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 2 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 $300m’, 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 impaired assets to.total commitments down 7 basis. points Sustainability + -Expense.growth 4% +..Expense to
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 Portfolio now ex
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-D2 Aug-D3 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 2 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: Traditionally stronger second half
Traditionally stronger second half % Change ..% Change $m 2H04..:1HO5.>:2HO5 1H05- 2H05- 2H04 1HO5 Net interest income 2,416. 2,545 2,700 5 6 Non- interest income 1,716. 1,659 .-1,9014 (3) 15 Operating expenses (2,015) (2,034) (2,071) (1) (2) Core.earnings 2,037. 2,087 ...2,445 2 17 Bad debts (207)
Slide 10: Analysis of margin movements
19 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 11: Continued to invest for future growth
21 Continued to invest for future growth Project expenditure over the year $m Front office capability Advice Platform Reach — CRM Corporate Online Pinnacle 82 Productivity & Infrastructure New head office BT Integration One Bank platform 216 Compliance Basel Il, IFRS, SOX 37 Other System refreshes P
Slide 12: Bad debt analysis
23 Bad debt analysis Total bad & doubtful debt charge to average loans and acceptances (basis points) 35 | we ee ‘Lee ee ee Long run expectation : 305 2535 basis points 2§ fenecsemecancsestsssctte ; -o .- 20-4 45.4 A 4997-4998 1999 2000 2004 2002-2003 2004 2005 Westpac 2005 Full Year Rasuits 24 Forw
Slide 13: BCB — a revenue led result
25 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 14: Business lending — growth returning
27 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 15: New Zealand — growth in a tough environment
29 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 16: Institutional Bank — clear number one
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 17: BT - good momentum
BT - good momentum Strong momentum from: - Funds under management - Strong Wrap and corporate super flows boosting funds under administration * Good claims experience assisting life insurance * Cash earnings assisted by - JDV sale $13m - Recovery of funds in certain managed funds $19m * Life company
Slide 18: Strong capital generation
35 Strong capital generation Movements in ACE ratio (%) Capital ratios and target ranges {%} 7.00 Target range ACE: 4.50 - 5.00% B.0%. [oro on corer rrr ccnp 0 (Sn ieee 1469 bps 70% 110 bps) A 6.50 {10 bps) aml 6.5% 6.0% 8.09. 5.5% 5) 40 bps (6 bps) 5.0% 5.50 (34 bps} — 5.40% ba C | 45%, 5.00 4.0% .
Slide 19: Preparing for New Zealand incorporation
37 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 20: 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! $300m #1 Expense / Income — banking 46% #1 1 Assuming a Buy-Back Price of $17.63, representing a Buy-Back Discount o
Slide 21: Economic environment sound
41 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 22: Operating environment remains challenging
43 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 23: 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 24: 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 25: Disclaimer
49 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