Slide 1: 2007 Interim Results
ABfestpac Australia’s First Bank 2007 Interim Results David Morgan, Chief Executive Officer 3 May 2007 A high quality result * Solid earnings growth and high return on equity « Improved operational momentum driving income « Expense discipline maintained * Investment in high growth businesses * Provi
Slide 2: A strong set of numbers: growth and return
A strong set of numbers: growth and return | Reported net profit $1,641m up.12% 3 Westpac 2007 Interim Results $1,281m Up 13%. down .90.bps | Allfestpac Consistent long-run performance Cash earnings, revenue and expense ($m) 1,800.7 8 year -® Revenue {RHS) ~é-~ Expenses (RHS) CAGR 1HO7 Th 7% 4% 4% g
Slide 3: Balanced performance across the business
Balanced performance across the business Contribution to cash earnings (%) Other NZ 4% Aust 12% Cons Australian Business 27% 4.42% + Prior investments paying off BT Financial Group &, 22% © + Growing market share in a fast growing market Bus 28% 5 Westpac 2007 Interim Results Wfestpac Delivering on
Slide 4: Strong outcomes for shareholders - dividend up 13%
Strong outcomes for shareholders - dividend up 13% * Increased capital reinvested in the _ Dividends per share (cents) business (195 * Strong dividend increase supported °°. by: 50 4 - 24% ROE, up 60 bps ~ Significant franking surplus of 40 4 305 $555m ~ Strong capital position 20 * Higher pay-out r
Slide 5: A revenue driven performance
ABfestpac Australia’s First Bank The Details Phil Coffey, Chief Financial Officer 3 May 2007 A revenue driven performance Contributions to cash earnings growth 1H06-1H67 ($m) Contributions to cash earnings. growth 2H06-1H07 ($m) 2,000 5 2,000 4 (69) (94) of fy ..42) 9, 1,800 Baz AAV% 4,800 4 eae (10
Slide 6: A high quality revenue growth
10 A high quality revenue growth % Change % Change 1HO7 1HO6 — 1HO7 | 2HO06 - 1H07 Credit card income over-accrual (23) 49 - Fair value of securities portfolios (32) (13) (4) MasterCard profit - (15) (21) Asset sales (10} - (1) NZS Impact? - 35 44 1, The NZ$ impact eliminates the impact of siovement
Slide 7: Margin movements in line with expectations
Margin movements in line with expectations Group interest margin movement 1H06-1HO7 (%)} Group interest margin movement 2H06-1HO7, (%) 2.5.5 254 2.40% | (8bps) 245 24.4 Flat (bps) 2.3.4 2 2.3.5 2.25% Abps .-2.25% 7bps «> Flat 2.2 4 2.2 | 2.19% | {5bps) a = | 2.4.4 2.4 i 1 1 oe QoQ = N © ~ oom ~~ aa
Slide 8: Customer flows driving non-interest income growth
14 Customer flows driving non-interest income growth Non-interest income movement 1H06-1H07 ($m) Non-interest income movement 2H06-1H07 ($m) 4,900 | 4,900 4,800 1,800 74,755 4,700 1,700 4,600 : —= | 1,600 S82 BS eS. OB BoB 8 $48 48°98 FRG EY & Source’ Westpac * BT non-interest income up 17% over yea
Slide 9: More investment directed to the front line
16 More investment directed to the front line Allocation of major project spending (%) + More resources devoted to growth 100 4 businesses — BT and business segment 90 4 30 4 + Large scale infrastructure platforms now 70 4 operating 60 7 * More investment devoted to smaller to ] projects focussed on
Slide 10: Responding to changes in the economic cycle
Responding to changes in the economic cycle 18 Portfolio is reflecting Stressed exposures as a %.of total changes in the environment commitments 1.5 Australia 1.0 * Higher interest rates 05 New Zealand 0.0 * Very high interest rates 8.8.8.8 .8.8.2 N N N N Nn NO - Source: Westpac. Consumer unsecured
Slide 11: Consumer — profitable growth broadly in line with system
20 Consumer — profitable growth broadly in line with system + Growth driven by ~ Investment in front line people (173 additional customer serving staff) ~ Capturing growth in high growth states (WA and Qld) ~ Maximising use of Reach and improved sales practices + Over 12 months, total mortgage growt
Slide 12: Business segment — benefiting from prior investments
22 Business segment — benefiting from prior investments + Solid balance sheet growth {loans 14%, deposits 17%) ~ 193 additional bankers added in 2006 now fully productive ~ Pinnacle embedded, with 80% of deals automatically assessed ~ Enhanced relationship focus improving cross-sell + Credit quality
Slide 13: Financial Markets and Treasury — solid contributions
24 Financial Markets and Treasury — solid contributions Financial Markets product income ($m) : AHO6 ; 2H06 Foreign exchange 148 120 128 Capital markets 62 34 99 Equity and energy 46 30 7 Group Treasury ($m) 1HO6 2HO06 1HO7 Net interest income 125 17 123 Non-interest income 25 23 - Westpac 2007 Inte
Slide 14: Fund management flows solid with good pipeline of new business
26 * Fund management flows solid with good pipeline of new business « Wrap FUA driving platforms growth * Ininsurance we have seen a pick-up in cross sell (insurance products sold as a percent of banking products sold) from 2H06-1HO7 ~ Home and contents sold by HFMs up from 38% to 45% - Credit card
Slide 15: NZ impairment losses consistent with economic environment
28 NZ impairment losses consistent with economic environment + Impairment losses up rising off a low base responding to the economic environment ~ Sustained higher interest rates - Strong currency * Composition of NZ$31m increase in impairment losses ~ NZ$14m increase from business regrades ~ NZ$15m
Slide 16: Outlook: Economic environment remains sound
ABfestpac Australia’s First Bank Outlook David Morgan, Chief Executive Officer 3 May 2007 Economic environment remains sound * In Australia: Annual GDP {Year average, Calendar years %)} GDP (Aust). GDP (NZ) 5 ~ Expansion continues in Australia, 4 despite impact of drought 3 2 1 0 - Inflation trendin
Slide 17: Credit growth moderating but solid
32 Credit growth moderating but solid Australian and New Zealand credit growth (%) 20 Forecasts {To Des 2607) 0 24 4 cworowons Total credit (NZ) —Total credit (Aust) o «== «Total credit long run avg {Aust} 4 Bec-38 Jun-00 Dec-00 Jun-01 Bec-O1 Jun-62 Bec-02 Jun-03 Bec-03 Jun-04 Bec-O4 Jun-05 BDec-03
Slide 18: Key priorities
Key priorities * Wealth management — actively growing our share * Business Financial Services — capitalising on our investment * New Zealand — executing on turnaround 34 Westpac 2007 Interim Results Wfestpac Confident outlook Confident we can continue to deliver strong results: * Solid earnings grow
Slide 19: Disclaimer
36 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. Also, it is not intended that it be relied upon as advi