Westpac Banking Corporation · ASX:WBC
Westpac Banking — Debt Investor Presentation (November 2016)
20 slides from Westpac Banking's debt investor presentation, November 2016
Slide 1: Westpac FY16 Fixed Income Investor Update
Westpac FY16 Fixed Income Investor Update November 2016
Slide 2: Disclaimer
Disclaimer The material contained in this presentation is intended to be general background information on Westpac Banking Corporation (“Westpac”) (ABN 33 007 457 141) and its activities. It does not constitute a prospectus, offering memorandum or offer of securities. It should not be reproduced, di
Slide 3: Westpac Banking Corporation highlights
Westpac Banking Corporation highlights • Full Year 2016 reported net profit $7.445bn Financials • Net profit before impairment charges and income tax expense (pre-provision profit) $11.768bn at 30 Sep 2016 • Return on average ordinary equity 13.3% • Cost to income ratio 43.9% • CET1 capital ratio 9.
Slide 4: Full Year 2016 Financial Results
Full Year 2016 Financial Results % Change Reported NPAT ($m) Net interest margin (%) FY16 Reported Results FY16 FY16 – FY15 Financial results (A$m) 8,012 7,561 7,445 Reported net profit after tax 7,445 (7) 6,751 2.16 2.14 2.09 2.09 2.10 5,936 Net operating income 20,985 (3) Expenses (9,217) (3) Core
Slide 5: A resilient balance sheet
A resilient balance sheet Westpac key balance sheet ratios as at 30 September 2016 (%) 14.4 134 >100 100 100 9.5 8.0 3.5 5.2 CCB inc. D-SIB1 3.0 4.5 Reg. minimum NSFR Regulatory LCR Regulatory Leverage ratio Basel III CET1 Regulatory CET1 minimum minimum minimum capital ratio minimum + (Internationa
Slide 6: Capital ratios well above target range
Capital ratios well above target range CET1 capital ratio (%) and CET1 capital ($bn) (APRA basis) Key capital ratios (%) Sep-15 Mar-16 Sep-16 Common equity Tier 1 (CET1) 9.5 10.5 9.5 capital ratio Preferred CET1 capital ratio range 8.75% - 9.25% 12.0 50 Additional Tier 1 capital 1.9 1.6 1.7 CET1 cap
Slide 7: Basel III regulatory capital ratios
Basel III regulatory capital ratios Regulatory capital ratios (%) Internationally comparable1 Internationally comparable basis APRA basis BIS 75th percentile3 basis incl. transitional instruments2 17.7 19.1 16.2 16.6 16.6 13.1 14.4 14.4 13.1 14.1 11.2 9.5 CET1 Tier 1 Total CET1 Tier 1 Total CET1 Tie
Slide 8: Targeting a diversified funding base
Targeting a diversified funding base Australian covered bond issuance5 FY16 new term issuance composition1 (%) ($bn) Charts do not add to 100 due to rounding. Remaining capacity By type By tenor 2,3 By currency (8% cap & over-collateralisation) 4 3 Outstanding 28 6 12 6 3 0.4 54 29 27 4 29 77 45 25
Slide 9: Westpac Tier 2 capital issuance profile
Westpac Tier 2 capital issuance profile Westpac Total Regulatory Capital (%) Westpac Tier 2 capital2 as at 30 September 2016 (notional amount, %) CET1 Additional Tier 1 Tier 2 Basel III and Basel III Tier 2 capital by format Tier 2 capital by currency3 17.7 Transitional capital 1.5 44 13.3 13.1 1.8
Slide 10: Asset quality remains sound; provision cover maintained
Asset quality remains sound; provision cover maintained Stressed exposures as a % of TCE (%) New and increased gross impaired assets ($m) . Includes 4 large Watchlist & substandard 1,748 names downgraded 3.20 3.09 1,519 in 1H16 $641m 90+ days past due and not impaired 1,343 1,218 1,194 2.48 1,060 99
Slide 11: Asset quality areas of interest
Asset quality areas of interest Mining (inc. Oil and Gas) portfolio New Zealand dairy portfolio Commercial property portfolio Mar-16 Sep-16 Mar-16 Sep-16 Mar-16 Sep-16 Total committed exposures Total committed exposure Total committed exposures $11.8bn $11.3bn NZ$5.8bn NZ$5.9bn $67.5bn $67.1bn (TCE)
Slide 12: High levels of borrower equity create buffers in the Australian mortgage portfolio
High levels of borrower equity create buffers in the Australian mortgage portfolio Sep-15 Mar-16 Sep-16 2H16 Australian housing loan-to-value ratios (LVRs)2,3 (%) Australian housing portfolio balance balance balance flow1 100 FY16 drawdowns LVR at origination Total portfolio ($bn) 375.8 390.8 404.2
Slide 13: Prudent lending standards support Australian mortgage portfolio quality
Prudent lending standards support Australian mortgage portfolio quality Lending standards on a tightening bias since 2015 Mortgage interest rate buffers (%) • Minimum assessment (floor) rate 7.25% and buffer rate of at least Westpac owner occupied SVR inc package discount 2.25% from September 2015 •
Slide 14: Australian mortgage delinquencies remain low; impacted by changes in hardship treatment
Australian mortgage delinquencies remain low; Impacted by changes in hardship treatment Australian mortgage portfolio Sep-15 Mar-16 Sep-16 Australian mortgages delinquencies (%) 30+ day delinquencies (bps) 102 134 130 90+ day past due total 90+ day past due investor 3.0 30+ day past due total Loss r
Slide 15: Snapshot: More than mining, the Australian economy is diverse and flexible
Snapshot More than mining, the Australian economy is diverse and flexible Australian economy key statistics Australia’s economy is diversified and flexible (latest available as at 2 November 2016) Sector contribution to GDP (%)1 Australian employment by sector 2015/16 (%) GDP 3.3% 2 Mining 2 Mining
Slide 16: Appendices
Appendices Westpac Banking Corporation ABN 33 007 457 141.
Slide 17: Appendix 1: Cash earnings adjustments
Appendix 1: Cash earnings adjustments Cash earnings adjustment FY16 FY15 Description Reported net profit 7,445 8,012 Net profit attributable to owners of Westpac Banking Corporation During Second Half 2015 the Group recognised a significant gain following the partial sale and deconsolidation of the
Slide 18: Appendix 2: Internationally comparable capital ratio reconciliation
Appendix 2: Internationally comparable capital ratio reconciliation APRA’s Basel III capital requirements are more conservative than those of the Basel Committee on Banking Supervision (BCBS), leading to lower reported capital ratios. In July 2015, APRA published a study that compared the major bank
Slide 19: Appendix 3: Regulatory capital securities outstanding
Appendix 3: Regulatory capital securities outstanding Tier 2 securities on issue as at 30 September 2016 Issue CCY Volume (issue ccy m) Volume A$m1 First Call Date Maturity PONV USD 352 462 30 Sep 91 Perpetual N USD 350 459 N/A 1 Jun 18 N AUD 500 500 21 Mar 17 21 Mar 22 N AUD 1,676 1,676 23 Aug 17 2
Slide 20: Appendix 4: Definitions
Appendix 4: Definitions Is a measure of the level of profit that is generated by ongoing operation and is Stressed loans are the total of watchlist and substandard, 90 days past due therefore available for distribution to shareholders. Three categories of Stressed loans and not impaired and impaired
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