Westpac Banking Corporation · ASX:WBC
Westpac Banking — Debt Investor Presentation (September 2023)
22 slides from Westpac Banking's debt investor presentation, September 2023
Slide 1: Westpac Banking Corporation Fixed Income Investor Presentation
WESTPAC BANKING CORPORATION Fixed Income Investor Presentation September 2023
Slide 2: Westpac overview – strong fundamentals
Westpac overview – strong fundamentals. • Net profit after tax $4.0bn, up 22% • Return on average ordinary equity 11.3%, up 205bps Financial performance • Net interest margin 1.96%, up 5bps improved Data as at 31 March 2023 • Cost to income ratio 45.3%, down from 52.5% Comparisons to First Half 2022
Slide 3: Simpler, stronger bank
Simpler, stronger bank. Data as at 31 March 2023 unless otherwise noted. Simpler bank 9 Businesses 50 Co-located branches 1 120 applications exited decommissioned 12% 1,700+ 47% Office space reduction ATMs – Armaguard reduction in major agreement2 technology incidents Stronger foundations Design Imp
Slide 4: Loans and deposits
Loans and deposits. Data as at 31 March 2023 unless otherwise noted. Composition of gross loans (% of total) Composition of customer deposits (% of total) 4 <1 Australian mortgages 9 8 18 Australian business 29 2 10 Institutional $628bn 29 $628bn $754bn Australian other consumer 26 56 12 63 New Zeal
Slide 5: CET1 capital ratio 11.9%
CET1 capital ratio 11.9%. Above target operating range of 11.0% -11.5%. Level 2 CET1 capital ratio movements (%, bps) Key capital ratios (%) Jun-22 Mar-23 Jun-23 Level 2 CET1 capital ratio 10.8 12.3 11.9 Additional Tier 1 capital ratio 2.0 2.2 2.2 0.37 (0.53) 12.28 (0.21) Tier 1 capital ratio 12.8 1
Slide 6: Provisions and credit quality
Provisions and credit quality. Total impairment provisions1 ($m) Stressed exposures as a % of TCE Watchlist & substandard Non-performing, not impaired Impaired 4,923 5,098 1.91 4,635 4,792 647 Overlay 706 720 700 809 Stage 1 CAP 0.85 1.36 870 830 845 1.20 1.16 Stage 2 CAP 1.07 1.10 0.49 1,980 2,200
Slide 7: Australian mortgage portfolio composition
Australian mortgage portfolio composition. Australian mortgage portfolio Sep-22 Mar-23 Jun-23 Australian mortgage portfolio by product and balance balance balance repayment type (%) Total portfolio ($bn) 467.6 472.7 478.4 Sep-22 Mar-23 Jun-23 Owner occupied (OO) (%) 65.8 66.4 66.7 63 64 64 Investmen
Slide 8: Australian mortgage portfolio buffers
Australian mortgage portfolio buffers. • Equity position for existing loans remain strong: Australian home loan customers ahead on repayments2 − 0.6% of loans in negative equity, down from 0.8% at Mar-23 (% by accounts) Sep-22 Mar-23 Jun-23 − Loan-to-value ratios have improved, supported by recovery
Slide 9: Liquidity risk management
Liquidity risk management. Key metrics Details Westpac at 30 June 2023 • LCR requires banks to hold a sufficient reserve of HQLA to allow them to survive a period 138% Liquidity Coverage of significant liquidity stress lasting 30 calendar days (June 2023 Ratio (LCR) • Westpac is subject to LCR requi
Slide 10: Well managed long term wholesale funding profile
Well managed long term wholesale funding profile. • Westpac maintains well diversified issuance Term debt issuance and maturity profile1 as at 30-June ($bn) across currencies, programs and tenors Issuance Maturities • The Group’s SEC registration is a key advantage 43 in USD market access 41 32 34 3
Slide 11: Long term wholesale funding well diversified
Long term wholesale funding well diversified. FY23 YTD term debt issuance1 as at 30-June (%) By program (%) By currency (%) By tenor (%) 11 5 2 11 15 3 Senior bonds AUD 2 years Covered bonds 24 39 USD 3 years RMBS 17 EUR 55 Tier 2 capital 32 5 years GBP >5 years Other 57 29 Charts may not add due to
Slide 12: Australian and New Zealand economic forecasts
Australian and New Zealand economic forecasts. Key economic indicators (%) 2022 2023 Calendar years as at 28 August 2023 Q2 Q3 Q4 Q1 Q2E Q3F Q4F 2021 2022 2023F 2024F World GDP1 - - - - - - - 6.3 3.4 3.0 3.0 Australia GDP2 3.1 6.0 2.6 2.3 1.8 1.4 1.0 4.6 2.6 1.0 1.4 Unemployment – end period 3.8 3.5
Slide 13: Australian housing market
Australian housing market. Australian dwelling prices (%, 3 month annualised) % 40 Macro-prudential 2019 COVID-19 ‘Delta’ 35 rate cuts measures election 30 rate hikes Macro- 25 prudential 20 measures 15 10 5 0 -5 -10 -15 -20 Jul-15 Jul-16 Jul-17 Jul-18 Jul-19 Jul-20 Jul-21 Jul-22 Jul-23 Jul-24 Sourc
Slide 14: Additional Information
Additional Information Wlfestpac Group
Slide 15: 1H23 Group Financial results
1H23 Group Financial results. Net profit after tax 1H22 – 1H23 ($m) Net interest margin 1H22 – 1H23 (% and bps) • Average interest earning assets 47bps 6bps up 7%, mainly mortgages and business lending Cost discipline resulted in lower (8bps) (1bp) (7bps) operating expenses despite (8bps) • Net inte
Slide 16: Net-zero 2030 targets
Net-zero 2030 targets. Targets set for five sectors in our lending portfolio For details on our targets and target-setting approach refer to our ‘Net-Zero 2030 Targets and Financed Emissions – our methodology and approach’. We continue to integrate and operationalise our targets into our processes a
Slide 17: Our people
Our people. Building capability, strengthening inclusion and diversity Data as at 31 March 2023 unless otherwise noted. Strengthening gender diversity Measuring organisational health Building skills and capability Organisational Health Index score5 • Risk management – ~12,000 employees Females % Mar
Slide 18: Credit quality across sectors
Credit quality across sectors. Corporate and business stressed exposures by industry sector (%) Sep-22 Mar-23 Jun-23 10.0 8.0 Reflecting downgrades of a small number of exposures Due to downgrade of a single name to 6.0 watchlist 4.0 2.0 0.0 Finance Property Wholesale & Services Manufacturing Agricu
Slide 19: Sectors in focus: Commercial property
Sectors in focus: Commercial property. Data as at 31 March 2023 unless otherwise noted. • Single Group-wide credit policy, supported Commercial property exposures Commercial property portfolio by industry concentration limits and sub (% of TCE) composition (TCE) (%) limits Sector6 • Managed by speci
Slide 20: New Zealand credit quality
New Zealand credit quality. Mortgage delinquencies (%) Mortgage portfolio LVR1 (% of portfolio) 90+ day past due 30+ day past due 93% of mortgage portfolio has 1.0 an LVR less than 80% 0.8 0.69 52% 0.6 0.4 0.32 21% 19% 0.2 5% 2% 0.0 Dec-20 Jun-21 Dec-21 Jun-22 Dec-22 Jun-23 0<=60 60<=70 70<=80 80<=9
Slide 21: Disclaimer
Disclaimer. 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 not
Slide 22: Disclaimer and footnotes – sustainability disclosures
Disclaimer and footnotes – sustainability disclosures. Footnotes: Net-zero 2030 targets 1. Financed emissions are the Group’s Scope 3 emissions attributable to its lending portfolios. We aim to achieve these targets by 30 September 2030. 2. Upstream oil and gas includes exploration, extraction and d
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