Westpac Banking Corp 6-K, filed Aug 17, 2021

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

August 17, 2021

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Commission File Number1-10167

WESTPAC BANKING CORPORATION

(Translation of registrant’s name into English)

275 KENT STREET, SYDNEY, NEW SOUTH WALES 2000, AUSTRALIA

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports

under cover of Form 20-F or Form 40-F.

Form 20-F ____x_____ Form 40-F __________

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): __________

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ___________

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Incorporation by Reference

The information contained in Exhibit No. 1 to this Report on Form 6-K shall be incorporated by reference in the prospectuses relating to the Registrant’s securities contained in the Registrant’s Registration Statements on Form F-3 (File Nos. 333-228295 and 333-228294), as such prospectuses may be amended or supplemented from time to time.

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Index to Exhibits

ExhibitNo.	Description
1	Westpac Group June 2021 Pillar 3 Report

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Disclosure regarding forward-looking statements

The information contained in this Report on Form 6-K contains statements that constitute “forward-looking statements” within the meaning of section 21E of the U.S. Securities Exchange Act of 1934. Forward-looking statements are statements about matters that are not historical facts. Forward-looking statements appear in a number of places in this Report and include statements regarding our intent, belief or current expectations with respect to our business and operations, macro and micro economic and market conditions, results of operations and financial condition.

We use words such as ‘will’, ‘may’, ‘expect’, ‘intend’, ‘seek’, ‘would’, ‘should’, ‘could’, ‘continue’, ‘plan’, ‘estimate’, ‘anticipate’, ‘believe’, ‘probability’, ‘risk’, ‘aim’ or other similar words to identify forward-looking statements. These forward-looking statements reflect our current views with respect to future events and are subject to change, certain risks, uncertainties and assumptions which are, in many instances, beyond our control and have been made based upon management’s expectations and beliefs concerning future developments and their potential effect upon us. There can be no assurance that future developments will be in accordance with our expectations or that the effect of future developments on us will be those anticipated. Should one or more of the risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results could differ materially from the expectations described in this Report. Factors that may impact on the forward-looking statements made include, but are not limited to, those described in the section entitled ‘Risk factors’ in Westpac’s 2021 Interim Financial Results on Form 6-K filed with the U.S. Securities and Exchange Commission, as well as the ongoing impact of COVID-19. When relying on forward-looking statements to make decisions with respect to us, investors and others should carefully consider such factors and other uncertainties and events. We are under no obligation, and do not intend, to update any forward-looking statements contained in this Report, whether as a result of new information, future events or otherwise, after the date of this Report.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		WESTPAC<br> BANKING CORPORATION
		(Registrant)
Date:	August<br> 17, 2021	By:	/s/<br> Yvette Adiguzel
			Yvette<br> Adiguzel
			Tier<br> One Attorney

Exhibit 1

Pillar 3 report<br><br> <br>Table<br> of contents
Structure of Pillar 3 report
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Executive summary	3
Introduction	5
Group structure	7
Capital overview	8
Leverage ratio	12
Credit risk exposures	13
Securitisation	17
Liquidity coverage ratio	20
Appendix
Appendix I	<br> APS330 Quantitative requirements	21
Disclosure regarding forward-looking statements	22

In this report references to ‘Westpac’, ‘Westpac Group’, ‘the Group’, ‘we’, ‘us’ and ‘our’ are to Westpac

Banking Corporation and its controlled entities (unless the context indicates otherwise).

In this report, unless otherwise stated or the context otherwise requires, references to ‘$’, ‘AUD’ or ‘A$’ are to Australian dollars.

Any discrepancies between totals and sums of components in tables contained in this report are due to rounding.

In this report, unless otherwise stated, disclosures reflect the Australian Prudential Regulation Authority’s (APRA) implementation of Basel III.

Information contained in or accessible through the websites mentioned in this 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.

2	Westpac Group June 2021 Pillar 3 Report
Pillar 3 report<br><br> <br>Executive summary
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Key capital ratios

%	30 June 2021	31 March 2021	30 June 2020
Level 2 Regulatory capital structure
Common equity Tier 1 capital ratio	12.0	12.3	10.8
Additional Tier 1 capital<br> ratio	2.2	2.2	2.1
Tier 1 capital ratio	14.2	14.5	12.9
Tier 2 capital	4.2	3.9	3.1
Total regulatory capital ratio	18.4	18.4	16.0
APRA leverage<br> ratio	5.9	6.3	5.9
Level 1 Common<br> equity Tier 1 capital ratio	12.2	12.6	11.1

Westpac’s Common equity Tier 1 (CET1) capital ratio was 12.0% at 30 June 2021. The CET1 ratio was lower than the CET1 ratio of 12.3% at 31 March 2021 due to payment of the 2021 interim dividend and a 2% increase in risk weighted assets (RWA). These impacts were partly offset by earnings over the quarter and divestments related to the sale of Coinbase Inc shares.

Risk Weighted Assets

$m	30 June 2021	31 March 2021	30 June 2020
Risk weighted assets at Level 2
Credit risk	358,249	347,127	373,675
Market risk	6,642	9,490	9,486
Operational risk	54,090	54,090	54,090
Interest rate risk in the banking book	12,155	11,998	6,849
Other	6,263	6,194	6,464
Total RWA	437,399	428,899	450,564
Total Exposure at Default	1,110,454	1,076,503	1,058,269

Total RWA increased $8.5 billion or 2.0% over the quarter from higher credit risk RWA partly offset by a decrease in non-credit RWA. The $11.1 billion increase in credit risk RWA included:

•	A $4.7 billion increase from higher lending, mostly<br>residential mortgage lending and from a rise in corporate lending facilities;
•	A $6.9 billion increase from mortgage RWA. At 30 June<br>2021 Westpac has chosen to apply an overlay to our modelled outcomes to increase the mortgage risk weight floor to 25%. This is to reflect<br>the anticipated unwind of temporary COVID-19 stimulus effects and our expectation that mortgage risk weights will rise from APRA’s<br>capital changes;
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•	Foreign currency translation impacts increased RWA<br>by $0.8 billion mostly from the depreciation of the A$ against the and NZ$; partially offset by;
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•	A $0.6 billion decrease from improved credit quality metrics; and
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•	A decrease in credit RWA associated with derivative<br>exposures (counterparty credit risk and mark-to-market related credit risk) of $0.7 billion.
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Non-credit risk RWA was $2.6 billion lower, mainly due to a $2.8 billion decrease in market risk RWA as the volatile period around March 2020 (related to the onset of COVID-19) rolled out of the one-year Value at Risk (VaR) lookback window.

Tier 2 Capital movements for third quarter 2021

On 13 May 2021, Westpac issued EUR 1.0 billion (approximately A$1.6 billion) Tier 2 capital instruments increasing our total capital ratio by approximately 37 basis points.

Exposure at Default

Exposure at default (EAD) increased $34.0 billion over the quarter, primarily due to an increase in exposure to sovereigns ($18.3 billion) due to higher liquid assets, residential mortgage lending ($12.5 billion) and corporate lending facilities ($2.9 billion).

	Westpac<br> Group June 2021 Pillar 3 Report	3
Pillar 3 report<br><br> <br>Executive summary
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Leverage Ratio

Westpac’s leverage ratio was 5.9%, down 35 basis points since 31 March 2021. The decline in the ratio was mainly due to an increase in total exposures^1^ by 5.4%.

Liquidity Coverage Ratio (LCR)

Westpac’s average LCR for the quarter ending 30 June 2021 was 127% (quarter ending 31 March 2021: 124%)^2^.

^1^	As defined under Attachment D of APS110: Capital Adequacy.
^2^	Calculated as a simple average of the daily observations over the relevant<br>quarter.
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4	Westpac Group June 2021 Pillar 3 Report
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Pillar<br> 3 report<br><br> <br>Introduction
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Westpac Banking Corporation is an Authorised Deposit–taking Institution (ADI) subject to regulation by the Australian Prudential Regulation Authority (APRA). APRA has accredited Westpac to apply advanced models permitted by the Basel III global capital adequacy regime to the measurement of its regulatory capital requirements. Westpac uses the Advanced Internal Ratings-Based approach (Advanced IRB) for credit risk and the Advanced Measurement Approach (AMA) for operational risk.

In accordance with APS330 Public Disclosure, financial institutions that have received this accreditation, such as Westpac, are required to disclose prudential information about their risk management practices on a semi-annual basis. A subset of this information must be disclosed quarterly.

In addition to this report, the regulatory disclosures section of the Westpac website^1^ contains the reporting requirements for:

•	Capital instruments under Attachment B of APS330; and
•	The identification of potential Global-Systemically Important Banks (G-SIB)<br>under Attachment H of APS330 (disclosed annually).
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Capital instruments disclosures are updated when:

•	A new capital instrument is issued that will form part of regulatory capital;<br>or
•	A capital instrument is redeemed, converted into CET1 capital, written<br>off, or its terms and conditions are changed.
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^1^ http://www.westpac.com.au/about-westpac/investor-centre/financial-information/regulatory-disclosures/

	Westpac<br> Group June 2021 Pillar 3 Report	5
Pillar<br> 3 report<br><br> <br>Group structure
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APRA applies a tiered approach to measuring Westpac’s capital adequacy^1^ by assessing financial strength at three levels:

•	Level 1, comprising Westpac Banking Corporation and its subsidiary entities<br>that have been approved by APRA as being part of a single 'Extended Licensed Entity' (ELE) for the purposes of measuring capital adequacy;
•	Level 2, the consolidation of Westpac Banking Corporation and all its subsidiary<br>entities except those entities specifically excluded by APRA regulations. The head of the Level 2 group is Westpac Banking Corporation;<br>and
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•	Level 3, the consolidation of Westpac Banking Corporation and all its subsidiary<br>entities.
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Unless otherwise specified, all quantitative disclosures in this report refer to the prudential assessment of Westpac’s financial strength on a Level 2 basis^2^.

The Westpac Group

The following diagram shows the Level 3 conglomerate group and illustrates the different tiers of regulatory consolidation.

Accounting consolidation^3^

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries (including structured entities) controlled by Westpac. Westpac and its subsidiaries are referred to collectively as the ‘Group’. The effects of all transactions between entities in the Group are eliminated on consolidation. Control exists when the parent entity is exposed to, or has rights to, variable returns from its involvement with an entity, and has the ability to affect those returns through its power over that entity. Subsidiaries are fully consolidated from the date on which control commences and they are no longer consolidated from the date that control ceases.

Group entities excluded from the regulatory consolidationat Level 2

Regulatory consolidation at Level 2 covers the global operations of Westpac and its subsidiary entities, including other controlled banking, securities and financial entities, except for those entities involved in the following business activities:

•	insurance;
•	acting as manager, responsible entity, approved trustee, trustee or similar<br>role in relation to funds management;
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•	non-financial (commercial) operations; or
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•	special purpose entities to which assets have been transferred in accordance<br>with the requirements of APS120 Securitisation.
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Retained earnings and equity investments in subsidiary entities excluded from the consolidation at Level 2 are deducted from capital, with the exception of securitisation special purpose entities.

^1^	APS110 Capital Adequacy outlines the overall framework adopted by APRA for the purpose of assessing the<br>capital adequacy of an ADI.
^2^	Impaired assets and provisions held in Level 3 entities are excluded from<br>the tables in this report.
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^3^	Refer to Note 31 of Westpac’s 2020 Annual Report for further details.
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6	Westpac Group June 2021 Pillar 3 Report
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Pillar 3 report<br><br> <br>Group structure
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Subsidiary banking entities

Westpac New Zealand Limited (WNZL), a wholly owned subsidiary entity, is a registered bank incorporated in New Zealand and regulated by the Reserve Bank of New Zealand (RBNZ). WNZL uses the Advanced IRB approach for credit risk and the AMA for operational risk. Other subsidiary banking entities in the Group include Westpac Europe Limited. For the purposes of determining Westpac’s capital adequacy subsidiary banking entities are consolidated at Level 2.

Restrictions and major impediments on the transfer of fundsor regulatory capital within the Group Minimum capital (‘thin capitalisation’) rules

Tax legislation in most jurisdictions in which the Group operates prescribes minimum levels of capital that must be retained in that jurisdiction to avoid a portion of the interest costs incurred in the jurisdiction ceasing to be tax deductible. Capital for these purposes includes both contributed capital and non-distributed retained earnings. Westpac seeks to maintain sufficient capital/retained earnings to comply with these rules.

Tax costs associated with repatriation

Repatriation of retained earnings (and capital) may result in tax being payable in either the jurisdiction from which the repatriation occurs or Australia on receipt of the relevant amounts. This cost would reduce the amount actually repatriated.

Intra-group exposure limits

Exposures to related entities are managed within the prudential limits prescribed by APRA in APS222 Associations with Related Entities^1^. Westpac has an internal limit structure and approval process governing credit exposures to related entities. This limit structure and approval process, combined with APRA’s prudential limits, is designed to reduce the potential for unacceptable contagion risk.

Prudential regulation of subsidiary entities

Certain subsidiary banking, insurance and trustee entities are subject to local prudential regulation in their own right, including capital adequacy requirements and investment or intra-group exposure limits. Westpac seeks to ensure that its subsidiary entities are adequately capitalised and adhere to regulatory requirements at all times. There are no capital deficiencies in subsidiary entities excluded from the regulatory consolidation at Level 2.

On 23 March 2021, the RBNZ issued two notices to WNZL under section 95 of the Reserve Bank of New Zealand Act 1989 requiring WNZL to supply two external review reports to the RBNZ. The reports are required to address concerns raised by the RBNZ around WNZL’s risk governance processes following various compliance issues reported over recent years. Those issues include non-compliance with the RBNZ’s liquidity, capital adequacy and outsourcing requirements (as previously reported in WNZL’s RBNZ disclosure statements) and IT outages. While work has been underway to address these areas for some time, more work is required to meet WNZL’s expectations and those of the regulator.

With effect from 31 March 2021, the RBNZ amended WNZL's conditions of registration to apply an overlay to WNZL's liquidity mismatch ratios^2^. The overlay requires WNZL to discount the value of its liquid assets by approximately 14% which as at 30 June 2021 was NZ$2.2 billion. This overlay will apply until the RBNZ is satisfied that:

•	the RBNZ's concerns regarding liquidity risk controls have been resolved;<br>and
•	sufficient progress has been made to address risk culture issues in WNZL's<br>Treasury and Market and Liquidity Risk functions.
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The RBNZ have appointed independent advisers to supply the report on liquidity risk controls and risk culture and the report on the effectiveness of risk governance.

^1^	For the purposes of APS222, subsidiaries controlled by Westpac, other than<br>subsidiaries that form part of the ELE, represent ‘related entities’. Prudential and internal limits apply to intra-group<br>exposures between the ELE and related entities, both on an individual and aggregate basis.
^2^	The mismatch ratio is a measure of a bank’s liquid assets, adjusted<br>for expected cash inflows and outflows during a one-month or one-week period of stress.
	Westpac<br> Group June 2021 Pillar 3 Report	7
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Pillar 3 report<br><br> <br>Capital overview
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Capital management strategy

Westpac’s approach to capital management seeks to ensure that it is adequately capitalised as an ADI. Westpac evaluates its approach to capital management through an Internal Capital Adequacy Assessment Process (ICAAP), the key features of which include:

•	the development of a capital management strategy, including consideration<br>of regulatory minimums, capital buffers and contingency plans;
•	consideration of both regulatory and economic capital requirements;
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•	a stress testing framework that challenges the capital measures, coverage<br>and requirements including the impact of adverse economic scenarios; and
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•	consideration of the perspectives of external stakeholders including rating<br>agencies as well as equity and debt investors.
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During the period of disruption caused by COVID-19, Westpac is operating with the following principles in relation to capital:

•	prioritise maintaining capital strength;
•	in the event of a significant market deterioration Westpac will retain<br>capital to absorb any further potential downside on credit quality and to acknowledge a high degree of uncertainty regarding the length<br>and depth of the stress;
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•	allow for capital flexibility to support lending to customers; and
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•	in line with APRA guidance, Westpac will seek to maintain a buffer above<br>the regulatory requirement including buffers (currently at least 8% for Domestically – Systemically important Banks (D-SIBs) including<br>Westpac).
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These principles take into consideration:

•	current regulatory capital minimums and the capital conservation buffer<br>(CCB), which together are the Total CET1 Requirement. In line with the above, the Total CET1 Requirement for Westpac is at least 8.0%, based<br>upon an industry minimum CET1 requirement of 4.5% plus a capital buffer of at least 3.5% applicable to D-SIBs^1,2^;
•	stress testing to calibrate an appropriate buffer against a downturn; and
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•	quarterly volatility of capital ratios due to the half yearly cycle of<br>ordinary dividend payments.
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Westpac will revise its capital management preferred range once APRA’s review of the capital adequacy framework is finalised.

APRA announcements on capital

On 19 July 2021 APRA announced regulatory support for banks offering temporary financial assistance to borrowers impacted by COVID-19^3^. APRA has outlined that for eligible borrowers, ADIs do not need to treat the period of deferral as a period of arrears or loan restructuring. This will apply to loans that are granted a repayment deferral of up to three months before the end of August 2021. ADIs must still continue to provision for these loans under relevant accounting standards.

In addition, over the quarter APRA has made the following announcement in relation to their capital framework reforms:

•	APRA has released the final revised standard for APS 111 Capital Adequacy:<br>Measurement of Capital effective from 1 January 2022^4^.<br>The final standard includes changes to the parent ADI’s (Level 1) treatment of equity investments in banking and insurance subsidiaries<br>including:
•	Equity investments in subsidiaries (including any Additional Tier 1 and<br>Tier 2 capital investments in subsidiaries) will be risk weighted at 250%, up to a limit of 10% of Level 1 CET1 capital per investment;<br>and
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•	Any equity investments in excess of the 10% limit will be fully deducted<br>from Level 1 CET1 capital in determining Level 1 capital ratios.
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The impact to the Group’s Level 1 ratio on a pro-forma basis at 30 June 2021 is an approximate reduction of 20 basis points. There is no impact from this proposal on the calculation of the Group’s reported regulatory capital ratios on a Level 2 basis.

^1^	Noting that APRA may apply higher CET1 requirements for an individual ADI.
^2^	If an ADI’s CET1 ratio falls below the Total CET1 Requirement (at least<br>8%), it faces restrictions on the distribution of earnings, such as dividends, distribution payments on AT1 capital instruments and discretionary<br>staff bonuses.
^3^	APRA announcement – “APRA announces further regulatory support<br>for loans impacted by COVID-19” dated 19 July 2021.
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^4^	Letter to all authorised deposit taking institutions – “Final<br>revised Prudential Standard: APS 111 Capital Adequacy - Measurement of Capital” dated 5 August 2021.
8	Westpac Group June 2021 Pillar 3 Report
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Pillar 3 report<br><br> <br>Capital overview
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•	APRA is currently proposing a number of changes to embed the ‘unquestionably<br>strong’ level of capital in the capital framework including implementation<br>of Basel III reforms^1^. On 21 July 2021 APRA released further guidance on capital buffers and the calculation of RWA including<br>for specific asset classes. As part of the proposal APRA are intending to increase the capital conservation buffer from 2.5% to 4.0% and<br>introduce a base level for the countercyclical capital buffer of 1.0%. As a result, the CET1 requirement (comprising the minimum requirement<br>and buffers) for the major banks is proposed to increase from 8% to 10.5% from 1 January 2023. We expect further clarity on the changes<br>ahead of 1 January 2023.
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Westpac’s capital adequacy ratios

%	30 June 2021	31 March 2021	30 June 2020
The Westpac Group at Level 2
Common equity Tier 1 capital ratio	12.0	12.3	10.8
Additional Tier 1 capital	2.2	2.2	2.1
Tier 1 capital ratio	14.2	14.5	12.9
Tier 2 capital	4.2	3.9	3.1
Total regulatory capital ratio	18.4	18.4	16.0
The Westpac Group at Level 1
Common equity Tier 1 capital ratio	12.2	12.6	11.1
Additional Tier 1 capital	2.2	2.2	2.1
Tier 1 capital ratio	14.4	14.8	13.2
Tier 2 capital	4.3	4.0	3.2
Total regulatory capital ratio	18.7	18.8	16.4

Westpac New Zealand Limited’s capital adequacy ratios

%	30 June 2021	31 March 2021	30 June 2020
Westpac New Zealand Limited
Common equity Tier 1 capital ratio	13.9	13.4	11.9
Additional Tier 1 capital	2.8	2.8	2.6
Tier 1 capital ratio	16.7	16.2	14.5
Tier 2 capital	2.1	2.0	2.1
Total regulatory capital ratio	18.8	18.2	16.6
^1^	Letter to all authorised deposit<br>taking institutions – “Bank Capital Reforms: Update” dated 21 July 2021
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	Westpac<br> Group June 2021 Pillar 3 Report	9
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Pillar 3 report<br><br> <br>Capital overview
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Capital requirements

This table shows RWA and associated capital requirements^1^ for each risk type included in the regulatory assessment of Westpac’s capital adequacy. More detailed disclosures on the prudential assessment of capital requirements are presented in the following sections of this report.

30 June 2021	IRB	Standardised	Total Risk	Total Capital
$m	Approach	Approach^2^	Weighted Assets	Required^1^
Credit risk
Corporate	68,028	849	68,877	5,510
Business lending	33,528	783	34,311	2,745
Sovereign	2,576	1,232	3,808	305
Bank	5,264	120	5,384	431
Residential mortgages	143,834	3,934	147,768	11,822
Australian credit cards	4,171	-	4,171	334
Other retail	8,844	772	9,616	769
Small business	16,160	-	16,160	1,293
Specialised lending	55,769	377	56,146	4,492
Securitisation	5,801	-	5,801	464
Mark-to-market related credit<br> risk^3^	-	6,207	6,207	497
Total	343,975	14,274	358,249	28,662
Market risk			6,642	531
Operational risk			54,090	4,327
Interest rate risk in the banking book			12,155	972
Other assets^4^			6,263	501
Total			437,399	34,993
31 March 2021	IRB	Standardised	Total Risk	Total Capital
---	---	---	---	---
$m	Approach	Approach^2^	Weighted Assets	Required^1^
Credit risk
Corporate	66,086	849	66,935	5,355
Business lending	34,061	774	34,835	2,787
Sovereign	2,355	1,081	3,436	275
Bank	5,708	132	5,840	467
Residential mortgages	133,938	4,090	138,028	11,042
Australian credit cards	4,279	-	4,279	342
Other retail	9,266	779	10,045	804
Small business	16,097	-	16,097	1,288
Specialised lending	55,314	386	55,700	4,456
Securitisation	5,513	-	5,513	441
Mark-to-market related credit<br> risk^3^	-	6,419	6,419	514
Total	332,617	14,510	347,127	27,771
Market risk			9,490	759
Operational risk			54,090	4,327
Interest rate risk in the banking book			11,998	960
Other assets^4^			6,194	496
Total			428,899	34,313
^1^	Total capital required is calculated as 8% of total risk weighted assets.
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^2^	Westpac’s<br> standardised risk weighted assets are categorised based on their equivalent IRB categories.
^3^	Mark-to-market related credit risk is measured under<br>the standardised approach. It is also known as Credit Valuation Adjustment (CVA) risk.
^4^	Other assets include cash items, unsettled transactions, fixed assets and<br>other non-interest earning assets.
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10	Westpac Group June 2021 Pillar 3 Report
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Pillar 3 report<br><br> <br>Capital overview
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30 June 2020	IRB	Standardised	Total<br> Risk	Total<br> Capital
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$m	Approach	Approach^2^	Weighted<br> Assets	Required^1^
Credit risk
Corporate	76,303	1,012	77,315	6,185
Business lending	37,584	913	38,497	3,080
Sovereign	2,194	1,233	3,427	274
Bank	6,461	63	6,524	522
Residential mortgages	134,425	4,567	138,992	11,119
Australian credit cards	4,332	-	4,332	347
Other retail	10,594	796	11,390	911
Small business	17,638	-	17,638	1,411
Specialised lending	59,114	458	59,572	4,766
Securitisation	5,429	-	5,429	434
Mark-to-market related credit<br> risk^3^	-	10,559	10,559	845
Total	354,074	19,601	373,675	29,894
Market risk			9,486	759
Operational risk			54,090	4,327
Interest rate risk in the banking<br> book			6,849	548
Other assets^4^			6,464	517
Total			450,564	36,045
^1^	Total capital required is calculated as 8% of total risk weighted assets.
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^2^	Westpac’s standardised risk weighted assets are categorised based<br>on their equivalent IRB categories.
^3^	Mark-to-market related credit risk is measured under the standardised approach.<br>It is also known as CVA risk.
^4^	Other assets include cash items, unsettled transactions, fixed assets,<br>and other non-interest earning assets.
	Westpac<br> Group June 2021 Pillar 3 Report	11
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Pillar 3 report<br><br> <br>Leverage ratio disclosure
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Leverage ratio

The following table summarises Westpac’s leverage ratio. This has been determined using APRA’s definition of the leverage ratio as specified in APS110 Capital Adequacy.

$ billion	30 June 2021	31 March 2021	31 December 2020	30 September 2020
Tier 1 Capital	62.2	62.4	61.0	57.9
Total Exposures	1,049.9	995.8	984.3	1,001.8
Leverage ratio	5.9%	6.3%	6.2%	5.8%
12	Westpac Group June 2021 Pillar 3 Report
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Pillar 3 report

Credit risk exposures

Summary credit risk disclosure

														Regulatory
														Expected								Specific				Actual
						Risk				Regulatory				Loss for								Provisions				Losses for
30 June 2021	Exposure				Weighted				Expected				non-defaulted				Impaired				for Impaired				the 9 months
m	at<br> Default				Assets				Loss^1^				exposures				Loans^2^				Loans				ended
Corporate		127,472				68,028				961				418				675				539				56
Business lending		52,922				33,528				680				401				343				179				40
Sovereign		161,510				2,576				2				2				-				-				-
Bank		21,780				5,264				6				6				-				-				-
Residential<br> mortgages		575,339				143,834				1,842				1,103				276				81				54
Australian credit<br> cards		16,048				4,171				186				140				76				47				107
Other retail		12,130				8,844				420				279				246				141				116
Small business		31,658				16,160				579				369				495				207				37
Specialised<br> Lending		65,995				55,769				877				580				60				16				1
Securitisation		29,641				5,801				-				-				-				-				-
Standardised3		15,959				14,274				-				-				68				22				-
Total		1,110,454				358,249				5,553				3,298				2,239				1,232				411

All values are in US Dollars.

															Regulatory
															Expected								Specific				Actual
							Risk				Regulatory				Loss<br> for								Provisions				Losses<br> for
31 March 2021		Exposure				Weighted				Expected				non-defaulted				Impaired				for<br> Impaired				the<br> 6 months
m		at<br> Default				Assets				Loss^1^				exposures				Loans				Loans				ended
Corporate		124,567				66,086				654				431				319				220				56
Business lending		53,052				34,061				750				475				388				198				25
Sovereign		143,237				2,355				2				2				-				-				-
Bank		23,404				5,708				7				7				-				-				-
Residential<br> mortgages		562,798				133,938				1,919				1,126				263				78				44
Australian credit<br> cards		16,459				4,279				202				154				82				49				71
Other retail		12,579				9,266				459				301				277				158				78
Small business		31,941				16,097				613				373				639				229				24
Specialised<br> Lending		64,867				55,314				813				598				39				12				1
Securitisation		28,299				5,513				-				-				-				-				-
Standardised3		15,300				14,510				-				-				64				30				-
Total		1,076,503				347,127				5,419				3,467				2,071				974				299

All values are in US Dollars.

															Regulatory
															Expected								Specific				Actual
							Risk				Regulatory				Loss<br> for								Provisions				Losses<br> for
30 June 2020		Exposure				Weighted				Expected				non-defaulted				Impaired				for<br> Impaired				the<br> 9 months
m		at<br> Default				Assets				Loss^1^				exposures				Loans				Loans				ended
Corporate		135,178				76,303				820				580				425				236				(4)
Business lending		54,710				37,584				805				538				377				206				55
Sovereign		116,800				2,194				1				1				-				-				-
Bank		23,919				6,461				7				7				-				-				-
Residential<br> mortgages		551,420				134,425				1,898				1,125				379				102				96
Australian credit<br> cards		17,649				4,332				269				195				127				75				247
Other retail		14,110				10,594				573				359				387				213				196
Small business		33,099				17,638				669				393				816				294				55
Specialised<br> Lending		64,943				59,114				1,011				790				59				25				1
Securitisation		27,135				5,429				-				-				-				-				-
Standardised3		19,306				19,601				-				-				49				20				1
Total		1,058,269				373,675				6,053				3,988				2,619				1,171				647

All values are in US Dollars.

^1^	Includes regulatory expected losses for defaulted and non-defaulted exposures.
^2^	Increase in impaired mainly driven by one large institutional exposure.
---	---
^3^	Includes mark-to-market related credit risk.
---	---
	Westpac Group June 2021 Pillar 3 Report<br>	13
---	---

Pillar 3 report

Credit risk exposures

Exposure at Default by major type

30 June 2021	On balance				Off-balance sheet								Total Exposure				Average
m	sheet				Non-market<br> related				Market<br> related				at<br> Default				3<br> months ended^1^
Corporate		52,560				61,160				13,752				127,472				126,020
Business lending		39,659				13,263				-				52,922				52,987
Sovereign		124,106				1,435				35,969				161,510				152,374
Bank		12,956				1,949				6,875				21,780				22,592
Residential<br> mortgages		496,954				78,385				-				575,339				569,069
Australian credit<br> cards		6,564				9,484				-				16,048				16,254
Other retail		9,124				3,006				-				12,130				12,355
Small business		24,680				6,978				-				31,658				31,800
Specialised<br> lending		53,087				11,370				1,538				65,995				65,431
Securitisation2		21,775				7,764				102				29,641				28,970
Standardised		12,373				1,060				2,526				15,959				15,630
Total		853,838				195,854				60,762				1,110,454				1,093,482

All values are in US Dollars.

31 March 2021		On<br> balance			Off-balance sheet									Total<br> Exposure				Average
m		sheet				Non-market<br> related				Market<br> related				at<br> Default				6<br> months ended^3^
Corporate		52,808				57,449				14,310				124,567				126,100
Business lending		39,220				13,832				-				53,052				53,786
Sovereign		109,514				1,490				32,233				143,237				137,438
Bank		14,085				1,829				7,490				23,404				22,546
Residential<br> mortgages		486,802				75,996				-				562,798				556,398
Australian credit<br> cards		6,664				9,795				-				16,459				16,731
Other retail		9,467				3,112				-				12,579				13,060
Small business		24,730				7,211				-				31,941				32,410
Specialised<br> lending		52,619				10,598				1,650				64,867				65,297
Securitisation2		20,145				8,033				121				28,299				27,319
Standardised		12,192				1,048				2,060				15,300				16,208
Total		828,246				190,393				57,864				1,076,503				1,067,293

All values are in US Dollars.

30 June 2020		On<br> balance				Off-balance sheet								Total<br> Exposure				Average
m		sheet				Non-market<br> related				Market<br> related				at<br> Default				3<br> months ended^4^
Corporate		61,212				60,146				13,820				135,178				140,854
Business lending		42,209				12,501				-				54,710				54,569
Sovereign		103,877				1,675				11,248				116,800				121,932
Bank		14,237				2,010				7,672				23,919				25,276
Residential<br> mortgages		484,540				66,880				-				551,420				552,643
Australian credit<br> cards		7,268				10,381				-				17,649				18,125
Other retail		10,841				3,269				-				14,110				14,667
Small business		26,023				7,076				-				33,099				33,140
Specialised<br> lending		53,231				9,652				2,060				64,943				65,405
Securitisation2		21,554				5,457				124				27,135				27,616
Standardised		12,838				1,211				5,257				19,306				19,461
Total		837,830				180,258				40,181				1,058,269				1,073,688

All values are in US Dollars.

^1^	Average is based on exposures as at 30 June 2021 and 31 March 2021.
^2^	The EAD associated with securitisations is for the banking book only.
---	---
^3^	Average is based on exposures as at 31 March 2021, 31 December 2020, and<br>30 September 2020.
---	---
^4^	Average is based on exposures as at 30 June 2021 and 31 March 2021.
---	---
14	Westpac Group June 2021 Pillar 3 Report
---	---

Pillar 3 report

Credit risk exposures

Loan impairment provisions

APS220 Credit Quality requires that Westpac report specific provisions and a General Reserve for Credit Loss (GRCL). All Individually Assessed Provisions (IAP) raised under Australian Accounting Standards (AAS) are classified as specific provisions. All Collectively Assessed Provisions (CAP) raised under AAS are either classified into specific provisions or a GRCL.

30 June 2021	A-IFRS Provisions								Total Regulatory
m	IAPs				CAPs				Provisions
Specific Provisions
for<br> impaired loans		868				364				1,232
for defaulted<br> but not impaired loans		NA				908				908
For<br> Stage 2		NA				1,895				1,895
Total<br> Specific Provision1		868				3,167				4,035
General<br> Reserve for Credit Loss1		NA				1,505				1,505
Total<br> provisions for ECL		868				4,672				5,540

All values are in US Dollars.

31 March 2021	A-IFRS Provisions								Total Regulatory
m	IAPs				CAPs				Provisions
Specific Provisions
for<br> impaired loans		564				410				974
for defaulted<br> but not impaired loans		NA				918				918
For<br> Stage 2		NA				2,051				2,051
Total<br> Specific Provision1		564				3,379				3,943
General<br> Reserve for Credit Loss1		NA				1,565				1,565
Total<br> provisions for ECL		564				4,944				5,508

All values are in US Dollars.

30 June 2020	A-IFRS Provisions				Total Regulatory
$m	IAPs		CAPs		Provisions
Specific Provisions
for impaired loans		607		564		1,171
for defaulted but not impaired loans		NA		860		860
For Stage 2		NA		2,167		2,167
Total Specific Provision^1^		607		3,591		4,198
General Reserve for Credit Loss^1^		NA		2,172		2,172
Total provisions for ECL		607		5,763		6,370
^1^	Provisions classified according to APRA’s letter<br>dated 4 July 2017 “Provisions for regulatory purposes and AASB 9 financial instruments”.
---	---
	Westpac Group June 2021 Pillar 3 Report	15
---	---

Pillar 3 report

Credit risk exposures

Impaired and past due loans

The following tables disclose the crystallisation of credit risk as impairment and loss. Analysis of exposures defaulted not impaired, impaired loans, related provisions and actual losses is broken down by concentrations reflecting Westpac’s asset categories.

										Specific				Specific				Actual
30 June 2021	Defaulted				Impaired				Provisions for				Provisions  to				Losses for the
m	not<br> impaired^1, 2^				Loans				Impaired<br> Loans				Impaired<br> Loans				9<br> months ended
Corporate		175				675				539				80	%			56
Business lending		1,068				343				179				52	%			40
Sovereign		-				-				-				-				-
Bank		-				-				-				-				-
Residential<br> mortgages		5,031				276				81				29	%			54
Australian credit<br> cards		-				76				47				62	%			107
Other retail		-				246				141				57	%			116
Small business		604				495				207				42	%			37
Specialised<br> lending		470				60				16				27	%			1
Securitisation		-				-				-				-				-
Standardised		74				68				22				32	%			-
Total		7,422				2,239				1,232				55	%			411

All values are in US Dollars.

					Specific		Specific			Actual
31 March 2021	Defaulted		Impaired		Provisions for		Provisions  to			Losses for the
$m	not impaired^1^		Loans		Impaired Loans		Impaired Loans			6 months ended
Corporate		155		319		220		69	%		56
Business lending		793		388		198		51	%		25
Sovereign		-		-		-		-			-
Bank		-		-		-		-			-
Residential mortgages		5,298		263		78		30	%		44
Australian credit cards		-		82		49		60	%		71
Other retail		-		277		158		57	%		78
Small business		423		639		229		36	%		24
Specialised lending		367		39		12		31	%		1
Securitisation		-		-		-		-			-
Standardised		73		64		30		47	%		-
Total		7,109		2,071		974		47	%		299
					Specific		Specific			Actual
---	---	---	---	---	---	---	---	---	---	---	---	---
30 June 2020	Defaulted		Impaired		Provisions for		Provisions  to			Losses for the
$m	not impaired^1^		Loans		Impaired Loans		Impaired Loans			9 months ended
Corporate		89		425		236		56	%		(4	)
Business lending		568		377		206		55	%		55
Sovereign		-		-		-		-			-
Bank		-		-		-		-			-
Residential mortgages		6,692		379		102		27	%		96
Australian credit cards		-		127		75		59	%		247
Other retail		2		387		213		55	%		196
Small business		516		816		294		36	%		55
Specialised lending		331		59		25		42	%		1
Securitisation		-		-		-		-			-
Standardised		105		49		20		41	%		1
Total		8,303		2,619		1,171		45	%		647
^1^	Includes items past 90 days not impaired.
---	---
^2^	Increase over quarter includes reclassification of facilities subject to<br>a forbearance agreement.
---	---
16	Westpac Group June 2021 Pillar 3 Report
---	---

Pillar 3 report

Securitisation

Banking book summary of securitisation activity by asset type

For the 3 months ended
30 June 2021	Amount				Recognised gain or
m	securitised				loss on sale
Residential mortgages		17,952				-
Credit cards		-				-
Auto and equipment finance		-				-
Business lending		-				-
Investments in ABS		-				-
Other		-				-
Total		17,952				-

All values are in US Dollars.

For the 6 months ended
31 March 2021	Amount				Recognised gain or
m	securitised				loss on sale
Residential mortgages		9,925				-
Credit cards		-				-
Auto and equipment finance		325				-
Business lending		-				-
Investments in ABS		-				-
Other		-				-
Total		10,250				-

All values are in US Dollars.

For the 3 months ended
30 June 2020	Amount		Recognised gain or
$m	securitised		loss on sale
Residential mortgages		46,347		-
Credit cards		-		-
Auto and equipment finance		-		-
Business lending		-		-
Investments in ABS		-		-
Other		-		-
Total		46,347		-
	Westpac Group June 2021 Pillar 3 Report	17
---	---
Pillar 3 report<br><br><br><br>Securitisation
---

Banking book summary of on and off-balance sheet securitisation by exposuretype

30 June 2021	On balance sheet		Off-balance	Total Exposure
$m	Securitisation retained	Securitisation purchased	sheet	at Default
Securities	-	7,353	37	7,390
Liquidity facilities	-	-	271	271
Funding facilities	3,029	-	1,432	4,461
Underwriting facilities	-	-	-	-
Lending facilities	686	-	374	1,060
Warehouse facilities	10,707	-	5,752	16,459
Total	14,422	7,353	7,866	29,641
31 March 2021	On balance sheet		Off-balance	Total Exposure
$m	Securitisation retained	Securitisation purchased	sheet	at Default
Securities	-	7,303	37	7,340
Liquidity facilities	-	-	273	273
Funding facilities	2,951	-	1,451	4,402
Underwriting facilities	-	-	-	-
Lending facilities	625	-	540	1,165
Warehouse facilities	9,265	-	5,854	15,119
Total	12,841	7,303	8,155	28,299
30 June 2020	On balance sheet		Off-balance	Total Exposure
$m	Securitisation retained	Securitisation purchased	sheet	at Default
Securities	-	8,165	37	8,202
Liquidity facilities	-	-	287	287
Funding facilities	2,702	-	1,049	3,751
Underwriting facilities	-	-	-	-
Lending facilities	527	-	291	818
Warehouse facilities	10,160	-	3,917	14,077
Total	13,389	8,165	5,581	27,135
18	Westpac Group June 2021 Pillar 3 Report
---	---
Pillar 3 report<br><br><br><br>Securitisation
---

Trading book summary of on and off-balance sheet securitisationby exposure type^1^

30 June 2021	On balance sheet		Off-balance	Total Exposure
$m	Securitisation retained	Securitisation purchased	sheet	at Default
Securities	-	-	-	-
Liquidity facilities	-	-	-	-
Funding facilities	-	-	-	-
Underwriting facilities	-	-	-	-
Lending facilities	-	-	-	-
Warehouse facilities	-	-	-	-
Credit enhancements	-	-	-	-
Basis swaps	-	-	89	89
Other derivatives	-	-	12	12
Total	-	-	101	101
31 March 2021	On balance sheet		Off-balance	Total Exposure
$m	Securitisation retained	Securitisation purchased	sheet	at Default
Securities	-	29	-	29
Liquidity facilities	-	-	-	-
Funding facilities	-	-	-	-
Underwriting facilities	-	-	-	-
Lending facilities	-	-	-	-
Warehouse facilities	-	-	-	-
Credit enhancements	-	-	-	-
Basis swaps	-	-	112	112
Other derivatives	-	-	11	11
Total	-	29	123	152
30 June 2020	On balance sheet		Off-balance	Total Exposure
$m	Securitisation retained	Securitisation purchased	sheet	at Default
Securities	-	18	-	18
Liquidity facilities	-	-	-	-
Funding facilities	-	-	-	-
Underwriting facilities	-	-	-	-
Lending facilities	-	-	-	-
Warehouse facilities	-	-	-	-
Credit enhancements	-	-	-	-
Basis swaps	-	-	109	109
Other derivatives	-	-	18	18
Total	-	18	127	145
^1^	EAD associated with trading book securitisation is not included in EAD by<br>major type on page 13. Trading book securitisation exposure is captured and risk weighted under APS116 Capital Adequacy: Market Risk.
---	---
	Westpac Group June 2021 Pillar 3 Report	19
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Pillar 3 report<br><br><br><br>Liquidity Coverage Ratio
---

Liquidity Coverage Ratio (LCR)

Westpac’s average LCR for the quarter was 127%^1^ (31 March 2021: 124%).

Liquid assets included in the LCR comprise High Quality Liquid Assets (HQLA), the Committed Liquidity Facility (CLF) offered by the Reserve Bank of Australia and additional qualifying Reserve Bank of New Zealand securities. LCR liquid assets also includes Westpac’s Additional Allowance of the Term Funding Facility (TFF).

Westpac’s portfolio of HQLA averaged $123.4 billion over the quarter^1^.

Funding is sourced from retail, small business, corporate and institutional customer deposits and wholesale funding. Westpac seeks to minimise the outflows associated with this funding by targeting customer deposits with lower LCR outflow rates and actively manages the maturity profile of its wholesale funding portfolio. Westpac maintains a buffer over the regulatory minimum of 100%.

Effective 1 January 2021, the Group is required by APRA to increase the value of its net cash outflows by 10% for the purpose of calculating LCR. The overlay to the Group’s net cash outflows has been required by APRA in response to breaches of liquidity requirements. A program is underway to address APRA’s requirements including commencement of APRA mandated reviews.

		30 June 2021		31 March 2021
		Total unweighted	Total weighted	Total unweighted	Total weighted
m	value (average)^1^	value (average)^1^	value (average)^1^	value (average)^1^
Liquid assets, of which:
1	High-quality liquid assets (HQLA)		123,429		117,280
2	Alternative liquid assets (ALA)		35,610		39,604
3	Reserve Bank of New Zealand (RBNZ) securities		7,558		8,196
Cash Outflows
4	Retail deposits and deposits from small business	297,200	25,568	287,212	25,064
	customers, of which:
5	Stable deposits	146,982	7,349	142,384	7,119
6	Less stable deposits	150,218	18,219	144,828	17,945
7	Unsecured wholesale funding, of which:	162,662	70,798	161,362	73,242
8	Operational deposits (all counterparties) and deposits	82,217	20,466	79,933	19,898
	in networks for cooperative banks
9	Non-operational deposits (all counterparties)	70,116	40,003	68,405	40,320
10	Unsecured debt	10,329	10,329	13,024	13,024
11	Secured wholesale funding		-		1
12	Additional requirements, of which:	206,587	26,844	204,259	27,461
13	Outflows related to derivatives exposures and other	10,004	10,004	10,882	10,882
	collateral requirements
14	Outflows related to loss of funding on debt products	781	781	1,365	1,365
15	Credit and liquidity facilities	195,802	16,059	192,012	15,214
16	Other contractual funding obligations	1,141	1,141	251	251
17	Other contingent funding obligations	40,502	3,290	37,718	3,185
18	Total cash outflows		127,641		129,204
Cash inflows
19	Secured lending (e.g. reverse repos)	2,894	-	5,891	-
20	Inflows from fully performing exposures	10,006	5,732	8,817	5,202
21	Other cash inflows	2,513	2,513	2,559	2,559
22	Total cash inflows	15,413	8,245	17,267	7,761
23	Total liquid assets		166,597		165,080
24	Total net cash outflows		131,336		133,587
	24.1 Of which: Net cash outflows overlay		11,940		12,144
25	Liquidity Coverage Ratio (%)		127%		124%
	Number of data points used		62		64

All values are in US Dollars.

^1^	Calculated as a simple average<br>of the daily observations over the quarter.
20	Westpac Group June 2021 Pillar 3 Report
---	---
Pillar 3 report<br><br><br><br>Appendix I - APS330 quantitative requirements
---

The following table cross-references the quantitative disclosure requirements outlined in Attachment C of APS330 to the quantitative disclosures made in this report.

APS330 reference		Westpac disclosure	Page
General Requirements
Paragraph 49		Summary leverage ratio	12
Attachment C
Table 3:	(a) to (e)	Capital requirements	10
Capital Adequacy	(f)	Westpac’s capital adequacy ratios	9
		Capital adequacy ratios of major subsidiary banks
Table 4:	(a)	Exposure at Default by major type	14
Credit Risk - general	(b)	Impaired and past due loans	16
disclosures	(c)	General reserve for credit loss	15
Table 5:	(a)	Banking Book summary of securitisation activity by asset type	17
Securitisation exposures		Banking  Book  summary  of  on  and  off-balance  sheet
	(b)	securitisation by exposure type	18
		Trading  Book  summary  of  on  and  off-balance  sheet
		securitisation by exposure type	19
Attachment F
Table 20: Liquidity		Liquidity Coverage Ratio disclosure	20
Coverage Ratio disclosure
template

Exchange rates

The following exchange rates were used in this report, and reflect spot rates for the period end.

$	30 June 2021	31 March 2021	30 June 2020
USD	0.7520	0.7596	0.6856
GBP	0.5431	0.5536	0.5584
NZD	1.0741	1.0892	1.0698
EUR	0.6319	0.6487	0.6114
	Westpac Group June 2021 Pillar 3 Report	21
---	---
Pillar 3 report<br><br><br><br>Disclosure regarding forward-looking statements
---

This report contains statements that constitute ‘forward-looking statements’ within the meaning of Section 21E of the US Securities Exchange Act of 1934.

Forward-looking statements are statements about matters that are not historical facts. Forward-looking statements appear in a number of places in this report and include statements regarding Westpac’s intent, belief or current expectations with respect to its business and operations, market conditions, results of operations and financial condition, including, without limitation, future loan loss provisions and financial support to certain borrowers. Words such as ‘will’, ‘may’, ‘expect’, ‘intend’, ‘seek’, ‘would’, ‘should’, ‘could’, ‘continue’, ‘plan’, ‘estimate’, ‘anticipate’, ‘believe’, ‘probability’, ‘risk’, ‘aim’, ‘outlook’ or other similar words are used to identify forward-looking statements. These forward-looking statements reflect Westpac’s current views with respect to future events and are subject to change, certain risks, uncertainties and assumptions which are, in many instances, beyond Westpac’s control, and have been made based upon management’s expectations and beliefs concerning future developments and their potential effect upon Westpac. There can be no assurance that future developments will be in accordance with Westpac’s expectations or that the effect of future developments on Westpac will be those anticipated. Actual results could differ materially from those expected, depending on the outcome of various factors, including, but not limited to:

•	information security breaches, including cyberattacks;
•	the effect of the global COVID-19 pandemic,<br>which has had, and may continue to have, a negative impact on our business and global economic conditions, adversely affect a wide-range<br>of Westpac’s key suppliers, third-party contractors and customers, create increased volatility in financial markets and result in<br>increased impairments, defaults and write-offs;
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•	the effect of, and changes in, laws,<br>regulations, taxation or accounting standards or practices and government policy, particularly changes to liquidity, leverage and capital<br>requirements;
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•	regulatory investigations, reviews and<br>other actions, inquiries, litigation, fines, penalties, restrictions or other regulator imposed conditions, including as a result of our<br>actual or alleged failure to comply with laws (such as financial crime laws), regulations or regulatory policy;
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•	the effectiveness of Westpac’s<br>risk management policies, including internal processes, systems and employees, and operational risks resulting from ineffective processes<br>and controls, as well as breakdowns in processes and procedures requiring remediation activity;
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•	the failure to comply with financial<br>crime obligations, which has had, and could further have, adverse effects on our business and reputation;
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•	the occurrence of environmental change<br>(including as a result of climate change) or external events in countries in which Westpac or its customers or counterparties conduct<br>their operations;
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•	internal and external events which may adversely impact<br>Westpac’s reputation;
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•	litigation and other legal proceedings and regulator<br>investigations and enforcement actions;
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•	reliability and security of Westpac’s technology<br>and risks associated with changes to technology systems;
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•	the stability of Australian and international<br>financial systems and disruptions to financial markets and any losses or business impacts Westpac or its customers or counterparties may<br>experience as a result;
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•	market volatility, including uncertain conditions<br>in funding, equity and asset markets;
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•	an increase in defaults in credit exposures<br>because of a deterioration in economic conditions; adverse asset, credit or capital market conditions;
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•	the incidence of inadequate capital levels under stressed<br>conditions;
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•	the risk that governments will default<br>on their debt obligations or will be unable to refinance their debts as they fall due;
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•	changes to Westpac’s credit ratings or the methodology<br>used by credit rating agencies;
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•	levels of inflation, interest rates (including<br>low or negative interest rates), exchange rates and market and monetary fluctuations and volatility;
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•	an increase in defaults, write-offs and provisions<br>for credit impairments;
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•	changes in economic conditions, consumer<br>spending, saving and borrowing habits in Australia, New Zealand and other countries (including as a result of tariffs and other protectionist<br>trade measures) in which Westpac or its customers or counterparties conduct their operations and Westpac’s ability to maintain or<br>to increase market share, margins and fees, and control expenses;
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•	the effects of competition, including<br>from established providers of financial services and from non-financial services entities, in the geographic and business areas in which<br>Westpac conducts its operations;
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•	poor data quality or poor data retention;
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•	the incidence or severity of Westpac-insured events;
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•	changes to Westpac’s critical accounting<br>estimates and judgements and changes to the value of Westpac’s intangible assets;
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22	Westpac Group June 2021 Pillar 3 Report
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Pillar 3 report<br><br><br><br>Disclosure regarding forward-looking statements
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•	changes in political, social or economic conditions in any of<br>the major markets in which Westpac or its customers or counterparties operate;
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•	the inability to syndicate or sell down<br>underwritten securities, particularly during times of heightened market volatility;
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•	strategic decisions including diversification,<br>innovation, divestment, acquisitions or business expansion activity, including the integration of new businesses; and
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•	various other factors beyond Westpac’s control.
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The above list is not exhaustive. For certain other factors that may impact on forward-looking statements made by Westpac, refer to ‘Risk factors’ in the Directors’ report in the 2021 Interim Financial Results Announcement. When relying on forward-looking statements to make decisions with respect to Westpac, investors and others should carefully consider the foregoing factors and other uncertainties and events.

Westpac is under no obligation to update any forward-looking statements contained in this report, whether as a result of new information, future events or otherwise, after the date of this report.

	Westpac Group June 2021 Pillar 3 Report	23