Westpac Banking Corporation · ASX:WBC
Westpac Banking — Q3 2023 Earnings Presentation
13 slides from Westpac Banking's earnings presentation, Jun 30, 2023
Slide 1: 3Q23 Capital, Credit Quality and Funding Update
3Q23 Capital, Credit Quality and Funding Update This document should be read in conjunction with Westpac’s June 2023 Pillar 3 Report. Content principally covers and compares the 3Q23 and 1H23 quarterly average periods unless otherwise stated. All amounts are in Australian dollars. FOR THE 3 MONTHS E
Slide 2: 3Q23 summary
3Q23 summary. Summary • CET11 capital ratio of 11.86%, above target operating range2 Strong capital position • RWA3 up $7.1bn or 1.6% • Stressed assets to TCE4 1.16%, up 6bps • Mortgage 90+ day delinquencies: - Australia 0.80%, up 7bps Credit quality resilient - - New Zealand 0.32%, up 3bps well pro
Slide 3: CET1 capital ratio 11.86%
CET1 capital ratio 11.86%. Capital Level 2 CET1 capital ratio movements (%) Key capital ratios (%) Jun-22 Mar-23 Jun-23 Level 2 CET1 capital ratio 10.8 12.3 11.9 Additional Tier 1 capital ratio 2.0 2.2 2.2 RWA details on page 4 Tier 1 capital ratio 12.8 14.5 14.0 0.37 (0.53) 12.28 (0.21) Tier 2 capi
Slide 4: Risk weighted assets movements
Risk weighted assets movements. Capital Risk weighted assets (RWA) ($bn) • RWA up $7.1bn or 1.6%: - Credit RWA increased due to loan growth and modest credit deterioration 7.9 (1.5) (0.9) 460.0 - IRRBB1 RWA increased $7.9bn due to an increase in the regulatory 452.9 2.2 (0.6) embedded loss from high
Slide 5: Provision coverage
Provision coverage. Provisioning Total impairment provisions1 ($m) Provision coverage Overlay Stage 1 CAP Sep-22 Dec-22 Mar-23 Jun-23 Stage 2 CAP Stage 3 CAP Stage 3 IAP Provisions to credit RWA2 128bps 132bps 145bps 149bps 5,098 4,923 NZ overlays reduced: 4,792 CAP to credit RWA2 116bps 121bps 133b
Slide 6: Stressed exposures and delinquencies
Stressed exposures and delinquencies. Credit quality Stressed exposures as a % of TCE Australian mortgage delinquencies (%) 1 Watchlist & substandard 30+ day delinquencies 90+ day delinquencies 90+ excl. 6m serviceability Non-performing, not impaired 3.0 COVID-19 Impaired deferrals 1.91 2.0 1.50 1.0
Slide 7: Credit quality across sectors
Credit quality across sectors. Credit quality Corporate and business stressed exposures by industry sector (%) Sep-22 Mar-23 Jun-23 10.0 8.0 Reflecting downgrades of a small number of exposures Due to downgrade of a single name to 6.0 watchlist 4.0 2.0 0.0 Finance Property Wholesale & Services Manuf
Slide 8: Australian mortgage portfolio composition
Australian mortgage portfolio composition. Mortgage credit quality Australian mortgage portfolio Sep-22 Mar-23 Jun-23 Australian mortgage portfolio by product and balance balance balance repayment type (%) Total portfolio ($bn) 467.6 472.7 478.4 Sep-22 Mar-23 Jun-23 Owner occupied (OO) (%) 65.8 66.4
Slide 9: Australian mortgage portfolio buffers
Australian mortgage portfolio buffers. Mortgage credit quality • Equity position for existing loans remain strong: Australian home loan customers ahead on repayments2 − 0.6% of loans in negative equity, down from 0.8% at Mar-23 (% by accounts) Sep-22 Mar-23 Jun-23 − Loan-to-value ratios have improve
Slide 10: New Zealand credit quality
New Zealand credit quality. New Zealand credit quality Mortgage delinquencies (%) Mortgage portfolio LVR1 (% of portfolio) 90+ day past due 30+ day past due 93% of mortgage portfolio has 1.0 an LVR less than 80% 0.8 0.69 52% 0.6 0.4 0.32 21% 19% 0.2 5% 2% 0.0 Dec-20 Jun-21 Dec-21 Jun-22 Dec-22 Jun-2
Slide 11: Funding and liquidity
Funding and liquidity. Funding and liquidity Key funding and liquidity measures Liquidity coverage ratio (%) Net stable funding ratio (%) Customer deposits to net loans ratio (%) Quarterly average 135 138 83.1 83.7 84.1 130 Regulatory 123 119 118 requirement 100% Jun-22 Mar-23 Jun-23 Jun-22 Mar-23 J
Slide 12: Investor Relations Team
Investor Relations Team. Contact us Justin McCarthy Jacqueline Boddy General Manager, Investor Relations Head of Debt Investor Relations Andrea Jaehne Catherine Garcia Head of Investor Relations, Head of Investor Relations, Ratings Agencies and Analysis Institutional Rebecca Plackett James Wibberley
Slide 13: Disclaimer
Disclaimer. Disclaimer The material contained in this presentation is intended to be general background information on Westpac Banking Corporation (Westpac) and its activities. The information is supplied in summary form and is therefore not necessarily complete. It is not intended that it be relied