Westpac Banking Corporation · ASX:WBC
Westpac Banking — Credit Suisse Asian Investment Conference Hong Kong 2007
18 slides from Westpac Banking's conference presentation, Mar 29, 2007
Slide 1: Investor Roadshow Pack
AMestpac Australia’s First Bank Investor Roadshow Pack 2 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. A
Slide 2: Index
Index Performance OVErVieW..... 0. r ener e ence ree eben tenner eee 4 DIVIGENKS ooo. ee cece cece rec en cere eee eee bese neeeeec sa resaeceu sewn serena ee 7 2007 OULOOK 20. nec cn ee ten tea tener ene et ea ence eedeetea etna eta tereiaee 8 Approach to acquisitions 20.00.00. cece ec ec ence esa
Slide 3: Composition of 2006 earnings by business unit
Composition of 2006 earnings by business unit Cash earnings 2006 (A$m) Sromts 2006 (%) BCB* 1% BT. 10% WIB ex- 209 SF. 0% NZ (NZ$) . Pacific Banking 17% © 2005* GBU 2006 large 2. RG SSER S88 eo ew Composition of 2006 cash earnings, ther 4%, Australian Business Financial Services 29% Total New Zealan
Slide 4: Strong dividend growth — higher sustainable payout
Strong dividend growth — higher sustainable payout 407 Ky 204 S.5'8:8:°8 8 EP EE £2 = NE NOON “enn 1 son gg Bwidend Deliver dividend increase each half 605 2006 dividend up 16% -~ son pat Supported by 23% ROE, 77.56 Franking | Only pay fully franked dividends significant franking New share General p
Slide 5: Leadership transition
Leadership transition Board + Chairman Leon Davis retiring March 2007 + Chairman elect Ted Evans, Board member since 2001 Chief Executive Officer + David Morgan, confirmed in 2006 his intention to retire as scheduled in December 2007. Succession process continuing. Leadership team + Changes have bee
Slide 6: Sustainability a comparative advantage
Sustainability a comparative advantage », Dow Jones 4 Sustainability Indexes Mewar 260807 Snapshot of Westpac’s 2006/07 Dow Jones Sustainability index rating Westpac total score 84% Total Scare Corporate Gnvernance Tras Excefient corporate governance, tisk Customer Relationship Management management
Slide 7: Diversified wholesale funding franchise
Diversified wholesale funding franchise Wholesale Funding + Raise efficiently priced funds within prudent liquidity limits, simultaneously building Objective capacity ahead of balance sheet needs « Well timed deals driven by investor demand « Responsible pricing and realistic volume expectations + L
Slide 8: Composition of portfolio
15 Composition of portfolio On balance sheet lending - September 2006 Margin Landing Busioesi: 26% Personat Loans Mortgages represent 43% of total commitments and 57% of funded lending Total Committed Exposure* by customer segment 400% 8% 9 8% B% 9% — | [| 80%, 60% 40%. 20%, 0% Sep-02 “ * Sep-03 Sep
Slide 9: Industry concentrations
17 Industry concentrations Total Committed Exposure and Outstandings — September 2006 (A$m) Property Banks Financial institutions Agriculture and Fishing Construction and Building Products: Business Serices Transport Electricity and Gas Supply - Food and Beverage Manufacturing and Wholesaling Person
Slide 10: Well provisioned under A-IFRS
Well provisioned under A-IFRS * On transition to A-IFRS Westpac and all Australian banks reduced their collective Provisions for impairment losses on loans ($m) ~~. provision levels 2,000 it General Resene for Credit Losses adjustment :| ’ Westpac remains well provisioned on both an i Individually A
Slide 11: Credit card loss rates
Credit card loss rates * We expect impairment losses related to credit cards will continue to rise at a rate in excess of portfolio growth * Higher impairment losses given: ~ Increase in write-offs as portfolio matures ~ Portfolio mix — growth in Low Rate cards ~ Rising industry delinquency levels e
Slide 12: Mortgage portfolio stress testing
23 Mortgage portfolio stress testing + Further improvements in the model in 2006, including additional economic variables in the stress scenarios + Capacity to absorb interest rate rises strong with 72% of amortising borrowers repaying in excess of required minimum + In addition to normal expenses,
Slide 13: Specialised Capital Group
25 Specialised Capital Group + Provides alternative asset and structured products, and institutional funds management * Solid position in a competitive market ~ Funds under management up 11% over prior year ~ Successful fund performance + Launching new funds: ~ Westpac Essential Services Trust ~ Wes
Slide 14: New Zealand
27 New Zealand * Business banking performing well * Initiatives to improve New Zealand consumer banking performance are showing traction - however, 18 month turnaround expected * Higher impairment losses offsetting underlying performance improvements Middle Business Lending Share ($5m - $100m t/o) {
Slide 15: BT - sustained investment performance over years
BT - sustained investment performance over 3 years Performance and Quartile Ranking as at Dec 2006 “Ayes Quartile | 2ys = Quartile. |= ars Quartilo” (4) j | (pa) i | (epa) Core Australian Share Fund 25 2 26 1 aT 4 Ethical Share Fund 30 1 30 1 31 1 imputation Fund* 3t 1 30 1 34 4 Smaller Companies Fu
Slide 16: Australian and New Zealand economic outlook
Australian and New Zealand economic outlook Calendar year Key economic indicators 2006 2007f 2008f World GDP §.2% 46% 4.5% Australia Private consumption 3.1% 3.7% 3.5% Business investment? 8.7% 5.0% 2.7% GDP 2.7% 3.5% 4.0% Unemployment — end period 4.6% 4.7% 4.6% CPI headline - yr end 3.3% 2.9% 2.5%
Slide 17: Aust. credit growth and nominal non-farm GDP
33 Aust. credit growth and nominal non-farm GDP * Australian credit growth has historically tracked the direction of nominal GDP growth but with a multiplier of around 1.5 times * Financial innovation and household's ability to allocate a greater share of disposable income to wealth creation support
Slide 18: Housing market — to adjust to rate rises
Housing market — to adjust to rate rises + Consumer Sentiment has rebounded sharply, as petrol price falls largely offset the August and Novernber rate rises. + Arrears rates up as interest rates increase — but coming off low levels. + Households enjoying job security — jobs up 3% yr & unemployment
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