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201 ,11 201 years proudly supporting Australia Westpac Banking - PowerPoint PPT Presentation

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2017 INTERIM FINANCIAL RESULTS 201 ,11 201 years proudly supporting Australia Westpac Banking Corporation ABN 33 007 457 141 Westpac 2017 Interim result index 3 Cover images, from left: 2017 Interim Result Presentation 26 Bank of New

  1. Margins impacted by funding costs 15 Net interest margin movement (% and bps) Treasury & Markets impact on NIM NIM excl. Treasury & Markets 2.11 (4bps) (1bps) 2.07 0bps 4bps (2bps) (1bps) 0.07 0.07 2.04 2.00 2H16 Customer Term Capital Liquidity Loans Treasury & 1H17 deposits wholesale funding & other markets Term deposit costs over benchmark (portfolio) Lower returns on capital and low rate deposits 9% 1.5% 1 3 year swap rate (spot) Tractor 7% 1.0% 5% 0.5% 3% 0.0% 1% Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Mar-00 Mar-02 Mar-04 Mar-06 Mar-08 Mar-10 Mar-12 Mar-14 Mar-16 1 Tractor is the 3 year moving average hedge rate for hedges on capital and low rate deposits. Westpac Group Interim 2017 Presentation & Investor Discussion Pack

  2. Non-interest income 16 Non-interest income ($m) Markets income ($m) 1 DVA Trading Customer 748 19 467 609 580 2 546 500 247 10 147 142 131 3,050 89 72 482 473 462 465 450 447 2,966 (13) (153) (22) 2,889 2H14 1H15 2H15 1H16 2H16 1H17 Selected wealth related non-interest income ($m) 667 667 646 General insurance Up 6% claims up 49% 273 252 214 Up 3% 73 73 62 71 30 24 1H16 2H16 1H17 1H16 2H16 1H17 1H16 2H16 1H17 1H16 2H16 1H17 BT Funds BT Insurance WIB New Zealand management 1H16 2H16 1H17 1 DVA is derivative valuation adjustments includes CVA and FVA adoption in 1H15. Westpac Group Interim 2017 Presentation & Investor Discussion Pack

  3. Expenses tightly managed 17 Movement in expenses ($m) Divisional expense growth 1H17 – 2H16 $m % Consumer Bank (4) 0 121 (118) Business Bank 11 1 5 (4) 4,483 4,479 BTFG (17) (3) WIB (21) (3) New Zealand (in NZ$) 6 1 Group Businesses 26 11 Sources of productivity savings • Further digitisation of manual processes Flat (up $4m) • Operating model changes in the Business Bank and in the Institutional Bank • Property, including consolidation and net reduction of 45 branches across Australia and New Zealand 2H16 Ongoing Productivity Regulatory/ Investment 1H17 expenses compliance Westpac Group Interim 2017 Presentation & Investor Discussion Pack

  4. Investment spend 18 Amortisation of capitalised software Total investment spend (expensed and capitalised) ($m) Amortisation ($m) 310.00 6 Average amortisation period (years) 303 700 5.5 300.00 294 291 580 5 567 290.00 527 4.5 11% 4.1 280.00 458 271 4 270.00 24% 3.5 3.6 65% 260.00 254 3 3.1 2.9 250.00 2.8 2.5 240.00 Growth & productivity 2 Regulatory change 230.00 1.5 Other technology 220.00 1 1H15 2H15 1H16 2H16 1H17 1H15 2H15 1H16 2H16 1H17 Westpac Group Interim 2017 Presentation & Investor Discussion Pack

  5. Australian mortgage trends 19 Mortgage portfolio ($bn) 38.4 (28.7) 41.8 (28.4) 42.1 (27.1) 413.9 404.2 390.8 Slowdown in new lending 375.8 • Reduced discounts • Higher proportion of proprietary flows • Fixed rate flow higher at 23% in 1H17 Sep-15 New Run-off Mar-16 New Run-off Sep-16 New Run-off Mar-17 Lending Lending Lending Mortgage 90+ day delinquencies by state (%) 2.0 NSW/ACT Vic/Tas Qld WA SA/NT ALL • Delinquencies up 2 bps • Hardship impact 1.0 flowed through • Delinquencies up in WA 0.0 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Westpac Group Interim 2017 Presentation & Investor Discussion Pack

  6. Australian mortgages well secured 20 Interest-only lending by LVR 1,2 and income band (%) Growth in mortgage lending (%) Australian mortgages annual growth (%) 14 Applicant gross income bands <$100k $100k - $250k >$250k Investor Owner occupied 57% 12 13% 10 35% 8 6.4 7% 29% 6 6.3 19% 8% 4 1% 15% 5% 9% 2% 2 <=60% 60%<=80% >80% 0 Dynamic LVR bands (%) Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 • 92% of IO with dynamic LVR <=80% • Investor property growth well below 10% cap • 2% of IO has a dynamic LVR > 80% and • Investor dynamic LVR average of 47% gross income < $100k • 1H17 IO flow 46% of new lending (portfolio 50%) 1 Excludes RAMS. 2 Dynamic LVR is the loan-to-value ratio taking into account the current outstanding loan balance, estimated changes in security value and other loan adjustments. Property valuation source Australian Property Monitors. Westpac Group Interim 2017 Presentation & Investor Discussion Pack

  7. Asset quality remains sound 21 Stressed assets as a % of TCE 1 Corporate/business stressed exposure by sector ($bn) Watchlist & substandard Mar-16 Sep-16 Mar-17 90+ days past due and not impaired Impaired 2.5 3.09 3.20 2.0 2.48 2.17 1.5 1.60 1.0 1.30 1.24 1.20 1.14 0.5 0.99 0.0 Agriculture, forestry & Wholesale & Property Manufacturing Property services & Services Construction Transport & storage Accommodation, cafes Mining Finance & insurance Utilities 2 retail trade business services Other & restaurants fishing Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Mar-17 1 TCE is total committed exposure. 2 Includes government, admin and defence. Westpac Group Interim 2017 Presentation & Investor Discussion Pack

  8. Asset quality – topical areas 22 Commercial property Unsecured consumer Australian unsecured lending 90+ day delinquencies (%) % of TCE (lhs) % in stress (rhs) 8 20 3.0 Total unsecured consumer lending Credit cards 7 2.5 15 6 2.0 5 10 1.5 4 1.0 5 3 0.5 2 0 0.0 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Mar-17 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Unsecured consumer Apartment development >$20m delinquencies (%) Sept-16 Mar- 17 Sept-16 Mar- 17 Lending ($bn) $5.1 $4.1 30+ day 2.95 3.99 Major market loans ($bn) $3.2 $2.8 90+ day 1.17 1.63 Estimated impact of hardship 54 52 0.01 0.28 Average LVR (%) changes 1 on 90+ day 1. APRA hardship policy was adopted across Westpac’s Australian unsecured portfolios in late 2016. March 2017 unsecured consumer delinquencies excluding hardship reporting changes are 14 bps lower than March 2016 Westpac Group Interim 2017 Presentation & Investor Discussion Pack

  9. Impairment charge components ($m) 23 Individually assessed provisions Collectively assessed provisions Total Other movement Write- backs Write-offs New IAPs in Collective & recoveries direct provisions 667 493 484 443 471 463 457 418 412 364 341 330 293 273 256 (48) (64) (110) (86) (114) (218)(210)(174)(173) (228) 1H15 2H15 1H16 2H16 1H17 1H15 2H15 1H16 2H16 1H17 1H15 2H15 1H16 2H16 1H17 1H15 2H15 1H16 2H16 1H17 1H15 2H15 1H16 2H16 1H17 Westpac Group Interim 2017 Presentation & Investor Discussion Pack

  10. CET1 capital ratio well positioned 24 • Total CET1 capital ratio increased 49 bps CET1 Capital ratio (% and bps) 15.34 • Organic capital generated (after dividends) 29bps with credit RWA declining • Capital initiatives includes management of unused limits and DTA in LMI 10 9.97 10 29 9.48 • Other includes FX translation, defined benefit and regulatory model changes • In 2H17 known regulatory changes on RWA calculations likely to reduce capital ratios by around 10bps Sep-16 Organic Capital Other Mar-17 Mar -17 APRA capital initiatives APRA Internationally comparable Westpac Group Interim 2017 Presentation & Investor Discussion Pack

  11. Considerations for FY17 25 • Continued discipline on growth/return • Margins – recent changes in pricing to flow into 2H17 • Expense growth likely below 2-3% range although subject to revenue outlook • Well positioned for unquestionably strong Westpac Group Interim 2017 Presentation & Investor Discussion Pack

  12. Investor Discussion Pack Financial results based on cash earning unless otherwise stated. Refer page 34 for definition. Results principally cover the 1H17, 2H16 and 1H16 periods. Comparison of 1H17 versus 2H16 (unless otherwise stated)

  13. Strategy Financial results based on cash earning unless otherwise stated. Refer page 34 for definition. Results principally cover the 1H17, 2H16 and 1H16 periods. Comparison of 1H17 versus 2H16 (unless otherwise stated)

  14. WBC Westpac Group at a glance: Australia’s First Bank listed on Strategy 28 ASX & NZX Consumer Business BT Financial Institutional Westpac • Australia’s first bank and first company, opened in 1817 Bank Bank Group Bank New Zealand • Australia’s 2nd largest bank; 15th largest bank in the world; ranked by market capitalisation 1 • Well positioned across key markets with a service-led strategy focused on customers and differentiated through service • Supporting consumers and businesses in Australia and New Zealand and customers with ties to these markets • Unique portfolio of brands providing a full range of financial services including consumer, business and institutional banking, wealth management and insurance Pacific • One of the most efficient banks globally 2 • Consistent earnings profile over time • Strong capital, funding, liquidity, with sound asset quality Credit ratings 3 AA- / Aa2 / AA- • • Leader in sustainability 4 Key statistics at 31 March 2017 Key financial data for First Half 2017 Customers 13.6m Reported net profit after tax $3,907m Australian household deposit market share 5 23% Cash earnings $4,017m Australian mortgage market share 6 23% Expense to income ratio 9 41.7% Australian business market share 6 19% Common equity Tier 1 capital ratio (APRA basis) 10.0% New Zealand deposit market share 7 19% Return on equity 9 14.0% New Zealand consumer lending market share 7 19% Total assets $840bn Australian wealth platforms market share 8 19% Market capitalisation 10 $118bn 1 31 March 2017. Source: S&P Capital IQ, based in US$. 2 Credit Suisse analysis of expense to income ratio of world’s largest banks April 2017. 3 S&P Global Ratings, Moody’s Investors Service and Fitch Ratings respectively. S&P Global Ratings and Moody’s Investors Services have Westpac on a negative outlook, Fitch Ratings has Westpac on a stable outlook. 4 Included in 2017 Global 100 most sustainable companies, announced at World Economic Forum in January 2017. 5 APRA Banking Statistics, March 2017. 6 RBA Financial Aggregates, March 2017. 7 RBNZ, February 2017. 8 Plan for Life, December 2016, All Master Funds Admin. 9 Cash earnings basis. 10 Based on share price at 31 March 2017 of $35.06. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  15. Progress on our five strategic priorities 29 Strategy Vision: To be one of the world’s great service companies, helping our customers, communities and people to prosper and grow The Service Revolution The Service Revolution Priorities Performance Service Digital Targeted Workforce Discipline Leadership Transformation Growth Revolution Employee Seeking to achieve Cost growth engagement in top 13-14% Measures 2-3% per annum and Stronger growth of high performing +1m customers ROE expense to income in wealth and SME norms, (2015-2017) (medium-term) ratio below 40% women in leadership 50% by end of 2017 Women in 1H17 expenses leadership 49% FUM up 12% ROE flat Progress Employee FUA up 4% 13.6m customers 14.0% Expense to income engagement 1H17-2H16 SME lending up 3% up 11bps ratio 41.7% to be measured up 3% down 59bps in 2H17 Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  16. Sources of comparative advantage Strategy 30 Excellent strategic position Sector leading balance sheet • Seeking to differentiate on service • Asset quality  Sector leading through global financial crisis • No. 1 or 2 position across key markets - all divisions well placed  Sound quality; balance sheet skewed to mortgages • Unique portfolio of brands, reaching a broader customer set  Low impaired assets; well provisioned at 52% 1 • Comparative advantage in wealth platforms • Capital • Embracing digital opportunities with leading online and mobile  CET1 capital ratio in top quartile of international peers capability • Liquidity • Underweight mining sector, NZ dairy and Western Australia  High liquidity levels; LCR of 125%  Estimated NSFR of 108% Global efficiency leader Sustainability culture • Expense to income ratio of 41.7% at lower end of global peers and • Australia’s first bank and first company, reached 200 year below average of Australian major banks anniversary on 8th April 2017 • Only major Australian bank with a target of reducing expense to • Global banking leader in Dow Jones Sustainability Index since income ratio below 40% 2002, named sector leader 9 times, including 2014, 2015 and 2016 • Productivity focus has delivered $1.9bn of savings FY09 to 1H17 • Ranked as one of the Global 100 most sustainable corporations in the world by Corporate Knights for 10 of the last 11 years • Only major Australian bank SEC registered and listed on NYSE 1 Gross impaired asset provisions to gross impaired loans. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  17. Consistent performer over the long term Strategy 31 Cash earnings ($bn) Cash earnings per share (cents) 245.4 248.2 235.5 197.8 209.3 214.8 227.8 7.8 7.8 7.6 189.4 198.3 167.2 163.7 7.1 119.8 6.6 6.3 5.9 5.0 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 1H17 4.7 4.0 Common equity Tier 1 capital ratio (%) 3.5 15.3 3.1 10.0 9.5 9.5 9.1 9.0 8.2 7.4 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Mar-17 International comparable 1 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 1H17 1 Internationally comparable methodology aligns with the APRA study titled ‘International Capital Comparison Study’ dated 13 July 2015. For more details on adjustments refer slide 89. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  18. A conservative, high quality bank Strategy 32 Individually assessed provisions to Collectively assessed provisions to Impaired assets to gross loans 1 (%) impaired assets 1 (%) credit RWA 1 (bps) 52.1 0.51 0.47 44.9 0.44 43.2 85 35.0 81 0.30 77 75 Peer 1 Peer 2 Peer 3 WBC Peer 1 Peer 2 Peer 3 WBC Peer 1 Peer 2 Peer 3 WBC Capitalised software, average Capitalised software balance and Effective tax rate 1 (%) amortisation period 1,2 (years) amortisation 1,2 ($bn) 6.5 2.49 1.92 30.3 1.90 4.2 1.81 29.5 3.5 28.7 28.4 2.9 0.61 0.59 0.44 0.36 Peer 1 Peer 2 Peer 3 WBC Peer 1 Peer 2 Peer 3 WBC Peer 1 Peer 2 Peer 3 WBC 1 Based on 1H17 results 2 Peer 2 data based on 1H17 cash earnings results excludes write-offs. Amortisation expense is based on amortisation expense excluding any impairment or accelerated amortisation. Based on 1H17 annualised expense. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  19. Overview Financial results based on cash earning unless otherwise stated. Refer page 34 for definition. Results principally cover the 1H17, 2H16 and 1H16 periods. Comparison of 1H17 versus 2H16 (unless otherwise stated)

  20. Cash earnings and reported net profit reconciliation Results 34 Reported net profit and cash Cash earnings 1 policy earnings adjustments ($m) • Westpac Group uses a measure of performance referred to as cash earnings to assess financial performance at both a Group and divisional level 2H16 1H17 • This measure has been used in the Australian banking market for over a decade and management believes it is the most effective way to assess performance for the current period against prior periods and to compare performance across divisions and across peer companies Reported net profit 3,744 3,907 • To calculate cash earnings, reported net profit is adjusted for:  Material items that key decision makers at Westpac Group believe do not reflect ongoing operations Amortisation of intangible assets 79 73  Items that are not considered when dividends are recommended, such as the amortisation of intangibles, impact of Treasury shares and economic hedging impacts  Accounting reclassifications between individual line items that do not impact reported results Acquisition transaction and 8 - integration expenses Reported net profit and cash % chg % chg earnings ($bn) 1H17 1H17- 1H17- Fair value (gain)/loss on 120 7 ($m) 1H16 2H16 economic hedges Reported profit Cash earnings 4.4 Cash earnings 4,017 3% 3% Ineffective hedges (35) (4) 4.0 4.0 3.9 3.9 3.9 3.9 3.9 3.8 3.8 3.7 3.7 Cash EPS (cents) 119.8 1% 2% Treasury shares 2 34 3.6 3.6 Reported net profit 3,907 6% 4% Cash earnings 3,918 4,017 1H14 2H14 1H15 2H15 1H16 2H16 1H17 1 Cash earnings is not a measure of cash flow or net profit determined on a cash accounting basis, as it includes non-cash items reflected in net profit determined in accordance with AAS (Australian Accounting Standards). The specific adjustments outlined include both cash and non-cash items. Cash earnings is reported net profit adjusted for material items to ensure they appropriately reflect profits available to ordinary shareholders. All adjustments shown are after tax. For further details refer to slide 128. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  21. 1H17 financial snapshot Results 35 Change Change Change Change 1H17 1H17 – 1H16 1H17 – 2H16 1H17 1H17 – 1H16 1H17 – 2H16 Balance sheet Earnings 1 Total assets ($bn) 840.0 1% flat Earnings per share (cents) 119.8 1% 2% Common equity Tier 1 9.97 (50bps) 49bps (CET1) capital ratio (APRA basis) (%) Core earnings ($m) 6,260 1% 3% CET1 capital ratio 15.3 67bps 91bps (Internationally comparable) (%) Cash earnings ($m) 4,017 3% 3% CET1 capital ($bn) 40.3 6% 4% Return on equity (%) 14.0 (20bps) 11bps Risk weighted assets ($bn) 404.4 11% (1%) Dividend (cents per share) 94 flat flat Loans ($bn) 666.9 4% 1% Expense to income ratio (%) 41.7 12bps (59bps) Customer deposits ($bn) 478.7 8% 3% Net tangible assets per share ($) 14.30 4% 2% Net interest margin (%) 2.07 (7pbs) (4bps) Funding and liquidity Asset quality Customer deposit to loan ratio (%) 71.8 279bps 128bps Impairment charges to average gross 15 (6bps) 1bp loans (bps) Net stable funding ratio (%) (estimate) 108 n/a n/a Impaired assets to gross loans (bps) 30 (9bps) (2bps) Liquidity coverage ratio (%) 125 (2ppts) (9ppts) Impaired provisions to impaired assets 52.1 5ppts 3ppts Total liquid assets 2 ($bn) 139 flat (4%) (%) 1 All measures on a cash earnings basis. 2 Total liquid assets represent cash, interbank deposits and assets eligible for existing repurchase agreements with a central bank. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  22. Cash earnings up 3% over the year and prior half Performance discipline 36 Cash earnings features of 1H17 – 2H16 ($m) % chg % chg 1H17 1H17- 1H17- AIEA up 2%, ($m) 1H16 2H16 margins down 4bps (36) 161 (4) (20) Net interest 4,017 3,918 (2) 7,693 1 - income Higher markets income Higher individually assessed Non-interest partly offset by higher provisions partly offset by higher 3,050 3 6 income general insurance claims write-backs and recoveries Up 3% Expenses (4,483) 1 - 2H16 Net interest Non-interest Expenses Impairment Tax & NCI 1H17 income income charges Core earnings 6,260 1 3 Cash earnings features of 1H17 - 1H16 ($m) Impairment Additional investment and higher AIEA up 4%, (493) (26) 8 regulatory and compliance costs charges margins down 7bps 174 (121) 84 (64) 4,017 40 3,904 Tax and non controlling (1,750) 7 1 interests Higher markets income, Lower single name provisions partially offset by higher and additional write-backs and general insurance claims recoveries Cash earnings 4,017 3 3 Up 3% Reported net 1H16 Net interest Non-interest Expenses Impairment Tax & NCI 1H17 3,907 6 4 profit income income charges Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  23. WIB up strongly, demonstrating value of portfolio diversification Performance discipline 37 1H17 divisional 1 cash earnings movements ($m) 1H17 divisional 1 core earnings movements ($m) 216 (40) 6,260 (10) 6 6,105 12 (29) 26 0 4,017 115 3,918 (28) 9 (23) Up 3% Up 3% 2 3 3 2 2H16 CB BB BTFG Other 1H17 2H16 CB BB BTFG Other 1H17 WIB NZ WIB NZ 1H17 ($m) CB BB BTFG WIB NZ 2 Other 3 Group Operating income 4,055 2,557 1,145 1,700 1,017 269 10,743 Expenses (1,629) (911) (578) (657) (443) (265) (4,483) Core earnings 2,426 1,646 567 1,043 574 4 6,260 Impairment (charges) / benefits (267) (205) (3) (64) 35 11 (493) Tax & non-controlling interests (648) (433) (167) (279) (174) (48) (1,750) Cash earnings 1,511 1,008 397 700 435 (34) 4,017 % of Group cash earnings 38 25 10 17 11 (1) 1 Refer to division definitions, slide 129. 2 In A$. 3 Other is Group Businesses (including Treasury). Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  24. Dividends Performance discipline 38 Key dividend considerations for 1H17 Dividends (cents per share) • Sustainability of payout ratios over medium term Special dividend 10 • Strong capital comfortably above preferred range 10 • Modest RWA growth 94 94 94 94 93 • Final regulatory capital requirements remain uncertain 92 90 88 86 84 82 • Surplus franking credits 1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16 1H17 Westpac dividend yield 1 (%) Ordinary dividend payout ratio (%) Ordinary yield Including franking Payout ratio (cash earnings basis) Effective payout ratio (after DRP) 9.1 9.0 8.8 8.2 7.7 79 6.8 6.4 6.3 6.2 5.7 5.4 4.7 2 55 1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16 1H17 2H14 1H15 2H15 1H16 2H16 1H17 1 Data using half year dividends and share price at 31 March 2017, or period end. 2 Effective pay-out ratio assumes 1H17 DRP participation of 30% Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  25. Building long term franchise value Service leadership 39 Australian banking customer numbers (#m) Australian customers with a wealth product 2 (%) Consumer Bank Business Bank Westpac St.George brands Peers 10.62 10.44 10.26 10.09 9.94 1.71 1.69 20.7 1.65 1.48 1.45 19.5 15.4 8.91 8.75 14.3 8.49 8.61 8.61 12.4 1 1 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Mar-15 Mar-16 Mar-17 New Zealand customers with a wealth product 2,3 (%) New Zealand customer numbers (#m) 1.34 1.35 1.35 1.36 1.32 28.6 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 1 Restated due to transfer of customers between Consumer Bank and Business Bank. 2 Refer slide 132 for metric definition. 3 No peer data available for New Zealand. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  26. Building long term franchise value Service leadership 40 Customer satisfaction 1 Customer complaints (#) Consumer and New Zealand (%), Business (mean) Westpac St.George brands Peers Australian retail (CB, BB and BT) Consumer 84.7% 82.7% 82.7% 81.9% Down 26% 79.9% Mar-15 Mar-16 Mar-17 Down 56% Westpac St.George brands Peers 2H14 1H15 2H15 1H16 2H16 1H17 Business 7.3 7.2 7.1 7.1 7.0 New Zealand retail Mar-15 Mar-16 Mar-17 Down 15% New Zealand 80.0% 77.0% 76.0% 69.0% Down 33% 67.0% 2H14 1H15 2H15 1H16 2H16 1H17 Mar-15 Mar-16 Mar-17 1 Refer slide 132 for metric definition. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  27. Customers continue to move to digital channels Digital transformation 41 Digitally active customers 1 (#m) Digital sales 1 (#000) Impacted by lower credit card balance transfers Up 4% Down 2% 4.33 433 4.18 425 4.05 3.96 367 347 3.84 Up 7% Up 16% 273 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 1H15 2H15 1H16 2H16 1H17 Digital transactions 1,2 (#m) Branch transactions 1,2 (#m) Up 3% Down 9% 30.7 29.7 287 279 26.9 26.4 262 23.9 254 241 Down 11% Up 8% 1H15 2H15 1H16 2H16 1H17 1H15 2H15 1H16 2H16 1H17 1 Australian Consumer and Business customers. 2 Digital transactions are typically payments and transfers. Branch transactions are typically withdrawals and deposits along with transfers and payments. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  28. New digital services launched over the last six months Digital transformation 42 Helping customers get more from digital Making digital services easier to find Easy set up of Quick key digital Balance and An enhanced menu features: Quick giving customers Transfer help faster access to key • Simple Sign In customers features in one tap • Quick Zone check • Register for balances or eStatements transfer • Set up push funds with notifications one swipe Anticipating customer needs Digitally resolving customer pain points If a transaction SuperCheck Allows looks allows customers customers to unfamiliar to search for and reset and customers can see their Super retrieve their access more accounts login information (including those credentials about considered lost) in merchants with real time a simple search Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  29. Uptake of recently launched capabilities Digital transformation 43 Taking out paper Transition to digital Customer self-serve On line password change/reset Proof of balance statements (# and % of total) Total accounts on eStatements (#m) 2 (#’000 events) 36% 1 Online Manual Proportion of accounts 770k 780k 795k 866k 6.0 1,179 29% 28% 4.8 988 48% 4.6 944 57% 61% 63% Up 19% Up 25% Up 25% 52% Up 30% 43% 39% 37% 1H16 2H16 1H17 3Q16 4Q16 1Q17 2Q17 Mar-16 Sep-16 Mar-17 1 Consumer Bank accounts only. 2 Password change/reset and retrieving customer number. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  30. Digital used to transform customer service: new capabilities 44 Digital transformation Westpac Keyboard 1 Expense splitter 1 Quick transfers 1 Samsung Pay 1 • An Asia-Pacific first • Manage what you’re owed, • Allows customers to transfer • First major Australian bank to and who has paid you between three accounts offer Samsung Pay • Make payments in context without the need to log into while inside social chat apps • SMS friends to let them know • Secure payments at mobile banking (such as Facebook, Instagram) how much they owe you, and contactless terminals with a what account to pay into • More control over finances on compatible Samsung phone or • No need to log into banking the go smartwatch app • CANSTAR 2017 Innovation • Free way to pay on the go, Excellence Award Winner offering greater convenience 1 Keyboard and Samsung Pay for Westpac brand only. Expense splitter for St.George brands only. Quick balance is active for both Westpac and St.George brands. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  31. Deep dive: Digitisation of personal loans 1 45 Digital transformation Simple form From up to with instant 1-2 days decision to 10-15 minutes 75% conditionally 25% unconditionally approved approved Applicants approved (predominantly existing customers)/or Simpler From 4 days declined verification Straight through process to 1-2 days process Customers accept offer and receive funds electronically (occurs in minutes 24/7 if a Westpac customer) Electronic From 3-4 days acceptance and to 15 minutes receipt of funds Improved process for online applicants, as well as branch or call centre applicants Customers save time: no need to visit a branch to sign contracts or collect funds Branch and call centre staff save time: 5 minutes per application Operations team saves time: 5 minutes per application in verification 25% of approvals receive funds on same day, 65% of these in 60 seconds: previous process took up to 9 days 1 This applies to the Westpac branded unsecured loan process. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  32. Actively responding to new digital opportunities Digital transformation 46 Investing and partnering to build new businesses and help Accelerating innovation solve customer problems “The Hothouse” provides innovation services supported by Entrepreneurs-In- Invested in QuintessenceLabs creating opportunities Residence to help solve customer with quantum technology that strongly encrypts problems. Dedicated space at Kogarah confidential data and 275 Kent St, Sydney 1 Uno is a new mortgage broker disrupting the The Hotbox program unleashes the entrepreneurs traditional market by providing consumers within Westpac’s employee network, creating new with the ability to search, compare and apply products and services that will form the leading for a home loan digitally, from a choice of 20 edge of innovation at Westpac to 2020 lenders 1 Invested and partnered with Surgical 1 Partners to help medical practices improve Sponsoring the innovation ecosystem their operating efficiency by connecting through Stone & Chalk allows Westpac practice management software to cloud to partner with the fintech community based accounting and bring the best of the outside in 1 Westpac and Australian fintech innovators inLoop have partnered to create LanternPay – a scalable, 1 Active member of R3 creating opportunities cloud based claiming and payments platform through industry collaboration. Utilising designed for use in Consumer Directed Care distributed ledger-based systems to simplify and programs such as the NDIS, Aged / Home Care automate more financial services and Government insurance schemes 1 Logos are of the respective companies Stone & Chalk, R3, Uno, Surgical Partners and LanternPay. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  33. Reinventure – Investing in new technology businesses 1 47 Digital transformation Westpac has committed $100m to Reinventure, an independently run venture capital fund. The operation allows Westpac to gain insights into emerging fintech business models, adjacent business opportunities and entrepreneurial ways to execute at speed Using data, sheds light on high A bitcoin wallet and platform A social media platform for A trust framework and volume crimes, improving where merchants and local communities. Nabo secure platform that allows prevention and detection consumers can transact the differentiates itself by helping users to exchange data digital currency, bitcoin residents develop real online safely and securely geographical communities (by suburbs) A free, all-in-one HR and A platform to help home benefits platform that sellers find and compare manages on-boarding and A one-stop payments platform real estate agents compliance and lets HR that helps marketplaces, professionals focus on value A peer-to-peer lending merchants and their customers added tasks platform reducing the cost of transact simply and securely originating and managing online (previously PromisePay) consumer loans, sharing its A business loan marketplace operating cost advantage that matches SMEs to the with both borrowers and best lender based on their A global Big Data, business New investors to get a better deal characteristics and needs intelligence and enterprise data warehousing company New A natural language AI system New for data analysis targeting relatively simple business An app to revolutionise Connects ordering apps, Standardises mobile forms into queries that comprise 70% of the payment process for payment devices, loyalty and a format you can easily read an analysts work in a large customers when dining out or reservations platforms to any and fill at the tap of a button organisation grabbing a coffee on the go POS 1. Logos are of the respective companies. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  34. Significant momentum in our technology transformation 48 Digital transformation 2015 Underway (degree of shading represents completion) Channel Assisted Unassisted Channels 5 (customer interface) Starting with home ownership in Phase One Customer Service Hub Brand Brand agnostic Digitised Credit agnostic view & source Customer Westpac BT originations St.George decisioning origination of customer process platform 1 profile 4 * Westpac St.George BT Westpac St.George BT Systems of record Pano- 3 2 rama Common Westpac St.George BT Infrastructure 1 Common * 1 Common IaaS (Infrastructure as a Service) foundations implemented across Group. Longer-term consolidation opportunities 2 St.George Hogan deposit & transaction core system upgraded to Celeriti in 2016. 3 Significant Panorama functionality delivered including SMSF. Customer Service Hub vendor selected and “steel thread” developed to validate strategy of connecting channels and systems of record through a customer hub. 4 Human Digital Connections telephony platform rolled out by the Customer Contact Centres. 5 1 Excludes RAMS and BT. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  35. Workforce revolution delivering Workforce revolution 49 Lost time injury frequency rate Agile work space providing benefits Women in leadership positions 2 (%) (rolling 12 months) (#) 49 • Around 10,300 employees now in agile workplaces • Commenced work on transforming Westpac Head 46 1.8 Office (275 Kent St) to agile 44 43 1.4 • Delivering the following benefits 41 − Employee to desk ratio now 1.3 across Sydney 0.9 CBD locations 0.8 0.7 − A further 72% reduction in paper and storage − 15-20% increase in staff satisfaction and pride with the workspace 1 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 High performer retention Agile working is Embedding customer service (rolling 12 months) (%) supported with our Worksmart app During 1H17 made changes to incentives and 96 96 96 95 95 performance management programs: • Removed all product-related incentives for tellers across the Group. Teller performance is now assessed on customer feedback and the quality of service provided • Introduced a new approach to performance, development and reward (Motivate). Motivate focuses on supporting people to develop and grow, removes forced rankings, and places a greater emphasis on behaviours Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 1 Based on survey of employees in 150 Collins St. Melbourne post move to agile. 2 Spot number as at 31 March for each period. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  36. Continued sustainability leadership Sustainable futures 50 Strategic priorities and 1H17 progress highlights Leading track record • Most sustainable bank globally in the 2016 Embracing societal change 1 Dow Jones Sustainability Index for the third • Leadership roles held by women increased to year in a row, and among sector leaders 49% (up from 46% a year ago). On track to annually since 2002 Help improve the way achieve the 2017 target of 50% people work and live as • Assigned a Gold Class ranking in the • Recruited an additional 76 Indigenous Australians our society changes RobecoSAM Sustainability Yearbook for 2017, released in January 2017 Included in the 2016 CDP 2 Climate A list, • Environmental solutions 2 ranking Westpac among the top 9% of • Total committed exposure to the CleanTech and participating companies globally environmental services sector was $6.7bn as at Help find solutions to 31 March 2017, remaining ahead of target 1 environmental challenges • Westpac Green Bond issued January 2017 Significant achievements • ‘Industry-first’ introduction of ESG (Environmental, Social and Governance) scoring data in BT Invest and BT Better financial futures 3 • BT Advice customer satisfaction rating was 4.9 Panorama for 1H17, meeting target of 4.9 out of 5 • Highest ever customer satisfaction rating Help customers to have a • Lending to the social and affordable housing achieved in BT Advice better relationship with sector increased to $1.24bn, up from $1.05bn a money, for a better life • Significant progress against Sustainability year ago Strategy with more than half of the 2017 targets met or exceeded ahead of schedule Further information on Westpac’s Sustainability and progress on our strategic priorities is available at www.westpac.com.au/sustainability 1 From 2015, a higher threshold for green buildings was introduced in line with industry trends. 2 Formerly the Carbon Disclosure Project. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  37. Continued support for customers through sustainable investing Sustainable futures 51 Industry first sustainability scoring on ASX200 and managed funds Making sustainable investing easier • BT launched sustainability scoring, providing financial advisers and customers visibility of how investments rate on key BTFG is the first to provide sustainability factors customers with integrated • Available on BT Invest and BT Panorama’s sustainability information, to investment menu for over 200 managed assist them in decision funds and ASX200 listed companies making • Research shows more than 90 per cent of Australians believe sustainable investing is important, with almost one in five saying it is extremely important for their investments, to be in sustainable companies 1 • BT Panorama is the only platform to offer integrated ESG scoring 1 2016 BT Australian Financial Health Index. More information available at bt.com.au/sustainability Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  38. Continued support for the environmental, energy and mining transition Sustainable futures 52 • Supporting CleanTech and environmental CleanTech and environmental Group mining portfolio to total services, with over $6.7bn TCE in Australia services exposure (%) 2 lending TCE (%) and New Zealand 0.4 0.2 3.8 3.7 • Mining as a percentage of Group TCE Green buildings 4.6 remains low, at approximately 1%. The Renewable energy portfolio mix continues to evolve as a result 1 Total Group lending Forestry of a transitioning economy (ex. Mining) Waste • Launched in April 2017, a revised Climate Mining 52.3 Change Position Statement and 2020 35.0 Other Action Plan - new and updated criteria: Energy efficiency 99 − $25bn target for lending to climate Green businesses change solutions (including CleanTech) TCE as at 31 March 2017 $6.7bn by 2030 (currently $6.7bn) − Strengthened criteria for financing coal CleanTech and environmental Mining portfolio (TCE) by sector mines services exposure ($bn) (%) − Commitment to actively reduce the emissions intensity of exposure to the TCE as at 31 March 2017 $10.3bn power generation sector, targeting 0.30 50 2H15 1H16 2H16 1H17 tCO2e/MWh by 2020 6.7 40 − Setting a Science-Based Target 1 to 6.3 6.2 6.1 30 reduce Westpac’s direct footprint emissions by 9% at or before 2020 20 10 0 Oil and Other Iron ore Mining Coal Other Sep-15 Mar-16 Sep-16 Mar-17 gas metal services ore 1 Targets adopted by companies to reduce greenhouse gas emissions are considered “science-based” if they are in line with the level of decarbonisation required to keep global temperature increase below 2 degrees Celsius compared to pre- industrial temperatures, as described in the Fifth Assessment Report of the Intergovernmental Panel on Climate Change. 2 As at 31 March 2017, Westpac had no exposure to water or land remediation projects that met the criteria for the Group’s CleanTech exposures. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  39. Actively supporting Australia Sustainable futures 53 Supporting communities 1 Income tax expense on a cash earnings basis ($m) 1H16 2H16 1H17 $49.3bn • Provide loans to help Australians own new lending 2 Notional income tax based on the Backing their home or grow their business 1,660 1,694 1,730 $584bn economic Australian company tax rate of 30% • Support the efficient flow of funds in the activity total economy and keep deposits safe Aust. loans Net amounts not deductible/ (40) 30 15 (not assessable) $3.2bn • Support working and retired Australians in dividends; Wealth Total income tax expense 1,620 1,724 1,745 either directly (611k shareholders) or via Market of many in the income statement Australians capitalisation their super funds $118bn Effective tax rate (%) 29.3 30.5 30.3 >$1.7bn The 2nd largest Australian taxpayer 3 paying • in income tax bottom expense for more than $3bn in income tax in 2016 line the half Other tax/government payments ($m) 1H16 2H16 1H17 $2.3bn The • Employ 37,425 people in payments Net GST, Payroll tax, FBT 230 217 238 workforce to employees Westpac also makes a number of other government and regulatory payments • Westpac 200 Businesses of Tomorrow >1% including fees for the committed liquidity facility, APRA fees and stamp duties community • First 200 Westpac Scholars which are not included in the above. The contributions • 200 Community Grants Similarly, Westpac also collects tax on behalf of others, such as withholding nation to pre-tax • 40+ years continuous support of the tax, PAYG and GST. These are excluded from this analysis profit Westpac Rescue Helicopter Service 1 All figures for the half year to 31 March 2017 unless otherwise stated. Dividends paid represents the 1H17 dividend. 2 New mortgage and new business lending in Australian retail operations which includes CB, BB and BTFG. 3 Source: ATO’s Corporate Tax Transparency Report for the 2014 - 15 Income Year, published December 2016. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  40. Earnings Drivers Financial results based on cash earning unless otherwise stated. Refer page 34 for definition. Results principally cover the 1H17, 2H16 and 1H16 periods. Comparison of 1H17 versus 2H16 (unless otherwise stated)

  41. Net operating income up 2% over the half Revenue 55 Net operating income movement ($m) 150 (108) 168 (170) 18 10,743 199 29 (96) 5 10,619 28 (84) (15) 10,584 Net interest up 1% Non-interest down 3% Net interest flat Non-interest up 6% 1 1 1H16 AIEA Margins Fees & Wealth Trading Other 2H16 AIEA Margins Fees & Wealth Trading Other 1H17 growth commissions growth commissions Net operating income by division ($m) 1H17 Divisional contribution (%) 2 CB 195 (31) 39 (12) 16 10,743 (100) 10,619 81 41 (84) 23 (46) 10,584 2 9 BB 16 38 BTFG WIB Up 2% Flat (down $35m) 11 2 NZ 24 3 Group 2 2 3 3 1H16 CB BB BTFG WIB NZ Group 2H16 CB BB BTFG WIB NZ Group 1H17 1 AIEA is average interest-earning assets. 2 New Zealand contribution represented in A$. 3 Group Businesses. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  42. Composition of lending Revenue 56 Composition of lending (% of total) Net loans ($bn) 7.4 0.9 (2.3) (1.7) 0.7 666.9 2.0 661.9 640.7 Aust. mortgages 10.5 New Zealand lending up Aust. business 3.5 NZ$1.4bn 8.8 Aust. institutional Up 1% Aust. other consumer 62.0 13.2 New Zealand lending Mar-16 Sep-16 Consumer Business WIB Zealand (inc. BT) Mar-17 Other Bank New Bank Other overseas lending Australian business lending 1 ($bn) Australian mortgage lending 1 ($bn) New Zealand net loans (NZ$bn) 0.2 76.5 1.2 75.1 10.7 (11.0) 71.7 38.4 (28.7) 150.2 148.7 413.9 (2.3) 0.1 147.7 404.2 390.8 Down 2% Up 2% Up 2% 2 3 2 Mar-16 Sep-16 BB new BB run-off WIB net Other Mar-17 lending lending Sep-16 lending Mar-16 Sep-16 Consumer Business Mar-17 Mar-16 run-off Mar-17 New Net 1 Gross loans. 2 Run-off includes repayment. 3 Other includes business lending in Private Wealth. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  43. Customer deposits Revenue 57 Customer deposit mix ($bn) and % of total Customer deposit composition ($bn) CB BB WIB BTFG, NZ & Other Term deposits Savings Online Transaction 479 467 479 467 442 442 Up 6% Up 3% 87 87 136 130 79 123 94 88 83 28% 92 84 80 112 111 106 40% 64 60 68 186 181 174 19% 189 191 171 12% Mar-16 Sep-16 Mar-17 LCR customer 13.5% Mar-16 Sep-16 Mar-17 14.2% 13.7% deposit run-off Mortgage offset 1 balances ($bn) New Zealand customer deposits (NZ$bn) Term deposits Savings Online Transaction 58 57 55 Up 5% Down 1% 36.6 12 33.6 12 12 26.8 14 21% 13 14 20.8 3 4 16.2 4 49% 12.8 23% 29 28 25 7% Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-16 Sep-16 Mar-17 1 Included in transaction accounts. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  44. Net interest margin down 4bps, primarily due to higher funding costs and lower interest rates Revenue 58 Net interest margin movement (%) Net interest margin (NIM) (%) NIM excl. Treasury & Markets Treasury & Markets impact on NIM NIM NIM excl. Treasury & Markets Lower CLF fee offset Repricing of certain mortgages Lower rates on by cost of holding and business loans capital held more HQLA 4bps (4bps) 2.07 2.14 2.17 2.07 2.11 (1bp) 2.00 (2bps) 0.07 (1bp) 0bp 2.07 0.07 0.07 1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16 1H17 Mostly term deposit Lengthening of average competition tenor in preparation for Net interest margin by division (%) NSFR. Higher Tier 1 and 2.07 Tier 2 costs 2.04 1H16 2H16 1H17 2.00 2.72 2.72 2.70 2.37 2.34 2.28 2.18 2.13 1.96 1.76 1.77 1.72 1H16 2H16 Loans Customer deposits Term wholesale Capital & other Liquidity 1H17 Treasury & Markets funding CB BB WIB NZ Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  45. Non-interest income up 6%, primarily from higher markets income Revenue 59 Non-interest income contributors ($m) Fees and commissions income ($m) Higher institutional and business fee income partly offset by lower card income 18 3,050 199 1,478 2,966 (84) 1,464 28 2,889 1,408 1,375 1,380 Up 6% 1H16 2H16 Fees & Wealth & Trading Other 1H17 1H15 2H15 1H16 2H16 1H17 commisions insurance income Wealth and insurance income ($m) Trading income ($m) Lower funds management income from margin Higher foreign exchange and compression and higher insurance claims, including commodity risk management 713 1,134 general insurance claims from Cyclone Debbie income and higher sales activity 1,090 610 970 941 539 886 514 425 1H15 2H15 1H16 2H16 1H17 1H15 2H15 1H16 2H16 1H17 Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  46. Wealth and insurance and markets and Treasury income Revenue 60 Funds management income ($m) Insurance income ($m) 327 305 Margin compression from Mostly higher claims, 614 665 622 product mix including including Cyclone Debbie 264 Hastings performance fees migration to MySuper and lower premiums 372 382 365 152 126 136 199 201 206 97 94 86 82 81 42 82 51 43 1H16 2H16 1H17 1H16 2H16 1H17 1H16 2H16 1H17 1H16 2H16 1H17 1H16 2H16 1H17 1H16 2H16 1H17 1H16 2H16 1H17 1H16 2H16 1H17 FUM/FUA BT Other NZ & WIB Total Life General LMI & NZ Total Markets income by activity ($m) Total Group market risk-related income ($m) 748 Rise in fixed income and FX sales 609 523 546 Higher FX, fixed income and commodities 465 447 482 403 trading with positive market conditions 349 259 250 257 247 247 142 142 89 89 19 19 10 10 2 2 1H16 2H16 1H17 1H16 2H16 1H17 1H16 2H16 1H17 1H16 2H16 1H17 1H16 2H16 1H17 1H16 2H16 1H17 1H16 2H16 1H17 1H16 2H16 1H17 Market risk Market risk Customer DVA 1 Total Treasury DVA 1 Total related related 1 DVA is derivative valuation adjustments. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  47. Expense to income ratio 41.7% Expenses 61 Expense movements ($m) FTE run versus change (#) 121 4,479 (118) (4) 5 4,483 454 35,580 (296) 6 35,290 162 34,964 Run: for ongoing operations Change: project Flat based 2H16 Ongoing Productivity Investment Regulatory/ 1H17 1H16 Run Change 2H16 Run Change 1H17 expenses compliance Global peer comparison of expense to income ratios 1 (%) Divisional expense to income (%) 1H16 2H16 1H17 62.9 62.3 60.5 59.9 50.5 51.0 50.0 45.9 45.9 42.7 47.0 41.7 41.5 45.0 43.4 41.8 41.7 41.4 41.2 40.3 40.2 38.6 35.9 35.6 35.5 European US regional Canadian average Hong Kong Singapore Peer 1 Peer 3 WBC Peer 2 Korean average average average average average CB BB BTFG WIB NZ 1 Company data, Credit Suisse. Expense to income ratio average for Peer 1, 2 and 3 based on their 1H17 results, all others based on FY16. European average excludes Deutsche Bank. Peer 2 is based on underlying cash to income ratio. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  48. Investment spend focused on growth and productivity Expenses 62 Investment spend capitalised 1 ($m) Total investment spend mix (% of total) Investment spend ($m) 1H16 2H16 1H17 1H16 2H16 1H17 Growth & productivity Regulatory change Capitalised software Expensed 256 261 236 Other technology Opening balance 1,654 1,651 1,781 Capitalised 1 271 439 344 Additions 268 428 344 Total investment Amortisation (271) (294) (303) 527 700 580 11 spend 14 14 Write-offs, impairments and - (4) (8) Investment spend foreign exchange translation 49% 37% 41% expensed Closing balance 1,651 1,781 1,814 24 Software amortisation 271 294 303 Other deferred expenses 22 23 Deferred acquisition costs 116 101 91 Average amortisation 3.1yrs 2.8yrs 2.9yrs period Other deferred expenses 27 45 56 Capitalised software balance Average amortisation period 2 (years ) and amortisation 2 ($bn) 6.5 2.49 65 64 63 1.92 1.90 4.2 1.81 3.5 2.9 0.61 0.59 0.44 0.36 1H16 2H16 1H17 Peer 1 Peer 2 Peer 3 WBC Peer 1 Peer 2 Peer 3 WBC 1 Investment spend capitalised also includes technology hardware equipment. 2 Data based on 1H17 results, excludes write-offs. Amortisation expense is based on amortisation expense excluding any impairment and is based on 1H17 annualised amortisation expense. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  49. Productivity track record: $1.9bn in savings since 2009 Expenses 63 Efficiency initiatives: $1.9bn saved from efficiency programs since FY09 ($m) • Business Connect and Connect Now video conferencing now in 91% of sites 1 118 1,946 1,828 263 Targeting FY16-1H17 annual • Improved e-Statement functionality in Consumer productivity savings to average $270m 239 Bank has supported an increase in the number of accounts registered for e-Statements to 6 million 219 225 • Digitised St.George mortgage top-up loan 238 document delivery and completion, enabling 289 customers to sign and return documents electronically, improving quality and reducing time 212 from application to funds from 10 days to same day 143 • Cheque digitisation has been rolled out to over 500 branches across NT, SA, WA, Tasmania and FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY09-FY16 1H17 Cumulative Queensland. Enables digital cheque imaging at cumulative each branch, reducing courier costs and results in faster and more efficient processing Metrics • Annual audit certificates requested by auditors now digitised, ~120k requests, with delivery reduced to FY15 FY16 1H17 2 days from 15 days Number of branches 1 1,429 1,309 1,264 • Launched Virtual Data Vault (VDV) portal, uses ‘drop box’ style technology, enabling Westpac to provide large volumes of data to regulatory and Australian % of Smart ATMs of ATM network 2 34% 41% 42% legislative bodies. Increasing security, saving paper and reducing time to meet requests Business Connect/Connect Now video conferencing 3 86% 90% 91% • 24/7 portal introduced that allows Westpac Credit Consumer Bank and Business Bank active digital customers 2 (# m) 4.0 4.2 4.3 Card customers with overdue payments to manage their payment arrangements online. Used by over 5,000 customers per month with 92% of payment Retail and business banking and wealth complaint reduction 4 28% 31% 26% arrangements set up on the same day Number of IT applications closed 2 119 151 161 1 Total branches in Australia, New Zealand and Westpac Pacific. 2 Cumulative numbers. 3 Represents % of Australian branches with Business Connect/Connect Now. 4 Percentage change is based on prior corresponding period. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  50. 1H17 impairment charge lift mainly due to higher IAPs Impairment charges 64 Impairment charges ($m) Individually assessed Collectively assessed New IAPs Write-backs & recoveries Write-offs direct Other movements in CAP Total Rise reflects new impairments in 667 Institutional Bank 493 484 457 471 443 463 418 412 Workout of Institutional 364 and NZ facilities 273 256 (48) (86) (114) (110) (173) (174) (210) (228) 2H15 1H16 2H16 1H17 2H15 1H16 2H16 1H17 2H15 1H16 2H16 1H17 2H15 1H16 2H16 1H17 2H15 1H16 2H16 1H17 Impairment charges and stressed exposures 1 (bps) 120 500 Impairment charge to average loans annualised (lhs) 100 400 Stressed exposures to TCE (rhs) 80 300 60 200 40 114bps 100 20 15bps 0 0 2007 2008 2009 2010 2011 2012 2013 2014 1H15 2H15 1H16 2H16 1H17 1 Pre-2008 does not include St.George. 2008 and 2009 are pro forma including St.George for the entire period with 1H09 ASX Profit Announcement providing details of pro forma adjustments. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  51. Asset quality Financial results based on cash earning unless otherwise stated. Refer page 34 for definition. Results principally cover the 1H17, 2H16 and 1H16 periods. Comparison of 1H17 versus 2H16 (unless otherwise stated)

  52. High quality portfolio with bias to secured consumer lending Asset Quality 66 Asset composition as at 31 March 2017 (%) Loans Total assets ($840bn) Total loans ($667bn) Trading securities, financial assets at fair value and available-for-sale securities 111 Derivative financial instruments 1 Housing Cash and balances with central banks 17 2 Business 3 Life insurance assets 80 68 Institutional 11 11 Goodwill Other consumer 4 Receivables due from other financial institutions Other assets Exposure by risk grade as at 31 March 2017 ($m) Standard and Poor’s Risk Grade 1 Australia NZ / Pacific Asia Americas Europe Group % of Total 97,865 6,877 1,938 4,676 528 111,884 AAA to AA- 11% 28,016 4,783 4,650 5,310 2,956 45,715 A+ to A- 5% 59,898 10,205 7,417 1,915 1,950 81,385 BBB+ to BBB- 8% 74,395 10,443 1,980 349 567 87,734 BB+ to BB 9% BB- to B+ 57,627 9,569 146 83 - 67,425 7% <B+ 5,529 3,244 - - 16 8,789 1% Secured consumer 479,665 50,689 579 - - 530,933 54% Unsecured consumer 45,719 5,209 - - - 50,928 5% Total committed exposures (TCE) 848,714 101,019 16,710 12,333 6,017 984,793 Exposure by region 2 (%) 86% 10% 2% 1% 1% 100% 1 Risk grade equivalent. 2 Exposure by booking office. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  53. A well diversified portfolio Asset Quality 67 Top 10 exposures to corporations and NBFIs 5 Exposures at default 1 by sector ($bn) as a % of TCE (%) 2 Finance & insurance Largest corporation/NBFI single name 1.9 exposure represents less than 0.2% of TCE 3 Property 1.4 1.3 1.3 Government admin. & defence 1.2 1.2 1.1 1.1 1.0 1.0 Wholesale & retail trade Manufacturing Mar-17 Services Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Mar-17 Sep-16 Property services & business services Top 10 exposures to corporations & NBFIs 5 Mar-16 Transport & storage at 31 March 2017 ($m) Agriculture, forestry & fishing A+ BBB- Utilities S&P rating or equivalent BBB+ A- Mining A 4 Construction BBB- A- Accommodation, cafes & restaurants BBB+ BBB Other A- 0 20 40 60 80 100 0 300 600 900 1,200 1,500 1 Exposures at default is an estimate of the committed exposure expected to be drawn by a customer at the time of default. Excludes consumer lending. 2 Finance and insurance includes banks, non-banks, insurance companies and other firms providing services to the finance and insurance sectors. 3 Property includes both residential and non-residential property investors and developers, and excludes real estate agents. 4 Construction includes building and non-building construction, and industries serving the construction sector. 5 NBFI is non-bank financial institutions. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  54. Strong provisioning maintained Asset Quality 68 Asset quality Total provisions ($m) Individually assessed provisions 1H16 2H16 1H17 Collectively assessed provisions Economic overlay Impairment charges to average loans annualised (bps) 21 14 15 5,061 Lower total provisions 4,734 453 Impairment charges to average loans annualised (bps) mainly due to improved credit 24 17 18 including interest carrying adjustment 4,414 quality in WIB 502 4,241 346 3,949 363 Gross impaired assets to gross loans (%) 0.39 0.32 0.30 3,602 389 3,513 3,481 3,332 389 Stressed exposures to TCE (%) 1.03 1.20 1.14 378 389 388 2,986 2,607 3,004 Provisions 2,408 2,196 2,344 Total provisions to gross loans (bps) 57 54 52 2,225 2,348 2,275 Impaired asset provisions to impaired assets (%) 48 49 52 1,622 1,470 1,461 1,364 Collectively assessed provisions to credit RWA (bps) 87 76 1 77 1,228 867 869 787 669 Economic overlay ($m) 393 389 378 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Mar17 1 Change in mortgage risk weights increased credit RWA by $43bn, reducing the collectively assessed provisions to credit RWA ratio by 11bps. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  55. Stressed exposures lower Asset Quality 69 Stressed exposures as a % of TCE Movement in stress categories (bps) (2) 2 Impaired (2) 10 120 (4) 114 6 90+ day past due and not impaired 103 (4) 5 Watchlist & substandard 3.20 . 3.09 Mainly due to work- Mainly NZ dairy and out of WIB exposures exposures in WIB Mar-16 Impaired 90+ dpd not Substandard Watchlist Sep-16 Impaired 90+ dpd not Substandard Watchlist Mar-17 Lower stress reflects 2.48 impaired impaired refinance and work-out of some institutional facilities 2.17 and an improved outlook for 2.07 some NZ dairy exposures 2.23 1.45 New and increased gross impaired assets ($m) 1.60 1.24 1.24 1,748 1.20 1.14 1,519 0.85 1.03 0.99 1,343 1,218 1,194 0.46 0.71 0.65 1,060 1,078 0.59 0.41 997 958 0.49 0.35 0.54 0.29 0.31 708 609 607 633 477 589 0.26 0.28 0.33 0.35 0.67 0.25 0.62 0.58 0.57 0.44 0.27 0.26 0.22 0.20 0.20 1H10 2H10 1H11 2H11 1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16 1H17 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Mar-16 Sep-16 Mar-17 Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  56. Stressed exposures lower across industries reflecting both work-out and return to health of facilities Asset Quality 70 Corporate and business portfolio stressed exposures by industry ($bn) 2.5 Mar-16 Sep-16 Mar-17 2.0 1.5 1.0 0.5 0.0 Agriculture, forestry & Wholesale & Property Manufacturing Property services & Services Construction Transport & storage Accommodation, cafes Mining 1 Finance & insurance Utilities retail trade business services Other & restaurants fishing 1 Includes Government admin. & defence Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  57. Areas of interest: Commercial property Asset Quality 71 Commercial property portfolio Commercial property exposures % of TCE and % in stress Sep-16 Mar-17 10 Commercial property as % of TCE (lhs) 20 Commercial property % in stress (rhs) Total committed exposures (TCE) $67.1bn $65.5bn 8 15 Lending $52.6bn $51.4bn 6 10 Commercial property as a % of Group TCE 6.87 6.65 4 5 Median risk grade 1 BB equivalent BB equivalent 2 0 0 % of portfolio graded as ‘stressed’ 1 1.32 1.39 1H09 2H09 1H10 2H10 1H11 2H11 1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16 1H17 % of portfolio in impaired 0.53 0.46 Commercial property portfolio composition (%) Region (%) Borrower type (%) Sector (%) Exposures <$10m NSW & ACT Commercial offices 9 & diversified groups 16 15 Vic Developers >$10m Residential Qld 20 11 43 44 44 SA & NT Retail Investors >$10m 30 9 WA Industrial Diversified Property 6 NZ & Pacific 28 5 11 Groups and Property 9 Institutional Trusts >$10m (diversified) 1 Includes impaired exposures. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  58. Areas of interest: Inner city apartments Asset Quality 72 Commercial property portfolio TCE ($bn) Sep-16 Mar-17 TCE % 1 • Progressively tightened risk appetite in areas of higher concern since 2012 Residential apartment development >$20m 5.1 4.1 6.3% • Actively monitoring settlements for >$20m residential development book Residential apartment development • While settlements have been slightly slower, Westpac’s debt has been 3.2 2.8 4.3% >$20m in major markets, shown below repaid in full given low LVRs Sydney major markets 1.2 1.3 2.0% • 1H17 new lending LVR 49.2% Inner Melbourne 1.4 1.0 1.5% • 1H17 new lending LVR 51.4% Inner Brisbane 0.4 0.2 0.3% • Exposure low and falling Perth metro 0.2 0.2 0.3% • Exposure low and falling Adelaide CBD 0.1 0.1 0.2% • One project Residential apartment development >$20m weighted average LVR (%) Consumer mortgages Consumer mortgages where security is within a residential Sep-16 Mar-17 apartment development >$20m 55.1 50.2 Total consumer mortgage loans 49.3 $13.0bn $13.5bn Average portfolio LVR 52% for inner city apartments 45.0 Average LVR at origination 69% 71% Average dynamic LVR 54% 53% Dynamic LVR >90% 2.9% 2.0% 2017 2018 2019 2020 90+ day delinquencies 30bps 37bps 1 Percentage of commercial property TCE. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  59. Asset quality areas of interest Asset Quality 73 Mining (inc. oil and gas) portfolio New Zealand dairy portfolio Retail trade portfolio Sep-16 Mar-17 Sep-16 Mar-17 Sep-16 Mar-17 Total committed exposure NZ$5.9bn NZ$5.9bn Total committed exposures (TCE) $16.3bn $15.3bn Total committed exposures (TCE) $11.3bn $10.4bn (TCE) Lending $6.2bn $6.0bn Lending $12.1bn $11.3bn Lending NZ$5.7bn NZ$5.6bn % of Group TCE 1.16 1.05 % of Group TCE 1.67 1.55 % of Group TCE 0.58 0.55 % of portfolio graded as % of portfolio graded as % of portfolio graded as 3.94 2.90 2.68 2.51 25.29 21.70 ‘stressed’ 1,2 ‘stressed’ 1,2 ‘stressed’ 1,2 % of portfolio in impaired 2 1.32 1.15 % of portfolio in impaired 2 0.34 0.34 % of portfolio in impaired 2 0.34 0.40 Mining portfolio (TCE) NZ dairy portfolio (TCE) Retail portfolio (TCE) by sector (%) by security (%) by sector (%) 10 25 26 12 1 41 42 7 73 16 33 14 Oil and gas Iron ore Food Retailing Fully secured Other metal ore Coal Partially secured Motor Vehicle Retailing and Services Unsecured Mining services Other Personal and Household Good Retailing 1 Includes impaired exposures. 2 Percentage of portfolio TCE. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  60. Provision cover by portfolio category Asset Quality 74 PROVISIONING TO TCE (%) Exposures as a % of TCE Sep-15 Mar-16 Sep-16 Mar-17 Fully performing portfolio • Small cover as low probability of default (PD) 0.21 0.22 0.22 0.21 • Includes economic overlay Fully performing 98.80 98.86 98.97 portfolio 99.01 Collective provisions Watchlist & substandard • Still performing but higher cover reflects 6.93 4.89 4.51 4.52 elevated PD 90+ day past due and not impaired Watchlist & 0.65 0.59 0.49 substandard 0.54 • In default but strong security 5.28 4.99 4.57 5.04 90+ day past 0.28 0.33 0.35 due and not 0.25 provisions Impaired assets Impaired impaired asset 0.26 0.22 0.20 0.20 Impaired • In default. High provision cover reflects 46.27 47.65 49.44 52.07 expected recovery Sep-15 Mar-16 Sep-16 Mar-17 Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  61. Changes in the treatment of hardship now flowing through other consumer delinquencies Asset Quality 75 APRA is standardising the delinquency treatment of facilities in hardship Hardship allows eligible customers to reduce or defer repayments in the short term to manage through a period of financial difficulty (e.g. unemployment, injury, natural disasters). Solutions are tailored to customer circumstances and may include extending the loan or restructuring. Prior Westpac approach Current Westpac approach Industry comparability • An account in hardship continues to migrate • When an account entered hardship its delinquency • Westpac changed hardship treatment following through delinquency buckets until 90+ day status (30, 60, or 90 days etc.) was frozen until after guidance from APRA. Implemented change for • Accounts reported as delinquent until repayments hardship arrangements ended or the facility mortgage portfolio; changes for NZ and consumer maintained for 6 months (‘serviceability period’) returned to performing (or not) unsecured currently underway • Average hardship period granted is 3-4 months • Treatment across banks and non-banks, including • Hardship plus serviceability period averages 10 serviceability period applied is not yet aligned. This months makes comparability of 90+ day delinquencies more • Changes have no impact on Westpac’s risk profile difficult Impact on mortgages - completed Impact on unsecured consumer lending Australian mortgage delinquencies (bps) • Portfolios impacted are • Implemented in 1H16 and has Australian unsecured consumer delinquencies (bps) credit cards, personal now fully flowed through Accounts in serviceability period Accounts in serviceability period loans and auto Accounts in hardship increase • Increased mortgage 90+ day Accounts in hardship increase 90+ day delinquencies excl. hardship changes • Impact on 90+ day delinquencies by 13bps 90+ day delinquencies excl. hardship changes 0.7 delinquencies in 1H17 2.0 was 28bps and will • Increase to risk weighted 0.12 0.6 0.12 continue to rise in 2H17 assets offset by change to 0.01 0.12 0.01 0.03 1.5 correlation factor in 1H17 0.01 • The change has yet to 0.5 0.16 flow through to risk 0.01 weighted assets 0.4 1.0 0.54 1.49 0.53 0.51 1.35 • Expected to result in 0.45 1.16 1.11 0.3 higher write-offs and higher write-backs 0.5 0.2 Sep-15 Mar-16 Sep-16 Mar-17 Sep-15 Mar-16 Sep-16 Mar-17 Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  62. Australian consumer unsecured lending Asset Quality 76 Australian unsecured consumer portfolio Australian unsecured lending 90+ day delinquencies (%) Total unsecured consumer lending Mar-16 Sep-16 Mar-17 3.00 Credit cards Total ex-hardship 2.50 30+ day delinquencies (%) 3.88 2.95 3.99 Credit cards ex-hardship 2.00 90+ day delinquencies (%) 1.49 1.17 1.63 1.50 Estimated impact of changes to hardship - 1bp 28bps treatment for 90+ day delinquencies (bps) 1.00 • APRA hardship policy adopted across Westpac’s Australian unsecured portfolios in 0.50 1H17 0.00 • March 2017 unsecured consumer delinquencies, excluding hardship reporting Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 changes are 14bps lower than March 2016 Australian consumer unsecured lending portfolio (% and $bn) Australian unsecured lending 90+ day delinquencies (%) Composition (%) Portfolio ($bn) Personal loans (excl Auto) Auto loans (consumer) 3.4% of Group lending Mar-16 Sep-16 Mar-17 3.00 Personal loans ex-hardship Auto loans ex-hardship 23 23 23 2.50 2.00 3 10 10 10 1.50 8 8 8 5 5 5 1.00 97 0.50 Credit cards Personal Auto loans Total loans (consumer) consumer 0.00 Group unsecured Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Consumer unsecured portfolio Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  63. High levels of borrower equity create buffers in the Australian mortgage portfolio Asset Quality 77 Australian housing loan-to-value ratios (LVRs) 2,3 (%) Australian housing portfolio Mar-16 Sep-16 Mar-17 1H17 100 balance balance balance flow 1 1H17 drawdowns LVR at origination Portfolio LVR at origination Total portfolio ($bn) 390.8 404.2 413.9 38.4 90 Portfolio dynamic LVR Owner occupied (%) 54.3 55.0 55.3 55.1 Investment property loans (%) 39.5 39.3 39.5 43.5 80 Portfolio loan/line of credit (%) 6.2 5.7 5.3 1.4 70 Variable rate / Fixed rate (%) 83 / 17 83 / 17 82 / 18 77 / 23 • 83% of portfolio with Low doc (%) 2.7 2.4 2.2 0.4 origination LVR ≤ 80% 60 • 94% of portfolio with Proprietary channel (%) 58.2 57.9 57.7 56.7 dynamic LVR ≤ 80% First home buyer (%) 8.9 8.6 8.4 7.9 50 Mortgage insured (%) 18.8 18.4 18.1 14.1 40 Mar-16 Sep-16 Mar-17 Average LVR at origination 2 (%) 70 70 70 30 Average dynamic LVR 2,3 (%) 43 43 42 Average LVR of new loans 2,4 (%) 70 70 68 20 Average loan size 5 ($’000) 249 254 259 Customers ahead on repayments 10 72 72 71 including offset accts 2,6 (%) Actual mortgage losses 35 31 36 net of insurance 7 ($m) 0 0<=60 60<=70 70<=80 80<=90 90<=95 95+ Actual mortgage loss rate annualised (bps) 2 2 2 1 Flow is all new mortgages settled during the 6 month period ended 31 March 2017 and includes RAMS. 2 Excludes RAMS. 3 Dynamic LVR is the loan-to-value ratio taking into account the current loan balance, changes in security value, offset account balances and other loan adjustments. Property valuation source Australian Property Monitors. 4 Average LVR of new loans is on rolling 6 month window. 5 Includes amortisation. 6 Customer loans ahead on payments exclude equity/line of credit products as there are no scheduled principal payments. Includes mortgage offset balances. ‘Behind’ is more than 30 days past due. ‘On time’ includes up to 30 days past due. 7 Mortgage insurance claims 1H17 $3m (2H16 $7m, 1H16 $4m). Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  64. Australian mortgage serviceability supporting payments ahead Asset Quality 78 Australian home loan customers ahead on repayments 2 (%) Mortgage interest rate buffers (%) 9 Westpac owner occupied SVR inc package discount Mar-16 Sep-16 Mar-17 30 Westpac minimum assessment ('floor') rate 7.25 25 7 20 15 5 4.42 10 5 0 3 Behind On Time < 1 Month < 1 Year < 2 Years > 2 Years Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Westpac Australian offset account balances ($bn) Key serviceability requirements Discounts of 20% apply to less certain income sources such Income as rental income/bonuses/pensions 36.2 Higher of declared expenses or HEM 1 adjusted by income Expenses and geography Higher of customer rate plus 2.25% or the minimum Interest rate buffer assessment (‘floor’) rate of 7.25% applied Restrictions • LVR restrictions apply to single-industry towns and higher-risk postcodes • LVR restrictions to Australian and NZ citizens and permanent visa holders using foreign income • Loans to non-residents not offered since April 2016 1H09 2H09 1H10 2H10 1H11 2H11 1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16 1H17 (limited exceptions) • Minimum property size and location restrictions apply 1 HEM is the Household Expenditure Measure, produced by the University of Melbourne. 2 Excludes RAMS. Customer loans ahead on payments exclude equity/line of credit products as there are no scheduled principal payments. Includes mortgage offset account balances. ‘Behind’ is more than 30 days past due. ‘On time’ includes up to 30 days past due. Calculated by loan balance. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  65. Australian mortgage delinquencies remain low Asset Quality 79 Australian mortgage portfolio Australian mortgages delinquencies (%) Mar-16 Sep-16 Mar-17 90+ day past due total 90+ day past due investor 30+ day past due total Loss rates 3.0 30+ day delinquencies (bps) 134 130 139 90+ day delinquencies (bps) Introduced new hardship treatment 55 66 67 (includes impaired mortgages) 2.0 Estimated cumulative impact of changes to 4 13 13 hardship treatment (bps) 1.0 Consumer properties in possession 253 262 382 • Increase in 1H17 mainly due to rise in WA and Qld reflecting weaker economic 0.0 conditions in those states Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Housing lending portfolio by State (%) Australian mortgages 90+ day delinquencies by state (%) 3.0 NSW/ACT VIC/TAS QLD Australian banking system 1 WA SA/NT ALL Westpac Group portfolio 44 40 1H17 Westpac Group drawdowns 2.0 35 Introduced new hardship treatment 27 27 26 18 17 17 1.0 12 10 7 7 7 6 0.0 NSW & ACT VIC & TAS QLD WA SA & NT Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 1 Source ABA Cannex February 2017. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  66. Sound underwriting supports quality across the mortgage book Asset Quality 80 Investment property portfolio Interest-only portfolio Mar-16 Sep-16 Mar-17 • Interest-only (IO) loans assessed on a principal and interest basis, now over the Average LVR of new IPL loans in the period 1,2 (%) 67 66 65 residual term. IO loans are full recourse Average LVR of IPL loans at origination 1 (%) 72 72 72 • Serviceability assessments include an interest rate buffer (at least 2.25%), minimum assessment rate (7.25%) and adequate surplus test 4 % IPL loans originated at or below 80% LVR 87 88 88 • IO is 50% of the mortgage portfolio and 46% of flows in 1H17. Average dynamic LVR 1,3 (%) 48 48 47 • Portfolio statistics as at 31 March 2017  67% average LVR of interest-only loans at origination 1 Average loan size ($’000) 299 305 309  66% of customers ahead of repayments (including offset accounts) 1 Customers ahead on repayments 62 62 61 including offset accounts 1 (%)  90+ day delinquencies 48bps  90+ day delinquencies (bps) 38 48 47 Annualised loss rate 1bp (net of insurance claims) Annualised loss rate (net of insurance claims) (bps) 2 2 2 Applicants by gross Interest-only lending by LVR 1,3 and income band (%) LVR at origination 1 (%) income band 1 (%) 57% Applicant gross income bands Owner occupied IPL Owner occupied IPL 50 30 <$100k $100k - $250k >$250k 13% 25 40 35% 20 30 2% of the IO portfolio with 7% 15 dynamic LVR >80% and 29% 20 income <$100k 10 19% 10 8% 5 1% 15% 9% 5% 0 0 2% <=50 50<=75 75<=100 100<=125 125<=150 150<=200 200<=500 500<=1m 1m+ 0<=60 60<=70 70<=75 75<=80 80<=85 85<=90 90<=95 95<=97 97+ <=60% 60%<=80% >80% Dynamic LVR bands (%) 1 Excludes RAMS. 2 Average LVR of new loans is on a rolling 6 month window. 3 Dynamic LVR is the loan-to-value ratio taking into account the current loan balance, changes in security value, offset account balances and other loan adjustments. Property valuation source Australian Property Monitors. 4 An adequate surplus test measures the extent to which a borrowers income exceeds loan repayments, expenses and other commitments, as assessed. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  67. Lenders mortgage insurance Asset Quality 81 Lenders mortgage insurance Lenders mortgage insurance arrangements • Where mortgage insurance is required, mortgages LVR Band Insurance are insured through Westpac’s captive mortgage insurer, Westpac Lenders Mortgage Insurance • LVR ≤ 80% Not required (WLMI), and through external LMI providers, based on risk profile • Low doc LVR ≤ 60% • WLMI is well capitalised (separate from bank capital) and subject to APRA regulation. WLMI • LVR >80% to ≤ 90% • Where insurance required, insured through captive insurer, WLMI targets a capitalisation range of 1.25x PCR 1 and have consistently been above this target • Low doc • LMI not required for certain borrower groups LVR >60% to ≤ 80% • Scenarios indicate sufficient capital to fund claims • Reinsurance arrangements: arising from events of severe stress – estimated − 40% risk retained by WLMI losses for WLMI from a 1 in 200 year event are $130m net of re-insurance recoveries (2H16: − 60% risk transferred through quota share arrangements 2 with Arch Reinsurance $132m) Limited, Tokio Millennium Re, Endurance Re, Everest Re, Trans Re and AWAC • LVR >90% • 100% reinsurance through Arch Reinsurance Limited Australian mortgage portfolio (%) − Reinsurance arrangements see loans with LVR >90% insured through WLMI with 100% of risk subsequently transferred to Arch Reinsurance Limited 82 Not insured Insurance statistics Insured by third 1H16 2H16 1H17 3 parties Insurance claims ($m) 4 7 3 Insured by WLMI 8 WLMI loss ratio 4 (%) 10 17 7 10 WLMI gross written premiums 5 ($m) 133 154 141 1 Prudential Capital Requirement (PCR) calculated in accordance with APRA standards. 2 For all new business from 1 October 2014. 3 Insured coverage is net of quota share. 4 Loss ratio is claims over the total of earned premium plus reinsurance plus exchange commission. 5 LMI gross written premium includes loans >90% LVR reinsured with Arch Reinsurance Limited. 1H17 gross written premium includes $107m from the arrangement (2H16: $125m, 1H16: $102m). Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  68. Mortgage portfolio stress testing outcomes Asset Quality 82 • Westpac regularly conducts a range of portfolio stress tests as part Australian mortgage portfolio stress testing of its regulatory and risk management activities as at 31 March 2017 • The Australian mortgage portfolio stress testing scenario presented Key assumptions Stressed scenario represents a severe recession and assumes that significant reductions in consumer spending and business investment lead to Current Year 1 Year 2 Year 3 six consecutive quarters of negative GDP growth. This results in a material increase in unemployment and nationwide falls in property and other asset prices Portfolio size ($bn) 413 398 390 388 • Estimated Australian housing portfolio losses under these stressed conditions are manageable and within the Group’s risk appetite and Unemployment rate (%) 5.8 12.0 11.0 9.7 capital base  Cumulative total losses of $3bn over three years for the Interest rates (cash rate, %) 1.50 0.50 0.50 0.50 uninsured portfolio (September 2016: $2.9bn)  Cumulative claims on LMI, both WLMI and external insurers, of $903m over the three years (September 2016: $856m) House prices (% change cumulative) 0.0 (13.0) (22.4) (26.2)  Cumulative loss rates have increased (74bps compared to 69bps at September 2016) mainly due to more conservative modelling Annual GDP growth (%) 2.7 (3.9) (0.2) 1.7 assumptions, changes in portfolio quality, as well as changes in the non-delinquent portfolio  WLMI separately conducts stress testing to test the sufficiency of Stressed loss outcomes (net of LMI recoveries) 1 its capital position to cover mortgage claims arising from a stressed mortgage environment $ million 72 2 1,084 1,646 486 • Preferred capital ranges incorporate buffers at Westpac Group level that also consider the combined impact on the mortgage portfolio and WLMI of severe stress scenarios Basis points 3 2 24 38 12 1 Assumes 30% of LMI claims will be rejected in a stressed scenario. 2 Represents 1H17 actual losses of $36 annualised. 3 Stressed loss rates are calculated as a percentage of mortgage exposure at default. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  69. Capital, Funding and Liquidity Financial results based on cash earning unless otherwise stated. Refer page 34 for definition. Results principally cover the 1H17, 2H16 and 1H16 periods. Comparison of 1H17 versus 2H16 (unless otherwise stated)

  70. CET1 capital ratio above preferred range Capital, Funding and Liquidity 84 Common equity Tier 1 (CET1) capital ratio (%) Key capital ratios (%) % Mar-16 Sep-16 Mar-17 11.0 10.5 Preferred CET1 capital ratio range 8.75% - 9.25% CET1 capital ratio 10.5 9.5 10.0 10.0 10.0 10.2 9.5 10.1 9.5 Additional Tier 1 capital 1.6 1.7 1.7 9.0 8.8 8.8 9.3 9.0 9.0 Tier 2 capital 1.9 1.9 2.3 Regulatory minimum plus regulatory capital buffers 8.0% 8.3 8.4 8.0 Total regulatory capital ratio 14.0 13.1 14.0 Regulatory capital buffers of 3.5% include: 7.0 • Capital conservation buffer Risk weighted assets (RWA) ($bn) 2 363 410 404 (2.5%) • Domestic systemically 6.0 important bank buffer (1%) Leverage ratio 5.0 5.2 5.3 and • Countercyclical buffer 1 (0%) 5.0 Internationally comparable ratios 3 Regulatory minimum 4.5% Leverage ratio (internationally comparable) 5.8 5.9 6.0 4.0 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 CET1 ratio (internationally comparable) 14.7 14.4 15.3 1 Countercyclical buffer currently set at nil for Australia and New Zealand. 2 APRA’s revision to the calculation of RWA for Australian residential mortgages, which came into effect on 1 July 2016 increased RWA by $43bn (reduced CET1 capital ratio by 110bps). 3 Internationally comparable methodology aligns with the APRA study titled ‘International Capital Comparison Study’ of 13 July 2015. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  71. Capital a strength Capital, Funding and Liquidity 85 Highlights Regulatory capital ratios (%) Internationally comparable 2 basis APRA basis • CET1 capital ratio above preferred BIS 75 th percentile 3 range CET1 19.4 • Well placed to respond to future APRA 17.2 announcements 15.3 14.0 16.8 11.7 14.3 13.8 10.0 Leverage • 5.3%, up from 5.2% ratio • Well above the 3.0% Basel minimum CET1 Tier 1 Total CET1 Tier 1 Total Internationally • Top quartile for CET1 capital ratio regulatory capital regulatory capital comparable • Leverage ratio well positioned against ratios international peers • Internationally comparable ratios exclude Basel III transitional instruments, which are included in the APRA capital ratios on a transitional basis Rating agency • Estimated S&P risk adjusted capital capital (RAC) ratio of 9.9% 1 • Westpac is seeking to replace Basel III transitional instruments with benchmarks • Near S&P’s “strong” assessment of 10% Basel III fully compliant instruments. Should Westpac do this, pro forma internationally comparable:  Tier 1 capital ratio would be 17.6% 4 (up from 17.2%) Risk • Reduced by 1% due to discipline in RWA  Total regulatory capital ratio would be 20.7% 4 (up from 19.4%) weighted management, both on and off balance  CET1 capital ratio would be unchanged assets sheet, and improved asset quality 1 Westpac’s estimate of RAC ratio based on current S&P RAC Framework. 2 Internationally comparable methodology aligns with the APRA study titled ‘International Capital Comparison Study’ dated 13 July 2015. For more details on adjustments refer slide 129. 3 Group 1 banks BIS 75 th percentile fully phased-in Basel III capital ratios from BIS monitoring report released 28 February 2017. 4 Includes transitional capital instruments eligible as Additional Tier 1 and Tier 2 capital under APRA Basel III rules. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  72. Strong capital generation supported by disciplined loan growth Capital, Funding and Liquidity 86 CET1 capital ratio (% and bps) 15.3 APRA changes Mostly FX translation impacts Disciplined growth and to mortgage on NZ$ loans improved asset quality RWA 10.47 (110) 99 (70) 6 9.97 3 4 4 3 2 (2) 11 9.48 Organic +29bps Other +20ps Up 49 basis points Mar-16 Mortgage Other Sep-16 Cash Final Ordinary Other RWA Regulatory FX impacts Defined Deferred tax Mar-17 Mar-17 2 APRA RWA movements APRA earnings dividend RWA movements initiatives modelling benefit asset APRA Int. Comp. 1 change (net of DRP) growth changes impact 1 APRA’s revision to the calculation of RWA for Australian residential mortgages, which came into effect on 1 July 2016. 2 Internationally comparable methodology aligns with the APRA study titled ‘International Capital Comparison Study’ dated 13 July 2015. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  73. Disciplined management and improved asset quality reduce RWA Capital, Funding and Liquidity 87 Movement in risk weighted assets ($bn) 410.1 (6.1) (0.4) 2.8 (0.3) 404.4 (1.7) Reduced embedded Updated loss 363.2 gain as the yield scenarios curve steepened Down $5.7bn or 1% Mar-16 Sep-16 Credit risk Market Operational IRRBB Other Mar-17 risk risk Movement in credit risk weighted assets ($bn) 3.3 (1.9) (1.0) (3.1) 358.8 (1.8) (1.6) 352.7 Translation Updates to PD for corporate and Changes in Reduced 313.0 impact, mostly business, and for hardship in interest rate unutilised NZ$ loans mortgages swaps limits Down $6.1bn or 2% Mar-16 Sep-16 Business growth FX translation Regulatory Credit quality Mark-to-market RWA initiatives Mar-17 impacts modelling changes Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  74. Well placed on internationally comparable CET1 and leverage ratios Capital, Funding and Liquidity 88 Common equity Tier 1 ratio (%) 20% 15.3% 15% 10% 5% 0% Nordea Norinchukin Bank CBA Westpac ANZ ING Lloyds NAB BPCE HSBC Standard Chartered Rabobank RBS China Construction Bank ICBC Intesa Sanpaolo Credit Agricole SA Citigroup Barclays Commerzbank JPMorgan Chase Societe Generale BNP Paribas Deutsche Bank Sumitomo Mitsui Credit Suisse China Merchants Bank Natixis Bank of China Wells Fargo Scotiabank Mitsubishi UFG Bank of Montreal Royal Bank of Canada Bank of Communications BBVA Toronto Dominion Bank Bank of America Mizuho FG Santander Agricultural Bank of China Unicredit Leverage ratio (%) 8.0% 6.0% 6.0% 4.0% 2.0% 0.0% China Construction Bank BBVA Credit Agricole SA ING Mitsubishi UFG Toronto Dominion Bank ICBC Bank of China Bank of Communications Intesa Sanpaolo Agricultural Bank of China HSBC Westpac ANZ Standard Chartered RBS NAB China Merchants Bank Lloyds CBA Norinchukin Bank Rabobank Barclays Santander BPCE Nordea Commerzbank Sumitomo Mitsui Credit Suisse BNP Paribas Scotiabank Royal Bank of Canada Societe Generale Bank of Montreal Mizuho FG Deutsche Bank Natixis Unicredit Peer group comprises listed commercial banks with assets in excess of A$700bn and which have disclosed fully implemented Basel III ratios or provided sufficient disclosure to estimate. Based on company reports/presentations. Ratios at 31 Dec 2016, except for Westpac, ANZ and NAB, which are at 31 Mar 2017, while Scotiabank, Bank of Montreal, Royal Bank of Canada and Toronto Dominion are at 31 Jan 2017, assumes Basel III capital reforms fully implemented. Where accrued expected dividends have been deducted, these have been added back for comparability. US banks are excluded from leverage ratio analysis due to business model differences, for example from loans sold to US Government sponsored enterprises. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  75. Internationally comparable capital ratio reconciliation 89 Capital, Funding and Liquidity APRA’s Basel III capital requirements are more conservative than those of the Basel Committee on Banking Supervision (BCBS), leading to lower reported capital ratios by Australian banks. In July 2015, APRA published a study that compared the major banks’ capital ratios against a set of international peers 1 . The following details the adjustments from this study and how Westpac’s APRA Basel III CET1 capital ratio aligns to an internationally comparable ratio (%) Westpac’s CET1 capital ratio (APRA basis) 10.0 Equity investments Balances below prescribed threshold are risk weighted, compared to a 100% CET1 deduction under APRA’s requirements 0.5 Deferred tax assets Balances below prescribed threshold are risk weighted, compared to a 100% CET1 deduction under APRA’s requirements 0.3 Interest rate risk in the banking APRA requires capital to be held for IRRBB. The BCBS does not have a Pillar 1 capital requirement for IRRBB 0.3 book (IRRBB) Loss given default (LGD) of 15%, compared to the 20% LGD floor under APRA’s requirements. APRA also applies a Residential mortgages 1.7 correlation factor for mortgages higher than the 15% factor prescribed in the Basel rules Unsecured non-retail exposures LGD of 45%, compared to the 60% or higher LGD under APRA’s requirements 0.7 Non-retail undrawn commitments Credit conversion factor of 75%, compared to 100% under APRA’s requirements 0.5 Use of internal-ratings based (IRB) probabilities of default (PD) and LGDs for income producing real estate and project Specialised lending finance exposures, reduced by application of a scaling factor of 1.06. APRA applies higher risk weights under a supervisory 0.7 slotting approach, but does not require the application of the scaling factors Increase in the A$ equivalent concessional threshold level for small business retail and small to medium enterprise Currency conversion threshold 0.2 corporate exposures APRA requires these items to be deducted from CET1. The BCBS only requires exposures classified as intangible assets Capitalised expenses 0.4 under relevant accounting standards to be deducted from CET1 Internationally comparable CET1 capital ratio 15.3 Internationally comparable Tier 1 capital ratio 17.2 Internationally comparable total regulatory capital ratio 19.4 1 Methodology aligns with the APRA study titled “International capital comparison study", dated 13 July 2015. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  76. Optimising returns by actively managing capital Capital, Funding and Liquidity 90 Ordinary equity (spot and includes reserves) ($bn) Actively managing returns • 1H17 ROE increased as cash earnings growth (3%) was higher than the increase in average ordinary equity (AOE) of 2% 0.9 59.3 0.3 0.6 58.1 0.3 57.2 • Leverage ratio improved from the increased AOE • Continue to refine capital allocation model with more capital allocated to divisions in 1H17 • Capital held centrally includes surplus capital, capital for Treasury, and capital for the next dividend payment Mar-16 DRP Other Sep-16 DRP Other Mar-17 Capital allocated to divisions ($bn) Return on equity (%) Division 1H16 2H16 1H17 Division 1H16 2H16 1H17 Total Group 55.2 56.6 57.7 Total Group 14.2 13.8 14.0 Consumer Bank and Business Bank 22.4 23.7 24.4 Consumer Bank and Business Bank 16.5 16.6 16.4 BTFG 3.2 3.3 3.4 BTFG 16.2 14.9 14.4 WIB 9.7 9.6 9.4 WIB 9.9 11.3 14.1 Westpac NZ (A$) 4.1 4.4 4.6 Westpac NZ (A$) 17.9 16.5 17.3 Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  77. Maintained strong funding and liquidity profile Capital, Funding and Liquidity 91 Funding composition by residual Liquidity Coverage Ratio ($bn and %) Net Stable Funding Ratio (NSFR) maturity (%) Sep-16 Mar-17 Sep-16 Mar-17 Wholesale Onshore <1yr Wholesale Offshore <1yr HQLA 1 69.4 73.6 Estimated NSFR 105% 108% Wholesale Onshore >1yr Wholesale Offshore >1yr CLF 2 58.6 49.1 NSFR composition 8 as at 31 March 2017 ($bn) 7 Securitisation Equity Total LCR Liquid assets 128.0 122.7 $557bn Customer deposits Customer deposits 63.5 65.9 $514bn Wholesale Wholesale funding 13.1 13.2 6 7 funding Liquids 16 Other flows 3 19.2 19.1 8 and other 9 8 and other liabilities Total cash outflows 95.8 98.2 LCR 4 134% 125% Corporate & 20 4 4 institutional Other 11 deposits loans 10 11 Unencumbered liquid assets ($bn) 1 1 8 8 Self securitisation 4 5 Private securities and deposits with other banks 10 Cash, governmet and semi-government bonds Retail & 1 SME 144.3 5 138.5 138.5 deposits 55.7 47.3 Residential 57.8 mortgages 62 16.2 61 21.0 13.8 <35% 108.3 44 75.0 67.6 66.9 Mar-16 Sep-16 Mar-17 Total short term Capital wholesale debt 6 outstanding at Available Stable Funding Required Stable Funding 31 Mar 17 Sep-08 Sep-16 Mar-17 1 Includes HQLA as defined in APS 210, RBNZ eligible liquids, less RBA open repos funding end of day ESA balances with the RBA. 2 The RBA makes available to Australian Authorised Deposit-taking Institutions a committed liquidity facility (CLF) that, subject to qualifying conditions, can be accessed to meet LCR requirements under APS210 – Liquidity. 3 Other flows include credit and liquidity facilities, collateral outflows and inflows from customers. 4 LCR is calculated as the percentage ratio of stock of HQLA and CLF over the total net cash outflows in a modelled 30 day defined stressed scenario. Calculated on a spot basis. 5 Private securities include Bank paper, RMBS, and Supra-nationals. 6 Includes long term wholesale funding with a residual maturity less than or equal to 1 year. 7 Equity excludes FX translation, Available-for-Sale securities and Cash Flow Hedging Reserves. 8 All figures shown on a Level 2 basis and based on current estimates. 9 Other includes derivatives and other assets. 10 Other loans includes off balance sheet exposures and residential mortgages >35% risk weight. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  78. New term issuance reflects investor preferences Capital, Funding and Liquidity 92 1H17 new term issuance composition 1 (%) By investor location By tenor 2,3 By type By currency 32 38 0.5 11 8 2 2 8 1 3.4 65 27 82 9 10 14 21 25 0.3 18 23 Senior Unsecured ABS Asia Australia & NZ AUD USD EUR 1 Year 2 Years 3 Years Europe North America Subordinated Debt JPY GBP Other 4 Years 5 Years >5 years UK Other Charts may not add to 100 due to rounding. Term debt issuance and maturity profile 1,2,4 ($bn) Australian covered bond issuance 5 ($bn) Sub Debt Issuance Maturities Outstanding Remaining capacity Senior/Securitisation (8% cap & over-collateralisation) 42 Hybrid Covered Bond 33 33 31 36 28 28 32 25 26 23 22 21 28 14 13 10 23 23 23 14 Peer 1 Peer 2 Peer 3 Westpac FY12 FY13 FY14 FY15 FY16 1H17 2H17 FY18 FY19 FY20 FY21 FY22 >FY22 1 Based on residual maturity and FX spot currency translation. Includes all debt issuance with contractual maturity greater than 370 days excluding US Commercial Paper and Yankee Certificates of Deposit. 2 Contractual maturity date for hybrids and callable subordinated instruments is the first scheduled conversion date or call date for the purposes of this disclosure. 3 Tenor excludes RMBS and ABS. 4 Perpetual sub- debt has been included in >FY22 maturity bucket. Maturities exclude securitisation amortisation. 5 Sources: Westpac, APRA Banking Statistics March 2017. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  79. Divisional Results Financial results based on cash earning unless otherwise stated. Refer page 34 for definition. Results principally cover the 1H17, 2H16 and 1H16 periods. Comparison of 1H17 versus 2H16 (unless otherwise stated)

  80. Consumer Bank disciplined 1H17 result in a competitive environment Consumer 94 Cash earnings ($m) Volume growth and higher mortgage Lower operating expenses with Key financial metrics margins offset by increased funding productivity offsetting run, regulatory and deposit costs and compliance cost increases Change on 1H16 2H16 1H17 2H16 Revenue ($m) - 3,972 4,053 4,055 12 (10) 4 (44) 1,539 10 1,511 Net interest margin (%) (6bps) 2.37 2.34 2.28 1,445 (12bps) Expense to income (%) 41.2 40.3 40.2 Customer deposit to loan ratio (%) 40bps 52.1 52.4 52.8 Rise in other consumer Lower cards fees lending delinquencies, mostly Stressed assets to TCE (%) 3bps 0.51 0.61 0.64 from changes to hardship Key operating metrics Change on Down $28m or 2% 2H16 1H16 2H16 1H17 Total customers (#m) 2% 8.6 8.8 8.9 1H16 2H16 Net interest income Non-interest income Operating expenses Impairment charges Tax and NCI 1H17 Active digital customers (#m) 4% 3.5 3.6 3.8 Total branches (#) (26) 1,096 1,085 1,059 Customer satisfaction 1 (%) 30bps 83.1 81.3 81.6 Service quality – complaints (#‘000) (10%) 16.8 13.1 11.8 1 Refer slide 132 for metric definition and details of provider. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  81. A disciplined 1H17 performance Consumer 95 Revenue 1 ($m) Core earnings 1 ($m) Cash earnings 1 ($m) 4,053 4,055 2,426 1,539 2,420 3,972 1,511 2,335 1,445 3,776 1,380 2,198 3,560 1,240 2,025 1H15 2H15 1H16 2H16 1H17 1H15 2H15 1H16 2H16 1H17 1H15 2H15 1H16 2H16 1H17 Loans ($bn) and customer deposit Expense to income ratio 1 (%) Revenue per FTE 1 ($’000) to loan ratio (%) Loans Customer deposit to loan ratio 52.8 398 52.4 52.4 43.1 52.1 396 51.7 393 41.8 352 345 41.2 360 40.3 334 40.2 321 311 324 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 1H15 2H15 1H16 2H16 1H17 1H15 2H15 1H16 2H16 1H17 1 Following an update to the Group’s capital allocation framework, 1H16 and 2H16 numbers have been restated to ensure comparability to 1H17. 1H15 and 2H15 have not been restated at this time. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  82. Improving the digital customer experience: Consumer Bank & Business Bank Consumer 96 Consumer Proof of balance Quick transfer Digitisation of personal loans • During 1H17 completed the digitisation of the • Following the successful launch of proof of balance • Enables customers to transfer between three unsecured personal loan process 1 for Westpac customers, this has now been rolled accounts without the need to log in to mobile out to St.George customers banking • Improved process time across all channels • Removes the need for customers to visit a branch to • CANSTAR 2017 Innovation Excellence Award 25% of approvals 2 receive funds on same day, 65% obtain a proof of income for third party applications Winner • of these in 60 seconds (see detailed case study 52% 4 of proof of balance statements obtained online slide 45) • • 1.1 million quick transfers since launch in December 2016 Business Digital for bankers Digital for customers Payments • Supporting 600 merchants with Genie (mPOS), enabling payment acceptance using a portable card reader linked to a smart phone • Completed of customer migration to our leading • Introduced simplified merchant pricing plans, Union online platform with improved customer • Simple and fast process for extending maturing Pay card acceptance online and transaction satisfaction reported facilities. LOLA sales almost doubled over the half reporting tools. Net merchant growth up 19% Credit risk management • Improved system has reduced manual processing • Providing more digital self service options, and saved time by simplifying risk reviews, including new deposit account opening and instant serviceability assessments and automated decision on overdrafts 3 . Digital sales have covenant monitoring increased 35% 1 This applies to Westpac branded unsecured loan process. 2 Existing customers. 3 For existing customers with credit limits. 4 At 2Q17. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  83. Business Bank delivers a solid 1H17 result Business 97 Cash earnings ($m) Key financial metrics Change on AIEA up 2%, margin down 2bps 1H16 2H16 1H17 2H16 Increased technology from deposit competition and higher and investment costs wholesale funding costs, partially Revenue ($m) 1% 2,495 2,534 2,557 offset by repricing Net interest margin (%) (2bps) 2.72 2.72 2.70 12 (11) 1 (4) 11 1,008 11bps 999 Expense to income (%) 35.9 35.5 35.6 976 Customer deposit to loan ratio (%) 49bps 71.2 72.1 72.6 Stressed assets to TCE (%) 8bps 2.13 2.24 2.32 Lower business lending Higher line fees charges offset by higher auto finance charge Key operating metrics Change on 1H16 2H16 1H17 2H16 Up $9m or 1% Total business customers (‘000’s) 1% 1,150 1,170 1,183 Customer satisfaction 1 (rank) 1H16 2H16 Net interest income Non-interest income Operating expenses Impairment charges Tax and NCI 1H17 - =#2 #1 =#1 Customer satisfaction - SME 1 (rank) - 1 place #2 #1 #2 Digital sales (%) + 1ppt 8 9 10 Loans via LOLA ($m) 95% 336 729 1,421 1 Refer slide 132 for metric definition and details of provider. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  84. A disciplined 1H17 performance Business 98 Revenue 1 ($m) Core earnings 1 ($m) Cash earnings 1 ($m) 2,557 1,646 2,534 1,017 1,634 1,008 999 2,495 976 1,599 962 2,443 2,392 1,563 1,541 1H15 2H15 1H16 2H16 1H17 1H15 2H15 1H16 2H16 1H17 1H15 2H15 1H16 2H16 1H17 Loans ($bn) and customer deposit Expense to income ratio 1 (%) Revenue per FTE 1 ($’000) to loan ratio (%) Loans Customer deposit to loan ratio 818 811 811 792 725 72.5 72.6 72.1 71.2 69.5 36.0 35.9 35.6 35.6 35.5 153 154 149 146 141 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 1H15 2H15 1H16 2H16 1H17 1H15 2H15 1H16 2H16 1H17 1 Following an update to the Group’s capital allocation framework, 1H16 and 2H16 numbers have been restated to ensure comparability to 1H17. 1H15 and 2H15 have not been restated at this time. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  85. BT franchise impacted by challenging environment BT Financial Group 99 Cash earnings movement 2H16 – 1H17 ($m) Key financial metrics Change on Growth in premium income and lapse 1H16 2H16 1H17 2H16 Reduced advice activity levels and improvement more than offset by higher margin compression including from general insurance claims and Cyclone (4%) Revenue ($m) 1,203 1,191 1,145 MySuper migration Debbie impact 52bps 47.0 50.0 50.5 Expense to income (%) 448 420 (17) 14% FUM ($bn) (spot) 46.4 48.4 55.1 (36) 11 397 17 (5) 7 4% FUA ($bn) (spot) 123.3 130.8 136.4 Key operating metrics Change on Productivity benefits partially 2H16 offset by increased regulatory 1H16 2H16 1H17 and compliance costs Customers with a wealth product 1 (%) 19.2 19.1 18.5 (60bps) Planners (salaried & aligned) (#) (spot) 1,116 1,134 1,094 (4%) BT Super for Life customers (#’000) 489 506 527 4% Down $23m or 5% Platform market share 2 19.6 19.0 19.0 - (inc. Corp Super) (%) Retail market share 2 (exc. cash) (%) 18.6 18.0 18.1 10bps 1H16 2H16 Insurance income Capital & other Expenses Impairment Tax and NCI 1H17 Funds Mgt charge Life Insurance market share 3 (%) 10.9 11.0 11.6 60bps income H&C insurance market share 4 (%) 5.7 5.7 5.7 - Women in leadership 5 (%) 42.1 45.0 46.0 100bps 1 Refer slide 132 for wealth metrics provider. 2 Strategic Insight, All Master Funds Admin as at December 2016 (for 1H17), as at June 2016 (for 2H16), as at December 2015 (for 1H16) and represents the BT Wealth business market share at these times. 3 Strategic Insight (Individual Risk) rolling 12 month average. New sales includes sales, premium re-rates, age and CPI indexation December 2016. 4 Internally calculated from APRA quarterly general insurance performance statistics, December 2016. 5 Spot number as at balance date. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

  86. Funds management business: Positive flows offset by margin compression from product mix changes BT Financial Group 100 Earning drivers 1H17 v 2H16 FUA ($bn) • Continued growth in Private Wealth BT Wrap/Asgard/Panorama Corporate super Other • Advice income lower from reduced activity and compliance Up 4% remediation program 136.4 130.8 125.0 121.9 123.3 4.0 3.8 • FUM related revenue down 9% on 2H16: 3.4 3.6 21.4 3.9 20.5 20.1 19.6 19.3  FUM margins down 7bps from shift in portfolio mix • FUA related revenue was down 3% on 2H16:  Panorama had positive flows of $1.1bn 111.0 106.5 101.5 98.7 100.1  BT Wrap/Asgard platforms FUA increased $3.3bn on 2H16  FUA margins were down 2bps on 2H16 due to shift in portfolio mix including MySuper migration 1H15 2H15 1H16 2H16 1H17 FUM ($bn) FUA by asset class (%) Equities Aust. Equities Intl. Property Advance Retail Super/other Cash Fixed interest Other inc. diversified Up 14% 55.1 8 7 7 9 10 48.4 13 13 12 12 46.3 46.4 12 19.1 18 18 19 18 16 18.3 17.8 4 18.3 4 6 6 6 19 20 20 19 20 36.0 30.1 28.6 28.0 39 37 36 36 36 1 1H15 2H15 1H16 2H16 1H17 2H15 1H16 2H16 1H17 1 Includes $4bn increase due to MySuper migrations which occurred in late 1H17. Westpac Group 2017 Interim Results Presentation & Investor Discussion Pack

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