Westpac Banking Corporation · ASX:WBC
Westpac Banking — Goldman Sachs JBWere Australasian Investment Forum 2005
23 slides from Westpac Banking's conference presentation, Mar 7, 2005
Slide 1: Westpac – Australia's First Bank
Wifestpac Australia’s First Bank Goldman Sachs JBWere Australasian Investment Forum David Morgan Chief Executive Officer 7 March 2005
Slide 2: Westpac at a glance
Westpac at a glance ¢ Established 1817 30 Sept 2004 . Top 100 b Total assets A$245bn Cash return on equity 21% 49% A$34bn ° Core ni Cost to income ratio sustainability 1 Euromoney June 2004 (rank of 76 by | shareholders equity) i 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 | Wlfestpac GSJBW Au
Slide 3: Key points of differentiation
Key points of differentiation Strategy ~ Focused on core markets of Australia, New Zealand and near Pacific - Balanced wealth management position * Customer franchise - Large customer base skewed towards higher value segments ¢ Leader in sustainability ~ Corporate governance and sustainability ethic
Slide 4: Driving the gap between revenue and expenses
Driving the gap between revenue and expenses Revenue and expense performance (A$m) | 8,500 5 ~ 5 Year CAGR * | —@ Revenue 7% 7,500 4 -H- Expenses? 3% 6,500 4 | =i Core earnings 12% 5,500 4 | 5 year 4,500 + CAGR | ~) Cash earnings 11% | 3:500.5 Cash EPS 11% | 2500 4 ROE (5 year avg) | 20% 1, Underlyi
Slide 5: Consistently delivering strong growth and returns
5 Consistently delivering strong growth and returns Economic profit (A$m) 1,800 - 1,600 + 1,400 4 1,200 4 1,000 4 800; 600 | T # Assumes 2H9 dividend was fully franked | * Excludes significant items in 2002 1999°2000.2001.2002' 2003 2004 Total Shareholder Return (TSR) for. period 1 Jan 2002 — 31 Dec
Slide 6: Housing — growth slowing, quality remains high
Housing — growth slowing, quality remains high * Housing credit growth has | Housing credit growth fallen from peak of above 21% to 14% * Higher growth segments have eased and prices are softer | 46. * Competition has intensified as V growth has slowed | 42 | | Annual % Change 20 * Signs of industry
Slide 7: Australian Business and Consumer Banking
Australian Business and Consumer Banking * Business and Consumer Banking Business and Consumer Banking delivered 52% of the group’s Cash Earnings cash earnings In 2004 (A$m - year.ended 30 September) a, . 1,600.5 ¢ Maintaining strong earnings 1350 momentum 1,400 5 ; 1,165 7 . 1,200 4 * Competition n
Slide 8: Westpac housing — delivering profitable growth
8 Westpac housing — delivering profitable growth * Consistently delivered profitable growth in housing lending with some loss of market share September.2004 full December qtr year outcome 2004 outcome Housing lending growth 12% 6% (Annualised) Change in spreads Down 3% Up 1% Change in market share D
Slide 9: Business lending continues to perform well
9 Business lending continues to perform well ¢ e Success of business markets strategy continues to deliver value - Increasing points of contact ~ Roll-out of CRM platform ~ Industry packages ~ Improved process technology Business lending (SME and Middle Market) up 15% in 2004 against market growth o
Slide 10: Deposit market — competition is more intense
Deposit market — competition is more intense * Proliferation of high yield at-call Interest rates at 28 February 2005 deposit accounts has increased Official Cash Rate 5.25% deposit competition Online at-call rate * Competitive response seeks to Competitor’ with minimum : : P balance of $1 protect r
Slide 11: New Zealand Retail — maintaining momentum
11 New Zealand Retail — maintaining momentum * New Zealand delivered 16% of the group’s cash earnings in New Zealand Cash Earnings (A$m - year ended 30 September) 2004 450.5 406 * Benefits flowing from 400.4 repositioning of business. 350 - 342 In 2004: 300 | 2278 ~- Employee satisfaction up 6% 9350
Slide 12: New Zealand — status on current issues
New Zealand — status on current issues Incorporation. | Agreed to incorporate key operations in NZ Incorporation model yet to be determined, although agreed that Westpac can operate both an incorporated entity and branch in NZ Cost impact not expected to be material Outsourcing Draft outsourcing pol
Slide 13: BT — ahead of expectations
13 BT — ahead of expectations * BT delivered 8% of the group’s cash earnings in 2004 BT Cash Earnings (A$m - year ended 30 September) 250.7 * Integration now behind us and on-track to deliver $116m in 496 ongoing synergies from 2005 200. 5 16s * Strong fund performance - top j.., | quartile over 1yr
Slide 14: Westpac Institutional Bank (WIB) — performing well
Westpac Institutional bank (WIB) — performing wel * WIB delivered 19% of the Institutional Bank Cash Earnings group’s cash earnings in 2004 (A$m - year ended 30 September) 600 5 * Strategy to reclaim lead bank status is paying dividends 500 4 489 ~ Customer related revenues up 384 12% in 2004 400 -
Slide 15: Compliance projects — tracking to plan
15 Compliance projects — tracking to plan Major 2005 Status compliance expected projects spend (A$m) Seeking accreditation by 2006 and implementation in 2008 Basel II 10 Capital release on transition dependent on APRA although. capital intensity of business written after 2008 should be substantially
Slide 16: Economic outlook remains supportive
16 Economic outlook remains supportive * Australia and New Zealand Key economic indicators economic fundamentals sound: Son 04 Sap 05 . . inanci ep 04. Sep ~- Solid domestic demand Financial year ended % % ~ Unemployment at 30 year lows Australia ¢« Business and consumer GDP 4.0 2.2 surveys continue
Slide 17: Credit growth returning to long term trend
17 Credit growth returning to long term trend ustralian credit growth (%) : Forecasts (To Sep 2005) 4. 20 r16 NEP a) +8 4 0 pon} -8 ep-90.. Sep-92 Sep-94 Sep-96 . Sep-98 -Sep-00 - Sep-02 ». Sep-04 ——— Housing =~-—= Business —— Totai (Aust) --*- Total credit average = ----- Total Housing average Sour
Slide 18: Stressed exposures continue to decline
Stressed exposures continue to decline Categories of stressed exposures as a percentage of total commitments (%) 1.6% yooc-sescoeancseesseseesecns 3,801" ooo ercriaeernsans “Watchlist & substandard 2,727" VAY pons fn censcgaf 00 paroessanesgneseoss % 90 days past due well secured ~. . 2,598" : : : 1
Slide 19: Forward credit indicators in good shape
19 Forward credit indicators in good shape Housing Portfolio - 90 day delinquencies (%) 1.5 ; 1.0 0.5. 0.0 + T r T 7 er T T a! "96 -'97°'98 99 -'00 "01 "02°03 -'04 1Q05 Aust. Business Banking - 90 day. delinquencies (3 3 month moving average) (%) 2.0 4.5 1.0 0.5 0.0 + T T T mal r T 1 1999-2000, 2001
Slide 20: Recent influences on capital and dividend policy
Recent influences on capital and dividend policy « At 30 September 2004, ACE ratio Dividends per share (cents) was around the midpoint of the as target range aoa « Recent developments improving capital flexibility: - Run-off of EPIC assets, A$297m ~ APRA clarification on treatment of pension fund su
Slide 21: Outlook remains positive
21 Outlook remains positive ¢ More competitive environment * Actively managing the growth/margin trade-off ¢ Asset quality remaining first class * Good earnings momentum across the group * Continue to be comfortable with the outlook for the year Wlfestpac GSJBW Australasian Investment Forum — March
Slide 22: Westpac – Closing slide
Wifestpac Australia’s First Bank Goldman Sachs JBWere Australasian Investment Forum David Morgan Chief Executive Officer 7 March 2005
Slide 23: Disclaimer
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 advice
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