Slide 1: 2005 Full Year Results
AMfestpac Australia’s First Bank 2005 Full Year Results David Morgan Chief Executive Officer Philip Chronican Chief Financial Officer 3 November 2005 2 Westpac — quality, consistency and growth Highest cash EPS growth of major banks up 12% Cash ROE 21% Economic profit up.17% Margins held down 3 basi
Slide 2: A dividend uplift and a substantial buy-back
A dividend uplift and a substantial buy-back * $1bn surplus capital generated « Dividends up 16% to $1.00 « Sustainable increase in pay-out ratio * An off-market buy-back’ of approx. $700m « $1.7bn bought back over last five years * Significant franking surplus, around $320m*, post buy- back Dividen
Slide 3: Profitable growth across major business aggregates
Profitable growth across major business aggregates Movement 2004 — 2005 (%) 20.5 15 5 11 10 | 8 5 4 05 r r r r . Aust. Retail Aust. Retail NZ Lending NZ Deposits WIB BT FUA Lending Deposits Transactional 2005 Fut Year Results Aifestpac BCB momentum increasing, upside remains Australian retail - annu
Slide 4: Quality growth
Quality growth Pricing +-Not growth for growth’s sake + .Margins down 3. basis. points for the year Risk + Forward credit indicators continue to.improve Portfolio quality improved —.ratio of stressed loans to.total commitments. down 7-basis points. Sustainability + -Expense.growth 4% +..Expense to i
Slide 5: Prior investments paying off
Prior investments paying off + Top quartile investment performance + Delivering on cross-sell — 12% of Wrap and 56% of Corporate Super flows from Westpac customers + Hastings and SCG FUM $5.3bn — up 64% over year + Revenues exceeded $100m + Partnership with Virgin Money Group established 2003 + Port
Slide 6: Enhanced customer positioning
qt Enhanced customer positioning Australian Business’ (%)} Australian Consumer? (%} 80 80 -@ Aust. Business —*- Peer Average, - Aust. Consumer ~* Peer Average 40. r T T 40 + T T T Sep-02 Sep-03 Sep-04 Sep-05 Aug-02 Aug-03 Aug-04 Aug-05 New Zealand Consumer® (%} Institutional Bank’ (%) 80 80 ~O-NZ Co
Slide 7: Westpac is continuing to deliver / The Details
Westpac is continuing to deliver Consistent, high quality financial performance and growth 13-2005 Full Year Resutts AMestpac AMestpac Australia’s First Bank The Details Philip Chronican Chief Financial Officer 3 November 2005
Slide 8: How the result stacks up
15 How the result stacks up Previous Medium term drivers Growth in loans & acceptances’ Up 9% 8-10% Margins Down 3bps 5-9bps Non-interest income Up 9% 5-9% Operating expenses Up 4% 2-4% Bad and doubtful debts 19bps 25-35bps Cash earnings Up 12% 1 Adding back securitisation & exciuding NZ structured
Slide 9: Revenue quality - looking beyond the top line
7 Revenue quality - looking beyond the top line $m 2004 2005 | % Change Reported operating income 8,010 8,805 10% Net accounting changes & Epic 79 168 NZ$ Impact* gain / (loss) (9) 22 High yield securities portfolio 17 64 Property sales 28 11 JDV sale 0 13 Recovery from managed funds 0 27 Mortgage b
Slide 10: Loan growth
Loan growth % Change’ Sep-05 $bn Sep-04 Sep- 05 Sep-04 Consumer (Australia) 98.9 106.5 8 Housing 91.6 99.0 8 Personal (loans & cards) 7.3 7.8 2 Business (Australia) 36.3 38.9 7 Institutional Bank 25.5 24.9 (2) New Zealand (NZ$) 28.2 32.2 14 BT Financial Group 1.8 2.5 37 Group Net loans and acceptanc
Slide 11: Analysis of margin movements
21 Analysis of margin movements Group margins 2004 - 2005 (%) + Overall margins declined 26 ] . . Sbps Spread decline — 6 basis points + Interest income assisted ON by: (- :) - $27m changes in ig 2.53% - (3bps) Treasury composition 25 | (3bps) 3bps . 2.50% ~ Approx $30m change in financial (2bps) 2b
Slide 12: Expenses — continued tight management
Expenses — continued tight management $m 2004 2005 Change Reported expenses 3,940 4,105 .-4.2% Less adjustments: Consolidation of Epic (22) > (8) Consolidation of the Life Company MIS (3) (4) Translation of NZ$ expenses to A$ - (24) Core expenses 3,915 4,069 3.9% Salary and other staff expenses 1,98
Slide 13: New head office — nearing completion
25 New head office — nearing completion « Moving from 13 sites to 2 primary sites « 5,000 staff moving to new premises from Feb 2006 « Lease costs fixed for 12 years « Refresh of mid-range server environment « $66m in net fit-out * raeh or eanich oem OUR GREAT PLACE provided by suppliers Westpac 200
Slide 14: Bad debts lower due to better write backs & recoveries
27 Bad debts lower due to better write backs & recoveries $m 2004 = 2005 New specific provisions 174 170 Fall in bad debts Write-offs 274 307| | ee ete Write backs & recoveries (116) (186) increased recovenes Specific provision 332 291 Dynamic provision Gross dynamic provision charge 122 112 Factor.
Slide 15: BCB — a revenue led result
29 BCB — a revenue led result * Cash earnings up 15% % $m 2004 2005 Change * Revenue growth twice ; Net interest expense growth and driven income 3,415 3,700 8 by: y Non- - 8% asset growth interest 1,290 1,373 6 - 11% deposit growth income - Excellent margin performance | OPerating. (9 465) - (2,570
Slide 16: Business lending — growth returning
31 Business lending — growth returning * Business lending income up 7% * Improved growth in 2HO05 following disappointing 1HO05. * 2HO05 performance lift due to: - New product launches - Promotional initiatives - Increase in business bankers * Spreads maintained (down only 1bp) full year * Originati
Slide 17: New Zealand — growth in a tough environment
33 New Zealand — growth in a tough environment Mortgages « 13% growth against system growth of 16% « Spread contraction 18 bps « Proportion of fixed/floating 75/25 at September 2005 Business « Rapidly growing portfolio, up 19% « Strong performance in property finance and middle market lending NZ Hou
Slide 18: Institutional Bank — clear number
Institutional Bank — clear number 1 Lead Bank' status =e WEC .-&-Bank2 —&- Bank 3. -°@Bank 4 45 + 40 4 BB porrcansrsstrce riggs 30 fp oroncone i fow--- orn ere reecne cena 25 ponc--neeceess cots ines a) AQ ponconnrnntreeenonnrreecoasere connor tecreat oe 0 2002-03 2003-04 2004-05 1, Peter Lee Survey
Slide 19: NZ structured finance transactions
37 NZ structured finance transactions NZ structured finance transactions contribution to earnings": * FY06 WwIB 2H04 1HO05 2H05 1HO06 Impact Core revenue. (28)... (23) (8) - 32 Gross up 71 67 24 (88) Total revenue 43 44 43 - (86) Tax {incl gross-up) (13) °° {43) (6) 20 Cash earnings 27 30 6 ~ (36) .
Slide 20: Market share gaining across the business
39 Market share gaining across the business Platforms 12.1 Corporate super 7.0 Margin lending 14.3 Broking - Coe 40.5 Life and risk 6.7 Funds Management 4.0 Source: Platforms— Assirt Jun 05 Margin Lending RBA June 0S market share “BT competitor analysis on ranking 10.4 3 3 23.0 1* 3 10.3 3 7 7.3 7 B
Slide 21: Group business unit
41 Group business unit « Nochange to composition ($m 2004-2005 Change of Group business unit over year peerating 69... 237 243 « Lower earnings in 2005 Operat from expenses 103 65. (37) ~ Reduced property sales : Core earnings 472 302 76 ~ Increase in general tax provisions $48m Bad debts (40) 37.10
Slide 22: Off-market buy-back
43 Off-market buy-back’ Target buy-back size approximately $700m (2% of ordinary shares) Off-market tender buy-back structure Buy-back price to include a $4.00 capital component, with balance treated as a fully franked deemed dividend for Australian tax purposes Shares can be tendered at discounts o
Slide 23: Preparing for New Zealand incorporation
45 Preparing for New Zealand incorporation + Agreed to incorporate systemically important operations in New Zealand in December 2004 + Proposed incorporation model has received in-principle agreement from the Reserve Bank of New Zealand * The incorporation model involves Westpac operating as a branc
Slide 24: A sector leading performance across key metrics
A sector leading performance across key metrics Major bank Westpac position Cash earnings per share growth 12% #1 Cash return on equity 21% #1 Dividend growth 16% #1 Franking surplus! post buy-back $320m #1 Expense / Income — banking 46% #1 1 Assuming a Buy-Back Price of $17.63, representing a Buy-B
Slide 25: Economic environment sound
49 Economic environment sound « Growth in Australia remains strong, NZ softer « Inflation under control and unlikely to significantly change in year ahead Annual GDP (Calendar years %) @ GDP (Aust) GDP (NZ) Owe NN Wk 2003 2004 + Unemployment at 30 year 2o0sie) 20080) low Annual CPt (Calendar years %
Slide 26: Operating environment remains challenging
31 Operating environment remains challenging Competitive + Expansion of competition footprint * Price increasingly used to attract business * Competition for talent + Westpac.has the strength and flexibility to respond Regulatory + Compliance requirements remaining heavy * International ‘harmonisati
Slide 27: Multiple sources of growth
Multiple sources of growth Increase wealth Bi Financial Group + Improving growth momentum penetration . : : with enhanced front line Aeommmomannmmle| «Growth in Platforms business capability/presence + Insurance potential + 2nd largest franchise in region + Independent advice group Platform for high
Slide 28: Outlook
Outlook * Operating environment remains favourable with good economic fundamentals and well positioned for competitive intensity « Westpac’s franchise is in excellent health Employees - Top quartile engagement Customers - Improved satisfaction in all segments Sustainability | - Global banking leader
Slide 29: Disclaimer
37 Disclaimer The material contained in this presentation is intended to be general background information on Westpac Banking Corporation and its activities. The information is supplied in summary form and is therefore not necessarily complete. Also, it is not intended that it be relied upon as advi