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Westpac Banking Corporation - New Zealand DivisionDisclosure Statement For the nine months ended 30 June 2013
Index 1 Generalinformationanddefinitions 1 Generalmatters 2 Creditratings 2 DisclosurestatementsoftheOverseasBankandthefinancialstatementsoftheOverseasBankandthe OverseasBankingGroup 2 Guaranteearrangements 3 Directors’andtheChiefExecutiveOfficer,NZBranch’sstatement 4 Indextofinancialstatements
Westpac Banking Corporation–NewZealandDivision1
General information and definitionsCertainoftheinformationcontainedinthisDisclosureStatementisrequiredbysection81oftheReserveBankofNewZealandAct1989(‘Reserve Bank Act’)andtheRegisteredBankDisclosureStatements(OverseasIncorporatedRegisteredBanks)Order2013(‘Order’).InthisDisclosureStatement,referenceismadetofivemainreportinggroups:
■■ WestpacBankingCorporationGroup(otherwisereferredtoasthe‘Overseas Banking Group’)–referstothetotalworldwidebusinessofWestpacBankingCorporationincludingitscontrolledentities;
■■ WestpacBankingCorporation(otherwisereferredtoasthe‘Overseas Bank’)–referstotheworldwideactivitiesofWestpacBankingCorporationexcludingitscontrolledentities;
■■ WestpacBankingCorporation-NewZealandDivision(otherwisereferredtoasthe‘NZ Banking Group’)–referstotheNewZealandoperationsofWestpacBankingCorporationGroupincludingthoseentitieswhosebusinessisrequiredtobereportedinthefinancialstatementsoftheOverseasBankingGroup’sNewZealandbusiness.ControlledentitiesoftheNZBankingGroupasat30September2012aresetoutinNote26tothefinancialstatementsincludedintheOverseasBank’sDisclosureStatementfortheyearended30September2012.ExceptasdetailedinNote10tothefinancialstatementsincludedinthisDisclosureStatement,therehavebeennootherchangesinthestructureorcompositionoftheNZBankingGroupsince30September2012;
■■ WestpacBankingCorporationNewZealandBranch(otherwisereferredtoasthe‘NZ Branch’)–referstotheNewZealandBranchofWestpacBankingCorporation(tradingasWestpac);and
■■ WestpacNewZealandLimited(otherwisereferredtoas‘Westpac New Zealand’)–referstoalocallyincorporatedsubsidiaryoftheOverseasBankcarryingontheOverseasBank’sNewZealandconsumer,businessandinstitutionalbankingoperations.
WordsandphrasesnotdefinedinthisDisclosureStatement,butdefinedbytheOrder,havethemeaninggivenbytheOrderwhenusedinthisDisclosureStatement.AllamountsreferredtointhisDisclosureStatementareinNewZealanddollarsunlessotherwisestated.
General matters
DirectorsTheDirectorsoftheOverseasBankatthetimethisDisclosureStatementwassignedwere:Lindsay Philip Maxsted,DipBus(Gordon),FCA,FAICD–ChairmanGail Patricia Kelly, HigherDipEd,BA,MBA,HonDBus–ManagingDirector&ChiefExecutiveOfficer John Simon Curtis AM,BA,LLB(Hons.)–DeputyChairmanElizabeth Blomfield Bryan AM, BA(Econ.),MA(Econ.)Gordon McKellar Cairns,MA(Hons.)Ewen Graham Wolseley Crouch AM,BEc(Hons.),LLBRobert George Elstone, BA(Hons.),MA(Econ.),MComPeter John Oswin Hawkins, BCA(Hons.),SFFin,FAIM,ACA(NZ),FAICDPeter Ralph Marriott, BEc(Hons.),FCAAnn Darlene Pickard,BA,MA
Chief Executive Officer, NZ Branch Karen Lee Ann Silk,B.Com
ThefollowingchangesinthecompositionoftheOverseasBank’sBoardofDirectors(the ‘Board’)havebeeneffectedsince30September2012:
■■ PeterWilsonretiredfromtheBoardattheconclusionofWestpacBankingCorporation’s2012AnnualGeneralMeetingon13December2012;
■■ RobertElstonewasappointedasChairmanoftheOverseasBank’sBoardAuditCommitteeeffective13December2012;■■ EwenCrouchwasappointedtotheBoardeffective1February2013;and■■ PeterMarriottwasappointedtotheBoardeffective1June2013.
Responsible personAlltheDirectorsnamedabovehaveauthorisedinwritingPeterGrahamClare,ChiefExecutive,WestpacNewZealandtosignthisDisclosureStatementontheDirectors’behalfinaccordancewithsection82oftheReserveBankAct.
Westpac Banking Corporation–NewZealandDivision2
Credit ratings
TheOverseasBankhasthefollowingcreditratingswithrespecttoitslong-termseniorunsecuredobligations,includingobligationspayableinNewZealandinNewZealanddollars,asatthedatethisDisclosureStatementwassigned:
Rating Agency Current Credit Rating Rating Outlook
FitchRatings AA- Stable
Moody’sInvestorsService Aa2 Stable
Standard&Poor’s AA- Stable
TherehavebeennochangestotheaboveOverseasBank’screditratingsorratingoutlookssince30September2012.Acreditratingisnotarecommendationtobuy,sellorholdsecuritiesoftheOverseasBank.Suchratingsaresubjecttorevision,qualification,suspensionorwithdrawalatanytimebytheassigningratingagency.InvestorsintheOverseasBank’ssecuritiesarecautionedtoevaluateeachratingindependentlyofanyotherrating.
Disclosure statements of the Overseas Bank and the financial statements of the Overseas Bank and the Overseas Banking Group
DisclosureStatementsoftheOverseasBankforthelastfiveyearsareavailable,freeofcharge,attheinternetaddresswww.westpac.co.nz.Aprintedcopywillalsobemadeavailable,freeofcharge,uponrequestandwillbedispatchedbytheendofthesecondworkingdayafterthedayonwhichtherequestismade.ThemostrecentlypublishedfinancialstatementsoftheOverseasBankandtheOverseasBankingGrouparefortheyearended30September2012andforthesixmonthsended31March2013andcanbeaccessedattheinternetaddresswww.westpac.com.au.
Guarantee arrangementsAsatthedatethisDisclosureStatementwassigned,nomaterialobligationsoftheOverseasBankthatrelatetotheNZBranchareguaranteed.
Westpac Banking Corporation–NewZealandDivision3
Directors’ and the Chief Executive Officer, NZ Branch’s statement
EachDirectoroftheOverseasBankbelievesandtheChiefExecutiveOfficer,NZBranch,believes,afterdueenquiry,that,asatthedateonwhichthisDisclosureStatementissigned,theDisclosureStatement:(a) containsallinformationthatisrequiredbytheOrder;and(b) isnotfalseormisleading.
EachDirectoroftheOverseasBankbelievesandtheChiefExecutiveOfficer,NZBranch,believes,afterdueenquiry,that,overtheninemonthsended30June2013:(a) theOverseasBankhascompliedwiththeconditionsofregistrationimposedonitpursuanttosection74oftheReserveBank
Act;and(b) theNZBranchhadsystemsinplacetomonitorandcontroladequatelytheNZBankingGroup’smaterialrisks,including
creditrisk,concentrationofcreditrisk,interestraterisk,currencyrisk,equityrisk,liquidityriskandotherbusinessrisks,andthatthosesystemswerebeingproperlyapplied.
ThisDisclosureStatementhasbeensignedonbehalfoftheDirectorsbyPeterGrahamClare,ChiefExecutive,WestpacNewZealand,andbyKarenLeeAnnSilk,asChiefExecutiveOfficer,NZBranch.
PeterGrahamClare
KarenLeeAnnSilk
Datedthisthe21stdayofAugust2013
Westpac Banking Corporation–NewZealandDivision4
Index to financial statementsPage Contents5 Consolidatedincomestatement6 Consolidatedstatementofcomprehensiveincome7 Consolidatedstatementofchangesinequity8 Consolidatedbalancesheet9 Consolidatedstatementofcashflows10 Notestothefinancialstatements10 Note1Statementofaccountingpolicies11 Note2Non-interestincome11 Note3Impairmentchargesonloans12 Note4Tradingsecurities12 Note5Loans12 Note6Creditquality,impairedassetsandprovisionsforimpairmentchargesonloans13 Note7Deposits13 Note8Tradingliabilities13 Note9Debtissues14 Note10Relatedentities14 Note11Commitmentsandcontingentliabilities14 Note12Segmentinformation16 Note13Insurancebusiness16 Note14Riskmanagement16 14.1Creditrisk16 14.2Marketrisk17 14.3Liquidityrisk17 Note15Concentrationofcreditexposurestoindividualcounterparties18 Note16OverseasBankandOverseasBankingGroupcapitaladequacy18 Note17OtherinformationontheOverseasBankingGroup19 Note18Eventsafterthereportingdate
Westpac Banking Corporation–NewZealandDivision5
Consolidated income statement fortheninemonthsended30June2013 NZ Banking Group
Nine Months NineMonths Year Ended Ended Ended 30-Jun-13 30-Jun-12 30-Sep-12$ millions Note Unaudited Unaudited Audited
Interestincome 2,845 2,987 3,965Interestexpense (1,661) (1,849) (2,440)
Net interest income 1,184 1,138 1,525Non-interestincome 2 442 424 582
Net operating income 1,626 1,562 2,107Operatingexpenses (667) (651) (872)Impairmentchargesonloans 3 (84) (125) (184)
Operating profit 875 786 1,051Shareofprofitofassociateaccountedforusingtheequitymethod - - 1
Profit before income tax expense 875 786 1,052Incometaxexpense (243) (213) (293)
Profit after income tax expense 632 573 759
Profit after income tax expense attributable to: HeadofficeaccountandownersoftheNZBankingGroup 629 571 756 Non-controllinginterests 3 2 3
632 573 759
Theaccompanyingnotes(numbered1to18)formpartof,andshouldbereadinconjunctionwith,thesefinancialstatements.
Westpac Banking Corporation–NewZealandDivision6
Consolidated statement of comprehensive income fortheninemonthsended30June2013 NZ Banking Group
Nine Months NineMonths Year Ended Ended Ended 30-Jun-13 30-Jun-12 30-Sep-12$ millions Unaudited Unaudited Audited
Profit after income tax expense 632 573 759
Other comprehensive income which may be reclassified to the income statement: Available-for-salesecurities: Netunrealisedgainsfromchangesinfairvalueofavailable-for-salesecurities 29 71 66 Exchangedifferences 6 (3) (6) Incometaxeffect (1) (14) (11) Cashflowhedges: Netgainsfromchangesinfairvalueofcashflowhedges 53 88 56 Incometaxeffect (15) (25) (16)
Total other comprehensive income which may be reclassified to the income statement 72 117 89
Other comprehensive income/(expense) which will not be reclassified to the income statement: Actuarialgains/(losses)onemployeedefinedbenefitsuperannuationschemes 6 - (25) Incometaxeffect (2) - 7
Total other comprehensive income/(expense) which will not be reclassified to the income statement 4 - (18)
Total other comprehensive income, net of tax 76 117 71
Total comprehensive income 708 690 830
Total comprehensive income attributable to: HeadofficeaccountandownersofNZBankingGroup 705 688 827 Non-controllinginterests 3 2 3
708 690 830
Theaccompanyingnotes(numbered1to18)formpartof,andshouldbereadinconjunctionwith,thesefinancialstatements.
Westpac Banking Corporation–NewZealandDivision7
Consolidated statement of changes in equity fortheninemonthsended30June2013 NZ Banking Group
Head Office Account NZ Banking Group Equity Available- Total for-sale Cash Flow before Non- Non- Branch Retained Convertible Share Retained Securities Hedge controlling controlling Total$ millions Capital Profits Debentures Capital Profits Reserve Reserve Interests Interests Equity
As at 1 October 2011 1,300 89 1,284 139 1,984 31 (74) 4,753 8 4,761
Nine months ended 30 June 2012 (Unaudited)Profitafterincometaxexpense - 141 - - 430 - - 571 2 573Netgainsfromchangesinfairvalue - - - - - 71 88 159 - 159Exchangedifferences - - - - - (3) - (3) - (3) Incometaxeffect - - - - - (14) (25) (39) - (39)Actuariallossesonemployeedefined benefitsuperannuationschemes - - - - - - - - - - Incometaxeffect - - - - - - - - - -
Total comprehensive income for the nine months ended 30 June 2012 - 141 - - 430 54 63 688 2 690
Transactionswithowners: Dividendspaidonconvertible debentures(netoftax) - (36) - - - - - (36) - (36) Dividendspaidonordinaryshares - - - - - - - - (4) (4)
As at 30 June 2012 (Unaudited) 1,300 194 1,284 139 2,414 85 (11) 5,405 6 5,411
Year ended 30 September 2012 (Audited)Profitafterincometaxexpense - 196 - - 560 - - 756 3 759Netgainsfromchangesinfairvalue - - - - - 66 56 122 - 122Exchangedifferences - - - - - (6) - (6) - (6) Incometaxeffect - - - - - (11) (16) (27) - (27)Actuariallossesonemployeedefined benefitsuperannuationschemes - - - - (25) - - (25) - (25) Incometaxeffect - - - - 7 - - 7 - 7
Total comprehensive income for the year ended 30 September 2012 - 196 - - 542 49 40 827 3 830
Transactionswithowners: Dividendspaidonconvertible debentures(netoftax) - (72) - - - - - (72) - (72) Dividendspaidonordinaryshares - - - - - - - - (4) (4)
As at 30 September 2012 (Audited) 1,300 213 1,284 139 2,526 80 (34) 5,508 7 5,515
Nine months ended 30 June 2013 (Unaudited)Profitafterincometaxexpense - 160 - - 469 - - 629 3 632 Netgainsfromchangesinfairvalue - - - - - 29 53 82 - 82 Exchangedifferences - - - - - 6 - 6 - 6 Incometaxeffect - - - - - (1) (15) (16) - (16) Actuarialgainsonemployeedefined benefitsuperannuationschemes - - - - 6 - - 6 - 6 Incometaxeffect - - - - (2) - - (2) - (2)
Total comprehensive income for the nine months ended 30 June 2013 - 160 - - 473 34 38 705 3 708
Transactionswithowners: Dividendspaidonconvertible debentures(netoftax) - (36) - - - - - (36) - (36) Dividendspaidonordinaryshares - - - - - - - - (4) (4)
As at 30 June 2013 (Unaudited) 1,300 337 1,284 139 2,999 114 4 6,177 6 6,183
Theaccompanyingnotes(numbered1to18)formpartof,andshouldbereadinconjunctionwith,thesefinancialstatements.
Westpac Banking Corporation–NewZealandDivision8
Consolidated balance sheet asat30June2013 NZ Banking Group
30-Jun-13 30-Jun-12 30-Sep-12$ millions Note Unaudited Unaudited Audited
AssetsCashandbalanceswithcentralbanks 1,644 1,404 1,714Duefromotherfinancialinstitutions 172 308 322Derivativefinancialinstruments 4,285 5,328 5,506Tradingsecurities 4 4,065 6,732 4,028Available-for-salesecurities 2,791 2,658 2,694Loans 5,6 60,936 59,198 59,892Lifeinsuranceassets 274 226 237Duefromrelatedentities 2,043 1,761 2,006Investmentinassociate 48 48 48Goodwillandotherintangibleassets 695 634 652Property,plantandequipment 166 157 162Currenttaxassets 48 8 -Deferredtaxassets 176 205 209Otherassets 355 296 384
Total assets 77,698 78,963 77,854
LiabilitiesDuetootherfinancialinstitutions 1,350 496 214Deposits 7 46,379 41,845 43,390Derivativefinancialinstruments 3,994 5,512 5,841Tradingliabilities 8 522 919 518Debtissues 9 11,944 15,887 12,914Currenttaxliabilities - - 49Provisions 84 90 96Otherliabilities 600 619 721
Total liabilities excluding related entities liabilities 64,873 65,368 63,743Subordinateddebentures 740 752 712Duetorelatedentities 5,902 7,432 7,884
Total related entities liabilities 6,642 8,184 8,596
Total liabilities 71,515 73,552 72,339
Net assets 6,183 5,411 5,515
EquityHead office accountBranchcapital 1,300 1,300 1,300Retainedprofits 337 194 213
Total head office account 1,637 1,494 1,513
Convertibledebentures 1,284 1,284 1,284
NZ Banking Group equityOrdinarysharecapital 139 139 139Retainedprofits 2,999 2,414 2,526Available-for-salesecuritiesreserve 114 85 80Cashflowhedgereserve 4 (11) (34)
Total equity attributable to owners of the NZ Banking Group 3,256 2,627 2,711Non-controllinginterests 6 6 7
Total equity 6,183 5,411 5,515
Interestearninganddiscountbearingassets 69,964 70,716 69,024Interestanddiscountbearingliabilities 62,509 62,813 60,877
Theaccompanyingnotes(numbered1to18)formpartof,andshouldbereadinconjunctionwith,thesefinancialstatements.
Westpac Banking Corporation–NewZealandDivision9
Consolidated statement of cash flows fortheninemonthsended30June2013 NZ Banking Group
Nine Months NineMonths Year Ended Ended Ended 30-Jun-13 30-Jun-12 30-Sep-12$ millions Unaudited Unaudited Audited
Cash flows from operating activitiesInterestincomereceived 2,841 2,986 3,955Interestexpensepaid (1,682) (1,894) (2,436)Non-interestincomereceived 464 432 562Net(increase)/decreaseintradingsecurities (97) (1,056) 1,643Netincrease/(decrease)intradingliabilities 4 (367) (768)Netmovementinderivativefinancialinstruments (573) 884 1,003Operatingexpensespaid (655) (617) (824)Incometaxpaid (305) (240) (240)
Net cash (used in)/provided by operating activities (3) 128 2,895
Cash flows from investing activitiesPurchaseofavailable-for-salesecurities (62) (1,072) (1,179)Proceedsfrommaturitiesofavailable-for-salesecurities - - 63Netloansadvancedtocustomers (1,128) (1,209) (1,962)Netincreaseinlifeinsuranceassets (37) (40) (51)Net(increase)/decreaseinduefromrelatedentities (37) 511 266Purchaseofcapitalisedcomputersoftware (71) (46) (73)Purchaseofproperty,plantandequipment (24) (23) (36)
Net cash used in investing activities (1,359) (1,879) (2,972)
Cash flows from financing activitiesNetincreaseindeposits 2,989 2,270 3,815Netdecreaseindebtissues (970) (1,743) (4,716)Net(decrease)/increaseinduetorelatedentities (1,987) 735 1,185Netincrease/(decrease)insubordinateddebentures 28 (33) (73)Dividendspaidonconvertibledebentures (50) (50) (100)Dividendspaidtominorityshareholders (4) (4) (4)
Net cash provided by financing activities 6 1,175 107
Net (decrease)/increase in cash and cash equivalents (1,356) (576) 30Cashandcashequivalentsatbeginningoftheperiod/year 1,822 1,792 1,792
Cash and cash equivalents at end of the period/year 466 1,216 1,822
Cash and cash equivalents comprise: Cashandbalanceswithcentralbanks 1,644 1,404 1,714 Due(to)/fromotherfinancialinstitutions(net) (1,178) (188) 108
Cash and cash equivalents at end of the period/year 466 1,216 1,822
Reconciliation of profit after income tax expense to net cash (used in)/provided by operating activitiesProfitafterincometaxexpense 632 573 759Adjustments: Impairmentchargesonloans 84 125 184 Computersoftwareamortisationcosts 28 29 38 Depreciationonproperty,plantandequipment 20 20 28 Share-basedpayments 5 5 7 Movementinotherassets 31 (62) (108) Movementinotherliabilities (70) (58) (10) Movementincurrentanddeferredtax (66) (5) 55 Taxoncashflowhedgereserve (15) (25) (16) Taxonavailable-for-salesecuritiesreserve (1) (14) (11) Taxonconvertibledebenturesdividends 14 14 28 Movementintradingsecurities (96) (991) 1,706 Movementintradingliabilities 4 (367) (768) Movementinderivativefinancialinstruments (573) 884 1,003
Net cash (used in)/provided by operating activities (3) 128 2,895
Theaccompanyingnotes(numbered1to18)formpartof,andshouldbereadinconjunctionwith,thesefinancialstatements.
Westpac Banking Corporation–NewZealandDivision10
Notestothefinancialstatements
Note 1 Statement of accounting policies
Statutory baseInthesefinancialstatementsreferenceismadetothefollowingreportingentities:
■■ WestpacBankingCorporationGroup(otherwisereferredtoasthe‘Overseas Banking Group’)–referstothetotalworldwidebusinessofWestpacBankingCorporationincludingitscontrolledentities;
■■ WestpacBankingCorporation(otherwisereferredtoasthe‘Overseas Bank’)–referstotheworldwideactivitiesofWestpacBankingCorporationexcludingitscontrolledentities;
■■ WestpacBankingCorporation-NewZealandDivision(otherwisereferredtoasthe‘NZ Banking Group’)–referstotheNewZealandoperationsofWestpacBankingCorporationGroupincludingthoseentitieswhosebusinessisrequiredtobereportedinthefinancialstatementsoftheOverseasBankingGroup’sNewZealandbusiness;
■■ WestpacBankingCorporationNewZealandBranch(otherwisereferredtoasthe‘NZ Branch’)–referstotheNewZealandBranchofWestpacBankingCorporation(tradingasWestpac);and
■■ WestpacNewZealandLimited(otherwisereferredtoas‘Westpac New Zealand’)–referstoalocallyincorporatedsubsidiaryoftheOverseasBank(carryingontheOverseasBank’sNewZealandconsumer,businessandinstitutionalbankingoperations).
TheseconsolidatedfinancialstatementshavebeenpreparedandpresentedinaccordancewiththeRegisteredBankDisclosureStatements(OverseasIncorporatedRegisteredBanks)Order2013(‘Order’)andtheReserveBankofNewZealandAct1989(‘Reserve Bank Act’).ThesefinancialstatementshavealsobeenpreparedinaccordancewithGenerallyAcceptedAccountingPracticeinNewZealand,asappropriateforprofit-orientedentities,andtheNewZealandEquivalenttoInternationalAccountingStandard(‘NZ IAS’)34Interim Financial ReportingandshouldbereadinconjunctionwiththeDisclosureStatementsfortheyearended30September2012andfortheperiodsended31December2012and31March2013.ThesefinancialstatementscomplywithInternationalAccountingStandard34Interim Financial ReportingasissuedbytheInternationalAccountingStandardsBoard.Asaresultoftherevisedaccountingstandardwhichbecameoperativefortheannualreportingperiodcommencing1October2012,theNZBankingGroupadoptedPresentation of Items of Other Comprehensive Income (AmendmentstoNZIAS1).Undertheamendedstandard,theformatofothercomprehensiveincomehaschangedtoseparateitemsthatmayberecycledtotheincomestatementfromitemsthatwillnotberecycled.AdoptionofthisrevisedaccountingstandardonlyrelatestodisclosuresandhasnoimpacttotheNZBankingGroup’sreportedresultorfinancialposition.ThesefinancialstatementswereauthorisedforissuebytheOverseasBank’sBoardofDirectors(‘Board’)on21August2013.TheBoardhasthepowertoamendthefinancialstatementsaftertheyareauthorisedforissue.
Basis of preparationThesefinancialstatementsarebasedonthegeneralprinciplesofhistoricalcostaccounting,asmodifiedbyfairvalueaccountingforavailable-for-salefinancialassets,financialassetsandfinancialliabilitiesatfairvaluethroughprofitorlossandallfinancialderivativecontracts.Thegoingconcernconceptandtheaccrualbasisofaccountinghavebeenadopted.AllamountsareexpressedinNewZealanddollarsunlessotherwisestated.Thesameaccountingpoliciesandmethodsofcomputationhavebeenfollowedinpreparingthesefinancialstatementsaswereusedinpreparingthefinancialstatementsfortheyearended30September2012,exceptasamendedforthechangesrequiredduetotheadoptionoftherevisedaccountingstandardasexplainedinthe‘Statutorybase’section.Certaincomparativeinformationhasbeenrestatedtoensureconsistenttreatmentwiththecurrentreportingperiod.Wheretherehasbeenamaterialrestatementofcomparativeinformationthenatureof,andthereasonfor,therestatementisdisclosedintherelevantnote.
Basis of aggregationTheNZBankingGroupasat30June2013,hasbeenaggregatedbycombiningthesumofthecapitalandreservesoftheNZBranch,HastingsForestryInvestmentsLimitedandtheconsolidatedcapitalandreservesofBTFinancialGroup(NZ)Limited,WestpacFinancialServicesGroup-NZ-Limited,WestpacGroupInvestment-NZ-Limited,WestpacNewZealandGroupLimitedandtheircontrolledentities.ForNewZealandentitiesacquiredbytheOverseasBankingGroup,capitalandreservesatacquisitionarenettedandrecognisedascapitalcontributedtotheNZBankingGroup.AlltransactionsandbalancesbetweenentitieswithintheNZBankingGrouphavebeeneliminated.Controlexistswhentheparententityhasthepower,directlyorindirectly,togovernthefinancialandoperatingpoliciesofanentitysoastoobtainbenefitsfromitsactivities.Inassessingcontrol,potentialvotingrightsthatarepresentlyexercisableorconvertiblearetakenintoaccount.Subsidiariesarefullyconsolidatedfromthedateonwhichcontrolcommencesandarede-consolidatedfromthedateonwhichcontrolceases.TheacquisitionmethodofaccountingisusedtoaccountfortheacquisitionofsubsidiariesbytheNZBankingGroup.TheNZBankingGroupmayinvestinorestablishspecialpurposeentitiestoenableittoundertakespecifictypesoftransactions.WheretheNZBankingGroupcontrolssuchentities,theyareconsolidatedintotheNZBankingGroup’sfinancialresults.Non-controllinginterestsarestatedattheproportionofthenetprofitandnetassetsofasubsidiaryattributabletoequityintereststhatarenotowned,directlyorindirectlybytheNZBankingGroup.Lossesareattributedtothenon-controllinginterestevenifthatresultsinadeficitbalance.
Westpac Banking Corporation–NewZealandDivision11
Notestothefinancialstatements
Note 2 Non-interest income NZ Banking Group
Nine Months NineMonths Year Ended Ended Ended 30-Jun-13 30-Jun-12 30-Sep-12$ millions Unaudited Unaudited Audited
Fees and commissionsTransactionfeesandcommissions 185 181 244Lendingfees(loanandrisk) 48 46 61Insurancecommissionsreceived 13 11 17Othernon-riskfeeincome 12 14 18
Total fees and commissions 258 252 340
Wealth management revenueFeesfromtrustandotherfiduciaryactivities 102 97 134Netlifeinsuranceincomeandchangeinpolicyliabilities (33) (29) (32)
Total wealth management revenue 69 68 102
Trading incomeForeignexchangetrading 66 65 85Interestratetrading 35 22 31
Total trading income 101 87 116
Net ineffectiveness on qualifying hedges 2 (1) 1
Other non-interest incomeNet(losses)/gainsonderivativesheldforriskmanagementpurposes (1) 4 6Dividendincome 2 2 2 Rentalincome - 1 1 Other 11 11 14
Total other non-interest income 12 18 23
Total non-interest income 442 424 582
Note 3 Impairment charges on loans
NZ Banking Group
Other Loans Loans for Residential for Consumer Business$ millions Mortgages Purposes Purposes Total
Nine months ended 30 June 2013 (Unaudited)Collectivelyassessedprovisions 5 4 (13) (4)Individuallyassessedprovisions 21 - 38 59 Baddebtswritten-offdirectlytotheincomestatement 3 31 17 51 Interestadjustments (3) (7) (12) (22)
Total impairment charges on loans 26 28 30 84
Nine months ended 30 June 2012 (Unaudited)Collectivelyassessedprovisions (1) 4 (40) (37)Individuallyassessedprovisions 20 - 110 130Baddebtswritten-offdirectlytotheincomestatement 4 32 21 57Interestadjustments (2) (7) (16) (25)
Total impairment charges on loans 21 29 75 125
Year ended 30 September 2012 (Audited)Collectivelyassessedprovisions (5) (6) (60) (71)Individuallyassessedprovisions 23 - 190 213Baddebtswritten-offdirectlytotheincomestatement 2 43 29 74Interestadjustments (4) (10) (18) (32)
Total impairment charges on loans 16 27 141 184
Westpac Banking Corporation–NewZealandDivision12
Notestothefinancialstatements
Note 4 Trading securities
NZ Banking Group
30-Jun-13 30-Jun-12 30-Sep-12$ millions Unaudited Unaudited Audited
Certificatesofdeposit 2,204 2,989 2,172Corporatebonds 712 568 485Mortgage-backedsecurities 3 5 -NZGovernmentsecurities 462 1,095 478Localauthoritysecurities 375 248 349Securitiespurchasedunderagreementtoresell 309 1,827 544
Total trading securities 4,065 6,732 4,028
Asat30June2013,theNZBankingGrouphad$149millionoftradingsecurities(30June2012:$540million,30September2012:$12million)thatwereencumberedthroughrepurchaseagreementsaspartofstandardtermsoftransactionswithotherbanks.
Note 5 Loans
NZ Banking Group
30-Jun-13 30-Jun-12 30-Sep-12$ millions Unaudited Unaudited Audited
Overdrafts 1,210 1,218 1,460Creditcardoutstandings 1,350 1,320 1,311Moneymarketloans 975 993 1,165Termloans: Housing 37,063 35,869 35,963 Non-housing 20,048 19,571 19,798Other 855 870 802
Total gross loans 61,501 59,841 60,499Provisionsforimpairmentchargesonloans (565) (643) (607)
Total net loans 60,936 59,198 59,892
Asat30June2013,$2.6billionofhousingloansand$1.1billionofcashareusedbytheNZBankingGrouptosecuretheobligationsofWestpacSecuritiesNZLimited(‘WSNZL’)underWestpacNewZealand’sGlobalCoveredBondProgramme(‘CB Programme’)(30June2012:$3.4billionofhousingloansand$0.3billionofcash,30September2012:$3.1billionofhousingloansand$0.6billionofcash).ThesehousingloanswerenotderecognisedfromWestpacNewZealand’sfinancialstatementsinaccordancewiththeaccountingpoliciesoutlinedinNote1tothefinancialstatementsincludedintheDisclosureStatementfortheyearended30September2012.Asat30June2013,theNewZealanddollarequivalentofbondsissuedbyWSNZLundertheCBProgrammewas$2.1billion(30June2012:$2.0billion,30September2012:$2.0billion).
Note 6 Credit quality, impaired assets and provisions for impairment charges on loans NZ Banking Group
30-Jun-13 (Unaudited) Other Loans Loans for Residential for Consumer Business$ millions Mortgages Purposes Purposes Total
Total neither past due nor impaired 35,878 1,704 21,731 59,313
Past due assets: Lessthan90dayspastdue 1,013 140 267 1,420 Atleast90dayspastdue 59 17 59 135
Total past due assets 1,072 157 326 1,555 Individually impaired assets 113 - 520 633
Total gross loans 37,063 1,861 22,577 61,501
Individuallyassessedprovisions 36 - 204 240 Collectivelyassessedprovisions 66 67 229 362
Total provisions for impairment charges on loans and credit commitments 102 67 433 602 Provisionforcreditcommitments - - (37) (37)
Total provisions for impairment charges on loans 102 67 396 565
Total net loans 36,961 1,794 22,181 60,936
Westpac Banking Corporation–NewZealandDivision13
Notestothefinancialstatements
Note 7 Deposits
NZ Banking Group
30-Jun-13 30-Jun-12 30-Sep-12$ millions Unaudited Unaudited Audited
Deposits at fair valueCertificatesofdeposit 1,070 973 1,423
Total deposits at fair value 1,070 973 1,423
Deposits at amortised costNon-interestbearing,repayableatcall 3,209 2,962 2,969Otherinterestbearing: Atcall 17,437 16,013 15,931 Term 24,663 21,897 23,067
Total deposits at amortised cost 45,309 40,872 41,967
Total deposits 46,379 41,845 43,390
TheNZBranchheldnoretaildepositsfromindividualsasat30June2013(30June2012:nil,30September2012:nil).
Note 8 Trading liabilities
NZ Banking Group
30-Jun-13 30-Jun-12 30-Sep-12$ millions Unaudited Unaudited Audited
Held for tradingSecuritiessoldshort 373 379 506Securitiessoldunderagreementstorepurchase 149 540 12
Total trading liabilities 522 919 518
Note 9 Debt issues
NZ Banking Group
30-Jun-13 30-Jun-12 30-Sep-12$ millions Unaudited Unaudited Audited
Short-term debtCommercialpaper 3,935 7,432 4,033
Total short-term debt 3,935 7,432 4,033
Long-term debtNon-domesticmedium-termnotes 5,325 6,384 6,207Domesticmedium-termnotes 2,684 2,071 2,674
Total long-term debt 8,009 8,455 8,881
Total debt issues 11,944 15,887 12,914
Debtissuesatamortisedcost 8,009 8,423 8,851Debtissuesatfairvalue 3,935 7,464 4,063
Total debt issues 11,944 15,887 12,914
Movement in debt issuesBalanceatbeginningoftheperiod/year 12,914 17,630 17,630Issuanceduringtheperiod/year 4,942 11,107 12,589Repaymentsduringtheperiod/year (6,417) (12,137) (16,196)Effectofforeignexchangemovementsduringtheperiod/year 572 (779) (1,188)Effectoffairvaluemovementsduringtheperiod/year (67) 66 79
Balance at end of the period/year 11,944 15,887 12,914
Asat30June2013,theNZBankingGrouphadNewZealandGovernmentguaranteeddebtof$1,977milliononissue(30June2012:$2,039million,30September2012:$1,970million).ForfurtherinformationonNewZealandGovernmentguaranteeddebtrefertoGuaranteearrangementsinWestpacNewZealand’sDisclosureStatementfortheninemonthsended30June2013.
Westpac Banking Corporation–NewZealandDivision14
Notestothefinancialstatements
Note 10 Related entitiesWestpacNZSecuritisationNo.2Limited(‘WNZSL 2’)wasincorporatedon2November2012.WNZSL2isawhollyownedsubsidiaryofWestpacNZSecuritisationHoldingsLimited.WestpacCashPIEFundwasestablishedon14November2012andcommencedoperationon22November2012.WestpacCashPIEFundisnotownedbytheNZBankingGroup,butisregardedasacontrolledentityduetocontractualarrangements.OthercontrolledentitiesoftheNZBankingGroupasat30September2012aresetoutinNote26tothefinancialstatementsincludedintheOverseasBank’sDisclosureStatementfortheyearended30September2012.InterchangeandSettlementLimited(‘ISL’)wasremovedfromtheNewZealandCompaniesRegisteron25February2013.TheremovalofISLdidnothaveasignificantimpactontheNZBankingGroup’sfinancialpositionorresultsofoperationsfortheninemonthsended30June2013.MondexNZLimited(‘Mondex’)wasremovedfromtheNewZealandCompaniesRegisteron4July2013.MondexdidnothaveasignificantimpactontheNZBankingGroup’sfinancialpositionorresultsofoperationsfortheninemonthsended30June2013.TherehavebeennootherchangestothestructureorcompositionoftheNZBankingGroupsince30September2012.ThetotalliabilitiesoftheNZBranch,netofamountsduetorelatedentitiesasat30June2013,amountedto$5,785million(30June2012:$6,729million,30September2012:$6,372million).
Note 11 Commitments and contingent liabilities
NZ Banking Group
30-Jun-13 30-Jun-12 30-Sep-12$ millions Unaudited Unaudited Audited
Commitments for capital expenditureDuewithinoneyear 7 1 4
Other expenditure commitments: Oneyearorless 106 77 95 Betweenoneandfiveyears 228 285 293 Overfiveyears 2 - -
Total other expenditure commitments 336 362 388
Lease commitments (all leases are classified as operating leases)Premisesandsites 269 211 219Motorvehicles 8 6 8
Total lease commitments 277 217 227
Lease commitments are due as follows: Oneyearorless 53 42 44 Betweenoneandfiveyears 146 108 117 Overfiveyears 78 67 66
Total lease commitments 277 217 227
Other contingent liabilities and commitmentsDirectcreditsubstitutes 1,031 334 335 Loancommitmentswithcertaindrawdown 222 192 177Transaction-relatedcontingentitems 903 803 796Short-term,selfliquidatingtrade-relatedcontingentliabilities 418 386 397Othercommitmentstoprovidefinancialservices 18,700 19,181 19,118
Total other contingent liabilities and commitments 21,274 20,896 20,823
Note 12 Segment informationTheNZBankingGroupoperatespredominantlyintheconsumer,businessandinstitutionalbankingsectorswithinNewZealand.Onthisbasis,nogeographicalsegmentinformationisprovided.Thebasisofsegmentreportingreflectsthemanagementofthebusiness,ratherthanthelegalstructureoftheNZBankingGroup.Thereisnodifferenceinaccountingmeasurementbetweenthemanagementandlegalstructures.Theoperatingsegmentresultshavebeenpresentedonamanagementreportingbasisandconsequentlyinternalchargesandtransferpricingadjustmentshavebeenreflectedintheperformanceofeachoperatingsegment.Intersegmentpricingisdeterminedonacostrecoverybasis.TheNZBankingGroupdoesnotrelyonanysinglemajorcustomerforitsrevenuebase.TheNZBankingGroup’soperatingsegmentsaredefinedbythecustomerstheyserveandtheservicestheyprovide.TheNZBankingGrouphasidentifiedthefollowingmainoperatingsegments:
■■ RetailBankingprovidesfinancialservicesforindividuals;■■ Wealthprovidesfinancialservicesforhighnetworthindividuals,fundsmanagementandinsurancedistribution;■■ BusinessBankingprovidesfinancialservicesforsmalltomediumsizedenterprisecustomers,corporatesandagriculturalbusinesses;and
■■ InstitutionalBankingprovidesabroadrangeoffinancialservicestolargecorporate,institutionalandgovernmentcustomersandthesupplyofderivativesandriskmanagementproductstotheentireWestpaccustomerbaseinNewZealand.
Westpac Banking Corporation–NewZealandDivision15
Notestothefinancialstatements
Note 12 Segment information (continued)RetailBankingandWealthhavebeenaggregatedanddisclosedastheConsumerBankingreportablesegment.BusinessBankingandInstitutionalBankingareseparatereportablesegments.Reconcilingitemsprimarilyrepresent:
■■ businessunitsthatdonotmeetthedefinitionofoperatingsegmentsunderNZIFRS8Operating Segments;■■ eliminationentriesonconsolidation/aggregationoftheresults,assetsandliabilitiesoftheNZBankingGroup’scontrolledentitiesinthepreparationoftheaggregatedfinancialstatementsoftheNZBankingGroup;and
■■ resultsofcertainbusinessunitsexcludedformanagementreportingpurposes,butincludedwithintheaggregatedfinancialstatementsoftheNZBankingGroupforstatutoryfinancialreportingpurposes.
Netinterestincomeandnon-interestincomehavebeenincludedinthefollowingtabletoalignwiththeinformationprovidedtothe‘chiefoperatingdecisionmaker’.Comparativeinformationhasbeenchangedtoensureconsistentpresentationwiththecurrentreportingperiod.Additionally,profitbeforeincometaxexpensefromdomestictransactionalbankingdepositsofcertaincustomersandtheassociateddepositshasbeenreclassifiedfromtheBusinessBankingsegmenttotheInstitutionalBankingsegment.Therevisedpresentationhasnoimpactontotalprofitbeforeincometaxexpensefortheninemonthsended30June2012andtheyearended30September2012.
NZ Banking Group
Consumer Business Institutional Reconciling $ millions Banking Banking Banking Items 1 Total
Nine months ended 30 June 2013 (Unaudited)Netinterestincome 596 351 139 98 1,184 Non-interestincome 221 69 134 18 442
Net operating income 817 420 273 116 1,626
Netoperatingincomefromexternalcustomers 1,012 742 257 (385) 1,626 Netinternaloperating(expense)/income (195) (322) 16 501 -
Net operating income 817 420 273 116 1,626
Operatingexpenses (137) (54) (39) (437) (667)Impairment(charges)/recoveriesonloans (50) 1 (36) 1 (84)
Profit before income tax expense 630 367 198 (320) 875
Total gross loans 32,450 22,298 6,936 (183) 61,501 Total deposits 25,974 11,384 7,951 1,070 46,379
Nine months ended 30 June 2012 (Unaudited)Netinterestincome 599 366 136 37 1,138Non-interestincome 202 68 132 22 424
Net operating income 801 434 268 59 1,562
Netoperatingincomefromexternalcustomers 1,104 802 285 (629) 1,562Netinternaloperating(expense)/income (303) (368) (17) 688 -
Net operating income 801 434 268 59 1,562
Operatingexpenses (138) (54) (39) (420) (651)Impairment(charges)/recoveriesonloans (44) (84) 3 - (125)
Profit before income tax expense 619 296 232 (361) 786
Total gross loans 31,285 21,978 6,808 (230) 59,841Total deposits 23,906 10,413 6,553 973 41,845
Year ended 30 September 2012 (Unaudited)Netinterestincome 800 488 181 56 1,525Non-interestincome 283 94 180 25 582
Net operating income 1,083 582 361 81 2,107
Netoperatingincomefromexternalcustomers 1,466 1,063 380 (802) 2,107Netinternaloperating(expense)/income (383) (481) (19) 883 -
Net operating income 1,083 582 361 81 2,107
Operatingexpenses (184) (73) (56) (559) (872)Impairmentchargesonloans (39) (144) (6) 5 (184)Shareofprofitofassociateaccountedforusingequitymethod - - - 1 1
Profit before income tax expense 860 365 299 (472) 1,052
Total gross loans 31,383 22,129 7,209 (222) 60,499Total deposits 24,744 10,809 6,414 1,423 43,390
1 Includedinthereconcilingitemsfortotaloperatingexpensesis$434million(30June2012:$422million;30September2012:$562million)ofheadofficeoperatingexpenses,whicharenotallocatedtoabusinessunitthatmeetsthedefinitionofanoperatingsegment.
Westpac Banking Corporation–NewZealandDivision16
Notestothefinancialstatements
Note 13 Insurance businessThefollowingtablepresentstheaggregateamountoftheNZBankingGroup’sinsurancebusinessconductedthroughoneofitscontrolledentities,WestpacLife-NZ-LimitedcalculatedinaccordancewiththeOverseasBank’sconditionsofregistrationasatthereportingdate:
NZ Banking Group
30-Jun-13 $ millions Unaudited
Totalassets 242
AsapercentageoftotalassetsoftheNZBankingGroup 0.31%
Note 14 Risk managementA14.1 Credit risk
The NZ Banking Group’s residential mortgages by loan-to-value ratio (‘LVR’) as at 30 June 2013 (Unaudited)InordertocalculateoriginationLVR,thecurrentexposureisthatusedintheinternalratingsbasedapproachformortgagelending.Forloansoriginatedfrom1January2008,theNZBankingGrouputilisesitsloanoriginationsystem.Forloansoriginatedpriorto1January2008,theoriginationLVRisnotseparatelyrecorded,andthereforeisnotavailablefordisclosureasrequiredunderClause1ofSchedule9totheOrder.Fortheseloans,theNZBankingGrouputilisesitsdynamicLVRprocesstocalculateanoriginationLVR.ExposuresforwhichnoLVRisavailablehavebeenincludedinthe‘Exceeds90%’categoryinaccordancewiththerequirementsoftheOrder.
NZ Banking Group
30-Jun-13 (Unaudited) Does not Exceeds 80%LVR range ($ millions) Exceed 80% and not 90% Exceeds 90% Total
On-balancesheetexposures 28,384 5,745 2,851 36,980 Undrawncommitmentsandotheroff-balancesheetexposures 6,348 411 178 6,937
Value of exposures 34,732 6,156 3,029 43,917
14.2 Market risk ThefollowingtableprovidesasummaryoftheNZBankingGroup’snotionalcapitalchargesbyrisktypeasatthereportingdate.
NZ Banking Group
30-Jun-13 (Unaudited) Implied Notional Risk-weighted Capital $ millions Exposure Charge
End-of-periodInterestraterisk 2,313 185 Foreigncurrencyrisk 104 8 Equityrisk 101 8
Westpac Banking Corporation–NewZealandDivision17
Notestothefinancialstatements
Note 14 Risk management (continued)14.3 Liquidity risk
Liquid assetsThetablebelowshowstheNZBankingGroup’sholdingofliquidassetsandrepresentsthekeyliquidityinformationprovidedtomanagement.LiquidassetsincludehighqualityassetsreadilyconvertibletocashtomeettheNZBankingGroup’sliquidityrequirements.Inmanagement’sopinion,liquidityissufficienttomeettheNZBankingGroup’spresentrequirements.
NZ Banking Group
30-Jun-13 $ millions Unaudited
Cashandbalanceswithcentralbanks 1,644 Supranationalsecurities 436 NZGovernmentsecurities 2,298 NZpublicsecurities 458 NZcorporatesecurities 2,591 Residentialmortgage-backedsecurities 3,992
Total liquid assets 11,419
Note 15 Concentration of credit exposures to individual counterpartiesThefollowingcreditexposuresarebasedonactualcreditexposurestoindividualcounterpartiesandgroupsofcloselyrelatedcounterparties.Thenumberofindividualbankcounterparties(whicharenotmembersofagroupofcloselyrelatedcounterparties),andgroupsofcloselyrelatedcounterpartiesofwhichabankistheparent,towhichtheNZBankingGrouphasanaggregatecreditexposureorpeakend-of-dayaggregatecreditexposurethatequalsorexceeds10%oftheOverseasBankingGroup’sequity:
■■ asat30June2013wasnil; and■■ inrespectofpeakend-of-dayaggregatecreditexposureforthethreemonthsended30June2013wasnil.Thenumberofindividualnon-bankcounterparties(whicharenotmembersofagroupofcloselyrelatedcounterparties),andgroupsofcloselyrelatedcounterpartiesofwhichabankisnottheparent,towhichtheNZBankingGrouphasanaggregatecreditexposureorpeakend-of-dayaggregatecreditexposurethatequalsorexceeds10%oftheOverseasBankingGroup’sequity:
■■ asat30June2013wasnil; and■■ inrespectofpeakend-of-dayaggregatecreditexposureforthethreemonthsended30June2013wasnil.Thepeakend-of-dayaggregatecreditexposureshavebeencalculatedbydeterminingthemaximumend-of-dayaggregateamountofactualcreditexposureovertherelevantthree-monthperiodandthendividingthatamountbytheOverseasBankingGroup’sequityasat31March2013.Creditexposurestoindividualcounterparties(notbeingmembersofagroupofcloselyrelatedcounterparties)andtogroupsofcloselyrelatedcounterpartiesexcludeexposurestothecentralgovernmentofanycountrywithalong-termcreditratingofA-orA3orabove,oritsequivalent,ortoanybankwithalong-termcreditratingofA-orA3orabove,oritsequivalent.ThesecalculationsrelateonlytoexposuresheldinthefinancialrecordsoftheNZBankingGroup(excludingexposuresbookedoutsideNewZealand)andwerecalculatednetofindividuallyassessedprovisions.
Westpac Banking Corporation–NewZealandDivision18
Notestothefinancialstatements
Note 16 Overseas Bank and Overseas Banking Group capital adequacyThetablebelowrepresentsthecapitaladequacycalculationfortheOverseasBankandOverseasBankingGroupbasedontheAustralianPrudentialRegulationAuthority’s(‘APRA’)applicationoftheBaselIIIcapitaladequacyframework.TheinformationforthecomparativeperiodiscalculatedbasedonAPRA’sapplicationoftheBasel2.5capitaladequacyframework.
30-Jun-13 30-Jun-12% Unaudited Unaudited
Overseas Banking Group1
CommonEquityTierOneCapitalratio 8.4 8.2AdditionalTierOneCapitalratio 2.1 1.9TierTwoCapitalratio 1.3 0.6
TotalRegulatoryCapitalratio 11.8 10.7
Overseas Bank (Extended Licensed Entity)1,2
CommonEquityTierOneCapitalratio 8.5 8.1AdditionalTierOneCapitalratio 2.3 2.0TierTwoCapitalratio 1.4 0.9
TotalRegulatoryCapitalratio 12.2 11.0
1 ThecapitalratiosrepresentinformationmandatedbyAPRA.2 ThecapitalratiosoftheOverseasBank(ExtendedLicensedEntity)arepubliclyavailableintheOverseasBankingGroup’sPillar3report.Thisinformationismade
availabletousersviatheOverseasBank’swebsite(www.westpac.com.au).
APRA’snewcapitalstandardscameintoeffecton1January2013.TheOverseasBankingGroupisaccreditedbyAPRAtoapplytheAdvancedInternalRatingsBased(‘Advanced IRB’)approachforcreditrisk,theAdvancedMeasurementApproach(‘AMA’)foroperationalriskandtheinternalmodelapproachforinterestrateriskinthebankingbookforcalculatingregulatorycapital(knownas‘AdvancedAccreditation’)andisrequiredbyAPRAtoholdminimumcapitalatleastequaltothatspecifiedundertheAdvancedIRBandAMAmethodologies.UnderNewZealandregulationsthismethodologyisreferredtoastheBaselIII(internalmodelsbased)approach.Withthisaccreditation,theOverseasBankingGroupisrequiredtodiscloseadditionaldetailedinformationonitsriskmanagementpracticesandcapitaladequacyonaquarterlyandasemi-annualbasis.ThisinformationismadeavailabletousersviatheOverseasBankingGroup’swebsite(www.westpac.com.au).TheaimistoallowthemarkettobetterassesstheOverseasBankingGroup’sriskandrewardassessmentprocessandhenceincreasethescrutinyofthisprocess.TheOverseasBankingGroup,andtheOverseasBank(ExtendedLicensedEntityasdefinedbyAPRA),exceededtheminimumcapitaladequacyrequirementsasspecifiedbyAPRAasat30June2013.APRAspecifiesaminimumprudentialcapitalratiofortheOverseasBankingGroup,whichisnotmadepubliclyavailable.
Note 17 Other information on the Overseas Banking GroupOtherinformationontheOverseasBankingGroupisfromthemostrecentlypublishedfinancialstatementsoftheOverseasBankingGroupforthesixmonthsended31March2013.
31-Mar-13Profitability Unaudited
Netprofitaftertaxforthesixmonthsended31March2013(A$millions) 3,339 Netprofitaftertax(forthe12monthperiodto31March2013)asapercentageofaveragetotalassets 0.9%
31-Mar-13Total assets and equity Unaudited
Totalassets(A$millions) 677,509 Percentagechangeintotalassetsforthe12monthsended31March2013 3.6%Totalequity(A$millions) 45,217
31-Mar-13Asset quality Unaudited
Totalindividuallyimpairedassets1,2(A$millions) 3,759 Asapercentageoftotalassets 0.6%Totalindividualcreditimpairmentallowance(A$millions) 1,505 Asapercentageoftotalindividuallyimpairedassets 40.0%Totalcollectivecreditimpairmentallowance(A$millions) 2,694
1 Totalindividuallyimpairedassetsarebeforeallowancesforcreditimpairmentlossandnetofinterestheldinsuspense.2 Non-financialassetshavenotbeenacquiredthroughtheenforcementofsecurity.
Westpac Banking Corporation–NewZealandDivision19
Notestothefinancialstatements
Note 18 Events after the reporting dateMondexwasremovedfromtheNewZealandCompaniesRegisteron4July2013.MondexdidnothaveasignificantimpactontheNZBankingGroup’sfinancialpositionorresultsofoperationsfortheninemonthsended30June2013.On8August2013,WestpacNewZealandissued$385millionofdomesticseniorunsecuredmediumtermnotes.On31July2013,WestpacGroupInvestment-NZ-Limitedpaidadividendof$303milliontoWestpacOverseasHoldingsPtyLimitedandWestpacCustodianNomineesLimited.InadditionWestpacFinancialServices-Group-NZ-Limitedpaidadividendof$20milliontoWestpacFinancialServicesGroupLimited.
Westpac Banking Corporation ABN 33 007 457 141, incorporated in Australia (New Zealand division).