Westpac Banking Corporation · ASX:WBC
Westpac Banking — Debt Investor Presentation (July 2015)
33 slides from Westpac Banking's debt investor presentation, Jul 27, 2015
Slide 1: Westpac Capital Notes 3 – July 2015
For personal use only Westpac Capital Notes 3 July 2015
Slide 2: Disclaimer
Disclaimer For personal use only THIS PRESENTATION IS NOT FOR DISTRIBUTION TO ANY U.S. PERSON OR ADDRESS IN THE UNITED STATES. ALL ELIGIBLE INVESTORS MUST RECEIVE AND READ A COPY OF THE PROSPECTUS. YOU SHOULD CONSIDER AND READ THE PROSPECTUS IN FULL BEFORE DECIDING WHETHER TO INVEST IN WESTPAC CAPIT
Slide 3: Westpac Capital Notes 3 Highlights
Westpac Capital Notes 3 Highlights For personal use only Highlights for investors Highlights for Westpac • A new investment in Westpac Banking Corporation • A new Basel III compliant security that will qualify as Additional Tier 1 Capital • Non-cumulative floating rate Distributions, payable quarter
Slide 4: Maintaining balance sheet strength, efficiency and consistent earnings
Maintaining balance sheet strength, efficiency and consistent earnings For personal use only Maintaining a strong balance sheet Risk management a competitive advantage Westpac key balance sheet ratios at 31 March 2015 (%) Total impaired loans to total loans1 (%) 114 100 8.8 8.0 0.54 83 >75 0.48 0.45
Slide 5: Summary of terms
Westpac Capital Notes 3 Summary of terms For personal use only Issuer • Westpac Banking Corporation (Westpac), through its London branch Offer size • A$750 million with the ability to raise more or less Face Value • A$100 per Note Purpose • Notes will qualify as Additional Tier 1 Capital of the West
Slide 6: Ranking of Westpac Capital Notes in a Winding Up
Ranking of Westpac Capital Notes 3 in a Winding Up For personal use only Higher ranking Illustrative examples1 Liabilities in Australia in relation to protected accounts (generally, savings accounts and Preferred and secured debt term deposits) and other liabilities preferred by law including employ
Slide 7: Trigger Events
Westpac Capital Notes 3 Trigger Events For personal use only Capital Trigger • Westpac determines or APRA notifies Westpac in writing that it believes Westpac’s Common Equity Tier 1 Capital Ratio is Event equal to or less than 5.125% (on either a Level 1 or Level 2 basis) Non-Viability • APRA notifi
Slide 8: Capital levels ahead of regulatory minimums and Capital Trigger Event level
Capital levels ahead of regulatory minimums and Capital Trigger Event level For personal use only • Westpac is well capitalised with a preferred CET1 capital range of Westpac’s Common Equity Tier 1 (CET1) capital ratio on a 8.75% - 9.25% Level 2 basis (%) • As at 31 March 2015 Westpac’s CET1 capital
Slide 9: CET1 capital and significant earnings buffers to absorb loss ahead of Additional Tier 1 securities
CET1 capital and significant earnings buffers to absorb loss ahead of Additional Tier 1 securities1 For personal use only • Westpac’s capital position and earnings provide a significant CET1 capital and earnings buffers above Capital Trigger level buffer for Additional Tier 1 investors ‒ $12.6bn of
Slide 10: Additional Tier 1 and Tier 2 capital
Additional Tier 1 and Tier 2 capital For personal use only • Westpac seeks to have both an appropriate level and appropriate Westpac is maintaining a strong capital base mix of capital • Westpac Capital Notes 3: Total Regulatory Capital (%) CET1 Additional Tier 1 Tier 2 ‒ Increases overall Tier 1 Ca
Slide 11: Offer summary
Offer summary For personal use only Offer • The Offer is for the issue of Westpac Capital Notes 3 by Westpac, through its London branch, at a Face Value of A$100 to raise approximately A$750 million, with the ability to raise more or less Who can • The Offer consists of: apply? – a Securityholder Of
Slide 12: Key dates
Key dates For personal use only Key dates for the Offer Record date for determining Eligible Securityholders (7.00pm Sydney time) 20 July 2015 Announcement of Offer and lodgement of Prospectus with ASIC 27 July 2015 Bookbuild 5 August 2015 Announcement of Margin 5 August 2015 Lodgement of replacemen
Slide 13: Westpac Capital Notes 3 Additional Information
For personal use only Westpac Capital Notes 3 Additional Information Westpac Banking Corporation ABN 33 007 457 141.
Slide 14: Distributions
Westpac Capital Notes 3 Distributions For personal use only Distributions • Non-cumulative, quarterly Distributions based on a floating rate (90 day BBSW) • Expected to be fully franked (if not fully franked the cash amount of the Distribution will be increased to compensate for the unfranked portio
Slide 15: Optional Conversion, Redemption or Transfer and mandatory Conversion upon an Acquisition Event
Optional Conversion, Redemption or Transfer and mandatory Conversion upon an Acquisition Event For personal use only Optional Conversion, • Westpac may elect to Convert, Redeem or Transfer Notes: Redemption or – on 22 March 2021 (some or all Notes) Transfer – following a Tax Event or a Regulatory Ev
Slide 16: Scheduled Conversion
Westpac Capital Notes 3 Scheduled Conversion For personal use only Scheduled • On 22 March 2023 (“Scheduled Conversion Date”), subject to the Scheduled Conversion Conditions being satisfied, the Conversion Notes will mandatorily Convert into Ordinary Shares • Holders will receive for each Note they
Slide 17: Summary of certain events that may occur during the term of Westpac Capital Notes 3
Summary of certain events that may occur during the term of Westpac Capital Notes 3 For personal use only The table below is a summary of certain events that may occur during the term of Westpac Capital Notes 3, and summarises what Holders may receive upon the occurrence of such events. The events m
Slide 18: Comparison to other recent Westpac Additional Tier 1 securities
Comparison to other recent Westpac Additional Tier 1 Securities For personal use only Westpac Capital Notes 3 Westpac Capital Notes 2 Westpac Capital Notes ASX code WBCPF WBCPE WBCPD Term • Perpetual with the first possible • Perpetual with the first possible • Perpetual with the first possible Sche
Slide 19: Key risks
Westpac Capital Notes 3 Key risks For personal use only Key risks Key risks • The Notes are not deposit liabilities or protected accounts of • There is a risk that Distributions may not be paid. Distributions are Westpac for the purposes of the Banking Act or Financial Claims discretionary, non-cumu
Slide 20: Key risks (continued)
Westpac Capital Notes 3 Key risks (continued) For personal use only Key risks Key risks • In the event of a Winding Up, if the Notes are still on issue and • The Ordinary Share price used to calculate the number of Ordinary have not been Redeemed or Converted, they will rank ahead of Shares to be is
Slide 21: Information on Westpac Banking Corporation
For personal use only Westpac Capital Notes 3 Information on Westpac Banking Corporation Westpac Banking Corporation ABN 33 007 457 141.
Slide 22: First Half 2015 Financial performance
First Half 2015 Financial performance For personal use only % Change Cash earnings 1H15 – 2H14 ($m) 1H15 Financial Results 1H15 1H15 – 2H14 181 122 Financial results (A$m) 3,856 73 32 32 3,778 Net profit after tax 3,609 (8) • Derivative adjustments2 $122m impact Cash earnings1 3,778 (2) • Excluding
Slide 23: Steadily building our customer franchise
Steadily building our customer franchise For personal use only Retail banking driving earnings Increasing customer numbers Leading consumer satisfaction 1H15 cash earnings by division (%) Australian retail customer numbers (#m) Total consumer satisfaction2 (%) 2 WRBB SGB Peers WRBB WRBB SGB 9.8 10.1
Slide 24: Asset quality a highlight
Asset quality a highlight For personal use only Stressed exposures as a % of TCE and provisions1 ($m) Impaired 90+ days past due and not impaired Watchlist & substandard . 3.09 3.20 2.48 2.26 2.17 2.07 1.94 2.23 1.45 1.60 1.30 1.26 1.24 1.37 1.03 1.24 1.12 0.85 0.88 0.75 0.91 0.46 0.41 0.40 0.71 0.6
Slide 25: Portfolio well diversified across industries
Portfolio well diversified across industries For personal use only Exposures at default1 by sector2 ($m) Stressed exposure by industry over last 3 halves ($bn) Finance & insurance3 3.5 1H15 lower stressed exposure 4 Property 3.0 1H15 higher stressed exposure Wholesale & Retail Trade Manufacturing 2.
Slide 26: High levels of borrower equity support
High levels of borrower equity support Australian mortgage portfolio For personal use only 1H14 2H14 1H15 1H15 Australian housing loan-to-value ratios (LVRs)2 (%) Australian housing portfolio balance balance balance flow1 1H15 drawdowns LVR at origination Total portfolio ($bn) 338.0 351.0 362.8 37.0
Slide 27: Mortgage customers continuing to repay ahead of schedule
Mortgage customers continuing to repay ahead of schedule For personal use only Australian home loan customers ahead on repayments1,2 (%) Australian mortgage lending volumes ($bn) Mar-14 Sep-14 Mar-15 37.0 ( 25.2) 36.9 ( 23.9) 30 362.8 73% ahead on repayments 351.0 25 338.0 20 15 10 5 Run-off Run-off
Slide 28: Strong liquidity position
Strong liquidity position LCR 114% For personal use only • Westpac’s Liquidity Coverage Ratio (LCR) Pro forma % Mov’t 1H15 – Liquidity Coverage Ratio ($m) as at 1H15 114% at 31 March 2015 as at 2H14 pro forma 2H14 • The LCR requires banks to hold 100% of High Quality Liquid Assets1 (HQLA) 59 57 (3)
Slide 29: Sound funding profile
Sound funding profile Stable sources providing 83% of all funding For personal use only • Stable Funding Ratio maintained at Maintaining a stable funding profile 83.2% as the Group continues to focus on funding growth through stable funding Funding composition by residual maturity (%) sources Stable
Slide 30: Wholesale term issuance well diversified
Wholesale term issuance well diversified Benefit from broad product capabilities For personal use only 1H15 new term issuance composition1 (%) Australian covered bond issuance5 Remaining capacity By type By tenor 2,3 By currency (8% cap & over-collateralisation) ($bn) Issued ($bn) 23 11 20 10 41 2 8
Slide 31: Appendix 1: Definitions
Appendix 1: Definitions For personal use only Key metrics Asset quality Core earnings Operating profit before income tax and impairment charges Stressed Stressed loans are the total of watchlist and substandard assets, 90 days loans past due and not impaired assets, and impaired assets Net interest
Slide 32: Appendix 2: Joint Lead Managers
Appendix 2: Joint Lead Managers For personal use only • Allan O’Sullivan (02) 8254 1425 Westpac Institutional Bank • Robbie Moulton (02) 8253 4584 ANZ Securities • Tariq Holdich (02) 8037 0622 • Truong Le (02) 9118 1205 Commonwealth Bank of Australia • Trevor Franz (02) 9118 1211 • Duncan Beattie (0
Slide 33: Information for investors
Information for investors For personal use only Westpac Treasury contacts Information for Westpac Capital Notes 3 investors Curt Zuber Joanne Dawson Westpac Capital Notes 3 Treasurer Deputy Treasurer Copies of the Prospectus are available at Westpac Banking Corporation Westpac Banking Corporation ww
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