Westpac Banking : Items affecting Westpac's Second Half 2020 Results

ASX

Release

26 OCTOBER 2020

Level 18, 275 Kent Street

Sydney, NSW, 2000

Items affecting Westpac's Second Half 2020 results and details of changes to divisions

Items affecting results

Westpac today announced that its cash earnings in 2H20 will be reduced by $1,220m (after tax) arising from notable items. Statutory net profit will also be reduced by these items. The notable items include new items of $816m (after tax), combined with the previously announced additional $404m provision (after tax) for AUSTRAC matters.

In aggregate, these notable items are estimated to reduce the Group's CET1 capital ratio by 24 basis points, noting that some items have no impact on capital as they are already capital deductions.

The after tax impact of notable items includes:

• write-downof goodwill and intangibles associated with Westpac Life Insurance Services Ltd (WLIS) and our Auto Finance business along with a write-down of capitalised software. These items total $568m after tax;
• an increase in the provision and costs associated with the AUSTRAC proceedings of $415m after tax. This includes the previously announced $404m in provisions associated with the court approved civil penalty and AUSTRAC's legal costs;
• an increase in provisions for customer refunds, repayments, associated costs, and litigation provisions of $182m after tax;
• asset sales and revaluations, the net impact of which reduces cash earnings by $55m after tax. This includes the revaluation of Life insurance liabilities and a loss on the agreed sale of our vendor finance business. These items totalling $267m after tax were partly offset by a benefit after tax of $212m from a revaluation of the Group's holding in Zip Co Limited1.

Details of these items are in Appendix 1 and a summary of line item impacts can be found in Appendix 2.

1 This refers to a revaluation of Westpac's holding in Zip Co Limited that occurred in 2H20 prior to the sale of the holding as announced on 22 October 2020. The sale of Zip Co Limited is expected to result in a pre-tax gain on sale of approximately $26m to be reflected in Westpac's 1H21 results.

Page 2 of 15

Changes to the presentation of Westpac Group's 2020 Full Year Financial Results

Following changes to its divisional structure earlier in the year, Westpac is also releasing details of changes to the presentation of its Full Year 2020 Results. These changes include:

• Creation of the Specialist Businesses division announced with our First Half
  2020 Results. This includes moving businesses from the Consumer, Business and WIB divisions and reallocating certain centrally managed costs across divisions;
• The movement of certain SME and Business products from the Business division to the Consumer division to better reflect our new Lines of Business operating structure; and
• A revision to the classification of notable items. This change results in a minor restatement of 1H20 and FY19 notable items2.

The impact of the revision to the definition of notable items on prior periods is included in Appendix 3 and other affected tables are in Appendix 4 attached to this disclosure.

The three changes above have no impact on the Group's cash earnings, reported net profit or balance sheet in prior periods. However, the changes do impact divisional cash earnings (and individual line items) and balance sheet items in prior periods.

We are scheduled to announce our 2020 Full Year results on Monday, 2 November 2020.

For further information:
David Lording	Andrew Bowden
Group Head of Media Relations	Head of Investor Relations
0419 683 411	0438 284 863

This document has been authorised for release by Tim Hartin, General Manager & Company Secretary.

2 The following revisions have been made due to the reclassification of notable items: FY19 notable items have been reduced by $83m after tax for Asset sales. 1H20 notable items have been increased by $114m after tax for the write- off of deferred acquisition costs associated with the exit of Group Life insurance and the write-down of intangible assets. For total notable items in 1H20 and FY20 refer to Appendix 3.

		Page 3 of 15
Appendix 1 - Details of items affecting Westpac's 2H20
Summary	2H20 Cash	Detail
	earnings
	(post tax)
Write-down of	$568m	• Following a review, the valuation of our life insurance business did
goodwill and		not support the carrying value of its intangibles and so they have
other intangibles		been written down. The cost of this write-down was $406m.
		• Lower returns in the Group's Auto Finance business has resulted in
		a $125m write-down of intangibles.
		• The impact of COVID-19 on asset values combined with the
		previously announced review of capitalised software has
		contributed to an impairment of capitalised software for some IT
		systems. The pre-tax cost of this write off is $71m.
AUSTRAC	$415m	• The Federal Court has approved the $1.3bn penalty in the
matters		Statement of Agreed Facts and Admissions with AUSTRAC. We
		have increased our penalty provision by $400m in 2H20, adding to
		the $900m raised in 1H20.
		• $20m in costs of remediating identified issues in 2H20, along with
		legal costs (including AUSTRAC's legal costs of $4m).
Additional	$182m	Continued customer remediation reviews have led to an increase in
provisions for		provisions with most of the increase related to previously disclosed
customer		matters. Main contributors in 2H20 provisions (pre-tax) include:
refunds		• $37m in net interest income, mostly due to previously identified
payments,		refunds to certain business customers who were provided with
associated costs		business loans where they should have been provided a consumer
and litigation		loan covered by the National Consumer Credit Protection Act and
provisions		the National Credit Code.
		• $78m in non-interest income mostly related to:
		- New provisions for refunds to customers for insurance trail
		commissions that were incorrectly charged following
		implementation of Future of Financial Advice reforms;
		- Increase in provisions for aligned advisor remediation following
		the completion of further reviews;
		- Increase in provisions for BT customers where certain wealth
		fees were inadequately disclosed; partly offset by
		- Reduced provisions for salaried advice and for customers on
		our platforms who were not advised of certain corporate actions
		following the completion of additional reviews.
		• $104m in additional costs for implementing the remediation
		program, including to accelerate customer payments.
		• $38m for litigation matters, including settlements.
Asset sales and	$55m	• Following its latest valuation, a loss has been recognised on
revaluations		insurance liabilities associated with the Group's disability
		insurance. Reduces non-interest income by $260m;
		• Following the decision to discontinue WLIS Group Life products
		$7m in expenses were recognised;
		• Loss on the agreed sale of our vendor finance business. The
		portfolio was sold at a discount to book (recorded loss), with
		potential earn-out payments on performance over the next 3 years
		(to be recognised as earned in future years); partly offset by
		• Gain on revaluation of our holding in Zip Co Limited of $303m (in
		non-interest income). This refers to a revaluation that occurred in
		2H20 and was prior to the sale of the holding as announced on 22
		October 20203.

3 Sale of Zip Co Limited is expected to result in a pre-tax gain on sale of approximately $26m to be reflected in Westpac's 1H21 results.

																													Page 4 of 15
Appendix 2 - Summary of 2H20 notable items
	2H20 ($m)															New					Specialist			Group			Total
			Consumer			Business				Zealand
										Businesses			Businesses
																(in $A)
	Net interest	-				(34)				(3)					-					-				(37)
	income
	Net fee income	4				(3)				(4)					(45)				62				14
	Net wealth
	management	-				-				-					(260)				(92)				(352)
	& insurance
	income
	Other income	-				-				-					-					303				303
	Non-interest	4				(3)				(4)					(305)				273				(35)
	income
	Operating	(31)				(106)				1					(653)				(494)				(1,283)
	expenses
	Core earnings	(27)				(143)				(6)					(958)				(221)				(1,355)
	Income tax
	benefit/	8				43				2					138				(56)				135
	expense
	Cash	(19)				(100)				(4)					(820)				(277)				(1,220)
	earnings
						AUSTRAC			Refunds,
	2H20 ($m)						payments,				Intangible			Asset sales /				Total
				and related
						costs &			write-downs			revaluations
						matters
									litigation
	Net interest			-					(37)						-					-				(37)
	income
	Net fee income		-					14							-					-				14
	Net wealth
	management &		-					(92)						-					(260)				(352)
	insurance income
	Other income		-					-								-					303				303
	Non-interest			-					(78)						-					43				(35)
	income
	Staff expenses		-					(62)						-					(3)				(65)
	Occupancy			-					-								-					-				-
	expenses
	Technology			-					(1)							(95)					(4)				(100)
	expenses
	Other expenses		(420)				(79)						(507)					(112)				(1,118)
	Operating			(420)				(142)						(602)					(119)				(1,283)
	expenses
	Core earnings		(420)				(257)						(602)					(76)				(1,355)
	Income tax			5					75							34					21				135
	benefit/expense
	Cash earnings		(415)				(182)						(568)					(55)				(1,220)

Page 5 of 15

Appendix 3 - Summary 1H20 and FY19 notable items by new divisional structure4,5

	1H20 ($m)															New					Specialist			Group			Total
			Consumer			Business				Zealand
										Businesses			Businesses
																(in $A)
	Net interest	5				(107)				(4)					-					-				(106)
	income
	Net fee income	-				5				(3)					(7)					(142)				(147)
	Net wealth
	management	-				-				-					(97)				16				(81)
	& insurance
	income
	Other income	-				-				-					-					-				-
	Non-interest	-				5				(3)					(104)				(126)				(228)
	income
	Operating	(33)				(24)				-					(41)				(1,158)			(1,256)
	expenses
	Core earnings	(28)				(126)				(7)					(145)				(1,284)			(1,590)
	Income tax
	benefit/	8				38				2					43					100				191
	expense
	Cash	(20)				(88)				(5)					(102)				(1,184)			(1,399)
	earnings
						AUSTRAC			Refunds,
	1H204 ($m)						payments,				Intangible			Asset sales /				Total
				and related
						costs &			write-downs			revaluations
						matters
									litigation
	Net interest			-					(106)						-					-				(106)
	income
	Net fee income		-					(147)						-					-				(147)
	Net wealth
	management &		-					16							-					(97)				(81)
	insurance income
	Other income		-					-								-					-				-
	Non-interest			-					(131)						-					(97)				(228)
	income
	Staff expenses		-					(61)						-					-				(61)
	Occupancy			-					-								-					-				-
	expenses
	Technology			-					(3)							(66)					-				(69)
	expenses
	Other expenses		(1,058)			(68)						-					-				(1,126)
	Operating			(1,058)			(132)						(66)					-				(1,256)
	expenses
	Core earnings		(1,058)			(369)						(66)					(97)				(1,590)
	Income tax			31					111						20					29				191
	benefit/expense
	Cash earnings		(1,027)			(258)						(46)					(68)				(1,399)

4 Revision of 1H20 notable items refers to inclusion of Intangible write-downs and Asset sales / revaluations categories.

																											Page 6 of 15
	FY19 ($m)														New				Specialist			Group				Total
			Consumer			Business			Zealand
									Businesses			Businesses
															(in $A)
	Net interest	(85)			(246)				(13)			-		-				(344)
	income
	Net fee income	(2)		(12)				(4)			(43)		(222)			(283)
	Net wealth
	management	-			-				-			-		(537)			(537)
	& insurance
	income
	Other income	-		-				38			3		42			83
	Non-interest	(2)			(12)				34			(40)		(717)			(737)
	income
	Operating	25			(57)				(15)			(30)		(384)			(461)
	expenses
	Core earnings	(62)		(315)				6			(70)		(1,101)			(1,542)
	Income tax
	benefit/	29		95				9			23		339			495
	expense
	Cash	(33)			(220)				15			(47)		(762)			(1,047)
	earnings
	FY195 ($m)					Refunds,				Asset sales /											Total
				payments, costs							Wealth reset
							revaluations
						& litigation
	Net interest					(344)				-					-							(344)
	income
	Net fee income					(283)				-				-							(283)
	Net wealth
	management &					(537)				-				-							(537)
	insurance income
	Other income					-					83				-								83
	Non-interest					(820)				83					-							(737)
	income
	Staff expenses					(99)				-				(169)						(268)
	Occupancy					-					-					-								-
	expenses
	Technology					(11)				-					(24)							(35)
	expenses
	Other expenses					(110)				-				(48)						(158)
	Operating					(220)				-					(241)						(461)
	expenses
	Core earnings					(1,384)				83				(241)						(1,542)
	Income tax					426				-					69								495
	benefit/expense
	Cash earnings					(958)				83				(172)						(1,047)

5 Revision of FY19 notable items refers to inclusion of the Asset sales / revaluations category.

Page 7 of 15

Appendix 4 - Full Year Financial Results Template

1.3 Cash earnings results

	Half Year	Half Year	% Mov't	Full Year	Full Year	% Mov't
	Sept	March	Sept 20 -	Sept	Sept	Sept 20 -
$m	2020	2020	Mar 20	2020	2019	Sept 19

Net interest income	8,666	16,953
Non-interest income	1,675	3,702
Net operating income	10,341	20,655
Operating expenses	(6,160)	(10,031)
Core earnings	4,181	10,624
Impairment charges	(2,238)	(794)
Operating profit before income tax	1,943	9,830
Income tax expense	(949)	(2,975)
Net profit for the period	994	6,855
Net profit attributable to non-controlling interests	(1)	(6)
Cash earnings	993	6,849
Add back notable items	1,399	1,047
Cash earnings excluding notable items	2,392	7,896

Page 8 of 15

2.0 Divisional Cash Earning Summary Note 2. Segment reporting

Half Year Sept 2020			Westpac	Westpac	Specialist	Group
			Institutional	Zealand
$m	Consumer	Business	Bank	(A$)	Businesses	Businesses	Group
Net interest income
Non-interest income
Net operating income
Operating expenses
Core earnings
Impairment (charges) / benefits
Operating profit before income tax
Income tax expense
Net profit
Net profit attributable to NCI
Cash earnings
Add back notable items
Cash earnings excluding notable items
Cash earnings for the period
Net cash earnings adjustments
Net profit for the period attributable to owners of WBC
Balance sheet
Loans
Deposits and other borrow ings
Half Year March 2020			Westpac	Westpac
			Institutional	Zealand	Specialist	Group
$m	Consumer	Business	Bank	(A$)	Businesses	Businesses	Group
Net interest income	4,234	2,144	605	940	287	456	8,666
Non-interest income	326	311	556	167	428	(113)	1,675
Net operating income	4,560	2,455	1,161	1,107	715	343	10,341
Operating expenses	(2,035)	(1,068)	(619)	(516)	(420)	(1,502)	(6,160)
Core earnings	2,525	1,387	542	591	295	(1,159)	4,181
Impairment (charges) / benefits	(416)	(697)	(293)	(200)	(160)	(472)	(2,238)
Operating profit before income tax	2,109	690	249	391	135	(1,631)	1,943
Income tax (expense) / benefit	(637)	(212)	(102)	(110)	(41)	153	(949)
Net profit	1,472	478	147	281	94	(1,478)	994
Net profit attributable to NCI	-	-	-	-	(1)	-	(1)
Cash earnings	1,472	478	147	281	93	(1,478)	993
Add back notable items	20	88	-	5	102	1,184	1,399
Cash earnings excluding notable items	1,492	566	147	286	195	(294)	2,392
Cash earnings for the period	1,472	478	147	281	93	(1,478)	993
Net cash earnings adjustments	-	-	-	11	(63)	249	197
Net profit for the period attributable to owners of WBC	1,472	478	147	292	30	(1,229)	1,190
Balance sheet
Loans	395,625	144,959	78,595	84,778	16,269	(548)	719,678
Deposits and other borrow ings	208,427	142,175	109,977	70,725	9,625	41,991	582,920
Mov't Sept 20 - March 20			Westpac	Westpac
			Institutional	Zealand	Specialist	Group
%	Consumer	Business	Bank	(A$)	Businesses	Businesses	Group
Net interest income

Non-interest income

Net operating income

Operating expenses

Core earnings

Impairment (charges) / benefits

Operating profit before income tax

Income tax expense

Net profit

Net profit attributable to NCI

Cash earnings

Add back notable items

Cash earnings excluding notable items

Cash earnings for the period

Net cash earnings adjustments

Net profit for the period attributable to owners of WBC

Balance sheet

Loans

Deposits and other borrow ings

Page 9 of 15

2.0 Divisional Cash Earning Summary Note 2. Segment reporting

Full Year Sept 2020			Westpac	Westpac	Specialist	Group
			Institutional	Zealand
$m	Consumer	Business	Bank	(A$)	Businesses	Businesses	Group
Net interest income
Non-interest income
Net operating income
Operating expenses
Core earnings
Impairment (charges) / benefits
Operating profit before income tax
Income tax expense
Net profit
Net profit attributable to NCI
Cash earnings
Add back notable items
Cash earnings excluding notable items
Cash earnings for the period
Net cash earnings adjustments
Net profit for the period attributable to owners of WBC
Balance sheet
Loans
Deposits and other borrow ings
Full Year Sept 2019			Westpac	Westpac
			Institutional	Zealand	Specialist	Group
$m	Consumer	Business	Bank	(A$)	Businesses	Businesses	Group
Net interest income	8,130	4,456	1,337	1,860	555	615	16,953
Non-interest income	695	594	1,195	423	1,412	(617)	3,702
Net operating income	8,825	5,050	2,532	2,283	1,967	(2)	20,655
Operating expenses	(3,794)	(2,094)	(1,220)	(939)	(847)	(1,137)	(10,031)
Core earnings	5,031	2,956	1,312	1,344	1,120	(1,139)	10,624
Impairment (charges) / benefits	(582)	(172)	(31)	10	(111)	92	(794)
Operating profit before income tax	4,449	2,784	1,281	1,354	1,009	(1,047)	9,830
Income tax (expense) / benefit	(1,333)	(838)	(356)	(369)	(292)	213	(2,975)
Net profit	3,116	1,946	925	985	717	(834)	6,855
Net profit attributable to NCI	-	-	-	-	(5)	(1)	(6)
Cash earnings	3,116	1,946	925	985	712	(835)	6,849
Add back notable items	33	220	-	(15)	47	762	1,047
Cash earnings excluding notable items	3,149	2,166	925	970	759	(73)	7,896
Cash earnings for the period	3,116	1,946	925	985	712	(835)	6,849
Net cash earnings adjustments	-	-	-	(1)	(45)	(19)	(65)
Net profit for the period attributable to owners of WBC	3,116	1,946	925	984	667	(854)	6,784
Balance sheet
Loans	399,279	146,867	73,572	78,005	17,216	(169)	714,770
Deposits and other borrow ings	207,578	142,558	99,005	60,801	9,277	44,028	563,247
Mov't Sept 20 - Sept 19			Westpac	Westpac
			Institutional	Zealand	Specialist	Group
%	Consumer	Business	Bank	(A$)	Businesses	Businesses	Group
Net interest income

Non-interest income

Net operating income

Operating expenses

Core earnings

Impairment (charges) / benefits

Operating profit before income tax

Income tax expense

Net profit

Net profit attributable to NCI

Cash earnings

Add back notable items

Cash earnings excluding notable items

Cash earnings for the period

Net cash earnings adjustments

Net profit for the period attributable to owners of WBC

Balance sheet

Loans

Deposits and other borrow ings

Page 10 of 15

3.1 Consumer

	Half Year	Half Year	% Mov't	Full Year		Full Year	% Mov't
	Sept	March	Sept 20 -	Sept		Sept	Sept 20 -
$m	2020	2020	Mar 20	2020	2019	Sept 19
Net interest income		4,234			8,130
Non-interest income		326			695
Net operating income		4,560			8,825
Operating expenses		(2,035)			(3,794)
Core earnings		2,525			5,031
Impairment charges		(416)			(582)
Profit before income tax		2,109			4,449
Income tax expense and NCI		(637)			(1,333)
Cash earnings		1,472			3,116
Add back notable items		20			33
Cash earnings excluding notable items		1,492			3,149
Expense to income ratio		44.63%			42.99%
Net interest margin		2.33%			2.22%
	As at	As at	% Mov't	As at		As at	% Mov't
	30 Sept	31 March	Sept 20 -	30 Sept		30 Sept	Sept 20 -
$bn	2020	2020	Mar 20	2020	2019	Sept 19
Customer deposits
Term deposits		50.0			55.9
Other		158.4			151.7
Total customer deposits		208.4			207.6
Net loans
Mortgages		385.8			388.6
Other		11.4			12.1
Provisions		(1.6)			(1.4)
Total net loans		395.6			399.3
Deposit to loan ratio		52.68%			51.99%
Total assets		404.3			407.0
TCE		464.2			469.3
Average interest earning assets		363.6			365.9
Credit quality	As at	As at	As at	As at
	30 Sept	31 March	30 Sept	31 March
%	2020	2020	2019	2019
Impairment charges to average loans annualised		0.21%	0.16%	0.14%
Mortgage 90+ day delinquencies		0.94%	0.90%	0.84%
Other consumer loans 90+ day delinquencies		1.96%	1.75%	1.67%
Total stressed exposures to TCE		0.83%	0.79%	0.73%

Page 11 of 15

3.2 Business

	Half Year	Half Year	% Mov't	Full Year		Full Year	% Mov't
	Sept	March	Sept 20 -	Sept		Sept	Sept 20 -
$m	2020	2020	Mar 20	2020	2019	Sept 19
Net interest income		2,144			4,456
Non-interest income		311			594
Net operating income		2,455			5,050
Operating expenses		(1,068)			(2,094)
Core earnings		1,387			2,956
Impairment charges		(697)			(172)
Profit before income tax		690			2,784
Income tax expense and NCI		(212)			(838)
Cash earnings		478			1,946
Add back notable items		88			220
Cash earnings excluding notable items		566			2,166
Expense to income ratio		43.50%			41.47%
Net interest margin		3.05%			3.16%
	As at	As at	% Mov't	As at		As at	% Mov't
	30 Sept	31 March	Sept 20 -	30 Sept		30 Sept	Sept 20 -
$bn	2020	2020	Mar 20	2020	2019	Sept 19
Customer deposits
Term deposits		57.3			63.4
Other		84.9			79.2
Total customer deposits		142.2			142.6
Net loans
Mortgages		59.9			60.8
Business		86.1			86.6
Other		0.7			0.7
Provisions		(1.7)			(1.2)
Total net loans		145.0			146.9
Deposit to loan ratio		98.07%			97.07%
Total assets		150.1			151.6
TCE		184.0			184.3
Average interest earning assets		140.5			140.8
Credit quality	As at	As at	As at	As at
	30 Sept	31 March	30 Sept	31 March
%	2020	2020	2019	2019
Impairment charges to average loans annualised		0.95%	0.20%	0.04%
Mortgage 90+ day delinquencies		0.93%	0.84%	0.72%
Other consumer loans 90+ day delinquencies		1.29%	1.38%	1.03%
Business: impaired exposures to TCE		0.71%	0.63%	0.60%
Total stressed exposures to TCE		3.07%	2.88%	2.49%

Page 12 of 15

3.3 Westpac Institutional Bank (WIB)

	Half Year	Half Year	% Mov't	Full Year	Full Year	% Mov't
	Sept	March	Sept 20 -	Sept	Sept	Sept 20 -
$m	2020	2020	Mar 20	2020	2019	Sept 19
Net interest income		605			1,337
Non-interest income		556			1,195
Net operating income		1,161			2,532
Operating expenses		(619)			(1,220)
Core earnings		542			1,312
Impairment charges		(293)			(31)
Profit before income tax		249			1,281
Income tax expense and NCI		(102)			(356)
Cash earnings		147			925
Expense to income ratio		53.32%			48.18%
Net interest margin		1.46%			1.59%
	As at	As at	% Mov't	As at	As at	% Mov't
	30 Sept	31 March	Sept 20 -	30 Sept	30 Sept	Sept 20 -
$bn	2020	2020	Mar 20	2020	2019	Sept 19
Customer deposits		110.0			99.0
Net loans
Loans		79.0			73.8
Provisions		(0.4)			(0.2)
Total net loans		78.6			73.6
Deposit to loan ratio		139.95%			134.51%
Total assets		109.4			95.0
TCE		172.7			172.6
Average interest earning assets		82.9			84.2
Impairment charges to average loans annualised		0.80%			0.04%
Impaired exposures to TCE		0.15%			0.06%
Total stressed exposures to TCE		1.09%			0.59%
Revenue contribution	Half Year	Half Year	% Mov't	Full Year	Full Year	% Mov't
	Sept	March	Sept 20 -	Sept	Sept	Sept 20 -
$m	2020	2020	Mar 20	2020	2019	Sept 19
Lending and deposit revenue		707			1,522
Markets, sales and fee income		389			817
Total customer revenue		1,096			2,339
Derivative valuation adjustments		(93)			(64)
Trading revenue		174			241
Other		(16)			16
Total WIB revenue		1,161			2,532

Page 13 of 15

3.4 Westpac New Zealand

	Half Year	Half Year	% Mov't	Full Year	Full Year	% Mov't
	Sept	March	Sept 20 -	Sept	Sept	Sept 20 -
NZ$m	2020	2020	Mar 20	2020	2019	Sept 19
Net interest income		987			1,967
Non-interest income		175			448
Net operating income		1,162			2,415
Operating expenses		(541)			(993)
Core earnings		621			1,422
Impairment (charges) / benefits		(211)			10
Profit before income tax		410			1,432
Income tax expense and NCI		(115)			(390)
Cash earnings		295			1,042
Add back notable items		5			(16)
Cash earnings excluding notable items		300			1,026
Expense to income ratio		46.56%			41.12%
Net interest margin		2.06%			2.16%
	As at	As at	% Mov't	As at	As at	% Mov't
	30 Sept	31 March	Sept 20 -	30 Sept	30 Sept	Sept 20 -
NZ$bn	2020	2020	Mar 20	2020	2019	Sept 19
Customer deposits
Term deposits		32.8			33.5
Other		36.3			31.0
Total customer deposits		69.1			64.5
Net loans
Mortgages		53.3			51.5
Business		32.5			31.1
Other		1.7			1.9
Provisions		(0.5)			(0.3)
Total net loans		87.0			84.2
Deposit to loan ratio		79.43%			76.60%
Total assets		105.0			97.1
TCE		125.1			117.3
Third party liquid assets		14.4			10.3
Average interest earning assets		95.8			91.1
Total funds		10.9			11.5
Credit quality	As at	As at	As at	As at
	30 Sept	31 March	30 Sept	31 March
%	2020	2020	2019	2019
Impairment charges/(benefits) to average loans annualised		0.49%	(0.06%)	0.03%
Mortgage 90+ day delinquencies		0.27%	0.13%	0.14%
Other consumer loans 90+ day delinquencies		1.59%	0.82%	1.02%
Impaired exposures to TCE		0.17%	0.08%	0.13%
Total stressed exposures to TCE		1.64%	1.66%	1.57%

Page 14 of 15

3.5 Specialist Businesses
	Half Year	Half Year	% Mov't	Full Year	Full Year	% Mov't
	Sept	March	Sept 20 -	Sept	Sept	Sept 20 -
$m	2020	2020	Mar 20	2020	2019	Sept 19
Net interest income		287			555
Non-interest income		428			1,412
Net operating income		715			1,967
Operating expenses		(420)			(847)
Core earnings		295			1,120
Impairment charges		(160)			(111)
Profit before income tax		135			1,009
Income tax expense and NCI		(42)			(297)
Cash earnings		93			712
Add back notable items		102			47
Cash earnings excluding notable items		195			759
Expense to income ratio		58.74%			43.06%
	As at	As at	% Mov't	As at	As at	% Mov't
	30 Sept	31 March	Sept 20 -	30 Sept	30 Sept	Sept 20 -
$bn	2020	2020	Mar 20	2020	2019	Sept 19
Deposits		9.6			9.3
Net loans
Loans		16.7			17.5
Provisions		(0.4)			(0.3)
Total net loans		16.3			17.2
Deposit to loan ratio		58.90%			54.07%
Total funds		179.1			207.2
TCE		20.6			21.9
Average funds		203.8			196.3
Cash earnings excluding notable items	Half Year	Half Year	% Mov't	Full Year	Full Year	% Mov't
	Sept	March	Sept 20 -	Sept	Sept	Sept 20 -
$m	2020	2020	Mar 20	2020	2019	Sept 19
Banking		34			166
Insurance		32			261
Superannuation, platforms and investments		129			332
Total cash earnings (ex notable items)		195			759
Insurance key metrics	Half Year	Half Year	% Mov't	Full Year	Full Year	% Mov't
	Sept	March	Sept 20 -	Sept	Sept	Sept 20 -
	2020	2020	Mar 20	2020	2019	Sept 19
Life Insurance in-force premiums ($m)
Life insurance in-force premiums at start of period		1,212			1,277
Sales / New Business		67			88
Lapses		(71)			(153)
Life insurance in-force premiums at end of period		1,208			1,212
Claims ratios for the Insurance Business (%)
Life insurance		54%			51%
General insurance		107%			62%
Lenders mortgage insurance		15%			20%
Gross written premiums ($m)
General insurance		273			538
Lenders mortgage insurance		89			160
	As at					As at	% Mov't	As at	% Mov't
	30 Sept			Net	Other	30 Sept	Sept 20 -	31 March	Sept 20 -
$bn	2020	Inflows	Outflows	Flows	Mov't	2019			Sept 19	2020	Mar 20
Superannuation						40.6				35.3
Platforms						123.0				105.0
Packaged funds						43.6				38.8
Total funds						207.2				179.1

Page 15 of 15

3.6 Group Businesses

	Half Year	Half Year	% Mov't	Full Year	Full Year	% Mov't
	Sept	March	Sept 20 -	Sept	Sept	Sept 20 -
$m	2020	2020	Mar 20	2020	2019	Sept 19
Net interest income		456			615
Non-interest income		(113)			(617)
Net operating income		343			(2)
Operating expenses		(1,502)			(1,137)
Core earnings		(1,159)			(1,139)
Impairment (charges) / benefits		(472)			92
Profit/(loss) before income tax		(1,631)			(1,047)
Income tax benefit and NCI		153			212
Cash earnings		(1,478)			(835)
Add back notable items
Costs associated w ith AUSTRAC proceedings including a provision for a potential penalty		1,027			-
Estimated customer refunds, payments, associated costs and litigation		157			590
Wealth restructuring		-			172
Cash earnings excluding notable items		(294)			(73)
Treasury	Half Year	Half Year	% Mov't	Full Year	Full Year	% Mov't
	Sept	March	Sept 20 -	Sept	Sept	Sept 20 -
$m	2020	2020	Mar 20	2020	2019	Sept 19
Net interest income		429			512
Non-interest income		(1)			5
Net operating income		428			517
Cash earnings		273			315
Treasury Value at Risk (VaR)
$m	Average	High	Low
Half Year September 2020
Half Year March 2020	46.3	176.7	33.7
Half Year September 2019	35.1	41.1	28.6