Westpac Banking Corporation · ASX:WBC
Westpac Banking — Debt Investor Presentation (July 2013)
23 slides from Westpac Banking's debt investor presentation, Jul 10, 2013
Slide 1: Westpac Subordinated Notes II
For personal use only WESTPAC GROUP WESTPAC SUBORDINATED NOTES II July 2013 Westpac Banking Corporation ABN 33 007 457 141.
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 This presentation has been prepared and authorised by Westpac Banking Corporation (ABN 33 007 457 141, AFSL 233714) in connection with a proposed offer of Westpac Subordinate
Slide 3: Westpac Subordinated Notes II summary
Westpac Subordinated Notes II summary For personal use only Issuer • Westpac Banking Corporation ("Westpac") • A$750 million with the ability to raise more or less Offer • The proceeds will be used for general business purposes • The Offer includes a Reinvestment Offer to Eligible Westpac SPS Holder
Slide 4: Westpac Subordinated Notes II summary (cont.)
Westpac Subordinated Notes II summary (cont.) For personal use only • Floating Interest Rate (Interest Rate = 90 day Bank Bill Rate + Margin) Interest Rate • Fixed Margin to be determined under the Bookbuild and expected to be in the range of 2.30% to 2.45% p.a. • The 90 day Bank Bill Rate is set on
Slide 5: Subordination and ranking of Westpac Subordinated Notes II
Subordination and ranking of Westpac Subordinated Notes II For personal use only • In a Winding-Up of Westpac, Westpac Subordinated Notes II (if they are on issue at the time) rank: – ahead of Ordinary Shares; – ahead of Tier 1 Capital Instruments, such as Westpac SPS and Westpac Capital Notes; and
Slide 6: Offer summary
Offer summary For personal use only • The Offer is for the issue of Westpac Subordinated Notes II at a Face Value of A$100 each to raise approximately Offer size A$750 million (with the ability to raise more or less) • The Offer includes a Reinvestment Offer, being a priority offer to Eligible Westp
Slide 7: Comparing Westpac Subordinated Notes II
Comparing Westpac Subordinated Notes II For personal use only Westpac Subordinated Westpac Subordinated Westpac Term Deposit Westpac Capital Notes Westpac SPS Notes 2012 Notes II ASX code Not quoted on ASX WBCHA WBCHB1 WBCPD WBCPA Note; Unsecured Note; Unsecured Note; Unsecured Stapled security; One
Slide 8: Comparing Westpac Subordinated Notes II (cont.)
Comparing Westpac Subordinated Notes II (cont.) For personal use only Westpac Subordinated Westpac Subordinated Westpac Term Deposit Westpac Capital Notes Westpac SPS Notes 2012 Notes II Are Interest / distribution / dividend No, subject to a No, subject to the No Yes Yes payments solvency condition
Slide 9: Key dates for the Offer
Key dates for the Offer For personal use only Key dates for the Offer Record date for determining Eligible Securityholders (7.00pm Sydney time) 1 July 2013 Announcement of Offer and lodgement of Prospectus with ASIC 10 July 2013 Bookbuild 17 July 2013 Announcement of Margin 17 July 2013 Lodgement of
Slide 10: Westpac Group
For personal use only WESTPAC GROUP Westpac Banking Corporation ABN 33 007 457 141.
Slide 11: Westpac – consistent, strong financial performance
Westpac – consistent, strong financial performance For personal use only Cash earnings1 ($m) Return on equity (cash basis, %) 3,525 16.4 16.5 16.1 3,403 15.8 15.6 15.9 3,168 3,195 15.1 3,133 2,949 2,930 2,605 2,442 2,332 2,295 1H10 2H10 1H11 2H11 1H12 2H12 1H13 1H08 2H08 1H09 2H09 1H10 2H10 1H11 2H1
Slide 12: Westpac's clear strategic priorities
Westpac’s clear strategic priorities For personal use only 1 A strengthened balance sheet • Basel III fully harmonised Common equity Tier 1 A$86bn A strong company ratio 11.4% market cap • Stable funding ratio1 83%, up 390bps on 1H12 The world’s 13th largest Maintain ROE above 15% bank by market 2 c
Slide 13: Setting Westpac apart – domestic focus, balance sheet strength and efficiency
Setting Westpac apart – Domestic focus, balance sheet strength and efficiency For personal use only Clear focus on home markets of Australia and New Zealand Leader in efficiency Total income by geography1 (%) Expense to income ratio2 (%) 1 4 9 16 8 15 45.1 Asia, Pacific, Europe 44.4 & Americas 7 43.
Slide 14: Strong Common equity Tier 1 ratio against global peers
Strong Common equity Tier 1 ratio against global peers For personal use only Global peer comparison of Basel III pro-forma Common equity Tier 1 ratios1 (%) 15.0 14.4 14.0 13.5 13.0 12.0 11.8 11.6 11.4 11.0 10.8 10.6 10.5 10.3 10.1 10.0 10.0 9.6 9.5 9.4 Basel III minimum 7.0% 9.3 9.3 9.3 9.3 9.0 8.9
Slide 15: Strong capital position, up across all measures in 1H13
Strong capital position, up across all measures in 1H13 For personal use only • Westpac operates under APRA Basel III Key capital ratios (%) 1H12 2H12 1H13 regulations from 1 January 2013 APRA Basel 2.5 APRA Basel III • Preferred range for Common equity Tier 1 ratio of 8.0% to 8.5%, comfortably abov
Slide 16: Strong funding profile supported by customer deposit growth
Strong funding profile supported by customer deposit growth For personal use only Funding composition by residual maturity (%) Westpac deposit growth funding loan growth Customer deposit growth ($bn) SFR1 64% SFR1 83% SFR1 83% Net loan growth ($bn) 69.0 30 Customer deposit to loans ratio (%) 27.8 70
Slide 17: Term funding focused on flexibility and diversity
Term funding focused on flexibility and diversity For personal use only New term issuance by type1 (%) New term issuance by original tenor1,2 (%) FY12 2013 year 1H13to date5 FY12 FY12 year to date5 2013 1H13 4 9 8 15 18 9 11 8 17 47 48 40 24 20 45 33 27 6 12 Senior unsecured Covered bonds RMBS & ABS
Slide 18: Significant improvement in asset quality in 1H13
Significant improvement in asset quality in 1H13 For personal use only Stressed exposures as a % of TCE1 (%) and provisions ($m) Australian mortgages delinquencies and loss rates (%) Watchlist & substandard (%, lhs) 4.0 90+ Past Due Total 90+ First Home Buyer 90+ days past due well secured (%, lhs)
Slide 19: Joint Lead Managers
Joint Lead Managers For personal use only • Allan O’Sullivan (02) 8254 1425 Westpac Institutional Bank • Robbie Moulton (02) 8253 4584 • Rupert Daly (02) 8258 1408 Deutsche Bank • Mozammel Ali (02) 8258 1845 • Michael Cluskey (03) 9679 1138 Goldman Sachs • Andrew Edwards Parton (02) 9320 1296 • Kate
Slide 20: Contacts
Contacts For personal use only For further information contact For further information on Westpac, please visit our investor website: Group Treasury www.westpac.com.au/investorcentre Joanne Dawson Deputy Treasurer, Westpac Banking Corporation Go to ‘Latest news’ to access information on +61 2 8204 2
Slide 21: Reinvestment Offer – Options for Eligible SPS Holders
Reinvestment Offer – Options for Eligible SPS Holders For personal use only • Eligible Westpac SPS Holders may apply to have all of their Westpac SPS held on the Reinvestment Offer Record Date Apply to reinvest all of reinvested in Westpac Subordinated Notes II 1 your Westpac SPS • Eligible Westpac
Slide 22: Key dates for the Reinvestment Offer
Key dates for the Reinvestment Offer For personal use only Key dates for the Reinvestment Offer Reinvestment Offer Record Date for determining Eligible Westpac SPS Holders (7.00pm Sydney time) 1 July 2013 Opening Date for the Reinvestment Offer 18 July 2013 Closing Date for the Reinvestment Offer (5
Slide 23: Key risks of Westpac Subordinated Notes II
Key risks of Westpac Subordinated Notes II For personal use only • It is possible that the Notes may trade at a market price below their Face Value. • Circumstances in which the market price of the Notes may decline include general financial market conditions, changes in investor perception and sent
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