2 basis point increase from a reduction in liquid asset balances; and
–
Capital and Other: 7 basis point increase primarily from higher earnings on capital balances as a result of higher
interest rates.
110
WESTPAC 2024 ANNUAL REPORT
GROUP PERFORMANCE
Review of earnings (Continued)
Average Balance Sheet
2024
2023
2022
Average
balance
Interest
income
Average
rate
Average
balance
Interest
income
Average
rate
Average
balance
Interest
income
Average
rate
$m
$m
%
$m
$m
%
$m
$m
%
Assets
Interest earning assets
Loansa
732,660
44,460
6.1
703,832
35,582
5.1
676,054
21,096
3.1
Housinga
500,338
28,560
5.7
484,214
22,360
4.6
469,492
13,666
2.9
Personal
11,754
1,137
9.7
13,055
1,104
8.5
15,043
1,200
8.0
Businessa
220,568
14,763
6.7
206,563
12,118
5.9
191,519
6,230
3.3
Trading securities and financial
assets measured at FVIS
36,350
1,600
4.4
30,086
1,143
3.8
22,836
347
1.5
Investment securities
93,925
3,494
3.7
74,877
2,037
2.7
77,781
1,126
1.4
Other interest earning assetsb
107,120
4,793
4.5
131,654
4,990
3.8
109,109
676
0.6
Assets held for sale
-
-
-
-
-
-
425
6
1.4
Total interest earning assets and
interest incomea
970,055
54,347
5.6
940,449
43,752
4.7
886,205
23,251
2.6
Non-interest earning assets
Derivative financial instruments
16,786
23,423
23,395
Assets held for sale
-
-
2,444
All other assetsa,c
70,468
59,356
62,719
Total non-interest earning assetsa
87,254
82,779
88,558
Total assets
1,057,309
1,023,228
974,763
Liabilities
Interest bearing liabilities
Deposits and other borrowingsd
574,119
23,657
4.1
544,041
16,918
3.1
508,950
3,209
0.6
Certificates of deposit
48,889
2,386
4.9
47,887
1,921
4.0
47,308
395
0.8
Transactions
131,894
4,529
3.4
139,275
3,412
2.4
141,643
709
0.5
Savings
208,866
7,667
3.7
185,211
5,182
2.8
181,918
791
0.4
Term
184,470
9,075
4.9
171,668
6,403
3.7
138,081
1,314
1.0
Repurchase agreements
26,551
937
3.5
39,652
556
1.4
37,779
150
0.4
Loan capital
40,212
1,848
4.6
34,384
1,448
4.2
30,708
1,026
3.3
Other interest bearing liabilitiese
185,809
9,152
4.9
176,699
6,513
3.7
158,251
1,705
1.1
Total interest bearing liabilities
and interest expensed
826,691
35,594
4.3
794,776
25,435
3.2
735,688
6,090
0.8
Non-interest bearing liabilities
Deposits and other borrowingsd
131,632
131,043
136,251
Derivative financial instruments
21,413
26,353
24,750
Liabilities held for sale
-
-
682
All other liabilities
6,024
(218)
7,069
Total non-interest
bearing liabilitiesd
159,069
157,178
168,752
Total liabilities
985,760
951,954
904,440
Shareholders' equity
71,493
71,229
70,268
Non-controlling interests
56
45
55
Total equity
71,549
71,274
70,323
Total liabilities and equity
1,057,309
1,023,228
974,763
Loansa
Australia
633,772
37,865
6.0
607,154
30,164
5.0
582,456
17,694
3.0
New Zealand
92,222
6,155
6.7
90,130
5,028
5.6
87,236
3,203
3.7
Other overseas
6,666
440
6.6
6,548
390
6.0
6,362
199
3.1
Deposits and other borrowingsd
Australia
489,693
19,413
4.0
460,149
13,544
2.9
427,097
2,249
0.5
New Zealand
65,070
3,220
4.9
63,760
2,464
3.9
60,678
765
1.3
Other overseas
19,356
1,024
5.3
20,132
910
4.5
21,175
195
0.9
a.
Certain portions of loans are non-interest bearing and are presented below in All other assets. The non-interest bearing portion represents
the impact of mortgage offset deposits which are taken into consideration when calculating interest charged on loans. In 2024, offset
loans within New Zealand were reclassified and presented within All other assets. Comparatives have been revised to align with current
period presentation.
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 $54,980 million (2023: $48,022 million, 2022: $45,996 million).
d.
In 2024, certain deposit products were reclassified between Savings and Transactions to align with how they are marketed to customers. The
Group has also revised the attribution of certain deposit products between interest bearing and non-interest bearing. Comparatives have been
revised to align with current period presentation.
e.
Interest expense includes the net impact of Treasury balance sheet management activities and the bank levy.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
111
Review of earnings (Continued)
Loans
$m
2024
2023
2022
% Mov't
2024 - 2023
Australia
704,907
674,422
647,122
5
Housing
473,435
449,509
431,538
5
RAMS (in runoff)
29,836
35,965
35,844
(17)
Personal
9,403
9,638
9,722
(2)
Business
194,138
178,965
166,402
8
Auto finance (in runoff)a
2,116
4,195
7,344
(50)
Provisions
(4,021)
(3,850)
(3,728)
4
New Zealand (A$)
94,137
92,854
85,772
1
New Zealand (NZ$)
102,463
99,711
97,393
3
Housing
68,011
65,757
63,827
3
Personal
1,151
1,163
1,202
(1)
Business
33,802
33,298
32,764
2
Provisions
(501)
(507)
(400)
(1)
Other overseas (A$)
7,723
5,978
6,753
29
Total loans
806,767
773,254
739,647
4
a.
Includes personal and business auto finance loans.
Loans increased by 4% to $806.8 billion and comprised the following movements:
•
Australian housing loans excluding RAMS grew by 5% to $473.4 billion or 1.2x APRA housing system, with faster
growth in owner occupied mortgages. Customers continue to prefer variable rate mortgages which now account for
90% of total mortgages, up from 76% in September 2023;
•
RAMS housing loans were down 17% to $29.8 billion as the portfolio is closed to new business;
•
Contraction in Australian personal lending of 2% to $9.4 billion due to higher paydown and subdued new lending,
particularly in personal loans;
•
Growth in Australian business lending of 8% to $194.1 billion. The strong loan growth in WIB was primarily driven
by deepening relationships with existing customers in the institutional property, industrials & infrastructure sectors.
Additionally, Business segment loan growth was diversified with growth in our target industries of agriculture, health
and professional services;
•
Auto finance loans were down 50% to $2.1 billion as the portfolio continued to runoff. The sale of this portfolio was
announced post balance date in October 2024;
•
Growth in New Zealand lending of 3% to $102.5 billion in NZ$ terms, driven by growth in mortgages of 3% and
business lending of 2%; and
•
Growth in other overseas loan balances of 29% to $7.7 billion. This reflected growth in lending to US customers.
112
WESTPAC 2024 ANNUAL REPORT
GROUP PERFORMANCE
Review of earnings (Continued)
Deposits and other borrowings
$m
2024
2023
2022
% Mov't
2024 - 2023
Customer deposits
Australia
593,795
557,781
535,645
6
Transactionsa
110,393
114,097
137,361
(3)
Savingsa
197,415
179,110
148,153
10
Term
157,282
144,220
127,921
9
Non-interest bearinga
128,705
120,354
122,210
7
New Zealand (A$)
73,201
74,297
68,614
(1)
New Zealand (NZ$)
79,676
79,783
77,910
-
Transactionsa
9,595
8,762
9,609
10
Savingsa
19,433
20,185
21,423
(4)
Term
39,451
38,472
32,273
3
Non-interest bearinga
11,197
12,364
14,605
(9)
Other overseas (A$)
6,619
8,873
8,575
(25)
Total customer deposits
673,615
640,951
612,834
5
Certificates of deposit
46,874
47,217
46,295
(1)
Australia
33,215
32,947
30,507
1
New Zealand (A$)
1,711
2,247
2,588
(24)
Other overseas (A$)
11,948
12,023
13,200
(1)
Total deposits and other borrowings
720,489
688,168
659,129
5
a.
Comparatives have been revised to align with current period presentation.
Customer deposits grew by 5% to $673.6 billion and comprised the following movements:
•
Australian deposits up 6% to $593.8 billion, mainly from growth in higher interest bearing products in the Consumer
and WIB segments. Non-interest bearing deposits were up 7% to $128.7 billion, due to an increase in mortgage offset
balances, supported by customer preference for variable rate loans and customers shifting from fixed rate loans;
•
New Zealand deposits was stable at $79.7 billion in NZ$ terms from an increase in term deposits offset by a decline in
non-interest bearing deposits; and
•
Decrease in other overseas deposits by 25% to $6.6 billion, primarily in WIB term deposits due to competition.
The deposit to loan ratio of 83.5% was higher than 30 September 2023, with deposit growth broadly funding loan
growth during the year.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
113
Review of earnings (Continued)
Loans and deposits market share and system multiple metrics
2024
2023
2022
Market Share
Australia
ADI System (APRA)
Housing credit
21%
21%
22%
Personal credit cards
21%
21%
21%
Business credita
16%
15%
15%
Household deposits
21%
21%
20%
Business depositsb
18%
18%
18%
Financial system (Reserve Bank of Australia (RBA))
Housing credit
20%
21%
21%
Business creditc
14%
15%
15%
Retail and business depositsd
19%
19%
20%
New Zealand (Reserve Bank of New Zealand (RBNZ))e
Consumer lending
18%
18%
18%
Business lending
16%
16%
16%
Deposits
17%
18%
18%
System multiples
Australia
ADI System (APRA)
Housing credit
0.8
0.8
0.5
Personal credit cardsf
n/a
0.5
0.7
Business credita
1.2
0.8
0.9
Household deposits
1.1
1.3
0.7
Business depositsb,f
1.5
n/a
0.8
Financial system (RBA)
Housing credit
0.8
0.9
0.5
Business creditc
0.7
0.7
0.8
Retail and business depositsd
1.1
0.6
0.8
New Zealand (RBNZ)e
Consumer lending
0.9
0.8
1.0
Business lending
0.9
1.6
0.8
Depositsf
n/a
0.9
0.5
a.
Westpac Group’s business credit growth rate and multiples are based on ADI System published by APRA in the Monthly ADI statistics.
Business credit includes loans with Non-Financial businesses and Community service organisations across all segments.
b.
Westpac Group’s business deposit growth rate and multiples are based on ADI System published by APRA in the Monthly ADI statistics.
Business deposits include deposits from Non-Financial businesses and Community service organisations across all segments.
c.
Westpac Group’s business credit growth rate and multiples are based on Financial System as published in the RBA Lending and Credit
Aggregates. Business credit includes loans with Non-financial businesses, Community service organisations, and select Financial Institutions.
d.
Retail and business deposits include deposits from Households, Non-financial businesses, and select Financial institutions as defined in the
RBA Monetary Aggregates.
e.
New Zealand comprises New Zealand banking operations.
f.
n/a indicates that system growth and/or Westpac growth was negative.
114
WESTPAC 2024 ANNUAL REPORT
GROUP PERFORMANCE
Review of earnings (Continued)
Non-interest income
$m
2024
2023
2022
% Mov't
2024 - 2023
Net fee income
1,672
1,645
1,671
2
Net wealth management and insurance incomea
441
562
808
(22)
Trading income
704
717
664
(2)
Other income
18
404
(698)
(96)
Total non-interest income
2,835
3,328
2,445
(15)
a.
Following the sales of our insurance businesses in 2023, insurance income was nil for Full Year 2024.
Non-interest income is comprised of:
$m
2024
2023
2022
% Mov't
2024 - 2023
Non-interest income (Ex Notable Items and Businesses sold)
Net fee income
1,672
1,645
1,672
2
Net wealth management and insurance incomea
441
457
467
(4)
Trading income
716
750
620
(5)
Other income
18
136
148
(87)
Non-interest income (Ex Notable Items and Businesses sold)
2,847
2,988
2,907
(5)
Notable Items
Net fee income
-
-
(1)
-
Net wealth management and insurance incomea
-
(10)
(51)
(100)
Trading income
(12)
(33)
44
(64)
Other income
-
243
(846)
(100)
Total non-interest income - Notable Items
(12)
200
(854)
large
Businesses sold
Net wealth management and insurance incomea
-
115
392
(100)
Other income
-
25
-
(100)
Total non-interest income - Businesses sold
-
140
392
(100)
Total non-interest income
2,835
3,328
2,445
(15)
a.
Following the sales of our insurance businesses in 2023, insurance income was nil for Full Year 2024.
Non-interest income decreased by 15% to $2,835 million. Excluding Notable Items and the impact of businesses sold,
non-interest income decreased by 5% to $2,847 million.
Net fee income
Net fee income increased by 2% to $1,672 million. Key movements included:
•
Higher Institutional lending fees of $59 million from increased underwriting activity and loan growth;
•
Lower Australian merchants income of $16 million due to lower volumes; and
•
Lower auto finance income of $14 million due to runoff of the portfolio.
Net wealth management income
Net wealth management income decreased by 22% to $441 million. Excluding Notable Items and the impact of
businesses sold, net wealth management income decreased by 4% to $441 million with platforms margin compression
more than offsetting higher funds under administration.
Trading income
Trading income decreased by 2% to $704 million. Excluding Notable Items, Trading income decreased by 5% to
$716 million primarily due to lower foreign exchange (FX) trading in WIB reflecting tighter spreads and reduced
derivative valuation adjustments (DVA). This was partly offset by the impact of hedges on commodity and
FX derivatives.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
115
Review of earnings (Continued)
Other income
Other income decreased by $386 million. Excluding Notable Items and the impact of businesses sold, Other income
decreased by $118 million primarily attributable to losses on commodity and FX derivatives.
Businesses sold
No business were sold in FY24. In October 2024, Westpac entered into an agreement to sell the auto finance portfolio
to Resimac Group Limited. The sale is expected to be completed in the first half of 2025, with an expected transaction
value of $1.4-$1.6 billion.
Past contribution to revenue from businesses sold totalled $140 million in FY23. This related to Advance Asset
Management Limited, BT's Superannuation business and Westpac Life Insurance Ltd prior to their exit. For further details
of the contribution of each business refer to Net profit contribution of businesses sold (page 292).
Markets related income1
$m
2024
2023
2022
% Mov't
2024 - 2023
Net interest incomea
252
166
123
52
Non-interest income
677
858
619
(21)
Markets income
929
1,024
742
(9)
Sales and risk management income
937
968
773
(3)
Derivative valuation adjustment
(8)
56
(31)
large
Markets income
929
1,024
742
(9)
a.
Comparatives have been revised to align with current period presentation.
Markets income comprises sales and risk management revenue derived from the creation, pricing and distribution of
risk management products to Westpac's customers. Dedicated relationship specialists provide product solutions to these
customers to help manage their interest rate, foreign exchange, commodity, credit and structured products exposures.
Markets income decreased by 9% to $929 million.
Sales and risk management income decreased by 3% to $937 million. Income from continued strong customer volumes
and effective risk management in fixed income products was more than offset by lower FX trading income.
DVA had a negative impact of $8 million compared to a $56 million positive contribution in the prior year. This was
driven by the non-repeat of tightening counterparty credit spreads in the prior year.
1.
Markets income includes financial markets income derived by WIB, Business & Wealth and Westpac New Zealand excluding Debt Capital
Market activities.
116
WESTPAC 2024 ANNUAL REPORT
GROUP PERFORMANCE
Review of earnings (Continued)
Operating expenses
$m
2024
2023
2022
% Mov't
2024 - 2023
Staff expenses
(5,899)
(6,098)
(5,866)
(3)
Occupancy expenses
(700)
(786)
(914)
(11)
Technology expenses
(2,764)
(2,211)
(2,203)
25
Other expenses
(1,581)
(1,597)
(1,819)
(1)
Total operating expenses
(10,944)
(10,692)
(10,802)
2
Excluding Notable Items
Staff expenses
(5,899)
(5,863)
(5,758)
1
Occupancy expenses
(700)
(722)
(788)
(3)
Technology expenses
(2,764)
(2,178)
(2,106)
27
Other expenses
(1,581)
(1,469)
(1,529)
8
Total operating expenses excluding Notable Items
(10,944)
(10,232)
(10,181)
7
Operating expenses - Businesses sold
-
46
(127)
(100)
Operating expenses excluding Notable Items and Business sold
(10,944)
(10,278)
(10,054)
6
Full Time Equivalent (FTE) employees
Number of FTE
2024
2023
2022
% Mov't
2024 - 2023
Permanent employees
33,583
33,664
33,774
-
Temporary employees
1,657
2,482
3,702
(33)
FTE
35,240
36,146
37,476
(3)
Average FTE
35,254
37,503
38,573
(6)
Total operating expenses increased 2% to $10,944 million.
Excluding Notable Items, operating expenses increased 7% to $10,944 million. The increase was mainly attributable to
higher software amortisation, higher third-party technology vendor expenses and costs related to closing RAMS to new
business. Cost Reset actions provided a partial offset. The expense to income ratio excluding Notable Items was 50.3%,
up from 47.5%.
Staff expenses decreased by 3% to $5,899 million. Excluding Notable Items, staff expenses increased by 1% due to the
impact of wage growth, continued step up in superannuation rates and RAMS restructuring costs. The 6% decline in
average FTE provided a partial offset, reflecting the continued impact of Cost Reset actions and our commitment to
improving efficiency.
Occupancy expenses decreased by 11% to $700 million. Excluding Notable Items, occupancy expenses decreased by
3% with further reductions in the Group's corporate and branch footprint, including the closure of 18 branches and
establishment of 29 co-locations.
Technology expenses increased 25% to $2,764 million. Excluding Notable Items, technology expenses were 27% higher
due to:
•
Increased software amortisation of $268 million related to the completion of major projects;
•
Higher software expenses across the Consumer and Westpac New Zealand segments; and
•
Higher costs related to third-party vendor contract renewals and UNITE.
Other Expenses decreased 1% to $1,581 million. Excluding Notable Items, other expenses increased by 8% to
$1,581 million mainly due to the RAMS brand write-off of $32 million, increased scams and fraud expenses and
litigation provisions.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
117
Review of earnings (Continued)
Investment spend
$m
2024
2023
2022
% Mov't
2024 - 2023
Expensed
992
816
883
22
Capitalised software, fixed assets and prepayments
764
1,106
1,104
(31)
Total
1,756
1,922
1,987
(9)
UNITE
147
-
-
-
Growth and productivity
550
728
675
(24)
Risk and regulatory
1,059
1,194
1,312
(11)
Total
1,756
1,922
1,987
(9)
Investment spend totalled $1,756 million in 2024, 9% lower than the prior year. The decline reflects the completion of
several large programs in 2023. Of the investment spend, UNITE accounted for 8%, 32% was directed towards growth
and productivity and 60% was focused on risk and regulatory initiatives.
UNITE commenced in 2024 to accelerate technology simplification. See page 38 for more information.
Growth and Productivity investments included:
•
New features in the Westpac App. Refer to Number one banking app (page 21) for more information;
•
Enhanced transactional banking and merchant service experience. Refer to Driving efficiency for businesses (page
24) for more information;
•
Pay with Points, enabling customers to use their points to pay for credit card purchases;
•
Enhanced international payments capability with the roll out of fixed FX payments, enabling customers to schedule
an international payment for a future date with an agreed exchange rate;
•
The launch of Sustainable Upgrades home and investor loans for customers looking to make energy efficient
upgrades to their home;
•
Commencing development of the integrated business lending origination platform; and
•
Continued development of the corporate cash management platform.
Risk and Regulatory spend included:
•
Completion of all the CORE Integrated Plan activities. Westpac is now in a transition phase, which is focused on
ensuring the sustainability and effectiveness of changes we have made to strengthen risk management and risk
culture across Westpac;
•
Extending our scam prevention capabilities. Refer to Protecting customers and preventing crime (page 25) for
more information;
•
Continued upgrade of international payments infrastructure;
•
Maintaining New Payments Platform Australia scheme compliance and improving payments resilience, stability,
and risk;
•
Continued simplification of our data environment to reduce risk and provide high-quality data for consumption; and
•
Implementing changes to comply with Prudential Standard CPS 230, Operational Risk Management, in 2025. The new
standard requires entities to better manage operational risks and respond to business disruptions.
Capitalised software
$m
2024
2023
2022
% Mov't
2024 - 2023
Balance as at beginning of the year
2,797
2,264
1,840
24
Total additions
792
1,141
1,101
(31)
Amortisation expense
(889)
(621)
(545)
43
Impairment expense
(19)
(8)
(110)
138
Foreign exchange movements
(6)
21
(22)
large
Balance as at end of the year
2,675
2,797
2,264
(4)
Average amortisation period (years)
3.1
3.6
3.2
(0.5) years
Capitalised software decreased $122 million or 4% compared to September 2023. The decrease reflects increased
amortisation due to the completion of key projects such as One Banking Platform, payments and investment to comply
with RBNZ’s outsourcing policy, BS11. Lower additions were driven by lower investment spend as focus turned towards
the planning phase of the Technology simplification program, UNITE. This has resulted in average amortisation period
reducing by 0.5 years to 3.1 years from September 2023.
118
WESTPAC 2024 ANNUAL REPORT
GROUP PERFORMANCE
Review of earnings (Continued)
Credit impairment charges
$m
2024
2023
2022
% Mov't
2024 - 2023
Individually assessed provisions (IAPs)
New IAPs
(423)
(197)
(220)
115
Write-backs
93
127
115
(27)
Recoveries
190
191
189
(1)
Total IAPs, write-backs and recoveries
(140)
121
84
large
Collectively assessed provisions (CAPs)
Write-offs
(486)
(440)
(446)
10
Other changes in CAPs
89
(329)
27
large
Total CAPs
(397)
(769)
(419)
(48)
Total impairment (charges)/benefits
(537)
(648)
(335)
(17)
Impairment charges/(benefits) to average loans
7 bps
9 bps
5 bps
(2 bps)
Net write-offs to average gross loans
5 bps
5 bps
10 bps
-
The credit impairment charge of $537 million represented 7 basis points of average loans, down from 9 basis points in
the prior year. The impairment charge was driven by a lower CAP charge of $397 million and IAP charge of $140 million.
This compared to a CAP charge of $769 million and an IAP benefit of $121 million in the prior year.
The CAP charge of $397 million comprised write-offs of $486 million partly offset by a benefit in other changes in CAP
of $89 million. The other changes in CAP were due to:
•
A reduction in portfolio overlays of $253 million driven by the partial release of mortgage related overlays;
•
A reduction in the downside scenario weight of 2.5% in First Half 2024 reflecting a modest reduction in
macroeconomic uncertainty at that time;
•
An increase in mortgage 90+ day delinquencies from 0.81% to 1.05%; and
•
Less favourable outlook for commercial property prices and GDP along with a delay in the expected timing of interest
rate declines.
The IAP charge of $140 million comprised:
•
New IAPs of $423 million, mostly in the wholesale & retail trade and manufacturing sectors and the
mortgage portfolio;
•
Recoveries of $190 million, mostly in the credit card and personal loan portfolios; and
•
Write-backs of $93 million, mostly within the Business & Wealth segment.
Income tax expense
The effective tax rate of 30.84% in 2024 (2023: 30.12%) was higher as 2023 included accounting gains from the sale
of Advance Asset Management Limited that were not taxable. The effective tax rates are both above the Australian
corporate tax rate of 30%
Non-controlling interests
During the year, Westpac New Zealand Limited issued a NZ$375 million perpetual preference shares which are
recognised as Additional Tier 1 capital for Westpac New Zealand Limited. For Westpac, the terms of this instrument do
not satisfy APRA's capital requirements and are deemed to be a non-controlling interests as they are equity instruments
issued by a wholly owned subsidiary that are held by external investors with no contractual obligation on Westpac to
repay in an adverse event.
In addition, Westpac acquired 8.74% of the non-controlling shares of Westpac Bank-PNG-Limited, which will raise our
controlling interest to 98.65%.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
119
Credit quality
Credit quality key metrics
2024
2023
2022
% Mov't
2024 - 2023
Stressed exposures by credit grade as a % of TCE:
Impaired
0.16%
0.11%
0.13%
5 bps
Non performing, 90 days past due
0.47%
0.39%
0.32%
8 bps
Non performing, less than 90 days past due
0.23%
0.22%
0.19%
1 bps
Watchlist and substandard
0.59%
0.54%
0.43%
5 bps
Total stressed exposures
1.45%
1.26%
1.07%
19 bps
Gross impaired exposures to TCE for business and institutional:
Business Australia
0.65%
0.44%
0.55%
21 bps
Business New Zealand
0.32%
0.12%
0.16%
20 bps
Institutional
0.04%
0.02%
0.05%
2 bps
Mortgage 90+ day delinquencies:
Group
1.05%
0.81%
0.69%
24 bps
Australia
1.12%
0.86%
0.75%
26 bps
New Zealand
0.49%
0.33%
0.22%
16 bps
Other consumer loans 90+ day delinquencies:
Group
1.40%
1.28%
1.56%
12 bps
Australia
1.47%
1.32%
1.60%
15 bps
New Zealand
0.87%
0.92%
1.03%
(5 bps)
Other:
Gross impaired exposures to gross loans
0.24%
0.17%
0.20%
7 bps
Gross impaired exposure provisions to gross impaired exposures
41.28%
43.47%
47.95%
(219 bps)
Total provisions to gross loans
63 bps
63 bps
62 bps
-
Collectively assessed provisions to credit risk weighted assets
132 bps
135 bps
116 bps
(3 bps)
Total provisions to credit risk weighted assets
147 bps
145 bps
128 bps
2 bps
Movement in gross impaired exposures
$m
2024
2023
2022
% Mov't
2024 - 2023
Balance as at beginning of the year
1,302
1,514
2,142
(14)
New and increased - individually managed
701
367
430
91
Write-offs
(620)
(601)
(934)
3
Returned to performing or repaid
(288)
(449)
(436)
(36)
Portfolio managed - new/increased/returned/repaid
870
468
296
86
Exchange rate and other adjustments
(10)
3
16
large
Balance as at end of the year
1,955
1,302
1,514
50
Loan quality
Housing and personal loans that were past due can be dis-aggregated based on days overdue as follows:
Consolidated
2024
2023
$m
30-89 days
90+ days
Total
30-89 days
90+ days
Total
Loans
Loans - housing
3,890
5,914
9,804
3,644
4,385
8,029
Loans - personal
125
143
268
128
144
272
Total
4,015
6,057
10,072
3,772
4,529
8,301
120
WESTPAC 2024 ANNUAL REPORT
GROUP PERFORMANCE
Credit quality (Continued)
Credit quality remained resilient, notwithstanding a rise in stressed exposures as a percentage of total committed
exposures (TCE) of 19 basis points to 1.45%. The composition and drivers of stressed exposures were:
•
Impaired exposures of 16 basis points: a 5 basis point increase reflecting higher impaired balances in the mortgage
portfolio and the wholesale & retail trade and manufacturing sectors.
•
Non-performing, 90+ days past due and not impaired exposures of 47 basis points: a 8 basis point increase reflecting
higher mortgage 90+ day delinquencies;
•
Non-performing not 90 days past due and not impaired exposures of 23 basis points: a 1 basis point increase; and
•
Watchlist and substandard exposures of 59 basis points: a 5 basis point increase relating to the wholesale & retail
trade and manufacturing sectors.
Gross impaired exposures to gross loans were 7 basis points higher at 0.24%, driven by higher impaired exposures
in the mortgage portfolio and the wholesale & retail trade and manufacturing sectors. The provision coverage of the
impaired portfolio was 41%, down from 43% at 30 September 2023. Impaired exposures have an appropriate level of
provision cover.
Portfolio segments
Stressed exposures in WIB increased by 18 basis points to 0.76%, driven by increases in substandard exposures in the
trade and property sectors. Impaired exposures to TCE remain low at 0.05%.
Australian business stressed exposure increased by 29 basis points to 5.24% driven by downgrades to watchlist in the
wholesale & retail trade and transport & storage sectors. Impaired exposures to TCE increased 20 basis points to 0.65%
with deterioration in the wholesale & retail trade and agriculture, forestry & fishing sectors.
Australian mortgage 90+ day delinquencies increased 26 basis points to 1.12% due to elevated interest rates and cost of
living pressures. Hardship increased by 43 basis points to 1.14% as customers required additional assistance.
Properties in possession were 201, a reduction of 9 compared to 30 September 2023 reflecting increased turnover and
price momentum in the residential property market.
Australian other consumer 90+ day delinquencies increased 15 basis points to 1.47% driven by cost of living pressures
impacting the cards and personal loans portfolios.
In New Zealand, stressed exposure to TCE increased by 24 basis points to 1.73%. This was driven by a 10 basis
point increase in impaired exposure to 0.16%, mostly within the manufacturing sector, and increases in watchlist and
substandard exposures in the agriculture, forestry & fishing sector.
New Zealand mortgage 90+ day delinquencies were up 16 basis points to 0.49%. This increase reflected the impact of
cost of living pressures. Other consumer 90+ day delinquencies were 5 basis points lower at 0.87% reflecting a lower
level of delinquency in the personal loans portfolio. The number of hardship cases has remained stable over the period.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
121
Credit quality (Continued)
Provisioning
$m
2024
2023
2022
% Mov't
2024 - 2023
Provision for expected credit losses (ECL) on loans and credit commitments
Collectively assessed provisions
Modelled provision
4,369
4,147
3,473
5
Overlays
179
432
700
(59)
Total collectively assessed provisions
4,548
4,579
4,173
(1)
Individually assessed provisions
536
351
452
53
Total provision for ECL on loans and credit commitments
5,084
4,930
4,625
3
Provision for ECL on debt securities at amortised cost
6
6
6
-
Provision for ECL on debt securities at FVOCIa
6
5
4
20
Total provision for ECL
5,096
4,941
4,635
3
a.
FVOCI represents fair value through other comprehensive income.
Total provisions increased 3% to $5,096 million. The increase was driven by a higher IAP.
The increase in the IAP of $185 million was driven by new IAPs in the mortgage portfolio and the wholesale & retail trade
and manufacturing sectors.
CAP was $31 million lower, reflecting higher modelled provisions more than offset by a reduction in portfolio overlays
and a reduction in the downside scenario weight.
Modelled provisions were higher due to:
•
Less favourable outlook for commercial property prices, GDP and interest rates; and
•
Higher levels of stress in the portfolio, particularly mortgage 90+ day delinquencies.
This was partly offset by a 2.5% reduction in the downside scenario weight to 42.5% in First Half 2024, reflecting
a reduction in macroeconomic uncertainty in First Half 2024. In the Second Half 2024 the scenario weights
remained unchanged.
Portfolio overlays were $253 million lower as the expected risk did not materialise or is now reflected in modelled
outcomes. The reduction reflects partial release of mortgage related overlays.
Scenario weightings (%)
2024
2023
2022
Upside
5.0
5.0
5.0
Base
52.5
50.0
50.0
Downside
42.5
45.0
45.0
122
WESTPAC 2024 ANNUAL REPORT
GROUP PERFORMANCE
Balance sheet and funding
Balance sheet
The detailed components of the balance sheet are set out in the notes to the financial statements.
$m
2024
2023
2022
% Mov't
2024 - 2023
Assets
Loans
806,767
773,254
739,647
4
Housing
566,081
547,074
523,952
3
Personal
11,238
12,379
13,897
(9)
Business
234,016
218,234
206,004
7
Provision for expected credit losses
(4,568)
(4,433)
(4,206)
3
Liquid assets
200,682
196,720
194,058
2
Assets held for sale
-
-
75
-
All other assets
70,095
59,800
80,418
17
Total assets
1,077,544
1,029,774
1,014,198
5
Liabilities
Customer deposits
673,615
640,951
612,834
5
Transactionsa
119,944
123,046
146,759
(3)
Savingsa
216,256
198,909
167,966
9
Term
197,230
185,770
161,858
6
Non-interest bearinga
140,185
133,226
136,251
5
Certificates of deposit
46,874
47,217
46,295
(1)
Debt issues
169,284
156,573
144,868
8
Term funding from central banks
2,777
16,586
33,277
(83)
Loan capital
37,883
33,176
31,254
14
Liabilities held for sale
-
-
32
-
All other liabilities
75,059
62,732
75,129
20
Total liabilities
1,005,492
957,235
943,689
5
Equity
Total equity attributable to owners of WBC
71,705
72,495
70,452
(1)
Non-controlling interestsb
347
44
57
large
Total equity
72,052
72,539
70,509
(1)
a.
Comparatives have been revised to align with current period presentation.
b.
Westpac recognises the perpetual preference shares issued by Westpac New Zealand Limited as non-controlling interests.
Funding and liquidity risk management
Liquidity risk is the risk that a bank will be unable to fund assets and meet obligations as they become due. This risk is
inherent for all banks as intermediaries between depositors and borrowers. Westpac has a Liquidity Risk Management
Framework which seeks to ensure we meet our cash flow obligations under a wide range of market conditions and
scenarios, as well as meeting the requirements of the LCR and NSFR.
The Liquidity Risk Management Framework is approved by the Board and sets out the funding and liquidity risk appetite.
It also determines the roles and responsibilities of key people managing funding and liquidity risk, risk reporting and
control processes. In addition, it sets out the limits and targets used to manage Westpac’s balance sheet, including
wholesale funding limits, liquidity risk limits and stress testing.
A strong liquidity position and a conservative funding profile were maintained over the year, with key ratios and metrics
remaining comfortably above minimum requirements. Reflecting Westpac’s low risk profile, the credit ratings for some
term funding and capital instruments were upgraded by key ratings agencies in March and April 2024.
STRATEGIC
REVIEW
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REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
123
Balance sheet and funding (Continued)
LCR
$m
2024
2023
2022
% Mov't
2024 - 2023
High Quality Liquid Assets (HQLA)
172,722
181,882
175,595
(5)
Committed Liquidity Facility (CLF)
-
-
15,512
-
Total LCR liquid assets
172,722
181,882
191,107
(5)
Cash outflows in a modelled 30-day APRA defined stressed scenario
Customer deposits
95,133
95,008
101,271
-
Wholesale funding
8,715
11,249
12,975
(23)
Other flowsa
26,067
29,943
31,051
(13)
Total
129,915
136,200
145,297
(5)
LCRb
133%
134%
132%
(59 bps)
a.
Other flows include credit and liquidity facilities, collateral outflows, inflows from customers and TFF maturities.
b.
Calculated on a quarterly average basis for the quarter ended 30 September.
The LCR is designed to enhance banks’ short-term resilience, by measuring the level of HQLA, as defined, held against its
liquidity needs for a 30 calendar day period under a regulator-defined stress scenario.
The average LCR for the quarter ended 30 September 2024 was 133%, little changed compared to the quarter ended
30 September 2023 due to reductions in both liquid assets and net cash outflows. The ratio remains well above the
regulatory minimum of 100%.
The average HQLA held in the September 2024 quarter was $173 billion, which provides approximately $43 billion in
HQLA above the 100% LCR minimum. The portfolio of HQLA provides a buffer against periods of liquidity stress, as well
as meeting regulatory requirements. HQLA include cash, deposits with central banks, government and semi-government
securities, and are recognised in the LCR calculation at market value.
Derivatives are used to hedge the interest rate risk of the liquid asset portfolio and reduce exposure to changes in fair
value. Changes in the fair value of liquid assets are recognised in Other Comprehensive Income through the relevant
equity reserve.
Westpac also has access to non-HQLA and other assets that are eligible for re-purchase with a central bank under
certain conditions and provide a source of additional liquidity. These assets include private securities and self-originated
AAA-rated mortgage-backed securities.
NSFR
$m
2024
2023
2022
% Mov't
2024 - 2023
Available stable funding
736,202
707,893
687,442
4
Required stable funding
654,798
615,341
570,185
6
Net stable funding ratio
112%
115%
121%
(261 bps)
The NSFR is designed to encourage banks’ longer-term funding resilience. To comply, banks are required to maintain an
NSFR of at least 100% at all times. The NSFR was 112% at 30 September 2024, well above the 100% minimum and within
the Group's normal operating range. There has been little change to our liquidity risk or structural term profile.
The ratio was down from 115% at 30 September 2023. Available stable funding increased due to growth in customer
deposits. This was offset by the increase in required stable funding due to growth in lending and TFF maturities, as
mortgages backing those facilities are no longer used as collateral for the TFF.
124
WESTPAC 2024 ANNUAL REPORT
GROUP PERFORMANCE
Balance sheet and funding (Continued)
Funding
The composition and stability of the Group's funding is monitored to comply with its funding risk appetite and the
regulatory requirements of both the LCR and NSFR. A stable funding profile was maintained during the year with
constructive credit market conditions providing opportunities to refinance wholesale maturities and remain responsive to
balance sheet needs.
Funding by residual maturity
2024
2023
2022
$m
Ratio %
$m
Ratio %
$m
Ratio %
Customer deposits
673,615
66.9
640,951
66.0
612,834
65.1
Wholesale funding
Short term
82,590
8.2
79,181
8.1
79,098
8.4
Long term - less than or equal to one year
residual maturity
31,790
3.2
40,607
4.2
38,896
4.1
Long term - more than one year
residual maturity
140,458
13.9
133,979
13.8
136,586
14.5
Securitisation
5,539
0.6
4,298
0.4
4,973
0.5
Total wholesale funding
260,377
25.9
258,065
26.5
259,553
27.5
Equitya
72,052
7.2
72,543
7.5
69,967
7.4
Total funding
1,006,044
100.0
971,559
100.0
942,354
100.0
a.
Includes total share capital, share-based payment reserve and retained profits.
Long term wholesale funding
Long term funding with a residual maturity greater than 12 months made up 13.9% of total funding at
30 September 2024, up from 13.8% at 30 September 2023. Funding from securitisation accounted for a further 0.6%
of total funding, an increase compared to 0.4% at 30 September 2023, reflecting the $2.75 billion transaction issued in
February 2024.
In total, $41.9 billion of long term wholesale funding was raised in 2024, including $5.1 billion issued by Westpac New
Zealand Limited. Leveraging the scale and diversity of the Group's wholesale funding franchise, new issuance included
senior unsecured and covered bonds, RMBS and capital securities, including $5.4 billion in Tier 2 capital securities
and $2.1 billion in Additional Tier 1 capital securities. New long term issuance was raised across a range of tenors and
currencies, although almost half was raised in Australian dollars, benefiting from the continued depth of the Australian
bond market.
Short term wholesale funding
Short term wholesale funding accounted for 8.2% of total funding at 30 September 2024, up from 8.1% at
30 September 2023. Long term funding where the residual maturity is less than one year, reduced to 3.2% at
30 September 2024, from 4.2% at 30 September 2023 mainly due to the repayment of TFF maturities. The short term
wholesale funding portfolio, including long term funding with a residual maturity of less than one year, had a weighted
average maturity of 151 days, up from 149 days at 30 September 2023.
Deposit to loan ratio
2024
2023
2022
$m
Ratio %
$m
Ratio %
$m
Ratio %
Customer deposits
673,615
640,951
612,834
Loans
806,767
83.50
773,254
82.89
739,647
82.85
Customer deposits
Customer deposits accounted for 66.9% of the total funding at 30 September 2024, compared to 66.0% at
30 September 2023. Over the year, customer deposits grew $32.7 billion compared to loan growth of $33.5 billion. As
the growth in customer deposit was 5.1% relative to the growth in loans of 4.3%, the deposit to loan ratio rose to 83.5%.
Equity
Funding from equity made up 7.2% of total funding at 30 September 2024, compared to 7.5% at 30 September 2023.
This reflects the impact of the on market share buyback conducted during the year.
STRATEGIC
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FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
125
Capital and dividends
2024
2023
2022a
% Mov't
2024 - 2023
Level 2 regulatory capital structure
Common equity Tier 1 (CET1) capital after deductions ($m)
54,648
55,885
53,943
(2)
Risk weighted assets (RWA) ($m)
437,430
451,418
477,620
(3)
CET1 capital ratio
12.49%
12.38%
11.29%
11 bps
Additional Tier 1 capital ratio
2.33%
2.21%
2.10%
12 bps
Tier 1 capital ratio
14.82%
14.59%
13.39%
23 bps
Tier 2 capital ratio
6.56%
5.86%
5.01%
70 bps
Total regulatory capital ratio
21.38%
20.45%
18.40%
93 bps
APRA leverage ratio
5.30%
5.50%
5.61%
(20 bps)
Level 1 regulatory capital structure
CET1 capital after deductions ($m)
50,454
52,273
50,722
(3)
Risk weighted assets ($m)
397,719
414,293
447,010
(4)
Level 1 CET1 capital ratio
12.69%
12.62%
11.35%
7 bps
a.
APRA’s revised capital framework (Basel III) became effective on 1 January 2023 and included updated prudential standards for capital
adequacy and credit risk capital. The reported 2022 comparatives have not been restated to align to the current capital framework.
Capital management strategy
The capital management strategy is reviewed on an ongoing basis, including through an annual Internal Capital
Adequacy Assessment Process. Key considerations include:
•
Regulatory capital minimums together with the capital conservation buffer and countercyclical capital buffer
comprise the Total CET1 Requirement. The Total CET1 Requirement for domestic systemically important banks (D-
SIBs), including Westpac, is at least 10.25%;1
•
Strategy, business mix and operations and contingency plans;
•
Perspectives of external stakeholders including rating agencies as well as equity and debt investors; and
•
A stress testing framework that tests our resilience under a range of adverse economic scenarios.
The Board has determined a target CET1 capital operating range of between 11.0% and 11.5%, in normal
operating conditions.
LEVEL 2 CET1 CAPITAL RATIO MOVEMENT FOR 2024
12.38%
160bps
(117bps)
36bps
(11bps)
(3bps)
(54bps)
12.49%
Sep-23
Net profit
Ordinary
dividends
RWA movement
Capital deductions
and other items
FX translation
impacts
Capital return
Sep-24
The Level 2 CET1 capital ratio was 12.49% at 30 September 2024, 11 basis points higher than 30 September 2023. Key
movements include:
•
2024 net profit: 160 basis points increase;
•
Payment of the 2023 final ordinary dividend and the 2024 interim ordinary dividend: 117 basis points reduction;
1.
Noting that APRA may apply higher CET1 requirements for an individual ADI.
126
WESTPAC 2024 ANNUAL REPORT
GROUP PERFORMANCE
Capital and dividends (Continued)
•
RWA movement: 36 basis points increase due to non-credit RWA decrease of 57 basis points partly offset by credit
RWA increase of 21 basis points;
•
Capital deductions and other items: 11 basis points decrease mainly due to other reserve movements and a higher
deduction for deferred tax assets;
•
Foreign currency translation impacts: 3 basis points reduction mainly from the appreciation of the A$ against the
US$; and
•
Capital return: 54 basis points reduction comprising a $0.5 billion special dividend and approximately $1.8 billion of
on market share buybacks.
The Level 1 CET1 capital ratio was 12.69% at 30 September 2024, 7 basis points higher than 30 September 2023 with
movements mostly in line with Level 2.
Additional Tier 1 and Tier 2 capital movement for 2024
During the year, Westpac issued $1.75 billion of APRA qualifying Additional Tier 1 instruments and redeemed $1.4 billion,
excluding issuance and redemption of Additional Tier 1 instruments by Westpac New Zealand Limited. The net impact of
these transactions was an increase in the Tier 1 capital ratio of approximately 7 basis points.
Westpac issued $5.4 billion of Tier 2 capital instruments and redeemed $1.35 billion over the year. The net impact of
these transactions was an increase in the total regulatory capital ratio of approximately 92 basis points.
Domestic systemically important banks (D-SIBs), including Westpac, have a total capital requirement of 18.25% from
1 January 2026. Westpac's total regulatory capital ratio was 21.38% at 30 September 2024.
Leverage ratio
The leverage ratio represents the amount of Tier 1 capital relative to exposure1. At 30 September 2024, the leverage ratio
was 5.30%, down 20 basis points from 30 September 2023, and above APRA's regulatory minimum requirement of 3.5%.
The decrease in the leverage ratio is mainly due to lower Tier 1 regulatory capital as a result of the on market share
buybacks completed during the year.
Internationally comparable capital ratios
APRA’s capital adequacy requirements are more conservative than those of the Basel Committee on Banking
Supervision, leading to lower reported capital ratios when compared to international peers.
International comparable capital ratios have been calculated using the methodology outlined in the Australian Banking
Association study released on 10 March 2023. The 2022 comparatives have not been restated and capital ratios are
reported under the APRA study published in July 2015.
%
2024
2023
2022
% Mov't
2024 - 2023
Internationally comparable capital ratios
CET1 capital ratio
18.27%
18.73%
17.57%
(46 bps)
Tier 1 capital ratio
21.33%
21.76%
20.57%
(43 bps)
Total regulatory capital ratio
29.93%
29.87%
27.75%
6 bps
Leverage ratio
5.78%
5.98%
6.00%
(20 bps)
1.
As defined under Attachment D of APS110: Capital Adequacy.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
127
Capital and dividends (Continued)
Risk Weighted Assets (RWA)
$m
2024
2023
2022a
% Mov't
2024 - 2023
Credit risk:
Corporate
25,976
24,818
5
Business lending
25,033
23,860
5
Property finance
32,196
30,416
6
Large corporate
21,035
20,570
2
Sovereign
2,047
2,143
(4)
Financial institution
13,694
13,457
2
Residential mortgages
116,228
112,948
3
Australian credit cards
3,565
3,712
(4)
Other retail
3,995
4,607
(13)
Small business
17,123
17,040
-
Specialised lending
3,695
3,065
21
Securitisation
7,821
7,661
2
Standardised
25,414
28,813
(12)
New Zealandb
48,142
46,648
3
Total credit risk
345,964
339,758
362,098
2
Market risk
9,555
11,538
9,290
(17)
Operational risk
48,196
55,175
59,063
(13)
Interest rate risk in the banking book (IRRBB)
27,955
40,138
42,782
(30)
Other
5,760
4,809
4,387
20
Total risk weighted assets
437,430
451,418
477,620
(3)
a.
APRA’s revised capital framework (Basel III) became effective on 1 January 2023 and included updated prudential standards for capital
adequacy and credit risk capital. Credit classes for 2022 do not align to the current capital framework and therefore have not been included in
the table.
b.
Includes credit and securitisation exposures regulated under RBNZ prudential requirements.
Total RWA decreased by 3.1% to $437.4 billion over the year largely due to the decrease in non-credit RWA.
Credit RWA increased by 1.8% or $6.2 billion. Key movements included:
•
A $6.9 billion increase from higher lending primarily in Corporate, Large Corporate and Property Finance;
•
A $8.1 billion increase due to deterioration in credit quality mainly from an increase in delinquencies in Residential
Mortgages and New Zealand exposures:
•
A $7.2 billion decrease from data refinements mainly related to Residential Mortgages, Corporate and Large
Corporate exposures;
•
A $0.3 billion decrease from counterparty credit risk and mark-to-market related credit risk from changes in
underlying foreign currency rates; and
•
A $1.3 billion decrease from foreign currency translation impacts, predominantly the appreciation of the A$ against
the US$.
Non-credit RWA were $20.2 billion lower. Key movements included:
•
IRRBB RWA: $12.2 billion decrease mainly due to:
–
A decrease of $17.1 billion due to lower interest rates and a revised IRRBB model, resulting in an embedded gain of
$1.3 billion for 30 September 2024 compared to a $15.9 billion loss at September 2023; and
–
A $4.9 billion increase in repricing and yield curve, basis and optionality risk in line with underlying banking
book positions.
•
Operational RWA: $7.0 billion decrease mainly driven by a reduction in the APRA capital overlay; and
•
Market RWA: $2.0 billion decrease due to reduced market volatility in the one-year historical VaR window as market
events rolled out of the observation period, a decrease in Stressed Value at Risk (SVaR) from lower market risk
exposures and a reduction in the Risks not in VaR (RNIV) add-on.
128
WESTPAC 2024 ANNUAL REPORT
GROUP PERFORMANCE
Capital and dividends (Continued)
Capital adequacy
$m
2024
2023
2022
% Mov't
2024 - 2023
Tier 1 capital
CET1 capital
Paid up ordinary capital
37,958
39,826
39,666
(5)
Treasury shares
(815)
(759)
(712)
7
Equity based remuneration
2,028
1,929
1,843
5
Foreign currency translation reserve
(471)
(171)
(537)
175
Accumulated other comprehensive income
(617)
(221)
28
179
Non-controlling interests - other
8
44
57
(82)
Retained earnings
32,773
31,436
29,063
4
Less retained earnings in life and general insurance, funds management and
securitisation entities
(357)
(369)
(300)
(3)
Deferred fees
350
334
300
5
Total CET1 capital
70,857
72,049
69,408
(2)
Deductions from CET1 capital
Goodwill (excluding funds management entities)
(7,922)
(7,940)
(7,914)
-
Deferred tax assets
(2,377)
(2,144)
(1,746)
11
Goodwill in life and general insurance, funds management and
securitisation entities
(149)
(149)
(204)
-
Capitalised expenditure
(2,349)
(2,375)
(2,148)
(1)
Capitalised software
(2,668)
(2,797)
(2,263)
(5)
Investments in subsidiaries not consolidated for regulatory purposes
(154)
(76)
(316)
103
Regulatory expected downturn loss in excess of eligible provisions
-
-
(144)
-
Securitisation
(9)
(16)
-
(44)
Defined benefit superannuation fund surplus
(215)
(217)
(219)
(1)
Equity investments
(235)
(228)
(187)
3
Regulatory adjustments to fair value positions
(131)
(222)
(324)
(41)
Total deductions from CET1 capital
(16,209)
(16,164)
(15,465)
-
Total CET1 capital after deductions
54,648
55,885
53,943
(2)
Additional Tier 1 capital
Basel III complying instruments
10,225
10,037
10,021
2
Total Additional Tier 1 capital
10,225
10,037
10,021
2
Deductions from Additional Tier 1 capital
Holdings of own and other financial institutions Additional Tier 1
capital instruments
(30)
(46)
(25)
(35)
Total deductions from Additional Tier 1 capital
(30)
(46)
(25)
(35)
Net Additional Tier 1 regulatory capital
10,195
9,991
9,996
2
Net Tier 1 regulatory capital
64,843
65,876
63,939
(2)
Tier 2 capital
Basel III complying instruments
28,293
25,740
23,791
10
Eligible general reserve for credit loss
770
1,051
411
(27)
Total Tier 2 capital
29,063
26,791
24,202
8
Deductions from Tier 2 capital
Holdings of own and other financial institutions Tier 2 capital instruments
(368)
(370)
(243)
(1)
Total deductions from Tier 2 capital
(368)
(370)
(243)
(1)
Net Tier 2 regulatory capital
28,695
26,421
23,959
9
Total regulatory capital
93,538
92,297
87,898
1
Risk weighted assets
437,430
451,418
477,620
(3)
CET1 capital ratio
12.49%
12.38%
11.29%
11 bps
Additional Tier 1 capital ratio
2.33%
2.21%
2.10%
12 bps
Tier 1 capital ratio
14.82%
14.59%
13.39%
23 bps
Tier 2 capital ratio
6.56%
5.86%
5.01%
70 bps
Total regulatory capital ratio
21.38%
20.45%
18.40%
93 bps
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
129
Capital and dividends (Continued)
Dividends
2024
2023
2022
% Mov't
2024 - 2023
Ordinary dividend - Interim (cents per share)
75
70
61
7
Ordinary dividend - Final (cents per share)
76
72
64
6
Total ordinary dividend (cents per share)
151
142
125
6
Special dividend (cents per share)
15
-
-
-
Ordinary dividend payout ratioa
74.62%
69.20%
76.79%
large
Ordinary dividend payout ratio (ex Notable Items)
73.32%
67.57%
66.57%
large
Adjusted franking credit balance ($m)
3,504
3,520
3,298
-
a.
Payout ratio excludes the dividend component of completed off-market share buyback announced on 14 February 2022.
The Board has determined a fully franked final ordinary dividend of 76 cents per share, to be paid on 19 December 2024
to shareholders on the register at the record date of 8 November 2024. The 2024 interim and final ordinary dividends
represent a payout ratio of 73.32% excluding Notable Items.
In addition to being fully franked, the final ordinary dividend will also carry NZ$0.06 in New Zealand imputation credits
that may be used by New Zealand tax residents.
The Board has determined to satisfy the DRP for the 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 13 November 2024 and will not include a discount.
The Board has also determined to increase the on-market share buyback by a further $1.0 billion, in addition to the
previously announced on-market share buyback of up to $2.5 billion. In aggregate, this represents a share buyback of up
to $3.5 billion.
Capital deduction for regulatory expected credit loss
For capital adequacy purposes APRA requires the amount of regulatory expected credit losses in excess of eligible
provisions to be deducted from CET1 capital. The table below shows the calculation of this capital deduction.
$m
2024
2023
2022
% Mov't
2024 - 2023
Provisions associated with eligible portfolios
Total provisions for expected credit losses
5,096
4,941
4,635
3
plus provisions associated with partial write-offs
290
292
377
(1)
less ineligible provisionsa
(201)
(192)
(143)
5
Total eligible provisions
5,185
5,041
4,869
3
Regulatory expected downturn loss
4,486
4,078
4,690
10
Excess/(shortfall) in eligible provisions compared to regulatory expected
downturn loss
699
963
179
(27)
CET1 capital deduction for regulatory expected downturn loss in excess of
eligible provisionsb
-
-
(144)
-
a.
Provisions associated with portfolios subject to the Basel standardised approach to credit risk are not eligible.
b.
Regulatory expected loss is calculated for portfolios subject to the Basel advanced capital IRB approach to credit risk. The comparison
between regulatory expected loss and eligible provisions is performed separately for defaulted and non-defaulted exposures.
130
WESTPAC 2024 ANNUAL REPORT
SEGMENT REPORTING
For reporting purposes, Westpac identifies the impact of Notable Items on income and expenses and includes a subtotal
titled “Pre-provision profit”. Pre-provision profit represents profit before impairment charges and income tax expenses.
In 2024, Westpac established a new operating segment called Business & Wealth and dissolved the Specialist Business
Division (SBD). The remaining operating businesses of SBD, which included the Platforms business, Pacific Banking,
Margin lending and the auto finance portfolio were aggregated into the Business & Wealth segment. The past
contribution from SBD’s sold businesses were aggregated with Group Businesses.
In addition, we have made some changes to enhance performance reporting and assessment:
•
Funds transfer pricing: The methodology by which the costs of wholesale funding and liquidity are allocated to
segments has been refined.
•
Capital allocations: Revised capital allocations to align to the Basel III framework adopted in January 2023.
•
Expense allocations: Reallocation of the activities and expenses of Enterprise functions across segments.
These changes have been reflected in segment reporting so that the information presented aligns with
information reported internally to key decision makers. Comparatives have been restated to align with the current
period presentation.
$m
Consumer
Business
& Wealth
Westpac
Institutional
Bank
Westpac
New Zealand
(A$)a
Group
Businesses
Group
2024
Net interest income
7,632
5,338
2,240
2,388
1,318
18,916
Non-interest income
528
798
1,265
257
(1)
2,847
Notable Items
-
-
-
(8)
(167)
(175)
Net operating income
8,160
6,136
3,505
2,637
1,150
21,588
Operating expenses
(4,787)
(2,626)
(1,465)
(1,262)
(804)
(10,944)
Total operating expenses
(4,787)
(2,626)
(1,465)
(1,262)
(804)
(10,944)
Pre-provision profit
3,373
3,510
2,040
1,375
346
10,644
Impairment (charges)/benefits
(248)
(142)
(120)
(25)
(2)
(537)
Profit before income tax (expense)/benefit
3,125
3,368
1,920
1,350
344
10,107
Income tax (expense)/benefit and NCIb
(941)
(1,012)
(553)
(377)
(234)
(3,117)
Net profit/(loss)
2,184
2,356
1,367
973
110
6,990
Net profit includes impact of:
Notable Items (post tax)b
-
-
-
(6)
(117)
(123)
2023
Net interest income
8,177
4,992
1,926
2,317
1,002
18,414
Non-interest income
524
844
1,367
240
153
3,128
Notable Items
-
(88)
-
-
191
103
Net operating income
8,701
5,748
3,293
2,557
1,346
21,645
Operating expenses
(4,533)
(2,459)
(1,316)
(1,186)
(738)
(10,232)
Notable Items
(202)
(64)
(15)
(9)
(170)
(460)
Total operating expenses
(4,735)
(2,523)
(1,331)
(1,195)
(908)
(10,692)
Pre-provision profit
3,966
3,225
1,962
1,362
438
10,953
Impairment (charges)/benefits
(179)
(257)
(87)
(124)
(1)
(648)
Profit before income tax (expense)/benefit
3,787
2,968
1,875
1,238
437
10,305
Income tax (expense)/benefit and NCIb
(1,142)
(882)
(538)
(350)
(198)
(3,110)
Net profit/(loss)
2,645
2,086
1,337
888
239
7,195
Net profit includes impact of:
Notable Items (post tax)b
(148)
(107)
(10)
(7)
99
(173)
Profit/(loss) attributable to
businesses soldc
-
-
-
-
131
131
a.
Refer to the Westpac New Zealand NZ$ segment reporting for further details.
b.
Includes tax benefits on Notable Items of $52 million in 2024 (2023: $184 million).
c.
Refer to Additional Information for further details.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
131
$m
Consumer
Business
& Wealth
Westpac
Institutional
Bank
Westpac
New Zealand
(A$)a
Group
Businesses
Group
2022
Net interest income
8,473
3,508
1,438
2,107
1,080
16,606
Non-interest income
557
881
1,150
279
432
3,299
Notable Items
-
(1)
-
120
(418)
(299)
Net operating income
9,030
4,388
2,588
2,506
1,094
19,606
Operating expenses
(4,411)
(2,446)
(1,265)
(1,072)
(987)
(10,181)
Notable Items
(66)
(13)
-
-
(542)
(621)
Total operating expenses
(4,477)
(2,459)
(1,265)
(1,072)
(1,529)
(10,802)
Pre-provision profit
4,553
1,929
1,323
1,434
(435)
8,804
Impairment (charges)/benefits
(187)
(97)
(85)
25
9
(335)
Profit before income tax (expense)/benefit
4,366
1,832
1,238
1,459
(426)
8,469
Income tax (expense)/benefit and NCIb
(1,314)
(557)
(372)
(382)
(150)
(2,775)
Net profit/(loss)
3,052
1,275
866
1,077
(576)
5,694
Net profit includes impact of:
Notable Items (post tax)b
(47)
(9)
-
119
(937)
(874)
Profit/(loss) attributable to
businesses soldc
-
-
-
18
168
186
a.
Refer to the Westpac New Zealand NZ$ segment reporting for further details.
b.
Includes tax benefits on Notable Items of $46 million.
c.
Refer to Additional Information for further details.
Businesses sold
The table below shows the profit/(loss) attributable to businesses sold on the segments by the relevant period. No
businesses were sold in FY24.
Further details are provided in Net profit contribution of businesses sold (page 292).
$m
Consumer
Business
& Wealth
Westpac
Institutional
Bank
Westpac
New Zealand
(A$)
Group
Businesses
Group
2023
Net interest income
-
-
-
-
-
-
Non-interest income
-
-
-
-
140
140
Net operating income
-
-
-
-
140
140
Operating expenses
-
-
-
-
46
46
Pre-provision profit
-
-
-
-
186
186
Impairment (charges)/benefits
-
-
-
-
-
-
Profit before income tax (expense)/benefit
-
-
-
-
186
186
Income tax (expense)/benefit and NCI
-
-
-
-
(55)
(55)
Net profit
-
-
-
-
131
131
2022
Net interest income
-
-
-
-
6
6
Non-interest income
-
-
-
28
364
392
Net operating income
-
-
-
28
370
398
Operating expenses
-
-
-
(3)
(124)
(127)
Pre-provision profit
-
-
-
25
246
271
Impairment (charges)/benefits
-
-
-
-
7
7
Profit before income tax (expense)/benefit
-
-
-
25
253
278
Income tax (expense)/benefit and NCI
-
-
-
(7)
(85)
(92)
Net profit
-
-
-
18
168
186
132
WESTPAC 2024 ANNUAL REPORT
SEGMENT REPORTING
Consumer
The Consumer segment provides a full range of banking products and services to customers in Australia. Products and
services are provided through a portfolio of brands comprising Westpac, St.George, BankSA and Bank of Melbourne
using digital channels, call centres, mobile bankers, branches and third-party brokers. It also includes the RAMS business,
which is closed to new business.
$m
2024
2023
2022
% Mov't
2024 - 2023
Net interest income
7,632
8,177
8,473
(7)
Non-interest income
528
524
557
1
Net operating income
8,160
8,701
9,030
(6)
Operating expenses
(4,787)
(4,533)
(4,411)
6
Notable Items
-
(202)
(66)
(100)
Total operating expenses
(4,787)
(4,735)
(4,477)
1
Pre-provision profit
3,373
3,966
4,553
(15)
Impairment (charges)/benefits
(248)
(179)
(187)
39
Profit before income tax expense
3,125
3,787
4,366
(17)
Income tax expense and NCI
(941)
(1,142)
(1,314)
(18)
Net profit
2,184
2,645
3,052
(17)
Notable Items (post tax)
-
(148)
(47)
(100)
Expense to income ratio (Ex Notable Items)
58.66%
52.10%
48.85%
large
Net interest margin (Ex Notable Items)
1.70%
1.88%
2.00%
(18 bps)
FTE
12,042
12,534
13,189
(4)
$bn
2024
2023
2022
% Mov't
2024 - 2023
Customer deposits
Transactions
46.6
49.5
61.3
(6)
Savings
159.0
138.3
103.1
15
Term
65.6
63.9
62.1
3
Mortgage offsets
63.3
56.6
54.0
12
Total customer deposits
334.5
308.3
280.5
8
Loans
Housing
473.5
449.6
431.8
5
RAMS (in runoff)
29.8
36.0
35.8
(17)
Other
8.8
8.9
8.8
(1)
Provisions
(1.8)
(1.8)
(1.8)
-
Total loans
510.3
492.7
474.6
4
Deposit to loan ratio
65.54%
62.58%
59.11%
296 bps
Total assets
521.8
504.2
486.0
3
TCE
594.2
577.7
562.3
3
Risk weighted assets
174.4
174.7
180.2
-
Average interest earning assets
449.9
435.3
422.7
3
Average allocated capital
24.0
24.3
24.0
(1)
Credit quality
Impairment charges/(benefits) to average loans
0.05%
0.04%
0.04%
1 bps
Mortgage 90+ day delinquencies
1.12%
0.86%
0.75%
26 bps
Other consumer loans 90+ day delinquencies
1.23%
1.01%
1.35%
22 bps
Total stressed exposures to TCE
1.10%
0.86%
0.67%
24 bps
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
133
Consumer (Continued)
Net profit decreased 17% to $2,184 million.
Pre-provision profit declined by 15% to $3,373 million. Excluding Notable Items in Full Year 2023 associated with
restructuring charges and the branch transformation program, pre-provision profit declined by 19% with operating
income falling 6% and operating expenses rising 6%. The decline in operating income reflected continued contraction of
the net interest margin while expenses rose due to costs associated with the closure of the RAMS business, inflationary
pressures, higher investment spend and amortisation.
Net interest income
down 7%
•
The net interest margin contracted by 18 basis points, slowing through the period,
with margins increasing 1 basis point in Second Half 2024. Price competition for
new mortgages and the impact of lower mortgage rates offered to retain customers
looking to refinance were the largest contributors to the contraction. Narrower
deposit spreads, largely the impact of a mix shift towards higher interest rate,
lower margin savings accounts, were offset by higher returns on hedged deposits
and capital;
•
Net loans increased by 4% to $510.3 billion. Mortgage growth of 4% was
below system, reflecting the decision to close the RAMS business. Excluding this
impact, mortgages grew 5%, mostly in owner occupied variable rate mortgages,
representing 1.2x APRA housing system growth. Variable rate mortgages increased
from 76% to 91% of the portfolio following most of the $65 billion of expiring fixed
rate loans being retained and rolling onto on variable rates, coupled with almost all
new loans on variable rates;
•
Deposits were up 8% to $334.5 billion representing 1.1x APRA household deposits
system growth. Growth in savings balances of $20.7 billion more than offset the
decline in transaction balances of $2.9 billion, as customer preference continued
to shift towards higher yielding products. Mortgage offset balances increased by
12% to $63.3 billion as fixed rate mortgage customers shifted onto variable rate
mortgages with deposit offset features; and
•
With deposit growth continuing to exceed loan growth, the deposit to loan ratio
improved 296 basis points to 65.5%
Non-interest income up 1%
•
Non-interest income increased 1% to $528 million due to higher credit card fees
which was partly offset by higher customer remediation costs.
Expenses up 1%
•
Operating expenses excluding Notable Items increased 6%. This was driven by:
–
The decision to close RAMS to new business resulted in impairment of the RAMS
brand, technology and software assets and restructuring costs;
–
Inflationary pressures from both wages and salaries and third-party vendor
costs; and
–
Higher amortisation costs.
•
Higher expenses were partly offset by benefits from a simpler operating model
following the implementation of the One Bank Platform and a smaller property
footprint, including our corporate office and branches which included the benefit of
an additional 29 co-locations.
Impairment charge of
$248 million
•
Impairment charges to average loans were 5 basis points, up 1 basis point from
the prior year. The charge reflects higher mortgage and other consumer loans
delinquencies, which was partly offset by reductions in the mortgage overlay and
the downside scenario weight; and
•
Stressed exposure to TCE deteriorated by 24 basis points to 1.10%. Mortgage 90+
day delinquencies increased 26 basis points to 1.12%, reflecting higher mortgage
interest rates and the higher cost of living. Other consumer loan 90+ day
delinquencies increased 22 basis points to 1.23%, due to cost of living pressures
impacting customers.
134
WESTPAC 2024 ANNUAL REPORT
SEGMENT REPORTING
Business & Wealth
The Business & Wealth segment provides banking products and services to customers in Business Banking, Wealth
Management, Private Wealth and Westpac Pacific. Business Banking offers lending generally up to $200 million in
exposure, merchant services using eCommerce solutions and transaction banking services. Customers are categorised
by commercial businesses, small to medium businesses and agribusiness. The segment includes Private Wealth,
supporting the needs of high-net-worth individuals, as well as BT Financial Group, which provides wealth management
platform services. It also includes Westpac Pacific and our auto finance portfolio, which has been in runoff. In October
2024, we entered into an agreement to sell the auto finance portfolio. Subject to regulatory approval, the sale is
expected to be completed in the first half of 2025. The segment operates under the Westpac, St.George, BankSA, Bank
of Melbourne and BT brands.
$m
2024
2023
2022
% Mov't
2024 - 2023
Net interest income
5,338
4,992
3,508
7
Non-interest income
798
844
881
(5)
Notable Items
-
(88)
(1)
(100)
Net operating income
6,136
5,748
4,388
7
Operating expenses
(2,626)
(2,459)
(2,446)
7
Notable Items
-
(64)
(13)
(100)
Total operating expenses
(2,626)
(2,523)
(2,459)
4
Pre-provision profit
3,510
3,225
1,929
9
Impairment (charges)/benefits
(142)
(257)
(97)
(45)
Profit before income tax expense
3,368
2,968
1,832
13
Income tax expense and NCI
(1,012)
(882)
(557)
15
Net profit
2,356
2,086
1,275
13
Notable Items (post tax)
-
(107)
(9)
(100)
Expense to income ratio (Ex Notable Items)
42.80%
42.14%
55.73%
66 bps
Net interest margin (Ex Notable Items)
5.35%
5.17%
3.70%
18 bps
FTE
6,851
6,954
7,118
(1)
$bn
2024
2023
2022
% Mov't
2024 - 2023
Customer deposits
Transactions
65.2
64.8
76.1
1
Savings
29.1
31.3
35.1
(7)
Term
50.0
44.4
30.9
13
Total customer deposits
144.3
140.5
142.1
3
Loans
Commercial/SME
99.1
90.5
86.4
10
Pacific
1.3
1.2
1.1
8
Business lending
100.4
91.7
87.5
9
Other
1.4
1.5
1.8
(7)
Auto finance (in runoff)a
2.1
4.2
7.3
(50)
Provisions
(1.9)
(1.9)
(1.8)
-
Total loans
102.0
95.5
94.8
7
Deposit to loan ratio
141.48%
147.08%
149.97%
large
Total assets
107.1
101.2
100.7
6
TCE
137.8
129.7
127.0
6
Risk weighted assets
92.9
87.1
95.8
7
Average interest earning assets
99.7
96.6
94.8
3
Average allocated capital
11.6
11.3
11.0
3
Credit quality
Impairment charges/(benefits) to average loans
0.14%
0.27%
0.10%
(13 bps)
Impaired exposures to TCE
0.68%
0.52%
0.66%
16 bps
Total stressed exposures to TCE
5.56%
5.46%
5.44%
10 bps
a.
Includes personal and business loans.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
135
Business & Wealth (Continued)
Net profit increased 13% to $2,356 million.
Pre-provision profit rose 9% to $3,510 million. Excluding Notable Items in Full Year 2023 associated with remediation
provisions and restructuring charges, pre-provision profit increased by 4% with a 5% increase in operating income more
than offsetting a 7% rise in operating expenses. A higher net interest margin and lending growth increased operating
income while higher operating expenses reflected an increase in bankers and wages, higher technology costs, increased
investment spend and an increase in litigation provisions.
Net interest income up 9%
•
Excluding the impact of Notable Items in Full Year 2023, net interest income was
up 7%;
•
The net interest margin was up 18 basis points excluding Notable Items. The
averaging impact of previous interest rate rises generated wider deposit spreads
and returns on both hedged deposits and capital. This more than offset the mix shift
to higher interest rate, lower margin term deposits and the compression of lending
spreads due to price competition in an increasingly contested sector and the runoff
of the higher spread auto finance portfolio;
•
Net loans increased by 7% to $102.0 billion. Business lending growth of 9% was
diversified with strong growth in our target industries of agriculture, health and
professional services. This was partly offset by the continued run down of the auto
finance portfolio to $2.1 billion; and
•
Deposits were up 3% to $144.3 billion. Growth in term deposits of $5.6 billion offset
the decline in at call balances of $1.8 billion, as customer preference continued
to shift towards higher yielding products. Within the business segment, growth in
commercial customers was more than offset by reduction in small and medium
business customers from softer economic and trading conditions.
Non-interest income
down 4%
•
Non-interest income excluding Notable Items decreased 5% due to lower merchants
income, the wind down of the auto finance portfolio and lower platform revenue.
Expenses up 4%
•
Operating expenses excluding Notable Items increased 7%. Excluding the increase in
litigation provisions operating expenses increased 5% reflecting:
–
Inflationary pressures on wages and salaries and third-party technology
vendor costs;
–
Higher investment spend from the initiation and integration of our new business
origination platform BizEdge, HealthPoint, UNITE and upgrade of merchant
terminals; and
–
Investment in business bankers to drive growth.
Impairment charge of
$142 million
•
The impairment charge of 14 basis points of average loans compared to 27 basis
points in the prior year. The charge reflects new IAPs and a modest increase in
CAP as a less favourable outlook for commercial property was largely offset by a
reduction in the downside scenario weight in First Half 2024; and
•
Credit quality metrics deteriorated with stressed exposures to TCE up 10 basis
points to 5.56%, mostly within the wholesale & retail trade sector. The proportion
of impaired loans to TCE increased 16 basis points to 0.68%.
Platforms and Investments
$bn
2024
Inflows
Outflows
Net Flows
Other Mov't
2023
% Mov't
2024 - 2023
Platforms
150.8
20.5
(23.6)
(3.1)
18.2
135.7
11
Packaged funds
-
-
(1.4)
(1.4)
(0.1)
1.5
(100)
Total funds
150.8
20.5
(25.0)
(4.5)
18.1
137.2
10
BT & Private Wealth platform funds under administration increased 11% to $150.8 billion during 2024 reflecting higher
equity market valuations and dividend distributions. Net flows were negative reflecting pension outflows, excluding this
impact net flows were positive $3.4 billion.
BT packaged funds under administration decreased by $1.5 billion during 2024, reflecting the completion of the sale of
the private portfolio management business.
136
WESTPAC 2024 ANNUAL REPORT
SEGMENT REPORTING
Westpac Institutional Bank (WIB)
Westpac Institutional Bank (WIB) services predominantly corporate, institutional and government clients through three
areas of specialisation: Corporate & Institutional Banking (CIB); Global Transaction Services (GTS); and Financial Markets
(FM). CIB uses dedicated industry relationship and specialist product teams to support clients’ borrowing needs.
GTS is responsible for the provision of payments and liquidity management solutions to WIB’s clients and Westpac's
domestic and international payments infrastructure. FM provides a range of risk management, investment and debt
capital markets solutions to WIB clients and access to financial markets products for consumer and business customers.
Clients are supported throughout Australia and via branches and subsidiaries located in New Zealand, New York, London,
Frankfurt and Singapore.
$m
2024
2023
2022
% Mov't
2024 - 2023
Net interest income
2,240
1,926
1,438
16
Non-interest income
1,265
1,367
1,150
(7)
Net operating income
3,505
3,293
2,588
6
Operating expenses
(1,465)
(1,316)
(1,265)
11
Notable Items
-
(15)
-
(100)
Total operating expenses
(1,465)
(1,331)
(1,265)
10
Pre-provision profit
2,040
1,962
1,323
4
Impairment (charges)/benefits
(120)
(87)
(85)
38
Profit before income tax expense
1,920
1,875
1,238
2
Income tax expense and NCI
(553)
(538)
(372)
3
Net profit
1,367
1,337
866
2
Notable Items (post tax)
-
(10)
-
(100)
Expense to income ratio (Ex Notable Items)
41.80%
39.96%
48.88%
184 bps
Net interest margin (Ex Notable Items)
1.83%
1.89%
1.63%
(6 bps)
FTE
2,870
2,776
2,689
3
$bn
2024
2023
2022
% Mov't
2024 - 2023
Customer deposits
Transactions and others
64.2
64.2
66.1
-
Savings
10.4
10.5
11.0
(1)
Term
45.2
41.4
40.2
9
Total customer deposits
119.8
116.1
117.3
3
Loans
Loans
101.0
92.9
85.5
9
Provisions
(0.4)
(0.3)
(0.3)
33
Total loans
100.6
92.6
85.2
9
Deposit to loan ratio
119.10%
125.37%
137.65%
large
Total assets
137.2
106.3
106.2
29
TCE
216.2
207.4
199.3
4
Risk weighted assets
83.0
82.1
94.8
1
Average interest earning assets
122.2
101.7
88.2
20
Average allocated capital
9.6
9.2
7.8
4
Credit quality
Impairment charges to average loans
0.13%
0.10%
0.11%
3 bps
Impaired exposures to TCE
0.05%
0.04%
0.10%
1 bps
Total stressed exposures to TCE
0.76%
0.58%
0.35%
18 bps
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
137
Westpac Institutional Bank (WIB) (Continued)
Net operating income contribution1
$m
2024
2023
2022
% Mov't
2024 - 2023
Lending and deposit revenue
2,561
2,339
1,994
9
Sales and risk management income
846
886
695
(5)
DVA
(8)
56
(31)
large
Othera
106
12
(70)
large
Net operating income contribution
3,505
3,293
2,588
6
a.
Includes capital benefit and Bank Levy
Net profit increased 2% to $1,367 million.
Pre-provision profit increased 4% to $2,040 million. Excluding Notable Items in 2023, pre-provision profit increased 3%
with operating income rising 6% and expenses increasing 11%. The growth in operating income reflects growth in lending
and deposits, while the rise in operating expenses was driven by increased software amortisation and higher staffing and
third party vendor costs to support growth.
Net interest income up 16%
•
The net interest margin decreased 6 basis points reflecting an increase in trading
securities related to reverse repurchase agreements in Markets. Excluding this,
the net interest margin expanded 4 basis points reflecting improved loan spreads
and the benefit of higher interest rates on hedged capital. These impacts were
partly offset by a shift in deposits towards lower margin term deposits and higher
funding costs;
•
Average interest earning assets rose by 20% reflecting the impact of strong lending
growth of 9% and additional trading assets for Markets customers;
•
Net loans increased 9% to $100.6 billion from deepening relationships with existing
customers, predominantly in the property, infrastructure and industrial sectors; and
•
Deposits increased 3% to $119.8 billion driven by term deposit growth in the second
half achieved through increased customer activity.
Non-interest income
down 7%
•
Non-interest income declined 7% to $1,265 million. Key drivers included:
–
Lower sales and risk management income, including foreign exchange;
–
Higher fee income from increased underwriting activity and a larger loan
book; and
–
A $66 million reduction from DVA, driven by the non-repeat of tightening
counterparty credit spreads in the prior year.
Expenses up 10%
•
Expenses excluding Notable Items were up 11% to $1,465 million.
Movements reflected:
–
Higher software amortisation costs from major technology infrastructure
investments including payments;
–
Higher wages and salaries costs including hiring of new front-line staff to support
relationships and lending growth.
Impairment charge of
$120 million
•
The impairment charge to average loans was 13 basis points, compared to a 10 basis
point charge in the prior year. The charge was driven by one new IAP and a
small CAP charge due to an increase in stressed exposures and revised economic
projections; and
•
Stressed exposures to TCE deteriorated 18 basis points to 0.76%, reflecting higher
watchlist and substandard exposures in the wholesale & retail trade and property
sectors. The proportion of impaired exposures to TCE deteriorated modestly
to 0.05%.
1.
DVA includes Funding Value Adjustment (FVA) and Credit Value Adjustment (CVA). Sales and risk management income includes both
customer and non-customer income.
138
WESTPAC 2024 ANNUAL REPORT
SEGMENT REPORTING
Westpac New Zealand
Westpac New Zealand provides banking and wealth products and services for consumer, business and institutional
customers in New Zealand.
All figures are in NZ$ unless noted otherwise.
NZ$m
2024
2023
2022
% Mov't
2024 - 2023
Net interest income
2,590
2,514
2,280
3
Non-interest income
279
261
306
7
Notable Items
(9)
-
127
-
Net operating income
2,860
2,775
2,713
3
Operating expenses
(1,369)
(1,286)
(1,158)
6
Notable Items
-
(10)
-
(100)
Total operating expenses
(1,369)
(1,296)
(1,158)
6
Pre-provision profit
1,491
1,479
1,555
1
Impairment (charges)/benefits
(27)
(135)
27
(80)
Profit before income tax expense
1,464
1,344
1,582
9
Income tax expense and NCI
(409)
(381)
(414)
7
Net profit
1,055
963
1,168
10
Notable Items (post tax)
(6)
(7)
127
(14)
Profit/(loss) attributable to businesses sold
-
-
19
-
Expense to income ratio (Ex Notable Items)
47.72%
46.34%
44.78%
138 bps
Net interest margin (Ex Notable Items)
2.17%
2.13%
2.02%
4 bps
FTE
5,221
5,288
5,070
(1)
NZ$bn
2024
2023
2022
% Mov't
2024 - 2023
Customer deposits
Transactions and others
20.8
21.1
24.2
(1)
Savings
19.4
20.2
21.4
(4)
Term
39.5
38.5
32.3
3
Total customer deposits
79.7
79.8
77.9
-
Loans
Mortgages
68.0
65.8
63.8
3
Business
33.4
32.8
32.2
2
Other
1.2
1.2
1.2
-
Provisions
(0.5)
(0.5)
(0.4)
-
Total loans
102.1
99.3
96.8
3
Deposit to loan ratio
78.06%
80.36%
80.48%
(230 bps)
Total assets
123.5
121.8
119.2
1
TCE
147.3
147.1
144.6
-
Risk weighted assets
62.0
60.3
53.6
3
Liquid assets
17.8
19.2
18.4
(7)
Average interest earning assets
119.2
118.0
113.0
1
Average allocated capital
8.2
7.9
7.2
4
Total funds
13.2
11.4
10.9
16
Credit quality
Impairment charges/(benefits) to average loans
0.03%
0.14%
(0.03%)
(11 bps)
Mortgage 90+ day delinquencies
0.49%
0.33%
0.22%
16 bps
Other consumer loans 90+ day delinquencies
0.87%
0.92%
1.03%
(5 bps)
Impaired exposures to TCE
0.16%
0.06%
0.06%
10 bps
Total stressed exposures to TCE
1.73%
1.49%
0.97%
24 bps
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
139
Westpac New Zealand (Continued)
Net profit increased 10% to $1,055 million.
Pre-provision profit increased 1% to $1,491 million, reflecting a 3% increase in operating income which more than
offset a 6% increase in operating expenses. Operating income reflected growth in lending and a higher net interest
margin, while operating expenses were driven by increased technology and onshoring costs, software amortisation and
inflationary pressures.
Net interest income up 3%
•
The net interest margin was up 4 basis points. Higher returns on both transaction
deposits and capital balances were partly offset by the shift in customer preference
to higher interest earning term deposit accounts and narrower lending spreads
driven by price competition.
•
Net loans increased 3%, reflecting slowing system lending growth as the challenging
macroeconomic environment reduced demand for credit. Key drivers included:
–
Mortgage growth of 3% represents 0.9x RBNZ housing system growth.
Expectations for the RBNZ to continue to cut interest rates drove a shift in
customers preference to shorter fixed rate tenors and variable rate loans; and
–
Business lending increased 2% driven by higher corporate and institutional
lending, up 1.7x system.
•
Deposits decreased slightly to $79.7 billion reflecting a decrease in transaction and
savings accounts as customers preference increased towards higher yielding term
deposits. Term deposits grew $1.0 billion with an increase in household term deposit
accounts partly offset by a reduction in institutional term products.
Non-interest income up 7%
•
Non-interest income increased 7% to $279 million reflecting higher investment
income and business fees from increased activity.
Expenses up 6%
•
Operating expenses excluding Notable Items increased 6%, reflecting:
–
Higher wages and salaries and third-party vendor costs; and
–
Increase in technology investment and amortisation costs and ongoing
operational support costs following the completion of activities to comply with
the RBNZ's outsourcing policy.
Impairment charge of
$27 million
•
The impairment charge to average loans was 3 basis points, compared to a charge
of 14 basis points in the prior year. The lower charge is due to decreases in CAP
which was offset by increases in IAP within the business portfolio.
•
Stressed exposures to TCE increased 24 basis points to 1.73% mostly due to
deterioration in mortgage 90+ day delinquencies and higher impaired balances as
consumers and businesses feel the stress of higher interest rates and the challenging
economic environment.
140
WESTPAC 2024 ANNUAL REPORT
SEGMENT REPORTING
Westpac New Zealand (Continued)
Westpac New Zealand segment performance (A$ Equivalent)
Results have been translated into Australian dollars (A$) at the average exchange rates for each reporting period,
2024: $1.0846 (2023: $1.0846 ; 2022: $1.0831). Unless otherwise stated, assets and liabilities have been translated at spot
rates as at the end of the period, 2024: $1.0885 (2023: $1.0738 ; 2022: $1.1355).
$m
2024
2023
2022
% Mov't
2024 - 2023
Net interest income
2,388
2,317
2,107
3
Non-interest income
257
240
279
7
Notable Items
(8)
-
120
-
Net operating income
2,637
2,557
2,506
3
Operating expenses
(1,262)
(1,186)
(1,072)
6
Notable Items
-
(9)
-
(100)
Total operating expenses
(1,262)
(1,195)
(1,072)
6
Pre-provision profit
1,375
1,362
1,434
1
Impairment (charges)/benefits
(25)
(124)
25
(80)
Profit before income tax expense
1,350
1,238
1,459
9
Income tax expense and NCI
(377)
(350)
(382)
8
Net profit
973
888
1,077
10
Notable Items (post tax)
(6)
(7)
119
(14)
Profit/(loss) attributable to businesses sold
-
-
18
-
Expense to income ratio (Ex Notable Items)a
47.72%
46.34%
44.78%
138 bps
Net interest margin (Ex Notable Items)a
2.17%
2.13%
2.02%
4 bps
a.
Ratios calculated using NZ$.
$bn
2024
2023
2022
% Mov't
2024 - 2023
Customer deposits
73.2
74.3
68.6
(1)
Loans
93.8
92.5
85.3
1
Deposit to loan ratioa
78.06%
80.36%
80.48%
(230 bps)
Total assets
113.5
113.5
105.0
-
TCE
135.3
136.9
127.3
(1)
Risk weighted assets
56.9
56.2
47.2
1
Liquid assets
16.3
17.9
16.2
(9)
Average interest earning assetsb
110.0
108.8
104.4
1
Average allocated capitalb
7.5
7.3
6.6
3
Total funds
12.1
10.6
9.6
14
a.
Ratios calculated using NZ$.
b.
Averages are converted at applicable average rates.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
141
Group Businesses
The segment comprises:
•
Treasury, which is responsible for the management of Westpac’s balance sheet including wholesale funding, capital,
and liquidity. Treasury also manages interest rate risk and foreign exchange risks associated with wholesale funding;
•
Enterprise services, which include earnings on capital not allocated to segments, certain intra-group transactions and
gains/losses from asset sales, earnings and costs associated with Westpac’s fintech investments; and
•
Other costs which include expenses not directly attributable to segments including Corporate Affairs, a portion of
enterprise technology costs related to UNITE, certain customer remediation expenses and enterprise provisions.
$m
2024
2023
2022
% Mov't
2024 - 2023
Net interest income
1,318
1,002
1,080
32
Non-interest income
(1)
153
432
large
Notable Items
(167)
191
(418)
large
Net operating income
1,150
1,346
1,094
(15)
Operating expenses
(804)
(738)
(987)
9
Notable Items
-
(170)
(542)
(100)
Total operating expenses
(804)
(908)
(1,529)
(11)
Pre-provision profit
346
438
(435)
(21)
Impairment (charges)/benefits
(2)
(1)
9
100
Profit before income tax expense
344
437
(426)
(21)
Income tax expense and NCI
(234)
(198)
(150)
18
Net profit/(loss)
110
239
(576)
(54)
Notable Items (post tax)
(117)
99
(937)
large
Profit/(loss) attributable to business sold
-
131
168
(100)
Treasury
$m
2024
2023
2022
% Mov't
2024 - 2023
Net interest income
1,054
665
979
58
Non-interest income
20
14
21
43
Notable Items
(158)
(20)
553
large
Net operating income
916
659
1,553
39
Net profit
484
319
960
52
Net profit of $110 million compared to a net profit of $239 million in the prior year.
Pre-provision profit of $346 million was lower than the profit of $438 million in the prior year. Excluding Notable Items,
pre-provision profit was $513 million compared with a $417 million profit in the prior year.
Net operating income
down 15%
•
Excluding Notable Items, income was up 14% to $1,317 million. Movements included:
–
Higher Treasury contribution from favourable positioning for interest
rate volatility;
–
Lower income due to businesses that were exited in the prior year; and
–
Lower realised gains on sale of liquid assets.
Expenses down 11%
•
Excluding Notable Items, expenses were up 9% to $804 million primarily driven
by higher technology investment spend relating to the technology simplification
program, UNITE.
142
WESTPAC 2024 ANNUAL REPORT
FINANCIAL
STATEMENTS
Income statements
Statements of comprehensive income
Balance sheets
Statements of changes in equity
Cash flow statements
NOTES TO THE FINANCIAL STATEMENTS
Note 1.
Financial statements preparation
FINANCIAL PERFORMANCE
Note 2.
Segment reporting
Note 3.
Net interest income and average balance sheet and
interest rates
Note 4.
Non-interest income
Note 5.
Operating expenses
Note 6.
Impairment charges
Note 7.
Income tax
Note 8.
Earnings per share
FINANCIAL ASSETS AND FINANCIAL LIABILITIES
Lending and credit risk
Note 9.
Loans
Note 10.
Provision for expected credit losses
Note 11.
Credit risk management
Deposits and other funding arrangements
Note 12.
Deposits and other borrowings
Note 13.
Debt issues
Note 14.
Loan capital
Note 15.
Securitisation, covered bonds and other
transferred assets
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
INTANGIBLE ASSETS, PROVISIONS, COMMITMENTS
AND CONTINGENCIES
Note 24.
Intangible assets
Note 25.
Provisions, contingent liabilities, contingent assets
and credit commitments
CAPITAL AND DIVIDENDS
Note 26. Shareholders’ equity
Note 27.
Capital adequacy
Note 28.
Dividends
GROUP STRUCTURE
Note 29.
Investments in subsidiaries and associates
Note 30. Structured entities
OTHER
Note 31.
Share-based payments
Note 32.
Superannuation commitments
Note 33.
Auditor’s remuneration
Note 34. Related party disclosures
Note 35.
Notes to the cash flow statements
Note 36. Subsequent events
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
STATUTORY STATEMENTS
Directors’ declaration
Independent auditor’s report to the members of Westpac
Banking Corporation
Limitation on Independent Registered Public Accounting
Firm’s Liability
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
143
INCOME STATEMENTS
for the years ended 30 September
Westpac Banking Corporation
Consolidated
Parent Entity
$m
Note
2024
2023
2022
2024
2023
Interest income:
Calculated using the effective interest method
3
52,739
42,515
22,981
48,358
38,909
Other
3
1,608
1,237
270
1,571
992
Total interest income
54,347
43,752
23,251
49,929
39,901
Interest expense
3
(35,594)
(25,435)
(6,090)
(34,492)
(24,786)
Net interest income
18,753
18,317
17,161
15,437
15,115
Non-interest income
Net fees
4
1,672
1,645
1,671
1,494
1,461
Net wealth management and insurance
4
441
562
808
-
-
Trading
4
704
717
664
637
678
Other
4
18
404
(698)
1,851
1,668
Total non-interest income
2,835
3,328
2,445
3,982
3,807
Net operating income
21,588
21,645
19,606
19,419
18,922
Operating expenses
5
(10,944)
(10,692)
(10,802)
(9,728)
(9,473)
Impairment (charges)/benefits
6
(537)
(648)
(335)
(475)
(511)
Profit before income tax expense
10,107
10,305
8,469
9,216
8,938
Income tax expense
7
(3,117)
(3,104)
(2,770)
(2,525)
(2,504)
Profit after income tax expense
6,990
7,201
5,699
6,691
6,434
Net profit attributable to non-controlling interests (NCI)
-
(6)
(5)
-
-
Net profit attributable to owners of Westpac Banking
Corporation (WBC)
6,990
7,195
5,694
6,691
6,434
Earnings per share (cents)
Basic
8
200.9
205.3
159.9
Diluted
8
191.7
195.2
152.4
The above income statements should be read in conjunction with the accompanying notes.
144
WESTPAC 2024 ANNUAL REPORT
STATEMENTS OF COMPREHENSIVE INCOME
for the years ended 30 September
Westpac Banking Corporation
Consolidated
Parent Entity
$m
2024
2023
2022
2024
2023
Profit after income tax expense
6,990
7,201
5,699
6,691
6,434
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)
(588)
(201)
(318)
(813)
(178)
Cash flow hedging instruments
501
(635)
1,107
873
(570)
Transferred to income statement:
Debt securities measured at FVOCI
5
(125)
(254)
5
(125)
Cash flow hedging instruments
77
(309)
(237)
132
(349)
Loss allowance on debt securities measured at FVOCI
1
1
(2)
1
1
Exchange differences on translation of foreign operations (net of
associated hedges)
(300)
367
(264)
(134)
54
Income tax on items taken to or transferred from equity:
Debt securities measured at FVOCI
179
98
166
242
92
Cash flow hedging instruments
(182)
283
(253)
(301)
276
Items that will not be reclassified subsequently to profit or loss
Gains/(losses) on equity securities measured at FVOCI (net of tax)
1
(10)
92
(3)
(20)
Own credit adjustment on financial liabilities designated at fair value (net
of tax)
13
(21)
80
13
(21)
Remeasurement of defined benefit obligation recognised in equity (net
of tax)
(14)
(105)
446
(12)
(110)
Net other comprehensive income/(expense) (net of tax)
(307)
(657)
563
3
(950)
Total comprehensive income
6,683
6,544
6,262
6,694
5,484
Attributable to:
Owners of WBC
6,685
6,536
6,257
6,694
5,484
NCI
(2)
8
5
-
-
Total comprehensive income
6,683
6,544
6,262
6,694
5,484
The above statements of comprehensive income should be read in conjunction with the accompanying notes.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
145
BALANCE SHEETS
as at 30 September
Westpac Banking Corporation
Consolidated
Parent Entity
$m
Note
2024
2023
2024
2023
Assets
Cash and balances with central banks
35
65,667
102,522
58,400
93,466
Collateral paid
6,269
4,535
6,199
4,505
Trading securities and financial assets measured at fair value through income
statement (FVIS)
16
49,228
30,507
47,014
27,987
Derivative financial instruments
20
24,109
21,343
23,902
21,038
Investment securities
17
103,885
75,326
95,623
67,508
Loans
9
806,767
773,254
710,043
678,021
Other financial assets
18
5,456
6,219
4,951
5,812
Due from subsidiaries
-
-
52,339
53,644
Investment in subsidiaries
-
-
9,095
8,019
Property and equipment
2,251
2,245
1,804
1,833
Tax assets
7
2,160
2,100
1,896
1,962
Intangible assets
24
10,746
10,886
9,131
9,260
Other assets
1,006
837
837
705
Total assets
1,077,544
1,029,774
1,021,234
973,760
Liabilities
Collateral received
3,078
3,525
2,935
3,243
Deposits and other borrowings
12
720,489
688,168
644,481
610,357
Other financial liabilities
19
38,077
44,870
33,917
38,780
Derivative financial instruments
20
30,974
24,647
30,795
24,574
Debt issues
13
169,284
156,573
143,882
134,957
Tax liabilities
7
569
780
408
607
Due to subsidiaries
-
-
55,722
55,663
Provisions
25
2,505
2,777
2,271
2,543
Other liabilities
2,633
2,719
2,065
2,177
Total liabilities excluding loan capital
967,609
924,059
916,476
872,901
Loan capital
14
37,883
33,176
36,770
32,085
Total liabilities
1,005,492
957,235
953,246
904,986
Net assets
72,052
72,539
67,988
68,774
Shareholders' equity
Share capital:
Ordinary share capital
26
37,958
39,826
37,958
39,826
Treasury shares
26
(758)
(702)
(816)
(760)
Reserves
26
1,732
1,935
1,757
1,659
Retained profits
32,773
31,436
29,089
28,049
Total equity attributable to owners of WBC
71,705
72,495
67,988
68,774
NCI
26
347
44
-
-
Total shareholders' equity and NCI
72,052
72,539
67,988
68,774
The above balance sheets should be read in conjunction with the accompanying notes.
146
WESTPAC 2024 ANNUAL REPORT
STATEMENTS OF CHANGES IN EQUITY
for the years ended 30 September
Westpac Banking Corporation
Consolidated
$m
Share
capital
(Note 26)
Reserves
(Note 26)
Retained
profits
Total equity
attributable
to owners
of WBC
NCI
(Note 26)
Total
shareholders'
equity
and NCI
Balance as at 30 September 2021
40,995
2,227
28,813
72,035
57
72,092
Profit after income tax expense
-
-
5,694
5,694
5
5,699
Net other comprehensive income/(expense)
-
37
526
563
-
563
Total comprehensive income/(expense)
-
37
6,220
6,257
5
6,262
Transactions in capacity as equity holders:
Dividends on ordinary sharesa
-
-
(4,337)
(4,337)
-
(4,337)
Other equity movements:
Off-market share buyback (net of transaction costs)b
(1,902)
-
(1,601)
(3,503)
-
(3,503)
Share-based payment arrangements
-
87
-
87
-
87
Purchase of shares
(33)
-
-
(33)
-
(33)
Net acquisition of treasury shares
(49)
-
-
(49)
-
(49)
Other
-
27
(32)
(5)
(5)
(10)
Total contributions and distributions
(1,984)
114
(5,970)
(7,840)
(5)
(7,845)
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 sharesa
-
-
(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 sharesa
-
-
(5,652)
(5,652)
-
(5,652)
Share buybackc
(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 interestd
-
5
-
5
(30)
(25)
Preference shares issuede
-
-
-
-
339
339
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
a.
Relates to fully franked dividends at 30%:
- 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);
- 2023: 2023 interim dividend of 70 cents per share ($2,456 million) and 2022 final dividend of 64 cents per share ($2,240 million); and
- 2022: 2022 interim dividend of 61 cents per share ($2,136 million) and 2021 final dividend of 60 cents per share ($2,201 million).
b.
In 2022, the Group completed a $3.5 billion off-market share buyback of Westpac ordinary shares.
c.
During 2024, Westpac announced its intention to undertake a $2.5 billion on market buyback of WBC ordinary shares. As at
30 September 2024 Westpac has bought back and cancelled 67,665,599 ordinary shares ($1,812 million) at an average price of $26.78.
d.
During 2024, Westpac acquired 8.74% of the non-controlling interest in Westpac Bank-PNG-Limited, which will raise its interest to 98.65%.
e.
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.
STRATEGIC
REVIEW
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STATEMENTS
SHAREHOLDER
INFORMATION
147
STATEMENTS OF CHANGES IN EQUITY
for the years ended 30 September
Westpac Banking Corporation
Parent Entity
$m
Share
capital
(Note 26)
Reserves
(Note 26)
Retained
profits
Total equity
attributable
to owners
of WBC
Balance as at 30 September 2022
38,953
2,388
26,442
67,783
Profit after income tax expense
-
-
6,434
6,434
Net other comprehensive income/(expense)
-
(819)
(131)
(950)
Total comprehensive income/(expense)
-
(819)
6,303
5,484
Transactions in capacity as equity holders:
Dividends on ordinary sharesa
-
-
(4,696)
(4,696)
Dividend reinvestment plan
192
-
-
192
Other equity movements:
Share-based payment arrangements
-
90
-
90
Purchase of shares
(32)
-
-
(32)
Net acquisition of treasury shares
(47)
-
-
(47)
Other
-
-
-
-
Total contributions and distributions
113
90
(4,696)
(4,493)
Balance as at 30 September 2023
39,066
1,659
28,049
68,774
Profit after income tax expense
-
-
6,691
6,691
Net other comprehensive income/(expense)
-
2
1
3
Total comprehensive income/(expense)
-
2
6,692
6,694
Transactions in capacity as equity holders:
Dividends on ordinary sharesa
-
-
(5,652)
(5,652)
Share buybackb
(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
a.
Relates to fully franked dividends at 30%:
- 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 million) and 2022 final dividend of 64 cents per share ($2,240 million).
b.
During 2024, Westpac announced its intention to undertake a $2.5 billion on market buyback of WBC ordinary shares. As at 30 September
2024 Westpac has bought back and cancelled 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.
148
WESTPAC 2024 ANNUAL REPORT
CASH FLOW STATEMENTS
for the years ended 30 September
Westpac Banking Corporation
Consolidated
Parent Entity
$m
Note
2024
2023
2022
2024
2023
Cash flows from operating activities
Interest received
52,515
41,970
22,423
48,242
38,311
Interest paid
(34,000)
(22,654)
(5,091)
(33,039)
(22,634)
Dividends received excluding life business
3
1
4
1,285
1,051
Other non-interest income received
4,314
3,567
4,208
4,274
3,301
Operating expenses paid
(9,679)
(9,856)
(9,724)
(8,464)
(8,762)
Income tax paid excluding life business
(3,369)
(2,439)
(2,278)
(2,871)
(2,141)
Life business:
Receipts from policyholders and customers
-
-
845
-
-
Interest and other items of similar nature
-
-
1
-
-
Dividends received
-
-
25
-
-
Payments to policyholders and suppliers
-
-
(619)
-
-
Income tax paid
-
-
(65)
-
-
Cash flows from operating activities before changes in operating
assets and liabilities
9,784
10,589
9,729
9,427
9,126
Net (increase)/decrease in:
Collateral paid
(2,097)
1,545
(1,524)
(2,057)
1,537
Trading securities and financial assets measured at FVIS
(18,994)
(4,524)
(3,750)
(19,452)
(4,162)
Derivative financial instruments
(836)
4,082
2,451
1,358
4,414
Loans
(35,083)
(27,270)
(36,345)
(32,528)
(25,080)
Other financial assets
(348)
128
279
(231)
94
Life insurance assets and liabilities
-
-
266
-
-
Other assets
(34)
8
20
2
11
Net increase/(decrease) in:
Collateral received
(318)
(2,888)
3,643
(181)
(3,092)
Deposits and other borrowings
35,243
24,692
35,054
35,870
23,347
Other financial liabilities
(7,084)
(17,146)
7,120
(5,281)
(18,117)
Other liabilities
-
(12)
11
(9)
(3)
Net cash provided by/(used in) operating activities
35
(19,767)
(10,796)
16,954
(13,082)
(11,925)
Cash flows from investing activities
Proceeds from investment securities
47,624
36,480
36,022
40,089
33,383
Purchase of investment securities
(72,786)
(33,753)
(34,076)
(65,072)
(29,406)
Net movement in amounts due to/from controlled entities
-
-
-
(1,283)
(625)
Proceeds from disposal of controlled entities and other businesses,
net of cash disposed
35
-
293
2,115
-
-
Purchase of controlled entities and other businesses
35
(30)
-
(14)
-
-
Net (increase)/decrease in investments in controlled entities
-
-
-
(254)
640
Purchase of associates
(4)
(1)
-
(3)
-
Proceeds from disposal of property and equipment
46
72
25
37
71
Purchase of property and equipment
(235)
(238)
(166)
(168)
(165)
Purchase of intangible assets
(782)
(1,141)
(1,099)
(673)
(952)
Net cash provided by/(used in) investing activities
(26,167)
1,712
2,807
(27,327)
2,946
Cash flows from financing activities
Proceeds from debt issues (net of issue costs)
80,245
70,974
73,309
68,438
62,992
Redemption of debt issues
(67,100)
(62,596)
(55,899)
(58,931)
(52,671)
Payments for the principal portion of lease liabilities
(416)
(401)
(427)
(365)
(358)
Issue of loan capital (net of issue costs)
6,326
3,453
6,527
6,326
2,894
Redemption of loan capital
(1,957)
(1,171)
(2,344)
(1,951)
(1,171)
Payments for share buyback
(1,812)
-
(3,503)
(1,812)
-
Issue of perpetual preference shares (net of issue cost)
339
-
-
-
-
Purchase of shares relating to share-based payment arrangements
(56)
(32)
(33)
(56)
(32)
Purchase of treasury shares (including RSP and EIP
restricted shares)
(56)
(47)
(49)
(56)
(47)
Payment of dividends
(5,652)
(4,504)
(4,337)
(5,652)
(4,504)
Dividends paid to NCI
(4)
(21)
(5)
-
-
Purchase of shares from NCI
35
(25)
-
-
-
-
Net cash provided by/(used in) financing activities
9,832
5,655
13,239
5,941
7,103
Net increase/(decrease) in cash and balances with central banks
(36,102)
(3,429)
33,000
(34,468)
(1,876)
Effect of exchange rate changes on cash and balances with
central banks
(753)
694
897
(598)
160
Net (increase)/decrease in cash and balances with central banks
included in assets held for sale
-
-
7
-
-
Cash and balances with central banks as at beginning of year
102,522
105,257
71,353
93,466
95,182
Cash and balances with central banks as at end of year
35
65,667
102,522
105,257
58,400
93,466
The above cash flow statements should be read in conjunction with the accompanying notes.
STRATEGIC
REVIEW
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FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
149
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 2024, was authorised for issue by the Board of Directors on
3 November 2024. 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 and de-recognition 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 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.
(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 2024
AASB 2023-2 Amendments to Australian Accounting Standards – International Tax Reform – Pillar Two Model Rules
(AASB 2023-2) was issued on 22 June 2023 and adopted by Westpac for the year ended 30 September 2024.
This Standard amends AASB 112 as a result of the Organisation for Economic Co-operation and Development’s (OECD)
international tax reform, known as Pillar Two, to introduce:
•
a mandatory temporary exception to the recognition and disclosure of deferred taxes arising from the
implementation of Pillar Two, which has been adopted by Westpac; and
•
disclosure requirements for impacted entities to help financial statement users better understand Westpac’s exposure
to Pillar Two income taxes.
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.
The Pillar Two legislation has been enacted or substantially enacted in certain jurisdictions in which Westpac
operates. The legislation is effective for Westpac’s financial year beginning 1 October 2024. Westpac has performed an
assessment of its potential exposure to Pillar Two income taxes.
The assessment is based on the most recent tax filings, country-by-country reporting and financial statements for the
constituent entities in the Group. Based on the assessment performed, Westpac does not expect a material exposure
to Pillar Two top-up taxes. The impact of the Pillar Two legislation on future financial performance will continue to
be assessed.
150
WESTPAC 2024 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 1. Financial statements preparation (Continued)
(iv) Other changes during the year ended 30 September 2024
Multinational tax reforms – Consolidated entity disclosure statement
During the year, the Federal Government passed legislation that made amendments to the Corporations Act 2001
to address tax transparency. The amendments require all public companies (listed and unlisted) to include a new
“consolidated entity disclosure statement” in their financial reports. This statement requires information about entities in
the consolidated group including the entities’ name, legal structure, location of incorporation or formation, percentage
ownership and country of tax residency. These amendments apply to Westpac for the year ended 30 September 2024
and are included the Consolidated Entity Disclosure Statement of this Annual Report on page 268.
(v) 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.
(vi) Foreign currency translation
Functional and presentational 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.
(vii) Comparative revisions
Comparative information has been revised where appropriate to conform to changes in presentation in the current year
and to enhance comparability.
STRATEGIC
REVIEW
PERFORMANCE
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STATEMENTS
SHAREHOLDER
INFORMATION
151
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 7
Income tax
Note 10
Provision for expected credit losses (ECL)
Note 22
Fair values of financial assets and financial liabilities
Note 24
Intangible assets
Note 25
Provisions, contingent liabilities, contingent assets and credit commitments
Note 32
Superannuation commitments
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 do not have a material impact on the judgements, assumptions and estimates for the year ended
30 September 2024. This conclusion also reflects that the most significant impacts of climate change is expected to
mostly occur beyond the expected life of our exposures.
Key considerations in reaching this conclusion included assessing Westpac’s exposure to:
•
high transition risk industries as a proportion of overall credit exposures; and
•
physical risks that may arise from changing weather patterns and extreme weather events, with a particular focus on
Westpac’s housing loans.
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 capabilities to assess these impacts.
Details of the provision for ECL, including overlays held in relation to physical climate-related risk, are provided in
Note 10.
c. Future developments
(i) Accounting standards
AASB 18 Presentation and Disclosure in Financial Statements (AASB 18) was issued on 7 June 2024 and will be effective
for the 30 September 2028 year end unless early adopted. AASB 18 will replace AASB 101 Presentation of Financial
Statements. This standard will not change the recognition and measurement of items in the financial statements, but will
impact the presentation and disclosure in the financial statements, including:
•
new categories and subtotals in the income statement to enhance comparability;
•
enhancing the disclosure of management defined performance measures; and
•
changes to the grouping of information in the financial statements to provide more useful information.
Westpac is continuing to assess the impact of adopting AASB 18.
AASB 2024-2 Amendments to Australian Accounting Standards – Classification and Measurement of Financial
Instruments (AASB 2024-2) was issued on 29 July 2024 and is effective for the 30 September 2027 year end unless
early adopted.
The amendments include:
•
changes to disclosures for investments in equity instruments designated at fair value through other comprehensive
income and additional disclosures for financial instruments with contingent features that do not relate directly to
basic lending risks and costs;
•
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.
The standard is not expected to have a material impact for Westpac.
152
WESTPAC 2024 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 1. Financial statements preparation (Continued)
(ii) Other developments
AASB S1 General Requirements for Disclosure of Sustainability-related Financial Information (AASB S1) and
AASB S2 Climate-related Disclosures (AASB S2) were issued by the AASB on 20 September 2024. AASB S1 is a
voluntary standard while AASB S2 is mandatory. Both standards are effective for the Group for the 30 September 2026
year end unless early adopted.
These standards are Australian Sustainability Reporting Standards which are issued by the AASB and set out the
sustainability-related and climate-related financial disclosures for sustainability reports and general purpose financial
reports. The main features of these standards are described below.
AASB S1
This Standard applies to reporting sustainability-related financial information across a range of possible sustainability
topics, including climate-related financial disclosures that form part of an entity’s general-purpose financial reporting.
It sets out general requirements for the presentation of those disclosures, guidelines for their structure and minimum
requirements for their content (including disclosures on governance, strategy, risk management, and metrics and
targets), the location of disclosures, the timing of reporting and disclosures relating to judgements, uncertainties
and errors.
AASB S2
This standard sets out disclosure requirements in general purpose financial reports about climate-related risks and
opportunities that could reasonably be expected to affect the entity’s cash flows, access to finance or cost of capital
over the short, medium or long term. The main climate-related financial disclosure requirements relate to four key areas
of governance, strategy, risk management, and metrics and targets. The standard also requires disclosures on scenario
analysis and greenhouse gas emissions (Scope 1, 2 and 3). General requirements such as the conceptual foundations for
reporting such information, the location of disclosures, the timing of reporting and disclosures relating to judgements,
uncertainties and errors are also provided.
The Group is continuing to assess the impact of adopting AASB S1 and AASB S2.
STRATEGIC
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153
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.
The statutory amount of the net operating income and operating expenses segment line items are separated to show
the balances excluding Notable Items and the total Notable Items for each of these categories. This is consistent with
the information provided internally to Westpac’s key decision makers.
Notable Items are items that management believes are not reflective of Westpac’s ongoing business performance and
are grouped into the following broad categories:
•
Unrealised fair value gains and losses on economic hedges that do not qualify for hedge accounting
•
Net ineffectiveness on qualifying hedges
•
Large items that are not reflective of 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
Changes in presentation
In 2024, Westpac established a new operating segment called Business & Wealth and dissolved the Specialist Business
Division (SBD). The remaining operating businesses of SBD, which included the Platforms business, Pacific Banking,
Margin lending and the Auto finance portfolio were aggregated into the Business & Wealth segment. The past
contribution from SBD’s sold businesses were aggregated with Group Businesses.
In addition, we have made some changes to enhance performance reporting and assessment:
•
Funds transfer pricing: The methodology by which the costs of wholesale funding and liquidity are allocated to
segments have been refined.
•
Capital allocations: Revised capital allocations to align to the Basel III framework adopted in January 2023.
•
Expense allocations: Reallocation of Enterprise functions across segments.
These changes have been reflected in segment reporting so that the information presented aligns with
information reported internally to key decision makers. Comparatives have been restated to align with the current
period 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 through a significant online capability supported by an extensive branch and ATM network, call centres and
specialist relationship and product managers. Our operations comprise the following key segments:
•
Consumer provides a full range of 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, generally up to $200 million in exposure, Wealth Management,
Private Wealth, Westpac Pacific and auto finance.
•
Westpac Institutional Bank (WIB) delivers a broad range of financial products and services to corporate, institutional
and government customers.
•
Westpac New Zealand provides banking, and wealth products and services for consumer, business and institutional
customers in New Zealand.
•
Group Businesses includes support functions such as Treasury, Customer & Corporate Services, Technology, Finance,
Human Resources, Legal and other Enterprise Services. It also includes Group-wide elimination entries arising on
consolidation, centrally raised provisions and other unallocated revenue and expenses.
154
WESTPAC 2024 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 2. Segment reporting (Continued)
The following tables present the segment results for Westpac.
$m
Consumer
Business &
Wealth
Westpac
Institutional
Bank
Westpac
New
Zealand (A$)
Group
Businesses
Total
Notable
Items
(pre-tax)
Income
statement
2024
Net interest income
7,632
5,338
2,240
2,388
1,318
18,916
(163)
18,753
Net fee income
515
341
653
179
(16)
1,672
-
1,672
Net wealth
management income
-
395
-
39
7
441
-
441
Trading income
-
57
635
40
(16)
716
(12)
704
Other income
13
5
(23)
(1)
24
18
-
18
Notable Items
-
-
-
(8)
(167)
(175)
175
-
Net operating income
8,160
6,136
3,505
2,637
1,150
21,588
-
21,588
Operating expensesa
(4,787)
(2,626)
(1,465)
(1,262)
(804)
(10,944)
-
(10,944)
Total operating expenses
(4,787)
(2,626)
(1,465)
(1,262)
(804)
(10,944)
-
(10,944)
Pre-provision profit
3,373
3,510
2,040
1,375
346
10,644
-
10,644
Impairment
(charges)/benefits
(248)
(142)
(120)
(25)
(2)
(537)
-
(537)
Profit before income
tax expense
3,125
3,368
1,920
1,350
344
10,107
-
10,107
Income tax
(expense)/benefitb
(941)
(1,012)
(553)
(377)
(234)
(3,117)
-
(3,117)
Net profit attributable
to NCI
-
-
-
-
-
-
-
-
Net profit attributable to
owners of WBC
2,184
2,356
1,367
973
110
6,990
-
6,990
Notable Items (post-tax)
-
-
-
(6)
(117)
(123)
Balance sheet
Loans
510,317
101,989
100,582
93,833
46
806,767
Deposits and
other borrowings
334,462
144,289
119,795
74,912
47,031
720,489
2023
Net interest income
8,177
4,992
1,926
2,317
1,002
18,414
(97)
18,317
Net fee income
504
360
596
177
8
1,645
-
1,645
Net wealth
management income
-
425
-
33
114
572
(10)
562
Trading income
-
47
692
33
(22)
750
(33)
717
Other income
20
12
79
(3)
53
161
243
404
Notable Items
-
(88)
-
-
191
103
(103)
-
Net operating income
8,701
5,748
3,293
2,557
1,346
21,645
-
21,645
Operating expensesc
(4,533)
(2,459)
(1,316)
(1,186)
(738)
(10,232)
(460)
(10,692)
Notable Items
(202)
(64)
(15)
(9)
(170)
(460)
460
-
Total operating expenses
(4,735)
(2,523)
(1,331)
(1,195)
(908)
(10,692)
-
(10,692)
Pre-provision profit
3,966
3,225
1,962
1,362
438
10,953
-
10,953
Impairment
(charges)/benefits
(179)
(257)
(87)
(124)
(1)
(648)
-
(648)
Profit before income
tax expense
3,787
2,968
1,875
1,238
437
10,305
-
10,305
Income tax
(expense)/benefitb
(1,142)
(877)
(538)
(350)
(197)
(3,104)
-
(3,104)
Net profit attributable
to NCI
-
(5)
-
-
(1)
(6)
-
(6)
Net profit attributable to
owners of WBC
2,645
2,086
1,337
888
239
7,195
-
7,195
Notable Items (post-tax)
(148)
(107)
(10)
(7)
99
(173)
Balance sheet
Loans
492,716
95,548
92,568
92,488
(66)
773,254
Deposits and
other borrowings
308,342
140,536
116,052
76,544
46,694
688,168
a.
Impairment of assets (including goodwill and other intangible assets) were insignificant for all the segments except for $55 million
in Consumer.
b.
Includes tax benefits on Notable Items of $52 million (2023: $184 million)
c.
Impairment of assets (including goodwill and other intangible assets) were insignificant for all the segments except for $36 million in
Group Businesses.
STRATEGIC
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SHAREHOLDER
INFORMATION
155
Note 2. Segment reporting (Continued)
$m
Consumer
Business &
Wealth
Westpac
Institutional
Bank
Westpac
New
Zealand (A$)
Group
Businesses
Total
Notable
Items
(pre-tax)
Income
statement
2022
Net interest income
8,473
3,508
1,438
2,107
1,080
16,606
555
17,161
Net fee income
508
381
605
185
(7)
1,672
(1)
1,671
Net wealth management
and insurance income
-
441
-
54
364
859
(51)
808
Trading income
-
41
516
43
20
620
44
664
Other income
49
18
29
(3)
55
148
(846)
(698)
Notable Items
-
(1)
-
120
(418)
(299)
299
-
Net operating income
9,030
4,388
2,588
2,506
1,094
19,606
-
19,606
Operating expensesa
(4,411)
(2,446)
(1,265)
(1,072)
(987)
(10,181)
(621)
(10,802)
Notable Items
(66)
(13)
-
-
(542)
(621)
621
-
Total operating expenses
(4,477)
(2,459)
(1,265)
(1,072)
(1,529)
(10,802)
-
(10,802)
Pre-provision profit
4,553
1,929
1,323
1,434
(435)
8,804
-
8,804
Impairment
(charges)/benefits
(187)
(97)
(85)
25
9
(335)
-
(335)
Profit before income
tax expense
4,366
1,832
1,238
1,459
(426)
8,469
-
8,469
Income tax
(expense)/benefitb
(1,314)
(553)
(372)
(382)
(149)
(2,770)
-
(2,770)
Net profit attributable
to NCI
-
(4)
-
-
(1)
(5)
-
(5)
Net profit attributable to
owners of WBC
3,052
1,275
866
1,077
(576)
5,694
-
5,694
Notable Items (post-tax)
(47)
(9)
-
119
(937)
(874)
Balance sheet
Loans
474,591
94,776
85,182
85,285
(187)
739,647
Deposits and
other borrowings
280,534
142,133
117,252
71,202
48,008
659,129
a.
Impairment of assets (including goodwill and other intangible assets) were insignificant for all the segments except for the following:
- Group Businesses: $291 million; and
- Westpac Institutional Bank: $45 million.
b.
Includes tax benefits on Notable Items of $46 million.
Notable Items after tax
$m
2024
2023
2022
Economic hedges
(128)
(92)
470
Hedge ineffectiveness
5
66
(52)
Provisions for remediation, litigation, fines and penalties
-
(176)
(133)
Asset sales and revaluations
-
256
(876)
The write-down of assets
-
(87)
(283)
Restructuring costs
-
(140)
-
Total Notable Items after tax
(123)
(173)
(874)
156
WESTPAC 2024 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
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:
2024
2023
2022
$m
%
$m
%
$m
%
Revenue
Australia
48,442
84.7
40,222
85.4
20,198
78.6
New Zealand
6,809
11.9
5,053
10.7
5,010
19.5
Other overseasa
1,931
3.4
1,805
3.9
488
1.9
Total
57,182
100.0
47,080
100.0
25,696
100.0
Non-current assetsb
Australia
11,573
89.0
11,782
89.7
11,606
91.0
New Zealand
1,319
10.1
1,282
9.8
1,088
8.5
Other overseasa
105
0.9
67
0.5
62
0.5
Total
12,997
100.0
13,131
100.0
12,756
100.0
a.
Other overseas included Pacific Islands, Asia, the Americas and Europe.
b.
Non-current assets represents property and equipment, and intangible assets.
STRATEGIC
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FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
157
Note 3. Net interest income and average balance sheet and interest rates
Net interest income1
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.
Consolidated
Parent Entity
$m
2024
2023
2022
2024
2023
Interest income
Calculated using the effective interest method
Cash and balances with central banks
4,123
4,277
683
3,651
3,785
Collateral paid
647
581
68
646
578
Investment securities
3,494
2,037
1,126
3,254
1,846
Loans
44,460
35,582
21,096
38,217
30,518
Other financial assets
15
38
2
13
37
Due from subsidiaries
-
-
-
2,577
2,145
Assets held for sale
-
-
6
-
-
Total interest income calculated using the effective
interest method
52,739
42,515
22,981
48,358
38,909
Other
Net ineffectiveness on qualifying hedges
8
94
(77)
16
94
Trading securities and financial assets measured at FVIS
1,600
1,143
347
1,474
1,044
Due from subsidiaries
-
-
-
81
(146)
Total other
1,608
1,237
270
1,571
992
Total interest income
54,347
43,752
23,251
49,929
39,901
Interest expense
Calculated using the effective interest method
Collateral received
(317)
(327)
(64)
(302)
(319)
Deposits and other borrowings
(21,268)
(14,993)
(2,810)
(18,190)
(12,666)
Debt Issues
(6,094)
(4,667)
(2,257)
(5,422)
(4,221)
Due to subsidiaries
-
-
-
(3,324)
(2,802)
Loan capital
(1,848)
(1,448)
(1,026)
(1,773)
(1,408)
Other financial liabilities
(394)
(516)
(162)
(177)
(302)
Total interest expense calculated using the effective
interest method
(29,921)
(21,951)
(6,319)
(29,188)
(21,718)
Other
Deposits and other borrowings
(2,389)
(1,925)
(399)
(2,248)
(1,789)
Trading liabilitiesa
(2,643)
(653)
1,169
(2,785)
(671)
Debt issues
(194)
(494)
(93)
(82)
(338)
Bank levy
(357)
(332)
(340)
(357)
(332)
Due to subsidiaries
-
-
-
242
131
Other interest expense
(90)
(80)
(108)
(74)
(69)
Total other
(5,673)
(3,484)
229
(5,304)
(3,068)
Total interest expense
(35,594)
(25,435)
(6,090)
(34,492)
(24,786)
Net interest income
18,753
18,317
17,161
15,437
15,115
a.
Includes net impact of Treasury balance sheet management activities.
1.
Included items relating to remediation costs recognised as a $47 million addition to net interest income (2023: $57 million reduction, 2022:
$1 million addition) for the Group, and an addition of $38 million (2023: $67 million reduction) for the Parent Entity. Refer to Note 25 for
further details.
158
WESTPAC 2024 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
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.
2024
2023
2022
Average
balance
Interest
income
Average
rate
Average
balance
Interest
income
Average
rate
Average
balance
Interest
income
Average
rate
Consolidated
$m
$m
%
$m
$m
%
$m
$m
%
Assets
Interest earning assets
Loans:a
Australia
633,772
37,865
6.0
607,154
30,164
5.0
582,456
17,694
3.0
New Zealand
92,222
6,155
6.7
90,130
5,028
5.6
87,236
3,203
3.7
Other overseas
6,666
440
6.6
6,548
390
6.0
6,362
199
3.1
Housinga
Australia
439,121
24,982
5.7
424,427
19,640
4.6
411,950
11,851
2.9
New Zealand
60,810
3,561
5.9
59,319
2,702
4.6
57,050
1,796
3.1
Other overseas
407
17
4.2
468
18
3.8
492
19
3.9
Personal
Australia
10,684
1,039
9.7
11,954
1,001
8.4
13,910
1,084
7.8
New Zealand
1,063
97
9.1
1,094
102
9.3
1,126
115
10.2
Other overseas
7
1
14.3
7
1
14.3
7
1
14.3
Businessa
Australia
183,967
11,844
6.4
170,773
9,523
5.6
156,596
4,759
3.0
New Zealand
30,349
2,497
8.2
29,717
2,224
7.5
29,060
1,292
4.4
Other overseas
6,252
422
6.7
6,073
371
6.1
5,863
179
3.1
Trading securities and financial
assets measured at FVIS:
Australia
28,605
1,223
4.3
23,486
843
3.6
16,715
235
1.4
New Zealand
4,718
251
5.3
3,959
201
5.1
3,784
76
2.0
Other overseas
3,027
126
4.2
2,641
99
3.7
2,337
36
1.5
Investment securities:
Australia
85,208
3,227
3.8
66,631
1,822
2.7
70,804
985
1.4
New Zealand
6,570
201
3.1
6,164
148
2.4
4,950
85
1.7
Other overseas
2,147
66
3.1
2,082
67
3.2
2,027
56
2.8
Other interest earning assets:b
Australia
79,226
3,340
4.2
96,291
3,424
3.6
82,102
366
0.4
New Zealand
8,636
465
5.4
10,496
496
4.7
9,769
153
1.6
Other overseas
19,258
988
5.1
24,867
1,070
4.3
17,238
157
0.9
Assets held for sale:
Australia
-
-
-
-
-
-
425
6
1.4
Total interest earning assets and
interest incomea
970,055
54,347
5.6
940,449
43,752
4.7
886,205
23,251
2.6
Non-interest earning assets
Derivative financial instruments
16,786
23,423
23,395
Assets held for sale
-
-
2,444
All other assetsa,c
70,468
59,356
62,719
Total non-interest earning assetsa
87,254
82,779
88,558
Total assets
1,057,309
1,023,228
974,763
a.
Certain portions of loans are non-interest bearing and are presented below in All other assets. The non-interest bearing portion represents
the impact of mortgage offset deposits which are taken into consideration when calculating interest charged on loans. In 2024, offset
loans within New Zealand were reclassified and presented within All other assets. Comparatives have been revised to align with current
period presentation.
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 $57,028 million (2023: $49,702 million, 2022: $47,328 million).
STRATEGIC
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SHAREHOLDER
INFORMATION
159
Note 3. Net interest income and average balance sheet and interest rates
(Continued)
2024
2023
2022
Average
balance
Interest
expense
Average
rate
Average
balance
Interest
expense
Average
rate
Average
balance
Interest
expense
Average
rate
Consolidated
$m
$m
%
$m
$m
%
$m
$m
%
Liabilities
Interest bearing liabilities
Deposits and other borrowings:a
Australia
489,693
19,413
4.0
460,149
13,544
2.9
427,097
2,249
0.5
New Zealand
65,070
3,220
4.9
63,760
2,464
3.9
60,678
765
1.3
Other overseas
19,356
1,024
5.3
20,132
910
4.5
21,175
195
0.9
Certificates of deposit
Australia
33,598
1,509
4.5
31,822
1,128
3.5
29,839
205
0.7
New Zealand
2,424
141
5.8
2,727
136
5.0
2,956
53
1.8
Other overseas
12,867
736
5.7
13,338
657
4.9
14,513
137
0.9
Transactionsa
Australia
122,235
4,112
3.4
129,760
3,083
2.4
131,923
629
0.5
New Zealand
8,836
404
4.6
8,647
322
3.7
8,878
77
0.9
Other overseas
823
13
1.6
868
7
0.8
842
3
0.4
Savingsa
Australia
189,405
7,007
3.7
164,800
4,620
2.8
160,261
654
0.4
New Zealand
18,465
635
3.4
19,376
537
2.8
20,722
132
0.6
Other overseas
996
25
2.5
1,035
25
2.4
935
5
0.5
Term
Australia
144,455
6,785
4.7
133,767
4,713
3.5
105,074
761
0.7
New Zealand
35,345
2,040
5.8
33,010
1,469
4.5
28,122
503
1.8
Other overseas
4,670
250
5.4
4,891
221
4.5
4,885
50
1.0
Repurchase agreements:
Australia
22,040
692
3.1
34,511
314
0.9
35,136
109
0.3
New Zealand
4,318
234
5.4
4,922
231
4.7
2,543
39
1.5
Other overseas
193
11
5.7
219
11
5.0
100
2
2.0
Loan capital:
Australia
37,229
1,676
4.5
31,895
1,313
4.1
28,961
934
3.2
New Zealand
2,983
172
5.8
2,489
135
5.4
1,747
92
5.3
Other interest bearing liabilities:b
Australia
164,722
8,370
5.1
154,859
5,990
3.9
137,796
1,308
0.9
New Zealand
20,134
768
3.8
19,986
464
2.3
18,579
403
2.2
Other overseas
953
14
1.5
1,854
59
3.2
1,876
(6)
(0.3)
Total interest bearing liabilities and
interest expensea
826,691
35,594
4.3
794,776
25,435
3.2
735,688
6,090
0.8
Non-interest bearing liabilities
Deposits and other borrowings:a
Australia
119,408
117,538
121,074
New Zealand
10,891
12,213
14,139
Other overseas
1,333
1,292
1,038
Derivative financial instruments
21,413
26,353
24,750
Liabilities held for sale
-
-
682
All other liabilities
6,024
(218)
7,069
Total non-interest bearing liabilitiesa
159,069
157,178
168,752
Total liabilities
985,760
951,954
904,440
Shareholders’ equity
71,493
71,229
70,268
Non-controlling interests
56
45
55
Total equity
71,549
71,274
70,323
Total liabilities and equity
1,057,309
1,023,228
974,763
a.
In 2024, certain deposit products were reclassified between Savings and Transactions to align with how they are marketed to customers. The
Group has also revised the attribution of certain deposit products between interest bearing and non-interest bearing. Comparatives have been
revised to align with current period presentation.
b.
Interest expense includes the net impact of Treasury balance sheet management activities and the bank levy.
160
WESTPAC 2024 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
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. 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.
2024
2023
Consolidated
Change due to
Change due to
$m
Volume
Rate
Total
Volume
Rate
Total
Interest earning assets
Loans:a
Australia
1,337
6,364
7,701
747
11,723
12,470
New Zealand
117
1,010
1,127
106
1,719
1,825
Other overseas
7
43
50
6
185
191
Housinga
Australia
853
4,489
5,342
492
7,297
7,789
New Zealand
65
794
859
57
849
906
Other overseas
-
(1)
(1)
1
(2)
(1)
Personal
Australia
43
(5)
38
46
(129)
(83)
New Zealand
2
(7)
(5)
4
(17)
(13)
Business
Australia
441
1,880
2,321
209
4,555
4,764
New Zealand
50
223
273
45
887
932
Other overseas
7
44
51
5
187
192
Trading securities and financial assets measured
at FVIS:
Australia
185
195
380
101
507
608
New Zealand
38
12
50
4
121
125
Other overseas
15
12
27
5
58
63
Investment securities:
Australia
508
897
1,405
(65)
902
837
New Zealand
10
43
53
21
42
63
Other overseas
2
(3)
(1)
2
9
11
Other interest earning assets:
Australia
(569)
485
(84)
72
2,986
3,058
New Zealand
(88)
57
(31)
13
330
343
Other overseas
(245)
163
(82)
76
837
913
Assets held for sale:
Australia
-
-
-
(6)
-
(6)
Total change in interest incomea
1,317
9,278
10,595
1,082
19,419
20,501
a.
Comparatives have been revised to align with current period presentation.
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SHAREHOLDER
INFORMATION
161
Note 3. Net interest income and average balance sheet and interest rates
(Continued)
2024
2023
Consolidated
Change due to
Change due to
$m
Volume
Rate
Total
Volume
Rate
Total
Interest bearing liabilities
Deposits and other borrowings:a
Australia
922
4,947
5,869
150
11,145
11,295
New Zealand
51
705
756
40
1,659
1,699
Other overseas
(35)
149
114
(10)
725
715
Certificates of deposits
Australia
128
253
381
23
900
923
New Zealand
3
2
5
3
80
83
Other overseas
(25)
104
79
(7)
527
520
Transactionsa
Australia
182
847
1,029
28
2,426
2,454
New Zealand
7
75
82
4
241
245
Other overseas
-
6
6
-
4
4
Savingsa
Australia
278
2,109
2,387
60
3,906
3,966
New Zealand
11
87
98
6
399
405
Other overseas
(1)
1
-
-
20
20
Term
Australia
334
1,738
2,072
39
3,913
3,952
New Zealand
30
541
571
27
939
966
Other overseas
(9)
38
29
(3)
174
171
Repurchase agreements:
Australia
134
244
378
(17)
222
205
New Zealand
(28)
31
3
37
155
192
Other overseas
(1)
1
-
2
7
9
Loan capital:
Australia
219
144
363
84
295
379
New Zealand
27
10
37
39
4
43
Other interest bearing liabilities:
Australia
350
2,030
2,380
297
4,385
4,682
New Zealand
3
301
304
15
46
61
Other overseas
(41)
(4)
(45)
(1)
66
65
Total change in interest expensea
1,601
8,558
10,159
636
18,709
19,345
Change in net interest income:
Australiaa
(164)
576
412
335
71
406
New Zealanda
24
75
99
13
348
361
Other overseas
(144)
69
(75)
98
291
389
Total change in net interest incomea
(284)
720
436
446
710
1,156
a.
Comparatives have been revised to align with current period presentation.
162
WESTPAC 2024 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 4. Non-interest income
Accounting policy
Non-interest income includes net fee income, net wealth management and insurance income, 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 and insurance income
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.
Insurance premium income
Insurance premium income includes premiums earned for life insurance, life investment, loan mortgage insurance and
general insurance products:
•
Life insurance premiums with a regular due date are recognised as revenue on an accrual basis;
•
Life investment premiums include a management fee component which is recognised as income over the period
the service is provided. The deposit components of life insurance and investment contracts are not revenue and
are treated as movements in life insurance liabilities; and
•
General insurance premium comprises amounts charged to policyholders, excluding taxes, and is recognised based
on the likely pattern in which the insured risk is likely to emerge. The portion not yet earned based on the pattern
assessment is recognised as unearned premium liability.
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SHAREHOLDER
INFORMATION
163
Note 4. Non-interest income (Continued)
Insurance claims expense
•
Life and general insurance contract claims are recognised as an expense when the liability is established; and
•
Claims incurred in respect of life investment contracts represent withdrawals and are recognised as a reduction in
life insurance liabilities.
Changes in life insurance liabilities
Changes in life insurance liabilities includes the change in the value of life insurance contract liabilities calculated
using the margin on services methodology (MoS), specified in the Prudential Standard LPS 340 Valuation of
Policy Liabilities.
Regulation, competition, interest rates, taxes, securities market conditions and general economic conditions also
affect the estimation of life insurance liabilities.
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.
164
WESTPAC 2024 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 4. Non-interest income (Continued)
Consolidated
Parent Entity
$m
2024
2023
2022
2024
2023
Net fees
Facility fees
763
697
686
709
647
Transaction fees
1,118
1,146
1,132
935
959
Other non-risk fee income
135
154
122
125
136
Fee income
2,016
1,997
1,940
1,769
1,742
Credit card loyalty programs
(134)
(153)
(126)
(106)
(120)
Transaction fee related expenses
(210)
(199)
(143)
(169)
(161)
Fee expenses
(344)
(352)
(269)
(275)
(281)
Net fees
1,672
1,645
1,671
1,494
1,461
Net wealth management and insurance
Net wealth management income
441
562
726
-
-
Life insurance premium income
-
-
834
-
-
Life insurance investment and other income
-
-
(141)
-
-
Total insurance premium, investment and other income
-
-
693
-
-
Life insurance claims, changes in life insurance liabilities
and other expenses
-
-
(611)
-
-
Total insurance claims, changes in life insurance liabilities
and other expenses
-
-
(611)
-
-
Net wealth management and insurance
441
562
808
-
-
Trading
704
717
664
637
678
Other
Dividends received from subsidiaries
-
-
-
1,284
1,050
Transactions with subsidiaries
-
-
-
564
550
Dividends received from other entities
3
1
4
1
1
Net gain/(loss) on disposal of assets
6
-
(3)
8
1
Net gain/(loss) on hedging of overseas operations
(1)
-
-
(4)
(51)
Net gain/(loss) on derivatives held for risk
management purposesa
7
1
9
7
1
Net gain/(loss) on financial instruments measured at
fair value
(24)
78
12
(32)
71
Net gain/(loss) on disposal of controlled entities and
other businessesb
-
268
(823)
-
-
Other
27
56
103
23
45
Total other
18
404
(698)
1,851
1,668
Total non-interest incomec
2,835
3,328
2,445
3,982
3,807
a.
Income from derivatives held for risk management purposes reflects the impact of economic hedges of earnings.
b.
Included gains/loss on sale of:
• 2023: $243 million gain for Advance Asset Management Limited; and
• 2022: $1,112 million loss for Australian life insurance business, $170 million gain for Auto Finance and $119 million gain for NZ life insurance.
c.
Included items relating to remediation costs recognised as a $44 million reduction to non-interest income (2023: $52 million, 2022:
$64 million) for the Group, and $30 million reduction (2023: $56 million) for the Parent Entity. Refer to Note 25 for further details.
Deferred income in relation to the credit card loyalty programs for Westpac was $338 million as at 30 September 2024
(2023: $324 million, 2022: $330 million) and $35 million for the Parent Entity (2023: $32 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.
STRATEGIC
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SHAREHOLDER
INFORMATION
165
Note 5. Operating expenses
Consolidated
Parent Entity
$m
2024
2023
2022
2024
2023
Staff
Employee remuneration, entitlements and on-costs
5,160
5,254
5,111
4,540
4,674
Superannuation
551
521
533
491
459
Share-based payments
97
90
88
94
88
Restructuring costs
91
233
134
75
226
Total staff
5,899
6,098
5,866
5,200
5,447
Occupancy
Operating lease rentals
116
153
170
99
128
Depreciation and impairment of property and equipmenta
455
474
626
387
420
Other
129
159
118
120
139
Total occupancy
700
786
914
606
687
Technology
Amortisation and impairment of software assetsa
908
629
655
802
573
Depreciation and impairment of IT equipment
125
132
177
99
108
Technology servicesb
871
735
721
770
645
Software maintenance and licences
770
603
506
653
504
Telecommunications
90
112
144
69
91
Total technologyb
2,764
2,211
2,203
2,393
1,921
Other
Professional and processing servicesb
798
905
1,056
696
762
Postage and stationery
130
139
144
109
114
Advertising
176
169
158
150
137
Non-lending losses
111
65
104
88
52
Amortisation and impairment of other intangible assets
and deferred expenditurea
34
2
123
2
2
Impairment of investments in subsidiaries
-
-
-
117
(14)
Other expensesb
332
317
234
367
365
Total otherb
1,581
1,597
1,819
1,529
1,418
Total operating expensesc
10,944
10,692
10,802
9,728
9,473
a.
Impairment expenses included:
• $32 million (2023: nil, 2022: $122 million) for goodwill and other intangibles assets for the Group, and nil (2023: nil) for the Parent Entity;
• $19 million (2023: $8 million, 2022: $110 million) for computer software for the Group, and $19 million (2023: $8 million) for the Parent
Entity; and
• $8 million (2023: $31 million, 2022: $117 million) for property and equipment for the Group, and $8 million (2023: $31 million) for the
Parent Entity.
b.
In 2024, the Group removed an immaterial expense line and reallocated the associated costs to other relevant expense categories.
Comparatives have been revised to align with current period presentation.
c.
Included items relating to compliance, regulation and remediation costs of $1 million addition (2023: $7 million addition, 2022: $63 million
addition) for the Group and $1 million addition (2023: $3 million reduction) for the Parent Entity. Refer to Note 25 for further details.
166
WESTPAC 2024 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
2024
2023
2022
2024
2023
Provisions raised/(released)
Performing
(150)
274
225
(142)
172
Non-performing
877
565
299
801
523
Recoveries
(190)
(191)
(189)
(184)
(184)
Impairment charges/(benefits)
537
648
335
475
511
of which relates to:
Loans and credit commitments
536
647
333
469
517
Debt securities at amortised cost
-
-
4
1
-
Debt securities at FVOCI
1
1
(2)
1
1
Due from subsidiaries
-
-
-
4
(7)
Impairment charges/(benefits)
537
648
335
475
511
Further details are included in Note 10.
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FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
167
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.
Critical accounting assumptions and estimates
Westpac operates in multiple tax jurisdictions and significant judgement is required in determining the worldwide
current tax liability. There are many transactions with uncertain tax outcomes and provisions are determined based on
the expected outcomes.
168
WESTPAC 2024 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.
Consolidated
Parent Entity
$m
2024
2023
2022
2024
2023
Profit before income tax
10,107
10,305
8,469
9,216
8,938
Tax at the Australian company tax rate of 30%
3,032
3,092
2,541
2,765
2,681
The effect of amounts which are not deductible/(assessable)
in calculating taxable income:
Hybrid capital distributions
139
117
67
139
117
Life insurance tax adjustment on policyholder earnings
-
-
(1)
-
-
Dividend adjustments
-
3
-
(379)
(315)
Other non-assessable items
(4)
(9)
(97)
(3)
(1)
Other non-deductible items
25
49
409
23
44
Adjustment for overseas tax rates
(27)
(25)
(31)
(4)
(4)
Income tax (over)/under provided in prior years
(20)
7
(77)
(13)
(2)
Other itemsa
(28)
(130)
(41)
(3)
(16)
Total income tax expense
3,117
3,104
2,770
2,525
2,504
Income tax expense comprises:
Current income tax
3,125
3,009
2,661
2,520
2,393
Movement in deferred taxb
12
88
186
18
113
Income tax (over)/under provision in prior years
(20)
7
(77)
(13)
(2)
Total income tax expense
3,117
3,104
2,770
2,525
2,504
Total Australia
2,632
2,637
2,316
2,480
2,430
Total Overseas
485
467
454
45
74
Total income tax expense
3,117
3,104
2,770
2,525
2,504
a.
2023 included $86 million (Parent Entity: nil) related to the sale of Advance Asset Management Limited.
b.
2022 included a $41 million credit (Parent Entity: nil) in relation to assets and liabilities held for sale.
The effective tax rate was 30.84% in 2024 (2023: 30.12%, 2022: 32.71%).
Tax assets
Consolidated
Parent Entity
$m
2024
2023
2024
2023
Current tax assets
13
5
13
5
Deferred tax assets
2,147
2,095
1,883
1,957
Total tax assets
2,160
2,100
1,896
1,962
Tax liabilities
Consolidated
Parent Entity
$m
2024
2023
2024
2023
Current tax liabilities
569
780
408
607
Total tax liabilities
569
780
408
607
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169
Note 7. Income tax (Continued)
Deferred tax assets
The balance comprises temporary differences attributable to:
Consolidated
Parent Entity
$m
2024
2023
2024
2023
Amounts recognised in the income statements and opening retained profits
Provision for ECL on loans and credit commitments
1,519
1,465
1,314
1,267
Provision for long service leave, annual leave and other employee benefits
407
403
388
384
Property and equipment
203
222
192
195
Other provisions
167
240
141
219
Lease liabilities
576
592
508
531
All other liabilities
222
240
205
226
Total amounts recognised in the income statements and opening
retained profits
3,094
3,162
2,748
2,822
Amounts recognised directly in OCI
Investment securities
206
-
206
-
Cash flow hedges
-
87
-
87
Total amounts recognised directly in OCI
206
87
206
87
Gross deferred tax assets
3,300
3,249
2,954
2,909
Set-off of deferred tax assets and deferred tax liabilities
(1,153)
(1,154)
(1,071)
(952)
Net deferred tax assets
2,147
2,095
1,883
1,957
Movements
Balance as at beginning of year
2,095
1,754
1,957
1,646
Recognised in the income statements
(68)
(141)
(74)
(155)
Recognised in OCI
119
87
119
87
Set-off of deferred tax assets and deferred tax liabilities
1
395
(119)
379
Balance as at end of year
2,147
2,095
1,883
1,957
Deferred tax liabilities
The balance comprises temporary differences attributable to:
Consolidated
Parent Entity
$m
2024
2023
2024
2023
Amounts recognised in the income statements and opening retained profits
Finance lease transactions
112
194
106
190
Property and equipment
538
497
482
446
All other assets
232
247
232
240
Total amounts recognised in the income statements and opening
retained profits
882
938
820
876
Amounts recognised directly in OCI
Investment securities
-
34
-
34
Cash flow hedges
233
138
214
-
Defined benefit
38
44
37
42
Total amounts recognised directly in OCI
271
216
251
76
Gross deferred tax liabilities
1,153
1,154
1,071
952
Set-off of deferred tax assets and deferred tax liabilities
(1,153)
(1,154)
(1,071)
(952)
Net deferred tax liabilities
-
-
-
-
Movements
Balance as at beginning of year
-
-
-
-
Recognised in the income statements
(56)
(53)
(56)
(42)
Recognised in OCI
55
(342)
175
(337)
Set-off of deferred tax assets and deferred tax liabilities
1
395
(119)
379
Balance as at end of year
-
-
-
-
170
WESTPAC 2024 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 45%.
Consolidated
Parent Entity
$m
2024
2023
2024
2023
Deductible temporary differences
Tax losses on revenue account
422
448
422
448
Tax losses on capital account
265
184
150
64
Taxable temporary differences
Retained earnings of subsidiaries that would be subject to withholding tax
if distributed
402
365
-
-
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.
2024
2023
2022
$m
Basic
Diluted
Basic
Diluted
Basic
Diluted
Net profit attributable to owners of WBC ($m)
6,990
6,990
7,195
7,195
5,694
5,694
Adjustment for restricted share dividendsa
(7)
-
(5)
-
(3)
-
Adjustment for potential dilution:
Distributions to convertible loan
capital holdersb
-
476
-
400
-
233
Adjusted net profit attributable to owners
of WBC
6,983
7,466
7,190
7,595
5,691
5,927
Weighted average number of ordinary shares
(# m)
Weighted average number of ordinary shares
on issue
3,481
3,481
3,507
3,507
3,564
3,564
Treasury shares (including RSP and EIP
restricted shares)a
(5)
(5)
(5)
(5)
(5)
(5)
Adjustment for potential dilution:
Share-based payments
-
6
-
4
-
4
Convertible loan capitalb
-
413
-
385
-
326
Adjusted weighted average number of
ordinary shares
3,476
3,895
3,502
3,891
3,559
3,889
Earnings per ordinary share (cents)
200.9
191.7
205.3
195.2
159.9
152.4
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 dates, where issuance occurred partway through the year.
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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).
De-recognition
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 de-recognition 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.
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.
172
WESTPAC 2024 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
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.
STRATEGIC
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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.
Consolidated
Parent Entity
$m
2024
2023
2024
2023
Australia
Housing
503,271
485,474
503,270
485,466
Personal
10,174
11,289
10,174
11,288
Business
195,483
181,509
193,042
179,241
Total Australia
708,928
678,272
706,486
675,995
New Zealand
Housing
62,484
61,235
-
-
Personal
1,058
1,083
-
-
Business
31,055
31,008
306
369
Total New Zealand
94,597
93,326
306
369
Total other overseas
7,810
6,089
7,189
5,470
Gross loans
811,335
777,687
713,981
681,834
Provision for ECL on loans (refer to Note 10)
(4,568)
(4,433)
(3,938)
(3,813)
Total loansa,b
806,767
773,254
710,043
678,021
a.
Total net loans included securitised loans of $5,185 million (2023: $3,949 million) for the Group and $6,054 million (2023: $4,734 million) for
the Parent Entity. The level of securitised loans excludes loans where Westpac is the holder of related debt securities.
b.
Total net loans included assets pledged for the covered bond programs of $42,228 million (2023: $43,029 million) for the Group and
$36,825 million (2023: $36,300 million) for the Parent Entity.
174
WESTPAC 2024 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 2024.
Consolidated
$m
Up to 1 year
Over 1 year to
5 years
Over 5 years to
15 years
Over 15 years
Total
Australia
Housing
5,272
1,007
21,536
475,456
503,271
Personal
6,385
3,074
715
-
10,174
Business
63,263
115,396
9,225
7,599
195,483
Total Australia
74,920
119,477
31,476
483,055
708,928
New Zealand
Housing
192
566
4,438
57,288
62,484
Personal
878
177
3
-
1,058
Business
19,762
11,215
77
1
31,055
Total New Zealand
20,832
11,958
4,518
57,289
94,597
Total other overseas
2,564
4,982
264
-
7,810
Total loans
98,316
136,417
36,258
540,344
811,335
The following table shows Westpac’s interest rate segmentation of loans maturing after one year as at
30 September 2024.
Consolidated
$m
Loans at
variable
interest rates
Loans at
fixed
interest rates
Total
Interest rate segmentation of loans maturing after one year
Australia
Housing
452,824
45,175
497,999
Personal
1,814
1,975
3,789
Business
127,540
4,680
132,220
Total Australia
582,178
51,830
634,008
New Zealand
Housing
6,571
55,721
62,292
Personal
179
1
180
Business
937
10,356
11,293
Total New Zealand
7,687
66,078
73,765
Total other overseas
4,860
386
5,246
Total loans maturing after one year
594,725
118,294
713,019
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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 and 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),
176
WESTPAC 2024 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, the deferral of payments by customers in hardship
arrangements is generally treated as an indication of a SICR.
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.
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177
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.
2024
2023
Performing
Non-
Performing
Performing
Non-
Performing
$m
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Consolidated
Provision for ECL on loans
Housing
162
879
639
1,680
152
1,036
513
1,701
Personal
61
207
99
367
64
198
98
360
Business
405
1,163
953
2,521
355
1,231
786
2,372
Total loans ECL provision
(Note 9)
628
2,249
1,691
4,568
571
2,465
1,397
4,433
Provision for ECL on
credit commitments
Housing
7
18
-
25
6
16
-
22
Personal
16
27
-
43
18
27
-
45
Business
110
300
38
448
111
300
19
430
Total credit commitments
ECL provision (Note 25)
133
345
38
516
135
343
19
497
Total provision for
ECL on loans and
credit commitments
761
2,594
1,729
5,084
706
2,808
1,416
4,930
Presented as provision for
ECL on:
Individually
assessed provisions
-
-
536
536
-
-
351
351
Collectively
assessed provisions
761
2,594
1,193
4,548
706
2,808
1,065
4,579
Total provision for
ECL on loans and
credit commitments
761
2,594
1,729
5,084
706
2,808
1,416
4,930
Gross loans
639,900
161,121
10,314
811,335
605,761
163,583
8,343
777,687
Credit commitments
181,275
30,395
441
212,111
177,971
27,814
366
206,151
Gross loans and
credit commitments
821,175
191,516
10,755
1,023,446
783,732
191,397
8,709
983,838
Coverage ratio on loans (%)
0.10
1.40
16.40
0.56
0.09
1.51
16.74
0.57
Coverage ratio on
loans and credit
commitments (%)
0.09
1.35
16.08
0.50
0.09
1.47
16.26
0.50
178
WESTPAC 2024 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 10. Provision for expected credit losses (Continued)
2024
2023
Performing
Non-
Performing
Performing
Non-
Performing
$m
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Parent Entity
Provision for ECL on loans
Housing
136
743
575
1,454
117
907
446
1,470
Personal
54
184
92
330
55
172
90
317
Business
348
968
838
2,154
306
1,026
694
2,026
Total loans ECL provision
(Note 9)
538
1,895
1,505
3,938
478
2,105
1,230
3,813
Provision for ECL on
credit commitments
Housing
6
14
-
20
4
13
-
17
Personal
12
17
-
29
13
19
-
32
Business
105
283
27
415
105
282
18
405
Total credit commitments
ECL provision (Note 25)
123
314
27
464
122
314
18
454
Total provision for
ECL on loans and
credit commitments
661
2,209
1,532
4,402
600
2,419
1,248
4,267
Presented as provision for
ECL on:
Individually
assessed provisions
-
-
437
437
-
-
301
301
Collectively
assessed provisions
661
2,209
1,095
3,965
600
2,419
947
3,966
Total provision for
ECL on loans and
credit commitments
661
2,209
1,532
4,402
600
2,419
1,248
4,267
Gross loans
564,844
139,828
9,309
713,981
533,446
140,873
7,515
681,834
Credit commitments
160,418
27,033
411
187,862
156,080
24,390
343
180,813
Gross loans and
credit commitments
725,262
166,861
9,720
901,843
689,526
165,263
7,858
862,647
Coverage ratio on loans (%)
0.10
1.36
16.17
0.55
0.09
1.49
16.37
0.56
Coverage ratio on
loans and credit
commitments (%)
0.09
1.32
15.76
0.49
0.09
1.46
15.88
0.49
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179
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” lines represent transfers between Stage 1, Stage 2 and Stage 3 prior to re-measurement
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 re-measurement of provision for ECL” line represents the impact on the provision for ECL due to changes in
credit quality during the year (including transfers between stages), changes in portfolio overlays, changes due to
forward-looking economic scenarios and partial repayments and additional draw-downs on existing facilities over the
year; and
•
“Write-offs” represent a reduction in the provision for ECL as a result of de-recognition of exposures where there is
no reasonable expectation of full recovery.
Consolidated
Parent Entity
Performing
Non-
Performing
Performing
Non-
Performing
$m
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Balance as at
30 September 2022
885
2,341
1,399
4,625
777
2,063
1,240
4,080
Transfers to Stage 1a
1,252
(1,119)
(133)
-
1,115
(990)
(125)
-
Transfers to Stage 2a
(588)
1,069
(481)
-
(503)
941
(438)
-
Transfers to Stage 3a
(7)
(489)
496
-
(6)
(443)
449
-
Business activity
during the yeara
226
(243)
(141)
(158)
191
(223)
(130)
(162)
Net remeasurement of
provision for ECLa
(1,066)
1,238
824
996
(975)
1,071
767
863
Write-offs
-
-
(601)
(601)
-
-
(554)
(554)
Exchange rate and
other adjustments
4
11
53
68
1
-
39
40
Balance as at
30 September 2023
706
2,808
1,416
4,930
600
2,419
1,248
4,267
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 year
303
(328)
(293)
(318)
267
(308)
(243)
(284)
Net remeasurement of
provision for ECL
(1,149)
1,070
1,123
1,044
(1,016)
937
1,016
937
Write-offs
-
-
(620)
(620)
-
-
(573)
(573)
Exchange rate and
other adjustments
(3)
(5)
56
48
(1)
-
56
55
Balance as at
30 September 2024
761
2,594
1,729
5,084
661
2,209
1,532
4,402
a.
The attribution of amounts disclosed in the movement schedule has been revised to better reflect the nature of the changes in the provision
for ECL. Comparatives have been revised to align with current period presentation.
180
WESTPAC 2024 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 10. Provision for expected credit losses (Continued)
Consolidated
Parent Entity
Performing
Non-
Performing
Performing
Non-
Performing
$m
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Housing
Balance as at
30 September 2022
143
1,095
415
1,653
106
1,016
369
1,491
Transfers to Stage 1a
316
(311)
(5)
-
295
(292)
(3)
-
Transfers to Stage 2a
(60)
316
(256)
-
(55)
290
(235)
-
Transfers to Stage 3a
-
(131)
131
-
-
(125)
125
-
Business activity
during the yeara
41
(98)
(106)
(163)
40
(97)
(99)
(156)
Net remeasurement of
provision for ECLa
(284)
176
364
256
(265)
128
316
179
Write-offs
-
-
(50)
(50)
-
-
(43)
(43)
Exchange rate and
other adjustments
2
5
20
27
-
-
16
16
Balance as at
30 September 2023
158
1,052
513
1,723
121
920
446
1,487
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 year
59
(131)
(158)
(230)
55
(123)
(143)
(211)
Net remeasurement of
provision for ECL
(357)
209
396
248
(309)
174
357
222
Write-offs
-
-
(57)
(57)
-
-
(46)
(46)
Exchange rate and
other adjustments
(1)
(2)
24
21
-
-
22
22
Balance as at
30 September 2024
169
897
639
1,705
142
757
575
1,474
Personal
Balance as at
30 September 2022
99
250
123
472
85
218
112
415
Transfers to Stage 1a
359
(356)
(3)
-
323
(322)
(1)
-
Transfers to Stage 2a
(59)
126
(67)
-
(54)
114
(60)
-
Transfers to Stage 3a
-
(132)
132
-
-
(123)
123
-
Business activity
during the yeara
28
(15)
-
13
26
(13)
-
13
Net remeasurement of
provision for ECLa
(346)
350
256
260
(312)
317
244
249
Write-offs
-
-
(358)
(358)
-
-
(341)
(341)
Exchange rate and
other adjustments
1
2
15
18
-
-
13
13
Balance as at
30 September 2023
82
225
98
405
68
191
90
349
Transfers to Stage 1
358
(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 year
36
(9)
-
27
34
(8)
-
26
Net remeasurement of
provision for ECL
(340)
405
295
360
(305)
372
283
350
Write-offs
-
-
(394)
(394)
-
-
(378)
(378)
Exchange rate and
other adjustments
-
(1)
13
12
-
-
12
12
Balance as at
30 September 2024
77
234
99
410
66
201
92
359
a.
The attribution of amounts disclosed in the movement schedule has been revised to better reflect the nature of the changes in the provision
for ECL. Comparatives have been revised to align with current period presentation.
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181
Note 10. Provision for expected credit losses (Continued)
Consolidated
Parent Entity
Performing
Non-
Performing
Performing
Non-
Performing
$m
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Business
Balance as at
30 September 2022
643
996
861
2,500
586
829
759
2,174
Transfers to Stage 1a
577
(452)
(125)
-
497
(376)
(121)
-
Transfers to Stage 2a
(469)
627
(158)
-
(394)
537
(143)
-
Transfers to Stage 3a
(7)
(226)
233
-
(6)
(195)
201
-
Business activity
during the yeara
157
(130)
(35)
(8)
125
(113)
(31)
(19)
Net remeasurement of
provision for ECLa
(436)
712
204
480
(398)
626
207
435
Write-offs
-
-
(193)
(193)
-
-
(170)
(170)
Exchange rate and
other adjustments
1
4
18
23
1
-
10
11
Balance as at
30 September 2023
466
1,531
805
2,802
411
1,308
712
2,431
Transfers to Stage 1
513
(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 year
208
(188)
(135)
(115)
178
(177)
(100)
(99)
Net remeasurement of
provision for ECL
(452)
456
432
436
(402)
391
376
365
Write-offs
-
-
(169)
(169)
-
-
(149)
(149)
Exchange rate and
other adjustments
(2)
(2)
19
15
(1)
-
22
21
Balance as at
30 September 2024
515
1,463
991
2,969
453
1,251
865
2,569
a.
The attribution of amounts disclosed in the movement schedule has been revised to better reflect the nature of the changes in the provision
for ECL. Comparatives have been revised to align with current period presentation.
Reconciliation of impairment charges
Consolidated
Parent Entity
$m
2024
2023
2024
2023
Loans and credit commitments:
Business activity during the yeara
(318)
(158)
(284)
(162)
Net remeasurement of the provision for ECLa
1,044
996
937
863
Impairment charges for debt securities at amortised cost
-
-
1
-
Impairment charges for debt securities at FVOCI
1
1
1
1
Impairment on due from subsidiaries
-
-
4
(7)
Recoveries
(190)
(191)
(184)
(184)
Impairment charges/(benefits) (Note 6)
537
648
475
511
a.
The attribution of amounts disclosed in the movement schedule has been revised to better reflect the nature of the changes in the provision
for ECL. Comparatives have been revised to align with current period presentation.
182
WESTPAC 2024 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
%
2024
2023
Write-offs net of recoveries to average loans
Housing
0.01
0.01
Personal
2.21
1.78
Business
0.05
0.07
Total write-offs net of recoveries to average loans
0.05
0.05
Write-offs still under enforcement activity
Of the amount of current year write-offs, $596 million for the Group (2023: $581 million) and $549 million (2023:
$534 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 modelled ECL and
portfolio overlays.
Portfolio overlays are used to capture areas of potential risk and uncertainty in the portfolio, that are not captured in the
underlying modelled ECL.
Consolidated
Parent Entity
$m
2024
2023
2024
2023
Modelled provision for ECL on loans and credit commitments
4,905
4,498
4,205
3,880
Overlays
179
432
197
387
Total provision for ECL on loans and credit commitments
5,084
4,930
4,402
4,267
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.
Changes in the modelled provision for ECL are reflected through the “net remeasurement of provision for ECL” line
item. Overlays are used to capture potential risk and uncertainty in the portfolio that are not captured in the underlying
modelled ECL.
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183
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 2024
30 September 2023
Annual GDP:
Australia
Forecast growth of 1.5% for
calendar year 2024 and
2.4% for calendar year 2025
Forecast growth of 1.2% for
calendar year 2023 and
1.6% for calendar year 2024
New Zealand
Forecast growth of 0.1% for
calendar year 2024 and
2.0% for calendar year 2025
Forecast growth of 0.8% for
calendar year 2023 and
0.2% for calendar year 2024
Commercial property index, Australia
Forecast price contraction of
11.5% for calendar year 2024
and growth of 1.3% for calendar
year 2025
Forecast price contraction of
15.0% for calendar year 2023 and
0.5% for calendar year 2024
Residential property prices:
Australia
Forecast price growth of
5.7% for calendar year 2024 and
4.0% for calendar year 2025
Forecast price growth of
5.8% for calendar year 2023 and
4.0% for calendar year 2024
New Zealand
Forecast price growth of
0.7% for calendar year 2024 and
6.4% for calendar year 2025
Forecast price contraction of
1.0% for calendar year 2023
and growth of 7.7% for calendar
year 2024
Cash rate, Australia
Forecast cash rate of
4.35% at December 2024 and
3.35% at December 2025
Forecast cash rate of
4.1% at December 2023 and
3.6% at December 2024
Unemployment rate:
Australia
Forecast rate of
4.3% at December 2024 and
4.6% at December 2025
Forecast rate of
3.9% at December 2023 and
4.7% at December 2024
New Zealand
Forecast rate of
5.3% at December 2024 and
5.6% at December 2025
Forecast rate of
4.3% at December 2023 and
5.2% at December 2024
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.
184
WESTPAC 2024 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
2024
2023
2024
2023
Reported probability-weighted ECL
5,084
4,930
4,402
4,267
100% base case ECL
3,559
3,409
3,089
2,927
100% downside ECL
7,195
6,849
6,221
5,957
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 $93 million (2023: $78 million)
for Westpac and $81 million (2023: $70 million) for the Parent Entity. This estimate applies the average modelled
provision coverage ratio by stage to the transfer of loans and credit commitments.
The following table discloses the economic weights applied by Westpac and the Parent Entity. In 2024, the downside
scenario weight was reduced by 2.5% and base case weight increased by the same value, reflecting a modest reduction
in broader macroeconomic uncertainty:
Scenario weightings (%)
2024
2023
Upside
5.0
5.0
Base
52.5
50.0
Downside
42.5
45.0
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 2024 were $179 million (2023: $432 million) for the Group and
$197 million (2023: $387 million) for the Parent Entity, and comprise:
•
$77 million (2023: $302 million) for the Group and $106 million (2023: $275 million) for the Parent Entity for
consumers, mostly reflecting potential high consumer stress from higher interest rates and inflation. The Group
included a negative overlay for WNZL;
•
$32 million (2023: $60 million) for the Group and $21 million (2023: $42 million) for the Parent Entity mostly
reflecting the impact of potential supply chain disruptions and labour shortages in certain industries; and
•
$70 million (2023: $70 million) for the Group and $70 million (2023: $70 million) for the Parent Entity for the
expected impact of extreme weather events on customers.
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 $37.4 billion (2023: net decrease of $15.6 billion) for Westpac and $35.7 billion
(2023: net decrease of $10.8 billion) for the Parent Entity. This was driven by new lending across the housing and
business loan portfolios, which also drove the overall increase in stage 1 ECL.
•
Stage 2 credit exposures increased by $0.1 billion (2023: increased by $54.3 billion) for Westpac and $1.6 billion
(2023: increased by $40.5 billion) for the Parent Entity, driven by a net transfer of business TCE from stage 1
in response to updated model economics, partly offset by net runoff across business and certain housing loan
portfolios. Stage 2 ECL decreased, driven by a reduction in overlays to the housing portfolio, reduction in downside
scenario weighting and net improvement in the average credit quality of the stage 2 business portfolio.
•
Stage 3 credit exposures increased by $2.0 billion (2023: increased by $1.1 billion) for Westpac and $1.9 billion (2023:
increased by $0.9 billion) for the Parent Entity. This was driven by an increase in the balance of housing loans that are
90 days past due and certain downgrades within the business portfolio.
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Note 11. Credit risk management
Index
Note name
Note
number
Credit risk
The risk of financial loss where a customer
or counterparty fails to meet their financial
obligations to Westpac.
Credit risk management framework
11.1
Credit risk ratings system
11.2
Credit risk concentrations and maximum exposure to
credit risk
11.3
Credit quality of financial assets
11.4
Credit risk mitigation, collateral and other
credit enhancements
11.5
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, a Credit Risk Management Strategy, and a Credit
Risk Appetite Statement, and a number of supporting policies and appetite statements that define roles and
responsibilities, acceptable practices, limits and key controls.
•
The Credit Risk Management Framework describes the principles, methodologies, systems, roles and responsibilities,
reports and key controls for managing credit risk.
•
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 describes the credit risk rating system philosophy, design, key features and uses
of rating outcomes.
•
All models materially impacting the risk rating process are periodically reviewed in accordance with Westpac’s model
risk policies.
•
An annual review is performed of the Credit Risk Rating System by the BRiskC and CREDCO.
•
Specific credit risk estimates (including PD, LGD and EAD levels) are overseen and reviewed annually in line with
Westpac’s Credit Model Risk Policy. Models are approved under delegated authority from the 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 for the delegation of credit approval authorities and formal limits for the extension of credit are established
throughout Westpac.
•
Credit manuals are established and maintained throughout Westpac including policies governing the origination,
evaluation, approval, documentation, settlement and ongoing management of credit risks.
•
Climate change related credit risks are considered in line with our Climate Change Position Statement and Action
Plan. Climate change risks are managed in accordance with Westpac’s risk framework which is supported by the
Sustainability Risk Management Framework (SRMF), Group 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 reports to CREDCO.
•
Westpac’s ESG Credit Risk Policy details Westpac’s overall approach to managing ESG risks in the credit risk process
for applicable transactions.
•
Sector policies guide credit extension where industry-specific guidelines are considered necessary (e.g. acceptable
financial ratios or permitted collateral).
186
WESTPAC 2024 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
Strong
A
Aaa – Aa3
AAA – AA–
B
A1 – A3
A+ – A–
C
Baa1 – Baa3
BBB+ – BBB–
Good/satisfactory
D
Ba1 – B1
BB+ – B+
Westpac Rating
Weak
E
Watchlist
F
Special Mention
G
Substandard/Default
H
Doubtful/Default
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.
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187
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
certain balances included in assets held for sale) 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)
•
47% (2023: 58%) were issued by financial institutions for Westpac;
48% (2023: 59%) for the Parent Entity.
•
50% (2023: 37%) were issued by government or semi-government authorities
for Westpac;
49% (2023: 37%) for the Parent Entity.
•
82% (2023: 76%) were held in Australia by Westpac;
86% (2023: 83%) by the Parent Entity.
Investment securities
(Note 17)
•
17% (2023: 21%) were issued by financial institutions for Westpac;
17% (2023: 22%) for the Parent Entity.
•
82% (2023: 79%) were issued by government or semi-government authorities
for Westpac;
83% (2023: 78%) for the Parent Entity.
•
91% (2023: 89%) were held in Australia by Westpac;
99% (2023: 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)
•
81% (2023: 80%) were issued by financial institutions for both Westpac and the
Parent Entity.
•
90% (2023: 75%) were held in Australia by Westpac;
91% (2023: 76%) by the Parent Entity.
188
WESTPAC 2024 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 11. Credit risk management (Continued)
2024
2023a
Consolidated
$m
Loans
Total all
other on
balance
sheet
Undrawn
credit
commit-
ments
Total
Loans
Total all
other on
balance
sheet
Undrawn
credit
commit-
ments
Total
Australia
Accommodation,
cafes and restaurants
9,810
26
1,637
11,473
8,818
22
1,619
10,459
Agriculture, forestry
and fishing
13,733
40
2,713
16,486
11,894
52
2,695
14,641
Construction
7,900
33
4,623
12,556
7,140
37
4,496
11,673
Finance and insurance
29,484
112,860
13,801
156,145
28,162
131,658
13,718
173,538
Government,
administration
and defence
811
99,830
1,558
102,199
1,030
62,231
1,414
64,675
Manufacturing
9,997
499
8,361
18,857
9,721
824
7,489
18,034
Mining
2,865
415
3,038
6,318
2,506
520
3,364
6,390
Property
60,767
546
13,771
75,084
55,970
668
13,342
69,980
Property services and
business services
14,321
149
7,921
22,391
13,468
207
6,542
20,217
Services
13,015
108
8,369
21,492
13,464
86
8,546
22,096
Trade
15,159
366
9,933
25,458
14,101
452
9,457
24,010
Transport and storage
10,289
681
6,313
17,283
8,862
668
5,440
14,970
Utilities
8,175
983
8,373
17,531
7,306
924
5,879
14,109
Retail lending
511,025
1,056
84,006
596,087
494,306
936
85,644
580,886
Other
1,577
592
1,781
3,950
1,524
576
1,545
3,645
Total Australia
708,928
218,184
176,198
1,103,310
678,272
199,861
171,190
1,049,323
New Zealand
Accommodation,
cafes and restaurants
313
3
32
348
318
1
33
352
Agriculture, forestry
and fishing
8,352
41
573
8,966
8,826
62
627
9,515
Construction
385
1
566
952
408
2
460
870
Finance and insurance
4,757
11,364
1,838
17,959
4,440
13,347
2,414
20,201
Government,
administration
and defence
210
8,820
812
9,842
183
7,598
809
8,590
Manufacturing
1,785
58
1,444
3,287
2,142
33
1,378
3,553
Mining
151
2
125
278
156
4
72
232
Property
7,604
649
1,080
9,333
7,011
618
1,291
8,920
Property services and
business services
962
121
357
1,440
996
111
418
1,525
Services
1,961
45
823
2,829
1,621
26
1,106
2,753
Trade
2,164
32
1,154
3,350
2,409
25
1,118
3,552
Transport and storage
661
105
362
1,128
763
115
404
1,282
Utilities
1,621
557
1,340
3,518
1,566
606
1,488
3,660
Retail lending
63,563
117
14,221
77,901
62,339
92
13,960
76,391
Other
108
77
123
308
148
81
161
390
Total New Zealand
94,597
21,992
24,850
141,439
93,326
22,721
25,739
141,786
Other overseas
Accommodation,
cafes and restaurants
85
-
11
96
107
-
10
117
Agriculture, forestry
and fishing
2
-
1
3
3
-
1
4
Construction
34
-
73
107
60
-
127
187
Finance and insurance
3,656
9,447
4,964
18,067
2,414
14,091
4,417
20,922
Government,
administration
and defence
-
4,389
-
4,389
-
3,218
-
3,218
Manufacturing
958
3
1,500
2,461
212
1
1,639
1,852
Mining
28
-
931
959
33
-
666
699
Property
472
2
37
511
466
1
43
510
Property services and
business services
503
35
797
1,335
543
22
400
965
Services
36
-
629
665
196
2
335
533
Trade
909
3
1,813
2,725
999
3
1,359
2,361
Transport and storage
527
15
108
650
438
6
132
576
Utilities
232
1
139
372
233
1
39
273
Retail lending
328
-
13
341
347
3
14
364
Other
40
97
47
184
38
75
40
153
Total other overseas
7,810
13,992
11,063
32,865
6,089
17,423
9,222
32,734
Total gross credit risk
811,335
254,168
212,111
1,277,614
777,687
240,005
206,151
1,223,843
a.
In 2024, the Group revised the attribution of certain exposures between industry categories to better align with their presentation for
regulatory reporting. Certain LCH cleared derivative exposures were also reclassified between locations to better reflect the location of the
underlying risk. Comparatives have been revised to align with current period presentation.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
189
Note 11. Credit risk management (Continued)
2024
2023a
Parent Entity
$m
Loans
Total all
other on
balance
sheet
Undrawn
credit
commit-
ments
Total
Loans
Total all
other on
balance
sheet
Undrawn
credit
commit-
ments
Total
Australia
Accommodation,
cafes and restaurants
9,777
26
1,637
11,440
8,784
22
1,619
10,425
Agriculture, forestry
and fishing
13,659
40
2,713
16,412
11,828
52
2,695
14,575
Construction
7,188
31
4,623
11,842
6,540
36
4,496
11,072
Finance and insurance
29,430
160,947
13,801
204,178
28,098
178,999
13,718
220,815
Government,
administration
and defence
809
99,831
1,558
102,198
1,028
62,231
1,414
64,673
Manufacturing
9,811
496
8,361
18,668
9,544
824
7,489
17,857
Mining
2,816
415
3,038
6,269
2,464
520
3,364
6,348
Property
60,743
548
13,771
75,062
55,934
668
13,341
69,943
Property services and
business services
14,013
151
7,921
22,085
13,147
207
6,542
19,896
Services
12,802
107
8,369
21,278
13,258
86
8,546
21,890
Trade
14,962
365
9,933
25,260
13,924
452
9,457
23,833
Transport and storage
9,978
682
6,313
16,973
8,593
668
5,440
14,701
Utilities
8,145
983
8,373
17,501
7,280
924
5,879
14,083
Retail lending
511,023
1,056
84,006
596,085
494,297
934
85,644
580,875
Other
1,330
521
1,781
3,632
1,276
474
1,545
3,295
Total Australia
706,486
266,199
176,198
1,148,883
675,995
247,097
171,189
1,094,281
New Zealand
Accommodation,
cafes and restaurants
-
2
-
2
-
-
-
-
Agriculture, forestry
and fishing
-
11
4
15
-
29
4
33
Construction
2
-
78
80
4
-
52
56
Finance and insurance
-
5,969
112
6,081
-
7,484
112
7,596
Government,
administration
and defence
-
2,087
2
2,089
-
1,761
2
1,763
Manufacturing
35
55
82
172
43
26
85
154
Mining
-
1
61
62
-
3
-
3
Property
-
141
-
141
-
138
1
139
Property services and
business services
2
21
13
36
5
19
13
37
Services
-
39
6
45
-
20
7
27
Trade
266
28
223
517
316
20
254
590
Transport and storage
1
76
32
109
1
15
20
36
Utilities
-
327
94
421
-
311
77
388
Retail lending
-
-
-
-
-
-
-
-
Other
-
-
1
1
-
2
1
3
Total New Zealand
306
8,757
708
9,771
369
9,828
628
10,825
Other overseas
Accommodation,
cafes and restaurants
74
-
11
85
75
-
10
85
Agriculture, forestry
and fishing
1
-
1
2
2
-
1
3
Construction
24
-
66
90
53
-
109
162
Finance and insurance
3,648
9,047
4,957
17,652
2,408
14,196
4,409
21,013
Government,
administration
and defence
-
3,288
-
3,288
-
1,831
-
1,831
Manufacturing
895
4
1,498
2,397
195
1
1,637
1,833
Mining
2
-
928
930
6
-
663
669
Property
241
1
16
258
235
1
20
256
Property services and
business services
480
35
794
1,309
521
22
395
938
Services
17
-
626
643
173
1
332
506
Trade
768
3
1,787
2,558
868
3
1,243
2,114
Transport and storage
499
15
103
617
410
6
128
544
Utilities
228
1
139
368
207
1
18
226
Retail lending
282
-
10
292
290
-
11
301
Other
30
94
20
144
27
75
20
122
Total other overseas
7,189
12,488
10,956
30,633
5,470
16,137
8,996
30,603
Total gross credit risk
713,981
287,444
187,862
1,189,287
681,834
273,062
180,813
1,135,709
a.
In 2024, the Group revised the attribution of certain exposures between industry categories to better align with their presentation for
regulatory reporting. Certain LCH cleared derivative exposures were also reclassified between locations to better reflect the location of the
underlying risk. Comparatives have been revised to align with current period presentation.
190
WESTPAC 2024 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
2024
2023a
$m
Stage 1
Stage 2
Stage 3
Totalb
Stage 1
Stage 2
Stage 3
Totalb
Loans - housing
Strong
311,054
24,975
-
336,029
291,914
27,447
-
319,361
Good/satisfactory
159,016
45,242
-
204,258
156,836
48,929
-
205,765
Weak
2,512
16,389
6,893
25,794
2,533
14,178
5,237
21,948
Total loans - housing
472,582
86,606
6,893
566,081
451,283
90,554
5,237
547,074
Loans - personal
Strong
4,104
104
-
4,208
4,318
95
-
4,413
Good/satisfactory
5,254
825
-
6,079
6,097
802
-
6,899
Weak
191
570
190
951
252
623
192
1,067
Total loans - personal
9,549
1,499
190
11,238
10,667
1,520
192
12,379
Loans - business
Strong
81,696
19,387
-
101,083
80,177
13,564
-
93,741
Good/satisfactory
75,873
47,282
-
123,155
63,434
52,477
-
115,911
Weak
200
6,347
3,231
9,778
200
5,468
2,914
8,582
Total loans - business
157,769
73,016
3,231
234,016
143,811
71,509
2,914
218,234
Investment securities
Strong
102,721
-
-
102,721
73,963
-
-
73,963
Good/satisfactory
-
71
-
71
-
51
-
51
Weak
-
649
-
649
-
876
-
876
Total
investment securitiesc
102,721
720
-
103,441
73,963
927
-
74,890
All other financial assets
Strong
76,264
-
-
76,264
112,482
-
-
112,482
Good/satisfactory
899
-
-
899
597
-
-
597
Weak
229
-
-
229
197
-
-
197
Total all other
financial assets
77,392
-
-
77,392
113,276
-
-
113,276
Undrawn
credit commitments
Strong
140,786
14,341
-
155,127
137,275
11,169
-
148,444
Good/satisfactory
40,271
14,186
-
54,457
40,482
15,142
-
55,624
Weak
218
1,868
441
2,527
214
1,503
366
2,083
Total undrawn
credit commitments
181,275
30,395
441
212,111
177,971
27,814
366
206,151
Total strong
716,625
58,807
-
775,432
700,129
52,275
-
752,404
Total good/satisfactory
281,313
107,606
-
388,919
267,446
117,401
-
384,847
Total weak
3,350
25,823
10,755
39,928
3,396
22,648
8,709
34,753
Total on and off-
balance sheet
1,001,288
192,236
10,755
1,204,279
970,971
192,324
8,709
1,172,004
a.
In 2024, the Group revised the methodology that it uses to classify program-managed exposures as strong, satisfactory, or weak in order to
better align the mapping of program-managed exposures to transaction-managed exposures. This is a change in disclosure methodology only
and does not represent a change in underlying credit quality of the Group's credit exposures, or a change in ECL. Comparatives have been
revised to align with current period presentation.
b.
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.
c.
Excludes equity instruments. Includes $1,172 million (2023: $1,438 million) at amortised cost. $452 million (2023: $511 million) of these are
classified as strong, $71 million (2023: $51 million) are classified as good/satisfactory and $649 million (2023: $876 million) are classified
as weak.
Details of collateral held in support of these balances are provided in Note 11.5.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
191
Note 11. Credit risk management (Continued)
Parent Entity
2024
2023a
$m
Stage 1
Stage 2
Stage 3
Totalb
Stage 1
Stage 2
Stage 3
Totalb
Loans - housing
Strong
304,169
24,829
-
328,998
285,019
27,316
-
312,335
Good/satisfactory
117,339
33,284
-
150,623
117,007
36,087
-
153,094
Weak
2,233
15,471
6,235
23,939
2,255
13,342
4,754
20,351
Total loans - housing
423,741
73,584
6,235
503,560
404,281
76,745
4,754
485,780
Loans - personal
Strong
3,721
92
-
3,813
3,917
82
-
3,999
Good/satisfactory
4,849
647
-
5,496
5,692
625
-
6,317
Weak
178
512
180
870
236
561
180
977
Total loans - personal
8,748
1,251
180
10,179
9,845
1,268
180
11,293
Loans - business
Strong
70,448
18,047
-
88,495
68,229
12,647
-
80,876
Good/satisfactory
61,784
42,132
-
103,916
50,967
46,127
-
97,094
Weak
123
4,814
2,894
7,831
124
4,086
2,581
6,791
Total loans - business
132,355
64,993
2,894
200,242
119,320
62,860
2,581
184,761
Investment securities
Strong
95,346
-
-
95,346
67,257
-
-
67,257
Good/satisfactory
-
71
-
71
-
51
-
51
Weak
-
-
-
-
-
-
-
-
Total
investment securitiesc
95,346
71
-
95,417
67,257
51
-
67,308
All other financial assets
Strong
119,265
-
-
119,265
155,014
-
-
155,014
Good/satisfactory
731
-
-
731
515
-
-
515
Weak
71
-
-
71
50
-
-
50
Total all other
financial assets
120,067
-
-
120,067
155,579
-
-
155,579
Undrawn
credit commitments
Strong
129,379
13,659
-
143,038
124,609
10,412
-
135,021
Good/satisfactory
30,827
11,667
-
42,494
31,265
12,655
-
43,920
Weak
212
1,707
411
2,330
206
1,323
343
1,872
Total undrawn
credit commitments
160,418
27,033
411
187,862
156,080
24,390
343
180,813
Total strong
722,328
56,627
-
778,955
704,045
50,457
-
754,502
Total good/satisfactory
215,530
87,801
-
303,331
205,446
95,545
-
300,991
Total weak
2,817
22,504
9,720
35,041
2,871
19,312
7,858
30,041
Total on and off-
balance sheet
940,675
166,932
9,720
1,117,327
912,362
165,314
7,858
1,085,534
a.
In 2024, the Group revised the methodology that it uses to classify program-managed exposures as strong, satisfactory, or weak in order to
better align the mapping of program-managed exposures to transaction-managed exposures. This is a change in disclosure methodology only
and does not represent a change in underlying credit quality of the Group's credit exposures, or a change in ECL. Comparatives have been
revised to align with current period presentation.
b.
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.
c.
Excludes equity instruments. Includes $71 million (2023: $51 million) 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.
192
WESTPAC 2024 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
personala
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 –
business
Business loans may be secured, partially secured or unsecured. Security is typically taken by way of a mortgage over property
and/or a general security agreement over business assets or other assets.
Other security such as guarantees, 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.
Offsetting
Creditworthy 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 clearing
Westpac 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.
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193
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 secured
Less than or equal to 100%
Partially secured
Greater 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:
2024
2023
%
Housing
loansa
Personal
loans
Business
loans
Total
Housing
loansa
Personal
loans
Business
loans
Total
Performing loans
Consolidated
Fully secured
100.0
9.7
68.1
89.6
100.0
10.0
66.1
89.1
Partially secured
-
11.1
14.2
4.2
-
16.4
15.2
4.5
Unsecured
-
79.2
17.7
6.2
-
73.6
18.7
6.4
Total
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Parent Entity
Fully secured
100.0
10.7
68.3
89.9
100.0
10.9
66.3
89.4
Partially secured
-
12.2
14.1
4.1
-
18.0
15.3
4.5
Unsecured
-
77.1
17.6
6.0
-
71.1
18.4
6.1
Total
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Non-performing loans
Consolidated
Fully secured
91.5
-
56.7
79.0
93.9
-
55.3
78.2
Partially secured
8.5
23.2
23.4
13.4
6.1
33.9
23.9
13.0
Unsecured
-
76.8
19.9
7.6
-
66.1
20.8
8.8
Total
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Parent Entity
Fully secured
91.8
-
59.7
80.0
93.9
-
56.8
78.9
Partially secured
8.2
24.4
21.7
12.7
6.1
35.6
23.3
12.7
Unsecured
-
75.6
18.6
7.3
-
64.4
19.9
8.4
Total
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
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
$m
2024
2023
2024
2023
Cash, primarily for derivatives
3,079
3,526
2,936
3,244
Securities under reverse repurchase agreementsa
17,950
11,862
17,950
11,821
Securities under derivativesa
112
53
112
53
Total other collateral held
21,141
15,441
20,998
15,118
a.
Securities received as collateral are not recognised in the Group and Parent Entity’s balance sheet.
194
WESTPAC 2024 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.
Consolidated
Parent Entity
$m
2024
2023
2024
2023
Australia
Certificates of deposit
33,215
32,947
33,215
32,947
Non-interest bearing, repayable at calla
128,705
120,354
128,705
120,354
Other interest bearing - transactionsa
110,393
114,097
110,393
114,097
Other interest bearing - savingsa
197,415
179,110
197,415
179,110
Other interest bearing term
157,282
144,220
157,282
144,220
Total Australia
627,010
590,728
627,010
590,728
New Zealand
Certificates of deposit
1,711
2,247
-
-
Non-interest bearing, repayable at calla
10,287
11,514
-
-
Other interest bearing - transactionsa
8,815
8,160
-
-
Other interest bearing - savingsa
17,854
18,796
-
-
Other interest bearing term
36,245
35,827
-
-
Total New Zealand
74,912
76,544
-
-
Other overseas
Certificates of deposit
11,948
12,023
11,948
12,023
Non-interest bearing, repayable at call
1,193
1,358
503
548
Other interest bearing - transactions
736
789
532
573
Other interest bearing - savings
987
1,003
892
883
Other interest bearing term
3,703
5,723
3,596
5,602
Total other overseas
18,567
20,896
17,471
19,629
Total deposits and other borrowings
720,489
688,168
644,481
610,357
a.
In 2024, certain deposit products were reclassified between Savings and Transactions to align with how they are marketed to customers. The
Group has also revised the attribution of certain deposit products between interest bearing and non-interest bearing. Comparatives have been
revised to align with current period presentation.
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195
Note 12. Deposits and other borrowings (Continued)
Uninsured time deposits
Uninsured time deposits are 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:
Consolidated
$m
Up to 3 months
Over 3 months
to 6 months
Over 6 months
to 1 year
Over 1 year
Total
Certificates of deposit in excess of insured amounts
Australia
11,627
20,405
1,161
22
33,215
New Zealand
1,532
170
9
-
1,711
Other overseas
2,129
4,742
5,077
-
11,948
Total certificates of deposit in excess of insured amounts
15,288
25,317
6,247
22
46,874
Term deposits in excess of insured amounts
Australia
61,500
23,100
28,351
8,025
120,976
New Zealand
14,463
12,914
6,848
2,020
36,245
Other overseas
1,722
927
944
108
3,701
Total term deposits in excess of insured amounts
77,685
36,941
36,143
10,153
160,922
Interbank term deposits in excess of insured amountsa
Australia
802
1,891
857
7
3,557
New Zealand
-
-
-
-
-
Other overseas
5
-
7
27
39
Total interbank term deposits in excess of insured amounts
807
1,891
864
34
3,596
a.
Interbank term deposits are included in Note 19.
196
WESTPAC 2024 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.
Consolidated
Parent Entity
$m
2024
2023
2024
2023
Short-term debt
Own issuances
32,328
29,285
28,905
27,915
Total short-term debt
32,328
29,285
28,905
27,915
Long-term debt
Covered bonds
39,472
41,605
35,513
36,954
Senior
91,945
81,385
79,464
70,088
Securitisation
5,539
4,298
-
-
Total long-term debt
136,956
127,288
114,977
107,042
Total debt issues
169,284
156,573
143,882
134,957
Movement reconciliation
Balance as at beginning of year
156,573
144,868
134,957
122,339
Issuances
80,245
70,974
68,438
62,992
Maturities, repayments, buybacks and reductions
(67,100)
(62,596)
(58,931)
(52,671)
Total cash movements
13,145
8,378
9,507
10,321
FX translation impact
(5,798)
3,458
(5,167)
2,530
Fair value adjustments
283
(135)
275
(144)
Fair value hedge accounting adjustments
4,338
(346)
3,659
(348)
Other
743
350
651
259
Total non-cash movements
(434)
3,327
(582)
2,297
Balance as at end of year
169,284
156,573
143,882
134,957
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197
Note 13. Debt issues (Continued)
Consolidated
$m
2024
2023
Short-term debt
Own issuances:
US commercial paper
22,507
22,687
EUR commercial paper
1,048
-
Senior Debt:
AUD
1,900
2,090
EUR
483
-
GBP
5,313
3,265
USD
-
564
Other
1,077
679
Total short-term debt
32,328
29,285
Long-term debt (by currency):
AUD
41,191
36,346
CHF
2,554
3,358
EUR
32,182
34,002
GBP
5,695
3,202
JPY
78
80
NZD
3,483
3,324
USD
50,258
45,288
Other
1,515
1,688
Total long-term debt
136,956
127,288
Westpac manages FX exposure from debt issuances as part of its hedging activities. Further details of Westpac’s hedge
accounting are in Note 20.
198
WESTPAC 2024 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.
Consolidated
Parent Entity
$m
2024
2023
2024
2023
Additional Tier 1 (AT1) loan capital
Westpac capital notes
8,376
8,056
8,376
8,056
USD AT1 securities
1,728
1,750
1,728
1,750
Total AT1 loan capital
10,104
9,806
10,104
9,806
Tier 2 loan capital
Subordinated notes
27,779
23,370
26,666
22,279
Total Tier 2 loan capital
27,779
23,370
26,666
22,279
Total loan capital
37,883
33,176
36,770
32,085
Movement reconciliation
Balance as at beginning of year
33,176
31,254
32,085
30,734
Issuances
6,326
3,453
6,326
2,894
Maturities, repayments, buybacks and reductions
(1,957)
(1,171)
(1,951)
(1,171)
Total cash movements
4,369
2,282
4,375
1,723
FX translation impact
(1,416)
235
(1,401)
212
Fair value hedge accounting adjustments
1,714
(623)
1,675
(611)
Other
40
28
36
27
Total non-cash movements
338
(360)
310
(372)
Balance as at end of year
37,883
33,176
36,770
32,085
Additional Tier 1 loan capital
A summary of the key terms and common features of AT1 instruments is provided below.
Consolidated and Parent Entity
$m
Distribution or interest rate
Potential scheduled
conversion datea
Optional
redemption dateb
2024
2023
Westpac capital notes (WCN)
AUD 1,690 million WCN5
(3-month BBSW rate + 3.20% p.a.)
x (1 - Australian corporate tax rate)
22 September 2027
22 September 2025
1,688
1,686
AUD 1,423 million WCN6
(3-month BBSW rate + 3.70% p.a.)
x (1 - Australian corporate tax rate)
31 July 2026
31 July 2024c
-
1,421
AUD 1,723 million WCN7
(3-month BBSW rate + 3.40% p.a.)
x (1 - Australian corporate tax rate)
22 March 2029
22 March 2027
1,716
1,714
AUD 1,750 million WCN8
(3-month BBSW rate + 2.90% p.a.)
x (1 - Australian corporate tax rate)
21 June 2032
21 September 2029
1,740
1,739
AUD 1,509 million WCN9
(3-month BBSW rate + 3.40% p.a.)
x (1 - Australian corporate tax rate)
22 June 2031
22 September 2028
1,499
1,496
AUD 1,750 million WCN10
(3-month BBSW rate + 3.10% p.a.)
x (1 - Australian corporate tax rate)
22 June 2034
22 September 2031
1,733
-
Total WCN
8,376
8,056
USD AT1 securities
USD 1,250 million USD AT1 securities
Fixed 5.00% p.a.d
n/a
21 September 2027
1,728
1,750
Total USD AT1 securities
1,728
1,750
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 18 December 2023, AUD 802 million of WCN6 were transferred to the WCN6 nominated party for AUD 100 each pursuant to the WCN10
reinvestment offer. Those WCN6 were subsequently redeemed and cancelled by Westpac. On 31 July 2024, the outstanding AUD 621 million of
WCN6 were redeemed and cancelled by Westpac for AUD 100 each.
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.
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199
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 instrument1
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 basis2); 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 convert1, or may be required to convert1, 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.
200
WESTPAC 2024 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:
$m
Interest ratea
Maturity date
Optional
redemption dateb
2024
2023
Subordinated notes issued by Westpac Banking Corporation
USD 100 million
Fixed
23 February 2046
n/a
110
103
JPY 20,000 million
Fixed
19 May 2026
n/a
202
206
JPY 10,200 million
Fixed
2 June 2026
n/a
103
105
JPY 10,000 million
Fixed
9 June 2026
n/a
101
103
USD 1,500 million
Fixed
23 November 2031
23 November 2026
2,095
2,127
AUD 350 million
Fixed
16 August 2029
16 August 2024
-
350
AUD 185 million
Fixed
24 January 2048
n/a
184
184
AUD 130 million
Fixed
2 March 2048
n/a
130
130
USD 1,000 million
Fixed
24 July 2039
n/a
1,196
1,134
USD 1,250 million
Fixed
24 July 2034
24 July 2029
1,686
1,677
AUD 1,000 million
Floating
27 August 2029
27 August 2024
-
1,000
USD 1,500 million
Fixed
4 February 2030
4 February 2025
2,141
2,199
USD 1,500 million
Fixed
15 November 2035
15 November 2030
1,854
1,802
USD 1,000 million
Fixed
16 November 2040
n/a
1,010
939
AUD 1,250 million
Floating
29 January 2031
29 January 2026
1,250
1,236
EUR 1,000 million
Fixed
13 May 2031
13 May 2026
1,544
1,476
USD 1,000 million
Fixed
18 November 2041
n/a
1,059
989
USD 1,250 million
Fixed
18 November 2036
18 November 2031
1,572
1,529
JPY 26,000 million
Fixed
8 June 2032
8 June 2027
261
266
USD 1,000 million
Fixed
10 August 2033
10 August 2032
1,368
1,346
SGD 450 million
Fixed
7 September 2032
7 September 2027
516
498
AUD 1,500 million
Floating
23 June 2033
23 June 2028
1,496
1,494
AUD 300 million
Fixed/Floating
23 June 2023
23 June 2028
300
292
AUD 1,100 million
Fixed/Floating
23 June 2038
23 June 2033
1,100
1,092
AUD 1,500 million
Fixed/Floating
15 November 2038
n/a
1,502
-
USD 750 million
Fixed
17 November 2033
n/a
1,148
-
AUD 650 million
Floating
3 April 2034
3 April 2029
649
-
AUD 600 million
Fixed/Floating
3 April 2034
3 April 2029
593
-
AUD 1,000 million
Floating
10 July 2034
10 July 2029
996
-
AUD 500 million
Fixed/Floating
10 July 2034
10 July 2029
500
-
Total subordinated notes issued by Westpac Banking Corporation
26,666
22,277
Subordinated notes issued by Westpac New Zealand Limitedc
NZD 600 million
Fixed/Floating
16 September 2032
16 September 2027
541
553
NZD 600 million
Fixed/Floating
14 February 2034
14 February 2029
572
540
Total subordinated notes issued by Westpac New Zealand Limited
1,113
1,093
Total subordinated notes
27,779
23,370
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 de-recognition of
the assets in their entirety, partial de-recognition or no de-recognition of the assets subject to the transfer. For Westpac’s
accounting policy on de-recognition of financial assets refer to the Financial Assets and Financial Liabilities (see page
171) .
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.
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 $345 million (2023: $356 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.
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.
202
WESTPAC 2024 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:
$m
Carrying
amount of
transferred
assets
Carrying
amount of
associated
liabilities
Fair value of
transferred
assets
Fair value of
transferred
liabilities
Net fair
value position
Consolidated
2024
Securitisationa
5,580
5,539
5,575
5,552
23
Covered bondsb
50,269
39,472
n/a
n/a
n/a
Repurchase agreements
19,938
18,848
n/a
n/a
n/a
Total
75,787
63,859
5,575
5,552
23
2023
Securitisationa
4,329
4,298
4,306
4,294
12
Covered bondsb
50,296
41,605
n/a
n/a
n/a
Repurchase agreements
35,075
25,059
n/a
n/a
n/a
Total
89,700
70,962
4,306
4,294
12
Parent Entity
2024
Securitisationa
6,449
6,407
6,443
6,420
23
Covered bondsb
43,337
35,512
n/a
n/a
n/a
Repurchase agreements
16,205
16,071
n/a
n/a
n/a
Total
65,991
57,990
6,443
6,420
23
2023
Securitisationa
5,114
5,082
5,088
5,079
9
Covered bondsb
43,291
36,954
n/a
n/a
n/a
Repurchase agreements
28,968
20,315
n/a
n/a
n/a
Total
77,373
62,351
5,088
5,079
9
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 comprise actively traded debt and equity instruments, and those 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 trading portfolio that is measured at fair value.
Other financial assets measured at FVIS
Other financial assets measured at FVIS include:
•
Non-trading securities 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).
Consolidated
Parent Entity
$m
2024
2023
2024
2023
Trading securities
Government and semi-government securities
24,532
10,808
23,225
9,772
Other debt securities
5,958
5,835
5,089
4,435
Equity securities
-
5
-
5
Other
285
448
282
448
Total trading securities
30,775
17,096
28,596
14,660
Reverse repurchase agreements
17,990
12,054
17,990
12,013
Other financial assets measured at FVIS
Other debt securities
461
1,351
428
1,310
Equity securities
2
6
-
4
Total other financial assets measured at FVIS
463
1,357
428
1,314
Total trading securities and financial assets measured at FVIS
49,228
30,507
47,014
27,987
204
WESTPAC 2024 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 they are held within a business model whose objective is achieved both through collecting these cash flows or
selling the financial asset.
These securities are measured at fair value with unrealised gains and losses recognised in OCI except for interest
income, impairment charges, 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
Include 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
$m
2024
2023
2024
2023
Investment securities
Investments securities measured at FVOCI
Government and semi-government debt securities
83,403
56,370
78,798
52,562
Other debt securities
18,866
17,082
16,548
14,695
Equity securities
450
442
208
202
Total investment securities measured at FVOCIa
102,719
73,894
95,554
67,459
Investment securities measured at amortised cost
Government and semi-government debt securities
1,172
1,438
71
51
Total investment securities measured at amortised cost
1,172
1,438
71
51
Provision for ECL on debt securities at amortised cost
(6)
(6)
(2)
(2)
Total net investment securities measured at amortised cost
1,166
1,432
69
49
Total investment securities
103,885
75,326
95,623
67,508
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 2024. There are no tax-exempt securities.
Up to 1
year
Over 1
year to 5
years
Over 5
years to
10 years
Over 10
years
No
specific
maturity
Total
Weighted
average
2024
$m
%
$m
%
$m
%
$m
%
$m
%
$m
%
Carrying Amount
Government and semi-
government securities
17,166
3.7
33,349
2.8
19,702
3.7
14,352
5.0
-
-
84,569
3.6
Other debt securities
3,471
5.4
15,088
5.2
307
4.7
-
-
-
-
18,866
5.2
Equity securities
-
-
-
-
-
-
-
-
450
-
450
-
Total by maturity
20,637
48,437
20,009
14,352
450
103,885
The maturity profile is determined based upon contractual terms for investment securities.
Note 18. Other financial assets
Consolidated
Parent Entity
$m
2024
2023
2024
2023
Accrued interest receivable
2,223
1,996
1,987
1,780
Securities sold not delivered
1,716
2,905
1,716
2,905
Trade debtors
343
333
320
282
Interbank lending
174
97
173
95
Clearing and settlement balances
602
454
480
445
Accrued fees and commissions
276
289
155
161
Other
122
145
120
144
Total other financial assets
5,456
6,219
4,951
5,812
206
WESTPAC 2024 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 they are managed as part of a trading portfolio, otherwise they are measured on an
amortised cost basis.
Where a repurchase agreement is designated at fair value, any changes in fair value (except those due to 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.
Consolidated
Parent Entity
$m
2024
2023
2024
2023
Repurchase agreements
18,848
25,059
16,071
20,315
Interbank placements
3,635
4,537
3,631
4,533
Accrued interest payable
4,940
4,138
4,094
3,337
Securities purchased not delivered
2,966
3,477
2,966
3,477
Trade creditors and other accrued expenses
2,375
2,191
1,994
1,723
Settlement and clearing balances
934
832
801
805
Securities sold short
3,248
3,496
3,248
3,496
Other
1,131
1,140
1,112
1,094
Total other financial liabilities
38,077
44,870
33,917
38,780
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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.
208
WESTPAC 2024 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
carrying value
Consolidated
Trading
Hedging
$m
Assets
Liabilities
Assets
Liabilities
Assets
Liabilities
2024
Interest rate contracts
Swap agreements
47,697
(49,742)
5,619
(5,969)
53,316
(55,711)
Options
235
(186)
-
-
235
(186)
Total interest rate contracts
47,932
(49,928)
5,619
(5,969)
53,551
(55,897)
FX contracts
Spot and forward contracts
10,887
(11,643)
20
(171)
10,907
(11,814)
Cross currency swap agreements
9,330
(14,783)
183
(373)
9,513
(15,156)
Options
152
(135)
-
-
152
(135)
Total FX contracts
20,369
(26,561)
203
(544)
20,572
(27,105)
Credit default swaps
Credit protection bought
-
(276)
-
-
-
(276)
Credit protection sold
225
-
-
-
225
-
Total credit default swaps
225
(276)
-
-
225
(276)
Commodity contracts
235
(85)
-
-
235
(85)
Total of gross derivatives
68,761
(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 derivatives
23,716
(30,317)
393
(657)
24,109
(30,974)
2023
Interest rate contracts
Swap agreements
65,324
(68,945)
5,689
(10,730)
71,013
(79,675)
Options
301
(317)
-
-
301
(317)
Total interest rate contracts
65,625
(69,262)
5,689
(10,730)
71,314
(79,992)
FX contracts
Spot and forward contracts
9,406
(8,219)
-
(74)
9,406
(8,293)
Cross currency swap agreements
7,650
(8,973)
394
(596)
8,044
(9,569)
Options
110
(132)
-
-
110
(132)
Total FX contracts
17,166
(17,324)
394
(670)
17,560
(17,994)
Credit default swaps
Credit protection bought
-
(127)
-
-
-
(127)
Credit protection sold
105
-
-
-
105
-
Total credit default swaps
105
(127)
-
-
105
(127)
Commodity contracts
116
(266)
-
-
116
(266)
Total of gross derivatives
83,012
(86,979)
6,083
(11,400)
89,095
(98,379)
Impact of netting arrangements
(62,259)
63,111
(5,493)
10,621
(67,752)
73,732
Total of net derivatives
20,753
(23,868)
590
(779)
21,343
(24,647)
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Note 20. Derivative financial instruments (Continued)
Total derivatives
carrying value
Parent Entity
Trading
Hedging
$m
Assets
Liabilities
Assets
Liabilities
Assets
Liabilities
2024
Interest rate contracts
Swap agreements
47,973
(50,141)
5,186
(5,495)
53,159
(55,636)
Options
235
(186)
-
-
235
(186)
Total interest rate contracts
48,208
(50,327)
5,186
(5,495)
53,394
(55,822)
FX contracts
Spot and forward contracts
10,887
(11,665)
20
(149)
10,907
(11,814)
Cross currency swap agreements
9,411
(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 sold
225
-
-
-
225
-
Total credit default swaps
225
(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)
2023
Interest rate contracts
Swap agreements
66,248
(69,227)
4,616
(10,412)
70,864
(79,639)
Options
301
(317)
-
-
301
(317)
Total interest rate contracts
66,549
(69,544)
4,616
(10,412)
71,165
(79,956)
FX contracts
Spot and forward contracts
9,406
(8,230)
-
(63)
9,406
(8,293)
Cross currency swap agreements
7,824
(9,369)
64
(163)
7,888
(9,532)
Options
110
(132)
-
-
110
(132)
Total FX contracts
17,340
(17,731)
64
(226)
17,404
(17,957)
Credit default swaps
Credit protection bought
-
(127)
-
-
-
(127)
Credit protection sold
105
-
-
-
105
-
Total credit default swaps
105
(127)
-
-
105
(127)
Commodity contracts
116
(266)
-
-
116
(266)
Total of gross derivatives
84,110
(87,668)
4,680
(10,638)
88,790
(98,306)
Impact of netting arrangements
(63,187)
63,415
(4,565)
10,317
(67,752)
73,732
Total of net derivatives
20,923
(24,253)
115
(321)
21,038
(24,574)
210
WESTPAC 2024 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.
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
211
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
Consolidated
Within 1
year
Over 1 year
to 5 years
Over 5
years
Total
Carrying value
$m
Hedging instrument
Hedged risk
Assets
Liabilities
2024
One-to-one hedge relationships
Fair value hedges
Interest rate swap
Interest rate risk
21,400
82,571
55,004
158,975
3,611
(4,858)
Cross currency swap
Interest rate risk
1,098
13,188
981
15,267
(22)
(281)
Cash flow hedges
Cross currency swap
FX risk
1,098
13,188
981
15,267
205
(92)
Foreign exchange
forwards and swaps
FX risk
3,663
-
-
3,663
2
(144)
Net investment hedges
Forward contracts
FX risk
3,631
-
-
3,631
18
(27)
Total one-to-one hedge relationships
30,890
108,947
56,966
196,803
3,814
(5,402)
Macro hedge relationships
Portfolio fair value hedges
Interest rate swap
Interest rate risk
n/a
n/a
n/a
16,317
35
(204)
Macro cash flow hedges
Interest rate swap
Interest rate risk
n/a
n/a
n/a
422,943
1,973
(907)
Total macro hedge relationships
n/a
n/a
n/a
439,260
2,008
(1,111)
Total of gross hedging derivatives
n/a
n/a
n/a
636,063
5,822
(6,513)
Impact of netting arrangements
n/a
n/a
n/a
n/a
(5,429)
5,856
Total of net hedging derivatives
n/a
n/a
n/a
n/a
393
(657)
2023
One-to-one hedge relationships
Fair value hedges
Interest rate swap
Interest rate risk
16,179
80,537
40,307
137,023
3,072
(8,979)
Cross currency swap
Interest rate risk
3,696
10,840
1,102
15,638
(274)
(806)
Cash flow hedges
Cross currency swap
FX risk
3,696
10,840
1,102
15,638
668
210
Foreign exchange
forwards and swaps
FX risk
n/a
n/a
n/a
n/a
n/a
n/a
Net investment hedges
Forward contracts
FX risk
3,486
-
-
3,486
-
(74)
Total one-to-one hedge relationships
27,057
102,217
42,511
171,785
3,466
(9,649)
Macro hedge relationships
Portfolio fair value hedges
Interest rate swap
Interest rate risk
n/a
n/a
n/a
21,524
217
(20)
Macro cash flow hedges
Interest rate swap
Interest rate risk
n/a
n/a
n/a
287,510
2,400
(1,731)
Total macro hedge relationships
n/a
n/a
n/a
309,034
2,617
(1,751)
Total of gross hedging derivatives
n/a
n/a
n/a
480,819
6,083
(11,400)
Impact of netting arrangements
n/a
n/a
n/a
n/a
(5,493)
10,621
Total of net hedging derivatives
n/a
n/a
n/a
n/a
590
(779)
212
WESTPAC 2024 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 20. Derivative financial instruments (Continued)
Notional amounts
Parent Entity
Within 1
year
Over 1 year
to 5 years
Over 5
years
Total
Carrying value
$m
Hedging instrument
Hedged risk
Assets
Liabilities
2024
One-to-one hedge relationships
Fair value hedges
Interest rate swap
Interest rate risk
20,962
77,739
54,797
153,498
3,457
(4,789)
Cross currency swap
Interest rate risk
377
1,002
659
2,038
(23)
(23)
Cash flow hedges
Cross currency swap
FX risk
377
1,002
659
2,038
75
(112)
Foreign exchange
forwards and swaps
FX risk
3,663
-
-
3,663
2
(144)
Net investment hedges
Forward contracts
FX risk
2,636
-
-
2,636
18
(5)
Total one-to-one hedge relationships
28,015
79,743
56,115
163,873
3,529
(5,073)
Macro hedge relationships
Portfolio fair value hedges
Interest rate swap
Interest rate risk
n/a
n/a
n/a
1,797
32
-
Macro cash flow hedges
Interest rate swap
Interest rate risk
n/a
n/a
n/a
398,519
1,697
(706)
Total macro hedge relationships
n/a
n/a
n/a
400,316
1,729
(706)
Total of gross hedging derivatives
n/a
n/a
n/a
564,189
5,258
(5,779)
Impact of netting arrangements
n/a
n/a
n/a
n/a
(5,151)
5,451
Total of net hedging derivatives
n/a
n/a
n/a
n/a
107
(328)
2023
One-to-one hedge relationships
Fair value hedges
Interest rate swap
Interest rate risk
15,636
79,627
38,674
133,937
2,933
(8,966)
Cross currency swap
Interest rate risk
95
1,340
674
2,109
(32)
(104)
Cash flow hedges
Cross currency swap
FX risk
95
1,340
674
2,109
96
(59)
Foreign exchange
forwards and swaps
FX risk
n/a
n/a
n/a
n/a
n/a
n/a
Net investment hedges
Forward contracts
FX risk
2,585
-
-
2,585
-
(63)
Total one-to-one hedge relationships
18,411
82,307
40,022
140,740
2,997
(9,192)
Macro hedge relationships
Portfolio fair value hedges
Interest rate swap
Interest rate risk
n/a
n/a
n/a
2,632
84
-
Macro cash flow hedges
Interest rate swap
Interest rate risk
n/a
n/a
n/a
263,188
1,599
(1,446)
Total macro hedge relationships
n/a
n/a
n/a
265,820
1,683
(1,446)
Total of gross hedging derivatives
n/a
n/a
n/a
406,560
4,680
(10,638)
Impact of netting arrangements
n/a
n/a
n/a
n/a
(4,565)
10,317
Total of net hedging derivatives
n/a
n/a
n/a
n/a
115
(321)
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
2024
2023
Consolidated
Cash flow hedges
Cross currency swap
FX risk
EUR:NZD
0.5963
0.5943
USD:NZD
0.6252
0.6716
Foreign
exchange swap
FX risk
USD:AUD
0.6676
n/a
Net investment hedges
Forward contracts
FX risk
NZD:AUD
1.0984
1.0857
USD:AUD
0.6745
0.6839
Parent Entity
Cash flow hedges
Cross currency swap
FX risk
EUR:AUD
0.6650
0.6650
JPY:AUD
79.6448
79.6448
CNH:AUD
4.7334
4.7275
HKD:AUD
5.6124
5.6124
Foreign
exchange swap
FX risk
USD:AUD
0.6676
n/a
Net investment hedges
Forward contracts
FX risk
NZD:AUD
1.0905
1.0842
USD:AUD
0.6745
0.6839
STRATEGIC
REVIEW
PERFORMANCE
REVIEW
FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
213
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).
2024
2023
$m
Carrying amount of
hedged item
FVHA
Carrying amount of
hedged item
FVHA
Consolidated
Interest rate risk
Investment securitiesa
65,585
(165)
40,402
(3,257)
Loans
16,638
77
21,223
(301)
Debt issues and loan capital
(102,039)
3,749
(100,176)
9,801
Parent Entity
Interest rate risk
Investment securitiesa
61,775
(294)
37,995
(3,170)
Loans
2,019
(22)
2,510
(122)
Debt issues and loan capital
(87,495)
3,532
(86,575)
8,866
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 (2023: 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 reserves is detailed below:
2024
2023
$m
Interest
rate risk
FX
risk
Total
Interest
rate risk
FX
risk
Total
Consolidated
Cash flow hedge reserve
Balance as at beginning of year
249
(47)
202
1,147
(1)
1,146
Net gains/(losses) from changes in fair value
878
(377)
501
(311)
(324)
(635)
Transferred to interest income
(149)
226
77
(587)
278
(309)
Balance as at end of year
978
(198)
780
249
(47)
202
Parent Entity
Cash flow hedge reserve
Balance as at beginning of year
(288)
(1)
(289)
629
1
630
Net gains/(losses) from changes in fair value
1,049
(176)
873
(535)
(35)
(570)
Transferred to interest income
91
41
132
(382)
33
(349)
Balance as at end of year
852
(136)
716
(288)
(1)
(289)
There were net gains of $16 million (2023: net gains $2 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 $28 million
(2023: net loss $155 million) for Westpac and $31 million (2023: net loss $97 million) for the Parent Entity. Included in
the foreign currency translation reserve is a loss of $158 million (2023: $158 million loss) for Westpac and $162 million
(2023: $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.
214
WESTPAC 2024 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:
$m
Hedging instrument
Hedged risk
Change in fair
value of
hedging
instrument
used for
calculating
ineffectiveness
Change in
value of the
hedged item
used for
calculating
ineffectiveness
Hedge
ineffectiveness
recognised in
interest income
Hedge
ineffectiveness
recognised
in non-
interest income
Consolidated
2024
Fair value hedges
Interest rate swap
Interest rate risk
1,845
(1,817)
28
n/a
Cross currency swap
Interest rate risk
761
(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 swaps
FX risk
(126)
126
-
n/a
Net investment hedges
Forward contracts
FX risk
28
(28)
n/a
-
Total
3,181
(3,173)
8
-
2023
Fair value hedges
Interest rate swap
Interest rate risk
(2,355)
2,397
42
n/a
Cross currency swap
Interest rate risk
(12)
15
3
n/a
Cash flow hedges
Interest rate swap
Interest rate risk
(849)
898
49
n/a
Cross currency swap
FX risk
(46)
46
-
n/a
Foreign exchange forwards
and swaps
FX risk
n/a
n/a
n/a
n/a
Net investment hedges
Forward contracts
FX risk
(155)
155
n/a
-
Total
(3,417)
3,511
94
-
Parent Entity
2024
Fair value hedges
Interest rate swap
Interest rate risk
2,295
(2,274)
21
n/a
Cross currency swap
Interest rate risk
84
(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 swaps
FX risk
(126)
126
-
n/a
Net investment hedges
Forward contracts
FX risk
31
(31)
n/a
-
Total
3,396
(3,380)
16
-
2023
Fair value hedges
Interest rate swap
Interest rate risk
(2,226)
2,260
34
n/a
Cross currency swap
Interest rate risk
(17)
18
1
n/a
Cash flow hedges
Interest rate swap
Interest rate risk
(858)
917
59
n/a
Cross currency swap
FX risk
(2)
2
-
n/a
Foreign exchange forwards
and swaps
FX risk
n/a
n/a
n/a
n/a
Net investment hedges
Forward contracts
FX risk
(97)
97
n/a
-
Total
(3,200)
3,294
94
-
STRATEGIC
REVIEW
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FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
215
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.
Index
Note Name
Note
number
Overview
Risk management frameworks
21.1
Credit risk
Refer to Note 11 Credit risk management
11
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
21.2.1
Sources of funding
21.2.2
Assets pledged as collateral
21.2.3
Contractual maturity of financial liabilities
21.2.4
Expected maturity
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 Framework, Risk Management Strategy 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 Framework, Risk Management Strategy 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 Framework and
Board Risk Appetite Statement); and
•
Review and, where appropriate, approve risks beyond the approval discretion provided to management.
216
WESTPAC 2024 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 21. Risk management, funding and liquidity risk and market risk
(Continued)
For each of its primary financial risks, Westpac maintains risk management frameworks and a number of supporting
policies that define roles and responsibilities, acceptable practices, limits and key controls:
Risk
Risk 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 three year period. This review encompasses trends in global markets, peer
analysis, wholesale funding capacity, expected funding requirements and a funding risk analysis.
This strategy is continuously reviewed to take account of changing market conditions, investor
sentiment and estimations of asset and liability growth rates.
•
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.
STRATEGIC
REVIEW
PERFORMANCE
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FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
217
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:
Consolidated
Parent Entity
2024
2023
2024
2023
$m
Actual
Average
Actual
Average
Actual
Average
Actual
Average
Cash
65,356
94,468
102,223
118,380
58,236
85,384
93,300
107,189
Trading securities and financial assets measured
at FVIS
31,717
19,183
19,516
19,937
29,538
16,954
17,080
17,941
Investment securities
103,435
92,622
74,884
72,101
95,415
85,076
67,306
65,199
Other financial assets
174
199
97
134
173
195
95
126
Total on-balance sheet liquid assets
200,682
206,472
196,720
210,552
183,362
187,609
177,781
190,455
In addition, Westpac has $70,306 million (2023: $65,155 million) and the Parent Entity has $62,770 million
(2023: $59,418 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 $70,282 million (2023: $60,083 million) for Westpac and $63,975 million (2023: $54,437 million) for the
Parent Entity.
218
WESTPAC 2024 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.
%
2024
2023
Customer deposits
66.9
66.0
Wholesale term funding with residual maturity greater than 12 months
13.9
13.8
Wholesale funding with a residual maturity less than 12 months
11.4
12.3
Equity
7.2
7.5
Securitisation
0.6
0.4
Group's total funding
100.0
100.0
Movements in Westpac’s funding composition in 2024 included:
•
Customer deposits increased by $32.7 billion in 2024 and now accounts for 66.9% of Westpac’s total funding
(including equity) at 30 September 2024, up from 66.0% at 30 September 2023;
•
Long-term funding with a residual maturity greater than 12 months accounted for 13.9% of Westpac’s total funding
at 30 September 2024. Funding from securitisation accounted for a further 0.6% of total funding. Westpac raised
$41.9 billion of long-term wholesale funding in 2024, leveraging the scale and diversity of its wholesale funding
franchise across global capital markets;
•
Wholesale funding with a residual maturity less than 12 months accounted for 11.4% of Westpac’s total funding at
30 September 2024, down from 12.3% at 30 September 2023. This portfolio, including long-term funding with a
residual maturity less than one year, had a weighted average maturity of 151 days; and
•
Funding from equity decreased by $0.5 billion in 2024 and made up 7.2% of total funding at 30 September 2024,
reflecting the impact of the share buyback and higher dividend payout.
Borrowings and outstanding issuances from existing debt programs at 30 September 2024 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 2024 the amount outstanding totalled NZ$2,981 million (30 September 2023:
NZ$4,981 million).
Credit ratings
As at 30 September 2024 the Parent Entity’s credit ratings were:
2024
Short-term
Long-term
Outlook
Fitch Ratings
F1+
AA-
Stable
Moody’s Ratings
P-1
Aa2
Stable
S&P Global Ratings
A-1+
AA-
Stable
STRATEGIC
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FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
219
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:
Consolidated
Parent Entity
$m
2024
2023
2024
2023
Cash
6,269
4,535
6,199
4,505
Securities (including certificates of deposit)
1,721
2,166
1,721
2,166
Securities pledged under repurchase agreements
19,938
35,075
16,205
28,968
Securities pledged on contingent liabilities
56
-
56
-
Total amount pledged to secure liabilities/contingent liabilities
27,984
41,776
24,181
35,639
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.
220
WESTPAC 2024 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 21. Risk management, funding and liquidity risk and market risk
(Continued)
Consolidated
$m
Up to 1 month
Over 1 month
to 3 months
Over 3 months
to 1 year
Over 1 year to
5 years
Over 5 years
Total
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
25,759
1,851
4,593
1,049
5
33,257
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
Letters of credit and guarantees
13,118
-
-
-
-
13,118
Commitments to extend credit
198,876
-
-
-
-
198,876
Other
117
-
-
-
-
117
Total undiscounted contingent liabilities
and commitments
212,111
-
-
-
-
212,111
2023
Financial liabilities
Collateral received
3,540
-
-
-
-
3,540
Deposits and other borrowings
492,759
77,985
115,224
8,847
47
694,862
Other financial liabilities
20,374
832
16,905
2,767
5
40,883
Derivative financial instruments:a
Held for trading
18,542
-
-
-
-
18,542
Held for hedging purposes
(net settled)
2
(6)
113
130
302
541
Held for hedging purposes
(gross settled):
Cash outflow
7,555
13,131
41,532
93,762
27,158
183,138
Cash inflow
(6,395)
(11,931)
(40,619)
(90,167)
(25,049)
(174,161)
Debt issues
5,258
13,656
39,958
102,529
18,116
179,517
Total financial liabilities excluding loan capital
541,635
93,667
173,113
117,868
20,579
946,862
Loan capital
18
267
815
9,416
38,430
48,946
Total undiscounted financial liabilities
541,653
93,934
173,928
127,284
59,009
995,808
Total contingent liabilities and commitments
Letters of credit and guarantees
12,447
-
-
-
-
12,447
Commitments to extend credit
193,457
-
-
-
-
193,457
Other commitments
247
-
-
-
-
247
Total undiscounted contingent liabilities
and commitments
206,151
-
-
-
-
206,151
a.
Derivatives not in hedge accounting relationships were all previously presented in the held for trading line. In 2024, economic hedges have
been presented within the relevant held for hedging purposes lines to better reflect how these derivatives are managed. Comparatives have
been revised to align with current period presentation.
STRATEGIC
REVIEW
PERFORMANCE
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FINANCIAL
STATEMENTS
SHAREHOLDER
INFORMATION
221
Note 21. Risk management, funding and liquidity risk and market risk
(Continued)
Parent Entity
$m
Up to 1 month
Over 1 month
to 3 months
Over 3 months
to 1 year
Over 1 year to
5 years
Over 5 years
Total
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 liabilities
25,217
1,851
2,829
8
-
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 issues
5,245
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
Letters of credit and guarantees
12,539
-
-
-
-
12,539
Commitments to extend credit
175,206
-
-
-
-
175,206
Other
117
-
-
-
-
117
Total undiscounted contingent liabilities
and commitments
187,862
-
-
-
-
187,862
2023
Financial liabilities
Collateral received
3,257
-
-
-
-
3,257
Deposits and other borrowings
447,791
66,071
94,886
6,969
47
615,764
Other financial liabilities
19,788
832
14,977
(9)
5
35,593
Derivative financial instruments:a
Held for trading
18,536
-
-
-
-
18,536
Held for hedging purposes
(net settled)
(73)
(147)
(24)
(194)
292
(146)
Held for hedging purposes
(gross settled):
Cash outflow
7,526
12,236
40,401
84,213
26,654
171,030
Cash inflow
(6,386)
(11,276)
(39,761)
(81,435)
(24,547)
(163,405)
Debt issues
4,847
12,820
33,866
86,665
17,068
155,266
Due to subsidiaries
13,921
546
2,670
12,195
48,625
77,957
Total financial liabilities excluding loan capital
509,207
81,082
147,015
108,404
68,144
913,852
Loan capital
18
249
761
9,133
36,922
47,083
Total undiscounted financial liabilities
509,225
81,331
147,776
117,537
105,066
960,935
Total contingent liabilities and commitments
Letters of credit and guarantees
11,847
-
-
-
-
11,847
Commitments to extend credit
168,719
-
-
-
-
168,719
Other
247
-
-
-
-
247
Total undiscounted contingent liabilities
and commitments
180,813
-
-
-
-
180,813
a.
Derivatives not in hedge accounting relationships were all previously presented in the held for trading line. In 2024, economic hedges have
been presented within the relevant held for hedging purposes lines to better reflect how these derivatives are managed. Comparatives have
been revised to align with current period presentation.
222
WESTPAC 2024 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 following tables present the balance sheet based on expected maturity dates. The liability balances in the following
tables will not agree to the contractual maturity tables (Note 21.2.4) due to the analysis below being based on expected
rather than contractual maturities, the impact of discounting and the exclusion of interest accruals beyond the reporting
period. Included in the following tables are equity securities classified as trading securities, investment securities and
life insurance assets that have no specific maturity. These assets have been classified based on the expected period of
disposal. Deposits are presented in the following table on a contractual basis, however as part of our normal banking
operations, Westpac would expect a large proportion of these balances to be retained.
2024
2023
Consolidated
Due within
12 months
Greater than
12 months
Total
Due within
12 months
Greater than
12 months
Total
$m
Assets
Cash and balances with central banks
65,667
-
65,667
102,522
-
102,522
Collateral paid
6,269
-
6,269
4,535
-
4,535
Trading securities and financial assets
measured at FVIS
33,090
16,138
49,228
25,046
5,461
30,507
Derivative financial instruments
21,978
2,131
24,109
18,633
2,710
21,343
Investment securities
20,930
82,955
103,885
17,221
58,105
75,326
Loans (net of provisions)
97,010
709,757
806,767
92,419
680,835
773,254
Other financial assets
5,355
101
5,456
6,219
-
6,219
All other assets
921
15,242
16,163
901
15,167
16,068
Total assets
251,220
826,324
1,077,544
267,496
762,278
1,029,774
Liabilities
Collateral received
3,078
-
3,078
3,525
-
3,525
Deposits and other borrowings
711,076
9,413
720,489
679,903
8,265
688,168
Other financial liabilities
37,024
1,053
38,077
42,050
2,820
44,870
Derivative financial instruments
25,390
5,584
30,974
19,737
4,910
24,647
Debt issues
59,911
109,373
169,284
53,854
102,719
156,573
All other liabilities
2,732
2,975
5,707
3,090
3,186
6,276
Total liabilities excluding loan capital
839,211
128,398
967,609
802,159
121,900
924,059
Loan capital
3,829
34,054
37,883
2,770
30,406
33,176
Total liabilities
843,040
162,452
1,005,492
804,929
152,306
957,235
Net assets/(liabilities)
(591,820)
663,872
72,052
(537,433)
609,972
72,539
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STATEMENTS
SHAREHOLDER
INFORMATION
223
Note 21. Risk management, funding and liquidity risk and market risk
(Continued)
2024
2023
Parent Entity
Due within
12 months
Greater than
12 months
Total
Due within
12 months
Greater than
12 months
Total
$m
Assets
Cash and balances with central banks
58,400
-
58,400
93,466
-
93,466
Collateral paid
6,199
-
6,199
4,505
-
4,505
Trading securities and financial assets
measured at FVIS
31,736
15,278
47,014
23,447
4,540
27,987
Derivative financial instruments
21,976
1,926
23,902
18,500
2,538
21,038
Investment securities
18,748
76,875
95,623
14,226
53,282
67,508
Loans (net of provisions)
76,274
633,769
710,043
68,391
609,630
678,021
Other financial assets
4,850
101
4,951
5,812
-
5,812
Due from subsidiaries
8,735
43,604
52,339
10,031
43,613
53,644
Investment in subsidiaries
-
9,095
9,095
-
8,019
8,019
All other assets
719
12,949
13,668
781
12,979
13,760
Total assets
227,637
793,597
1,021,234
239,159
734,601
973,760
Liabilities
Collateral received
2,935
-
2,935
3,243
-
3,243
Deposits and other borrowings
637,088
7,393
644,481
603,816
6,541
610,357
Other financial liabilities
33,883
34
33,917
38,736
44
38,780
Derivative financial instruments
25,392
5,403
30,795
19,722
4,852
24,574
Debt issues
53,982
89,900
143,882
47,176
87,781
134,957
Due to subsidiaries
13,492
42,230
55,722
14,748
40,915
55,663
All other liabilities
2,357
2,387
4,744
2,464
2,863
5,327
Total liabilities excluding loan capital
769,129
147,347
916,476
729,905
142,996
872,901
Loan capital
3,829
32,941
36,770
2,770
29,315
32,085
Total liabilities
772,958
180,288
953,246
732,675
172,311
904,986
Net assets/(liabilities)
(545,321)
613,309
67,988
(493,516)
562,290
68,774
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 risk
Non-traded market risk
Holding period
1 day
1 year
Confidence level
99%
99%
Period of historical data used
1 year
6 years
224
WESTPAC 2024 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 Entity
2024
2023
2022
$m
High
Low
Average
High
Low
Average
High
Low
Average
Interest rate risk
21.2
5.4
10.8
21.8
7.2
11.0
20.2
5.0
9.2
FX risk
7.3
0.9
2.4
14.2
1.1
4.3
8.3
0.3
2.5
Equity risk
0.0
0.0
0.0
0.1
0.0
0.0
0.1
0.0
0.0
Commodity risk
1.7
0.6
1.2
3.5
0.9
2.0
4.0
1.5
2.5
Other market risksa
10.1
1.9
5.4
9.4
3.2
6.0
6.5
1.4
2.9
Diversification effect
n/a
n/a
(6.9)
n/a
n/a
(8.1)
n/a
n/a
(6.5)
Net market risk
23.4
6.8
12.9
31.8
8.8
15.2
21.2
5.4
10.6
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 and 200 basis
point shifts 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 100 basis point rate shock (up and down) with
a 12 month time horizon (expressed as a percentage of reported NII):
2024
2023
% (increase)/decrease in NII
As at
Maximum
exposure
Minimum
exposure
Average
exposure
As at
Maximum
exposure
Minimum
exposure
Average
exposure
Consolidated
1.84
1.84
0.97
1.42
1.81
1.88
0.82
1.42
Parent Entity
1.40
1.43
0.59
1.03
1.47
1.67
0.49
1.20
Value at Risk - IRRBB
The table below depicts internal VaR for IRRBB1:
2024
2023
$m
As at
High
Low
Average
As at
High
Low
Average
Consolidated
77.7
80.6
37.5
50.0
49.5
68.4
45.7
55.8
As at 30 September 2024 the Value at Risk – IRRBB for the Parent Entity was $77 million (2023: $49 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.
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225
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 significant unobservable information is used,
the difference between the transaction price and the fair value (day one profit or loss) is recognised in the income
statement over the life of the instrument or when the inputs become observable.
Critical accounting assumptions and estimates
The majority of valuation models used by 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 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:
226
WESTPAC 2024 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 products
Derivatives
Exchange traded interest
rate futures and options
and commodity and
carbon futures
All these instruments are traded in liquid, active
markets where prices are readily observable.
No modelling or assumptions are used in
the valuation.
FX products
Derivatives
FX spot and
futures contracts
Equity products
Derivatives
Trading securities and financial
assets measured at FVIS
Other financial liabilities
Listed equities and
equity indices
Debt instruments
Trading securities and financial
assets measured at FVIS
Investment securities
Other financial liabilities
Australian
Commonwealth and
New Zealand
government bonds
Level 2 instruments (Level 2)
The fair value for financial instruments that are not actively traded is determined using valuation techniques which
maximise the use of observable market prices. Valuation techniques include:
•
The use of market standard discounting methodologies;
•
Option pricing models; and
•
Other valuation techniques widely used and accepted by market participants.
Instrument
Balance sheet category
Includes
Valuation
Interest
rate products
Derivatives
Interest 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 active quoted interest rates
in the swap, bond and futures markets. Interest
rate volatilities are sourced from brokers and
consensus data providers. If consensus prices
are not available, these are classified as Level
3 instruments.
FX products
Derivatives
FX 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 products
Derivatives
Single name and index credit
default swaps
Valued using an industry standard model
that incorporates the credit spread as its
principal input. Credit spreads are obtained from
consensus data providers. If consensus prices
are not available, these are classified as Level
3 instruments.
Commodity
products
Derivatives
Commodity and carbon derivatives
Valued 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 products
Derivatives
Exchange traded equity options,
OTC equity options and
equity warrants
Due to low liquidity, exchange traded options are
Level 2.
Valued using industry standard models based
on observable parameters such as stock prices,
dividends, volatilities and interest rates.
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Note 22. Fair values of financial assets and financial liabilities (Continued)
Instrument
Balance sheet category
Includes
Valuation
Asset backed
debt instruments
Trading securities and financial
assets measured at FVIS
Investment securities
Australian residential mortgage
backed securities (RMBS) and other
asset backed securities (ABS)
Valued using an industry approach to value
floating rate debt with prepayment features.
Australian RMBS are valued using prices sourced
from a consensus data provider. If consensus
prices are not available, these are classified as
Level 3 instruments.
Non-asset
backed
debt instruments
Trading securities and financial
assets measured at FVIS
Investment securities
Other financial liabilities
State and other government
bonds, corporate bonds and
commercial paper
Repurchase agreements and reverse
repurchase agreements over non-
asset backed debt securities
Valued using observable market prices, which
are sourced from independent pricing services,
broker quotes or inter-dealer prices. If prices
are not available from these sources, these are
classified as Level 3 instruments.
Loans at
fair value
Loans
Fixed rate bills and syndicated loans
Discounted 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 deposit
Deposits and other borrowings
Certificates of deposit
Discounted cash flow using market rates offered
for deposits of similar remaining maturities.
Debt issues at
fair value
Debt issues
Debt issues
Discounted cash flows, using a discount rate
which reflects the terms of the instrument
and the timing of cash flows adjusted for
market observable changes in 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 instruments
Trading 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
instruments
Investment securities
Strategic equity investments
Valued 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.
228
WESTPAC 2024 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.
2024
2023
$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
15,522
33,700
6
49,228
4,468
26,012
27
30,507
Derivative financial instruments
13
24,089
7
24,109
27
21,290
26
21,343
Investment securities
14,117
88,155
447
102,719
5,620
67,833
441
73,894
Loans
-
210
15
225
-
4
15
19
Total financial assets measured at fair value on a
recurring basis
29,652
146,154
475
176,281
10,115
115,139
509
125,763
Financial liabilities measured at fair value on a
recurring basis
Deposits and other borrowingsa
-
46,878
-
46,878
-
47,220
-
47,220
Other financial liabilitiesb
891
18,428
-
19,319
1,714
10,255
-
11,969
Derivative financial instruments
14
30,955
5
30,974
28
24,604
15
24,647
Debt issuesc
-
5,385
-
5,385
-
3,222
-
3,222
Total financial liabilities measured at fair value on
a recurring basis
905
101,646
5
102,556
1,742
85,301
15
87,058
Parent Entity
Financial assets measured at fair value on a
recurring basis
Trading securities and financial assets
measured at FVIS
15,091
31,918
5
47,014
4,395
23,566
26
27,987
Derivative financial instruments
13
23,883
6
23,902
27
20,985
26
21,038
Investment securities
11,166
84,182
206
95,554
3,490
63,767
202
67,459
Loans
-
210
1
211
-
4
3
7
Due from subsidiaries
-
1,044
-
1,044
-
1,159
-
1,159
Total financial assets measured at fair value on a
recurring basis
26,270
141,237
218
167,725
7,912
109,481
257
117,650
Financial liabilities measured at fair value on a
recurring basis
Deposits and other borrowingsa
-
45,167
-
45,167
-
44,973
-
44,973
Other financial liabilitiesb
891
18,428
-
19,319
1,714
10,213
-
11,927
Derivative financial instruments
14
30,776
5
30,795
28
24,531
15
24,574
Debt issuesc
-
1,961
-
1,961
-
1,852
-
1,852
Due to subsidiaries
-
344
-
344
-
1,875
-
1,875
Total financial liabilities measured at fair value on
a recurring basis
905
96,676
5
97,586
1,742
83,444
15
85,201
a.
The contractual outstanding amount payable at maturity was $47,328 million (2023: $47,614 million) for the Group and $45,603 million (2023:
$45,331 million) for the Parent Entity.
b.
The contractual outstanding amount payable at maturity for the Group is $19,320 million (2023: $11,970 million) and $19,320 million for the
Parent Entity (2023: $11,929 million).
c.
The contractual outstanding payable at maturity was $5,678 million (2023: $3,772 million) for the Group and $2,226 million (2023:
$2,392 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 $58 million decrease (2023: $45 million decrease) for the Group and Parent Entity.
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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).
$m
Trading
securities and
financial assets
measured
at FVIS
Investment
securities
Derivative and
other assets
Total Level
3 assets
Derivative
liabilities
Total Level
3 liabilities
Consolidated
Balance as at 30 September 2022
18
387
40
445
23
23
Gains/(losses) on assets/(gains)/losses on
liabilities recognised in:
Income statements
-
-
(9)
(9)
(7)
(7)
OCI
-
(17)
-
(17)
-
-
Acquisitions and issues
31
84
145
260
115
115
Disposals and settlements
(19)
(13)
(124)
(156)
(109)
(109)
Transfer into or out of non-market observables
(4)
-
(12)
(16)
(7)
(7)
Foreign currency translation impacts
1
-
1
2
-
-
Balance as at 30 September 2023
27
441
41
509
15
15
Gains/(losses) on assets/(gains)/losses on
liabilities recognised in:
Income statements
(1)
-
(28)
(29)
2
2
OCI
-
(11)
-
(11)
-
-
Acquisitions and issues
9
21
231
261
308
308
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
6
447
22
475
5
5
Unrealised gains/(losses) recognised in the
income statements for financial instruments
held as at:
30 September 2023
(1)
-
25
24
(1)
(1)
30 September 2024
-
-
5
5
1
1
230
WESTPAC 2024 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 22. Fair values of financial assets and financial liabilities (Continued)
$m
Trading
securities and
financial assets
measured
at FVIS
Investment
securities
Derivative and
other assets
Total Level
3 assets
Derivative
liabilities
Total Level
3 liabilities
Parent Entity
Balance as at 30 September 2022
18
157
22
197
23
23
Gains/(losses) on assets/(gains)/losses on
liabilities recognised in:
Income statements
-
-
(9)
(9)
(7)
(7)
OCI
-
(30)
-
(30)
-
-
Acquisitions and issues
30
79
144
253
115
115
Disposals and settlements
(19)
(4)
(116)
(139)
(109)
(109)
Transfer into or out of non-market observables
(4)
-
(12)
(16)
(7)
(7)
Foreign currency translation impacts
1
-
-
1
-
-
Balance as at 30 September 2023
26
202
29
257
15
15
Gains/(losses) on assets/(gains)/losses on
liabilities recognised in:
Income statements
(1)
-
(28)
(29)
2
2
OCI
-
(13)
-
(13)
-
-
Acquisitions and issues
9
16
228
253
308
308
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
5
206
7
218
5
5
Unrealised gains/(losses) recognised in the
income statements for financial instruments
held as at:
30 September 2023
(1)
-
25
24
(1)
(1)
30 September 2024
-
-
5
5
1
1
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 2024
was $1 million (2023: nil).
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
Loans
Where available, the fair value of loans is based on observable market transactions, otherwise fair value is estimated
using discounted cash flow models. For variable rate loans, the discount rate used is the current effective interest
rate. The discount rate applied for fixed rate loans reflects the market rate for the maturity of the loan and the
credit worthiness of the borrower.
Investment securities
The 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 borrowings
Fair 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 capital
Fair 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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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
Consolidated
Carrying
amount
Level 1
Level 2
Level 3
Total
$m
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 securities
1,166
-
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 issuesa
163,899
-
162,750
1,755
164,505
Loan capitala
37,883
-
39,390
-
39,390
Total financial liabilities not measured at fair value
897,229
3,078
891,413
5,624
900,115
2023
Financial assets not measured at fair value
Cash and balances with central banks
102,522
102,522
-
-
102,522
Collateral paid
4,535
4,535
-
-
4,535
Investment securities
1,432
-
511
921
1,432
Loans
773,235
-
-
768,890
768,890
Other financial assets
6,219
-
6,219
-
6,219
Total financial assets not measured at fair value
887,943
107,057
6,730
769,811
883,598
Financial liabilities not measured at fair value
Collateral received
3,525
3,525
-
-
3,525
Deposits and other borrowings
640,948
-
636,999
4,331
641,330
Other financial liabilities
32,901
-
32,901
-
32,901
Debt issuesa
153,351
-
152,131
998
153,129
Loan capitala
33,176
-
33,512
-
33,512
Total financial liabilities not measured at fair value
863,901
3,525
855,543
5,329
864,397
a.
The estimated fair values of debt issues and loan capital include the impact of changes in Westpac's credit spreads since origination.
232
WESTPAC 2024 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 22. Fair values of financial assets and financial liabilities (Continued)
Estimated fair value
Parent Entity
Carrying
amount
Level 1
Level 2
Level 3
Total
$m
2024
Financial assets not measured at fair value
Cash and balances with central banks
58,400
58,400
-
-
58,400
Collateral paid
6,199
6,199
-
-
6,199
Investment securities
69
-
-
69
69
Loans
709,832
-
-
709,048
709,048
Due from subsidiariesa
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 received
2,935
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 issuesb
141,921
-
142,427
-
142,427
Due to subsidiaries
55,378
-
3,505
51,873
55,378
Loan capitalb
36,770
-
38,240
-
38,240
Total financial liabilities not measured at fair value
850,916
2,935
797,357
53,278
853,570
2023
Financial assets not measured at fair value
Cash and balances with central banks
93,466
93,466
-
-
93,466
Collateral paid
4,505
4,505
-
-
4,505
Investment securities
49
-
-
49
49
Loans
678,014
-
-
674,713
674,713
Due from subsidiariesa
51,796
-
4,274
47,522
51,796
Other financial assets
5,812
-
5,812
-
5,812
Total financial assets not measured at fair value
833,642
97,971
10,086
722,284
830,341
Financial liabilities not measured at fair value
Collateral received
3,243
3,243
-
-
3,243
Deposits and other borrowings
565,384
-
564,310
1,443
565,753
Other financial liabilities
26,853
-
26,853
-
26,853
Debt issuesb
133,105
-
133,039
-
133,039
Due to subsidiaries
53,788
-
3,408
50,380
53,788
Loan capitalb
32,085
-
32,431
-
32,431
Total financial liabilities not measured at fair value
814,458
3,243
760,041
51,823
815,107
a.
Due from subsidiaries excluded $778 million (2023: $689 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 offsetting
in the balance sheet
Amounts subject to enforceable
netting arrangements but not offset
Consolidated
$m
Gross amounts
Amounts
offset
Net amounts
reported in
the balance
sheet
Other
recognised
financial
instruments
Cash
collaterala,b
Financial
instrument
collateral
Net amount
2024
Assets
Collateral paidc
4,532
(4,474)
58
-
-
-
58
Derivative financial instrumentsd
73,247
(50,474)
22,773
(17,071)
(3,065)
(112)
2,525
Reverse repurchase agreementse
19,898
(1,908)
17,990
-
(14)
(17,950)
26
Loansf
23,218
(23,147)
71
-
-
-
71
Total assets
120,895
(80,003)
40,892
(17,071)
(3,079)
(18,062)
2,680
Liabilities
Collateral received
2,562
(2,559)
3
-
-
-
3
Derivative financial instrumentsd
80,776
(52,389)
28,387
(17,071)
(5,870)
(1,721)
3,725
Repurchase agreementsg
20,756
(1,908)
18,848
-
(57)
(18,791)
-
Deposits and other borrowingsf
49,007
(23,147)
25,860
-
-
-
25,860
Total liabilities
153,101
(80,003)
73,098
(17,071)
(5,927)
(20,512)
29,588
2023
Assets
Collateral paidc
11,162
(11,107)
55
-
-
-
55
Derivative financial instrumentsd
87,261
(67,752)
19,509
(13,344)
(3,417)
(53)
2,695
Reverse repurchase agreementse
12,054
-
12,054
-
(109)
(11,862)
83
Loansf
25,343
(25,301)
42
-
-
-
42
Total assets
135,820
(104,160)
31,660
(13,344)
(3,526)
(11,915)
2,875
Liabilities
Collateral received
5,131
(5,127)
4
-
-
-
4
Derivative financial instrumentsd
95,461
(73,732)
21,729
(13,364)
(4,340)
(2,166)
1,859
Repurchase agreementsg
25,059
-
25,059
-
(19)
(25,040)
-
Deposits and other borrowingsf
52,421
(25,301)
27,120
-
-
-
27,120
Total liabilities
178,072
(104,160)
73,912
(13,364)
(4,359)
(27,206)
28,983
a.
$3,078 million (2023: $3,525 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.
$5,927 million (2023: $4,359 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 $342 million (2023: $176 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.
$1,336 million (2023: $1,834 million) of derivative financial assets and $2,587 million (2023: $2,918 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.
234
WESTPAC 2024 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 23. Offsetting financial assets and financial liabilities (Continued)
Amounts subject to enforceable netting arrangements
Effects of offsetting
in the balance sheet
Amounts subject to enforceable
netting arrangements but not offset
Parent Entity
$m
Gross amounts
Amounts
offset
Net amounts
reported in
the balance
sheet
Other
recognised
financial
instruments
Cash
collaterala,b
Financial
instrument
collateral
Net amount
2024
Assets
Collateral paidc
4,532
(4,474)
58
-
-
-
58
Derivative financial instrumentsd
73,041
(50,474)
22,567
(16,971)
(2,922)
(112)
2,562
Reverse repurchase agreementse
19,898
(1,908)
17,990
-
(14)
(17,950)
26
Loansf
23,218
(23,147)
71
-
-
-
71
Total assets
120,689
(80,003)
40,686
(16,971)
(2,936)
(18,062)
2,717
Liabilities
Collateral received
2,562
(2,559)
3
-
-
-
3
Derivative financial instrumentsd
80,595
(52,389)
28,206
(16,971)
(5,800)
(1,721)
3,714
Repurchase agreementsg
17,979
(1,908)
16,071
-
(57)
(16,014)
-
Deposits and other borrowingsf
49,007
(23,147)
25,860
-
-
-
25,860
Total liabilities
150,143
(80,003)
70,140
(16,971)
(5,857)
(17,735)
29,577
2023
Assets
Collateral paidc
11,162
(11,107)
55
-
-
-
55
Derivative financial instrumentsd
86,969
(67,752)
19,217
(13,334)
(3,135)
(53)
2,695
Reverse repurchase agreementse
12,013
-
12,013
-
(109)
(11,821)
83
Loansf
25,343
(25,301)
42
-
-
-
42
Total assets
135,487
(104,160)
31,327
(13,334)
(3,244)
(11,874)
2,875
Liabilities
Collateral received
5,131
(5,127)
4
-
-
-
4
Derivative financial instrumentsd
95,394
(73,732)
21,662
(13,334)
(4,310)
(2,166)
1,852
Repurchase agreementsg
20,315
-
20,315
-
(19)
(20,296)
-
Deposits and other borrowingsf
52,421
(25,301)
27,120
-
-
-
27,120
Total liabilities
173,261
(104,160)
69,101
(13,334)
(4,329)
(22,462)
28,976
a.
$2,935 million (2023: $3,243 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.
$5,857 million (2023: $4,329 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 $342 million (2023: $176 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.
$1,335 million (2023: $1,821 million) of derivative financial assets and $2,589 million (2023: $2,912 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 assets 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.
Intangible
Useful life
Depreciation method
Goodwill
Indefinite
Not applicable
Brand names
Indefinite
Not applicable
Computer software
3 to 10 years
Straight-line or the diminishing balance
method (using the Sum of the Years Digits)
Critical accounting assumptions and estimates
Judgement is required in determining the fair value of assets and liabilities acquired in a business combination. A
different assessment of fair values would have resulted in a different goodwill balance and different post-acquisition
performance of the acquired entity.
Judgement is also required in determining the useful life of intangible assets other than goodwill.
When assessing impairment of intangible assets, significant judgement is needed to determine the appropriate cash
flows and discount rates to be applied to the calculations. The significant assumptions applied to the value-in-use
calculations are outlined below.
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.
236
WESTPAC 2024 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 24. Intangible assets (Continued)
Consolidated
Parent Entity
$m
2024
2023
2024
2023
Goodwill
Balance as at beginning of year
7,419
7,393
6,253
6,253
Additionsa
21
-
-
-
Other adjustments
(7)
26
-
-
Balance as at end of year
7,433
7,419
6,253
6,253
Computer software
Balance as at beginning of year
2,797
2,264
2,371
1,992
Additions
792
1,141
673
952
Impairment
(19)
(8)
(19)
(8)
Amortisation
(889)
(621)
(783)
(565)
Other adjustments
(6)
21
-
-
Balance as at end of year
2,675
2,797
2,242
2,371
Cost
8,856
8,450
7,493
7,187
Accumulated amortisation and impairment
(6,181)
(5,653)
(5,251)
(4,816)
Carrying amount
2,675
2,797
2,242
2,371
Brand names
638
670
636
636
Total intangible assets
10,746
10,886
9,131
9,260
Goodwill has been allocated to the following CGUs:
Consumer
4,829
4,829
4,484
4,484
Business & Wealthb
2,122
2,101
1,769
1,769
New Zealand
482
489
-
-
Total goodwill
7,433
7,419
6,253
6,253
Brand names has been allocated to the following CGUs:
Consumer
350
382
350
350
Business & Wealthb
288
288
286
286
Total goodwill
638
670
636
636
a.
Related to the acquisition of HealthPoint.
b.
During 2024, the Group established a new operating segment called Business & Wealth and dissolved the Specialist Business Division (SBD).
Certain businesses of SBD, which included the Platforms and Margin Lending CGUs, have been incorporated into the Business & Wealth
segment. The Business & Wealth segment now comprises individual CGUs (Business, Platforms, Margin Lending and HealthPoint) to which
goodwill has been allocated. The carrying amount of goodwill for Business was $1,812 million as at 30 September 2024 and 30 September
2023. The carrying amount of goodwill allocated to the remaining individual CGUs in this segment is not significant.
The carrying value of the RAMS brand ($32 million) was impaired in full in 2024.
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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 goodwill impairment testing for each relevant significant CGU are provided in the following
table and are based on past experience and management’s expectations for the future. In the current year and given the
present economic environment, 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
Post-tax rate/Pre-tax rate
Cash flows
Forecast period/terminal growth rate
2024
2023
2024
2023
Australian CGUsa
9% / 11.7%-11.9%
9% / 11.8%-12.1%
5 years / 2%
3 years / 2%
New Zealand
9% / 11.4%-11.7%
9% / 11.5%-12.0%
5 years / 2%
3 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 management approved forecasts. These forecasts utilise information about current
and future economic conditions, observable historical information and management expectations of future business
performance. The terminal 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.
238
WESTPAC 2024 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.
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. If it is probable that a facility will be
drawn and the resulting asset will be less than the drawn amount then a provision for impairment is recognised. The
provision for 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 our 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.
Provisions carried for long service leave are supported by an independent actuarial report.
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239
Note 25. Provisions, contingent liabilities, contingent assets and credit
commitments (Continued)
Provisions
$m
Long service
leave
Annual leave
and other
employee
benefits
Provision for
impairment
on credit
commitments
Lease
restoration
obligations
Restructuring
and other
provisions
Litigation,
non-lending
losses and
remediation
provisions
Total
Consolidated
Balance as at 30 September 2023
464
933
497
183
342
358
2,777
Additions
99
1,139
80
7
190
188
1,703
Utilisation
(58)
(1,163)
-
(27)
(274)
(188)
(1,710)
Reversal of unutilised provisions
(28)
(9)
(61)
-
(48)
(118)
(264)
Other
-
(1)
-
-
-
-
(1)
Balance as at 30 September 2024
477
899
516
163
210
240
2,505
Parent Entity
Balance as at 30 September 2023
453
844
454
160
329
303
2,543
Additions
88
1,099
71
6
180
158
1,602
Utilisation
(48)
(1,110)
-
(25)
(267)
(168)
(1,618)
Reversal of unutilised provisions
(28)
(9)
(61)
-
(44)
(114)
(256)
Balance as at 30 September 2024
465
824
464
141
198
179
2,271
Legislative liabilities
Westpac had the following assessed liabilities as at 30 September 2024:
•
$22 million (2023: $23 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 (2023: $8 million) based on actuarial assessment as a self-insurer under the Accident Compensation Act
1985 (Victoria);
•
$7 million (2023: $8 million) based on actuarial assessment as a self-insurer under the Workers’ Rehabilitation and
Compensation Act 1986 (South Australia);
•
$2 million (2023: $2 million) based on an actuarial assessment as a self-insurer under the Workers’ Compensation and
Rehabilitation Act 2003 (Queensland);
•
Nil (2023: nil) based on an actuarial assessment as a self-insurer under the Workers’ Compensation Act 1951
(Australian Capital Territory);
•
Nil (2023: nil) based on an actuarial assessment as a self-insurer under the Return to Work Act 1986
(Northern Territory);
•
$1 million (2023: $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 (2023: $1 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.
240
WESTPAC 2024 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 2024 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
As at 30 September 2024, the Group held provisions in respect of potential non-lending losses and costs connected with
certain litigation, 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 288 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. A hearing date has been fixed for
27 May 2025;
•
A class action commenced against Westpac and St.George Finance Limited (SGF) on 15 July 2020, in the Supreme
Court of Victoria in relation to flex commissions paid to auto dealers from 1 March 2013 to 31 October 2018. It
is alleged that Westpac and SGF are liable for the unfair conduct of dealers acting as credit representatives and
engaged in misleading or deceptive conduct. This proceeding is one of three class actions commenced against
lenders in the auto finance industry. One proceeding settled in September 2024. The joint trial for two of the
proceedings commenced 14 October 2024. Westpac and SGF are defending the proceedings. Westpac no longer
pays flex commissions following an industry wide ban and will finalise the divestment of its auto-finance business in
2025; and
•
On 5 October 2023 a class action was commenced in the Federal Court of Australia against BT Funds Management
Limited (BTFM), Westpac Securities Administration Limited (WSAL) and Westpac Life Insurance Services Limited
(now known as TAL Life Insurance Services Limited) (WLIS), a former Group subsidiary. In September 2024 the
parties agreed to discontinue the proceedings, subject to approval of the Court.
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 the matter, 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.
Contingent liabilities
Regulatory investigations, reviews and inquiries
Domestic regulators, statutory authorities and other bodies, such as ASIC, 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 and Commerce Commission, BPNG
and its Financial Analysis & Supervision Unit, the SEC and FINRA, 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:
•
Engagement with various regulators in relation to RAMS. The engagements include an enforcement investigation by
ASIC into Westpac, RAMS Financial Group Pty Limited (RFG) and RAMS authorised credit representatives (including
RAMS franchisees) in connection with the provision of home loan products from 1 January 2019 to 1 September
2023. The current focus of ASIC’s investigation is on RFG’s and Westpac’s general conduct obligations, prohibitions
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241
Note 25. Provisions, contingent liabilities, contingent assets and credit
commitments (Continued)
on conducting business with unaccredited loan referrers and unlicensed persons, and giving misleading information.
Following a strategic review by Westpac and RFG of the RAMS business, RFG has exited a number of franchisees
and closed the RAMS business to new home loan applications from 6 August 2024. Disputes have been raised by
franchisees in relation to these actions, including the commencement of a class action in May 2024. We are also
responding to enquiries from APRA;
•
Engagement with the ATO in relation to the remediation and uplift of Westpac’s Common Reporting Standard (CRS)
reporting, noting unsatisfactory completion may result in enforcement action against Westpac;
•
Investigation by the FWO in relation to Westpac’s self-disclosed remediation program regarding employee pay-
related entitlements. Westpac considers enforcement action against it likely, and could include an Enforceable
Undertaking; and
•
Regulatory investigations, reviews or inquiries into other areas such as risk governance, AML/CTF Program,
including Transaction Monitoring Program and associated processes and procedures, compliance with industry codes,
consumer credit contracts banking products, hardship processes, consumer lending conduct, Consumer Data Rights
and design and distribution obligations.
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 action being taken by regulators or
other parties. Investigations have in some instances resulted, and could in the future result, in findings of a significant
number of breaches of obligations. This in turn could lead to significant financial and other penalties. Prior penalties and
contraventions by Westpac in relation to similar issues can also affect penalties that may be imposed. Reliance on third
parties and any contributing actions of third parties may not mitigate penalties.
Litigation
There are ongoing Court proceedings, claims and possible claims against the Group. Contingent liabilities exist in respect
of actual and potential claims and proceedings, including those listed below.
Class actions
In addition to the class action litigation noted under Provisions, above:
•
Westpac is defending a class action proceeding which was commenced in December 2019 in the Federal Court
of Australia on behalf of certain investors who acquired an interest in Westpac securities between 16 December
2013 and 19 November 2019. The proceeding involves allegations relating to market disclosure issues connected
to Westpac’s monitoring of financial crime over the relevant period and matters which were the subject of the
AUSTRAC civil proceedings. The damages sought on behalf of members of the class have not yet been specified.
However, in the course of a procedural hearing in August 2022, the applicant indicated that a preliminary estimate
of the losses that may be alleged in respect of a subset of potential group members exceeded $1 billion. While it
remains unclear how the applicant will ultimately formulate their estimate of alleged damages claimed on behalf of
group members, it is possible that the claim may be higher (or lower) than the amount referred to above. Given
the time period and the nature of the claims alleged to be in question, along with the reduction in our market
capitalisation at the time of the commencement of the AUSTRAC civil proceedings, it is likely that any total alleged
damages (when, and if, ultimately articulated by the applicant) will be significant. Westpac continues to deny both
that its disclosure was inappropriate and, as such, that any group member has incurred damage. The matter has not
yet been set down for a hearing.
242
WESTPAC 2024 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 our customers, employees, other stakeholders and reputation. These internal reviews continue
to identify issues in respect of which we are taking, or will take, steps to put things right, including so that our
customers and employees (as applicable) are not disadvantaged from certain past practices, including by making
compensation/remediation payments and providing refunds where appropriate. These issues include, among other
things, consumer lending conduct; compliance with lending obligations; hardship processes; sufficiency of training,
policies, processes and procedures; AML/CTF Program, including Transaction Monitoring Program and associated
processes and procedures; product disclosure; destruction and retention of personal information; and impacts from
inadequate product governance, including the way some product terms and conditions are operationalised.
By undertaking these reviews, we can also improve our processes and controls, including those of our contractors,
agents, and authorised credit representatives. An assessment of the Group’s likely loss has been made on a case-by-
case basis for the purpose of the financial statements but cannot always be reliably estimated. Even where Westpac
has remediated or compensated customers, employees or issues, there can still be the risk of regulators challenging
the basis, scope or pace of remediation, taking enforcement action (including seeking enforceable undertakings and
contrition payments), or imposing fines/penalties or other sanctions, including civil or criminal prosecutions. Contingent
liabilities may exist in respect of actual or potential claims or proceedings (which could be brought by customers,
employees/unions, regulators or criminal prosecutors), compensation/remediation payments and/or refunds identified
as part of these reviews.
Contingent levies
The Group is subject to a number of regulatory levies, which may be imposed at the discretion of the relevant regulating
body. These include levies that fund the Financial Claims Scheme and the Compensation Scheme of Last Resort.
Exposures to third parties relating to divested businesses
The Group has potential exposures relating to warranties, indemnities and other commitments it has provided to third
parties in connection with various divestments of entities, businesses and assets. The warranties, indemnities and
other commitments cover a range of matters, conduct and risks. We have made payments under these indemnities
and are in discussions with one or more parties in relation to claims made, and potential claims, under these
arrangements. Provisions have been raised for matters where a present obligation exists, and a probable settlement
can be reliably estimated.
Contingent tax risk
Tax and regulatory authorities in Australia and in other jurisdictions review, in the normal course of business, the direct
and indirect taxation treatment of transactions (both historical and present-day transactions) undertaken by Westpac.
Westpac 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 Westpac has made contributions to a default
fund. In the event of a default of another clearing member, Westpac could be required to make additional default
fund contributions.
Parent entity guarantees and undertakings to subsidiaries
Consistent with 2023, Westpac Banking Corporation, as the parent entity of Westpac, makes the following guarantees
and undertakings to its subsidiaries:
•
Letters of comfort for certain subsidiaries which recognise that Westpac has a responsibility that those subsidiaries
continue to meet their obligations; and
•
Guarantees to certain wholly owned subsidiaries which are Australian financial services or credit licensees to comply
with legislative requirements. All but two guarantees are capped at $20 million per year (with an automatic
reinstatement for another $20 million) and two specific guarantees are capped at $2 million (with an automatic
reinstatement for another $2 million).
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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 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.
They expose Westpac to liquidity risk when called upon and also to credit risk if the customer fails to repay the amounts
owed at the due date. The maximum exposure to credit loss is the contractual or notional amount of the instruments.
Some of the arrangements can be cancelled by Westpac at any time and a significant portion is expected to expire
without being drawn. The actual liquidity and credit risk exposure varies in line with amounts drawn and may be less
than the amounts disclosed.
Westpac uses the same credit policies when entering into these arrangements as it does for on-balance sheet
instruments. Refer to Note 11 and Note 21 of the 2024 Annual Report for further details of credit risk and liquidity
risk management, respectively.
Undrawn credit commitments excluding derivatives are as follows:
Consolidated
Parent Entity
$m
2024
2023
2024
2023
Undrawn credit commitments
Letters of credit and financial guaranteesa
13,118
12,447
12,539
11,847
Commitments to extend creditb
198,876
193,457
175,206
168,719
Other
117
247
117
247
Total undrawn credit commitments
212,111
206,151
187,862
180,813
a.
Standby letters of credit are undertakings to pay, against presentation documents, an obligation in the event of a default by a customer.
Financial guarantees are unconditional undertakings given to support the obligations of a customer to third parties. The Group may hold cash
as collateral for certain financial guarantees issued.
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,
$6 billion (2023: $8.8 billion) for the Group and $5.1 billion (2023: $7.9 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.
244
WESTPAC 2024 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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Note 26. Shareholders’ equity (Continued)
Consolidated
Parent Entity
$m
2024
2023
2024
2023
Share capital
Ordinary share capital, fully paid
37,958
39,826
37,958
39,826
Treasury sharesa
(758)
(702)
(816)
(760)
Total share capital
37,200
39,124
37,142
39,066
Non-controlling interest
Perpetual Preference Shares (PPS)
339
-
-
-
Otherb
8
44
-
-
Total non-controlling interests
347
44
-
-
a.
2024: 6,173,874 unvested RSP and EIP treasury shares held (2023: 5,249,663).
b.
Westpac acquired 8.74% of the non-controlling interest in Westpac Bank-PNG-Limited.
Perpetual Preference Shares (PPS)
On 13 September 2024, Westpac New Zealand Limited (WNZL), a wholly-owned subsidiary of Westpac, issued
NZD375 million PPS to 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.
A summary of the key terms of the PPS is provided below.
$
Issue date
PPS distribution rate
Optional redemption date
NZ$375 million
13 September 2024
Fixed at 7.10% until 13 September 2029 (when it resets to a
floating rate equal to the NZ 3 month bank bill rate + 3.50% p.a.)
13 September 2029 and each
quarterly scheduled distribution
payment date after that date
PPS distribution payable
Quarterly PPS distributions are at the absolute discretion of WNZL. In addition, PPS distributions will only be paid if
WNZL is solvent on the payment date and remains solvent immediately after such payment is made and the payment of
the PPS distribution will not result in a breach of WNZL’s conditions of registration as at the time of the payment.
PPS distributions are non-cumulative. If a PPS distribution is not paid in full, WNZL may not determine or pay any
dividends on its ordinary shares or undertake a discretionary buy-back or capital reduction of WNZL’s ordinary shares
until a subsequent PPS distribution is paid in full (except in limited circumstances).
Redemption
WNZL may elect to redeem all of the PPS, on the relevant optional redemption date, or at any time for certain
tax or regulatory reasons. Redemption is subject to certain conditions, including the Reserve Bank of New Zealand’s
prior written approval and WNZL remaining solvent immediately after the redemption. Holders have no right to
require redemption.
Conversion
The PPS have no conversion or exchange options and no non-viability triggers.
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.
246
WESTPAC 2024 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 26. Shareholders’ equity (Continued)
Reconciliation of movement in number of ordinary shares
Consolidated and Parent Entity
(number)
2024
2023
Opening balance
3,509,076,960
3,501,127,694
Shares issued from dividend reinvestment plana
-
7,949,266
Share buybackb
(67,665,599)
-
Closing balance
3,441,411,361
3,509,076,960
a.
The dividends re-investment plans for the 2024 interim, 2023 interim and 2023 final dividends were satisfied with the purchase of existing
shares by a third party and therefore does not impact the numbers of shares on issue. For the 2022 final dividend, participants received shares
at an average price per share of $23.86, which increased share capital by $192 million.
b.
During 2024, Westpac announced its intention to undertake a $2.5 billion on market buyback of WBC ordinary shares. As at 30 September
2024 Westpac has bought back and cancelled 67,665,599 ordinary shares ($1,812 million) at an average price of $26.78.
Ordinary shares purchased on market
2024
Consolidated and Parent Entity
Number
Average Price ($)
For share-based payment arrangements:
Employee share plan (ESP)
1,294,803
21.05
Restricted Sharesa
2,456,247
23.02
Westpac Performance Plan (WPP) - share rights exercised
317,173
22.00
Westpac Equity Incentive Plan (EIP) - Unhurdled share rights exercised
836
21.47
Westpac Long Term Variable Reward Plan (LTVR) - share rights to be exercisedb
679,694
32.54
Total number of ordinary shares purchased on market
4,748,753
-
a.
Ordinary shares allocated to employees under the RSP and EIP are classified as treasury shares until the shares vest.
b.
During September 2024, 679,694 shares were purchased for future share rights exercises.
For details of the share-based payment arrangements refer to Note 31.
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Note 26. Shareholders’ equity (Continued)
Reconciliation of movement in reserves
Consolidated
Parent Entity
$m
2024
2023
2024
2023
Debt securities at FVOCI reserve
Balance as at beginning of year
(165)
62
103
313
Net gains/(losses) from changes in fair value
(591)
(187)
(813)
(179)
Income tax effect
180
59
243
53
Transferred to income statements
5
(125)
5
(125)
Income tax effect
(1)
39
(1)
39
Loss allowance on debt securities measured at FVOCI
1
1
1
1
Other
3
(14)
-
1
Balance as at end of year
(568)
(165)
(462)
103
Equity securities at FVOCI reserve
Balance as at beginning of year
126
136
(15)
5
Net gains/(losses) from changes in fair value
(2)
(19)
(5)
(29)
Exchange differences on translation
1
-
-
-
Income tax effect
2
9
2
9
Balance as at end of year
127
126
(18)
(15)
Share-based payment reserve
Balance as at beginning of year
1,983
1,893
1,874
1,784
Share-based payment expense
96
90
96
90
Balance as at end of year
2,079
1,983
1,970
1,874
Cash flow hedge reserve
Balance as at beginning of year
152
813
(203)
440
Net gains/(losses) from changes in fair value
501
(635)
873
(570)
Income tax effect
(158)
189
(262)
171
Transferred to income statements
77
(309)
132
(349)
Income tax effect
(24)
94
(39)
105
Balance as at end of year
548
152
501
(203)
Foreign currency translation reserve
Balance as at beginning of year
(138)
(505)
(141)
(195)
Exchange differences on translation of foreign operations
(328)
522
(165)
151
Gains/(losses) on net investment hedges
28
(155)
31
(97)
Balance as at end of year
(438)
(138)
(275)
(141)
Other reserves
Balance as at beginning of year
(23)
(21)
41
41
Transactions with owners
7
(2)
-
-
Balance as at end of year
(16)
(23)
41
41
Total reserves
1,732
1,935
1,757
1,659
248
WESTPAC 2024 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 27. Capital adequacy
APRA is the prudential regulator of ADI’s including Westpac. APRA measures an ADI’s regulatory capital using the
following measures:
Level of capital
Definition
Common Equity Tier 1 Capital (CET1)
Comprises 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 Capital
The sum of CET1 and 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 Regulatory Capital
The 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 ratio
The Leverage ratio is calculated as Tier 1 Capital divided by the Exposure Measure,
where the Exposure Measures consists of on balance sheet items, derivatives
exposure, securities financing transaction (SFT) exposures and non-market related off
balance sheet exposures.
Under APRA’s Prudential Standards, Australian ADIs, including Westpac, are required to maintain minimum Prudential
Capital Requirements (PCRs) being:
•
CET1 Ratio of at least 4.5%;
•
Tier 1 Capital Ratio of at least 6.0%; and
•
Total Regulatory Capital Ratio of at least 8.0%.
APRA may also require ADIs, including Westpac, to meet PCRs above the industry PCRs. APRA does not allow the PCRs
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 Regulatory 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.
Capital management strategy
Westpac evaluates its approach to capital management 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 CET1 operating capital range of between 11.0% and 11.5%, in normal
operating conditions.
1.
Noting that APRA may apply higher requirements for an individual ADI.
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Note 28. Dividends
Consolidated
Parent Entity
$m
2024
2023
2022
2024
2023
Dividends not recognised at year end
Since year end the Directors have proposed the
following dividends:
Final dividend 76 cents per share
(2023: 72 cents, 2022: 64 cents) all fully franked at 30%
2,615
2,527
2,241
2,615
2,527
Total dividends not recognised at year end
2,615
2,527
2,241
2,615
2,527
The Board has determined a final fully franked dividend of 76 cents per share, to be paid on 19 December 2024 to
shareholders on the register at the record date of 8 November 2024.
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 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 13 November 2024 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 $3,504 million (2023: $3,520 million,
2022: $3,298 million). This is calculated as the year end franking credit balance, adjusted for the Australian current tax
liability and the proposed 2024 final dividend.
New Zealand imputation credits
New Zealand imputation credits of NZ$0.06 (2023: NZ$0.07, 2022: NZ$0.08) per share will be attached to the
proposed 2024 final dividend. New Zealand imputation credits available to the Parent Entity for subsequent years are
NZ$374 million (2023: NZ$557 million, 2022: NZ$678 million). This is calculated on the same basis as the Australian
franking credits but using the New Zealand current tax liability.
250
WESTPAC 2024 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
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 2024.
Name
Country
of incorporation
Name
Country
of incorporation
Westpac Financial Services Group Pty Limited
Australia
Westpac Equity Holdings Pty Limited
Australia
BT Portfolio Services Limited
Australia
Westpac Overseas Holdings No. 2 Pty Limited
Australia
Capital Finance Australia Limited
Australia
Westpac Securitisation Holdings Pty Limited
Australia
Crusade trust No.2P of 2008
Australia
Westpac New Zealand Group Limited
New Zealand
Series 2008-1M WST Trust
Australia
Westpac New Zealand Limited
New Zealand
Series 2022-1P WST Trust
Australia
Westpac NZ Covered Bond Limiteda
New Zealand
Series 2024-1 WST Trust
Australia
Westpac NZ Securitisation Limiteda
New Zealand
Westpac Term PIE Fund
New Zealand
Westpac Securities NZ Limited
New Zealand
Westpac Covered Bond Trust
Australia
Westpac Bank - PNG - Limited
Papua New Guinea
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.
The following material controlled entities are not wholly owned:
Percentage Owned
2024
2023
Westpac Bank - PNG - Limiteda
89.9%
89.9%
Westpac NZ Covered Bond Limited
19.0%
19.0%
Westpac NZ Securitisation Limited
19.0%
19.0%
a.
In September 2024, Westpac acquired an additional 8.74%. As at the reporting date, the registration of the share transfer in PNG was still
pending. Once this is completed, Westpac’s shareholding will increase to 98.65%.
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Note 29. Investments in subsidiaries and associates (Continued)
Non-controlling interests
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:
2024 - Westpac acquired:
•
8.74% of the non-controlling interest in Westpac Bank - PNG - Limited on 11 September 2024, which will raise
Westpac's interest to 98.65%; and
•
The business of HealthPoint Claims Pty Ltd on 6 April 2024.
2023 - no businesses were acquired.
2022 - Westpac acquired a 100% interest in MoneyBrilliant Pty Ltd on 13 December 2021.
Businesses disposals
During the year ended 30 September:
2024 - no businesses were sold.
2023 - Westpac sold its interest in Advance Asset Management Limited on 31 March 2023.
2022 - Westpac sold its interest in the following businesses:
•
Westpac Life-NZ- Limited (sold on 28 February 2022);
•
Westpac Motor Vehicle Dealer Finance and Novated Leasing business (sold on 24 March 2022); and
•
Westpac Life Insurance Services Limited (sold on 1 August 2022).
252
WESTPAC 2024 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
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 securities
Westpac 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 securities
Westpac 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 commitments
Westpac 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 agreements
Westpac 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.
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253
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.
Consolidated
$m
Investment in third
party mortgage
and other asset-
backed securitiesa
Financing to
securitisation
vehicles
Group
managed funds
Interest in other
structured entities
Total
2024
Assets
Trading securities and financial assets
measured at FVIS
1,055
-
2
8,241
9,298
Investment securities
8,881
-
-
-
8,881
Loans
-
27,786
-
23,871
51,657
Other financial assets
2
-
53
-
55
Total on-balance sheet exposures
9,938
27,786
55
32,112
69,891
Total notional amounts of off-balance
sheet exposures
-
7,638
-
9,145
16,783
Maximum exposure to loss
9,938
35,424
55
41,257
86,674
Size of structured entitiesb
90,864
35,424
15,811
41,257
183,356
2023
Assets
Trading securities and financial assets
measured at FVIS
1,436
-
2
1,989
3,427
Investment securities
6,538
-
-
-
6,538
Loans
-
26,176
-
22,439
48,615
Other financial assets
1
-
54
-
55
Total on-balance sheet exposures
7,975
26,176
56
24,428
58,635
Total notional amounts of off-balance
sheet exposures
-
9,269
-
7,930
17,199
Maximum exposure to loss
7,975
35,445
56
32,358
75,834
Size of structured entitiesb
71,193
35,445
16,352
49,943
172,933
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.
254
WESTPAC 2024 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
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 are 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 will be 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 has replaced
the RSP, WPP & LTVR plans. Existing allocations under the RSP, WPP and LTVR will 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 & 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 issued to satisfy
the obligation to employees is recognised in equity. Alternatively, shares may be purchased on market to satisfy the
obligation to employees.
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SHAREHOLDER
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255
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 Shares
Employee Share Plan (ESP)
Type of share-
based payment
Share 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 used
Aligns 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 price
Nil
Nil
n/a
n/a
Performance
conditionsa
For the 2024 awards: 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.
Awards from 2020 to
2023: TSR over a four-year
performance period.
None
None
None
Service conditions
Continued 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)b
Awards for 2020 to 2023: 4 years
2024 performance rights CEO
award: 6 years
2024 performance rights GE
award: 5 years
2024 restricted rights CEO award:
50% over 4 years and 50% over
5 years
2024 restricted rights GE award:
4 years
Defined period set out at time
of grantb
Defined period set out
at time of grant
1 year
Treatment at end
of term
Automatically 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.
Does the
employee receive
dividends and
voting rights
during the vesting
period?c
No
No
Yes
Yes
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.
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 LTVR award
(performance rights and restricted rights) are exercisable up to 2 years after the vesting date.
c.
For LTVR restricted rights, dividends are accrued for the vesting period. For LTVR performance rights, dividends are only accrued for the
further deferral period after the performance period. These dividend equivalent payments 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.
256
WESTPAC 2024 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 31. Share-based payments (Continued)
Each share-based payment scheme is quantified below.
i. Westpac Equity Incentive Plan (EIP) - Unhurdled Share Rights
Outstanding as
at beginning
of year
Granted during
the year
Exercised
during the year
Lapsed during
the year
Outstanding as
at end of year
Outstanding
and exercisable
as at end
of year
2024
Share rights
One-year vesting period
4,252
111,458
836
3,416
111,458
-
Two-year vesting period
7,714
81,828
-
-
89,542
-
Three-year vesting period
2,862
29,584
-
-
32,446
-
Four-year vesting period
9,870
76,116
-
4,225
81,761
-
Five-year vesting period
-
15,270
-
-
15,270
-
Six-year vesting period
-
9,661
-
-
9,661
-
Seven-year vesting period
-
10,250
-
-
10,250
-
Total share rights
24,698
334,167
836
7,641
350,388
-
Weighted average remaining contractual life
10.6 years
13.8 years
2023
Share rights
-
24,698
-
-
24,698
-
The weighted average fair value at grant date of EIP service-based share rights issued during the year was $20.65
(2023: $19.52).
ii. Westpac Equity Incentive Plan (EIP) Long Term Variable Reward (LTVR) - Performance Rights and Restricted
Rights
Outstanding as at
beginning of year
Granted during
the year
Exercised during
the year
Lapsed during
the year
Outstanding as at
end of year
Outstanding and
exercisable as at
end of year
2024
Share rights
-
898,756
-
-
898,756
-
Weighted average remaining
contractual life
0 years
5.8 years
2023
Share rights
-
-
-
-
-
-
The weighted average fair value at grant date of EIP LTVR Performance Rights and Restricted Rights issued during the
year was $18.00 (2023: nil).
iii. Westpac Long-Term Variable Reward Plan (LTVR)
Outstanding as
at beginning
of year
Granted during
the year
Exercised
during the year
Lapsed during
the year
Outstanding as
at end of year
Outstanding
and exercisable
as at end
of year
2024
Share rights
4,028,972
-
-
645,174
3,383,798
-
Weighted average remaining contractual life
12.6 years
11.9 years
2023
Share rights
3,777,179
1,054,449
-
802,656
4,028,972
-
No LTVR share rights were issued in the year ending 30 September 2024 following the introduction of the EIP from
1 January 2023. The weighted average fair value at grant date of LTVR share rights issued during the year ended
30 September 2023 was $11.90.
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257
Note 31. Share-based payments (Continued)
iv. Westpac Performance Plan (WPP)
Outstanding as
at beginning
of year
Granted during
the year
Exercised
during the year
Lapsed during
the year
Outstanding as
at end of year
Outstanding
and exercisable
as at end
of year
2024
Share rights
One-year vesting period
136,521
-
56,966
15,219
64,336
60,779
Two-year vesting period
173,646
-
46,602
28,533
98,511
38,257
Three-year vesting period
50,168
-
12,523
-
37,645
9,243
Four-year vesting period
428,203
-
201,082
13,323
213,798
2,799
Five-year vesting period
6,927
-
-
-
6,927
-
Six-year vesting period
6,576
-
-
-
6,576
-
Seven-year vesting period
6,977
-
-
-
6,977
-
Total share rights
809,018
-
317,173
57,075
434,770
111,078
Weighted average remaining contractual life
12.2 years
11.7 years
2023
Share rights
788,794
265,859
182,624
63,011
809,018
100,303
No WPP share rights were issued in the year ending 30 September 2024 following the introduction of the EIP from
1 January 2023. The weighted average fair value at grant date of WPP share rights issued during the year ended
30 September 2023 was $20.81.
v. Westpac Equity Incentive Plan (EIP) - Restricted Shares
Allocation date
Outstanding as at
beginning of year
Granted during
the year
Released
Forfeited during
the year
Outstanding as at
end of year
2024
310,649
2,393,902
115,752
38,327
2,550,472
2023
-
313,599
2,950
-
310,649
The weighted average fair value at grant date of EIP restricted shares issued during the year was $23.14 (2023: $22.23).
vi. Restricted Share Plan (RSP)
Allocation date
Outstanding as at
beginning of year
Granted during
the year
Released
Forfeited during
the year
Outstanding as at
end of year
2024
4,916,346
-
2,085,417
92,540
2,738,389
2023
5,036,346
1,908,170
1,845,884
182,286
4,916,346
No RSP shares were issued in the year ending 30 September 2024 following the introduction of the EIP from 1 January
2023. The weighted average fair value at grant date of RSP shares issued during the year ended 30 September 2023
was $23.50.
258
WESTPAC 2024 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 31. Share-based payments (Continued)
vii. Employee Share Plan (ESP)
Allocation date
Number
of participants
Average number
of shares allocated
per participant
Total number of
shares allocated
Market price
per sharea
Total fair value
2024
23 November 2023
27,549
47
1,294,803
$21.20
$27,449,824
2023
24 November 2022
27,541
42
1,156,722
$23.75
$27,472,148
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 2023 ESP award was satisfied through the purchase of shares on market.
The liability accrued for the ESP at 30 September 2024 was $28 million (2023: $28 million) and was provided for as
other employee benefits.
viii. Other plans
Westpac also provides 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 Link Market Services, Level 12, 680 George 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 3.8% applied to TSR-hurdled grants;
•
The dividend yield on Westpac shares applied to TSR-hurdled grants was 5.5% for those issued under the LTVR and
for those issued under the EIP;
•
Volatility in Westpac’s TSR of 26%, applied to TSR-hurdled grants; and
•
Volatilities of, and correlation factors between, TSR of the comparator group and Westpac for TSR-hurdled grants.
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SHAREHOLDER
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259
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.
Critical accounting assumptions and estimates
The actuarial valuation of plan obligations is dependent upon a series of assumptions, principally price inflation,
salary growth, mortality, morbidity, discount rate and investment returns. Different assumptions could significantly
alter the valuation of the plan assets and obligations and the resulting remeasurement recognised in OCI and the
superannuation expense recognised in the income statement.
Westpac had the following defined benefit plans at 30 September 2024:
Name of plan
Type
Form of benefit
Date of last actuarial assessment of 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 benefit
Indexed pension and lump sum
5 April 2021a
Westpac UK Medical Benefits Scheme
Defined benefit
Medical benefits
n/a
a.
The 2024 final actuarial assessment of the funding status for UKSS will be available in 2025.
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 $140 million
(2023: $47 million). Current contribution rates are as follows:
•
WGP – contributions are made to the WGP at the rate of 19.5% 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 2021 actuarial assessment.
260
WESTPAC 2024 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 32. Superannuation commitments (Continued)
Contributions
Consolidated
Parent Entity
$m
2024
2023
2024
2023
Employer contributions
30
89
30
87
Member contributions
7
8
7
8
Expected employer contributions for the year ended 30 September 2025 are $29 million.
Expense recognised
Consolidated
Parent Entity
$m
2024
2023
2022
2024
2023
Current service cost
27
26
40
26
25
Net interest cost on net benefit liability
(11)
(14)
11
(10)
(14)
Total defined benefit expense
16
12
51
16
11
Defined benefit balances recognised
Consolidated
Parent Entity
$m
2024
2023
2024
2023
Benefit obligation as at end of year
2,218
2,110
2,169
2,062
Fair value of plan assets as at end of year
2,424
2,320
2,380
2,274
Net surplus/(deficit)
206
210
211
212
Defined benefit surplus included in other assets
215
217
215
217
Defined benefit deficit included in other liabilities
(9)
(7)
(4)
(5)
Net surplus/(deficit)
206
210
211
212
The average duration of the defined benefit obligation is 12 years (2023: 12 years).
Significant assumptions
2024
2023
Consolidated and Parent Entity
Australian funds
Overseas funds
Australian funds
Overseas funds
Discount rate
5.6%
4.3%-5.0%
5.8%
5.1%-5.5%
Salary increases
3.5%
3.0%-3.9%
3.6%
3.0%-4.0%
Inflation rate (pensioners received inflationary increase)
2.5%
2.0%-3.2%
2.6%
2.0%-3.3%
Life expectancy of a 60-year-old male
31.9
27.6-27.8
31.7
27.5-27.9
Life expectancy of a 60-year-old female
34.5
29.6
34.3
29.6
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SHAREHOLDER
INFORMATION
261
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
2024
2023
0.5% decrease in discount rate
136
135
0.5% increase in annual salary increases
3
5
0.5% increase in inflation rate (pensioners receive inflationary increase)
131
127
1 year increase in life expectancy
46
45
Asset allocation
The table below provides a breakdown of the schemes’ investments by asset class.
2024
2023
$m
Australian funds
Overseas funds
Australian funds
Overseas funds
Cash
5%
3%
5%
3%
Equity instruments
43%
9%
43%
8%
Debt instruments
26%
5%
26%
7%
Property
8%
2%
8%
1%
Other assets
18%
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.
262
WESTPAC 2024 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 33. Auditor’s remuneration
The fees payable to the auditor, PricewaterhouseCoopers (PwC), and overseas firms belonging to the PwC network of
firms were:
Consolidated
Parent Entity
$'000
2024
2023
2024
2023
Audit and audit-related fees
Audit fees
PwC Australia
28,035
25,859
27,673
25,580
Overseas PwC network firms
5,429
5,712
689
812
Total audit fees
33,464
31,571
28,362
26,392
Audit-related fees
PwC Australia
2,888
2,605
2,888
2,605
Overseas PwC network firms
279
96
30
-
Total audit-related fees
3,167
2,701
2,918
2,605
Total audit and audit-related fees
36,631
34,272
31,280
28,997
Other fees
Overseas PwC network firms
69
282
-
-
Total other fees
69
282
-
-
Total audit and non-audit fees
36,700
34,554
31,280
28,997
Fees payable to the auditor have been categorised as follows:
Audit
The year end audit, half-year review and comfort letters associated with debt issues and
capital raisings.
Audit-related
Consultations regarding accounting standards and reporting requirements, regulatory
compliance reviews and assurance related to debt and capital offerings.
Other
Various services including systems assurance, compliance advice and controls reviews.
It is Westpac’s policy to engage PwC 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 PricewaterhouseCoopers for Audit or Non-Audit Services Policy.
PwC also received fees of $6.6 million (2023: $8.7 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.
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263
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 subsidiaries
Balance Sheet
Dividend income/Transactions with subsidiaries
Note 4
Interest income and Interest expense
Note 3
Tax consolidated group transactions and undertakings
Note 7
Guarantees and undertakings
Note 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 $535 million (2023: $509 million) to defined contribution plans and $30 million (2023: $89 million)
to defined benefit plans. Refer to Note 32.
Remuneration of KMP
Total remuneration of the KMP was:
$
Short-
term benefits
Post
employment
benefits
Other long-
term benefits
Termination
benefits
Share-
based payments
Total
Consolidated
2024
22,085,122
613,423
175,780
-
15,481,114
38,355,439
2023
22,430,187
601,682
147,090
1,187,215
13,494,675
37,860,849
Parent Entity
2024
20,907,779
493,529
175,780
-
14,569,565
36,146,653
2023
21,252,526
487,514
147,090
1,187,215
12,904,703
35,979,048
264
WESTPAC 2024 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
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
for the year
Closing
loan balance
Number of KMP
with loans
2024
1,030,280
32,064,184
10
2023a
741,814
20,443,546
10
a.
Loan balance as at 30 September 2023 has been revised.
Share rights holdings
For compliance with SEC disclosure requirements, the following table sets out certain details of the performance share
rights and unhurdled share rights held at 30 September 2024 by the CEO and other key management personnel
(including their related parties):
Latest Date of Exercise
Number of Share Rights
Managing Director and Chief Executive Officer
Peter King
Ranges from 15 November 2029 to 1 October 2037
635,251
Group Executivesa
Christine Parker
Ranges from 15 November 2029 to 1 October 2037
281,151
Carolyn McCann
Ranges from 15 November 2029 to 1 October 2037
260,824
Nell Hutton
Ranges from 15 November 2029 to 15 November 2030
84,637
Catherine McGrath
Ranges from 1 October 2026 to 1 October 2037
228,294
Jason Yetton
Ranges from 15 November 2029 to 1 October 2037
397,027
Michael Rowland
Ranges from 15 November 2029 to 1 October 2037
316,795
Anthony Miller
Ranges from 15 November 2029 to 1 October 2037
391,789
Scott Collary
Ranges from 15 November 2029 to 1 October 2037
401,683
Ryan Zanin
Ranges from 15 November 2029 to 1 October 2037
239,355
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 2024.
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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.
Consolidated
Parent Entity
$m
2024
2023
2022
2024
2023
Profit after income tax expense
6,990
7,201
5,699
6,691
6,434
Adjustments:
Depreciation, amortisation and impairment
1,522
1,237
1,581
1,407
1,089
Impairment charges/(benefits)
727
839
524
659
695
Net decrease/(increase) in current and deferred tax
(252)
665
427
(346)
363
(Increase)/decrease in accrued interest receivable
(227)
(730)
(544)
(207)
(657)
(Decrease)/increase in accrued interest payable
802
2,400
794
757
1,863
(Decrease)/increase in provisions
(272)
(173)
(621)
(272)
(162)
Other non-cash items
494
(850)
1,869
738
(499)
Cash flows from operating activities before changes in
operating assets and liabilities
9,784
10,589
9,729
9,427
9,126
Net (increase)/decrease in:
Collateral paid
(2,097)
1,545
(1,524)
(2,057)
1,537
Trading securities and financial assets measured at FVIS
(18,994)
(4,524)
(3,750)
(19,452)
(4,162)
Derivative financial instruments
(836)
4,082
2,451
1,358
4,414
Loans
(35,083)
(27,270)
(36,345)
(32,528)
(25,080)
Other financial assets
(348)
128
279
(231)
94
Life insurance assets and life insurance liabilities
-
-
266
-
-
Other assets
(34)
8
20
2
11
Net increase/(decrease) in:
Collateral received
(318)
(2,888)
3,643
(181)
(3,092)
Deposits and other borrowings
35,243
24,692
35,054
35,870
23,347
Other financial liabilities
(7,084)
(17,146)
7,120
(5,281)
(18,117)
Other liabilities
-
(12)
11
(9)
(3)
Net cash provided by/(used in) operating activities
(19,767)
(10,796)
16,954
(13,082)
(11,925)
Business acquired
Acquisition of HealthPoint Claims Pty Ltd
On 6 April 2024, Westpac acquired the HealthPoint business through its wholly owned subsidiary Westpac Investment
Vehicle Pty Limited (WIV) for a total consideration of $30 million. The acquired business comprises technology,
intellectual property, contracts, employees and associated assets. Goodwill of $21 million was recognised as part of
this business combination.
266
WESTPAC 2024 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Note 35. Notes to the cash flow statements (Continued)
Details of the assets and liabilities over which control ceased
Details of the entities over which control ceased are provided in Note 29.
Consolidated
Parent Entity
$m
2024
2023
2022
2024
2023
Assets
Cash and balances with central banks
-
18
169
-
-
Loans
-
-
965
-
-
Other financial assets
-
18
66
-
-
Life insurance assets
-
-
2,366
-
-
Tax assets
-
-
39
-
-
Intangible assets
-
55
-
-
-
Other assets
-
-
168
-
-
Total assets
-
91
3,773
-
-
Liabilities
Other financial liabilities
-
22
34
-
-
Tax liabilities
-
-
36
-
-
Life insurance liabilities
-
-
185
-
-
Provisions
-
1
52
-
-
Other liabilities
-
-
213
-
-
Total liabilities
-
23
520
-
-
Total equity attributable to owners of WBC
-
68
3,253
-
-
Cash proceeds received (net of transaction costs)
-
311
2,284
-
-
Expected receivable (completion settlement)/
deferred consideration
-
-
146
-
-
Total consideration
-
311
2,430
-
-
Gain/(loss) on disposal
-
243
(823)
-
-
Reconciliation of cash proceeds from disposal:
Cash proceeds received (net of transaction costs)
-
311
2,284
-
-
Less: Cash deconsolidated
-
(18)
(169)
-
-
Cash consideration (paid)/received (net of transaction costs
and cash held)
-
293
2,115
-
-
Non-cash investing activities
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
Consolidated
Parent Entity
$m
2024
2023
2022
2024
2023
Shares issued under the dividend reinvestment plan
-
192
-
-
192
Increase in lease liabilities
399
235
244
319
217
On 11 September 2024, Westpac Bank - PNG - Limited (WPNG) paid PGK66 million to minority shareholders, on behalf
of the Parent Entity, to acquire 8.74% 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 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.
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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.
Consolidated
Parent Entity
$m
2024
2023
2024
2023
Cash and cash at bank
9,320
13,852
8,961
13,490
Exchange settlement accounts
56,036
88,371
49,276
79,810
Regulatory deposits with central banks
311
299
163
166
Total cash and balances with central banks
65,667
102,522
58,400
93,466
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 $311 million (2023: $299 million) for Westpac and $164 million
(2023: $166 million) for the Parent Entity which are included in cash and balances with central banks.
Note 36. Subsequent events
Since 30 September 2024, the Board has determined to pay a fully franked final dividend of 76 cents per fully
paid ordinary share. The dividend is expected to be $2,615 million. The dividend is not recognised as a liability at
30 September 2024. The proposed payment date of the dividend is 19 December 2024.
The Board has determined to satisfy the DRP for the 2024 final dividend by arranging for the purchase of existing shares
by a third party. The market price used to determine the number of shares allocated to DRP participants will be set over
the 15 trading days commencing 13 November 2024 and will not include a discount.
The Board has also determined to extend the share buyback announced in November 2023 and May 2024 by a further
$1.0 billion to a total of $3.5 billion. As at 30 September 2024, Westpac has bought back and cancelled 67,665,599
ordinary shares ($1,812 million).
In addition, on 3 October 2024, Westpac announced it has entered into an agreement to sell its auto finance loans
and lease receivables to Resimac Group Limited. The sale is anticipated to complete in the first half of 2025, with an
expected transaction value of $1.4 - $1.6 billion that will approximate the book value at the date of sale.
No other matters have arisen since the year ended 30 September 2024 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.
268
WESTPAC 2024 ANNUAL REPORT
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.
Name of entity
Type of entity
% of share
capital
held
Country of incorporation
Tax 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
Asgard Wealth Solutions Pty Limited
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
Danaby Pty. Limited
Body Corporate
100
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
Magnitude Group Pty Ltd
Body Corporate
100
Australia
Australia
Mortgage Management Pty Limited
Body Corporate
100
Australia
Australia
Net Nominees 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.a
Limited Partnership
N/A
Australia
Australia
Reinventure Fund II I.L.P.a
Limited Partnership
N/A
Australia
Australia
Reinventure Fund III I.L.Pa
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
Sallmoor Pty. Ltd.
Body Corporate
100
Australia
Australia
Securitor Financial Group Pty Limited
Body Corporate
100
Australia
Australia
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SHAREHOLDER
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269
Name of entity
Type of entity
% of share
capital
held
Country of incorporation
Tax residency
Series 2008-1M WST Trust
Trust
N/A
Australia
Australia
Series 2014-2 WST Trust
Trust
N/A
Australia
Australia
Series 2015-1 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
Sixty Martin Place (Holdings) Pty Ltd
Body Corporate
100
Australia
Australia
St.George Business Finance Pty. Limited
Body Corporate
100
Australia
Australia
St.George Finance Holdings Limited
Body Corporate
100
Australia
Australia
St.George Finance Limited
Body Corporate
100
Australia
Australia
St.George Motor Finance 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
Waratah Receivables Corporation
Pty Limitedb
Body Corporate
0
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 - Limitedc
Body Corporate
89.91
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 Corporate
100
United States
Foreign - United States
Westpac Cash PIE Fundb
Trust
N/A
New Zealand
Foreign - 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
270
WESTPAC 2024 ANNUAL REPORT
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
Name of entity
Type of entity
% of share
capital
held
Country of incorporation
Tax residency
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 Fundb
Trust
N/A
New Zealand
Foreign - New Zealand
Westpac NZ Covered Bond
Holdings Limitedd
Body Corporate
19
New Zealand
Foreign - New Zealand
Westpac NZ Covered Bond Limitedd
Body Corporate
19
New Zealand
Foreign - New Zealand
Westpac NZ Operations Limited
Body Corporate
100
New Zealand
Foreign - New Zealand
Westpac NZ Securitisation
Holdings Limitedd
Body Corporate
19
New Zealand
Foreign - New Zealand
Westpac NZ Securitisation Limitedd
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 RE Pty Limited
Body Corporate
100
Australia
Australia
Westpac Securities
Administration 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 Fundb
Trust
N/A
New Zealand
Foreign - New Zealand
a.
The Reinventure Funds are registered Early Stage Venture Capital Partnerships (ESVCLPs) which are treated as partnerships for Australian tax
purposes. Australia’s Income Tax Assessment Act does not contain a residency test for partnerships such as ESVCLPs given the income of the
partnership is taxed to the partners. The taxable income of the Reinventure Funds is calculated in accordance with Australian tax principles
and Westpac’s share is brought to account for tax in Australia by Westpac.
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.
In September 2024, Westpac acquired an additional 8.74%. As at the reporting date, the registration of the share transfer in PNG was still
pending. Once this is completed, Westpac’s shareholding will increase to 98.65%.
d.
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.
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271
STATUTORY STATEMENTS
Directors’ declaration
In the Directors’ opinion:
(a) the financial statements and notes set out in ‘Financial statements’ for the year ended 30 September 2024 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 (Westpac) and the Group's financial position as at
30 September 2024 and of their performance for the financial year ended on that date.
(b) The Consolidated Entity Disclosure Statement included in 'Financial statements' as at 30 September 2024 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 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
Peter King
Managing Director and Chief Executive Officer
Sydney
3 November 2024
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999
Liability limited by a scheme approved under Professional Standards Legislation.
Independent auditor’s report
To the members of Westpac Banking Corporation
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Westpac Banking Corporation (the Parent Entity) and its
controlled entities (together the Group) is in accordance with the Corporations Act 2001, including:
(a) giving a true and fair view of the Parent Entity’s and Group's financial positions as at 30
September 2024 and of their financial performance for the year then ended
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Parent Entity and Group financial report comprises:
●
the Consolidated and Parent Entity balance sheets as at 30 September 2024
●
the Consolidated and Parent Entity income statements for the year then ended
●
the Consolidated and Parent Entity statements of comprehensive income for the year then
ended
●
the Consolidated and Parent Entity statements of changes in equity for the year then ended
●
the Consolidated and Parent Entity cash flow statements for the year then ended
●
the notes to the financial statements, including material accounting policy information and other
explanatory information
●
the consolidated entity disclosure statement as at 30 September 2024
●
the directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards and International Standards
on Auditing. Our responsibilities under those standards are further described in the Auditor’s
responsibilities for the audit of the financial report section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We are independent of the Parent Entity and the Group in accordance with the auditor independence
requirements of the Corporations Act 2001 and the ethical requirements of the Accounting
Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants
(including Independence Standards) (the Code) and the International Code of Ethics for Professional
Accountants (including International Independence Standards) issued by the International Ethics
Standards Board for Accountants (IESBA Code) that are relevant to our audit of the financial report in
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Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code and the
IESBA Code.
Our audit approach for the Group
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
Group Audit scope
Key audit matters
●
Our audit focused on where the Group
made subjective judgements; for example,
significant accounting estimates involving
assumptions and inherently uncertain future
events.
●
We tailored the scope of our audit to
determine that we performed enough work
to be able to give an opinion on the financial
report as a whole, taking into account the
following factors: the geographic,
management and legal structure of the
Group; the significance and risk profile of
each segment within the Group; the Group's
accounting processes and controls; the
financial services industry; and broader
macroeconomic environment in which the
Group operates. We also determined that
the audit team included the appropriate
skills and competencies which are needed
for the audit of a complex financial services
group. This included industry expertise in
consumer, business and institutional
banking and wealth management services,
as well as specialists and experts in IT,
actuarial, economics, tax and valuation.
●
We conducted an audit of the most
financially significant divisions, being the
Consumer segment, Business and Wealth
segment and the Westpac Institutional Bank
segment. In addition, we performed audit
procedures over specified financial
statement line items in relation to the
Westpac New Zealand segment, and the
Group Businesses segment.
●
Amongst other relevant topics, we
communicated the following key audit
matters to the Audit and Risk Committee:
−
Provisions for expected credit losses on
loans and credit commitments (ECL)
−
Litigation, remediation provisions and
regulatory investigations
●
These are further described in the Key audit
matters section of our report.
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Group Audit scope
Key audit matters
●
Further audit procedures were performed
over the remaining balances and the
consolidation process, including testing of
entity level controls, as well as substantive
and analytical procedures. The work carried
out in these divisions, together with those
additional procedures performed at the
Group level, gave us sufficient coverage to
express an opinion on the financial report as
a whole.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. The key audit matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. Further, any commentary on the outcomes of a
particular audit procedure is made in that context. The key audit matters identified below relate to both
the Parent Entity and the Group audit, unless otherwise stated below.
Key audit matter
How our audit addressed the key audit matter
Provisions for expected credit losses on loans
and credit commitments (ECL)
As described in Note 10 to the financial report,
the provision for expected credit losses on loans
and credit commitments (ECL) was $5,084
million for the Group and $4,402 million for the
Parent Entity at 30 September 2024.
ECL is a probability-weighted estimate of the
cash shortfalls expected to result from defaults
over the relevant timeframe 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 Group’s model
to determine the ECL includes critical
accounting assumptions to determine when a
significant increase in credit risk (SICR) has
occurred, estimating forward looking
macroeconomic scenarios and applying a
probability weighting to these, and identifying
Our procedures included testing the
effectiveness of controls relating to the Group’s
ECL estimation process, which included controls
over the data, model and significant
assumptions used in determining the ECL as
well as relevant IT controls.
Our procedures also included, among others:
(i) the involvement of professionals with
specialised skill and knowledge to assist in
testing the Group’s process for determining the
ECL by evaluating the appropriateness of the
models and assumptions related to SICR and
the downside severity.
(ii) testing the appropriateness of the probability
weights assigned to the forward-looking
macroeconomic scenarios.
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Key audit matter
How our audit addressed the key audit matter
judgemental adjustments to modelled outcomes
(overlays).
The principal considerations for our
determination that performing procedures
relating to the ECL is a key audit matter were:
(i) there was a high degree of auditor
judgement, subjectivity and effort to evaluate
audit evidence related to the ECL model and
significant assumptions used to estimate the
ECL,
(ii) there was a high degree of auditor
judgement, subjectivity and effort to test the
Group’s judgements relating to the severity of
the forward-looking macroeconomic downside
scenario and the associated weighting applied,
(iii) there was a high degree of auditor effort
required to test critical data elements used in the
model,
(iv) there was a high degree of auditor effort
required to test relevant IT controls used in
determining the ECL, and
(v) the nature and extent of audit effort required
to test the models, assumptions and judgements
required the use of professionals with
specialised skill and knowledge.
(iii) testing the accuracy and completeness of
critical data elements that are inputs used in the
ECL model, and
(iv) testing the appropriateness and
completeness of overlays.
Litigation, remediation provisions and regulatory
investigations
As described in Note 25 to the financial report,
provisions for litigation, non-lending losses and
remediation were $240 million for the Group and
$179 million for the Parent Entity at 30
September 2024.
The provisions relate to customer refunds
associated with matters of potential historical
misconduct, costs of completing remediation
Our procedures included testing the
effectiveness of controls relating to the Group’s
evaluation of provisions to determine whether a
present obligation with a probable cash outflow
exists and can be reliably estimated. For
contingent liabilities, our procedures also
included testing the effectiveness of controls
relating to the Group’s identification and
evaluation of contingent liabilities, including
controls over determining whether or not it is
possible that a loss has occurred or whether
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Key audit matter
How our audit addressed the key audit matter
programs, and potential non-lending losses and
costs connected with certain litigation and
regulatory investigations. An assessment of the
likely cost to the Group of these matters is made
on a case-by-case basis and specific provisions
or disclosures are made where the Group
considers appropriate.
Disclosures are also made in Note 25 for
contingent liabilities for 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 estimated.
The principal considerations for our
determination that performing procedures
relating to litigation, remediation provisions and
regulatory investigations is a key audit matter
were:
(i) there was significant judgement by the Group
to identify contingent liabilities and quantify
required provisions, which included assumptions
related to the probability of loss and the timing,
nature and quantum of related cash outflows,
and
(ii) there was a moderate degree of auditor
judgement and effort in performing procedures
and evaluating audit evidence related to the
provisions and key assumptions, and in
evaluating the appropriateness of the related
disclosures.
there is a probable outflow from a present
obligation.
Our procedures also included, among others:
(i) evaluating the evidence of the quantification
of provisions and the assumptions applied, and
(ii) assessing the appropriateness of
disclosures.
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the year ended 30 September 2024, but does not include
the financial report and our auditor’s report thereon.
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Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon through our opinion on the financial report. We
have issued a separate opinion on the remuneration report, a limited and reasonable assurance
opinion on specified metrics included in the Group’s Climate Report, and a limited assurance opinion
on specified metrics included in the Group's Sustainability Index and Datasheet supplement and
sustainability sections of the Strategic Review in the Annual Report as detailed in our Assurance
Report on Sustainability Related information.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Parent Entity are responsible for the preparation of the financial report in
accordance with Australian Accounting Standards and the Corporations Act 2001, including giving a
true and fair view, and for such internal control as the directors determine is necessary to enable the
preparation of the financial report that is free from material misstatement, whether due to fraud or
error.
In preparing the financial report, the directors are responsible for assessing the ability of the Parent
Entity and the Group to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the directors either intend to
liquidate the Parent Entity or the Group or to cease operations, or have no realistic alternative but to
do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards and International Standards
on Auditing will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing
and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
auditor's report.
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Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in the directors’ report for the year ended 30
September 2024.
In our opinion, the remuneration report of Westpac Banking Corporation for the year ended 30
September 2024 complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
PricewaterhouseCoopers
CJ Heath
Sydney
Partner
3 November 2024
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279
Limitation on Independent Registered Public Accounting Firm’s Liability
The liability of PricewaterhouseCoopers (an Australian partnership which we refer to as PwC Australia), with respect
to claims arising out of its audit report included in this Annual Report, is subject to the limitations set forth in the
Professional Standards Act 1994 of New South Wales, Australia, as amended (the Professional Standards Act) and
Chartered Accountants Australia and New Zealand (NSW) scheme adopted by Chartered Accountants Australia and
New Zealand and approved by the New South Wales Professional Standards Council pursuant to the Professional
Standards Act (the NSW Accountants Scheme). For matters occurring on or prior to 8 October 2019, the liability of PwC
Australia may be subject to the limitations set forth in predecessor schemes. The current NSW Accountants Scheme
expires on 12 July 2025 unless further extended or replaced.
The Professional Standards Act and the NSW Accountants Scheme may limit the liability of PwC Australia for damages
with respect to certain civil claims arising in, or governed by the laws of, New South Wales directly or vicariously from
anything done or omitted to be done in the performance of its professional services for us, including, without limitation,
its audits of our financial statements.
The extent of the limitation depends on the timing of the relevant matter and in relation to matters occurring on or after
8 October 2013, is a maximum liability for audit work of A$75 million.
The limitations do not apply to claims for breach of trust, fraud or dishonesty.
In addition, there is equivalent professional standards legislation in place in other states and territories in Australia and
amendments have been made to a number of Australian federal statutes to limit liability under those statutes to the
same extent as liability is limited under state and territory laws by professional standards legislation. Accordingly, liability
for acts or omissions by PwC Australia in Australian states or territories other than New South Wales may be limited in a
manner similar to that in New South Wales.
These limitations of liability may limit recovery upon the enforcement in Australian courts of any judgment under US or
other foreign laws rendered against PwC Australia based on or related to its audit report on our financial statements.
Substantially all of PwC Australia’s assets are located in Australia. However, the Professional Standards Act and the NSW
Accountants Scheme have not been subject to extensive judicial consideration and therefore how the limitation might
be applied by the courts and the effect of the limitation remain untested in a number of respects, including its effect in
respect of the enforcement of foreign judgments.
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SHAREHOLDING INFORMATION
ADDITIONAL INFORMATION
GLOSSARY OF ABBREVIATIONS AND DEFINED TERMS
CONTACT US
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SHAREHOLDING INFORMATION
Westpac ordinary shares
Top 20 ordinary shareholders as at 30 September 2024
Number of
Fully Paid
Ordinary Shares
% Held
HSBC Custody Nominees (Australia) Limited
866,714,876
25.18
J P Morgan Nominees Australia Pty Limited
512,401,798
14.89
Citicorp Nominees Pty Limited
228,997,948
6.65
BNP Paribas Nominees Pty Ltd
61,463,468
1.79
National Nominees Limited
40,456,973
1.18
BNP Paribas NOMS Pty Ltd
26,864,218
0.78
HSBC Custody Nominees (Australia) Limited
25,113,326
0.73
Citicorp Nominees Pty Limited
24,642,154
0.72
Pacific Custodians Pty Limited
18,679,841
0.54
Netwealth Investments Limited
16,586,728
0.48
BNP Paribas Nominees Pty Ltd
15,361,493
0.45
Australian Foundation Investment Company Limited
13,282,500
0.39
Argo Investments Limited
8,807,648
0.26
IOOF Investment Services Limited
7,692,979
0.22
IOOF Investment Services Limited
6,213,315
0.18
BNP Paribas NOMS (NZ) Ltd
5,652,649
0.16
UBS Nominees Pty Ltd
4,240,536
0.12
Washington H Soul Pattinson and Company Limited
3,953,000
0.11
Netwealth Investments Limited
3,642,054
0.11
Mutual Trust Pty Ltd
3,401,970
0.10
Total of Top 20 registered shareholdersa
1,894,169,474
55.04
a.
As recorded on the holder register by holder reference number.
As at 30 September 2024, there were 585,176 holders of our ordinary shares compared to 654,993 in 2023 and 672,589
in 2022. Ordinary shareholders with a registered address in Australia held approximately 96% of our fully paid share
capital at 30 September 2024 (approximately 98% in 2023 and 2022).
Substantial shareholders as at 30 September 2024
As at 30 September 2024, BlackRock Group (comprised of BlackRock Inc. and its subsidiaries), State Street Corporation
(comprised of State Street Corporation and its subsidiaries), and The Vanguard Group (comprised of The Vanguard
Group, Inc. and its controlled entities) had a ‘substantial holding’ of our shares within the meaning of the Corporations
Act. A person has a substantial holding of our shares if the total votes attached to our voting shares in which they or
their associates have relevant interests is 5% or more of the total number of votes attached to all our voting shares.
The above table of the Top 20 ordinary shareholders includes shareholders that may hold shares for the benefit of
third parties.
BlackRock Group has been a substantial shareholder since 4 April 2017 (221,964,794 equity securities as
at 24 March 2020). State Street Corporation has been a substantial shareholder since 20 July 2022
(226,119,322 equity securities as at 6 August 2024). The Vanguard Group has been a substantial shareholder since
12 May 2022 (175,093,754 equity securities as at 12 May 2022).
Analysis by range of holdings of ordinary shares as at 30 September 2024
Number of Shares
Number of Holders
of Fully Paid
Ordinary Shares
%
Number of
Fully Paid
Ordinary Shares
%
Number of Holders
of Share Options
and Rights
1 – 1,000
324,370
55.43
120,246,358
3.49%
25,245
1,001 – 5,000
196,200
33.53
456,959,625
13.28%
302
5,001 – 10,000
38,295
6.54
270,031,632
7.85%
69
10,001 – 100,000
25,674
4.39
541,512,959
15.73%
126
100,001 and over
637
0.11
2,052,660,787
59.65%
19
Totals
585,176
100.00
3,441,411,361
100.00%
25,761
There were 13,025 shareholders holding less than a marketable parcel ($500) based on a market price of $31.72 per
share at the close of trading on 30 September 2024.
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Westpac ordinary shares (Continued)
Voting rights of ordinary shares
Holders of our fully paid ordinary shares have, at general meetings (including special general meetings), one vote on a
show of hands and, upon a poll, one vote for each fully paid ordinary share held by them.
Westpac Capital Notes 5
Top 20 holders of Westpac Capital Notes 5 as at 30 September 2024
Number of
Westpac Capital
Notes 5
% Held
HSBC Custody Nominees (Australia) Limited
1,161,069
6.87
Citicorp Nominees Pty Limited
778,985
4.61
BNP Paribas Nominees Pty Ltd
595,158
3.52
Citicorp Nominees Pty Limited <143212 NMMT Ltd A/C>
451,386
2.67
Netwealth Investments Limited
363,648
2.15
IOOF Investment Services Limited
303,810
1.80
Diocese Development Fund - Catholic Diocese of Parramatta
269,486
1.59
BNP Paribas Nominees Pty Ltd
266,827
1.58
HSBC Custody Nominees (Australia) Limited - A/C 2
263,906
1.56
IOOF Investment Services Limited
143,762
0.85
Mutual Trust Pty Ltd
116,141
0.69
BNP Paribas Nominees Pty Ltd
115,255
0.68
Dimbulu Pty Ltd
100,000
0.59
Netwealth Investments Limited
88,844
0.53
J P Morgan Nominees Australia Pty Limited
87,466
0.52
Marrosan Investments Pty Ltd
85,000
0.50
Royal Freemasons' Benevolent Institution
60,000
0.35
Mrs Linda Anne Van Lieshout
60,000
0.35
Harriette & Co Pty Ltd
50,000
0.30
HSBC Custody Nominees (Australia) Limited-GSI EDA
50,000
0.30
Total of Top 20 registered shareholdersa
5,410,743
32.01
a.
As recorded on the holder register by holder reference number.
Analysis by range of holdings of Westpac Capital Notes 5 as at 30 September 2024
Number of Shares
Number of
Holders of Westpac
Capital Notes 5
%
Number of
Westpac Capital
Notes 5
%
1 – 1,000
14,918
87.68
5,264,016
31.14
1,001 – 5,000
1,861
10.94
3,866,674
22.88
5,001 – 10,000
147
0.86
1,103,434
6.53
10,001 – 100,000
77
0.45
1,839,826
10.88
100,001 and over
12
0.07
4,829,433
28.57
Totals
17,015
100.00
16,903,383
100.00
There were 9 security holders holding less than a marketable parcel ($500) of Westpac Capital Notes 5 based on a
market price of $102.000 at the close of trading on 30 September 2024.
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Westpac Capital Notes 7
Top 20 holders of Westpac Capital Notes 7 as at 30 September 2024
Number of
Westpac Capital
Notes 7
% Held
Citicorp Nominees Pty Limited
1,216,633
7.06
HSBC Custody Nominees (Australia) Limited
1,023,243
5.94
Citicorp Nominees Pty Limited <143212 NMMT Ltd A/C>
446,552
2.59
BNP Paribas Nominees Pty Ltd
411,294
2.39
BNP Paribas Nominees Pty Ltd
379,896
2.20
Netwealth Investments Limited
297,364
1.73
Mutual Trust Pty Ltd
267,561
1.55
HSBC Custody Nominees (Australia) Limited-GSI EDA
170,000
0.99
Dimbulu Pty Ltd
150,000
0.87
Netwealth Investments Limited
135,150
0.78
HSBC Custody Nominees (Australia) Limited - A/C 2
130,658
0.76
Marrosan Investments Pty Ltd
110,000
0.64
IOOF Investment Services Limited
105,971
0.61
Bond Street Custodians Limited
100,000
0.58
BNP Paribas Nominees Pty Ltd
97,800
0.57
BNP Paribas NOMS Pty Ltd
83,460
0.48
IOOF Investment Services Limited
80,376
0.47
J P Morgan Nominees Australia Pty Limited
65,674
0.38
V S Access Pty Ltd
64,624
0.38
Eastcote Pty Ltd
61,619
0.36
Total of Top 20 registered shareholdersa
5,397,875
31.33
a.
As recorded on the holder register by holder reference number.
Analysis by range of holdings of Westpac Capital Notes 7 as at 30 September 2024
Number of Shares
Number of
Holders of Westpac
Capital Notes 7
%
Number of
Westpac Capital
Notes 7
%
1 – 1,000
15,883
88.48
5,551,257
32.22
1,001 – 5,000
1,853
10.32
3,948,083
22.92
5,001 – 10,000
136
0.76
1,029,284
5.97
10,001 – 100,000
67
0.37
1,856,417
10.77
100,001 and over
13
0.07
4,844,322
28.12
Totals
17,952
100.00
17,229,363
100.00
There were 5 security holders holding less than a marketable parcel ($500) of Westpac Capital Notes 7 based on a
market price of $104.000 at the close of trading on 30 September 2024.
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Westpac Capital Notes 8
Top 20 holders of Westpac Capital Notes 8 as at 30 September 2024
Number of
Westpac Capital
Notes 8
% Held
BNP Paribas Nominees Pty Ltd
3,839,682
21.94
HSBC Custody Nominees (Australia) Limited
917,184
5.24
Citicorp Nominees Pty Limited
849,938
4.86
BNP Paribas Nominees Pty Ltd
343,873
1.96
Netwealth Investments Limited
260,124
1.49
Dimbulu Pty Ltd
200,000
1.14
HSBC Custody Nominees (Australia) Limited - A/C 2
169,410
0.97
Mutual Trust Pty Ltd
164,908
0.94
IOOF Investment Services Limited
134,630
0.77
Netwealth Investments Limited
103,856
0.59
IOOF Investment Services Limited
98,535
0.56
BNP Paribas Nominees Pty Ltd
85,178
0.49
BNP Paribas Nominees Pty Ltd
72,993
0.42
J P Morgan Nominees Australia Pty Limited
69,554
0.40
Megt (Australia) Ltd
61,516
0.35
V S Access Pty Ltd
52,220
0.30
National Nominees Limited
44,302
0.25
Invia Custodian Pty Limited
43,735
0.25
Adirel Holdings Pty Ltd
33,000
0.19
HSBC Custody Nominees (Australia) Limited-GSI EDA
30,000
0.17
Total of Top 20 registered shareholdersa
7,574,638
43.28
a.
As recorded on the holder register by holder reference number.
Analysis by range of holdings of Westpac Capital Notes 8 as at 30 September 2024
Number of Shares
Number of
Holders of Westpac
Capital Notes 8
%
Number of
Westpac Capital
Notes 8
%
1 – 1,000
14,188
88.32
4,961,867
28.35
1,001 – 5,000
1,690
10.52
3,346,140
19.12
5,001 – 10,000
125
0.78
921,320
5.26
10,001 – 100,000
51
0.32
1,287,068
7.36
100,001 and over
10
0.06
6,983,605
39.91
Totals
16,064
100.00
17,500,000
100.00
There were 4 security holders holding less than a marketable parcel ($500) of Westpac Capital Notes 8 based on a
market price of $104.000 at the close of trading on 30 September 2024.
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Westpac Capital Notes 9
Top 20 holders of Westpac Capital Notes 9 as at 30 September 2024
Number of
Westpac Capital
Notes 9
% Held
BNP Paribas Nominees Pty Ltd
3,761,389
24.92
HSBC Custody Nominees (Australia) Limited
1,010,346
6.70
Citicorp Nominees Pty Limited
506,385
3.36
BNP Paribas Nominees Pty Ltd
486,150
3.22
Bond Street Custodians Limited
275,000
1.82
Netwealth Investments Limited
272,810
1.81
HSBC Custody Nominees (Australia) Limited - A/C 2
203,522
1.35
Netwealth Investments Limited
174,063
1.15
BNP Paribas Nominees Pty Ltd
105,095
0.70
Dimbulu Pty Ltd
100,000
0.66
Royal Freemasons' Benevolent Institution
82,000
0.54
IOOF Investment Services Limited
73,886
0.49
Mutual Trust Pty Ltd
70,101
0.46
IOOF Investment Services Limited
60,886
0.40
Marrosan Investments Pty Ltd
50,000
0.33
Bond Street Custodians Limited
40,832
0.27
Pesutu Pty Ltd
35,868
0.24
Sir Moses Montefiore Jewish Home
30,000
0.20
HSBC Custody Nominees (Australia) Limited-GSI EDA
30,000
0.20
Morris Commercial P/L
30,000
0.20
Total of Top 20 registered shareholdersa
7,398,333
49.03
a.
As recorded on the holder register by holder reference number.
Analysis by range of holdings of Westpac Capital Notes 9 as at 30 September 2024
Number of Securities
Number of
Holders of Westpac
Capital Notes 9
%
Number of
Westpac Capital
Notes 9
%
1 – 1,000
9,261
86.62
3,684,371
24.41
1,001 – 5,000
1,276
11.94
2,683,000
17.78
5,001 – 10,000
96
0.90
705,832
4.68
10,001 – 100,000
49
0.46
1,222,917
8.10
100,001 and over
9
0.08
6,794,760
45.03
Totals
10,691
100.00
15,090,880
100.00
There were 4 security holders holding less than a marketable parcel ($500) of Westpac Capital Notes 9 based on a
market price of $105.950 at the close of trading on 30 September 2024.
286
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SHAREHOLDING INFORMATION
Westpac Capital Notes 10
Top 20 holders of Westpac Capital Notes 10 as at 30 September 2024
Number of
Westpac Capital
Notes 10
% Held
Citicorp Nominees Pty Limited
1,716,071
9.81
HSBC Custody Nominees (Australia) Limited
1,250,975
7.15
BNP Paribas Nominees Pty Ltd
590,188
3.37
HSBC Custody Nominees (Australia) Limited - A/C 2
485,184
2.77
Netwealth Investments Limited
351,788
2.01
Bond Street Custodians Limited
200,000
1.14
BNP Paribas Nominees Pty Ltd
145,774
0.83
Netwealth Investments Limited
112,558
0.64
Elmore Super Pty Ltd
105,900
0.61
IOOF Investment Services Limited
103,524
0.59
Dimbulu Pty Ltd
100,000
0.57
V S Access Pty Ltd
90,000
0.51
Mutual Trust Pty Ltd
84,633
0.48
Tandom Pty Ltd
82,100
0.47
J P Morgan Nominees Australia Pty Limited
67,620
0.39
J C Family Investments Pty Limited
54,007
0.31
IOOF Investment Services Limited
53,953
0.31
National Nominees Limited
52,135
0.30
John E Gill Trading Pty Ltd
50,000
0.29
Willimbury Pty Ltd
50,000
0.29
Total of Top 20 registered shareholdersa
5,746,410
32.84
a.
As recorded on the holder register by holder reference number.
Analysis by range of holdings of Westpac Capital Notes 10 as at 30 September 2024
Number of Securities
Number of
Holders of Westpac
Capital Notes 10
%
Number of
Westpac Capital
Notes 10
%
1 – 1,000
12,017
83.91
4,807,424
27.47
1,001 – 5,000
2,040
14.24
4,327,745
24.73
5,001 – 10,000
175
1.22
1,308,087
7.47
10,001 – 100,000
80
0.56
1,994,782
11.40
100,001 and over
10
0.07
5,061,962
28.93
Totals
14,322
100.00
17,500,000
100.00
There were 2 security holders holding less than a marketable parcel ($500) of Westpac Capital Notes 10 based on a
market price of $105.700 at the close of trading on 30 September 2024.
Voting rights of Westpac Capital Notes 5, Westpac Capital Notes 7, Westpac Capital Notes 8, Westpac Capital
Notes 9 and Westpac Capital Notes 10
In accordance with the terms of issue, holders of Westpac Capital Notes 5, Westpac Capital Notes 7, Westpac Capital
Notes 8, Westpac Capital Notes 9 and Westpac Capital Note 10 have no right to vote at any general meeting of Westpac
before conversion into Westpac ordinary shares.
If conversion occurs (in accordance with the applicable terms of the relevant AT1 instrument), holders of Westpac Capital
Notes 5, Westpac Capital Notes 7, Westpac Capital Notes 8, Westpac Capital Notes 9 or Westpac Capital Notes 10
(as applicable) will become holders of Westpac ordinary shares and have the voting rights that attach to Westpac
ordinary shares.
Unquoted securities
Westpac also has the following unquoted securities on issue: USD 1.25 billion AT1 securities (comprised of 3 individual
notes) which are all held by Cede & Co. as nominee for the Depository Trust Company. See Note 14 to the financial
statements for further information.
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287
Financial calendar
Westpac shares are listed on the securities exchanges in Australia (ASX) and New Zealand (NZX). Westpac Capital Notes
5, Westpac Capital Notes 7, Westpac Capital Notes 8, Westpac Capital Notes 9 and Westpac Capital Notes 10 are listed
on the ASX.
Important dates to note are set out below, subject to change. Payment of any distribution, dividend or interest payment
is subject to the relevant payment conditions and the key dates for each payment will be confirmed to the ASX for
securities listed on the ASX.
Westpac Ordinary Shares (ASX code: WBC, NZX code: WBC)
Ex-dividend date for final dividend
7 November 2024
Record date for final dividend
8 November 2024
Annual General Meeting
13 December 2024
Final dividend payable
19 December 2024
First quarter update
17 February 2025
Financial Half Year end
31 March 2025
Interim Results and dividend announcement
5 May 2025
Ex-dividend date for interim dividend
8 May 2025
Record date for interim dividend
9 May 2025
Interim dividend payable
27 June 2025
Third quarter update
18 August 2025
Financial Year end
30 September 2025
Final Results and dividend announcement
3 November 2025
Ex-dividend date for final dividend
6 November 2025
Record date for final dividend
7 November 2025
Annual General Meeting
11 December 2025a
Final dividend payable
19 December 2025
a.
Details regarding the location of the meeting and the business to be dealt with will be contained in a Notice of Meeting sent to shareholders in
November before the meeting.
Westpac Capital Notes 5 (ASX code: WBCPH)
Ex-date for quarterly distribution
12 December 2024
Record date for quarterly distribution
13 December 2024a
Payment date for quarterly distribution
23 December 2024b
Ex-date for quarterly distribution
13 March 2025
Record date for quarterly distribution
14 March 2025
Payment date for quarterly distribution
24 March 2025b
Ex-date for quarterly distribution
12 June 2025
Record date for quarterly distribution
13 June 2025a
Payment date for quarterly distribution
23 June 2025b
Ex-date for quarterly distribution
11 September 2025
Record date for quarterly distribution
12 September 2025a
Payment date for quarterly distribution
22 September 2025
Ex-date for quarterly distribution
11 December 2025
Record date for quarterly distribution
12 December 2025a
Payment date for quarterly distribution
22 December 2025
a.
Adjusted to immediately preceding business day as record date falls on a non-ASX business day or a date on which banks are not open for
general business in Sydney.
b.
Adjusted to next business day as payment date falls on a non-ASX business day or a date on which banks are not open for general business
in Sydney.
288
WESTPAC 2024 ANNUAL REPORT
SHAREHOLDING INFORMATION
Financial calendar (Continued)
Westpac Capital Notes 7 (ASX code: WBCPJ)
Ex-date for quarterly distribution
12 December 2024
Record date for quarterly distribution
13 December 2024a
Payment date for quarterly distribution
23 December 2024b
Ex-date for quarterly distribution
13 March 2025
Record date for quarterly distribution
14 March 2025
Payment date for quarterly distribution
24 March 2025b
Ex-date for quarterly distribution
12 June 2025
Record date for quarterly distribution
13 June 2025a
Payment date for quarterly distribution
23 June 2025b
Ex-date for quarterly distribution
11 September 2025
Record date for quarterly distribution
12 September 2025a
Payment date for quarterly distribution
22 September 2025
Ex-date for quarterly distribution
11 December 2025
Record date for quarterly distribution
12 December 2025a
Payment date for quarterly distribution
22 December 2025
a.
Adjusted to immediately preceding business day as record date falls on a non-ASX business day or a date on which banks are not open for
general business in Sydney.
b.
Adjusted to next business day as payment date falls on a non-ASX business day or a date on which banks are not open for general business
in Sydney.
Westpac Capital Notes 8 (ASX code: WBCPK)
Ex-date for quarterly distribution
12 December 2024
Record date for quarterly distribution
13 December 2024
Payment date for quarterly distribution
23 December 2024a
Ex-date for quarterly distribution
12 March 2025
Record date for quarterly distribution
13 March 2025
Payment date for quarterly distribution
21 March 2025
Ex-date for quarterly distribution
12 June 2025
Record date for quarterly distribution
13 June 2025
Payment date for quarterly distribution
23 June 2025a
Ex-date for quarterly distribution
11 September 2025
Record date for quarterly distribution
12 September 2025b
Payment date for quarterly distribution
22 September 2025a
Ex-date for quarterly distribution
11 December 2025
Record date for quarterly distribution
12 December 2025b
Payment for quarterly distribution
22 December 2025a
a.
Adjusted to next business day as payment date falls on a non-ASX business day or a date on which banks are not open for general business
in Sydney.
b.
Adjusted to immediately preceding business day as record date falls on a non-ASX business day or a date on which banks are not open for
general business in Sydney.
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289
Financial calendar (Continued)
Westpac Capital Notes 9 (ASX code: WBCPL)
Ex-date for quarterly distribution
12 December 2024
Record date for quarterly distribution
13 December 2024a
Payment date for quarterly distribution
23 December 2024b
Ex-date for quarterly distribution
13 March 2025
Record date for quarterly distribution
14 March 2025
Payment date for quarterly distribution
24 March 2025b
Ex-date for quarterly distribution
12 June 2025
Record date for quarterly distribution
13 June 2025a
Payment date for quarterly distribution
23 June 2025b
Ex-date for quarterly distribution
11 September 2025
Record date for quarterly distribution
12 September 2025a
Payment date for quarterly distribution
22 September 2025
Ex-date for quarterly distribution
11 December 2025
Record date for quarterly distribution
12 December 2025a
Payment date for quarterly distribution
22 December 2025
a.
Adjusted to immediately preceding business day as record date falls on a non-ASX business day or a date on which banks are not open for
general business in Sydney.
b.
Adjusted to next business day as payment date falls on a non-ASX business day or a date on which banks are not open for general business
in Sydney.
Westpac Capital Notes 10 (ASX code: WBCPM)
Ex-date for quarterly distribution
12 December 2024
Record date for quarterly distribution
13 December 2024a
Payment date for quarterly distribution
23 December 2024b
Ex-date for quarterly distribution
13 March 2025
Record date for quarterly distribution
14 March 2025
Payment date for quarterly distribution
24 March 2025b
Ex-date for quarterly distribution
12 June 2025
Record date for quarterly distribution
13 June 2025a
Payment date for quarterly distribution
23 June 2025b
Ex-date for quarterly distribution
11 September 2025
Record date for quarterly distribution
12 September 2025a
Payment date for quarterly distribution
22 September 2025
Ex-date for quarterly distribution
11 December 2025
Record date for quarterly distribution
12 December 2025a
Payment date for quarterly distribution
22 December 2025
a.
Adjusted to immediately preceding business day as record date falls on a non-ASX business day or a date on which banks are not open for
general business in Sydney.
b.
Adjusted to next business day as payment date falls on a non-ASX business day or a date on which banks are not open for general business
in Sydney.
290
WESTPAC 2024 ANNUAL REPORT
ADDITIONAL INFORMATION
Exchange rates against A$
Twelve months to/as at 30 Sept
2024
2023
2022
Currency
Average
Spot
Average
Spot
Average
Spot
US$
0.6594
0.6929
0.6662
0.6467
0.7125
0.6490
GBP
0.5201
0.5176
0.5435
0.5284
0.5575
0.5841
NZ$
1.0846
1.0885
1.0846
1.0738
1.0831
1.1355
Impact of exchange rate movements on Westpac's results
2024 vs 2023
2023 vs 2022
Growth
FX impact ($m)
Growth
ex- FX
Growth
FX impact ($m)
Growth
ex- FX
Net interest income
2%
(2)
2%
7%
5
7%
Non-interest income
(15%)
9
(15%)
36%
5
36%
Net operating income
-
7
-
10%
10
10%
Operating expenses
2%
(9)
2%
(1%)
(11)
(1%)
Pre-provision profit
(3%)
(2)
(3%)
24%
(1)
24%
Impairment
(charges)/benefits
(17%)
-
(17%)
93%
-
93%
Profit before income
tax expense
(2%)
(2)
(2%)
22%
(1)
22%
Income tax expense
-
-
-
12%
-
12%
Profit after income
tax expense
(3%)
(2)
(3%)
26%
(1)
26%
Profit attributable to non-
controlling interests (NCI)
(100%)
-
(100%)
20%
-
20%
Net profit attributable to
owners of WBC
(3%)
(2)
(3%)
26%
(1)
26%
Exchange rate risk on future NZ$ earnings
Westpac’s policy in relation to the hedging of the future earnings of Westpac’s New Zealand division is to manage the
economic risk for volatility of the NZ$ against A$. Westpac manages these flows over a time horizon under which up
to 100% of the expected earnings for the following 12 months and 50% of the expected earnings for the subsequent 12
months can be hedged. NZ Future Earnings hedges are only implemented when AUD/NZD is trading at the low end of
the range or is expected to move higher over the next 12 months. As at 30 September 2024, Westpac has hedges in
place for forecasts up to November 2024 with an average rate of $1.0852.
Dividend reinvestment plan
The Board has determined a fully franked final ordinary dividend of 76 cents per share, to be paid on 19 December 2024
to shareholders on the register at the record date of 8 November 2024. The 2024 final and interim ordinary dividend
represents a payout ratio of 74.62%. In addition to being fully franked, the final ordinary dividend will also carry NZ$0.06
in New Zealand imputation credits that may be used by New Zealand tax residents.
Westpac operates a DRP that is available to holders of fully paid ordinary shares who are resident in, or whose address
on the register of shareholders is in Australia or New Zealand. Shareholders can choose to receive their 2024 final
ordinary dividend as cash or reinvest it in additional shares under the DRP. As noted in Note 28 to the financial
statements, the Board has made certain determinations in relation to the DRP for the final ordinary dividend only,
including that the market price will be set over 15 trading days commencing 13 November 2024 and will not include
a discount.
Shareholders who wish to commence participation in the DRP, or to vary their current participation election, must do so
by 5.00pm (Sydney time) on 11 November 2024.
Shareholders can provide these instructions:
•
Online for shareholders with holdings that have a market value of less than $1,000,000 within their Link
Market Services portfolio, by logging into or creating a Portfolio via the Westpac share registry's website at
linkmarketservices.com.au and electing the DRP or amending their existing instructions online; or
•
By completing and returning a DRP application or variation form to Westpac’s share registry. Registry contact details
are listed in Useful information (page 297).
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291
Information on related entities
a. Changes in control of Westpac entities
During the twelve months ended 30 September 2024 the following controlled entities were acquired, formed,
or incorporated:
•
Series 2024-1 WST Trust (formed 17 October 2023)
During the twelve months ended 30 September 2024, the following controlled entities ceased to be controlled:
•
Westpac Nominees NZ - Limited (deregistered 11 October 2023)
•
Westpac Superannuation Nominees - NZ - Limited (deregistered 11 October 2023)
•
Aotearoa Financial Services Limited (deregistered 26 October 2023)
•
Westpac Investment Vehicle No.2 Pty Limited (deregistered 29 October 2023)
•
Westpac USA Inc. (dissolved 6 May 2024)
•
Series 2014-1 WST Trust (terminated 3 June 2024)
•
Sydney Capital Corporations Inc. (dissolved 23 August 2024)
•
Partnership Pacific Pty Limited (deregistered 28 August 2024)
•
BT Financial Group Holdings Pty Ltd (deregistered 5 September 2024)
•
St. George Security Holdings Pty. Limited (deregistered 12 September 2024)
•
Westpac Europe Limited (dissolved 17 September 2024)
•
Westpac Syndications Management Pty Ltd (deregistered 19 September 2024)
•
Westpac Leasing Nominees - VIC- Pty. Limited (deregistered 19 September 2024)
•
Waratah Securities Australia Limited (deregistered 19 September 2024)
b. Associates
As at 30 September 2024
Ownership Interest Held (%)
Akahu Technologies Ltd
34.5%
OpenAgent Pty Ltd
22.6%
mx51 Group Pty Ltd
22.2%
Safe Will Pty Ltd
14.2%
292
WESTPAC 2024 ANNUAL REPORT
ADDITIONAL INFORMATION
Net profit contribution of businesses sold
To assist in understanding the contribution of these businesses, the following tables provide the earnings (excluding
Notable Items) attributable to the entities sold. Earnings attributed to each business reflect its contribution up to the
sale date, and any other gains/losses on these transactions which were not identified as Notable Items. Balance sheet
data is at completion date. Businesses sold in the 2023 financial year had negligible balance sheet contribution. No
businesses were sold in 2024.
Businesses sold
$m
Advance
Asset
Management
BT
Personal
and
Corporate
Supera
Westpac
Life
Insurance
Ltd.
Motor
Vehicle
Finance
and
Novated
Leasing
Westpac
Life-NZ-
Limited
(A$)
Contribution
of
businesses
sold
Westpac
Life-NZ-
Limited
(NZ$)
2023
Non-interest income
38
77
25
-
-
140
-
Operating expenses
(8)
26
28
-
-
46
-
Income tax expense and NCI
(9)
(31)
(15)
-
-
(55)
-
Net profit
21
72
38
-
-
131
-
2022
Net interest income
-
-
-
6
-
6
-
Non-interest income
80
177
107
-
28
392
30
Operating expenses
(18)
(77)
(23)
(6)
(3)
(127)
(3)
Impairment charges
-
-
-
7
-
7
-
Income tax expense and NCI
(19)
(30)
(34)
(2)
(7)
(92)
(8)
Net profit
43
70
50
5
18
186
19
a.
Transfer of the members and benefits of BT Funds Management Limited’s personal and corporate (non-platform) superannuation products, via
a successor funds transfer to Mercer Super Trust.
$bn
Advance
Asset
Management
BT
Personal
and
Corporate
Super
Westpac
Life
Insurance
Ltd.
Motor
Vehicle
Finance
and
Novated
Leasing
Westpac
Life-NZ-
Limited
(A$)
Contribution
of
businesses
sold
Westpac
Life-NZ-
Limited
(NZ$)
As at 30 Sept 2022
Total assets
-
-
2.6
-
-
2.6
-
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293
Additional information for Non-AAS financial measures
Calculation of Non-AAS financial measures
Details of the calculation of non-AAS financial measures not disclosed elsewhere are provided below:
Expense to income ratio (excluding Notable Items)
$m
2024
2023
2022
Operating expenses
10,944
10,692
10,802
Less: Notable Items (operating expenses)
-
(460)
(621)
Operating expenses excluding Notable Items
10,944
10,232
10,181
Net operating income
21,588
21,645
19,606
Add/(less): Notable Items (net interest income)
163
97
(555)
Add/(less): Notable Items (non-interest income)
12
(200)
854
Net operating income excluding Notable Items
21,763
21,542
19,905
Expense to income ratio (excluding Notable Items)
50.29%
47.50%
51.15%
Average tangible ordinary equity and Return on average tangible ordinary equity (ROTE)
$m
2024
2023
2022
2021
2020
Net profit attributable to owners of WBC (adjusted for
RSP dividends)a
6,983
7,190
5,691
5,456
2,288
Average ordinary equity
71,493
71,229
70,268
70,849
68,014
Less: Intangible assets (average)
(10,758)
(10,664)
(10,182)
(11,310)
(11,964)
Add: Computer software (average)
2,680
2,552
1,992
2,361
2,371
Average tangible ordinary equity
63,415
63,117
62,078
61,900
58,421
Return on average tangible ordinary equity (ROTE)
11.01%
11.39%
9.17%
8.81%
3.92%
a.
See Note 8 to the financial statements for calculations of this profit measure.
Net profit attributable to owners of WBC (adjusted for RSP shares) excluding Notable Items
$m
2024
2023
2022
2021
2020
Net profit attributable to owners of WBC (adjusted for
RSP dividends)
6,983
7,190
5,691
5,456
2,288
Add/(less): Notable Items (post tax)
123
173
874
1,495
2,937
Net profit attributable to owners of WBC (adjusted for RSP
dividends) excluding Notable Items
7,106
7,363
6,565
6,951
5,225
ROE (excluding Notable Items) and ROTE (excluding Notable Items)
$m
2024
2023
2022
2021
2020
Net profit attributable to owners of WBC (adjusted for RSP
dividends) excluding Notable Items
7,106
7,363
6,565
6,951
5,225
Average ordinary equity
71,493
71,229
70,268
70,849
68,014
Average tangible ordinary equity
63,415
63,117
62,078
61,900
58,421
Return on average ordinary equity (excluding Notable Items)
9.94%
10.34%
9.34%
9.81%
7.68%
Return on average tangible ordinary equity (excluding
Notable Items)
11.21%
11.67%
10.58%
11.23%
8.94%
294
WESTPAC 2024 ANNUAL REPORT
ADDITIONAL INFORMATION
Additional information for Non-AAS financial measures (Continued)
Pre-provision profit
$m
2024
2023
2022
Net interest income
18,753
18,317
17,161
Non-interest income
2,835
3,328
2,445
Operating expenses
(10,944)
(10,692)
(10,802)
Pre-provision profit
10,644
10,953
8,804
Dividend payout ratio (excluding Notable Items)
$m
2024
2023
2022
Ordinary dividend paid/declared on issued shares (net of Treasury shares)
5,210
4,975
4,370
divided by: Net profit attributable to owners of WBC (adjusted for RSP dividends) excluding
Notable Items
7,106
7,363
6,565
Dividend payout ratio (excluding Notable Items)a
73.32%
67.57%
66.57%
a.
Dividend used in calculation not subjected to rounding.
Segment pre-provision profit excluding Notable Items
$m
Consumer
Business & Wealth
Westpac
Institutional Bank
Westpac
New Zealand
(A$)
Group
Businesses
Group
2024
Pre-provision profit/(loss)
3,373
3,510
2,040
1,375
346
10,644
Add/(less): Notable Items
-
-
-
8
167
175
Pre-provision profit/(loss)
excluding Notable Items
3,373
3,510
2,040
1,383
513
10,819
2023
Pre-provision profit/(loss)
3,966
3,225
1,962
1,362
438
10,953
Add/(less): Notable Items
202
152
15
9
(21)
357
Pre-provision profit/(loss)
excluding Notable Items
4,168
3,377
1,977
1,371
417
11,310
2022
Pre-provision profit/(loss)
4,553
1,929
1,323
1,434
(435)
8,804
Add/(less): Notable Items
66
14
-
(120)
960
920
Pre-provision profit/(loss)
excluding Notable Items
4,619
1,943
1,323
1,314
525
9,724
Earnings per ordinary share (ex Notable Items)
2024
2023
2022
Basic
Diluted
Basic
Diluted
Basic
Diluted
Net profit attributable to
owners of WBC (adjusted for
RSP dividends) ($m)
6,983
7,466
7,190
7,595
5,691
5,927
Add/(less): Notable
Items ($m)
123
123
173
173
874
874
Adjusted net profit
attributable to owners of
WBC (adjusted for RSP
dividends) (excluding Notable
Items) ($m)
7,106
7,589
7,363
7,768
6,565
6,801
Adjusted weighted average
number of ordinary shares
3,476
3,895
3,502
3,891
3,559
3,889
Earnings per ordinary
share (excluding Notable
Items) (cents)
204.4
194.8
210.3
199.6
184.5
174.9
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295
Other Westpac business information
Property
Occupied premises are primarily in Australia, New Zealand and Pacific including 762 branches (2023: 786) as at
30 September 2024. This includes 111 (2023: 82) co-located branches in Australia which support multiple brands.
With the exception of 2 freehold branches, all retail premises occupied in Australia and New Zealand are held under
commercial leases with terms generally ranging between 12 months and 7 years. The carrying value of our directly
owned Corporate and Retail premises and sites was $45 million (2023: $61 million).
Head office is located at Westpac Place, 275 Kent Street, Sydney with leases over levels 1-23, allowing continued
occupation until 2030. There is also a lease over levels 1-28 of International Tower 2, Barangaroo, Sydney until 2030,
of which 9 floors are sublet. Together these sites provide a current capacity for approximately 16,500 staff on a hybrid
working basis.
In the Sydney metropolitan area, the lease commitment for the corporate office at Kogarah expires in 2034 and provides
capacity for approximately 2,000 staff on a hybrid working basis. The lease for 8 levels at 8 Parramatta Square,
Parramatta provides capacity for approximately 3,000 staff on a hybrid working basis.
In Melbourne, there is a lease over the majority of 150 Collins Street until 2033, providing capacity for approximately
2,000 staff.
Westpac on Takutai Square is New Zealand’s head office, located at the eastern end of Britomart Precinct near Customs
Street in Auckland, contains 26,710 square metres of office space across three buildings. Lease commitment at this site
extends to 2031, with two six-year options (for two buildings) and one six-year option to extend on the third building.
Significant long-term agreements
We have no individual contracts, other than contracts entered into in the ordinary course of business, that would
constitute a material contract.
Related party disclosures
Details of our related party disclosures are set out in Note 34 to the financial statements and details of Directors’
interests in securities are set out in the Remuneration Report (page 68) included in the Directors’ Report.
Other than as disclosed in Note 34 to the financial statements and the Remuneration Report (page 68), if applicable,
loans made to parties related to Directors and other key management personnel of Westpac are made in the ordinary
course of business on normal terms and conditions (including interest rates and collateral). Loans are made on the same
terms and conditions (including interest rates and collateral) as they apply to other employees and certain customers in
accordance with established policy. These loans do not involve more than the normal risk of collectability or present any
other unfavourable features.
Auditor’s remuneration
Auditor’s remuneration, to the external auditor for the years ended 30 September 2024 and 2023 is provided in Note 33
to the financial statements.
Audit related services
Westpac’s Group Finance function monitors the application of the pre-approval process in respect of audit, audit-related
and non-audit services provided by PricewaterhouseCoopers (PwC) under Westpac’s Pre-Approval of Engagement of
PricewaterhouseCoopers for Audit or Non-Audit Services Policy (‘Pre-Approval Policy’).
Group Finance promptly brings to the attention of the Board Audit Committee any exceptions that need to be approved
pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
The Pre-Approval Policy is communicated to Westpac’s divisions through publication on the Westpac intranet.
During the year ended 30 September 2024, there were no fees paid by Westpac to PwC that required approval by the
Board Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
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ADDITIONAL INFORMATION
Other Westpac business information (Continued)
Westpac debt programs and issuing shelves
Access in a timely and flexible manner to a diverse range of debt markets and investors is provided by the following
programs and issuing shelves as at 30 September 2024:
Program Limit
Issuer(s)
Program/Issuing Shelf Type
Australia
No limit
WBC
Debt Issuance Program
No limit
WBC
Capital Notes Program
New Zealand
No limit
WNZL
Medium Term Note Program
Euro Market
No limit
WBC
Euro Commercial Paper and Certificate of Deposit Program
USD 20 billion
WNZL
Euro Commercial Paper and Certificate of Deposit Program
USD 70 billion
WBC
Euro Medium Term Note Program
USD 10 billion
WSNZLa
Euro Medium Term Note Program
USD 40 billion
WBCb
Global Covered Bond Program
EUR 5 billion
WSNZLc
Global Covered Bond Program
Japan
JPY 750 billion
WBC
Samurai shelf
JPY 750 billion
WBC
Uridashi shelf
United States
USD 45 billion
WBC
US Commercial Paper Program
USD 10 billion
WSNZLa
US Commercial Paper Program
USD 35 billion
WBC
US Medium Term Note Program
USD 10 billion
WNZL
US Medium Term Note Program
No limit
WBC (NY Branch)
Certificate of Deposit Program
No limit
WBC
US Securities and Exchange Commission registered shelves
a.
Notes issued under this program by Westpac Securities NZ Limited, London branch are guaranteed by Westpac New Zealand Limited, its
parent company.
b.
Notes issued under this program are guaranteed by BNY Trust Company of Australia Limited as trustee of the Westpac Covered Bond Trust.
c.
Notes issued under this program by Westpac Securities NZ Limited, London branch are guaranteed by Westpac New Zealand Limited, its
parent company, and Westpac NZ Covered Bond Limited.
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Useful information
Key sources of information for shareholders
We report our full year performance to shareholders, in
late October or early November, in the following forms: an
Annual Report; a Climate Report; an Investor Discussion
Pack and earnings releases.
Electronic communications
Shareholders can elect to receive the following
communications electronically:
•
Annual Report;
•
Dividend statements when paid by direct credit or via
Westpac’s Dividend Reinvestment Plan (DRP);
•
Notices of Meetings and proxy forms; and
•
Major company announcements.
Opt for electronic communications by logging
into Westpac’s Share Registrar’s Investor Centre
at www.linkmarketservices.com.au.
Online information
Australia
Westpac’s website www.westpac.com.au provides
information for shareholders and customers, including:
•
access to internet banking and online
investing services;
•
details on Westpac’s products and services;
•
company history, results, market releases and
news; and
•
corporate responsibility and Westpac in the
community activities.
New Zealand
Westpac’s New Zealand website
www.westpac.co.nz provides:
•
access to internet banking services;
•
details on products and services;
•
economic updates, news and information, key financial
results; and
•
sponsorships and other community activities.
Stock exchange listings
Westpac ordinary shares are listed on:
•
Australian Securities Exchange (code WBC);
•
New Zealand Exchange Limited (code WBC).
We do not sponsor or endorse and are not affiliated in any
way with trading in our equity securities in any market or
under any facility other than direct trading in our ordinary
shares listed on the Australian Securities Exchange and
New Zealand Exchange Limited.
Westpac Investor Relations
Investors can access the Investor Centre at
www.westpac.com.au/investorcentre. The Investor Centre
includes the current Westpac share price and links to the
latest ASX announcements.
Information other than that relating to your shareholding
can be obtained from:
•
Westpac Investor Relations
275 Kent Street
Sydney NSW 2000 Australia
Telephone: +61 2 9178 2977
Email: investorrelations@westpac.com.au
Westpac sustainability
For further information on Westpac’s sustainability
approach, policies and performance please visit
westpac.com.au/sustainability
Email: sustainability@westpac.com.au
Share registrars
Shareholders can check and update their information in
Westpac’s Share Registrars’ online Investor Centres, see
details below. In Australia, broker sponsored holders must
contact their broker to amend their address.
Australia – Ordinary shares on the main register, Westpac
Capital Notes 5, Westpac Capital Notes 7, Westpac Capital
Notes 8, Westpac Capital Notes 9 and Westpac Capital
Notes 10.
Link Market Services Limited1
Level 12, 680 George Street
Sydney NSW 2000
Postal address:
Locked Bag A6015,
Sydney South NSW 1235, Australia
www.linkmarketservices.com.au
Shareholder enquiries:
Telephone: 1800 804 255 (toll free within Australia)
International: +61 1800 804 255
Facsimile: +61 2 9287 0303
Email: westpac@linkmarketservices.com.au
New Zealand – Ordinary shares
Link Market Services Limited
Level 30 PwC Tower
15 Customs Street West
Auckland 1010, New Zealand
Postal address:
P.O. Box 91976,
Auckland 1142, New Zealand
www.linkmarketservices.co.nz
Shareholder enquiries:
Telephone: 0800 002 727 (toll free within New Zealand)
International: +64 9 375 5998
Facsimile: +64 9 375 5990
Email: enquiries@linkmarketservices.co.nz
1.
On 16 May 2024, Link Group was acquired by Mitsubishi UFJ Trust & Banking Corporation. Link Group is now known as MUFG Pension & Market
Services. Over the coming months, our registry, Link Market Services Limited will progressively change to MUFG Corporate Markets and will
rebrand websites, documentation, and emails you receive as a shareholder. While the name may be changing, we do not expect any material
changes to how you interact with the registry.
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GLOSSARY OF ABBREVIATIONS AND DEFINED TERMS
Shareholder value
Average ordinary equity
Average total equity less average non-controlling interests.
Average tangible ordinary equity
Average ordinary equity less intangible assets (excluding capitalised software).
Average total equity
The average balance of shareholders’ equity, including non-controlling interests.
Dividend payout ratio
Current period ordinary dividend paid/declared on issued shares (net of Treasury shares) divided by the net
profit attributable to owners of WBC (adjusted for RSP dividends).
Earnings per ordinary share
•
Basic earnings per ordinary share 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, adjusted for
treasury shares.
•
Diluted earnings per ordinary share is calculated by adjusting the basic earnings per ordinary share by
assuming all dilutive potential ordinary shares are converted.
Fully franked dividends per
ordinary share (cents)
Dividends paid out of retained profits which carry a credit for Australian company income tax paid
by Westpac.
Net tangible assets per share
Net tangible assets (total equity less goodwill and other intangible assets less non-controlling interests)
divided by the number of ordinary shares on issue (less Treasury shares held).
Pre-provision profit
Net interest income plus non-interest income less operating expenses.
Return on average ordinary
equity (ROE)
Net profit attributable to the owners of WBC adjusted for RSP dividends (annualised where applicable)
divided by average ordinary equity.
Return on average tangible
ordinary equity (ROTE)
Net profit attributable to the owners of WBC adjusted for RSP dividends (annualised where applicable)
divided by average tangible ordinary equity.
Weighted average ordinary shares
Weighted average number of fully paid ordinary shares listed on the Australian Stock Exchange for the
relevant period less Westpac shares held by Westpac (‘Treasury shares’).
Productivity and efficiency
Expense to income ratio
Operating expenses divided by net operating income.
Expense to income ratio (ex
Notable Items)
Operating expenses excluding Notable Items divided by net operating income excluding Notable Items.
Full time equivalent
employees (FTE)
A calculation based on the number of hours worked by full and part-time employees as part of their normal
duties. For example, the full time equivalent of one FTE is 76 hours paid work per fortnight.
Revenue per FTE
Total operating income divided by the average number of FTE for the period.
Business Performance
Average
Where possible, daily balances are used to calculate the average balance for the period.
Average interest bearing liabilities
The average balance of liabilities owed by Westpac that incur an interest expense. Where possible, daily
balances are used to calculate the average balance for the period.
Average interest earning assets
The average balance of assets held by Westpac that generate interest income. Where possible, daily
balances are used to calculate the average balance for the period.
Core NIM
Calculated by dividing net interest income excluding Notable Items and Treasury & Markets (annualised
where applicable) by average interest earning assets.
Group NIM/Net interest margin
Calculated by dividing net interest income (annualised where applicable) by average interest earning assets.
Net profit
Net profit attributable to owners of WBC.
TSR
Total shareholder return.
Capital Adequacy
Australian Prudential Regulation
Authority (APRA) leverage ratio
Tier 1 capital divided by ‘exposure measure’ and expressed as a percentage. ‘Exposure measure’ is the sum
of on balance sheet exposures, derivative exposures, securities financing transaction (SFT) exposures and
non-market related off balance sheet exposures.
Common equity tier 1 (CET1)
capital ratio
Total common equity capital divided by risk weighted assets, as defined by APRA.
Internationally comparable
capital ratios
Internationally comparable methodology references the ABA study on the comparability of APRA’s capital
framework released on 10 March 2023.
Risk weighted assets (RWA)
Assets (both on and off-balance sheet) are risk weighted according to each asset’s inherent potential for
default and what the likely losses would be in case of default. In the case of non-asset backed risks (i.e.
market, IRRBB and operational risk), RWA is determined by multiplying the capital requirements for those
risks by 12.5.
Credit risk weighted assets
(Credit RWA)
Credit risk weighted assets represent risk weighted assets (on-balance sheet and off-balance sheet) that
relate to credit exposures and therefore exclude market risk, operational risk, IRRBB and other assets.
Business lending
Includes credit exposures not captured elsewhere, and where the borrower’s annual turnover is below
$75 million.
Corporate
Exposures to corporate borrowers that do not fall within the definition of Large Corporate, Property
Finance, Specialised Lending, Business Lending or Small Business exposures.
Financial institution
Includes exposure to entities whose primary dealings relates to management of financial assets, lending,
factoring, leasing provision of credit enhancements, securitisation, investments, financial custody, central
counter party services and proprietary trading.
Large corporate
Exposures to counter parties with consolidated annual revenue (of the counterparty or group that the
counter party consolidates into) exceeding $750 million.
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Capital Adequacy
New Zealand
Overseas banking subsidiary regulated by the RBNZ.
Property finance
Exposures to borrowers where repayments depend primarily on the cash flows generated by the property or
other real estate assets owned by the borrower.
Securitisation
Exposures relating to Westpac’s involvement in securitisation activities range from a seller of its own assets
to an investor in third party transactions and include the provision of securitisation services for its clients.
Small business
Program-managed business exposures typically below $1.5 million in value. Program-managed exposures are
managed on a statistical basis according to pre-determined objective criteria.
Sovereign
Exposures to Australian and overseas central and sub-national governments, and central banks.
Specialised lending
Includes exposures to project and object finance lending. Project finance and object finance rely primarily
on the revenues generated by a project, or equipment asset respectively, both as a source of repayment and
as security for the loan. Excludes Property Finance exposures.
Operational risk
The risk of loss resulting from inadequate or failed internal processes, people and systems or from external
events, including legal risk but excluding strategic or reputational risk.
Tier 1 capital ratio
Total Tier 1 capital divided by risk weighted assets, as defined by APRA.
Total regulatory capital ratio
Total regulatory capital divided by risk weighted assets, as defined by APRA.
Funding and liquidity
Committed Liquidity Facility (CLF)
Facility made available by the RBA to cover the shortfall in Australian dollars between the ADI's holding
of HQLA and net cash outflows, subject to qualifying conditions. The facility was phased out by 1 January
2023. The CLF was treated as an ALA for Westpac's LCR calculation.
Deposit to loan ratio
Customer deposits divided by net loans.
Funding for Lending
Programme (FLP)
A facility that was established by the RBNZ in December 2020 to provide 3 year term funding to eligible
New Zealand institutions via repurchase transactions, subject to qualifying conditions, to help support
lending to New Zealand customers. The facility closed to new draw downs in December 2022.
High Quality Liquid Assets (HQLA)
Assets which meet APRA’s criteria for inclusion as HQLA in the numerator of the LCR.
Liquid assets
HQLA and non LCR qualifying liquid assets, but excludes internally securitised assets that are eligible for a
repurchase agreement with the RBA and the RBNZ.
Liquidity Coverage Ratio (LCR)
An APRA requirement to maintain an adequate level of unencumbered high quality liquid assets, to meet
liquidity needs for a 30 calendar day period under an APRA-defined severe stress scenario. Absent a
situation of financial stress, the value of the LCR must not be less than 100%. LCR is calculated as the
percentage ratio of stock of HQLA, and qualifying RBNZ securities over the total net cash out-flows in a
modelled 30 day defined stressed scenario.
Net Stable Funding Ratio (NSFR)
The NSFR is defined as the ratio of the amount of available stable funding (ASF) to the amount of required
stable funding (RSF) defined by APRA. The amount of ASF is the portion of an ADI’s capital and liabilities
expected to be a reliable source of funds over a one year time horizon. The amount of RSF is a function of
the liquidity characteristics and residual maturities of an ADI’s assets and off-balance sheet activities. ADIs
must maintain an NSFR of at least 100%.
Term Funding Facility (TFF)
A facility that was established by the RBA in March 2020 to provide 3 year term funding to Australian
ADIs via repurchase transactions, subject to qualifying conditions, to help support lending to Australian
businesses. The facility closed to new draw downs in June 2021.
Term funding from central banks
Term funding from central banks includes the drawn balances of the RBA TFF and the RBNZ FLP and Term
Lending Facility.
Wholesale funding
Wholesale funding includes debt issues, loan capital, certificates of deposit, term funding from central banks
and interbank placements.
Credit quality
Collectively assessed
provisions (CAPs)
Collectively assessed provisions for expected credit loss under AASB 9 represent the Expected Credit
Loss (ECL) which is collectively assessed in pools of similar assets with similar risk characteristics. This
incorporates forward-looking information and does not require an actual loss event to have occurred for an
impairment provision to be recognised.
Default
Credit exposures that are non-performing.
Exposure at default (EAD)
The estimated outstanding amount of credit exposure at the time of the default.
Gross impaired exposures
provisions to gross
impaired exposures
Impairment provisions relating to impaired exposures include individually assessed provisions plus the
proportion of the collectively assessed provisions that relate to impaired exposures.
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GLOSSARY OF ABBREVIATIONS AND DEFINED TERMS
Credit quality
Impaired exposures
Includes exposures that have deteriorated to the point where full collection of interest and principal is in
doubt, based on an assessment of the customer’s outlook, cash flow, and the net realisation of value of
assets to which recourse is held:
•
Facilities 90 days or more past due, and full recovery is in doubt: exposures where contractual payments
are 90 or more days in arrears and the net realisable value of assets to which recourse is held
may not be sufficient to allow full collection of interest and principal, including overdrafts or other
revolving facilities that remain continuously outside approved limits by material amounts for 90 or more
calendar days;
•
Non-accrual facilities: exposures with individually assessed impairment provisions held against them,
excluding restructured loans;
•
Restructured facilities: exposures where the original contractual terms have been formally modified
to provide for concessions of interest or principal for reasons related to the financial difficulties of
the customer;
•
Other assets acquired through security enforcement (includes other real estate owned): includes the
value of any other assets acquired as full or partial settlement of outstanding obligations through the
enforcement of security arrangements; or
•
Any other facilities where the full collection of interest and principal is in doubt.
Impairment charges/(benefit) to
average loans
Calculated as impairment charges (annualised where applicable) divided by average gross loans.
Individually assessed
provisions (IAPs)
Provisions raised for losses on loans that are known to be impaired and are assessed on an individual basis.
The estimated losses on these impaired loans is based on expected future cash flows discounted to their
present value and, as this discount unwinds, interest will be recognised in the income statement.
Loss given default (LGD)
The loss that is expected to arise in the event of a default.
Non-performing not
impaired exposures
Includes those credit exposures that are in default, but where it is expected that the full value of principal
and accrued interest can be collected, generally by reference to the value of security held.
Performing exposures
Credit exposures that are not non-performing.
Probability of default (PD)
The probability that a counter party will default.
Provision for expected credit
losses (ECL)
Expected credit losses (ECL) are a probability-weighted estimate of the cash shortfalls expected to result
from defaults over the relevant time frame. They are determined by evaluating a range of possible outcomes
and taking into account the time value of money, past events, current conditions and forecasts of future
economic conditions.
Stage 1: 12 months ECL
- performing
For financial assets where there has been no significant increase in credit risk since origination a provision
for 12 months expected credit losses is recognised. Interest revenue is calculated on the gross carrying
amount of the financial asset.
Stage 2: Lifetime ECL - 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 expected losses is recognised. Interest revenue is calculated
on the gross carrying amount of the financial asset.
Stage 3: Lifetime ECL - non-
performing
For financial assets that are non-performing a provision for lifetime expected losses is recognised.
Interest revenue is calculated on the carrying amount net of the provision for ECL rather than the gross
carrying amount.
Stressed exposures
Watchlist and substandard credit exposures plus non-performing exposures.
Total committed exposure (TCE)
Represents the sum of the committed portion of direct lending (including funds placement overall and
deposits placed), contingent and pre-settlement risk plus the committed portion of secondary market
trading and underwriting risk.
Watchlist and substandard
Loan facilities where customers are experiencing operating weakness and financial difficulty but are not
expected to incur loss of interest or principal.
Sustainability
ESG
Environment, social and governance
FPIC
Free, Prior and Informed Consent
NZBA
Net-Zero Banking Alliance
OHI
Organisational Health Index
RAP
Reconciliation Action Plan
TNFD
Taskforce on Nature-related Financial Disclosures
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Other
AAS
Australian Accounting Standards
AASB
Australian Accounting Standards Board
ABA
Australian Banking Association
ACCC
Australian Competition and Consumer Commission
ADI
Authorised Deposit-taking Institution
AGM
Annual General Meeting
AI
Artificial intelligence
ALM
Asset and Liability Management
APRA
Australian Prudential Regulation Authority
APS
Australian Prudential Standard
ASIC
Australian Securities and Investments Commission
ASX
Australian Securities Exchange
ATM
Automated Teller Machine
ATO
Australian Taxation Office
AUSTRAC
Australian Transaction Reports and Analysis Centre
BBSW
Bank bill swap rate
BCCC
The Banking Code Compliance Committee
bps
Basis points
CORE program
Customer Outcomes and Risk Excellence
Credit Value Adjustment (CVA)
CVA adjusts the fair value of over-the-counter derivatives for credit risk. CVA is employed on the majority
of derivative positions and reflects the market view of the counterparty credit risk. A Debit Valuation
Adjustment is employed to adjust for our own credit risk.
CTF
Counter-terrorism financing
Derivative Valuation
Adjustment (DVA)
DVA includes CVA and FVA.
DRP
Dividend Reinvestment Plan
D-SIB
Domestic systemically important bank
EIP
Executive incentive plan
FATCA
Foreign Account Tax Compliance Act
First Half 2024 (1H24)
Six months ended 31 March 2024
Full Year 2023 (FY23)
Twelve months ended 30 September 2023
Full Year 2024 (FY24)
Twelve months ended 30 September 2024
Funding Value Adjustment (FVA)
FVA relates to the funding cost or benefit associated with the uncollateralised portion of the
derivative portfolio.
FVIS
Fair value through income statement
FVOCI
Fair value through other comprehensive income
FX
Foreign exchange
IASB
International Accounting Standards Board
IFRS
International Financial Reporting Standards
IRRBB
Interest Rate Risk in the Banking Book
LCH
London Clearing House
LTVR
Long term variable reward
NCI
Non-controlling interests
Non-interest earning/bearing
Instruments which do not carry an entitlement to interest
NPS
Net promoter score
OAIC
The Office of the Australian Information Commissioner
OCI
Other comprehensive income
OHI
Organisational Health Index
OTC
Over the counter
Prior period
Refers to the twelve months ended 30 September 2023
RBA
Reserve Bank of Australia
RBNZ
Reserve Bank of New Zealand
RSP
Restricted Share Plan
Runoff
Scheduled and unscheduled repayments and debt repayments, net of redraws
Second Half 2024 (2H24)
Six months ended 30 September 2024
Segment reporting
Segment reporting is presented on a management reporting basis. Internal charges and transfer pricing
adjustments are included in the performance of each segment reflecting the management structure
rather than the legal entity (these results cannot be compared to results for individual legal entities).
Where management reporting structures or accounting classifications have changed, financial results for
comparative periods have been restated and may differ from results previously reported. Overhead costs are
allocated to revenue generating segments.
Westpac’s internal transfer pricing frameworks facilitate risk transfer, profitability measurement, capital
allocation and segment alignment, tailored to the jurisdictions in which Westpac operates. Transfer pricing
allows Westpac to measure the relative contribution of products and segments to Westpac’s interest margin
and other dimensions of performance. Key components of Westpac’s transfer pricing frameworks are funds
transfer pricing for interest rate and liquidity risk and allocation of basis and contingent liquidity costs,
including capital allocation.
SPPI
Solely payments of principal and interest
STVR
Short term variable reward
UNITE program
A business-led, technology-enabled simplification program
Value at Risk (VaR)
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.
WIB
Westpac Institutional Bank
WNZL
Westpac New Zealand Limited
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CONTACT US
Westpac Head Office
275 Kent Street,
Sydney NSW 2000 Australia
Tel: +61 2 9155 7713
International payments Tel: +61 2 9155 7700
Website: westpac.com.au/westpacgroup
Westpac
Consumer - Tel: 132 032
Business - Tel: 132 142
From outside Australia: +61 2 9155 7700
Website: westpac.com.au
St.George Bank
St.George House
4-16 Montgomery Street
Kogarah NSW 2217 Australia
Mail: Locked Bag 1
Kogarah NSW 1485 Australia
Tel: 13 33 30
website: stgeorge.com.au
Bank of Melbourne
150 Collins Street
Melbourne VIC 3000 Australia
Tel: 13 22 66
From outside Australia: +61 3 8536 7870
Website: bankofmelbourne.com.au
BankSA
Level 8, 97 King William Street,
Adelaide SA 5000 Australia
Mail: GPO Box 399,
Adelaide SA 5001 Australia
Tel: 13 13 76
From outside Australia: +61 2 9155 7850
Website: banksa.com.au
RAMS
RAMS Financial Group Pty Ltd
International Towers
Tower 2, Level 19, 200 Barangaroo Avenue
Barangaroo NSW 2000 Australia
Mail: GPO Box 4008,
Sydney NSW 2001 Australia
Tel: +61 2 8218 7000
Email: communications@rams.com.au
Website: rams.com.au
BT
Level 8, Tower Two, International Towers
200 Barangaroo Avenue
Barangaroo NSW 2000 Australia
Mail: GPO Box 2861
Adelaide SA 5001
Tel: 1300 881 716
From outside Australia: +61 2 9155 4030
Email: support@panorama.com.au
Website: bt.com.au
Westpac Institutional Bank
Tel: 132 032
Website: westpac.com.au
Westpac NZ Limited
Westpac On Takutai Square
16 Takutai Square
Auckland 1010, New Zealand
Tel: +64 9 912 8000
Email: customer_support@westpac.co.nz
Website: westpac.co.nz
Global locations
Fiji
Germany
Papua New Guinea
Republic of Singapore
United States of America
United Kingdom
See our website at westpac.com.au for the contact
details of our global locations.
Share Registrar
Link Market Services Limited
Level 12, 680 George Street
Sydney NSW 2000 Australia
Mail: Locked Bag A6015, Sydney South NSW 1235
Tel: 1800 804 255
Facsimile: +61 2 9287 0303
Email: westpac@linkmarketservices.com.au
Website: linkmarketservices.com.au
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The 2024 Westpac Annual Report is printed
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