Westpac Banking Corporation · ASX:WBC
Westpac Banking — Debt Investor Presentation (May 2021)
36 slides from Westpac Banking's debt investor presentation, May 2021
Slide 1: Westpac Green Bond Investor Presentation May 2021
Westpac Green Bond Investor Presentation May 2021 Westpac Banking Corporation ABN 33 007141
Slide 2: The Australian economy
The Australian economy. Recovery well under way and stronger than expected. Australia’s GDP profile (index) Unemployment rate (%) % % Index pre covid forecast current forecast Index Westpac f’casts 9 9 112 112 to Dec-23 Dec 2019 = 100 Westpac 8 8 108 f’casts 108 7 7 104 104 6 6 100 100 5 5 96 96 4 R
Slide 3: 1H21 financial results overview
1H21 financial results overview. Comparisons to 2H20. Earnings • Cash earnings $3.5bn, up $1.9bn • Cash ROE 10% • Net interest margin 2.09%, up 6bps Balance sheet • CET1 capital ratio at 12.3% (APRA basis); 18.1% (Internationally comparable basis1) strength • NSFR 123%, LCR 124% • 1H21 dividend of 5
Slide 4: Asset quality
Asset quality. Stressed exposures as a % of Total Committed Exposures Total Australian mortgage deferral packages provided (% by balances) 3.20 • Upgrades in business lending following review Returned to normal Watchlist and coupled with improved delinquency performance repayment or paid down substa
Slide 5: Key capital ratios
Key capital ratios. Key capital Key capital ratios ratios (%, APRA basis) Mar-20 Sep-20 Mar-21 Westpac CET1 and APRA current minimum capital requirements2 (%) CET1 capital ratio 10.8 11.1 12.3 12.3% Additional Tier 1 capital 2.1 2.1 2.2 Tier 1 capital ratio 12.9 13.2 14.5 $7.7bn above ‘unquestionabl
Slide 6: Global capital comparison
Global capital comparison1. Global banks ranked by Tier 1 capital ratio (%) Tier 1 Tier 2 NPS/HoldCo Senior Average Australian Tier 1 40% 35% 30% 25.9% 25% 20% 15% 10% 5% 0% Westpac TD Bank SHB CBA NAB ANZ NBC RBC BNS ABN AMRO Nordea Societe Generale SEB BMO CIBC Danske DNB ING Rabobank Swedbank Cre
Slide 7: Balance sheet funding
Balance sheet funding. Shift in balance sheet: higher customer deposits, lower offshore wholesale funding Funding composition (%) Significant balance sheet Customer deposits to net loans ratio (%) By residual maturity changes in the last 18 months Customer deposits Net customer loans Deposits to net
Slide 8: Long term wholesale funding
Long term wholesale funding. Funding in 1H21 limited to meeting TLAC and capital needs. Term Funding Facility1 (TFF) ($bn) Term debt issuance and maturity profile2 ($bn) Funding for Lending 30 Programme (NZ) Issuance Maturities 37 Supplementary 37 Term Funding Facility allowance 32 34 12 22 31 (Aus)
Slide 9: Our sustainability strategy
Our sustainability strategy Westpac Banking Corporation ABN 33 007141
Slide 10: Westpac's commitment to sustainability
Westpac’s commitment to sustainability. Our goal is to build sustainable, long term value for Principles for Responsible Banking our shareholders Signatory 2019 Long-standing commitment to operating sustainably Principles for Responsible Investment Signatory (2007) Environment and social practices h
Slide 11: Our strategy
Our strategy. Purpose Helping Australians and New Zealanders Succeed Markets, products, Banking for consumer, business and institutional customers customers FIX SIMPLIFY PERFORM Address outstanding issues Streamline & focus the business Sustainable long-term returns Priorities • Risk management • Ex
Slide 12: Our sustainability strategy
Our sustainability strategy. Sustainability Priorities What How UN Sustainable Development Goals1 Help individuals and businesses • Supporting customers build strong financial futures and and businesses through navigate times of change, times of change and End poverty in all its Decent work and Redu
Slide 13: Delivering on priority areas
Delivering on priority areas. Sustainability Priorities 2023 measures1 Examples in the last 12 months • Number of customers supported with relief packages • Last year we provided 176k consumer and 36k business relief • Number of customers who received assistance through packages in response to COVID
Slide 14: Sustainability management framework
Sustainability management framework. Westpac Westpac Board Stakeholder Westpac Advisory Executive Team New Zealand Council Sustainability Advisory Panel Westpac Group Executive Risk Climate Change Financial Risk Westpac New Zealand Sustainability Westpac Committee Committee Steering Committee Indige
Slide 15: Our commitment to action on climate change
Our commitment to action on climate change. Westpac has a long history of action on climate change. 1991 2012 2014 2016 Founding Signed Montreal member of the 2003 Commitment to carbon Carbon Pledge 2-degrees Climate Scenario 2018 2019 United Nations One of nine and endorsed Analysis. 4-degrees 1.5-
Slide 16: Our climate change strategy
Our climate change strategy. OUR PRINCIPLES A transition to a net Economic growth Addressing climate Climate-related risk Collective action, zero emissions and emissions change creates is a financial risk. transparency and economy is required reductions are opportunities. disclosure matter. by 2050.
Slide 17: Managing climate-related risks
Managing climate-related risks. OVERSIGHT RISK MANAGEMENT SCENARIO ANALYSIS Westpac used scenario analysis to inform our The Board has oversight of the Group’s approach to Westpac Group’s Climate Action Plan sets out our identification of industries exposed to assessment of and management of climate
Slide 18: Climate-related metrics
Climate-related metrics. Lending to climate change solutions Electricity generation exposure Lending to electricity generation ($bn, Total Committed Exposures (TCE)) (% of TCE)1 at 30 September 2020 in Australia and New Zealand (% of total) 80% 10.1 10.0 9.1 9.3 2.8 0.6 70% 6.4 Renewable energy 60%
Slide 19: Westpac Green Bond Framework
Westpac Green Bond Framework Westpac Banking Corporation ABN 33 007141
Slide 20: Westpac Green Bonds
Westpac Green Bonds. SUPPORTING WESTPAC’S COMMITMENTS WESTPAC GREEN BOND ISSUANCE • Green bonds are issued by Westpac as part of its commitment to provide • Westpac issued its first Green Bond in June 2016 $3.5 billion of new lending to climate change solutions over the three years to • In total, We
Slide 21: Green Bond Framework
Green Bond Framework. Westpac’s Framework aligns with the four core components Overview and key recommendations of the International Capital Market The issuance of Green Bonds aims to contribute Association (ICMA) Green Bond Principles (GBPs). to the key role that debt markets can play in • Use of P
Slide 22: Green Bond Framework
Green Bond Framework. Green Bond Principles and United Nations Sustainable Development Goal Alignment Eligibility Criteria Eligibility Criteria Renewable energy and energy efficiency Sustainable water and waste water management • Construction, operation, and maintenance of renewable energy • Constru
Slide 23: Green Bond Framework
Green Bond Framework. Process for asset evaluation and selection Management of proceeds Westpac’s sustainable finance governance structure for the evaluation, The net proceeds are managed by the SFWG and SBC to ensure ongoing selection and management of assets under its Framework includes: review an
Slide 24: Green Bond Framework
Green Bond Framework. Reporting and disclosures Westpac will publish an Impact Report annually, which includes at least the following information: 1. 1 Pool identification and allocation to green categories. Where possible, the list of green assets will be disclosed (either individually or in aggreg
Slide 25: External Reviews and Certifications
External Reviews and Certifications. CBI Programmatic Certification For all Green Bonds issued under Westpac’s Green Bond Framework, Westpac will obtain Climate Bonds Initiative Programmatic Certification. Post-issuance external verification On an annual basis, an external auditor will verify the tr
Slide 26: Green Bond asset pool
Green Bond asset pool. Green Bond Pool as at 31 March 2021 Aggregate Statistics by Sector Sector TCE𝟏,𝟐 (A$m) Share of Green Bond Pool𝟑 (%) Renewable Energy (Solar) 688 22 AUD 689m AUD 688m Renewable Energy (Wind) 982 32 22% 22% Low Carbon Buildings 720 24 Low Carbon Transport (Rail) 689 22 AUD…
Slide 27: Transaction details
Transaction details Westpac Banking Corporation ABN 33 007141
Slide 28: Westpac Green Euro 10NC5 Tier 2 Subordinated Instruments
Westpac Green Euro 10NC5 Tier 2 Subordinated Instruments1. Issuer • Westpac Banking Corporation (“Westpac”) Issuer Ratings2 • Aa3 (Stable) | AA- (Negative) | A+ (Stable) (Moody’s/S&P Global Ratings/Fitch) Expected Issue Ratings2 • Baa1(hyb) | BBB+ (Moody’s/S&P Global Ratings) • Westpac’s US$70,000,0
Slide 29: Westpac Green Euro 10NC5 Tier 2 Subordinated Instruments
Westpac Green Euro 10NC5 Tier 2 Subordinated Instruments1. • A Non-Viability Trigger Event will occur when APRA notifies Westpac in writing that it believes Westpac would become non-viable without: Non-Viability Trigger − Conversion or Write-off of Subordinated Instruments or conversion, write-off o
Slide 30: Appendices
Appendices Westpac Banking Corporation ABN 33 007141
Slide 31: Appendix 1: Sustainability recognition
Appendix 1: Sustainability recognition Industry recognition Sustainability indexes Inclusion and diversity recognition Received “B” rating in the 2020 Recognised by the CDP for our response to Member of the DJSI Bloomberg Gender Equality Climate Change, announced Indexes since 2002 Index for the 5th
Slide 32: Appendix 2: Sustainability commitments and partnerships
Appendix 2: Sustainability commitments and partnerships. Key commitments and partnerships Principles for Responsible Banking Principles for Responsible Investment UN Sustainable Development Goals Paris Climate Agreement Signatory 2019 Signatory (2007) CEO Statement of Commitment (2015) Supporter (20
Slide 33: Appendix 3: Climate-related disclosures – scenario analysis
Appendix 3: Climate-related disclosures – scenario analysis. Transition risk – key points Alignment with the TCFD • Transition climate risk includes domestic and market changes when moving to • We continue to integrate the consideration of climate-related risks and a greener economy, which can resul
Slide 34: More information
More information. www.westpac.com.au/investorcentre + - X Contact our Global Funding Team Joanne Dawson Alexander Bischoff Jacqueline Boddy Treasurer, Westpac Banking Corporation Head of Balance Sheet Management and Global Funding Head of Debt Investor Relations +61 2 8253 4420 +61 2 8253 4314 +61 2
Slide 35: 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 should not be reproduced, distributed or transmitted to any person without the consent of Westpac and is not
Slide 36: Disclaimer
Disclaimer. PROHIBITION OF SALES TO UK RETAIL INVESTORS – The Subordinated Instruments are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the UK. For these purposes, a retail investor means a perso
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