Westpac Banking Corp 6-K, filed Oct 24, 2022
Westpac Banking Corp (WEBNF)
About this 6-K
Westpac Banking Corp filed this 6-K on October 24, 2022.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
October 24, 2022
Commission File Number 1-10167
WESTPAC BANKING CORPORATION
(Translation of registrant’s name into English)
275 KENT STREET, SYDNEY, NEW SOUTH WALES 2000, AUSTRALIA
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
Index to Exhibits
| Exhibit No. |
Description | |
| 1 | ASX Release – Westpac Second Half 2022 notable items |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| WESTPAC BANKING CORPORATION | |||
| (Registrant) | |||
| Date: | October 24, 2022 | By: | /s/ Yvette Adiguzel |
| Yvette Adiguzel | |||
| Tier One Attorney | |||
| ASX Release 24 October 2022 Westpac ’ s Second Half 2022 (2H22) notable items Westpac today announced that its reported net profit and cash earnings in 2H22 will be reduced by $1.3 billion (after tax) due to notable items. The majority of these notable items have been previously disclosed with announced divestments. The notable items after tax for 2H22 include: A loss of $1.1 billion on the sale of Westpac Life Insurance Limited; Expenses and revaluations associated with the sale of Advance Asset Management and successor funds transfer of BT’s personal and corporate superannuation funds; Tax benefits from the sales of our motor vehicle and vendor finance businesses; Expenses and write-downs associated with reducing our corporate and branch footprint; and An increase in provisions for customer refunds, associated costs and litigation costs. The net impact of these notable items on our Common equity Tier 1 capital ratio was a positive 12 basis points. The impact was positive as the completion of the life insurance sale added 17 basis points while the other notable items had a 5 basis point impact. Details of notable items in Second Half 2022 are in Appendix 1 and a summary of line item impacts is in Appendix 2. Segment structure changes in Westpac ’ s FY22 results From 1H22 we changed our segment reporting for our lines of business operating structure. At that time, we updated prior period numbers for 2H21 and these have not changed. We are now providing FY21 data under these segment changes in the same way they will be presented in FY22. This is in Appendix 3. There are no other prior period restatements to the P&L. There has been one restatement to the balance sheet, with a movement in the allocation of intangible items between the Consumer and Business segments. We are scheduled to announce our Full Year 2022 results on Monday, 7 November 2022. For further information: Hayden Cooper Andrew Bowden Group Head of Media Relations General Manager Investor Relations 0402 393 619 0438 284 863 This document has been authorised for release by Tim Hartin, Company Secretary. Level 18, 275 Kent Street Sydney, NSW, 2000 |
| Appendix 1 – Details of items affecting Westpac ’ s 2H22 Financial Results This table details how the notable items will be described in our 2H22 Financial Results. Summary 2H22 Cash earnings ( after tax) Detail Provisions for customer refunds and payments, associated costs and litigation costs $68m reduction Revenue - $17m (pre-tax) Decrease in revenue due to additional remediation provisions related to wealth products and to New Zealand. Expenses - $80m (pre-tax) Additional costs for our Australian customer remediation program; and An increase in litigation costs and provisions. The write- down of assets (incl. goodwill and capitalised software) and costs associated with the consolidation of branches $129m reduction Write-down of assets from a reduction in corporate office space required. Reduced space requirements are from business sales, reduced headcount, and more flexible working. The write-down considers the capitalised value of the remaining term of the lease less likely sublease income, $118m in costs, $82m after tax; and Expenses associated with the accelerated consolidation of branches that has progressed more rapidly than recent years of $66m in costs, $47m after tax. The impact of asset sales and revaluations $1,089m reduction Loss on sale of Westpac Life Insurance Services Limited of $1,112m in non-interest income, $1,120m after tax; Expenses and revaluations associated with assets sales, including of Advance Asset Management and successor funds transfer of BT’s personal and corporate superannuation funds of $125m, $101m after tax; and A tax refund related to the sale of the Group’s motor vehicle dealer finance and novated leasing business and vendor finance businesses. |
| Appendix 2 – Summary of 2H22 and FY22 notable items 2H22 ($m) Consumer Business WIB New Zealand (in $A) Specialist Businesses Group Businesses Total Net interest income - - - (8) - - (8) Non-interest income - - - (1) (1,120) - (1,121) Operating expenses (66) - - - (150) (174) (390) Core earnings (66) - - (9) (1,270) (174) (1,519) Income tax benefit/ (expense) 19 - - 2 158 54 233 NCI - - - - - - - Cash earnings (47) - - (7) (1,112) (120) (1,286) 2H22 ($m) Provisions for refunds, payments, costs & litigation Write-down of assets and accelerated branch closure costs Asset sales and revaluations Total Net interest income (8) - - (8) Non-interest income (9) - (1,112) (1,121) Operating expenses (80) (184) (126) (390) Core earnings (97) (184) (1,238) (1,519) Income tax benefit/( expense ) 29 55 149 233 NCI - - - - Cash earnings (68) (129) (1,089) (1,286) FY22 ($m) Consumer Business WIB New Zealand (in $A) Specialist Businesses Group Businesses Total Net interest income - - - (1) - - (1) Non-interest income - - - 118 (1,011) - (893) Operating expenses (66) - - - (365) (190) (621) Core earnings (66) - - 117 (1,376) (190) (1,515) Income tax benefit/ ( expense ) 19 - - - 150 54 223 NCI - - - - - - - Cash earnings (47) - - 117 (1,226) (136) (1,292) FY22 ($m) Provisions for refunds, payments, costs & litigation Write-down of assets and accelerated branch closure costs Asset sales and revaluations Total Net interest income (1) - - (1) Non-interest income (52) - (841) (893) Operating expenses (126) (351) (144) (621) Core earnings (179) (351) (985) (1,515) Income tax benefit/( expense ) 46 68 109 223 NCI - - - - Cash earnings (133) (283) (876) (1,292) |
| Appendix 3 – Selected comparative disclosures 3.1 Consumer and Business Banking Half YearHalf Year% Mov'tFull YearFull Year% Mov't SeptMarchSept 22 - SeptSeptSept 22 - $m20222022Mar 2220222021Sept 21 Net interest income5,70012,473 Non-interest income487867 Net operating income6,18713,340 Operating expenses(3,351)(7,116) Core earnings2,8366,224 Impairment (charges)/benefits(131)609 Profit before income tax expense2,7056,833 Income tax expense and NCI(820)(2,049) Cash earnings1,8854,784 Add back notable items-20 Cash earnings excluding notable items1,8854,804 Expense to income ratio54.16%53.34% Net interest margin2.29%2.54% As atAs at% Mov'tAs atAs at% Mov't 30 Sept31 March Sept 22 - 30 Sept30 Sept Sept 22 - $bn20222022Mar 2220222021Sept 21 Customer deposits Term deposits75.676.5 Other335.3318.5 Total customer deposits410.9395.0 Net loans Mortgages458.4455.7 Business82.479.8 Other9.08.8 Provisions(3.2)(3.2) Total net loans546.6541.1 Deposit to loan ratio75.16%73.00% Total assets561.0555.4 TCE660.6653.9 Average interest earning assets499.9490.8 Average allocated capital33.133.0 Credit quality Impairment charges/(benefits) to average loans0.05%(0.15%) Total stressed exposures to TCE1.49%1.74% |
| 3.1.1 Consumer Half YearHalf Year% Mov'tFull YearFull Year% Mov't SeptMarchSept 22 - SeptSeptSept 22 - $m20222022Mar 2220222021Sept 21 Net interest income4,3779,486 Non-interest income324518 Net operating income4,70110,004 Operating expenses(2,369)(4,898) Core earnings2,3325,106 Impairment (charges)/benefits27184 Profit before income tax expense2,3595,290 Income tax expense and NCI(713)(1,583) Cash earnings1,6463,707 Add back notable items-105 Cash earnings excluding notable items1,6463,812 Expense to income ratio50.39%48.96% Net interest margin2.09%2.30% As atAs at% Mov'tAs atAs at% Mov't 30 Sept31 March Sept 22 - 30 Sept30 Sept Sept 22 - $bn20222022Mar 2220222021Sept 21 Customer deposits Term deposits50.550.2 Other225.7216.2 Total customer deposits276.2266.4 Net loans Mortgages458.4455.7 Other9.08.8 Provisions(1.7)(1.8) Total net loans465.7462.7 Deposit to loan ratio59.30%57.58% Total assets477.8474.8 TCE554.0551.8 Average interest earning assets420.3411.7 Average allocated capital25.224.8 Credit quality Impairment charges/(benefits) to average loans(0.01%)(0.04%) Mortgage 90+ day delinquencies0.88%1.07% Other consumer loans 90+ day delinquencies1.48%1.60% Total stressed exposures to TCE0.81%0.98% |
| 3.1.2 Business Half YearHalf Year% Mov'tFull YearFull Year% Mov't SeptMarchSept 22 - SeptSeptSept 22 - $m20222022Mar 2220222021Sept 21 Net interest income1,3232,987 Non-interest income163349 Net operating income1,4863,336 Operating expenses(982)(2,218) Core earnings5041,118 Impairment (charges)/benefits(158)425 Profit before income tax expense3461,543 Income tax expense and NCI(107)(466) Cash earnings2391,077 Add back notable items-(85) Cash earnings excluding notable items239992 Expense to income ratio66.08%66.49% Net interest margin3.33%3.78% As atAs at% Mov'tAs atAs at% Mov't 30 Sept31 March Sept 22 - 30 Sept30 Sept Sept 22 - $bn20222022Mar 2220222021Sept 21 Customer deposits Term deposits25.126.3 Other109.6102.3 Total customer deposits134.7128.6 Net loans Loans82.479.8 Provisions(1.5)(1.4) Total net loans80.978.4 Deposit to loan ratio166.42%164.00% Total assets83.280.6 TCE106.6102.1 Average interest earning assets79.679.1 Average allocated capital7.98.2 Credit quality Impairment charges/(benefits) to average loans0.40%(0.80%) Impaired exposures to TCE0.60%0.72% Total stressed exposures to TCE5.07%5.90% |
| 3.2 Westpac Institutional Bank (WIB) Half YearHalf Year% Mov'tFull YearFull Year% Mov't SeptMarchSept 22 - SeptSeptSept 22 - $m20222022Mar 2220222021Sept 21 Net interest income481925 Non-interest income5881,313 Net operating income1,0692,238 Operating expenses(577)(2,595) Core earnings492(357) Impairment (charges)/benefits(58)(162) Profit before income tax expense434(519) Income tax expense and NCI(128)(14) Cash earnings306(533) Add back notable items-991 Cash earnings excluding notable items306458 Expense to income ratio53.98%115.95% Net interest margin1.17%1.25% As atAs at% Mov'tAs atAs at% Mov't 30 Sept31 March Sept 22 - 30 Sept30 Sept Sept 22 - $bn20222022Mar 2220222021Sept 21 Customer deposits104.799.3 Net loans Loans74.368.3 Provisions(0.3)(0.6) Total net loans74.067.7 Deposit to loan ratio141.53%146.64% Total assets94.082.8 TCE190.8179.7 Average interest earning assets82.673.9 Average allocated capital7.77.8 Credit quality Impairment charges to average loans0.16%0.25% Impaired exposures to TCE0.14%0.29% Total stressed exposures to TCE0.20%0.64% Revenue Contribution Half YearHalf Year% Mov'tFull YearFull Year% Mov't SeptMarchSept 22 - SeptSeptSept 22 - $m20222022Mar 2220222021Sept 21 Lending and deposit revenue7101,315 Markets, sales and fee income417823 Total customer revenue1,1272,138 Derivative valuation adjustments(29)97 Trading revenue34100 Other(63)(97) Total WIB revenue1,0692,238 |
| 3.4 Specialist Businesses (SB) Half YearHalf Year% Mov'tFull YearFull Year% Mov't SeptMarchSept 22 - SeptSeptSept 22 - $m20222022Mar 2220222021Sept 21 Net interest income242494 Non-interest income5501,455 Net operating income7921,949 Operating expenses(584)(1,478) Core earnings208471 Impairment (charges)/benefits3866 Profit before income tax expense246537 Income tax expense and NCI(114)(375) Cash earnings132162 Add back notable items114540 Cash earnings excluding notable items246702 Expense to income ratio73.74%75.83% Net interest margin3.45%3.10% As atAs at% Mov'tAs atAs at% Mov't 30 Sept31 March Sept 22 - 30 Sept30 Sept Sept 22 - $bn20222022Mar 2220222021Sept 21 Deposits8.48.7 Net loans Loans12.014.0 Provisions(0.3)(0.4) Total net loans11.713.6 Deposit to loan ratio71.29%64.46% Total funds222.9227.4 TCE15.418.1 Average interest earning assets14.115.9 Average allocated capital4.14.6 Average funds224.9214.6 Credit quality Auto finance 90 day+ delinquencies2.00%1.97% Total stressed exposures to TCE6.98%6.41% |
| 3.5 Group Businesses Half YearHalf Year% Mov'tFull YearFull Year% Mov't SeptMarchSept 22 - SeptSeptSept 22 - $m20222022Mar 2220222021Sept 21 Net interest income564835 Non-interest income36366 Net operating income6001,201 Operating expenses(320)(1,032) Core earnings280169 Impairment (charges)/benefits3(2) Profit before income tax expense283167 Income tax expense and NCI(108)(178) Cash earnings175(11) Add back notable items16(2) Cash earnings excluding notable items191(13) Treasury Half YearHalf Year% Mov'tFull YearFull Year% Mov't SeptMarch Sept 22 - SeptSept Sept 22 - $m20222022Mar 2220222021Sept 21 Net interest income554838 Non-interest income128 Net operating income566846 Cash earnings368521 |
