Westpac Banking Corporation · ASX:WBC
Westpac Banking — Debt Investor Presentation (November 2018)
37 slides from Westpac Banking's debt investor presentation, Nov 12, 2018
Slide 1: Westpac Capital Notes 6 Investor Presentation
For personal use only CAUTION – Westpac Capital Notes 6 are not deposit liabilities of Westpac, are riskier than bank deposits and may not be suitable for some investors. Their complexity may make them difficult to understand and the risks associated with the Notes could result in the loss of all of
Slide 2: Disclaimer
Click icon to add picture 2 Disclaimer For personal use only THIS PRESENTATION IS NOT FOR DISTRIBUTION IN THE UNITED STATES. YOU SHOULD CONSIDER AND READ THE PROSPECTUS IN FULL BEFORE DECIDING WHETHER TO INVEST IN WESTPAC CAPITAL NOTES 6. This presentation has been prepared and authorised by Westpac
Slide 3: Disclaimer (continued)
Click icon to add picture 3 Disclaimer (continued) For personal use only No representation or warranty, express or implied, is made as to the accuracy, adequacy, currency, completeness or reliability of any statements, estimates or opinions or other information contained in this presentation. To the
Slide 4: Westpac Capital Notes Summary of terms and conditions
Westpac Capital Notes 6 Summary of terms and conditions 4 For personal use only Issuer • Westpac Banking Corporation (“Westpac”) Quotation • Expected to be quoted on ASX under code WBCPI Size • Approximately A$750 million with the ability to raise more or less • Notes will qualify as Additional Tier
Slide 5: Summary of terms and conditions (continued)
Westpac Capital Notes 6 Summary of terms and conditions (continued) 5 For personal use only • A Capital Trigger Event occurs if Westpac determines, or APRA notifies Westpac in writing that it believes, that Westpac’s Common Equity Tier 1 Capital Trigger Event Capital Ratio is equal to or less than 5
Slide 6: Comparison to other Westpac Group ASX listed Additional Tier 1 securities
Comparison to other Westpac Group ASX listed Additional Tier 1 securities1 6 Westpac Capital Notes 6 Westpac Capital Notes 5 Westpac Capital Notes For personal use only ASX code WBCPI2 WBCPH WBCPD Issue date • 18 December 2018 • 13 March 2018 • 8 March 2013 Term • Perpetual with the first possible •
Slide 7: Westpac has limited Additional Tier 1 needs
Westpac has limited Additional Tier 1 needs 7 For personal use only Westpac Total Regulatory Capital (%) Annual issuance in the range of AUD1.3bn - 1.7bn1 . Basel III AT1 issuance from FY13 (notional amount, AUD m) Westpac CET1 Additional Tier 1 Tier 2 USD issuance 21.5 AUD issuance (securityholder/
Slide 8: Westpac 2018 financial performance
Westpac 2018 financial performance 8 For personal use only Flat cash earnings1 growth in a challenging year Balance sheet in great shape across all dimensions Cash earnings movements ($m) full year • CET1 capital ratio 10.6%, APRA Basel III basis • CET1 capital ratio 16.1%, Basel III internationally
Slide 9: Well positioned for 'Unquestionably strong'
Well positioned for ‘Unquestionably strong’ 9 For personal use only Capital ratios (%) CET1 capital ratio (%) and CET1 capital ($bn) (APRA basis) Sep-17 Mar-18 Sep-18 Westpac CET1 capital (lhs, $bn) APRA industry CET1 capital ratio 10.6 10.5 Westpac CET1 capital ratio (rhs, %) 10.6 guidelines 10.5%
Slide 10: Significant capital and earnings buffers
Significant capital and earnings buffers 10 For personal use only Distribution Restriction Trigger1 Indicative Level 2 buffers3 Potential measures available to Westpac to strengthen capital • DRP discount and/or DRP underwrite • New share issuance FY18 $12.4bn • RWA management CET1 10.6% as at earni
Slide 11: Westpac Capital Notes Offer Summary
Westpac Capital Notes 6 Offer Summary 11 For personal use only • The Offer is for the issue of Westpac Capital Notes 6 at an Issue Price of A$100 to raise approximately A$750 million, with the ability to raise more or less • The Offer includes a Reinvestment Offer, which is a priority offer to Eligi
Slide 12: Priority Reinvestment Offer for Eligible Westpac Capital Notes Holders
Priority Reinvestment Offer for Eligible Westpac Capital Notes Holders 12 For personal use only • A priority offer to Eligible Westpac Capital Notes Holders to apply to reinvest some or all of their Westpac Capital Notes in Notes Reinvestment Offer through the Reinvestment Offer • An Eligible Westpa
Slide 13: Key dates
Key dates 13 For personal use only Key dates for the Offer Key dates for Westpac Capital Notes 6 Record date for determining Eligible Securityholders 5 November 2018 Record Date for first Distribution 8 March 2019 (7.00pm Sydney time) Announcement of Offer and lodgement of 12 November 2018 First Dis
Slide 14: Westpac Capital Notes key risks
Westpac Capital Notes 6 key risks 14 Caution - Westpac Capital Notes 6 are not deposit liabilities of Westpac, are riskier than bank deposits and may not be suitable for some investors. Their complexity may For personal use only make them difficult to understand and the risks associated with the Not
Slide 15: Westpac Capital Notes key risks (continued)
Westpac Capital Notes 6 key risks (continued) 15 Caution - Westpac Capital Notes 6 are not deposit liabilities of Westpac, are riskier than bank deposits and may not be suitable for some investors. Their complexity may make them difficult to understand and the risks associated with the Notes could r
Slide 16: Additional Information and Appendices
For personal use only Additional Information and Appendices Westpac Capital Notes 6 I November 2018
Slide 17: Westpac Group at a glance: Australia's First Bank
Westpac Group at a glance: Australia’s First Bank 17 For personal use only • In its 202nd year, Australia’s first bank and first company, opened 1817 Consumer Business BT Financial Institutional Westpac • Australia’s 2nd largest bank and 20th largest bank in the world; Bank Bank Group Bank New Zeala
Slide 18: Consistent performer over the long term
Consistent performer over the long term 18 For personal use only Cash earnings ($bn) Cash earnings per share (cents) 245.4 248.2 235.5 239.7 236.2 8.1 8.1 227.8 7.8 7.8 209.3 214.8 7.6 198.3 197.8 163.7 7.1 6.6 6.3 5.9 5.0 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 4.7 Ordinary dividend
Slide 19: AUD32bn new term funding raised in FY18
AUD32bn new term funding raised in FY18 19 For personal use only Term debt issuance and maturity profile1,2,3 ($bn) Covered bond Hybrid Senior/Securitisation Sub debt 42 Issuance Maturities 37 33 31 32 29 30 30 27 22 17 5 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 >FY24 New term issuance
Slide 20: Westpac Tier issuance and maturities
Westpac Tier 2 issuance and maturities 20 For personal use only Westpac Tier 2 issuance ($m, AUD equivalent)1 Westpac Tier 2 maturities2 (A$m) AUD USD CNY SGD JPY NZD HKD . Basel III transitional Basel III issuance1 ($m) issuance 2,947 2,078 2,879 1,907 1,195 1,150 1,066 1,000 941 1,290 1,000 925 92
Slide 21: Stressed exposures little changed
Stressed exposures little changed 21 For personal use only Stressed exposures as a % of TCE (%) New and increased gross impaired assets ($m) 1,343 Watchlist & substandard 1,194 1,060 1,078 997 958 1 90+ day past due (dpd) and not impaired 708 Impaired 609 607 633 589 477 440 471 450 2.48 2.17 2H11 1
Slide 22: Australian mortgage portfolio performance
Australian mortgage portfolio performance 22 For personal use only Australian mortgage delinquencies and Sep-17 Mar-18 Sep-18 Australian mortgage portfolio delinquencies (%) properties in possession (PIPs) 90+ day past due total 90+ day past due investor 30+ day delinquencies (bps) 130 144 3.0 140 3
Slide 23: Australian mortgage portfolio well collateralised
Australian mortgage portfolio well collateralised 23 For personal use only Sep-17 Mar-18 Sep-18 2H18 Australian mortgage portfolio balance balance balance flow1 Australian housing loan-to-value ratios (LVRs) (%) 100 FY18 drawdowns LVR at origination Total portfolio ($bn) 427.2 437.2 444.7 36.9 90 Po
Slide 24: Impact of macro-prudential measures across Australian industry
Impact of macro-prudential measures across Australian industry 24 For personal use only Change in composition of housing credit Introduction of differentiated mortgage pricing Australian housing credit growth (6mth % change annualised) % Mortgage interest rates (major bank average) % 7.5 10% limit o
Slide 25: The Australian housing market has cooled
The Australian housing market has cooled 25 For personal use only Dwelling prices cooling Price decline felt most in the top 25% of house prices Change in Australian dwelling prices (annual %) Dwelling prices by property value ann% ann% 25 30 ann % (annual %, all dwellings, seasonally adjusted by We
Slide 26: Physical supply/demand fundamentals remain supportive across wider market
Physical supply/demand fundamentals remain supportive across wider market 26 For personal use only Dwelling supply has not kept pace with stronger demand Rental vacancy rates remain low in Sydney and Melbourne Population versus dwelling stock (annual average change ‘000) ‘000 Rental vacancy rates (%
Slide 27: Australian economic snapshot – growth to moderate
Australian economic snapshot – growth to moderate 27 For personal use only Australian economy key statistics Global backdrop less positive Inflation remains subdued1 (latest available as at October 2018) Avg RBA core CPI %qtr (rhs) Westpac global trade PMI %yr %qtr Index 8 Headline CPI %yr (lhs) 3.2
Slide 28: Westpac Capital Notes Additional Information
Westpac Capital Notes 6 Additional Information 28 For personal use only • Non-cumulative, floating rate Distributions paid quarterly in arrear • Expected to be fully franked (if not fully franked the cash amount of the Distribution will be increased to compensate for the unfranked portion)1 Distribu
Slide 29: Westpac Capital Notes Additional Information: Scheduled Conversion
Westpac Capital Notes 6 Additional Information Scheduled Conversion 29 For personal use only • On 31 July 2026, the first possible “Scheduled Conversion Date” and subject to the Scheduled Conversion Conditions being satisfied, the Notes will mandatorily Convert into Ordinary Shares Scheduled Convers
Slide 30: Summary of certain events that may occur
Westpac Capital Notes 6 Additional Information Summary of certain events that may occur 30 The table below is a summary of certain events that may occur while the Notes are on issue and what Holders may receive under the Westpac Capital Notes 6 Terms. For personal use only The events may not occur a
Slide 31: Appendix 1: Internationally comparable capital ratio reconciliation
Appendix 1: Internationally comparable capital ratio reconciliation 31 For personal use only 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 by Australian banks. In July 2015, APRA p
Slide 32: Appendix 2: Regulatory capital agenda
Appendix 2: Regulatory capital agenda 32 For personal use only 2H18 2019 2020 2021 2023+ New Basel III framework Consult Finalise Implementation Implement – 1 July Counterparty credit risk 2019 Implement – 1 July Leverage ratio Finalise 2019 Standardised approach Consult and Consult Implementation t
Slide 33: Appendix 3: Cash earnings adjustments
Appendix 3: Cash earnings adjustments 33 For personal use only Cash earnings FY18 FY17 adjustment ($m) ($m) Description Reported net profit 8,095 7,990 Net profit attributable to owners of Westpac Banking Corporation Identifiable intangible assets arising from business acquisitions are amortised ove
Slide 34: Appendix 4: Definitions
Appendix 4: Definitions 34 As defined by APRA (unless stated otherwise) For personal use only Capital ratios The NSFR is defined as the ratio of the amount of available stable funding (ASF) to the amount of required stable funding Assets (both on and off-balance sheet) are risk weighted according (R
Slide 35: Appendix 4: Definitions (cont.)
Appendix 4: Definitions (cont.) 35 Total Represents the sum of the committed portion of direct lending Loans not found to be individually impaired or significant will be For personal use only committed (including funds placement overall and deposits placed), contingent collectively assessed in pools
Slide 36: Appendix 5: Joint Lead Managers
Appendix 5: Joint Lead Managers 36 For personal use only ARRANGER AND JOINT LEAD MANAGER • Allan O’Sullivan (02) 8254 1425 Westpac Institutional Bank • Ryan Evans (02) 8254 4694 JOINT LEAD MANAGERS ANZ Securities Limited • Tariq Holdich (02) 8037 0622 • Truong Le (02) 9118 1205 Commonwealth Bank of
Slide 37: More information
More information | www.westpac.com.au/investorcentre 37 For personal use only + - X Key Treasury contacts Curt Zuber Joanne Dawson Guy Volpicella Treasurer, Westpac Banking Corporation Deputy Treasurer, Westpac Banking Corporation Managing Director, Structured Funding & Capital +61 2 8253 4230 +61 2
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