Westpac Banking Corporation

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Westpac Banking Corporation

Philip Coffey

Chief Financial Officer

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Presentation Title & Date

Westpac at a glance

• Established 1817

• Top 40 bank globally

1

• Core markets - Australia,

New Zealand and near

Pacific

• 8.3 million customers

• Global sustainability leader

• Consistent earnings growth

• Broad business mix

21% Cash return on equity

A$260bn Total assets

A$44bn

Market cap2

47% Cost to income ratio

30 Sept 2005

1 FT Global 500 by sector - 2005 - ranked by market capitalisation

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What is different about Westpac?

• 2nd largest customer franchise in the region

• Customer base skewed to high value

segments

Large, high

quality, customer franchise

• Long run consistency in earnings

• Top quartile employee engagement

• Sustainability strategy embedded across the

business

Global leader in sustainability

• Not chasing growth outside Australia, New

Zealand and the near Pacific

• No strategic gaps

• Consistent acquisition criteria

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Financial services environment remains positive

• Solid Australian economy

• NZ market more challenging

but still delivering growth

• Credit growth remaining

above long term average

• Supportive asset quality

environment:

-

Unemployment rate at 30 year lows

-

Business balance sheets under geared

• Double digit growth in

wealth management

Australia and New Zealand credit growth (%)

-5 -3 -1 1 3 5 7 9 11 13 15 17 90 92 94 96 98 00 02 04 Aus total credit Aus period avg NZ total credit NZ period avg

(5)

Operating environment challenging

• Compliance requirements remain heavy • International harmonisation challenges:

-

IFRS

-

Basel II

-

Sarbanes Oxley • Anti-money laundering changes underway • Australian institutions expanding their footprint

• International players re-emerging

• Price increasingly used to attract business

• Increased product choice

• Competition for talent is intense

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Westpac’s franchise health is strong…

56 60 65 65 68 69 40 45 50 55 60 65 70 200 0 20 01 200 2 200 3 200 4 20 05

Westpac employee commitment

30% 40% 50% 60% 70% 80% Ju n-0 2 Se p-0 2 De c-0 2 Ma r-0 3 Ju n-0 3 Se p-0 3 De c-0 3 Ma r-0 4 Ju n-0 4 Se p-0 4 De c-0 4 Ma r-0 5 Ju n-0 5 Se p-0 5 De c-0 5

Small and medium businesses Middle market businesses Consumers

Institutional Bank

Westpac customer satisfaction1,2

1. Consumer - proportion of customers very or fairly satisfied in Roy Morgan (Consumer) and Taylor Nelson Sofres (business) 2. Institutional Bank – proportion of customers rating as excellent or above average in satisfaction in annual (August)

Peter Lee Survey

Leader in corporate governance

Ranked No.1 bank globally for sustainability

by Dow Jones Sustainability Index for

the past 4 years

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… with a strong financial performance

Dividend per share 5 year CAGR 13%

Expense 5 year CAGR 4%

Cash ROE 5 year average 21% EPS 5 year CAGR 11%

Consistent, high quality financial

performance and growth Performing well against peers

12% cash EPS growth in 2005 -highest of major banks

16% dividend uplift in 2005 -highest of major banks

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Consistent returns over the long run

914 1,127 1,314 1,354 1,548 1,770 1,950 2,244 2,271 2,559 2,874 0 500 1,000 1,500 2,000 2,500 3,000 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Cash earnings 2H Cash earnings 1H

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Growth across all operating business units

Cash earnings (A$m) Contribution to

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BCB momentum continues to build

6% 4% 0% 6% 10% 9% 4% 13% 12% 9% 15% 0% 2% 4% 6% 8% 10% 12% 14% 16%

Housing Lending Business Lending Other Personal Lending (incl. credit

cards)

Deposits (excl working capital)

1H05 2H05 1Q06

Business and consumer banking (BCB) - annualised growth1

1. Annualised half yearly growth for 1H05 and 2H05; annualised quarterly growth for 1Q06 2. Including securitisations

3. BCB business lending including equipment finance

2 3

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Housing loan growth back on track

3rd party percentage of new lending mortgages (%)

Margins down around 2bps from 2H05 to 1Q06

Selective pricing initiatives and increased preparedness to meet market

Uplift in broker sales - averaging 39% of total drawdowns since September 2005 More active broker engagement

Productivity1 _{increased by 40% from}

March 2005 to December 2005 Implemented a new sales management

program, ‘Westpac Way’

Outcome Initiative 0.2 0.4 0.6 0.8 1.0 1.2 n -0 0 l-0 0 n -0 1 l-0 1 n -0 2 l-0 2 n -0 3 l-0 3 n -0 4 l-0 4 n -0 5 l-0 5 n -0 6

Westpac mortgage growth as multiple of system2

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Business lending growing solidly

• Westpac’s total Australian business lending growing above system

-

Strong gains in corporate and

middle markets

-

Small business lending

growing slower

• Modest spread compression

• Pinnacle loan origination system is no longer an impediment to writing new business

• Strong upside remains

2.11 1.78 2H05 2.09 2.15 2.02^ 2.16 Equipment Finance 1.76 1.78 1.80 1.79 Business 1Q06 1H05 2H04 1H04 Product spreads3

3. Small and medium business lending

^ Spread in 2H04 impacted by repurchase of portfolio of equipment finance loans under the terms of the sale of AGC to GE Capital Finance in 2002

Total business credit quarterly % growth1_{by loan size}2

0% 2% 4% 6% 8% 10%

Less than $2m More than $2m Total

Westpac System

1. December quarter, financial year 2006

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Deposits market undergoing structural change

• Continuing to grow deposits in line with market

• Portfolio composition is undergoing significant change with

most growth in:

-

Flat fee transaction account (Westpac One)

-

High interest online savings account (Max-i Direct)

• Move to Max-i Direct is impacting margins, although partially

offset by rate movements on other savings accounts

-

Net impact of these changes has resulted in retail deposit margins being 1 basis point lower in 1Q06 compared to 2H05

• Transaction fee changes introduced during the year have

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New Zealand a tough environment

• Solid housing growth of

13.5%1_{, against 15% system} growth

• Softer business confidence

impacting loan growth; market share stable

• Strong performance in online

account, supporting deposit market share

• Margin pressure continuing

across all portfolios

• Subdued fee growth

• Asset quality environment

remains favourable -15 0 15 30 Ma r-0 0 S e p-00 Ma r-0 1 S e p-01 Ma r-0 2 S e p-02 Ma r-0 3 S e p-03 Ma r-0 4 S e p-04 Ma r-0 5 S e p-05

Share of Growth Market Share

NZ Housing market share monthly (%)

0 2 4 6 8 10

Sep-03 Mar-04 Sep-04 Mar-05 Sep-05 Dec-05 Business banking term lending (NZ$bn)

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Australasia’s lead institutional bank

• Regional lead bank position

supported by:

- Strong relationship focus

- Superior transaction banking platform

• Established specialised capital

capability

• Starting point for 2006 cash

earnings will be lower by $100m given one-offs previously

disclosed:

- Run-off of NZ structured finance transactions

- No further gains on high yield portfolio 10 15 20 25 30 35 40 45 2002-03 2003-04 2004-05 WBC Bank 2 Bank 3 Bank 4

Lead relationship market share1_(%)

0 100 200 300 400 F in anc in g te rnat iona l pr od u c ts F in anc ia l ma rk e ts S tr u c tur ed fi n anc e ac ti ona l Ma rk e t & d ebt s a le s C a p it a l G roup 2004 2005 Revenue contribution ($m)

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Wealth management (BT) growing strongly

0 2 4 6 8 10 12 14 16 18 20 22 Sep-02 Mar -03

Sep-03 Mar-04 Sep-04 Mar-05 Sep-05 Dec-05

Wrap FUA ($bn) 0 1 2 3 4 5

Mar -03 Sep-03 Mar-04 Sep-04 Mar-05 Sep-05 Dec-05

Corporate Super FUA ($bn) • Strong growth in Wrap and corporate

super (pensions) boosting funds under administration (FUA)

• 3 year Top quartile fund performance

• Insurance benefiting from positive market conditions

• Good growth in margin lending, off a small base 0 500 1,000 1,500 2,000 2,500 3,000 Sep-02

Mar-03 Sep-03 Mar-04 Sep-04 Mar-05 Sep-05 Dec-05

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Asset quality remains sound

Consumer - 90 day delinquencies (%)

0.77 0.71 0.96 1.02 1.07 0.82 0.63 0.90 0.21 0.20 0.16 0.15 0.15 0.23 0.25 0.26 0.0 0.5 1.0 1.5 1999 2000 2001 2002 2003 2004 2005 Dec-05 Consumer unsecured Housing

Aust. Business Banking - 90 day delinquencies (3 month moving average) (%)

0.90 0.50 1.27 1.47 1.40 0.52 0.48 0.75 0.0 0.5 1.0 1.5 2.0 1999 2000 2001 2002 2003 2004 2005

Dec-Categories of stressed exposures as a % of total commitments (%) 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6%

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Positioned to create value into the future

• Deliver on infrastructure

investments including corporate online, Pinnacle, Reach

• Further productivity opportunities in pipeline

• Growth options delivering further value

• Global leader in sustainability

• Advanced Basel II accreditation

• Momentum restored in

Australian retail franchise

• More aggressively pursuing growth in core markets

• Wealth management business

growing ahead of market

• Most consistent financial performance of peers

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Positive outlook remains

• Macro environment sound,

although competition tougher

• Westpac’s franchise health is strong, with matching financial performance

• Retail momentum restored

• Consistently returning value to shareholders

• No change to outlook provided

at the full year 2005 –

confident that Westpac can continue to deliver strong outcomes for shareholders

28 33 39 43 47 54 62 70 86 100 78 0 20 40 60 80 100

Dividends per share (cents)

10yr CAG

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Disclaimer

The material contained in this presentation is intended to be general

background information on Westpac Banking Corporation and its activities. The information is supplied in summary form and is therefore not necessarily complete. Also, it is not intended that it be relied upon as advice to investors or potential investors, who should consider seeking independent

professional advice depending upon their specific investment objectives, financial situation or particular needs.