Westpac Banking Corporation · ASX:WBC
Westpac Banking — Debt Investor Presentation (May 2014)
32 slides from Westpac Banking's debt investor presentation, May 7, 2014
Slide 1: Westpac Capital Notes 2 Offer
For personal use only WESTPAC GROUP WESTPAC CAPITAL NOTES 2 OFFER MAY 2014
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 2
Westpac Capital Notes 2 For personal use only For investors For Westpac • A new investment in Westpac Banking Corporation • A new security that will qualify as Additional Tier 1 Capital • A reinvestment opportunity for existing Westpac SPS II Holders • Offer size of A$750 million, with the ability t
Slide 4: Westpac delivering consistent financial performance, with a strong balance sheet
Westpac delivering consistent financial performance, with a strong balance sheet For personal use only Consistent earnings Strong asset quality Cash Earnings ($m) 3,772 Stressed Assets to Total Committed Exposures (%) 3,508 3,555 2.3 2.2 3,386 1.9 1.6 3,178 1.4 1H12 2H12 1H13 2H13 1H14 1H12 2H12 1H1
Slide 5: Westpac Capital Notes – Summary of terms
Westpac Capital Notes 2 – Summary of terms For personal use only Issue • Issue of Westpac Capital Notes 2 (Notes) by Westpac Banking Corporation (Westpac) Offer size • A$750 million with the ability to raise more or less Face Value • Initially A$100 per Note • Notes will qualify as Additional Tier 1
Slide 6: Ranking of Westpac Capital Notes in a Winding Up
Ranking of Westpac Capital Notes 2 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: Capital Trigger Event and Non-Viability Trigger Event
Capital Trigger Event and Non-Viability Trigger Event 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) • APRA notif
Slide 8: Westpac's significant capital buffers
Westpac’s significant capital buffers For personal use only • From 1 January 2016, APRA requires Australian banks to hold Westpac’s CET1 ratio Level 1 Level 2 capital buffers above minimum capital requirements 30 September 2013 9.3% 9.1% – A capital conservation buffer (CCB) of 2.5%, and 31 March 20
Slide 9: Offer summary
Offer summary For personal use only • The Offer is for the issue of Westpac Capital Notes 2 at an Initial 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 We
Slide 10: Priority Reinvestment Offer for Eligible SPS II Holders
Priority Reinvestment Offer for Eligible SPS II Holders For personal use only • The Reinvestment Offer is an opportunity for Eligible Westpac SPS II Holders to reinvest their Westpac SPS II in Notes What is the • Participating Westpac SPS II Holders will have their Westpac SPS II sold through the On
Slide 11: Key dates
Key dates For personal use only Key dates for the Offer Record date for determining Eligible Securityholders (7.00pm Sydney time) 30 April 2014 Announcement of Offer and lodgement of Prospectus with ASIC 7 May 2014 Bookbuild 14 May 2014 Announcement of Margin 14 May 2014 Lodgement of replacement Pro
Slide 12: Key dates
Key dates For personal use only Key dates for the Reinvestment Offer Reinvestment Offer Record Date for determining Eligible Westpac SPS II Holders (7.00pm Sydney time) 30 April 2014 Opening Date for the Reinvestment Offer 15 May 2014 Closing Date for the Reinvestment Offer (5.00pm Sydney time) 10 J
Slide 13: Westpac Capital Notes Additional Information
For personal use only WESTPAC CAPITAL NOTES 2 ADDITIONAL INFORMATION
Slide 14: Westpac Capital Notes – Distributions
Westpac Capital Notes 2 – Distributions For personal use only • 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 portion) Distribut
Slide 15: Options for Westpac to Convert, Redeem or Transfer and Acquisition Event
Options for Westpac to Convert, Redeem or Transfer and Acquisition Event For personal use only • Westpac may elect to Convert, Redeem or Transfer Notes on: Optional Conversion, – 23 September 2022 Redemption or – following a Tax Event or a Regulatory Event Transfer • Redemption is subject to Westpac
Slide 16: Westpac Capital Notes – Scheduled Conversion
Westpac Capital Notes 2 – Scheduled Conversion For personal use only • On 23 September 2024 (Scheduled Conversion Date), subject to the Scheduled Conversion Conditions being satisfied, the Scheduled Notes will mandatorily Convert into Ordinary Shares Conversion • Holders will receive for each Note t
Slide 17: Comparison to other Westpac Additional Tier Securities
Comparison to other Westpac Additional Tier 1 Securities For personal use only Westpac Capital Notes 2 Westpac Capital Notes Westpac SPS II1 ASX code WBCPE WBCPD WBCPB • Perpetual with the first possible • Perpetual with the first possible • Mandatory conversion on 30 Term Scheduled Conversion Date
Slide 18: Key risks of Westpac Capital Notes
Key risks of Westpac Capital Notes 2 For personal use only • The Notes are not deposit liabilities or protected accounts of Westpac for the purposes of the Banking Act or Financial Claims Scheme and are not subject to the depositor protection provisions of Australian banking legislation (including t
Slide 19: Westpac Group Additional Information
For personal use only WESTPAC GROUP ADDITIONAL INFORMATION
Slide 20: Setting Westpac apart – Domestic customer focus, efficiency and balance sheet strength
Setting Westpac apart – Domestic customer focus, efficiency and balance sheet strength For personal use only Clear focus on Australia and New Zealand Brands supporting targeted growth Wealth penetration leads sector (%) Total income by geography1 (%) Australian Financial Services Brands rank #1 and
Slide 21: Another high quality financial performance
Another high quality financial performance For personal use only % Change Strong financial performance Net interest margin (%) 1H14 Cash earnings results 1H14 1H14 – 1H13 Cash earnings ($m) NIM Financial results (A$m) NIM excl. Treasury and Markets 3,772 Cash earnings 3,772 8 3,508 3,555 Reported ne
Slide 22: Westpac has clear strategic priorities
Westpac has clear strategic priorities... For personal use only Remain strong ...managed in a balanced way Targeted growth Strength Return A strong company Maintain discipline Capital within Maintain strong ROE preferred range Maintain dividend path Target stable funding Customer relationships ratio
Slide 23: Strategy delivering growth in targeted areas
Strategy delivering growth in targeted areas For personal use only Aust. housing growth vs system1 (times) Customer deposits ($bn) Customer numbers4 (#m) Westpac RBB St.George 0.9x 383 389 0.8x 0.8x 348 360 6.07 6.11 6.20 0.7x 3.22 3.26 3.55 3Q13 4Q13 1Q14 2Q14 2H12 1H13 2H13 1H14 1H13 2H13 1H14 FUA
Slide 24: Strong portfolio of brands
Strong portfolio of brands For personal use only All comparisons to 1H13 Westpac Retail & Business • 1H14 cash earnings $1,251m Contribution to Cash Earnings (%) Banking • Up 10% on 1H13 Westpac Retail & Australian Financial Services Australian retail and business • Strong franchise; lending up 4%,
Slide 25: Fully harmonised common equity tier capital ratio at the upper end of global peers
Fully harmonised common equity tier 1 capital ratio at the upper end of global peers For personal use only Global peer comparison of Basel III pro-forma common equity tier 1 capital ratios1 (%) 15.0 14.7 13.9 13.6 12.8 11.9 11.9 11.8 11.4 11.3 11.1 10.9 10.7 10.5 10.5 10.4 10.4 10.4 10.3 10.3 10.3 1
Slide 26: Capital strength maintained
Capital strength maintained1 For personal use only Key capital ratios (%) Mar-13 Sept-13 Mar-14 Common equity tier 1 capital ratio (% and bps) Common equity tier 1 capital ratio 8.7 9.1 8.8 40 11.26 Additional tier 1 capital 2.1 1.6 1.5 73 24 107 Tier 1 capital ratio 10.8 10.7 10.3 8.82 Tier 2 capit
Slide 27: Asset growth funded through stable sources; Strong liquidity position
Asset growth funded through stable sources; Strong liquidity position For personal use only • Stable Funding Ratio 83% at 1H14, down 45bps (up 24bps 1H13/1H14) Funding composition by residual maturity (%) – Growth in funding through stable sources of customer deposits and term wholesale funding – Av
Slide 28: New term issuance well diversified
New term issuance well diversified For personal use only Term debt issuance and maturity profile1,2 ($bn) Lowest short term funding of peers Covered Bond Hybrid Senior Govt Guaranteed Sub Debt Short term funding3,4 ($bn) Short term funding to total funding including equity3,4 (%) 45 43 Issuance Matu
Slide 29: Significant improvement in asset quality
Significant improvement in asset quality For personal use only Stressed exposures as a % of TCE1 (%) and provisions ($m) Stressed exposures by industry ($bn) Watchlist & substandard (lhs) 1H13 2H13 1H14 4.5 90+ days past due well secured (lhs) Impaired (lhs) 4.0 IAP (rhs) 3.5 4.0 Total Provisions (r
Slide 30: High quality Australian mortgage portfolio
High quality Australian mortgage portfolio For personal use only 1H13 2H13 1H14 1H14 Australian mortgages delinquencies and loss rates (%) Australian housing portfolio Balance Balance Balance Flow1 90+ Past Due Total 90+ First Home Buyer Total portfolio ($bn) 321.9 328.5 338.0 33.1 90+ Investor 30+
Slide 31: Joint Lead Managers
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 Commonwealth Bank of • Truong Le (02) 9118 1205 Australia • Trevor Franz (02) 9118 1211 • Rupert Daly (02) 8258 1408 De
Slide 32: For further information
For further information For personal use only Westpac Group Treasury and Investor Relations For further information on Westpac, please visit our investor website: www.westpac.com.au/investorcentre Curt Zuber Group Treasurer, Westpac Banking Corporation Go to www.westpac.com.au/westpaccapnotes2 +61 2
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