20-F - WEBNF - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F


☐		REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

Or

☒		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September 30, 2024

Or

☐		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Or

☐		SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 1-10167

WESTPAC BANKING CORPORATION

Australian Business Number 33 007 457 141

(Exact name of Registrant as specified in its charter)

New South Wales, Australia

(Jurisdiction of incorporation or organization)

275 Kent Street , Sydney , NSW 2000 , Australia

(Address of principal executive offices)

Westpac Banking Corporation, New York branch,

575 Fifth Avenue, 39th Floor , New York , New York **** 10017-2422 ,

Attention: Branch Manager , telephone number: ( 212 ) 551-1800

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act: None

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities **** for which there is a reporting obligation pursuant to Section 15(d) of the Act: 5.350% Notes due October 18, 2024 1.019% Notes due November 18, 2024, Floating Rate Notes due November 18, 2024, 2.350% Notes due February 19, 2025, Floating Rate Note due August 26, 2025, 3.735% Notes due August 26, 2025, 5.512% Notes due November 17, 2025, Floating Rate Notes due November 17, 2025, 5.200% Notes due April 16, 2026, Floating Rate Notes due April 16, 2026, 2.850% Notes due May 13, 2026, 1.150% Notes due June 3, 2026, Floating Rate Notes due June 3, 2026, 2.700% Notes due August 19, 2026, 3.350% Notes due March 8, 2027, 4.043% Notes due August 26, 2027, 5.457% Notes due November 18, 2027 3.400% Notes due January 25, 2028, 5.535% Notes due November 17, 2028, 1.953% Notes due November 20, 2028, 5.050% Notes due April 16, 2029, Floating Rate Notes due April 16, 2029, 2.650% Notes due January 16, 2030, 2.894% Subordinated Notes due February 4, 2030, 2.150% Notes due June 3, 2031, 4.322% Subordinated Notes due November 23, 2031, 5.405% Subordinated Notes due August 10, 2033, 6.820% Subordinated Notes due November 17, 2033, 4.110% Subordinated Notes due July 24, 2034, 2.668% Subordinated Notes due November 15, 2035, 3.020% Subordinated Notes due November 18, 2036, 4.421% Subordinated Notes due July 24, 2039, 2.963% Subordinated Notes due November 16, 2040, 3.133% Subordinated Notes due November 18, 2041 and 5.000% Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

Ordinary shares		3,441,411,361 fully paid

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☒No ☐

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes ☐No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒No ☐ (not currently applicable to registrant)

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒	Accelerated filer ☐	Non-accelerated filer ☐	Emerging growth company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbannes-Oxley Act (15 U.S.C. 7262(b)) by the registered public account firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b) ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☐ International Financial Reporting Standards as issued by the International Accounting Standards Board ☒

Other ☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

“Item 17” ☐“Item 18” ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company.

Yes ☐No ☒


I

TABLE OF CONTENTS

FORM 20-F CROSS-REFERENCE INDEX	ii	PERFORMANCE REVIEW	270
FINANCIAL REPORT	1	Reading this report	271
Income statements	2	Group performance	276
Statements of comprehensive income	3	Segment reporting	302
Balance sheets	4	Review of earnings: 2023 vs 2022	314
Statements of changes in equity	5	Risk factors	317
Cash flow statements	7	FINANCIAL STATEMENTS	333
Notes to the Financial Statements	8	SHAREHOLDER INFORMATION	334
Statutory Statements	130	Shareholding Information	335
EXHIBITS INDEX	136	Additional Information	350
STRATEGIC REVIEW	156	Glossary of Abbreviations and Defined Terms	363
Strategic review	156
Corporate governance	196
Directors’ report	222
Remuneration Report	236
Information on Westpac	263

In this Annual Report a reference to ‘Westpac’, ‘Group’, ‘Westpac Group’, ‘we’, ‘us’ and ‘our’ is to Westpac Banking Corporation ABN 33 007 457 141 and its subsidiaries unless it clearly means just Westpac Banking Corporation.

For certain information about the basis of preparing the financial information in this Annual Report see ‘Reading this report’ in Section 2. In addition, this Annual Report contains statements that constitute ‘forward-looking statements’ within the meaning of Section 21E of the US Securities Exchange Act of 1934. For an explanation of forward-looking statements and the risks, uncertainties and assumptions to which they are subject, see ‘Reading this report’ in Section 2. Please consider those important disclaimers when reading the forward-looking statements in this Annual Report.

References to the 2024 Risk Factors are to the ‘Risk factors’ section in this 2024 Annual Report on Form 20-F.

Information contained in or accessible through the websites mentioned in this Annual Report does not form part of this report unless we specifically state that it is incorporated by reference and forms part of this report. All references in this report to websites are inactive textual references and are for information only.


II** WESTPAC GROUP** 2024 ANNUAL REPORT

FORM 20-F CROSS-REFERENCE INDEX

20-F item number and description		Page

Part I

Item 1.	Identity of directors, senior management and advisers	Not applicable

Item 2.	Offer statistics and expected timetable	Not applicable

Item 3.	Key information

	Capitalisation and indebtedness	Not applicable

	Reasons for the offer and use of proceeds	Not applicable

	Risk factors	317-331

Item 4.	Information on Westpac

	History and development of Westpac	158-163

	Business overview	158-163

	Organisational structure	109-110

	Property, plants and equipment	360

Item 4A.	Unresolved staff comments	Not applicable

Item 5.	Operating and financial review and prospects

	Operating results	276-279

	Liquidity and capital resources	103-107

	Research and development, patents and licences, etc.	Not applicable

	Trend information	276-301, 302-313

	Critical accounting estimates	25, 26, 84, 94, 97, 118

Item 6.	Directors, senior management and employees

	Directors and senior management	222-229, 232-233

	Compensation	113-117, 236-261

	Board practices	196-220

	Employees	288

	Share ownership	123, 232-233, 335

Item 7.	Major shareholders and related party transactions

	Major shareholders	335-340

	Related party transactions	122-123

	Interests of experts and counsel	Not applicable


III

FORM 20-F CROSS-REFERENCE INDEX


20-F item number and description		Page

Item 8.	Financial information

	Consolidated statements and other financial information	1-135

	Significant changes	263-265

Item 9.	The offer and listing

	Offer and listing details	Not applicable

	Plan of distribution	Not applicable

	Markets	Not applicable

	Selling shareholders	Not applicable

	Dilution	Not applicable

	Expenses of the issue	Not applicable

Item 10.	Additional information

	Share capital	Not applicable

	Memorandum and articles of association	350-353

	Material contracts	360

	Exchange controls	346-347

	Taxation	347-349

	Dividends and paying agents	Not applicable

	Statements by experts	Not applicable

	Documents on display	353

	Subsidiary information	Not applicable

Item 11.	Quantitative and qualitative disclosures about market risk	82-83

Item 12.	Description of securities other than equity securities

	Debt securities	Not applicable

	Warrants and rights	Not applicable

	Other securities	Not applicable

	American depositary shares	Not applicable


Part II

Item 13.	Defaults, dividend arrearages and delinquencies	Not applicable

Item 14.	Material modifications to the rights of security holders and use of proceeds	Not applicable


IV** WESTPAC GROUP** 2024 ANNUAL REPORT

FORM 20-F CROSS-REFERENCE INDEX

20-F item number and description		Page

Item 15.	Controls and procedures	131, 362

Item 16A.	Audit committee financial expert	206

Item 16B.	Code of ethics	210-211

Item 16C.	Principal accountant fees and services, PCAOB ID: 1379; Auditor Remuneration	121, 216-218

Item 16D.	Exemptions from the Listing Standards for audit committees	Not applicable

Item 16E.	Purchases of equity securities by Westpac and affiliated purchasers	Not applicable

Item 16F.	Changes in Westpac’s certifying accountant	268-269

Item 16G.	Corporate governance	196

Item 16H.	Mine safety disclosure	Not applicable

Item 16I.	Disclosure regarding foreign jurisdictions that prevent inspections	Not applicable

Item 16J.	Insider trading policies	138

Item 16K.	Cybersecurity	268


Part III

Items 17. & 18.	Financial statements	1-135

Item 19.	Exhibits	136

Consolidated income statements for the years ended 30 September 2024, 2023 and 2022		2

Consolidated balance sheets as at 30 September 2024 and 2023		4

Consolidated statements of comprehensive income for the years ended 30 September 2024, 2023 and 2022		3

Consolidated statements of cash flows for the years ended 30 September 2024, 2023 and 2022		7

Notes to the financial statements		8-126

Management’s report on the internal control over financial reporting		131

Report of independent registered public accounting firm		132-135

Item 1402: Distribution of assets, liabilities and stockholders’ equity; interest rates and interest differential

Average balance sheets		17-18, 282

Analysis of net interest earnings		16, 280-281

Interest rate and interest differential analysis		17-20, 280-281


V

FORM 20-F CROSS-REFERENCE INDEX


20-F item number and description		Page

Item 1403: Investments in debt securities t II Investment portfolio

Weighted average yield of debt securities		64

Calculation of weighted average yield; tax-exempt obligations		64

Item 1404: Loan Portfolio

Maturity and interest rate profile of loan portfolio		33

Item 1405: Allowances for Credit Losses

Credit ratios and material changes		34-43

Allocation of the allowance for credit losses		34-43

Item 1406: Deposits

Deposits by category		53-54

Uninsured deposits		53-54

Time deposits		53-54


VI** WESTPAC GROUP** 2024 ANNUAL REPORT

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FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	1

FINANCIAL STATEMENTS




Income statements<br>Statements of comprehensive income		INTANGIBLE ASSETS, PROVISIONS, COMMITMENTS AND CONTINGENCIES
Balance sheets		Note 24.	Intangible assets
Statements of changes in equity<br>Cash flow statements		Note 25.	Provisions, contingent liabilities, contingent assets <br>and credit commitments

NOTES TO THE FINANCIAL STATEMENTS		CAPITAL AND DIVIDENDS
Note 1.	Financial statements preparation	Note 26.	Shareholders’ equity
		Note 27.	Capital adequacy
FINANCIAL PERFORMANCE		Note 28.	Dividends
Note 2.	Segment reporting
Note 3.	Net interest income and average balance sheet and interest rates	GROUP STRUCTURE
Note 4.	Non-interest income	Note 29.	Investments in subsidiaries and associates
Note 5.	Operating expenses	Note 30.	Structured entities
Note 6.	Impairment charges
Note 7.	Income tax	OTHER
Note 8.	Earnings per share	Note 31.	Share-based payments
		Note 32.	Superannuation commitments
FINANCIAL ASSETS AND FINANCIAL LIABILITIES		Note 33.	Auditor’s remuneration
		Note 34.	Related party disclosures
Lending and credit risk		Note 35.	Notes to the cash flow statements
Note 9.	Loans	Note 36.	Subsequent events
Note 10.	Provision for expected credit losses
Note 11.	Credit risk management	CONSOLIDATED ENTITY DISCLOSURE STATEMENT

Deposits and other funding arrangements		STATUTORY STATEMENTS
Note 12.	Deposits and other borrowings	Directors’ declaration
Note 13.	Debt issues	Management’s report on internal control over financial reporting
Note 14.	Loan capital	Report of Independent Registered Public Accounting Firm
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


2** WESTPAC GROUP** 2024 ANNUAL REPORT

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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	3

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.


4** WESTPAC GROUP** 2024 ANNUAL REPORT

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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	5

STATEMENTS OF CHANGES IN EQUITY

for the years ended 30 September

Westpac Banking Corporation


							Total equity				Total
	Share						attributable				shareholders’
Consolidated	capital		Reserves		Retained		to owners		NCI		equity
m	(Note 26)	****	(Note 26)	****	profits	****	of WBC	****	(Note 26)	****	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

All values are in US Dollars.

a.	Relates to fully franked dividends at 30%:<br>- 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);<br>- 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 <br>- 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.


6** WESTPAC GROUP** 2024 ANNUAL REPORT

STATEMENTS OF CHANGES IN EQUITY

for the years ended 30 September

Westpac Banking Corporation


							Total equity
	Share						attributable
Parent Entity	capital		Reserves		Retained		to owners
m	(Note 26)	****	(Note 26)	****	profits	****	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

All values are in US Dollars.

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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	7

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

All values are in US Dollars.

The above cash flow statements should be read in conjunction with the accompanying notes.


8** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

Note 1. Financial **** statements preparation

This financial report of Westpac Banking Corporation (the Parent Entity), together with its controlled entities (the Group or Westpac), for the year ended 30 September 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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	9

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 127.

(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.


10** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

Note 1. Financial statements preparation (Continued)

**b.**Critical accounting assumptions and estimates

Applying Westpac’s accounting policies requires the use of judgement, assumptions and estimates which impact the financial information. The significant assumptions and estimates used are discussed in the relevant notes below:

Note 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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	11

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.


12** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

FINANCIAL PERFORMANCE

Note 2. Segment reporting

Accounting policy

Operating segments are presented on a basis consistent with information provided internally to Westpac’s key decision makers and reflect the management of the business, rather than the legal structure of Westpac. 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.
---	---

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	13

Note 2. Segment reporting (Continued)

The following tables present the segment results for Westpac.


	****		****					****		****				****
					Westpac		Westpac					Notable
			Business &		Institutional		New	Group				Items		Income
m	Consumer	****	Wealth	****	Bank	****	Zealand (A)	Businesses	****	Total	****	(pre-tax)	****	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

All values are in US Dollars.

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.
---	---


14** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

Note 2. Segment reporting (Continued)


	****		****					****		****				****
					Westpac		Westpac					Notable
			Business &		Institutional		New	Group				Items		Income
m	Consumer	****	Wealth	****	Bank	****	Zealand (A)	Businesses	****	Total	****	(pre-tax)	****	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

All values are in US Dollars.

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)

All values are in US Dollars.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	15

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 overseas^a^		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 assets^b^
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 overseas^a^		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.
---	---


16** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

Note 3. Net interest income and average balance sheet and interest rates

Net interest income^1^

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

All values are in US Dollars.

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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	17

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		Interest		Average		Average		Interest		Average		Average		Interest		Average
		balance		income		rate		balance		income		rate		balance		income		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
Housing^a^
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
Business^a^
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 income^a^	****	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 assets^a,c^		70,468						59,356						62,719
Total non-interest earning assets^a^	****	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).
---	---


18** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

Note 3. Net interest income and average balance sheet and interest rates (Continued)


		2024						2023						2022
		Average		Interest		Average		Average		Interest		Average		Average		Interest		Average
		balance		expense		rate		balance		expense		rate		balance		expense		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
Transactions^a^
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
Savings^a^
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 expense^a^	****	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 liabilities^a^	****	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.
---	---

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	19

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

All values are in US Dollars.

a.Comparatives have been revised to align with current period presentation.


20** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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

All values are in US Dollars.

a.	Comparatives have been revised to align with current period presentation.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	21

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.


22** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	23

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

All values are in US Dollars.

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.


24** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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

All values are in US Dollars.

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.
---	---

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	25

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

All values are in US Dollars.

Further details are included in Note 10.


26** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	27

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

All values are in US Dollars.

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

All values are in US Dollars.

Tax liabilities


	Consolidated				Parent Entity
m	2024		2023		2024		2023
Current tax liabilities	569		780		408		607
Total tax liabilities	569	****	780	****	408	****	607

All values are in US Dollars.


28** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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	-	****	-	****	-	****	-

All values are in US Dollars.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	29

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		-		-

All values are in US Dollars.

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

All values are in US Dollars.

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.

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.

---


30** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	31

FINANCIAL ASSETS AND FINANCIAL LIABILITIES (Continued)

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.


32** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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

All values are in US Dollars.

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.
---	---

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	33

Note 9. Loans (Continued)

The following table shows Westpac’s contractual maturity distribution of all loans as at 30 September 2024.


Consolidated			Over 1 year to		Over 5 years to		****
m	Up to 1 year	****	5 years	****	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

All values are in US Dollars.

The following table shows Westpac’s interest rate segmentation of loans maturing after one year as at 30 September 2024.


	Loans at		Loans at
Consolidated	variable		fixed
m	interest rates	****	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

All values are in US Dollars.


34** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

Note 10. Provision for expected credit losses

Accounting policy

Note 6 provides details of impairment charges.<br><br>Impairment applies to all financial assets at amortised cost, lease receivables, debt securities measured at FVOCI, due from subsidiaries and credit commitments.<br><br>The ECL is recognised as follows:<br><br>●<br><br>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);<br><br>●<br><br>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<br><br><br><br>●<br><br>Credit commitments: as a provision (refer to Note 25).
Measurement<br><br>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:<br><br>●<br><br>Probability of default (PD): the probability that a counterparty will default;<br><br>●<br><br>Loss given default (LGD): the loss that is expected to arise in the event of a default; and<br><br>●<br><br>Exposure at default (EAD): the estimated outstanding amount of credit exposure at the time of the default.
Model stages<br><br>The three stages are as follows:<br><br>Stage 1: 12 months ECL – performing<br><br>For financial assets where there has been no significant increase in credit risk since origination, a provision for 12 months ECL is recognised.<br><br>Stage 2: Lifetime ECL – performing<br><br>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.<br><br>Stage 3: Lifetime ECL – non-performing<br><br>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:<br><br>●<br><br>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<br><br>●<br><br>The customer is more than 90 days past due on any material credit obligation.<br><br><br><br>A provision for lifetime ECL is recognised on these financial assets.<br><br>Collective and individual assessment<br><br>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.<br><br>Expected life<br><br>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), 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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	35

Note 10. Provision for expected credit losses (Continued)

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.


36** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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
						Non-								Non-
		Performing				Performing				Performing				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

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	37

Note 10. Provision for expected credit losses (Continued)


		2024								2023
						Non-								Non-
		Performing				Performing				Performing				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


38** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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
			Non-					Non-
	Performing		Performing	****		Performing		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

All values are in US Dollars.

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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	39

Note 10. Provision for expected credit losses (Continued)


	****	Consolidated				Parent Entity
				Non-				****	Non-
		Performing		Performing		Performing			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 1^a^		316	(311)	(5)	-	295	(292)		(3)	-
Transfers to Stage 2^a^		(60)	316	(256)	-	(55)	290		(235)	-
Transfers to Stage 3^a^		-	(131)	131	-	-	(125)		125	-
Business activity during the year^a^		41	(98)	(106)	(163)	40	(97)		(99)	(156)
Net remeasurement of provision for ECL^a^		(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 1^a^		359	(356)	(3)	-	323	(322)		(1)	-
Transfers to Stage 2^a^		(59)	126	(67)	-	(54)	114		(60)	-
Transfers to Stage 3^a^		-	(132)	132	-	-	(123)		123	-
Business activity during the year^a^		28	(15)	-	13	26	(13)		-	13
Net remeasurement of provision for ECL^a^		(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.


40** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

Note 10. Provision for expected credit losses (Continued)


	Consolidated								Parent Entity
					Non-								Non-
	Performing				Performing	****			Performing				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

All values are in US Dollars.

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

All values are in US Dollars.

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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	41

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

All values are in US Dollars.

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.


42** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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:<br><br>Australia	<br><br>Forecast growth of<br>1.5% for calendar year 2024 and<br>2.4% for calendar year 2025	<br><br>Forecast growth of<br>1.2% for calendar year 2023 and<br>1.6% for calendar year 2024
New Zealand	Forecast growth of<br>0.1% for calendar year 2024 and<br>2.0% for calendar year 2025	Forecast growth of<br>0.8% for calendar year 2023 and<br>0.2% for calendar year 2024
Commercial property index, Australia	Forecast price contraction of<br>11.5% for calendar year 2024 and growth of<br>1.3% for calendar year 2025	Forecast price contraction of<br>15.0% for calendar year 2023 and<br>0.5% for calendar year 2024
Residential property prices:<br><br>Australia	<br><br>Forecast price growth of<br>5.7% for calendar year 2024 and<br>4.0% for calendar year 2025	<br><br>Forecast price growth of<br>5.8% for calendar year 2023 and<br>4.0% for calendar year 2024
New Zealand	Forecast price growth of<br>0.7% for calendar year 2024 and<br>6.4% for calendar year 2025	Forecast price contraction of<br>1.0% for calendar year 2023 and growth of<br>7.7% for calendar year 2024
Cash rate, Australia	Forecast cash rate of<br>4.35% at December 2024 and<br>3.35% at December 2025	Forecast cash rate of<br>4.1% at December 2023 and<br>3.6% at December 2024
Unemployment rate:<br><br>Australia	<br><br>Forecast rate of<br>4.3% at December 2024 and<br>4.6% at December 2025	<br><br>Forecast rate of<br>3.9% at December 2023 and<br>4.7% at December 2024
New Zealand	Forecast rate of<br>5.3% at December 2024 and<br>5.6% at December 2025	Forecast rate of<br>4.3% at December 2023 and<br>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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	43

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

All values are in US Dollars.

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.
---	---


44** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

Note 11. Credit risk management


				Note
Index	****	Note name	****	number
Credit risk		Credit risk management framework		11.1
The risk of financial loss where a customer or counterparty fails to meet their financial obligations to Westpac.		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).
---	---

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	45

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.


46** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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)		●<br><br>47% (2023: 58%) were issued by financial institutions for Westpac;<br><br>48% (2023: 59%) for the Parent Entity.<br><br>●<br><br>50% (2023: 37%) were issued by government or semi-government authorities for Westpac;<br><br>49% (2023: 37%) for the Parent Entity.<br><br>●<br><br>82% (2023: 76%) were held in Australia by Westpac;<br><br>86% (2023: 83%) by the Parent Entity.
Investment securities (Note 17)		●<br><br>17% (2023: 21%) were issued by financial institutions for Westpac;<br><br>17% (2023: 22%) for the Parent Entity.<br><br>●<br><br>82% (2023: 79%) were issued by government or semi-government authorities for Westpac;<br><br>83% (2023: 78%) for the Parent Entity.<br><br>●<br><br>91% (2023: 89%) were held in Australia by Westpac;<br><br>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)		●<br><br>81% (2023: 80%) were issued by financial institutions for both Westpac and the Parent Entity.<br><br>●<br><br>90% (2023: 75%) were held in Australia by Westpac;<br><br>91% (2023: 76%) by the Parent Entity.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	47

Note 11. Credit risk management (Continued)


			2024								2023^a^
			Total all		Undrawn						Total all		Undrawn
			other on		credit						other on		credit
Consolidated			balance		commit-						balance		commit-
m	Loans	****	sheet	****	ments	****	Total	****	Loans	****	sheet	****	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

All values are in US Dollars.

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.


48** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

Note 11. Credit risk management (Continued)


		****	2024								2023^a^
			Total all		Undrawn						Total all		Undrawn
			other on		credit						other on		credit
Parent Entity			balance		commit-						balance		commit-
m	Loans	****	sheet	****	ments	****	Total	****	Loans	****	sheet	****	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

All values are in US Dollars.

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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	49

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								2023^a^
m	Stage 1	****	Stage 2	****	Stage 3	****	Total^b^	****	Stage 1	****	Stage 2	****	Stage 3	****	Total^b^
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

All values are in US Dollars.

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.


50** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

Note 11. Credit risk management (Continued)


Parent Entity			2024								2023^a^
m	Stage 1	****	Stage 2	****	Stage 3	****	Total^b^	****	Stage 1	****	Stage 2	****	Stage 3	****	Total^b^
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

All values are in US Dollars.

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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	51

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.

		<br><br>
Loans – housing and personal^a^		Housing loans are secured by a mortgage over property and additional security may take the form of guarantees and deposits.<br><br>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.<br><br>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.<br><br>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.<br><br>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:<br><br>●<br><br>Formal valuations currently held for such collateral; and<br><br>●<br><br>Management’s assessment of the estimated realisable value of all collateral held.<br><br><br><br>This analysis also takes into consideration any other relevant knowledge available to management at the time. Updated valuations are obtained when appropriate.<br><br>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.<br><br>In relation to financial markets positions, Westpac only recognises collateral which is:<br><br>●<br><br>Cash, primarily in Australian dollars (AUD), New Zealand dollars (NZD), US dollars (USD), Canadian dollars (CAD), British pounds (GBP) or European Union euro (EUR);<br><br>●<br><br>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;<br><br>●<br><br>Securities issued by other sovereign governments and supranationals as approved by an authorised credit officer; or<br><br>●<br><br>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:<br><br>●<br><br>Sovereign;<br><br>●<br><br>Australia and New Zealand public sector;<br><br>●<br><br>ADIs and overseas banks with a minimum risk grade equivalent of A3 / A–; and<br><br>●<br><br>Others with a minimum risk grade equivalent of A3 / A–.<br><br><br><br>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.<br><br>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.<br><br>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.


52** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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		Personal		Business				Housing		Personal		Business
%	****	loans^a^		loans		loans		Total		loans^a^		loans		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 agreements^a^		17,950		11,862		17,950		11,821
Securities under derivatives^a^		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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	53

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.<br><br>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

All values are in US Dollars.

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.


54** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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			Over 3 months to		Over 6 months to
m	Up to 3 months		6 months		1 year		Over 1 year		Total
Certificates of deposit in excess of insured amounts
Australia	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

All values are in US Dollars.

a.	Interbank term deposits are included in Note 19.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	55

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.<br><br>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

All values are in US Dollars.


56** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

Note 13. Debt issues (Continued)


Consolidated	****		****
m	2024	****	2023
Short-term debt
Own issuances:
US commercial paper	22,507		22,687
commercial paper	1,048		-
Senior Debt:
AUD	1,900		2,090
	483		-
	5,313		3,265
	-		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
	32,182		34,002
	5,695		3,202
	78		80
NZD	3,483		3,324
	50,258		45,288
Other	1,515		1,688
Total long-term debt	136,956	****	127,288

All values are in US Dollars.

Westpac manages FX exposure from debt issuances as part of its hedging activities. Further details of Westpac’s hedge accounting are in Note 20. ****

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	57

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
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

All values are in US Dollars.

Additional Tier 1 loan capital

A summary of the key terms and common features of AT1 instruments is provided below.


Consolidated and Parent Entity			Potential scheduled		Optional
m	Distribution or interest rate	****	conversion date^a^	****	redemption date^b^	****	2024	****	2023
Westpac capital notes (WCN)
AUD 1,690 million WCN5	(3-month BBSW rate + 3.20% p.a.)		22 September 2027		22 September 2025		1,688		1,686
	x (1 - Australian corporate tax rate)
AUD 1,423 million WCN6	(3-month BBSW rate + 3.70% p.a.)		31 July 2026		31 July 2024^c^		-		1,421
	x (1 - Australian corporate tax rate)
AUD 1,723 million WCN7	(3-month BBSW rate + 3.40% p.a.)		22 March 2029		22 March 2027		1,716		1,714
	x (1 - Australian corporate tax rate)
AUD 1,750 million WCN8	(3-month BBSW rate + 2.90% p.a.)		21 June 2032		21 September 2029		1,740		1,739
	x (1 - Australian corporate tax rate)
AUD 1,509 million WCN9	(3-month BBSW rate + 3.40% p.a.)		22 June 2031		22 September 2028		1,499		1,496
	x (1 - Australian corporate tax rate)
AUD 1,750 million WCN10	(3-month BBSW rate + 3.10% p.a.)		22 June 2034		22 September 2031		1,733		-
	x (1 - Australian corporate tax rate)
Total WCN		****	****	****	****	****	8,376	****	8,056
AT1 securities
1,250 million AT1 securities	Fixed 5.00% p.a.^d^		n/a		21 September 2027		1,728		1,750
Total AT1 securities						****	1,728	****	1,750

All values are in US Dollars.

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.
---	---


58** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

Note 14. Loan capital (Continued)

Common features of AT1 instruments issued by Westpac Banking Corporation

Payment conditions

Distributions and interest payments on the AT1 instruments are discretionary and will only be paid if the payment conditions are satisfied, including that the payment will not result in a breach of Westpac’s capital requirements under APRA’s prudential standards; not result in Westpac becoming, or being likely to become, insolvent; and if APRA does not object to the payment.

Broadly, if for any reason a distribution or interest payment has not been paid in full on the relevant payment date, Westpac must not determine or pay any dividends on Westpac ordinary shares or undertake a discretionary buyback or capital reduction of Westpac ordinary shares, unless the unpaid amount is paid in full within 20 business days of the relevant payment date or in certain other circumstances.

The AT1 instruments convert into Westpac ordinary shares in the following circumstances:

●	Scheduled Conversion

On the scheduled conversion date, provided certain conversion conditions are satisfied, the relevant AT1 instrument^1^ will convert and holders will receive a variable number of Westpac ordinary shares calculated using the face value of the relevant AT1 instrument and the Westpac ordinary share price determined over the 20 business day period prior to the scheduled conversion date, including a 1% discount.

●	Capital Trigger Event or Non-Viability Trigger Event

Westpac will be required to convert some or all AT1 instruments upon the occurrence of:

–	A capital trigger event, when Westpac determines, or APRA notifies Westpac in writing that it believes, Westpac’s Common Equity Tier 1 Capital ratio is equal to or less than 5.125% (on a Level 1 or Level 2 basis^2^); or
–	A non-viability trigger event, when APRA notifies Westpac in writing that it believes conversion, write-off or write-down of capital instruments of the Westpac, or public sector injection of capital (or equivalent support), in each case is necessary because without it, Westpac would become non-viable
---	---

For each AT1 instrument converted, holders will receive a variable number of Westpac ordinary shares calculated using the face value of the relevant AT1 instrument and the Westpac ordinary share price over the five business day period prior to the capital trigger event date or non-viability trigger event date and includes a 1% discount, subject to a maximum conversion number. The maximum conversion number is based on an ordinary share price broadly equivalent to 20% of the Westpac ordinary share price at the time of issue.

Following the occurrence of a capital trigger event or non-viability trigger event, if conversion does not occur within five business days, holders’ rights in relation to the relevant AT1 instrument will be immediately and irrevocably terminated.

●	Conversion in other circumstances

Westpac is able to elect to convert^1^, or may be required to convert^1^, AT1 instruments early in certain circumstances. The terms of conversion are broadly similar to scheduled conversion, however, the maximum conversion number will depend on the conversion event.

●	Early Redemption

Westpac is able to elect to redeem the relevant AT1 instrument on the optional redemption dates or for certain taxation or regulatory reasons, subject to APRA’s prior written approval.

Excludes USD AT1 securities.

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.

---

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	59

Note 14. Loan capital (Continued)

Tier 2 loan capital

A summary of the key terms and common features of Westpac’s Tier 2 instruments (subordinated notes) is provided below:


					Optional
m	Interest rate^a^	****	Maturity date	****	redemption date^b^	****	2024	****	2023
Subordinated notes issued by Westpac Banking Corporation

100 million	Fixed		23 February 2046		n/a		110		103

20,000 million	Fixed		19 May 2026		n/a		202		206

10,200 million	Fixed		2 June 2026		n/a		103		105

10,000 million	Fixed		9 June 2026		n/a		101		103

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

1,000 million	Fixed		24 July 2039		n/a		1,196		1,134

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

1,500 million	Fixed		4 February 2030		4 February 2025		2,141		2,199

1,500 million	Fixed		15 November 2035		15 November 2030		1,854		1,802

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

1,000 million	Fixed		13 May 2031		13 May 2026		1,544		1,476

1,000 million	Fixed		18 November 2041		n/a		1,059		989

1,250 million	Fixed		18 November 2036		18 November 2031		1,572		1,529

26,000 million	Fixed		8 June 2032		8 June 2027		261		266

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		-

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

All values are in US Dollars.

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.
---	---


60** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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 30).

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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	61

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:
	Carrying	Carrying
	amount of	amount of	Fair value of	Fair value of
	transferred	associated	transferred	transferred	Net fair
m	assets	liabilities	assets	liabilities	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

All values are in US Dollars.

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.

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.

---


62** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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

All values are in US Dollars.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	63

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 FVOCI^a^		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.


64** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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.


					Over 1			Over 5						No
		Up to 1			year to 5			years to			Over 10			specific				Weighted
		year			years			10 years			years			maturity			Total	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

All values are in US Dollars.

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

All values are in US Dollars.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	65

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:
●<br><br>Trading liabilities (i.e. securities sold short); and
●<br><br>Liabilities designated at FVIS (i.e. certain repurchase agreements).<br><br><br><br>Refer to Note 22 for balances measured at fair value and amortised cost.<br><br>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

All values are in US Dollars.


66** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	67

Note 20. Derivative financial instruments (Continued)

Total derivatives

The carrying values of derivative instruments are set out in the tables below.


									Total derivatives
Consolidated	Trading				Hedging				carrying value
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)

All values are in US Dollars.


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)


68** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

Note 20. Derivative financial instruments (Continued)


					Total derivatives
Parent Entity	Trading		Hedging		carrying value
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)

All values are in US Dollars.


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)

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	69

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.


70** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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	Over 1 year	Over 5		Carrying value
m	Hedging instrument	Hedged risk	year	to 5 years	years	Total	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)

All values are in US Dollars.


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)

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	71

Note 20. Derivative financial instruments (Continued)


			Notional amounts
Parent Entity			Within 1	Over 1 year	Over 5		Carrying value
m	Hedging instrument	Hedged risk	year	to 5 years	years	Total	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)

All values are in US Dollars.


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


72** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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
	Carrying amount of				Carrying amount of
m	hedged item	****	FVHA	****	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

All values are in US Dollars.

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
	Interest		FX				Interest		FX
m	rate risk	****	risk	****	Total	****	rate risk	****	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)

All values are in US Dollars.

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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	73

Note 20. Derivative financial instruments (Continued)

Hedge effectiveness

Hedge effectiveness is tested prospectively at inception and during the lifetime of hedge relationships. For one-to-one hedge relationships this testing uses a qualitative assessment of matched terms where the critical terms of the derivatives used as the hedging instrument match the terms of the hedged item. In addition, a quantitative effectiveness test is performed for all hedges which could include regression analysis, dollar offset and/or sensitivity analysis.

Retrospective testing is also performed to determine whether the hedge relationship remains highly effective so that hedge accounting can continue to be applied and also to determine any ineffectiveness. These tests are performed using regression analysis and the dollar offset method.

The following tables provide information regarding the determination of hedge effectiveness:


			Change in fair
			value of	Change in
			hedging	value of the		Hedge
			instrument	hedged item	Hedge	ineffectiveness
			used for	used for	ineffectiveness	recognised
			calculating	calculating	recognised in	in non-
m	Hedging instrument	Hedged risk	ineffectiveness	ineffectiveness	interest income	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	-

All values are in US Dollars.


74** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

Note 21. Risk management, funding and liquidity risk and market risk

Financial instruments are fundamental to Westpac’s business of providing banking and financial services. The associated financial risks (including credit risk, funding and liquidity risk and market risk) are a significant proportion of the total risks faced by Westpac.

This note details the financial risk management policies, practices and quantitative information of Westpac’s principal financial risk exposures.

		Note
Index	Note Name	number
Overview	Risk management frameworks	21.1
Credit risk	Refer to Note 11 Credit risk management	11
Funding and liquidity risk<br><br>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<br><br>Sources of funding<br><br>Assets pledged as collateral<br><br>Contractual maturity of financial liabilities<br><br>Expected maturity	21.2.1<br><br>21.2.2<br><br>21.2.3<br><br>21.2.4<br><br>21.2.5
Market risk<br><br>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)<br><br>Traded market risk<br><br>Non-traded market risk	21.3.1<br><br>21.3.2<br><br>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.
---	---

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	75

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.


76** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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

All values are in US Dollars.

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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	77

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


78** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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

All values are in US Dollars.

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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	79

Note 21. Risk management, funding and liquidity risk and market risk (Continued)


Consolidated	****		****	Over 1 month	****	Over 3 months	****	Over 1 year to	****		****	****
$m		Up to 1 month		to 3 months		to 1 year		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.


80** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

Note 21. Risk management, funding and liquidity risk and market risk (Continued)


Parent Entity		Over 1 month	Over 3 months	Over 1 year to		****
$m	Up to 1 month	to 3 months	to 1 year	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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	81

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	Greater than		Due within	Greater than
m	12 months	12 months	Total	12 months	12 months	Total
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

All values are in US Dollars.


82** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

Note 21. Risk management, funding and liquidity risk and market risk (Continued)


	2024			2023
Parent Entity	Due within	Greater than		Due within	Greater than	****
m	12 months	12 months	Total	12 months	12 months	Total
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

All values are in US Dollars.

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

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	83

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

All values are in US Dollars.

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
		Maximum	Minimum	Average		Maximum	Minimum	Average
% (increase)/decrease in NII	As at	exposure	exposure	exposure	As at	exposure	exposure	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 IRRBB^1^:


	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

All values are in US Dollars.

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.


84** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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:

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	85

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
FX products	Derivatives	FX spot and futures contracts
Equity products	Derivatives<br><br>Trading securities and financial assets measured at FVIS<br><br>Other financial liabilities	Listed equities and equity indices	All these instruments are traded in liquid, active markets where prices are readily observable. No modelling or assumptions are used in the valuation.
Debt instruments	Trading securities and financial assets measured at FVIS<br><br>Investment securities<br><br>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.<br><br>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.<br><br>Valued using industry standard models based on observable parameters such as stock prices, dividends, volatilities and interest rates.


86** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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<br><br>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<br><br>Investment securities<br><br>Other financial liabilities	State and other government bonds, corporate bonds and commercial paper<br><br>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<br><br>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.<br><br>Due to their illiquidity, complexity and/or use of unobservable inputs into valuation models, they are classified as Level 3 assets.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	87

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

All values are in US Dollars.

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.
---	---


88** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

Note 22. Fair values of financial assets and financial liabilities (Continued)

Reconciliation of non-market observables

The following tables summarise the changes in financial instruments measured at fair value derived from non-market observable valuation techniques (Level 3).


	****	Trading	****	****	****	****	****	****	****	****	****	****
		securities and
		financial assets
		measured		Investment		Derivative and		Total Level		Derivative		Total Level
$m		at FVIS		securities		other assets		3 assets		liabilities		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

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	89

Note 22. Fair values of financial assets and financial liabilities (Continued)


	****	Trading	****	****	****	****	****	****	****	****	****	****
		securities and
		financial assets
		measured		Investment		Derivative and		Total Level		Derivative		Total Level
$m		at FVIS		securities		other assets		3 assets		liabilities		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.


90** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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
m	amount		Level 1		Level 2		Level 3		Total
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

All values are in US Dollars.


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 issues^a^		153,351		-		152,131		998		153,129
Loan capital^a^		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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	91

Note 22. Fair values of financial assets and financial liabilities (Continued)


			Estimated fair value
Parent Entity	Carrying
m	amount	****	Level 1	****	Level 2	****	Level 3	****	Total
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

All values are in US Dollars.


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 subsidiaries^a^		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 issues^b^		133,105		-		133,039		-		133,039
Due to subsidiaries		53,788		-		3,408		50,380		53,788
Loan capital^b^		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.
---	---


92** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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			Amounts subject to enforceable
	in the balance sheet			netting arrangements but not offset
			Net amounts	Other
			reported in	recognised		Financial
Consolidated		Amounts	the balance	financial	Cash	instrument
m	Gross amounts	offset	sheet	instruments	collateral^a,b^	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

All values are in US Dollars.

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.
---	---

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	93

Note 23. Offsetting financial assets and financial liabilities (Continued)


	Amounts subject to enforceable netting arrangements
	Effects of offsetting			Amounts subject to enforceable
	in the balance sheet			netting arrangements but not offset
			Net amounts	Other
			reported in	recognised		Financial
Parent Entity		Amounts	the balance	financial	Cash	instrument
m	Gross amounts	offset	sheet	instruments	collateral^a,b^	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

All values are in US Dollars.

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.


94** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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.<br><br>Judgement is also required in determining the useful life of intangible assets other than goodwill.<br><br>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.<br><br>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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	95

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

All values are in US Dollars.

Related to the acquisition of HealthPoint.

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.


96** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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		Cash flows
	Post-tax rate/Pre-tax rate		Forecast period/terminal growth rate
	2024	2023	2024	2023
Australian CGUs^a^	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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	97

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.


98** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

Note 25. Provisions, contingent liabilities, contingent assets and credit commitments (Continued)

Provisions


	****	****	****		****		****	****	****	****	****	Litigation,	****	****
				Annual leave		Provision for						non-lending
				and other		impairment on		Lease		Restructuring		losses and
		Long service		employee		credit		restoration		and other		remediation
$m		leave		benefits		commitments		obligations		provisions		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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	99

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.


100** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

Note 25. Provisions, contingent liabilities, contingent assets and credit commitments (Continued)

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 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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	101

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).
---	---


102** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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

All values are in US Dollars.

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.

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.

---

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	103

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.


104** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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		-		-

All values are in US Dollars.

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**	****
NZ375 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

All values are in US Dollars.

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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	105

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 plan^a^		-		7,949,266
Share buyback^b^		(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 Shares^a^		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 exercised^b^		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.


106** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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

All values are in US Dollars.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	107

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.


108** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	109

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.


	****	Country	****		****	Country
Name		of incorporation		Name		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 Limited^a^		New Zealand
Series 2024-1 WST Trust		Australia		Westpac NZ Securitisation Limited^a^		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 - Limited^a^		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%.


110** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

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).
---	---

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	111

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.<br><br>Westpac may also retain units in these investment management funds. Westpac earns fund distribution income and recognises fair value movements through non-interest income.


112** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

Note 30. Structured entities (Continued)

The following tables show Westpac’s interests in unconsolidated structured entities and its maximum exposure to loss in relation to those interests. The maximum exposure does not take into account any collateral or hedges that will reduce the risk of loss.

●	For on-balance sheet instruments, including debt and equity instruments in and loans to unconsolidated structured entities, the maximum exposure to loss is the carrying value.
●	For off-balance sheet instruments, including liquidity facilities, loan and other credit commitments and guarantees, the maximum exposure to loss is the notional amounts.
---	---


	****	Investment in third	****		****		****		****
		party mortgage		Financing to
Consolidated		and other asset-		securitisation		Group		Interest in other
$m		backed securities^a^		vehicles		managed funds		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 entities^b^	****	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 entities^b^		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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	113

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.<br><br>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.


114** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

Note 31. Share-based payments (Continued)

Scheme name	Westpac Long Term Variable Reward Plan (LTVR)/ EIP LTVR – Performance Rights and Restricted Rights	Westpac Performance Plan (WPP)/ EIP - Unhurdled Share Rights	Restricted Share Plan (RSP)/ EIP - Restricted 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 conditions^a^	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.<br><br><br><br>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<br><br>2024 performance rights CEO award: 6 years<br><br>2024 performance rights GE award: 5 years<br><br>2024 restricted rights CEO award: 50% over 4 years and 50% over 5 years<br><br>2024 restricted rights GE award: 4 years	Defined period set out at time of grant^b^	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.
---	---

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	115

Note 31. Share-based payments (Continued)

Each share-based payment scheme is quantified below.

i. Westpac Equity Incentive Plan (EIP) - Unhurdled Share Rights


												Outstanding
		Outstanding as										and exercisable
	****	at beginning	****	Granted during	****	Exercised	****	Lapsed during	****	Outstanding as	****	as at end
	****	of year	****	the year	****	during the year	****	the year	****	at end of year	****	of year
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 and
		Outstanding as at		Granted during		Exercised during		Lapsed during		Outstanding as at		exercisable as at
		beginning of year		the year		the year		the year		end of year		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 and
		Outstanding as										exercisable
		at beginning		Granted during		Exercised during		Lapsed during		Outstanding as at		as at end
		of year		the year		the year		the year		end of year		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.


116** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

Note 31. Share-based payments (Continued)

iv.	Westpac Performance Plan (WPP)

---	---	---	---	---	---	---	---	---	---	---	---	---
	****		****		****		****		****		****	Outstanding
		Outstanding as at										and exercisable
		beginning		Granted during		Exercised		Lapsed during		Outstanding as		as at end
		of year		the year		during the year		the year		at end of year		of year
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

---	---	---	---	---	---	---	---	---	---	---
		Outstanding as at		Granted during				Forfeited during		Outstanding as at
Allocation date		beginning of year		the year		Released		the year		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)

---	---	---	---	---	---	---	---	---	---	---
		Outstanding as at		Granted during				Forfeited during		Outstanding as at
Allocation date		beginning of year		the year		Released		the year		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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	117

Note 31. Share-based payments (Continued)

vii.Employee Share Plan (ESP)


						Average number of
				Number		shares allocated per		Total number of		Market price
	****	Allocation date	****	of participants	****	participant	****	shares allocated	****	per share^a^		****	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.
---	---


118** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

Note 32. Superannuation commitments

Accounting policy

Westpac recognises an asset or a liability for its defined benefit schemes, being the net of the defined benefit obligations and the fair value of the schemes’ assets. The defined benefit obligation is calculated as the present value of the estimated future cash flows, discounted using high-quality long dated corporate bond rates.
The superannuation expense is recognised in operating expenses and remeasurements are recognised through OCI.
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:


						Date of last actuarial assessment of the
Name of plan	****	Type	****	Form of benefit	****	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		Defined benefit		Indexed pension and lump sum		5 April 2021^a^
Staff Superannuation Scheme (UKSS)
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.
---	---

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	119

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

All values are in US Dollars.

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


120** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

Note 32. Superannuation commitments (Continued)

Sensitivity to changes in significant assumptions

The following table shows the impact of changes in assumptions on the defined benefit obligation for the WGP. No reasonably possible changes in the assumptions of Westpac’s other defined benefit plans would have a material impact on the defined benefit obligation.


	Increase in obligation
$m	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%

All values are in US Dollars.

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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	121

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

All values are in US Dollars.

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.


122** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

Note 34. Related party disclosures

Related parties

Westpac’s related parties are those it controls or can exert significant influence over. Examples include subsidiaries, associates, joint ventures and superannuation plans as well as key management personnel and their related parties.

Key management personnel (KMP)

Key management personnel are those persons who have the authority and responsibility for planning, directing and controlling the activities of Westpac, directly or indirectly, including any director (whether executive or otherwise).

Parent Entity

Westpac Banking Corporation is the ultimate parent company of the Group.

Subsidiaries - Note 29

The Parent Entity has the following related party transactions and balances with subsidiaries:

Type of transaction/balance	Details disclosed in
Balances due to/from 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:


	****		****	Post	****		****		****		****	****
		Short-		employment		Other long-		Termination		Share-
$		term benefits		benefits		term benefits		benefits		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

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	123

Note 34. Related party disclosures (Continued)

Other transactions with KMP

KMP receive personal banking and financial investment services from Westpac in the ordinary course of business. The terms and conditions, for example interest rates and collateral, and the risks to Westpac are comparable to transactions with other employees and did not involve more than the normal risk of repayment or present other unfavourable features.

Details of loans provided and the related interest charged to KMP and their related parties are as follows:


	****	Interest payable	****	Closing	****	Number of KMP
$		for the year		loan balance		with loans
2024		1,030,280		32,064,184		10
2023^a^		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 Executives^a^
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.


124** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

Note 35. Notes to the cash flow statements

Accounting policy

Cash and balances with central banks include cash held at branches and in ATMs, balances with overseas banks in their local currency and balances with central banks including accounts with the RBA and accounts with overseas central banks.

Reconciliation of net cash provided by/(used in) operating activities to net profit for the year is set out below.


		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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	125

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

All values are in US Dollars.

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.


126** WESTPAC GROUP** 2024 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

Note 35. Notes to the cash flow statements (Continued)

Cash and balances with central banks

The following table provides the breakdown of cash and cash balances with central banks.


	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

All values are in US Dollars.

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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	127

CONSOLIDATED ENTITY DISCLOSURE STATEMENT

The following table includes details of the controlled entities of Westpac. The entity’s role as a trustee, partner or participant in a joint venture (if applicable), of an entity within the Group is disclosed in ‘Type of entity’. Overseas companies predominantly carry on business in the country of incorporation. For unincorporated entities, ‘Country of incorporation’ refers to the country where business is carried on. Where the tax residency of an entity is foreign (as defined in the Income Tax Assessment Act 1997), the relevant country of tax residency is disclosed.


	****		****	% of share	****		****
				capital
Name of entity		Type of entity	****	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.P^a^		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


128** WESTPAC GROUP** 2024 ANNUAL REPORT

CONSOLIDATED ENTITY DISCLOSURE STATEMENT


	****		****	% of share	****		****
				capital
Name of entity		Type of entity	****	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 Limited^b^		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 - Limited^c^		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 Fund^b^		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

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	129


	****		****	% of share	****		****
				capital
Name of entity		Type of entity		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 Fund^b^		Trust		N/A		New Zealand		Foreign - New Zealand
Westpac NZ Covered Bond Holdings Limited^d^		Body Corporate		19		New Zealand		Foreign - New Zealand
Westpac NZ Covered Bond Limited^d^		Body Corporate		19		New Zealand		Foreign - New Zealand
Westpac NZ Operations Limited		Body Corporate		100		New Zealand		Foreign - New Zealand
Westpac NZ Securitisation Holdings Limited^d^		Body Corporate		19		New Zealand		Foreign - New Zealand
Westpac NZ Securitisation Limited^d^		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 Fund^b^		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.
---	---


130** WESTPAC GROUP** 2024 ANNUAL REPORT

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<br>Chairman<br><br>Sydney<br><br>3 November 2024	Peter King<br><br>Managing Director and Chief Executive Officer

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	131

Management’s report on internal control over financial reporting

The following report is required by rules of the US Securities and Exchange Commission.

The management of Westpac is responsible for establishing and maintaining adequate internal control over financial reporting for Westpac as defined in Rule 13a - 15(f) under the Securities Exchange Act of 1934, as amended. Westpac’s internal control system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with applicable accounting standards.

Westpac’s internal control over financial reporting includes policies and procedures that: pertain to the maintenance of records that in reasonable detail accurately reflect the transactions and dispositions of the assets of Westpac and its consolidated entities; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with applicable accounting standards, and that receipts and expenditures of Westpac are being made only in accordance with authorizations of management and directors of Westpac and its consolidated entities; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the assets of Westpac and its consolidated entities that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Westpac management, with the participation of the CEO and CFO, assessed the effectiveness of Westpac’s internal control over financial reporting as of 30 September 2024 based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in its 2013 Internal Control Integrated Framework. Based on this assessment, management has concluded that Westpac’s internal control over financial reporting as of 30 September 2024 was effective.

The effectiveness of Westpac’s internal control over financial reporting as of 30 September 2024 has been audited by PricewaterhouseCoopers, an independent registered public accounting firm, as stated in its report which is included herein.


132** WESTPAC GROUP** 2024 ANNUAL REPORT

STATUTORY STATEMENTS

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Westpac Banking Corporation

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Westpac Banking Corporation and its subsidiaries (the “Company”) as of September 30, 2024 and 2023, and the related consolidated income statements, statements of comprehensive income, statements of changes in equity and cash flow statements for each of the three years in the period ended September 30, 2024, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of September 30, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of September 30, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2024 in conformity with Australian Accounting Standards as issued by the Australian Accounting Standards Board and International Financial Reporting Standards as issued by the International Accounting Standards Board. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing on page 131 of the 2024 Annual Report. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

PricewaterhouseCoopers, ABN 52 780 433 757

One International Towers Sydney, Watermans Quay, Barangaroo NSW 2000,

GPO BOX 2650 Sydney NSW 2001

T: 1300 799 615, F: 1300 799 618, www.pwc.com.au

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	133

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Supplemental Information

The parent entity only information on the face of the consolidated financial statements and other parent entity only disclosures in the notes to the financial statements (the “supplemental information”) have been subjected to audit procedures performed in conjunction with the audit of the Company’s consolidated financial statements. The supplemental information is the responsibility of the Company’s management. Our audit procedures included determining whether the supplemental information reconciles to the consolidated financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. The supplemental information, which is presented for purposes of additional analysis, is presented on a basis that differs from the consolidated financial statements and is not a required part of the consolidated financial statements presented in accordance with Australian Accounting Standards as issued by the Australian Accounting Standards Board and International Financial Reporting Standards as issued by the International Accounting Standards Board. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the consolidated financial statements as a whole.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.


134** WESTPAC GROUP** 2024 ANNUAL REPORT

STATUTORY STATEMENTS

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Provisions for expected credit losses on loans and credit commitments (ECL)

As described in Note 10 to the consolidated financial statements, the provision for expected credit losses on loans and credit commitments (ECL) was $5,084 million 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. Management’s model to estimate 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 judgmental adjustments to modelled outcomes (overlays).

The principal considerations for our determination that performing procedures relating to the ECL is a critical audit matter were: (i) there was a high degree of auditor judgment, 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 judgment, subjectivity and effort to test management’s judgments 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 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 judgments required the use of professionals with specialised skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’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. These procedures also included, among others (i) the involvement of professionals with specialised skill and knowledge to assist in testing management’s process for determining the ECL by evaluating the appropriateness of the models and the reasonableness of the assumptions related to SICR and the downside severity, (ii) testing the reasonableness of the probability weights assigned to the forward-looking macroeconomic scenarios, (iii) testing the accuracy and completeness of critical data elements that are inputs used in the ECL model, and (iv) testing the reasonableness and completeness of overlays.

Litigation, remediation provisions and regulatory investigations

As described in Note 25 to the consolidated financial statements, the Company recorded provisions for litigation, non-lending losses and remediation of $240 million at September 30, 2024. A portion of the provisions relate to 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. An assessment of the likely cost to the Company of these matters is made on a case-by-case basis and specific provisions or disclosures are made where management 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.

FINANCIAL STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	135

The principal considerations for our determination that performing procedures relating to litigation, remediation provisions and regulatory investigations is a critical audit matter were (i) there was significant judgment by management 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 judgment 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.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s evaluation of provisions to determine whether a present obligation with a probable cash outflow exists and can be reliably estimated. For contingent liabilities, these procedures also included testing the effectiveness of controls relating to management’s identification and evaluation of contingent liabilities, including controls over determining whether or not it is possible that a loss has occurred or whether there is a probable outflow from a present obligation. These procedures also included, among others, (i) evaluating the evidence of management’s quantification of provisions and the assumptions applied and (ii) assessing the appropriateness of management’s disclosures.

PricewaterhouseCoopers Sydney, Australia

November 3, 2024

We have served as the Company’s auditor since 1968.


136 WESTPAC GROUP 2024 **** ANNUAL REPORT

ITEM 19. EXHIBITS INDEX

1.		Constitution (as amended) incorporated by reference to our Form 6-K filed on 15 December 2021.
4(c).2		Form of Access and Indemnity Deed between Westpac Banking Corporation and Director, incorporated by reference to our Annual Report on Form 20-F for the year ended 30 September 2008.
4(c).3		Indemnity Deed Poll dated 10 September 2009, of Westpac Banking Corporation, incorporated by reference to our Annual Report on Form 20-F for the year ended 30 September 2009.
8.		List of controlled entities – refer to Note 29 to the financial statements in this Annual Report.
11(b)		Insider trading policies
12.		Certifications pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.
13.		Certifications pursuant to 18 U.S.C. Section 1350.
15.1		Auditor consent dated 5 November 2024
15.2		Westpac Group 2024 Annual Report on Form 20-F
16.1		Letter from PricewaterhouseCoopers to the SEC
101.INS		Inline XBRL Instance Document – The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

Copies of any instrument relating to the long-term debt of Westpac Banking Corporation that is not being attached as an exhibit to this Annual Report on Form 20-F and which does not exceed 10% of the total consolidated assets of Westpac Banking Corporation will be furnished to the SEC upon request.

FINANCIAL<br>STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	137

Signatures

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorised the undersigned to sign this Annual Report on its behalf.

WESTPAC BANKING CORPORATION

By: /s/ Michael Clayton

Michael Clayton

General Counsel – Corporate, Treasury and WIB

Dated 5 November 2024

Exhibit 11(B)

138 **** WESTPAC GROUP 2024 ANNUAL REPORT

EXHIBIT 11(B): INSIDER TRADING POLICIES

Securities trading

Westpac’s Group Securities Trading Policy prohibits Directors, employees, secondees and contractors from trading in any securities and other financial products that they possess inside information on. They are also prohibited from passing on inside information to others who may use that information to trade in securities or from procuring others to trade. The policy requirements also apply to associate accounts.

In addition, Directors and any employees, secondees or contractors who, because of their seniority or the nature of their position, may have access to material non-public information about Westpac (known as Prescribed Employees) are subject to further restrictions, including prohibitions on trading prior to and immediately following annual and half year results announcements. These restrictions also apply to their associates.

The Westpac Group Securities Trading Policy is available in the Corporate Governance section of our website at www.westpac.com.au/about-westpac/westpac-group/corporate-governance/principles-policies/.

FINANCIAL<br>STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	139


Westpac Group Securities Trading Policy

Policy Owner:		GM Non-Financial Risk and Chief
		Compliance Officer
Last ** Policy approval:**		23 February 2023
Last ** Policy Owner review:**		5 September 2022
Effective date:		20 March 2023
Policy ** Contact:**		Head of Group Control Room
Location:		Compliance and Financial Crime
		Policy Centre



	This Policy forms part of the following Risk Document hierarchy:
	Level ** 1: Framework**	Compliance and Conduct Management Framework
	Level 2: Policy	Westpac ** Group Securities Trading Policy**
	Level ** 3: Standard**	Westpac Group Key Prescribed Employee Trading Standard
	Level ** 4: Procedure**	Westpac Group Securities Trading Policy Procedures for Identifying Prescribed Employees

1	Westpac Group Securities Trading Policy

140 WESTPAC GROUP 2024 ANNUAL REPORT Table of contents


1.	Overview			3

1.1	Purpose			3

1.2	Key Principles			3

1.3	Application			3

1.3.1			Employee and associate accounts	3

2.	Policy Requirements			4

2.1	Insider trading and general obligations for all employees			4

2.1.1			Insider trading prohibition	4
2.1.2			Use of derivatives and hedging over unvested Westpac securities prohibition	4
2.1.3			Short-term trading prohibition	4

2.2	Rules for Westpac Directors and PEs when trading Westpac securities			4

2.2.1			Identifying PEs and KPEs	4
2.2.2			Monitoring of PEs and KPEs	4
2.2.3			No trading during Blackout Periods	5
2.2.4			PEs trading outside a Blackout Period	5
2.2.5			Key Prescribed Employees trading outside a Blackout Period	5
2.2.6			Westpac Directors trading outside a Blackout Period	5
2.2.7			Participation in corporate actions and employee share plans	6
2.2.8			Margin loans	6
2.2.9			Short selling is prohibited	6
2.2.10			Exceptions to Blackout Periods	6

3.		Roles and Responsibilities		7

4.		Policy Control		7

4.1		Policy Ownership, Approval and Review		7

4.2		Prudential and Statutory Requirements		8

4.3		Monitoring and Reporting		8

4.4		Breaches and Exceptions		8

Appendix 1 – Key terms and related documents				9

Appendix 2 – Criteria for Identifying PEs and KPEs				11


2	Westpac Group Securities Trading Policy


FINANCIAL<br>STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	141

1.	Overview
1.1	Purpose
---	---

Delivering on Westpac’s Purpose requires that we observe proper standards of market conduct. This Westpac Group Securities Trading Policy (the Policy) sets out the obligations and minimum standards required to manage risks around insider trading and other conflicts of interest relating to employee trading in securities (including Westpac securities^1^).

Appendix 1 contains the key terms and definitions used within this Policy. Defined terms are bolded on first use.

This Policy supports the Westpac Group Compliance and Conduct Risk Management Framework^2^, and the Code of Conduct^3^ Outcome, ‘Being ethical’.

1.2	Key Principles
i.	Westpac Employees who are in receipt of inside information must not:
---	---
a)	Trade in the relevant securities (including Westpac securities) to which that information relates;
---	---
b)	Tip or procure another person to trade in those securities; or
---	---
c)	Share that information with anyone else.
---	---
ii.	Westpac Employees must not use derivatives or any other hedging instrument to manage the risk of unvested Westpac securities.
---	---
iii.	Westpac Employees must not undertake any short-term trading activity.
---	---
iv.	Westpac Directors and Prescribed Employees (PEs) or their associates must not trade in Westpac securities during Blackout Periods.
---	---
v.	PEs are subject to pre-trade notification requirements when trading in Westpac securities outside of Blackout Periods.
---	---
vi.	Key Prescribed Employees (KPEs) and Westpac Directors are subject to pre-clearance requirements when trading in Westpac securities outside of Blackout Periods.
---	---
vii.	Westpac Directors and PEs must not engage in short selling of Westpac securities.
---	---
viii.	Westpac Directors and Westpac Employees must ask ‘Should We?’, as well as ‘Can We?’ to ensure they exercise good judgement when trading in securities, and to avoid any perception that they have misused inside information for personal benefit.
---	---
1.3	Application
---	---

This Policy applies to all full-time and part-time employees, contractors, secondees, interns and consultants of Westpac Group globally (Westpac Employees)^4^ and Directors of Westpac Banking Corporation and its controlled entities. The Policy also applies to employees on extended leave, such as parental leave, career break, long service leave or leave without pay. Compliance with this Policy is a condition of employment or a contract for service with Westpac. Specific requirements (subsection 2.2) apply only to Westpac Directors and employees who have been classified by Control Room Operations as PEs.

1.3.1Employee and associate accounts

The Policy requirements apply to all trading or investment accounts held individually or jointly by Westpac Employees. They also apply to trading or investment accounts held by their associates (associate accounts).

Associates are:

■Children under age 18, and

■	Any other persons or legal entities (including self-managed superannuation funds) where Westpac Employees have the control or influence over trading or investment decisions.

When identifying associate accounts, Westpac Employees should consider whether they could be perceived as having control over or investment influence on trading of a particular account.

^1^Westpac securities include Westpac New Zealand Limited (WNZL) securities.

^2^The New Zealand Group Compliance and Conduct Risk Management Framework for Employees in New Zealand.

^3^ The New Zealand Code of Conduct for Employees in New Zealand.

^4^This definition is for the purpose of this Policy only. It is deliberately broad in order to incorporate the broad categories of applicable persons. It differs from the definition of “employees” in the Compliance Glossary.

3	Westpac Group Securities Trading Policy

142 WESTPAC GROUP 2024 ANNUAL REPORT Westpac Employees must take all reasonable steps to inform their associates of the requirements of this Policy and ensure their associates act in accordance with the Policy. In instances where an associate is required under this Policy to act, the Westpac Employee must take that action on their associate’s behalf; for example, obtaining pre-clearance prior to trading by a KPE’s associate outside of the Blackout Period.

**2.**Policy Requirements

2.1	Insider trading and general obligations for all employees

2.1.1Insider trading prohibition

Insider trading is illegal and therefore strictly prohibited. In circumstances where Westpac Employees are in possession of inside information, employees must not trade in securities to which that information relates. Inside information is information that is not generally available and, if the information were generally available, a reasonable person would expect it to have a material effect on the price or value of securities. Inside information may relate to Westpac, one of our subsidiaries, a corporate customer or any other company with listed securities.

Westpac Employees also must not encourage others to trade in those securities or share inside information with others (except when permitted by Westpac policy and for legitimate business purposes).

The insider trading prohibition applies regardless of how an employee acquired the information. The prohibition continues to apply even when the employee is no longer employed by or providing services to Westpac.

2.1.2Use of derivatives and hedging over unvested Westpac securities prohibition

Westpac Employees are prohibited from entering into any options, derivatives or other arrangements which operate to limit the economic risk of an unvested holding in Westpac securities or other unvested entitlements under employee share plans.

This prohibition does not apply to vested holdings in Westpac securities, although approval or notification and other arrangements apply to Westpac Directors and PEs dealing in vested securities (refer to subsection 2.2 below).

2.1.3Short-term trading prohibition

Westpac Employees are prohibited from engaging in short-term or day trading. Their trading activities should have a medium to long term investment objective and they must hold securities for a minimum period of 30 calendar days.

2.2****Rules for Westpac Directors and PEs when trading Westpac securities

2.2.1Identifying PEs and KPEs

Heads of business units or functions (Heads) are responsible for identifying Westpac Employees within their business unit or function who satisfy the criteria of PEs or KPEs.

PEs	■Westpac Employees who, due to the nature of their position, are likely to come in contact with, or have access to, key financial, operational or strategic information about Westpac that will, or is likely to have, a material effect on the price or value of Westpac securities.<br><br>■Includes Westpac Directors and Group Executives
KPEs	■Certain PEs, such as those who hold senior positions, whose trading activities may give rise to heightened regulatory or reputational scrutiny.<br><br>■KPEs are subject to more onerous obligations in relation to trading in Westpac securities.

The Policy Owner or delegate may from time to time nominate additional Westpac Employees who are working on a particular market-sensitive matter as KPEs or impose ad hoc trading restrictions on them for the duration of the matter.

2.2.2Monitoring of PEs and KPEs

The MyComplianceOffice (MCO) system:

■Contains all active PEs and KPEs and

■Notifies these individuals upon their appointment as PEs or KPEs, or their removal from the Register.


4	Westpac Group Securities Trading Policy

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Upon appointment, PEs and KPEs must input details of their and their associates’ HINs/SRNs/CSNs and other information as may be required relating to their Westpac securities holdings in their personal and associate accounts into MCO, to enable Control Room Operations to conduct monitoring of their compliance with the Policy.

2.2.3No trading during Blackout Periods

In addition to the general prohibition on Westpac Employees trading in Westpac securities while in receipt of inside information, Westpac Directors and PEs (including KPEs) and their associates are prohibited from trading in Westpac securities during the following Blackout Periods:

■	The period commencing on 15 March and ending at the beginning of trading in Sydney one day following the announcement of Westpac’s half year results in early May; and
■	The period commencing on 15 September and ending at the beginning of trading in Sydney one day following the announcement of Westpac’s full year results in early November.
---	---

The GM Non-Financial Risk and Chief Compliance Officer has discretion to extend or reduce (conditionally or unconditionally) the Blackout Periods. Control Room Operations provides notifications to PEs before the start and end of Blackout Periods.

In addition, the GM Non-Financial and Chief Compliance Officer has discretion to impose ad hoc restrictions at times when matters subject to ASX Listing Rule 3.1A or NZX Listing Rule 3.1.2 are being considered^5^. Any such ad hoc restrictions may be imposed on all PEs or limited to KPEs or individually identified employees, depending on the nature of the matter.

If you have inside information about Westpac, you must not trade in Westpac securities at any time, including outside a Blackout Period.

2.2.4PEs trading outside a Blackout Period

PEs (other than KPEs) must submit a trade pre-clearance request in MCO before they or their associates do any of the following outside a Blackout Period:

■	Trade Westpac securities, or enter into a hedging arrangement over vested Westpac securities; or

■Arrange for another person to enter into arrangements of those kinds.

PEs who do not have access to MCO must notify Control Room Operations by email at groupcontrolroomprescribedemployees@westpac.com.au of their intention to trade.

Any transaction which causes a change in ownership of Westpac securities will be considered a trade of securities under this Policy. This includes a transfer to a family member, family trust or personal superannuation scheme.

2.2.5Key Prescribed Employees trading outside a Blackout Period

KPEs must obtain pre-clearance prior to trading in Westpac securities, as set out in the Westpac Group Key Prescribed Employees Trading Standard (KPE Trading Standard). They are not required to complete the Prescribed Employee Trade Notification Form, as set out in subsection 2.2.3 of this Policy.

2.2.6Westpac Directors trading outside a Blackout Period

Westpac Directors must obtain the approval of the Chairman before they or their associates do any of the following outside a Blackout Period:

■Trade Westpac securities, or enter into a hedging arrangement over vested Westpac securities; or

■Arrange for another person to enter into arrangements of those kinds.

In the case of the Chairman, approval must be obtained from the Chairman of the Board Audit Committee. Westpac Directors must also notify the General Manager, Company Secretary as soon as practical of any trading by either themselves or their associates in Westpac securities, including entering into a hedging arrangement over vested Westpac securities.

^5^ This relates to potentially market sensitive matters that are not required to be disclosed immediately to the market under ASX Listing Rule 3.1 due to the application of the exceptions in ASX Listing Rule 3.1A or NZX Listing Rule 3.1.2

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144 WESTPAC GROUP 2024 ANNUAL REPORT

2.2.7Participation in corporate actions and employee share plans

Westpac Directors and PEs who are eligible may participate in dividend reinvestment plans, rights issues or bonus issues (corporate actions) which are offered to all Westpac shareholders, even where the corporate action is made, or acceptance falls, within a Blackout Period. However, Westpac Directors and PEs must not elect to participate in a corporate action or change their election if they are in possession of inside information relating to Westpac.

PEs may accept an invitation to participate in an employee share plan, regardless of when the offer is made, even if the acceptance falls within a Blackout Period. PEs must then comply with all rules in this Policy for trading in Westpac securities acquired under an employee share plan.

2.2.8Margin loans

Westpac Directors and PEs are permitted to take out margin loans over their holdings in Westpac securities. However, they must not meet margin calls by the sale of Westpac securities at a time when trading in Westpac securities is prohibited under this Policy, including trading when in receipt of inside information relating to Westpac or during a Blackout Period.

Westpac Directors and PEs are expected to have sufficient resources to meet a margin call by means other than a sale of Westpac securities. If a Westpac Director or PE has any doubt about their ability to meet a margin call by means other than a sale of their Westpac securities, they should take steps to rearrange their affairs to have a facility that does not contain price triggers (for example, an investment loan secured against other assets). If a margin lender sells Westpac securities during a Blackout Period or without the relevant pre-trade notification or pre-clearance approval being provided outside of a Blackout Period, it will be considered a breach of this Policy, whether executed on the Westpac Director’s or PE’s instructions to do so, or not.

In addition, KPEs are required to disclose to Control Room Operations any margin lending arrangements they may have in respect to Westpac securities.

2.2.9Short selling is prohibited

Westpac Directors and PEs must not short sell Westpac securities; that is, sell Westpac securities that have been borrowed with a view to repurchasing them later at a lower price and returning them to the lender.

Short selling can send a negative message about the level of confidence in the prospects of the company. It could also be speculated that short selling of Westpac securities by a Westpac Director or PE is due to their knowledge or awareness of negative information about Westpac that the market is not aware of or has not fully absorbed.

2.2.10Exceptions to Blackout Periods

Generally, no exceptions will be made to the prohibition on Westpac Directors and PEs, or their associates, trading in Westpac securities during a Blackout Period. However, Westpac Directors and PEs who have an unreasonable financial impost or who are in other exceptional circumstances may apply in writing to be exempted from the prohibition on selling Westpac securities during a Blackout Period.


Applicant	Submit application to
PEs, KPEs, Group Executives	■GM Non-Financial Risk and Chief Compliance Officer
Westpac Directors	■Chair
Westpac Chair	■Chair of Board Audit Committee

In the application, the applicant must confirm that they are not in receipt of inside information relating to Westpac and provide details of all relevant circumstances, including why the proposed sale of Westpac securities is the only reasonable course of action available to overcome the circumstances.

The applicant will be informed in writing of the outcome of their application and any conditions imposed for an exception to trading during a Blackout Period. In certain circumstances, it may not be appropriate to advise the applicant of the reasons for the decision made.


6	Westpac Group Securities Trading Policy

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If the person to whom the application is made, as set out in the table above, possesses inside information about Westpac themselves, they must decline the application.

Where approval to trade during a Blackout Period has been provided to a Westpac Director or a Group Executive, the applicant is required to advise the Group General Counsel and the General Manager, Company Secretary to assist in the preparation of any 3Y Notice which may need to be lodged with the ASX.

3.	Roles and Responsibilities

First Line of Defence

All staff		■Understand and comply with obligations under this Policy including prohibition on insider trading, short selling and hedging of unvested Westpac securities.
PEs and KPEs		■Input all required information relating to personal and associate holdings and accounts into MCO.<br><br>■Do not trade in Westpac securities during Blackout Periods.<br><br>■Submit a trade pre-clearance request in MCO of your intention to trade in Westpac securities outside of Blackout Periods.
Directors		■Provide Control Room Operations with all required information relating to personal and associate holdings and accounts.<br><br>■Do not trade in Westpac securities during Blackout Periods.<br><br>■Obtain pre-clearance approval prior to trading in Westpac securities outside of Blackout Periods.
Business and Support − Group and Divisional teams		■Implement this Policy by ensuring staff understand their obligations under the Policy.<br><br>■Identify employees within business unit or function who satisfy the criteria of PEs or KPEs.<br><br>■Ensure that all PEs (including KPEs) within business unit or function have provided all required information to Control Room Operations.<br><br>■Establish effective business procedures and controls to comply with Policy.<br><br>■Escalate actual, likely, or suspected violations of this Policy.

Second Line of Defence

GM Non-Financial Risk and Chief Compliance Officer		■Accountable for ownership and approval of this Policy.<br><br>■Apply discretion to extend or reduce (conditionally or unconditionally) Blackout Periods (or apply additional restrictions) where appropriate.<br><br>■Consider and approve exceptions to this Policy where appropriate.
Control Room Operations – Enterprise Compliance		■Responsible for ongoing maintenance of this Policy.<br><br>■Monitor for PE and KPE compliance with this Policy.<br><br>■Act as delegate of Policy Owner for purposes of nominating additional Westpac Employees as KPEs and handling breaches of this Policy.<br><br>■Support the Group Securities Trading functionality in MCO.
Divisional Compliance		■Provide oversight and control to ensure Business compliance with this Policy.<br><br>■Provide Compliance advice to Business stakeholders.

Third Line of Defence

Group Audit		■Provide independent assurance by evaluating and opining on the adequacy and effectiveness of both First and Second Line risk management approaches.<br><br>■Track remediation progress, with the aim of providing the Board, and Senior Executives, with comfort that the Group’s governance, risk management and internal controls are operating effectively.

4.	Policy Control

4.1****Policy Ownership, Approval and Review

This Policy is owned by the GM Non-Financial Risk and Chief Compliance Officer, who is accountable for its ongoing management. The Head of Control Room Operations is responsible for the Policy’s ongoing maintenance.

This Policy is approved by the GM Non-Financial Risk and Chief Compliance Officer.

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146 WESTPAC GROUP 2024 ANNUAL REPORT

This Policy must be reviewed every two years to ensure it remains relevant, fit for purpose and aligns to the Compliance and Conduct Risk Management Framework.

4.2	Prudential and Statutory Requirements

This Policy supports our compliance with various regulatory obligations including s1043A - Insider Trading, s.912A(1)(aa) - Conflicts of Interests of the Corporation Act 2001 (Cth) and Chapter 12, ASX Listing Rules and Subpart 2 of Part 5 of the New Zealand Financial Markets Conduct Act 2013 and Part 3 of the NZX Listing Rules.

4.3****Monitoring and Reporting

Business units and functions are required to implement a plan to monitor for compliance with this Policy. The nature and frequency of monitoring must be proportionate to the inside information relating to Westpac securities that the Business Unit has access to.

4.4****Breaches and Exceptions

Non-compliance with this Policy could have serious consequences for Westpac. It is important for all Westpac Employees to speak up about risks, Issues or Incidents relating to the requirements in this Policy. Please refer to the Westpac Group Speaking up Policy^6^ for more information on the channels available to raise these matters.

Where potential breaches of this Policy are identified they should be managed in accordance with the requirements of the Group Incident Management Policy, Group Regulatory Disclosure Policy^7^ and specific regulatory or legislative requirements. Breaches of this Policy must be notified to the Policy Owner or delegate for action and remediation.

Exceptions to the Policy are approved by the Policy Owner. Requests for exceptions should be in writing and include a documented rationale that considers mitigation of any risks resulting from a departure from the Policy.

^6^ The New Zealand Speaking Up Policy for employees in New Zealand.

^7^ The New Zealand Regulatory Disclosure Policy for employees in New Zealand.


8	Westpac Group Securities Trading Policy

FINANCIAL<br>STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	147

Appendix****1 Key terms and related documents

The key terms and their definitions used within this Policy are:


Term	Definition
Associates	■As defined in subsection 1.3.1.
Corporate actions	■Refers to dividend reinvestment plans, rights issues, bonus issues or other securities issuances
CSN	Common Shareholder Number. This is a unique account number issued to a holder of the quoted securities (i.e., WNZL securities) that is common to all New Zealand share registers.
HIN	■Holder Identification Number. This is a unique account number issued to a person upon becoming a customer of a broker.
Inside information	■Information that:<br><br>–is not generally available; and<br><br>–if it were generally available, a reasonable person would expect to have a material effect on the price or value of financial products.<br><br>A reasonable person would be taken to expect information to have a material<br><br>effect on price or value of financial products if the information would, or is likely to, influence the trading decision of a person who commonly trades in the market
Insider Trading	Insider trading would occur if:<br><br>■a person possesses inside information about a security or an issuer of a security (insider); and<br><br>■that person (whether as principal or agent):<br><br>–trades in the security (or related derivative); or<br><br>–advises, procures, or encourages any other person to trade or enter into an agreement to trade in the security (or related derivative); or<br><br>–communicates inside information, either directly or indirectly, to another person if the insider knows or ought reasonably to know, that the other person would or would be likely to trade or advise, procure, or encourage<br><br>a third person to trade or enter into an agreement to trade in the relevant security (or related derivative).
Key Prescribed<br><br>Employees	■As defined in subsection 2.2.1
Prescribed Employees	■As defined in subsection 2.2.1
Securities	■In this Policy, securities include but are not limited to:<br><br>–Shares, bonds or debentures issued or proposed to be issued by a company; or<br><br>–derivatives; or<br><br>–options; or<br><br>–interests in a managed investment scheme; or<br><br>–debentures, stocks, or bonds issued or proposed to be issued by a government; or<br><br>–superannuation products, other than those prescribed by regulations; or<br><br>–any other financial products that can be traded on a financial market.
Trading	Includes any transaction or change affecting title or interest in securities, including:<br><br>■Acquiring or disposing of securities, whether on or off market, or instructing a third party to do so;<br><br>■Entering into or exercising options or rights over securities, including Westpac employee share options;<br><br>■Converting convertible securities;<br><br>■Engaging in margin lending or stock lending in relation to securities;<br><br>■Electing to participate in, cease or vary participation in share purchase plans or dividend reinvestment plans;<br><br>■Transferring legal ownership of securities, even if beneficial ownership does not change; or<br><br>■Agreeing or apply to do any of the above.

9	Westpac Group Securities Trading Policy

148 WESTPAC GROUP 2024 ANNUAL REPORT


Term	Definition
SRN	■Shareholder Reference Number. This is a unique account number issued to<br><br>a holder of sponsor-issued securities (i.e. Westpac securities).
Westpac (“we” or “us”)	■Means Westpac Banking Corporation, its brands, divisions and each of its controlled entities
WNZL Securities	■In this policy, WNZL securities include but are not limited to:<br><br>–Notes issued under WNZL’s domestic medium term note programme; or<br><br>–Regulatory capital in the form of subordinated debt qualifying as Tier 2 Capital or perpetual preference shares qualifying as Additional Tier 1 Capital, for WNZL’s regulatory capital purposes, or<br><br>–Any other WNZL financial products that can be traded on a financial market.

This Policy should also be read in conjunction with the following documents:

Table 1: Key supporting risk documents


Document	Purpose	Document Owner
Westpac Code of Conduct	■Practically outlines the expectations of Westpac and our people to do what is right, including putting the customer<br><br>and bank ahead of personal interests and identify, declare, record and appropriately manage conflicts	■Code of Conduct Team
Westpac Group Conflicts of Interest Policy	■Sets out the high-level principles of Conflicts management of the many types of conflicts that are applicable across the Group.	■GM Non- Financial Risk and Chief Compliance<br><br>Officer
Westpac Group Personal Account Dealing Policy	■Sets out the requirements applying to employees the conduct personal trading and investments in securities.	■GM Non- Financial Risk and Chief Compliance<br><br>Officer
Westpac Group Securities Trading Policy Key Prescribed Employee Trading Standard	■Sets out the obligations of KPEs (including Group Executives) when trading in Westpac securities.	■Head of Control Room Operations
Westpac Group Securities Trading Policy Procedures for Identifying<br><br>Prescribed Employees	■Sets out the procedures that Heads of business units or functions should follow when identifying employees within their business unit or function who should be classified as PEs or KPEs.	■Head of Control Room Operations


10	Westpac Group Securities Trading Policy

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Appendix 2 – Criteria for Identifying PEs and KPEs

1.	Identifying PEs and KPEs by Business Unit and Function

Employees who work in a business unit or function where the nature of business activities means there is a higher risk of actual or perceived insider trading, conflict of interest or impropriety will be classified as DEs.

Heads of business units or functions are responsible for identifying employees within their business unit or function who satisfy the above criteria and who should be included in the register of DEs.

**2.**Identifying KPEs by position (irrespective of business unit or function)

The following employees are classified as KPEs:

Employees who undertake the roles or hold the specific positions of:

■	Chief Executive Officer
■	Group Executive
---	---
■	General Manager or equivalent
---	---

Any employees who are formally appointed in the Acting role for the above positions are automatically KPEs. In addition, employees in the immediate office of the above-mentioned employees (e.g., Chief of Staff, Business Managers, Executive Assistants etc.) should also be classified as KPEs.

Please refer to Westpac Group Securities Trading Policy Procedures for Identifying Prescribed Employees which set out procedures that heads of business units or functions should follow when identifying employees within their business unit or function who should be classified as PEs or KPEs.

11	Westpac Group Securities Trading Policy

Exhibit 12

150 WESTPAC GROUP 2024 ANNUAL REPORT

EXHIBIT 12

SECTION 302 CERTIFICATION

I, Peter Francis King, certify that:

1.	I have reviewed this annual report on Form 20-F of Westpac Banking Corporation (“the company”);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
---	---
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
---	---
4.	The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
---	---

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5.	The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: 5 November 2024



/s/ Peter Francis King

Peter Francis King

Managing Director and Chief Executive Officer

FINANCIAL<br>STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	151

EXHIBIT 12

SECTION 302 CERTIFICATION

I, Michael Rowland, certify that:

1.	I have reviewed this annual report on Form 20-F of Westpac Banking Corporation (“the company”);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
---	---
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
---	---
4.	The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
---	---

5.	The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: 5 November 2024



/s/ Michael Rowland

Michael Rowland

Chief Financial Officer

Exhibit 13

152 WESTPAC GROUP 2024 ANNUAL REPORT

EXHIBIT 13

SECTION 906 CERTIFICATIONS

Pursuant to 18 U.S.C. § 1350

I, Peter Francis King, certify that the Annual Report on Form 20-F for the year ended 30 September 2024 of Westpac Banking Corporation (the “issuer”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the issuer.


		Date: 5 November 2024
		/s/ Peter Francis King
		Peter Francis King
		Managing Director and Chief
		Executive Officer

I, Michael Rowland, certify that the Annual Report on Form 20-F for the year ended 30 September 2024 of Westpac Banking Corporation (the “issuer”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the issuer.


		Date: 5 November 2024
		/s/ Michael Rowland
		Michael Rowland
		Chief Financial Officer

Exhibit 15.1

FINANCIAL<br>STATEMENTS	EXHIBITS INDEX	STRATEGIC REVIEW	PERFORMANCE<br>REVIEW	SHAREHOLDER<br>INFORMATION	153

EXHIBIT 15.1

Consent of Independent Registered Public Accounting Firm

We hereby consent to the incorporation by reference in the Registration Statements on Form F-3 (Nos. 333-260702 and 333-260703) of Westpac Banking Corporation of our report dated 3 November 2024 relating to the financial statements and the effectiveness of internal control over financial reporting which appears in this Form 20- F.


/s/ PricewaterhouseCoopers

Sydney, Australia

5 November 2024

Exhibit 15.2

154 WESTPAC GROUP 2024 ANNUAL REPORT<br>EXHIBIT 15.2<br>Westpac Group 2024 Annual Report on Form 20-F<br>Section 1 156<br>Strategic review 156<br>Corporate governance 196<br>Directors’ report 222<br>Remuneration report 236<br>Information on Westpac 263<br>Section 2 270<br>Reading this report 271<br>Group performance 276<br>Performance summary 276<br>Key financial information 277<br>Impact of Notable Items 278<br>Review of earnings 280<br>Credit quality 291<br>Balance sheet and funding 294<br>Capital and dividends 297<br>Segment reporting 302<br>Consumer 304<br>Business and Wealth 306<br>Westpac Institutional Bank (WIB) 308<br>Westpac New Zealand 310<br>Group Businesses 313<br>Risk factors 317<br>Section 3 Financial statements 333<br>Section 4 334<br>Shareholding information 335<br>Additional information 350<br>Glossary of abbreviations and defined terms 363
FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 155<br>This page has been intentionally left blank.
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156 WESTPAC GROUP 2024 ANNUAL REPORT<br>HOW WE CREATE VALUE<br>OUR FOUNDATIONS OUR BUSINESS THE VALUE WE CREATEa<br>Passionate people<br>who make<br>a difference<br>Data-informed<br>insights and<br>decision making<br>Proactive risk<br>management<br>and risk culture<br>Strong balance<br>sheet<br>Shareholders<br>Delivering improved returns to shareholders (pages 164-167)<br>151C 15C $2.0BN<br>ordinary<br>dividends<br>per share<br>special<br>dividend<br>per share<br>total share<br>buyback<br>announced<br>b<br>Customers<br>Building enduring customer relationships (pages 168-173)<br>$807BN $674BN 13M<br>in lending in customer<br>deposits<br>customers served<br>Our people<br>Being a place where the best people want to work<br>(pages 174-177)<br>80 $5.9BN 49%<br>Organisational<br>Health Index<br>paid to our<br>people<br>women in senior<br>leadership<br>c<br>Community<br>Being a leader in the community (pages 178-181)<br>$3.5BN $177M $21.1M<br>taxes paid globally,<br>including the bank levy<br>and 5th largest tax<br>payer in Australiad<br>in community<br>investmente<br>spent with<br>Indigenous-owned suppliers<br>Environment<br>Contributing to the net-zero transition (pages 182-185)<br>$10BN 86% 13<br>increase in sustainable<br>finance lendingf<br>reduction in scope 1 and<br>2 emissions from our<br>2021 baseline<br>targets in all<br>9 NZBA emissions<br>intensive sectors<br>a. Comparisons are to the 12 months ended 30 September 2023, unless otherwise stated.<br>b. Includes $1.0 billion announced in May 2024 and $1.0 billion announced in November 2024.<br>c. Senior Leadership includes the Executive Team, General Managers and their direct reports (excluding administrative or support roles).<br>d. Based on the ATO's Corporate Tax Transparency Report for the 2021-22 Income Year, published in November 2023.<br>e. Figure includes commercial sponsorships and foregone fee revenue.<br>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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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 157<br>OUR FOUNDATIONS OUR BUSINESS THE VALUE WE CREATEa<br>Passionate people<br>who make<br>a difference<br>Data-informed<br>insights and<br>decision making<br>Proactive risk<br>management<br>and risk culture<br>Strong balance<br>sheet<br>Shareholders<br>Delivering improved returns to shareholders (pages 164-167)<br>151C 15C $2.0BN<br>ordinary<br>dividends<br>per share<br>special<br>dividend<br>per share<br>total share<br>buyback<br>announcedb<br>Customers<br>Building enduring customer relationships (pages 168-173)<br>$807BN $674BN 13M<br>in lending in customer<br>deposits<br>customers served<br>Our people<br>Being a place where the best people want to work<br>(pages 174-177)<br>80 $5.9BN 49%<br>Organisational<br>Health Index<br>paid to our<br>people<br>women in senior<br>leadershipc<br>Community<br>Being a leader in the community (pages 178-181)<br>$3.5BN $177M $21.1M<br>taxes paid globally,<br>including the bank levy<br>and 5th largest tax<br>payer in Australiad<br>in community<br>investmente<br>spent with<br>Indigenous-owned suppliers<br>Environment<br>Contributing to the net-zero transition (pages 182-185)<br>$10BN 86% 13<br>increase in sustainable<br>finance lendingf<br>reduction in scope 1 and<br>2 emissions from our<br>2021 baseline<br>targets in all<br>9 NZBA emissions<br>intensive sectors<br>a. Comparisons are to the 12 months ended 30 September 2023, unless otherwise stated.<br>b. Includes $1.0 billion announced in May 2024 and $1.0 billion announced in November 2024.<br>c. Senior Leadership includes the Executive Team, General Managers and their direct reports (excluding administrative or support roles).<br>d. Based on the ATO's Corporate Tax Transparency Report for the 2021-22 Income Year, published in November 2023.<br>e. Figure includes commercial sponsorships and foregone fee revenue.<br>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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158 WESTPAC GROUP 2024 ANNUAL REPORT<br>ABOUT WESTPAC<br>Established in 1817, Westpac provides<br>banking and other financial services in<br>Australia and New Zealand.<br>As one of Australia’s largest companies and employers,<br>we recognise the important role we play to improve<br>social, environmental and economic outcomes for<br>Australians and New Zealanders. We are dedicated<br>to serving our 13 million customers, helping them to<br>build strong financial futures and navigate periods<br>of change.<br>We have a long-standing commitment to the community,<br>including a 51 year partnership with the Westpac Lifesaver<br>Rescue Helicopter Service. We are proud of our<br>involvement in establishing the Westpac and St.George<br>Foundations and Trusts. These separate non-profit<br>organisations have contributed $90 million in the past<br>decade to create meaningful change in people’s lives.<br>We are working towards becoming a net-zero, climate<br>resilient bank. Our 2024 Climate Report details our<br>efforts to reduce our emissions, assist customers in their<br>transition and advocate for positive change.<br>We are proud to contribute to the nation’s prosperity<br>through $5.9 billion in salaries, $5.7 billion in shareholder<br>dividends, $3.5 billion in cash taxes and levies and<br>$4.4 billion spent with suppliers inside Australia1<br>..<br>As we evolve, we draw inspiration from our customers,<br>their needs and our purpose. Our values guide our actions<br>to create better futures.<br>Our values<br> • Helpful – Passionate about providing a great<br>customer experience<br> • Ethical – Trusted to do the right thing<br> • Leading Change – Determined to make it better<br>and be better<br> • Performing – Accountable to get it done<br> • Simple – Inspired to keep it simple and easy<br>Market share<br>Australia<br>Household depositsaa<br>21%<br>Mortgagesa<br>21%<br>Business lendinga<br>16%<br>New Zealand<br>Consumer lendingbb<br>18%<br>Depositsb<br>17%<br>Business lendingb<br>16%<br>a. APRA Banking Statistics, September 2024.<br>b. RBNZ, September 2024.<br>1. Refer to the 2024 Sustainability Index and Datasheet for details.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 159<br>Our four operating segments<br>Consumer Business & Wealth<br>Westpac Institutional<br>Bank (WIB) Westpac New Zealand<br>Helping more Australians<br>into their home, save for<br>the future and manage<br>their money with a range<br>of banking products under<br>the brands of Westpac,<br>St.George, BankSA and<br>Bank of Melbourne.<br>Serving the needs<br>of small to<br>medium businesses<br>and commercial and<br>agribusiness customers<br>across Australia. This<br>segment also includes<br>Private Wealth and BT<br>Financial Group, along<br>with our operations in Fiji<br>and Papua New Guinea.<br>Delivering a broad range<br>of financial services to<br>corporate, institutional<br>and government<br>customers operating in,<br>and with connections<br>to, Australia and<br>New Zealand.<br>Providing banking and<br>wealth services to<br>consumer, business and<br>institutional customers<br>in New Zealand.<br>Our foundations<br>Passionate people<br>who make<br>a difference<br>Data-informed<br>insights and<br>decisioning<br>Proactive risk<br>management and<br>risk culture<br>Strong<br>balance<br>sheet<br>The value we create<br>Shareholders Customers People Community Environment<br>Delivering<br>sustainable returns<br>to more than<br>585,000<br>shareholders<br>Creating better<br>futures for the<br>13 million customers<br>we serve<br>Helping over 35,000<br>people in our<br>workforce to reach<br>their potential<br>Investing to create<br>stronger, more<br>inclusive<br>communities<br>Supporting global<br>efforts towards<br>net-zero by 2050<br>Pages 164-167 Pages 168-173 Pages 174-177 Pages 178-181 Pages 182-185
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160 WESTPAC GROUP 2024 ANNUAL REPORT<br>OUR STRATEGY<br>Our strategy for growth and return is guided by our purpose and supports our<br>ambition to be our customers' #1 bank and partner through life.<br>Built on four pillars, it focuses on developing strong customer relationships to drive growth in target markets and<br>improve returns. In turn, this helps us to create positive change and better futures by using our influence to support<br>communities, the economy and the environment.<br>Customer Easy Expert Advocate<br>Customers are at the<br>heart of what we do.<br>We value the entire<br>customer relationship<br>and are working hard<br>to anticipate their<br>needs, including through<br>delivering personalised<br>experiences, offers and<br>insights. Transaction<br>accounts and payments<br>are at the centre of<br>our customer relationships,<br>enabling us to build early<br>and deeper connections.<br>We’re making banking<br>easier, more intuitive and<br>digital. We’re simplifying<br>our bank – solving<br>pain points, removing<br>manual processes, making<br>banking safer and<br>automating workflows.<br>We’re aiming to<br>create a seamless<br>customer experience<br>across our channels.<br>We deliver expert<br>solutions and tools to<br>guide customers in<br>making better decisions.<br>We help them manage<br>their money every day as<br>well as plan ahead by<br>sharing our insights. Our<br>people work alongside<br>customers to tackle some<br>of the issues, including<br>managing the cost of<br>living and transitioning<br>to net-zero.<br>We advocate for<br>positive change and<br>speak up for what’s<br>right. We’re advocating<br>for financial inclusion,<br>greater accountability for<br>social media platforms<br>promoting scams, on<br>climate and safer<br>digital services across<br>our business, industry<br>and communities.<br>Measures<br>Return on tangible equity (ROTE) Market position<br>Sustainability<br>Aligned with our purpose and the pillars of our strategy, our sustainability approach is shaped by key material topics<br>and guided by the UN Sustainable Development Goals. Detailed information about our sustainability strategy, including<br>metrics from our 2024 Sustainability Index and Datasheet, is available on our website.<br>Following the Global Reporting Initiative (GRI) Universal Standards, we annually identify the most significant<br>sustainability topics to guide our strategy and focus on areas with the greatest impact on our stakeholders. The process<br>and details of these material topics are also outlined on our website.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 161<br>A STRATEGY FOR GROWTH AND RETURN: PROGRESS<br>The strength of our customer relationships is crucial to our long term success. By enhancing products and services, we<br>are creating exceptional banking experiences that help to drive growth. Combined with initiatives that intend to reduce<br>our costs relative to peers, we aim to improve our market position and ROTE, the key measures of the strategy.<br>Shareholders Delivering improved returns to shareholders<br>See<br>pages<br>164-167<br>There was a modest decline in ROTE however we grew our businesses and<br>maintained a strong financial position. This was reflected in higher fully franked<br>ordinary dividends along with $2.3 billion of capital returned to shareholders<br>comprising a $0.5 billion in special dividend and the purchase of $1.8 billion of<br>sharesa<br> through an on market buyback.<br>a. As at 30 September 2024.<br>Customers Building enduring customer relationships<br>See<br>pages<br>168-173<br>We have enhanced customer experiences and protections against scams through<br>digital innovation. This has helped make banking easier, safer and more<br>personalised for customers. Consistent and simple everyday banking offers<br>resulted in higher deposits, while improved processing times stabilised our share<br>of home loans. New convenient payments and merchant technology saw us<br>attract new business customers in Australia and New Zealand. Business lending<br>grew above system.<br>People Being a place where the best people want to work<br>See<br>pages<br>174-177<br>Our Organisational Health Index (OHI) improved by five points to 80, placing us<br>in the top quartile globally. We attract and retain talented people by investing in<br>training and career development while supporting wellbeing. We are a proudly<br>inclusive employer, committed to fostering a safe and inclusive workplace.<br>Community Being a leader in the community<br>See<br>pages<br>178-181<br>Our success is intrinsically linked with the success of the economy and<br>communities. We have a proud legacy of community support through workplace<br>giving, volunteering, community initiatives and the separate Westpac Foundation,<br>St.George Foundationa<br> and Trusts. We helped to keep cash circulating in society<br>and made progress against our objectives for advancing human rights and<br>supporting reconciliation.<br>a. Includes BankSA Foundation and Bank of Melbourne Foundation.<br>Environment Contributing to the net-zero transition<br>See<br>pages<br>182-185<br>We made progress on our climate strategy, shifting our focus to supporting<br>customers with their transition plans. Our Scope 1 and 2 emissions have reduced<br>by 86% from our 2021 baseline, achieving our 2030 targeta<br>.. With 13 targets<br>across the 9 most emission-intensive sectors under the NZBA framework, we are<br>engaging our customers to help them move towards lower emission practices.<br>a. Refer to the 2024 Sustainability Index and Datasheet for more information.
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162 WESTPAC GROUP 2024 ANNUAL REPORT<br>OUR OPERATING<br>ENVIRONMENT1<br>Australian economic growth was subdued<br>The Australian economy has experienced an extended period of below trend<br>growth, particularly in the private sector. Government spending has provided<br>some support, alongside a tight labour market and elevated terms of trade.<br>However, strong population growth has masked the weakest period of per capita<br>growth in decades. Australian economic growth is projected to recover from 1.5%<br>this year to 2.5% in 2025.<br>Households absorbed squeeze to incomes<br>Real household incomes have faced the negative shocks of high interest rates,<br>cost of living pressures and higher taxes. This has translated into pessimism<br>and weaker consumption. The impact has been uneven with younger and lower<br>incomes households disproportionately affected. Mortgage stress, while rising<br>during the year, remains low. Some relief has arrived in the form of declining<br>inflation and tax cuts. The undersupply of housing and continued house price<br>growth has resulted in a recovery in housing credit growth from an annualised<br>trough below 4% to more than 5% through the year. System credit growth of<br>approximately 5% is expected for 2025.<br>Strong business growth exceeded expectations<br>Australian businesses have navigated challenging operating conditions of weaker<br>demand and cost pressures. Profitability has eased to levels consistent with<br>the decade prior to COVID-19. Smaller businesses, particularly those exposed to<br>consumer discretionary sectors, experienced a more difficult trading environment.<br>Strong financial positions, high capacity use and population growth have boosted<br>credit demand, especially in infrastructure, health, education and technology<br>investments. While overall business investment has slowed, credit demand is<br>expected to grow by approximately 6% in 2025.<br>The New Zealand economy weakened<br>New Zealand’s economy stagnated due to significant monetary tightening aimed<br>at combating inflationary pressures. The Reserve Bank of New Zealand began<br>lowering interest rates in August 2024 in response to weaker economic activity,<br>rising unemployment and receding inflation. The easing of financial conditions is<br>expected to result in improved economic activity into 2025.<br>Global economy on track for a soft landing<br>Global economic prospects have improved with inflation, which is under control<br>across major developed economies, declining from more than 8% in 2022<br>to below 3% by mid-2024. This allowed G7 central banks, except Japan, to<br>ease monetary policy. The downside risk posed by weakness of the Chinese<br>economy is expected to be mitigated by the announcement of significant stimulus<br>measures. Notwithstanding the structural challenges that China will be required<br>to address in the medium term, its activity will be supported in the short term.<br>Global economic growth is expected to exceed 3% in 2025.<br>1. All references are to calendar years unless otherwise stated.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 163<br>We regularly review our operating environment to identify changes, emerging risks and opportunities. This helps us<br>to evolve our strategy and approach to current and future key risks. Below are some of the factors1<br> that could affect<br>Westpac’s ability to create value in the short, medium or long term. Our major risk categories, mitigation strategies and<br>areas of focus are detailed in Risk Management (page 188). For further information, see 2024 Risk Factors.<br>Rising threat: Scams and fraud become more sophisticated<br>Fraud and scams are increasing with more sophisticated methods targeting a<br>wider range of individuals and businesses. Over the past two years, Westpac<br>invested more than $100 million in new prevention and detection measures<br>to support customers, such as Westpac SaferPay and Westpac Verify. We<br>are working closely with government and industry to further strengthen our<br>defences and make Australia a harder target for scammers.<br>See Operational Risk, Cyber Risk and<br>Creating value for customers (page 168)<br>Supporting financial stability: Prudent lending and customer assistance<br>Maintaining prudent lending practices and policies are critical to safeguarding<br>our financial stability and profitability. Our Customer and Business Assist teams<br>in Australia provided 47,500 hardship and disaster support packages. Factors<br>including cost of living pressures and higher interest rates contributed to this<br>increase. We continue to provide a range of support to help customers get back<br>on track.<br>See Credit Risk and Creating value for customers (page 168)<br>Rising to the challenge: Expectations in addressing climate change<br>Climate change continues to have significant global impacts. Banks play an<br>important role in supporting the transition and helping customers become more<br>climate resilient. New mandatory climate-related reporting requirements will<br>require companies to disclose climate-related risks, opportunities and emissions<br>across their value chain. We are strengthening our approach to managing<br>climate change, as outlined in our 2024 Climate Report.<br>See Credit Risk, Reputational and Sustainability Risk and<br>Creating value for the environment (page 182)<br>Navigating competition: The importance of strategic customer focus<br>Nearly one hundred banks, including many foreign ones, now operate in<br>Australia. Westpac is one of four major banks and has been serving customers<br>for more than 200 years. The landscape is evolving and competition has<br>intensified, particularly in mortgages. We are investing in technology and our<br>people, leveraging the advantages and scale that come with being a major bank,<br>to deliver great service and benefits to our customers.<br>See Strategic Risk and Creating value for customers (page 168)<br>Protecting reputation: Strong risk management for better outcomes<br>Managing and responding to expectations from regulators and the community<br>requires strong risk management. Poor conduct, negative customer experience,<br>or failing to adequately respond to risks such as scams can impact our integrity<br>and the trust of our stakeholders. Through the Integrated Plan of the CORE<br>Program, we have strengthened our risk governance, accountability and risk<br>culture to drive better customer outcomes.<br>See Reputational and Sustainability Risk and<br>Compliance and Conduct Risk (page 190)<br>1. Not exhaustive. See Risk Management (page 188) for full table of risk categories.
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164 WESTPAC GROUP 2024 ANNUAL REPORT<br>CREATING<br>VALUE FOR<br>SHAREHOLDERS<br>We are committed to<br>delivering long term value<br>for shareholders by focusing<br>on providing great customer<br>service, maintaining a strong<br>balance sheet and delivering<br>sustainable returns above our<br>cost of capital.<br>Key highlights<br>151c<br>FULL YEAR<br>ORDINARY DIVIDENDS<br>58%<br>TOTAL<br>SHAREHOLDER RETURN<br>15c<br>SPECIAL DIVIDEND<br>$2.0BN<br>TOTAL SHARE<br>BUYBACK ANNOUNCED1<br>1. $1.0 billion announced in May 2024 and $1.0 billion announced in<br>November 2024.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 165<br>Solid financial result1<br>Our financial performance demonstrates the continued focus on the delivery<br>of sustainable returns for shareholders while growing our businesses and<br>maintaining a strong financial position.<br>$7.0BN<br>Net profit,<br>down 3% on FY23<br>1.93%<br>Net interest margin,<br>down 2bps on FY23<br>7bps<br>Impairment charges to average<br>loans, down 2bps on FY23<br>Net profit was delivered through disciplined management<br>of net interest margins and growth across our businesses.<br>Pre-provision profit declined by 3% on the prior year.<br>Excluding Notable Items, pre-provision profit was down<br>4% with the 1% increase in operating income more than<br>offset by a 7% increase in operating expenses.<br>Operating income reflected solid loan growth constrained<br>by a modest decline in the net interest margin. The<br>increase in operating expenses was driven by higher<br>software amortisation and technology costs along with<br>the impact of closing RAMS to new business.<br>Net interest margin (NIM)<br>The modest contraction in NIM reflected competition<br>for mortgages and customers preferencing higher yield<br>deposits which more than offset the benefits from higher<br>earnings on capital and hedged deposits, in addition to a<br>larger contribution from Treasury.<br>Impairment charges and credit quality<br>The low level of impairment charges reflects our prudent<br>lending practices and customer resilience across both<br>households and businesses.<br>The modest deterioration in credit quality metrics was due<br>to the impacts of the decline in real household disposable<br>income and weaker demand and cost pressures on<br>business customers. We remain appropriately provisioned<br>with credit impairment provisions of $5,096 million,<br>$1.5 billion above the expected losses of our base case<br>economic scenario.<br>$m<br>Full Year<br>2024<br>Full Year<br>2023<br>% Mov't<br>2024-2023<br>Net operating income 21,588 21,645 -<br>Operating expenses (10,944) (10,692) 2<br>Pre-provision profit 10,644 10,953 (3)<br>Net profit 6,990 7,195 (3)<br>For more see Performance Review (page 276).<br>Solid growth in our core markets<br>Loans increased by 4% reflecting growth across all segments: Consumer;<br>Business & Wealth; WIB; and New Zealand.<br>Growth in Australian housing loans, excluding RAMS, of 5%, or 1.2x APRA<br>housing system, mainly in owner occupied mortgages was supported by<br>faster and more consistent decision times and enhancements to our single<br>mortgage platform. Total Australian housing loans growth was 4%. See<br>Faster lending decisions (page 171) for more information.<br>Australian business lending was up 8%. This reflected strong loan growth<br>in WIB as we deepened relationships with existing customers and selective<br>growth in lending to international customers. Growth in the Business<br>segment was well diversified with strong growth in our target industries of<br>agriculture, health and professional services.<br>Customer deposits grew by 5% with strong growth in the Consumer and WIB<br>segments. Household deposits growth of 1.1x APRA system is testament to<br>the health of our consumer franchise.<br>LOANS ($BN)<br>739.6 773.3 806.8<br>Sep-22 Sep-23 Sep-24<br>CUSTOMER DEPOSITS ($BN)<br>612.8 641.0 673.6<br>Sep-22 Sep-23 Sep-24<br>1. Unless otherwise stated, all figures relate to the year ended 30 September 2024 with comparative period the year ended 30 September 2023.<br>Certain amounts, measures and ratios are not defined by Australian Accounting Standards (AAS). These non-AAS measures are identified and<br>described in the Reading this report . Notable Items are discussed further on page 278.
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166 WESTPAC GROUP 2024 ANNUAL REPORT<br>CREATING VALUE FOR SHAREHOLDERS<br>Strong financial position<br>We maintained a strong financial position with capital, funding and liquidity all<br>above regulatory minimums.<br>Capital<br>CET1 capital ratio of 12.5% compares to the target<br>operating range of 11.0% to 11.5% in normal operating<br>conditions equating to $4.3 billion of capital above the<br>top end of the target range.<br>The CET1 capital ratio increased slightly. Solid organic<br>capital generation and reductions in Risk Weighted<br>Assets (RWA), in addition to the return of $500 million<br>in operational risk capital overlay, were offset by the<br>payment of dividends and the on market share buyback.<br>CET1 CAPITAL RATIO<br>11.3 12.4 12.5<br>17.6 18.7 18.3<br>APRA basis Internationally comparable<br>Sep-22 Sep-23 Sep-24<br>Funding and liquidity<br>The September quarterly average liquidity coverage ratio (LCR) and the net<br>stable funding ratio (NSFR) were both above regulatory minimums.<br>The deposit to loan ratio increased slightly, with deposit growth broadly<br>funding loan growth during the year.<br>The Group raised $41.9 billion of new long term wholesale funding. 83.5%<br>Deposit to loan ratio,<br>up 61bps on Sep-23<br>Simplifying banking<br>To deliver long term value for shareholders, we are focused on providing great<br>customer service.<br>Better outcomes for customers and our people<br>We made progress on initiatives to improve customer<br>experience. Highlights during the year included giving<br>businesses new and more flexible payments technology,<br>improving the Westpac banking app and creating<br>Australian-first scam protections for customers.<br>Our people are key to our success and we are investing in<br>their capability.<br>We mobilised UNITE, our business-led, technology-enabled transformation, that is laying the foundations<br>for our future by aiming to simplify our processes<br>and technology.<br>For more on our progress, refer to:<br>Creating value for customers (page 168)<br>Creating value for our people (page 174)<br>Technology (page 186)<br>Substantially improving risk management capability<br>Over the past four years we delivered a program of<br>risk culture and risk management uplift. The CORE<br>Integrated Plan activities were completed in December<br>2023 and Promontory assessed the program as complete<br>in May 2024.<br>We are now completing a transition phase to continue to<br>embed the improvements we've made for the long term.<br>Subsequently, APRA reduced the $1.0 billion operational<br>risk capital overlay by $500 million in July 2024.<br>Refer to Risk Management (page 188) for more.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 167<br>Improved shareholder returns<br>To create value for our 585,000 shareholders, we aim to deliver sustainable<br>returns above our cost of capital.<br>Shareholder returns<br>The decline in net profit resulted in a 38 basis points<br>decrease in ROTE to 11.0% and earnings per ordinary<br>share were 201 cents, down 2%.<br>Over the year our share price rose 50%, contributing to a<br>58% increase in total shareholder return (TSR). The S&P<br>ASX All Ordinaries accumulation index rose 22% over the<br>same period.<br>Ordinary dividends<br>This year, shareholders will receive $5.2 billion through<br>fully franked ordinary dividends. Ordinary dividends were<br>up 9 cents per share, or 6%.<br>This year’s payout ratio is 75% on a net profit basis and<br>73% excluding Notable Items.<br>ROTE (%)<br>9.2<br>11.4 11.0<br>FY22 FY23 FY24<br>ORDINARY DIVIDEND PER ORDINARY SHARE (CENTS)<br>125<br>142 151<br>61 70 75<br>64<br>72 76<br>Interim Final<br>FY22 FY23 FY24<br>Returning surplus capital to shareholders<br>We bought back $1.8 billion of shares on market and we returned $0.5 billion<br>through a special dividend.<br>With $4.3 billion of capital above the target operating range and confidence<br>in the medium-term economic outlook, the on market share buyback was<br>increased by a further $1.0 billion in November 2024.<br>$2.0bn total share<br>buybacks announced1<br>15c special dividend<br>1. $1.0 billion announced in May 2024 and $1.0 billion announced in November 2024.
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168 WESTPAC GROUP 2024 ANNUAL REPORT<br>CREATING<br>VALUE FOR<br>CUSTOMERS<br>Delivering great customer<br>service motivates our people<br>and brings our purpose to life.<br>Through better products and<br>services, technology and fraud<br>and scams protection, we're<br>supporting customers through<br>life's challenges to help them<br>realise their financial goals.<br>Key highlights<br>13M<br>CUSTOMERS<br>#<br>1<br>BANKING APP1<br>21%<br>AUSTRALIAN MORTGAGE<br>MARKET SHARE2<br>+4<br>CONSUMER NPS3<br>RANKED THIRD AMONG<br>MAJOR PEERS<br>1. The Forrester Digital Experience Review: Australian Mobile Banking<br>Apps, Q3 2024.<br>2. APRA Banking Statistics, September 2024.<br>3. Source: Fifth Dimension for September 2024, 6MR. MFI customers.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 169<br>Number one banking app<br>Our banking app won awards for its simple design<br>and rich functionality, including #1 mobile app by<br>Forrester1<br>.. As one of our customers' preferred banking<br>channels, we have continued to invest in its capabilities<br>to make it simpler, secure and more personalised,<br>directly contributing to long term customer satisfaction<br>and loyalty.<br>Our banking app offers essential everyday banking and<br>money management tools. More than 1 million customers2<br>are using money management features such as Net<br>Worth view and Financial Wellbeing to help them budget,<br>manage their finances and understand their financial<br>position. The Savings Finder automatically calculates a<br>customer’s annual spending on subscriptions and regular<br>bills, helping to identify those that could be reduced or<br>cancelled. Other features include Smart Search and a<br>Cards Hub where customers can manage their debit and<br>credit cards.<br>Customers can easily switch between personal and<br>business banking within the app to manage their finances<br>in one place.<br>Westpac SaferPay and Westpac SafeCall are new<br>Australian-first innovations we designed to help customers<br>avoid scams. To further enhance digital card security,<br>dynamic CVC refreshes every 24 hours, reducing fraud and<br>unauthorised access.<br>See Protecting customers and preventing crime<br>(page 173) for more information<br>Building financial literacy<br>We are committed to supporting our customers and the<br>broader community in building financial confidence. This<br>helps customers to manage their finances more effectively<br>which builds trust and ultimately drives the sustained<br>growth of our business.<br>In addition to the money management features, we<br>introduced a Pocket Money and Chores feature in our<br>banking app. Parents or guardians can use this to set up<br>regular or one-off Pocket Money payments to a child's<br>account to manage chores, develop their money skills and<br>encourage saving. This helps to teach children the value<br>of money and how to spend and save responsibly. We<br>also saw positive momentum in use of the savings account<br>features, in particular the safety features available within<br>the Youth Debit card.<br>We launched a new Property Dashboard in our digital<br>banking channels, offering customers a snapshot of their<br>property portfolio linked to Westpac loans. This provides<br>valuable insights such as estimated property values<br>and home equity to help customers understand their<br>financial position.<br>To further build financial confidence and wellbeing, we<br>offer a range of resources to customers, employees and<br>the community. Through Westpac Master Your Money<br>and the Finlit program, designed for younger adults,<br>we provide interactive webinars, online learning modules,<br>articles and tools.<br>In New Zealand, more than 12,000 people participated<br>in Managing Your Money workshops, alongside targeted<br>seminars for businesses and corporate customers,<br>including through our partnership with key Chambers of<br>Commerce across the country.<br>1. The Forrester Digital Experience Review: Australian Mobile Banking Apps, Q3 2024.<br>2. In the 90 days to 30 September 2024.<br>WESTPAC SAFERPAY:<br>MULTI-LAYERED PROTECTION<br>After researching investment opportunities, a<br>Queensland couple transferred $350,000 to an account<br>to invest in government bonds. The transfer, made<br>on a Friday afternoon, was flagged by our SaferPay<br>technology as a high scam risk.<br>Fortunately, SaferPay placed a 24-hour hold on the<br>transfer, protecting the couple’s funds. After speaking<br>with the couple, our Fraud and Scams Operations Team<br>was able to cancel the transaction for the customer.
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170 WESTPAC GROUP 2024 ANNUAL REPORT<br>CREATING VALUE FOR CUSTOMERS<br>Listening to our customers<br>We actively gather feedback from customers and<br>employees to improve our services. Insights from Net<br>Promoter Score (NPS) and complaints help us to create<br>better solutions, measure improvements and promote a<br>customer-first culture.<br>We improved in Consumer NPS to +4 and in Business<br>NPS to -3. We have strengthened our leadership in<br>Branch NPS and have seen positive progress in Business<br>Lending, though our overall scores that reflect broader<br>customer experience are not where we'd like them to be.<br>For our institutional customers, we aim to be their<br>bank of choice and cater for all their banking needs.<br>Customers who consider us to be their main financial<br>institution more than doubled over the year, improving<br>our position from #3 to #2.<br>Resolving complaints<br>Complaints are a second chance for us to make<br>things right for our customers and apologise for any<br>inconvenience. Through our customer-first approach, we<br>aim to resolve each customer complaint objectively,<br>fairly, efficiently and with empathy. We are improving<br>how we manage complaints by enhancing banker<br>training, increasing responsiveness and improving<br>classification and escalation processes. Our average<br>resolution time is stable, with 93% resolved without need<br>for escalation.<br>Our Customer Advocate advises the complaints<br>team, recommends policy changes and supports<br>vulnerable customers.<br>Listening to feedback helps us to continuously improve<br>our products and services. For example, we improved the<br>digital experience for customers reordering cards, which<br>has led to a reduction in related complaints.<br>Maintaining community presence<br>While customer preferences are increasingly digital,<br>we have 626 branches across Australia including 111<br>co-located branches which support multiple brands.<br>Our customers have access to the largest fee-free<br>ATM network in the country and our agreement<br>with Australia Post’s Bank@Post service provides an<br>additional 3,400 points of presence for customers to<br>access our banking services.<br>Our Virtual Banking team provides additional support<br>through secure phone, video and chat services. We<br>recognise there is more work to do to support regional<br>communities across Australia. We listened to customer<br>and community feedback to better understand the<br>unique challenges faced by many customers who<br>live outside major cities. We have since pledged<br>to keep regional branches open until at least 2027,<br>providing greater certainty to our customers, people<br>and communities.<br>The opening of our 100th co-located branch in Menai,<br>New South Wales<br>Promoting financial inclusion<br>We are focused on delivering products and services that<br>are accessible to customers with disabilities, illnesses,<br>injuries or who are neurodivergent. Our Access and<br>Inclusion Plan guides our efforts, such as creating more<br>inclusive and accessible workplaces, branches, services<br>and collateral. We have also improved our digital services.<br>Backing female entrepreneurs: We helped more than<br>726 women to start or grow their business and settled<br>$274 million under our $500 million commitment1<br> to<br>support more female-led businesses. We partnered with<br>The University of New South Wales Founders’ 10X<br>Accelerator Program, providing funding for three $20,000<br>scholarships designed to support women to balance work<br>and personal commitments. New banker training helps our<br>people better understand the barriers faced by female<br>business owners.<br>Supporting Indigenous customers: Westpac supports<br>Indigenous customers across multiple channels including<br>a dedicated Indigenous Call Centre where translators are<br>available to support Indigenous languages. On-the-ground<br>teams in remote areas of every state and territory work<br>in partnership with community groups to help empower<br>Indigenous customers with their banking needs.<br>Putting home ownership within reach: Housing<br>affordability and rental supply challenges have made<br>home ownership less accessible. We are providing<br>ways for people to fast-track their home ownership<br>ambitions and our lenders are available to help customers<br>choose the best level of support. For 23 professional<br>occupations, including nurses and midwives, we offer<br>Lenders Mortgage Insurance waivers. This benefited<br>13,300 customers while 4,000 customers used our Family<br>Security Guarantee. We have extended the Housing<br>Australia Home Guarantee Scheme to all our brands,<br>settling $5.2 billion in loans under the Scheme to help<br>customers with a smaller deposit.<br>Westpac New Zealand pledged NZ$1 billion in lending<br>over the next three years to help more people secure<br>homes through variety of social and affordable housing<br>options, such as shared equity and leasehold projects,<br>through loans to scheme providers and home buyers.<br>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,<br>however the Business Loans for Start Up and Business Loans for Scale Up are available to people of any gender.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 171<br>Supporting customers<br>How we support customers facing financial difficulties is<br>a true reflection of our values. We understand that tough<br>times can impact anyone, whether due to higher cost of<br>living, illness, relationship breakdowns, reduced business<br>cash flow or natural disasters.<br>This is why we have more than 400 skilled professionals<br>in our Customer and Business Assist teams to provide<br>a range of options to help customers, such as deferring<br>loan repayments. Over the year, we provided 47,500<br>hardship and disaster support packages to customers and<br>businesses to help them get back on track. By the end of<br>the year, 19,000 accounts remained in hardship.<br>Based on feedback, we also found other ways to support<br>our customers. In an Australian-first, we gave customers<br>the flexibility and freedom to use their Altitude Rewards<br>points on everyday items1<br>.. Additional in-app savings<br>prompts helped 193,000 customers earn an average of<br>$324 in additional total interest2<br>.. Through the Westpac<br>Rewards’ ShopBack program, we helped customers earn<br>more than $24 million in cashback from purchases at<br>4,000 retailers. Westpac Rewards was recognised as the<br>Best Overall Loyalty Program in financial services3<br>..<br>We participated in ASIC’s Better Banking for Indigenous<br>Consumers Project and supported our customers<br>receiving ABSTUDY and those in project postcodes. This<br>included refunding account keeping, debit interest and<br>overdrawn fees dating back to July 2019 for eligible<br>customers. We also expanded access to our basic<br>bank account to customers who receive an Australian<br>Government benefit payment that makes them eligible<br>to hold a concession or healthcare card. Our basic bank<br>account has no account keeping fees, overdrawn fees or<br>debit interest.<br>Faster lending decisions<br>We have made the home loan experience more<br>efficient for customers by optimising our operations and<br>technology. This has reduced average home loan decision<br>times to approximately five days and increased on-day<br>settlements to an industry leading level. This has led<br>to a significant 41-point increase in Broker NPS4<br> and<br>improved sentiment over the past two years. Additionally,<br>we are piloting a new AI-driven method to further<br>streamline assessments.<br>HOME LOAN APPLICATION TIME TO DECISION (DAYS)<br>6.3 5.9<br>5.2<br>8.1<br>7.1<br>4.8<br>Proprietary Broker<br>Sep-22 Sep-23 Sep-24<br>In business lending, more than $1 billion in applications<br>have been approved using our simplified pathway since its<br>launch in April last year. This lets businesses borrow up to<br>$3 million and gives customers quick access to their most<br>recent financial information from their business activity<br>statements. Business loan processing times take 9 days<br>and this should improve as we continue to digitise the<br>entire process over the next few years.<br>1. Pay with Points is a way of redeeming Altitude Reward points for eligible purchases under the Altitude Reward Terms & Conditions.<br>2. From January to September 2024.<br>3. Westpac Rewards received the award for Best Overall Loyalty Program in Financial Services at the 2023/2024 Asia Pacific Loyalty Awards.<br>4. Internal Broker NPS survey Sep24 - spot brand NPS for combined brands. Brokers that have settled a loan with Westpac Group in the previous<br>6 months invited to participate (10,459 invitations sent, 1,399 responses / 13% response rate).<br>BEST OVERALL<br>LOYALTY<br>PROGRAM<br>111<br>CO-LOCATED BRANCHES<br>SUPPORTING MULTIPLE BRANDS<br>#1<br>$A BOND LEAGUE TABLE<br>BUILDING SUSTAINABLE FUTURES<br>In response to growing customer demand for more energy efficient and climate<br>resilient homes, we launched the Sustainable Upgrades home and investor<br>loans product, becoming the first bank to be backed by the Clean Energy<br>Finance Corporation.<br>This loan offers existing customers a reduced interest rate on loans up to<br>$50,000 to make upgrades that improve their property's energy efficiency and<br>resilience to natural disasters.
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172 WESTPAC GROUP 2024 ANNUAL REPORT<br>CREATING VALUE FOR CUSTOMERS<br>Driving efficiency for businesses<br>Small businesses make a significant contribution to our<br>economy, representing 97% of all Australian businesses1<br>..<br>We offer a range of working capital solutions to give<br>customers confidence, whether they’re starting up or<br>growing their business. In response to customer feedback,<br>we established a dedicated Bank Guarantee Specialist<br>Team that allows customers to obtain a bank guarantee<br>in less than 24 hours.<br>We have continuously enhanced our merchant technology<br>for businesses since launching Australia’s first EFTPOS<br>machine 40 years ago. Our latest high-speed, cost-effective merchant terminal, EFTPOS Flex integrates with<br>more than 550 Point of Sale systems. We offered EFTPOS<br>Air to more customers, allowing businesses to accept<br>instant payments through their phone or tablet.<br>We are working to make it safer for businesses to manage<br>their recurring payments through real-time control over<br>payment agreements, reducing the risk of errors and<br>fraud. We extended this benefit to our commercial and<br>institutional customers. The acquisition of HealthPoint,<br>which offers instant e-health claiming to small business<br>and commercial customers, recognises the growth of the<br>healthcare sector as the population ages.<br>To make employee spending easier and more secure for<br>large businesses, new Dynamic Virtual Cards can be issued<br>to their people on the go. This removes the need to<br>issue physical cards or cash while enabling control and<br>transparency over spending.<br>To support our ambition to restore our institutional bank<br>to the number one position, we have employed more<br>bankers to provide deeper support to new and existing<br>customers. Our financial markets franchise continues<br>to perform, with a leading position in fixed income<br>markets2<br> and #1 rank on the $A bond league table3<br>..<br>We were joint lead manager on the Australian Office<br>of Financial Management’s (AOFM) first green bond<br>issuance. Please see Collaborating for impact (page 185)<br>for more information.<br>Combating financial abuse<br>We stand against financial abuse and our specialist<br>teams are trained to support customers experiencing<br>vulnerability, including domestic and family violence,<br>financial abuse and problem gambling. We continue to<br>embed Safety by Design principles into our product<br>design and provided customer safety training to<br>an additional 1,200 employees. See Respecting and<br>advancing human rights (page 180) for more information.<br>We enhanced our protection measures to include:<br> • Education and Awareness: Westpac partnered with<br>Legal Aid NSW and OurWatch to enhance the<br>education on the Westpac website relating to financial<br>abuse, elder financial abuse and gambling.<br> • Gambling Block: Customers can apply an instant<br>block on certain gambling-related transactions through<br>Westpac’s mobile or online banking.<br> • Parental controls and child education: To help young<br>people learn how to manage their money safely<br>- while giving parents the opportunity to act as<br>banking ‘safety nets’ - we’ve added push notifications,<br>restrictions on online payments and daily payment<br>limits of $50 for under 14 years olds to our Choice<br>Youth everyday account and Bump Savings account.<br> • Power of attorney account monitoring: While the<br>vast majority of attorneys act in the best interests of<br>account holders, sadly this is not always the case. We<br>have added an extra layer of transaction monitoring<br>to flag unusual transactions from these accounts. This<br>allows our specialist teams to step in and support<br>customers and their attorneys regarding their rights<br>and obligations.<br> • Updated Terms & Conditions for savings, transaction,<br>personal loan and credit card products highlight to<br>customers that we have a zero-tolerance for products<br>being misused for financial abuse.<br>1. Source: Australian Bureau of Statistics, describing small business as those with less than 20 employees.<br>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<br>share in OIS, #1 market share in asset-backed bonds – 2023 Peter Lee Associates Fixed Income Survey, ranking against all banks.<br>3. Bloomberg Australian Bonds League table (excluding self-led issuance), YTD as at 27 September 2024.<br>CUSTOMER SPOTLIGHT:<br>SLOANEBUILT<br>Sloanebuilt, based in Western Sydney, has been a leading manufacturer of heavy<br>vehicle trailers for more than three decades. CEO Fred Marano attributes the<br>company’s success to two core values: producing high-quality products and<br>delivering first-class customer service.<br>After visiting Sloanebuilt's operations, Anthony Miller, Chief Executive of<br>Business & Wealth (pictured), said: “It’s a real privilege for Westpac to<br>support a business like Sloanebuilt. They are a significant local employer in<br>Western Sydney, committed to training and hiring many apprentices. Their<br>dedication to employees and contribution to Australia’s manufacturing industry<br>is truly commendable.”
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 173<br>Protecting customers and<br>preventing crime<br>We play a critical role in safeguarding customers from<br>fraud, scams, cyber threats and financial crime. We have<br>invested more than $100 million in scam prevention<br>initiatives over the past two years, contributing to a 29%<br>reduction in reported customer scam losses this year.<br>Our fraud detection systems screen approximately<br>30 million banking interactions daily, using a combination<br>of Artificial Intelligence (AI) and human intelligence to<br>spot unusual activity and issue 24/7 customer alerts. We<br>block payments to reported scam and fraud accounts and<br>work around-the-clock to detect and take down phishing<br>websites and threats that target customers.<br>WESTPAC VERIFY<br>Alerts customers when there is a<br>potential account name mismatch<br>when they’re adding a new payee<br>using a BSB and account number<br>WESTPAC SAFERPAY<br>Presents customers with a series<br>of questions in instances where a<br>payment is considered a high risk<br>of being a scam<br>WESTPAC SAFECALL<br>Will provide customers with calls<br>via the banking app that are<br>Westpac branded, verified by<br>Optus and show a reason for<br>the call<br>Strengthening customer awareness<br>As we intensify our efforts to safeguard customers, we focus on keeping customers informed and equipped to protect<br>themselves. Our Cyber Response Playbook provides current scam information and videos. The Westpac banking app<br>includes advanced security features such as Security Wellbeing Check, Westpac Protect SMS code and biometric<br>authentication. We issue digital and social alerts on new scams and raise awareness through our Scam Spot video series<br>and actively participate in Scams Awareness Week.<br>Supporting affected customers<br>Fraud and scams can have devastating effects on customers and businesses. Our Online Banking Security Guarantee1<br>and Fraud Money Back Guarantee1<br> provide peace of mind in certain situations. Whilst we make every effort to retrieve<br>funds sent to scams, this is unfortunately not always possible. We work closely with affected customers and offer free<br>support through our partnership with IDCARE, Australia and New Zealand’s National Identity & Cyber Support Service<br>and a free trial of McAfee for enhanced online protection.<br>Advocating for change<br>Combating scams and fraud requires a combined, multi-stakeholder approach. We liaise with industry, regulators,<br>government and law enforcement to identify threats to make Australia a harder target for scammers. Recognising that a<br>significant number of scams are found on social media platforms, we are also advocating for the operators of these<br>platforms to be held accountable through stricter regulation.<br>1. Refer to Online Banking Terms and Conditions and relevant Card Terms and Conditions.<br>BANKER SAVES CUSTOMER FROM $1.8M LOSS<br>Marlena Karbowski (pictured) assisted a customer who wanted to make a<br>significant funds transfer to buy a property. As a Personal Banking Specialist of<br>19 years, she took care in listening to the customer's request.<br>During their conversation, she spotted a number of red flags. Marlena acted<br>on her instincts and worked with her Bank Manager to stop $1.8 million being<br>transferred to a romance scam. She then helped the customer report it to<br>the Police.<br>Marlena was recognised in our Scam and Fraud Busters employee<br>recognition awards.
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174 WESTPAC GROUP 2024 ANNUAL REPORT<br>CREATING<br>VALUE FOR<br>OUR PEOPLE<br>Our people are key to<br>our success.<br>We are investing in their<br>careers and building an<br>inclusive and diverse<br>workplace, with strong<br>leadership and<br>opportunities to grow.<br>Key highlights<br>80<br>ORGANISATIONAL<br>HEALTH INDEX<br>49%<br>WOMEN IN<br>SENIOR LEADERSHIP1<br>$5.9BN<br>PAID IN SALARIES<br>35,240<br>EMPLOYEES2<br>1. Senior Leadership includes Executive Team, General Managers and<br>their direct reports (excluding administrative or support roles).<br>2. Refers to Full-Time Equivalent as at 30 September 2024.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 175<br>~3,000<br>Leaders participated in<br>Leader Forums<br>11,200<br>People in Employee<br>Advocacy Groups<br>138<br>New graduates joined Westpac<br>Embedding cultural change<br>We have made significant progress in improving our<br>culture and the way we manage risk. This progress is<br>reflected in both the final independent report of our CORE<br>program and positive engagement results from our annual<br>employee survey, Voice+.<br>As role models, our leaders continue to play a critical<br>role in embedding positive change. Our senior leaders are<br>encouraging behaviours that focus on:<br> • consistent, high-quality customer experiences;<br> • excellent performance; and<br> • confidently managing risks.<br>At our Leader Forums, our Executives engaged<br>approximately 3,000 leaders to share views on practical<br>ways to drive positive customer and risk outcomes. Our<br>third cohort of General Managers completed the Horizon<br>Leadership Program and we launched a Better Leaders<br>Program for our broader leadership group.<br>We reinforce desired risk behaviours through our regular<br> ‘Skill Boosts’ learning modules. Meanwhile, our 200<br>volunteer Culture Champions act as internal ambassadors,<br>promoting a proactive risk and customer-focused culture<br>with their peers.<br>Our performance management framework ensures our<br>employees understand what is expected of them. It<br>also motivates our employees through clear goal setting<br>and regular feedback. All employees have defined risk<br>goals and 621 employees received additional variable<br>reward for achieving great risk outcomes. Individuals and<br>teams were also recognised by their peers or leaders via<br>our recognition platform, with nearly 115,000 actions to<br>recognise positive risk management and risk behaviours.<br>Our employee survey Voice+ provides a holistic picture<br>of employee engagement and includes the Organisational<br>Health Index (OHI) global benchmarking measure. This<br>year's results showed a significant improvement to 80 (+5)<br>which places Westpac in the global top quartile.<br>It also showed an improvement in our risk culture. These<br>results reflect the positive impact of our organisation’s<br>strategic direction, as well as customer, cultural and<br>employee initiatives that have been implemented<br>throughout the year.<br>Building future skills<br>Equipping our people with the skills and capabilities<br>needed for both today and tomorrow is central to our<br>learning and talent strategy. We are focusing on upskilling<br>our organisation in critical skills areas such as data, digital<br>and AI.<br>An additional 2,300 employees completed the Data and<br>Digital Capability Program, bringing the total to more<br>than 6,200 individuals who have earned external badge<br>qualifications in the past two years. 98% of participants<br>reported that the program provided them with skills,<br>knowledge and tools they'll find useful for the next<br>three years.<br>Our skills based strategy helps us define the skills needed<br>to meet workforce demand and identify specific pathways<br>in critical areas such as relationship management,<br>sustainability, cyber security and data management. All<br>employees complete mandatory cyber awareness, data<br>protection and cyber threat training. Meanwhile, new<br>learning modules on generative AI are helping our people<br>to learn and build confidence with emerging technologies.<br>INVESTING IN CAREERS<br>We are future-proofing the skills of our people<br>to support careers and improve customer service.<br>We provided online sustainability training to 1,155<br>employees in wholesale and institutional banking,<br>covering climate transition plans, sustainable finance<br>and sustainability reporting.
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176 WESTPAC GROUP 2024 ANNUAL REPORT<br>CREATING VALUE FOR OUR PEOPLE<br>Attracting and recognising talent<br>We are committed to creating better futures for our<br>people by ensuring they thrive, feel inspired to do<br>their best work and have opportunities to advance<br>their careers. Our refreshed employer brand - Passionate<br>people who make a difference - positions Westpac as a<br>great place to work.<br>We are proud to have attracted 138 bright minds through<br>our industry-recognised1<br> graduate program of which more<br>than 40% have degrees in STEM fields. Our commitment<br>to diversity and inclusion is reflected in this year’s cohort,<br>with 57% graduates being women.<br>We have continued to invest in hiring engineering and<br>data professionals, welcoming more than 350 engineers<br>and 130 data specialists to the organisation. Our award-winning2<br> Mob Tech program offers an alternative pathway<br>for First Nations people to gain comprehensive training<br>in cloud computing, security, data analytics and web<br>development. The program has been highly successful,<br>with all 28 participants from the pilot cohort transitioning<br>into ongoing technology roles at Westpac.<br>We continue to invest in our people to help them achieve<br>their career and learning goals. We expanded our Career<br>Planning resources which now provides guidance to 11,600<br>individuals on their potential next role and pathways to<br>success. Additionally, 384 permanent full-time and part-time employees utilised our study and graduation leave<br>options. Updating our recruitment policies resulted in a<br>28% increase in the visibility of internal opportunities,<br>encouraging our top talent to stay and grow their careers.<br>Promoting employee wellbeing<br>Fostering a flexible, safe and healthy workplace is a core<br>part of our people strategy. We know that enhancing<br>our employees’ work experience and supporting positive<br>mental health are fundamental to creating an environment<br>where everyone can thrive.<br>Our Chief Mental Health Officer leads the strategy<br>to support our people's mental health, focusing<br>on prevention, early intervention and connected<br>care. We conduct workplace assessments and offer<br>targeted resources, support and education to promote<br>employee wellbeing.<br>This year, we completed a comprehensive review of<br>factors that may influence wellbeing. This enabled us<br>to provide tailored solutions to support our people's<br>mental health and wellbeing, as well as their broader<br>experience at work. To ensure successful implementation.,<br>we leveraged the expertise of psychologists and<br>safety specialists.<br>Employees have access to 24/7 confidential counselling<br>support and other resources for both personal and<br>professional support. Our workplace flexibility, wide range<br>of leave options, banking benefits and private health<br>care discounts further support employee wellbeing. For<br>example, we offer parental leave (including support<br>for those who experience pregnancy loss), cultural,<br>wellbeing and lifestyle leave, uncapped domestic and<br>family violence support leave, gender affirmation leave<br>and Sorry Business leave.<br>EMPOWERING WOMEN<br>The EmPOWERUP Tech Returnship program<br>provides a pathway for women to reignite<br>their technology careers. We proudly welcomed<br>37 talented women to Westpac, offering them<br>extensive support and training during their first<br>24 weeks. With more than 1,000 applicants, this<br>program continues to strengthen our female talent<br>pipeline. EmPOWERUP fosters individual growth,<br>flexible working and networking opportunities while<br>enriching our workplace with diverse perspectives<br>and skills.<br>1. 2024 Australian HR Awards – Best Graduate Development Program.<br>2. 2024 Women in Banking and Finance Awards – Winner of the Inclusive Workplace of the Year.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 177<br>3,000+<br>Leaders completed<br>inclusive<br>leadership training<br>24/7<br>COUNSELLING<br>SUPPORT<br>Supporting positive<br>mental health<br>1.08%<br>First nations people in<br>our workforce<br>UPSTANDER<br>INITIATIVE<br>Speaking up and<br>acting against racism<br>and discrimination<br>Strengthening diversity, equity and inclusion<br>Westpac is a proudly inclusive employer, committed to fostering a safe and inclusive workplace for everyone, regardless<br>of background, gender or identity. We want our people to feel valued, respected and safe to be themselves at work. We<br>have 10 Employee Advocacy Groups that connect more than 11,200 people on matters they are passionate about.<br>Our zero tolerance approach to all forms of discrimination and harassment is reinforced through our Code of<br>Conduct and Discrimination, Bullying and Harassment policy. Our commitment is supported by training for leaders and<br>employees, dedicated reporting channels, investigation and support processes. This year, more than 5,000 employees<br>participated in the Upstander initiative, which encourages our people to speak up against inappropriate behaviours.<br>Our industry-recognised1<br> programs and initiatives are informed by the views of our people, captured in the annual<br>Inclusion and Diversity survey. Examples included:<br>Learning and development to support marginalised groups. We have introduced mandatory training for<br>leaders to provide the necessary tools and capabilities to support people with diverse views, experiences<br>and backgrounds.<br>Prioritising cultural diversity and increasing culturally diverse leaders. Our partnerships with the Asian<br>Leadership Project and Dr. John Yu Fellowship offer future leaders through networking, mentorship and<br>career development opportunities.<br>Helping First Nations people to build meaningful careers. As outlined in our Reconciliation Action Plan<br>(RAP), we are committed to helping First Nations People build meaningful careers. This year, we improved<br>representation to 1.08% and aim to increase this to 1.5% next year. Refer to Creating value for the community<br>(page 178) for more information.<br>Providing inclusive career opportunities for candidates with disability. As the first financial institution in<br>Australia to obtain Disability Confident Recruiter accreditation, we ensure equitable hiring processes for<br>individuals with disability, including neurodivergent candidates. We have also partnered with People with<br>Disability Australia to launch a program advancing women with disability, a first for Westpac.<br>Taking action to support women to advance their careers. We support the 40:40 Vision and are proud to<br>have 49% women in senior leadership positionsa<br>.. The Illuminate program supports 82 aspiring female leaders<br>in Australia, Fiji, PNG, Singapore and New Zealand through General Manager sponsorship. We are also the<br>first bank to join Diversity Council Australia’s RISE Project, helping culturally diverse women to advance their<br>leadership careers. Our EmPOWERUp program creates a pathway for women to reignite their careers after<br>an extended leave break (see Empowering Women case study on page 176).<br>We are committed to paying our people fairly and equitably. However, we recognise there is more work to<br>do. As reported to the Workplace Gender Equality Agency, we have a median gender gap of 29.3%. For<br>more information on this gap and our strategy to increase women's representation in key roles refer to our<br>Gender Pay Statement on our website.<br>a. Senior Leadership includes Executive Team, General Managers and their direct reports (excluding administrative or support roles).<br>Further information is set out in the 2024<br>Sustainability Index and Datasheet.<br>1. Global recognition of Westpac's diversity, inclusion and equity practices includes Equileap’s 2024 report, the Australian Workplace Equality<br>Index (AWEI), the Australian Disability Network INDEX and the Australian Defence Force Reserves and Employer Support Awards.
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178 WESTPAC GROUP 2024 ANNUAL REPORT<br>CREATING<br>VALUE FOR<br>THE COMMUNITY<br>We are determined to<br>create meaningful impact<br>by supporting people,<br>community organisations<br>and social enterprises that<br>are building better futures<br>for Australians.<br>#1<br>BANK FOR<br>CORPORATE GIVING1<br>73,000<br>HOURS VOLUNTEERED BY<br>WESTPAC EMPLOYEES<br>$177M<br>IN<br>COMMUNITY INVESTMENT2<br>$37.9M<br>SPENT WITH<br>DIVERSE SUPPLIERS3<br>1. Westpac was named the #1 Bank for Corporate Giving in 2024 by<br>Forbes Australia.<br>2. Figure includes commercial sponsorships and foregone<br>fee revenue.<br>3. Refer to the 2024 Sustainability Index and Datasheet for definition.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 179<br>Doing good is in our DNA<br>As one of Australia’s largest organisations, we have a<br>proud legacy of supporting local communities by investing<br>in change that matters. Since our first charity was formed<br>in 1879, we have built one of the strongest community<br>offerings in corporate Australia1<br> through our employee<br>workplace giving programs, the Westpac and St.George<br>Foundations and the Westpac Scholars Trust2<br>..<br>Our people dedicate their time and energy to support<br>causes they are passionate about. This year, our people<br>volunteered more than 73,000 hours to create positive<br>change and value in the community. In addition, our<br>people participated in programs such as the Community<br>Ambassador, the Westpac Board Observer and the<br>Jawun Programs.<br>We reinvigorated our workplace giving initiative, leading<br>to a 16% increase in employee participation. Our<br>people donated more than $2.4 million to not-for-profit<br>organisations which Westpac matched.<br>See our 2024 Foundations Impact Report<br>Strong community partnerships<br>In our 51 year partnership with the Westpac Lifesaver<br>Rescue Helicopter Service, more than 100,000 community<br>missions have been performed, including search and<br>rescue and hospital emergencies. We also support Little<br>Wings, a children’s charity providing free transport for<br>seriously ill children in rural areas to access vital city<br>medical services. Our rugby league program supports and<br>promotes both the National Rugby League and Women’s<br>National Rugby League competitions, including pathway<br>and development programs for young females. Westpac<br>is also proud to be the major sponsor of the New<br>South Wales and Queensland men’s and women’s State of<br>Origin teams.<br>Westpac Foundation2<br>Investing in job creation and social enterprises to help<br>build a stronger, more inclusive Australia.<br>This year, Westpac Foundation awarded $2.8 million to 45<br>social enterprise partners. It also achieved a significant<br>milestone by surpassing its goal of 10,000 jobs by 2030<br>through helping its partners to create 10,141 jobs for<br>Australians facing barriers to employment since 2015.<br>Westpac Scholars Trust2<br>Investing in the next generation of Australian leaders<br>focused on creating a more sustainable, inclusive or<br>globally connected Australia.<br>Through 100 scholarships annually, Westpac Scholars<br>Trust supports university students, researchers and social<br>entrepreneurs. This year, it awarded $4.9 million to 100<br>scholars who are undertaking varied and meaningful<br>pursuits, bringing the total since 2015 to more than<br>$45 million awarded to 824 scholars.<br>St.George Foundation2<br>Investing in small, local charities to provide children<br>and young people with access to education and<br>wellbeing initiatives.<br>More than $3 million was awarded to 51 charities across<br>Australia, supporting initiatives that make a real difference<br>to young lives.<br>Te Waiu O Aotearoa Trust3<br>Investing in the education and advancement of Māori in<br>the general business, banking and finance industries.<br>Each year, Māori recipients throughout Aotearoa are each<br>awarded a $5,000 scholarship so support their tertiary<br>study costs.<br>The Foundations and Trusts we support awarded<br>$11 million to more than 200 new and returning grant<br>partners and recipients in 2024.<br>1. Westpac was named the #1 bank for Corporate Giving by Forbes Australia in 2024.<br>2. Westpac Group provides support to the Westpac Community Trust and the Westpac Buckland Fund (known as the Westpac Foundation),<br>Westpac Scholars Trust and the St George Foundation Trust (known as St George Foundation, BankSA Foundation and the Bank of Melbourne<br>Foundation). While Westpac was involved in establishing these foundations, they are non-profit organisations that are separate to the<br>Westpac Group. The trustee of St George Foundation Trust (St George Foundation Limited) is a related body corporate of Westpac.<br>3. Westpac New Zealand provides administrative support and skilled volunteering to Te Waiu O Aotearoa Trust, which is a charitable trust and<br>not part of the Westpac Group.<br>CHAMPIONING INCLUSIVE EMPLOYMENT<br>Nestled in the village of Mount Victoria in the Blue Mountains,<br>Hotel Etico is Australia’s first social enterprise hotel, leading<br>the way in disability employment within the hospitality industry.<br>Co-founder and CEO Andrea Comastri provides live-in<br>accommodation for employees with disability, helping them<br>develop hospitality and life skills. In recognition of his work,<br>Andrea was awarded a $50,000 Social Change Fellowship from<br>the Westpac Scholars Trust to enhance his leadership skills and<br>support Hotel Etico and its employees in reaching their full potential.
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180 WESTPAC GROUP 2024 ANNUAL REPORT<br>CREATING VALUE FOR THE COMMUNITY<br>Respecting and advancing human rights<br>We are committed to respecting human rights. Our Human Rights Position Statement (HRPS) and Action Plan outlines<br>our commitments, approach, areas of focus and support for the UN Guiding Principles on Business and Human Rights.<br>Our goal is to undertake human rights due diligence to identify, prevent, mitigate and address human rights risks and<br>impacts, including those arising from our business relationships. Our processes include ESG risk assessments, transaction<br>monitoring, Responsible Sourcing assessments, employee and third-party due diligence and customer care protocols.<br>We enhanced our ESG tools, leading to 164 customer escalations for further review on human rights and modern slavery<br>risks. We worked with suppliers to close more than 100 priority action plans addressing potential gaps in their modern<br>slavery approaches. We assessed our grievance mechanisms and identified improvements for handling human rights<br>grievances. Additionally, we piloted a monitoring framework to track and report on the impact of our human rights<br>efforts, focusing on 14 indicators related to modern slavery. For more details, refer to our Modern Slavery Statement.<br>Creating safer communities for children and young people<br>Our Safer Children, Safer Communities (SCSC) program has made good progress since its inception. Since 2020 we<br>have granted more than $77 million to 50+ child safeguarding organisations in Australia and Asia. This year, the funding<br>has helped our partners reach more than 69,0001<br> children, young people and adults through various programs. One<br>example is The Benevolent Society which is supporting seven local organisations across three states to improve child<br>safety outcomes. We also made progress on the commitments in our Child Safeguarding Supplement. The SCSC Impact<br>Report has more detail.<br>Strengthening risk management<br>The first stage of our Human Rights Risk Assessment (HRRA) provided insights into our salient human rights issues<br>across our lending and supply chain. Salient issues are those with the most severe impacts on people connected to<br>our activities. Future assessments will cover our financial products, services, employment practices and community<br>partnerships. While we can’t control all issues, we aim to reduce adverse outcomes and have identified actions to<br>strengthen our response and seek improvement opportunities.<br>Salient human rights issues<br>Our role as a bank<br>As a lender to business,<br>corporates and institutions<br>As a lender<br>to individuals<br>As a purchaser of<br>goods and services<br>SALIENT ISSUE OUR ROLE DESCRIPTION<br>Health, safety<br>and wellbeing<br>Impacts to the health, safety and wellbeing of workers, consumers and communities in both our own<br>and our customers' operations and supply chains.<br>Modern slavery and<br>labour exploitation<br>Modern slavery and exploitative labour practices in both our own and our customers' operations or<br>supply chain. Examples include slavery, servitude, human trafficking, forced labour, debt bondage,<br>deceptive recruitment, child labour and forced marriage.<br>Conflict and<br>security practices<br>Customer connections to, or exacerbation of, local conflict and/or the harmful use of security<br>practices against local communities or workers.<br>Land rights<br>and livelihoods<br>Customer connections to land rights violations, Free, Prior and Informed Consent (FPIC) or adverse<br>impacts to communities and their livelihoods associated with land use and compensation practices.<br>Climate vulnerability<br>and resilience<br>Our role in supporting customers and communities vulnerable to or affected by climate change,<br>helping to build climate resilience and financing climate mitigation and adaptation projects.<br>Customer hardship<br>and exploitation<br>Our role in supporting and avoiding impacts to customers in times of hardship, vulnerability,<br>exploitation or abuse, including situations of fraud, scams, financial abuse, coercion, or domestic<br>and family violence.<br>Housing affordability<br>and inclusivity<br>Our role in supporting customers and communities to access affordable, inclusive and<br>adequate housing.<br>Financial inclusion<br>and wellbeing<br>Our role in supporting diverse customers, fostering equitable access to finance and promoting<br>financial wellbeing so that customers and communities can meet their basic needs.<br>Privacy and<br>data protection Protection and respect for the privacy of our customers and their data.<br>1. Data is from 1 October 2023 to 31 March 2024 and includes children, young people and adults directly and indirectly reached through funded<br>programs across Australia, the Philippines, Thailand and Cambodia.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 181<br>Keeping cash flowing in communities<br>Cash is important for many customers. Looking ahead, we are committed to engaging with industry and government<br>to develop a sustainable, long term solution to maintain cash services in our communities. Westpac, in collaboration<br>with other major banks and retailers, committed almost $50 million to support Armaguard to maintain cash availability<br>in the community. This funding took Westpac's total cost of supplying cash services to Australians for the year to<br>approximately $330 million.<br>Diverse suppliers<br>We aim to build a stronger, more inclusive society by supporting businesses that drive positive change. Through<br>our Supplier Inclusion and Diversity program, we collaborate with Indigenous-owned businesses, social enterprises,<br>Australian Disability Enterprises, women-owned businesses and B Corporations (companies certified for their high<br>standards of social and environmental performance, transparency and accountability). This year, we spent $37.9 million<br>with diverse suppliers1<br>, an increase of $10 million from last year. This includes $21.1 million spent with Indigenous-owned businesses.<br>Supporting Reconciliation<br>Our vision for reconciliation is an Australia where Aboriginal and Torres Strait Islander peoples have equitable<br>economic participation and financial wellbeing. Our 2022-2025 Reconciliation Action Plan (RAP) outlines our<br>commitment and actions to achieve this vision through our roles as a lender, employer, purchaser, community<br>supporter and corporate voice. As we approach the final year of our RAP, we continue to make progress in our<br>four focus areas.<br>Respect for self-determination and a deeper understanding of Free Prior and Informed Consent (FPIC)<br>Our RAP sets out our Free, Prior and Informed Consent (FPIC) project, which aims to further develop our<br>understanding of FPIC, work with stakeholders, improve our capability and share our learnings as widely as we can.<br>See our RAP for more information.<br>This year, we continued our community consultations to better understand our role as a bank and lender and refined<br>our risk assessment tools for institutional customers.<br>RAP FOCUS AREA FY24 PROGRESSa<br>Valuing culture: building<br>relationships based on trust and<br>respect; valuing cultures and<br>histories and recognising the<br>importance of self-determination.<br> • Celebrated and supported Indigenous culture by hosting more than 30 events internally<br>and externally for National Reconciliation Week and NAIDOC Week.<br> • 30 Westpac staff completed a Jawun secondment, contributing more than 6,800 hours<br>to community organisations across 8 regions.<br> • Maintained cultural capability with 100% of employees completing mandatory learning.<br>Meaningful careers: investing<br>in Indigenous careers through<br>dedicated programs to recruit,<br>retain and develop Aboriginal and<br>Torres Strait Islander people.<br> • Increased our Aboriginal and Torres Strait Islander workforce representation to 1.08%,<br>exceeding our 2024 target of 0.9%.<br> • Recruited 28 cadets through the MobTech program with all gaining permanent roles at<br>Westpac. See Building future skills (page 175) for more detail.<br> • Expanded leadership development opportunities through our Echo leadership and<br>coaching programs and our Indigenous employee Summit, Bayala Djurali.<br>Better banking experiences:<br>making it easier for Indigenous<br>customers to do business with us<br>and improving financial inclusion<br>and economic participation.<br> • Supported more than 12,867 uniquea<br> customers through our Indigenous call centre<br>since 2022.<br> • Simplified our customer onboarding process, allowing remote customers to onboard<br>without visiting a branch.<br> • New scam and fraud dedicated phone line to improve support for impacted customers.<br>Backing Indigenous enterprise:<br>helping more Aboriginal and<br>Torres Strait Islander people<br>to grow their businesses<br>as customers, suppliers<br>and partners.<br> • Spent $21.1 million with Indigenous-owned suppliers this year, bringing the total<br>since April 2022 to $32.6 million. This exceeds our RAP target to spend a<br>cumulative $8 million with Indigenous-owned suppliers between 1 April 2022 and<br>30 September 2025.<br> • Supported 11 Indigenous-owned organisations through our Skilled Volunteering Network.<br>a. Refer to the 2024 Sustainability Index and Datasheet for definition.<br>1. Refer to the 2024 Sustainability Index and Datasheet for definition.
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182 WESTPAC GROUP 2024 ANNUAL REPORT<br>CREATING<br>VALUE FOR<br>THE ENVIRONMENT<br>We are committed to global<br>efforts in achieving<br>net-zero by 2050 through<br>our operations, helping<br>customers to transition and<br>collaborating for impact.<br>Key highlights1<br>13<br>TARGETS IN ALL<br>9 NZBA EMISSIONS-INTENSIVE SECTORS2<br>86%<br>REDUCTION IN SCOPE<br>1 AND 2 EMISSIONS<br>SINCE 2021<br>$29BN<br>IN SUSTAINABLE<br>FINANCE LENDING (TCE)<br>$13.7BN<br>IN BOND FACILITATION<br>SINCE THE START OF FY22<br>1. Refer to our 2024 Climate Report for definitions and detail.<br>2. Westpac joined the Net-Zero Banking Alliance (NZBA) in 2022.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 183<br>In line with our purpose of creating better futures<br>together, we are progressing our climate transition<br>plan with the ambition to become a Net-Zero, climate<br>resilient bank.<br>Our approach to climate change, detailed in our Climate<br>Report, guides our carbon footprint reduction efforts<br>across the organisation.<br>We've continued to make progress against our three<br>action areas. Further details on our targets and plans are<br>available in our 2024 Climate Report.<br>1. Net-zero, climate resilient<br>operations<br>We are committed to reducing the climate change impacts<br>of our operations through the reduction of our scope 1, 2<br>and scope 3 upstream emissions.<br>This year, we reduced our total operational emissions<br>(scope 1, 2 and scope 3 upstream) by a further 19% largely<br>due to meeting our renewable energy goals ahead of<br>schedule. Our scope 1 and 2 emissions are now 86% lower<br>than our 2021 baseline1<br> which surpasses our 2030 target<br>of a 76% reduction, six years ahead of schedule. To further<br>reduce our scope 1 emissions, we have installed electric<br>vehicle (EV) charging stations in more workplaces and<br>commenced including EVs in our fleet.<br>Scope 3 upstream emissions are now 41% lower than our<br>2021 baseline1<br>, positioning us well against our 2030 target<br>for a 50% reduction. We developed a new program which<br>will support employees reduce their home emissions by<br>switching to renewable electricity contracts with retailers.<br>WESTPAC'S OPERATIONAL EMISSIONS<br>(Tonnes of CO2<br> equivalent)<br>TITLE 1<br>TITLE<br>7,851 7,297 6,559 6,262<br>53,981<br>36,734<br>14,489<br>2,303<br>71,738<br>63,377<br>61,044<br>57,655<br>Scope 1 emissions Scope 2 emissions<br>Scope 3 upstream emissions<br>2021¹ 2022 2023 2024<br>TITLE<br>2. Supporting customers’ transition<br>to net-zero and to build their<br>climate resilience<br>More than 99% of our carbon footprint is derived from<br>financed emissions, which are the emissions associated<br>with the activities of the customers we lend to. Reducing<br>the emissions intensity of our loan portfolio by mobilising<br>capital to support customers in their transition is one of<br>the most significant roles we can play as a bank. This<br>supports the transition to a net-zero economy and helps<br>us to reduce our financed emissions.<br>To guide our efforts, we joined the NZBA and have set<br>2030 targets for some of the most emissions intensive<br>sectors in our lending.<br>We made progress last year with an improved emissions<br>profile in 11 of our 12 sectors where we have targets.<br>This year, we introduced a new aluminium sector target,<br>bringing us to a total of 13 targets across emissions<br>intensive sectors under our NZBA commitment. Up to 54%<br>of our estimated scope 3 financed emissions from the<br>scope 1 and 2 emissions of our customers at a Group level<br>for FY23 relate to customers and industries captured in<br>our NZBA sector targets.<br>We engaged just over 150 institutional customers on their<br>climate transition plans and found that 84% of customers<br>had a public transition plan. As part of our engagement,<br>we provided insights on industry best practice, climate<br>strategy and ESG trends.<br>Other areas of progress include:<br> • Launching the Sustainable Upgrades home and<br>investor loans with the support of the Clean Energy<br>Finance Corporation’s $1 billion Household Energy<br>Upgrades Fund, for customers to install new features<br>or technology to improve the energy efficiency or<br>climate resilience of their properties.<br> • Building on the success of New Zealand’s Sustainable<br>Farm Loan and Sustainable Finance Business Loan<br>launched last year, we introduced a new Sustainable<br>Equipment Finance Loan. This initiative supports more<br>businesses in reducing their climate impacts through a<br>range of sustainable assets, such as electric vehicles.<br> • We reviewed our loans and bond facilitation activities<br>against our Sustainable Finance Framework. At<br>30 September 2024 we had $29 billion in lending<br>while the cumulative total of bond facilitation since<br>the start of FY22 was $13.7 billion. This puts us on<br>track to meet our 2030 targets of $55 billion and<br>$40 billion respectively.<br>Refer to the 2024 Climate Report for further<br>information about our financed emissions at an<br>industry level<br>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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184 WESTPAC GROUP 2024 ANNUAL REPORT<br>CREATING VALUE FOR THE ENVIRONMENT<br>GROUP FINANCED EMISSIONS AND PROGRESS ON OUR NZBA SECTOR TARGETS<br>Financed emissions are our estimated share of customers’ scope 1, 2 and, for certain sectors, scope 3 emissions -<br>collectively referred to as our scope 3 financed emissions. In FY23, the financed emissions for our portfolio were<br>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.<br>Our NZBA sector targets are set over subsets of the sectors in our portfolio. The progress metrics for these targets<br>are calculated using different methodologies to those used to calculate our Group financed emissions. Calculations<br>typically rely on more granular data, including customer or related asset emissions. Given the complexity of the<br>calculations and the time needed to collect customers' information, our estimated Group portfolio financed emissions<br>and progress of our NZBA sector targets are reported one year in arrears, for the period ended 30 September 2023,<br>unless otherwise indicated.<br>The below table summarises our progress on our NZBA sector targets. See our 2024 Climate Report for<br>more information.<br>PROGRESS ON OUR NZBA SECTOR TARGETS<br>NZBA SECTOR WESTPAC SECTOR<br>TYPE OF<br>TARGET<br>CUMULATIVE CHANGE IN EMISSIONS<br>FROM BASELINE YEAR (%)a<br>PROGRESS FY22 PROGRESS FY23<br>IMPLIED<br>2030 TARGET<br>Power<br>generation<br>Power<br>Generation<br>Intensity -12 -23 -62<br>Cement Cement<br>Production<br>Intensity 0 -5 -14<br>Oil and Gas Upstream Oil<br>and Gas<br>Absolute -18 -45 -23<br>Coal Thermal<br>Coal Mining<br>Absolute -23 -81 -100<br>Transport Aviation<br>(Passenger<br>Aircraft<br>Operations)<br>Intensity -18 -45 -60<br>Iron and Steel Steel Production Intensity In FY23, we are on track to achieve our 2030 target<br>and progress remains below our emissions pathway. Given<br>the small number of customers, this information is not<br>publicly disclosed.<br>Aluminium Aluminiuma<br>Intensity The baseline year for this target is 2023. Given the<br>small number of customers, this information is not<br>publicly disclosed.<br>Commercial<br>and Residential<br>Real Estate<br>Commercial Real<br>Estate (Offices)a<br>Intensity NA - baseline year<br>is 2022<br>-18 -59<br>Residential Real<br>Estate<br>(Australia)a<br>Intensity NA - baseline year<br>is 2022<br>-11 -56<br>Agriculture Australia Beef<br>and Sheep<br>Intensity +4 +4 -9<br>Australia Dairy Intensity -7 -8 -10<br>New Zealand<br>Beef and Sheep<br>Intensity -1 -4 -9<br>New<br>Zealand Dairy<br>Intensity +4 -7 -10<br>a. Baseline year for Commercial Real Estate and Residential Real Estate targets is 2022. Baseline year for Aluminium is 2023. Baseline year for all<br>other NZBA sector targets is 2021. Baseline and progress metrics for Residential Real Estate target are as at 31 August.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 185<br>3. Collaborating for impact<br>Transitioning to net-zero requires collaboration across all<br>sectors of the global economy. We collaborate with<br>governments, industry associations, NGOs, communities<br>and international bodies while participating in the<br>initiatives of several standard setting bodies. This included:<br> • participating in consultations for the AASB climate-related disclosures standards and the Climate Active<br>program through our Australian Banking Association<br>(ABA) membership;<br> • participating in the development of the Australian<br>Sustainable Finance Taxonomy through our Australian<br>Sustainable Finance Institute (ASFI) membership; and<br> • co-chairing the Banking Board of the United Nations<br>Environment Programme Finance Initiative (UNEP FI)<br>which oversees the Principles for Responsible Banking<br>(PRBs) and being involved in steering and principals groups that govern the NZBA.<br>We’ve committed to invest in a new fund by Virescent Ventures focused on in early-stage climate technologies. This<br>investment, alongside the Clean Energy Finance Corporation, will provide insights into emerging technologies and help<br>us to assist customers, especially in hard-to-abate sectors, as they progress their transition plans.<br>SUPPORTING THE TRANSITION TO A<br>SUSTAINABLE FUTURE<br>Westpac supported the Australian Office of Financial<br>Management (AOFM) as Joint Lead Manager, with their<br>first 10-year A$7 billion Green Treasury Bond. AOFM<br>manages the Australian Government’s debt portfolio.<br>The green bond’s proceeds will be allocated to projects<br>that drive Australia’s transition to net-zero by 2050<br>and aim to deliver lower greenhouse gas emissions,<br>increases in renewable energy production and bolstering<br>biodiversity conservation, restoration and adaptation<br>NATURAL CAPITAL<br>The world’s natural capital is under threat as natural<br>resources decline and critical habitats are placed under<br>pressure. As with climate change, we have a role to play<br>in supporting customers to conserve nature and reduce<br>natural capital loss.<br>We released our Natural Capital Position Statement<br>(NCPS) last year and are working to further build our<br>understanding of nature-related dependencies, impacts,<br>risks and opportunities. According to the Task Force on<br>Nature-related Financial Disclosures (TNFD)’s reference<br>sectors, we estimate that more than 13% of our lending<br>is to sectors with significant nature-related dependencies<br>and impacts.<br>We are further developing our geospatial capabilities<br>and piloting TNFD LEAP (Locate, Evaluate, Assess and<br>Prepare) assessments for material sectors. This is helping<br>to set the baselines for additional work.<br>As our customers and investors become more aware<br>of nature-related risks and opportunities, we continue<br>to engage with them to support their journey and<br>deepen our understanding of these impacts. In FY24, we<br>supported the Australian Sustainable Finance Institute’s<br>(ASFI) Valuing Natural Capital program as part of their<br>Natural Capital Advisory Group.<br>We are developing foundational training for front line<br>bankers and participation in external learning, such as<br>workshops by the Principles for Responsible Banking.<br>Next year, we aim to foster greater awareness amongst<br>other employees, management and the Board on nature-related topics.<br>EXPOSURE TO TNFD REFERENCE SECTORS<br>TNFD REFERENCE SECTORSa<br>2024<br>% OF<br>GROUP TCEb<br>Automobiles and Components 0.07<br>Consumer Durables & Apparel 0.34<br>Consumer Services, Consumer Staples<br>Distribution and Retail<br>1.71<br>Energy 0.62<br>Food & Beverage 2.74<br>Household & Personal Products 0.01<br>Materials 1.12<br>Pharmaceuticals & Biotechnology 0.09<br>Real Estate Management & Development,<br>Equity Real Estate Investment Trusts<br>(REITs), Home building and Capital Goods<br>2.83<br>Semiconductors &<br>Semiconductor Equipment<br>0.13<br>Transportation 2.09<br>Utilities, Commercial and<br>Professional Services<br>1.54<br>Total 13.29<br>a. Reference sectors set out within Annex 1 of the TNFD Sector<br>guidance, Additional guidance for financial institutions Version<br>2.0 June 2024. Refer to the glossary of the 2024 Sustainability<br>Index and Datasheet for further details.<br>b. Represents the TCE for customers in each reference sector,<br>excluding exposures for the committed portion of secondary<br>market trading and underwriting risk, as a percentage of TCE<br>for Westpac.
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186 WESTPAC GROUP 2024 ANNUAL REPORT<br>TECHNOLOGY<br>SIMPLIFY MODERNISE INNOVATE<br>Accelerating simplification<br>We are taking significant steps to rationalise our<br>technology and reduce costs.<br>UNITE, our business-led, technology-enabled<br>transformation program, aims to simplify our processes<br>and systems to build a strong foundation for<br>future growth.<br>The multi-year program intends to deliver progressive<br>benefits to customers, employees and shareholders by<br>reducing the number of our technology platforms and<br>business complexity in the longer term.<br>Our objective is to have an efficient technology<br>environment, allowing us to be faster in responding to<br>customer needs and technological changes.<br>We have begun 39 initiatives under UNITE, including<br>streamlining the way we verify customer identification<br>(see case study). We are giving our bankers and<br>lenders across St.George, Bank of Melbourne and BankSA<br>a new Customer Relationship Management system to<br>improve service. We have decommissioned more than<br>200 applications and are well-progressed on launching a<br>unified platform to provide better support to collections<br>and hardship customers.<br>We undertook other major simplification projects,<br>including one that halved our data centres and<br>consolidated nine networks into one, earning recognition<br>as Australia’s best technology project.1<br>Technology simplification will remain a priority for<br>Westpac, driving operational efficiency and enhancing our<br>ability to create long term value for stakeholders.<br>STREAMLINED ID VERIFICATION<br>We are consolidating 22 customer verification<br>processes into a single digital identification<br>solution, which includes biometrics.<br>Customers will be able to verify their identity<br>through the Westpac App or Online Banking using<br>acceptable forms of ID such as an Australian<br>driver’s licence, passport, or Medicare card.<br>This will help make the crucial ID verification step<br>faster, easier and more secure for new customers.<br>UNITE objectives<br>Better<br>customer experience<br>UNITE aims to deliver all customers<br>Westpac’s best experience, including<br>access to Australia’s best banking app<br>leading to improved customer experience,<br>NPS and customer loyalty.<br>Improved<br>employee experience<br>UNITE aims to give us one best way<br>to serve and support our customers<br>across the entire bank<br>leading to<br>more time with customers,<br>fewer systems to navigate,<br>easier processes and increased<br>employee engagement.<br>Increased<br>shareholder return<br>UNITE aims to reduce business<br>complexity leading to lower run costs<br>and spend on transformation<br>leading to close the cost to income<br>ratio gap to peers.<br>1. 2024 Australian Institute of Project Management National Awards.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 187<br>Modernising for superior experiences<br>While simplifying our technology, we are also modernising<br>to deliver market-leading products and experiences to<br>customers.<br> • Our online banking app was rated #1 by Forrester for<br>the second year, with enhanced security and features<br>such as Westpac SaferPay and Westpac Verify. See<br>Creating value for customers (page 168) for more<br>information.<br> • BT Panorama won best wealth management platform<br>at the Australian Wealth Management Awards.<br> • Robotic automation across consumer, business and<br>institutional lending saved bankers 20,000<br>administration hours to focus on customer service.<br> • Our new Digital Banker platform will enable our<br>bankers to better support and service customers.<br> • Westpac Mesh, our world-class technology<br>development platform, grew from 85 million in daily<br>transactions in FY23 to more than 120 million. Our Mesh<br>engineers rank in the top 20% globally for productivity1<br>..<br> • We strengthened our defences against customer fraud, scams and cyber-attacks by investigating over 11,000 alerts<br>and using a combination of Artificial Intelligence and automation to detect suspicious patterns and risks.<br>Innovating to drive intelligent banking<br>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.<br>LEVERAGING THE POWER OF AI<br>We are using AI to develop new capabilities that deliver benefits to our customers, people and organisation. Our<br>new AI platform is the foundation of our progress, hosting multiple AI-based solutions and enabling the seamless<br>integration of new applications.<br>Advanced AI models are used in home lending to verify customer income and expense information, making the home<br>loan process more efficient for customers, brokers and our people by reducing rework.<br>Our use of AI assists thousands of our software engineers, boosting their productivity by between 10 and 25% in<br>coding output and quality. AI powers our Everyday Banking chatbots, providing 24/7 support and resolving 70%<br>of customer queries without escalation. We are also trialling new internal chatbots for financial market dealers and<br>mortgage lenders.<br>Other opportunities include using ‘AI agents’ that are capable of executing multi-step actions to drive operational<br>efficiencies and improved service to our customers. We are committed to the responsible use of AI, ensuring our<br>initiatives align with our principles, policies, values and Code of Conduct.<br>Data: The foundation of intelligent banking<br>Data is critical to every aspect of our business, empowering informed decision-making. We have made significant<br>progress in migrating our data to the cloud, a major milestone in simplifying Westpac’s data ecosystem, reducing risk<br>and enabling our team to create value at scale through data products. Our customer insights platform continues to<br>evolve, offering a comprehensive view of our customers and delivering hyper-personalised experiences. We have defined<br>our approach to information security, including our alignment with international and industry standards, in our<br>Cybersecurity Statement.<br>Investing in our technology workforce<br>To drive our technology ambitions, we’re investing in our people. Over the course of the year, we brought on close to<br>1,000 engineers2<br> and we’re upskilling our team while attracting new talent through initiatives like EmPOWERUP and<br>MobTech. For more details, please see Creating value for our people (page 174).<br>1. BlueOptima software development metrics.<br>2. Figure includes all employment types, including contractors.
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188 WESTPAC GROUP 2024 ANNUAL REPORT<br>RISK MANAGEMENT<br>Proactive risk management and risk culture are fundamental to our bank. They underpin our strength and resilience,<br>shape the way we operate and provide clear parameters for decision-making. Strengthening risk management remains a<br>priority as the nature of the risks we face may change and evolve.<br>We manage risks through a Risk Management Framework (Framework) which is centred around customers, a strong<br>risk culture and the Three Lines of Defence (3LoD) model. These are surrounded by nine elements that work together<br>to guide how we manage risk and deliver fair customer outcomes. We regularly review these elements to ensure<br>the Framework operates effectively. The Framework is approved by the Board and implemented through our Risk<br>Management Strategy, which is supported by our risk class frameworks, policies and risk appetite statements.<br>To manage sustainability risks, the Framework is supported by a Sustainability Risk Management Framework (SRMF) and<br>related policies to guide how we manage risks such as climate change and human rights across our operations, lending<br>and supply chain. For further information on risks we face, see 2024 Risk Factors.<br>RISK MANAGEMENT FRAMEWORK COMPONENTS<br>Governance and<br>Management Control<br>Business Strategy<br>Risk Identification<br>Risk Appetite<br>Stress and<br>Scenarios Analysis<br>People and<br>Infrastructure<br>Control Definition and<br>Effectiveness<br>Monitoring and<br>Reporting<br>Actions and<br>Response<br>Westpac’s business plans<br>are shaped considering the<br>risks associated with its<br>strategic objectives<br>Identifying<br>existing and<br>emerging risks in<br>our business<br>from internal and<br>external<br>environments<br>Setting risk<br>appetite to<br>provide clarity on<br>the level of risk<br>we are prepared<br>to take<br>Performing stress tests and<br>scenario analysis to assess<br>potential impacts that changes<br>to existing and emerging risks<br>may have on the Group,<br>including on our capital<br>Having appropriate capability, people,<br>data and systems to support effective risk<br>management and decision making<br>Embedding appropriate<br>Frameworks, policies,<br>standards and controls to<br>manage the risks we take<br>Risks are<br>assessed<br>through ongoing<br>monitoring,<br>management,<br>reporting<br>and assurance<br>Appropriate<br>action plans<br>are<br>implemented<br>to improve<br>our risk<br>profile<br>Ensuring that appropriate data,<br>analysis and recommendations flow to<br>appropriate people and forums on a<br>timely basis to support decision making<br>Customers<br>Risk Culture<br>Board approved 7 March 2024 (no changes from 2023)
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 189<br>Strengthening risk management<br>We implemented a comprehensive Integrated Plan (IP), through the CORE program, to strengthen risk management<br>practices. The completion of the three year plan on 31 December 2023, marked a significant milestone in strengthening<br>our risk culture, governance and accountability. Promontory Australia, the independent reviewer of our IP, have noted the<br>progress in its final report. Subsequently, APRA reduced Westpac’s total operational risk capital overlay from $1 billion<br>to $500 million. We are now completing a transition phase to continue to embed the improvements we've made for the<br>long term and demonstrate their sustainability and effectiveness.<br>Three Lines of Defence<br>The 3LOD work together to make sound risk-based decisions through:<br> • Strong and proactive engagement, communication, trust and collaboration;<br> • Management information that is reliable, coherent and transparent; and<br> • Alignment of activities across the 3LOD to avoid unnecessary duplication, overlap or gaps.<br>WESTPAC THREE LINES OF DEFENCE<br>WESTPAC THREE LINES OF DEFENCE<br>The 3LoD work together to deliver effective risk management outcomes.<br>The 3LoD work together to make sound risk-based decisions through:<br> — strong and proactive engagement, communication, trust and collaboration<br> — management information that is reliable, coherent and transparent.<br>There must also be alignment of activities across the 3LoD to avoid unnecessary duplication, overlap or gaps.<br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br>Risk identification: Major risk categories<br>We have defined 11 major risks that impact our business. These major risks represent only the most material<br>risks to the Group and are not exhaustive.<br>Major risk categories<br>1<br>Capital<br>Adequacy<br>2<br>Funding &<br>Liquidity<br>Risk<br>3<br>Credit<br>Risk<br>4<br>Market<br>Risk<br>5<br>Strategic<br>Risk<br>6<br>Risk<br>Culture<br>7<br>Operational<br>Risk<br>8<br>Compliance<br> & Conduct<br>Risk<br>9<br>Financial<br>Crime Risk<br>10<br>Cyber<br>Risk<br>11<br>Reputational &<br>Sustainability<br>Risk<br>For each major risk category, the Board establishes a risk appetite, which is articulated in the Board Risk Appetite<br>Statement (RAS). The RAS lists the Group’s major risks and the measures and tolerances used to monitor these risks.<br>Most of these measures are monitored by ‘amber’ and ‘red’ tolerances which indicate when risks are close to, or over,<br>the Board’s approved appetite.<br>The following provides an explanation of our major risk categories, considerations for risk appetite and examples of areas<br>of focus which illustrate the operation of the Risk Management Framework.<br>RISK<br>MANAGEMENT<br>42 WESTPAC GROUP 2023 ANNUAL REPORT<br>Embedded sustainability practices<br>Dedicated ESG specialists are integrated within our Business & Wealth, WIB and Westpac New Zealand<br>operating segments.<br>The ESG Risk team, as a second line of defence, performs independent monitoring and oversight of risk profiles to<br>ensure that risk and control assessments accurately reflect our sustainability risks.<br>Our approach to managing climate-related risks and opportunities, including assessing physical and transition climate<br>risks, is outlined in the 2024 Climate Report.
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190 WESTPAC GROUP 2024 ANNUAL REPORT<br>RISK MANAGEMENT<br>Risk assessment<br>In line with our Risk Management Framework, we regularly assess the risks that could impact Westpac’s strategic<br>objectives. This process involves workshops with first and second line defence teams to identify potential risks, assess<br>their impact and outline how we manage, monitor and report them with the controls in place. Emerging risks and<br>changes to the external environment are considered as part of the assessment. For material non-financial risks, we<br>generate a risk profile which enables each risk to be rated from ‘Low’ to ‘Very high’. Each risk is also assessed for its<br>financial, customer, staff, regulatory, reputation, social and environmental impact.<br>Major risk categories<br>We have identified 11 major risk categories, among other potential risks, that could impact Westpac. Sustainability risks,<br>including climate change, have the potential to affect the company in various ways with the main impacts classified<br>under the material risks of Credit Risk (as a financial risk) and Reputation and Sustainability Risk (as a non-financial risk).<br>1<br>Capital<br>Adequacy<br>2<br>Funding<br>and<br>Liquidity<br>Risk<br>3<br>Credit<br>Risk<br>4<br>Market<br>Risk<br>5<br>Strategic<br>Risk<br>6<br>Risk<br>Culture<br>7<br>Operational<br>Risk<br>8<br>Compliance<br> & Conduct<br>Risk<br>9<br>Financial<br>Crime Risk<br>10<br>Cyber<br>Risk<br>11<br>Reputational<br>and<br>Sustainability<br>Risk<br>For each major risk category, the Board establishes a risk appetite which is articulated in the Board Risk Appetite<br>Statement (RAS). The RAS lists our major risks, along with the measures and tolerances used to monitor each risk. Most<br>of these measures are monitored by 'green', ‘amber’ and ‘red’ tolerances which indicate when risks are close to, or over,<br>the Board’s approved appetite. The following table provides more detail on the major risk categories.<br>MAJOR RISK CATEGORIES<br>1<br>Capital Adequacy<br>The risk that Westpac has an<br>inadequate level or composition<br>of capital to support its<br>normal business activities<br>and to meet its regulatory<br>capital requirements.<br>Risk Appetite and Mitigation<br>We aim to maintain a strong balance sheet including under<br>stressed scenarios.<br>We evaluate capital management through our Internal Capital Adequacy<br>Assessment Process, features of which include:<br> • Capital management strategy<br> • Considering economic and regulatory requirements and<br>stakeholder perspectives<br> • Stress-testing considerations<br> • Target operating range for key capital ratios.<br>Areas of focus include:<br> • Continuous monitoring of capital forecasts<br> • Considerations of capital headwinds<br> • Actively monitoring the economic outlook and credit risk arising from<br>higher interest rates and cost-of-living pressures.<br>Example of a Risk Appetite measure<br> • CET1 capital ratio – a measure which shows a bank’s capacity to<br>absorb losses.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 191<br>2<br>Funding and Liquidity Risk<br>The risk that Westpac cannot<br>meet its payment obligations<br>or that it does not have the<br>appropriate amount, tenor and<br>composition of funding and<br>liquidity to support its assets.<br>Risk Appetite and Mitigation<br>We aim to manage our balance sheet such that we:<br> • Maintain a diversified, stable and cost-effective funding base<br> • Can source funding as and when needed<br> • Have sufficient securable assets to meet our funding and repurchase<br>agreement requirements<br> • Fund lending growth with stable funding sources.<br>Further information on funding and liquidity risk management is in Note 21<br>(page 74).<br>Areas of focus include:<br> • Executing the wholesale funding plan to support balance sheet growth<br>and refinance maturing debt<br> • Managing liquidity risk to meet regulatory requirements and Westpac’s<br>liquidity needs in line with market conditions.<br>Examples of a Risk Appetite measure<br> • Net Stable Funding Ratio (NFSR)<br> • Liquidity Coverage Ratio (LCR).<br>3<br>Credit Risk<br>The risk of financial loss where a<br>customer or counterparty fails to<br>meet their financial obligations<br>to Westpac.<br>Risk Appetite and Mitigation<br>We manage credit risk using either a Program-managed approach for high-volume homogeneous credit risk or Transaction-managed approach for<br>individual customers.<br>These approaches include:<br> • Setting boundaries to guide appropriate credit risk conscious strategic<br>choices, including for changes in the operating environment<br> • A range of policies, processes, systems, risk-delegated authorities and<br>Board-approved credit risk limits.<br>Further information on credit risk management and provisioning is in Note<br>10 (page 34) and Note 11 (page 44) to the financial statements and in the<br>September 2024 Pillar 3 report.<br>Areas of focus include:<br> • Responding to heightened credit risk from the rapid interest rate<br>tightening cycle, ongoing geopolitical risks, an uncertain economic<br>environment and inflationary pressures<br> • Stress testing our credit portfolio for climate change including the<br>transition to net-zero emissions<br> • Assessing the impact of any external events that may impact our<br>credit portfolio (i.e. geopolitical events, industry specific events), on the<br>adequacy of the overall expected credit loss provision.<br>Example of a Risk Appetite measure<br> • Top 10 exposures to Corporates and Non-Bank Financial Institutions as a<br>% of Total Committed Exposure.
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192 WESTPAC GROUP 2024 ANNUAL REPORT<br>RISK MANAGEMENT<br>4<br>Market Risk<br>The risk of an adverse impact<br>on our financial performance<br>or financial position resulting<br>from changes in market factors,<br>such as foreign exchange rates,<br>commodity prices, equity prices,<br>credit spreads and interest rates.<br>This includes interest rate risk in<br>the banking book.<br>Risk Appetite and Mitigation<br>We have appetite for market risk in approved products within our limit<br>framework. We manage market risk through the employment of prudent risk<br>management strategies and active monitoring of Board-approved metrics<br>that capture the potential risk of adverse movements in financial markets.<br>The Board has approved a risk appetite for traded and non-traded risks via<br>the measurement of Value at Risk (VaR), Stressed VaR (SVaR), Net Income<br>at Risk (NaR) and risk sensitivities to interest rates for capital hedges and to<br>credit spreads for the liquid securities portfolio. The management of market<br>risk is supported by the Market Risk Management Framework and associated<br>policies, limits, processes, systems and delegated authorities.<br>Further information on market risk management is in Note 21 (page 74).<br>Areas of focus include:<br> • Upgrading/replacing market risk systems and supporting infrastructure<br> • Implementing regulatory change related to prudential market<br>risk standards.<br>Example of a Risk Appetite measure<br> • Value at Risk (VaR), a statistic that quantifies the extent of possible<br>financial losses arising from the Bank’s Financial Markets business.<br>5<br>Strategic Risk<br>The risk that Westpac makes<br>inappropriate strategic choices,<br>does not implement its strategies<br>successfully, or does not respond<br>effectively to changes in<br>the environment.<br>Risk Appetite and Mitigation<br>We aim to grow through well-considered initiatives aligned to our strategy<br>and risk appetite. We aim to manage the impact of threats from changes in<br>the environment, which could significantly impact our ability to implement<br>our strategies. We continually evaluate our performance against plans and in<br>light of changes, we must respond to such factors in a timely manner.<br>Areas of focus include:<br> • Accelerating technology simplification and transformation agenda<br> • Appropriate funding, resourcing and delivery of regulatory commitments<br> • Continuing to invest in digital and data journey, improving the<br>customer experience.<br>Example of a Risk Appetite measure<br> • Actual ROTE against the Target ROTE.<br>6<br>Risk Culture<br>The risk that our culture does<br>not promote and reinforce<br>behavioural expectations and<br>structures to identify,<br>understand, discuss and act<br>on risks.<br>Risk Appetite and Mitigation<br>We promote a risk culture that supports our purpose, strategy and values<br>and our ability to manage risk effectively. We regularly assess our risk<br>culture and undertake initiatives to continually improve.<br>Areas of focus include:<br> • Maintaining and continuing to review and improve our tools and<br>processes to support risk culture<br> • Supporting improved capability across key behavioural change areas,<br>including decision making, ownership, challenge and reinforcement and<br>maturing action planning to drive behavioural change<br> • Continuing to align to the broader organisational culture plan to support<br>driving change at all levels.<br>Example of a Risk Appetite measure<br> • Internal Voice+ survey results – % of respondents who feel safe calling<br>out risks and/or concerns.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 193<br>7<br>Operational Risk<br>The risk of loss resulting from<br>inadequate or failed internal<br>processes, people and systems<br>or from external events.<br>Risk Appetite and Mitigation<br>We aim to be resilient to operational risk and minimise risk through robust<br>processes and controls. We aim to quickly and effectively remediate material<br>operational issues and incidents.<br>Areas of focus include:<br> • Maturing our Operational Risk Management Framework and practices to<br>continuously strengthen risk management across the organisation<br> • Strengthening the control environment, including risk prevention<br>and automation<br> • Strengthening our operational resilience and adopting a cross-organisation view of events to fully understand underlying issues. Areas<br>of focus include data, records management and third-party risk.<br>Example of a Risk Appetite measure<br> • % of key controls assessed as ‘Unsatisfactory’.<br>8<br>Compliance and Conduct Risk<br>The risk of failing to abide by<br>compliance obligations required<br>of us, or otherwise failing to have<br>behaviours and practices that<br>deliver suitable, fair and clear<br>outcomes for customers and that<br>support market integrity.<br>Risk Appetite and Mitigation<br>We establish robust controls and systems to manage compliance and<br>conduct risk. We aim to promptly own, investigate and remediate incidents<br>of non-compliance. We aim to eliminate:<br> • Any breaches of regulatory requirements<br> • Conduct that causes unsuitable, unfair or unclear customer outcomes or<br>adversely impacts the integrity of markets<br> • Complicated systems or processes that could lead to systemic or<br>material breaches of regulatory requirements.<br>Areas of focus include:<br> • Strengthening the management of our conflicts of interest, product<br>governance and privacy risks<br> • Improving our tools and processes to support alignment of our business<br>practices to fair customer outcomes and market integrity<br> • Applying the Code of Conduct including our ‘Should We?’ Test to deliver<br>better outcomes for our customers, our communities and each other.<br>Example of a Risk Appetite measure<br> • Average calendar days to complete all Compliance Assessments
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194 WESTPAC GROUP 2024 ANNUAL REPORT<br>RISK MANAGEMENT<br>9<br>Financial Crime Risk<br>The risk that Westpac fails<br>to prevent financial crime<br>and/or fails to comply with<br>applicable global financial crime<br>regulatory obligations.<br>Financial Crime includes<br>bribery and corruption, money<br>laundering, sanctions and export<br>control violations, tax evasion,<br>fraud and scams, terrorist<br>financing and proliferation.<br>Risk Appetite and Mitigation<br>Westpac helps prevent financial crime by proactively identifying, assessing,<br>mitigating and reporting financial crime risks and complying with all<br>applicable global and local financial crime regulatory obligations. This means<br>that our financial crime risks must be managed through robust controls and<br>systems and that we must promptly own, investigate and remediate financial<br>crime incidents where they do occur.<br>Areas of focus include:<br> • Simplification and embedding strategic capabilities, improving detection<br>and surveillance capabilities and expanding the use of network analytics<br> • Collaboration through involvement in Public and Private sector<br>partnerships and other intelligence bodies to disrupt financial crime<br> • Continued Know your Customer (KYC) identity checks, including<br>remediation of pre-commencement customers and enhancing<br>customer lifecycle management through digital capabilities and<br>automated controls. Pre-commencement customers are customers<br>who were onboarded before KYC requirements came into effect on<br>12 December 2007.<br>Example of a Risk Appetite measure<br> • Number of high rated Issues which haven’t been remediated within the<br>initially agreed timeframe.<br>10 Cyber Risk<br>The risk that Westpac’s or its<br>third parties’ data or technology<br>are inappropriately accessed,<br>manipulated or damaged from<br>cyber threats or vulnerabilities.<br>Risk Appetite and Mitigation<br>We proactively manage our cyber risk exposure, to ensure that we are<br>resilient to cyber threats and vulnerabilities. In managing our cyber risk, we<br>aim to ensure that:<br> • We manage our risks within the appropriate regulatory frameworks<br> • We do not undermine our strategic, financial, reputational or<br>regulatory standing<br> • We implement cyber controls commensurate to the cyber threats we<br>respond to.<br>We recognise that cyber events may occur, however incidents must be<br>managed timely and effectively to limit impact and future likelihood.<br>Areas of focus include:<br> • Enhancing cybersecurity capability including data security controls,<br>application protection controls, identity and access management and<br>strengthening our network perimeters<br> • Embedding a consistent cyber risk management framework.<br>Examples of a Risk Appetite measure<br> • Control effectiveness against external cyber threats<br> • Supplier security assessment outcomes.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 195<br>11 Reputational and<br>Sustainability Risk<br>The risk of failing to recognise or<br>address environmental, social or<br>governance (ESG) issues as well<br>as the risk that an action, inaction,<br>transaction, investment or event<br>will reduce trust in Westpac’s<br>integrity and competence.<br>Risk Appetite and Mitigation<br>We aim to maintain the confidence of all stakeholders by fostering trust<br>in our integrity and competence. Our approach aims to balance the<br>commercial aspects of decisions with stakeholder expectations, while<br>considering potential impacts on people, communities or the environment.<br>We recognise that ESG issues can involve complex, interconnected and<br>sometimes competing considerations.<br>In our lending<br>The ESG Credit Risk Policy supports the SRMF and forms part of our credit<br>risk assessment process. ESG risk assessment tools are used within the<br>business and institutional banking teams to assess ESG risks associated<br>with customers, transactions and the activity being supported. These<br>assessments are performed for new-to-bank opportunities and for existing<br>customers as part of periodic risk reviews or where there are major<br>changes to facilities. When potential ESG risks remain, they are escalated<br>to a Customer and Transaction Risk Escalation Committee for additional<br>review in the relevant business unit. The Climate Change Credit Risk<br>Committee provides portfolio oversight, informing accountable individuals<br>in making appropriate climate-related credit risk decisions.<br>In our supply chain<br>We require suppliers to adhere to Westpac’s Responsible Sourcing Code<br>of Conduct by completing an assessment that outlines our standards for<br>ethical, social and environmental business practices.<br>Areas of focus include:<br> • Improving tools and processes to understand sustainability risks<br>associated with our lending and supply chain<br> • Building our understanding of the nature-related risks, consistent with<br>our Natural Capital Position Statement<br> • Embedding findings of our salient human rights risk assessment into<br>risk management processes. See page 180 for more information.<br>Examples of a Risk Appetite measure<br> • Reputation ranking from RepTrak (a firm providing an independent<br>assessment of a company’s reputation, brand and ESG)<br> • Progress against our NZBA targets.
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196 WESTPAC GROUP 2024 ANNUAL REPORT<br>CORPORATE GOVERNANCE<br>OUR APPROACH<br>TO GOVERNANCE<br>Corporate governance is the framework of systems,<br>policies and processes by which we operate and<br>through which our people are both empowered<br>and accountable for making decisions that affect our<br>business, operations, customers and stakeholders. The<br>framework establishes the roles and responsibilities of<br>Westpac’s Board, management team, employees and<br>suppliers. It also establishes the systems, policies and<br>processes for monitoring and evaluating Board and<br>management performance, and the practices for corporate<br>reporting, disclosure, remuneration, risk management and<br>engagement of security holders.<br>Our approach to corporate governance is based on a<br>set of values and behaviours that underpin our day-to-day activities. Our values and behaviours are designed<br>to promote transparency, fair dealing, and the protection<br>of stakeholder interests, including our customers, our<br>shareholders, our employees and our community. We<br>aspire to the highest standards of corporate governance,<br>which Westpac sees as fundamental to the sustainability<br>of our business and our performance.<br>As Westpac’s principal listing is on the Australian<br>Securities Exchange (ASX), we have followed the ASX<br>Corporate Governance Principles and Recommendations<br>(fourth edition) (ASXCGC Recommendations) published<br>by the ASX Limited’s Corporate Governance Council<br>(ASXCGC) throughout the year. Westpac’s ordinary shares<br>are also quoted on the NZX Main Board, which is the main<br>board equity security market operated by NZX Limited.<br>BOARD AREAS<br>OF FOCUS IN FY24<br>This year the Board (including with assistance from its Board Committees) has focused on overseeing:<br> • our UNITE program which is focused on making our processes, systems and technology simpler and improving<br>service to customers;<br> • the Group’s financial and operating performance, including progress in improving the Group’s financial<br>performance relative to peers;<br> • ongoing initiatives that are designed to support our customers experiencing hardship and to help protect our<br>customers from scams;<br> • completion of the Integrated Plan under the Customer Outcomes and Risk Excellence (CORE) program, as well as<br>the transition phase that is focused on sustainably embedding changes implemented by the CORE program;<br> • management of current and emerging risks arising from the evolving economic, geopolitical, regulatory, and<br>competitive environment;<br> • Westpac’s capital position and various capital management initiatives;<br> • consideration and assessment of the resilience of the Group’s systems and response to potential cyber incidents<br>and data breaches;<br> • priorities outlined in our Sustainability Strategy and our Climate Change Position Statement and Action Plan; and<br> • ongoing consideration of Board and senior executive succession, as well as Board Committee composition.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 197<br>THE BOARD<br>Board of Directors<br>The Board is comprised of nine independent Non-executive Directors and the Managing Director and<br>Chief Executive Officer (CEO).<br>A profile of each Director can be found on<br>our website at: www.westpac.com.au/about-westpac/<br>westpac-group/ board-of-directors/.<br>STEVEN GREGG<br>Chairman and<br>Independent<br>Non-executive Director<br>PETER KING<br>Managing Director and<br>Chief Executive Officer<br>TIM BURROUGHS<br>Independent<br>Non-executive Director<br>NERIDA CAESAR<br>Independent<br>Non-executive Director<br>AUDETTE EXEL<br>Independent<br>Non-executive Director<br>ANDY MAGUIRE<br>Independent<br>Non-executive Director<br>PETER NASH<br>Independent<br>Non-executive Director<br>NORA SCHEINKESTEL<br>Independent<br>Non-executive Director<br>MARGARET (MARGIE) SEALE<br>Independent<br>Non-executive Director<br>MICHAEL ULLMER<br>Independent<br>Non-executive Director
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198 WESTPAC GROUP 2024 ANNUAL REPORT<br>CORPORATE GOVERNANCE<br>ROLES AND<br>RESPONSIBILITES<br>The Board<br>The role of the Board is to provide leadership and<br>strategic guidance for Westpac and its related bodies<br>corporate, in addition to overseeing the sound and<br>prudent management of the Westpac Group. The Board<br>Charter outlines the roles and responsibilities of the Board.<br>Key responsibilities are:<br> • approving and overseeing management’s<br>implementation of the strategic direction of the<br>Westpac Group, its business plan and significant<br>corporate strategic initiatives;<br> • appointing the CEO and Chief Financial Officer (CFO),<br>and approving the appointment of Group Executives,<br>the General Manager, Group Audit and any other<br>person the Board determines;<br> • overseeing culture across the Group by setting the<br>tone from the top, approving Westpac Group’s Code<br>of Conduct and Values and receiving reporting on the<br>Group’s culture;<br> • assessing and reviewing the performance of the<br>Board, its Board Committees, the CEO and the<br>Group Executives;<br> • providing oversight of the Group’s technology strategy<br>and the implementation of key technology initiatives;<br> • approving the Westpac Director Appointment<br> & Renewal Policy and determining Board size<br>and composition;<br> • approving the Westpac Group Remuneration Policy;<br> • approving, in accordance with the Westpac Group<br>Remuneration Policy, remuneration arrangements,<br>variable remuneration outcomes and adjustments to<br>variable remuneration where appropriate for Group<br>Executives, other employees who are accountable<br>persons under the Financial Accountability Regime<br>(FAR) (Accountable Person), any person performing a<br>role specified by the Australian Prudential Regulation<br>Authority (APRA) and any other person the<br>Board determines;<br> • approving the annual financial targets and financial<br>statements, and monitoring financial performance<br>against forecast and prior periods;<br> • determining our dividend policy and the amount,<br>nature and timing of dividends to be paid;<br> • approving the Internal Capital Adequacy Assessment<br>Process, including reviewing Group stress testing<br>outcomes/scenarios, and approving recovery and<br>resolution plans;<br> • considering and approving our overall risk<br>management framework for managing financial and<br>non-financial risk;<br> • approving the Group Risk Management Framework, the<br>Group Risk Management Strategy and the Board Risk<br>Appetite Statement and monitoring the effectiveness<br>of risk management by the Group;<br> • forming a view of our risk culture and overseeing<br>the identification of, and steps taken to address any<br>desirable changes to risk culture;<br> • considering the social, ethical and environmental<br>impact of our activities including the effects<br>of climate change, and setting standards and<br>monitoring compliance with our sustainability policies<br>and practices;<br> • overseeing and monitoring workplace health and<br>safety (WHS) issues in the Group and considering<br>appropriate WHS reports and information; and<br> • meeting with representatives from our principal<br>regulators on a regular basis.<br>The Board Charter is available on our website<br>at: www.westpac.com.au/about-westpac/westpac-group/<br>corporate-governance/constitution-board/.<br>WESTPAC’S BOARD AND BOARD COMMITTEE STRUCTURE<br>BOARD COMMITTEES<br>Provide relevant periodic assurances<br>and reports (as appropriate)<br>Provide assurance<br>on the remuneration<br>disclosures in the<br>Remuneration Report<br>Provide assurance on<br>risk components of<br>the annual report and<br>interim financial results<br>announcement<br>Delegation<br>Assurance,<br>Oversight through<br>Reporting<br>Accountability<br>Accountability<br>Delegation<br>Delegation<br>Board Committees will refer matters to the Board or other Board Committees where appropriate.<br>Specific reporting as shown above<br>BOARD<br>Independent Assurance and Advice<br>External<br>Auditors<br>Group<br>Audit<br>Independent<br>Assurance and<br>External Advice<br>Chief Executive Officer<br>Group Executives<br>Remuneration Audit Nominations<br> & Governance Risk
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 199<br>The Board has delegated to the CEO, and through the CEO to the Executive Team, responsibility for the day-to-day<br>management of Westpac’s business. These delegations are subject to the limitations and restrictions contained in the<br>delegation instruments.<br>The Board is assisted in meeting its roles and responsibilities by its four standing Board Committees. Further information<br>about each of the Board Committees is set out in the section titled ‘Role of the Board Committees’.<br>Chairman<br>The Board elects one of the independent Non-executive<br>Directors as Chairman. Our Chairman is Steven Gregg. His<br>role includes:<br> • providing effective leadership to the Board in relation<br>to all Board matters;<br> • guiding the agenda and conducting all Board meetings<br>to facilitate discussions, challenge and decision-making;<br> • in conjunction with the Company Secretary, arranging<br>regular Board meetings throughout the year and<br>confirming that minutes of meetings accurately record<br>decisions taken and, as required, the views of<br>individual Directors;<br> • overseeing the process for appraising Directors and the<br>Board as a whole;<br> • overseeing Board succession, including in relation to<br>the Board Chair and Board Committee Chair roles;<br> • acting as a conduit between management and the<br>Board, and being the primary point of communication<br>between the Board and CEO;<br> • representing the views of the Board to the public; and<br> • taking a leading role in creating and maintaining an<br>effective corporate governance system.<br>CEO<br>Our Managing Director and CEO is Peter King1<br>.. His<br>role includes:<br> • leadership of the Executive Team and, with the<br>Board, overseeing succession planning for the<br>Executive Team;<br> • developing strategic objectives for the business and<br>achievement of the planned results; and<br> • the day-to-day management of the Westpac Group’s<br>operations, subject to the specified delegations of<br>authority approved by the Board.<br>1. On 9 September 2024, Westpac announced that Anthony Miller will succeed Peter King as CEO and Managing Director. Mr Miller’s<br>appointment will commence on 16 December 2024 following Mr King’s retirement as CEO and Managing Director.
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200 WESTPAC GROUP 2024 ANNUAL REPORT<br>CORPORATE GOVERNANCE<br>Board skills, experience and attributes<br>Westpac seeks to maintain a Board of Directors with<br>a broad range of relevant financial and other skills,<br>knowledge, and experience necessary to guide the<br>business of the Group. The Board uses a skills matrix to<br>illustrate the key skills and experience the Westpac Board<br>is seeking to achieve in its membership collectively and<br>the number of Directors with each skill and experience.<br>The skills matrix also assists to identify focus areas for<br>the continuing education and professional development of<br>Directors. For example, in FY24 these focus areas included<br>cyber risk, technology developments, crisis management<br>and key environmental, social and governance topics<br>(amongst others). The skills matrix also assists to identify<br>areas where it may be desirable for specialist external<br>expertise to be retained to supplement the Board’s skills<br>and experience. The skills matrix is set out in Figure 1.<br>FIGURE 1 – BOARD SKILLS, EXPERIENCE AND ATTRIBUTES AS AT 30 SEPTEMBER 2024<br>SKILLS AND EXPERIENCE DESCRIPTION NUMBER OF DIRECTORS<br>Customer<br>focus<br>Experience in developing and overseeing the embedding of a strong<br>customer-focused culture in large and complex organisations, and a<br>demonstrable commitment to achieving customer outcomes<br>Strategy<br>An ability to define strategic objectives, constructively question<br>business plans, oversee the implementation of strategy using<br>commercial judgement and bring a global perspective to bear<br>Financial<br>services<br>Experience working in, or advising, the banking and financial<br>services industry with strong knowledge of its economic drivers and<br>global business perspectives<br>Financial<br>acumen<br>Highly proficient in accounting or related financial management and<br>reporting for businesses of significant size<br>Risk<br>Experience in anticipating, recognising and managing risks,<br>including financial, non-financial and emerging risks, and monitoring<br>risk management frameworks and controls<br>Technology,<br>digital and<br>data<br>Experience in developing or overseeing the application of<br>technology in large and complex businesses, with particular<br>reference to technology - innovation, disruptive technologies, data,<br>cyber-security, digital transformation and customer experience<br>Governance<br>Experience as a Director of a listed entity, with detailed knowledge<br>of governance issues, with particular reference to the legal,<br>compliance, regulatory and voluntary frameworks applicable to<br>listed entities and highly regulated industries<br>Environment<br>and social<br>Experience in understanding and identifying potential risks and<br>opportunities arising from environmental and social issues, including<br>the transition to a climate resilient future, management of<br>biodiversity, and addressing human rights and modern slavery<br>within supply chains<br>People and<br>culture<br>Experience in people matters including workplace health and safety,<br>cultures, morale, inclusion and diversity, management development,<br>succession, remuneration and talent retention initiatives<br>Executive<br>leadership<br>Having held a CEO or a similar senior leadership role in a large<br>complex organisation, and having experience in managing the<br>business through periods of significant change and delivering<br>desired business outcomes<br>Deep experience and knowledge General working experience and knowledge Limited working experience and knowledge<br>In addition to the skills outlined above, the Westpac Board seeks to ensure that it operates as a cohesive team, bringing<br>together a range of perspectives to guide the Group and oversee management. The Westpac Board also expects its<br>members to be committed to supporting our Purpose and upholding our Values.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 201<br>Board diversity<br>A diverse group of skilled Directors helps us be a stronger<br>organisation that makes better decisions. In relation<br>to gender diversity, for 2024, the Board Nominations<br> & Governance Committee confirmed its objective of<br>40% women, 40% men and 20% any gender for the<br>composition of the Westpac Board.<br>As Westpac has met its 2024 objective for Board gender<br>diversity, the focus is on maintaining alignment with this<br>objective, noting that our performance against it will vary<br>at any given time depending on the timing of Board<br>renewal and Board composition changes.<br>The Board gender diversity as at 30 September 2024 is<br>set out below.<br>NUMBER OF FEMALE DIRECTORS ON THE BOARD<br>(4 OUT OF 10)<br>40%<br>FEMALE DIRECTORS<br>Female Male<br>Independence<br>All Non-executive Directors satisfy our criteria for<br>independence, which aligns with the guidance provided in<br>the ASXCGC Recommendations.<br>The Board assesses the independence of our Non-executive Directors on appointment and annually. Each<br>Non-executive Director provides an annual attestation of<br>their interests and independence. Directors are considered<br>to be independent if they are independent of management<br>and free from any business or other relationship that could<br>materially interfere with, or could reasonably be perceived<br>to materially interfere with:<br> • the exercise of their unfettered and independent<br>judgement; and<br> • their ability to act in the best interests of Westpac as a<br>whole rather than the interests of another party.<br>Materiality is assessed on a case-by-case basis by<br>reference to each Non-executive Director’s individual<br>circumstances rather than by applying general<br>materiality thresholds.<br>Each Non-executive Director is required to disclose<br>any business or other relationship that they have<br>directly, or as a partner, shareholder or officer of a<br>company or other entity that has an interest or a<br>business or other relationship with Westpac or a Group<br>entity. The Board considers information about any such<br>interests or relationships, including any related financial<br>or other details, when it assesses the Non-executive<br>Director’s independence.<br>APPOINTMENT OF<br>DIRECTORS<br>The Board Nominations & Governance Committee<br>considers and makes recommendations to the Board<br>on candidates for appointment as Directors. Such<br>recommendations pay particular attention to:<br> • the mix of skills, experience, expertise, diversity,<br>independence, and other qualities of existing<br>Directors; and<br> • how the candidate’s attributes will balance and<br>complement those skills and qualities, and address<br>any potential skills gaps in relation to the current and<br>future composition of the Board.<br>Subject to the Constitution and ASX Listing Rules, the<br>Board may appoint a Director, either to fill a casual<br>vacancy or as an addition to the existing Directors. Except<br>for the CEO, a Director appointed by the Board holds<br>office only until the close of the next annual general<br>meeting (AGM) but is eligible for election by shareholders<br>at that meeting.<br>Our Constitution states that a Director (except for the<br>CEO) must not hold office (without re-election) past the<br>third AGM following their appointment or last election, or<br>for more than three years, whichever is longer. Retiring<br>Directors hold office until the conclusion of the meeting<br>at which they retire but are eligible for re-election at<br>that meeting.<br>Our Constitution also provides that at least one Director<br>must stand for election or re-election at each AGM. This<br>requirement could be satisfied by a person standing for<br>election as a new Director; a Director who has been<br>appointed to fill a casual vacancy seeking election; or<br>a Director seeking re-election because of the tenure<br>limitation (referred to in the paragraph above). If there<br>are no such Directors required to stand for election or re-election at the AGM, and no Director volunteers to stand<br>for re-election, the Director who has served the longest<br>in office since their last election or re-election must retire<br>and stand for re-election. The CEO is not required to stand<br>for re-election.<br>Prior to a Director’s appointment or consideration<br>for election or re-election by shareholders, the Board<br>conducts due diligence and considers the results of<br>the Board performance evaluation conducted during<br>the year. Where a Director is seeking election or re-election, Westpac provides shareholders with all material<br>information relevant to a decision on whether or not to<br>elect or re-elect a Director.<br>New Directors receive an induction pack and letter of<br>appointment setting out the expectations of the role, and<br>conditions of appointment including the expected term of<br>appointment and remuneration. This letter aligns to the<br>ASXCGC Recommendations. All new Directors participate<br>in an induction program to familiarise themselves with<br>our business and strategy, culture and values and any<br>current issues before the Board/Board Committees. The<br>induction program includes an opportunity to review key
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202 WESTPAC GROUP 2024 ANNUAL REPORT<br>CORPORATE GOVERNANCE<br>documents and meet with a range of representatives from<br>the organisation, including the Chairman, the CEO, the<br>Board Committee Chairs and each Group Executive.<br>The Westpac Director Appointment & Renewal Policy<br>limits the tenure of office that any Non-executive Directors<br>other than the Chairman may serve to 9 years, from<br>the date of first election by shareholders. The maximum<br>tenure for the Chairman is 12 years (which includes any<br>term served as a Director prior to being elected as<br>Chairman), from the date of first election by shareholders.<br>The Board, on an exceptional basis, may extend the<br>maximum terms specified above where it considers the<br>extension would benefit the Group. The Board may<br>exercise this discretion on an annual basis, and the<br>Director concerned will be required to stand for re-election annually.<br>The average Board tenure as at 30 September 2024 is set<br>out below. The length of service of each Director is set out<br>in the Directors’ report in our 2024 Annual Report.<br>AVERAGE BOARD TENURE<br>3.5 YEARS<br>AVERAGE BOARD TENURE<br>0-3 years 40% 3-6 years 40% 6-9 years 20%<br>Conflicts of interest<br>All Directors are required to disclose to the Board any<br>actual, potential or apparent conflicts of interest upon<br>appointment and are required to keep these disclosures<br>up to date.<br>Any Director with a material personal interest in a matter<br>being considered by the Board must declare their interest<br>and may not be present during any related boardroom<br>discussions nor vote on the matter unless the Board<br>resolves otherwise.<br>Continuing education<br>Directors undertake continuing education and training to<br>develop and maintain the skills and knowledge needed to<br>perform their role effectively, including by participating in<br>workshops held throughout the year, attending relevant<br>site visits, and undertaking relevant external education.<br>These activities are planned each year and are included in<br>the Board’s/Board Committees’ calendars. In addition, the<br>Board and Board Committees consider whether additional<br>education and professional development opportunities<br>should be offered as part of the annual Board<br>Effectiveness Review.<br>Access to information<br>All Directors have unrestricted access to company records<br>and information required to perform their duties, and<br>receive regular detailed financial and operational reports<br>from senior management.<br>Each Director also enters into an access and indemnity<br>agreement, which among other things, provides for access<br>to documents for up to seven years after their retirement<br>as a Director.<br>The Chairman and other Non-executive Directors regularly<br>consult with the CEO, CFO and other senior executives,<br>and may consult with, and request additional information<br>from, any of our employees.<br>Access to advice<br>All Directors have access to advice from senior internal<br>legal advisers including the Group General Counsel.<br>The Board collectively, and all Directors individually, can<br>also seek independent professional advice, at Westpac's<br>expense, to help them carry out their responsibilities.<br>While the Chairman’s prior approval is needed, it may not<br>be unreasonably withheld.<br>Remuneration framework<br>Information about our remuneration framework, including<br>policies and practices regarding the remuneration of<br>Non-executive Directors, the CEO and other senior<br>executives, is included in the Remuneration Report in<br>the Directors’ report (which is located in our 2024<br>Annual Report). Westpac does not provide performance-based remuneration or retirement benefits (other<br>than superannuation) to Non-executive Directors. The<br>Remuneration Report also includes details of Westpac’s<br>hedging policy, which prohibits participants in equity<br>plans from entering into transactions that mitigate the risk<br>associated with the equity award.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 203<br>PERFORMANCE<br>REVIEWS<br>Board, Board Committees and Directors<br>The Board undertakes ongoing self-assessment as well<br>as an annual performance review, which is periodically<br>conducted by an independent consultant.<br>The review process includes an assessment of the<br>performance of the Board, the Board Committees and<br>each Director, with outputs collected, analysed and<br>presented to the Board. The Board will discuss the<br>results and agree follow-up actions. Actions from the<br>previous review related to matters regarding Board<br>processes, ongoing succession planning and creating<br>further opportunities to increase the connection between<br>the Board and the Group’s businesses and operations.<br>Directors meet individually with the Chairman to discuss<br>performance feedback (and in the case of the Chairman,<br>performance is discussed with another Board Committee<br>Chair). At the time of this Corporate Governance<br>Statement, the 2024 financial year evaluation is being<br>finalised and will be completed prior to the end of the<br>2024 calendar year.<br>Board assessment of management performance<br>The Board, in conjunction with its Board Remuneration<br>Committee, is responsible for:<br> • selecting, appointing, and determining terms of<br>appointment of, the CEO and the CFO;<br> • determining the CEO’s goals and objectives, and<br>evaluating the CEO’s performance in light of<br>these objectives;<br> • approving the appointment of Group Executives, the<br>General Manager Group Audit, and any other person<br>the Board determines; and<br> • approving individual remuneration arrangements,<br>and adjustments to variable remuneration where<br>appropriate for Group Executives and certain other<br>senior employees, including in light of relevant matters<br>brought to the attention of the Board Remuneration<br>Committee from the CEO, Chief Risk Officer, Group<br>Executive, Human Resources, General Manager Group<br>Audit, and Chairs of the Board Risk Committee and<br>Board Audit Committee.<br>All new senior executives receive an employment contract<br>setting out the terms and conditions of their employment,<br>and those that are Accountable Persons also receive an<br>Accountability Statement for their respective role. Briefing<br>sessions are scheduled to discuss our strategies and<br>operations, and the respective roles and responsibilities of<br>the Board and senior management.<br>Under Westpac’s executive remuneration framework, the<br>performance of senior executives is assessed annually.<br>Management performance evaluations for the financial<br>year ended 30 September 2024 were conducted following<br>the end of the financial year.<br>The process for reviewing the performance of senior<br>executives, as well as further information on Westpac’s<br>executive remuneration framework, FY24 performance<br>objectives and performance achieved, is contained in the<br>Remuneration Report in the Directors’ report (which is<br>located in our 2024 Annual Report).
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204 WESTPAC GROUP 2024 ANNUAL REPORT<br>CORPORATE GOVERNANCE<br>ROLE OF THE BOARD<br>COMMITTEES<br>The Board is assisted by its four standing Board Committees and the key roles, responsibilities, and composition<br>requirements of each of the Board Committees are outlined in their respective Charter and are summarised in the<br>table below.<br>The Board Committee Charters are available on our website at www.westpac.com.au/about-westpac/westpac-group/<br>corporate-governance/constitution-board/. All of the Board Committees are currently comprised of independent Non-executive Directors.<br>Board Committee members are chosen for the skills and experience they can contribute to the respective Board<br>Committees and their qualifications are set out in the Directors’ report, in our 2024 Annual Report.<br>COMMITTEE KEY RESPONSIBILITIES COMPOSITION<br>REQUIREMENTS<br>MEMBERSHIP<br>Board Risk<br>Committee<br>(BRiskC)<br>To assist the Board to:<br> • review and approve the Group’s overall risk management<br>framework for managing financial and non-financial risks as<br>well as emerging risks;<br> • oversee the risk culture across the Group;<br> • review and approve the Group Risk Management<br>Framework, the Group Risk Management Strategy, and the<br>Board Risk Appetite Statement; and<br> • make its annual declaration to APRA on risk<br>management under APRA prudential standard CPS 220<br>Risk Management.<br>The Committee is also responsible for:<br> • reviewing and monitoring the risk profile and controls<br>of the Group for consistency with the Board Risk<br>Appetite Statement;<br> • reviewing and approving other risk management<br>frameworks for financial and non-financial risks and<br>reviewing the monitoring of performance under those<br>frameworks (as appropriate);<br> • reviewing and approving the limits and conditions that<br>apply to the delegated credit risk and market risk<br>approval authorities;<br> • reviewing and recommending for approval the Internal<br>Capital Adequacy Assessment Process, including target<br>capital ranges (where appropriate), and reviewing and<br>monitoring capital levels for consistency with the Board Risk<br>Appetite Statement;<br> • reviewing stress testing results, monitoring management<br>responses and, together with the Board, providing<br>recommendations for future scenarios;<br> • reviewing and recommending recovery and resolution plans<br>to the Board for approval, as required;<br> • reviewing Group cyber risk and cybersecurity reporting,<br>including information on the monitoring and performance of<br>the Group’s cyber risk management and controls;<br> • providing oversight of risks associated with the<br>Group’s approach to customer remediation activities, the<br>management of customer complaints and hardship;<br> • providing oversight of the Group’s management of other<br>financial and non-financial risks including financial crime<br>risk, reputation and sustainability risks including climate<br>risk; and<br> • monitoring changes anticipated for the economic and<br>business environment, including consideration of emerging<br>risks and other factors.<br>At least three Non-executive Directors.<br>Majority of<br>Committee members<br>must be independent.<br>An independent Non-executive Director<br>must be the<br>Committee Chairman,<br>who is not the<br>Board Chairman.<br>At least one member<br>of the Board<br>Audit Committee<br>and at least one<br>member of the<br>Board Remuneration<br>Committee must<br>be members.<br> • Audette Exel<br>(Chair)<br> • Tim<br>Burroughs<br> • Peter Nash<br> • Nora<br>Scheinkestel<br> • Michael<br>Ullmer
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 205<br>COMMITTEE KEY RESPONSIBILITIES COMPOSITION<br>REQUIREMENTS<br>MEMBERSHIP<br>Board Audit<br>Committee<br>(BAC)<br>To assist the Board by:<br> • overseeing the integrity of financial statements and<br>financial reporting systems of Westpac and its related<br>bodies corporate;<br> • maintaining oversight of the external audit engagement,<br>including by making recommendations to the Board on<br>the external auditor’s appointment and removal (including<br>the rotation of the lead audit engagement partner),<br>and overseeing the external auditor’s qualifications,<br>performance, independence and fees;<br> • overseeing the performance of the internal audit function;<br> • overseeing the integrity of the Group’s corporate reporting<br>including the Group‘s financial reporting and compliance<br>with prudential regulatory reporting and professional<br>accounting requirements;<br> • reviewing and discussing with management and the external<br>auditor half and full year financial statements, Annual<br>Report disclosures (including sustainability disclosures) and<br>the Climate Report (or any other periodic sustainability<br>reports agreed with the Committee from time to time) and<br>recommending their approval to the Board; and<br> • reviewing and discussing the process by which management<br>assures the integrity of information on Westpac Group<br>earnings and key sustainability metrics.<br>At least three Non-executive Directors.<br>Majority of<br>Committee<br>members must<br>be independent.<br>An independent Non-executive Director<br>must be<br>the Committee<br>Chairman, who is not<br>the Board Chairman.<br> • Peter Nash<br>(Chairman)<br> • Nerida Caesar<br> • Audette Exel<br> • Michael<br>Ullmer<br>Board<br>Remuneration<br>Committee<br>(BRemC)<br>To assist the Board by reviewing and making recommendations<br>in relation to:<br> • the Group’s remuneration framework (as articulated in<br>the Group Remuneration Policy), as well as assessing its<br>compliance with laws, regulations and prudential standards;<br> • individual remuneration arrangements and variable<br>remuneration outcomes for the CEO, Group Executives,<br>other Accountable Persons, and any other person the<br>Board determines;<br> • the remuneration framework, policies, and fee levels<br>(including superannuation) for Non-executive Directors on<br>the Board and subsidiary Boards;<br> • remuneration arrangements on a cohort basis (including<br>variable remuneration outcomes) for certain employees;<br> • in conjunction with the Board Chairman, evaluating the<br>performance of the CEO, including their goals and<br>objectives as assessed against the Group Performance<br>Review; and<br> • the design and terms of all equity plans.<br>At least three Non-executive Directors.<br>Majority of<br>Committee<br>members must<br>be independent.<br>An independent Non-executive Director<br>must be<br>the Committee<br>Chairman, who is not<br>the Board Chairman.<br> • Nora<br>Scheinkestel<br>(Chair)<br> • Tim<br>Burroughs<br> • Margaret<br>Seale<br>Board<br>Nominations &<br>Governance<br>Committee<br>(BNGC)<br>To assist the Board, including by:<br> • recommending candidates for appointment as Non-executive Directors to the Board and the Boards of<br>significant subsidiaries;<br> • reviewing the process for the orientation and continuing<br>education of Directors;<br> • considering succession planning for Non-executive Directors;<br> • assessing the overall skills, experience, expertise and<br>diversity of the Board;<br> • reviewing annually diversity generally within the Group,<br>including approving measurable objectives for achieving<br>diversity and the Group’s progress in achieving<br>such objectives;<br> • reviewing annually the time required to be committed to<br>Westpac business by Non-executive Directors on the Board,<br>including reviewing the other commitments of those Non-executive Directors; and<br> • reviewing and, where required, approving the Group’s<br>corporate governance policies.<br>At least three Non-executive Directors.<br>Majority of<br>Committee<br>members must<br>be independent.<br>The Board Chairman<br>will be the<br>Committee<br>Chairman.<br> • Steven Gregg<br>(Chairman)<br> • Peter Nash<br> • Margaret<br>Seale
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206 WESTPAC GROUP 2024 ANNUAL REPORT<br>CORPORATE GOVERNANCE<br>Information about Board Committee composition changes<br>in FY24 can be found in the Directors' meetings section of<br>the Directors’ report, in our 2024 Annual Report.<br>From time to time, the Board may form other Committees<br>or request Directors to undertake specific extra duties.<br>In addition, the Board may participate (either directly<br>or through representatives) in due diligence committees<br>in relation to strategic decisions and capital and<br>funding activities.<br>Each Board Committee:<br> • will refer to the Board or other Board Committee any<br>matter that comes to their attention that is relevant for<br>the Board or respective Board Committee; and<br> • is entitled to the resources and information it requires<br>and has direct access to our employees and advisers.<br>Board and Board Committee meetings<br>The number of meetings of the Board and Board<br>Committees for the financial year ended 30 September<br>2024, and each Director’s attendance is reported in the<br>Directors' meetings section of the Directors’ report, in our<br>2024 Annual Report.<br>Scheduled meetings of the Board Committees occur at<br>least quarterly, with the Board Risk Committee meeting at<br>least five times annually. All Board Committees can meet<br>more frequently as necessary.<br>Non-executive Directors regularly meet without<br>management present, so they can discuss issues<br>appropriate to such a forum. Senior executives and<br>other selected employees are invited, where considered<br>appropriate, to participate in Board and Board Committee<br>meetings. They are also available to be contacted by<br>Directors between meetings.<br>All Directors can receive all Board Committee papers and<br>can attend any Board Committee meeting, provided there<br>is no conflict of interest.<br>The CEO attends all Board Committee meetings, except<br>where they have a material personal interest in a matter<br>being considered.<br>Board Audit Committee financial knowledge<br>All Board Audit Committee members have appropriate<br>financial experience, an understanding of the financial<br>services industry and satisfy the independence<br>requirements under the ASXCGC Recommendations,<br>Securities Exchange Act of 1934 (US) (as amended) and<br>its related rules.<br>The Board has determined that Mr Nash is an<br> ‘audit committee financial expert’ and independent in<br>accordance with US securities law.<br>The designation of Mr Nash as an audit committee<br>financial expert does not impose duties, obligations or<br>liability on him that are greater than those imposed on him<br>as a Board Audit Committee member, and does not affect<br>the duties, obligations or liability of any other Board Audit<br>Committee member or Board member. Audit committee<br>financial experts are not deemed as an ‘expert’ for any<br>other purpose.<br>Meeting with Regulators<br>The Directors met with representatives from the Australian<br>Securities and Investments Commission (ASIC) and APRA<br>during the course of the year.<br>Role of the Company Secretary<br>Westpac’s Company Secretary attends Board and Board<br>Committee meetings and is responsible for the operation<br>of the Secretariat function, including advising the Board<br>on governance and, in conjunction with management,<br>giving practical effect to the Board’s decisions. The<br>Company Secretary is accountable to the Board, through<br>the Chairman, on all matters to do with the proper<br>functioning of the Board.<br>A profile for the Company Secretary can be found in the<br>Directors’ report, in our 2024 Annual Report.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 207<br>DIVERSITY<br>At Westpac we’re focused on building a workplace that<br>fosters a diverse and inclusive workforce where our people<br>feel valued, respected and safe.<br>We seek to embrace everything that makes people<br>unique in their identity like age, cultural background,<br>disability, ethnicity, sex, gender identity, marital or<br>family status, religious belief, sexual orientation or socio-economic background.<br>Our Diversity, Equity & Inclusion Strategy and Policy aims<br>to put people at the heart of everything we do and sets<br>out our objective to encourage a more inclusive workplace<br>for our people to support our customers. We are focused<br>on hiring, developing and retaining diverse talent in a<br>culture that embraces and celebrates differences, and<br>allows people to feel safe at work.<br>Our Diversity, Equity, and Inclusion priorities<br>for FY23-25<br>Our Executive Team oversees the Group-wide Diversity,<br>Equity, and Inclusion Strategy and reviews progress at<br>least annually. Our FY23-25 Strategy seeks to create an<br>inclusive environment for all employees by aspiring to:<br> • support our employees in the moments that matter to<br>them in both their career and personal lives;<br> • grow a workforce that takes action and advocates for<br>a more equitable and inclusive society – shifting from<br>being bystanders to upstanders; and<br> • build a workplace where it is safe to be yourself<br>and where your unique identity is celebrated through<br>trusted communities and allies.<br>Making Inclusion happen<br>We expect all employees to foster a culture which values<br>diversity and includes everybody.<br>The Board Nominations & Governance Committee annually<br>reviews diversity within the Group, including approving<br>diversity and inclusion objectives and overseeing progress<br>in achieving these objectives.<br>Westpac is a signatory to the 40:40 Vision, and the<br>Board Nominations & Governance Committee confirmed<br>the Group’s measurable objectives (which were in place<br>for this reporting period) for achieving gender diversity<br>in the composition of the Board, Executive Team, General<br>Managers, and workforce generally as follows:<br> • achieve 40:40:20 on the Westpac Board;<br> • achieve 40:40:20 in our Executive Team1<br>;<br> • achieve 40% (+/- 2%) women in our General<br>Manager population;<br> • achieve 50% (+/- 2%) women in our Senior<br>Leadership2<br>; and<br> • maintain at least 50% women in our<br>workforce generally.<br>More information is set out in the table below.<br>% FEMALES SEP-23 SEP-24 TARGET TARGET MET<br>Westpac Board 40 40 40:40:20a Met<br>Executive Team 50 50 40:40:20a Met<br>General Managers 40 39 40 +/- 2% Met<br>Senior Leadership 49 49 50 +/- 2% Met<br>Westpac workforce 54 54 50 Met<br>a. 40% women, 40% men and 20% of any gender<br>1. Includes the full Executive Team other than the CEO.<br>2. Senior Leadership refers to the proportion of women (permanent and maximum term) in senior leadership roles across the Group. It includes<br>the Executive Team, General Managers, and direct reports to General Managers, excluding administrative or support roles.
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208 WESTPAC GROUP 2024 ANNUAL REPORT<br>CORPORATE GOVERNANCE<br>We are committed to achieving pay equity. We undertake<br>like-for-like and by-level analysis to identify potential<br>gender-based pay equity issues and take action when<br>needed. Our focus is on improving the gender pay gap<br>by increasing participation of women in senior roles<br>as well as specialist areas such as institutional banking<br>and technology.<br>We continue to seek to uphold a zero-tolerance approach<br>to all forms of discrimination, bullying and harassment,<br>including sexual harassment. Our Discrimination, Bullying<br>and Harassment and Sexual Harassment policies are<br>available at the following link www.westpac.com.au/about-westpac/inclusion-and-diversity/.<br>Our ‘Upstander’ initiative aims to grow employee<br>confidence and capability to speak up and take<br>action against behaviours and activities that negatively<br>impact others. We have also introduced online inclusive<br>leadership modules which are mandatory for all people<br>leaders to complete.<br>We have made progress against our commitments in<br>our fifth Reconciliation Action Plan. We have increased<br>our Aboriginal and Torres Strait Islander workforce<br>representation to 1.08%, exceeding our 2024 target of<br>0.9%. We have introduced measures to support our<br>Aboriginal and Torres Strait Islander employees including<br>expanding leadership development opportunities. These<br>measures include our Echo programs (designed to<br>support emerging leaders by building leadership<br>capability and career progression) and our Indigenous<br>employee summit (Bayala Djurali). We provide an online<br>Indigenous cultural learning program to our employees,<br>with face to face options also available. We believe there<br>is much work to be done to progress reconciliation<br>and move forward together and acknowledge that we<br>may at times fall short of the standards we expect of<br>ourselves. However, where we misstep, we aim to swiftly<br>set things right.<br>Our ten Employee Advocacy Groups help us strengthen<br>an inclusive culture by building trusted communities<br>that celebrate and advocate for gender, LGBTQIA+,<br>young and mature-age employees, cultural diversity in<br>leadership, accessibility, Indigenous employees, veterans,<br>skilled volunteering and supporting victims of domestic<br>and family violence.<br>Westpac offers workplace flexibility and provides<br>employees with a variety of leave options such as parental<br>leave (including support for those who experience<br>pregnancy loss), fertility leave, carers’ leave, wellbeing and<br>lifestyle leave, career breaks, purchased leave, uncapped<br>domestic and family violence support leave, gender<br>affirmation leave, Sorry Business leave, volunteer leave<br>and emergency services leave.<br>Further information on our inclusion and diversity<br>programs and performance, as well as a copy of<br>our Diversity, Equity & Inclusion Policy and Westpac’s<br>Workplace Gender Equality Agency (WGEA) report, can<br>be found on our website at www.westpac.com.au/about-westpac/inclusion-and-diversity/.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 209<br>ETHICAL<br>DECISION MAKING<br>Ethical and responsible decision making is critical to decision-making at Westpac. Our Purpose, Values and Behaviours,<br>together with our Code of Conduct and related policies and frameworks, are focused on instilling and reinforcing an<br>ethical and responsible decision-making culture across the Group.<br>Purpose, Values and Behaviours<br>Westpac’s purpose is creating better futures together. In working to fulfill our purpose, we are guided by our ‘HELPS’<br>values. Our Purpose, Values and Behaviours set the direction for our culture by providing clarity about what is valued<br>most and what our people need to do.<br>FIGURE 2 – PURPOSE, VALUES AND BEHAVIOURS<br>OUR<br>PURPOSE Creating better futures together<br>Helpful<br>Passionate about<br>providing a great<br>customer experience<br>Ethical<br>Trusted to do the<br>right thing<br>Leading Change<br>Determined to make<br>it better and be better<br>Performing<br>Accountable to get<br>it done<br>Simple<br>Inspired to keep it<br>simple and easy<br>OUR<br>VALUES<br>OUR<br>BEHAVIOURS ˃ I care, listen<br>and act,<br>providing<br>consistently<br>great service to<br>our customers<br> ˃ I always ask,<br> ‘Should We?’,<br>speaking up,<br>seeking feedback<br>and applying<br>judgement<br> ˃ I collaborate and<br>look for ways to<br>innovate, embracing<br>new ways of working<br>and technologies<br> ˃ I set stretch targets<br>and am empowered<br>to take ownership<br>and deliver<br>outcomes for our<br>customers and<br>shareholders<br> ˃ I always ask ‘can<br>this be simpler’, I<br>clear the way to<br>problem solve to<br>make it easier and<br>quicker<br>Underpinning our 5 values are our behavioural statements (see Figure 2 above). These statements are expressed<br>in simple, action-orientated language and address important themes such as speaking up, ownership, collaboration<br>and empowerment.<br>We embed our Purpose, Values and Behaviours through employee and leadership initiatives and align them with the<br>systems, processes and policies that impact our day-to-day activities.
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210 WESTPAC GROUP 2024 ANNUAL REPORT<br>CORPORATE GOVERNANCE<br>Code of Conduct<br>The Westpac Group Code of Conduct (Code) sets out a consistent standard and establishes the expectations of our<br>people to do what is right. The Code goes beyond an obligation to comply with laws and policies and is a key aspect of<br>improving conduct to seek to ensure fair outcomes for customers, communities and each other.<br>The Code requires us to apply the ‘Should We?’ Test (see Figure 3 below) when making decisions and encourages our<br>people to speak up when our standards are not being met.<br>We take non-compliance with the Code seriously. Material breaches of the Code are reported to the Board<br>Risk Committee.<br>Supporting the Code are numerous frameworks and policies outlining our commitment to sustainable business practices<br>and behaviours. These include our Purpose, Values and Behaviours, policies and position statements addressing<br>sustainability themes such as human rights, climate change and other environmental and social impacts.<br>The Code is available on our website at: www.westpac.com.au/about-westpac/westpac-group/corporate-governance/ principles-policies/.<br>FIGURE 3 – THE ‘SHOULD WE?’ TEST
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 211<br>KEY POLICIES<br>We have a number of key policies that seek to manage our<br>regulatory compliance and human resource requirements.<br>We are also subject to a range of external industry<br>codes, such as the Banking Code of Practice and the<br>ePayments Code.<br>Code of Ethics for Senior Finance Officers<br>Our Code of Accounting Practice and Financial Reporting<br>(COAPFR) complements our Code of Conduct. It is<br>designed to assist our CEO, CFO and other principal<br>financial officers to apply the highest ethical standards to<br>their duties and responsibilities with respect to accounting<br>and financial reporting. The COAPFR requires those<br>officers to:<br> • act honestly and ethically, including in the handling<br>of actual or apparent conflicts of interest between<br>personal and professional relationships;<br> • provide full, fair, accurate, timely and understandable<br>disclosure in reporting and other communications;<br> • comply with applicable laws, rules and regulations;<br> • promptly report violations of the COAPFR; and<br> • be accountable for adherence to the COAPFR.<br>The COAPFR is available on our website<br>at www.westpac.com.au/about-westpac/westpac-group/<br>corporate- governance/principles-policies/.<br>Delegated authority<br>The Delegated Authority Policy outlines key principles<br>(and forms part of a framework) governing decision-making within the Westpac Group, including channels of<br>escalation and reporting to the Board.<br>The scope of, and limitations to, authority delegated<br>by the Board to the CEO and through the CEO to<br>other Group Executives, is articulated in delegation<br>instruments and covers areas such as expenditure,<br>funding and securitisation, and lending. These delegations<br>have been implemented with a view to balancing<br>effective oversight with appropriate empowerment and<br>accountability of management.<br>Any matters or transactions outside the delegations of<br>authority given to management are required to be referred<br>to the Board or relevant Board Committee for approval.<br>Securities trading<br>Westpac’s Group Securities Trading Policy prohibits<br>Directors, employees, secondees and contractors from<br>trading in any securities and other financial products<br>that they possess inside information on. They are also<br>prohibited from passing on inside information to others<br>who may use that information to trade in securities or<br>from procuring others to trade. The policy requirements<br>also apply to associate accounts.<br>In addition, Directors and any employees, secondees<br>or contractors who, because of their seniority or the<br>nature of their position, may have access to material non-public information about Westpac (known as Prescribed<br>Employees) are subject to further restrictions, including<br>prohibitions on trading prior to and immediately following<br>annual and half year results announcements. These<br>restrictions also apply to their associates.<br>The Westpac Group Securities Trading Policy is<br>available in the Corporate Governance section of our<br>website at www.westpac.com.au/about-westpac/westpac-group/corporate-governance/principles-policies/.<br>Concern reporting and whistleblower protection<br>The Westpac Group Speaking Up Policy encourages our<br>employees, contractors, secondees, former employees,<br>brokers, service providers and suppliers to raise any<br>concerns about our activities or behaviours that may<br>be unlawful or unethical. Our senior management are<br>committed to supporting those who speak up. Westpac<br>does not tolerate detrimental conduct related to a<br>Speaking Up report.<br>A person can raise a concern using our whistleblowing<br>channels, including our reporting system ‘Concern Online’<br>and our Whistleblower Hotline. Both channels enable<br>anonymous reporting.<br>Westpac’s Whistleblower Protection Officers are<br>responsible for providing protections to whistleblowers<br>who are concerned about potentially experiencing<br>detrimental conduct because of speaking up. They also<br>engage directly with whistleblowers to address risks of<br>reprisal. Whistleblowers may raise a concern directly with<br>a Whistleblower Protection Officer.<br>The Westpac Group Speaking Up Policy requires that we<br>investigate concerns in a confidential, fair and objective<br>manner. If the investigation shows that wrongdoing<br>occurred, we are committed to taking action, such as<br>changing our processes and imposing consequences on<br>those involved in wrongdoing. Outcomes may also involve<br>reporting the matter to relevant authorities and regulators.<br>The Board Audit Committee, in conjunction with the<br>Board Risk Committee, oversees Westpac’s Whistleblower<br>Program. Material whistleblower matters raised under the<br>Westpac Group Speaking Up Policy are reported to the<br>Board Risk Committee. The Board Risk Committee also<br>receives regular reporting on whistleblowing, including key<br>metrics, measures and themes that provide insights into<br>the performance of the Whistleblower Program.<br>The Westpac Group Speaking Up Policy is available on our<br>website at www.westpac.com.au/about-westpac/westpac-group/corporate-governance/principles-policies/.<br>Anti-Bribery and Corruption<br>The Westpac Group has an Anti-Bribery and Corruption<br>(ABC) Policy and related bribery and corruption<br>prevention standards, procedures and systems. Material<br>breaches of the ABC Policy are reported to the Board Risk<br>Committee. The ABC Policy is available on our website<br>at www.westpac.com.au/ about-westpac/westpac-group/<br>corporate-governance/ anti-bribery-corruption-policy-procedures/.<br>Westpac has no tolerance for any form of bribery or<br>corruption. This includes a ban on facilitation payments<br>and offering or soliciting secret commissions.
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212 WESTPAC GROUP 2024 ANNUAL REPORT<br>CORPORATE GOVERNANCE<br>Westpac is committed to preventing, detecting and<br>deterring bribery and corruption by managing its bribery<br>and corruption risk and complying with relevant ABC<br>legislation in all jurisdictions in which it operates or has<br>dealings. This includes the Australian Criminal Code Act<br>1995 (Cth), the Bribery Act 2010 (UK) and the Foreign<br>Corrupt Practices Act 1977 (US).<br>Under the ABC Policy, Westpac expects that its<br>officers, Directors, employees, agents, contractors, service<br>providers, subsidiaries and third parties acting for or on<br>behalf of Westpac will comply with all applicable ABC<br>laws and will not offer, provide, authorise, request or<br>receive a bribe or anything which may be viewed as<br>a bribe.<br>Fit and Proper Person assessments<br>Westpac’s Board-approved Group Fit and Proper Policy<br>(F&P Policy) outlines how we assess the fitness and<br>propriety of our Directors, Accountable Persons, and other<br>individuals in key positions of responsibility.<br>The F&P Policy supports Westpac in complying with APRA<br>Prudential Standards CPS 520 and SPS 520, the Banking<br>Act 1959 (Cth), Financial Accountability Regime Act 2023<br>(Cth), Superannuation Industry (Supervision) Act 1993<br>(Cth), relevant ASIC licensing requirements (Australian<br>Financial Services Licence and Australian Credit Licence)<br>and equivalent offshore regulations as applicable.<br>The Chairman of the Board is responsible for assessing<br>the fitness and propriety of our CEO and Non-executive<br>Directors. The Board (as a collective) is responsible for<br>assessing the fitness and propriety of the Chairman.<br>A Fit and Proper Committee is responsible under<br>delegated authority from the Board for undertaking a<br>fit and proper assessment of all other individuals in<br>key positions of responsibility. In all cases, a fit and<br>proper assessment will be undertaken prior to their initial<br>appointment and they will be re-assessed annually. This<br>involves the relevant individual providing a declaration<br>and background checks (including police and bankruptcy<br>checks) being undertaken as appropriate.<br>Conflicts of interest<br>Westpac’s conflicts of interest framework is designed<br>to identify and manage actual, potential and perceived<br>conflicts of interest. The conflicts of interest framework<br>includes the Group Conflicts of Interest Policy, along with<br>supporting policies, standards and procedures.<br>Under our conflicts of interest framework, any person who<br>acts on behalf of the Westpac Group must:<br> • promptly identify, declare, assess, manage and record<br>conflicts of interest appropriately;<br> • discharge their duties concerning conflicts of interest<br>with integrity, fairness, honesty and due skill, care<br>and diligence;<br> • avoid a conflict of interest where it cannot be<br>effectively managed; and<br> • not solicit, accept or offer money, gifts, favours or<br>entertainment that might influence, or might be seen<br>to influence, their professional judgement.<br>Modern Slavery<br>Under the Australian Modern Slavery Act 2018 (Cth)<br>and Modern Slavery Act 2015 (UK), Westpac is required<br>to prepare an annual statement describing the risks of<br>modern slavery across our operations and supply chain,<br>and the actions taken to address the risks. Westpac<br>published a joint statement for FY23 on behalf of itself<br>and certain reporting entities within the Group that<br>addresses the requirements of both Acts.<br>The Westpac Group’s 2023 Modern Slavery<br>Statement was published in March 2024 and can<br>be located at www. westpac.com.au/content/dam/<br>public/wbc/documents/pdf/aw/sustainability/wbc-2023-<br>modern-slavery- statement.pdf.<br>Customer Advocate<br>Westpac’s Customer Advocate provides advice and<br>guidance to our complaints team regarding complaints<br>raised by customers in relation to personal banking<br>and small business matters. In addition, the Customer<br>Advocate recommends changes to policies, procedures<br>and processes, arising from the complaints made by<br>customers, and in particular focuses on how we can best<br>support our vulnerable customers.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 213<br>SUSTAINABILITY<br>We view sustainable and responsible business practices<br>as important for our business and our stakeholders.<br>Sustainability is about managing environmental and social<br>risks and opportunities across our business in a way<br>that seeks to balance the needs of our stakeholders –<br>our customers, employees, suppliers, investors and the<br>communities in which we operate.<br>We aim to address the matters we believe are the most<br>material for our business and our stakeholders, now<br>and in the future. Environmental and social risks and<br>opportunities continue to evolve so we seek to monitor<br>these developments while aiming to embed sustainability<br>into our business practices.<br>We participate in a number of voluntary initiatives<br>including the Global Reporting Initiative (GRI), the<br>UN Global Compact and the recommendations of the<br>Taskforce on Climate-Related Financial Disclosures (TCFD)<br>(which have now been incorporated into the International<br>Sustainability Standards Board (ISSB) standards). We<br>report on the most material sustainability topics, identified<br>in our annual materiality assessment and aligned with the<br>GRI standards, in our Annual Report. Our Annual Report<br>and Climate Report include sustainability governance and<br>risk management and are available on our website at<br>www.westpac.com.au/2024annualreport/.<br>Material exposure to sustainability<br>risks and other categories of risks<br>Westpac is exposed to environmental and social risks such<br>as climate change risk. We seek to manage our material<br>exposures to these risks, as well as other material risks<br>we face, in accordance with our risk management strategy<br>and frameworks.<br>Further details about the risks we face, and how we seek<br>to manage them, are in our 2024 Annual Report (see<br>sections on 'Creating Value for the Community', 'Creating<br>Value for the Environment' and 'Risk Management')<br>and our 2024 Risk Factors. In addition, our Climate<br>Change Position Statement and Action Plan, our Climate<br>Report, our Human Rights Position Statement and<br>Action Plan, and our Modern Slavery Statement are<br>available on our website at www.westpac.com.au/about-westpac/sustainability/.<br>RISK MANAGEMENT<br>Westpac's Risk Management Framework describes the<br>material risks faced by our business and how they are<br>managed. With customers at the centre, there are nine<br>components to the framework that are underpinned by a<br>strong risk culture and a Three Lines of Defence model.<br>These components are represented in the diagram on<br>page 214.<br>Effective risk management requires all the elements of our<br>framework to operate independently and interactively to<br>provide a complete approach for managing risk and to<br>deliver fair customer outcomes.<br>As part of the CORE program transition phase, Westpac<br>has continued to focus on the sustainability and<br>effectiveness of the uplift delivered under the Integrated<br>Plan. For further information about the CORE program,<br>refer to the Strategic review in our 2024 Annual Report.<br>The Group’s Risk Management Framework, Risk<br>Management Strategy and Board Risk Appetite Statement<br>are reviewed annually by the Board Risk Committee. The<br>Board Risk Committee also oversees that Westpac is<br>operating with due regard to risk appetite. The review of<br>the Risk Management Framework includes consideration<br>of whether the framework continues to be sound.<br>The Risk Management Framework, Risk Management<br>Strategy and Board Risk Appetite Statement were<br>approved by the Board, on the recommendation of the<br>Board Risk Committee, during the financial year ended<br>30 September 2024.<br>The CEO and Executive Team are responsible for<br>implementing our Risk Management Framework and Risk<br>Management Strategy, and for developing frameworks,<br>policies, controls, processes and procedures for identifying<br>and managing risk in Westpac’s activities.<br>To support our management of risk, Westpac has<br>an Executive risk committee (RISKCO) that assists<br>accountable individuals in making risk-related decisions<br>in respect of the Group. It monitors material risk<br>exposures, their alignment to risk appetite approved by<br>the Board and related actions. RISKCO also oversees the<br>implementation and performance of the Risk Management<br>Framework and Risk Management Strategy, as well as<br>required controls and actions. RISKCO is supported<br>by a number of management subcommittees. RISKCO<br>and these subcommittees provide an important channel<br>for senior management to communicate and report on<br>risk matters.
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214 WESTPAC GROUP 2024 ANNUAL REPORT<br>CORPORATE GOVERNANCE<br>RISK MANAGEMENT FRAMEWORK COMPONENTS<br>Governance and<br>Management Control<br>Business Strategy<br>Risk Identification<br>Risk Appetite<br>Stress and<br>Scenarios Analysis<br>People and<br>Infrastructure<br>Control Definition and<br>Effectiveness<br>Monitoring and<br>Reporting<br>Actions and<br>Response<br>Westpac’s business plans<br>are shaped considering the<br>risks associated with its<br>strategic objectives<br>Identifying<br>existing and<br>emerging risks in<br>our business<br>from internal and<br>external<br>environments<br>Setting risk<br>appetite to<br>provide clarity on<br>the level of risk<br>we are prepared<br>to take<br>Performing stress tests and<br>scenario analysis to assess<br>potential impacts that changes<br>to existing and emerging risks<br>may have on the Group,<br>including on our capital<br>Having appropriate capability, people,<br>data and systems to support effective risk<br>management and decision making<br>Embedding appropriate<br>Frameworks, policies,<br>standards and controls to<br>manage the risks we take<br>Risks are<br>assessed<br>through ongoing<br>monitoring,<br>management,<br>reporting<br>and assurance<br>Appropriate<br>action plans<br>are<br>implemented<br>to improve<br>our risk<br>profile<br>Ensuring that appropriate data,<br>analysis and recommendations flow to<br>appropriate people and forums on a<br>timely basis to support decision making<br>Customers<br>Risk Culture<br>Board approved 7 March 2024 (no changes from 2023)
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 215<br>Risk Culture<br>Westpac considers that a strong risk culture is essential<br>for the Group’s Risk Management Framework to operate<br>effectively. Building and maintaining a strong risk culture is<br>a continuing focus of the Board and will help us remain a<br>simpler, stronger bank.<br>Through the frameworks established under the CORE<br>program, Westpac has embedded processes and tools<br>to continue to improve risk culture, and track progress<br>towards our goal of a risk culture that proactively<br>identifies, manages and mitigates risks, learns from<br>risk events and continuously anticipates new risks<br>and opportunities. We have also implemented a Group-wide learning program which provides an opportunity<br>for employees to spend time on the specifics of<br>risk management. Further information about this work<br>is available in the Strategic review in our 2024<br>Annual Report.<br>Three Lines of Defence<br>We have adopted and continue to embed a Three Lines of<br>Defence model which is designed to enable all our people<br>to understand their own role and responsibilities in the<br>active management of risk (see Figure 4 below).
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216 WESTPAC GROUP 2024 ANNUAL REPORT<br>CORPORATE GOVERNANCE<br>FINANCIAL<br>REPORTING<br>AND AUDIT<br>Approach to financial reporting<br>Our approach to financial reporting reflects three<br>core principles:<br> • that our financial reports present a true and fair view of<br>our financial position and performance;<br> • that our accounting methods comply with applicable<br>accounting standards and policies; and<br> • that our external auditor is independent and serves<br>security holders’ interests.<br>The Board, through the Board Audit Committee, has<br>regard to Australian and international developments<br>relevant to these principles when reviewing our practices.<br>The Board delegates oversight responsibility for the<br>integrity of financial statements and financial reporting<br>systems to the Board Audit Committee. The Board<br>Risk Committee provides relevant periodic assurances<br>and reports (as appropriate) to the Board Audit<br>Committee. Similarly, the Board delegates oversight<br>responsibility for the preparation of remuneration reports<br>and disclosures to the Board Remuneration Committee,<br>which recommends remuneration reports and related<br>disclosures, and provides relevant assurances, through the<br>Board Audit Committee to the Board for approval.<br>CEO and CFO assurance<br>The Board receives regular reports from management<br>about our financial condition and operational results.<br>Before the Board approves the half year and full year<br>financial statements, the CEO and the CFO declare to the<br>Board that in all material respects:<br> • Westpac’s financial records:<br> – correctly record and explain its transactions, and<br>financial position and performance;<br> – enable true and fair financial statements to be<br>prepared and audited; and<br> – are retained for seven years after the transactions<br>covered by the records are completed;<br> • the financial statements and notes comply with<br>applicable accounting standards;<br> • the financial statements and notes give a true and fair<br>view of Westpac’s financial position and performance;<br> • (in relation to full year financial statements), the<br>consolidated entity disclosure statement is true<br>and correct;<br> • any other matters that are prescribed by the<br>Corporations Act 2001 (Cth) and regulations as they<br>relate to the financial statements and notes are<br>satisfied; and<br> • the declarations above have been formed on the<br>basis of a sound system of risk management and<br>internal control, and that the system is operating<br>effectively in all material respects in relation to<br>financial reporting risks.<br>The CEO and CFO have provided such statements for the<br>financial year ended 30 September 2024.<br>External auditor<br>Our external auditor (for the 2024 financial year)<br>is PricewaterhouseCoopers (PwC), appointed by<br>shareholders at the 2002 AGM. Prior to 2002, individuals<br>who were partners of PwC or its antecedent firms were<br>our external auditors from 1968. Our PwC lead audit<br>partner is Mr Colin Heath. Mr Heath assumed responsibility<br>for this role in December 2021.<br>Westpac commenced a tender for its external audit<br>services in November 2023, which was considered to be<br>reflective of best practice for audit firm rotation. Due<br>to PwC’s tenure as the Group’s external auditor, PwC<br>was not invited to participate in the tender. Following<br>completion of our tender process in March 2024, Westpac<br>has confirmed KPMG as the preferred firm to be appointed<br>as its external auditor from the 2025 financial year. The<br>approval of Westpac shareholders to appoint KPMG as its<br>external auditor will be sought at the 2024 AGM.<br>The external auditor receives all Board Audit Committee<br>and Board Risk Committee papers, attends all meetings<br>of these committees and is available to Committee<br>members at any time. The external auditor also attends<br>the AGM to answer questions from shareholders regarding<br>the conduct of its audit, the audit report and financial<br>statements and its independence.<br>The external auditor is required to confirm<br>its independence and compliance with specified<br>independence standards at our half and full financial year,<br>however in practice it confirms its independence on a<br>quarterly basis.<br>We strictly govern our relationship with the external<br>auditor, including restrictions on employment, business<br>relationships, financial interests and use of our financial<br>products by the external auditor.<br>Periodically, the Board Audit Committee consults with the<br>external auditor without the presence of management<br>about internal controls over financial information,<br>reporting and disclosure and the fullness and accuracy<br>of the Group’s financial statements. The Board Audit<br>Committee also meets with the General Manager,<br>Group Audit without other members of management<br>being present.<br>Engagement of the external auditor<br>To avoid possible independence or conflict issues, our<br> ‘Pre-approval of engagement of external auditor for audit<br>and non-audit services’ policy (NAS Policy) prohibits the<br>external auditor from carrying out certain types of non-audit services for Westpac. The NAS Policy also limits the<br>extent to which the external auditor can perform other<br>non-audit services. Use of the external auditor for any<br>non-audit services must be assessed and approved in<br>accordance with the pre-approval process set out in the<br>NAS Policy.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 217<br>Group Audit (internal audit)<br>Group Audit is independent of the first and second<br>lines of defence and provides independent and objective<br>assurance and insight on the adequacy and effectiveness<br>of the Group’s governance, risk management and internal<br>controls to the Board and management.<br>Group Audit is governed by a charter approved by the<br>Board Audit Committee that sets out its purpose, role,<br>scope and responsibilities. Group Audit seeks to conduct<br>its activities in line with regulatory standards and adheres<br>to The Institute of Internal Auditors’ mandatory guidance,<br>including the Core Principles for the Professional Practice<br>of Internal Auditing, Definition of Internal Auditing, the<br>Code of Ethics, and the International Standards for the<br>Professional Practice of Internal Auditing.<br>Group Audit is structured to support its independence<br>from management, with the General Manager, Group<br>Audit having a direct reporting line into the Board<br>Audit Committee, through the Chairman of the Board<br>Audit Committee and, for administrative purposes only, to<br>the CFO.<br>Group Audit has the right to unrestricted and private<br>access to the CEO and Senior Executive team, the<br>Board Chairman and Chairman of the Board Audit<br>Committee, other Board members where relevant and<br>external regulators. Group Audit’s responsibilities include<br>attending and presenting reports relevant to the Board<br>and Management committees, on the Group’s Risk<br>Management Framework.<br>Board Audit Committee dialogue with management,<br>external audit and Group audit<br>The Board Audit Committee maintains an ongoing<br>dialogue with management, the external auditor and<br>Group Audit, including regarding those matters that are<br>likely to be designated as Key Audit Matters in the external<br>auditor’s report. Key Audit Matters are those matters<br>which, in the opinion of the external auditor, are of the<br>most significance in their audit of the financial report.<br>As part of its oversight responsibilities, the Board Audit<br>Committee also conducts discussions with a wide range of<br>internal and external stakeholders including:<br> • the external auditor, about our major financial<br>reporting risk exposures and the steps management<br>has taken to monitor and control such exposures;<br> • Group Audit and the external auditor concerning their<br>reports regarding significant findings in the conduct of<br>their audits, and overseeing that any issues identified<br>are rectified by management in an appropriate<br>and timely way or reported to the Board Risk<br>Committee (with the Board Risk Committee overseeing<br>management's response to rectifying those issues);<br> • management and the external auditor concerning the<br>half year and full year financial statements;<br> • management and the external auditor regarding<br>any correspondence with regulators or government<br>agencies, and any published reports which raise<br>material issues or could impact on matters<br>regarding the Westpac Group’s financial statements or<br>accounting policies; and<br> • the Group General Counsel regarding any legal matters<br>that may have a material impact on, or require<br>disclosure in, the financial statements.<br>MARKET<br>DISCLOSURE AND<br>SHAREHOLDER<br>COMMUNICATION<br>Verification of periodic corporate reports<br>For periodic corporate reports released to the market<br>which are not required to be audited or reviewed by<br>our external auditor, we have verification and approval<br>processes to support the integrity of the information<br>disclosed. The process varies depending on the report and<br>generally involves the individuals with responsibility for<br>the information confirming to the best of their knowledge<br>that the information is accurate and not misleading. The<br>process may also involve review by internal subject matter<br>experts (and as appropriate, our external advisers); and<br>review by and confirmation from the individual responsible<br>for the corporate report that it is appropriate for release.<br>Such periodic corporate reports may also be required<br>to be approved by the Disclosure Committee or the<br>Disclosure Officer (or delegate) or the Board under our<br>Market Disclosure Policy – as described below.<br>Market disclosure<br>We seek to provide all investors with equal, timely,<br>accurate and balanced disclosure.<br>Our Board-approved Market Disclosure Policy governs<br>how we communicate with our shareholders<br>and the investment community. Our Market<br>Disclosure Policy is available on our website<br>at www.westpac.com.au/about-westpac/westpac-group/<br>corporate-governance/principles-policies/.<br>The policy provides a framework for how we manage<br>our disclosure obligations and satisfy the disclosure<br>requirements of the ASX, NZX, and other relevant<br>offshore securities exchanges, as well as relevant securities<br>and corporations legislation. Under our policy, and in<br>accordance with our obligations, information that a<br>reasonable person would expect to have a material effect<br>on the price or value of our securities must immediately<br>be disclosed via the ASX unless an exception applies<br>under regulatory requirements.<br>Certain disclosure decisions are the responsibility of the<br>Board (for example, relating to matters of fundamental<br>importance to the Group such as material transactions<br>or material changes in strategic direction). For other<br>decisions, our Disclosure Committee is responsible<br>for determining whether matters should be disclosed<br>publicly under the policy, and for assisting employees in<br>understanding what information may require disclosure to<br>the market on the basis that it is market sensitive.
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218 WESTPAC GROUP 2024 ANNUAL REPORT<br>CORPORATE GOVERNANCE<br>The Disclosure Committee is comprised of the Disclosure<br>Officer (who is the CFO), the Group General Counsel<br>and at least one of the following: the CEO, the Chief<br>Risk Officer, the Group Executive, Customer & Corporate<br>Services, the Company Secretary of Westpac and the<br>General Manager, Investor Relations.<br>The Disclosure Officer is ultimately responsible for all<br>disclosure-related communication with relevant securities<br>exchanges. The Company Secretary or their delegate is<br>authorised to lodge ASX announcements once they have<br>been approved. A copy of announcements on material<br>issues will also be provided to the Board promptly after<br>release to the ASX, unless previously provided.<br>Before Westpac gives a new and substantive investor<br>or analyst presentation, we will release a copy of that<br>presentation to the market. Once relevant information<br>is disclosed to the market and available to investors,<br>it may also be published on our website. This includes<br>investor discussion packs and presentations on our<br>financial results.<br>Our website also contains Annual Reports, results<br>announcements, speeches and support material given at<br>investor conferences or presentations, notices of meetings<br>and key media releases.<br>Shareholder communication and participation<br>We are committed to keeping shareholders fully informed<br>about Westpac in compliance with our obligations –<br>from our strategy, operations and performance, to our<br>governance and sustainability approach. As part of<br>our investor relations program – and consistent with<br>our Market Disclosure Policy – we carry out a range<br>of activities to facilitate two-way communication with<br>shareholders, including:<br> • providing relevant company information online via our<br>Investor Centre on our website;<br> • giving shareholders the option to receive information<br>and communications electronically or via hard copy;<br> • responding to shareholder queries directly via phone,<br>email and mail; and<br> • enabling shareholders to view major market<br>briefings and maintaining that information in our<br>Investor Centre.<br>Our financial calendar in our Investor Centre lists<br>all major market briefings and shareholder meetings.<br>Announcements on these events may also be made on<br>the ASX.<br>Westpac seeks to facilitate shareholder participation at<br>general meetings. We aim to choose a time and location<br>that is convenient for shareholders, and we typically move<br>our AGMs across capital cities. We provide explanatory<br>notes in the Notice of Meeting to shareholders, and the<br>AGM is also webcast live with a replay available for<br>viewing in our Investor Centre.<br>Westpac engages with shareholders and shareholder<br>groups throughout the year to gather feedback and allow<br>them to ask questions. This feedback assists the Group’s<br>decision making and allows us to address any key themes<br>in our reporting and/or at our meeting.<br>Westpac intends to hold a ‘hybrid AGM’ this year, with<br>shareholders being able to attend the AGM venue in<br>person or participate online or via the telephone.<br>Shareholders taking part in our 2024 AGM online (and<br>their proxies, corporate representatives and attorneys) will<br>be able to ask questions and make comments (either<br>through the AGM Online Platform or via the telephone)<br>and vote on the resolutions.<br>In addition, shareholders can lodge a direct vote before<br>the AGM. Consistent with our practice for voting at<br>meetings of shareholders, voting on all resolutions is<br>conducted by a poll.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 219<br>SUSTAINABILITY GOVERNANCE<br>The Board is responsible for considering the social, ethical and environmental impact of our activities. The Board<br>helps to set Westpac's strategic priorities for Sustainability by approving key policies such as the Climate Change<br>Position Statement and Human Rights Position Statement. It monitors progress against our Net-Zero Banking Alliance<br>commitment, as well as overseeing risks and opportunities.<br>The Board Risk Committee reviews and approves the Sustainability Risk Management Framework every two years<br>and reviews the monitoring of reputation and sustainability risk performance. See Risk Management (page 188) for<br>more information.<br>In relation to Board skills, the ‘Environment & Social’ category in the Board skills matrix in Corporate Governance<br>(page 196) reflects four directors with deep experience and knowledge and five with general working experience<br>and knowledge.<br>The Board and its Committees receive regular reports on climate-related matters from the CEO, Group Executives, and<br>other functions. The Board and Committee charters are available on our website.<br>Key sustainability-related agenda items for the Board and its Committees in FY24<br>Board • Provided oversight of the sustainability strategy, including receiving updates on<br>sustainability-related strategic initiatives;<br> • Approved the Climate Report;<br> • Approved Board Risk Appetite Statement which includes measures related to ESG scores<br>by sustainability rating agencies;<br> • Received updates on progress against NZBA sector targets; and<br> • Received training on environmental and social topics, including climate change and<br>human rights.<br>Board<br>Risk Committee<br> • Reviewed and recommended the Board Risk Appetite Statement to the Board for<br>approval, which included measures related to climate change risk; and<br> • Reviewed and monitored the Credit Risk and Reputation and Sustainability risk classes,<br>including measures related to climate risk.<br>Board<br>Audit Committee<br> • Received updates on sustainability reporting and standards (including climate<br>standards); and<br> • Provided oversight of the Climate Report, including recommending the Climate Report to<br>the Board for approval.<br>Board Remuneration<br>Committee<br> • Recommended a new climate change measure for the Group Short Term Variable<br>scorecard (STVR).<br>Role of management<br>The day-to-day management of Westpac’s approach to sustainability is the responsibility of the CEO and is delegated<br>to Group Executives and senior management where appropriate. The CEO and senior management work to integrate the<br>risks and opportunities of sustainability, including climate change, into our operations and ensure our people understand<br>their role in supporting the Group’s sustainability ambitions.<br>Several management committees help assess climate-related matters and support Executive management in their<br>decision making. These are summarised in the following chart.<br>Climate measures in executive remuneration<br>The Group STVR Scorecard includes a climate-related measure for the CEO and certain Group Executives, aimed at<br>delivering the climate transition plan. This measure is part of the broader ‘Strategic Execution’ key priority.<br>2024 progress is assessed using three measures:<br>1. The number of 2030 targets set for NZBA carbon-intensive sectors;<br>2. The number of top emitters engaged on transition plans; and<br>3. Performance against our annual plan of the 2030 Sustainable Finance Target.<br>Refer to the Remuneration Report (page 236) for information on performance against these measures.
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220 WESTPAC GROUP 2024 ANNUAL REPORT<br>SUSTAINABILITY GOVERNANCE<br>Sustainability Governance Structure<br>KEY<br> Flow of information relating to climate change-related targets and strategies.<br> Flow of information relating to climate-related disclosures.<br> Flow of information relating to the climate change-related risk management.<br> Participating Group departments in committees (including papers)<br>BOARD LEVEL<br>Board<br>Approves material sustainability positions (CCPS, NCPS, HRPS)<br>Approves Board Risk Appetite Statement (Board RAS), RMF, RMS<br>ESG & Reputation Committee<br>Meets at least 5 times per year.<br>Chaired by CEO<br>Supports decision making on significant sustainability and reputation<br>related matters, including monitoring of NZBA targets.<br>Approves our key sustainability positions<br>Group Executive Risk Committee<br>Meets at least 7 times per year.<br>Chaired by Chief Risk Ocer<br>Review RMF, RMS, SRMF and Board RAS<br>Oversee the implementation and performance of the SRMF and key<br>supporting policies / controls and actions<br>MANAGEMENT LEVEL<br>Board Risk Committee<br>Approves Sustainability Risk Management<br>Framework (SRMF) and Credit Risk Management<br>Framework (CRMF) at least biennially<br>Reviews Board RAS, RMF, RMS annually<br>ESG Council<br>Chaired by divisional<br>Chief Executive<br>Supports coordination and<br>prioritisation of group-wide<br>ESG priorities<br>Group Credit Risk<br>Committee<br>Chaired by Deputy<br>Chief Risk Ocer<br>Review and provide input on the<br>CRMF and Credit Risk Appetite<br>Statement (CRAS) for inclusion<br>in the Board RAS<br>ESG Risk<br>Line 2 risk function, Risk Class<br>Owner of Reputation and<br>Sustainability Risk.<br> Oversight and challenge the<br>management of sustainability<br>risk. Sets the Group’s approach<br>for sustainability risks, including<br>related frameworks and policies<br>such as the SRMF<br>ESG Disclosure<br>and Reporting<br>Under Group Finance.<br>Leads the Climate Report and<br>external sustainability<br>reporting. Works to improve<br>the Group’s alignment with<br>ESG related standards.<br>Calculate and report Group<br>financed emissions.<br>Divisions<br>Manage sustainability risk and<br>opportunities. Set NZBA targets<br> and baselines and reports on<br>progress.<br>Lead customer engagement<br>and assess risk and<br>opportunities in transactions<br>Group<br>Sustainability<br>Develops and maintains the<br>Group Sustainability Strategy,<br>Group Position Statements,<br>Sustainable Finance Taxonomy<br>and Modern Slavery Statement.<br>Leads the Group approach for<br>Climate, Nature and Human<br>Rights and leads external<br>engagement on sustainability<br>matters.<br>Group Property,<br>Procurement and<br>Protective Services<br>Manages the environmental<br>performance of the Group’s<br>operations. Works to reduce<br>the Group’s direct<br>environmental footprint.<br>Supports key suppliers with<br>sustainability strategies<br>Divisional Risk<br>Committees<br>Chaired by divisional<br>Chief Executive<br>Considers material sustainability<br>risks for division, including risk<br>profile assessments, and risk<br>appetite<br>Board Audit Committee<br>Reviews the sustainability disclosures in the<br>Annual Report and Climate Report and<br>recommends their approval to the Board<br>Executive Team<br>(CEO / divisional Chief Executives). Oversee Sustainability Strategy implementation<br>Board Remuneration Committee<br>Assists the Board by overseeing the design,<br>operation and monitoring of the remuneration<br>framework<br>GROUP DEPARTMENTS WITH SUSTAINABILITY RESPONSIBILITIES<br>Informs<br>Customer & Transaction Risk<br>Escalation Committee<br>Chaired by divisional Chief Executive.<br>Meets weekly (WIB) or as required (B&W)<br> – to escalate key transactions to relevant<br>executives for ESG review and decision<br>Climate Change Credit Risk Committee<br>Chaired by Deputy Chief Risk Ocer<br>Review and provide input to the Group’s risk appetite<br>measures and thresholds related to climate-related<br>risk in CRAS and Board RAS
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222 WESTPAC GROUP 2024 ANNUAL REPORT<br>DIRECTORS'<br>REPORT<br>Our Directors present their report<br>together with the financial statements<br>of the Group for the financial year<br>ended 30 September 2024.<br>Directors<br>The names of the persons who have been Directors,<br>or appointed as Directors, during the period since<br>1 October 2023 and up to the date of this report are:<br>Steven Gregg (appointed as a Director on 7 November<br>2023 and appointed Chairman on 14 December 2023),<br>Peter King, John McFarlane (appointed as a Director on<br>17 February 2020, appointed as Chairman on 2 April<br>2020 and retired as Chairman and as a Director on<br>14 December 2023), Tim Burroughs, Nerida Caesar,<br>Audette Exel AO, Andy Maguire (appointed as a Director<br>15 July 2024), Christopher Lynch (appointed as a Director<br>on 1 September 2020 and retired as a Director on<br>14 December 2023), Peter Nash, Nora Scheinkestel,<br>Margaret Seale and Michael Ullmer AO. Particulars of<br>the skills, experience, expertise and responsibilities of<br>the Directors at the date of this report, including<br>all directorships of other listed companies held by a<br>Director at any time in the three years immediately<br>before 30 September 2024, and the period for which<br>each directorship has been held, are set out in the<br>following pages.<br>Board Committee Member Key<br>Chair of each Committee is noted with a red icon.<br>Board Audit<br>Board Nominations & Governance<br>Board Remuneration<br>Board Risk<br>Board of Directors<br>Steven Gregg<br>BCom<br>Age: 63<br>CHAIRMAN AND INDEPENDENT<br>NON-EXECUTIVE DIRECTOR<br>Appointed: Director since November<br>2023 and Chairman since<br>December 2023.<br>Board Committees: Chairman<br>of the Board Nominations &<br>Governance Committee.<br>Experience: Steven has more than 35<br>years' experience in global financial<br>services, strategy consulting and<br>professional services across Australia,<br>Asia, Europe and the US. Steven has<br>extensive experience in global investment<br>banking, including through senior roles<br>with ABN Amro, Chase Manhattan,<br>Lehman Brothers and AMP Morgan<br>Grenfell. His most recent executive role<br>was as a partner at McKinsey & Company<br>where he advised clients in Financial<br>Services and other sectors, primarily in<br>Australia and Asia.<br>Steven has served as Chairman and<br>Director for companies across various<br>sectors and is currently Chairman of<br>Ampol Limited and the Lorna Hodgkinson<br>Foundation (and a Director of Unisson<br>Disability Limited). Steven is also a<br>Director of William Inglis & Son Limited.<br>Steven was formerly the Chairman<br>of The Lottery Corporation, Tabcorp<br>Holdings Limited, Goodman Fielder<br>Limited and Austock Group Limited, and<br>formerly a Non-executive Director at<br>Challenger Limited.<br>Directorships of listed entities over the<br>past three years: Ampol Limited (since<br>October 2015), The Lottery Corporation<br>Limited (May 2022 to March 2024),<br>Challenger Limited (October 2012 to<br>October 2023) and Tabcorp Holdings<br>Limited (July 2012 to May 2022).<br>Other principal directorships and<br>interests: Chairman of the Lorna<br>Hodgkinson Foundation (and a Director<br>of Unisson Disability Limited).<br>Board Committees:
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 223<br>Peter King<br>BEc, FCA<br>Age: 54<br>MANAGING DIRECTOR AND<br>CHIEF EXECUTIVE OFFICER<br>Appointed: Director since<br>December 2019.<br>Board Committees: Nil.<br>Experience: Peter was appointed<br>Westpac Group Chief Executive Officer in<br>April 2020. Peter previously held this role<br>on an acting basis between December<br>2019 and March 2020.<br>Since joining the Westpac Group in<br>1994, Peter also held senior finance roles<br>including Chief Financial Officer with<br>responsibility for Westpac’s Finance, Tax,<br>Treasury and Investor Relations functions.<br>He has worked in senior finance roles<br>across the Group including in Group<br>Finance, Business and Consumer Banking,<br>Business and Technology Services,<br>Treasury and Financial Markets.<br>Peter commenced his career at Deloitte<br>Touche Tohmatsu. He has a Bachelor of<br>Economics from Sydney University and<br>completed the Advanced Management<br>Programme at INSEAD. He is a Director of<br>the Australian Banking Association (ABA)<br>and also a Fellow of the Institute of<br>Chartered Accountants.<br>Directorships of listed entities over the<br>past three years: Nil.<br>Other principal directorships and<br>interests: Director of the Australian<br>Banking Association Incorporated,<br>Director of the Institute of International<br>Finance, Director of Financial Markets<br>Foundation for Children and Director<br>of Jawun.<br>Board Committees:<br>Nil.<br>Tim Burroughs<br>MA (Hons), B Psy (Hons), FCA, FAICD<br>Age: 70<br>INDEPENDENT NON-EXECUTIVE DIRECTOR<br>Appointed: Director since March 2023.<br>Board Committees: Member of the Board<br>Remuneration and Board Risk Committee.<br>Experience: Tim has over 40 years'<br>experience in finance, international<br>banking and mergers and acquisitions.<br>Tim was formerly Chairman of Investment<br>Banking at Goldman Sachs Australia,<br>where he worked for 11 years. Prior to<br>this, Tim held senior positions at Merrill<br>Lynch including Chairman of Mergers and<br>Acquisitions. From 1993 to 1997, Tim was<br>Principal at Centaurus Corporate Finance,<br>a leading independent advisory firm.<br>Over the course of his career, Tim<br>has specialised in providing strategic<br>financial advice to major corporations and<br>their boards. He has advised on capital<br>restructures, capital raisings and more<br>than 100 public company acquisitions.<br>Tim has an engineering degree from<br>Cambridge University and is a Fellow of<br>the Institute of Chartered Accountants.<br>Tim has also studied and taught<br>Psychology at Macquarie University.<br>Directorships of listed entities over the<br>past three years: Nil.<br>Other principal directorships and<br>interests: Panel member of Adara<br>Partners (Australia) Pty Ltd.<br>Board Committees:<br>Nerida Caesar<br>BCom, MBA, GAICD<br>Age: 60<br>INDEPENDENT NON-EXECUTIVE DIRECTOR<br>Appointed: Director since<br>September 2017.<br>Board Committees: Member of the Board<br>Audit Committee.<br>Experience: Nerida has over 38 years of<br>broad ranging commercial and business<br>management experience, with particular<br>depth in technology-led businesses.<br>Nerida was Group Managing Director and<br>Chief Executive Officer, Australia and New<br>Zealand, of Equifax (formerly the ASX-listed Veda Group Limited) and was also<br>a former director of Genome One Pty Ltd<br>and Stone and Chalk Limited.<br>Before joining Equifax, Nerida held several<br>senior management roles at Telstra,<br>including Group Managing Director,<br>Enterprise and Government and Group<br>Managing Director, Wholesale. Nerida<br>also held several executive and senior<br>management positions with IBM within<br>Australia and internationally, including<br>as Vice President of IBM’s Intel Server<br>Division for the Asia Pacific region.<br>Directorships of listed entities over the<br>past three years: Nil.<br>Other principal directorships and<br>interests: Co-Chair of Good2Give and its<br>subsidiaries Workplace Giving Australia,<br>Good2Give Research & Technology Fund<br>and ShareGift. Director of NBN Co<br>Ltd, Director of CreditorWatch and<br>Director of O’Connell Street Associates<br>Pty Ltd. Advisor to startups in the<br>technology sector.<br>Board Committees:
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224 WESTPAC GROUP 2024 ANNUAL REPORT<br>DIRECTORS' REPORT<br>Audette Exel AO<br>BA, LLB (Hons)<br>Age: 61<br>INDEPENDENT NON-EXECUTIVE DIRECTOR<br>Appointed: Director since<br>September 2021.<br>Board Committees: Chair of the Board<br>Risk Committee, Member of the Board<br>Audit Committee.<br>Experience: Audette has more than<br>35 years' experience in the global<br>financial services markets as a senior<br>executive, a non-executive director and<br>as a social entrepreneur. Audette was<br>formerly the Managing Director of BSX-listed Bermuda Commercial Bank (1993<br>to 1996), Chair of the Bermuda Stock<br>Exchange (1995 to 1996) and a Director<br>and Chair of the Investment Committee<br>of the Bermuda Monetary Authority<br>(1999 to 2005). She was a Director and<br>Chair of the Investment Committee of<br>Steamship Mutual (1999 to 2017). She<br>began her career as a lawyer specialising<br>in international finance. Audette is the<br>founder and Chair of the Adara Group, a<br>pioneering social enterprise which exists<br>to support people living in extreme<br>poverty and is the Chief Executive Officer<br>of its corporate advice businesses. She<br>is the recipient of numerous awards,<br>including an honorary Order of Australia<br>for service to humanity.<br>Directorships of listed entities over the<br>past three years: Nil.<br>Other principal directorships and<br>interests: Founder and Chair of<br>Adara Development Australia, Adara<br>Development USA, Adara Development<br>Bermuda, Adara Development UK and<br>Adara Development Uganda. CEO<br>and Director of Adara Advisors Pty<br>Limited and Adara Partners (Australia)<br>Pty Limited.<br>Board Committees:<br>Andy Maguire<br>BA, BAI<br>Age: 58<br>INDEPENDENT NON-EXECUTIVE DIRECTOR<br>Appointed: Director since July 2024.<br>Board Committees: Nil.<br>Experience: Andy has more than 35<br>years' experience in financial services<br>and began his career in banking at<br>Lloyds Banking Group. From 2014 to<br>2020, he was Group Chief Operating<br>Officer at HSBC Holdings plc with<br>responsibility for operations, technology,<br>real estate, change and transformation<br>and operational resilience.<br>Previously he spent 16 years with the<br>Boston Consulting Group, where he<br>became Managing Partner of the London<br>office covering the UK and Ireland, and<br>a member of the firm’s global executive<br>committee, as well as formerly serving as<br>Global Head of Retail Banking.<br>Andy is currently Chairman of UK banking<br>software fintech Thought Machine Group.<br>He is also an independent Non-executive<br>Director of AIB Group plc, a financial<br>services group operating predominantly<br>in the Republic of Ireland and the UK.<br>Andy previously held Chair positions with<br>RegTech compliance company Napier AI<br>and IT service management provider CX<br>Holdings (Cennox Group).<br>Directorships of listed entities over the<br>past three years: AIB Group plc (since<br>March 2021).<br>Other principal directorships and<br>interests: Chairman of Thought<br>Machine Group.<br>Board Committees:<br>Nil.<br>Peter Nash<br>BCom, FCA, F Fin<br>Age: 62<br>INDEPENDENT NON-EXECUTIVE DIRECTOR<br>Appointed: Director since March 2018.<br>Board Committees: Chair of the Board<br>Audit Committee. Member of the<br>Board Risk and Board Nominations &<br>Governance Committees.<br>Experience: Peter was formerly a Senior<br>Partner with KPMG, having been admitted<br>to the Australian partnership in 1993. He<br>served as the National Chairman of KPMG<br>Australia and served on KPMG’s Global<br>and Regional Boards.<br>His previous positions with KPMG<br>included Regional Head of Audit<br>for Asia Pacific, National Managing<br>Partner for Audit in Australia and<br>head of KPMG Financial Services. Peter<br>has worked in geographically diverse<br>and complex operating environments<br>providing advice on a range of<br>topics including business strategy, risk<br>management, internal controls, business<br>processes and regulatory change. He has<br>also provided financial and commercial<br>advice to many State and Federal<br>Government businesses.<br>Peter is a former member of the Business<br>Council of Australia and its Economic and<br>Regulatory Committee.<br>Directorships of listed entities over the<br>past three years: Johns Lyng Group<br>Limited (Chairman since October 2017),<br>Mirvac Group (since November 2018) and<br>ASX Limited (since June 2019).<br>Other principal directorships and<br>interests: Director of the General Sir John<br>Monash Foundation.<br>Board Committees:
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 225<br>Nora Scheinkestel<br>LLB (Hons), PhD, FAICD<br>Age: 64<br>INDEPENDENT NON-EXECUTIVE DIRECTOR<br>Appointed: Director since March 2021.<br>Board Committees: Chair of the Board<br>Remuneration Committee. Member of the<br>Board Risk Committee.<br>Experience: Nora is an experienced<br>company director with a background as<br>a senior banking executive in international<br>and project financing. Nora has served<br>as Chairman and Director in a range<br>of companies across various industry<br>sectors and in the public, private and<br>government arena. Previously, Nora was<br>a director of a number of other major<br>ASX-listed companies, was formerly a<br>member of the Takeovers Panel and was<br>an Associate Professor in the Melbourne<br>Business School at Melbourne University.<br>In 2003, Nora was awarded a centenary<br>medal for services to Australian society in<br>business leadership.<br>Directorships of listed entities over the<br>past three years: Qantas Airways Limited<br>(since March 2024), Brambles Limited<br>(since June 2020), Origin Energy Limited<br>(since March 2022), Telstra Corporation<br>Limited (August 2010 to October 2022)<br>and AusNet Services Ltd (November 2016<br>to February 2022).<br>Other principal directorships and<br>interests: Nil.<br>Board Committees:<br>Margaret (Margie) Seale<br>BA, FAICD<br>Age: 64<br>INDEPENDENT NON-EXECUTIVE DIRECTOR<br>Appointed: Director since March 2019.<br>Board Committees: Member of the Board<br>Remuneration and Board Nominations &<br>Governance Committees.<br>Experience: Margie has more than 25<br>years' experience in senior executive<br>roles in Australia and overseas, including<br>in consumer goods, global publishing,<br>sales and marketing, and the successful<br>transition of traditional business models<br>to digital environments. Prior to her<br>non-executive career, Margie was the<br>Managing Director of Random House<br>Australia and New Zealand and President,<br>Asia Development for Random House<br>Inc. Margie was a Director and then<br>Chair of Penguin Random House Australia<br>Pty Limited, and a Director of Telstra<br>Corporation Limited, Ramsay Health Care<br>Limited, Bank of Queensland Limited<br>and the Australian Publishers’ Association.<br>She also served on the Boards of<br>Chief Executive Women (chairing its<br>Scholarship Committee), the Powerhouse<br>Museum, and the Sydney Writers Festival.<br>Directorships of listed entities over<br>the past three years: Scentre Group<br>Limited (since February 2016) and<br>Telstra Corporation Limited (May 2012 to<br>October 2021).<br>Other principal directorships and<br>interests: Director of Westpac Scholars<br>Limited, Seaborn Broughton & Walford<br>Pty Limited, Pinchgut Opera Limited and<br>Jana Investment Advisers Pty Ltd.<br>Board Committees:<br>Michael Ullmer AO<br>BSc, FAICD, FCA, SF Fin<br>Age: 73<br>INDEPENDENT NON-EXECUTIVE DIRECTOR<br>Appointed: Director since April 2023.<br>Board Committees: Member of the Board<br>Audit and Board Risk Committees.<br>Experience: Michael has more than 40<br>years' experience in international banking,<br>finance and professional services. Michael<br>was formerly the Deputy Group Chief<br>Executive Officer of the National Australia<br>Bank (NAB) from 2007 until he retired<br>from the Bank in August 2011. He<br>joined NAB in 2004 as Finance Director<br>and held a number of key positions<br>including Chairman of the subsidiaries<br>Great Western Bank (US) and JB<br>Were. Prior to NAB, Michael was at<br>Commonwealth Bank of Australia, initially<br>as Group Chief Financial Officer and then<br>Group Executive with responsibility for<br>Institutional and Business Banking. Before<br>that, he was a Partner at accounting firms<br>KPMG (1982 to 1992) and Coopers &<br>Lybrand (1992 to 1997).<br>From a philanthropic perspective,<br>throughout his career Michael has been<br>heavily involved in supporting the Arts<br>and Education sectors.<br>Directorships of listed entities over the<br>past three years: Lendlease Corporation<br>Limited (Director since December 2011<br>and Chairman since November 2018) and<br>Woolworths Limited (January 2012 to<br>October 2021).<br>Other principal directorships and<br>interests: Member of the National Gallery<br>of Victoria Foundation Board.<br>Board Committees:
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226 WESTPAC GROUP 2024 ANNUAL REPORT<br>DIRECTORS' REPORT<br>Executive Team<br>Peter King<br>BEc, FCA<br>Age: 54<br>MANAGING DIRECTOR AND<br>CHIEF EXECUTIVE OFFICER,<br>WESTPAC GROUP<br>Peter was appointed Westpac<br>Group Chief Executive Officer<br>in April 2020, after holding<br>the role on an acting basis<br>between December 2019 and<br>March 2020.<br>Since joining Westpac in<br>1994, Peter has held<br>senior finance roles including<br>Chief Financial Officer with<br>responsibility for Westpac’s<br>Finance, Group Audit, Tax,<br>Treasury and Investor Relations<br>functions. He has worked in<br>senior finance roles across<br>the Group including in<br>Group Finance, Business and<br>Consumer Banking, Business<br>and Technology Services,<br>Treasury and Financial Markets.<br>Peter commenced his career<br>at Deloitte Touche Tohmatsu.<br>He has a Bachelor of<br>Economics from Sydney<br>University and completed<br>the Advanced Management<br>Programme at INSEAD.<br>Peter is a Director of the<br>Australian Banking Association<br>(ABA) and he is also a<br>Fellow of the Institute of<br>Chartered Accountants.<br>Scott Collary<br>BA, Humanities<br>Age: 60<br>GROUP CHIEF INFORMATION<br>OFFICER, TECHNOLOGY<br>Scott was appointed as the<br>Group’s Chief Information<br>Officer in August 2023. Prior to<br>this, he held the role of Group<br>Executive, Customer Services<br> & Technology after joining<br>Westpac as Chief Operating<br>Officer in November 2020.<br>Scott has over 37 years'<br>global banking experience,<br>with a breadth of<br>expertise across technology,<br>operations, risk mitigation and<br>commercial functions.<br>Before joining Westpac, Scott<br>was Chief Information &<br>Operations Officer for North<br>America Consumer, Business,<br>Wealth and Global Asset<br>Management Businesses at<br>Bank of Montreal, Canada.<br>Prior to that, Scott held<br>senior executive positions at<br>a number of multinational<br>financial institutions including<br>ANZ, Citibank, Fifth Third Bank<br>and Bank of America.<br>Scott holds a Bachelor’s<br>Degree from the University of<br>Maryland, College Park in the<br>United States.<br>Shannon Finch<br>BA (Hons), LLB (Hons), FGIA<br>Age: 54<br>GROUP GENERAL COUNSEL<br>Shannon joined Westpac<br>in November 2021 and<br>leads Westpac’s legal<br>function globally.<br>Shannon has nearly 30 years<br>legal experience including<br>with the Commonwealth<br>Attorney General’s<br>Department Corporations Law<br>Simplification Unit, Mallesons<br>Stephen Jaques (now King &<br>Wood Mallesons) in Canberra,<br>London and Sydney, including<br>as head of the Sydney office,<br>and as a senior partner of<br>global corporate law firm<br>Jones Day.<br>Shannon is a member of the<br>Business Law Executive of<br>the Law Council of Australia,<br>the Advisory Committee to<br>the Australian Law Reform<br>Commission’s Review of the<br>Legislative Framework for<br>Corporations and Financial<br>Services Regulation and<br>the Australian Institute of<br>Company Directors (AICD)<br>Law Committee.<br>Shannon has experience as<br>a Non-executive Director, is<br>a member of the AICD and<br>Chief Executive Women, and<br>is a Fellow of the Governance<br>Institute of Australia. Shannon<br>has a Bachelor of Arts<br>(Hons) and Bachelor of Laws<br>(Hons) from the Australian<br>National University.<br>Nell Hutton<br>BCom (Hons), MPhil, GAICD<br>Age: 48<br>CHIEF EXECUTIVE, WESTPAC<br>INSTITUTIONAL BANK<br>Nell was appointed<br>Chief Executive, Westpac<br>Institutional Bank in October<br>2023. The Institutional Bank<br>provides a range of banking<br>services to Commercial,<br>Corporate, Institutional and<br>Public Sector customers with<br>connections to Australia, New<br>Zealand, Asia, Europe and<br>US markets.<br>Nell first joined Westpac in<br>February 2021 as Managing<br>Director, Financial Markets,<br>after 21 years at Goldman<br>Sachs in London and Australia,<br>most recently as Head of<br>the Global Markets division in<br>Australia and New Zealand.<br>She holds a Master of<br>Philosophy in Finance and<br>Economics from Cambridge<br>University and a Bachelor<br>of Commerce (First Class<br>Honours) from the University<br>of Sydney.<br>Nell is Deputy Chair of the<br>Australian Financial Markets<br>Association, and a member<br>of the AICD and Chief<br>Executive Women.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 227<br>Carolyn McCann<br>BBus (Com), BA,<br>GradDipAppFin, GAICD<br>Age: 52<br>GROUP EXECUTIVE, CUSTOMER<br> & CORPORATE SERVICES<br>Carolyn has been part of<br>the Westpac Group Executive<br>team since 2018 and is<br>currently Group Executive,<br>Customer & Corporate<br>Services, responsible for<br>operations and customer<br>support services. The division<br>brings together customer<br>solutions, fraud prevention,<br>customer operations, property,<br>procurement and protective<br>services, corporate affairs, HR<br>and Finance Services. Carolyn<br>has more than 27 years’<br>experience in financial services.<br>Carolyn joined Westpac in<br>2013, as General Manager,<br>Corporate Affairs and<br>Sustainability. Prior to joining<br>Westpac, Carolyn spent 13<br>years at Insurance Australia<br>Group in various positions,<br>including Group General<br>Manager, Corporate Affairs and<br>Investor Relations. She began<br>her career in consulting in<br>financial services.<br>Carolyn has a Bachelor of<br>Arts from The University of<br>Queensland, a Bachelor of<br>Business from Queensland<br>University of Technology,<br>and a Graduate Diploma<br>of Applied Finance and<br>Investment from the Securities<br>Institute of Australia. She is<br>a member of the Australian<br>Institute of Company Directors<br>(AICD) and Chief Executive<br>Women (CEW).<br>Catherine McGrath<br>LLB/BCom<br>Age: 53<br>CHIEF EXECUTIVE OFFICER,<br>WESTPAC NEW ZEALAND<br>Catherine was appointed<br>Chief Executive Officer of<br>Westpac New Zealand in<br>November 2021.<br>She has more than 25 years'<br>experience working in financial<br>services, spanning business,<br>operational and people<br>leadership roles to which she<br>has driven significant people,<br>structural, technology and<br>strategic change.<br>Prior to joining Westpac,<br>Catherine led large-scale<br>transformations at some of<br>the world’s best known banks<br>including Barclays Group<br>and Lloyds TSB in the<br>UK. This included various<br>positions such as Head of<br>Channels, Managing Director<br>of Transaction Products and<br>Payments, and Transaction<br>Banking Director. Earlier in her<br>career she worked at BNZ,<br>ASB and the Prudential Group.<br>Catherine was raised in New<br>Zealand. She graduated from<br>Canterbury University with<br>a Bachelor of Law and a<br>Bachelor of Commerce.<br>Anthony Miller<br>LLB (Hons), BA<br>Age: 54<br>CHIEF EXECUTIVE, BUSINESS<br> & WEALTH1<br>Anthony Miller first joined<br>Westpac Group in 2020 and<br>was appointed Chief Executive,<br>Business & Wealth in August<br>2023. He has responsibility for<br>providing a range of banking<br>and wealth services for small<br>to medium and commercial<br>sized businesses, merchants,<br>private wealth, sustainability,<br>Westpac’s Pacific banking<br>business and BT.<br>Previously he was the<br>Chief Executive of Westpac’s<br>Institutional Bank.<br>Before joining Westpac Group,<br>Anthony was CEO of Australia<br> & New Zealand and Co-Head<br>of Investment Bank, Asia<br>Pacific at Deutsche Bank<br>from 2017.<br>Prior to Deutsche Bank,<br>Anthony was a partner<br>at Goldman Sachs based<br>in Hong Kong within the<br>investment banking division<br>and previously held several<br>roles at Goldman Sachs in<br>Australia and New Zealand<br>having joined the organisation<br>in 2001. Before joining<br>Goldman Sachs, Anthony<br>worked at Credit Suisse.<br>Anthony holds a Bachelor<br>of Law (Honours) from<br>Queensland University of<br>Technology, and Bachelor of<br>Arts (Japanese Language,<br>Modern Asian Studies) from<br>Griffith University.<br>Christine Parker<br>BGDipBus (HRM)<br>Age: 64<br>GROUP EXECUTIVE,<br>HUMAN RESOURCES2<br>Christine was appointed to<br>Westpac Group’s Executive<br>Team in October 2011.<br>Christine holds leadership<br>responsibility for the Human<br>Resources function across<br>the Westpac Group. She is<br>responsible for the Westpac<br>Group’s human resources<br>strategy and management,<br>including reward and<br>recognition, safety, learning<br>and development, careers and<br>talent, employee relations and<br>employment policy.<br>Christine is also responsible<br>for the office of the Financial<br>Accountability Regime (FAR)<br>and supports the CEO and<br>Board on culture and conduct.<br>Since joining Westpac in<br>2007, Christine has held a<br>variety of senior leadership<br>roles including Group General<br>Manager, Human Resources<br>and General Manager, Human<br>Resources for Westpac New<br>Zealand Limited.<br>Before joining Westpac,<br>Christine held senior HR<br>roles in a number of high<br>profile organisations and<br>across a range of industries,<br>including Carter Holt Harvey<br>and Restaurant Brands New<br>Zealand. Christine is currently<br>Chair of the St.George<br>Foundation and a Director<br>of Westpac New Zealand.<br>Previously, Christine was a<br>Director of Orygen Youth<br>Mental Health Foundation<br>and Women’s Community<br>Shelters and a member of<br>the Veterans’ Employment<br>Industry Advisory Committee.<br>1. On 9 September 2024, Westpac announced that Anthony Miller will succeed Peter King as CEO and Managing Director. Mr Miller's<br>appointment will commence on 16 December 2024 following Mr King's retirement as CEO and Managing Director. Commencing on<br>5 November 2024, Peter Herbert, the Chief Operating Officer, Business & Wealth, will become the Acting Chief Executive, Business & Wealth.<br>2. On 5 November 2024, Westpac announced that Christine Parker will retire as Group Executive, Human Resources. Ms Parker will remain in the<br>role while a search is undertaken for a successor.
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228 WESTPAC GROUP 2024 ANNUAL REPORT<br>DIRECTORS' REPORT<br>Michael Rowland<br>B.Comm, FCA<br>Age: 63<br>CHIEF FINANCIAL OFFICER<br>Michael joined Westpac<br>Group as Chief Financial<br>Officer in September 2020.<br>He is responsible for<br>Westpac’s Finance, Group<br>Audit, Investor Relations, Tax,<br>Treasury, Group Business<br>Controls and Management<br>and Corporate and Business<br>Development functions.<br>Before joining Westpac,<br>Michael was a Partner in<br>Management Consulting at<br>KPMG. Before that he held<br>a number of senior executive<br>positions at ANZ from 1999<br>to 2013. These included CFO<br>Institutional Banking, CFO<br>Wealth, CFO New Zealand,<br>CFO Personal Financial<br>Services, and business<br>leadership roles as CEO<br>Pacific, Managing Director<br>Mortgages and General<br>Manager, Transformation.<br>Michael commenced his career<br>at KPMG, where he was<br>promoted to become a Tax<br>Partner in 1993.<br>Michael holds a Bachelor of<br>Commerce from the University<br>of Melbourne and a Graduate<br>Diploma of Taxation Law<br>from Monash University. He<br>is a Fellow of the Institute<br>of Chartered Accountants in<br>Australia and New Zealand.<br>Jason Yetton<br>B.Comm (Finance &<br>Mktg), GradDipAppFin<br>Age: 53<br>CHIEF EXECUTIVE, CONSUMER<br>Jason was appointed Chief<br>Executive, Consumer in<br>August 2023.<br>The Consumer segment<br>provides a full range<br>of banking products and<br>services including mortgages,<br>credit cards, personal loans<br>and deposits to customers<br>in Australia.<br>Previously he led the Group’s<br>Specialist Businesses Division<br>overseeing a number of<br>investments and business<br>divestments to create a<br>simpler, stronger bank. He<br>has also held a number<br>of Group Executive roles<br>with Westpac at different<br>times for more than 20<br>years including Group Strategy,<br>Westpac Retail and Business<br>Banking, and senior positions<br>in BT Financial Group.<br>Outside of Westpac, Jason<br>has been Chief Executive<br>Officer NewCo, CBA, where<br>he was appointed to lead<br>the demerger of its wealth<br>management and mortgage<br>broking businesses. Prior to<br>that, he was Chief Executive<br>Officer and Managing<br>Director, SocietyOne, an early<br>financial services disrupter<br>and consumer finance<br>marketplace lender.<br>Jason holds a Bachelor of<br>Commerce (Marketing and<br>Finance) from the University<br>of New South Wales and a<br>Graduate Diploma in Applied<br>Finance and Investment<br>from the Securities Institute<br>of Australia.<br>Ryan Zanin<br>CFA<br>Age: 62<br>CHIEF RISK OFFICER<br>Ryan was appointed Chief<br>Risk Officer in April 2022.<br>Ryan is responsible for<br>risk management across<br>the Group, which includes<br>credit risk, operational risk,<br>financial crime, compliance<br>and conduct.<br>Ryan has over 30 years<br>experience in financial<br>services specialising in risk<br>management. Prior to joining<br>Westpac Group, Ryan was<br>Executive Vice President and<br>Chief Risk Officer at Fannie<br>Mae overseeing the company’s<br>governance and strategy for<br>global risk management.<br>Prior to Fannie Mae, Ryan held<br>senior positions at GE Capital,<br>Wells Fargo & Company and<br>Deutsche Bank. Ryan has<br>also been on the Board<br>of Fannie Mae and General<br>Electric Capital Corporation.<br>A Canadian, Ryan began his<br>career at the Bank of Montreal<br>before taking on various roles<br>across Citibank and Bankers<br>Trust Company.<br>Ryan is a Chartered<br>Financial Analyst.<br>Tim Hartin<br>LLB (Hons.)<br>Age: 49<br>COMPANY SECRETARY<br>Tim was appointed Company<br>Secretary in November 2011.<br>Before that appointment, Tim<br>was Head of Legal – Risk<br>Management & Workouts,<br>Counsel & Secretariat and<br>prior to that, he was Counsel,<br>Corporate Core.<br>Before joining Westpac in<br>2006, Tim was a Consultant<br>with Gilbert + Tobin,<br>where he provided corporate<br>advisory services to ASX-listed<br>companies. Tim was previously<br>a lawyer at Henderson Boyd<br>Jackson W.S. in Scotland and<br>in London in Herbert Smith’s<br>corporate and corporate<br>finance division.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 229<br>Executive Team<br>POSITION YEAR JOINED GROUP<br>YEAR APPOINTED<br>TO POSITION<br>Peter King<br>Managing Director & Chief Executive Officer<br>1994 2020<br>Scott Collary<br>Group Chief Information Officer, Technology<br>2020 2023<br>Shannon Finch<br>Group General Counsel<br>2021 2021<br>Nell Hutton<br>Chief Executive, Westpac Institutional Bank<br>2021 2023<br>Carolyn McCann<br>Group Executive, Customer & Corporate Services<br>2013 2023<br>Catherine McGrath<br>Chief Executive Officer, Westpac New Zealand<br>2021 2021<br>Anthony Miller<br>Chief Executive, Business & Wealth<br>2020 2023<br>Christine Parker<br>Group Executive, Human Resources<br>2007 2011<br>Michael Rowland<br>Chief Financial Officer<br>2020 2020<br>Jason Yetton<br>Chief Executive, Consumer<br>2020 2023<br>Ryan Zanin<br>Chief Risk Officer<br>2022 2022
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230 WESTPAC GROUP 2024 ANNUAL REPORT<br>DIRECTORS' REPORT<br>Operating and financial review<br>Principal activities<br>The principal activities of the Group during the financial year ended 30 September 2024 were the provision of financial<br>services including lending, deposit taking, payments services, investment platforms, leasing finance, general finance,<br>interest rate risk management and foreign exchange services.<br>There have been no significant changes in the nature of the principal activities of the Group during 2024.<br>Operations and financial performance<br>Net profit for 2024 was $6,990 million, a decrease of 3% compared to 2023, which reduced basic earnings per share<br>by 2%.<br>The decrease in net profit reflects lower income and higher expenses partly offset by a decrease in credit<br>impairment charges.<br>The following is a summary of the movements in major line items in net profit for 2024 compared to 2023.<br>Net interest income increased by $436 million or 2% driven by growth in average interest earning assets of 3%, which<br>was tempered by a 2 basis point contraction in net interest margin. Key movements in net interest margin included:<br> • Lower spreads on loans mainly reflecting competition for mortgages;<br> • Benefits from the investment of capital in a rising rate environment; and<br> • The impact of higher unrealised losses of $171 million (2023: $113 million) on fair value movements of non-hedge<br>accounted economic hedges.<br>Non-interest income was $493 million or 15% lower. The key movements included:<br> • Lower contribution from our wealth management business following business sales in 2023, with businesses sold<br>contributing $140 million in 2023;<br> • No gains on sales of controlled entities and other businesses, compared to gains of $268 million in 2023; and<br> • Adverse market movements impacted the value of financial instruments measured at fair value in 2024 by<br>$24 million, compared to a gain of $78 million in 2023.<br>Operating expenses were $252 million or 2% higher. The key movements included:<br> • A $279 million increase in amortisation and impairment of software assets from projects completed; and<br> • A $136 million increase in technology services expenses from inflationary pressure and the impact of our UNITE<br>program; partly offset by<br> • Reduced employee costs of $199 million mainly from lower restructuring costs.<br>Credit impairment charges of $537 million represented 7 basis points of average gross loans compared to 9 basis points<br>of average gross loans in 2023. The decrease primarily reflected lower collectively assessed provisions.<br>The effective tax rate was 30.84% in 2024 was slightly higher than the Australian corporate tax rate of 30%, due to<br>certain non tax deductible expenses.<br>A review of the operations of the Group and its segments and their results for the financial year ended<br>30 September 2024 is set out in the sections Group performance (pages 276-301) and Segment reporting (pages<br>302-313), which form part of this Directors' report. Further information about our financial position and financial results<br>is included in the Financial Statements (pages 2- 135) which form part of this Directors' report.<br>Dividends<br>Westpac has announced a final ordinary dividend of 76 cents per Westpac ordinary share, totalling approximately<br>$2,615 million. The dividend will be fully franked and will be paid on 19 December 2024.<br>In 2024, an interim ordinary dividend of 75 cents and a special dividend of 15 cents per Westpac ordinary share totalling<br>$3,125 million was paid as a fully franked dividend on 25 June 2024 (2023: 70 cents totalling to $2,456 million was paid<br>as interim ordinary dividend).<br>For the year ended 30 September 2023, a fully franked final dividend of 72 cents per ordinary share totalling<br>$2,527 million was paid on 19 December 2023.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 231<br>Significant changes in state of affairs and events during and since the end of the 2024 financial year<br>Significant changes in the state of affairs of the Group during the financial year ended 30 September 2024, or that have<br>occurred since that date, were:<br> • On 14 December 2023, at the conclusion of the AGM, Steven Gregg succeeded John McFarlane as Chairman of the<br>Board following Mr McFarlane’s retirement.<br> • The announcement that Anthony Miller will succeed Peter King as CEO and Managing Director, effective following Mr<br>King’s retirement as CEO and Managing Director.<br> • The commencement of UNITE, a multi-year programme of work to accelerate our technology and<br>business simplification.<br> • The announcement by APRA on 19 July 2024 of its decision to reduce Westpac’s total operational risk capital overlay<br>from $1 billion to $500 million.<br> • The delivery of the CORE program and completion of the Integrated Plan required by the 2020 enforceable<br>undertaking with APRA in relation to our risk governance remediation, and supporting the strengthening of our<br>risk governance, accountability, and culture. We are continuing to focus on the sustainability and effectiveness of the<br>uplift delivered by the Integrated Plan through a transition phase.<br>For a discussion of these changes and other significant developments, please refer to Significant developments (pages<br>263-265) which forms part of this Directors' report.<br>The Directors are not aware of any other matter or circumstance that has occurred since 30 September 2024 that has<br>significantly affected or may significantly affect the operations of the Group, the results of these operations or the state<br>of affairs of the Group in subsequent financial years.<br>Business strategies, developments and expected results<br>Our business strategies, prospects and likely major developments in the Group’s operations in future financial years<br>and the expected results of those operations are discussed in the Strategic Review (pages 156- 269) and in Significant<br>developments (pages 263-265) which forms part of this Directors' report.<br>Further information on our business strategies and prospects for the future financial years and likely developments in our<br>operations and the expected results of operations have not been included in this report because the Directors believe it<br>would be likely to result in unreasonable prejudice to Westpac.<br>Risks to our financial performance, position and our operations<br>Our financial position, our future financial results, our operations and the success of our strategy are subject to a range<br>of risks. These risks are set out and discussed in the Risk Management section (pages 188-195) which forms part of the<br>Directors' report. For additional information on risks relating to Westpac, refer to "2024 Risk Factors" as disclosed on the<br>ASX on the same date as this report.
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232 WESTPAC GROUP 2024 ANNUAL REPORT<br>DIRECTORS' REPORT<br>Directors’ interests<br>Directors’ interests in securities<br>The following particulars for each Director are set out in the Remuneration Report (pages 236- 261) of the Directors’<br>report for the year ended 30 September 2024 and/or in the table below:<br> • Their relevant interests in our shares or the shares of any of our related bodies corporate;<br> • Their relevant interests in debentures of, or interests in, a registered scheme made available by us or any of our<br>related bodies corporate;<br> • Their rights or options over shares in, debentures of, or interests in, any registered scheme made available by us or<br>any of our related bodies corporate; and<br> • Any contracts:<br> – To which the Director is a party or under which they are entitled to a benefit; and<br> – That confer a right to call for or deliver shares in, debentures of, or interests in, a registered scheme made<br>available by us or any of our related bodies corporate.<br>Directors’ interests in Westpac and related bodies corporate as at 3 November 2024<br>Number of Relevant Interests<br>in Westpac Ordinary Shares<br>Number of Westpac<br>Share Rights<br>Westpac Banking Corporation<br>Current Directors<br>Steven Gregg 75,208 -<br>Peter King 262,333a 541,684b<br>Tim Burroughs 67,302 -<br>Nerida Caesar 13,583 -<br>Audette Exel 11,952 -<br>Andy Maguire - -<br>Peter Nash 15,260 -<br>Nora Scheinkestel 17,225<br>Margaret Sealec 10,438 -<br>Michael Ullmerd 12,570 -<br>Former Directors<br>John McFarlanee 45,000<br>Chris Lynchf 13,090 -<br>a. Peter King’s interest in Westpac ordinary shares includes 24,403 restricted shares held under the Equity Incentive Plan.<br>b. Share rights issued under the Long Term Variable Reward Plan and Equity Incentive Plan.<br>c. Margaret Seale and her related bodies corporate also hold relevant interests in 100 Westpac Capital Notes 7 (ASX: WBCPJ).<br>d. Michael Ullmer and his related bodies corporate also hold relevant interests in 800 Westpac Capital Notes 5 (ASX:WBCPH), 300 Westpac<br>Capital Notes 9 (WBCPL) and 1,000 Westpac Subordinated Notes.<br>e. Figure displayed is as at John McFarlane’s retirement date of 14 December 2023.<br>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<br>relevant interests in 1,137 Westpac Capital Notes 5 (ASX:WBCPH) as at his retirement date of 14 December 2023.<br>Note: Certain subsidiaries of Westpac offer a range of registered schemes. The Directors may from time to time invest<br>in these schemes and are required to provide a statement to the ASX when any of their interests in these schemes<br>change. ASIC has exempted each Director from the obligation to notify the ASX of a relevant interest in a security that<br>is an interest in BT Cash Management Trust (ARSN 087 531 539), BT Premium Cash Fund (ARSN 089 299 730), BT<br>Investor Choice Cash Management Trust (formerly Westpac Cash Management Trust) (ARSN 088 187 928) or Advance<br>Cash Multi-Blend Fund (ARSN 094 113 050).
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 233<br>Indemnities and insurance<br>Under the Westpac Constitution, unless it is forbidden or would be made void by statute, we indemnify any person who<br>is or has been a Director or Company Secretary of Westpac and of each of our related bodies corporate (except related<br>bodies corporate listed on a recognised stock exchange), any person who is or has been an employee of Westpac or our<br>subsidiaries (except subsidiaries listed on a recognised stock exchange), and any person who is or has been acting as<br>a responsible manager under the terms of an Australian Financial Services Licence of any of Westpac’s wholly-owned<br>subsidiaries against every liability (other than a liability for legal costs) incurred by each such person in their capacity<br>as director, company secretary, employee or responsible manager, as the case may be; and all legal costs incurred in<br>defending or resisting (or otherwise in connection with) proceedings, whether civil or criminal or of an administrative or<br>investigatory nature, in which the person becomes involved because of that capacity.<br>Each of the Directors named in this Directors’ report and the Company Secretary of Westpac has the benefit of<br>this indemnity.<br>Consistent with shareholder approval at the 2000 Annual General Meeting, Westpac has entered into a Deed of Access<br>and Indemnity with each of the Directors, which includes indemnification in identical terms to that provided in the<br>Westpac Constitution.<br>Westpac also executed a deed poll in September 2009 providing indemnification equivalent to that provided under the<br>Westpac Constitution to individuals who are or have been acting as:<br> • statutory officers (other than as a director) of Westpac;<br> • directors and other statutory officers of wholly-owned subsidiaries of Westpac; and<br> • directors and statutory officers of other nominated companies as approved by Westpac in accordance with the terms<br>of the deed poll and Westpac’s Contractual Indemnity Policy.<br>Some employees of Westpac’s related bodies corporate and responsible managers of Westpac and its related bodies<br>corporate are also currently covered by a deed poll that was executed in November 2004, which is on similar terms to<br>the September 2009 deed poll.<br>The Westpac Constitution also permits us, to the extent permitted by law, to pay or agree to pay premiums for contracts<br>insuring any person who is or has been a Director or Company Secretary of Westpac or any of its related bodies<br>corporate against liability incurred by that person in that capacity, including a liability for legal costs, unless:<br> • we are forbidden by statute to pay or agree to pay the premium; or<br> • the contract would, if we paid the premium, be made void by statute.<br>Under the September 2009 deed poll, Westpac also agrees to provide directors’ and officers’ liability insurance to<br>Directors of Westpac and Directors of Westpac’s wholly-owned subsidiaries (except wholly-owned subsidiaries listed on<br>a recognised stock exchange).<br>For the year ended 30 September 2024, the Group has insurance cover which, in certain circumstances, will provide<br>reimbursement for amounts which we have to pay under the indemnities set out above. That cover is subject to the<br>terms and conditions of the relevant insurance, including but not limited to the limit of indemnity provided by the<br>insurance. The insurance policies prohibit disclosure of the premium payable and the nature of the liabilities covered.<br>Share rights outstanding<br>As at the date of this report there are 4,291,291 share rights outstanding in relation to Westpac ordinary shares, held by<br>99 holders. The latest dates for exercise of the share rights range between 17 December 2024 and 1 October 2038.<br>Holders of outstanding share rights in relation to Westpac ordinary shares do not have any rights under the share rights<br>to participate in any share issue or interest of Westpac or any other body corporate.<br>Proceedings on behalf of Westpac<br>No application has been made and no proceedings have been brought or intervened in, on behalf of Westpac under<br>section 237 of the Corporations Act.
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234 WESTPAC GROUP 2024 ANNUAL REPORT<br>DIRECTORS' REPORT<br>Environmental disclosure<br>The Westpac Group’s environmental disclosure is summarised in this Annual Report and detailed in our 2024 Climate<br>Report and our 2024 Sustainability Index and Datasheet.<br>Additional disclosure on environmental matters includes our Climate Change Position Statement and Action Plan and<br>our Natural Capital Position Statement, which looks at how we are considering the risks and opportunities associated<br>with climate and nature.<br>We participate in a number of sustainability initiatives and standards including: the Global Reporting Initiative (GRI), the<br>Equator Principles, the Principles for Responsible Banking, the Net-Zero Banking Alliance, the United Nations Global<br>Compact, the RE100, the Sustainability Accounting Standards Board (SASB), International Sustainability Standards<br>Board (ISSB) Sustainability Disclosure Standards, the Taskforce on Nature-related Financial Disclosures (TNFD) and the<br>Australian Government Climate Active Carbon Neutral Standard for Organisations.<br>In Australia we report our scope 1 and 2 greenhouse gas emissions, energy consumption and production under the<br>National Greenhouse and Energy Reporting (NGER) scheme for the period 1 July through 30 June each year.<br>The Financial Markets Conduct Act 2013 (New Zealand) sets disclosure requirements for 'climate reporting entities',<br>including large, registered banks and large listed issuers, for accounting periods commencing from 1 January 2023.<br>The External Reporting Board (XRB) published Aotearoa New Zealand Climate Standards ('NZCS') for mandatory<br>climate-related disclosures.<br>Westpac is a climate reporting entity and is therefore required to prepare climate-related disclosures that comply with<br>NZCS. It has relied on the exemptions in clause 8 and clause 10 of the Financial Markets Conduct (Climate-related<br>Disclosures for Foreign Listed Issuers) Exemption Notice 2024. These exemptions allow Westpac to produce a climate<br>report only for the Group's New Zealand business other than Westpac New Zealand Limited and BT Funds Management<br>(NZ) Limited, each of which are climate reporting entities and prepare their own climate-related disclosures.<br>Westpac Group will also need to comply with the new climate related disclosure standard AASB S2 by FY26 and work is<br>underway to meet the new requirements.<br>We are not aware of the Group incurring any material liability (including for rectification costs) under any environmental<br>legislation. Westpac’s environment disclosures are available in the Creating value for the environment (pages 182-185)<br>section of this Annual Report, and in our 2024 Climate Report.<br>Westpac's climate-related disclosures for its New Zealand business for the year ended 30 September 2024 will be<br>published by 31 January 2025 and, when published, will be available at https://www.westpac.co.nz/about-us/legal-information-privacy/disclosure-statement/.<br>The climate reports prepared by Westpac New Zealand Limited and BT Funds Management (NZ) Limited<br>also contain information about the climate-related risks and opportunities of the Westpac Group's New<br>Zealand businesses. The Climate Statements for BT Funds Management (NZ) Limited's three schemes for<br>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<br>ended30 September 2024 will be published by 31 January 2025 and, when published, will be available at https://<br>www.westpac.co.nz/about-us/legal-information-privacy/disclosure-statements/.<br>Human rights disclosure<br>Our Human Rights Position Statement and 2026 Action Plan sets out Westpac Group's commitments and approach to<br>respecting and advancing human rights. It outlines the actions we are taking across our roles as a financial services<br>provider, lender, purchaser of goods and services, employer, and supporter of communities, as well as integrating our<br>position on child safeguarding.<br>Under the Modern Slavery Act 2018 (Cth) and Modern Slavery Act 2015 (UK), Westpac is required to prepare an annual<br>statement describing the risks of modern slavery across our operations and supply chain, and the actions taken to<br>address the risks. Westpac published a joint statement for FY23 on behalf of itself and certain reporting entities that<br>addressed the requirements of both Acts.<br>For more information, see the Westpac Group’s 2023 Modern Slavery Statement, published in March 2024.<br>We will release the Group’s FY24 Modern Slavery Statement in March 2025.<br>Rounding of amounts<br>Westpac is an entity to which ASIC Corporations Instrument 2016/191 dated 24 March 2016, relating to the rounding of<br>amounts in directors’ reports and financial reports, applies. Pursuant to this Instrument, amounts in this Directors’ report<br>and the accompanying financial report have been rounded to the nearest million dollars, unless indicated to the contrary.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 235<br>Political engagement<br>In line with Westpac policy, no cash donations were made to political parties during the financial year ended<br>30 September 2024.<br>Westpac does participate in political engagement activities assessed as directly relevant to the bank and or the<br>banking industry. Such activities include business observer programs attached to annual party conferences, policy<br>dialogue forums and other political engagement activities, such as speeches and events with industry participants.<br>Westpac attends these events to put forward its position on policy matters of importance to our customers, suppliers,<br>shareholders and our employees.<br>Political expenditure on these events in Australia for the financial year ended 30 September 2024 was $172,513. In<br>New Zealand, political expenditure for the financial year ended 30 September 2024 was NZ$ 3,000.<br>Directors’ meetings<br>The Westpac Banking Corporation Board met 15 times during the financial year ended 30 September 2024. In addition,<br>Directors attended Board strategy sessions and special purpose committee meetings during the financial year.<br>The following table includes:<br> • Names of the Directors that held office at any time during, or since the end of, the financial year.<br> • The number of Board and Board Committee meetings held during the financial year that each Director, as a member<br>of the Board or Board Committee, was eligible to attend, and the number of meetings attended by each Director.<br>The table excludes the attendance of those Directors who attended meetings of Board Committees of which they are<br>not a member.<br>Board Committees<br>Scheduled<br>meetings<br>Unscheduled<br>meetingsa Risk Audit Remuneration Nominations<br> & Governance<br>Heldb Attendedc Heldb Attendedc Heldb Attendedc Heldb Attendedc Heldb Attendedc Heldb Attendedc<br>Director<br>Steven Greggd 8 7 5 5 n/a n/a n/a n/a n/a n/a 3 3<br>Peter King 10 10 3 3 n/a n/a n/a n/a n/a n/a n/a n/a<br>Tim Burroughse 10 10 5 5 8 8 n/a n/a 4 4 n/a n/a<br>Nerida Caesarf 10 10 5 5 n/a n/a 5 5 n/a n/a n/a n/a<br>Audette Exelg 10 10 5 5 8 8 5 5 n/a n/a n/a n/a<br>Andy Maguireh 2 1 4 4 n/a n/a n/a n/a n/a n/a n/a n/a<br>Peter Nashi 10 10 5 5 8 8 5 5 n/a n/a 4 4<br>Nora Scheinkestelj 10 9 5 5 8 7 n/a n/a 8 7 n/a n/a<br>Margaret Sealek 10 10 5 5 n/a n/a n/a n/a 8 8 4 4<br>Michael Ullmerl 10 10 5 5 8 8 5 5 n/a n/a n/a n/a<br>Former Director<br>John McFarlanem 4 4 0 0 n/a n/a n/a n/a n/a n/a 1 1<br>Chris Lynchm 4 4 0 0 n/a n/a 1 1 4 4 n/a n/a<br>a. Out of cycle meetings normally called for a special purpose that do not form part of the Board’s forward agenda.<br>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<br>to attend as a member.<br>c. The number of Board Committee meetings that the Director attended as a member.<br>d. Appointed as a Director on 7 November 2023 and appointed Chairman of the Board and Chair of the Board Nominations & Governance<br>Committee following completion of the 2023 Annual General Meeting on 14 December 2023.<br>e. Member of the Board Risk Committee. Appointed as a member of the Board Remuneration Committee with the appointment taking effect<br>following completion of the 2023 Annual General Meeting on 14 December 2023.<br>f. Member of the Board Audit Committee.<br>g. Chair of the Board Risk Committee and member of the Board Audit Committee.<br>h. Appointed as a Director on 15 July 2024.<br>i. Chair of the Board Audit Committee and member of the Board Risk Committee and Board Nominations & Governance Committee.<br>j. Chair of the Board Remuneration Committee and member of the Board Risk Committee.<br>k. Member of the Board Nominations & Governance Committee and Board Remuneration Committee.<br>l. Member of the Board Audit Committee and the Board Risk Committee.<br>m. Retired as a Director following the completion of the 2023 Annual General Meeting on 14 December 2023.
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236 WESTPAC GROUP 2024 ANNUAL REPORT<br>DIRECTORS' REPORT<br>Remuneration Report<br>LETTER FROM<br>THE CHAIR<br>of the Board Remuneration<br>Committee<br>Dear shareholders,<br>Group performance<br>In 2024, Westpac made good progress on all our key<br>priorities. We delivered against our financial targets in a<br>competitive market while maintaining a strong balance<br>sheet and capital position. Our investment in customer<br>experience and our focus on supporting customers<br>continued. This was reflected in above system household<br>and business deposit growth and improved customer<br>advocacy metrics, albeit not at the level we aspire to.<br>We achieved growth in our key markets while also<br>managing margins with net interest margin (NIM),<br>excluding Notable Items, down 1 basis point and above<br>target. Expenses were higher than target, mostly due to<br>the wind down of the RAMS business and technology<br>costs. The commencement of the UNITE program, our<br>business led technology simplification program, will be<br>critical in reducing the cost of complexity across the<br>Group and, in turn, reducing the cost to income gap to<br>peers over time.<br>Impairments were lower than target due to better<br>than expected key economic indicators and outcomes.<br>Credit quality remained resilient, despite a rise in<br>stressed exposures.<br>We delivered value to shareholders with dividends at the<br>upper end of the payout range, the announcement of<br>$2 billion in on market share buybacks and a 1H24 special<br>dividend of 15 cents per share.<br>Importantly, we delivered a significant uplift in risk<br>management, completing the three year Customer<br>Outcomes and Risk Excellence (CORE) program. Westpac<br>delivered all activities under the CORE program within the<br>timeframes committed to. All activities and deliverables<br>were assessed and independently reviewed and confirmed<br>as complete by Promontory Australia. In recognition of<br>this progress, APRA reduced the operational risk capital<br>overlay by $500 million.<br>We continue this year in a transition phase with<br>independent reviews by Promontory Australia, to ensure<br>that our risk management capabilities are embedded as<br>part of business as usual. This work is on track to complete<br>by end of calendar year 2024.<br>Executive performance and remuneration outcomes<br>Having introduced our new remuneration framework<br>for 2024, including the addition of a restricted rights<br>component in the Long Term Variable Reward (LTVR)<br>plan, the main focus for the Remuneration Committee<br>and Board this year was on assessing performance to<br>determine Short Term Variable Reward (STVR) outcomes.<br>The 2024 STVR Scorecard focused on five key priority<br>areas: Financial performance, Risk management, Strategic<br>execution, Serving customers and People. Details of the<br>assessment are shown in Section 3.3.<br>The Board assessed Group performance at 101% of target<br>and the CEO's STVR outcome at 104% of his target<br>opportunity and 83% of maximum opportunity. This was<br>in recognition of Peter King's leadership in completing the<br>CORE program and setting up the organisation to execute<br>the UNITE program. His STVR will be paid 50% in cash and<br>50% will be deferred over one and two years.<br>For Group Executives, STVR outcomes ranged from<br>87% to 110% of target opportunity or 70% to 88%<br>of maximum opportunity, reflecting the differentiation<br>of performance outcomes for their respective divisions<br>and individual performance, including assessments of<br>leadership behaviours.<br>The 2021 LTVR was tested against a relative TSR measure<br>compared to our financial services comparator group.<br>The Group delivered a TSR of 113% over the 4 year<br>performance period resulting in a 50th percentile ranking<br>relative to the comparator group. As a result, the CEO<br>and all eligible Group Executives received 50% of their<br>award. It is pleasing that improved performance has led to<br>a return to vesting of the LTVR.<br>The Board granted the incoming CEO and all Group<br>Executives their allocation of 2025 LTVR restricted rights<br>under the revised LTVR plan, having completed the pre-grant assessment and assessed our risk culture maturity as<br>having been maintained.<br>CEO transition<br>In September 2024, we announced that Anthony Miller,<br>currently Chief Executive, Business & Wealth, will be<br>appointed as the Managing Director & CEO commencing<br>16 December 2024. Anthony will succeed Peter King who<br>will retire after a 30 year career at Westpac, including five<br>years as CEO.<br>Anthony has a vision to return Westpac to a position of<br>leadership and build on the foundational work of the past<br>five years. As an internal appointment Anthony knows<br>what needs to be done and will move at pace, ensuring<br>a seamless transition.<br>Anthony's remuneration package will be the same as the<br>current CEO's remuneration package. Upon retirement,<br>Peter will receive remuneration in line with his contract<br>and relevant variable reward plans.<br>Please refer to the ASX release dated 9 September<br>2024 for further details. The 2025 Remuneration Report<br>will contain further details of Anthony's and Peter's<br>remuneration for 2025.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 237<br>Remuneration for our people<br>Risk and remuneration<br>In 2025, we will increase the capped variable reward<br>opportunity for home finance manager roles from 50% to<br>80% of fixed pay in response to the change made by CBA<br>and NAB. We need to remain competitive in our markets,<br>attract talent and reward for outperformance. Before<br>making this decision, we carefully considered our risk and<br>conduct management maturity and controls framework.<br>Good risk management, including embedded controls and<br>processes to manage conduct risk, is central to our culture<br>and a fundamental consideration in how we structure and<br>manage remuneration and reward. We continue to work<br>hard to ensure that our controls are appropriate, and that<br>we can manage and keep our people and customers safe.<br>We continue to look for ways to reinforce our risk,<br>compliance and conduct expectations. This year, while<br>ensuring that appropriate action is taken when required<br>to adjust remuneration for adverse outcomes, we looked<br>to enhance how we recognise great risk behaviours.<br>We provide a platform for our people to recognise their<br>peers when they make a positive impact on Westpac<br>and our customers through their risk management and<br>risk behaviours. Our people recorded nearly 115,000<br>recognition actions this year and Board Directors also<br>personally recognised over 60 people.<br>Enterprise Agreement<br>We were pleased to conclude a new Enterprise Agreement<br>with our people this year, subject to Fair Work<br>Commission approval. We listened to and consulted with<br>our people to put together a comprehensive range of<br>benefits and arrangements that builds on our current<br>Enterprise Agreement. 87% of employees who voted<br>supported the proposal. We thank the Finance Sector<br>Union for their constructive engagement.<br>Gender pay<br>We are committed to paying our people fairly and<br>equitably. Our overall average difference (by level,<br>weighted by number of people) for gender pay equity<br>is less than 2%. Where we identify a pay difference that<br>cannot be explained by individual skills, experience or<br>performance, we take action. We have more work to do<br>on our gender pay gap. As reported to the Workplace<br>Gender Equality Agency, we have a median gender pay<br>gap of 29.3%. This is the difference between the median<br>total remuneration of men compared to that of women.<br>We have strategies to increase women's representation in<br>key cohorts and we have set clear objectives to reduce the<br>gap. For more information on this gap and our strategies,<br>please refer to the 'Creating value for our people' section<br>of the Annual Report.<br>Looking ahead<br>2025 LTVR performance rights comparator group<br>During the year, we reviewed the relative TSR comparator<br>group for the LTVR performance rights taking into<br>account market practice, external feedback and our<br>assessment of the comparator group’s continued<br>relevance. We decided to make two changes for the 2025<br>LTVR performance rights.<br>First, we will reduce the current comparator group to<br>a streamlined group of five companies that are focused<br>on the banking market in Australia. The five companies<br>in the banking comparator group will be ANZ, Bank of<br>Queensland, Bendigo & Adelaide Bank, CBA and NAB.<br>Secondly, we will introduce an additional general<br>ASX comparator group comprising the 20 largest<br>companies on the ASX by market capitalisation, excluding<br>resource companies, to reflect a broader benchmark of<br>performance. The companies will be determined at the<br>start of each performance period. The LTVR performance<br>rights will be tested against the two comparator groups,<br>equally weighted and tested independently.<br>2025 total target remuneration<br>The Board reviewed total target remuneration packages<br>for the Executive Team against market benchmarks.<br>Reflecting market comparisons and role accountabilities,<br>we awarded increases for four Group Executives<br>for 2025, ranging from approximately 2% to 10%.<br>Further information will be provided in the 2025<br>Remuneration Report.<br>We hope you find the report informative and always<br>welcome your feedback.<br>Nora Scheinkestel<br>CHAIR<br>BOARD REMUNERATION COMMITTEE<br>CONTENTS<br>1. Snapshot of remuneration for 2024 238 5. Further detail on executive<br>remuneration arrangements<br>249<br>2. Key Management Personnel 240 6. Non-executive Director remuneration 253<br>3. 2024 remuneration outcomes and alignment<br>to performance<br>241 7. Statutory remuneration details 254<br>4. Remuneration governance 247
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238 WESTPAC GROUP 2024 ANNUAL REPORT<br>DIRECTORS' REPORT<br>1. Snapshot of remuneration for 2024<br>OUR REMUNERATION STRATEGY AND PRINCIPLES<br>Our remuneration strategy is to attract and retain talented employees. We reward them for achieving high performance<br>and delivering superior long term results for our customers and shareholders.<br>Promote our<br>purpose, values<br>and behaviours<br>Align with our<br>strategy and<br>create sustainable<br>shareholder value<br>Offer market<br>competitive and<br>equitable pay<br>Reward financial and<br>non-financial performance<br>including customer outcomes<br>and risk excellence<br>Reinforce our risk<br>and conduct<br>expectations<br>OUR EXECUTIVE REMUNERATION FRAMEWORK<br>A revised executive remuneration framework was introduced effective from 1 October 2023. It is designed to align with<br>our strategy, market practice, investor expectations and compliance with CPS 511.<br>Component Purpose Year 1 Year 2 Year 3 Year 4 Year 5 Year 6<br>FIXED<br>REMUNERATION<br>100% cash (including<br>superannuation)<br>Provide market<br>competitive<br>remuneration<br>reflecting role scope<br>and accountabilities<br>Salary and<br>superannuation<br> Vesting point<br>Performance assessment and grant<br>SHORT TERM<br>VARIABLE REWARD<br>50% cash<br>50% restricted shares<br>Reward executives<br>for delivering financial<br>and non-financial<br>annual objectives<br>Performance<br>assessed<br>against a<br>balanced<br>scorecard<br>100% of cash is paid at Year 1<br>50% restricted shares vesting at Year 2<br>50% restricted shares vesting at Year 3<br>Pre-grant assessment Pre-vest assessment<br>LONG TERM<br>VARIABLE REWARD<br>50% restricted rights<br>Reward executives for<br>sustainable risk culture<br>and for creating<br>shareholder value over<br>the long term<br>Performance assessed against risk culture at grant and at Year 4 CEO: 50% vesting<br>at Year 4 and 50%<br>at Year 5<br>Group Executives:<br>100% vesting at<br>Year 4<br>Grant Performance assessment<br>LONG TERM<br>VARIABLE REWARD<br>50% performance rights<br>Reward executives for<br>creating shareholder<br>value over the long<br>term<br>Performance assessed against relative total shareholder return (TSR)<br>at Year 4<br>CEO: 100% vesting at Year 6<br>Group Executives: 100% vesting at Year 5<br>cash shares shares<br>rights<br>rights rights<br>rights<br>Minimum shareholding requirement is equivalent to two times fixed remuneration for the CEO and one times fixed<br>remuneration for the Group Executives. Refer to Section 5.5 for further details.<br>REMUNERATION MIX<br>The remuneration mix is designed with a significant proportion of variable reward at risk and based on performance.<br>The graphic below sets out the maximum remuneration mix1<br> showing the relative proportion of each component in the<br>executive remuneration framework as a percentage of total maximum opportunity. Refer to Section 5 for further details<br>of executive remuneration arrangements.<br>Component Purpose Year 1 Year 2 Year 3 Year 4 Year 5 Year 6<br>FIXED<br>REMUNERATION<br>100% cash (including<br>superannuation)<br>Provide market<br>competitive<br>remuneration<br>reflecting role scope<br>and accountabilities<br>Salary and<br>superannuation<br> Vesting point<br>Performance assessment and grant<br>SHORT TERM<br>VARIABLE REWARD<br>50% cash<br>50% restricted shares<br>Reward executives<br>for delivering financial<br>and non-financial<br>annual objectives<br>Performance<br>assessed<br>against a<br>balanced<br>scorecard<br>50% restricted shares vesting at<br>Year 2<br>50% restricted shares vesting at<br>Year 3<br>Pre-grant assessment Pre-vest assessment<br>LONG TERM<br>VARIABLE REWARD<br>50% restricted rights<br>Reward executives for<br>sustainable risk culture<br>and for creating<br>shareholder value over<br>the long term<br>Performance assessed against risk culture at grant and at Year 4 CEO: 50% vesting<br>at Year 4 and 50%<br>at Year 5<br>Group Executives:<br>100% vesting at<br>Year 4<br>Grant Performance assessment<br>LONG TERM<br>VARIABLE REWARD<br>50% performance rights<br>Reward executives for<br>creating shareholder<br>value over the long<br>term<br>Performance assessed against relative total shareholder return (TSR)<br>at Year 4<br>CEO: 100% vesting at Year 6<br>Group Executives: 100% vesting at Year 5<br>FIXED<br>REMUNERATION<br>30%<br>STVR<br>28%<br>LTVR<br>RESTRICTED RIGHTS<br>21%<br>LTVR<br>PERFORMANCE RIGHTS<br>21%<br>94% of fixed<br>remuneration<br>44% cash 56% equity<br>70% of fixed<br>remuneration<br>70% of fixed<br>remuneration<br>At risk performance based variable remuneration (70%)<br>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<br>Group Executive, Human Resources) are on a similar maximum remuneration mix comprised of 33% fixed remuneration, 31% maximum STVR,<br>18% LTVR restricted rights and 18% LTVR performance rights. The remaining 3 roles will transition to the above remuneration mix over time.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 239<br>PERFORMANCE SNAPSHOT<br>Financial<br>performance<br>$7,113m NPAT<br>Excluding Notable Items.<br>11.21% ROTE<br>Excluding Notable Items.<br>Risk<br>management<br>100% CORE completion<br>Integrated Plan activities and<br>deliverables assessed and closed.<br>$500m capital release<br>Reduction to the $1bn total operational<br>risk capital overlay.<br>Strategic<br>execution<br>Significant<br>transformation delivery<br>Significant progress on transaction and<br>payments capability, mobilised UNITE.<br>$9.6bn sustainable<br>finance lending<br>And $4.9bn in bond facilitation.<br>Over 150 customers engaged on<br>transition plans.<br>Serving<br>customers<br>+1 in Consumer NPS<br>Relative to the major bank<br>average increase.<br>+1 in Business NPS<br>Relative to the major bank<br>average increase.<br>People 80 OHI (+5)<br>Up from 75 in 2023. Above top quartile<br>globally (76).<br>49% women in<br>senior leadership<br>In line with target of 50% +/- 2.<br>Performance achieved Target<br>Further detail on performance against all measures of the Group STVR Scorecard is set out in Section 3.3.<br>REMUNERATION OUTCOMES<br>104%<br>CEO's 2024 STVR<br>outcome<br>as a % of target,<br>or 83% as a % of maximum.<br>87% to 110%<br>Group Executive<br>STVR outcomes<br>Range of STVR outcomes<br>as a % of target,<br>or 70% to 88% as % of maximum.<br>50%<br>LTVR vesting<br>outcome<br>2021 LTVR vesting outcome.<br>Reflects a TSR of 113% over the four<br>year performance period.
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240 WESTPAC GROUP 2024 ANNUAL REPORT<br>DIRECTORS' REPORT<br>2. Key Management Personnel<br>The remuneration of KMP is disclosed in this Report. Disclosures related to former KMP that ceased prior to 1 October<br>2023 are included in the 2023 Remuneration Report. KMP are defined as those persons that have the authority and<br>responsibility for planning, directing and controlling the activities of an entity, directly or indirectly, including any director<br>(whether executive or otherwise) of that entity.<br>Name Position Term as KMP<br>Managing Director & Chief Executive Officer<br>Peter King Managing Director & Chief Executive Officer Full Year<br>Group Executivesa<br>Scott Collary Chief Information Officer Full Year<br>Nell Hutton Chief Executive, Westpac Institutional Bank Full Year<br>Carolyn McCann Group Executive, Customer & Corporate Services Full Year<br>Catherine McGrath Chief Executive Officer, Westpac New Zealand Full Year<br>Anthony Miller Chief Executive, Business & Wealth Full Year<br>Christine Parker Group Executive, Human Resources Full Year<br>Michael Rowland Chief Financial Officer Full Year<br>Jason Yetton Chief Executive, Consumer Full Year<br>Ryan Zanin Chief Risk Officer Full Year<br>Current Non-executive Directors<br>Steven Gregg Chair Commenced as Non-executive Director and Chair-Elect on<br>7 November 2023 and as Chair on 14 December 2023<br>following completion of the 2023 Annual General Meeting<br>Tim Burroughs Director Full Year<br>Nerida Caesar Director Full Year<br>Audette Exel AO Director Full Year<br>Andy Maguire Director Commenced on 15 July 2024<br>Peter Nash Director Full Year<br>Nora Scheinkestel Director Full Year<br>Margaret Seale Director Full Year<br>Michael Ullmer AO Director Full Year<br>Former Non-executive Directors<br>John McFarlane Chair Retired on 14 December 2023 following completion of the<br>2023 Annual General Meeting<br>Chris Lynch Director Retired on 14 December 2023 following completion of the<br>2023 Annual General Meeting<br>a. References to Group Executives in this Report refer to Group Executives who are in KMP roles.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 241<br>3. 2024 remuneration outcomes and alignment to performance<br>3.1. Group performance<br>The table below summarises variable reward outcomes and Group performance over the last five years.<br>Years ended 30 September<br>2024 2023 2022 2021 2020<br>CEO STVR outcome (% of maximum)a 83% 60% 52% 47% 0%<br>CEO STVR outcome (% of target)b 104% 90% 78% 70% 0%<br>Average Group Executive STVR outcome (% of maximum)a 82% 60% 53% 48% 0%<br>Average Group Executive STVR outcome (% of target)b 102% 89% 79% 73% 0%<br>LTVR outcome (% vested) 50% 0% 0% 0% 0%<br>Net profit after tax attributable to owners of WBC ($m) 6,990 7,195 5,694 5,458 2,290<br>Net profit after tax (excluding Notable Items) ($m)c 7,113 7,368 6,568 6,953 5,227<br>Return on tangible equity (ROTE) (statutory basis) 11.01% 11.39% 9.17% 8.82% 3.92%<br>Return on tangible equity (ROTE) (excluding Notable Items)c 11.21% 11.67% 10.58% 11.23% 8.95%<br>TSR – four years 113.10% (9.27%) (11.15%) (1.95%) (27.28%)<br>TSR – five years 34.24% (4.05%) (13.82%) 10.34% (27.87%)<br>Total ordinary dividend (cents per share) 151 142 125 118 31<br>Special dividend (cents per share) 15 0 0 0 0<br>Share price – close $31.72 $21.15 $20.64 $26.00 $16.84<br>a. From 2024, maximum STVR opportunity was reduced from 150% to 125% of target STVR.<br>b. From 2024, target STVR opportunity was reduced from approximately 100% to 75% of fixed remuneration for business roles, and maintained<br>at 75% for functional roles.<br>c. Refer to the 'Additional information for non-AAS financial measures' section of the Annual Report for a reconciliation of this measure.<br>3.2. 2021 LTVR vesting outcome<br>We tested the 2021 LTVR on 1 October 20241<br>.. Our TSR for the 4 year performance period was 113% resulting in a 50th<br>percentile ranking relative to the comparator group. This resulted in 50% of the 2021 LTVR award vesting.<br>Performance range<br>Performance<br>hurdle<br>Performance<br>start date Test date Threshold Maximum Outcome<br>%<br>Vested<br>%<br>Lapsed<br>TSR (100% of<br>award)<br>1 October<br>2020<br>1 October<br>2024<br>Percentile ranking is<br>at the median<br>Percentile ranking is at the<br>75th percentile or higher<br>50th percentile ranking relative<br>to the comparator group 50% 50%<br>NPAT (EXCLUDING NOTABLE ITEMS) AND<br>CEO STVR OUTCOME<br>NPAT (excluding Notable Items) ($m)<br>CEO STVR (%)<br>NPAT (excluding Notable Items) ($m)<br>CEO STVR outcome (% of target)<br>CEO STVR outcome (% of maximum)<br>2020 2021 2022 2023 2024<br>0<br>2,000<br>4,000<br>6,000<br>8,000<br>0<br>40<br>80<br>120<br>ROTE (EXCLUDING NOTABLE ITEMS) AND<br>CEO STVR OUTCOME<br>ROTE<br>(excluding Notable Items) (%)<br>CEO STVR (%)<br>ROTE (excluding Notable Items)<br>CEO STVR outcome (% of target)<br>CEO STVR outcome (% of maximum)<br>2020 2021 2022 2023 2024<br>0<br>4<br>8<br>12<br>0<br>40<br>80<br>120<br>TSR<br>TSR (%)<br>WBC Peer 1 Peer 2 Peer 3<br>2021 2022 2023 2024<br>0<br>80<br>160<br>40<br>120<br>TSR AND LTVR VESTING OUTCOME<br>(percentile rank over the prior 4 year period)<br>TSR over<br>4<br>years (percentile rank)<br>LTVR award<br>(% vested)<br>TSR over 4 years (percentile rank)<br>LTVR award (% vested)<br>2020 2021 2022 2023 2024<br>0<br>40<br>80<br>20<br>60<br>100<br>0<br>40<br>80<br>20<br>60<br>100<br>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,<br>Carolyn McCann and Jason Yetton for changes to their total target remuneration. The awards were granted on the same terms and conditions<br>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.
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242 WESTPAC GROUP 2024 ANNUAL REPORT<br>DIRECTORS' REPORT<br>3.3. 2024 Group STVR Scorecard<br>The Group’s priorities are set out in the Group STVR Scorecard, which forms part of the CEO’s Scorecard. Common<br>elements appear in Group Executive Scorecards together with individual objectives reflecting Divisional measures.<br>A summary of the performance assessment is provided below and is designed to be read over two pages. Where<br>appropriate, individual measures have been assessed against a 'Threshold', 'Target' and 'Stretch' rating scale as outlined<br>in the key. Each priority has also been assessed in totality using the same key.<br>Key priority Measure Outcome Outcome commentary<br>Key:<br>Threshold<br>50-99%<br>Stretch<br>101-125%<br>Target<br> 100% Performance assessment<br>Financial<br>performance<br>(45%)<br>Deliver current year<br>financial performance:<br> • Net profit after tax (excluding<br>Notable Items)a<br>-5% $7,013m +5% $7,113m result was above target. The only Notable<br>Items in 2024 were from the timing impact of hedge<br>accounting items.<br>We delivered our financial targets in a competitive market. NPAT (excluding Notable Items) was $7,113m which was above target. Pre-provision<br>profit was $10,819m which was below target. ROTE (excluding Notable Items) was 11.21% which was above target.<br>We achieved growth in our key markets while also managing margins with net interest margin (NIM), excluding Notable Items, down 1 basis<br>point and above target. Expenses were higher than target, mostly due to the wind down of the RAMS business and technology costs. The<br>commencement of the UNITE program, our business led technology simplification program, will be critical in reducing the cost of complexity<br>across the Group and, in turn, reducing the cost to income gap to peers over time.<br>Impairments were lower than targeted due to key economic indicators being better than forecast and lower individual provisions. Credit quality<br>remained resilient, notwithstanding a rise in stressed exposures.<br>We assessed Financial performance at just above target.<br> • Pre-provision profit (excluding<br>Notable Items)a<br>-5% $10,949m +5%<br>$10,819m result was below target.<br> • Return on tangible equity<br>(excluding Notable Items)a<br>-5% 11.0% +5%<br>11.21% result was above target.<br>Risk<br>management<br>(20%)<br>Deliver the Customer Outcomes and<br>Risk Excellence (CORE) program and<br>embed and sustain improvements<br>in risk management, capability<br>and culture<br>- Target -<br>All activities and deliverables in the CORE<br>Integrated Plan were assessed and closed by<br>Promontory Australia.<br>Practices and improvements in risk management,<br>governance and culture sustained post end of the<br>CORE program evidenced by Promontory Australia<br>reports and internal measures.<br>Focus remained on uplifting our risk management with achievement of the major milestone of the completion of the CORE program, on time and<br>assessed by Promontory Australia as complete. APRA recognised the progress and improvements we have made and partially reduced the level of<br>our operational risk capital overlay from $1 billion to $500 million.<br>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<br>program will be critical to further reducing the risk of complexity across the Group.<br>We assessed Risk management at target.<br>Strategic<br>execution<br>(15%)<br>Deliver the significant change<br>initiatives to transform the bank<br>- Target -<br>Delivered transformation change initiatives in line<br>with targets. Significant delivery of payments<br>capability including delivery of PayTo, international<br>payment processor migration, corporate cash<br>management platform and improving payments<br>for merchants. Mobilised UNITE technology<br>simplification plan.<br>We made good progress across the Group’s transformation agenda. Highlights during the year included mobilising UNITE, tangible delivery across<br>our payments and transaction banking capability and extending scam protection for our customers.<br>We made demonstrable progress in improving our capabilities including PayTo for Billers, extending PayTo for business customers, launching<br>Pay with Points, launching EFTPOS Flex, extending EFTPOS Air coverage, tracking well to deliver international payment processor migration and<br>progressing well in the implementation of the corporate cash management platform (Westpac One Core program in Westpac Institutional Bank).<br>The UNITE program comprises circa 60 initiatives of which 39 have commenced and 2 have been completed as at 30 September 2024. On<br>delivering our climate transition plan, we finished the year with 13 targets in all 9 emission-intensive sectors under the NZBA framework. We have<br>focused on operationalising our sector targets. We engaged with over 150 institutional customers on their climate transition plans and found that<br>84% had a public transition plan.<br>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<br>2030 targets.<br>We assessed Strategic execution at above target.<br>Deliver the climate transition plan<br>- Target - 2030 targets set in 9 NZBA carbon intensive sectors.<br>Engaged over 150 institutional customers on their<br>climate transition plans. Above target on sustainable<br>finance measures for the year.<br>Serving<br>customers<br>(10%)<br>Improve customer advocacy of<br>Westpac Group (measured in<br>points relative to major bank<br>average change)<br>0 +2 +4<br>Consumer NPS was +1 relative to the major bank<br>average change, which was below our target.<br>Our Australian Consumer NPS score increased over the year but not at the pace we want. We have seen improvements in product and channel<br>NPS, however these are yet to flow through to the overall brand NPS measures.<br>In Australian Business, our score increased over the year and achieved target. We have more work to do on customer journeys and servicing<br>customers. Our Institutional customers remain strong advocates. WNZL Consumer NPS remains #5 and grew in line with the market average.<br>We have progressed in other areas of customer service such as progressing well on consolidating 22 customer verification processes into a single<br>digital identification solution, being recognised by Forrester as the #1 mobile banking app (second year in a row) and improving security features,<br>such as SafeCall and SaferPay. Customer losses from scams are down almost 30% year-on-year. Our average customer complaint resolution time is<br>stable with 93% resolved by our people in the moment without the need for escalation.<br>From a market share perspective, we have maintained momentum with growth across the business. We grew in deposits, critical to customer<br>primacy and relationship banking. Growth in Australian mortgages was 0.8x of ADI financial system growth, which was below target. Growth in<br>Australian business lending was 1.3x of ADI financial system growth, which was at stretch.<br>We assessed Serving customers at below target.<br>0 +1 +2 Business NPS was +1 relative to the major bank<br>average change, which was in line with our target.<br>Grow market share in key segments<br>compared to system growth<br>0.8x 1.0x 1.2x<br>Growth in Australian mortgages was 0.8x of ADI<br>financial system growth, which was below target.<br>Growth in Australian business lending was 1.3x of ADI<br>financial system growth, which was at stretch.<br>People<br>(10%)<br>Improve organisational health as<br>measured through the Organisational<br>Health Index (OHI)<br>75 76 77<br>Westpac Group OHI was 80, which was at stretch and<br>up from 75 last year.<br>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,<br>which now sees us in the top quartile globally. We improved OHI in all large divisions.<br>We continue to develop our leaders and enhance our executive bench strength. All Group Executive and critical General Manager roles were<br>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.<br>We assessed People at above target.<br>OVERALL GROUP STVR SCORECARD PERFORMANCE ASSESSMENT 101% OF TARGET<br>81% OF MAXIMUM<br>The STVR Scorecard has a modifier that allows the Board to take into account risk and reputation, people management and any other matters as<br>determined by the Board. Refer to Section 3.5 for further detail on individual outcomes.<br>a. Refer to the 'Additional information for non-AAS financial measures' section of the Annual Report for a reconciliation of this measure.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 243<br>KEY CHANGES TO THE 2024 GROUP STVR SCORECARD<br>Given the progress on the Customer Outcomes and Risk Excellence program, we reviewed the Scorecard weightings<br>for 2024. We decided to reduce the weighting to Risk management by 10% and increase the weighting to Financial<br>performance and Strategic execution by 5% each.<br>Key priority Measure Outcome Outcome commentary<br>Key:<br>Threshold<br>50-99%<br>Stretch<br>101-125%<br>Target<br> 100% Performance assessment<br>Financial<br>performance<br>(45%)<br>Deliver current year<br>financial performance:<br> • Net profit after tax (excluding<br>Notable Items)<br>a<br>-5% $7,013m +5% $7,113m result was above target. The only Notable<br>Items in 2024 were from the timing impact of hedge<br>accounting items.<br>We delivered our financial targets in a competitive market. NPAT (excluding Notable Items) was $7,113m which was above target. Pre-provision<br>profit was $10,819m which was below target. ROTE (excluding Notable Items) was 11.21% which was above target.<br>We achieved growth in our key markets while also managing margins with net interest margin (NIM), excluding Notable Items, down 1 basis<br>point and above target. Expenses were higher than target, mostly due to the wind down of the RAMS business and technology costs. The<br>commencement of the UNITE program, our business led technology simplification program, will be critical in reducing the cost of complexity<br>across the Group and, in turn, reducing the cost to income gap to peers over time.<br>Impairments were lower than targeted due to key economic indicators being better than forecast and lower individual provisions. Credit quality<br>remained resilient, notwithstanding a rise in stressed exposures.<br>We assessed Financial performance at just above target.<br> • Pre-provision profit (excluding<br>Notable Items)<br>a<br>-5% $10,949m +5%<br>$10,819m result was below target.<br> • Return on tangible equity<br>(excluding Notable Items)<br>a<br>-5% 11.0% +5%<br>11.21% result was above target.<br>Risk<br>management<br>(20%)<br>Deliver the Customer Outcomes and<br>Risk Excellence (CORE) program and<br>embed and sustain improvements<br>in risk management, capability<br>and culture<br>- Target -<br>All activities and deliverables in the CORE<br>Integrated Plan were assessed and closed by<br>Promontory Australia.<br>Practices and improvements in risk management,<br>governance and culture sustained post end of the<br>CORE program evidenced by Promontory Australia<br>reports and internal measures.<br>Focus remained on uplifting our risk management with achievement of the major milestone of the completion of the CORE program, on time and<br>assessed by Promontory Australia as complete. APRA recognised the progress and improvements we have made and partially reduced the level of<br>our operational risk capital overlay from $1 billion to $500 million.<br>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<br>program will be critical to further reducing the risk of complexity across the Group.<br>We assessed Risk management at target.<br>Strategic<br>execution<br>(15%)<br>Deliver the significant change<br>initiatives to transform the bank<br>- Target -<br>Delivered transformation change initiatives in line<br>with targets. Significant delivery of payments<br>capability including delivery of PayTo, international<br>payment processor migration, corporate cash<br>management platform and improving payments<br>for merchants. Mobilised UNITE technology<br>simplification plan.<br>We made good progress across the Group’s transformation agenda. Highlights during the year included mobilising UNITE, tangible delivery across<br>our payments and transaction banking capability and extending scam protection for our customers.<br>We made demonstrable progress in improving our capabilities including PayTo for Billers, extending PayTo for business customers, launching<br>Pay with Points, launching EFTPOS Flex, extending EFTPOS Air coverage, tracking well to deliver international payment processor migration and<br>progressing well in the implementation of the corporate cash management platform (Westpac One Core program in Westpac Institutional Bank).<br>The UNITE program comprises circa 60 initiatives of which 39 have commenced and 2 have been completed as at 30 September 2024. On<br>delivering our climate transition plan, we finished the year with 13 targets in all 9 emission-intensive sectors under the NZBA framework. We have<br>focused on operationalising our sector targets. We engaged with over 150 institutional customers on their climate transition plans and found that<br>84% had a public transition plan.<br>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<br>2030 targets.<br>We assessed Strategic execution at above target.<br>Deliver the climate transition plan<br>- Target - 2030 targets set in 9 NZBA carbon intensive sectors.<br>Engaged over 150 institutional customers on their<br>climate transition plans. Above target on sustainable<br>finance measures for the year.<br>Serving<br>customers<br>(10%)<br>Improve customer advocacy of<br>Westpac Group (measured in<br>points relative to major bank<br>average change)<br>0 +2 +4<br>Consumer NPS was +1 relative to the major bank<br>average change, which was below our target.<br>Our Australian Consumer NPS score increased over the year but not at the pace we want. We have seen improvements in product and channel<br>NPS, however these are yet to flow through to the overall brand NPS measures.<br>In Australian Business, our score increased over the year and achieved target. We have more work to do on customer journeys and servicing<br>customers. Our Institutional customers remain strong advocates. WNZL Consumer NPS remains #5 and grew in line with the market average.<br>We have progressed in other areas of customer service such as progressing well on consolidating 22 customer verification processes into a single<br>digital identification solution, being recognised by Forrester as the #1 mobile banking app (second year in a row) and improving security features,<br>such as SafeCall and SaferPay. Customer losses from scams are down almost 30% year-on-year. Our average customer complaint resolution time is<br>stable with 93% resolved by our people in the moment without the need for escalation.<br>From a market share perspective, we have maintained momentum with growth across the business. We grew in deposits, critical to customer<br>primacy and relationship banking. Growth in Australian mortgages was 0.8x of ADI financial system growth, which was below target. Growth in<br>Australian business lending was 1.3x of ADI financial system growth, which was at stretch.<br>We assessed Serving customers at below target.<br>0 +1 +2 Business NPS was +1 relative to the major bank<br>average change, which was in line with our target.<br>Grow market share in key segments<br>compared to system growth<br>0.8x 1.0x 1.2x<br>Growth in Australian mortgages was 0.8x of ADI<br>financial system growth, which was below target.<br>Growth in Australian business lending was 1.3x of ADI<br>financial system growth, which was at stretch.<br>People<br>(10%)<br>Improve organisational health as<br>measured through the Organisational<br>Health Index (OHI)<br>75 76 77<br>Westpac Group OHI was 80, which was at stretch and<br>up from 75 last year.<br>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,<br>which now sees us in the top quartile globally. We improved OHI in all large divisions.<br>We continue to develop our leaders and enhance our executive bench strength. All Group Executive and critical General Manager roles were<br>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.<br>We assessed People at above target.<br>OVERALL GROUP STVR SCORECARD PERFORMANCE ASSESSMENT 101% OF TARGET<br>81% OF MAXIMUM<br>The STVR Scorecard has a modifier that allows the Board to take into account risk and reputation, people management and any other matters as<br>determined by the Board. Refer to Section 3.5 for further detail on individual outcomes.<br>a. Refer to the 'Additional information for non-AAS financial measures' section of the Annual Report for a reconciliation of this measure.
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244 WESTPAC GROUP 2024 ANNUAL REPORT<br>DIRECTORS' REPORT<br>3.4. Total realised remuneration – Chief Executive Officer and Group Executives<br>The table below details the actual remuneration paid and equity1<br> that vested or lapsed in 2024 and 2023 related to<br>KMP roles. It does not include termination payments and buy out awards. This table is not prepared in accordance with<br>Australian Accounting Standards which differs from the disclosure in Section 7.<br>Fixed<br>remuneration<br>Cash<br>STVR payments<br>Vesting of prior<br>year deferred<br>STVR awards<br>Vesting of<br>prior year<br>LTVR awards<br>Total realised<br>remuneration<br>Prior year<br>LTVR lapsed<br>Name $ $ $ $ $ $<br>Managing Director & Chief Executive Officer<br>Peter King, Managing Director & Chief Executive Officer<br>2024 2,502,920 975,000 1,442,898 2,990,401 7,911,219 3,314,178<br>2023 2,507,497 1,125,000 861,964 - 4,494,461 1,878,389<br>Group Executives<br>Scott Collary, Chief Information Officera<br>2024 1,293,976 508,500 706,444 1,927,412 4,436,332 1,927,412<br>2023 1,234,741 508,500 458,147 - 2,201,388 -<br>Nell Hutton, Chief Executive, Westpac Institutional Bank<br>2024 1,278,338 502,000 - - 1,780,338 -<br>2023 --------------------- Not a KMP in 2023 ---------------------<br>Carolyn McCann, Group Executive, Customer & Corporate Services<br>2024 1,062,447 437,500 484,098 1,149,441 3,133,486 1,269,346<br>2023 1,019,918 380,000 289,602 - 1,689,520 743,801<br>Catherine McGrath, Chief Executive Officer, Westpac New Zealand<br>2024 981,129 311,189 502,028 - 1,794,346 -<br>2023 890,307 350,356 152,519 - 1,393,182 -<br>Anthony Miller, Chief Executive, Business & Wealthb<br>2024 1,277,944 478,000 706,795 1,925,462 4,388,201 1,925,462<br>2023 1,198,066 611,000 384,960 - 2,194,026 -<br>Christine Parker, Group Executive, Human Resources<br>2024 1,041,206 417,000 513,821 1,459,709 3,431,736 1,459,677<br>2023 1,007,812 392,000 321,423 - 1,721,235 1,104,203<br>Michael Rowland, Chief Financial Officer<br>2024 1,274,390 500,500 577,773 1,588,668 3,941,331 1,588,636<br>2023 1,263,779 446,500 381,624 - 2,091,903 -<br>Jason Yetton, Chief Executive, Consumer<br>2024 1,277,944 443,000 782,285 2,009,165 4,512,394 3,432,493<br>2023 1,198,066 611,000 548,354 - 2,357,420 -<br>Ryan Zanin, Chief Risk Officerc<br>2024 1,699,186 674,000 504,105 - 2,877,291 -<br>2023 1,691,361 503,500 102,432 - 2,297,293 -<br>a. In addition, Scott Collary had 45,879 restricted shares vest in December 2023 in relation to a buy out award.<br>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<br>in relation to a buy out award.<br>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<br>relation to a buy out award.<br>Explanation of total realised remuneration<br>Component Explanation<br>Fixed remuneration Represents salary and superannuation paid during the financial year.<br>Cash STVR payments Represents the cash portion of the STVR outcome for the financial year. This represents 50% of the overall STVR<br>outcome as the remaining 50% is deferred and vests in equal portions over two years.<br>Vesting of prior year<br>deferred STVR awards<br>Represents the portions of STVR that were deferred in prior years and vested during the financial year.<br>Vesting of prior year<br>LTVR awards<br>Represents the LTVR that was deferred in prior years and vested during the financial year, if the performance<br>conditions were met.<br>Total realised remuneration Sum of the above components.<br>Prior year LTVR lapsed Represents the LTVR from prior years that lapsed or was determined to be lapsed.<br>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<br>value of deferred STVR is based on the number of restricted shares or share rights multiplied by the five day volume weighted average price<br>(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<br>VWAP up to and including the scheduled date of testing. The value of equity differs from the disclosure in Section 7.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 245<br>3.5. Variable reward awarded for 2024<br>The table below shows the variable reward awarded1<br> to the CEO and Group Executives for 2024, including:<br> • STVR outcomes for 2024 (including the cash and deferred equity components); and<br> • equity granted as 2024 LTVR in January 2024. The 2024 LTVR grants shown at face value in the table below will be<br>tested on 1 October 2027.<br>For the CEO, the Board assessed his Scorecard at 104% (+3% on the Group STVR Scorecard) of his target STVR<br>opportunity. This was in recognition of Peter King's leadership in completing the CORE program and setting up the<br>organisation to execute the UNITE program.<br>In addition, the Board made a downward adjustment to the 2024 STVR outcome for a Group Executive based on an<br>assessment of leadership behaviours. There were no risk related adjustments for the CEO or Group Executives.<br>2024 STVR award 2024 LTVR award<br>Name<br>Target<br>STVR<br>opportunity<br>($)<br>Maximum<br>STVR<br>opportunity<br>($)<br>STVR<br>outcome<br>(% of<br>target)<br>STVR<br>outcome<br>(% of<br>maximum)<br>STVR<br>outcome<br>($)<br>Maximum<br>STVR<br>foregone<br>($)<br>Restricted<br>rights<br>($)a<br>Performance<br>rights<br>($)a<br>Managing Director & Chief<br>Executive Officer<br>Peter King 1,875,000 2,343,750 104% 83% 1,950,000 393,750 1,750,000 1,750,000<br>Group Executives<br>Scott Collary<br>Chief Information Officer 968,600 1,210,750 105% 84% 1,017,000 193,750 904,000 904,000<br>Nell Hutton<br>Chief Executive, Westpac<br>Institutional Bank 956,250 1,195,313 105% 84% 1,004,000 191,313 892,500 892,500<br>Carolyn McCann<br>Group Executive, Customer &<br>Corporate Services 795,000 993,750 110% 88% 875,000 118,750 742,000 742,000<br>Catherine McGrath<br>Chief Executive Officer, Westpac<br>New Zealand 715,734 894,667 87% 70% 622,377 272,290 668,018 668,018<br>Anthony Miller<br>Chief Executive, Business & Wealth 956,250 1,195,313 100% 80% 956,000 239,313 892,500 892,500<br>Christine Parker<br>Group Executive, Human Resources 779,300 974,125 107% 86% 834,000 140,125 571,500 571,500<br>Michael Rowland<br>Chief Financial Officer 953,600 1,192,000 105% 84% 1,001,000 191,000 699,300 699,300<br>Jason Yetton<br>Chief Executive, Consumer 956,250 1,195,313 93% 74% 886,000 309,313 892,500 892,500<br>Ryan Zaninb<br>Chief Risk Officer 1,271,500 1,589,375 106% 85% 1,348,000 241,375 932,400 932,400<br>Average Group Executive STVR outcome 102% 82%<br>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.<br>The five day VWAP was $21.09 for awards made in January 2024.<br>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<br>his role in completing a critical risk management and risk culture transformation, and increases alignment with shareholders through greater<br>equity holdings. The award is subject to service conditions and remuneration adjustments. It will vest in three tranches in January 2026,<br>January 2028 and January 2029.<br>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<br>vest subject to performance conditions (where applicable), service conditions and remuneration adjustments. The value of equity differs from<br>the disclosure in Section 7 which provides the annualised accounting value for unvested equity awards prepared in accordance with Australian<br>Accounting Standards.
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246 WESTPAC GROUP 2024 ANNUAL REPORT<br>DIRECTORS' REPORT<br>2024 LTVR restricted rights pre-grant assessment<br>We awarded the 2024 LTVR restricted rights, outlined in Section 3.5 above, following the pre-grant assessment which<br>was completed in October 2023. The Board determined that no adjustment was required. Further details are available in<br>the 2023 Remuneration Report.<br>2025 LTVR restricted rights pre-grant assessment<br>The pre-grant assessment for the 2025 LTVR restricted rights was completed in October 2024. The Board determined<br>that no adjustment was required and the 2025 LTVR restricted rights will be granted in full.<br>The prudential soundness gate was satisfied by reviewing the key capital and liquidity ratios, including CET1, LCR and<br>NSFR. The ratios are all above minimum prudential requirements.<br>Group risk culture maturity was assessed as 'Maintained'. The Board had regard to the Group level rating arising from<br>the annual Risk Culture Self-Assessment which was stable at ‘Systematic’, improved results in risk culture questions<br>as indicated through our annual employee survey, Voice+, and other evidence points informing the CPS 220 Risk<br>Management Declaration including risk management framework maturity, root cause analyses, prudential attestations,<br>audit and assurance findings and regulatory reviews.<br>There were no significant risk outcomes or serious misconduct issues that arose that were not sufficiently<br>addressed elsewhere.<br>The LTVR restricted rights remain subject to the pre-vest assessment after the four year performance period ending<br>30 September 2028. The restricted rights also remain subject to remuneration adjustments during and after this period.<br>Pre-grant assessment Outcome<br>Step 1: Assessment<br>Prudential soundness gate: Has Westpac remained safe and secure, taking into account capital position and liquidity? Met<br>Group risk culture: Has Group risk culture maturity been maintained or improved, considering both executive actions<br>or inactions?<br>Maintained<br>Significant risk outcomes: Have risk outcomes arisen that have a significant and material impact on the Group, not<br>sufficiently addressed elsewhere?<br>No adjustment<br>Serious misconduct: Has Westpac suffered from a serious misconduct issue, not sufficiently addressed elsewhere? No adjustment<br>Step 2: Consider Board discretion No adjustment<br>Overall pre-grant assessment Grant in full
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 247<br>4. Remuneration governance<br>4.1. Group remuneration policy<br>The Group remuneration policy sets out information in relation to remuneration design, arrangements and outcomes<br>across Westpac. The policy is supported by an established governance structure, plans and frameworks. The policy<br>supports our compliance with legal and regulatory requirements.<br>Remuneration strategy<br>Our remuneration strategy is to attract and retain talented employees. We reward them for achieving high performance and delivering<br>superior long term results for our customers and shareholders.<br>Remuneration principles<br> • Promote our purpose, values and behaviours;<br> • Align with our strategy and create sustainable shareholder value;<br> • Offer market competitive and equitable pay;<br> • Reward financial and non-financial performance, including customer outcomes and risk excellence; and<br> • Reinforce our risk and conduct expectations.<br>4.2. Group remuneration governance<br>The Board has overall accountability for the remuneration framework and its application. As set out in the Board Charter (and as<br>supported by the Board Remuneration Committee Charter), without limiting its role the Board approves (following recommendation<br>from the Board Remuneration Committee): the Group remuneration policy; the size of the annual Group variable reward pool;<br>performance objectives and remuneration outcomes for the CEO; remuneration arrangements and outcomes for accountable persons,<br>specified roles and any other person the Board determines; and equity-based plans.<br>The Board has the discretion to defer, adjust or withdraw aggregate and individual variable reward. Further detail is contained in<br>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/<br>The Board Remuneration Committee assists the Board to discharge its responsibility by overseeing the design, operation and<br>monitoring of the remuneration framework. Members of the Board Remuneration Committee are independent Non-executive<br>Directors. The Board and the Board Remuneration Committee have free and unfettered access to internal and external personnel<br>in carrying out their respective duties. Further detail is contained in the Board Remuneration Committee Charter which is available on<br>Westpac’s website: https://www.westpac.com.au/about-westpac/westpac-group/corporate-governance/constitution-board/<br>The Board and the Board Remuneration Committee receive<br>support from internal groups and committees including, but<br>not limited to, the Group Remuneration Oversight Committee<br>and business specific remuneration oversight committees.<br>The Board or the Board Remuneration Committee may engage<br>a remuneration consultant to directly provide specialist<br>information on remuneration for key management personnel.<br>The Chair of the Board Remuneration Committee oversees the<br>engagement and associated costs.<br>The Board Remuneration Committee seeks feedback from<br>and considers matters raised by other Board Committees<br>(as appropriate) with respect to remuneration outcomes,<br>adjustments to remuneration in light of relevant matters and<br>alignment of remuneration with the risk management framework.<br>Cross membership of the Board Remuneration Committee and<br>the Board Risk Committee also supports alignment between risk<br>and remuneration.<br>Independent input is received from the Chief Risk Officer on risk,<br>compliance and conduct matters that may need to be considered<br>in remuneration outcomes.<br>Use of remuneration consultants: In 2024, the Board engaged Ernst & Young to provide market benchmarking<br>information on Non-executive Director and Group Executive remuneration. Ernst & Young did not provide any<br>remuneration recommendations as prescribed under the Corporations Act 2001 (Cth) (Corporations Act) in 2024.
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248 WESTPAC GROUP 2024 ANNUAL REPORT<br>DIRECTORS' REPORT<br>4.3. Our approach to remuneration adjustments<br>Remuneration adjustment is one of the ways we reinforce our risk, compliance and conduct expectations. This includes<br>downward adjustments for adverse outcomes, as well as upward adjustment to reward positive risk behaviours.<br>Significant risk, compliance or conduct matters<br>We have guidelines in place to support the consistent application of proportionate adjustments for significant risk,<br>compliance or conduct matters.<br>SEVERITY OF IMPACT BASED ON:<br>Customer<br>People<br>Reputation<br>Regulatory<br>Financial<br>ACCOUNTABILITY<br>Action or inaction of the individual<br>Quantum of adjustment<br>Indicative order of downward adjustments<br>1. Current year STVR<br>2. Unvested deferred STVR (malus)<br>3. Unvested LTVR (malus)<br>4. Unvested retention awards (malus)<br>5. Unvested buy out awards (malus)<br>6. Vested or paid VR (clawback)<br>We apply judgement to consider whether the<br>size of the adjustment is proportionate and fair,<br>taking into consideration the severity of the matter<br>and level of individual accountability and any<br>mitigating factors, such as the context of the<br>matter and how the individual responded.<br>The quantum of the remuneration adjustment<br>increases with the severity of impact and<br>individual accountability.<br>To ensure remuneration adjustments are<br>proportionate to accountability, we consider<br>various facts specific to the matter including<br>(but not limited to) the individual’s contribution<br>and proximity to the direct and root causes<br>of the matter, time in role, relative level of<br>influence, findings of previous reviews and previous<br>adjustments for related matters.<br>Other risk, compliance or conduct matters<br>In addition to assessing significant matters, we also assess other matters including less material risk, compliance or<br>conduct matters and can apply remuneration adjustments and non-financial consequences for conduct that does not<br>meet our expectations.<br>We set conduct standards expected of our people through our code of conduct. Our expectations are in place to<br>support our people, culture and good conduct outcomes. They are non-negotiable and our people must comply with<br>these, regardless of their role or responsibilities.<br>Recognising positive risk behaviours and outcomes<br>We recognise and reward our people who role model positive risk behaviours and outcomes. This reinforces the<br>behaviour we expect of all of our people. We do this through a number of ways including through our recognition<br>platform or an upward adjustment to variable reward.<br>An upward adjustment in variable reward may be considered for exceptional risk performance not already reflected in<br>the delivery of agreed performance objectives.<br>In addition, Directors can recognise people who have demonstrated positive risk behaviours and outcomes. We have a<br>mechanism in place to provide the Board and each Committee with regular visibility of people who have demonstrated<br>positive risk behaviours.<br>Adjustment and consequence outcomes during 2024<br>Senior leadersa<br> that received downward remuneration adjustments 2<br>Senior leaders that received upward remuneration adjustments 9<br>Employees identified as not having met risk expectations during performance assessments 1,538<br>Employees that received downward remuneration adjustments 235<br>Employees leaving due to consequence outcomes 160<br>Actions to recognise positive risk management and risk behaviours through our recognition platform 114,350<br>Employees that received an additional variable reward for achieving great risk outcomes 621<br>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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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 249<br>5. Further detail on executive remuneration arrangements<br>5.1. Fixed remuneration<br>The table below sets out the key design features of fixed remuneration.<br>Fixed remuneration<br>Purpose Provide market competitive remuneration reflecting role scope and accountabilities.<br>Opportunity<br>and benchmarking<br>Set with reference to market benchmarks in the financial services industry and large corporates in Australia as appropriate.<br>We also consider the size, responsibilities and complexity of the role, and the skills and experience of the executive.<br>5.2. Short term variable reward<br>The table below sets out the key design features of the 2024 STVR.<br>Short term variable reward<br>Purpose Reward executives for delivering financial and non-financial annual objectives.<br>Structure<br>and delivery<br>50% of STVR is awarded in cash and 50% is deferred into equity in the form of restricted shares (or unhurdled share rights<br>for the Group Executive based outside of Australia).<br>One restricted share provides the holder with one Westpac ordinary share at no cost subject to trading restrictions until<br>the time of vesting. One unhurdled share right entitles the holder to one ordinary share at the time of vesting with no<br>exercise cost. Dividends are paid on restricted shares from the grant date.<br>Target and<br>maximum<br>opportunity<br>The target opportunity for the CEO and Group Executives is expressed as a percentage of fixed remuneration and is set at<br>75% of fixed remuneration (inclusive of superannuation as at 1 October 2023). The target opportunity is set considering a<br>range of factors including market competitiveness.<br>Target STVR: awarded for the delivery of agreed targets for financial and non-financial measures. A reduced outcome can<br>be determined for threshold performance.<br>Maximum STVR: up to 125% of target STVR, awarded in circumstances where outcomes are achieved over and<br>above target.<br>Performance<br>measures<br>STVR awards are determined based on meeting minimum behaviour and risk and compliance gate openers, and<br>performance against a scorecard designed to align with shareholder interests. The STVR Scorecard comprises<br>three components:<br> • Values and behaviours assessment: Demonstration of behaviours in line with Westpac's values of 'Helpful, Ethical,<br>Leading change, Performing and Simple';<br> • Focus areas: Performance is assessed against a balance of financial and non-financial measures that support the<br>effective execution of Westpac’s strategy; and<br> • Modifier: The modifier allows adjustment upwards or downwards (including to zero), for risk and reputation and<br>people management considerations and any other matters as determined by the Board.<br>Further information on the 2024 Group STVR Scorecard is provided in Section 3.3.<br>Deferral period 50% of STVR is deferred into equity for a period of up to two years, which aligns executive remuneration with shareholder<br>interests and acts as a retention mechanism. Deferred STVR vests in equal portions after one and two years, subject to<br>service conditions and adjustment.<br>Delayed vesting Refer to Section 5.4 for further information.<br>Treatment<br>of awards<br>on cessation<br>of employment<br>Refer to Section 5.4 for further information.<br>Remuneration<br>adjustments<br>Refer to Section 5.4 for further information.
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250 WESTPAC GROUP 2024 ANNUAL REPORT<br>DIRECTORS' REPORT<br>5.3. Long term variable reward<br>LTVR is comprised of two components, which are equally weighted, comprising LTVR restricted rights and LTVR<br>performance rights. The tables below set out the key design features of the 2024 LTVR awarded in January 2024,<br>as determined by the Board in October 2023.<br>5.3.1. Long term variable reward restricted rights for 2024<br>Long term variable reward restricted rights<br>Purpose Reward executives for sustainable risk culture and for creating shareholder value over the long term.<br>Structure<br>and delivery<br>50% of the LTVR is awarded in restricted share rights (known as restricted rights). For the CEO, 50% vest after four years<br>and 50% vest after five years. For Group Executives, 100% vest after four years.<br>One restricted right provides the holder with one Westpac ordinary share at the time of vesting with no exercise cost.<br>Executives receive dividend equivalent payments as outlined below.<br>Award opportunity The value of LTVR restricted rights awarded to the CEO and Group Executives is expressed as a percentage of fixed<br>remuneration. The value of LTVR restricted rights is set considering a range of factors including market competitiveness.<br>The face value of the 2024 LTVR restricted rights opportunity for the CEO and Group Executives in business roles is<br>70% of fixed remuneration (inclusive of superannuation as at 1 October 2023). The face value of the LTVR restricted<br>rights opportunity for Group Executives in functional roles is 55% of fixed remuneration (inclusive of superannuation as at<br>1 October 2023).<br>Allocation<br>methodology<br>The number of restricted rights each executive receives will be determined by dividing the dollar value of the LTVR<br>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<br>the commencement of the performance period (which is 1 October 2023 for the 2024 LTVR grant).<br>Performance<br>condition<br>The restricted rights are subject to performance conditions which are assessed prior to the grant and prior to vesting.<br>These assessments are known as the pre-grant assessment and the pre-vest assessment.<br>The assessment is focused on maintaining or improving Group risk culture. The assessment will be primarily based on the<br>assessment of collective Group risk culture as part of the Board’s annual attestation to APRA required under Prudential<br>Standard CPS 220 Risk Management, which is a multi factorial, evidence based process. A prudential soundness gate<br>applies. The Board will also consider if there have been any significant risk outcomes or any serious misconduct that have<br>not been sufficiently addressed through performance management or STVR outcomes.<br>Step 1: Assessment of risk factors<br>1. Prudential soundness gate: Has Westpac remained safe and secure, taking into account capital position and liquidity?<br>Prudential soundness is measured through the common equity tier 1 capital ratio, liquidity coverage ratio and the<br>net stable funding ratio.<br>2. Group risk culture: Has Group risk culture maturity been maintained or improved, considering both executive actions or<br>inactions? The risk culture assessment involves a series of inputs, a review process and a Board assessment of Group<br>risk culture.<br>3. Significant risk outcomes: Have risk outcomes arisen that have a significant and material impact on the Group, not<br>sufficiently addressed elsewhere?<br>4. Serious misconduct: Has Westpac suffered from a serious misconduct issue, not sufficiently addressed elsewhere?<br>Step 2: Consider Board discretion<br>Considerations to guide the application of discretion and the overall assessment include:<br> • The materiality of the adverse impact on Westpac’s financial position, or reputation, or customers, or shareholders, or<br>employees or regulatory standing.<br> • Whether the outcome was specific to Westpac, the banking industry or the broader market.<br> • The extent to which performance and reward outcomes are already impacted (e.g. through remuneration adjustments),<br>at a collective or individual level.<br> • Whether any adjustment should be made on a collective or individual basis.<br>Given the focus on maintaining or improving Group risk culture over the performance period, adjustments are unlikely at<br>the pre-grant assessment and any potential adjustment is more likely at the pre-vest assessment.<br>Assessment of<br>performance<br>outcomes<br>LTVR restricted rights are assessed against risk culture at grant and following a four year performance period. The<br>assessment of performance includes an assessment of risk factors and considers Board discretion.<br>Dividend<br>equivalent<br>payments<br>Dividend equivalent payments are payable to the extent that LTVR vests. For LTVR restricted rights, these are accrued for<br>the performance period and the further deferral period after the performance period (if applicable), and paid at the end<br>of the deferral period. Dividend equivalent payments are calculated by multiplying the number of LTVR restricted rights<br>eligible to vest by the declared dividend price on each respective record date during the applicable period. The calculation<br>excludes franking credits.<br>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.<br>No re-testing There is no re-testing. Awards that have not vested after the peformance period are lapsed.<br>Early vesting Unvested awards may vest (unless prevented by law) before the performance test date in the event of a change of control<br>in Westpac as determined at the discretion of the Board or where employment ceases due to death or disability.<br>Delayed vesting Refer to Section 5.4 for further information.<br>Treatment<br>of awards<br>on cessation<br>of employment<br>Refer to Section 5.4 for further information.<br>Remuneration<br>adjustments<br>Refer to Section 5.4 for further information.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 251<br>5.3.2. Long term variable reward performance rights for 2024<br>Long term variable reward performance rights<br>Purpose Reward executives for creating shareholder value over the long term.<br>Structure and<br>delivery<br>50% of the LTVR is awarded in performance share rights (known as performance rights) which vest after six years for the CEO<br>and five years for Group Executives.<br>One performance right provides the holder with one Westpac ordinary share at the time of vesting with no exercise cost.<br>Executives receive dividend equivalent payments as outlined below.<br>Award<br>opportunity<br>The value of LTVR performance rights awarded to the CEO and Group Executives is expressed as a percentage of fixed<br>remuneration. The value of LTVR performance rights is set considering a range of factors including market competitiveness.<br>The face value of the 2024 LTVR performance rights opportunity for the CEO and Group Executives in business roles is<br>70% of fixed remuneration (inclusive of superannuation as at 1 October 2023). The face value of the LTVR performance<br>rights opportunity for Group Executives in functional roles is 55% of fixed remuneration (inclusive of superannuation as at<br>1 October 2023).<br>Allocation<br>methodology<br>The number of performance rights each executive receives will be determined by dividing the dollar value of the LTVR<br>performance rights award by the face value of a performance right. The face value of a performance right is the five day<br>VWAP up to the commencement of the performance period (which is 1 October 2023 for the 2024 LTVR grant).<br>Performance<br>condition<br>LTVR performance rights are subject to a relative TSR performance condition that aims to achieve long term growth in<br>shareholder value and support alignment between executive reward and shareholder interests. Relative TSR is a measure of the<br>total return delivered to shareholders over the performance period assuming dividends are reinvested, relative to that of peers.<br>The performance condition measures Westpac’s TSR performance against eight Australian financial services companies using a<br>percentile ranking vesting schedule as outlined below.<br>Westpac’s TSR performance Indicative vesting percentage<br>At the 75th percentile or higher 100%<br>Between the median and the 75th percentile Pro-rata vesting between 50% and 100%<br>At the median 50%<br>Below the median 0%<br>The comparator group of companies comprise: AMP Limited, Australia & New Zealand Banking Group Limited, Bank of<br>Queensland Limited, Bendigo and Adelaide Bank Limited, Commonwealth Bank of Australia, Macquarie Group Limited, National<br>Australia Bank Limited and Suncorp Group Limited. The Board retains discretion to amend the comparator group and<br>determine the overall vesting outcome as appropriate.<br>Assessment of<br>performance<br>outcomes<br>LTVR performance rights are subject to relative TSR performance following a four year performance period.<br>The relative TSR result is calculated independently to ensure external objectivity before being provided to the Board to<br>determine the vesting outcome. The Board may exercise discretion in determining the final vesting outcome.<br>Dividend<br>equivalent<br>payments<br>Dividend equivalent payments are payable to the extent that LTVR vests. For LTVR performance rights, these are only accrued<br>for the further deferral period after the performance period and paid at the end of the deferral period. Dividend equivalent<br>payments are calculated by multiplying the number of LTVR performance rights eligible to vest by the declared dividend price<br>on each respective record date during the applicable period. The calculation excludes franking credits.<br>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<br>not exercised within the period. The exercise price for the rights is zero.<br>No re-testing There is no re-testing. Awards that have not vested after the performance period are lapsed.<br>Early vesting Unvested awards may vest (unless prevented by law) before the performance test date in the event of a change of control in<br>Westpac as determined at the discretion of the Board or where employment ceases due to death or disability.<br>Delayed<br>vesting<br>Refer to Section 5.4 for further information.<br>Treatment of<br>awards on<br>cessation of<br>employment<br>Refer to Section 5.4 for further information.<br>Remuneration<br>adjustments<br>Refer to Section 5.4 for further information.<br>5.4. Common design features for variable reward<br>Delayed<br>vesting<br>The Board has discretion (subject to law) to delay vesting of variable reward if the individual is under investigation for adverse<br>risk or conduct events including misconduct, is the subject of or implicated in legal or regulatory proceedings, if the Board<br>considers it reasonable to delay vesting, or if delayed vesting is otherwise required by law.<br>Treatment of<br>awards on<br>cesssation of<br>employment<br>Unvested variable reward lapses where the CEO or a Group Executive resigns or otherwise leaves the Group (except for the<br>reasons listed below) before vesting occurs unless the Board determines that some of the unvested variable reward should<br>remain on foot.<br>If the CEO or a Group Executive ceases employment because of death or total and permanent disability, all unvested variable<br>reward immediately vests or becomes exercisable unless prevented by law.<br>If the CEO or a Group Executive ceases employment because they retire, are retrenched or cease employment by agreed<br>separation, unvested variable reward stays on foot subject to applicable performance conditions and subject to any reduction<br>determined by the Board.<br>Remuneration<br>adjustments<br>The Board has discretion to adjust variable reward (including current year STVR) downwards, including to zero, in specified<br>circumstances including serious misconduct, if serious circumstances or new information come to light which mean that in the<br>Board’s view all or part of the award was not appropriate, or where required by law or prudential standards.<br>The Board will typically apply the adjustment to unvested deferred STVR where an adjustment to current year STVR is<br>considered insufficient or unavailable, followed by an adjustment to unvested LTVR where an adjustment to current and<br>deferred STVR is considered insufficient or unavailable. Clawback may also apply to vested variable reward, to the extent<br>legally permissible and practicable.<br>Refer to Section 4.3 for further information on our approach to remuneration adjustments.
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252 WESTPAC GROUP 2024 ANNUAL REPORT<br>DIRECTORS' REPORT<br>5.5. Executive minimum shareholding requirements and current compliance<br>The CEO and Group Executives are required to build and maintain a significant Westpac shareholding to strengthen<br>alignment with shareholder interests. LTVR restricted rights and LTVR performance rights are not included in the<br>calculation of shareholdings until performance conditions are met.<br>At 30 September 2024, the CEO and Group Executives comply with or are on track to meet the requirements.<br>Aspect of the requirements Description<br>Requirement level CEO: Two times fixed remuneration including superannuation.<br>Group Executives: One times fixed remuneration including superannuation.<br>Sale restrictions Executives are restricted from selling vested equity, other than for the purpose of meeting tax obligations,<br>as follows:<br> • For LTVR awards granted from 1 October 2021 onwards, until the required shareholding level is met; and<br> • For STVR awards, where the required shareholding level is not met at the end of the accumulation period.<br>Accumulation period Within five years of 1 October 2022 (i.e. by 1 October 2027), or appointment to their role, whichever is later. The<br>Board Remuneration Committee retains discretion to make adjustments in exceptional circumstances.<br>Calculation<br>of shareholdings<br>Unvested LTVR (including restricted rights and performance rights) is not included in the calculation of<br>shareholdings until performance conditions are met. Other shareholdings are recognised. This includes:<br> • Shares held in an employee share plan (including deferred STVR);<br> • Shares held outright in the individual’s name either solely or jointly with another person; and<br> • Shares held in a family trust or a self-managed superannuation fund.<br>5.6. Hedging policy<br>Participants in Westpac’s equity plans are prohibited from entering, either directly or indirectly, into hedging<br>arrangements for unvested awards. No financial products may be used to mitigate the risk associated with these awards.<br>Any attempt to hedge awards will result in forfeiture and the Board may consider other disciplinary action. These<br>restrictions satisfy the requirements of the Corporations Act which prohibits hedging of unvested awards.<br>5.7. Employment agreements<br>The remuneration and other terms of employment for the CEO and Group Executives are formalised in their employment<br>agreements. Each agreement provides for the payment of fixed remuneration (including superannuation contributions),<br>variable reward and other benefits such as death and disablement insurance cover.<br>The table below details the key terms including termination provisions of the employment agreements for the CEO and<br>Group Executives.<br>Term Conditions<br>Duration of agreement Ongoing until notice given by either party.<br>Notice (by the<br>executive or the Group)<br>to terminate employment<br>12 months.a<br>Termination payments on<br>termination without causeb<br>Deferred STVR (which may be awarded on a pro rata basis for the part year served) and unvested LTVR will be<br>treated in accordance with the applicable equity plan rules, and will remain subject to remuneration adjustments if<br>the award is retained.<br>Termination for cause Occurs immediately for misconduct. Deferred STVR and LTVR is forfeited, noting the Board has discretion to<br>determine otherwise.<br>Post-employment restraints CEO: 12 months non-compete and non-solicitation restraints.<br>Group Executives: 6 months non-compete and 12 months non-solicitation restraints.<br>a. Payment in lieu of notice may in certain circumstances be approved by the Board for some or all of the notice period.<br>b. The maximum aggregate liability for termination benefits in respect of notice periods for the CEO and Group Executives at 30 September<br>2024 was $12.5 million (2023: $11.0 million).
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 253<br>6. Non-executive Director remuneration<br>6.1. Structure and policy<br>Non-executive Director fees are not related to Westpac’s results. Fees are paid in cash and no discretionary payments<br>are made for performance. Non-executive Directors are required to build and maintain a minimum shareholding from<br>their own funds to align their interests with those of shareholders (refer to Section 6.3 for further details).<br>The table below sets out the components of Non-executive Director remuneration.<br>Non-executive Director remuneration<br>Base fees Relate to service on the Westpac Banking Corporation Board. The base fee for the Chair covers all responsibilities,<br>including for Board Committees.<br>Committee fees Additional fees are paid to Non-executive Directors (other than the Board Chair) for chairing or being a member of<br>Board Committees, other than the Board Nominations & Governance Committee.<br>Employer superannuation<br>contributions<br>Reflects statutory superannuation contributions which are capped at the superannuation maximum contributions<br>base as prescribed under the superannuation guarantee legislation.<br>6.2. Non-executive Director remuneration in 2024<br>The table below sets out the annual Board and standing Committee fees (exclusive of superannuation). Changes in<br>Board and Committee composition during the year are set out in the overview of Directors' meetings in Section 9 of the<br>Directors' report.<br>For 2024, $3.3 million (72%) of the fee pool was used. The fee pool of $4.5 million per annum was approved by<br>shareholders at the 2008 Annual General Meeting and includes employer superannuation contributions.<br>The members of the Nominations & Governance Committee do not receive any additional fees for their roles on<br>the Committee.<br>Base and Committee fees Annual fee $ (exclusive of superannuation)<br>Chair 823,000<br>Other Non-executive Directors 215,000<br>Committee Chair fees<br>Board Audit Committee 69,000<br>Board Risk Committee 69,000<br>Board Remuneration Committee 59,000<br>Committee membership fees<br>Board Audit Committee 31,000<br>Board Risk Committee 31,000<br>Board Remuneration Committee 28,000<br>During the year, we benchmarked Non-executive Director fees. As a result, we increased all Committee fees to $34,000.<br>We also increased the Board Remuneration Committee Chair fee to $69,000 to align to market, reflecting increased<br>regulatory complexity in financial services remuneration oversight. Both changes are effective from 1 October 2024.<br>Non-executive Directors may also receive fees for additional duties which are paid at a per meeting rate of $2,000<br>for Committee members and $4,000 for Committee Chairs (excluding superannuation). During the reporting period,<br>Peter Nash received additional fees of $12,000 for responsibilities and participation in a Due Diligence Committee and<br>Margaret Seale received additional fees of $20,000 for assistance in recruitment of the new Chair.<br>In addition, to support the technology transformation being delivered through the UNITE program, a UNITE Oversight<br>Group was established in May 2024 comprising three Non-executive Directors (Nerida Caesar, Andy Maguire and Peter<br>Nash). To recognise the additional workload, these Non-executive Directors each receive an additional fee of $34,000<br>(excluding superannuation) per annum effective from 1 June 2024.<br>6.3. Non-executive Director minimum shareholding requirement<br>Non-executive Directors are required to build and maintain a holding in Westpac ordinary shares with a value not less<br>than the Board base fee (and in case of the Chair, the Chair's fee), within five years of appointment to the Board.<br>At 30 September 2024, all Non-executive Directors comply with or are on track to meet the requirement.
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254 WESTPAC GROUP 2024 ANNUAL REPORT<br>DIRECTORS' REPORT<br>7. Statutory remuneration details<br>7.1. Details of Non-executive Director remuneration<br>The table below details Non-executive Director remuneration.<br>Short-term benefits<br>Post-employment<br>benefits<br>Westpac Banking<br>Corporation Board<br>feesa<br>Non-monetary<br>benefitsb Superannuation Total<br>Name $ $ $ $<br>Current Non-executive Directors<br>Steven Gregg, Chairc<br>2024 680,727 5,893 30,017 716,637<br>2023 --------------------- Not a KMP in 2023 ---------------------<br>Tim Burroughs<br>2024 269,410 - 28,054 297,464<br>2023 138,123 - 14,163 152,286<br>Nerida Caesar<br>2024 258,208 - 27,674 285,882<br>2023 240,392 - 24,901 265,293<br>Audette Exel AO<br>2024 316,232 - 28,211 344,443<br>2023 302,177 - 26,020 328,197<br>Andy Maguirec<br>2024 53,631 - 6,168 59,798<br>2023 --------------------- Not a KMP in 2023 ---------------------<br>Peter Nash<br>2024 339,478 - 28,316 367,795<br>2023 316,177 - 25,851 342,028<br>Nora Scheinkestel<br>2024 340,346 - - 340,346<br>2023 306,951 - 25,076 332,027<br>Margaret Seale<br>2024 263,977 - 26,459 290,436<br>2023 270,731 - 25,452 296,183<br>Michael Ullmer AO<br>2024 300,846 - 8,214 309,060<br>2023 134,764 - 6,323 141,087<br>Former Non-executive Directors<br>John McFarlanec<br>2024 170,927 1,756 4,761 177,444<br>2023 824,177 8,335 25,909 858,421<br>Chris Lynchc<br>2024 56,904 - 6,155 63,059<br>2023 275,177 - 25,846 301,023<br>Total fees<br>2024 3,050,685 7,649 194,029 3,252,364<br>2023d 3,082,704 8,335 210,822 3,301,861<br>a. Includes base fees, Committee fees and any other fees.<br>b. Non-monetary benefits are determined on the basis of the cost to the Group including associated fringe benefits tax (FBT) where applicable<br>and includes bank funded car parking.<br>c. The information relates to the period the individual was a KMP. Refer to Section 2 for further details.<br>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<br>therefore their individual remuneration is not included in the above table.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 255<br>7.2. Statutory remuneration details – Chief Executive Officer and Group Executives<br>The table below details remuneration for the CEO and Group Executives prepared and audited in accordance with<br>Australian Accounting Standards.<br>Short term benefits<br>Post-employment<br>benefits<br>Other<br>long term<br>benefits Share-based payments<br>Fixed<br>remunerationa<br>Cash<br>STVR<br>awardb<br>Non-monetary<br>benefitsc<br>Other<br>paymentsd<br>Superannuation<br>benefitse<br>Long<br>service<br>leave<br>Restricted<br>sharesf<br>Restricted<br>rightsg<br>Performance<br>rightsg Totalh<br>$ $ $ $ $ $ $ $ $<br>Managing Director & Chief Executive Officer<br>Peter King, Managing Director & Chief Executive Officeri<br>2024 2,418,943 975,000 20,823 - 48,249 22,024 1,198,595 728,328 1,521,487 6,933,449<br>2023 2,437,773 1,125,000 30,873 - 45,676 37,773 982,267 - 1,084,059 5,743,421<br>Group Executives<br>Scott Collary, Chief Information Officer<br>2024 1,300,753 508,500 8,333 - 34,739 21,537 563,784 241,512 740,674 3,419,832<br>2023 1,187,292 508,500 19,658 - 33,161 18,593 806,081 - 631,647 3,204,932<br>Nell Hutton, Chief Executive, Westpac Institutional Bank<br>2024 1,230,101 502,000 5,359 - 35,046 17,352 1,132,285 238,441 105,932 3,266,516<br>2023 ------------------------------------------------------- Not a KMP in 2023 -------------------------------------------------------<br>Carolyn McCann, Group Executive, Customer & Corporate Services<br>2024 1,038,679 437,500 5,359 - 36,479 15,727 398,684 198,233 482,393 2,613,054<br>2023 1,014,216 380,000 5,631 - 29,927 21,684 329,981 - 449,375 2,230,814<br>Catherine McGrath, Chief Executive Officer, Westpac New Zealand<br>2024 857,768 311,189 8,386 - 119,894 - - 523,182 388,367 2,208,786<br>2023 816,255 350,356 11,050 - 114,168 - - 281,725 308,247 1,881,801<br>Anthony Miller, Chief Executive, Business & Wealth<br>2024 1,279,390 478,000 3,315 166,277 37,898 19,056 684,787 238,441 717,728 3,624,892<br>2023 1,195,992 611,000 4,489 404,713 35,432 21,539 851,380 - 610,124 3,734,669<br>Christine Parker, Group Executive, Human Resources<br>2024 1,045,623 417,000 3,315 - 32,976 16,896 401,268 152,684 524,412 2,594,174<br>2023 995,877 392,000 3,306 - 30,305 15,183 353,590 - 534,136 2,324,397<br>Michael Rowland, Chief Financial Officer<br>2024 1,249,398 500,500 3,315 - 34,007 18,870 465,327 186,823 579,245 3,037,485<br>2023 1,207,072 446,500 4,888 - 31,278 19,038 404,955 - 494,888 2,608,619<br>Jason Yetton, Chief Executive, Consumer<br>2024 1,200,082 443,000 3,315 - 38,009 19,050 539,012 238,441 770,574 3,251,483<br>2023 1,175,407 611,000 4,489 - 35,495 22,119 559,508 - 702,392 3,110,410<br>Ryan Zanin, Chief Risk Officer<br>2024 1,663,065 674,000 151,817 116,682 2,097 25,268 730,310 249,101 541,063 4,153,403<br>2023 1,737,772 503,500 81,424 594,277 9,482 25,453 319,974 - 429,219 3,701,101<br>a. Fixed remuneration is the total cost of cash salary, salary sacrificed benefits and an accrual for annual leave. Superannuation in excess of the<br>maximum contribution base that is paid as cash is also included.<br>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<br>and deferred portions of the 2024 STVR award for one Group Executive based on an assessment of leadership behaviours.<br>c. Non-monetary benefits are determined on the basis of the cost to the Group (including associated FBT, where applicable) and may include<br>annual health checks, provision of taxation advice, bank funded car parking, executive life insurance as well as relocation costs and travel<br>allowances. Cash relocation allowances are recognised as an expense from the commencement date as a KMP to the end of a clawback period.<br>d. Includes payments on termination or other contracted amounts for current KMP. The cash portion of buy out arrangements is recognised as an<br>expense from commencement date as a KMP to the end of the deferral period. For Anthony Miller, the cash buy out arrangement was agreed<br>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<br>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<br>the remaining portions of the award are due to be paid through to December 2024.<br>e. Includes Group life and salary continuance insurance cover provided at no cost to the individual. Superannuation benefits have been calculated<br>consistent with AASB 119 Employee Benefits.<br>f. The amortisation approach for restricted shares commences from the service period when the award was earned through to the end of the<br>deferral period. A portion of the restricted shares held by Scott Collary, Nell Hutton and Anthony Miller represent an allocation made to<br>compensate them for remuneration foregone from their previous employer on resignation to join Westpac. The restricted shares replicate the<br>deferral periods of the equity foregone.<br>g. Equity-settled remuneration is based on the amortisation over the performance and the deferral period. It is calculated using the fair value<br>at the grant date of hurdled and unhurdled share rights granted during the financial year up to 30 September 2024. Fair value is calculated
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256 WESTPAC GROUP 2024 ANNUAL REPORT<br>DIRECTORS' REPORT<br>using an external valuation based on the invitation opt out date. The 2024 value for Catherine McGrath includes 38% attributed to deferred<br>STVR awards.<br>h. The table includes remuneration details of individuals that are KMP for 2024, whereas the totals presented in Note 34 to the financial<br>statements includes former KMP who ceased as KMP in 2023. The percentage of total remuneration which is performance related (i.e. cash<br>STVR plus share-based payments) was: Peter King 64%, Scott Collary 60%, Nell Hutton 61%, Carolyn McCann 58%, Catherine McGrath 55%,<br>Anthony Miller 58%, Christine Parker 58%, Michael Rowland 57%, Jason Yetton 61% and Ryan Zanin 53%. The percentage of total remuneration<br>delivered in the form of share rights was: Peter King 32%, Scott Collary 29%, Nell Hutton 11%, Carolyn McCann 26%, Catherine McGrath 41%,<br>Anthony Miller 26%, Christine Parker 26%, Michael Rowland 25%, Jason Yetton 31% and Ryan Zanin 19%.<br>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<br>share-based payments. As a result of his intention to retire on 15 December 2024, the amortisation of these share-based payments (restricted<br>shares, restricted rights and performance rights) is being recognised over an accelerated vesting period. This resulted in additional accounting<br>amortisation of $850,382 recognised in 2024 across all share-based payments. The remaining accounting amortisation relating to these<br>awards will be recognised in 2025. The full value will be recognised for these awards over this accelerated vesting period regardless of whether<br>the awards ultimately vest. The awards remain subject to the existing performance conditions and may or may not vest subject to meeting<br>these performance conditions. Refer to the ASX release dated 9 September 2024 for further information of Peter King’s exit arrangement.<br>In addition, in July 2024, Peter King received the standard service recognition award of $3,000 for when an employee reaches 30 years of<br>service at Westpac.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 257<br>7.3. Movement in equity-settled instruments during the year<br>The table below shows the movements in the number and value of equity instruments for the CEO and Group Executives<br>during 2024.<br>Name Type of equity-based instrument<br>Number<br>granteda<br>Number<br>vestedb<br>Number<br>exercisedc<br>Value granted<br>$<br>d<br>Value<br>exercised<br>$<br>e<br>Value forfeited<br>or lapsed<br>$<br>e<br>Managing Director & Chief Executive Officer<br>Peter King Restricted shares 48,806 40,821 - 1,132,299 - -<br>Restricted rights 82,977 - - 1,925,066 - -<br>Performance rights 82,978 - - 1,062,948 - 2,228,805<br>Group Executives<br>Scott Collary Restricted shares 22,060 67,576 - 511,792 - -<br>Restricted rights 42,863 - - 994,422 - -<br>Performance rights 42,864 - - 549,088 - -<br>Nell Hutton Restricted shares 54,229 8,983 - 1,258,113 - -<br>Restricted rights 42,318 - - 981,778 - -<br>Performance rights 42,319 - - 542,106 - -<br>Carolyn McCann Restricted shares 16,485 13,715 - 382,452 - -<br>Restricted rights 35,182 - - 816,222 - -<br>Performance rights 35,183 - - 450,694 - 873,728<br>Catherine McGrath Unhurdled share rights 16,597 7,223 - 360,951 - -<br>Restricted rights 31,670 - - 734,744 - -<br>Performance rights 31,670 - - 405,693 - -<br>Anthony Miller Restricted shares 26,507 65,029 - 614,962 - -<br>Restricted rights 42,318 - - 981,778 - -<br>Performance rights 42,319 - - 542,106 - -<br>Christine Parker Restricted shares 17,006 15,222 - 394,539 - -<br>Restricted rights 27,098 - - 628,674 - -<br>Performance rights 27,098 - - 347,125 - 1,107,043<br>Michael Rowland Restricted shares 19,370 18,073 - 449,384 - -<br>Restricted rights 33,157 - - 769,242 - -<br>Performance rights 33,158 - - 424,754 - -<br>Jason Yetton Restricted shares 26,507 25,969 - 614,962 - -<br>Restricted rights 42,318 - - 981,778 - -<br>Performance rights 42,319 - - 542,106 - 1,519,196<br>Ryan Zanin Restricted shares 43,534 4,851 - 1,009,989 - -<br>Restricted rights 44,210 - - 1,025,672 - -<br>Performance rights 44,211 - - 566,343 - -<br>a. Restricted rights and performance rights granted to the CEO are approved by shareholders at the Annual General Meeting each year under<br>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<br>in New Zealand). 2023 deferred STVR was awarded on 19 January 2024 for the CEO and Group Executives, the deferral period commenced<br>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<br>remuneration adjustments).<br>b. No performance rights granted in 2019 vested in October 2023 when assessed against the relative TSR performance condition. 100% of the<br>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<br>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.<br>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<br>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<br>restricted shares that were granted relate to awards for her prior role before becoming a KMP.<br>c. Vested share rights granted prior to September 2023 may be exercised up to a maximum of 15 years from their commencement date. Vested<br>share rights granted after September 2023 may be exercised up to two years following the vesting date, otherwise the share rights will be<br>auto-exercised at the end of the term.<br>d. For performance rights, the value granted represents the number of securities granted multiplied by the fair value per instrument as set<br>out in the table in the sub-section titled ‘Overview of unvested equity awards’. For restricted shares and restricted rights, the value granted<br>represents the number of rights granted multiplied by the closing price of a Westpac ordinary share on the date the awards were granted<br>($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<br>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<br>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<br>shown above. This includes Ryan Zanin’s additional grant of restricted shares and their estimated maximum possible total value is the fair value<br>of $500,000.<br>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<br>exercise (or forfeiture or lapse). The overall values reflect forfeitures or lapses as a result of a failure to meet performance conditions.
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258 WESTPAC GROUP 2024 ANNUAL REPORT<br>DIRECTORS' REPORT<br>7.3.1 Overview of unvested equity awards<br>The table below outlines key details of unvested STVR and LTVR as at 30 September 2024 awarded to the CEO and<br>Group Executives while in KMP roles1<br>.. All awards are subject to service conditions, performance conditions (where<br>applicable), deferral periods and remuneration adjustments. Further details of the awards can be located in prior<br>Annual Reports.<br>Fair values<br>Fair values are determined in accordance with the requirements of AASB 2 Share-based Payment.<br>For STVR and LTVR restricted rights, the fair value is calculated using the closing price of the grant date, which for<br>accounting purposes is the invitation opt out date.<br>For LTVR performance rights, fair values are independently calculated by PFS Consulting at the grant date (which is the<br>invitation opt out date) using a Monte Carlo simulation pricing model.<br>Allocation values<br>The value granted to executives for remuneration purposes differs from the fair value used for accounting purposes.<br>For STVR grants, the allocation is determined by dividing the dollar value of the STVR award by the five day VWAP up to<br>the grant date. Refer to Section 5.2 for further details of STVR.<br>For LTVR grants, the allocation is determined by dividing the dollar value of the LTVR awards by the face value of a<br>share right. The face value of a share right is the five day VWAP up to the commencement of the performance period.<br>Refer to Section 5.3 for further details of LTVR.<br>Award name Grant date<br>Performance<br>period start<br>date<br>Performance<br>period end<br>date Deferral period end date Expiry Fair value<br>Performance<br>conditions<br>2023 STVR 19 Jan 2024 1 Oct 2022 30 Sep 2023 1 Oct 2024 (tranche<br>one) and 1 Oct 2025<br>(tranche two)<br>N/A $23.20 Service (noting<br>STVR Scorecard<br>assessment<br>was completed)<br>2022 STVR 15 Dec 2022 1 Oct 2021 30 Sep 2022 1 Oct 2024<br>(tranche two)<br>N/A $23.50 Service (noting<br>STVR Scorecard<br>assessment<br>was completed)<br>2024 LTVR<br>performance<br>rights<br>19 Jan 2024 1 Oct 2023 30 Sep 2027 CEO: 15 Nov 2029<br>Group Executives: 15<br>Nov 2028<br>CEO: 15 Nov 2031<br>Group Executives: 15<br>Nov 2030<br>$12.81 Relative TSR<br>2024 LTVR<br>restricted<br>rights<br>19 Jan 2024 1 Oct 2023 30 Sep 2027 CEO: 50% on 15 Nov<br>2027 (tranche one) and<br>50% on 15 Nov 2028<br>(tranche two)<br>Group Executives: 15<br>Nov 2027<br>CEO: 15 Nov 2029<br>(tranche one) and 15<br>Nov 2030 (tranche two)<br>Group Executives: 15<br>Nov 2029<br>$23.20 Pre-vest<br>assessment of<br>risk culture<br>(noting a pre-grant assessment<br>was completed)<br>2023 LTVR<br>performance<br>rights<br>15 Dec 2022 1 Oct 2022 30 Sep 2026 25 Oct 2026 1 Oct 2037 $11.90 Relative TSR<br>2022 LTVR<br>performance<br>rights<br>CEO: 16 Dec<br>2021<br>Group<br>Executives:<br>15 Dec 2021<br>1 Oct 2021 30 Sep 2025 1 Nov 2025 1 Oct 2036 CEO: $5.81<br>Group<br>Executives:<br>$5.82<br>Relative TSR<br>2021 LTVR<br>performance<br>rightsa<br>CEO: 16 Dec<br>2020<br>Group<br>Executives:<br>11 Dec 2020<br>1 Oct 2020 30 Sep 2024 31 Oct 2024 1 Oct 2035 CEO: $6.35<br>Group<br>Executives:<br>$6.40<br>Relative TSR<br>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<br>percentile ranking relative to the comparator group. This resulted in 50% of the 2021 LTVR award vesting.<br>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<br>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<br>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<br>2022, which was after the grant of 2022 LTVR to other Group Executives in December 2021. Ryan Zanin was awarded a grant of restricted<br>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<br>management and risk culture transformation, and increases alignment with shareholders through greater equity holdings. The award is subject<br>to a service condition until January 2026 and remuneration adjustments and scheduled to vest in three tranches on January 2026, January<br>2028 and January 2029.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 259<br>7.4. Details of Westpac equity holdings of Non-executive Directors<br>The table below sets out details of relevant interests in Westpac ordinary shares held by Non-executive Directors<br>(including their related parties) during the year ended 30 September 20241<br>..<br>Number held at<br>start of the year<br>Changes<br>during the year<br>Number held at<br>end of the year<br>Current Non-executive Directors<br>Steven Gregga n/a - 75,208<br>Tim Burroughs 67,302 - 67,302<br>Nerida Caesar 13,583 - 13,583<br>Audette Exel AO 11,562 390 11,952<br>Andy Maguirea n/a - -<br>Peter Nash 15,360 - 15,360<br>Nora Scheinkestel 14,874 2,351 17,225<br>Margaret Sealeb 26,158 - 26,158<br>Michael Ullmer AOc 12,570 - 12,570<br>Former Non-executive Directors<br>John McFarlanea 50,000 - n/a<br>Chris Lyncha,d 13,090 - n/a<br>a. The information relates to the period the individual was a KMP. Refer to Section 2 for further details.<br>b. In addition to holding ordinary shares, Margaret Seale and her related parties held interests in 100 Westpac Capital Notes 7 (ASX: WBCPJ) at<br>year end.<br>c. In addition to holding ordinary shares, Michael Ullmer AO and his related parties held interests in 800 Westpac Capital Notes 5 (ASX: WBCPH),<br>300 Westpac Capital Notes 9 (ASX: WBCPL) and 1,000 Westpac Subordinated Notes at year end.<br>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<br>his retirement date of 14 December 2023.<br>1. Other than as disclosed above, no share interests include non-beneficially held shares.
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260 WESTPAC GROUP 2024 ANNUAL REPORT<br>DIRECTORS' REPORT<br>7.5. Details of Westpac equity holdings of executive Key Management Personnel<br>The table below details Westpac equity held and movement in that equity by the CEO and Group Executives (including<br>their related parties) for the year ended 30 September 20241<br>..<br>Name<br>Type of equity-based instrument<br>Number<br>held at<br>start of<br>the yeara<br>Number<br>granted<br>during the<br>year as<br>remuneration<br>Received<br>on exercise<br>and/or<br>exercised<br>during the<br>year<br>Number<br>forfeited or<br>lapsed<br>during the<br>yearb<br>Other<br>changes<br>during the<br>year<br>Number held<br>at end of the<br>year<br>Number vested<br>and exercisable at<br>end of the year<br>Managing Director & Chief Executive Officer<br>Peter King Ordinary shares 213,527 48,806 - - - 262,333 -<br>Restricted rights - 82,977 - - - 82,977 -<br>Performance rights 570,644 82,978 - (101,348) - 552,274 -<br>Group Executives<br>Scott Collary Ordinary shares 118,483 22,060 - - - 140,543 -<br>Restricted rights - 42,863 - - - 42,863 -<br>Performance rights 315,956 42,864 - - - 358,820 -<br>Nell Hutton Ordinary shares 119,814 54,229 - - (8,983) 165,060 -<br>Restricted rights - 42,318 - - - 42,318 -<br>Performance rights - 42,319 - - - 42,319 -<br>Carolyn McCann Ordinary shares 94,606 16,485 - - - 111,091 -<br>Restricted rights - 35,182 - - - 35,182 -<br>Performance rights 230,274 35,183 - (39,815) - 225,642 -<br>Catherine McGrath Ordinary shares - - - - - - -<br>Unhurdled share rights 14,874 16,597 - - - 31,471 7,223<br>Restricted rights - 31,670 - - - 31,670 -<br>Performance rights 133,483 31,670 - - - 165,153 -<br>Anthony Miller Ordinary shares 159,756 26,507 - - - 186,263 -<br>Restricted rights - 42,318 - - - 42,318 -<br>Performance rights 307,152 42,319 - - - 349,471 -<br>Christine Parker Ordinary shares 53,401 17,006 - - - 70,407 -<br>Restricted rights - 27,098 - - - 27,098 -<br>Performance rights 279,248 27,098 - (52,293) - 254,053 -<br>Michael Rowland Ordinary shares 36,146 19,370 - - - 55,516 -<br>Restricted rights - 33,157 - - - 33,157 -<br>Performance rights 250,480 33,158 - - - 283,638 -<br>Jason Yetton Ordinary shares 51,939 26,507 - - - 78,446 -<br>Restricted rights - 42,318 - - - 42,318 -<br>Performance rights 366,861 42,319 - (54,471) - 354,709 -<br>Ryan Zanin Ordinary shares 9,702 43,534 - - - 53,236 -<br>Restricted rights - 44,210 - - - 44,210 -<br>Performance rights 150,934 44,211 - - - 195,145 -<br>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.<br>b. Forfeitures or lapses during the year are as a result of a failure to meet performance conditions.<br>1. The highest number of shares held by an individual in the table is 0.0076% of total Westpac ordinary shares outstanding as at<br>30 September 2024.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 261<br>7.6. Loans to Non-executive Directors and executive Key Management Personnel<br>Financial instrument transactions are provided in the ordinary course of business. These transactions are at arm's-length<br>on terms and conditions as they apply to all employees.<br>The table below details loans to Non-executive Directors, the CEO and Group Executives (including their related parties)<br>of the Group.<br>Balance at start of<br>the year<br>$<br>a<br>Interest paid and<br>payable for the year<br>$<br>Interest not charged<br>during the year<br>$<br>Balance at end of<br>the year<br>$<br>Number in Group at<br>end of the year<br>Non-executive Directors 4,507,501 191,280 - 3,012,367 3<br>CEO and Group Executives 30,377,545 839,000 - 29,051,817 7<br>Total 34,885,046 1,030,280 - 32,064,184 10<br>a. Balances at start of the year have been revised for updated balances during the reporting period.<br>The table below details KMP (including their related parties) with aggregate loans above $100,000 during 2024.<br>Balance at start of<br>the year<br>$<br>a<br>Interest paid and<br>payable for the year<br>$<br>Interest not charged<br>during the year<br>$<br>Balance at end of<br>the year<br>$<br>Highest indebtedness<br>during the year<br>$<br>Non-executive Directors<br>Peter Nash 2,364,821 149,359 - 2,498,978 3,023,589<br>Nora Scheinkestel n/a - - 100,000 1,600,000<br>Margaret Seale 620,442 29,989 - 413,389 655,094<br>Former Non-executive Directors<br>Chris Lynchb 1,522,238 11,932 - n/a 1,522,238<br>CEO and Group Executives<br>Peter King 1,158,000 10,492 - 1,158,000 1,159,175<br>Scott Collary 2,294,958 40,606 - 2,166,513 2,289,315<br>Nell Hutton 14,441,500 303,040 - 14,432,940 14,471,500<br>Carolyn McCann 3,396,296 121,040 - 3,250,672 3,401,353<br>Anthony Miller 2,277,513 8,591 - 1,389,164 3,716,759<br>Christine Parker 5,434,278 269,863 - 5,396,236 5,471,019<br>Jason Yetton 1,375,000 85,368 - 1,258,292 1,425,371<br>a. Balances at start of the year have been revised for updated balances during the reporting period.<br>b. The information relates to the period the individual was a KMP. Refer to Section 2 for further details.<br>Other transactions relating to KMP<br>Accrual for dividend equivalent payments<br>The non-current liability owing as a result of dividend equivalent payments that have been accrued for the 2024<br>LTVR restricted rights was $381,700 as at 30 September 2024. Details of the LTVR restricted rights can be found in<br>Section 5.3.1.
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262 WESTPAC GROUP 2024 ANNUAL REPORT<br>DIRECTORS' REPORT<br>Auditor<br>Non-audit services<br>We may decide to engage PwC on assignments additional to their statutory audit duties where their expertise or<br>experience with Westpac or a controlled entity is important.<br>Details of the non-audit service amounts paid or payable to PwC for non-audit services provided during the 2024 and<br>2023 financial years are set out in Note 33 (page 121) to the financial statements.<br>PwC also provides audit and non-audit services to non-consolidated entities, non-consolidated trusts of which a<br>Westpac Group entity is trustee, manager or responsible entity and non-consolidated superannuation funds or pension<br>funds. The fees in respect of these services were approximately $6.6 million in total (2023: $8.7 million). PwC may also<br>provide audit and non-audit services to other entities in which Westpac holds a minority interest and which are not<br>consolidated. Westpac is not aware of the amount of any fees paid to PwC by those entities.<br>Westpac has a policy on engaging PwC, details of which are set out in its 2024 Corporate Governance Statement in the<br>section ‘Engagement of the external auditor’.<br>The Board has considered the position and, in accordance with the advice received from the Board Audit Committee,<br>is satisfied that the provision of the non-audit services during 2024 by PwC is compatible with the general standard<br>of independence for auditors imposed by the Corporations Act. The Directors are satisfied, in accordance with advice<br>received from the Board Audit Committee, that the provision of non-audit services by PwC, as set out above, did not<br>compromise the auditor independence requirements of the Corporations Act for the following reasons:<br> • all non-audit services provided by PwC for the year have been reviewed by the Board Audit Committee, which is of<br>the view that they do not impact the impartiality and objectivity of PwC; and<br> • based on Board quarterly independence declarations made by PwC to the Board Audit Committee during the<br>year, none of the services undermine the general principles relating to auditor independence including reviewing<br>or auditing PwC’s own work, acting in a management or a decision-making capacity for the company, acting as<br>advocate for the company or jointly sharing economic risk and rewards.<br>The Directors’ Report is signed in accordance with a resolution of the Board of Directors.<br>Steven Gregg<br>Chairman<br>3 November 2024<br>Peter King<br>Managing Director &<br>Chief Executive Officer<br>3 November 2024
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 263<br>INFORMATION ON<br>WESTPAC<br>Significant developments<br>Westpac significant developments – Australia<br>Changes to Chairman, CEO and Board of Directors<br>On 14 December 2023, at the conclusion of the AGM, Mr<br>Steven Gregg succeeded Mr McFarlane as Chairman of the<br>Board following Mr McFarlane’s retirement.<br>On 9 September 2024, Westpac announced that Anthony<br>Miller will succeed Peter King as CEO and Managing<br>Director, effective 16 December 2024 following Mr King’s<br>retirement as CEO and Managing Director.<br>Independent Non-executive Director Chris Lynch retired<br>from the Board at the conclusion of the AGM on<br>14 December 2023.<br>On 15 July 2024, Mr Andy Maguire commenced as an<br>independent Non-executive Director of the Board.<br>On market buyback<br>As at 30 September 2024, Westpac had completed<br>$1.8 billion of the $2.5 billion on-market share<br>buyback previously announced, with 67.7 million Westpac<br>shares purchased at an average price of $26.78. The<br>shares bought back were subsequently cancelled. On<br>4 November 2024, Westpac announced an increase in<br>the amount of Westpac shares it intends to buyback<br>by up to a further $1.0 billion, to an aggregate total<br>buyback amount of up to $3.5 billion of Westpac shares.<br>Westpac reserves the right to vary, suspend or terminate<br>the buyback at any time.<br>External auditor rotation<br>On 8 March 2024, Westpac announced that KPMG was<br>the preferred firm to be appointed as Westpac’s external<br>auditor for the 2025 financial year, beginning 1 October<br>2024. This appointment is subject to the approval of<br>Westpac shareholders at the 2024 AGM.<br>Technology simplification<br>On 27 March 2024, Westpac provided an update on<br>its technology simplification project, UNITE, a multi-year<br>program of work commenced in FY24.<br>Closure of RAMS to new business<br>On 6 August 2024, Westpac announced that it had<br>completed its strategic review of RAMS Financial Group<br>Pty Limited (RAMS) and would close RAMS to new home<br>loan applications. Existing RAMS customers continue to be<br>serviced, and their loans remain in place.<br>Regulatory and risk developments<br>Enforceable undertaking on risk governance<br>remediation, Integrated Plan and CORE program<br>In December 2023, Westpac completed the Integrated<br>Plan (IP) required under the enforceable undertaking<br>(EU) entered into with APRA in December 2020<br>in relation to our risk governance remediation and<br>supporting the strengthening of our risk governance,<br>accountability and culture. In its final report issued<br>30 April 2024, the Independent Reviewer (Promontory<br>Australia) confirmed that Westpac has successfully<br>completed the IP. Promontory Australia’s final report,<br>along with reports issued previously, are available on our<br>website at https://www.westpac.com.au/about-westpac/<br>media/core/. Westpac is continuing to focus on the<br>sustainability and effectiveness of the uplift delivered by<br>the IP through a transition phase.<br>APRA releases final Prudential Standard CPS 230<br>Operational Risk Management<br>On 17 July 2023, APRA released the final version<br>of the Prudential Standard CPS 230 Operational Risk<br>Management which will come into effect from 1 July<br>2025. CPS 230 brings new and enhanced requirements<br>for our operational risk management, material service<br>provider management and business continuity planning;<br>and we are undertaking a programme of work to<br>assist in implementing these requirements. Details about<br>operational risk and the consequences of failing to comply<br>with regulatory requirements are set out in the 2024<br>Risk Factors.<br>Financial crime<br>We continue to make progress on improving our financial<br>crime risk management with significant ongoing work, as<br>we implement a multi-year program of work (including<br>AML/CTF, Sanctions, Anti-Bribery and Corruption, the<br>US Foreign Account Tax Compliance Act (FATCA) and<br>Common Reporting Standard (CRS)).<br>Through this work, we continue to undertake<br>activities to strengthen our AML/CTF Program,<br>including our Transaction Monitoring Program, and<br>remediate and improve our financial crime controls in<br>multiple areas including: initial, enhanced and ongoing<br>customer due diligence and associated record keeping;<br>upgrading customer and payment screening, enhancing<br>transaction monitoring and associated processes;<br>improving Electronic Funds Transfer Instruction processes;<br>establishing data reconciliations and checks to ensure<br>the completeness of data feeding into our financial<br>crime systems; and improving regulatory reporting,<br>including in relation to International Funds Transfer<br>Instructions, Threshold Transaction Reports, Suspicious<br>Matter Reports (including ‘tipping off’ controls), and<br>FATCA and CRS reporting and equivalent reports in<br>jurisdictions outside Australia.<br>On 11 September 2024, the Anti-Money Laundering and<br>Counter-Terrorism Financing Amendment Bill 2024 was<br>introduced into Parliament. The Bill seeks to modernise<br>and overhaul the AML/CTF regime, to ensure Australia<br>continues to effectively deter, detect and disrupt financial<br>crime. We are considering the potential impacts of the
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264 WESTPAC GROUP 2024 ANNUAL REPORT<br>INFORMATION ON WESTPAC<br>proposed Bill, including on our policies, procedures,<br>systems and controls.<br>With increased focus on financial crime, further areas of<br>potential non-compliance have been, and may continue<br>to be identified, and we continue to liaise with AUSTRAC<br>and the ATO and local regulators in jurisdictions<br>outside Australia, as appropriate, including to remediate<br>findings and adopt recommendations from regulators<br>with significant ongoing programmes of work across<br>the Group. Details about the consequences of failing to<br>comply with financial crime obligations are set out in the<br>2024 Risk Factors.<br>Scams<br>In September 2024, the Australian Government released<br>draft legislation to implement the Scams Prevention<br>Framework (SPF). The SPF outlines the responsibilities<br>of designated sectors (initially banks, telecommunications,<br>and digital platform service providers) to prevent, detect,<br>report, disrupt and respond to scams in Australia. We are<br>considering the potential impacts of the SPF if adopted<br>as drafted, including on our policies, procedures, systems<br>and controls.<br>New climate reporting standards<br>New mandatory climate-related reporting standards have<br>been finalised by the Australian Accounting Standards<br>Board and legislation requiring compliance has been<br>passed by the Australian Parliament. Westpac will report<br>against these new requirements from its financial year<br>ending 30 September 2026.<br>As of 4 April 2024, new SEC rules in relation to<br>the disclosure of climate-related information that were<br>expected to apply to Westpac from FY26 have been<br>stayed pending the outcome of a lawsuit challenging<br>the rules in the United States Court of Appeals for the<br>Eighth Circuit.<br>APRA capital requirements<br>Operational risk capital overlays<br>In 2019 APRA applied $1 billion of additional capital<br>overlays to our operational risk capital requirement.<br>These overlays were applied through an increase in risk<br>weighted assets (RWA).<br>On 19 July 2024, APRA announced its decision to reduce<br>Westpac’s total operational risk capital overlay from<br>$1 billion to $500 million.<br>The impact of the $500 million overlay reduction on<br>our Level 2 common equity Tier 1 (CET1) capital ratio at<br>30 September 2024 was an increase of 18 basis points.<br>APRA Discussion Paper on Replacement of Additional<br>Tier 1 Capital<br>On 10 September 2024, APRA released a discussion paper<br>titled “A more effective capital framework for a crisis”<br>(APRA Discussion Paper) outlining potential amendments<br>to APRA’s prudential framework and seeking feedback<br>on a proposal for banks to phase out Additional Tier 1<br>(AT1) capital and replace it with greater amounts of Tier<br>2 capital and CET1 capital. The APRA Discussion Paper<br>follows APRA’s September 2023 discussion paper relating<br>to improving the effectiveness of AT1 capital instruments.<br>APRA’s proposed approach (applicable to large,<br>internationally active banks such as Westpac) would<br>replace the existing 1.5% AT1 capital with 0.25% CET1<br>and 1.25% Tier 2 capital, which would see the total<br>minimum CET1 requirement (including regulatory buffers)<br>increase from 10.25% to 10.50%. This includes increasing<br>the minimum CET1 requirement from 4.5% to 6.0% but<br>offsetting this increase by removing the Advanced portion<br>of the capital conservation buffer (CCB) of 1.25% in<br>order to maintain a minimum Tier 1 capital ratio of<br>6.0% and a minimum 2.5% CCB in line with the Basel<br>minimum standards.<br>The proposed changes, if implemented as set out in the<br>APRA Discussion Paper, would commence from 1 January<br>2027. In addition, from this date existing AT1 instruments<br>would be eligible to be included as Tier 2 capital, until<br>their first scheduled call date. All existing AT1 instruments<br>(issued by any Australian bank) would reach their first<br>scheduled call date by 2032 at the latest.<br>APRA is seeking feedback on the APRA Discussion Paper<br>by 8 November 2024 and intends to provide an update on<br>the consultation process in late 2024 and formally consult<br>on any proposed amendments to APRA’s prudential<br>framework in 2025.<br>Westpac significant developments – New Zealand<br>RBNZ review of overseas bank branches<br>On 21 August 2024 the RBNZ released the proposed<br>Branch Standard under the Deposit Takers Act 2023<br>which will implement decisions made as part of the<br>review of its policy for branches of overseas banks. The<br>proposed Branch Standard will require that overseas bank<br>branches only conduct business with wholesale clients;<br>the total size of an overseas bank’s branch cannot exceed<br>NZ$15 billion in total assets; and dual-operating branches<br>(such as Westpac’s New Zealand Branch) only conduct<br>business with “large” corporate and institutional clients. It<br>is proposed that “large” means those with consolidated<br>annual turnover of over NZ$50 million, total assets of over<br>NZ$75 million or total assets under management of over<br>NZ$1 billion (for funds management entities only). The<br>implementation date is expected to be in July 2028.<br>Westpac’s New Zealand Branch currently provides<br>financial markets, trade finance and international payment<br>products and services to customers referred by WNZL.<br>We expect the RBNZ’s Branch Standard will require<br>changes to the activities Westpac’s New Zealand Branch<br>undertakes, and as a result, WNZL may also make changes<br>to the scope of the activities it undertakes.<br>General regulatory changes affecting our businesses<br>Cyber security<br>Regulators have continued their focus on cyber<br>security due to high profile cyber-related incidents.<br>APRA is seeking to ensure that regulated entities<br>improve their cyber security practices, focusing on<br>the effective implementation of ongoing compliance<br>with Prudential Standard CPS 234 Information Security.<br>APRA has been actively communicating with entities to
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 265<br>emphasise the importance of cyber resilience, including<br>releasing two letters in June and August 2024 to<br>regulated entities highlighting expectations about the<br>effective implementation of cyber controls including<br>data backups, security in configuration management,<br>privileged access management, and security testing.<br>Similarly, ASIC is emphasising improved cybersecurity<br>at the companies it regulates and has indicated a<br>focus on improving cyber resilience through proposed<br>testing strategies. The Australian Signals Directorate and<br>the Australian Cyber Security Centre are increasingly<br>providing threat intelligence and tailored guidance to<br>help organisations enhance their information security<br>measures. We will continue to engage with regulators<br>and the government more broadly regarding cyber-related<br>regulation, legislation and policy.<br>We continue to work on enhancing our systems and<br>processes to mitigate cyber security risks, including those<br>related to third parties, and to respond to changes in<br>regulation. Details about operational risks and information<br>security risks, including cyberattacks, are set out in the<br>2024 Risk Factors.<br>Artificial Intelligence<br>On 5 September 2024 the Australian<br>Government published:<br> • a voluntary AI Safety Standard, implementing<br>risk- based guardrails for how Australian organisations<br>should safely and responsibly use AI; and<br> • a consultation for introducing mandatory guardrails on<br>how to use AI safely and responsibly when developing<br>and deploying AI in Australia in high-risk settings<br>(consultation submissions closed 4 October 2024).<br>We continue to work on enhancing our systems and<br>processes to mitigate risks that may be amplified by<br>AI and collaborating with industry and government to<br>shape development of AI regulation, including by making<br>a submission as part of the consultation. Details about<br>operational risks and information security risks, including<br>AI, are set out in the 2024 Risk Factors. Details about<br>how we are leveraging the power of AI are outlined in the<br>Technology section (page 186).<br>Reforms to the Privacy Act<br>On 12 September 2024, the Federal Attorney-General<br>introduced into Parliament the Privacy and Other<br>Legislation Amendment Bill 2024 (Cth) which implements<br>the first tranche of agreed recommendations from the<br>Australian Government’s Privacy Act Review.<br>Key changes introduced by the first tranche include<br>the following:<br> • a new statutory tort for serious invasions of privacy;<br> • greater transparency for individuals regarding the use<br>of their personal information in automated decisions<br>that impact them;<br> • new criminal offences for the malicious release of<br>personal data (known as doxxing); and<br> • enhanced enforcement powers and new civil penalties<br>which can be tailored according to the seriousness of a<br>privacy breach.<br>A number of proposed reforms from the Privacy Act<br>Review have been deferred, with the expectation that a<br>draft Tranche 2 will be developed for consultation at a<br>later stage.<br>Revised Banking Code of Practice<br>On 27 June 2024, ASIC approved a new version of<br>the Australian Banking Association’s Banking Code of<br>Practice (the Code) with an implementation date of<br>28 February 2025 for each bank that has adopted the<br>Code (including Westpac).<br>The strengthened Code reflects the consultations both the<br>ABA and ASIC conducted with stakeholders, consumer<br>representatives and the BCCC, and includes uplifts to<br>existing provisions and additional protections for small<br>business customers, guarantors, vulnerable customers<br>and customers requiring additional support. These<br>updates include:<br> • an expanded small business definition that increases<br>the borrowing limit from $3 million to $5 million which<br>is anticipated to provide up to 10,000 more small<br>businesses with access to the Code protections;<br> • a new obligation to ensure that a meeting is held with<br>a guarantor in the absence of the borrower before<br>signing a guarantee;<br> • an updated vulnerability definition that expands the<br>categories of vulnerability and recognises that a<br>customer can become vulnerable at any time;<br> • updated provisions for managing deceased<br>estates; and<br> • an uplift of the inclusivity and accessibility provisions<br>to expressly include LGBTQIA+ persons and a new<br>commitment to organise or refer customers to free<br>support services.<br>Legal proceedings<br>Our entities are parties to legal proceedings from time<br>to time arising from the conduct of our business. Certain<br>litigation (including regulatory proceedings) and class<br>actions are described as required in Note 25 to the<br>financial statements (page 97).<br>Supervision and regulation<br>Australia<br>Within Australia, we are subject to supervision and<br>regulation by seven principal agencies and bodies: the<br>Australian Prudential Regulation Authority (APRA); the<br>Reserve Bank of Australia (RBA); the Australian Securities<br>and Investments Commission (ASIC); Australian Securities<br>Exchange Limited (ASX); the Australian Competition and<br>Consumer Commission (ACCC); the Australian Transaction<br>Reports and Analysis Centre (AUSTRAC) and the Office of<br>the Australian Information Commissioner (OAIC).<br>APRA is the prudential regulator of the Australian<br>financial services industry. As an ADI, we report prudential<br>information to APRA, including information in relation<br>to capital adequacy, large exposures, credit quality<br>and liquidity.<br>The RBA is responsible for monetary policy, maintaining<br>financial system stability and promoting the safety and
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266 WESTPAC GROUP 2024 ANNUAL REPORT<br>INFORMATION ON WESTPAC<br>efficiency of the payments system. The RBA is an active<br>participant in the financial markets, manages Australia’s<br>foreign reserves, issues Australian currency notes and<br>serves as banker to the Australian Government.<br>ASIC is Australia’s corporate, markets, financial services<br>and consumer credit regulator. It is responsible<br>for the regulation of Australian companies and<br>consumer protection within the financial sector. ASIC<br>is an independent Australian government body and<br>was established under the Australian Securities and<br>Investments Commission Act 2001 (Cth). It carries out<br>most of its regulatory functions and supervision under the<br>Corporations Act 2001 (Cth) (Corporations Act).<br>ASX operates Australia’s primary national market for<br>trading of securities issued by listed companies. Some of<br>our securities (including our ordinary shares) are listed on<br>the ASX and we therefore have obligations to comply with<br>the ASX Listing Rules, which have statutory backing under<br>the Corporations Act.<br>The ACCC is the federal regulator responsible for<br>the regulation and prohibition of anti-competitive and<br>unfair market practices and mergers and acquisitions<br>in Australia. Its broad objective is to administer<br>the Competition and Consumer Act 2010 (Cth) and<br>related legislation to bring greater competitiveness, fair<br>trading, consumer protection and product safety to the<br>Australian economy.<br>AUSTRAC oversees the compliance of Australian reporting<br>entities (including Westpac) with the requirements<br>under the Anti-Money Laundering and Counter-Terrorism<br>Financing Act 2006 (Cth) and the Financial Transaction<br>Reports Act 1988 (Cth). These requirements include:<br> • implementing programs for identifying and monitoring<br>customers, and for managing the risks of money<br>laundering and terrorism financing;<br> • reporting suspicious matters, threshold transactions<br>and international funds transfer instructions; and<br> • submitting an annual compliance report.<br>The OAIC is responsible for the regulation of privacy<br>and information rights, including under the Privacy Act<br>1988 (Cth) (Privacy Act). Its functions include handling<br>complaints about the handling of personal information,<br>conducting investigations and undertaking enforcement<br>actions in relation to potential breaches of the Privacy Act.<br>New Zealand<br>The Reserve Bank of New Zealand (RBNZ) is responsible<br>for supervising New Zealand registered banks and<br>protects the financial stability of New Zealand through<br>the application of minimum prudential obligations. The<br>New Zealand prudential supervision regime requires that<br>registered banks publish disclosure statements, which<br>contain information on financial performance and risk<br>positions as well as attestations by the directors about the<br>bank’s compliance with its conditions of registration and<br>certain other matters.<br>The Financial Markets Authority (FMA) and the New<br>Zealand Commerce Commission (NZCC) are the two<br>primary conduct and enforcement regulators. The FMA<br>and NZCC are responsible for ensuring that markets are<br>fair and transparent and are supported by confident<br>and informed investors and consumers. Regulation of<br>markets and their participants is undertaken through a<br>combination of market supervision, corporate governance<br>and licensing approvals.<br>In New Zealand, other relevant regulator mandates include<br>those relating to taxation, privacy and foreign affairs<br>and trade.<br>Banks in New Zealand are also subject to a number of<br>self-regulatory regimes. Examples include Payments NZ,<br>the New Zealand Bankers’ Association (NZBA) and the<br>Financial Services Council (FSC). Examples of industry<br>agreed codes include the NZBA’s Code of Banking<br>Practice and FSC’s Code of Conduct.<br>United States<br>Our New York branch is a US federally licensed branch<br>and therefore is subject to supervision, examination<br>and regulation by the US Office of the Comptroller<br>of the Currency and the Board of Governors of the<br>Federal Reserve System (the US Federal Reserve) under<br>the US International Banking Act of 1978 (IBA) and<br>related regulations.<br>A US federal branch must maintain, with a US Federal<br>Reserve member bank, a capital equivalency deposit<br>as prescribed by the US Comptroller of the Currency,<br>which is at least equal to 5% of its total liabilities<br>(including acceptances, but excluding accrued expenses,<br>and amounts due and other liabilities to other branches,<br>agencies and subsidiaries of the foreign bank).<br>In addition, a US federal branch is subject to periodic<br>onsite examination by the US Comptroller of the Currency.<br>Such examination may address risk management,<br>operations, asset quality, compliance with the record<br>keeping and reporting, and any additional requirements<br>prescribed by the US Comptroller of the Currency from<br>time to time.<br>A US federal branch of a foreign bank is, by virtue of the<br>IBA, subject to the receivership powers exercisable by the<br>US Comptroller of the Currency.<br>As of 22 June 2016, we elected to be treated as a<br>financial holding company in the US pursuant to the Bank<br>Holding Company Act of 1956 and Federal Reserve Board<br>Regulation Y. Our election will remain effective so long<br>as we meet certain capital and management standards<br>prescribed by the US Federal Reserve.<br>Westpac and some of its affiliates are engaged in various<br>activities that are subject to regulation by other US federal<br>regulatory agencies, including the US Securities and<br>Exchange Commission, US Financial Industry Regulatory<br>Authority, the US Commodity Futures Trading Commission<br>and the National Futures Association.<br>Section 219 of the Iran Threat Reduction and Syria Human<br>Rights Act of 2012 added Section 13(r) to the U.S.<br>Securities Exchange Act of 1934, as amended, requiring<br>each SEC reporting issuer to disclose in its annual<br>and, if applicable, quarterly reports whether it or any<br>of its affiliates have knowingly engaged in specified<br>activities, transactions or dealings relating to Iran or with<br>the Government of Iran or certain designated persons<br>or entities involved in terrorism or the proliferation of<br>weapons of mass destruction during the period covered
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 267<br>by the report. Section 219 requires disclosure even of<br>certain activities not prohibited by U.S. or other law and<br>even if such activities were conducted outside the United<br>States by non-U.S. affiliates in compliance with local law.<br>Westpac and WNZL have engaged in activity that<br>is relevant for this purpose. WBC and WNZL (as a<br>wholly owned subsidiary) maintain compliance policies<br>and procedures to comply with all applicable economic<br>sanctions laws and regulations. In that context, and only<br>after confirming that such transactions did not involve<br>prohibited or sanctionable activity under U.S. or other<br>economic sanctions, the above Westpac Group entities<br>outside the United States engaged in a limited number of<br>activities reportable under Section 219 during the period<br>covered by this annual report, as described below. No U.S.<br>persons or entities, or entities owned or controlled by U.S.<br>persons were involved in these activities.<br>There are two matters requiring disclosure for this<br>reporting period 1 October 2023 to 30 September 2024:<br>1. Payments to the Embassy of Iran in Australia. During<br>1 October 2023 to 30 September 2024, retail and<br>business customers of WBC remitted AUD payments<br>from their accounts at WBC to accounts of the<br>Embassy of Iran in Australia at an unaffiliated bank<br>in Australia. It was observed that the purpose of<br>these transactions was generally related to consular<br>purposes of the Embassy, such as obtaining travel<br>visas or mandatory travel insurance for travel to Iran.<br>WBC is not a U.S. person or owned or controlled<br>by U.S. persons and therefore its transactions that<br>do not include any U.S. jurisdictional elements are<br>not subject to the Iranian Transactions and Sanctions<br>Regulations (ITSR) at Part 560 of title 31, Code of<br>Federal Regulations, issued by the U.S. Department<br>of the Treasury’s Office of Foreign Assets Control. In<br>addition, transactions that are “ordinarily incident to<br>travel to” Iran are exempt from the ITSR (at 31 Code of<br>Federal Regulations Section 560.210(d). All payments<br>were facilitated through the NPP domestic payments<br>platform. This activity contributed an insignificant<br>amount of gross revenues and net profit to the<br>Westpac Group.<br>2. Payments to the Embassy of Iran in New Zealand.<br>During 1 October 2023 to 30 September 2024, New<br>Zealand based customers of WNZL remitted domestic<br>NZD payments from their accounts at WNZL to<br>accounts of the Embassy of Iran in New Zealand at an<br>unaffiliated bank in New Zealand. It was observed that<br>the purpose of these transactions was generally related<br>to diplomatic and consular duties of the Embassy. All<br>payments were facilitated through the WNZL domestic<br>NZD payments platform. This activity contributed an<br>insignificant amount of gross revenues and net profit<br>to the Group.<br>WNZL is not a U.S. Person or owned or controlled<br>by U.S. Persons and therefore its transactions that do<br>not include any U.S. Jurisdictional elements are not<br>subject to the ITSR at Part 560 of title 31, Code of<br>Federal Regulations, issued by the U.S. Department<br>of the Treasury's Office of Foreign Assets Control. In<br>addition, transactions that are "ordinarily incident to<br>travel to" Iran are exempt from the ITSR (at 31 Code of<br>Federal Regulations Section 560.210(d)).<br>Westpac and WNZL intend to continue to process<br>payments to the Embassies of Iran in Australia and<br>New Zealand but only under limited circumstances where<br>Westpac Group believes the funds transfers conform to<br>its compliance policies, procedures and all applicable<br>sanctions laws and regulations.<br>Anti-money laundering regulation<br>and related requirements<br>Australia<br>Westpac has a Group-wide program to manage its<br>obligations under the Anti-Money Laundering and<br>Counter- Terrorism Financing Act 2006 (Cth). We<br>continue to actively engage with the regulator, AUSTRAC,<br>on our activities.<br>Our Anti-Money Laundering and Counter-Terrorism<br>Financing Policy (AML/CTF Policy) sets out how the<br>Westpac Group complies with its legislative obligations.<br>The AML/CTF Policy applies to all business segments<br>and employees (permanent, temporary and third<br>party providers) working in Australia, New Zealand<br>and overseas.<br>United States<br>The USA PATRIOT Act of 2001 requires US financial<br>institutions, including the US branches of foreign banks, to<br>take certain steps to prevent, detect and report individuals<br>and entities involved in international money laundering<br>and the financing of terrorism. The required actions<br>include verifying the identity of financial institutions<br>and other customers and counterparties, terminating<br>correspondent accounts for foreign ‘shell banks’ and<br>obtaining information about the owners of foreign bank<br>clients and the identity of the foreign bank’s agent for<br>service of process in the US. The anti-money laundering<br>compliance requirements of the USA PATRIOT Act include<br>requirements to appoint a qualified BSA Officer, adopt and<br>implement an effective anti-money laundering program,<br>report suspicious transactions or activities, and implement<br>due diligence procedures for correspondent and other<br>customer accounts in line with the CDD rule. Westpac’s<br>New York Branch and Westpac Capital Markets LLC<br>maintain an anti-money laundering compliance program<br>designed to address US legal requirements.<br>US economic and trade sanctions, as administered by<br>the Office of Foreign Assets Control (OFAC), prohibit or<br>significantly restrict US financial institutions, including the<br>US branches and operations of foreign banks, and other<br>US persons from doing business with certain persons,<br>entities and jurisdictions. Westpac’s New York Branch<br>and Westpac Capital Markets LLC maintain compliance<br>programs designed to comply with OFAC sanctions<br>programs, and Westpac has a Group-wide program to<br>ensure adequate compliance.<br>Legal proceedings<br>Our entities are parties from time to time in legal<br>proceedings arising from the conduct of our business.<br>Material legal proceedings, if any, are described in Note<br>25 to the financial statements and/or under the Significant
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268 WESTPAC GROUP 2024 ANNUAL REPORT<br>INFORMATION ON WESTPAC<br>developments section above. Where appropriate as<br>required by the accounting standards, a provision has<br>been raised in respect of these proceedings and disclosed<br>in the financial statements.<br>Cybersecurity management<br>and governance<br>The Group Chief Information Security Officer (CISO)<br>reports to the Chief Information Officer, a member of<br>the Executive Team. The CISO is a member of key<br>cybersecurity governance forums and is responsible<br>for leading and managing the cybersecurity function,<br>setting the cybersecurity strategy and direction, and<br>overseeing the implementation, operation and execution<br>of the cybersecurity policies, standards, controls, and<br>capabilities, including for third parties who are engaged<br>to manage Westpac’s information assets.<br>We have implemented a range of cybersecurity processes,<br>technologies, and controls to facilitate our efforts<br>to assess, identify, and manage such risks, including<br>regular network and endpoint monitoring, access controls,<br>vulnerability assessments, penetration testing, annual<br>information security training for employees, and tabletop<br>cybersecurity incident response exercises.<br>We have an Incident Response Plan which guides the<br>actions we are to take in the event of a suspected<br>or confirmed cybersecurity incident. The plan includes<br>processes to triage, investigate, contain, and remediate<br>the incident. The plan is designed to contain and<br>minimise the impact of a cybersecurity incident on our<br>customers. We also maintain a Business Continuity Plan,<br>which provides procedures for maintaining the continuity<br>of critical business processes in the event of business<br>interruption, including any that involve cybersecurity<br>incidents which may significantly impact our operations.<br>Our cybersecurity team is informed about and monitors<br>the prevention, mitigation, detection and remediation of<br>cybersecurity threats through their management of, and<br>participation in, the strategy processes.<br>The CISO and the cybersecurity team have relevant<br>expertise and experience in various aspects of<br>cybersecurity, such as strategy, governance, risk<br>management, threat intelligence, incident response,<br>security operations, architecture, engineering, testing<br>and awareness. The CISO has extensive experience<br>in information technology and cybersecurity. The<br>cybersecurity team consists of qualified and competent<br>professionals who have diverse backgrounds and skills<br>in cybersecurity. The cybersecurity team regularly<br>participates in training, education, and development<br>programs to enhance their knowledge and skills to keep<br>up with the evolving cybersecurity landscape.<br>As part of its cybersecurity risk management, Westpac<br>engages with third parties for independent reviews<br>and assessments of its cybersecurity policies, standards,<br>controls, and capabilities. These third parties include<br>external auditors, industry bodies, consultants, and<br>specialists. The purpose of these engagements is to obtain<br>assurance, validation, benchmarking and improvement<br>recommendations on Westpac's cybersecurity posture<br>and maturity. Westpac holds ISO27001, PCI-DSS and SOC<br>2 Type 2 certifications for areas of the Group.<br>The CISO escalates key cybersecurity risk and control<br>issues, as appropriate, to the Technology Risk Committee<br>(TRC) or to the appropriate Line of Business and<br>Divisional Committees. The TRC, a senior management<br>committee, oversees the technology function and<br>technology risk management. The TRC reports to<br>the Group Executive Risk Committee (GRISKCO),<br>the executive management committee responsible for<br>overseeing the group's strategy, performance, and<br>risk management.<br>The Board of Directors receives periodic updates from<br>the CIO and the CISO regarding cybersecurity matters.<br>The Board is ultimately responsible for the oversight of<br>the cybersecurity risk management. The Board delegates<br>some of its oversight responsibilities to the Board Risk<br>Committee, which assists the Board in the oversight of<br>cybersecurity risk management.<br>During the period covered by this 2024 Annual Report,<br>we have not experienced any cybersecurity incidents<br>which have materially affected or are reasonably likely<br>to materially affect our business strategy, results of<br>operations, or financial condition. However, institutions<br>like ours, as well as our employees, service providers and<br>other third parties have experienced a significant increase<br>in information security and cybersecurity risk in recent<br>years and will likely continue to be the target of increasing<br>sophisticated cyber-related attacks.<br>Change In Registrant’s<br>Certifying Accountant<br>On 8 March 2024, Westpac announced that KPMG was<br>the preferred firm to be appointed as Westpac’s external<br>auditor for the 2025 financial year, beginning 1 October<br>2024. This appointment is subject to the approval of<br>Westpac shareholders at the Westpac Annual General<br>Meeting (AGM), scheduled for 13 December 2024. The<br>selection and change in external auditor was adopted by<br>the Westpac Board at the recommendation of Westpac’s<br>Board Audit Committee following a competitive tender<br>process. PwC was not invited to participate in this<br>audit tender process, having regard to best practice for<br>audit firm rotation and PwC’s tenure as the Group’s<br>external auditor. Accordingly, PwC, subject to approval<br>by the Westpac shareholders at the AGM of KPMG’s<br>appointment, will resign as Westpac’s external auditor,<br>effective from the close of that meeting.<br>The audit reports of PwC dated 3 November 2024 and<br>5 November 2023 did not contain any adverse opinion or<br>disclaimer of opinion and were not qualified or modified<br>as to uncertainty, audit scope or accounting principles.<br>During the fiscal years ended 30 September 2024 and<br>2023, there has not been any disagreement on any<br>matter of accounting principles or practices, financial<br>statement disclosure, or auditing scope or procedure,<br>which disagreement, if not resolved to the satisfaction of<br>PwC, would have caused them to make reference to the<br>subject matter of the disagreement in connection with<br>their reports, nor has there been an “reportable event” as<br>described in Item 16F(a)(1)(v) of Form 20-F.<br>Further, during the fiscal years ended 30 September 2024<br>and 2023, neither Westpac, nor anyone on its behalf,<br>consulted with KPMG regarding (i) the application of
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 269<br>accounting principles to a specified transaction, either<br>completed or proposed, or the type of audit opinion that<br>might be rendered with respect to Westpac’s consolidated<br>financial statements and either a written report was<br>provided to Westpac or oral advice was provided that<br>KPMG concluded was an important factor considered by<br>Westpac in reaching a decision as to the accounting,<br>auditing or financial reporting issue; or (ii) any matter that<br>was either the subject of a disagreement, as that term is<br>defined in Item 16F(a)(1)(iv) of Form 20-F and the related<br>instructions, or a “reportable event” as described in Item<br>16F(a)(1)(v) of Form 20-F.<br>Westpac has provided PwC with a copy of the foregoing<br>disclosure and has requested that PwC furnish Westpac<br>with a letter addressed to the SEC stating whether it<br>agrees with such disclosure. A copy of the letter, dated<br>5 November 2024, is filed herewith as Exhibit 16.1.
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270 WESTPAC GROUP 2024 ANNUAL REPORT<br>PERFORMANCE<br>REVIEW<br>READING THIS REPORT<br>GROUP PERFORMANCE<br>Performance summary<br>Key financial information<br>Impact of Notable Items<br>Review of earnings<br>Credit quality<br>Balance sheet and funding<br>Capital and dividends<br>SEGMENT REPORTING<br>REVIEW OF EARNINGS: 2023 VS 2022<br>RISK FACTORS<br>Limitation on Independent Registered Public Accounting Firm’s Liability<br>FINANCIAL STATEMENTS
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 271<br>READING THIS REPORT<br>Disclosure regarding forward-looking statements<br>This 2024 Annual Report contains statements that constitute ‘forward-looking statements’ within the meaning of Section<br>21E of the US Securities Exchange Act of 1934.<br>Forward-looking statements are statements that are not historical facts. Forward-looking statements appear in a number<br>of places in this 2024 Annual Report and include statements regarding our current intent, belief or expectations with<br>respect to our business and operations, macro and micro economic and market conditions, results of operations<br>and financial condition and performance, capital adequacy and liquidity and risk management, including, without<br>limitation, future loan loss provisions and financial support to certain borrowers, forecasted economic indicators and<br>performance metric outcomes, indicative drivers, climate- and other sustainability-related statements, commitments,<br>targets, projections and metrics, and other estimated and proxy data.<br>Words such as ‘will’, ‘may’, ‘expect’, ‘intend’, ‘seek’, ‘would’, ‘should’, ‘could’, ‘continue’, ‘plan’, ‘estimate’, ‘anticipate’,<br> ‘believe’, ‘probability’, ‘indicative’, ‘risk’, ‘aim’, ‘outlook’, ‘forecast’, ‘assumption’, ‘projection’, ‘target’, ‘goal’, ‘guidance’,<br> ‘objective’, ‘ambition’ or other similar words, are used to identify forward-looking statements. These statements reflect<br>our current views on future events and are subject to change, certain known and unknown risks, uncertainties and<br>assumptions and other factors which are, in many instances, beyond our control (and the control of our officers,<br>employees, agents, and advisors), and have been made based on management’s current expectations or beliefs<br>concerning future developments and their potential effect upon Westpac.<br>Forward-looking statements may also be made, verbally or in writing, by members of Westpac’s management or<br>Board in connection with this 2024 Annual Report. Such statements are subject to the same limitations, uncertainties,<br>assumptions and disclaimers set out in this document.<br>There can be no assurance that future developments or performance will align with our expectations or that the effect of<br>future developments on us will be those anticipated. Actual results could differ materially from those we expect or which<br>are expressed or implied in forward-looking statements, depending on various factors including, but not limited to:<br> • information security breaches, including cyber attack events<br> • the effect of, and changes in, laws, regulations, regulatory policy, taxation or accounting standards or practices, and<br>government and central bank monetary policies, including changes to liquidity, leverage and capital requirements<br> • regulatory investigations, reviews (including industry reviews) and other actions, inquiries, litigation, fines, penalties,<br>restrictions or other regulator-imposed conditions, including from our actual or alleged failure to comply with laws,<br>regulations or regulatory policy<br> • the effectiveness of our risk management practices, including our framework, policies, processes, systems<br>and employees<br> • the reliability and security of Westpac’s technology and risks associated with changes to technology systems<br> • geopolitical events or other changes in countries in which Westpac or its customers or counterparties operate<br> • climate-related risks (including physical, transition and liability risks) that may arise from changing climate patterns,<br>and risks associated with the transition to a lower carbon economy (including Westpac’s ambition to become a<br>net-zero, climate resilient bank) or risks from legal and regulatory action, or risks from other sustainability factors<br>such as human rights and natural capital<br> • the failure to comply with financial crime obligations (including anti-money laundering and counter-terrorism<br>financing laws, anti-bribery and corruption laws, sanctions laws and tax transparency laws), which has had, and could<br>further have, adverse effects on our business and reputation<br> • internal and external events which may adversely impact our reputation<br> • litigation and other legal proceedings and regulator investigations and enforcement actions (including the liability of<br>Westpac to pay significant monetary settlements and legal costs in order to resolve a dispute)<br> • market volatility and disruptions, including uncertain conditions in funding, equity and asset markets and any losses<br>or business impacts we or our customers or counterparties may experience<br> • the incidence of inadequate capital levels<br> • changes in economic conditions, consumer or business spending, saving and borrowing habits in Australia, New<br>Zealand and other countries in which we or our customers or counterparties operate and our ability to maintain or to<br>increase market share, margins and fees, and control expenses<br> • adverse asset, credit or capital market conditions or an increase in defaults, impairments and provisioning because of<br>a deterioration in economic conditions<br> • sovereign risks, including the risk that governments will default on their debt obligations, fail to perform contractual<br>obligations, or be unable to refinance their debts<br> • changes to Westpac’s credit ratings or the methodology used by credit rating agencies<br> • the effects of market competition and competition regulatory policy impacting the areas in which we operate<br> • operational risks resulting from ineffective processes and controls<br> • levels of inflation, changes to interest rates, exchange rates and market and monetary fluctuations and volatility<br> • poor data quality, data availability or data retention
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272 WESTPAC GROUP 2024 ANNUAL REPORT<br>READING THIS REPORT<br>Disclosure regarding forward-looking statements (Continued)<br> • strategic decisions including diversification, innovation, retention, divestment, acquisitions, expansion activity,<br>integration and decisions to shut down some operations<br> • failure to recruit and retain key executives, employees and Directors<br> • changes to our critical accounting assumptions and estimates and changes to the value of our intangible assets; and<br> • various other factors including those beyond Westpac’s control.<br>The above list is not exhaustive. For certain other factors that may impact on forward-looking statements made by<br>Westpac, refer to Risk Management (page 188) and the 2024 Risk Factors. When relying on forward-looking statements<br>to make decisions with respect to Westpac, investors and others relying on information in this 2024 Annual Report<br>should carefully consider the foregoing factors and other uncertainties and events.<br>Except as required by law, we assume no obligation to revise or update any forward-looking statements in this 2024<br>Annual Report, whether from new information, future events, conditions, or otherwise, after the date of this 2024<br>Annual Report.<br>Further important information regarding climate change and sustainability-related statements<br>This 2024 Annual Report contains forward-looking statements and other representations relating to ESG topics,<br>including but not limited to climate change, net zero, climate resilience, natural capital, emissions intensity, human<br>rights and other sustainability-related statements, commitments, targets, projections, scenarios, risk and opportunity<br>assessments, pathways, forecasts, estimated projections and other proxy data.<br>These are subject to known and unknown risks, and there are significant uncertainties, limitations, risks and assumptions<br>in the metrics and modelling on which these statements rely.<br>In particular, the metrics, methodologies and data relating to climate and sustainability are rapidly evolving and<br>maturing, including variations in approaches and common standards in estimating and calculating emissions, and<br>uncertainty around future climate- and sustainability-related policy and legislation. There are inherent limits in the<br>current scientific understanding of climate change and its impacts. Some material contained in this 2024 Annual Report<br>may include information including, without limitation, methodologies, modelling, scenarios, reports, benchmarks, tools<br>and data, derived from publicly available or government or industry sources that have not been independently verified.<br>No representation or warranty is made as to the accuracy, completeness or reliability of such information. There is a risk<br>that the estimates, judgements, assumptions, views, models, scenarios or projections used by Westpac may turn out to<br>be incorrect. These risks may cause actual outcomes, including the ability to meet commitments and targets, to differ<br>materially from those expressed or implied in this 2024 Annual Report and the 2024 Risk Factors. The climate- and<br>sustainability-related forward-looking statements made in this 2024 Annual Report and the 2024 Risk Factors are not<br>guarantees or predictions of future performance and Westpac gives no representation, warranty or assurance (including<br>as to the quality, accuracy or completeness of these statements), nor guarantee that the occurrence of the events<br>expressed or implied in any forward-looking statement will occur. There are usually differences between forecast and<br>actual results because events and actual circumstances frequently do not occur as forecast and these differences may be<br>material. Westpac will continue to review and develop its approach to ESG as this subject area matures.<br>Currency of presentation, exchange rates and certain definitions<br>In this Annual Report, ‘financial statements’ means our audited consolidated balance sheets as at 30 September 2024<br>and 30 September 2023 and income statements, statements of comprehensive income, changes in equity and cash flows<br>for each of the years ended 30 September 2024, 2023 and 2022 together with accompanying notes which are included<br>in this Annual Report.<br>Our financial year ends on 30 September. As used throughout this Annual Report, the financial year ended<br>30 September 2024 is referred to as 2024 and other financial years are referred to in a corresponding manner.<br>All dollar values in this report are in Australian dollars unless otherwise noted or the context otherwise requires,<br>references to ‘dollars’, ‘dollar amounts’, ‘$’, ‘AUD’ or ‘A$’ are to Australian dollars. References to ‘US$’, ‘USD’ or ‘US<br>dollars’ are to United States dollars, references to ‘NZ$’, ‘NZD’ or ‘NZ dollars’ are to New Zealand dollars and references<br>to 'GBP' are to British Pound Sterling. Refer to Exchange rates (page 353) for information regarding the rates of<br>exchange between the Australian dollar and the US dollar applied by Westpac as part of its operating activities for<br>2024, 2023 and 2022.<br>Any discrepancies between totals and sums of components in tables contained in this Annual Report are due to<br>rounding. Percentage (%) movements are shown as % unless otherwise stated to all the tables in this document and<br>represent the percentage change between 2024 and 2023.<br>Information on terms, acronyms and calculations used in this report are provided in the Glossary of Abbreviations and<br>Defined Terms (pages 363-367).
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 273<br>Selected consolidated financial and operating data<br>We have derived the following selected financial information, as of, and for the financial years ended,<br>30 September 2024, 2023 and 2022 from our consolidated financial statements and related notes, except for certain<br>data such as market share information, and other regulatory information which are derived from filings with our<br>regulators and are unaudited.<br>This information should be read together with our audited consolidated financial statements and the accompanying<br>notes included elsewhere in this Annual Report.<br>Only the Financial Statements are audited<br>PricewaterhouseCoopers has audited the financial statements, accompanying notes and the Consolidated Entity<br>Disclosure Statement contained within the Financial Statements (pages 2- 135 ) of this Annual Report and has<br>issued an unmodified audit report. All other sections of the Annual Report have not been subject to audit by<br>PricewaterhouseCoopers. The financial information contained in this Annual Report includes information extracted from<br>the audited financial statements together with information that has not been audited.<br>Non-AAS financial measures<br>Westpac’s statutory results are prepared in accordance with AAS and are also compliant with IFRS.<br>In assessing Westpac’s performance and that of our operating segments we use a number of financial measures,<br>including amounts, measures and ratios that are presented on a non-AAS basis, as described below.<br>Non-AAS financial measures and ratios do not have standardised meanings under AAS. As such they are unlikely to be<br>directly comparable to similar measures presented by other companies and should not be viewed in isolation from, or as<br>a substitute for, the AAS results.<br>Our non-AAS measures fall within the following categories:<br>MEASURE/RATIO DESCRIPTION FURTHER<br>INFORMATION<br>Performance<br>measures<br>excluding the<br>impact of<br>Notable Items,<br>businesses<br>sold<br>The net interest income, non-interest income, operating expenses and<br>segment reporting sections of this report include performance measures<br>that exclude Notable Items, businesses sold and/or held-for-sale.<br>Notable Items are items that management believes are not reflective of<br>Westpac’s ongoing business performance. Details of Notable Items are<br>included in Impact of Notable Items (page 278).<br>Businesses sold reflect the contribution to Westpac’s results in the period<br>sold prior to their sale. It also includes any gains/ losses related to their<br>sale but excludes items that have been identified as Notable Items.<br>Performance measures which are adjusted for one or more of these<br>items include:<br> • Net interest income<br> • Non-interest income (including net fee income, net wealth<br>management and insurance income, trading income and other income)<br> • Operating expenses (including staff expenses, occupancy expenses,<br>technology expenses and other expenses)<br> • Pre-provision profit<br> • Net profit<br> • Net profit attributable to owners of WBC<br> • Return on average ordinary equity<br> • Return on tangible ordinary equity<br>Management considers this information useful as these measures provide a<br>view that reflects Westpac’s ongoing business performance.<br>See pages<br>160-161, 164-167,<br>276-301, 302-313,<br>and 357-358.
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274 WESTPAC GROUP 2024 ANNUAL REPORT<br>READING THIS REPORT<br>Non-AAS financial measures (Continued)<br>MEASURE/RATIO DESCRIPTION FURTHER<br>INFORMATION<br>Pre-provision<br>profit<br>Pre-provision profit is net profit/(loss) excluding credit impairment<br>(charges)/benefits and income tax (expense)/benefit.<br>This is calculated as net interest income plus non-interest income less<br>operating expenses. This includes (charges)/benefits relating to provisions<br>and impairment other than from expected credit losses.<br>Management considers this information useful as this measure provides<br>readers with a view of the impact of the operating performance<br>of Westpac.<br>See pages 164-167,<br>276-301, 302-313,<br>and 357-358.<br>Basic earnings<br>per share<br>(excluding<br>Notable Items)<br>and Diluted<br>earnings per<br>share<br>(excluding<br>Notable Items)<br>Basic earnings per share (excluding Notable Items) is calculated as<br>net profit attributable to owners of WBC (adjusted for RSP dividends)<br>excluding Notable items divided by the weighted average number of<br>ordinary shares on issue during the period, adjusted for treasury shares.<br>Diluted earnings per share is calculated by adjusting the basic earnings per<br>share (excluding Notable Items) by assuming all dilutive potential ordinary<br>shares are converted.<br>Management considers this information useful as these measures provide<br>a view of the basic and diluted earnings per share based on the ongoing<br>operating performance of Westpac.<br>See pages 277<br>and 357-358<br>Core net<br>interest<br>income and<br>core net<br>interest margin<br>(NIM)<br>Core net interest income is calculated as net interest income excluding<br>Notable Items, and Treasury and Markets income.<br>Core NIM is calculated as core net interest income (annualised where<br>applicable) divided by average interest earning assets.<br>Management considers this information useful as these measures provide a<br>view of the underlying performance of Westpac’s net interest income and<br>margin, for lending, deposit and wholesale funding.<br>See pages 164-167,<br>277 and 280.<br>Dividend<br>payout ratio<br>(excluding<br>Notable Items)<br>Calculated as ordinary dividend paid/declared on issued shares<br>(net of Treasury shares) divided by the net profit attributable to owners<br>of WBC excluding Notable Items.<br>Management considers this information useful as it provides a view of<br>the dividend payout ratio based on the ongoing operating performance<br>of Westpac.<br>See pages 277<br>and 357-358.<br>Expense to<br>income ratio<br>(excluding<br>Notable Items)<br>Calculated as operating expenses excluding Notable Items divided by net<br>operating income excluding Notable Items.<br>Management considers this information useful as this measure provides a<br>view of the efficiency of the ongoing operating performance of Westpac.<br>See pages 164-167,<br>277, 288-289<br>and 357-358.<br>Average<br>tangible<br>ordinary<br>equity and<br>Return on<br>average<br>tangible<br>ordinary<br>equity (ROTE)<br>Average tangible ordinary equity is calculated as average ordinary<br>equity less average goodwill and other intangible assets (excluding<br>capitalised software).<br>Return on average tangible ordinary equity is calculated as net profit<br>attributable to owners of WBC adjusted for RSP dividends (annualised<br>where applicable) divided by average tangible ordinary equity.<br>Management considers this information useful as these measures are<br>commonly used as a performance measure by WBC, investors, analysts<br>and others in assessing Westpac's application of equity.<br>See pages<br>160-161, 164-167, 277<br>and 357-358.<br>Presentation changes<br>In 2024, we have made changes to both the composition of our segments and the measurement of segment<br>performance. Comparatives have been restated to align to the current period presentation. Refer to Segment Reporting<br>(pages 302-313) for further details.<br>Certain comparative information has also been revised where appropriate to conform to changes in presentation in the<br>current period to enhance comparability.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 275<br>References to websites<br>Information contained in or accessible through the websites mentioned in this Annual Report does not form part of this<br>Annual Report unless we specifically state that it is incorporated by reference and forms part of this Annual Report.
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276 WESTPAC GROUP 2024 ANNUAL REPORT<br>GROUP PERFORMANCE<br>Performance summary<br>$m 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Net interest income 18,753 18,317 17,161 2<br>Non-interest income 2,835 3,328 2,445 (15)<br>Net operating income 21,588 21,645 19,606 -<br>Operating expenses (10,944) (10,692) (10,802) 2<br>Pre-provision profit 10,644 10,953 8,804 (3)<br>Impairment (charges)/benefits (537) (648) (335) (17)<br>Profit before income tax expense 10,107 10,305 8,469 (2)<br>Income tax expense (3,117) (3,104) (2,770) -<br>Profit after income tax expense 6,990 7,201 5,699 (3)<br>Profit attributable to non-controlling interests (NCI) - (6) (5) (100)<br>Net profit attributable to owners of WBC 6,990 7,195 5,694 (3)<br>Notable Items (123) (173) (874) (29)<br>Effective tax rate 30.84% 30.12% 32.71% 72 bps<br>Performance Summary excluding Notable Items<br>$m 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Net interest income 18,916 18,414 16,606 3<br>Non-interest income 2,847 3,128 3,299 (9)<br>Net operating income 21,763 21,542 19,905 1<br>Operating expenses (10,944) (10,232) (10,181) 7<br>Pre-provision profit 10,819 11,310 9,724 (4)<br>Impairment (charges)/benefits (537) (648) (335) (17)<br>Profit before income tax expense 10,282 10,662 9,389 (4)<br>Income tax expense (3,169) (3,288) (2,816) (4)<br>Profit after income tax expense 7,113 7,374 6,573 (4)<br>Profit attributable to non-controlling interests (NCI) - (6) (5) (100)<br>Net profit attributable to owners of WBC 7,113 7,368 6,568 (3)
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 277<br>Key financial information<br>2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Shareholder value<br>Basic earnings per ordinary share (cents) 200.9 205.3 159.9 (2)<br>Basic earnings per ordinary share (ex Notable Items) (cents) 204.4 210.3 184.5 (3)<br>Diluted earnings per ordinary share (cents) 191.7 195.2 152.4 (2)<br>Diluted earnings per ordinary share (ex Notable Items) (cents) 194.8 199.6 174.9 (2)<br>Weighted average ordinary shares (millions) 3,476 3,502 3,559 (1)<br>Fully franked ordinary dividends per share (cents) 151 142 125 6<br>Fully franked special dividend per share (cents) 15 - - -<br>Dividend payout ratioa 74.62% 69.20% 76.79% large<br>Dividend payout ratio (ex Notable Items)a 73.32% 67.57% 66.57% large<br>Return on average ordinary equity 9.77% 10.09% 8.10% (32 bps)<br>Return on average ordinary equity (ex Notable Items) 9.94% 10.34% 9.34% (40 bps)<br>Return on average tangible equity (ROTE)b 11.01% 11.39% 9.17% (38 bps)<br>ROTE (ex Notable Items) 11.21% 11.67% 10.58% (46 bps)<br>Average ordinary equity ($m) 71,493 71,229 70,268 -<br>Average tangible ordinary equity ($m) 63,415 63,117 62,078 -<br>Average total equity ($m) 71,549 71,274 70,323 -<br>Net tangible asset per ordinary share ($) 17.75 17.58 17.18 1<br>Business performance<br>Group NIM 1.93% 1.95% 1.94% (2 bps)<br>Core NIMb 1.82% 1.86% 1.76% (4 bps)<br>Treasury & markets impact on NIMb 0.13% 0.10% 0.12% 3 bps<br>Notable Items impact on NIM (0.02%) (0.01%) 0.06% (1 bps)<br>Average interest-earning assets ($m)c 970,055 940,449 886,205 3<br>Return on average assets 0.66% 0.70% 0.58% (4 bps)<br>Expense to income ratio 50.69% 49.40% 55.10% 129 bps<br>Expense to income ratio (ex Notable Items) 50.29% 47.50% 51.15% 279 bps<br>Full time equivalent employees (FTE) 35,240 36,146 37,476 (3)<br>Revenue per FTE ($'000's) 612 577 508 6<br>Capital, funding and liquidity<br>Level 2 common equity Tier 1 capital ratio:<br>- Australian Prudential Regulation Authority (APRA) 12.49% 12.38% 11.29% 11 bps<br>- Internationally comparable 18.27% 18.73% 17.57% (46 bps)<br>Credit RWA ($m) 345,964 339,758 362,098 2<br>Total risk weighted assets (RWA) ($m) 437,430 451,418 477,620 (3)<br>Liquidity coverage ratio (LCR) 133% 134% 132% (59 bps)<br>Net stable funding ratio (NSFR) 112% 115% 121% (261 bps)<br>Deposit to loan ratio 83.50% 82.89% 82.85% 61 bps<br>Credit quality and impairment charges<br>Gross impaired exposures to gross loans 0.24% 0.17% 0.20% 7 bps<br>Gross impaired exposures provisions to gross impaired exposures 41.28% 43.47% 47.95% (219 bps)<br>Collectively assessed provisions to credit RWA 132 bps 135 bps 116 bps (3 bps)<br>Total provisions to credit RWA 147 bps 145 bps 128 bps 2 bps<br>Total committed exposure (TCE) ($bn) 1,252 1,218 1,186 3<br>Total stressed exposures as a % of TCE 1.45% 1.26% 1.07% 19 bps<br>Total provision to gross loans 63 bps 63 bps 62 bps -<br>Mortgages 90+ day delinquencies 1.05% 0.81% 0.69% 24 bps<br>Other consumer loans 90+ day delinquencies 1.40% 1.28% 1.56% 12 bps<br>Impairment charges/(benefits) to average loans 7 bps 9 bps 5 bps (2 bps)<br>Balance sheet ($m)<br>Loans 806,767 773,254 739,647 4<br>Total assets 1,077,544 1,029,774 1,014,198 5<br>Customer deposits 673,615 640,951 612,834 5<br>a. Excludes the impact of special dividends and the dividend component of the off-market share buyback in 2022.<br>b. Comparatives have been revised to align with current period presentation.<br>c. Net of average mortgage offset balances.
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278 WESTPAC GROUP 2024 ANNUAL REPORT<br>GROUP PERFORMANCE<br>Impact of Notable Items<br>To assist in explaining our financial performance, we report Notable Items, which represent certain items that are not<br>considered to be reflective of Westpac's ongoing business performance.<br>Notable Items broadly fall into the following categories:<br> • Unrealised fair value gains/(losses) on economic hedges that do not qualify for hedge accounting<br> • Net ineffectiveness on qualifying hedges<br> • Large items that are not reflective of Westpac's ordinary operations. In individual reporting periods large items<br>may include:<br> – Provisions for remediation, litigation, fines and penalties<br> – The impact of asset sales and revaluations<br> – The write-down of assets (including goodwill and capitalised software)<br> – Restructuring costs<br>In determining dividends, the impact of Notable Items is typically excluded.<br>Notable Items reduced net profit after tax in 2024 by $123 million (2023: $173 million, 2022: $874 million).<br>Details of Notable Items (post tax) impacting on 2024 and 2023 results are presented below:<br>Category Net profit impact Detail<br>2024<br>Unrealised fair value gains/<br>(losses) on economic hedges<br>that do not qualify for<br>hedge accounting<br>$128 million<br>reduction<br>The unrealised fair value loss on hedges of accrual accounted term funding transactions for<br>the year was $128 million. This represents a timing difference for the statutory results but<br>does not affect profits over the life of the hedge.<br>Net ineffectiveness on<br>qualifying hedges<br>$5 million<br>benefit<br>The net ineffectiveness on qualifying hedges of $5 million for the period arises from the fair<br>value movement in these hedges which reverses over time and therefore does not affect<br>profits over time.<br>Total Notable Items $123 million<br>reduction<br>2023<br>The impact of asset sales<br>and revaluations<br>$256 million<br>benefit<br>Gain on the sale of Advance Asset Management Limited of $243 million. This also includes a<br>tax refund related to transaction and separation costs.<br>Provision for remediation,<br>litigation, fines and penalties<br>$176 million<br>reduction<br>Net operating income - $103 million<br> • Decrease in revenue due to additional repayments to institutional, business and<br>superannuation customers.<br>Expenses - $132 million<br> • An increase in provisions for costs associated with customer remediation programs,<br>regulatory investigations and litigation of $90 million.<br> • Estimated costs for the one-off levy for the Commonwealth’s Compensation Scheme of<br>Last Resort of $42 million.<br>Restructuring costs $140 million<br>reduction<br>Costs associated with accelerating organisation simplification and the discontinuance of<br>specialist businesses.<br>The write-down of assets $87 million<br>reduction<br>The write-down of property assets and costs related to the reduction in corporate office<br>space and accelerated consolidation of branches.<br>Unrealised fair value gains/<br>(losses) on economic hedges<br>that do not qualify for<br>hedge accounting<br>$92 million<br>reduction<br>The unrealised fair value loss on hedges of accrual accounted term funding transactions for<br>the year was $92 million. This represents a timing difference for the statutory results but does<br>not affect profits over the life of the hedge.<br>Net ineffectiveness on<br>qualifying hedges<br>$66 million<br>benefit<br>The net ineffectiveness on qualifying hedges of $66 million for the period arises from the<br>fair value movement in these hedges which reverses over time and therefore does not affect<br>profits over time.<br>Total Notable Items $173 million<br>reduction
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 279<br>Impact of Notable Items (Continued)<br>A summary of 2024, 2023 and 2022 Notable Items is presented below:<br>$m<br>Economic<br>hedges<br>Hedge<br>ineffectiveness<br>Provisions for<br>remediation,<br>litigation,<br>fines and<br>penalties<br>Asset sales<br>and<br>revaluations<br>The write-down of<br>assets<br>Restructuring<br>costs Total<br>2024<br>Net interest income (171) 8 - - - - (163)<br>Non-interest income (12) - - - - - (12)<br>Net operating income (183) 8 - - - - (175)<br>Operating expenses - - - - - - -<br>Pre-provision profit (183) 8 - - - - (175)<br>Income tax (expense)/benefit and NCI 55 (3) - - - - 52<br>Net profit/(loss) (128) 5 - - - - (123)<br>2023<br>Net interest income (113) 94 (78) - - - (97)<br>Non-interest income (18) - (25) 243 - - 200<br>Net operating income (131) 94 (103) 243 - - 103<br>Operating expenses - - (132) - (126) (202) (460)<br>Pre-provision profit (131) 94 (235) 243 (126) (202) (357)<br>Income tax (expense)/benefit and NCI 39 (28) 59 13 39 62 184<br>Net profit/(loss) (92) 66 (176) 256 (87) (140) (173)<br>2022<br>Net interest income 633 (77) (1) - - - 555<br>Non-interest income 39 - (52) (841) - - (854)<br>Net operating income 672 (77) (53) (841) - - (299)<br>Operating expenses - - (126) (144) (351) - (621)<br>Pre-provision profit 672 (77) (179) (985) (351) - (920)<br>Income tax (expense)/benefit and NCI (202) 25 46 109 68 - 46<br>Net profit/(loss) 470 (52) (133) (876) (283) - (874)
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280 WESTPAC GROUP 2024 ANNUAL REPORT<br>GROUP PERFORMANCE<br>Review of earnings<br>Pages 280 to 301 provides a comparative discussion of Westpac’s performance for the financial year ended<br>30 September 2024 compared to 2023, unless otherwise specified. Factors that relate primarily to a single business<br>segment are discussed in more detail in Segment Reporting (pages 302-313).<br>Net interest income<br>2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Net interest Income ($m)<br>Net interest income 18,753 18,317 17,161 2<br>Core net interest incomea 17,608 17,519 15,532 1<br>Notable Items (163) (97) 555 68<br>Treasurya,b 1,056 729 951 45<br>Marketsa 252 166 123 52<br>Average interest earning assets ($m)c<br>Loans 732,660 703,832 676,469 4<br>Housinga,d 500,338 484,214 469,492 3<br>Personal 11,754 13,055 15,043 (10)<br>Business 220,568 206,563 191,934 7<br>Liquid assets 206,266 210,960 191,749 (2)<br>Other interest-earning assets 31,129 25,657 17,987 21<br>Average interest earning assets 970,055 940,449 886,205 3<br>NIM (%)<br>NIM 1.93% 1.95% 1.94% (2 bps)<br>Core NIMa 1.82% 1.86% 1.76% (4 bps)<br>Treasury & Markets impact on NIMa 0.13% 0.10% 0.12% 3 bps<br>Notable Items impact on NIM (0.02%) (0.01%) 0.06% (1 bps)<br>a. Comparatives have been revised to align with current period presentation.<br>b. Treasury net interest income excludes capital benefit.<br>c. Includes assets held for sale.<br>d. Net of average mortgage offset balances.<br>Net interest income increased 2% to $18,753 million. Key drivers included:<br> • Higher core net interest income, up 1% to $17,608 million, due to balance sheet growth which was partly offset by<br>lower net interest margin;<br> • Notable Items reduced income by $163 million compared to a reduction of $97 million in the prior year; and<br> • Treasury and Markets income, up 46% to $1,308 million due to stronger performance by Treasury which was well<br>positioned for interest rate volatility.<br>Average interest-earning assets increased by 3% to $970.1 billion, including growth of 7% in business and 3% in<br>housing loans respectively. This was partially offset by the reduction in Personal loans which included auto finance<br>loan runoff. Average liquid assets declined by 2% while other interest-earning assets increased by 21% due to increased<br>holdings of trading securities, mainly relating to holdings of reverse repurchase agreements in Markets to facilitate<br>client transactions.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 281<br>Review of earnings (Continued)<br>Net interest margin<br>T&M2<br>(1bps)<br>0.09 0.11<br>1.82<br>Notable Items 2024<br>1.86<br>2023<br>(10bps)<br>(1bp)<br>Deposits<br>2bps<br>Loans Liquid Assets WSF1<br>1.95 3bps 1.93<br>(2bps)<br>7bps<br>Capital & Other<br>NIM down 2bps<br>Net interest margin movement (%)<br>Full Year 2023 – Full Year 2024<br>Core NIM down 4bps<br>1. Wholesale Funding Cost.<br>2. Treasury & Markets contribution.<br>Notable Items, Treasury & Markets<br>Core NIM<br> • The NIM decreased by 2 basis points to 1.93%. NIM comprised:<br> – Core NIM of 1.82%, down 4 basis points with key drivers described below;<br> – Treasury and Markets added 13 basis points, up 3 basis points due to a higher Treasury contribution from<br>favourable positioning for interest rate volatility; and<br> – Notable Items from unrealised fair value losses for accounting purposes related to economic hedges of term<br>funding detracted 2 basis points, having detracted 1 basis point in the prior year.<br> • The 4 basis points decrease in Core NIM comprised the following movements:<br> – Loan interest spread: 10 basis point decrease mainly from tighter spreads on mortgage lending in Australia due<br>to competition for new and existing customers. Spreads on credit cards and business loans also contributed to<br>margin decline. The contraction slowed through the period, with loan interest spreads down 1 basis point in the<br>Second Half 2024;<br> – Wholesale funding: 2 basis point decrease as spreads on new term wholesale funding were higher than maturing<br>facilities, which included the Term Funding Facility (TFF);<br> – Deposit interest spread: 1 basis point decrease included the impacts of a mix shift towards lower spread savings<br>and term deposit accounts. Earnings on hedged deposits were higher;<br> – Liquid Assets: 2 basis point increase from a reduction in liquid asset balances; and<br> – Capital and Other: 7 basis point increase primarily from higher earnings on capital balances as a result of higher<br>interest rates.
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282 WESTPAC GROUP 2024 ANNUAL REPORT<br>GROUP PERFORMANCE<br>Review of earnings (Continued)<br>Average Balance Sheet<br>2024 2023 2022<br>Average<br>balance<br>Interest<br>income<br>Average<br>rate<br>Average<br>balance<br>Interest<br>income<br>Average<br>rate<br>Average<br>balance<br>Interest<br>income<br>Average<br>rate<br>$m $m % $m $m % $m $m %<br>Assets<br>Interest earning assets<br>Loansa 732,660 44,460 6.1 703,832 35,582 5.1 676,054 21,096 3.1<br>Housinga 500,338 28,560 5.7 484,214 22,360 4.6 469,492 13,666 2.9<br>Personal 11,754 1,137 9.7 13,055 1,104 8.5 15,043 1,200 8.0<br>Businessa 220,568 14,763 6.7 206,563 12,118 5.9 191,519 6,230 3.3<br>Trading securities and financial<br>assets measured at FVIS 36,350 1,600 4.4 30,086 1,143 3.8 22,836 347 1.5<br>Investment securities 93,925 3,494 3.7 74,877 2,037 2.7 77,781 1,126 1.4<br>Other interest earning assetsb 107,120 4,793 4.5 131,654 4,990 3.8 109,109 676 0.6<br>Assets held for sale - - - - - - 425 6 1.4<br>Total interest earning assets and<br>interest incomea 970,055 54,347 5.6 940,449 43,752 4.7 886,205 23,251 2.6<br>Non-interest earning assets<br>Derivative financial instruments 16,786 23,423 23,395<br>Assets held for sale - - 2,444<br>All other assetsa,c 70,468 59,356 62,719<br>Total non-interest earning assetsa 87,254 82,779 88,558<br>Total assets 1,057,309 1,023,228 974,763<br>Liabilities<br>Interest bearing liabilities<br>Deposits and other borrowingsd 574,119 23,657 4.1 544,041 16,918 3.1 508,950 3,209 0.6<br>Certificates of deposit 48,889 2,386 4.9 47,887 1,921 4.0 47,308 395 0.8<br>Transactions 131,894 4,529 3.4 139,275 3,412 2.4 141,643 709 0.5<br>Savings 208,866 7,667 3.7 185,211 5,182 2.8 181,918 791 0.4<br>Term 184,470 9,075 4.9 171,668 6,403 3.7 138,081 1,314 1.0<br>Repurchase agreements 26,551 937 3.5 39,652 556 1.4 37,779 150 0.4<br>Loan capital 40,212 1,848 4.6 34,384 1,448 4.2 30,708 1,026 3.3<br>Other interest bearing liabilitiese 185,809 9,152 4.9 176,699 6,513 3.7 158,251 1,705 1.1<br>Total interest bearing liabilities<br>and interest expensed 826,691 35,594 4.3 794,776 25,435 3.2 735,688 6,090 0.8<br>Non-interest bearing liabilities<br>Deposits and other borrowingsd 131,632 131,043 136,251<br>Derivative financial instruments 21,413 26,353 24,750<br>Liabilities held for sale - - 682<br>All other liabilities 6,024 (218) 7,069<br>Total non-interest<br>bearing liabilitiesd 159,069 157,178 168,752<br>Total liabilities 985,760 951,954 904,440<br>Shareholders' equity 71,493 71,229 70,268<br>Non-controlling interests 56 45 55<br>Total equity 71,549 71,274 70,323<br>Total liabilities and equity 1,057,309 1,023,228 974,763<br>Loansa<br>Australia 633,772 37,865 6.0 607,154 30,164 5.0 582,456 17,694 3.0<br>New Zealand 92,222 6,155 6.7 90,130 5,028 5.6 87,236 3,203 3.7<br>Other overseas 6,666 440 6.6 6,548 390 6.0 6,362 199 3.1<br>Deposits and other borrowingsd<br>Australia 489,693 19,413 4.0 460,149 13,544 2.9 427,097 2,249 0.5<br>New Zealand 65,070 3,220 4.9 63,760 2,464 3.9 60,678 765 1.3<br>Other overseas 19,356 1,024 5.3 20,132 910 4.5 21,175 195 0.9<br>a. Certain portions of loans are non-interest bearing and are presented below in All other assets. The non-interest bearing portion represents<br>the impact of mortgage offset deposits which are taken into consideration when calculating interest charged on loans. In 2024, offset<br>loans within New Zealand were reclassified and presented within All other assets. Comparatives have been revised to align with current<br>period presentation.<br>b. Interest income includes net ineffectiveness on qualifying hedges.<br>c. Includes property and equipment, intangible assets, deferred tax assets, non-interest earning loans relating to mortgage offset accounts and<br>all other non-interest earning assets. Mortgage offset balances were $54,980 million (2023: $48,022 million, 2022: $45,996 million).<br>d. In 2024, certain deposit products were reclassified between Savings and Transactions to align with how they are marketed to customers. The<br>Group has also revised the attribution of certain deposit products between interest bearing and non-interest bearing. Comparatives have been<br>revised to align with current period presentation.<br>e. Interest expense includes the net impact of Treasury balance sheet management activities and the bank levy.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 283<br>Review of earnings (Continued)<br>Loans<br>$m 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Australia 704,907 674,422 647,122 5<br>Housing 473,435 449,509 431,538 5<br>RAMS (in runoff) 29,836 35,965 35,844 (17)<br>Personal 9,403 9,638 9,722 (2)<br>Business 194,138 178,965 166,402 8<br>Auto finance (in runoff)a 2,116 4,195 7,344 (50)<br>Provisions (4,021) (3,850) (3,728) 4<br>New Zealand (A$) 94,137 92,854 85,772 1<br>New Zealand (NZ$) 102,463 99,711 97,393 3<br>Housing 68,011 65,757 63,827 3<br>Personal 1,151 1,163 1,202 (1)<br>Business 33,802 33,298 32,764 2<br>Provisions (501) (507) (400) (1)<br>Other overseas (A$) 7,723 5,978 6,753 29<br>Total loans 806,767 773,254 739,647 4<br>a. Includes personal and business auto finance loans.<br>Loans increased by 4% to $806.8 billion and comprised the following movements:<br> • Australian housing loans excluding RAMS grew by 5% to $473.4 billion or 1.2x APRA housing system, with faster<br>growth in owner occupied mortgages. Customers continue to prefer variable rate mortgages which now account for<br>90% of total mortgages, up from 76% in September 2023;<br> • RAMS housing loans were down 17% to $29.8 billion as the portfolio is closed to new business;<br> • Contraction in Australian personal lending of 2% to $9.4 billion due to higher paydown and subdued new lending,<br>particularly in personal loans;<br> • Growth in Australian business lending of 8% to $194.1 billion. The strong loan growth in WIB was primarily driven<br>by deepening relationships with existing customers in the institutional property, industrials & infrastructure sectors.<br>Additionally, Business segment loan growth was diversified with growth in our target industries of agriculture, health<br>and professional services;<br> • Auto finance loans were down 50% to $2.1 billion as the portfolio continued to runoff. The sale of this portfolio was<br>announced post balance date in October 2024;<br> • Growth in New Zealand lending of 3% to $102.5 billion in NZ$ terms, driven by growth in mortgages of 3% and<br>business lending of 2%; and<br> • Growth in other overseas loan balances of 29% to $7.7 billion. This reflected growth in lending to US customers.
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284 WESTPAC GROUP 2024 ANNUAL REPORT<br>GROUP PERFORMANCE<br>Review of earnings (Continued)<br>Deposits and other borrowings<br>$m 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Customer deposits<br>Australia 593,795 557,781 535,645 6<br>Transactionsa 110,393 114,097 137,361 (3)<br>Savingsa 197,415 179,110 148,153 10<br>Term 157,282 144,220 127,921 9<br>Non-interest bearinga 128,705 120,354 122,210 7<br>New Zealand (A$) 73,201 74,297 68,614 (1)<br>New Zealand (NZ$) 79,676 79,783 77,910 -<br>Transactionsa 9,595 8,762 9,609 10<br>Savingsa 19,433 20,185 21,423 (4)<br>Term 39,451 38,472 32,273 3<br>Non-interest bearinga 11,197 12,364 14,605 (9)<br>Other overseas (A$) 6,619 8,873 8,575 (25)<br>Total customer deposits 673,615 640,951 612,834 5<br>Certificates of deposit 46,874 47,217 46,295 (1)<br>Australia 33,215 32,947 30,507 1<br>New Zealand (A$) 1,711 2,247 2,588 (24)<br>Other overseas (A$) 11,948 12,023 13,200 (1)<br>Total deposits and other borrowings 720,489 688,168 659,129 5<br>a. Comparatives have been revised to align with current period presentation.<br>Customer deposits grew by 5% to $673.6 billion and comprised the following movements:<br> • Australian deposits up 6% to $593.8 billion, mainly from growth in higher interest bearing products in the Consumer<br>and WIB segments. Non-interest bearing deposits were up 7% to $128.7 billion, due to an increase in mortgage offset<br>balances, supported by customer preference for variable rate loans and customers shifting from fixed rate loans;<br> • New Zealand deposits was stable at $79.7 billion in NZ$ terms from an increase in term deposits offset by a decline in<br>non-interest bearing deposits; and<br> • Decrease in other overseas deposits by 25% to $6.6 billion, primarily in WIB term deposits due to competition.<br>The deposit to loan ratio of 83.5% was higher than 30 September 2023, with deposit growth broadly funding loan<br>growth during the year.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 285<br>Review of earnings (Continued)<br>Loans and deposits market share and system multiple metrics<br>2024 2023 2022<br>Market Share<br>Australia<br>ADI System (APRA)<br>Housing credit 21% 21% 22%<br>Personal credit cards 21% 21% 21%<br>Business credita 16% 15% 15%<br>Household deposits 21% 21% 20%<br>Business depositsb 18% 18% 18%<br>Financial system (Reserve Bank of Australia (RBA))<br>Housing credit 20% 21% 21%<br>Business creditc 14% 15% 15%<br>Retail and business depositsd 19% 19% 20%<br>New Zealand (Reserve Bank of New Zealand (RBNZ))e<br>Consumer lending 18% 18% 18%<br>Business lending 16% 16% 16%<br>Deposits 17% 18% 18%<br>System multiples<br>Australia<br>ADI System (APRA)<br>Housing credit 0.8 0.8 0.5<br>Personal credit cardsf n/a 0.5 0.7<br>Business credita 1.2 0.8 0.9<br>Household deposits 1.1 1.3 0.7<br>Business depositsb,f 1.5 n/a 0.8<br>Financial system (RBA)<br>Housing credit 0.8 0.9 0.5<br>Business creditc 0.7 0.7 0.8<br>Retail and business depositsd 1.1 0.6 0.8<br>New Zealand (RBNZ)e<br>Consumer lending 0.9 0.8 1.0<br>Business lending 0.9 1.6 0.8<br>Depositsf n/a 0.9 0.5<br>a. Westpac Group’s business credit growth rate and multiples are based on ADI System published by APRA in the Monthly ADI statistics.<br>Business credit includes loans with Non-Financial businesses and Community service organisations across all segments.<br>b. Westpac Group’s business deposit growth rate and multiples are based on ADI System published by APRA in the Monthly ADI statistics.<br>Business deposits include deposits from Non-Financial businesses and Community service organisations across all segments.<br>c. Westpac Group’s business credit growth rate and multiples are based on Financial System as published in the RBA Lending and Credit<br>Aggregates. Business credit includes loans with Non-financial businesses, Community service organisations, and select Financial Institutions.<br>d. Retail and business deposits include deposits from Households, Non-financial businesses, and select Financial institutions as defined in the<br>RBA Monetary Aggregates.<br>e. New Zealand comprises New Zealand banking operations.<br>f. n/a indicates that system growth and/or Westpac growth was negative.
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286 WESTPAC GROUP 2024 ANNUAL REPORT<br>GROUP PERFORMANCE<br>Review of earnings (Continued)<br>Non-interest income<br>$m 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Net fee income 1,672 1,645 1,671 2<br>Net wealth management and insurance incomea 441 562 808 (22)<br>Trading income 704 717 664 (2)<br>Other income 18 404 (698) (96)<br>Total non-interest income 2,835 3,328 2,445 (15)<br>a. Following the sales of our insurance businesses in 2023, insurance income was nil for Full Year 2024.<br>Non-interest income is comprised of:<br>$m 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Non-interest income (Ex Notable Items and Businesses sold)<br>Net fee income 1,672 1,645 1,672 2<br>Net wealth management and insurance incomea 441 457 467 (4)<br>Trading income 716 750 620 (5)<br>Other income 18 136 148 (87)<br>Non-interest income (Ex Notable Items and Businesses sold) 2,847 2,988 2,907 (5)<br>Notable Items<br>Net fee income - - (1) -<br>Net wealth management and insurance incomea<br>- (10) (51) (100)<br>Trading income (12) (33) 44 (64)<br>Other income - 243 (846) (100)<br>Total non-interest income - Notable Items (12) 200 (854) large<br>Businesses sold<br>Net wealth management and insurance incomea<br>- 115 392 (100)<br>Other income - 25 - (100)<br>Total non-interest income - Businesses sold - 140 392 (100)<br>Total non-interest income 2,835 3,328 2,445 (15)<br>a. Following the sales of our insurance businesses in 2023, insurance income was nil for Full Year 2024.<br>Non-interest income decreased by 15% to $2,835 million. Excluding Notable Items and the impact of businesses sold,<br>non-interest income decreased by 5% to $2,847 million.<br>Net fee income<br>Net fee income increased by 2% to $1,672 million. Key movements included:<br> • Higher Institutional lending fees of $59 million from increased underwriting activity and loan growth;<br> • Lower Australian merchants income of $16 million due to lower volumes; and<br> • Lower auto finance income of $14 million due to runoff of the portfolio.<br>Net wealth management income<br>Net wealth management income decreased by 22% to $441 million. Excluding Notable Items and the impact of<br>businesses sold, net wealth management income decreased by 4% to $441 million with platforms margin compression<br>more than offsetting higher funds under administration.<br>Trading income<br>Trading income decreased by 2% to $704 million. Excluding Notable Items, Trading income decreased by 5% to<br>$716 million primarily due to lower foreign exchange (FX) trading in WIB reflecting tighter spreads and reduced<br>derivative valuation adjustments (DVA). This was partly offset by the impact of hedges on commodity and<br>FX derivatives.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 287<br>Review of earnings (Continued)<br>Other income<br>Other income decreased by $386 million. Excluding Notable Items and the impact of businesses sold, Other income<br>decreased by $118 million primarily attributable to losses on commodity and FX derivatives.<br>Businesses sold<br>No business were sold in FY24. In October 2024, Westpac entered into an agreement to sell the auto finance portfolio<br>to Resimac Group Limited. The sale is expected to be completed in the first half of 2025, with an expected transaction<br>value of $1.4-$1.6 billion.<br>Past contribution to revenue from businesses sold totalled $140 million in FY23. This related to Advance Asset<br>Management Limited, BT's Superannuation business and Westpac Life Insurance Ltd prior to their exit. For further details<br>of the contribution of each business refer to Net profit contribution of businesses sold (page 356).<br>Markets related income1<br>$m 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Net interest incomea 252 166 123 52<br>Non-interest income 677 858 619 (21)<br>Markets income 929 1,024 742 (9)<br>Sales and risk management income 937 968 773 (3)<br>Derivative valuation adjustment (8) 56 (31) large<br>Markets income 929 1,024 742 (9)<br>a. Comparatives have been revised to align with current period presentation.<br>Markets income comprises sales and risk management revenue derived from the creation, pricing and distribution of<br>risk management products to Westpac's customers. Dedicated relationship specialists provide product solutions to these<br>customers to help manage their interest rate, foreign exchange, commodity, credit and structured products exposures.<br>Markets income decreased by 9% to $929 million.<br>Sales and risk management income decreased by 3% to $937 million. Income from continued strong customer volumes<br>and effective risk management in fixed income products was more than offset by lower FX trading income.<br>DVA had a negative impact of $8 million compared to a $56 million positive contribution in the prior year. This was<br>driven by the non-repeat of tightening counterparty credit spreads in the prior year.<br>1. Markets income includes financial markets income derived by WIB, Business & Wealth and Westpac New Zealand excluding Debt Capital<br>Market activities.
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288 WESTPAC GROUP 2024 ANNUAL REPORT<br>GROUP PERFORMANCE<br>Review of earnings (Continued)<br>Operating expenses<br>$m 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Staff expenses (5,899) (6,098) (5,866) (3)<br>Occupancy expenses (700) (786) (914) (11)<br>Technology expenses (2,764) (2,211) (2,203) 25<br>Other expenses (1,581) (1,597) (1,819) (1)<br>Total operating expenses (10,944) (10,692) (10,802) 2<br>Excluding Notable Items<br>Staff expenses (5,899) (5,863) (5,758) 1<br>Occupancy expenses (700) (722) (788) (3)<br>Technology expenses (2,764) (2,178) (2,106) 27<br>Other expenses (1,581) (1,469) (1,529) 8<br>Total operating expenses excluding Notable Items (10,944) (10,232) (10,181) 7<br>Operating expenses - Businesses sold - 46 (127) (100)<br>Operating expenses excluding Notable Items and Business sold (10,944) (10,278) (10,054) 6<br>Full Time Equivalent (FTE) employees<br>Number of FTE 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Permanent employees 33,583 33,664 33,774 -<br>Temporary employees 1,657 2,482 3,702 (33)<br>FTE 35,240 36,146 37,476 (3)<br>Average FTE 35,254 37,503 38,573 (6)<br>Total operating expenses increased 2% to $10,944 million.<br>Excluding Notable Items, operating expenses increased 7% to $10,944 million. The increase was mainly attributable to<br>higher software amortisation, higher third-party technology vendor expenses and costs related to closing RAMS to new<br>business. Cost Reset actions provided a partial offset. The expense to income ratio excluding Notable Items was 50.3%,<br>up from 47.5%.<br>Staff expenses decreased by 3% to $5,899 million. Excluding Notable Items, staff expenses increased by 1% due to the<br>impact of wage growth, continued step up in superannuation rates and RAMS restructuring costs. The 6% decline in<br>average FTE provided a partial offset, reflecting the continued impact of Cost Reset actions and our commitment to<br>improving efficiency.<br>Occupancy expenses decreased by 11% to $700 million. Excluding Notable Items, occupancy expenses decreased by<br>3% with further reductions in the Group's corporate and branch footprint, including the closure of 18 branches and<br>establishment of 29 co-locations.<br>Technology expenses increased 25% to $2,764 million. Excluding Notable Items, technology expenses were 27% higher<br>due to:<br> • Increased software amortisation of $268 million related to the completion of major projects;<br> • Higher software expenses across the Consumer and Westpac New Zealand segments; and<br> • Higher costs related to third-party vendor contract renewals and UNITE.<br>Other Expenses decreased 1% to $1,581 million. Excluding Notable Items, other expenses increased by 8% to<br>$1,581 million mainly due to the RAMS brand write-off of $32 million, increased scams and fraud expenses and<br>litigation provisions.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 289<br>Review of earnings (Continued)<br>Investment spend<br>$m 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Expensed 992 816 883 22<br>Capitalised software, fixed assets and prepayments 764 1,106 1,104 (31)<br>Total 1,756 1,922 1,987 (9)<br>UNITE 147 - - -<br>Growth and productivity 550 728 675 (24)<br>Risk and regulatory 1,059 1,194 1,312 (11)<br>Total 1,756 1,922 1,987 (9)<br>Investment spend totalled $1,756 million in 2024, 9% lower than the prior year. The decline reflects the completion of<br>several large programs in 2023. Of the investment spend, UNITE accounted for 8%, 32% was directed towards growth<br>and productivity and 60% was focused on risk and regulatory initiatives.<br>UNITE commenced in 2024 to accelerate technology simplification. See page 186 for more information.<br>Growth and Productivity investments included:<br> • New features in the Westpac App. Refer to Number one banking app (page 169) for more information;<br> • Enhanced transactional banking and merchant service experience. Refer to Driving efficiency for businesses (page<br>172) for more information;<br> • Pay with Points, enabling customers to use their points to pay for credit card purchases;<br> • Enhanced international payments capability with the roll out of fixed FX payments, enabling customers to schedule<br>an international payment for a future date with an agreed exchange rate;<br> • The launch of Sustainable Upgrades home and investor loans for customers looking to make energy efficient<br>upgrades to their home;<br> • Commencing development of the integrated business lending origination platform; and<br> • Continued development of the corporate cash management platform.<br>Risk and Regulatory spend included:<br> • Completion of all the CORE Integrated Plan activities. Westpac is now in a transition phase, which is focused on<br>ensuring the sustainability and effectiveness of changes we have made to strengthen risk management and risk<br>culture across Westpac;<br> • Extending our scam prevention capabilities. Refer to Protecting customers and preventing crime (page 173) for<br>more information;<br> • Continued upgrade of international payments infrastructure;<br> • Maintaining New Payments Platform Australia scheme compliance and improving payments resilience, stability,<br>and risk;<br> • Continued simplification of our data environment to reduce risk and provide high-quality data for consumption; and<br> • Implementing changes to comply with Prudential Standard CPS 230, Operational Risk Management, in 2025. The new<br>standard requires entities to better manage operational risks and respond to business disruptions.<br>Capitalised software<br>$m 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Balance as at beginning of the year 2,797 2,264 1,840 24<br>Total additions 792 1,141 1,101 (31)<br>Amortisation expense (889) (621) (545) 43<br>Impairment expense (19) (8) (110) 138<br>Foreign exchange movements (6) 21 (22) large<br>Balance as at end of the year 2,675 2,797 2,264 (4)<br>Average amortisation period (years) 3.1 3.6 3.2 (0.5) years<br>Capitalised software decreased $122 million or 4% compared to September 2023. The decrease reflects increased<br>amortisation due to the completion of key projects such as One Banking Platform, payments and investment to comply<br>with RBNZ’s outsourcing policy, BS11. Lower additions were driven by lower investment spend as focus turned towards<br>the planning phase of the Technology simplification program, UNITE. This has resulted in average amortisation period<br>reducing by 0.5 years to 3.1 years from September 2023.
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290 WESTPAC GROUP 2024 ANNUAL REPORT<br>GROUP PERFORMANCE<br>Review of earnings (Continued)<br>Credit impairment charges<br>$m 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Individually assessed provisions (IAPs)<br>New IAPs (423) (197) (220) 115<br>Write-backs 93 127 115 (27)<br>Recoveries 190 191 189 (1)<br>Total IAPs, write-backs and recoveries (140) 121 84 large<br>Collectively assessed provisions (CAPs)<br>Write-offs (486) (440) (446) 10<br>Other changes in CAPs 89 (329) 27 large<br>Total CAPs (397) (769) (419) (48)<br>Total impairment (charges)/benefits (537) (648) (335) (17)<br>Impairment charges/(benefits) to average loans 7 bps 9 bps 5 bps (2 bps)<br>Net write-offs to average gross loans 5 bps 5 bps 10 bps -<br>The credit impairment charge of $537 million represented 7 basis points of average loans, down from 9 basis points in<br>the prior year. The impairment charge was driven by a lower CAP charge of $397 million and IAP charge of $140 million.<br>This compared to a CAP charge of $769 million and an IAP benefit of $121 million in the prior year.<br>The CAP charge of $397 million comprised write-offs of $486 million partly offset by a benefit in other changes in CAP<br>of $89 million. The other changes in CAP were due to:<br> • A reduction in portfolio overlays of $253 million driven by the partial release of mortgage related overlays;<br> • A reduction in the downside scenario weight of 2.5% in First Half 2024 reflecting a modest reduction in<br>macroeconomic uncertainty at that time;<br> • An increase in mortgage 90+ day delinquencies from 0.81% to 1.05%; and<br> • Less favourable outlook for commercial property prices and GDP along with a delay in the expected timing of interest<br>rate declines.<br>The IAP charge of $140 million comprised:<br> • New IAPs of $423 million, mostly in the wholesale & retail trade and manufacturing sectors and the<br>mortgage portfolio;<br> • Recoveries of $190 million, mostly in the credit card and personal loan portfolios; and<br> • Write-backs of $93 million, mostly within the Business & Wealth segment.<br>Income tax expense<br>The effective tax rate of 30.84% in 2024 (2023: 30.12%) was higher as 2023 included accounting gains from the sale<br>of Advance Asset Management Limited that were not taxable. The effective tax rates are both above the Australian<br>corporate tax rate of 30%<br>Non-controlling interests<br>During the year, Westpac New Zealand Limited issued a NZ$375 million perpetual preference shares which are<br>recognised as Additional Tier 1 capital for Westpac New Zealand Limited. For Westpac, the terms of this instrument do<br>not satisfy APRA's capital requirements and are deemed to be a non-controlling interests as they are equity instruments<br>issued by a wholly owned subsidiary that are held by external investors with no contractual obligation on Westpac to<br>repay in an adverse event.<br>In addition, Westpac acquired 8.74% of the non-controlling shares of Westpac Bank-PNG-Limited, which will raise our<br>controlling interest to 98.65%.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 291<br>Credit quality<br>Credit quality key metrics<br>2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Stressed exposures by credit grade as a % of TCE:<br>Impaired 0.16% 0.11% 0.13% 5 bps<br>Non performing, 90 days past due 0.47% 0.39% 0.32% 8 bps<br>Non performing, less than 90 days past due 0.23% 0.22% 0.19% 1 bps<br>Watchlist and substandard 0.59% 0.54% 0.43% 5 bps<br>Total stressed exposures 1.45% 1.26% 1.07% 19 bps<br>Gross impaired exposures to TCE for business and institutional:<br>Business Australia 0.65% 0.44% 0.55% 21 bps<br>Business New Zealand 0.32% 0.12% 0.16% 20 bps<br>Institutional 0.04% 0.02% 0.05% 2 bps<br>Mortgage 90+ day delinquencies:<br>Group 1.05% 0.81% 0.69% 24 bps<br>Australia 1.12% 0.86% 0.75% 26 bps<br>New Zealand 0.49% 0.33% 0.22% 16 bps<br>Other consumer loans 90+ day delinquencies:<br>Group 1.40% 1.28% 1.56% 12 bps<br>Australia 1.47% 1.32% 1.60% 15 bps<br>New Zealand 0.87% 0.92% 1.03% (5 bps)<br>Other:<br>Gross impaired exposures to gross loans 0.24% 0.17% 0.20% 7 bps<br>Gross impaired exposure provisions to gross impaired exposures 41.28% 43.47% 47.95% (219 bps)<br>Total provisions to gross loans 63 bps 63 bps 62 bps -<br>Collectively assessed provisions to credit risk weighted assets 132 bps 135 bps 116 bps (3 bps)<br>Total provisions to credit risk weighted assets 147 bps 145 bps 128 bps 2 bps<br>Movement in gross impaired exposures<br>$m 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Balance as at beginning of the year 1,302 1,514 2,142 (14)<br>New and increased - individually managed 701 367 430 91<br>Write-offs (620) (601) (934) 3<br>Returned to performing or repaid (288) (449) (436) (36)<br>Portfolio managed - new/increased/returned/repaid 870 468 296 86<br>Exchange rate and other adjustments (10) 3 16 large<br>Balance as at end of the year 1,955 1,302 1,514 50<br>Loan quality<br>Housing and personal loans that were past due can be dis-aggregated based on days overdue as follows:<br>Consolidated 2024 2023<br>$m 30-89 days 90+ days Total 30-89 days 90+ days Total<br>Loans<br>Loans - housing 3,890 5,914 9,804 3,644 4,385 8,029<br>Loans - personal 125 143 268 128 144 272<br>Total 4,015 6,057 10,072 3,772 4,529 8,301
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292 WESTPAC GROUP 2024 ANNUAL REPORT<br>GROUP PERFORMANCE<br>Credit quality (Continued)<br>Credit quality remained resilient, notwithstanding a rise in stressed exposures as a percentage of total committed<br>exposures (TCE) of 19 basis points to 1.45%. The composition and drivers of stressed exposures were:<br> • Impaired exposures of 16 basis points: a 5 basis point increase reflecting higher impaired balances in the mortgage<br>portfolio and the wholesale & retail trade and manufacturing sectors.<br> • Non-performing, 90+ days past due and not impaired exposures of 47 basis points: a 8 basis point increase reflecting<br>higher mortgage 90+ day delinquencies;<br> • Non-performing not 90 days past due and not impaired exposures of 23 basis points: a 1 basis point increase; and<br> • Watchlist and substandard exposures of 59 basis points: a 5 basis point increase relating to the wholesale & retail<br>trade and manufacturing sectors.<br>Gross impaired exposures to gross loans were 7 basis points higher at 0.24%, driven by higher impaired exposures<br>in the mortgage portfolio and the wholesale & retail trade and manufacturing sectors. The provision coverage of the<br>impaired portfolio was 41%, down from 43% at 30 September 2023. Impaired exposures have an appropriate level of<br>provision cover.<br>Portfolio segments<br>Stressed exposures in WIB increased by 18 basis points to 0.76%, driven by increases in substandard exposures in the<br>trade and property sectors. Impaired exposures to TCE remain low at 0.05%.<br>Australian business stressed exposure increased by 29 basis points to 5.24% driven by downgrades to watchlist in the<br>wholesale & retail trade and transport & storage sectors. Impaired exposures to TCE increased 20 basis points to 0.65%<br>with deterioration in the wholesale & retail trade and agriculture, forestry & fishing sectors.<br>Australian mortgage 90+ day delinquencies increased 26 basis points to 1.12% due to elevated interest rates and cost of<br>living pressures. Hardship increased by 43 basis points to 1.14% as customers required additional assistance.<br>Properties in possession were 201, a reduction of 9 compared to 30 September 2023 reflecting increased turnover and<br>price momentum in the residential property market.<br>Australian other consumer 90+ day delinquencies increased 15 basis points to 1.47% driven by cost of living pressures<br>impacting the cards and personal loans portfolios.<br>In New Zealand, stressed exposure to TCE increased by 24 basis points to 1.73%. This was driven by a 10 basis<br>point increase in impaired exposure to 0.16%, mostly within the manufacturing sector, and increases in watchlist and<br>substandard exposures in the agriculture, forestry & fishing sector.<br>New Zealand mortgage 90+ day delinquencies were up 16 basis points to 0.49%. This increase reflected the impact of<br>cost of living pressures. Other consumer 90+ day delinquencies were 5 basis points lower at 0.87% reflecting a lower<br>level of delinquency in the personal loans portfolio. The number of hardship cases has remained stable over the period.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 293<br>Credit quality (Continued)<br>Provisioning<br>$m 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Provision for expected credit losses (ECL) on loans and credit commitments<br>Collectively assessed provisions<br>Modelled provision 4,369 4,147 3,473 5<br>Overlays 179 432 700 (59)<br>Total collectively assessed provisions 4,548 4,579 4,173 (1)<br>Individually assessed provisions 536 351 452 53<br>Total provision for ECL on loans and credit commitments 5,084 4,930 4,625 3<br>Provision for ECL on debt securities at amortised cost 6 6 6 -<br>Provision for ECL on debt securities at FVOCIa 6 5 4 20<br>Total provision for ECL 5,096 4,941 4,635 3<br>a. FVOCI represents fair value through other comprehensive income.<br>Total provisions increased 3% to $5,096 million. The increase was driven by a higher IAP.<br>The increase in the IAP of $185 million was driven by new IAPs in the mortgage portfolio and the wholesale & retail trade<br>and manufacturing sectors.<br>CAP was $31 million lower, reflecting higher modelled provisions more than offset by a reduction in portfolio overlays<br>and a reduction in the downside scenario weight.<br>Modelled provisions were higher due to:<br> • Less favourable outlook for commercial property prices, GDP and interest rates; and<br> • Higher levels of stress in the portfolio, particularly mortgage 90+ day delinquencies.<br>This was partly offset by a 2.5% reduction in the downside scenario weight to 42.5% in First Half 2024, reflecting<br>a reduction in macroeconomic uncertainty in First Half 2024. In the Second Half 2024 the scenario weights<br>remained unchanged.<br>Portfolio overlays were $253 million lower as the expected risk did not materialise or is now reflected in modelled<br>outcomes. The reduction reflects partial release of mortgage related overlays.<br>Scenario weightings (%) 2024 2023 2022<br>Upside 5.0 5.0 5.0<br>Base 52.5 50.0 50.0<br>Downside 42.5 45.0 45.0
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294 WESTPAC GROUP 2024 ANNUAL REPORT<br>GROUP PERFORMANCE<br>Balance sheet and funding<br>Balance sheet<br>The detailed components of the balance sheet are set out in the notes to the financial statements.<br>$m 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Assets<br>Loans 806,767 773,254 739,647 4<br>Housing 566,081 547,074 523,952 3<br>Personal 11,238 12,379 13,897 (9)<br>Business 234,016 218,234 206,004 7<br>Provision for expected credit losses (4,568) (4,433) (4,206) 3<br>Liquid assets 200,682 196,720 194,058 2<br>Assets held for sale - - 75 -<br>All other assets 70,095 59,800 80,418 17<br>Total assets 1,077,544 1,029,774 1,014,198 5<br>Liabilities<br>Customer deposits 673,615 640,951 612,834 5<br>Transactionsa 119,944 123,046 146,759 (3)<br>Savingsa 216,256 198,909 167,966 9<br>Term 197,230 185,770 161,858 6<br>Non-interest bearinga 140,185 133,226 136,251 5<br>Certificates of deposit 46,874 47,217 46,295 (1)<br>Debt issues 169,284 156,573 144,868 8<br>Term funding from central banks 2,777 16,586 33,277 (83)<br>Loan capital 37,883 33,176 31,254 14<br>Liabilities held for sale - - 32 -<br>All other liabilities 75,059 62,732 75,129 20<br>Total liabilities 1,005,492 957,235 943,689 5<br>Equity<br>Total equity attributable to owners of WBC 71,705 72,495 70,452 (1)<br>Non-controlling interestsb 347 44 57 large<br>Total equity 72,052 72,539 70,509 (1)<br>a. Comparatives have been revised to align with current period presentation.<br>b. Westpac recognises the perpetual preference shares issued by Westpac New Zealand Limited as non-controlling interests.<br>Funding and liquidity risk management<br>Liquidity risk is the risk that a bank will be unable to fund assets and meet obligations as they become due. This risk is<br>inherent for all banks as intermediaries between depositors and borrowers. Westpac has a Liquidity Risk Management<br>Framework which seeks to ensure we meet our cash flow obligations under a wide range of market conditions and<br>scenarios, as well as meeting the requirements of the LCR and NSFR.<br>The Liquidity Risk Management Framework is approved by the Board and sets out the funding and liquidity risk appetite.<br>It also determines the roles and responsibilities of key people managing funding and liquidity risk, risk reporting and<br>control processes. In addition, it sets out the limits and targets used to manage Westpac’s balance sheet, including<br>wholesale funding limits, liquidity risk limits and stress testing.<br>A strong liquidity position and a conservative funding profile were maintained over the year, with key ratios and metrics<br>remaining comfortably above minimum requirements. Reflecting Westpac’s low risk profile, the credit ratings for some<br>term funding and capital instruments were upgraded by key ratings agencies in March and April 2024.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 295<br>Balance sheet and funding (Continued)<br>LCR<br>$m 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>High Quality Liquid Assets (HQLA) 172,722 181,882 175,595 (5)<br>Committed Liquidity Facility (CLF) - - 15,512 -<br>Total LCR liquid assets 172,722 181,882 191,107 (5)<br>Cash outflows in a modelled 30-day APRA defined stressed scenario<br>Customer deposits 95,133 95,008 101,271 -<br>Wholesale funding 8,715 11,249 12,975 (23)<br>Other flowsa 26,067 29,943 31,051 (13)<br>Total 129,915 136,200 145,297 (5)<br>LCRb 133% 134% 132% (59 bps)<br>a. Other flows include credit and liquidity facilities, collateral outflows, inflows from customers and TFF maturities.<br>b. Calculated on a quarterly average basis for the quarter ended 30 September.<br>The LCR is designed to enhance banks’ short-term resilience, by measuring the level of HQLA, as defined, held against its<br>liquidity needs for a 30 calendar day period under a regulator-defined stress scenario.<br>The average LCR for the quarter ended 30 September 2024 was 133%, little changed compared to the quarter ended<br>30 September 2023 due to reductions in both liquid assets and net cash outflows. The ratio remains well above the<br>regulatory minimum of 100%.<br>The average HQLA held in the September 2024 quarter was $173 billion, which provides approximately $43 billion in<br>HQLA above the 100% LCR minimum. The portfolio of HQLA provides a buffer against periods of liquidity stress, as well<br>as meeting regulatory requirements. HQLA include cash, deposits with central banks, government and semi-government<br>securities, and are recognised in the LCR calculation at market value.<br>Derivatives are used to hedge the interest rate risk of the liquid asset portfolio and reduce exposure to changes in fair<br>value. Changes in the fair value of liquid assets are recognised in Other Comprehensive Income through the relevant<br>equity reserve.<br>Westpac also has access to non-HQLA and other assets that are eligible for re-purchase with a central bank under<br>certain conditions and provide a source of additional liquidity. These assets include private securities and self-originated<br>AAA-rated mortgage-backed securities.<br>NSFR<br>$m 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Available stable funding 736,202 707,893 687,442 4<br>Required stable funding 654,798 615,341 570,185 6<br>Net stable funding ratio 112% 115% 121% (261 bps)<br>The NSFR is designed to encourage banks’ longer-term funding resilience. To comply, banks are required to maintain an<br>NSFR of at least 100% at all times. The NSFR was 112% at 30 September 2024, well above the 100% minimum and within<br>the Group's normal operating range. There has been little change to our liquidity risk or structural term profile.<br>The ratio was down from 115% at 30 September 2023. Available stable funding increased due to growth in customer<br>deposits. This was offset by the increase in required stable funding due to growth in lending and TFF maturities, as<br>mortgages backing those facilities are no longer used as collateral for the TFF.
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296 WESTPAC GROUP 2024 ANNUAL REPORT<br>GROUP PERFORMANCE<br>Balance sheet and funding (Continued)<br>Funding<br>The composition and stability of the Group's funding is monitored to comply with its funding risk appetite and the<br>regulatory requirements of both the LCR and NSFR. A stable funding profile was maintained during the year with<br>constructive credit market conditions providing opportunities to refinance wholesale maturities and remain responsive to<br>balance sheet needs.<br>Funding by residual maturity<br>2024 2023 2022<br>$m Ratio % $m Ratio % $m Ratio %<br>Customer deposits 673,615 66.9 640,951 66.0 612,834 65.1<br>Wholesale funding<br>Short term 82,590 8.2 79,181 8.1 79,098 8.4<br>Long term - less than or equal to one year<br>residual maturity 31,790 3.2 40,607 4.2 38,896 4.1<br>Long term - more than one year<br>residual maturity 140,458 13.9 133,979 13.8 136,586 14.5<br>Securitisation 5,539 0.6 4,298 0.4 4,973 0.5<br>Total wholesale funding 260,377 25.9 258,065 26.5 259,553 27.5<br>Equitya 72,052 7.2 72,543 7.5 69,967 7.4<br>Total funding 1,006,044 100.0 971,559 100.0 942,354 100.0<br>a. Includes total share capital, share-based payment reserve and retained profits.<br>Long term wholesale funding<br>Long term funding with a residual maturity greater than 12 months made up 13.9% of total funding at<br>30 September 2024, up from 13.8% at 30 September 2023. Funding from securitisation accounted for a further 0.6%<br>of total funding, an increase compared to 0.4% at 30 September 2023, reflecting the $2.75 billion transaction issued in<br>February 2024.<br>In total, $41.9 billion of long term wholesale funding was raised in 2024, including $5.1 billion issued by Westpac New<br>Zealand Limited. Leveraging the scale and diversity of the Group's wholesale funding franchise, new issuance included<br>senior unsecured and covered bonds, RMBS and capital securities, including $5.4 billion in Tier 2 capital securities<br>and $2.1 billion in Additional Tier 1 capital securities. New long term issuance was raised across a range of tenors and<br>currencies, although almost half was raised in Australian dollars, benefiting from the continued depth of the Australian<br>bond market.<br>Short term wholesale funding<br>Short term wholesale funding accounted for 8.2% of total funding at 30 September 2024, up from 8.1% at<br>30 September 2023. Long term funding where the residual maturity is less than one year, reduced to 3.2% at<br>30 September 2024, from 4.2% at 30 September 2023 mainly due to the repayment of TFF maturities. The short term<br>wholesale funding portfolio, including long term funding with a residual maturity of less than one year, had a weighted<br>average maturity of 151 days, up from 149 days at 30 September 2023.<br>Deposit to loan ratio<br>2024 2023 2022<br>$m Ratio % $m Ratio % $m Ratio %<br>Customer deposits 673,615 640,951 612,834<br>Loans 806,767 83.50 773,254 82.89 739,647 82.85<br>Customer deposits<br>Customer deposits accounted for 66.9% of the total funding at 30 September 2024, compared to 66.0% at<br>30 September 2023. Over the year, customer deposits grew $32.7 billion compared to loan growth of $33.5 billion. As<br>the growth in customer deposit was 5.1% relative to the growth in loans of 4.3%, the deposit to loan ratio rose to 83.5%.<br>Equity<br>Funding from equity made up 7.2% of total funding at 30 September 2024, compared to 7.5% at 30 September 2023.<br>This reflects the impact of the on market share buyback conducted during the year.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 297<br>Capital and dividends<br>2024 2023 2022a<br>% Mov't<br>2024 - 2023<br>Level 2 regulatory capital structure<br>Common equity Tier 1 (CET1) capital after deductions ($m) 54,648 55,885 53,943 (2)<br>Risk weighted assets (RWA) ($m) 437,430 451,418 477,620 (3)<br>CET1 capital ratio 12.49% 12.38% 11.29% 11 bps<br>Additional Tier 1 capital ratio 2.33% 2.21% 2.10% 12 bps<br>Tier 1 capital ratio 14.82% 14.59% 13.39% 23 bps<br>Tier 2 capital ratio 6.56% 5.86% 5.01% 70 bps<br>Total regulatory capital ratio 21.38% 20.45% 18.40% 93 bps<br>APRA leverage ratio 5.30% 5.50% 5.61% (20 bps)<br>Level 1 regulatory capital structure<br>CET1 capital after deductions ($m) 50,454 52,273 50,722 (3)<br>Risk weighted assets ($m) 397,719 414,293 447,010 (4)<br>Level 1 CET1 capital ratio 12.69% 12.62% 11.35% 7 bps<br>a. APRA’s revised capital framework (Basel III) became effective on 1 January 2023 and included updated prudential standards for capital<br>adequacy and credit risk capital. The reported 2022 comparatives have not been restated to align to the current capital framework.<br>Capital management strategy<br>The capital management strategy is reviewed on an ongoing basis, including through an annual Internal Capital<br>Adequacy Assessment Process. Key considerations include:<br> • Regulatory capital minimums together with the capital conservation buffer and countercyclical capital buffer<br>comprise the Total CET1 Requirement. The Total CET1 Requirement for domestic systemically important banks (D-SIBs), including Westpac, is at least 10.25%;1<br> • Strategy, business mix and operations and contingency plans;<br> • Perspectives of external stakeholders including rating agencies as well as equity and debt investors; and<br> • A stress testing framework that tests our resilience under a range of adverse economic scenarios.<br>The Board has determined a target CET1 capital operating range of between 11.0% and 11.5%, in normal<br>operating conditions.<br>LEVEL 2 CET1 CAPITAL RATIO MOVEMENT FOR 2024<br>12.38%<br>160bps (117bps)<br>36bps (11bps) (3bps) (54bps)<br>12.49%<br>Sep-23 Net profit Ordinary<br>dividends<br>RWA movement Capital deductions<br>and other items<br>FX translation<br>impacts<br>Capital return Sep-24<br>The Level 2 CET1 capital ratio was 12.49% at 30 September 2024, 11 basis points higher than 30 September 2023. Key<br>movements include:<br> • 2024 net profit: 160 basis points increase;<br> • Payment of the 2023 final ordinary dividend and the 2024 interim ordinary dividend: 117 basis points reduction;<br>1. Noting that APRA may apply higher CET1 requirements for an individual ADI.
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298 WESTPAC GROUP 2024 ANNUAL REPORT<br>GROUP PERFORMANCE<br>Capital and dividends (Continued)<br> • RWA movement: 36 basis points increase due to non-credit RWA decrease of 57 basis points partly offset by credit<br>RWA increase of 21 basis points;<br> • Capital deductions and other items: 11 basis points decrease mainly due to other reserve movements and a higher<br>deduction for deferred tax assets;<br> • Foreign currency translation impacts: 3 basis points reduction mainly from the appreciation of the A$ against the<br>US$; and<br> • Capital return: 54 basis points reduction comprising a $0.5 billion special dividend and approximately $1.8 billion of<br>on market share buybacks.<br>The Level 1 CET1 capital ratio was 12.69% at 30 September 2024, 7 basis points higher than 30 September 2023 with<br>movements mostly in line with Level 2.<br>Additional Tier 1 and Tier 2 capital movement for 2024<br>During the year, Westpac issued $1.75 billion of APRA qualifying Additional Tier 1 instruments and redeemed $1.4 billion,<br>excluding issuance and redemption of Additional Tier 1 instruments by Westpac New Zealand Limited. The net impact of<br>these transactions was an increase in the Tier 1 capital ratio of approximately 7 basis points.<br>Westpac issued $5.4 billion of Tier 2 capital instruments and redeemed $1.35 billion over the year. The net impact of<br>these transactions was an increase in the total regulatory capital ratio of approximately 92 basis points.<br>Domestic systemically important banks (D-SIBs), including Westpac, have a total capital requirement of 18.25% from<br>1 January 2026. Westpac's total regulatory capital ratio was 21.38% at 30 September 2024.<br>Leverage ratio<br>The leverage ratio represents the amount of Tier 1 capital relative to exposure1<br>.. At 30 September 2024, the leverage ratio<br>was 5.30%, down 20 basis points from 30 September 2023, and above APRA's regulatory minimum requirement of 3.5%.<br>The decrease in the leverage ratio is mainly due to lower Tier 1 regulatory capital as a result of the on market share<br>buybacks completed during the year.<br>Internationally comparable capital ratios<br>APRA’s capital adequacy requirements are more conservative than those of the Basel Committee on Banking<br>Supervision, leading to lower reported capital ratios when compared to international peers.<br>International comparable capital ratios have been calculated using the methodology outlined in the Australian Banking<br>Association study released on 10 March 2023. The 2022 comparatives have not been restated and capital ratios are<br>reported under the APRA study published in July 2015.<br>% 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Internationally comparable capital ratios<br>CET1 capital ratio 18.27% 18.73% 17.57% (46 bps)<br>Tier 1 capital ratio 21.33% 21.76% 20.57% (43 bps)<br>Total regulatory capital ratio 29.93% 29.87% 27.75% 6 bps<br>Leverage ratio 5.78% 5.98% 6.00% (20 bps)<br>1. As defined under Attachment D of APS110: Capital Adequacy.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 299<br>Capital and dividends (Continued)<br>Risk Weighted Assets (RWA)<br>$m 2024 2023 2022a<br>% Mov't<br>2024 - 2023<br>Credit risk:<br>Corporate 25,976 24,818 5<br>Business lending 25,033 23,860 5<br>Property finance 32,196 30,416 6<br>Large corporate 21,035 20,570 2<br>Sovereign 2,047 2,143 (4)<br>Financial institution 13,694 13,457 2<br>Residential mortgages 116,228 112,948 3<br>Australian credit cards 3,565 3,712 (4)<br>Other retail 3,995 4,607 (13)<br>Small business 17,123 17,040 -<br>Specialised lending 3,695 3,065 21<br>Securitisation 7,821 7,661 2<br>Standardised 25,414 28,813 (12)<br>New Zealandb 48,142 46,648 3<br>Total credit risk 345,964 339,758 362,098 2<br>Market risk 9,555 11,538 9,290 (17)<br>Operational risk 48,196 55,175 59,063 (13)<br>Interest rate risk in the banking book (IRRBB) 27,955 40,138 42,782 (30)<br>Other 5,760 4,809 4,387 20<br>Total risk weighted assets 437,430 451,418 477,620 (3)<br>a. APRA’s revised capital framework (Basel III) became effective on 1 January 2023 and included updated prudential standards for capital<br>adequacy and credit risk capital. Credit classes for 2022 do not align to the current capital framework and therefore have not been included in<br>the table.<br>b. Includes credit and securitisation exposures regulated under RBNZ prudential requirements.<br>Total RWA decreased by 3.1% to $437.4 billion over the year largely due to the decrease in non-credit RWA.<br>Credit RWA increased by 1.8% or $6.2 billion. Key movements included:<br> • A $6.9 billion increase from higher lending primarily in Corporate, Large Corporate and Property Finance;<br> • A $8.1 billion increase due to deterioration in credit quality mainly from an increase in delinquencies in Residential<br>Mortgages and New Zealand exposures:<br> • A $7.2 billion decrease from data refinements mainly related to Residential Mortgages, Corporate and Large<br>Corporate exposures;<br> • A $0.3 billion decrease from counterparty credit risk and mark-to-market related credit risk from changes in<br>underlying foreign currency rates; and<br> • A $1.3 billion decrease from foreign currency translation impacts, predominantly the appreciation of the A$ against<br>the US$.<br>Non-credit RWA were $20.2 billion lower. Key movements included:<br> • IRRBB RWA: $12.2 billion decrease mainly due to:<br> – A decrease of $17.1 billion due to lower interest rates and a revised IRRBB model, resulting in an embedded gain of<br>$1.3 billion for 30 September 2024 compared to a $15.9 billion loss at September 2023; and<br> – A $4.9 billion increase in repricing and yield curve, basis and optionality risk in line with underlying banking<br>book positions.<br> • Operational RWA: $7.0 billion decrease mainly driven by a reduction in the APRA capital overlay; and<br> • Market RWA: $2.0 billion decrease due to reduced market volatility in the one-year historical VaR window as market<br>events rolled out of the observation period, a decrease in Stressed Value at Risk (SVaR) from lower market risk<br>exposures and a reduction in the Risks not in VaR (RNIV) add-on.
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300 WESTPAC GROUP 2024 ANNUAL REPORT<br>GROUP PERFORMANCE<br>Capital and dividends (Continued)<br>Capital adequacy<br>$m 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Tier 1 capital<br>CET1 capital<br>Paid up ordinary capital 37,958 39,826 39,666 (5)<br>Treasury shares (815) (759) (712) 7<br>Equity based remuneration 2,028 1,929 1,843 5<br>Foreign currency translation reserve (471) (171) (537) 175<br>Accumulated other comprehensive income (617) (221) 28 179<br>Non-controlling interests - other 8 44 57 (82)<br>Retained earnings 32,773 31,436 29,063 4<br>Less retained earnings in life and general insurance, funds management and<br>securitisation entities (357) (369) (300) (3)<br>Deferred fees 350 334 300 5<br>Total CET1 capital 70,857 72,049 69,408 (2)<br>Deductions from CET1 capital<br>Goodwill (excluding funds management entities) (7,922) (7,940) (7,914) -<br>Deferred tax assets (2,377) (2,144) (1,746) 11<br>Goodwill in life and general insurance, funds management and<br>securitisation entities (149) (149) (204) -<br>Capitalised expenditure (2,349) (2,375) (2,148) (1)<br>Capitalised software (2,668) (2,797) (2,263) (5)<br>Investments in subsidiaries not consolidated for regulatory purposes (154) (76) (316) 103<br>Regulatory expected downturn loss in excess of eligible provisions - - (144) -<br>Securitisation (9) (16) - (44)<br>Defined benefit superannuation fund surplus (215) (217) (219) (1)<br>Equity investments (235) (228) (187) 3<br>Regulatory adjustments to fair value positions (131) (222) (324) (41)<br>Total deductions from CET1 capital (16,209) (16,164) (15,465) -<br>Total CET1 capital after deductions 54,648 55,885 53,943 (2)<br>Additional Tier 1 capital<br>Basel III complying instruments 10,225 10,037 10,021 2<br>Total Additional Tier 1 capital 10,225 10,037 10,021 2<br>Deductions from Additional Tier 1 capital<br>Holdings of own and other financial institutions Additional Tier 1<br>capital instruments (30) (46) (25) (35)<br>Total deductions from Additional Tier 1 capital (30) (46) (25) (35)<br>Net Additional Tier 1 regulatory capital 10,195 9,991 9,996 2<br>Net Tier 1 regulatory capital 64,843 65,876 63,939 (2)<br>Tier 2 capital<br>Basel III complying instruments 28,293 25,740 23,791 10<br>Eligible general reserve for credit loss 770 1,051 411 (27)<br>Total Tier 2 capital 29,063 26,791 24,202 8<br>Deductions from Tier 2 capital<br>Holdings of own and other financial institutions Tier 2 capital instruments (368) (370) (243) (1)<br>Total deductions from Tier 2 capital (368) (370) (243) (1)<br>Net Tier 2 regulatory capital 28,695 26,421 23,959 9<br>Total regulatory capital 93,538 92,297 87,898 1<br>Risk weighted assets 437,430 451,418 477,620 (3)<br>CET1 capital ratio 12.49% 12.38% 11.29% 11 bps<br>Additional Tier 1 capital ratio 2.33% 2.21% 2.10% 12 bps<br>Tier 1 capital ratio 14.82% 14.59% 13.39% 23 bps<br>Tier 2 capital ratio 6.56% 5.86% 5.01% 70 bps<br>Total regulatory capital ratio 21.38% 20.45% 18.40% 93 bps
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 301<br>Capital and dividends (Continued)<br>Dividends<br>2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Ordinary dividend - Interim (cents per share) 75 70 61 7<br>Ordinary dividend - Final (cents per share) 76 72 64 6<br>Total ordinary dividend (cents per share) 151 142 125 6<br>Special dividend (cents per share) 15 - - -<br>Ordinary dividend payout ratioa 74.62% 69.20% 76.79% large<br>Ordinary dividend payout ratio (ex Notable Items) 73.32% 67.57% 66.57% large<br>Adjusted franking credit balance ($m) 3,504 3,520 3,298 -<br>a. Payout ratio excludes the dividend component of completed off-market share buyback announced on 14 February 2022.<br>The Board has determined a fully franked final ordinary dividend of 76 cents per share, to be paid on 19 December 2024<br>to shareholders on the register at the record date of 8 November 2024. The 2024 interim and final ordinary dividends<br>represent a payout ratio of 73.32% excluding Notable Items.<br>In addition to being fully franked, the final ordinary dividend will also carry NZ$0.06 in New Zealand imputation credits<br>that may be used by New Zealand tax residents.<br>The Board has determined to satisfy the DRP for the final ordinary dividend by arranging for the purchase of shares in<br>the market by a third party. The market price used to determine the number of shares provided to DRP participants will<br>be set over the 15 trading days commencing 13 November 2024 and will not include a discount.<br>The Board has also determined to increase the on-market share buyback by a further $1.0 billion, in addition to the<br>previously announced on-market share buyback of up to $2.5 billion. In aggregate, this represents a share buyback of up<br>to $3.5 billion.<br>Capital deduction for regulatory expected credit loss<br>For capital adequacy purposes APRA requires the amount of regulatory expected credit losses in excess of eligible<br>provisions to be deducted from CET1 capital. The table below shows the calculation of this capital deduction.<br>$m 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Provisions associated with eligible portfolios<br>Total provisions for expected credit losses 5,096 4,941 4,635 3<br>plus provisions associated with partial write-offs 290 292 377 (1)<br>less ineligible provisionsa<br>(201) (192) (143) 5<br>Total eligible provisions 5,185 5,041 4,869 3<br>Regulatory expected downturn loss 4,486 4,078 4,690 10<br>Excess/(shortfall) in eligible provisions compared to regulatory expected<br>downturn loss 699 963 179 (27)<br>CET1 capital deduction for regulatory expected downturn loss in excess of<br>eligible provisionsb - - (144) -<br>a. Provisions associated with portfolios subject to the Basel standardised approach to credit risk are not eligible.<br>b. Regulatory expected loss is calculated for portfolios subject to the Basel advanced capital IRB approach to credit risk. The comparison<br>between regulatory expected loss and eligible provisions is performed separately for defaulted and non-defaulted exposures.
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302 WESTPAC GROUP 2024 ANNUAL REPORT<br>SEGMENT REPORTING<br>For reporting purposes, Westpac identifies the impact of Notable Items on income and expenses and includes a subtotal<br>titled “Pre-provision profit”. Pre-provision profit represents profit before impairment charges and income tax expenses.<br>In 2024, Westpac established a new operating segment called Business & Wealth and dissolved the Specialist Business<br>Division (SBD). The remaining operating businesses of SBD, which included the Platforms business, Pacific Banking,<br>Margin lending and the auto finance portfolio were aggregated into the Business & Wealth segment. The past<br>contribution from SBD’s sold businesses were aggregated with Group Businesses.<br>In addition, we have made some changes to enhance performance reporting and assessment:<br> • Funds transfer pricing: The methodology by which the costs of wholesale funding and liquidity are allocated to<br>segments has been refined.<br> • Capital allocations: Revised capital allocations to align to the Basel III framework adopted in January 2023.<br> • Expense allocations: Reallocation of the activities and expenses of Enterprise functions across segments.<br>These changes have been reflected in segment reporting so that the information presented aligns with<br>information reported internally to key decision makers. Comparatives have been restated to align with the current<br>period presentation.<br>$m Consumer<br>Business<br> & Wealth<br>Westpac<br>Institutional<br>Bank<br>Westpac<br>New Zealand<br>(A$)a<br>Group<br>Businesses Group<br>2024<br>Net interest income 7,632 5,338 2,240 2,388 1,318 18,916<br>Non-interest income 528 798 1,265 257 (1) 2,847<br>Notable Items - - - (8) (167) (175)<br>Net operating income 8,160 6,136 3,505 2,637 1,150 21,588<br>Operating expenses (4,787) (2,626) (1,465) (1,262) (804) (10,944)<br>Total operating expenses (4,787) (2,626) (1,465) (1,262) (804) (10,944)<br>Pre-provision profit 3,373 3,510 2,040 1,375 346 10,644<br>Impairment (charges)/benefits (248) (142) (120) (25) (2) (537)<br>Profit before income tax (expense)/benefit 3,125 3,368 1,920 1,350 344 10,107<br>Income tax (expense)/benefit and NCIb (941) (1,012) (553) (377) (234) (3,117)<br>Net profit/(loss) 2,184 2,356 1,367 973 110 6,990<br>Net profit includes impact of:<br>Notable Items (post tax)b - - - (6) (117) (123)<br>2023<br>Net interest income 8,177 4,992 1,926 2,317 1,002 18,414<br>Non-interest income 524 844 1,367 240 153 3,128<br>Notable Items - (88) - - 191 103<br>Net operating income 8,701 5,748 3,293 2,557 1,346 21,645<br>Operating expenses (4,533) (2,459) (1,316) (1,186) (738) (10,232)<br>Notable Items (202) (64) (15) (9) (170) (460)<br>Total operating expenses (4,735) (2,523) (1,331) (1,195) (908) (10,692)<br>Pre-provision profit 3,966 3,225 1,962 1,362 438 10,953<br>Impairment (charges)/benefits (179) (257) (87) (124) (1) (648)<br>Profit before income tax (expense)/benefit 3,787 2,968 1,875 1,238 437 10,305<br>Income tax (expense)/benefit and NCIb (1,142) (882) (538) (350) (198) (3,110)<br>Net profit/(loss) 2,645 2,086 1,337 888 239 7,195<br>Net profit includes impact of:<br>Notable Items (post tax)b (148) (107) (10) (7) 99 (173)<br>Profit/(loss) attributable to<br>businesses soldc<br>- - - - 131 131<br>a. Refer to the Westpac New Zealand NZ$ segment reporting for further details.<br>b. Includes tax benefits on Notable Items of $52 million in 2024 (2023: $184 million).<br>c. Refer to Additional Information for further details.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 303<br>$m Consumer<br>Business<br> & Wealth<br>Westpac<br>Institutional<br>Bank<br>Westpac<br>New Zealand<br>(A$)a<br>Group<br>Businesses Group<br>2022<br>Net interest income 8,473 3,508 1,438 2,107 1,080 16,606<br>Non-interest income 557 881 1,150 279 432 3,299<br>Notable Items - (1) - 120 (418) (299)<br>Net operating income 9,030 4,388 2,588 2,506 1,094 19,606<br>Operating expenses (4,411) (2,446) (1,265) (1,072) (987) (10,181)<br>Notable Items (66) (13) - - (542) (621)<br>Total operating expenses (4,477) (2,459) (1,265) (1,072) (1,529) (10,802)<br>Pre-provision profit 4,553 1,929 1,323 1,434 (435) 8,804<br>Impairment (charges)/benefits (187) (97) (85) 25 9 (335)<br>Profit before income tax (expense)/benefit 4,366 1,832 1,238 1,459 (426) 8,469<br>Income tax (expense)/benefit and NCIb (1,314) (557) (372) (382) (150) (2,775)<br>Net profit/(loss) 3,052 1,275 866 1,077 (576) 5,694<br>Net profit includes impact of:<br>Notable Items (post tax)b (47) (9) - 119 (937) (874)<br>Profit/(loss) attributable to<br>businesses soldc<br>- - - 18 168 186<br>a. Refer to the Westpac New Zealand NZ$ segment reporting for further details.<br>b. Includes tax benefits on Notable Items of $46 million.<br>c. Refer to Additional Information for further details.<br>Businesses sold<br>The table below shows the profit/(loss) attributable to businesses sold on the segments by the relevant period. No<br>businesses were sold in FY24.<br>Further details are provided in Net profit contribution of businesses sold (page 356).<br>$m Consumer<br>Business<br> & Wealth<br>Westpac<br>Institutional<br>Bank<br>Westpac<br>New Zealand<br>(A$)<br>Group<br>Businesses Group<br>2023<br>Net interest income - - - - - -<br>Non-interest income - - - - 140 140<br>Net operating income - - - - 140 140<br>Operating expenses - - - - 46 46<br>Pre-provision profit - - - - 186 186<br>Impairment (charges)/benefits - - - - - -<br>Profit before income tax (expense)/benefit - - - - 186 186<br>Income tax (expense)/benefit and NCI - - - - (55) (55)<br>Net profit - - - - 131 131<br>2022<br>Net interest income - - - - 6 6<br>Non-interest income - - - 28 364 392<br>Net operating income - - - 28 370 398<br>Operating expenses - - - (3) (124) (127)<br>Pre-provision profit - - - 25 246 271<br>Impairment (charges)/benefits - - - - 7 7<br>Profit before income tax (expense)/benefit - - - 25 253 278<br>Income tax (expense)/benefit and NCI - - - (7) (85) (92)<br>Net profit - - - 18 168 186
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304 WESTPAC GROUP 2024 ANNUAL REPORT<br>SEGMENT REPORTING<br>Consumer<br>The Consumer segment provides a full range of banking products and services to customers in Australia. Products and<br>services are provided through a portfolio of brands comprising Westpac, St.George, BankSA and Bank of Melbourne<br>using digital channels, call centres, mobile bankers, branches and third-party brokers. It also includes the RAMS business,<br>which is closed to new business.<br>$m 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Net interest income 7,632 8,177 8,473 (7)<br>Non-interest income 528 524 557 1<br>Net operating income 8,160 8,701 9,030 (6)<br>Operating expenses (4,787) (4,533) (4,411) 6<br>Notable Items - (202) (66) (100)<br>Total operating expenses (4,787) (4,735) (4,477) 1<br>Pre-provision profit 3,373 3,966 4,553 (15)<br>Impairment (charges)/benefits (248) (179) (187) 39<br>Profit before income tax expense 3,125 3,787 4,366 (17)<br>Income tax expense and NCI (941) (1,142) (1,314) (18)<br>Net profit 2,184 2,645 3,052 (17)<br>Notable Items (post tax) - (148) (47) (100)<br>Expense to income ratio (Ex Notable Items) 58.66% 52.10% 48.85% large<br>Net interest margin (Ex Notable Items) 1.70% 1.88% 2.00% (18 bps)<br>FTE 12,042 12,534 13,189 (4)<br>$bn 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Customer deposits<br>Transactions 46.6 49.5 61.3 (6)<br>Savings 159.0 138.3 103.1 15<br>Term 65.6 63.9 62.1 3<br>Mortgage offsets 63.3 56.6 54.0 12<br>Total customer deposits 334.5 308.3 280.5 8<br>Loans<br>Housing 473.5 449.6 431.8 5<br>RAMS (in runoff) 29.8 36.0 35.8 (17)<br>Other 8.8 8.9 8.8 (1)<br>Provisions (1.8) (1.8) (1.8) -<br>Total loans 510.3 492.7 474.6 4<br>Deposit to loan ratio 65.54% 62.58% 59.11% 296 bps<br>Total assets 521.8 504.2 486.0 3<br>TCE 594.2 577.7 562.3 3<br>Risk weighted assets 174.4 174.7 180.2 -<br>Average interest earning assets 449.9 435.3 422.7 3<br>Average allocated capital 24.0 24.3 24.0 (1)<br>Credit quality<br>Impairment charges/(benefits) to average loans 0.05% 0.04% 0.04% 1 bps<br>Mortgage 90+ day delinquencies 1.12% 0.86% 0.75% 26 bps<br>Other consumer loans 90+ day delinquencies 1.23% 1.01% 1.35% 22 bps<br>Total stressed exposures to TCE 1.10% 0.86% 0.67% 24 bps
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 305<br>Consumer (Continued)<br>Net profit decreased 17% to $2,184 million.<br>Pre-provision profit declined by 15% to $3,373 million. Excluding Notable Items in Full Year 2023 associated with<br>restructuring charges and the branch transformation program, pre-provision profit declined by 19% with operating<br>income falling 6% and operating expenses rising 6%. The decline in operating income reflected continued contraction of<br>the net interest margin while expenses rose due to costs associated with the closure of the RAMS business, inflationary<br>pressures, higher investment spend and amortisation.<br>Net interest income<br>down 7%<br> • The net interest margin contracted by 18 basis points, slowing through the period,<br>with margins increasing 1 basis point in Second Half 2024. Price competition for<br>new mortgages and the impact of lower mortgage rates offered to retain customers<br>looking to refinance were the largest contributors to the contraction. Narrower<br>deposit spreads, largely the impact of a mix shift towards higher interest rate,<br>lower margin savings accounts, were offset by higher returns on hedged deposits<br>and capital;<br> • Net loans increased by 4% to $510.3 billion. Mortgage growth of 4% was<br>below system, reflecting the decision to close the RAMS business. Excluding this<br>impact, mortgages grew 5%, mostly in owner occupied variable rate mortgages,<br>representing 1.2x APRA housing system growth. Variable rate mortgages increased<br>from 76% to 91% of the portfolio following most of the $65 billion of expiring fixed<br>rate loans being retained and rolling onto on variable rates, coupled with almost all<br>new loans on variable rates;<br> • Deposits were up 8% to $334.5 billion representing 1.1x APRA household deposits<br>system growth. Growth in savings balances of $20.7 billion more than offset the<br>decline in transaction balances of $2.9 billion, as customer preference continued<br>to shift towards higher yielding products. Mortgage offset balances increased by<br>12% to $63.3 billion as fixed rate mortgage customers shifted onto variable rate<br>mortgages with deposit offset features; and<br> • With deposit growth continuing to exceed loan growth, the deposit to loan ratio<br>improved 296 basis points to 65.5%<br>Non-interest income up 1% • Non-interest income increased 1% to $528 million due to higher credit card fees<br>which was partly offset by higher customer remediation costs.<br>Expenses up 1% • Operating expenses excluding Notable Items increased 6%. This was driven by:<br> – The decision to close RAMS to new business resulted in impairment of the RAMS<br>brand, technology and software assets and restructuring costs;<br> – Inflationary pressures from both wages and salaries and third-party vendor<br>costs; and<br> – Higher amortisation costs.<br> • Higher expenses were partly offset by benefits from a simpler operating model<br>following the implementation of the One Bank Platform and a smaller property<br>footprint, including our corporate office and branches which included the benefit of<br>an additional 29 co-locations.<br>Impairment charge of<br>$248 million<br> • Impairment charges to average loans were 5 basis points, up 1 basis point from<br>the prior year. The charge reflects higher mortgage and other consumer loans<br>delinquencies, which was partly offset by reductions in the mortgage overlay and<br>the downside scenario weight; and<br> • Stressed exposure to TCE deteriorated by 24 basis points to 1.10%. Mortgage 90+<br>day delinquencies increased 26 basis points to 1.12%, reflecting higher mortgage<br>interest rates and the higher cost of living. Other consumer loan 90+ day<br>delinquencies increased 22 basis points to 1.23%, due to cost of living pressures<br>impacting customers.
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306 WESTPAC GROUP 2024 ANNUAL REPORT<br>SEGMENT REPORTING<br>Business & Wealth<br>The Business & Wealth segment provides banking products and services to customers in Business Banking, Wealth<br>Management, Private Wealth and Westpac Pacific. Business Banking offers lending generally up to $200 million in<br>exposure, merchant services using eCommerce solutions and transaction banking services. Customers are categorised<br>by commercial businesses, small to medium businesses and agribusiness. The segment includes Private Wealth,<br>supporting the needs of high-net-worth individuals, as well as BT Financial Group, which provides wealth management<br>platform services. It also includes Westpac Pacific and our auto finance portfolio, which has been in runoff. In October<br>2024, we entered into an agreement to sell the auto finance portfolio. Subject to regulatory approval, the sale is<br>expected to be completed in the first half of 2025. The segment operates under the Westpac, St.George, BankSA, Bank<br>of Melbourne and BT brands.<br>$m 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Net interest income 5,338 4,992 3,508 7<br>Non-interest income 798 844 881 (5)<br>Notable Items - (88) (1) (100)<br>Net operating income 6,136 5,748 4,388 7<br>Operating expenses (2,626) (2,459) (2,446) 7<br>Notable Items - (64) (13) (100)<br>Total operating expenses (2,626) (2,523) (2,459) 4<br>Pre-provision profit 3,510 3,225 1,929 9<br>Impairment (charges)/benefits (142) (257) (97) (45)<br>Profit before income tax expense 3,368 2,968 1,832 13<br>Income tax expense and NCI (1,012) (882) (557) 15<br>Net profit 2,356 2,086 1,275 13<br>Notable Items (post tax) - (107) (9) (100)<br>Expense to income ratio (Ex Notable Items) 42.80% 42.14% 55.73% 66 bps<br>Net interest margin (Ex Notable Items) 5.35% 5.17% 3.70% 18 bps<br>FTE 6,851 6,954 7,118 (1)<br>$bn 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Customer deposits<br>Transactions 65.2 64.8 76.1 1<br>Savings 29.1 31.3 35.1 (7)<br>Term 50.0 44.4 30.9 13<br>Total customer deposits 144.3 140.5 142.1 3<br>Loans<br>Commercial/SME 99.1 90.5 86.4 10<br>Pacific 1.3 1.2 1.1 8<br>Business lending 100.4 91.7 87.5 9<br>Other 1.4 1.5 1.8 (7)<br>Auto finance (in runoff)a 2.1 4.2 7.3 (50)<br>Provisions (1.9) (1.9) (1.8) -<br>Total loans 102.0 95.5 94.8 7<br>Deposit to loan ratio 141.48% 147.08% 149.97% large<br>Total assets 107.1 101.2 100.7 6<br>TCE 137.8 129.7 127.0 6<br>Risk weighted assets 92.9 87.1 95.8 7<br>Average interest earning assets 99.7 96.6 94.8 3<br>Average allocated capital 11.6 11.3 11.0 3<br>Credit quality<br>Impairment charges/(benefits) to average loans 0.14% 0.27% 0.10% (13 bps)<br>Impaired exposures to TCE 0.68% 0.52% 0.66% 16 bps<br>Total stressed exposures to TCE 5.56% 5.46% 5.44% 10 bps<br>a. Includes personal and business loans.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 307<br>Business & Wealth (Continued)<br>Net profit increased 13% to $2,356 million.<br>Pre-provision profit rose 9% to $3,510 million. Excluding Notable Items in Full Year 2023 associated with remediation<br>provisions and restructuring charges, pre-provision profit increased by 4% with a 5% increase in operating income more<br>than offsetting a 7% rise in operating expenses. A higher net interest margin and lending growth increased operating<br>income while higher operating expenses reflected an increase in bankers and wages, higher technology costs, increased<br>investment spend and an increase in litigation provisions.<br>Net interest income up 9% • Excluding the impact of Notable Items in Full Year 2023, net interest income was<br>up 7%;<br> • The net interest margin was up 18 basis points excluding Notable Items. The<br>averaging impact of previous interest rate rises generated wider deposit spreads<br>and returns on both hedged deposits and capital. This more than offset the mix shift<br>to higher interest rate, lower margin term deposits and the compression of lending<br>spreads due to price competition in an increasingly contested sector and the runoff<br>of the higher spread auto finance portfolio;<br> • Net loans increased by 7% to $102.0 billion. Business lending growth of 9% was<br>diversified with strong growth in our target industries of agriculture, health and<br>professional services. This was partly offset by the continued run down of the auto<br>finance portfolio to $2.1 billion; and<br> • Deposits were up 3% to $144.3 billion. Growth in term deposits of $5.6 billion offset<br>the decline in at call balances of $1.8 billion, as customer preference continued<br>to shift towards higher yielding products. Within the business segment, growth in<br>commercial customers was more than offset by reduction in small and medium<br>business customers from softer economic and trading conditions.<br>Non-interest income<br>down 4%<br> • Non-interest income excluding Notable Items decreased 5% due to lower merchants<br>income, the wind down of the auto finance portfolio and lower platform revenue.<br>Expenses up 4% • Operating expenses excluding Notable Items increased 7%. Excluding the increase in<br>litigation provisions operating expenses increased 5% reflecting:<br> – Inflationary pressures on wages and salaries and third-party technology<br>vendor costs;<br> – Higher investment spend from the initiation and integration of our new business<br>origination platform BizEdge, HealthPoint, UNITE and upgrade of merchant<br>terminals; and<br> – Investment in business bankers to drive growth.<br>Impairment charge of<br>$142 million<br> • The impairment charge of 14 basis points of average loans compared to 27 basis<br>points in the prior year. The charge reflects new IAPs and a modest increase in<br>CAP as a less favourable outlook for commercial property was largely offset by a<br>reduction in the downside scenario weight in First Half 2024; and<br> • Credit quality metrics deteriorated with stressed exposures to TCE up 10 basis<br>points to 5.56%, mostly within the wholesale & retail trade sector. The proportion<br>of impaired loans to TCE increased 16 basis points to 0.68%.<br>Platforms and Investments<br>$bn 2024 Inflows Outflows Net Flows Other Mov't 2023<br>% Mov't<br>2024 - 2023<br>Platforms 150.8 20.5 (23.6) (3.1) 18.2 135.7 11<br>Packaged funds - - (1.4) (1.4) (0.1) 1.5 (100)<br>Total funds 150.8 20.5 (25.0) (4.5) 18.1 137.2 10<br>BT & Private Wealth platform funds under administration increased 11% to $150.8 billion during 2024 reflecting higher<br>equity market valuations and dividend distributions. Net flows were negative reflecting pension outflows, excluding this<br>impact net flows were positive $3.4 billion.<br>BT packaged funds under administration decreased by $1.5 billion during 2024, reflecting the completion of the sale of<br>the private portfolio management business.
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308 WESTPAC GROUP 2024 ANNUAL REPORT<br>SEGMENT REPORTING<br>Westpac Institutional Bank (WIB)<br>Westpac Institutional Bank (WIB) services predominantly corporate, institutional and government clients through three<br>areas of specialisation: Corporate & Institutional Banking (CIB); Global Transaction Services (GTS); and Financial Markets<br>(FM). CIB uses dedicated industry relationship and specialist product teams to support clients’ borrowing needs.<br>GTS is responsible for the provision of payments and liquidity management solutions to WIB’s clients and Westpac's<br>domestic and international payments infrastructure. FM provides a range of risk management, investment and debt<br>capital markets solutions to WIB clients and access to financial markets products for consumer and business customers.<br>Clients are supported throughout Australia and via branches and subsidiaries located in New Zealand, New York, London,<br>Frankfurt and Singapore.<br>$m 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Net interest income 2,240 1,926 1,438 16<br>Non-interest income 1,265 1,367 1,150 (7)<br>Net operating income 3,505 3,293 2,588 6<br>Operating expenses (1,465) (1,316) (1,265) 11<br>Notable Items - (15) - (100)<br>Total operating expenses (1,465) (1,331) (1,265) 10<br>Pre-provision profit 2,040 1,962 1,323 4<br>Impairment (charges)/benefits (120) (87) (85) 38<br>Profit before income tax expense 1,920 1,875 1,238 2<br>Income tax expense and NCI (553) (538) (372) 3<br>Net profit 1,367 1,337 866 2<br>Notable Items (post tax) - (10) - (100)<br>Expense to income ratio (Ex Notable Items) 41.80% 39.96% 48.88% 184 bps<br>Net interest margin (Ex Notable Items) 1.83% 1.89% 1.63% (6 bps)<br>FTE 2,870 2,776 2,689 3<br>$bn 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Customer deposits<br>Transactions and others 64.2 64.2 66.1 -<br>Savings 10.4 10.5 11.0 (1)<br>Term 45.2 41.4 40.2 9<br>Total customer deposits 119.8 116.1 117.3 3<br>Loans<br>Loans 101.0 92.9 85.5 9<br>Provisions (0.4) (0.3) (0.3) 33<br>Total loans 100.6 92.6 85.2 9<br>Deposit to loan ratio 119.10% 125.37% 137.65% large<br>Total assets 137.2 106.3 106.2 29<br>TCE 216.2 207.4 199.3 4<br>Risk weighted assets 83.0 82.1 94.8 1<br>Average interest earning assets 122.2 101.7 88.2 20<br>Average allocated capital 9.6 9.2 7.8 4<br>Credit quality<br>Impairment charges to average loans 0.13% 0.10% 0.11% 3 bps<br>Impaired exposures to TCE 0.05% 0.04% 0.10% 1 bps<br>Total stressed exposures to TCE 0.76% 0.58% 0.35% 18 bps
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 309<br>Westpac Institutional Bank (WIB) (Continued)<br>Net operating income contribution1<br>$m 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Lending and deposit revenue 2,561 2,339 1,994 9<br>Sales and risk management income 846 886 695 (5)<br>DVA (8) 56 (31) large<br>Othera 106 12 (70) large<br>Net operating income contribution 3,505 3,293 2,588 6<br>a. Includes capital benefit and Bank Levy<br>Net profit increased 2% to $1,367 million.<br>Pre-provision profit increased 4% to $2,040 million. Excluding Notable Items in 2023, pre-provision profit increased 3%<br>with operating income rising 6% and expenses increasing 11%. The growth in operating income reflects growth in lending<br>and deposits, while the rise in operating expenses was driven by increased software amortisation and higher staffing and<br>third party vendor costs to support growth.<br>Net interest income up 16% • The net interest margin decreased 6 basis points reflecting an increase in trading<br>securities related to reverse repurchase agreements in Markets. Excluding this,<br>the net interest margin expanded 4 basis points reflecting improved loan spreads<br>and the benefit of higher interest rates on hedged capital. These impacts were<br>partly offset by a shift in deposits towards lower margin term deposits and higher<br>funding costs;<br> • Average interest earning assets rose by 20% reflecting the impact of strong lending<br>growth of 9% and additional trading assets for Markets customers;<br> • Net loans increased 9% to $100.6 billion from deepening relationships with existing<br>customers, predominantly in the property, infrastructure and industrial sectors; and<br> • Deposits increased 3% to $119.8 billion driven by term deposit growth in the second<br>half achieved through increased customer activity.<br>Non-interest income<br>down 7%<br> • Non-interest income declined 7% to $1,265 million. Key drivers included:<br> – Lower sales and risk management income, including foreign exchange;<br> – Higher fee income from increased underwriting activity and a larger loan<br>book; and<br> – A $66 million reduction from DVA, driven by the non-repeat of tightening<br>counterparty credit spreads in the prior year.<br>Expenses up 10% • Expenses excluding Notable Items were up 11% to $1,465 million.<br>Movements reflected:<br> – Higher software amortisation costs from major technology infrastructure<br>investments including payments;<br> – Higher wages and salaries costs including hiring of new front-line staff to support<br>relationships and lending growth.<br>Impairment charge of<br>$120 million<br> • The impairment charge to average loans was 13 basis points, compared to a 10 basis<br>point charge in the prior year. The charge was driven by one new IAP and a<br>small CAP charge due to an increase in stressed exposures and revised economic<br>projections; and<br> • Stressed exposures to TCE deteriorated 18 basis points to 0.76%, reflecting higher<br>watchlist and substandard exposures in the wholesale & retail trade and property<br>sectors. The proportion of impaired exposures to TCE deteriorated modestly<br>to 0.05%.<br>1. DVA includes Funding Value Adjustment (FVA) and Credit Value Adjustment (CVA). Sales and risk management income includes both<br>customer and non-customer income.
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310 WESTPAC GROUP 2024 ANNUAL REPORT<br>SEGMENT REPORTING<br>Westpac New Zealand<br>Westpac New Zealand provides banking and wealth products and services for consumer, business and institutional<br>customers in New Zealand.<br>All figures are in NZ$ unless noted otherwise.<br>NZ$m 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Net interest income 2,590 2,514 2,280 3<br>Non-interest income 279 261 306 7<br>Notable Items (9) - 127 -<br>Net operating income 2,860 2,775 2,713 3<br>Operating expenses (1,369) (1,286) (1,158) 6<br>Notable Items - (10) - (100)<br>Total operating expenses (1,369) (1,296) (1,158) 6<br>Pre-provision profit 1,491 1,479 1,555 1<br>Impairment (charges)/benefits (27) (135) 27 (80)<br>Profit before income tax expense 1,464 1,344 1,582 9<br>Income tax expense and NCI (409) (381) (414) 7<br>Net profit 1,055 963 1,168 10<br>Notable Items (post tax) (6) (7) 127 (14)<br>Profit/(loss) attributable to businesses sold - - 19 -<br>Expense to income ratio (Ex Notable Items) 47.72% 46.34% 44.78% 138 bps<br>Net interest margin (Ex Notable Items) 2.17% 2.13% 2.02% 4 bps<br>FTE 5,221 5,288 5,070 (1)<br>NZ$bn 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Customer deposits<br>Transactions and others 20.8 21.1 24.2 (1)<br>Savings 19.4 20.2 21.4 (4)<br>Term 39.5 38.5 32.3 3<br>Total customer deposits 79.7 79.8 77.9 -<br>Loans<br>Mortgages 68.0 65.8 63.8 3<br>Business 33.4 32.8 32.2 2<br>Other 1.2 1.2 1.2 -<br>Provisions (0.5) (0.5) (0.4) -<br>Total loans 102.1 99.3 96.8 3<br>Deposit to loan ratio 78.06% 80.36% 80.48% (230 bps)<br>Total assets 123.5 121.8 119.2 1<br>TCE 147.3 147.1 144.6 -<br>Risk weighted assets 62.0 60.3 53.6 3<br>Liquid assets 17.8 19.2 18.4 (7)<br>Average interest earning assets 119.2 118.0 113.0 1<br>Average allocated capital 8.2 7.9 7.2 4<br>Total funds 13.2 11.4 10.9 16<br>Credit quality<br>Impairment charges/(benefits) to average loans 0.03% 0.14% (0.03%) (11 bps)<br>Mortgage 90+ day delinquencies 0.49% 0.33% 0.22% 16 bps<br>Other consumer loans 90+ day delinquencies 0.87% 0.92% 1.03% (5 bps)<br>Impaired exposures to TCE 0.16% 0.06% 0.06% 10 bps<br>Total stressed exposures to TCE 1.73% 1.49% 0.97% 24 bps
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 311<br>Westpac New Zealand (Continued)<br>Net profit increased 10% to $1,055 million.<br>Pre-provision profit increased 1% to $1,491 million, reflecting a 3% increase in operating income which more than<br>offset a 6% increase in operating expenses. Operating income reflected growth in lending and a higher net interest<br>margin, while operating expenses were driven by increased technology and onshoring costs, software amortisation and<br>inflationary pressures.<br>Net interest income up 3% • The net interest margin was up 4 basis points. Higher returns on both transaction<br>deposits and capital balances were partly offset by the shift in customer preference<br>to higher interest earning term deposit accounts and narrower lending spreads<br>driven by price competition.<br> • Net loans increased 3%, reflecting slowing system lending growth as the challenging<br>macroeconomic environment reduced demand for credit. Key drivers included:<br> – Mortgage growth of 3% represents 0.9x RBNZ housing system growth.<br>Expectations for the RBNZ to continue to cut interest rates drove a shift in<br>customers preference to shorter fixed rate tenors and variable rate loans; and<br> – Business lending increased 2% driven by higher corporate and institutional<br>lending, up 1.7x system.<br> • Deposits decreased slightly to $79.7 billion reflecting a decrease in transaction and<br>savings accounts as customers preference increased towards higher yielding term<br>deposits. Term deposits grew $1.0 billion with an increase in household term deposit<br>accounts partly offset by a reduction in institutional term products.<br>Non-interest income up 7% • Non-interest income increased 7% to $279 million reflecting higher investment<br>income and business fees from increased activity.<br>Expenses up 6% • Operating expenses excluding Notable Items increased 6%, reflecting:<br> – Higher wages and salaries and third-party vendor costs; and<br> – Increase in technology investment and amortisation costs and ongoing<br>operational support costs following the completion of activities to comply with<br>the RBNZ's outsourcing policy.<br>Impairment charge of<br>$27 million<br> • The impairment charge to average loans was 3 basis points, compared to a charge<br>of 14 basis points in the prior year. The lower charge is due to decreases in CAP<br>which was offset by increases in IAP within the business portfolio.<br> • Stressed exposures to TCE increased 24 basis points to 1.73% mostly due to<br>deterioration in mortgage 90+ day delinquencies and higher impaired balances as<br>consumers and businesses feel the stress of higher interest rates and the challenging<br>economic environment.
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312 WESTPAC GROUP 2024 ANNUAL REPORT<br>SEGMENT REPORTING<br>Westpac New Zealand (Continued)<br>Westpac New Zealand segment performance (A$ Equivalent)<br>Results have been translated into Australian dollars (A$) at the average exchange rates for each reporting period,<br>2024: $1.0846 (2023: $1.0846 ; 2022: $1.0831). Unless otherwise stated, assets and liabilities have been translated at spot<br>rates as at the end of the period, 2024: $1.0885 (2023: $1.0738 ; 2022: $1.1355).<br>$m 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Net interest income 2,388 2,317 2,107 3<br>Non-interest income 257 240 279 7<br>Notable Items (8) - 120 -<br>Net operating income 2,637 2,557 2,506 3<br>Operating expenses (1,262) (1,186) (1,072) 6<br>Notable Items - (9) - (100)<br>Total operating expenses (1,262) (1,195) (1,072) 6<br>Pre-provision profit 1,375 1,362 1,434 1<br>Impairment (charges)/benefits (25) (124) 25 (80)<br>Profit before income tax expense 1,350 1,238 1,459 9<br>Income tax expense and NCI (377) (350) (382) 8<br>Net profit 973 888 1,077 10<br>Notable Items (post tax) (6) (7) 119 (14)<br>Profit/(loss) attributable to businesses sold - - 18 -<br>Expense to income ratio (Ex Notable Items)a 47.72% 46.34% 44.78% 138 bps<br>Net interest margin (Ex Notable Items)a 2.17% 2.13% 2.02% 4 bps<br>a. Ratios calculated using NZ$.<br>$bn 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Customer deposits 73.2 74.3 68.6 (1)<br>Loans 93.8 92.5 85.3 1<br>Deposit to loan ratioa 78.06% 80.36% 80.48% (230 bps)<br>Total assets 113.5 113.5 105.0 -<br>TCE 135.3 136.9 127.3 (1)<br>Risk weighted assets 56.9 56.2 47.2 1<br>Liquid assets 16.3 17.9 16.2 (9)<br>Average interest earning assetsb 110.0 108.8 104.4 1<br>Average allocated capitalb 7.5 7.3 6.6 3<br>Total funds 12.1 10.6 9.6 14<br>a. Ratios calculated using NZ$.<br>b. Averages are converted at applicable average rates.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 313<br>Group Businesses<br>The segment comprises:<br> • Treasury, which is responsible for the management of Westpac’s balance sheet including wholesale funding, capital,<br>and liquidity. Treasury also manages interest rate risk and foreign exchange risks associated with wholesale funding;<br> • Enterprise services, which include earnings on capital not allocated to segments, certain intra-group transactions and<br>gains/losses from asset sales, earnings and costs associated with Westpac’s fintech investments; and<br> • Other costs which include expenses not directly attributable to segments including Corporate Affairs, a portion of<br>enterprise technology costs related to UNITE, certain customer remediation expenses and enterprise provisions.<br>$m 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Net interest income 1,318 1,002 1,080 32<br>Non-interest income (1) 153 432 large<br>Notable Items (167) 191 (418) large<br>Net operating income 1,150 1,346 1,094 (15)<br>Operating expenses (804) (738) (987) 9<br>Notable Items - (170) (542) (100)<br>Total operating expenses (804) (908) (1,529) (11)<br>Pre-provision profit 346 438 (435) (21)<br>Impairment (charges)/benefits (2) (1) 9 100<br>Profit before income tax expense 344 437 (426) (21)<br>Income tax expense and NCI (234) (198) (150) 18<br>Net profit/(loss) 110 239 (576) (54)<br>Notable Items (post tax) (117) 99 (937) large<br>Profit/(loss) attributable to business sold - 131 168 (100)<br>Treasury<br>$m 2024 2023 2022<br>% Mov't<br>2024 - 2023<br>Net interest income 1,054 665 979 58<br>Non-interest income 20 14 21 43<br>Notable Items (158) (20) 553 large<br>Net operating income 916 659 1,553 39<br>Net profit 484 319 960 52<br>Net profit of $110 million compared to a net profit of $239 million in the prior year.<br>Pre-provision profit of $346 million was lower than the profit of $438 million in the prior year. Excluding Notable Items,<br>pre-provision profit was $513 million compared with a $417 million profit in the prior year.<br>Net operating income<br>down 15%<br> • Excluding Notable Items, income was up 14% to $1,317 million. Movements included:<br> – Higher Treasury contribution from favourable positioning for interest<br>rate volatility;<br> – Lower income due to businesses that were exited in the prior year; and<br> – Lower realised gains on sale of liquid assets.<br>Expenses down 11% • Excluding Notable Items, expenses were up 9% to $804 million primarily driven<br>by higher technology investment spend relating to the technology simplification<br>program, UNITE.
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314 WESTPAC GROUP 2024 ANNUAL REPORT<br>REVIEW OF EARNINGS: 2023 VS 2022<br>Group performance<br>Performance overview<br>Net profit for 2023 was $7,195 million, an increase of $1,501 million or 26% compared to 2022. The increase in net profit<br>was predominantly due to an increase in operating income and reduction in operating expenses, partly offset by higher<br>credit impairment charges.<br>The following is a summary of the movements in major line items in net profit.<br>Group NIM increased by 1 basis points to 1.95%. Key movements included:<br> • Core NIM: 10 basis point increase. Wider deposit spreads in the first half of the year and higher returns on both<br>hedged deposits and capital as a result of rising interest rates more than offset tighter lending spreads and<br>competition increased; and<br> • Notable Items: 7 basis point decline reflecting unrealised fair value losses related to economic hedges of our<br>term funding.<br>Net interest income increased $1,156 million or 7% over 2023 with a higher net interest margin and balance sheet<br>growth offsetting a decline in Treasury and Markets income. Average interest earning assets increased 6% with growth<br>in owner-occupied mortgages, institutional lending and commercial property. Customer deposits increased 5% over the<br>year, fully funding loan growth and maintaining the customer deposit to loan ratio to 82.9%.<br>Non-interest income increased by 36% to $3,328 million. Notable Items and the impact of businesses sold increased<br>non-interest income by $340 million or 10% in 2023 reflecting the gain on the sale of Advance Asset Management<br>Limited of $243 million. Excluding Notable Items and businesses sold, non-interest income increased 3% to<br>$2,988 million driven by higher trading income from higher credit spreads and foreign exchange sales.<br>Operating expenses were $110 million or 1% lower compared to 2022. The decrease was mainly due to:<br> • Lower occupancy costs associated with a reduction in corporate and branch footprint including the closure of 88<br>branches and establishment of 55 co-locations; and<br> • Reduced use of third-party and consulting services.<br>The reduction in operating expenses was partly offset by:<br> • Inflationary pressures across salaries and wages and software maintenance and license costs; and<br> • Higher software amortisation of approximately $80 million related to growth, productivity and regulatory and<br>risk investments.<br>Credit impairment charges were $648 million in 2023, compared to a credit impairment charge of $335 million in 2022.<br>The charge in 2023 represented 9 basis points of average gross loans and is still below long-term historical averages.<br>The charge in 2023 reflected the impact of:<br> • Higher inflation, interest rates rising and expectation of slowing economic activity; and<br> • Deterioration in credit quality metrics through the year including increased stressed exposures in mortgages and<br>institutional lending.<br>The effective tax rate of 30.1% in 2023 was slightly above the Australian corporate tax rate of 30% due to some<br>non-deductible expenses and hybrid capital distributions. The effective tax rate was higher in 2022 due to some<br>non-deductible expenses including the loss on sale of our Australian life insurance business.<br>In 2023, the Board determined a final dividend of 72 cents per ordinary share. The FY23 ordinary dividends of $1.42 were<br>higher than the ordinary dividends declared in 2022 and represented a payout ratio of 69.20%. The 2023 final ordinary<br>dividend was fully franked.<br>Consumer<br>Net profit of $2,645 million was $407 million or 13% lower in 2023. Excluding Notable Items associated with restructuring<br>charges and the branch transformation program, net profit decreased $306 million or 10%. The following is a summary of<br>the movements in major line items in net profit:<br> • Net-interest income declined 3% reflecting a 12 basis point reduction in the net interest margin which more than<br>offset volume growth;<br> • Non-interest income declined 6% reflecting the non-recurrence of a payment received from the distribution<br>agreement for general insurance in the prior year as well as lower cards and share trading income;<br> • Operating expenses rose 3% driven by higher wage and vendor services inflation and increased amortisation<br>costs; and
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 315<br> • Impairments charge of $179 million was slightly lower than previous year driven by a CAP benefit that was driven by a<br>reduction in overlays which more than offset the deteriorating credit risk metrics in the mortgage portfolio.<br>Business and Wealth<br>Net profit of $2,086 million was $811 million, or 64% higher than 2022. Excluding notable items associated with<br>remediation charges, net profit increased $909 million. The following is a summary of the movements in major line<br>items in net profit:<br> • Net-interest income increased 42% reflecting 147 basis point increase to net interest margin as rising interest rates<br>supported higher deposit spreads and returns on both hedged deposits and capital;<br> • Non-interest income declined 4% due to lower merchant fees and auto finance fees;<br> • Operating expenses increased 1% due to unfavourable FX translation impact and increased inflation; and<br> • Impairment charge of $257 million reflected a deteriorating economic environment and worsening credit quality<br>metrics with stressed exposures rising to 5.46% of total committed exposures.<br>Auto finance continued to run-down with $4.2 billion remaining at 30 September 2023.<br>Platforms funds under advisement increased by 7% reflecting higher equity markets and dividend distributions.<br>Westpac Institutional Bank<br>Net profit of $1,337 million was $471 million higher than 2022. Excluding Notable Items associated with restructuring<br>charges, net profit rose $481 million. The following is a summary of the movements in major line items in net profit:<br> • Net-interest income increased by 34% driven by growth in loans of 9% and 26 basis point increase to net interest<br>margin which benefited from higher interest rates supported loan and deposit spreads and returns on capital;<br> • Non-interest income increased 19% driven by positive impact from derivative valuation adjustments and higher credit<br>and foreign exchange sale volumes;<br> • Operating expenses increased by 4% reflecting inflationary pressures on salaries and wages and third party vendor<br>costs which more than offset cost reset outcomes; and<br> • Impairment charge of $87 million was slightly higher than previous year driven by higher CAP charge reflecting an<br>increase in customers entering watchlist.<br>Westpac New Zealand<br>Net profit of NZ$963 million was NZ$205 million, or 18% lower than 2022, primarily driven by higher expenses on<br>regulatory, risk and compliance spending and higher loan impairment charges due to emerging stress in the portfolio<br>and deteriorating economic outlook. This was partly offset by higher net-interest income benefiting from rising rates.<br>Group Businesses<br>Net profit of $239 million was $815 million higher than 2022. The following is a summary of the movements in major line<br>items in net profit:<br> • Lower net-interest income reflecting decline in treasury earnings due to market volatility and lower realised gains on<br>sales of liquid assets; and<br> • Lower operating expenses due to favourable employee provision movements, lower consulting and third-party costs<br>and reduced costs for the Banking as a Service (BaaS) platform.<br>For further discussion and analysis of the financial year ended 30 September 2023 compared to 2022, please refer to<br> “Group Performance” and “Segment Reporting” on pages 259-301 in our Annual Report on Form 20-F for the fiscal year<br>ended 30 September 2023, which was filed with the US Securities and Exchange Commission on 7 November 2023 and<br>which sections are incorporated herein by reference.
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316 WESTPAC GROUP 2024 ANNUAL REPORT<br>REVIEW OF EARNINGS: 2023 VS 2022<br>Impact of Notable Items<br>Details of Notable Items (post tax) impacting on 2022 results are presented below:<br>Category Net profit impact Detail<br>2022<br>The impact of asset sales<br>and revaluations<br>$876 million<br>reduction<br> • Loss on sale of Australian life insurance of $1,112 million in non-interest income,<br>$1,120 million after tax;<br> • Expenses and revaluations associated with asset sales, including of Advance Asset<br>Management and successor funds transfer of BT’s personal and corporate superannuation<br>funds of $125 million, $101 million after tax; and<br> • Other costs associated with the divestments of the Group’s businesses; partly offset by:<br> • Gain on the sale of NZ life insurance; and<br> • Gain on sale of the Group’s motor vehicle dealer finance and novated leasing business.<br>This also includes a tax refund related to transaction and separation costs relating<br>to the Group’s motor vehicle dealer finance, novated leasing business and vendor<br>finance businesses.<br>The write-down of assets $283 million<br>reduction<br> • Write-down of assets related to our superannuation business in preparation for its exit.<br>This included all goodwill attributable to the business along with some capitalised<br>software of $167 million in costs, $154 million after tax;<br> • Write-down of assets from a reduction in corporate office space required. Reduced space<br>requirements are from business sales, reduced headcount, and more flexible working. The<br>write-down considers the capitalised value of the remaining term of the lease less likely<br>sublease income, $118 million in costs, $82 million after tax; and<br> • Expenses associated with the accelerated consolidation of branches that has progressed<br>more rapidly than recent years of $66 million in costs, $47 million after tax.<br>Provision for remediation,<br>litigation, fines and penalties<br>$133 million<br>reduction<br> • Additional provisions for estimated customer refunds:<br> – remediation for premium increases on certain life insurance products issued by<br>Australian life insurance; and<br> – additional wealth related remediation; partly offset by release of provisions for<br>customer remediation in Westpac New Zealand.<br> • Additional costs for our customer remediation program; and<br> • Increase in litigation provisions.<br>Hedging items $418 million<br>addition<br>The unrealised fair value gains and loss on economic hedges of accrual accounted term<br>funding transactions for the period and the net ineffectiveness on qualifying hedges. There is<br>no impact to Westpac’s profit over time as the hedges reverse.<br>Total Notable Items $874 million<br>reduction
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 317<br>RISK FACTORS<br>Risk factors<br>Our business is subject to risks that can adversely impact our financial performance, financial condition and future<br>performance. Our 2024 Annual Report sets out the 11 major risk categories that impact our business, our approach<br>to managing risks, as well as key focus areas. The 2024 Risk Factors provides our investors (and potential investors)<br>with further information in relation to the current and future risks we face, as well as potential consequences if those<br>risks materialise.<br>The content of the 2024 Risk Factors is current as of the date of publication, and it is important to note that<br>subsequent developments may impact its relevance. Risks and risk management strategies are inherently dynamic,<br>evolving alongside changes in the external environment, market conditions and organisational priorities. The risks and<br>uncertainties described below can emerge together or quickly in succession in a fashion that is uncorrelated with the<br>order in which they are presented below, and they are not the only ones we face. Additional risks and uncertainties that<br>we are unaware of, or that we currently deem to be immaterial, may also become important factors that affect us.<br>If any of the following risks materialise, our business, prospects, reputation, financial performance or financial condition<br>could be materially adversely affected, which may subsequently cause the price of our securities or the level of<br>dividends to decline and, as a security holder, you could lose all, or part, of your investment. You should carefully<br>consider the risks described (individually and in combination) and the other information in the 2024 Risk Factors and in<br>our 2024 Annual Report and subsequent disclosures before investing in, or continuing to own, our securities.<br>Risks relating to our business<br>We have experienced, and could in the<br>future experience, information security risks,<br>including cyberattacks<br>- Cyber risk<br>- Cyber attacks<br>- Operational risk<br>- Information security risks<br>- Data breaches<br>- Third party risk<br>Our operations depend on the secure processing, storage and transmission of information on our systems and those<br>of external suppliers. Despite our measures to protect the confidentiality, availability and integrity of our information,<br>our information assets may face security breaches, unauthorised access, malware, social engineering, denial of service<br>attacks, ransomware, destructive attacks, employee misconduct, human error or other external and internal threats.<br>These could adversely impact our and others’ confidential information and system availability.<br>Information security risks are heightened by factors such as new technologies, increased digitisation, larger volumes<br>of sensitive data, sophisticated cyber crime, supply chain disruptions, remote and hybrid working, targeting of critical<br>infrastructure providers, geopolitical tensions, terrorism, state sponsored attacks, and the use of AI in cyberattacks<br>(which can increase the speed, complexity and effectiveness of cyberattacks), each of which could compromise our<br>information assets and interrupt our usual operations and those of our customers, suppliers and counterparties.<br>Adverse events like data breaches, cyberattacks, espionage and errors (including human-related), are increasing<br>in frequency and impact. These can cause a range of impacts including financial instability, reputational damage,<br>disruption to services, contagion risk, in addition to economic and non-economic losses to us, our customers,<br>shareholders, suppliers, counterparties and others. Our systems and processes designed to protect against and<br>respond to these threats have not always been, and may not always be, effective and human error can occur.<br>Westpac, its customers and other stakeholders could suffer losses from cyberattacks, information security breaches<br>or ineffective cyber resilience. Consequences could be severe if customer data is being held in breach of legal or<br>regulatory obligations and that data is compromised as part of an information security incident. We may not always<br>be able to anticipate and prevent or effectively respond to such incidents , or effectively respond to and/or rectify<br>the resulting damage. Our suppliers, counterparties, and other parties involved in or who facilitate our activities,<br>financial platforms and infrastructure as well as our customers’ suppliers and counterparties are also at risk, which<br>could impact us.<br>As cyberattacks increase globally, there is a higher likelihood of regulatory enforcement and legal action for<br>information security failures from customers or shareholders. This could include class action litigation for issues such<br>as information security risk management failures, misleading statements about our information security practices or<br>for deficiencies in our response to cyberattacks and information security threats (including any delayed, deficient or<br>misleading notifications).<br>Consequences of successful attacks could include damage to technology infrastructure, government intervention,<br>service disruptions, loss of customers and market share, data loss, cyber extortion, customer remediation and/or<br>compensation, breaches of the law, vulnerability to fraud or scams, litigation, fines, and increased regulatory scrutiny<br>or other enforcement action.
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318 WESTPAC GROUP 2024 ANNUAL REPORT<br>RISK FACTORS<br>Risk factors (Continued)<br>These potential consequences could negatively affect our business, prospects, reputation, financial performance or<br>financial condition. As cyber threats evolve, we may need to allocate significant resources and incur additional costs<br>to enhance our systems, address vulnerabilities or incidents and respond to regulatory changes.<br>We could be adversely affected by legal or<br>regulatory change<br>- Compliance and conduct risk<br>- Regulators' expectations<br>- Legal and regulatory change<br>- Fines, penalties, other costs and capital overlays<br>We operate in a highly regulated industry with an environment of sustained legal and regulatory change and ongoing<br>scrutiny of financial services providers. Our business, prospects, reputation, financial performance and financial<br>condition have been, and could in the future be, adversely affected by domestic and international changes to law,<br>regulation, policies, supervisory activities, regulator expectations, and the requirements of industry codes of practice,<br>such as the Banking Code of Practice.<br>Such changes may affect how we operate and have altered, and may in the future alter, the way we provide our<br>products and services, in some cases requiring us to change or discontinue our offerings. This includes possible future<br>changes in laws, regulations, policy or regulatory expectations arising from industry-wide reviews and inquiries. The<br>effects of such changes and reviews in the past have included, and could continue to include, limiting our flexibility,<br>requiring us to incur substantial costs (such as costs of systems changes, the levies associated with the Compensation<br>Scheme of Last Resort, or if our liability for scams or operational costs relating to scam management or other<br>industry wide issues are increased as a result of legal or regulatory change), absorbing specialist resources, impacting<br>the profitability of our businesses, requiring us to retain additional capital, impacting our ability to pursue strategic<br>initiatives or implement other changes, resulting in us being unable to increase or maintain market share and/or<br>creating pressure on margins and fees.<br>A failure to manage legal or regulatory changes effectively and in the timeframes required has resulted, and could<br>in the future result, in the Group not meeting its compliance obligations. It could also result in enforcement action,<br>penalties, fines, civil litigation, capital impacts and ultimately loss of business licences. Managing large volumes of<br>regulatory change contributes to execution risk. Updates to our technology, systems and processes to keep pace with<br>legal and regulatory change may not always be successful, and such changes can increase the risk of flaws, human<br>error or unintended consequences. This is exacerbated by frequent requirements for change. Significant management<br>attention, costs and resources may be required to update existing, or implement new, processes to comply with such<br>changes. The availability of skilled personnel required to implement changes may be limited.<br>There is additional information on certain aspects of regulatory changes affecting the Group in the Significant<br>developments section and in the sections ‘Critical accounting assumptions and estimates’ and ‘Future developments<br>in accounting standards’ in Note 1 to the financial statements in the 2024 Annual Report.<br>We have been and could be adversely affected<br>by failing to comply with laws, regulations or<br>regulatory policy<br>- Compliance and conduct Risk<br>- Regulators' expectations<br>- Legal and regulatory<br>- Industry codes<br>- Fines, penalties and capital overlays<br>We are responsible for ensuring that we comply with all applicable legal and regulatory requirements and industry<br>codes of practice in the jurisdictions in which we operate or obtain funding.<br>We are subject to compliance and conduct risks. These risks are exacerbated by the complexity and volume of<br>regulation, and the level of ongoing regulatory change, including where we interpret our obligations and rights<br>differently to regulators or a Court, tribunal or other body, or where applicable laws (in different jurisdictions or<br>between regimes in Australia) conflict. The potential for this is heightened when regulation is new, untested or is not<br>accompanied by extensive regulatory guidance, or where industry consultation is limited.<br>Our compliance and conduct management system (which is designed to support our commitment to satisfying<br>regulatory requirements and the effective management of compliance and conduct risk for the benefit of customers,<br>other stakeholders and financial markets) has not always been, and may not always be, effective. Breakdowns have<br>occurred, and may in the future occur, including due to a failure to exercise good judgement in the decisions we make,<br>flaws in the design or implementation of controls or processes, or when new measures are implemented. These factors<br>can result in a failure by the Group to meet its compliance obligations (including obligations to report or provide<br>information to regulators). As reviews and change programs are progressed, compliance issues have been, and will<br>likely continue to be, identified.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 319<br>Risk factors (Continued)<br>Conduct risk has occurred, and could continue to occur, through the provision of products and services to customers<br>(including vulnerable customers and customers in hardship) that do not meet their needs or do not meet the<br>expectations of the market. It has occurred, and could continue to occur, through the deliberate, reckless, negligent,<br>accidental or unintentional conduct of our employees, contractors, agents, authorised representatives, credit<br>representatives and/or external services providers that results in the circumvention or inadequate implementation of<br>our controls, processes, policies or procedures. This could occur through a failure to meet professional obligations<br>to specific clients (including fiduciary, suitability, responsible lending and hardship requirements), weakness in<br>risk culture, corporate governance or organisational culture, poor product design and implementation, failure to<br>adequately consider customer needs or selling products and services outside of customer target markets, or human<br>error. These risks are heightened where there has been, or is in the future, inadequate supervision and oversight<br>of our distribution channels. A failure by our people to comply with the behaviours we expect, our policies and<br>procedures, or the law, could also negatively impact other employees, which could lead to outcomes including<br>litigation and reputational damage for Westpac. Where third parties have contributed to conduct risk (for example,<br>where customers misrepresent their position on product applications and we have failed to identify it), Westpac<br>and its related entities may have limited recourse against these third parties, and regulatory outcomes may not be<br>mitigated by third party culpability.<br>These factors have resulted, and could continue to result, in poor customer outcomes (including for vulnerable<br>customers and customers in hardship), a failure by the Group to meet its compliance obligations (or to promptly<br>detect, report and/or remedy non-compliance) and other outcomes including impacts which may compromise the<br>integrity of the markets in which we operate or data we report, reputational damage, increased regulatory surveillance<br>or investigation and employment disputes in relation to consequence management. We are currently subject to a<br>number of investigations, reviews and industry inquiries by, and have and continue to respond to a number of requests<br>from, domestic and international regulators including APRA, ASIC, the ATO, the ACCC, AUSTRAC, BCCC, FINRA,<br>AFCA, RBNZ and the Fair Work Ombudsman, BaFin and BPNG’s Financial Analysis and Supervision Unit, involving<br>significant resources and costs (which may divert specialist resources from other programs of work).<br>Regulatory reviews and investigations have in the past, and may in the future, result in a regulator taking<br>administrative or enforcement action against the Group and/or its representatives. Regulators have broad powers,<br>and in certain circumstances, can issue directions to us (including in relation to product design and distribution and<br>remedial action). Regulators could also pursue civil or criminal proceedings, seek substantial fines, civil penalties,<br>compliance regimes or other enforcement outcomes. Penalties can be (and have been) more significant where it has<br>taken some time to identify contraventions, or to investigate, correct or remediate contraventions, where there are<br>patterns of similar conduct, or where there has been awareness of contraventions. These risks are heightened where<br>we fail to meet our obligations (or the expectations of regulators) in areas of particular regulatory focus. For example,<br>in relation to vulnerable customers, customers in hardship and indigenous customers or where regulators consider<br>issues to be material or indicate systemic issues. In addition, regulatory investigations may lead to adverse findings<br>against directors and management, including potential disqualification. The allocation of resources to regulatory<br>reviews and investigations can also impede other activities, including change, simplification and remediation activities.<br>APRA can also require the Group to hold additional capital either through a capital overlay or higher risk weighted<br>assets (including in response to a failure to comply with prudential standards and/or expectations including in relation<br>to, for example, stress testing and liquidity management). Following the commencement of civil penalty proceedings,<br>APRA imposed a A$500 million Culture, Governance and Accountability Review overlay and a further A$500 million<br>Risk Governance overlay to our required operational risk capital in 2019. On 19 July 2024, APRA announced the<br>reduction of the Group’s total operational risk capital overlay from A$1 billion to A$500m. This increased the Common<br>Equity Tier 1 (CET1) capital ratio by approximately 18 basis points, reflecting a reduction in risk weighted assets of<br>$6,250 million. This change was applied with immediate effect. If the Group incurs additional capital overlays, we may<br>need to raise additional capital, which could have an adverse impact on our financial performance.<br>The political and regulatory environment that we operate in has seen (and may continue to see) the expansion<br>of powers of regulators along with materially increased civil penalties and fines for corporate and financial sector<br>misconduct or non-compliance and an increase in criminal prosecutions against institutions and/or their employees<br>and representatives (including where there is no fault element). This could also result in reputational damage and<br>impact the willingness of customers, investors and other stakeholders to deal with Westpac. Given the size of<br>Westpac and scale of its activities, a failure by Westpac may result in multiple contraventions, which could lead to<br>significant financial and other penalties. The introduction of the Financial Accountability Regime may heighten these<br>risks as it imposes a strengthened responsibility and accountability framework.<br>Regulatory investigations or actions commenced against the Group have exposed, and may in the future expose, the<br>Group to an increased risk of litigation brought by third parties (including through class action proceedings), which<br>may require us to pay compensation to third parties and/or to undertake further remediation activities. In some cases,<br>the amounts claimed and/or to be paid may be substantial. Market developments suggest the scope and nature of<br>potential claims is expanding, including in relation to cyber incidents, financial crime and environmental, social and<br>governance issues. We have incurred significant remediation costs on a number of occasions (including compensation<br>payments and costs of correcting issues) and new issues may arise requiring remediation. We have faced, and may<br>continue to face, challenges in effectively and reliably scoping, quantifying and implementing remediation activities,
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320 WESTPAC GROUP 2024 ANNUAL REPORT<br>RISK FACTORS<br>Risk factors (Continued)<br>including determining how to compensate impacted parties properly, fairly and in a timely way. Remediation activities<br>may be affected or delayed by a number of factors including the number of customers (or other parties) affected,<br>the commencement of investigations or litigation (including regulatory or class action proceedings), requirements of<br>regulators (including as to the method or timeframe for remediation) or difficulties in locating or contacting affected<br>parties and any reluctance of affected parties to respond to contact. Investigation of the underlying issue may be<br>impeded due to the passage of time, technical system constraints, or inadequacy of records. Remediation programs<br>may not prevent regulatory action or investigations, litigation or other proceedings from being pursued, or sanctions<br>being imposed.<br>Regulatory investigations, inquiries, litigation, fines, penalties, infringement notices, revocation, suspension or variation<br>of conditions of regulatory licences or other enforcement or administrative action or agreements (such as enforceable<br>undertakings) have and could, either individually or in aggregate with other regulatory action, adversely affect our<br>business, prospects, reputation, financial performance or financial condition and increases class action risk.<br>There is additional information on certain regulatory and other matters that may affect the Group (including class<br>actions) in the Significant developments section and in the sections ‘Critical accounting assumptions and estimates’<br>and ‘Future developments in accounting standards’ in Note 1 to the financial statements in the 2024 Annual Report.<br>We have suffered, and in the future could suffer,<br>losses and be adversely affected by the failure<br>to implement effective risk management<br>- Risk management<br>- Controls and processes<br>- Risk culture<br>- Risk governance<br>- Fines, penalties<br>Our risk management framework has not always been, and may not in the future be, fully effective. The resources<br>we have in place for identifying, measuring, evaluating, monitoring, reporting and controlling or mitigating material<br>risks may not always be adequate. This may arise due to inadequacies in the design of the framework or<br>key risk management policies, controls and processes, the design or operation of our remuneration structures<br>and consequence management processes, technology failures, our corporate structure, incomplete implementation<br>or embedment, or failure by our people (including contractors, agents, authorised representatives and credit<br>representatives) to comply with or properly implement our policies and processes. The potential for these types<br>of failings is heightened if we do not have appropriately skilled, trained and qualified people in key positions or we do<br>not have sufficient capacity, including people, processes and technology, to appropriately manage risks.<br>There are also inherent limitations with any risk management framework. Risks may exist, or emerge in the future, that<br>we have not anticipated or identified.<br>The risk management framework may also prove ineffective because of weaknesses in risk culture or risk governance<br>practices and policies. For example, where there is a lack of awareness of our policies, controls and processes or<br>where they are not adequately complied with, monitored, audited or enforced. This may result in poor decision-making or risk and control weaknesses not being identified, escalated or acted upon.<br>We periodically review our risk management framework to determine if it remains appropriate. Our ongoing analysis<br>and reviews, in addition to regulatory feedback, have highlighted that while there have been improvements, the risk<br>management framework is still not operating satisfactorily in a number of respects and needs continued focus.<br>As part of our risk management framework, we measure and monitor risks against our risk appetite. When a risk is out<br>of appetite, we aim to take steps to bring this risk back into appetite. This may include improving the design of our<br>risk management framework and supporting policies. However, we may not always be able to bring a risk back within<br>appetite within proposed timeframes or implement effective improvements. This may occur because, for example,<br>the required changes involve significant complexity, or because we experience delays in enhancing our information<br>technology systems, or we do not have sufficient appropriately trained staff for required activities (including where<br>staff are occupied by other regulatory change or remediation projects), or because of an operational failure. It is<br>also possible that due to external factors beyond our control, certain risks may be inherently outside of appetite for<br>periods of time.<br>Westpac developed the Integrated Plan (IP) to address the root causes of our risk governance shortcomings<br>which led to the Enforceable Undertaking (EU) with APRA in December 2020 in relation to our risk governance<br>remediation and supporting the strengthening of our risk governance, accountability and culture. We completed<br>the IP in December 2023, as committed. Promontory Australia (as Independent Reviewer) issued its final report on<br>30 April 2024 confirming that Westpac has successfully completed the IP. This report and previously issued reports<br>are published on our website at https://www.westpac.com.au/about-westpac/media/core/. Westpac is continuing to<br>focus on the sustainability and effectiveness of the uplift delivered by the Integrated Plan through a transition phase<br>in 2024.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 321<br>Risk factors (Continued)<br>If any of our governance or risk management processes and procedures prove ineffective or inadequate or are<br>otherwise not appropriately implemented or we do not bring risks into appetite, we could be exposed to higher<br>levels of risk than expected and sustained or increased regulatory scrutiny and action. While improvements in<br>risk culture can drive early and increased self-identification and remediation of compliance concerns, this can also<br>highlight concerns that may lead to further regulatory action. This may result in financial losses, imposition of capital<br>requirements, breaches of compliance obligations, fines and reputational damage, and significant remediation which<br>could adversely affect our business, prospects, financial performance or financial condition.<br>We could suffer losses due to<br>technology failures<br>- Operational risk<br>- Information and technology<br>- Change management<br>- Technology failure<br>- Outages<br>Maintaining the reliability, availability, integrity, confidentiality, security and resilience of our information and<br>technology is crucial to our business. While the Group has a number of processes in place to preserve and monitor<br>the availability, and facilitate the recovery, of our systems, there is a risk that our information and technology systems<br>may be inadequate, fail to operate properly or result in outages, including from events wholly or partially beyond<br>our control.<br>If we experience a technology failure, we may fail to meet a compliance obligation (such as a requirement to<br>retain records and/or data for a certain period, or to destroy records and/or data after a certain period, or other<br>risk management, privacy, business continuity management or outsourcing obligations), or our employees and our<br>customers may be adversely affected, including through the inability for them to access our products and services,<br>privacy breaches, or the loss of personal data. This could result in reputational damage, remediation costs and a<br>regulator commencing an investigation and/or taking action, or others commencing litigation, against us. Technology<br>issues in the financial sector can also affect multiple institutions. This means we could impact, or be impacted by,<br>other institutions.<br>The use of legacy systems, as well as work underway to uplift our technological capabilities, may heighten the risk<br>of a technology failure, change management issues and the risk of non-compliance with our regulatory obligations or<br>poor customer outcomes. Projects aimed at simplifying/streamlining our systems (including our UNITE program) will<br>require the allocation of significant resources (including specialist expertise) and incur costs. In addition, the risk of<br>technology failure, regulatory non-compliance or poor customer outcomes may be heightened while those projects<br>are being undertaken, or post-implementation where there are unanticipated outcomes or impacts. We are also<br>exposed to the risk that such projects may not be completed on time or may require further resources or funding than<br>anticipated. The success of such projects relies in part on having robust governance arrangements and appropriate<br>oversight at board and senior executive level, and the risk of regulatory non-compliance, poor customer outcomes,<br>delays, increased cost or demand on resources can be heightened where we fall short in these areas.<br>Failure to regularly renew and enhance our technology to deliver new products and services, comply with regulatory<br>obligations and ongoing regulatory changes, improve automation of our systems and controls, and meet our<br>customers’ and regulators’ expectations, or to effectively implement new technology projects, could result in cost<br>overruns, technology failures (including due to human error in implementation), reduced productivity, outages,<br>operational failures or instability, compliance failures, reputational damage and/or the loss of market share. This could<br>place us at a competitive disadvantage and also adversely affect our business, prospects, financial performance or<br>financial condition.<br>We could suffer losses due to<br>geopolitical events<br>- Geopolitical risks<br>- Conflicts<br>- Operational risk<br>- Credit risk<br>We, our customers and our suppliers operate businesses and hold assets in different geographic locations. Significant<br>risks remain including from geopolitical instability, conflicts, trade tensions, tariffs, sanctions, social disruption, civil<br>unrest, war, terrorist activity, acts of international hostility, and complicity with or reluctance to take action against<br>certain types of crimes.<br>Such events could affect domestic and international economic stability and impact consumer and investor confidence<br>which in turn could disrupt industries, businesses, service providers and supply chains and ultimately adversely impact<br>economic activity. This could lead to shortages of materials and labour, higher energy costs and commodity prices,<br>volatility in markets and damage to property. This in turn could affect asset values and impact customers’ ability to
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322 WESTPAC GROUP 2024 ANNUAL REPORT<br>RISK FACTORS<br>Risk factors (Continued)<br>repay amounts owing to us, and our ability to recover amounts owing. All of these impacts could adversely affect<br>our business, prospects, financial performance or financial condition. The current global landscape is marked by<br>significant conflict and heightened tensions, which have the potential to further intensify these impacts.<br>Climate change and other sustainability factors<br>such as human rights and natural capital may<br>have adverse effects on our business<br>- Climate and nature risks<br>- Physical and transition risks<br>- Social and human rights risks<br>- Credit risk<br>- Operational risk<br>- Reputational and sustainability risk<br>- Compliance and conduct risks<br>Climate and other sustainability-related risks have had and are likely to have adverse effects on us, our customers,<br>external suppliers, and the communities in which we operate. Managing these risks is challenging given the<br>significant uncertainties in modelling climate and other sustainability-related risks and opportunities and in assessing<br>their impact.<br>Climate related risks may manifest as physical risks, transition risks, and risks related to legal and regulatory action.<br>Physical risks from climate change include risks to us directly, as well as to customers, suppliers and other<br>stakeholders that may impact us due to disruption or changes to business activities, income, business models, asset<br>values, insurability of assets (or the availability/affordability of insurance), and frequency or extent of damage to<br>assets. These risks could arise from increases and variability in temperatures, changes in precipitation, rising sea levels,<br>loss of natural capital (including biodiversity loss), and more severe and frequent climatic events, including fires,<br>storms, floods and droughts. Such events could also increase human rights risk and/or increase customer vulnerability.<br>Transition risks are risks that the transition to a lower carbon economy could impact Westpac. This could occur from<br>climate change mitigation, obsolescence of certain businesses including from energy transition, changes in investor<br>appetite, shifting customer preferences, technology developments and changes in regulatory expectations/policy.<br>Transition risks could emerge through our lending to certain customers that experience reduced revenues or asset<br>values or increased costs, which in turn impacts our credit risk. Westpac may also be directly impacted by transition<br>risks, or be unable to reduce our exposure to impacted customers, suppliers and other third parties.<br>Our ambition to become a net-zero, climate resilient bank, has led and will lead to changes in policies and processes<br>which may present associated execution risk. Our ability to meet our commitments and targets is in part dependent<br>on the orderly transition of the economy towards net-zero, which may be impacted by external factors including<br>(but not limited to) government and other policies, investment, electricity grid capacity, and constraints in the<br>development and supply of technology, infrastructure and the skilled labour required to deliver the necessary change.<br>Our ability to transition, including to meet our targets and commitments, may also be impacted by challenges faced<br>by customers in meeting their own transition plans and commitments.<br>The high dependency of the economy on nature means natural capital loss is a risk to us, primarily through our<br>exposure to customers that are materially dependent or impact on nature. Natural capital refers to the stock of<br>renewable and non-renewable natural resources (e.g. plants, animals, air, water, soils, minerals) that combine to yield<br>a flow of benefits to people. Natural capital loss can also contribute to, and be accelerated by, climate change.<br>Increasing recognition and responses to this risk also create heightened regulatory and stakeholder expectations on<br>Westpac. As with our climate ambitions, our ambition to become a nature positive bank will lead to changes to<br>policies and processes which may present associated execution risk, and our ability to meet those ambitions will be<br>impacted by external factors outside our control. Global strategies and standards for nature positivity are at an early<br>stage, which increases regulatory risk and uncertainty.<br>Our business may be exposed to social and human rights risks through our operations, our supply chain and in the<br>provision of financial services. If we fail to adequately identify and manage these risks, we may cause, contribute to,<br>or be directly linked to adverse social and human rights impacts. This includes a risk that we provide financial services<br>to, or use services provided by, parties involved in human rights abuses or criminal activity, or that our platforms and<br>products may be exploited for criminal purposes.<br>While we seek to manage and assess social risks and act if we identify risks, we cannot be certain that our assessment<br>will uncover these risks and/or enable us to act. This could be because of the increasing sophistication of perpetrators<br>and/or our monitoring systems and analytics have not kept pace with change.<br>Data relevant to our assessment and management of climate, and other sustainability-related risks continues to<br>mature. In some cases, we require data from third parties to estimate our exposure and risks. If those data sources<br>are not sufficiently available or reliable, there is a risk that our decision making, including target setting and reporting,<br>could be affected and we may not be able to meet our targets and commitments. Associated risks increase where<br>disclosure of data is required by mandatory reporting.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 323<br>Risk factors (Continued)<br>Failure or perceived failure to adapt the Group’s strategy, governance, procedures, systems and/or controls to<br>proactively manage or disclose climate and other sustainability-related risks and opportunities (including, for example,<br>perceived misstatement of, or failure to adequately implement or meet, sustainability claims, commitments and/or<br>targets) may give rise to business, reputational, legal and regulatory risks. This includes financial and credit risks<br>that may impact our profitability and outlook, and the risk of regulatory action or litigation (including class actions)<br>against us and/or our customers.<br>We may also be subject, from time to time, to legal and business challenges due to actions instituted by activist or<br>other groups. Examples of areas which have attracted activism and challenges include: the financing of businesses<br>perceived to be at greater risk from climate-related physical and transition risks and/or perceived not to demonstrate<br>responsible management of climate or other sustainability issues; and climate and sustainability related disclosures<br>(including net-zero or emissions reduction strategies, targets and policies).<br>Scrutiny from regulators, shareholders, activists and other stakeholders on climate-related risk management practices,<br>lending policies, targets and commitments, and other sustainability products, claims and marketing practices will<br>likely remain high. Applicable legal and regulatory regimes, policies, and reporting and other standards are also<br>evolving. For example, in Australia, mandatory climate reporting has been introduced, and there is an increased<br>compliance and enforcement focus by ASIC and ACCC on a range of issues related to sustainability, sustainable<br>finance, and monitoring/investigation of related claims. This increases compliance, legal and regulatory risks,<br>and costs.<br>For further detail on the identification, assessment and management of these risks, please refer to our 2024 Climate<br>Report, and the Creating Value for the Community, Creating Value for the Environment, Risk Management and<br>Sustainability Governance sections of the 2024 Annual Report.<br>The failure to comply with financial crime<br>obligations has had, and could have further,<br>adverse effects on our business and reputation<br>- Financial crime risk<br>- Bribery and corruption<br>- Tax evasion<br>- Money laundering and terrorism financing<br>- Economic and trade sanctions<br>The Group is subject to anti-money laundering and counter-terrorism financing (AML/CTF) laws, anti-bribery and<br>corruption laws, economic and trade sanctions laws and tax transparency laws in the jurisdictions in which it<br>operates (Financial Crime Laws). These laws can be complex and, in some circumstances, impose a diverse range<br>of obligations. As a result, regulatory, operational and compliance risks are heightened. In some jurisdictions (e.g. the<br>Pacific region) financial crime risks are elevated beyond the Group’s risk appetite requiring an appropriate action plan<br>to reduce risk, and return to within appetite.<br>Financial Crime Laws require us to report certain matters and transactions to regulators (such as international funds<br>transfer instructions, threshold transaction reports, suspicious matter reports, FATCA and CRS reports) and ensure<br>that we know who our customers are and that we have appropriate ongoing customer due diligence in place. The<br>failure to comply with some of these laws has had, and in the future could have, adverse impacts for the Group.<br>The Group operates within a landscape that is constantly changing, particularly with the emergence of new payment<br>technologies, ongoing legislative reform impacting Financial Crime Laws, increased regulatory focus on digital<br>assets, and increasing reliance on economic and trade sanctions to manage issues of international concern. These<br>developments bring with them new financial crime risks for the Group (as well as other risks including scams and<br>fraud, and criminal activity that utilises a variety of technology and platforms), which may require adjustments to the<br>Group’s systems, policies, processes and controls.<br>There has been, and continues to be, a focus on compliance with financial crime obligations, with regulators globally<br>commencing investigations and taking enforcement action for identified non-compliance (often seeking significant<br>penalties). Due to the Group’s scale of operations, an undetected failure or the ineffective implementation, monitoring<br>or remediation of a system, policy, process or control (including a regulatory reporting obligation) has resulted, and<br>could in the future result, in a significant number of breaches of AML/CTF or other Financial Crime Laws. This in turn<br>could lead to significant financial penalties and other adverse impacts for the Group, such as reputational damage and<br>litigation risk.<br>While the Group has systems, policies, processes and controls in place designed to manage its financial crime<br>obligations (including reporting obligations), these have not always been, and may not in the future always be,<br>effective. This could be for a range of reasons including, for example, a deficiency in the design of a control or a<br>technology failure or a change in financial crime risks or typologies. Our analysis and reviews, in addition to regulator<br>feedback, have highlighted that our systems, policies, processes and controls are not always operating satisfactorily<br>in a number of respects and require improvement. We continue to have an increased focus on financial crime risk<br>management and, as such, further issues requiring attention have been identified and may continue to be identified.
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324 WESTPAC GROUP 2024 ANNUAL REPORT<br>RISK FACTORS<br>Risk factors (Continued)<br>Although the Group provides updates to various regulators on its remediation and other program activities, there<br>is no assurance that those or other regulators will agree that its remediation and program update activities will be<br>adequate or effectively enhance the Group’s compliance programs.<br>If we fail to comply with our financial crime obligations, we have faced, and could in the future face, significant<br>regulatory enforcement action and other consequences (as discussed in the risk factor entitled ‘We have been<br>and could be adversely affected by failing to comply with laws, regulations or regulatory policy’) and increased<br>reputational risks (as discussed in the risk factor entitled ‘Reputational damage has harmed, and could in the future<br>harm, our business and prospects’). There is additional information on financial crime matters in the Significant<br>developments section in the 2024 Annual Report.<br>Reputational damage has harmed, and could in<br>the future harm, our business and prospects<br>- Reputational and sustainability risk<br>- Negative customer outcomes<br>Reputational risk arises where there are differences between stakeholders’ current and emerging perceptions, beliefs<br>and expectations and our past, current and planned activities, processes, performance and behaviours.<br>Potential sources of reputational damage include where our actions (or those of our contractors, agents, authorised<br>representatives and credit representatives) cause, or are perceived to cause, a negative outcome for customers,<br>shareholders, stakeholders or the community. Reputational damage could also arise from the failure to effectively<br>manage risks, failure to comply with legal and regulatory requirements, enforcement or supervisory action by<br>regulators, adverse findings from regulatory reviews, failure or perceived failure to adequately prevent or respond<br>to community, environmental, social and ethical issues or expectations and cyber incidents, and inadequate record-keeping, which may prevent Westpac from demonstrating that, or determining if, a past decision was appropriate at<br>the time it was made. We are also exposed to contagion risk from incidents in (or affecting) other financial institutions<br>and/or the financial sector more broadly (for example, issues affecting the cash-in-transit industry and the potential<br>for disruption to the availability of cash, as well as flow on consequences including runs on cash).<br>There are potential reputational consequences (together with other potential commercial and operational<br>consequences) of failing to appropriately identify, assess and manage environmental, social and governance<br>related risks, or to respond effectively to evolving standards and stakeholder expectations. Our reputation could<br>also be adversely affected by the actions of customers, suppliers, contractors, authorised representatives, credit<br>representatives, joint-venture partners, strategic partners or other counterparties.<br>Failure, or perceived failure, to address issues that could or do give rise to reputational risk, has created, and could<br>in the future create, additional legal risk, subject us to regulatory investigations, regulatory enforcement actions, fines<br>and penalties or litigation or other actions brought by third parties (including class actions), and the requirement to<br>remediate and compensate customers, including prospective customers, investors and the market. It could also result<br>in the loss of customers or restrict the Group’s ability to efficiently access capital markets. This could adversely affect<br>our business, prospects, financial performance or financial condition.<br>We have and could suffer losses due<br>to litigation<br>- Compliance and conduct risk<br>- Enforcement action<br>- Litigation<br>- Class actions<br>- Substantial fines and penalties<br>Litigation has been, and could in the future be, commenced against us by a range of plaintiffs, such as customers,<br>shareholders, employees, suppliers, counterparties, activists and regulators and may, either individually or in<br>aggregate, adversely affect the Group’s business, operations, prospects, reputation or financial condition.<br>In recent years, there has been an increase in class action proceedings in the broader market, many of which have<br>resulted in significant monetary settlements. The risk of class actions has been heightened by a number of factors,<br>including regulatory enforcement actions, an increase in the number of regulatory investigations and inquiries, a<br>greater willingness on the part of regulators to commence court proceedings, more intense media scrutiny, the<br>increasing prospect of regulatory reforms which might eliminate some of the current barriers to such litigation, and<br>the growth of third party litigation funding and other funding arrangements. Class actions commenced against a<br>competitor could also lead to similar proceedings against Westpac and a competitor’s response to those actions may<br>impact attitudes of counterparties to Westpac proceedings.<br>Activism strategies directed at financial institutions, particularly in the area of climate change, sustainability and<br>energy transition, have also increased globally in recent years, where the focus, including through the commencement
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 325<br>Risk factors (Continued)<br>of proceedings, may be to publicly highlight particular issues, to enforce legal or regulatory standards, or to influence<br>the financial institution to change its operations and activities. Westpac is currently, and in the future may be, exposed<br>to such litigation and/or strategies employed by activist shareholders or organisations.<br>Litigation is subject to many uncertainties and the outcome may not be predicted accurately. Furthermore, the<br>Group’s ability to respond to and defend litigation may be adversely affected by inadequate record keeping. The<br>Group’s ability to settle litigation on reasonable terms will be affected by attitudes of counterparties.<br>Depending on the outcome of any litigation, the Group has been, and may in the future be, required to comply<br>with broad court orders, including compliance orders, enforcement orders or otherwise pay significant damages,<br>fines, penalties or legal costs. There is a risk that the actual penalty or damages paid following a settlement or<br>determination by a Court for any legal proceedings may be materially higher or lower than any relevant provision<br>(where applicable) or that any contingent liability may be larger than anticipated. There is also a risk that additional<br>litigation or contingent liabilities arise, all of which could adversely affect our business, prospects, reputation, financial<br>performance or financial condition.<br>There is additional information on certain legal proceedings that may affect the Group in the Significant developments<br>section and in Note 25 to the financial statements in the 2024 Annual Report.<br>We are exposed to adverse funding<br>market conditions<br>- Market risk<br>- Volatility and disruption<br>- Funding and liquidity risk<br>- Credit risk<br>We rely on deposits, global money markets and global capital markets to fund our business and source liquidity. Our<br>liquidity and costs of obtaining funding are related to funding market and general economic conditions, in addition to<br>our creditworthiness and credit profile.<br>Funding sources can be unpredictable and experience periods of extreme volatility, disruption and decreased liquidity.<br>Market conditions, and the behaviour of market participants, can shift significantly over very short periods of time.<br>The main risks we face are damage to market confidence, changes to the access and cost of funding and reduction<br>in appetite for exposure to Westpac, as well as the potential impacts arising from broader macroeconomic themes.<br>Additionally, a shift in investment preferences could result in deposit withdrawals that would increase our need for<br>funding from other sources. These other sources may offer lower levels of liquidity and increase costs.<br>If market conditions deteriorate due to economic, political, regulatory, or other reasons (including those idiosyncratic<br>to Westpac), there may also be a loss of confidence in bank deposits leading to unexpected withdrawals. These<br>events can transpire quickly and be exacerbated by information transmission on social media. This could increase<br>funding costs, constrain our liquidity, funding and lending activities and threaten our financial solvency. In such events,<br>even robust levels of capital may not be sufficient to safeguard Westpac against detrimental loss of funding.<br>If our current sources of funding prove to be insufficient, we may need to seek alternatives which will depend on<br>factors such as market conditions, our credit ratings, reputation and confidence issues and market capacity. Even<br>if available, these alternatives may be more expensive or on unfavourable terms, which could adversely affect our<br>financial performance, liquidity, capital resources or financial condition.<br>If we are unable to source appropriate funding, we may be forced to reduce business activities (e.g. lending) or<br>operate with smaller liquidity buffers. This may adversely impact our business, liquidity, capital resources, financial<br>performance or financial condition. If we are unable to source appropriate funding for an extended period, or if<br>we can no longer realise liquidity, we may not be able to pay our debts as and when they fall due or meet other<br>contractual obligations.<br>We also enter into collateralised derivative obligations, which may require us to post additional collateral based on<br>market movements. This has the potential to adversely affect our liquidity or ability to use derivatives to hedge<br>interest rate, currency and other financial risks.<br>We could be adversely affected by the risk of<br>inadequate capital levels<br>- Capital adequacy<br>- Capital risk<br>- Regulatory capital requirements<br>The Group is subject to the risk of an inadequate level or composition of capital to support our business activities and<br>meet regulatory capital requirements under normal operating environments or stressed conditions, and to maintain<br>our solvency. Even robust levels of capital may not be sufficient to ensure the ongoing sustainability of Westpac in the<br>event of a bank run, where depositors quickly withdraw funds because of concerns about bank failure.
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326 WESTPAC GROUP 2024 ANNUAL REPORT<br>RISK FACTORS<br>Risk factors (Continued)<br>Our capital levels are determined by regulation and risk appetite and informed by stress testing. Buffers on regulatory<br>requirements have been built to assist in maintaining capital adequacy during stressed times. We determine our<br>management buffers taking into consideration various factors. These include our balance sheet, forecasts, portfolio<br>mix, potential capital headwinds (including real estate valuations, inflation and rising rates) and stressed outcomes,<br>(also noting that models and assumptions may or may not be accurate in predicting the nature and magnitude of<br>particular stress events). The macroeconomic environment, stressed conditions and/or regulatory framework could<br>result in a material increase to risk weighted assets or impact our capital adequacy, trigger capital distribution<br>constraints, threaten our financial viability and/or require us to undertake a highly dilutive capital raising.<br>Capital distribution constraints apply when an ADI’s Common Equity Tier 1 Capital ratio is within the prudential capital<br>buffer range (consisting of the Capital Conservation Buffer plus any Countercyclical Capital Buffer). Such constraints<br>could impact future dividends and distributions on Additional Tier 1 (AT1) capital instruments. Should AT1 and Tier<br>2 capital securities that we have issued be converted into ordinary shares (for example where our CET 1 ratio falls<br>below a certain level or APRA determines we would become non-viable without conversion of capital instruments<br>or equivalent support), this could significantly dilute the value of existing ordinary shares. Additionally, it should be<br>noted that APRA is currently consulting on a proposal to phase out AT1 capital instruments (see further discussion in<br>the Significant developments section in the 2024 Annual Report).<br>Our business is substantially dependent<br>on the Australian and New Zealand<br>economies, and could be adversely<br>affected by a material downturn or<br>shock to these economies or other<br>financial systems<br>- Strategic risk<br>- Macroeconomic risks<br>- Market disruption<br>- Domestic and international economic conditions<br>- Geopolitical risks<br>- Credit risk<br>Our revenues and earnings are dependent on domestic and international economic activity, business conditions and<br>the level of financial services our customers require. Most of our business is conducted in Australia and New Zealand<br>so our performance is influenced by the level and cyclical nature of activity in these countries. The financial services<br>industry and capital markets have been, and may continue to be, adversely affected by volatility, global economic<br>conditions (including inflation and rising interest rates), external events, geopolitical instability, political developments,<br>cyberattacks or a major systemic shock.<br>Market and economic disruptions (or the possibility of interest rates remaining higher for longer than anticipated)<br>could cause consumer and business spending to decrease, unemployment to rise, demand for our products and<br>services to decline and credit losses to increase, thereby reducing our earnings. These events could undermine<br>confidence in the financial system, reduce liquidity, impair access to funding and adversely affect our customers<br>and counterparties.<br>Given Australia’s export reliance on China, slowdown in China’s economic growth and foreign policies (including the<br>adoption of protectionist trade measures or sanctions) could negatively impact the Australian economy. This could<br>result in reduced demand for our products and services and affect supply chains, the level of economic activity and<br>the ability of our borrowers to repay their loans.<br>The nature and consequences of any such event are difficult to predict but each of these factors could adversely<br>affect our business, prospects, financial performance or financial condition.<br>Declines in asset markets could adversely<br>affect our operations or profitability and an<br>increase in impairments and provisioning could<br>adversely affect our financial performance or<br>financial condition<br>- Market risk<br>- Decline in asset values<br>- Impairments<br>- Credit risk<br>Declines in Australian, New Zealand or other asset markets, including equity, bond, residential and commercial<br>property markets, have adversely affected, and could in the future adversely affect, our operations and profitability.<br>Declining asset prices including as a result of change in taxation policies and potential legislation to restrict rents,<br>could also impact customers and counterparties and the value of security (including residential and commercial<br>property) we hold. This may impact our ability to recover amounts owing to us if customers or counterparties default.<br>It may also affect our impairment charges and provisions, in turn impacting our financial performance, financial<br>condition and capital levels. Declining asset prices could also impact our wealth management business as its earnings<br>partly depend on fees based on the value of securities and/or assets held or managed.<br>We establish provisions for credit impairment based on accounting standards using current information and our<br>expectations. If economic conditions deteriorate beyond our expectations, some customers and/or counterparties
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 327<br>Risk factors (Continued)<br>could experience higher financial stress, leading to an increase in impairments, defaults and write-offs, and higher<br>provisioning. Changes in regulatory expectations in relation to the treatment of customers in hardship could lead to<br>increased impairments and/or higher provisioning. Such events could adversely affect our liquidity, capital resources,<br>financial performance or financial condition.<br>Credit risk also arises from certain derivative, clearing and settlement contracts we enter into, and from our dealings<br>in, and holdings of, debt securities issued by other institutions and government agencies, the financial conditions of<br>which may be affected to varying degrees by economic conditions in global financial markets.<br>Sovereign risk may destabilise financial<br>markets adversely<br>- Sovereign risk<br>- Defaults<br>Potential sovereign contractual defaults, sovereign debt defaults and the risk that governments will nationalise parts<br>of their economy including assets of financial institutions (such as Westpac) could negatively impact the value of<br>our holdings of assets. Such an event could also destabilise global financial markets, adversely affecting our liquidity,<br>financial performance or financial condition.<br>We could be adversely affected by the failure to<br>maintain our credit ratings<br>- Availability of funding<br>- Cost of funding<br>- Downgrade<br>Credit ratings are independent opinions on our creditworthiness. Our credit ratings can affect the cost and availability<br>of our funding and may be important to investors, certain institutional customers and counterparties when evaluating<br>their investments in the Group, our products and services.<br>A rating downgrade could be driven by a downgrade of Australia’s sovereign credit rating, a material weakening in our<br>financial performance, or one or more of the risks identified in this section or by other events including changes to the<br>methodologies rating agencies use to determine credit ratings. A credit rating or rating outlook could be downgraded<br>or revised where credit rating agencies believe there is a very high level of uncertainty on the impact to key rating<br>factors from a significant event.<br>A downgrade to our credit ratings could have an adverse effect on our cost of funds, collateral requirements, liquidity,<br>competitive position, our access to capital markets and our financial stability. The extent and nature of these impacts<br>would depend on various factors, including the extent of any rating change, differences across agencies (split ratings)<br>and whether competitors or the sector are also impacted.<br>We face intense competition in all aspects of<br>our business<br>- Margins;<br>- Regulatory scrutiny<br>- Strategic risk<br>- New entrants<br>The financial services industry is highly competitive. We compete with a range of firms, including retail and<br>commercial banks, investment banks, other financial service companies, fintech companies and businesses in other<br>industries with financial services aspirations. This includes those competitors who are not subject to the same capital<br>and regulatory requirements as us or who derive substantial revenue from other markets, which may allow those<br>competitors to operate more flexibly and with lower costs of funds.<br>Emerging competitors are increasingly altering the competitive environment by adopting new business models or<br>seeking to use new technologies to disrupt existing business models.<br>The competitive environment may also change as a result of increased scrutiny by regulators in the sector (such as<br>in the payments space, or as a result of the recommendations following the ACCC’s inquiry into the market for the<br>supply of retail deposit products) and other legislative reforms, which will stimulate competition, improve customer<br>choice and likely give rise to increased competition from new and existing firms.<br>Competition in the various markets in which we operate has led, and may continue to lead, to a decline in our margins<br>or market share.
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328 WESTPAC GROUP 2024 ANNUAL REPORT<br>RISK FACTORS<br>Risk factors (Continued)<br>Deposits fund a significant portion of our balance sheet and have been a relatively stable source of funding. If we are<br>not able to successfully compete for deposits this could increase our cost of funding, lead us to seek access to other<br>types of funding, or result in us reducing our lending.<br>Our ability to compete depends on our ability to offer products and services that meet evolving customer<br>preferences. Not responding to changes in customer preferences could see us lose customers. This could adversely<br>affect our business, prospects, financial performance or financial condition.<br>For more detail on how we address competitive pressures refer to the Our Operating Environment section in the 2024<br>Annual Report.<br>We have suffered, and could continue to suffer,<br>losses due to operational risk<br>- Operational risk<br>- Change execution<br>- Records management<br>- Ineffective processes and controls<br>- Fraud and scams<br>- Third parties<br>- AI<br>Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or from<br>external events. It includes, among other things, model risk, data risk, operations risk, change execution risk and third<br>party risk. While we have policies, processes and controls in place to manage these risks, these have not always been,<br>or may not be, effective.<br>Ineffective processes and controls (including those of our contractors, agents, authorised representatives and credit<br>representatives, or inadequate supervision and oversight of their activities) have resulted in, and could continue to<br>result in, adverse outcomes for customers, employees or other third parties.<br>The risk of operational breakdowns occurring is heightened if measures are implemented quickly in response to<br>external events. These types of operational failures may result in financial losses, customer remediation, regulatory<br>scrutiny and intervention, fines, penalties and capital overlays and, depending on the nature of the failure, litigation,<br>including class action proceedings.<br>Examples of operational risks include:<br> • Fraud and scams. We have incurred, and could in the future incur, losses from fraud and scams, including<br>fraudulent applications for loans (including misrepresentations by customers), or from incorrect or fraudulent<br>payments and settlements. Such losses, including the potential for additional customer compensation and financial<br>penalties, could increase significantly due to regulatory change (for example, if the Group does not adhere to<br>obligations set out in the impending mandatory cross industry scams code framework and/or a UK style bank<br>reimbursement scheme is implemented in Australia or New Zealand, making Australian and New Zealand banks<br>liable to compensate scam victims). Fraudulent conduct can also arise from external parties seeking to access<br>our systems or customer accounts, the use of mule accounts and where identification records are compromised<br>due to third party cybersecurity events. These risks are heightened by real-time transaction capability, and we are<br>also exposed to contagion risk from incidents affecting other institutions. If systems, procedures and protocols<br>for preventing and managing fraud, scams or improper access to our systems and customer accounts fail, or<br>are inadequate or ineffective, they could lead to losses which could adversely affect our customers, business,<br>prospects, reputation, financial performance or financial condition. Regulatory and compliance requirements can<br>impede the ability to swiftly identify or respond to a fraud or scam, or to communicate with affected parties.<br> • Records management. We could incur losses from a failure to adequately implement and monitor effective records<br>management policies and processes. This could impact our ability to safeguard or locate relevant records, respond<br>to production and regulatory notices, conduct remediation, and generally meet records lifecycle management<br>and compliance obligations. Where there are inadequacies or complexities in our systems, these risks are further<br>heightened, for example retaining records and data for, or destroying records or de-identifying records after a<br>certain period.<br> • Artificial Intelligence (AI). As we increase the adoption of AI to support our customers and business processes, we<br>may become more exposed to risks associated with the use of technology, such as lack of transparency, inaccurate<br>data input, risk of unintentional bias or inaccurate outputs, breaches of confidentiality and privacy obligations,<br>and inaccurate decisions or unintended consequences that are inconsistent with our policies or values. In addition,<br>failure or delays in adopting AI could lead to competitive disadvantages or otherwise not leveraging capability<br>that could better support risk management or improve customer outcomes. These could have financial, regulatory,<br>conduct, reputational and customer impacts.<br> • Third party. We rely on third parties, both in Australia and overseas, to provide services to us and our customers.<br>Failures by these third parties, including our authorised representatives and credit representatives, to deliver<br>services as required and in accordance with law, regulation and regulatory expectations could disrupt our ability
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 329<br>Risk factors (Continued)<br>to provide products and services and adversely impact our customers, operations, financial performance or<br>reputation. For example, we rely on third parties to provide cash transport, handling and storage services. With<br>reduced demand for cash placing pressure on the cash-in-transit (CIT) industry, we are exposed to operational risk<br>including loss of (or delays in accessing) cash held by CIT providers on our behalf, reduced availability of cash in<br>the system generally (which could lead to a run on cash), and related consequences where we or our customers<br>suffer loss or damage due to disruptions to CIT services.<br> • Change execution. We are exposed to change execution risk through delivery of technology and other change<br>programs. There are risks that a change program fails to deliver the desired outcomes, or fails to reduce, pre-empt, mitigate and manage the challenges associated with transformation delivery. This could result in business<br>disruption and delays, technology challenges, financial loss or further regulatory scrutiny. If our technology<br>systems or financial infrastructure do not operate correctly, this may also cause loss or damage to us or our<br>customers. This can also arise from complexities in our systems, and the interaction between those systems. This<br>could include, for example, where systems issues result in incorrect fees or charges being applied to customers, or<br>other poor customer outcomes.<br> • Insurance coverage. There is a risk that we will not be able to obtain and/or have not obtained appropriate<br>insurance coverage for the risks that we may be exposed to. This could be due to lack of available or adequate<br>insurance, an increase in the cost of insurance, or failure of the insurance underwriter. If an insurance policy is not<br>available or does not respond to a loss, we will not have the ability to recover its loss from an insurance policy.<br>We could suffer losses due to market volatility<br>- Market risk<br>- Geopolitical risks<br>- Volatility and disruption<br>- Credit risk<br>Market risk is the risk of an adverse impact on the Group’s financial performance, financial position, capital and<br>liquidity, resulting from changes in market factors, such as foreign exchange rates, commodity prices, equity prices,<br>credit spreads and interest rates. Market risk is present in both banking book and trading book. We are exposed<br>to market risk due to our financial markets businesses, asset and liability management, our holdings in liquid asset<br>securities and our defined benefit plan.<br>Changes in market factors could be driven by a variety of developments including economic disruption, geopolitical<br>events, market liquidity or concerns relating to major market participants or sectors. The resulting market volatility<br>could potentially lead to losses and may adversely affect our financial performance.<br>As a financial intermediary, we underwrite listed and unlisted debt securities. We could suffer losses if we fail to<br>syndicate or sell down this risk to others. This risk is more pronounced in times of heightened market volatility.<br>Poor data quality could adversely affect our<br>business and operations<br>- Operational risk<br>- Data quality<br>- Poor customer and risk outcomes<br>Having accurate, complete and reliable data, supported by appropriate data controls, retention and, destruction<br>methods and access to internal frameworks and processes, is critical to the effective operation of Westpac’s<br>businesses. Data plays a key role in determining how we provide products and services to customers, the<br>effectiveness of our systems and risk management frameworks and our ability to make effective decisions and<br>strategic planning.<br>Some of our businesses are affected by poor data quality and/or limited data availability. This has been, and may<br>continue to be, due to a number of factors, including inadequacies across systems, processes and policies, or<br>ineffectively implemented data management frameworks.<br>Poor data quality could lead to poor customer service outcomes, adverse risk management outcomes, deficient<br>system outputs and processes. This is because inadequacies in data quality renders that data unreliable to assist<br>in making informed business decisions. Deficiencies with internal systems and processes could negatively impact<br>Westpac’s decision-making in areas such as the provision of credit to a customer, and the terms on which a credit<br>facility is provided. The production of accurate data is also critical for other functions across the Westpac Group, such<br>as financial and other reporting (internal and external).<br>Poor data quality and availability impacts the ability for Westpac’s business to effectively monitor and manage their<br>operations, comply with production notices, respond to regulatory notices, defend and respond to litigation and<br>conduct remediation activities. Conflicting data retention or destruction obligations may increase that risk.
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330 WESTPAC GROUP 2024 ANNUAL REPORT<br>RISK FACTORS<br>Risk factors (Continued)<br>Poor data and/or poor data retention/destruction methods, deficient controls that result in control gaps and<br>weaknesses, negatively impact Westpac’s ability to meet its compliance obligations (including its regulatory reporting<br>obligations). In the past this has led to regulatory investigations or adverse findings and actions against Westpac, and<br>such actions are likely to continue if we do not maintain an acceptable level of quality for the data we hold and use, as<br>well as having effective oversight practices in place.<br>The data related frameworks and processes that we have in place must be continuously reviewed, and improved<br>where required, to ensure our data quality and data management practices remain relevant, fit for purpose and<br>sustainable. This is because outdated or unsustainable practices may lead to inefficient data management practices<br>and/or poor quality data.<br>Potential consequences from holding data that is of a poor quality and/or having poor data oversight and controls<br>include adversely impacting on the ability for the Group to effectively operate its existing businesses, securing<br>prospective business from third parties, its reputation, financial performance and financial condition.<br>Certain strategic decisions may have adverse<br>effects on our business<br>- Strategic risk<br>- Warranties and indemnities<br>- Divestments and acquisitions<br>- Implementation risk<br>We routinely evaluate and implement strategic decisions, priorities and objectives including simplification,<br>diversification, innovation, divestment, investment, acquisition, business expansion initiatives or decisions to shut<br>down some operations. Each of these activities can be complex, costly and may not proceed in a timely manner. For<br>example, we may experience difficulties in completing certain transactions, separating or integrating businesses in the<br>scheduled timeframe or at all, disruptions to operations, diversion of management resources or higher than expected<br>transaction costs, there may be impacts on third parties, and there may be differing market views about a strategic<br>choice, which may cause reputational damage.<br>Any failure to successfully divest businesses means that we may have sustained exposure to higher operating costs<br>and to the higher inherent risks in those businesses. Decisions to retain businesses means we may be exposed to<br>the higher inherent risks in those businesses. For example, our Pacific businesses face a number of risks including<br>heightened operational risk, sovereign risk, financial crime and exchange control risks which could adversely affect<br>our customers, business, prospects, reputation, financial performance or financial condition. In addition, as part of the<br>now-completed Specialist Businesses transactions, we have given a number of warranties and indemnities in favour of<br>counterparties relating to certain pre-completion matters and made certain other contractual commitments, including<br>in relation to transitional services. Warranties, indemnities and commitments may also be given in the future in relation<br>to other divestments we undertake. Claims under these warranties, indemnities and other contractual commitments<br>may result in us being liable to make significant payments to these counterparties while the various contractual<br>liability regimes remain on foot. For potential matters related to conduct and customer redress, additional operational<br>risk capital is held against this risk pursuant to APRA’s published guidance. These contingent liabilities are described<br>in Note 25 to the financial statements in the 2024 Annual Report.<br>We also acquire and invest in businesses. These transactions involve a number of risks and costs. A business we invest<br>in may not perform as anticipated, may result in the assumption of unknown and unaccounted for liabilities, regulatory<br>risks or may ultimately prove to have been overvalued when the transaction was entered into.<br>Operational, cultural, governance, compliance and risk appetite differences between us and an acquired business may<br>lead to longer and more costly integration.<br>There are risks involved in not implementing strategies successfully due to internal factors, for example, inadequate<br>funding, resourcing, business capabilities or operating model, or failing to identify, understand or respond effectively<br>to changes in the external business environment, including economic, geopolitical, regulatory, consumer sentiment,<br>technological, environmental, social and competitive factors. This could have a range of adverse effects on us, such as<br>being unable to increase or maintain market share or resulting pressure on margins and fees.<br>Any of these risks could have a negative impact on our business, growth prospects, reputation, engagement with<br>regulators, financial performance or financial condition.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 331<br>Risk factors (Continued)<br>Other risks<br> • Failure to recruit and retain key executives, employees and Directors may have adverse effects on our business,<br>prospects, reputation, financial performance or financial condition. Macro-environmental factors including low<br>unemployment, restricted migration levels, on-shoring of work and the competitive talent market, may also have<br>an adverse impact on attracting specialist skills for the Group.<br> • Changes to the critical accounting assumptions and estimates (outlined in Note 1 to the financial statements in<br>our 2024 Annual Report) could expose the Group to losses greater than those anticipated or recognised, which<br>could adversely affect our financial performance, financial condition and reputation.
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332 WESTPAC GROUP 2024 ANNUAL REPORT<br>RISK FACTORS<br>Limitation on Independent Registered Public Accounting Firm’s Liability<br>The liability of PricewaterhouseCoopers (an Australian partnership which we refer to as PwC Australia), with respect<br>to claims arising out of its audit report included in this Annual Report, is subject to the limitations set forth in the<br>Professional Standards Act 1994 of New South Wales, Australia, as amended (the Professional Standards Act) and<br>Chartered Accountants Australia and New Zealand (NSW) scheme adopted by Chartered Accountants Australia and<br>New Zealand and approved by the New South Wales Professional Standards Council pursuant to the Professional<br>Standards Act (the NSW Accountants Scheme). For matters occurring on or prior to 8 October 2019, the liability of PwC<br>Australia may be subject to the limitations set forth in predecessor schemes. The current NSW Accountants Scheme<br>expires on 12 July 2025 unless further extended or replaced.<br>The Professional Standards Act and the NSW Accountants Scheme may limit the liability of PwC Australia for damages<br>with respect to certain civil claims arising in, or governed by the laws of, New South Wales directly or vicariously from<br>anything done or omitted to be done in the performance of its professional services for us, including, without limitation,<br>its audits of our financial statements.<br>The extent of the limitation depends on the timing of the relevant matter and in relation to matters occurring on or after<br>8 October 2013, is a maximum liability for audit work of A$75 million.<br>The limitations do not apply to claims for breach of trust, fraud or dishonesty.<br>In addition, there is equivalent professional standards legislation in place in other states and territories in Australia and<br>amendments have been made to a number of Australian federal statutes to limit liability under those statutes to the<br>same extent as liability is limited under state and territory laws by professional standards legislation. Accordingly, liability<br>for acts or omissions by PwC Australia in Australian states or territories other than New South Wales may be limited in a<br>manner similar to that in New South Wales.<br>These limitations of liability may limit recovery upon the enforcement in Australian courts of any judgment under US or<br>other foreign laws rendered against PwC Australia based on or related to its audit report on our financial statements.<br>Substantially all of PwC Australia’s assets are located in Australia. However, the Professional Standards Act and the NSW<br>Accountants Scheme have not been subject to extensive judicial consideration and therefore how the limitation might<br>be applied by the courts and the effect of the limitation remain untested in a number of respects, including its effect in<br>respect of the enforcement of foreign judgments.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 333<br>FINANCIAL STATEMENTS<br>The financial statements section is presented on pages 1- 126.
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334 WESTPAC GROUP 2024 ANNUAL REPORT<br>SHAREHOLDER<br>INFORMATION<br>SHAREHOLDING INFORMATION<br>ADDITIONAL INFORMATION<br>GLOSSARY OF ABBREVIATIONS AND DEFINED TERMS<br>EXHIBIT 16.1
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 335<br>SHAREHOLDING INFORMATION<br>Westpac ordinary shares<br>Top 20 ordinary shareholders as at 30 September 2024<br>Number of<br>Fully Paid<br>Ordinary Shares % Held<br>HSBC Custody Nominees (Australia) Limited 866,714,876 25.18<br>J P Morgan Nominees Australia Pty Limited 512,401,798 14.89<br>Citicorp Nominees Pty Limited 228,997,948 6.65<br>BNP Paribas Nominees Pty Ltd <Agency Lending A/C> 61,463,468 1.79<br>National Nominees Limited 40,456,973 1.18<br>BNP Paribas NOMS Pty Ltd 26,864,218 0.78<br>HSBC Custody Nominees (Australia) Limited <NT-Comnwlth Super Corp A/C> 25,113,326 0.73<br>Citicorp Nominees Pty Limited <Colonial First State Inv A/C> 24,642,154 0.72<br>Pacific Custodians Pty Limited <WBC Plans Ctrl A/C> 18,679,841 0.54<br>Netwealth Investments Limited <Wrap Services A/C> 16,586,728 0.48<br>BNP Paribas Nominees Pty Ltd <HUB24 Custodial Serv Ltd> 15,361,493 0.45<br>Australian Foundation Investment Company Limited 13,282,500 0.39<br>Argo Investments Limited 8,807,648 0.26<br>IOOF Investment Services Limited <IPS Superfund A/C> 7,692,979 0.22<br>IOOF Investment Services Limited <IOOF IDPS A/C> 6,213,315 0.18<br>BNP Paribas NOMS (NZ) Ltd 5,652,649 0.16<br>UBS Nominees Pty Ltd 4,240,536 0.12<br>Washington H Soul Pattinson and Company Limited 3,953,000 0.11<br>Netwealth Investments Limited <Super Services A/C> 3,642,054 0.11<br>Mutual Trust Pty Ltd 3,401,970 0.10<br>Total of Top 20 registered shareholdersa 1,894,169,474 55.04<br>a. As recorded on the holder register by holder reference number.<br>As at 30 September 2024, there were 585,176 holders of our ordinary shares compared to 654,993 in 2023 and 672,589<br>in 2022. Ordinary shareholders with a registered address in Australia held approximately 96% of our fully paid share<br>capital at 30 September 2024 (approximately 98% in 2023 and 2022).<br>Substantial shareholders as at 30 September 2024<br>As at 30 September 2024, BlackRock Group (comprised of BlackRock Inc. and its subsidiaries), State Street Corporation<br>(comprised of State Street Corporation and its subsidiaries), and The Vanguard Group (comprised of The Vanguard<br>Group, Inc. and its controlled entities) had a ‘substantial holding’ of our shares within the meaning of the Corporations<br>Act. A person has a substantial holding of our shares if the total votes attached to our voting shares in which they or<br>their associates have relevant interests is 5% or more of the total number of votes attached to all our voting shares.<br>The above table of the Top 20 ordinary shareholders includes shareholders that may hold shares for the benefit of<br>third parties.<br>BlackRock Group has been a substantial shareholder since 4 April 2017 (221,964,794 equity securities as<br>at 24 March 2020). State Street Corporation has been a substantial shareholder since 20 July 2022<br>(226,119,322 equity securities as at 6 August 2024). The Vanguard Group has been a substantial shareholder since<br>12 May 2022 (175,093,754 equity securities as at 12 May 2022).<br>Control of registrant<br>We are not directly or indirectly owned or controlled by any other corporation(s) or by any foreign government. Refer<br>to the section ‘Exchange controls and other limitations affecting security holders’, which provides information on the<br>Foreign Acquisitions and Takeovers Act 1975, Corporations Act 2001 and Financial Sector (Shareholdings) Act 1998,<br>which impose limits on equity holdings.<br>At 30 September 2024, our Directors and Executive Officers owned beneficially, directly or indirectly, an aggregate of<br>1,346,433 (0.0391%) of the fully paid ordinary shares outstanding.
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336 WESTPAC GROUP 2024 ANNUAL REPORT<br>SHAREHOLDING INFORMATION<br>Westpac ordinary shares (Continued)<br>Analysis by range of holdings of ordinary shares as at 30 September 2024<br>Number of Shares<br>Number of Holders<br>of Fully Paid<br>Ordinary Shares %<br>Number of<br>Fully Paid<br>Ordinary Shares %<br>Number of Holders<br>of Share Options<br>and Rights<br>1 – 1,000 324,370 55.43 120,246,358 3.49% 25,245<br>1,001 – 5,000 196,200 33.53 456,959,625 13.28% 302<br>5,001 – 10,000 38,295 6.54 270,031,632 7.85% 69<br>10,001 – 100,000 25,674 4.39 541,512,959 15.73% 126<br>100,001 and over 637 0.11 2,052,660,787 59.65% 19<br>Totals 585,176 100.00 3,441,411,361 100.00% 25,761<br>There were 13,025 shareholders holding less than a marketable parcel ($500) based on a market price of $31.72 per<br>share at the close of trading on 30 September 2024.<br>Voting rights of ordinary shares<br>Holders of our fully paid ordinary shares have, at general meetings (including special general meetings), one vote on a<br>show of hands and, upon a poll, one vote for each fully paid ordinary share held by them.<br>Westpac Capital Notes 5<br>Top 20 holders of Westpac Capital Notes 5 as at 30 September 2024<br>Number of<br>Westpac Capital<br>Notes 5 % Held<br>HSBC Custody Nominees (Australia) Limited 1,161,069 6.87<br>Citicorp Nominees Pty Limited 778,985 4.61<br>BNP Paribas Nominees Pty Ltd <HUB24 Custodial Serv Ltd> 595,158 3.52<br>Citicorp Nominees Pty Limited <143212 NMMT Ltd A/C> 451,386 2.67<br>Netwealth Investments Limited <Wrap Services A/C> 363,648 2.15<br>IOOF Investment Services Limited <IPS Superfund A/C> 303,810 1.80<br>Diocese Development Fund - Catholic Diocese of Parramatta 269,486 1.59<br>BNP Paribas Nominees Pty Ltd <Agency Lending A/C> 266,827 1.58<br>HSBC Custody Nominees (Australia) Limited - A/C 2 263,906 1.56<br>IOOF Investment Services Limited <IOOF IDPS A/C> 143,762 0.85<br>Mutual Trust Pty Ltd 116,141 0.69<br>BNP Paribas Nominees Pty Ltd <Pitcher Partners> 115,255 0.68<br>Dimbulu Pty Ltd 100,000 0.59<br>Netwealth Investments Limited <Super Services A/C> 88,844 0.53<br>J P Morgan Nominees Australia Pty Limited 87,466 0.52<br>Marrosan Investments Pty Ltd 85,000 0.50<br>Royal Freemasons' Benevolent Institution 60,000 0.35<br>Mrs Linda Anne Van Lieshout 60,000 0.35<br>Harriette & Co Pty Ltd <Harriette Investment A/C> 50,000 0.30<br>HSBC Custody Nominees (Australia) Limited-GSI EDA 50,000 0.30<br>Total of Top 20 registered shareholdersa 5,410,743 32.01<br>a. As recorded on the holder register by holder reference number.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 337<br>Westpac Capital Notes 5 (Continued)<br>Analysis by range of holdings of Westpac Capital Notes 5 as at 30 September 2024<br>Number of Shares<br>Number of<br>Holders of Westpac<br>Capital Notes 5 %<br>Number of<br>Westpac Capital<br>Notes 5 %<br>1 – 1,000 14,918 87.68 5,264,016 31.14<br>1,001 – 5,000 1,861 10.94 3,866,674 22.88<br>5,001 – 10,000 147 0.86 1,103,434 6.53<br>10,001 – 100,000 77 0.45 1,839,826 10.88<br>100,001 and over 12 0.07 4,829,433 28.57<br>Totals 17,015 100.00 16,903,383 100.00<br>There were 9 security holders holding less than a marketable parcel ($500) of Westpac Capital Notes 5 based on a<br>market price of $102.000 at the close of trading on 30 September 2024.<br>Westpac Capital Notes 7<br>Top 20 holders of Westpac Capital Notes 7 as at 30 September 2024<br>Number of<br>Westpac Capital<br>Notes 7 % Held<br>Citicorp Nominees Pty Limited 1,216,633 7.06<br>HSBC Custody Nominees (Australia) Limited 1,023,243 5.94<br>Citicorp Nominees Pty Limited <143212 NMMT Ltd A/C> 446,552 2.59<br>BNP Paribas Nominees Pty Ltd <HUB24 Custodial Serv Ltd> 411,294 2.39<br>BNP Paribas Nominees Pty Ltd <Agency Lending A/C> 379,896 2.20<br>Netwealth Investments Limited <Wrap Services A/C> 297,364 1.73<br>Mutual Trust Pty Ltd 267,561 1.55<br>HSBC Custody Nominees (Australia) Limited-GSI EDA 170,000 0.99<br>Dimbulu Pty Ltd 150,000 0.87<br>Netwealth Investments Limited <Super Services A/C> 135,150 0.78<br>HSBC Custody Nominees (Australia) Limited - A/C 2 130,658 0.76<br>Marrosan Investments Pty Ltd 110,000 0.64<br>IOOF Investment Services Limited <IPS Superfund A/C> 105,971 0.61<br>Bond Street Custodians Limited <BENQLD - D79772 A/C> 100,000 0.58<br>BNP Paribas Nominees Pty Ltd <Pitcher Partners> 97,800 0.57<br>BNP Paribas NOMS Pty Ltd 83,460 0.48<br>IOOF Investment Services Limited <IOOF IDPS A/C> 80,376 0.47<br>J P Morgan Nominees Australia Pty Limited 65,674 0.38<br>V S Access Pty Ltd <V S Access A/C> 64,624 0.38<br>Eastcote Pty Ltd <The Van-Lieshout Family A/C> 61,619 0.36<br>Total of Top 20 registered shareholdersa 5,397,875 31.33<br>a. As recorded on the holder register by holder reference number.<br>Analysis by range of holdings of Westpac Capital Notes 7 as at 30 September 2024<br>Number of Shares<br>Number of<br>Holders of Westpac<br>Capital Notes 7 %<br>Number of<br>Westpac Capital<br>Notes 7 %<br>1 – 1,000 15,883 88.48 5,551,257 32.22<br>1,001 – 5,000 1,853 10.32 3,948,083 22.92<br>5,001 – 10,000 136 0.76 1,029,284 5.97<br>10,001 – 100,000 67 0.37 1,856,417 10.77<br>100,001 and over 13 0.07 4,844,322 28.12<br>Totals 17,952 100.00 17,229,363 100.00<br>There were 5 security holders holding less than a marketable parcel ($500) of Westpac Capital Notes 7 based on a<br>market price of $104.000 at the close of trading on 30 September 2024.
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338 WESTPAC GROUP 2024 ANNUAL REPORT<br>SHAREHOLDING INFORMATION<br>Westpac Capital Notes 8<br>Top 20 holders of Westpac Capital Notes 8 as at 30 September 2024<br>Number of<br>Westpac Capital<br>Notes 8 % Held<br>BNP Paribas Nominees Pty Ltd <Agency Lending A/C> 3,839,682 21.94<br>HSBC Custody Nominees (Australia) Limited 917,184 5.24<br>Citicorp Nominees Pty Limited 849,938 4.86<br>BNP Paribas Nominees Pty Ltd <HUB24 Custodial Serv Ltd> 343,873 1.96<br>Netwealth Investments Limited <Wrap Services A/C> 260,124 1.49<br>Dimbulu Pty Ltd 200,000 1.14<br>HSBC Custody Nominees (Australia) Limited - A/C 2 169,410 0.97<br>Mutual Trust Pty Ltd 164,908 0.94<br>IOOF Investment Services Limited <IPS Superfund A/C> 134,630 0.77<br>Netwealth Investments Limited <Super Services A/C> 103,856 0.59<br>IOOF Investment Services Limited <IOOF IDPS A/C> 98,535 0.56<br>BNP Paribas Nominees Pty Ltd <Pitcher Partners> 85,178 0.49<br>BNP Paribas Nominees Pty Ltd <IB Au Noms Retailclient> 72,993 0.42<br>J P Morgan Nominees Australia Pty Limited 69,554 0.40<br>Megt (Australia) Ltd 61,516 0.35<br>V S Access Pty Ltd <V S Access A/C> 52,220 0.30<br>National Nominees Limited 44,302 0.25<br>Invia Custodian Pty Limited <Wehi - Investment Pool A/C> 43,735 0.25<br>Adirel Holdings Pty Ltd 33,000 0.19<br>HSBC Custody Nominees (Australia) Limited-GSI EDA 30,000 0.17<br>Total of Top 20 registered shareholdersa 7,574,638 43.28<br>a. As recorded on the holder register by holder reference number.<br>Analysis by range of holdings of Westpac Capital Notes 8 as at 30 September 2024<br>Number of Shares<br>Number of<br>Holders of Westpac<br>Capital Notes 8 %<br>Number of<br>Westpac Capital<br>Notes 8 %<br>1 – 1,000 14,188 88.32 4,961,867 28.35<br>1,001 – 5,000 1,690 10.52 3,346,140 19.12<br>5,001 – 10,000 125 0.78 921,320 5.26<br>10,001 – 100,000 51 0.32 1,287,068 7.36<br>100,001 and over 10 0.06 6,983,605 39.91<br>Totals 16,064 100.00 17,500,000 100.00<br>There were 4 security holders holding less than a marketable parcel ($500) of Westpac Capital Notes 8 based on a<br>market price of $104.000 at the close of trading on 30 September 2024.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 339<br>Westpac Capital Notes 9<br>Top 20 holders of Westpac Capital Notes 9 as at 30 September 2024<br>Number of<br>Westpac Capital<br>Notes 9 % Held<br>BNP Paribas Nominees Pty Ltd <Agency Lending A/C> 3,761,389 24.92<br>HSBC Custody Nominees (Australia) Limited 1,010,346 6.70<br>Citicorp Nominees Pty Limited 506,385 3.36<br>BNP Paribas Nominees Pty Ltd <HUB24 Custodial Serv Ltd> 486,150 3.22<br>Bond Street Custodians Limited <BENQLD - D79696 A/C> 275,000 1.82<br>Netwealth Investments Limited <Wrap Services A/C> 272,810 1.81<br>HSBC Custody Nominees (Australia) Limited - A/C 2 203,522 1.35<br>Netwealth Investments Limited <Super Services A/C> 174,063 1.15<br>BNP Paribas Nominees Pty Ltd <Pitcher Partners> 105,095 0.70<br>Dimbulu Pty Ltd 100,000 0.66<br>Royal Freemasons' Benevolent Institution 82,000 0.54<br>IOOF Investment Services Limited <IPS Superfund A/C> 73,886 0.49<br>Mutual Trust Pty Ltd 70,101 0.46<br>IOOF Investment Services Limited <IOOF IDPS A/C> 60,886 0.40<br>Marrosan Investments Pty Ltd 50,000 0.33<br>Bond Street Custodians Limited <BENQLD - D80279 A/C> 40,832 0.27<br>Pesutu Pty Ltd <Karedis Super A/C> 35,868 0.24<br>Sir Moses Montefiore Jewish Home <Income A/C> 30,000 0.20<br>HSBC Custody Nominees (Australia) Limited-GSI EDA 30,000 0.20<br>Morris Commercial P/L 30,000 0.20<br>Total of Top 20 registered shareholdersa 7,398,333 49.03<br>a. As recorded on the holder register by holder reference number.<br>Analysis by range of holdings of Westpac Capital Notes 9 as at 30 September 2024<br>Number of Securities<br>Number of<br>Holders of Westpac<br>Capital Notes 9 %<br>Number of<br>Westpac Capital<br>Notes 9 %<br>1 – 1,000 9,261 86.62 3,684,371 24.41<br>1,001 – 5,000 1,276 11.94 2,683,000 17.78<br>5,001 – 10,000 96 0.90 705,832 4.68<br>10,001 – 100,000 49 0.46 1,222,917 8.10<br>100,001 and over 9 0.08 6,794,760 45.03<br>Totals 10,691 100.00 15,090,880 100.00<br>There were 4 security holders holding less than a marketable parcel ($500) of Westpac Capital Notes 9 based on a<br>market price of $105.950 at the close of trading on 30 September 2024.
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340 WESTPAC GROUP 2024 ANNUAL REPORT<br>SHAREHOLDING INFORMATION<br>Westpac Capital Notes 10<br>Top 20 holders of Westpac Capital Notes 10 as at 30 September 2024<br>Number of<br>Westpac Capital<br>Notes 10 % Held<br>Citicorp Nominees Pty Limited 1,716,071 9.81<br>HSBC Custody Nominees (Australia) Limited 1,250,975 7.15<br>BNP Paribas Nominees Pty Ltd <HUB24 Custodial Serv Ltd> 590,188 3.37<br>HSBC Custody Nominees (Australia) Limited - A/C 2 485,184 2.77<br>Netwealth Investments Limited <Wrap Services A/C> 351,788 2.01<br>Bond Street Custodians Limited <BENQLD - D79696 A/C> 200,000 1.14<br>BNP Paribas Nominees Pty Ltd <Pitcher Partners> 145,774 0.83<br>Netwealth Investments Limited <Super Services A/C> 112,558 0.64<br>Elmore Super Pty Ltd <The Peabody Super Fund A/C> 105,900 0.61<br>IOOF Investment Services Limited <IPS Superfund A/C> 103,524 0.59<br>Dimbulu Pty Ltd 100,000 0.57<br>V S Access Pty Ltd <V S Access A/C> 90,000 0.51<br>Mutual Trust Pty Ltd 84,633 0.48<br>Tandom Pty Ltd 82,100 0.47<br>J P Morgan Nominees Australia Pty Limited 67,620 0.39<br>J C Family Investments Pty Limited <J Herrington Super Fund A/C> 54,007 0.31<br>IOOF Investment Services Limited <IOOF IDPS A/C> 53,953 0.31<br>National Nominees Limited 52,135 0.30<br>John E Gill Trading Pty Ltd 50,000 0.29<br>Willimbury Pty Ltd 50,000 0.29<br>Total of Top 20 registered shareholdersa 5,746,410 32.84<br>a. As recorded on the holder register by holder reference number.<br>Analysis by range of holdings of Westpac Capital Notes 10 as at 30 September 2024<br>Number of Securities<br>Number of<br>Holders of Westpac<br>Capital Notes 10 %<br>Number of<br>Westpac Capital<br>Notes 10 %<br>1 – 1,000 12,017 83.91 4,807,424 27.47<br>1,001 – 5,000 2,040 14.24 4,327,745 24.73<br>5,001 – 10,000 175 1.22 1,308,087 7.47<br>10,001 – 100,000 80 0.56 1,994,782 11.40<br>100,001 and over 10 0.07 5,061,962 28.93<br>Totals 14,322 100.00 17,500,000 100.00<br>There were 2 security holders holding less than a marketable parcel ($500) of Westpac Capital Notes 10 based on a<br>market price of $105.700 at the close of trading on 30 September 2024.<br>Voting rights of Westpac Capital Notes 5, Westpac Capital Notes 7, Westpac Capital Notes 8, Westpac Capital<br>Notes 9 and Westpac Capital Notes 10<br>In accordance with the terms of issue, holders of Westpac Capital Notes 5, Westpac Capital Notes 7, Westpac Capital<br>Notes 8, Westpac Capital Notes 9 and Westpac Capital Note 10 have no right to vote at any general meeting of Westpac<br>before conversion into Westpac ordinary shares.<br>If conversion occurs (in accordance with the applicable terms of the relevant AT1 instrument), holders of Westpac Capital<br>Notes 5, Westpac Capital Notes 7, Westpac Capital Notes 8, Westpac Capital Notes 9 or Westpac Capital Notes 10<br>(as applicable) will become holders of Westpac ordinary shares and have the voting rights that attach to Westpac<br>ordinary shares.<br>Unquoted securities<br>Westpac also has the following unquoted securities on issue: USD 1.25 billion AT1 securities (comprised of 3 individual<br>notes) which are all held by Cede & Co. as nominee for the Depository Trust Company. See Note 14 to the financial<br>statements for further information.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 341<br>Information on domicile<br>Domicile1<br> of ordinary shareholders as at 30 September 2024<br>Number of Holders % of Holdings<br>Number of Issued Shares<br>and Options<br>% of Issued Shares<br>and Options<br>Australia 562,624 96.15 3,394,137,598 98.63<br>New Zealand 19,050 3.26 35,405,288 1.03<br>United Kingdom 1,360 0.23 2,545,000 0.07<br>United States 488 0.08 1,252,391 0.04<br>Other overseas 1,654 0.28 8,071,084 0.23<br>Total 585,176 100.00 3,441,411,361 100.00<br>Domicile1<br> of holders of Westpac Capital Notes 5 as at 30 September 2024<br>Number of Holders % of Holdings<br>Number of Issued Westpac<br>Capital Notes 5<br>% of Issued Westpac<br>Capital Notes 5<br>Australia 16,994 99.88 16,890,835 99.93<br>New Zealand 4 0.02 3,340 0.02<br>United Kingdom 6 0.04 2,473 0.01<br>United States 1 0.01 200 0.00<br>Other overseas 10 0.05 6,535 0.04<br>Total 17,015 100.00 16,903,383 100.00<br>Domicile1<br> of holders of Westpac Capital Notes 7 as at 30 September 2024<br>Number of Holders % of Holdings<br>Number of Issued Westpac<br>Capital Notes 7<br>% of Issued Westpac<br>Capital Notes 7<br>Australia 17,933 99.89 17,218,279 99.94<br>New Zealand 3 0.02 1,460 0.01<br>United Kingdom 5 0.03 3,452 0.02<br>United States 3 0.02 1,242 0.01<br>Other overseas 8 0.04 4,930 0.02<br>Total 17,952 100.00 17,229,363 100.00<br>Domicile1<br> of holders of Westpac Capital Notes 8 as at 30 September 2024<br>Number of Holders % of Holdings<br>Number of Issued Westpac<br>Capital Notes 8<br>% of Issued Westpac<br>Capital Notes 8<br>Australia 16,046 99.89 17,490,661 99.95<br>New Zealand 2 0.01 400 0.00<br>United Kingdom 2 0.01 2,040 0.01<br>United States 5 0.03 2,828 0.02<br>Other overseas 9 0.06 4,071 0.02<br>Total 16,064 100.00 17,500,000 100.00<br>Domicile1<br> of holders of Westpac Capital Notes 9 as at 30 September 2024<br>Number of Holders % of Holdings<br>Number of Issued Westpac<br>Capital Notes 9<br>% of Issued Westpac<br>Capital Notes 9<br>Australia 10,683 99.93 15,082,056 99.94<br>New Zealand 0 0.00 0 0.00<br>United Kingdom 0 0.00 0 0.00<br>United States 2 0.01 1,100 0.01<br>Other overseas 6 0.06 7,724 0.05<br>Total 10,691 100.00 15,090,880 100.00<br>1. Based on registered address holder.
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342 WESTPAC GROUP 2024 ANNUAL REPORT<br>SHAREHOLDING INFORMATION<br>Information on domicile (Continued)<br>Domicile1<br> of holders of Westpac Capital Notes 10 as at 30 September 2024<br>Number of Holders % of Holdings<br>Number of Issued Westpac<br>Capital Notes 10<br>% of Issued Westpac<br>Capital Notes 10<br>Australia 14,312 99.93 17,491,791 99.95<br>New Zealand 1 0.01 100 0.00<br>United Kingdom 1 0.01 382 0.00<br>United States 1 0.01 500 0.01<br>Other overseas 7 0.04 7,227 0.04<br>Total 14,322 100.00 17,500,000 100.00<br>Financial calendar<br>Westpac shares are listed on the securities exchanges in Australia (ASX) and New Zealand (NZX). Westpac Capital Notes<br>5, Westpac Capital Notes 7, Westpac Capital Notes 8, Westpac Capital Notes 9 and Westpac Capital Notes 10 are listed<br>on the ASX.<br>Important dates to note are set out below, subject to change. Payment of any distribution, dividend or interest payment<br>is subject to the relevant payment conditions and the key dates for each payment will be confirmed to the ASX for<br>securities listed on the ASX.<br>Westpac Ordinary Shares (ASX code: WBC, NZX code: WBC)<br>Ex-dividend date for final dividend 7 November 2024<br>Record date for final dividend 8 November 2024<br>Annual General Meeting 13 December 2024<br>Final dividend payable 19 December 2024<br>First quarter update 17 February 2025<br>Financial Half Year end 31 March 2025<br>Interim Results and dividend announcement 5 May 2025<br>Ex-dividend date for interim dividend 8 May 2025<br>Record date for interim dividend 9 May 2025<br>Interim dividend payable 27 June 2025<br>Third quarter update 18 August 2025<br>Financial Year end 30 September 2025<br>Final Results and dividend announcement 3 November 2025<br>Ex-dividend date for final dividend 6 November 2025<br>Record date for final dividend 7 November 2025<br>Annual General Meeting 11 December 2025a<br>Final dividend payable 19 December 2025<br>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<br>November before the meeting.<br>1. Based on registered address holder.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 343<br>Financial calendar (Continued)<br>Westpac Capital Notes 5 (ASX code: WBCPH)<br>Ex-date for quarterly distribution 12 December 2024<br>Record date for quarterly distribution 13 December 2024a<br>Payment date for quarterly distribution 23 December 2024b<br>Ex-date for quarterly distribution 13 March 2025<br>Record date for quarterly distribution 14 March 2025<br>Payment date for quarterly distribution 24 March 2025b<br>Ex-date for quarterly distribution 12 June 2025<br>Record date for quarterly distribution 13 June 2025a<br>Payment date for quarterly distribution 23 June 2025b<br>Ex-date for quarterly distribution 11 September 2025<br>Record date for quarterly distribution 12 September 2025a<br>Payment date for quarterly distribution 22 September 2025<br>Ex-date for quarterly distribution 11 December 2025<br>Record date for quarterly distribution 12 December 2025a<br>Payment date for quarterly distribution 22 December 2025<br>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<br>general business in Sydney.<br>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<br>in Sydney.<br>Westpac Capital Notes 7 (ASX code: WBCPJ)<br>Ex-date for quarterly distribution 12 December 2024<br>Record date for quarterly distribution 13 December 2024a<br>Payment date for quarterly distribution 23 December 2024b<br>Ex-date for quarterly distribution 13 March 2025<br>Record date for quarterly distribution 14 March 2025<br>Payment date for quarterly distribution 24 March 2025b<br>Ex-date for quarterly distribution 12 June 2025<br>Record date for quarterly distribution 13 June 2025a<br>Payment date for quarterly distribution 23 June 2025b<br>Ex-date for quarterly distribution 11 September 2025<br>Record date for quarterly distribution 12 September 2025a<br>Payment date for quarterly distribution 22 September 2025<br>Ex-date for quarterly distribution 11 December 2025<br>Record date for quarterly distribution 12 December 2025a<br>Payment date for quarterly distribution 22 December 2025<br>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<br>general business in Sydney.<br>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<br>in Sydney.
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344 WESTPAC GROUP 2024 ANNUAL REPORT<br>SHAREHOLDING INFORMATION<br>Financial calendar (Continued)<br>Westpac Capital Notes 8 (ASX code: WBCPK)<br>Ex-date for quarterly distribution 12 December 2024<br>Record date for quarterly distribution 13 December 2024<br>Payment date for quarterly distribution 23 December 2024a<br>Ex-date for quarterly distribution 12 March 2025<br>Record date for quarterly distribution 13 March 2025<br>Payment date for quarterly distribution 21 March 2025<br>Ex-date for quarterly distribution 12 June 2025<br>Record date for quarterly distribution 13 June 2025<br>Payment date for quarterly distribution 23 June 2025a<br>Ex-date for quarterly distribution 11 September 2025<br>Record date for quarterly distribution 12 September 2025b<br>Payment date for quarterly distribution 22 September 2025a<br>Ex-date for quarterly distribution 11 December 2025<br>Record date for quarterly distribution 12 December 2025b<br>Payment for quarterly distribution 22 December 2025a<br>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<br>in Sydney.<br>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<br>general business in Sydney.<br>Westpac Capital Notes 9 (ASX code: WBCPL)<br>Ex-date for quarterly distribution 12 December 2024<br>Record date for quarterly distribution 13 December 2024a<br>Payment date for quarterly distribution 23 December 2024b<br>Ex-date for quarterly distribution 13 March 2025<br>Record date for quarterly distribution 14 March 2025<br>Payment date for quarterly distribution 24 March 2025b<br>Ex-date for quarterly distribution 12 June 2025<br>Record date for quarterly distribution 13 June 2025a<br>Payment date for quarterly distribution 23 June 2025b<br>Ex-date for quarterly distribution 11 September 2025<br>Record date for quarterly distribution 12 September 2025a<br>Payment date for quarterly distribution 22 September 2025<br>Ex-date for quarterly distribution 11 December 2025<br>Record date for quarterly distribution 12 December 2025a<br>Payment date for quarterly distribution 22 December 2025<br>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<br>general business in Sydney.<br>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<br>in Sydney.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 345<br>Financial calendar (Continued)<br>Westpac Capital Notes 10 (ASX code: WBCPM)<br>Ex-date for quarterly distribution 12 December 2024<br>Record date for quarterly distribution 13 December 2024a<br>Payment date for quarterly distribution 23 December 2024b<br>Ex-date for quarterly distribution 13 March 2025<br>Record date for quarterly distribution 14 March 2025<br>Payment date for quarterly distribution 24 March 2025b<br>Ex-date for quarterly distribution 12 June 2025<br>Record date for quarterly distribution 13 June 2025a<br>Payment date for quarterly distribution 23 June 2025b<br>Ex-date for quarterly distribution 11 September 2025<br>Record date for quarterly distribution 12 September 2025a<br>Payment date for quarterly distribution 22 September 2025<br>Ex-date for quarterly distribution 11 December 2025<br>Record date for quarterly distribution 12 December 2025a<br>Payment date for quarterly distribution 22 December 2025<br>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<br>general business in Sydney.<br>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<br>in Sydney.
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346 WESTPAC GROUP 2024 ANNUAL REPORT<br>SHAREHOLDING INFORMATION<br>Exchange controls and other limitations affecting security holders<br>Australian exchange controls<br>Australian laws control and regulate or permit the control<br>and regulation of a broad range of payments and<br>transactions involving non-residents of Australia. Pursuant<br>to a number of exemptions, authorities and approvals,<br>there are no general restrictions from transferring<br>funds from Australia or placing funds to the credit of<br>non-residents of Australia. However, Australian foreign<br>exchange controls are implemented from time to time<br>against prescribed countries, entities and persons. At the<br>present time, these include:<br>(a) withholding taxes in relation to remittances or<br>dividends (to the extent they are unfranked) and<br>interest payments;<br>(b) the financial sanctions administered by the Department<br>of Foreign Affairs and Trade (DFAT) in accordance<br>with the Autonomous Sanctions Act 2011 (Cth) and the<br>Autonomous Sanctions Regulations 2011, specifically,<br>in relation to transactions involving the transfer of<br>funds or payments to, by the order of, or on<br>behalf of individuals or entities designated by the<br>Minister of Foreign Affairs as published on the<br>DFAT Sanctions Webpage (https://www.dfat.gov.au/<br>international-relations/security/sanctions);<br>(c) the United Nations Security Council (UNSC) financial<br>sanctions administered by DFAT, including:<br> – Terrorist Asset Freezing Regime In accordance<br>with the Charter of the United Nations Act 1945<br>(Cth) and the Charter of the United Nations<br>(Dealings with Assets) Regulations 2008, a person<br>is prohibited from using or dealing with funds,<br>financial assets or economic resources of persons<br>or entities listed as terrorists by the Minister for<br>Foreign Affairs in the Commonwealth of Australia<br>Gazette. It is also a criminal offence to make<br>assets available to such persons or entities; and<br> – Country-based sanctions Under the Charter of<br>the United Nations Act 1945 and associated<br>regulations, UNSC financial sanctions have been<br>implemented. It is an offence to use or deal<br>with funds, financial assets or economic resources<br>of certain persons or entities associated with<br>countries designated by the UNSC. It is also a<br>criminal offence to make assets available to such<br>persons or entities.<br>Limitations affecting security holders<br>The following Australian laws impose limitations on the<br>right of non-residents or non-citizens of Australia to hold,<br>own or vote Westpac shares.<br>Foreign Acquisitions and Takeovers Act 1975<br>Acquisitions of interests in shares in Australian companies<br>by foreign persons that meet certain thresholds are<br>required to be notified to the Treasurer of Australia<br>(through the Foreign Investment Review Board) and to<br>obtain a no objections notification under the Foreign<br>Acquisitions and Takeovers Act 1975 (Cth). That legislation<br>applies to any acquisition by a foreign person, including<br>a corporation or group of associated foreign persons,<br>which results in ownership of 20% or more of the issued<br>shares of an Australian company or the ability to control<br>20% or more of the total voting power. In addition,<br>the legislation applies to any acquisition by a foreign<br>government investor of 10% or more of the total voting<br>power or ownership of an Australian company (or any<br>interest if the foreign government investor acquires any<br>control or influence– for example the right to appoint<br>a director). Further, this lower 10% or control/influence<br>threshold also applies to any acquisition by a foreign<br>person, including a corporation or group of associated<br>foreign persons, insofar as Westpac Banking Corporation<br>owns or operates a critical banking asset as defined<br>in the Security of Critical Infrastructure Act 2018 (Cth).<br>The legislation requires any persons proposing to make<br>any such acquisition to first notify the Treasurer of their<br>intention to do so. Where such an acquisition has already<br>occurred in the absence of a no objections notification,<br>the Treasurer has the power to order divestment if he<br>considers the acquisition to be contrary to Australia’s<br>national interest.<br>Financial Sector (Shareholdings) Act 1998<br>The Financial Sector (Shareholdings) Act 1998 (Cth)<br>imposes restrictions on shareholdings in Australian<br>financial sector companies (which includes Westpac).<br>Under that legislation a person (including a corporation)<br>may not hold more than a 20% ‘stake’ in a financial sector<br>company without prior approval from the Treasurer of<br>Australia. A person’s stake in a financial sector company is<br>equal to the aggregate of the person’s voting power in the<br>company and the voting power of the person’s associates.<br>The concept of voting power is broadly defined. The<br>Treasurer may approve a higher percentage stake if the<br>Treasurer is satisfied that it is in the national interest to<br>do so.<br>In addition, even if a person’s stake in a financial sector<br>company does not exceed the 20% limit, the Treasurer<br>has the power to declare that a person has ‘practical<br>control’ of a financial sector company and require the<br>person to relinquish that control or reduce their stake in<br>that company.<br>Corporations Act 2001<br>The Corporations Act 2001 (Cth) prohibits any person<br>(including a corporation) from acquiring a relevant interest<br>in our voting shares if, after the acquisition, that person or<br>any other person would be entitled to exercise more than<br>20% of the voting power in our shares. The prohibition is<br>subject to certain limited exceptions. In addition, under<br>the Corporations Act, a person is required to give a<br>notice to us and to the ASX providing certain prescribed<br>information, including their name, address and details of<br>their relevant interests in our voting shares if they begin<br>to have, or cease to have, a substantial holding in us, or<br>if they already have a substantial holding and there is a<br>movement of at least 1% in their holding. Such notice must,<br>generally, be provided within two business days after the<br>person becomes aware of that information.<br>A person will have a substantial holding if the total votes<br>attached to our voting shares in which they or their<br>associates have relevant interests is 5% or more of the<br>total number of votes attached to all our voting shares.<br>The concepts of ‘associate’ and ‘relevant interest’ are
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 347<br>Exchange controls and other limitations affecting security<br>holders (Continued)<br>broadly defined in the Corporations Act and investors are<br>advised to seek their own advice on their scope. In general<br>terms, a person will have a relevant interest in a share<br>if they:<br>(a) are the holder of that share;<br>(b) have power to exercise, or control the exercise of, a<br>right to vote attached to that share; or<br>(c) have power to dispose of, or control the exercise of a<br>power to dispose of, that share.<br>It does not matter how remote the relevant interest is or<br>how it arises. If two or more persons can jointly exercise<br>any one of these powers, each of them is taken to have<br>that power. Nor does it matter that the power or control<br>is express or implied, formal or informal, exercisable either<br>alone or jointly with someone else.<br>Enforceability of foreign judgments in Australia<br>We are an Australian public corporation with limited<br>liability. All of our Directors and Executive Officers reside<br>outside the US. Substantially all or a substantial portion<br>of the assets of all or many of such persons are located<br>outside the US. As a result, it may not be possible<br>for investors to effect service of process within the US<br>upon such persons or to enforce against them judgments<br>obtained in US courts predicated upon the civil liability<br>provisions of the federal securities laws of the US. There<br>may be doubt as to the enforceability in Australia, in<br>original actions or in actions for enforcement of judgments<br>of US courts, of civil liabilities predicated upon the federal<br>securities laws of the US.<br>Taxation<br>Australian taxation<br>The following discussion is a summary of certain<br>Australian taxation implications of the ownership and<br>disposition of ordinary shares for shareholders holding<br>their shares on capital account. This discussion is based<br>on the laws in force at the date of the Annual Report<br>and the Convention between the Government of Australia<br>and the Government of the United States of America for<br>the Avoidance of Double Taxation and The Prevention of<br>Fiscal Evasion with Respect to Taxes on Income (the Tax<br>Treaty), and is subject to any changes in Australian law<br>and any change in the Tax Treaty occurring after that date.<br>This discussion is intended only as a descriptive summary<br>and does not purport to be a complete analysis of<br>all the potential Australian tax implications of owning<br>and disposing of ordinary shares. The specific tax<br>position of each investor will determine the applicable<br>Australian income tax implications for that investor and we<br>recommend that investors consult their own tax advisers<br>concerning the implications of owning and disposing of<br>ordinary shares.<br>Taxation of dividends<br>Under the Australian dividend imputation system,<br>Australian tax paid at the company level is imputed (or<br>allocated) to shareholders by means of imputation credits<br>(also called franking credits) which attach to dividends<br>paid by the company to the shareholder. Such dividends<br>are termed ‘franked dividends’.<br>When an Australian resident individual shareholder<br>receives a franked dividend, the shareholder may be<br>entitled, depending upon their particular circumstances, to<br>a tax offset to the extent of the franking credits, which<br>may be offset against the Australian income tax payable<br>by the shareholder. An Australian resident shareholder<br>may, in certain circumstances, be entitled to a refund of<br>excess tax offsets.<br>The extent to which a dividend is franked typically<br>depends upon a company’s available franking credits at<br>the time of payment of the dividend. Accordingly, a<br>dividend paid to a shareholder may be wholly or partly<br>franked or wholly unfranked.<br>Fully franked dividends paid to non-resident shareholders<br>are exempt from Australian dividend withholding tax.<br>Dividends paid to a non-resident shareholder which are<br>not fully franked are subject to dividend withholding tax<br>at the rate of 30% (unless reduced by a double tax<br>treaty) to the extent they are unfranked. In the case<br>of residents of the US who are entitled to the benefits<br>of the Tax Treaty and are beneficially entitled to the<br>dividends, the rate is reduced to 15% under the Tax<br>Treaty, provided the shares are not effectively connected<br>with a permanent establishment or a fixed base of the<br>non-resident in Australia through which the non-resident<br>carries on business in Australia or provides independent<br>personal services. In the case of residents of the US that<br>have a permanent establishment or fixed base in Australia<br>where the shares in respect of which the dividends are<br>paid are attributable to that permanent establishment or<br>fixed base, there is no dividend withholding tax. Rather,<br>such dividends will be taxed on a net assessment basis<br>and, where the dividends are franked, entitlement to a tax<br>offset may arise.<br>Fully franked dividends paid to non-resident shareholders<br>and dividends that have been subject to dividend<br>withholding tax should not be subject to any further<br>Australian income tax.<br>There are circumstances where a shareholder may not be<br>entitled to the benefit of franking credits. The application<br>of these rules depends upon the shareholder’s own<br>circumstances, including the period during which the<br>shares are held and the extent to which the shareholder<br>is ‘at risk’ in relation to their shareholding.<br>Gain or loss on disposition of shares<br>Generally, any profit made by a resident shareholder on<br>disposal of shares will be subject to capital gains tax.<br>However, if the shareholder is regarded as a trader or<br>speculator, or carries on a business of investing for profit,<br>any profits may be taxed as ordinary income.<br>A discount may be available on capital gains on shares<br>held for 12 months or more by Australian resident<br>individuals, trusts or complying superannuation entities.<br>The discount is one half for individuals and trusts, and one<br>third for complying superannuation entities. Companies<br>are not eligible for the capital gains tax discount. For<br>shares acquired prior to 21 September 1999, an alternative
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348 WESTPAC GROUP 2024 ANNUAL REPORT<br>SHAREHOLDING INFORMATION<br>Taxation (Continued)<br>basis of calculation of the capital gain may be available<br>which allows the use of an indexation formula.<br>Normal rates of income tax would apply to capital gains<br>so calculated. Any capital loss can only be offset against<br>capital gains. Excess capital losses may be able to be<br>carried forward for offset against future capital gains.<br>Generally, subject to two exceptions, a non-resident<br>disposing of shares in an Australian public company who<br>holds those shares on capital account will be free from<br>income tax in Australia. The main exceptions are:<br> • shares held as part of a trade or business conducted<br>through a permanent establishment in Australia. In<br>such a case, any profit on disposal would be assessable<br>to tax. Losses may give rise to capital losses or be<br>otherwise deductible; and<br> • shares held in companies where the shareholder and its<br>associates have held at the time of disposal (or at least<br>12 months in the 24 months prior to disposal) a holding<br>of 10% or more in the company and more than 50%<br>of the company’s assets are represented by interests<br>in Australian real property (which is unlikely to be the<br>case for Westpac). In such a case, capital gains tax<br>would apply.<br>United States taxation<br>The following discussion is a summary of certain US<br>federal income tax implications of the ownership and<br>disposition of ordinary shares by US holders (as defined<br>below) that hold the ordinary shares as capital assets.<br>This discussion is based on the US Internal Revenue<br>Code of 1986, as amended, its legislative history, existing<br>and proposed regulations, published rulings and court<br>decisions, and the Tax Treaty, all as currently in effect<br>and all of which are subject to change, possibly on a<br>retroactive basis.<br>This discussion is intended only as a descriptive summary.<br>It does not purport to be a complete analysis of all<br>the potential US federal income tax consequences of<br>owning and disposing of ordinary shares and does not<br>address US federal income tax considerations that may<br>be relevant to US holders subject to special treatment<br>under US federal income tax law (such as banks, insurance<br>companies, real estate investment trusts, regulated<br>investment companies, dealers in securities, brokers, tax-exempt entities, retirement plans, certain former citizens<br>or residents of the US, persons holding ordinary shares as<br>part of a straddle, hedge, conversion or other integrated<br>transaction, persons that have a ‘functional currency’ other<br>than the US dollar, persons that own 10% or more (by vote<br>or value) of our stock, persons that generally mark their<br>securities to market for US federal income tax purposes<br>or persons that receive ordinary shares as compensation).<br>As this is a complex area, we recommend investors consult<br>their own tax advisers concerning the US federal, state<br>and/or local implications of owning and disposing of<br>ordinary shares.<br>For the purposes of this discussion you are a US holder if<br>you are a beneficial owner of ordinary shares and you are<br>for US federal income tax purposes:<br> • an individual who is a citizen or resident of the US;<br> • a corporation created or organised in or under the<br>laws of the US or any state thereof or the District<br>of Columbia;<br> • an estate, the income of which is subject to US federal<br>income taxation regardless of its source; or<br> • a trust, if a US court can exercise primary supervision<br>over the trust’s administration and one or more<br>US persons are authorised to control all substantial<br>decisions of the trust, or certain electing trusts that<br>were in existence on 19 August 1996 and were treated<br>as domestic trusts on that date.<br>If an entity treated as a partnership for US federal income<br>tax purposes owns the ordinary shares, the US federal<br>income tax implications of the ownership and disposition<br>of ordinary shares will generally depend upon the status<br>and activities of such partnership and its partners. Such an<br>entity should consult its own tax adviser concerning the<br>US federal income tax implications to it and its partners of<br>owning and disposing of ordinary shares.<br>Taxation of dividends<br>If you are a US holder, you must include in your income as<br>a dividend, the gross amount of any distributions paid by<br>us out of our current or accumulated earnings and profits<br>(as determined for US federal income tax purposes)<br>without reduction for any Australian tax withheld from<br>such distribution. We have not maintained and do not<br>plan to maintain calculations of earnings and profits for<br>US federal income tax purposes, and as a result, you may<br>need to include the entire amount of any distribution<br>in income as a dividend. If you are a non-corporate US<br>holder, dividends paid to you that constitute qualified<br>dividend income may be taxable to you at a preferential<br>tax rate so long as certain holding period and other<br>requirements are met. Dividends we pay with respect to<br>the ordinary shares generally will be qualified dividend<br>income so long as we are not a passive foreign investment<br>company (PFIC) during the taxable year in which the<br>dividend is paid or the preceding taxable year. Each non-corporate US holder should consult their own tax advisor<br>regarding the possible applicability of the reduced tax rate<br>and the related restrictions and special rules.<br>Dividends paid by us constitute ordinary income that<br>must generally be included in income when actually or<br>constructively received. Such dividends will not be eligible<br>for the dividends-received deduction generally allowed to<br>corporate shareholders with respect to dividends received<br>from US corporations. The amount of the dividend that<br>you must include in your income as a US holder will<br>be the US dollar value of the Australian dollar payments<br>made, determined at the spot Australian dollar/US dollar<br>rate on the date the dividend distribution is included in<br>your income, regardless of whether the payment is in<br>fact converted into US dollars. Generally, any gain or loss<br>resulting from currency exchange fluctuations during the<br>period from the date you include the dividend payment<br>in income to the date you convert the payment into US<br>dollars will be treated as ordinary income or loss and<br>will not be eligible for the special tax rate applicable to<br>qualified dividend income. This gain or loss generally will<br>be income from sources within the US for foreign tax<br>credit limitation purposes. Distributions on an ordinary<br>share in excess of current and accumulated earnings and
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 349<br>Taxation (Continued)<br>profits, as determined for US federal income tax purposes,<br>will be treated as a non-taxable return of capital to the<br>extent of your basis in such ordinary share and thereafter<br>as capital gain.<br>Subject to certain limitations, Australian tax withheld in<br>accordance with the Tax Treaty and paid over to Australia<br>may be claimed as a foreign tax credit against your<br>US federal income tax liability. Special rules apply in<br>determining the foreign tax credit limitation with respect<br>to dividends that are subject to a preferential tax rate.<br>A US holder that does not elect to claim a US foreign<br>tax credit for Australian income tax withheld may instead<br>claim a deduction for such withheld tax, but only for a<br>taxable year in which the US holder elects to do so with<br>respect to all non-US income taxes paid or accrued in such<br>taxable year.<br>Dividends paid by us generally will be income from<br>sources outside the US for foreign tax credit limitation<br>purposes. Under the foreign tax credit rules, dividends<br>may, depending on your circumstances, generally be<br> ‘passive category’ or ‘general category’ income for<br>purposes of computing the foreign tax credit.<br>The rules relating to US foreign tax credits are very<br>complex, and each US holder should consult its own tax<br>adviser regarding the application of such rules.<br>Taxation of capital gains<br>If you sell, exchange or otherwise dispose of your ordinary<br>shares, you will generally recognise a capital gain or loss<br>for US federal income tax purposes equal to the difference<br>between the US dollar value of the amount that you<br>realise and your tax basis, determined in US dollars, in<br>your ordinary shares. A capital gain of a non-corporate<br>US holder is generally taxed at a reduced rate if the<br>holder has a holding period greater than one year. The<br>deductibility of capital losses is subject to limitations. Such<br>capital gain or loss generally will be income from sources<br>within the US, for foreign tax credit limitation purposes.<br>Medicare tax<br>In addition to regular US federal income tax, certain US<br>holders that are individuals, estates or trusts are subject<br>to a 3.8% tax on all or a portion of their ‘net investment<br>income’, which may include all or a portion of their<br>dividend income and net gain from the sale, exchange or<br>other disposition of their ordinary shares.<br>Passive foreign investment company considerations<br>We believe that we will not be treated as a passive foreign<br>investment company (PFIC) for US federal income tax<br>purposes, and this discussion assumes we are not a PFIC.<br>However, the determination as to whether we are a PFIC<br>is made annually at the end of each taxable year and<br>therefore could change. If we were to be treated as a PFIC,<br>a US holder of ordinary shares could be subject to certain<br>adverse tax consequences.<br>Disclosure requirements for specified foreign<br>financial assets<br>Individual US holders (and certain US entities specified in<br>US Internal Revenue Service (IRS) guidance) who, during<br>any taxable year, hold any interest in any specified foreign<br>financial asset, generally will be required to file with their<br>US federal income tax returns certain information on IRS<br>Form 8938 if the aggregate value of all such assets<br>exceeds certain specified amounts. ‘Specified foreign<br>financial asset’ generally includes any financial account<br>maintained with a non-US financial institution and may<br>also include the ordinary shares if they are not held in an<br>account maintained with a financial institution. Substantial<br>penalties may be imposed, and the period of limitations<br>on assessment and collection of US federal income taxes<br>may be extended, in the event of a failure to comply. US<br>holders should consult their own tax advisers as to the<br>possible application to them of this filing requirement.<br>Information reporting and backup withholding<br>Under certain circumstances, information reporting and/or<br>backup withholding may apply to US holders with respect<br>to payments on or the proceeds from the sale, exchange<br>or other disposition of the ordinary shares, unless an<br>applicable exemption is satisfied.<br>Backup withholding is not an additional tax. Any amounts<br>withheld under the backup withholding rules generally will<br>be allowed as a refund or credit against a US holder’s US<br>federal income tax liability if the required information is<br>furnished by the US holder on a timely basis to the IRS.
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350 WESTPAC GROUP 2024 ANNUAL REPORT<br>ADDITIONAL INFORMATION<br>Overview<br>We were incorporated in 1850 under the Bank of New<br>South Wales Act 1850 (NSW), a special piece of legislation<br>passed by the New South Wales Parliament at a time<br>when there was no general companies’ legislation in<br>Australia. On 23 August 2002, Westpac became registered<br>under the Corporations Act 2001 (Cth) (Corporations Act)<br>as a public company limited by shares.<br>As part of the process of becoming a company regulated<br>under the Corporations Act, shareholders adopted a new<br>constitution at the AGM on 15 December 2000, which<br>came into operation on 23 August 2002. Our constitution<br>has been subsequently amended by shareholders on<br>15 December 2005, 13 December 2007, 13 December 2012<br>and 15 December 2021.<br>Our objects and purposes<br>Our constitution does not contain a statement of our<br>objects and purposes. As a company regulated by the<br>Corporations Act, we have the legal capacity and powers<br>of an individual both within and outside Australia, and all<br>the powers of a body corporate, including the power to<br>issue and cancel shares, to issue debentures, to distribute<br>our property among our equity holders (either in kind<br>or otherwise), to give security by charging our uncalled<br>capital, to grant a floating charge over our property and to<br>do any other act permitted by any law.<br>Directors’ voting powers<br>Under clause 9.11(a) of our constitution, subject to<br>complying with the Corporations Act regarding disclosure<br>of and voting on matters involving material personal<br>interests, our Directors may:<br>(a) hold any office or place of profit in our company,<br>except that of auditor;<br>(b) hold any office or place of profit in any other company,<br>body corporate, trust or entity promoted by our<br>company or in which it has an interest of any kind;<br>(c) enter into any contract or arrangement with<br>our company;<br>(d)participate in any association, institution, fund, trust or<br>scheme for past or present employees or Directors of<br>our company or persons dependent on or connected<br>with them;<br>(e) act in a professional capacity (or be a member of<br>a firm that acts in a professional capacity) for our<br>company, except as auditor; and<br>(f) participate in, vote on and be counted in a quorum<br>for any meeting, resolution or decision of the Directors<br>and be present at any meeting where any matter is<br>being considered by the Directors.<br>Under clause 9.11(b) of our constitution, a Director may do<br>any of the above despite the fiduciary relationship of the<br>Director’s office:<br>(a) without any liability to account to our company for any<br>direct or indirect benefit accruing to the Director; and<br>(b) without affecting the validity of any contract<br>or arrangement.<br>Under the Corporations Act, however, a Director who<br>has a material personal interest in any matter to be<br>considered at any Board meeting must not be present<br>while the matter is being considered or vote on the matter,<br>unless the other Directors resolve to allow that Director<br>to be present and vote or a declaration is made by ASIC<br>permitting that Director to participate and vote. These<br>restrictions do not apply to a limited range of matters set<br>out in section 191(2) of the Corporations Act, where the<br>Director’s interest:<br>(a) arises because the Director is a shareholder<br>of the company and is held in common with<br>other shareholders;<br>(b) arises in relation to the Director’s remuneration as a<br>Director of the company;<br>(c) relates to a contract the company is proposing to enter<br>into that is subject to shareholder approval and will not<br>impose obligations on the company if not approved<br>by shareholders;<br>(d) arises merely because the Director is a guarantor or<br>has given an indemnity or security for all or part of a<br>loan (or proposed loan) to the company;<br>(e) arises merely because the Director has a right of<br>subrogation in relation to a guarantee or indemnity<br>referred to in (d);<br>(f) relates to a contract that insures, or would insure,<br>the Director against liabilities the Director incurs as<br>an officer of the company (but only if the contract<br>does not make the company or related body corporate<br>the insurer);<br>(g) relates to any payment by the company or a related<br>body corporate in respect of certain indemnities<br>permitted by the Corporations Act or any contract<br>relating to such an indemnity; or<br>(h) is in a contract or proposed contract with, or for the<br>benefit of, or on behalf of, a related body corporate<br>and arises merely because the Director is a Director of<br>that related body corporate.<br>If there are not enough Directors to form a quorum for<br>the Board meeting because of Directors’ interests in a<br>particular matter, a general meeting for shareholders may<br>be called to consider the matter and interested Directors<br>are entitled to vote on any proposal to requisition such<br>a meeting.<br>Under clause 9.7 of our constitution, the maximum<br>aggregate amount of annual remuneration to be paid to<br>our Non-Executive Directors must be approved by our<br>shareholders. This aggregate amount is paid to the Non-Executive Directors in such manner as the Board from<br>time to time determines. Directors’ remuneration is one<br>of the exceptions under section 191 of the Corporations<br>Act to the prohibitions against being present and voting<br>on any matter in which a Director has a material<br>personal interest.<br>Directors’ borrowing powers<br>Clause 10.2 of our constitution empowers our Directors,<br>as a Board, to exercise all the powers of Westpac to<br>borrow or raise money, to charge any property or business<br>of Westpac or all or any of its uncalled capital and to<br>issue debentures or give any other security for a debt,
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 351<br>Our constitution (Continued)<br>liability or obligation of Westpac or of any other person.<br>Such powers may only be changed by amending the<br>constitution, which requires a special resolution (that is,<br>a resolution passed by at least 75% of the votes cast<br>by members entitled to vote on the resolution and for<br>which notice has been given in accordance with the<br>Corporations Act).<br>Minimum number of Directors<br>Our constitution requires that the minimum number<br>of Directors is determined in accordance with the<br>Corporations Act or other regulations. Currently the<br>Corporations Act prescribes three as a minimum number<br>of Directors for a public company and APRA governance<br>standards specify five as the minimum number of<br>Directors for APRA regulated entities. Westpac’s current<br>number of Directors is above these prescribed minimums.<br>Share rights<br>The rights attaching to our ordinary shares are set out in<br>the Corporations Act and in our constitution, and may be<br>summarised as follows:<br>a. Profits and dividends<br>Holders of ordinary shares are entitled to receive such<br>dividends on those shares as may be determined by<br>our Directors from time to time. Dividends that are paid<br>but not claimed may be invested by our Directors for<br>the benefit of Westpac until claimed or required to<br>be dealt with in accordance with any law relating to<br>unclaimed monies.<br>Under the Corporations Act, Westpac must not pay<br>a dividend unless our assets exceed our liabilities<br>immediately before the dividend is declared and the<br>excess is sufficient for payment of the dividend. In<br>addition, the payment must be fair and reasonable to<br>the company’s shareholders as a whole and must not<br>materially prejudice our ability to pay our creditors.<br>Subject to the Corporations Act, the constitution, the<br>rights of persons (if any) entitled to shares with special<br>rights to a dividend and any contrary terms of issue of<br>or applying to any shares, our Directors may determine<br>that a dividend is payable, fix the amount and the time<br>for payment and authorise the payment or crediting by<br>Westpac to, or at the direction of, each shareholder<br>entitled to that dividend.<br>If any dividends are returned unclaimed, we are generally<br>obliged, under the Banking Act 1959 (Cth) (Banking Act),<br>to hold those amounts as unclaimed monies for a period<br>of seven years. If at the end of that period the monies<br>remain unclaimed by the shareholder concerned, we must<br>submit an annual unclaimed money return to ASIC by<br>31 March each year containing the unclaimed money as<br>at 31 December of the previous year. Upon such payment<br>being made, we are discharged from further liability in<br>respect of that amount.<br>Our Directors may, before paying any dividend, set aside<br>out of our profits such sums as they think proper as<br>reserves, to be applied, at the discretion of our Directors,<br>for any purpose for which the profits may be properly<br>applied. Our Directors may carry forward so much of<br>the profits remaining as they consider ought not to be<br>distributed as dividends without transferring those profits<br>to a reserve.<br>The following additional restrictions apply to our ability to<br>declare and/or pay dividends:<br>(i) if the payment of the dividend would breach or cause<br>a breach by us of applicable capital adequacy or<br>other supervisory requirements of APRA, including<br>where Westpac’s Common Equity Tier 1 Capital Ratio<br>falls within APRA’s capital conservation buffer range<br>(consisting of the capital conservation buffer plus any<br>countercyclical capital buffer, currently 5.75% of risk-weighted assets). Currently, one such requirement is<br>that a dividend should not be paid without APRA’s<br>prior consent if payment of that dividend, after taking<br>into account all other dividends (if any) paid on<br>our shares and payments on more senior capital<br>instruments, in the preceding 12 consecutive months<br>to which they relate, would cause the aggregate<br>of such dividend payments to exceed our after tax<br>earnings for the preceding 12 consecutive months, as<br>reflected in our relevant audited consolidated financial<br>statements; and<br>(ii) if, under the Banking Act, we are directed by APRA not<br>to pay a dividend;<br>(iii)if the declaration or payment of the dividend would<br>result in us becoming insolvent; or<br>(iv)if any interest payment, dividend or distribution on<br>certain Additional Tier 1 securities issued by us is not<br>paid in accordance with the terms of those securities,<br>we may be restricted from declaring and/or paying<br>dividends on ordinary shares. This restriction is subject<br>to a number of exceptions.<br>b. Voting rights<br>Holders of our fully paid ordinary shares have, at general<br>meetings, one vote on a show of hands and, upon a poll,<br>one vote for each fully paid share held by them.<br>c. Voting and re-election of Directors<br>Under our constitution, each Director, apart from the<br>Managing Director, must not hold office without re-election past the third AGM following the Director’s<br>appointment or last election, whichever is longer. A<br>retiring Director holds office until the conclusion of the<br>meeting at which that Director retires but is eligible for<br>re-election at that meeting. In addition, there must be an<br>election of Directors at each AGM. This is consistent with<br>the requirements of the ASX Listing Rules.<br>Under the Corporations Act, the election or re-election<br>of each Director by shareholders at a general meeting<br>of a public company must proceed as a separate item,<br>unless the shareholders first resolve that the elections or<br>re-elections may be voted on collectively. A resolution<br>to allow collective voting in relation to elections or re-elections is effective only if no votes are cast against<br>that resolution. Any resolution electing or re-electing two<br>or more Directors in contravention of this requirement<br>is void.<br>d. Winding up<br>Subject to any preferential entitlement of holders of<br>preference shares on issue at the relevant time, holders
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352 WESTPAC GROUP 2024 ANNUAL REPORT<br>ADDITIONAL INFORMATION<br>Our constitution (Continued)<br>of our ordinary shares are entitled to share equally in any<br>surplus assets if we are wound up.<br>e. Sinking fund provisions<br>We do not have any class of shares on issue that is subject<br>to any sinking fund provisions.<br>Variation of rights attaching to our shares<br>Under the Corporations Act, unless otherwise provided by<br>the terms of issue of a class of shares, the terms of issue<br>of a class of shares in Westpac can only be varied or<br>cancelled in any way by a special resolution of Westpac<br>and with either the written consent of our shareholders<br>holding at least 75% of the votes in that class of shares<br>or with the sanction of a special resolution passed at a<br>separate meeting of the holders of that class of shares.<br>Convening general meetings<br>Under our constitution, our Directors may convene and<br>arrange to hold a general meeting of Westpac whenever<br>they think fit and must do so if required to do so under<br>the Corporations Act and ASX Listing Rules. Under the<br>Corporations Act, our Directors must call and arrange to<br>hold a general meeting of Westpac if requested to do so<br>by our shareholders who hold at least 5% of the votes<br>that may be cast at the general meeting. Shareholders<br>who hold at least 5% of the votes that may be cast at<br>a general meeting may also call and arrange to hold a<br>general meeting of Westpac at their own expense.<br>At least 28 days notice must be given of a meeting of<br>our shareholders. Written notice must be given to all<br>shareholders entitled to attend and vote at the meeting.<br>All ordinary shareholders are entitled to attend and,<br>subject to the constitution and the Corporations Act, to<br>vote at general meetings of Westpac.<br>Limitations on securities ownership<br>A number of limitations apply in relation to the ownership<br>of our shares, and these are described in more detail in the<br>section ‘Limitations affecting security holders’.<br>Change in control restrictions<br>Restrictions apply under the Corporations Act, the<br>Financial Sector (Shareholdings) Act 1998 (Cth) and the<br>Foreign Acquisitions and Takeovers Act 1975 (Cth).<br>For more detailed descriptions of these restrictions, refer<br>to the sections ‘Limitations affecting security holders’,<br> ‘Foreign Acquisitions and Takeovers Act 1975’, ‘Financial<br>Sector (Shareholdings) Act 1998’, and ‘Corporations<br>Act 2001’.<br>Substantial shareholder disclosure<br>There is no provision in our constitution that requires a<br>shareholder to disclose the extent of their ownership of<br>our shares.<br>Under the Corporations Act, however, any person who<br>begins or ceases to have a substantial holding of our<br>shares must notify us within two business days after they<br>become aware of that information. A further notice must<br>be given to us if there is an increase or decrease of 1%<br>in a person’s substantial holding. Copies of these notices<br>must also be given to the ASX. A person has a substantial<br>holding of our shares if the total votes attached to our<br>voting shares in which they or their associates have<br>relevant interests is 5% or more of the total number of<br>votes attached to all our voting shares. For more details,<br>refer to the section ‘Corporations Act 2001’.<br>We also have a statutory right under the Corporations Act<br>to trace the beneficial ownership of our shares by giving<br>a direction to a shareholder, or certain other persons,<br>requiring disclosure to us of, among other things, their<br>own relevant interest in our shares and the name and<br>address of each other person who has a relevant interest<br>in those shares, the nature and extent of that interest and<br>the circumstances that gave rise to that other person’s<br>interest. Such disclosure must, except in certain limited<br>circumstances, be provided within two business days after<br>the direction is received.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 353<br>Our constitution (Continued)<br>Australian Company and Business Numbers<br>All Australian companies have a unique nine-digit identifier, referred to as an Australian Company Number (ACN), which<br>must be included on public documents, eligible negotiable instruments and the company’s common seal. In addition,<br>entities can apply for registration on the Australian Business Register and be allocated a unique eleven-digit identifier<br>known as an Australian Business Number (ABN). For Australian companies, the last nine digits of their ABN are identical<br>to their ACN. The ABN may be quoted on documents in lieu of the ACN.<br>Our ACN is 007 457 141 and our ABN is 33 007 457 141.<br>Documents on display<br>We are subject to the disclosure requirements of the US Securities Exchange Act of 1934, as amended. In accordance<br>with these requirements, we file Annual Reports with, and furnish other information to, the US Securities & Exchange<br>Commission (SEC). The SEC also maintains a website at www.sec.gov that contains reports, proxy statements and<br>other information regarding registrants that file electronically with the SEC. Since April 2002, we have filed our reports<br>on Form 20-F and have furnished other information to the SEC in electronic format which may be accessed through<br>this website.<br>Exchange rates<br>For each of the years indicated, the high, low, average and year-end noon buying rates1<br> for Australian dollars were:<br>Year Ended 30 September<br>(US$ per A$1.00) 2025a 2024 2023 2022 2021 2020<br>High 0.6895 0.6934 0.7102 0.7598 0.7953 0.7388<br>Low 0.6797 0.6290 0.6219 0.6437 0.7006 0.5755<br>Averageb n/a 0.6620 0.6651 0.7097 0.7490 0.6815<br>Close (on 30 September)<br>c n/a 0.6934 0.6451 0.6437 0.7228 0.7160<br>a. Through to 4 October 2024. On 4 October 2024, the noon buying rate was A$1.00 = 0.6797.<br>b. The average is calculated by using the average of the exchange rates on the last day of each month during the period.<br>c. The noon buying rate as such date may differ from the rate used in the preparation of our consolidated financial statements at such date. Refer<br>to Note 1(a) to the financial statements.<br>For each of the months indicated, the high and low noon buying rates for Australian dollars were:<br>Month<br>(US$ per A$1.00)<br>October<br>2024a<br>September<br>2024<br>August<br>2024<br>July<br>2024<br>June<br>2024<br>May<br>2024<br>High 0.6895 0.6934 0.6807 0.6788 0.6701 0.6686<br>Low 0.6797 0.6650 0.6488 0.6535 0.6589 0.6496<br>a. Through to 4 October 2024. On 4 October 2024, the noon buying rate was A$1.00 = 0.6797.<br>Exchange rates against A$<br>Twelve months to/as at 30 Sept 2024 2023 2022<br>Currency Average Spot Average Spot Average Spot<br>US$ 0.6594 0.6929 0.6662 0.6467 0.7125 0.6490<br>GBP 0.5201 0.5176 0.5435 0.5284 0.5575 0.5841<br>NZ$ 1.0846 1.0885 1.0846 1.0738 1.0831 1.1355<br>1. The noon buying rate in New York City for cable transfers in Australian dollars as certified for customs purposes by the Federal Reserve Bank<br>of New York.
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354 WESTPAC GROUP 2024 ANNUAL REPORT<br>ADDITIONAL INFORMATION<br>Exchange rates (Continued)<br>Impact of exchange rate movements on Westpac's results<br>2024 vs 2023 2023 vs 2022<br>Growth FX impact ($m)<br>Growth<br>ex- FX Growth FX impact ($m)<br>Growth<br>ex- FX<br>Net interest income 2% (2) 2% 7% 5 7%<br>Non-interest income (15%) 9 (15%) 36% 5 36%<br>Net operating income - 7 - 10% 10 10%<br>Operating expenses 2% (9) 2% (1%) (11) (1%)<br>Pre-provision profit (3%) (2) (3%) 24% (1) 24%<br>Impairment<br>(charges)/benefits (17%) - (17%) 93% - 93%<br>Profit before income<br>tax expense (2%) (2) (2%) 22% (1) 22%<br>Income tax expense - - - 12% - 12%<br>Profit after income<br>tax expense (3%) (2) (3%) 26% (1) 26%<br>Profit attributable to non-controlling interests (NCI) (100%) - (100%) 20% - 20%<br>Net profit attributable to<br>owners of WBC (3%) (2) (3%) 26% (1) 26%<br>Exchange rate risk on future NZ$ earnings<br>Westpac’s policy in relation to the hedging of the future earnings of Westpac’s New Zealand division is to manage the<br>economic risk for volatility of the NZ$ against A$. Westpac manages these flows over a time horizon under which up<br>to 100% of the expected earnings for the following 12 months and 50% of the expected earnings for the subsequent 12<br>months can be hedged. NZ Future Earnings hedges are only implemented when AUD/NZD is trading at the low end of<br>the range or is expected to move higher over the next 12 months. As at 30 September 2024, Westpac has hedges in<br>place for forecasts up to November 2024 with an average rate of $1.0852.<br>Dividend reinvestment plan<br>The Board has determined a fully franked final ordinary dividend of 76 cents per share, to be paid on 19 December 2024<br>to shareholders on the register at the record date of 8 November 2024. The 2024 final and interim ordinary dividend<br>represents a payout ratio of 74.62%. In addition to being fully franked, the final ordinary dividend will also carry NZ$0.06<br>in New Zealand imputation credits that may be used by New Zealand tax residents.<br>Westpac operates a DRP that is available to holders of fully paid ordinary shares who are resident in, or whose address<br>on the register of shareholders is in Australia or New Zealand. Shareholders can choose to receive their 2024 final<br>ordinary dividend as cash or reinvest it in additional shares under the DRP. As noted in Note 28 to the financial<br>statements, the Board has made certain determinations in relation to the DRP for the final ordinary dividend only,<br>including that the market price will be set over 15 trading days commencing 13 November 2024 and will not include<br>a discount.<br>Shareholders who wish to commence participation in the DRP, or to vary their current participation election, must do so<br>by 5.00pm (Sydney time) on 11 November 2024.<br>Shareholders can provide these instructions:<br> • Online for shareholders with holdings that have a market value of less than $1,000,000 within their Link<br>Market Services portfolio, by logging into or creating a Portfolio via the Westpac share registry's website at<br>linkmarketservices.com.au and electing the DRP or amending their existing instructions online; or<br> • By completing and returning a DRP application or variation form to Westpac’s share registry. Registry contact details<br>are listed in Useful information (page 359).
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 355<br>Information on related entities<br>a. Changes in control of Westpac entities<br>During the twelve months ended 30 September 2024 the following controlled entities were acquired, formed,<br>or incorporated:<br> • Series 2024-1 WST Trust (formed 17 October 2023)<br>During the twelve months ended 30 September 2024, the following controlled entities ceased to be controlled:<br> • Westpac Nominees NZ - Limited (deregistered 11 October 2023)<br> • Westpac Superannuation Nominees - NZ - Limited (deregistered 11 October 2023)<br> • Aotearoa Financial Services Limited (deregistered 26 October 2023)<br> • Westpac Investment Vehicle No.2 Pty Limited (deregistered 29 October 2023)<br> • Westpac USA Inc. (dissolved 6 May 2024)<br> • Series 2014-1 WST Trust (terminated 3 June 2024)<br> • Sydney Capital Corporations Inc. (dissolved 23 August 2024)<br> • Partnership Pacific Pty Limited (deregistered 28 August 2024)<br> • BT Financial Group Holdings Pty Ltd (deregistered 5 September 2024)<br> • St. George Security Holdings Pty. Limited (deregistered 12 September 2024)<br> • Westpac Europe Limited (dissolved 17 September 2024)<br> • Westpac Syndications Management Pty Ltd (deregistered 19 September 2024)<br> • Westpac Leasing Nominees - VIC- Pty. Limited (deregistered 19 September 2024)<br> • Waratah Securities Australia Limited (deregistered 19 September 2024)<br>b. Associates<br>As at 30 September 2024 Ownership Interest Held (%)<br>Akahu Technologies Ltd 34.5%<br>OpenAgent Pty Ltd 22.6%<br>mx51 Group Pty Ltd 22.2%<br>Safe Will Pty Ltd 14.2%
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356 WESTPAC GROUP 2024 ANNUAL REPORT<br>ADDITIONAL INFORMATION<br>Net profit contribution of businesses sold<br>To assist in understanding the contribution of these businesses, the following tables provide the earnings (excluding<br>Notable Items) attributable to the entities sold. Earnings attributed to each business reflect its contribution up to the<br>sale date, and any other gains/losses on these transactions which were not identified as Notable Items. Balance sheet<br>data is at completion date. Businesses sold in the 2023 financial year had negligible balance sheet contribution. No<br>businesses were sold in 2024.<br>Businesses sold<br>$m<br>Advance<br>Asset<br>Management<br>BT<br>Personal<br>and<br>Corporate<br>Supera<br>Westpac<br>Life<br>Insurance<br>Ltd.<br>Motor<br>Vehicle<br>Finance<br>and<br>Novated<br>Leasing<br>Westpac<br>Life-NZ-Limited<br>(A$)<br>Contribution<br>of<br>businesses<br>sold<br>Westpac<br>Life-NZ-Limited<br>(NZ$)<br>2023<br>Non-interest income 38 77 25 - - 140 -<br>Operating expenses (8) 26 28 - - 46 -<br>Income tax expense and NCI (9) (31) (15) - - (55) -<br>Net profit 21 72 38 - - 131 -<br>2022<br>Net interest income - - - 6 - 6 -<br>Non-interest income 80 177 107 - 28 392 30<br>Operating expenses (18) (77) (23) (6) (3) (127) (3)<br>Impairment charges - - - 7 - 7 -<br>Income tax expense and NCI (19) (30) (34) (2) (7) (92) (8)<br>Net profit 43 70 50 5 18 186 19<br>a. Transfer of the members and benefits of BT Funds Management Limited’s personal and corporate (non-platform) superannuation products, via<br>a successor funds transfer to Mercer Super Trust.<br>$bn<br>Advance<br>Asset<br>Management<br>BT<br>Personal<br>and<br>Corporate<br>Super<br>Westpac<br>Life<br>Insurance<br>Ltd.<br>Motor<br>Vehicle<br>Finance<br>and<br>Novated<br>Leasing<br>Westpac<br>Life-NZ-Limited<br>(A$)<br>Contribution<br>of<br>businesses<br>sold<br>Westpac<br>Life-NZ-Limited<br>(NZ$)<br>As at 30 Sept 2022<br>Total assets - - 2.6 - - 2.6 -
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 357<br>Additional information for Non-AAS financial measures<br>Calculation of Non-AAS financial measures<br>Details of the calculation of non-AAS financial measures not disclosed elsewhere are provided below:<br>Expense to income ratio (excluding Notable Items)<br>$m 2024 2023 2022<br>Operating expenses 10,944 10,692 10,802<br>Less: Notable Items (operating expenses) - (460) (621)<br>Operating expenses excluding Notable Items 10,944 10,232 10,181<br>Net operating income 21,588 21,645 19,606<br>Add/(less): Notable Items (net interest income) 163 97 (555)<br>Add/(less): Notable Items (non-interest income) 12 (200) 854<br>Net operating income excluding Notable Items 21,763 21,542 19,905<br>Expense to income ratio (excluding Notable Items) 50.29% 47.50% 51.15%<br>Average tangible ordinary equity and Return on average tangible ordinary equity (ROTE)<br>$m 2024 2023 2022 2021 2020<br>Net profit attributable to owners of WBC (adjusted for<br>RSP dividends)a 6,983 7,190 5,691 5,456 2,288<br>Average ordinary equity 71,493 71,229 70,268 70,849 68,014<br>Less: Intangible assets (average) (10,758) (10,664) (10,182) (11,310) (11,964)<br>Add: Computer software (average) 2,680 2,552 1,992 2,361 2,371<br>Average tangible ordinary equity 63,415 63,117 62,078 61,900 58,421<br>Return on average tangible ordinary equity (ROTE) 11.01% 11.39% 9.17% 8.81% 3.92%<br>a. See Note 8 to the financial statements for calculations of this profit measure.<br>Net profit attributable to owners of WBC (adjusted for RSP shares) excluding Notable Items<br>$m 2024 2023 2022 2021 2020<br>Net profit attributable to owners of WBC (adjusted for<br>RSP dividends) 6,983 7,190 5,691 5,456 2,288<br>Add/(less): Notable Items (post tax) 123 173 874 1,495 2,937<br>Net profit attributable to owners of WBC (adjusted for RSP<br>dividends) excluding Notable Items 7,106 7,363 6,565 6,951 5,225<br>ROE (excluding Notable Items) and ROTE (excluding Notable Items)<br>$m 2024 2023 2022 2021 2020<br>Net profit attributable to owners of WBC (adjusted for RSP<br>dividends) excluding Notable Items 7,106 7,363 6,565 6,951 5,225<br>Average ordinary equity 71,493 71,229 70,268 70,849 68,014<br>Average tangible ordinary equity 63,415 63,117 62,078 61,900 58,421<br>Return on average ordinary equity (excluding Notable Items) 9.94% 10.34% 9.34% 9.81% 7.68%<br>Return on average tangible ordinary equity (excluding<br>Notable Items) 11.21% 11.67% 10.58% 11.23% 8.94%
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358 WESTPAC GROUP 2024 ANNUAL REPORT<br>ADDITIONAL INFORMATION<br>Additional information for Non-AAS financial measures (Continued)<br>Pre-provision profit<br>$m 2024 2023 2022<br>Net interest income 18,753 18,317 17,161<br>Non-interest income 2,835 3,328 2,445<br>Operating expenses (10,944) (10,692) (10,802)<br>Pre-provision profit 10,644 10,953 8,804<br>Dividend payout ratio (excluding Notable Items)<br>$m 2024 2023 2022<br>Ordinary dividend paid/declared on issued shares (net of Treasury shares) 5,210 4,975 4,370<br>divided by: Net profit attributable to owners of WBC (adjusted for RSP dividends) excluding<br>Notable Items 7,106 7,363 6,565<br>Dividend payout ratio (excluding Notable Items)a 73.32% 67.57% 66.57%<br>a. Dividend used in calculation not subjected to rounding.<br>Segment pre-provision profit excluding Notable Items<br>$m Consumer Business & Wealth<br>Westpac<br>Institutional Bank<br>Westpac<br>New Zealand<br>(A$)<br>Group<br>Businesses Group<br>2024<br>Pre-provision profit/(loss) 3,373 3,510 2,040 1,375 346 10,644<br>Add/(less): Notable Items - - - 8 167 175<br>Pre-provision profit/(loss)<br>excluding Notable Items 3,373 3,510 2,040 1,383 513 10,819<br>2023<br>Pre-provision profit/(loss) 3,966 3,225 1,962 1,362 438 10,953<br>Add/(less): Notable Items 202 152 15 9 (21) 357<br>Pre-provision profit/(loss)<br>excluding Notable Items 4,168 3,377 1,977 1,371 417 11,310<br>2022<br>Pre-provision profit/(loss) 4,553 1,929 1,323 1,434 (435) 8,804<br>Add/(less): Notable Items 66 14 - (120) 960 920<br>Pre-provision profit/(loss)<br>excluding Notable Items 4,619 1,943 1,323 1,314 525 9,724<br>Earnings per ordinary share (ex Notable Items)<br>2024 2023 2022<br>Basic Diluted Basic Diluted Basic Diluted<br>Net profit attributable to<br>owners of WBC (adjusted for<br>RSP dividends) ($m) 6,983 7,466 7,190 7,595 5,691 5,927<br>Add/(less): Notable<br>Items ($m) 123 123 173 173 874 874<br>Adjusted net profit<br>attributable to owners of<br>WBC (adjusted for RSP<br>dividends) (excluding Notable<br>Items) ($m) 7,106 7,589 7,363 7,768 6,565 6,801<br>Adjusted weighted average<br>number of ordinary shares 3,476 3,895 3,502 3,891 3,559 3,889<br>Earnings per ordinary<br>share (excluding Notable<br>Items) (cents) 204.4 194.8 210.3 199.6 184.5 174.9
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 359<br>Useful information<br>Key sources of information for shareholders<br>We report our full year performance to shareholders, in<br>late October or early November, in the following forms: an<br>Annual Report; a Climate Report; an Investor Discussion<br>Pack and earnings releases.<br>Electronic communications<br>Shareholders can elect to receive the following<br>communications electronically:<br> • Annual Report;<br> • Dividend statements when paid by direct credit or via<br>Westpac’s Dividend Reinvestment Plan (DRP);<br> • Notices of Meetings and proxy forms; and<br> • Major company announcements.<br>Opt for electronic communications by logging<br>into Westpac’s Share Registrar’s Investor Centre<br>at www.linkmarketservices.com.au.<br>Online information<br>Australia<br>Westpac’s website www.westpac.com.au provides<br>information for shareholders and customers, including:<br> • access to internet banking and online<br>investing services;<br> • details on Westpac’s products and services;<br> • company history, results, market releases and<br>news; and<br> • corporate responsibility and Westpac in the<br>community activities.<br>New Zealand<br>Westpac’s New Zealand website<br>www.westpac.co.nz provides:<br> • access to internet banking services;<br> • details on products and services;<br> • economic updates, news and information, key financial<br>results; and<br> • sponsorships and other community activities.<br>Stock exchange listings<br>Westpac ordinary shares are listed on:<br> • Australian Securities Exchange (code WBC);<br> • New Zealand Exchange Limited (code WBC).<br>We do not sponsor or endorse and are not affiliated in any<br>way with trading in our equity securities in any market or<br>under any facility other than direct trading in our ordinary<br>shares listed on the Australian Securities Exchange and<br>New Zealand Exchange Limited.<br>Westpac Investor Relations<br>Investors can access the Investor Centre at<br>www.westpac.com.au/investorcentre. The Investor Centre<br>includes the current Westpac share price and links to the<br>latest ASX announcements.<br>Information other than that relating to your shareholding<br>can be obtained from:<br> • Westpac Investor Relations<br>275 Kent Street<br>Sydney NSW 2000 Australia<br>Telephone: +61 2 9178 2977<br>Email: investorrelations@westpac.com.au<br>Westpac sustainability<br>For further information on Westpac’s sustainability<br>approach, policies and performance please visit<br>westpac.com.au/sustainability<br>Email: sustainability@westpac.com.au<br>Share registrars<br>Shareholders can check and update their information in<br>Westpac’s Share Registrars’ online Investor Centres, see<br>details below. In Australia, broker sponsored holders must<br>contact their broker to amend their address.<br>Australia – Ordinary shares on the main register, Westpac<br>Capital Notes 5, Westpac Capital Notes 7, Westpac Capital<br>Notes 8, Westpac Capital Notes 9 and Westpac Capital<br>Notes 10.<br>Link Market Services Limited1<br>Level 12, 680 George Street<br>Sydney NSW 2000<br>Postal address:<br>Locked Bag A6015,<br>Sydney South NSW 1235, Australia<br>www.linkmarketservices.com.au<br>Shareholder enquiries:<br>Telephone: 1800 804 255 (toll free within Australia)<br>International: +61 1800 804 255<br>Facsimile: +61 2 9287 0303<br>Email: westpac@linkmarketservices.com.au<br>New Zealand – Ordinary shares<br>Link Market Services Limited<br>Level 30 PwC Tower<br>15 Customs Street West<br>Auckland 1010, New Zealand<br>Postal address:<br>P.O. Box 91976,<br>Auckland 1142, New Zealand<br>www.linkmarketservices.co.nz<br>Shareholder enquiries:<br>Telephone: 0800 002 727 (toll free within New Zealand)<br>International: +64 9 375 5998<br>Facsimile: +64 9 375 5990<br>Email: enquiries@linkmarketservices.co.nz<br>1. On 16 May 2024, Link Group was acquired by Mitsubishi UFJ Trust & Banking Corporation. Link Group is now known as MUFG Pension & Market<br>Services. Over the coming months, our registry, Link Market Services Limited will progressively change to MUFG Corporate Markets and will<br>rebrand websites, documentation, and emails you receive as a shareholder. While the name may be changing, we do not expect any material<br>changes to how you interact with the registry.
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360 WESTPAC GROUP 2024 ANNUAL REPORT<br>ADDITIONAL INFORMATION<br>Other Westpac business information<br>Property<br>Occupied premises are primarily in Australia, New Zealand and Pacific including 762 branches (2023: 786) as at<br>30 September 2024. This includes 111 (2023: 82) co-located branches in Australia which support multiple brands.<br>With the exception of 2 freehold branches, all retail premises occupied in Australia and New Zealand are held under<br>commercial leases with terms generally ranging between 12 months and 7 years. The carrying value of our directly<br>owned Corporate and Retail premises and sites was $45 million (2023: $61 million).<br>Head office is located at Westpac Place, 275 Kent Street, Sydney with leases over levels 1-23, allowing continued<br>occupation until 2030. There is also a lease over levels 1-28 of International Tower 2, Barangaroo, Sydney until 2030,<br>of which 9 floors are sublet. Together these sites provide a current capacity for approximately 16,500 staff on a hybrid<br>working basis.<br>In the Sydney metropolitan area, the lease commitment for the corporate office at Kogarah expires in 2034 and provides<br>capacity for approximately 2,000 staff on a hybrid working basis. The lease for 8 levels at 8 Parramatta Square,<br>Parramatta provides capacity for approximately 3,000 staff on a hybrid working basis.<br>In Melbourne, there is a lease over the majority of 150 Collins Street until 2033, providing capacity for approximately<br>2,000 staff.<br>Westpac on Takutai Square is New Zealand’s head office, located at the eastern end of Britomart Precinct near Customs<br>Street in Auckland, contains 26,710 square metres of office space across three buildings. Lease commitment at this site<br>extends to 2031, with two six-year options (for two buildings) and one six-year option to extend on the third building.<br>Significant long-term agreements<br>We have no individual contracts, other than contracts entered into in the ordinary course of business, that would<br>constitute a material contract.<br>Related party disclosures<br>Details of our related party disclosures are set out in Note 34 to the financial statements and details of Directors’<br>interests in securities are set out in the Remuneration Report (page 236) included in the Directors’ Report.<br>Other than as disclosed in Note 34 to the financial statements and the Remuneration Report (page 236), if applicable,<br>loans made to parties related to Directors and other key management personnel of Westpac are made in the ordinary<br>course of business on normal terms and conditions (including interest rates and collateral). Loans are made on the same<br>terms and conditions (including interest rates and collateral) as they apply to other employees and certain customers in<br>accordance with established policy. These loans do not involve more than the normal risk of collectability or present any<br>other unfavourable features.<br>Auditor’s remuneration<br>Auditor’s remuneration, to the external auditor for the years ended 30 September 2024 and 2023 is provided in Note 33<br>to the financial statements.<br>Audit related services<br>Westpac’s Group Finance function monitors the application of the pre-approval process in respect of audit, audit-related<br>and non-audit services provided by PricewaterhouseCoopers (PwC) under Westpac’s Pre-Approval of Engagement of<br>PricewaterhouseCoopers for Audit or Non-Audit Services Policy (‘Pre-Approval Policy’).<br>Group Finance promptly brings to the attention of the Board Audit Committee any exceptions that need to be approved<br>pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.<br>The Pre-Approval Policy is communicated to Westpac’s divisions through publication on the Westpac intranet.<br>During the year ended 30 September 2024, there were no fees paid by Westpac to PwC that required approval by the<br>Board Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 361<br>Other Westpac business information (Continued)<br>Westpac debt programs and issuing shelves<br>Access in a timely and flexible manner to a diverse range of debt markets and investors is provided by the following<br>programs and issuing shelves as at 30 September 2024:<br>Program Limit Issuer(s) Program/Issuing Shelf Type<br>Australia<br>No limit WBC Debt Issuance Program<br>No limit WBC Capital Notes Program<br>New Zealand<br>No limit WNZL Medium Term Note Program<br>Euro Market<br>No limit WBC Euro Commercial Paper and Certificate of Deposit Program<br>USD 20 billion WNZL Euro Commercial Paper and Certificate of Deposit Program<br>USD 70 billion WBC Euro Medium Term Note Program<br>USD 10 billion WSNZLa Euro Medium Term Note Program<br>USD 40 billion WBCb Global Covered Bond Program<br>EUR 5 billion WSNZLc Global Covered Bond Program<br>Japan<br>JPY 750 billion WBC Samurai shelf<br>JPY 750 billion WBC Uridashi shelf<br>United States<br>USD 45 billion WBC US Commercial Paper Program<br>USD 10 billion WSNZLa US Commercial Paper Program<br>USD 35 billion WBC US Medium Term Note Program<br>USD 10 billion WNZL US Medium Term Note Program<br>No limit WBC (NY Branch) Certificate of Deposit Program<br>No limit WBC US Securities and Exchange Commission registered shelves<br>a. Notes issued under this program by Westpac Securities NZ Limited, London branch are guaranteed by Westpac New Zealand Limited, its<br>parent company.<br>b. Notes issued under this program are guaranteed by BNY Trust Company of Australia Limited as trustee of the Westpac Covered Bond Trust.<br>c. Notes issued under this program by Westpac Securities NZ Limited, London branch are guaranteed by Westpac New Zealand Limited, its<br>parent company, and Westpac NZ Covered Bond Limited.
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362 WESTPAC GROUP 2024 ANNUAL REPORT<br>ADDITIONAL INFORMATION<br>Other Westpac business information<br>Commitments<br>Contractual obligations and commitments<br>In connection with our operating activities we enter into certain contractual obligations and commitments. The following<br>table shows our significant contractual obligations as at 30 September 2024:<br>$m Up to 1 year<br>Over 1 year to<br>3 years<br>Over 3 years to<br>5 years Over 5 years Total<br>On balance sheet long-term debta 27,583 51,400 43,800 14,173 136,956<br>Lease liabilities 430 746 580 460 2,216<br>Total contractual cash obligations 28,013 52,146 44,380 14,633 139,172<br>a. Refer to Note 13 to the financial statements for details of on balance sheet long-term debt.<br>The above table excludes deposits and other liabilities taken in the normal course of banking business and short-term<br>and undated liabilities.<br>Commercial commitments1<br>The following table shows our significant commercial commitments as at 30 September 2024:<br>$m Up to 1 year<br>Over 1 year to<br>3 years<br>Over 3 years to<br>5 years Over 5 years Total<br>Letters of credit and financial guarantees 5,306 4,037 618 3,157 13,118<br>Commitments to extend credit 63,270 39,257 18,956 77,393 198,876<br>Other - 67 - 50 117<br>Total undrawn credit commitments 68,576 43,361 19,574 80,600 212,111<br>Financial reporting<br>Internal control over financial reporting<br>The US Congress passed the Public Company Accounting Reform and Investor Protection Act in July 2002, which is<br>commonly known as the Sarbanes-Oxley Act of 2002 (SOx). SOx is a wide ranging piece of US legislation concerned<br>largely with financial reporting and corporate governance. We are obligated to comply with SOx by virtue of being a<br>foreign registrant with the SEC and we have established procedures designed to comply with all applicable requirements<br>of SOx.<br>Disclosure controls and procedures<br>Our management, with the participation of our CEO and CFO, evaluated the effectiveness of the design and operation of<br>our disclosure controls and procedures (as defined in Rule 13a-15(e) under the US Securities Exchange Act of 1934) as of<br>30 September 2024.<br>Based upon this evaluation, our CEO and CFO have concluded that the design and operation of our disclosure controls<br>and procedures were effective as of 30 September 2024.<br>Management’s report on internal control over financial reporting<br>Rule 13a-15(a) under the US Securities Exchange Act of 1934 requires us to maintain an effective system of internal<br>control over financial reporting. Refer to the sections headed ‘Management’s report on internal control over financial<br>reporting’ and ‘Report of independent registered public accounting firm’ in Section 3 for those reports.<br>Changes in our internal control over financial reporting<br>There has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) of the US Securities<br>Exchange Act of 1934) for the year ended 30 September 2024 that has been identified and that has materially affected,<br>or is reasonably likely to materially affect, our internal control over financial reporting.<br>1. The numbers in this table are notional amounts (refer to Note 25 to the financial statements).
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 363<br>GLOSSARY OF ABBREVIATIONS AND DEFINED TERMS<br>Shareholder value<br>Average ordinary equity Average total equity less average non-controlling interests.<br>Average tangible ordinary equity Average ordinary equity less intangible assets (excluding capitalised software).<br>Average total equity The average balance of shareholders’ equity, including non-controlling interests.<br>Dividend payout ratio Current period ordinary dividend paid/declared on issued shares (net of Treasury shares) divided by the net<br>profit attributable to owners of WBC (adjusted for RSP dividends).<br>Earnings per ordinary share • Basic earnings per ordinary share is calculated by dividing the net profit attributable to owners of<br>WBC by the weighted average number of ordinary shares on issue during the period, adjusted for<br>treasury shares.<br> • Diluted earnings per ordinary share is calculated by adjusting the basic earnings per ordinary share by<br>assuming all dilutive potential ordinary shares are converted.<br>Fully franked dividends per<br>ordinary share (cents)<br>Dividends paid out of retained profits which carry a credit for Australian company income tax paid<br>by Westpac.<br>Net tangible assets per share Net tangible assets (total equity less goodwill and other intangible assets less non-controlling interests)<br>divided by the number of ordinary shares on issue (less Treasury shares held).<br>Pre-provision profit Net interest income plus non-interest income less operating expenses.<br>Return on average ordinary<br>equity (ROE)<br>Net profit attributable to the owners of WBC adjusted for RSP dividends (annualised where applicable)<br>divided by average ordinary equity.<br>Return on average tangible<br>ordinary equity (ROTE)<br>Net profit attributable to the owners of WBC adjusted for RSP dividends (annualised where applicable)<br>divided by average tangible ordinary equity.<br>Weighted average ordinary shares Weighted average number of fully paid ordinary shares listed on the Australian Stock Exchange for the<br>relevant period less Westpac shares held by Westpac (‘Treasury shares’).<br>Productivity and efficiency<br>Expense to income ratio Operating expenses divided by net operating income.<br>Expense to income ratio (ex<br>Notable Items) Operating expenses excluding Notable Items divided by net operating income excluding Notable Items.<br>Full time equivalent<br>employees (FTE)<br>A calculation based on the number of hours worked by full and part-time employees as part of their normal<br>duties. For example, the full time equivalent of one FTE is 76 hours paid work per fortnight.<br>Revenue per FTE Total operating income divided by the average number of FTE for the period.<br>Business Performance<br>Average Where possible, daily balances are used to calculate the average balance for the period.<br>Average interest bearing liabilities The average balance of liabilities owed by Westpac that incur an interest expense. Where possible, daily<br>balances are used to calculate the average balance for the period.<br>Average interest earning assets The average balance of assets held by Westpac that generate interest income. Where possible, daily<br>balances are used to calculate the average balance for the period.<br>Core NIM Calculated by dividing net interest income excluding Notable Items and Treasury & Markets (annualised<br>where applicable) by average interest earning assets.<br>Group NIM/Net interest margin Calculated by dividing net interest income (annualised where applicable) by average interest earning assets.<br>Net profit Net profit attributable to owners of WBC.<br>TSR Total shareholder return.<br>Capital Adequacy<br>Australian Prudential Regulation<br>Authority (APRA) leverage ratio<br>Tier 1 capital divided by ‘exposure measure’ and expressed as a percentage. ‘Exposure measure’ is the sum<br>of on balance sheet exposures, derivative exposures, securities financing transaction (SFT) exposures and<br>non-market related off balance sheet exposures.<br>Common equity tier 1 (CET1)<br>capital ratio Total common equity capital divided by risk weighted assets, as defined by APRA.<br>Internationally comparable<br>capital ratios<br>Internationally comparable methodology references the ABA study on the comparability of APRA’s capital<br>framework released on 10 March 2023.<br>Risk weighted assets (RWA) Assets (both on and off-balance sheet) are risk weighted according to each asset’s inherent potential for<br>default and what the likely losses would be in case of default. In the case of non-asset backed risks (i.e.<br>market, IRRBB and operational risk), RWA is determined by multiplying the capital requirements for those<br>risks by 12.5.<br>Credit risk weighted assets<br>(Credit RWA)<br>Credit risk weighted assets represent risk weighted assets (on-balance sheet and off-balance sheet) that<br>relate to credit exposures and therefore exclude market risk, operational risk, IRRBB and other assets.<br>Business lending Includes credit exposures not captured elsewhere, and where the borrower’s annual turnover is below<br>$75 million.<br>Corporate Exposures to corporate borrowers that do not fall within the definition of Large Corporate, Property<br>Finance, Specialised Lending, Business Lending or Small Business exposures.<br>Financial institution Includes exposure to entities whose primary dealings relates to management of financial assets, lending,<br>factoring, leasing provision of credit enhancements, securitisation, investments, financial custody, central<br>counter party services and proprietary trading.<br>Large corporate Exposures to counter parties with consolidated annual revenue (of the counterparty or group that the<br>counter party consolidates into) exceeding $750 million.
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364 WESTPAC GROUP 2024 ANNUAL REPORT<br>GLOSSARY OF ABBREVIATIONS AND DEFINED TERMS<br>Capital Adequacy<br>New Zealand Overseas banking subsidiary regulated by the RBNZ.<br>Property finance Exposures to borrowers where repayments depend primarily on the cash flows generated by the property or<br>other real estate assets owned by the borrower.<br>Securitisation Exposures relating to Westpac’s involvement in securitisation activities range from a seller of its own assets<br>to an investor in third party transactions and include the provision of securitisation services for its clients.<br>Small business Program-managed business exposures typically below $1.5 million in value. Program-managed exposures are<br>managed on a statistical basis according to pre-determined objective criteria.<br>Sovereign Exposures to Australian and overseas central and sub-national governments, and central banks.<br>Specialised lending Includes exposures to project and object finance lending. Project finance and object finance rely primarily<br>on the revenues generated by a project, or equipment asset respectively, both as a source of repayment and<br>as security for the loan. Excludes Property Finance exposures.<br>Operational risk The risk of loss resulting from inadequate or failed internal processes, people and systems or from external<br>events, including legal risk but excluding strategic or reputational risk.<br>Tier 1 capital ratio Total Tier 1 capital divided by risk weighted assets, as defined by APRA.<br>Total regulatory capital ratio Total regulatory capital divided by risk weighted assets, as defined by APRA.<br>Funding and liquidity<br>Committed Liquidity Facility (CLF) Facility made available by the RBA to cover the shortfall in Australian dollars between the ADI's holding<br>of HQLA and net cash outflows, subject to qualifying conditions. The facility was phased out by 1 January<br>2023. The CLF was treated as an ALA for Westpac's LCR calculation.<br>Deposit to loan ratio Customer deposits divided by net loans.<br>Funding for Lending<br>Programme (FLP)<br>A facility that was established by the RBNZ in December 2020 to provide 3 year term funding to eligible<br>New Zealand institutions via repurchase transactions, subject to qualifying conditions, to help support<br>lending to New Zealand customers. The facility closed to new draw downs in December 2022.<br>High Quality Liquid Assets (HQLA) Assets which meet APRA’s criteria for inclusion as HQLA in the numerator of the LCR.<br>Liquid assets HQLA and non LCR qualifying liquid assets, but excludes internally securitised assets that are eligible for a<br>repurchase agreement with the RBA and the RBNZ.<br>Liquidity Coverage Ratio (LCR) An APRA requirement to maintain an adequate level of unencumbered high quality liquid assets, to meet<br>liquidity needs for a 30 calendar day period under an APRA-defined severe stress scenario. Absent a<br>situation of financial stress, the value of the LCR must not be less than 100%. LCR is calculated as the<br>percentage ratio of stock of HQLA, and qualifying RBNZ securities over the total net cash out-flows in a<br>modelled 30 day defined stressed scenario.<br>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<br>stable funding (RSF) defined by APRA. The amount of ASF is the portion of an ADI’s capital and liabilities<br>expected to be a reliable source of funds over a one year time horizon. The amount of RSF is a function of<br>the liquidity characteristics and residual maturities of an ADI’s assets and off-balance sheet activities. ADIs<br>must maintain an NSFR of at least 100%.<br>Term Funding Facility (TFF) A facility that was established by the RBA in March 2020 to provide 3 year term funding to Australian<br>ADIs via repurchase transactions, subject to qualifying conditions, to help support lending to Australian<br>businesses. The facility closed to new draw downs in June 2021.<br>Term funding from central banks Term funding from central banks includes the drawn balances of the RBA TFF and the RBNZ FLP and Term<br>Lending Facility.<br>Wholesale funding Wholesale funding includes debt issues, loan capital, certificates of deposit, term funding from central banks<br>and interbank placements.<br>Credit quality<br>Collectively assessed<br>provisions (CAPs)<br>Collectively assessed provisions for expected credit loss under AASB 9 represent the Expected Credit<br>Loss (ECL) which is collectively assessed in pools of similar assets with similar risk characteristics. This<br>incorporates forward-looking information and does not require an actual loss event to have occurred for an<br>impairment provision to be recognised.<br>Default Credit exposures that are non-performing.<br>Exposure at default (EAD) The estimated outstanding amount of credit exposure at the time of the default.<br>Gross impaired exposures<br>provisions to gross<br>impaired exposures<br>Impairment provisions relating to impaired exposures include individually assessed provisions plus the<br>proportion of the collectively assessed provisions that relate to impaired exposures.
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FINANCIAL<br>STATEMENTS EXHIBITS INDEX STRATEGIC REVIEW<br>PERFORMANCE<br>REVIEW<br>SHAREHOLDER<br>INFORMATION 365<br>Credit quality<br>Impaired exposures Includes exposures that have deteriorated to the point where full collection of interest and principal is in<br>doubt, based on an assessment of the customer’s outlook, cash flow, and the net realisation of value of<br>assets to which recourse is held:<br> • Facilities 90 days or more past due, and full recovery is in doubt: exposures where contractual payments<br>are 90 or more days in arrears and the net realisable value of assets to which recourse is held<br>may not be sufficient to allow full collection of interest and principal, including overdrafts or other<br>revolving facilities that remain continuously outside approved limits by material amounts for 90 or more<br>calendar days;<br> • Non-accrual facilities: exposures with individually assessed impairment provisions held against them,<br>excluding restructured loans;<br> • Restructured facilities: exposures where the original contractual terms have been formally modified<br>to provide for concessions of interest or principal for reasons related to the financial difficulties of<br>the customer;<br> • Other assets acquired through security enforcement (includes other real estate owned): includes the<br>value of any other assets acquired as full or partial settlement of outstanding obligations through the<br>enforcement of security arrangements; or<br> • Any other facilities where the full collection of interest and principal is in doubt.<br>Impairment charges/(benefit) to<br>average loans Calculated as impairment charges (annualised where applicable) divided by average gross loans.<br>Individually assessed<br>provisions (IAPs)<br>Provisions raised for losses on loans that are known to be impaired and are assessed on an individual basis.<br>The estimated losses on these impaired loans is based on expected future cash flows discounted to their<br>present value and, as this discount unwinds, interest will be recognised in the income statement.<br>Loss given default (LGD) The loss that is expected to arise in the event of a default.<br>Non-performing not<br>impaired exposures<br>Includes those credit exposures that are in default, but where it is expected that the full value of principal<br>and accrued interest can be collected, generally by reference to the value of security held.<br>Performing exposures Credit exposures that are not non-performing.<br>Probability of default (PD) The probability that a counter party will default.<br>Provision for expected credit<br>losses (ECL)<br>Expected credit losses (ECL) are a probability-weighted estimate of the cash shortfalls expected to result<br>from defaults over the relevant time frame. They are determined by evaluating a range of possible outcomes<br>and taking into account the time value of money, past events, current conditions and forecasts of future<br>economic conditions.<br>Stage 1: 12 months ECL<br>- performing<br>For financial assets where there has been no significant increase in credit risk since origination a provision<br>for 12 months expected credit losses is recognised. Interest revenue is calculated on the gross carrying<br>amount of the financial asset.<br>Stage 2: Lifetime ECL - performing For financial assets where there has been a significant increase in credit risk since origination but where the<br>asset is still performing a provision for lifetime expected losses is recognised. Interest revenue is calculated<br>on the gross carrying amount of the financial asset.<br>Stage 3: Lifetime ECL - non-performing<br>For financial assets that are non-performing a provision for lifetime expected losses is recognised.<br>Interest revenue is calculated on the carrying amount net of the provision for ECL rather than the gross<br>carrying amount.<br>Stressed exposures Watchlist and substandard credit exposures plus non-performing exposures.<br>Total committed exposure (TCE) Represents the sum of the committed portion of direct lending (including funds placement overall and<br>deposits placed), contingent and pre-settlement risk plus the committed portion of secondary market<br>trading and underwriting risk.<br>Watchlist and substandard Loan facilities where customers are experiencing operating weakness and financial difficulty but are not<br>expected to incur loss of interest or principal.<br>Sustainability<br>ESG Environment, social and governance<br>FPIC Free, Prior and Informed Consent<br>NZBA Net-Zero Banking Alliance<br>OHI Organisational Health Index<br>RAP Reconciliation Action Plan<br>TNFD Taskforce on Nature-related Financial Disclosures
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366 WESTPAC GROUP 2024 ANNUAL REPORT<br>GLOSSARY OF ABBREVIATIONS AND DEFINED TERMS<br>Other<br>AAS Australian Accounting Standards<br>AASB Australian Accounting Standards Board<br>ABA Australian Banking Association<br>ACCC Australian Competition and Consumer Commission<br>ADI Authorised Deposit-taking Institution<br>AGM Annual General Meeting<br>AI Artificial intelligence<br>ALM Asset and Liability Management<br>APRA Australian Prudential Regulation Authority<br>APS Australian Prudential Standard<br>ASIC Australian Securities and Investments Commission<br>ASX Australian Securities Exchange<br>ATM Automated Teller Machine<br>ATO Australian Taxation Office<br>AUSTRAC Australian Transaction Reports and Analysis Centre<br>BBSW Bank bill swap rate<br>BCCC The Banking Code Compliance Committee<br>bps Basis points<br>CORE program Customer Outcomes and Risk Excellence<br>Credit Value Adjustment (CVA) CVA adjusts the fair value of over-the-counter derivatives for credit risk. CVA is employed on the majority<br>of derivative positions and reflects the market view of the counterparty credit risk. A Debit Valuation<br>Adjustment is employed to adjust for our own credit risk.<br>CTF Counter-terrorism financing<br>Derivative Valuation<br>Adjustment (DVA) DVA includes CVA and FVA.<br>DRP Dividend Reinvestment Plan<br>D-SIB Domestic systemically important bank<br>EIP Executive incentive plan<br>FATCA Foreign Account Tax Compliance Act<br>First Half 2024 (1H24) Six months ended 31 March 2024<br>Full Year 2023 (FY23) Twelve months ended 30 September 2023<br>Full Year 2024 (FY24) Twelve months ended 30 September 2024<br>Funding Value Adjustment (FVA) FVA relates to the funding cost or benefit associated with the uncollateralised portion of the<br>derivative portfolio.<br>FVIS Fair value through income statement<br>FVOCI Fair value through other comprehensive income<br>FX Foreign exchange<br>IASB International Accounting Standards Board<br>IFRS International Financial Reporting Standards<br>IRRBB Interest Rate Risk in the Banking Book<br>LCH London Clearing House<br>LTVR Long term variable reward<br>NCI Non-controlling interests<br>Non-interest earning/bearing Instruments which do not carry an entitlement to interest<br>NPS Net promoter score<br>OAIC The Office of the Australian Information Commissioner<br>OCI Other comprehensive income<br>OHI Organisational Health Index<br>OTC Over the counter<br>Prior period Refers to the twelve months ended 30 September 2023<br>RBA Reserve Bank of Australia<br>RBNZ Reserve Bank of New Zealand<br>RSP Restricted Share Plan<br>Runoff Scheduled and unscheduled repayments and debt repayments, net of redraws<br>Second Half 2024 (2H24) Six months ended 30 September 2024<br>Segment reporting Segment reporting is presented on a management reporting basis. Internal charges and transfer pricing<br>adjustments are included in the performance of each segment reflecting the management structure<br>rather than the legal entity (these results cannot be compared to results for individual legal entities).<br>Where management reporting structures or accounting classifications have changed, financial results for<br>comparative periods have been restated and may differ from results previously reported. Overhead costs are<br>allocated to revenue generating segments.<br>Westpac’s internal transfer pricing frameworks facilitate risk transfer, profitability measurement, capital<br>allocation and segment alignment, tailored to the jurisdictions in which Westpac operates. Transfer pricing<br>allows Westpac to measure the relative contribution of products and segments to Westpac’s interest margin<br>and other dimensions of performance. Key components of Westpac’s transfer pricing frameworks are funds<br>transfer pricing for interest rate and liquidity risk and allocation of basis and contingent liquidity costs,<br>including capital allocation.<br>SPPI Solely payments of principal and interest<br>STVR Short term variable reward<br>UNITE program A business-led, technology-enabled simplification program<br>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<br>confidence based on historical market movements.<br>WIB Westpac Institutional Bank<br>WNZL Westpac New Zealand Limited
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Exhibit 16.1

368 WESTPAC GROUP 2024 ANNUAL REPORT

EXHIBIT 16.1

Letter from PricewaterhouseCoopers to the SEC

November 5, 2024

Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549

Commissioners:

We have read the statements made by Westpac Banking Corporation pursuant to Item 16F of Form 20-F (copy attached), which we understand will be filed with the Securities and Exchange Commission as part of Westpac Banking Corporation’s 2024 Annual Report on Form 20-F dated November 5, 2024. We agree with the statements concerning our Firm contained therein.

Very truly yours,

/s/ PricewaterhouseCoopers

Sydney, Australia