Westpac Banking Corporation · ASX:WBC
Westpac Banking — Debt Investor Presentation (November 2017)
36 slides from Westpac Banking's debt investor presentation, November 2017
Slide 1: Euro Green Bond Debt Investor Update
200 years proudly supporting Australia Euro Green Bond Debt Investor Update European Investor Roadshow November 2017 Dow Jones Sustainability Indices Number one bank globally in 2017, for the 4th year in a row and the 10th time since the index was established Westpac Banking Corporation ABN 33 007 4
Slide 2: Disclaimer
Disclaimer 2 The material contained in this presentation is intended to be general background information on Westpac Banking Corporation (“Westpac”) (ABN 33 007 457 141) and its activities. It should not be reproduced, distributed or transmitted to any person without the consent of Westpac and is no
Slide 3: Westpac: clear domestic focus and a strong market position
Westpac: clear domestic focus and a strong market position 3 Unique portfolio of national and regional brands Large domestic presence Top 10 banks in Australia by total resident assets1 (A$bn) Australian retail banking and wealth Westpac CBA NAB ANZ Macquarie Bank Bendigo and Adelaide Bank Suncorp-M
Slide 4: Full Year 2017 financial performance
Full Year 2017 financial performance 4 % Change FY17 Reported Results FY17 FY17-FY16 Capital ratios (%) Balance sheet ratios (%) Financial results (A$m) 21.1 16.2 124 Net operating income 21,802 4 109 10.6 100 100 Expenses (9,434) 2 6.3 Net profit before impairment charges and 12,368 5 Leverage reg.
Slide 5: Westpac capital levels 'unquestionably strong'
Westpac capital levels ‘unquestionably strong’ 5 CET1 capital ratio (%) and CET1 capital ($bn) (APRA basis) Key capital ratios (%) Westpac CET1 capital (lhs, $bn) APRA Level 2 basis Sep-16 Mar-17 Sep-17 APRA’s unquestionably Westpac CET1 capital ratio (rhs, %) strong benchmark 10.5%, under the curre
Slide 6: Well placed on internationally comparable CET1 and leverage ratios
Well placed on internationally comparable CET1 and leverage ratios 6 Common equity Tier 1 ratio (%) 25% 20% 16.20% 15% 10% 5% 0% Lloyds Credit Suisse Barclays Scotiabank Westpac Deutsche Bank Nordea Natixis BBVA CBA RBS Unicredit BNP Paribas Wells Fargo ANZ Rabobank NAB HSBC Mizuho FG Bank of Americ
Slide 7: Well positioned for NSFR on 1 January 2018
Well positioned for NSFR on 1 January 2018 7 Liquidity coverage ratio ($bn and %) Liquidity coverage ratio (%) Unencumbered liquid assets ($bn) Committed Liquidity Facility ($bn) Self securitisation Sep-16 Mar-17 Sep-17 HQLA ($bn) Private securities 5 and deposits with other banks HQLA1 69.4 73.6 71
Slide 8: New term issuance well diversified
New term issuance well diversified 8 FY17 new term issuance composition1 (%) By type By investor location2 By currency By tenor3,4 30 22 3 43 18 9 4 5 1 2 4 12 8 8 28 49 66 21 30 17 19 0.3 Senior Unsecured Covered Bonds Asia Australia & NZ AUD USD EUR 1 Year 2 Years 3 Years Securitisation Hybrid Eur
Slide 9: Impaired assets and stressed assets lower
Impaired assets and stressed assets lower 9 Stressed exposures as a % of TCE (%) New and increased gross impaired assets ($m) Watchlist & substandard 1,748 90+ day past due and not impaired 1,519 1,343 1,218 1,194 Impaired 3.20 1,060 997 1,078 3.09 958 708 609 607 633 589 477 440 Lower stress reflec
Slide 10: Sustainability – Environmental, Social and Governance at Westpac
200 years proudly supporting Australia Sustainability – Environmental, Social and Governance at Westpac Westpac Banking Corporation ABN 33 007 457 141
Slide 11: Overview
Overview 11 Fifteen years ago Westpac set out its first sustainability strategy outlining the bank’s position on the responsibility of business, with the vision that every generation should live better than the last Part of doing business at Westpac Strategic priorities Track record Significant achi
Slide 12: In 2013, we set out a five-year sustainability strategy
In 2013, we set out a five-year strategy stating our vision, strategic priorities and priorities for a sustainable future 12 Westpac Group Fixed Income Presentation I November 2017 I Euro Climate Bond Roadshow
Slide 13: Progress on our Strategy
Progress on our Strategy 13 Embracing Environmental Better societal change solutions financial futures Helping improve the way people work Helping find solutions to Helping customers to have a better relationship and live, as our society changes environmental challenges with money, for a better life
Slide 14: Alignment to the UN Sustainable Development Goals
Alignment to the UN Sustainable Development Goals 14 Overview Alignment to the Sustainable Development Goals • In 2016, building on our • Conduct and culture earlier mapping of Conduct • Changing regulatory landscape Westpac activities to the and Trust • Financial and economic performance • Governan
Slide 15: Sustainability governance framework
Sustainability governance framework 15 Westpac Board Westpac Westpac Stakeholder New Zealand Advisory Council Executive Team External Stakeholder Panel Westpac Group Inclusion Westpac New Zealand Sustainable Westpac Westpac Group Sustainability Council and Diversity Council Business Steering Committ
Slide 16: Westpac's framework for managing ESG risks…
Westpac’s framework for managing ESG risks… 16 Westpac’s approach to environmental, social, and governance Governance and oversight forums for the ongoing assessment of companies and projects management of environmental challenges Group-wide sustainability performance is reported to the • A Board-ap
Slide 17: …which we continue to update
…which we continue to update 17 • Westpac continues to update the Group’s Climate change Human rights Reconciliation sustainability governance frameworks responding to material sustainability topics, both issues and opportunities, including: Climate Change Position Statement and 2020 Action Plan
Slide 18: Westpac Climate Change Position Statement and 2020 Action Plan
Westpac Climate Change Position Statement and 2020 Action Plan 18 Westpac was the first Australian bank to recognise the importance of limiting global warming to two degrees Westpac’s Approach Our Our 2020 to Climate Change Principles Action Plan The Westpac Group has long recognised The following f
Slide 19: Our 2020 Action Plan
Our 2020 Action Plan 19 Provide finance to back climate change solutions 1 Increase our target lending exposure to climate change solutions to $10 billion by 2020 and $25 billion by 2030 Facilitate up to $3 billion in climate change solutions by 2020, e.g. Climate Bond issuance and arrangement Suppo
Slide 20: Provide finance to back climate change solutions
Provide finance to back climate change solutions 20 CleanTech and environmental Group mining portfolio to total services exposure ($bn) lending TCE (%) • In our role as a financial intermediary we 7.0 act as a market facilitator and partner to 6.7 1 6.3 Total Group lending existing and new customers
Slide 21: Supporting the transition to a 2 degree economy
Supporting the transition to a 2 degree economy 21 • The proportion of renewable energy Westpac Group electricity Westpac Group electricity financing in our total electricity generation generation – Aust. & NZ (%)1 generation exposure (%)1 portfolio has increased from 45% in 2011 to 2 1 66% in 2017
Slide 22: Well recognised performance and achievements
Well recognised performance and achievements 22 Extra-Financing Ratings Awarded Gold Class ranking Achieved a Prime status rating Recognised in the 2017 CDP Reconfirmed as a constituent of Achieved highest “Leading” rating for in RobecoSAM’s 2017 and identified as a leading to achieve Leadership lev
Slide 23: Westpac's key international initiatives, commitments and partnerships
Westpac’s key international initiatives, commitments and partnerships 23 UN Sustainable United Nations The Equator Principles UN Environment Program UN Principles for Development Goals Global Compact Founding Adopter Finance Initiative Responsible Investment Signatory (2002) CEO Statement of Global
Slide 24: Westpac Climate Bond
200 years proudly supporting Australia Westpac Climate Bond Westpac Banking Corporation ABN 33 007 457 141
Slide 25: Westpac Climate Bond: a strong fit to our 2020 Action Plan
Westpac Climate Bond: a strong fit to our 2020 Action Plan 25 Use of proceeds Selection of assets Management of Proceeds Reporting Why issue Climate Bonds? Climate Bond Framework in accordance with GBP and CBI • To provide financing for technologies and practices that are consistent with the investm
Slide 26: Use of Proceeds
Use of Proceeds 26 Use of proceeds Selection of assets Management of Proceeds Reporting • The net proceeds will be used to fund Eligible Green Projects that meet the requirements of the Climate Bond Initiative’s Climate Bonds Standard (V2.1) in all material respects, are fully aligned with the Green
Slide 27: Selection of Assets
Selection of Assets 27 Use of proceeds Selection of assets Management of Proceeds Reporting • Projects must first comply with Westpac Climate Change Solutions criteria and all lending and investment decisions must also include a Social and Environmental Assessment (SEA) that satisfies local social a
Slide 28: Selection of Assets – Climate Bond asset pool
Selection of Assets – Climate Bond asset pool 28 Use of proceeds Selection of assets Management of Proceeds Reporting Climate Bond Pool Aggregate Statistics by Sector Customer State Sector UN SDG Oaklands Hill Wind Farm VIC Renewable Energy Projects 7, 13 AUD 179m Hallett 4 Wind Farm SA Renewable En
Slide 29: Selection of Assets – Examples of eligible projects
Selection of Assets – Examples of eligible projects 29 Use of proceeds Selection of assets Management of Proceeds Reporting White Rock Wind Farm Northern New South Wales, Australia • White Rock Wind Farm is a green field renewable energy project currently being developed in the north of New South [I
Slide 30: Management of proceeds
Management of proceeds 30 Use of proceeds Selection of assets Management of Proceeds Reporting Management of Climate Bond proceeds Governance and oversight • Eligible assets will be identified for inclusion in an aggregated common pool of • Westpac has established an internal Climate Change Solution
Slide 31: Reporting – Certification and Assurance
Reporting – Certification and Assurance 31 Use of proceeds Selection of assets Management of Proceeds Reporting Independent Third Party Certification Independent Third Party Assurance • Westpac’s Climate Bonds have been certified by the Climate Bonds • Compliance with Climate Bonds Standard has been
Slide 32: Reporting – Impact Reporting
Reporting – Impact Reporting 32 www.westpac.com.au/about-westpac/investor-centre/fixed-income-investors/ Use of proceeds Selection of assets Management of Proceeds Reporting Reporting • Westpac will provide an annual use of proceeds and impact report on a single common pool of the Climate Bond asset
Slide 33: Reporting – Impact Report
Reporting – Impact Report 33 Use of proceeds Selection of assets Management of Proceeds Reporting • Renewable energy projects financed in part by Westpac Climate Bonds have, to date: Generated 2.6 million megawatt hours (MWh) of clean energy (a megawatt hour is equivalent to the amount of electric
Slide 34: More information
More information | www.westpac.com.au/investorcentre 34 + - X Contact our Global Funding team Joanne Dawson Richard Salmon Jacqueline Boddy Deputy Treasurer, Westpac Banking Corporation Director, Global Funding Director, Debt Investor Relations +61 2 8204 2777 +61 2 8253 4314 +61 2 8253 3133 joanned
Slide 35: Appendix
200 years proudly supporting Australia Appendix Westpac Banking Corporation ABN 33 007 457 141
Slide 36: References and Links
References and Links www.westpac.com.au/about-westpac/investor-centre/fixed-income-investors/Climate-Bonds/ www.westpac.com.au/about-westpac/sustainability/ www.westpac.com.au/about-westpac/sustainability/our-positions-and-perspectives/ www.westpac.com.au/about-westpac/sustainability/performance-rep
Westpac Banking — Debt Investor Presentation (November 2017) on 6ix