WESTPAC FIXED INCOME INVESTOR PRESENTATION

FOR THE SIX MONTHS ENDED 31 MARCH 2014 UNLESS OTHERWISE STATED

EUROPEAN ROADSHOW MAY 2014 Disclaimer

The material contained in this presentation is intended to be general background information on Westpac Banking Corporation (“Westpac”) and its activities. It does not constitute a prospectus, offering memorandum or offer of securities. It should not be reproduced, distributed or transmitted to any person without the consent of Westpac and is not intended for distribution in any jurisdiction in which such distribution would be contrary to local law or regulation. This presentation is directed only at persons who (i) have professional experience in matters relating to investments; or (ii) are persons falling within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations etc.”) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (as amended); or (iii) are outside the United Kingdom (all such persons together being referred to as “relevant persons”). This document must not be acted on or relied on by persons who are not relevant persons. 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. The material contained in this presentation may include information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. All amounts are in Australian dollars unless otherwise indicated. Financial information in this presentation may be presented on a cash earnings basis. Cash earnings is a non-GAAP measure. Refer to Westpac’s Interim 2014 Results (incorporating the requirements of Appendix 4D) for the half year ended 31 March 2014 available at www.westpac.com.au for details of the basis of preparation of cash earnings. Refer to Appendix 1 for a reconciliation of reported net profit to cash earnings. Inf ormati on cont ai ned i n or oth erwi se accessibl e th rough th e web sit es men tione d in this presen ta tion does no t form par t o f the presentati on unl ess we specifi ca lly s ta te tha t the in forma tion is incorporated by reference thereby forming part of the presentation. All references in this presentation to web sites are inactive textual references and are for information only. Disclosure regarding forward-looking statements This presentation contains statements that constitute “forward-looking statements” within the meaning of Section 21E of the US Securities Exchange Act of 1934. The forward-looking statements include statements regarding our intent, belief or current expectations with respect to our business and operations, market conditions, results of operations and financial condition, including, without limitation, future loan loss provisions, indicative drivers, forecasted economic indicators and performance metric outcomes. We use words such as ‘will’, ‘may’, ‘expect’, 'indicative', ‘intend’, ‘seek’, ‘would’, ‘should’, ‘could’, ‘continue’, ‘plan’, ‘probability’, ‘risk’, ‘forecast’, ‘likely’, ‘estimate’, ‘anticipate’, ‘believe’, or similar words to identify forward-looking statements. These statements reflect our current views with respect to future events and are subject to change, certain risks, uncertainties and assumptions which are, in many instances, beyond our control and have been made based upon management’s expectations and beliefs concerning future developments and their potential effect upon us. Should one or more of the risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from the expectations described in this presentation. Factors that may impact on the forward-looking statements made include those described in the section entitled ‘Risk factors’ in Westpac’s Interim Financial Report for the half year ended 31 March 2014 available at www.westpac.com.au. When relying on forward-looking statements to make decisions with respect to us, investors and others should carefully consider such factorfactorss and other uncertainties and events. We are under no obligation, and do not intend, to update any forward-looking statements contained in this presentation.

Westpac Group | May 2014 | European Investor Roadshow 2 INDEX 1H14 HIGHLIGHTS 4 AUSTRALIAN HOME LENDING 20 ECONOMICS 28 SECURED FUNDING 40 ADDITIONAL INFORMATION 50 APPENDICES 60 Another quality financial performance from Westpac

% Change 1H14 Cash earnings results 1H14 Strong financial performance Net interest margin (%) 1H14 – 1H13 Cash earningg($)s ($m) NIM Financial results (A$m) NIM excl. Treasury and Markets 3,772 Cash earnings 3,772 8 3,508 3,555 Reported net profit after tax 3,622 10 2.19 2.12 2.11 NtNet operati ng i ncome 98599,859 5 2.06 2.06 Expenses 4,065 6 2.01

Impairment charges 341 (22)

1H13 2H13 1H14 H10 H10 H11 H11 H12 H12 H13 H13 H14 Financial metrics 11 22 11 22 11 22 11 22 11

Cash earnings per share 121.3c 7 Portfolio quality continues to improve Net interest margin 2.11% (8bps) Impairment charges to average gross loans annualised (%) Expense to income ratio 41.2% 35bps 73 Cash earnings return on equity 16.5% 43bps

Asset quality 33 31 31 30 Net write-offs to avg loans annualised 22bps 1bp 23 22 24 24 19 17 19 19 17 15 12 Total impaired assets to gross loans 51bps (31bps)

Total provisions to gross loans 67bps (13bps) 2002 2003 2004 2005 2006 2007 2008 2009 2010

Impairment provisions to impaired assets 46.4% large 1H11 2H11 1H12 2H12 1H13 2H13 1H14

Westpac Group | May 2014 | European Investor Roadshow 4 Westpac has clear strategic priorities...

...managed in a balanced way Remain strong

TtdthTargeted growth Strength Return A strong company Maintain discipline Capital within Maintain strong ROE preferred range Maintain dividend path Target stable funding ratio >75% Customer relationships

Productivity Growth Sector leading Investment driven Maintain expense to Higher growth in target Materially simplify income ratio segments, including below peers Deposits, Asia, SME, Trade and Natural Resources

One team

Westpac Group | May 2014 | European Investor Roadshow 5

Strategy delivering growth in targeted areas

Aust. housing growth vs system (times) Customer deposits ($bn) Customer numbers (#m)

Westpac RBB St.George 0.9x 383 389 0.8x 0.8x 360 348 6.13 6.17 6.22 0.7x

3223.22 3263.26 3.55

3Q13 4Q13 1Q14 2Q14 2H12 1H13 2H13 1H14 1H13 2H13 1H14

FUA2 and FUM3 ($bn) Insurance premiums ($m) WIB trade finance volumes ($bn)

FUA FUM Life in-force premiums Asia Australia General gross written premiums 104 108 7.1 97 685 734 93 635 89 86 601 5.5 76 68 3.9 3.3

186 198 218 227

2H12 1H13 2H13 1H14 2H12 1H13 2H13 1H14 2H12 1H13 2H13 1H14

1 RBA Financial Aggregates March 2014. 2 Funds under administration. 3 Funds under management.

Westpac Group | May 2014 | European Investor Roadshow 6 Strong portfolio of brands

All comparisons to 1H13

Westpac Retail & Business • 1H14 cash earnings $1,251m Contribution to Cash Earnings (%) Banking

• Up 10% on 1H13

ss Australian retail and business Westpac Retail & • Strong franchise; lending up 4%, banking for consumers, SMEs and Business Banking deposits up 8%, as the division tilts to 3 commercial customers under the 2 33 St.George Banking growth Westpac brand Group BT Financial Group St.George Banking Group • 1H14 cash earnings $772m 10

cial Service Australian retail and business • Up 12% on 1H13 Westpac Institutional nn banking under the St.George, Bank • Each brand contributing positively; 20 BankSA, Bank of Melbourne and solid revenue growth; decline in 20 Westpac New Zealand RAMS brands impairment charges 12 Westpac Pacific BT Financial Group • 1H14 cash earnings $438m Wealth division with $82bn funds Group (inc. Treasury)

stralian Fina • Up 21% on 1H13 under management an d $107bn

Au • Funds management earnings up 28%; funds under administration at 31 strong insurance flows in life and March 2014 general insurance Market share at 31 March 2014 (%)

Australia Westpac Institutional Bank • 1H14 cash earnings $752m al n n LLdiAtlieading Australasian itittilinstitutional • DD4%1H13own 4% on 1H13 Household deposit market share1 23% bank, with branches and • Underlying business continues to representative offices in Australia, perform well; customer revenue up Housing credit market share2 23% NZ, US, UK and Asia 3%; strong contribution from markets 2 Institutio businesses Business credit market share 19%

Wealth platforms market share 3 20% Westpac New Zealand • 1H14 cash earnings NZ$432m Banking and wealth services to • Up 17% on 1H13 New Zealand consumers, businesses and • Improving asset quality driving lower NZ Household deposit market share4 21% institutions in New Zealand impairment charges; lending up 6%, deposits up 8% Consumer lending market share4 20%

1 APRA Banking Statistics. 2 Reserve Bank of Australia. 3 Plan for Life December 2013, All Master Funds Admin. 4 Reserve Bank of New Zealand.

Westpac Group | May 2014 | European Investor Roadshow 7 Improving balance sheet momentum

Australian private sector credit growth (% ann) Net loans ($bn)

Housing Total credit Business 11 6 565 25 4 16 7 20 f/cs 521 end 15 '15 10 Up 8% 5

0

-5 1H13 Aust. Aust. Aust. NZ (A$) Overseas 1H14 -10 Housing Business Personal & Jan-94 Jan-98 Jan-02 Jan-06 Jan-10 Jan-14 other Sources: RBA, Westpac Economics

Australian household savings rate (% income) Customer deposits ($bn) Customer deposits at 1H14 (%)

% income 15 383 389 12 360 25 42 9

6 18 U8%Up 8% 3 15

0 Term deposits Savings -3 Dec-89 Dec-93 Dec-97 Dec-01 Dec-05 Dec-09 Dec-13 1H13 2H13 1H14 Online Transaction Sources: ABS, Westpac Economics

Westpac Group | May 2014 | European Investor Roadshow 8 Setting Westpac apart – Domestic customer focus,,y efficiency and balance sheet stren gth

Clear focus on Australia and New Zealand Brands supporting targeted growth Wealth penetration2 leads sector (%)

1 Total income by geography (%) Australian Financial Services Brands rank #1 and # 3

2 4 Asia, Pacific, 21.9% 10 17 9 15 WRBB Europe & 8 19.5% Americas 15 SGB New Zealand P1Peer 1 16. 1% 88 87 76 14.3% 67 WIB Westpac NZ Peer 2 14.1% Australia Peer 3

Westpac Peer 1 Peer 2 Peer 3 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14

Leader in efficiency Risk management a competitive advantage Capital level strong relative to peers

Expense to income ratio3 (%) Impairment charges to average loans Common equity ratio3 (APRA Basel III) (%) 47. 0 annualised3 (p)(bps)

44.3 8.8 42.6 8.5 8.6 21 20 8.3 41.2 16 12

Westpac Peer 1 Peer 2 Peer 3 Westpac Peer 1 Peer 2 Peer 3 Westpac Peer 1 Peer 2 Peer 3

1 Source: Company Annual Reports. Westpac, Peer 1 and Peer 3 as at 30 September 2013. Peer 2 as at 30 June 2013. 2 See Appendix 4 for Wealth penetration metrics definition and provider details 3. Source: Company reports. Westpac , Peer 1 and Peer 3 as at 31 March 2014, Peer 2 as at 31 December 2013.

Westpac Group | May 2014 | European Investor Roadshow 9 Fully harmonised common equity tier 1 capital ratio at the upper end of global peers

Global peer comparison of Basel III pro-forma common equity tier 1 capital ratios1 (%)

15.0 14.7

13.9 13.6

12.8

11.9 11.9 11.8 11.4 11.3 11.1 10.9 10.7 10.5 10.5 10.5 10.4 10.4 10.4 10.3 10.3 10. 0 9.8 9.7 9.7 9.5 9.5 9.3 9.3 9.1 9.0 8.9 8.8 8.8 8.6 8.6 8.3 8.1 8.3 8.1 7.9 … nB VA BS EB BS BS BA NZ AB nk EN BC UN der rgo orp cial yds ova ank ank ank pac ank ank ank ank SA IBC KIR dea oup real ular ular rale HK tixis tixis lays lays nley nley ibas t aa t D t c D t c S r n A r a BB S r n A r a RR BB UU DD CC NN n n o S C o S C b r b e r e p p e p p e aa c a c B B B a B B B B B B B B B B NN B CC B Ll O N No Bar TD TD Wes Citig Santa Wells F US Ban Royal B Royal BNP Pa Danske Bank of PNC Fina Commerz Banco Po Banco Po Dah Sing Deutsche Morgan Sta Macquarie Bank of Mon Bank of Hang Seng Societe Gen Bank of Chin Bank of Credit Agricol

1 Company data, Credit Suisse estimates (based on latest reporting data as at April 2014. Australian banks based on 1H14 results.

Westpac Group | May 2014 | European Investor Roadshow 10 Capital strength maintained1

Key capital ratios (%) Mar-13 Sept-13 Mar-14 Common equity tier 1 capital ratio (% and bps)

Common eqqyuity tier 1 ca pital ratio 8.7 9.1 8.8 40 11.26 Additional tier 1 capital 2.1 1.6 1.5 73 24 107 Tier 1 capital ratio 10.8 10.7 10.3 8.82 Tier 2 capital 1.7 1.6 1.8

Total regulatory capital ratio 12.5 12.3 12.1 244bps

Risk weighted assets ($bn) 308 307 322 31 Mar 14 Concessional Mortgage LGD IRRBB RWA Other 4 31 Mar 13 Common equity tier 1 capital ratio 2 11.4 11.6 11.3 APRA Basel III thresholds floor (min 20% BCBS Basel III (BCBS2) v 10%)

Common equity tier 1 capital ratio3 (%) Common equity tier 1 capital ratio (% and bps)

9.1 11.26 888.8 878.7 117 (85) 8.4 9.10 (37) (18) 8.3 8.74 7 (2) 8.82 8.2 (10) 7.7 7.5 7.3 7.4 7.2 6.7 696.9 2 Other Lloyds Lloyds Cash RWA Special BCBS dividend Earnings Basel III Basel III Basel III benefit 31 Mar 14 Mar 14 31 31 Mar 13 31 30 Sep 13 30 movement SGB tax tax SGB dividend Jun-13 Jun-12 Jun-11 Mar-14 Mar-13 Mar-12 Mar-11 Sep-13 Sep-12 Dec-12 Sep-11 Dec-11 Dec-10 consolidation Final ordinary Final ordinary

1 All capital ratios and risk weighted assets disclosed in this presentation are calculated on a Westpac Level 2 consolidated basis. 2 BCBS is Basel Committee on Banking Supervision. 3 All numbers prior to March 2013 on a pro-forma Basel III basis. 4 Other includes the treatment of specialised lending.

Westpac Group | May 2014 | European Investor Roadshow 11 Capital well positioned for D-SIB capital requirement

• On 23 December 2013, APRA issued an information paper which Westpac’s capital base – Identified the four major Australian banks as domestic systemically important banks (D-SIB) – Provided detail of the additional higher loss absorbency requirements for D-SIB 12.1% as a buffer Total regulatory capital ratio • D-SIB requirement of 1% is to be met by common equity tier 1 capital (CET1) • IlImplemen ttifthDtation of the D-SIB i s throug h an extitension of fthitl the capital conservati on 1. 8% / $5. 7bn Tier 2 buffer (CCB) effectively increasing the buffer above regulatory minimums • The CCB and D-SIB buffer will commence on 1 January 2016 1.5% / $4.8bn AT1 8.0 % • Westpac is currently reviewing its preferred capital range Regulatory minimum (effective Jan 2016) Common APRA Requirement Tier 1 Total Capital 8.8% Equity Implementation 3.5% D-SIB HLA + $28.5bn Capital Common Equity Minimum 4.5% 6.0% 8.0% 1 Jan 2013 Conservation Tier 1 Buffer Capital Conservation 2.5% 1 Jan 2016 Buffer (CCB)

D-SIB requirement 1.0% 1 Jan 2016 4.5% Common Equity Countercyclical Buffer 0% - 2.5% 1 Jan 2016 Tier 1

Total Capital 8.0%-10.5% 9.5%-12.0% 11.5%-14.0% Requirement

Leverage Ratio 3% 1 Jan 2018 APRA regulatory minimums Westpac 1H14

Westpac Group | May 2014 | European Investor Roadshow 12 Asset growth funded through stable sources

• Stable Funding Ratio 83% at 1H14, down 45bps (up 24bps Funding composition by residual maturity (%) 1H13/1H14) – GthifdithhtblGrowth in funding through stable sources o f cus tomer depos its and term wholesale funding Stable Funding Ratio 64% 83% 84% 83% – Average tenor of new term funding 4.9 years - a very stable source of funds for the bank

• Customer depp$,osits increased $6bn, with the increase in term fundin g 777Wholesale Onshore <1yr providing scope to manage deposit quality 16 9 10 10 Wholesale Offshore <1yr – Preferred household deposits up $7bn (4.4%) with growth in this segment 1.0x system1 Wholesale Onshore >1yr 20 • Short term funding increased $6bn 5 5 5 Wholesale Offshore >1yr – Supporting an increase in short dated assets, mainly growth in 10 9 9 2 2 Securitisation trade finance in Asia and Australian 2 7 4 7 7 – Weighted average maturity of the short term portfolio has Equity 3 remained around 141 days 10 1 Customer deposits • Balance sheet well positioned for start of Liquidity Coverage Ratio 5 (LCR)

59 61 60 44

FY08 2 1H13 2H13 1H14

1 APRA Banking Statistics March 2014. 2 2008 does not include St.George. 3 Equity excludes FX translation, Available-for-Sale Securities and Cash Flow Hedging Reserves.

Westpac Group | May 2014 | European Investor Roadshow 13 Strong liquidity position maintained

• $127bn in unencumbered liquid assets held at 31 March 2014 Liquid assets ($bn) – Securities are eligible for repo with a central bank and proposed Committed Liquidity Facility (CLF) 127 Self securitisation 126 – Sufficient to cover all short term debt outstanding (including long 111 term debt with a residual maturity less than one year) • Westpac is well positioned for the introduction of the LCR 54 58 Private securities 45 – APRA w ill app ly the LCR throug h APS210 f rom 1 J anuary 2015 andtd government guaranteed paper1 – The LCR is intended to improve the resilience of banks against 28 26 45 30 108 potential short-term stress Cash, government and semi- – It requires banks to hold 100% of their net cash outflows over a 38 44 43 30-dayygyq() horizon in High Quality Liquid Assets (HQLA) government bonds 36 7 – In addition, APRA has stated that a suitable buffer would be in FY082 1H13 2H13 1H14 Short term the range of 10-15% of net cash outflows outstanding debt 1H14 3 • As insufficient HQLA are available in Australia to meet the LCR requirement, a CLF will be provided by APRA and the RBA – The CLF allows banks to access a specified amount of liquidity (approved by APRA) through repo arrangements with the RBA, for a 15bps fee – The CLF is available only to address a shortage of HQLA in Australian dollars – APRA has yet to finalise the CLF limit for Westpac

1 Private securities include Bank paper, RMBS, and Supra-nationals. 2 2008 does not include St.George. 3 Includes long term wholesale funding with a residual maturity less than 1 year.

Westpac Group | May 2014 | European Investor Roadshow 14 New term issuance well diversified

Term debt issuance and maturity profile1,2 ($bn) Lowest short term funding of peers

Covered Bond Hybrid Senior Govt Guaranteed Sub Debt Short term funding3,4 ($bn ) Short term funding to total funding including equity3,4 (%) 45 43 Issuance Maturities 24 33 21 18 170 17 153 25 23 23 24 22 20 20 119 15 108 11

FY09 FY10 FY11 FY12 FY13 1H14 2H14 FY15 FY16 FY17 FY18 >FY18 West pac Peer 1 Peer 2 Peer 3

1H14 new term issuance composition1 (%) Australian covered bond issuance5

By type By tenor By currency Issued ($bn) % Capacity utilised Remaining capacity (8% cap & 5 overcollateralisation) ($bn) 49 4 5 19 23 2 43 11 4 40 36 26 29 24 32 22 58 25 52 39 16

15 20 19 Senior unsecured Covered bonds 2 Years 3 Years 14 AUD USD EUR JPY Other RMBS ABS 5 Years >5 years Peer 1 Peer 2 Peer 3 Westpac Peer 1 Peer 2 Peer 3 Westpac Subordinated debt

1 Based on residual maturity and FX spot currency translation. Includes all debt issuance with contractual maturity greater than 13 months, excluding US Commercial Paper. 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. Perpetual sub-debt has been included in >FY18 maturity bucket. Maturities exclude securitisation amortisation. 3 Includes long term wholesale funding with a residual maturity less than 1 year. 4 Short term funding includes Central Bank deposits and long term wholesale funding with a residual maturity less than 1 year. Source: Westpac, Company reports. Westpac and Peer 1 as at 31 March 2014, Peer 2 as at 31 December 2013 and Peer 3 as at 30 September 2013. 5 Sources: Westpac, APRA Banking Statistics March 2014.

Westpac Group | May 2014 | European Investor Roadshow 15 Significant improvement in asset quality

Stressed exposures as a % of TCE1 (%) and provisions ($m) Stressed exposures by industry ($bn)

Impaired (lhs) 4.5 1H13 2H13 1H14 90+ days past due well secured (lhs) Watchlist & substandard (lhs) 4.0 IAP (rhs) 3.5 4.0 Total Provisions (rhs) 5,500 3.0 CAP (inc. economic overlay) (rhs) 5,000

3.17 3.20 2.5 3.09 4,500 3.0 2.85 4,000 2.0

2.48 3,500 1.5 2.26 2.17 2.06 2.07 3,000 2.18 1.94 1.0 2.0 2.23 1.66 2,500 1145.45 1160.60 1.26 0.5 1.24 1.37 1.27 1.03 2,000 0.0 0.85 1,500 1.0 0.75 0.46 0.51 Other sale & sale & torage

0.41 ts Mining 0.36 , cafes 0.40 cturing y & y & urance estry & & estry ervices ervices l Trade Utilities lending truction t t e s 0.35 e s i i nn r r

0.35 nn 0290.29 1,000 aa ss s s 0.29 0.31 SS 0.28 Reta Cons Whol

0.68 500 Retail

0.67 fishing Proper 0.63 Manuf 0.50 0.57 0.62 0.60 0.58 0.56 0.44 0.34 business 0.0 0 & restaura Transport & 1H09 2H09 1H10 2H10 1H11 2H11 1H12 2H12 1H13 2H13 1H14 Finance & in Agriculture, fo Accommodatio

1 TCE is Total Committed Exposures.

Westpac Group | May 2014 | European Investor Roadshow 16 Australian mortgage delinquencies at low levels

Delinquencies Australian mortgages delinquencies and loss rates (%)

• Sustained period of low interest rates and a continued conservative 90+ Past Due Total 90+ First Home Buyer approachth to d ebt btb by borrowers has suppor te d very s trong cre dit 90+ Investor 30+ Past Due quality Loss Rates 3.0 • 90+ days delinquencies remain low at 50bps, down 3bps (down 8bps 1H13/1H14) 2.0 • 30+ dayyqs delinquencies 128b p,pp(pps, up 8bps (down 15bps 1H13/1H14 ) reflecting normal seasonal trends for the first half 1.0 Properties in possession - • Properties in possession 189 at March 2014, down from 353 at September 2013 (248 at March 2013) ec-11 ec-12 ec-13 ep-09 ep-10 ep-11 ep-12 ep-13 ep-08 Jun 10 Jun 09 Jun-11 Jun-12 Jun-13 Mar-10 Mar-11 Mar-09 Mar-12 Mar-13 Mar-14 Dec 09 Dec 10 Dec 08 SS SS SS DD SS DD SS DD SS • Represents <2bps of the portfolio Loss rates Australian mortgage 90+ days delinquencies (%) • Portfolio losses of $45m represent an annualised loss rate of 2bps (net of insurance claims1) 1.5 ALL NSW/ACT VIC/TAS • Loss rates remain very low by international standards due to sound QLD WA SA/NT underwriting standards, high levels of borrower equity, mortgage 1.0 insurance and active collections strategies

0.5

0.0 Jun-13 Jun-12 Jun-11 Jun-10 Jun-09 Mar-14 Mar-13 Mar-12 Mar-11 Mar-10 Mar-09 Sep-13 Dec-13 Sep-12 Dec-12 Sep-11 Dec-11 Sep-10 Dec-10 Sep-09 Dec-09

1 Mortgage insurance claims 1H14 $3m (2H13 $14m, 1H13 $10m).

Westpac Group | May 2014 | European Investor Roadshow 17 High quality Australian mortgage portfolio

1H13 2H13 1H14 1H14 Australian housing portfolio Australian housing loan-to-value (LVR) ratios (%) Balance Balance Balance Flow1 100 1H14 drawdowns LVR at origination TtlTotal portf tfli($b)olio ($bn) 321. 9 328. 5 338. 0 33. 1 90 Portfolio LVR at origination Owner-occupied (%) 48.1 47.9 47.6 47.7 80 Portfolio dynamic LVR2,3,4 Investment property loans (%) 42.2 43.1 44.0 49.2 70 60 Portfolio loan/line of credit (%) 9.7 9.0 8.4 3.1 50 VViblt/Fidariable rate / Fixed ra t(%)te (%) 85 / 15 81 / 19 84 /1/ 16 76 / 24 40 Low Doc (%) 5.2 4.7 4.2 1.0 30 Proprietary channel (%) 58.2 58.0 55.3 55.7 20 10 First Home Buyer (%) 11.7 11.4 10.9 7.6 0 MtMortgage i nsured d(%) (%) 24. 4 23. 3 22. 2 13. 5 0<=60 60<=70 70<=80 80<=90 90<=95 95+ 1H13 2H13 1H14 Average LVR at origination (%) 69 69 69 Australian housing portfolio by State (%)

8 Average dynamic2,3,4 LVR (%) 48 46 47 Australian banking system 50 Total portfolio (all brands) Average LVR of new loans5 (%) 70 72 72 1H14 drawdowns (all brands) Average loan size ($’000) 219 221 223 40

Customers ahead on 30 repayments, including offset 70 71 73 accounts2,6 (()%) 20 Actual mortgage losses 52 43 45 (net of insurance)7 ($m) 10

Actual mortgage loss rate 3 3 2 - annualised (bps) NSW & ACT VIC & TAS QLD WA SA & NT

1 Flow is all new mortgage originations total settled amount originated during the 6 month period ended 31 March 2014 and includes RAMS. 2 Excludes RAMS. 3 Dynamic LVR represents the loan-to-value ratio taking into account the current outstanding loan balance, changes in security value and other loan adjustments. 4 Property valuation source Australian Property Monitors. 5 Average LVR of new loans is based on rolling 6 month window for each half year period. 6 Customer loans ahead on payments exclude equity/line of credit products as there are no scheduled payments. 7 Mortgage insurance claims 1H14 $3m (2H13 $14m, 1H13 $10m). 8 ABA Cannex February 2014.

Westpac Group | May 2014 | European Investor Roadshow 18 Mortgage customers continuing to repay ahead of schedule

• Australian mortgage customers continue to display a cautious Australian home loan customers ahead on repayments1,2 (%) approach to debt levels, taking advantage of historically low mortgage rates to pay down debt Mar-13 Sep-13 exc. mortgage offset accounts – Including mortgage offset account balances, 73% of customers Mar-14 are ahead of scheduled payments, with 21% of these being more 50 Mar-14 inc. mortgage offset accounts than 2 years ahead 40 Ahead on repayments – Excluding mortgage offset account balances, 56% of Australian 30 mortttgage customers are ah hdfhdldtead of scheduled payments 20 • Sound underwriting criteria underpin the Group’s very low level of residential mortgage arrears and losses 10

• Credit policies are broadly aligned across brands and all credit 0 decisions are made byyg the Westpac Group, regardless of the Behind On Time < 1 Month < 1 Year < 2 Years > 2 Years origination channel • Loan serviceability assessments include an interest rate buffer, Aust. mortgage offset Australian mortgage1 balance growth ($bn) adequate surplus test and discounts to certain forms of income account balances ($bn) (e.g. dividends, bonus or rental income)

• Westpac has a minimum assessment rate, often referred to as a floor 15. 2 (6.7) 20. 8 31.9 (15.1) rate, currently set at 6.80% p.a. across all brands (12.8) 312.5 (3.5) 321.5 • In the current interest rate environment, the minimum assessment rate is at least 185bps higher than the standard lending rate 1H14 2H13 External External refinance Contract Redraw/ Redraw/ repayments repayments repayments repayments Accelerated New lending New Interest/fees Interest/fees other runoff 1H09 2H09 1H10 1H11 2H11 1H12 2H12 1H13 2H13 1H14 Property sales & Property 1 Excludes RAMS. 2 Customer loans ahead on payments exclude equity loans/line of credit products as there is no scheduled principal payments. ‘Behind’ is more than 30 days past due. ‘On time’ includes up to 30 days past due.

Westpac Group | May 2014 | European Investor Roadshow 19 AUSTRALIAN HOME LENDING Housing activity responding to lower rates

Housing finance approvals: value of housing finance ($bn/mth) Housing credit: rate cut cycles compared (index)

'upgraders', ex-refinancing investor finance first home buyers current 2008-09 2001-02 1996-97 AUDbn/mth AUDbn/mth Index* 1990-93 1987-88 1983-84 Index* 12 12 160 *index based to 100 in month 160 10 last 5yrs 10 150 prior to first rate cut 150 8 8 140 140

6 6 130 130 120 120 4 4 110 110 2 2 100 100 0 0 90 90 FbFeb-92 FbFeb-97 FbFeb-02 FbFeb-07 FbFeb-12 0 3 6 9 12 15 18 21 24 27 months Sources: ABS, Westpac Economics. Sources: RBA, Westpac Economics.

Dwelling prices: Australia capital cities (index) House affordability: all dwellings (%)

index index % % Sydney Perth Melbourne Brisbane %income required to service mortgage 140 140 40 deteriorate 40 of 75% median dwelling , all regions

130 130 35 35 improve 30 30 120 120 10yr avg 25 25 long run avg 110 110 20 20 100 100 estimates based on 15 15 capital cities prior to 1993 90 90 10 10 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Mar-79 Mar-84 Mar-89 Mar-94 Mar-99 Mar-04 Mar-09 Mar-14

Sources: RP Data-Rismark, Residex, Westpac. Sources: RP Data-Rismark, Residex, ABS, RBA, Westpac Economics.

Westpac Group | May 2014 | European Investor Roadshow 21 Australian housing market fundamentals sound

Rental vacancy rates (%) Population versus dwelling stock (annual average change ‘000)

Australia Sydney Melbourne population dwelling stock*

% % ’000 6 6 400

* net of demolitions – implied by Census data to 2006; Westpac 350 investor 5 5 housing

300

4 4 250

3 3 200

150 2 2

100

1 1 50

0 0 0 Mar-84 Mar-89 Mar-94 Mar-99 Mar-04 Mar-09 Mar-14 1950s 1960s 1970s 1980s 1990s 2000s last 3 years

Sources: REIA, Westpac Economics. Sources: ABS, Westpac Economics.

Westpac Group | May 2014 | European Investor Roadshow 22 A more cautious approach to household leverage by Australian households

Australian households: debt to income ratio (%) Pressure easing on existing borrowers (%)

accumulated savings since Jun-07 debt serv ratio (mortgagors, lagged 6mths , rhs) arrears rate (lhs) * total (gross) debt % % % % housing debt 180 180 2.2 24 total debt net of deposits* *% of securitised loans in arrears, by trend since Jun-07 value, including self-securitised loans WBC 160 160 202.0 forecasts 22

140 *direct holdings of cash 140 and deposits 1.8 20 120 120 1.6

100 100 –25pts since 18 peak 1.4 80 80 1.2 16 60 60 = 52.9% 1.0 40 40 ~20pts 14 elsewhere? 0.8 20 20 12 0 0 0.6

-20 -20 0.4 10 Mar-77 Mar-87 Mar-97 Mar-07 Jan-96 Jan-99 Jan-02 Jan-05 Jan-08 Jan-11 Jan-14

Sources: ABS, RBA, Westpac. Sources: ABS, RBA, Standard & Poor's, Westpac Economics.

Westpac Group | May 2014 | European Investor Roadshow 23 Australian mortgage market features underpin asset quality

Australian mortgage market Australian bank mortgage market share1 (%)

Market share • 4 major banks dominate - 84% share held • Major banks have a lower share of low doc market, with 16% Westpac (incl. St.George) low flow in this segment over recent years 25% CBA (incl. BWA) Lenders • Banks in Australia have full recourse to the borrower’s recourse mortgaged property and other assets and future earnings NAB • Banks can and do pursue defaulting borrowers for losses 15% ANZ • Reduces speculative buying behaviour Other banks Products • Majority of housing loans are variable rate (84%) • Fixed rate loans for short periods of time (max. 12 years) 17% 27% – in most cases customer opt for 3 to 5 years • Fixed rate borrowers generally incur a break fee if they choose to refinance within the fixed period • Interest rate buffers built into loan serviceability tests at 90+ day prime arrears by country2 (%) application; Interest-only loans assessed on a full P&I basis Australia UK US Netherlands • Interest payments on primary residence are not tax 404.0 deductible, provides incentive to pay off mortgage 3.0

Regulation • For mortgage insured loans, mortgage insurance covers 2.0 the entire loan

• Strict prudential supervisisupervisionon provided by one national 1.0 regulator, APRA 0.0 Performance • Australian 90+ day prime arrears at low levels - absolutely and relative to other major economies Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13

1 Source: APRA Banking Statistics February 2014. 2 Source: S&P and Bloomberg.

Westpac Group | May 2014 | European Investor Roadshow 24 Australian investment property portfolio performing well

• Investment property loans (IPLs) 44% of Loan-to-value ratio at origination1 (%) Applicants by gross income band1 (%) Westpac’s Australian mortgage portfolio

• 46% of IPL loans originated at 75-80% LVR , to 50 Owner Occupied IPL 25 Owner Occupied IPL maximise tax benefits and avoid mortgage insurance costs 40 20 IPL average • Majority of IPLs are interest-only, however the 30 dynamic LVR1 51% 15 actual amortisation profile closely tracks the principal and interest portfolio 20 10 – 41% of interest-only IPL customers ahead on 10 5 repayments • Compared to owner-occupied applicants, IPL 0 0 applicants on average are older, have higher 97+ 1m+ 0-60

incomes and higher credit scores 60-70 70-75 75-80 80-85 85-90 90-95 95-97 0<=50 5<=100 0<=125 5<=150 0<=200 0<=500 50<=75 00<=1m 77 00 22 55 00 55 • Spec ific cre dit po lici es appl y to IPL s to ass ist 1 1 1 2 risk mitigation, including – Holiday apartments subject to tighter IPL1 portfolio (%) 90+ days delinquency by customer type1 (%) Loss rates1 (bps) acceptance requirements

– Additional LVR restrictions apply to single By customer type All 11.0 industry towns Non-IPL • IPL delinquency performance historically better Mix (IPL & Owner Occ.) Multi (More than 1 IPL)2 than portfolio average 28 1.0 Single IPL 2.2 3.1 – At 1H14, IPL 90+ days delinquencies were 48 1.2 39bps compared to 50bps for total portfolio 25

ll 1 0.5 .. o o • IPL losses $22m in 1H14 , representing an o o annualised loss rate of 3bps Single IPL • Self-managed Super Fund balances a very small 0.0 portfolio part of the portfolio, at <1% of Australian Mix (IPL & Owner Occ.) 1H14 tota portfolio mortgage balances Multi (>1 IPL) Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 (last recession) recession) (last Sep-10 Sep-11 Sep-12 Sep-13 1H14 Owner 1H14 Owner Occ 1H14 IPL portfoli 1992 total portfoli

1 Excludes RAMS. 2 The average number of securities for multi-IPL customers is two.

Westpac Group | May 2014 | European Investor Roadshow 25 Lenders mortgage insurance managing risk transfer

• Lenders mortgage insurance (LMI) provides benefits to the Westpac Group Lenders mortgage insurance structure at 31 March 2014 – Risk transfer / loss mitigation LVR ≤80% and Low Doc – Improvement in the quality of risk acceptance via the additional 77.8 LVR ≤60% not insured layer of independent review provided by the mortgage insurers • New mortgages with origination LVR between 80-90% (or 60-80% for Low Doc)1 are generally covered by Westpac Lenders Mortgage LVR >80% to ≤ 90% and 12. 2 Insurance (WLMI) , Westpac’ s captive lenders mortgage insurer . A Low Doc LVR >60% to ≤ 80% 10. 0 LVR >90% portion of that portfolio (60%) is subsequently reinsured via a quota insured through captive LMI 3 insured externally share arrangement External Mortgage Insurance In-house mortgage • Quota reinsurance arrangements through four providers further Westpac channel through QBE LMI insurance reduces risk by not relying on a single supplier St.George and RAMS through WLMI Genworth • Mortgages with origination LVR >90% are insured with third parties • WLMI provides the Westpac Group with an increased return on the Quota share reinsurance mortgages it insures through the capture of underwriting profit 60% risk transferred through quota share 40% risk retained by WLMI • WLMI is strongly capitalised (separate from bank capital) and subject with Genworth Australia, QBE LMI, Arch Re and Tokio Millennium to APRA regulation . Capitalised at 1. 31x PCR2 • Scenarios confirm sufficient capital to fund claims arising from events of severe stress – estimated losses for WLMI from a 1 in 200 year 1H13 2H13 1H14 event are $204m (net of re-insurance recoveries). This is lower compared to 2H13 in line with reductions in WLMI’s portfolio Insurance claims ($m) 10 14 3

WLMI loss ratio4 (%) 30 39 10

Gross written premiums ($m) 25 25 24

1 Limited waivers of the LMI requirement are provided to certain approved borrowers. Waivers are not provided to Low Doc borrowers. 2 Prudential Capital Requirement (PCR) determined by APRA. 3 Insured coverage is net of quota share. 4 Loss ratio is claims over the total of earned premium plus reinsurance rebate plus exchange commission.

Westpac Group | May 2014 | European Investor Roadshow 26 Mortgage portfolio stress testing outcomes

• Westpac regularly conducts a range of portfolio stress tests as part Australian mortgage portfolio stress testing as at 31 March 2014 of its regulatory and risk management activities • The Aus tra lian mor tgage por tfoli o s tress t esti ng scenari o present ed 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, resulting in a material increase in unemployment and nationwide falls in property Portfolio size ($bn) 338 326 320 318 and other asset prices Unemployment rate (%) 5.8 11.6 10.6 9.4 • Estimated Australian housing portfolio losses under stress conditions are manageable and within the Group’s risk appetite and Interest rates (cash rate, %) 2.5 1.25 1.25 1.25 capital base House prices – Cumulative total losses of $2.2bn over three years for the 0.0 -13.0 -22.4 -26.2 uninsured portfolio ((g% change cumulative) – Cumulative claims on LMI, both WMLI and external insurers, of Annual GDP growth (%) 2.8 -3.9 -0.2 1.7 $765m over the three years Key outcomes • Westpac’s captive mortgage insurer, Westpac Lenders Mortgage Insurance (WLMI), separately conducts stress testing to ensure it is Stressed losses ((p)bps) 2 26 32 7 sufficiently capitalised to cover mortgage claims arising from a (net of LMI recoveries)1,2 stressed mortgage environment • Preferred capital ranges incorporate buffers at the Westpac Group level that consider the combined impact on the mortgage portfolio and WLMI of severe stress scenarios

1 Assumes 30% of LMI claims will be rejected in a stressed scenario. 2 Stressed loss rates are calculated as a percentage of mortgage exposure at default.

Westpac Group | May 2014 | European Investor Roadshow 27 ECONOMICS Australian and New Zealand economic forecasts

Calendar year Key economic indicators1 (%) as at April 2014 2012 2013 2014f 2015f World GDP 3.2 2.9 3.2 3.8 Australia GDP 3.6 2.4 2.7 3.0 Private consumption 2.5 2.0 3.0 3.2 BiBusiness inves tmen t232,3 16. 4 –232.3 –404.0 –303.0 Unemployment – end period 5.4 5.8 6.5 6.3 CPI headline – year end 2.2 2.7 2.4 2.5 Interest rates – cash rate 3.0 2.5 2.5 3.0 Credit growth, Total – year end 3.6 3.9 6.0 7.0 Credit growth, Housing – year end 4.5 5.4 7.2 7.5 Credit growth, Business – year end 2.9 1.7 4.0 5.5 New Zealand GDP 1.2 2.7 4.0 3.2 Unemployment – end period 6.8 6.0 5.1 4.7 Consumer prices 0.9 1.6 1.5 2.7 Interest rates – official cash rate 252.5 252.5 3753.75 454.5 Credit growth – Total 3.6 4.8 5.2 5.1 Credit growth – Housing 3.7 5.9 5.3 4.9 Credit growth – Business 3.5 3.4 5.2 5.5

1 Source: Westpac Economics . 2 GDP and component forecasts updated following the release of quarterly national accounts. 3 Business investment adjusted to exclude the effect of private sector purchases of public assets.

Westpac Group | May 2014 | European Investor Roadshow 29 Australia remains well-placed relative to developed economies

Net public debt levels as a % of GDP 2012 Real GDP growth (%)

% 120 Australia UK Canada US Euro

100 Australian Government % growth, year-ended 80 including 6 60 2014/15 forecasts

40 4 20

0 NZ UK US 2 Aus Italy Italy Spain France ermany ermany Canada GG

Sources: IMF, budget papers, Westpac Economics . 0 Australia’s economy: diversified and flexible

Sector contribution to GDP (%)1 Manufacturing -2 Construction 6 8 Mining 12 9 Rural -4 Utilities & transport 6 12 Wholesale & retail 3 Property, business services -6 Finance 3 11 Communications 8 Household services -8 Education & health 13 10 Dec-97 Dec-01 Dec-05 Dec-09 Dec-13 Government

Sources: ABS, Westpac Economics. Sources: OECD, Westpac Economics.

1 Excludes ownership of dwellings and taxes less subsidies.

Westpac Group | May 2014 | European Investor Roadshow 30 Australia’s economic transition from mining to non-mining

Australian growth mix: Contributions to GDP growth (%) Investment: share of Australian economy (% of GDP)

2012 2013 2014f 2015f mining, CAPEX housing investment ppts ann% % of GDP % of GDP business investment (ex mining) 4 4 14 14 f/cs end 2015 12 12 3 3

10 10 2 2

8 8

1 1

6 6

0 0 4 4

* includes housing -1 -1 2 2

-2 -2 0 0 Consumer* Mining inv. Business Net Exports GDP Dec-89 Dec-93 Dec-97 Dec-01 Dec-05 Dec-09 Dec-13 investment

Sources: ABS, Westpac Economics. Sources: ABS, Westpac Economics.

Westpac Group | May 2014 | European Investor Roadshow 31 Commodity cycle evolves

Committed Australian projects and mining investment ($bn) Commodity prices (index)

committed i nvest ment (lh s) bulks* (lhs) exchange traded* (rhs)

$bn BREE* most likely projection $bn index index 300 120 mining capital expenditure (rhs) 680 Westpac forecasts 350 *Bureau of Resources 250 and Energy Economics 100 580

300 200 80 480

250 150 60 380

200 100 40 280

150 50 20 180 *bulk s inc lu des iron ore an d coa l. exchange traded includes rural, crude oil, base metals & gold. 0 0 80 100 2002/03 2006/07 2010/11 2014/15 2018/19 Apr-03 Apr-05 Apr-07 Apr-09 Apr-11 Apr-13

Sources: BREE, ABS, Westpac Economics. Sources: Westpac Economics, Bloomberg, ABS.

Westpac Group | May 2014 | European Investor Roadshow 32 Cash rate expected to remain stable at 2.50%; AUD expected to trend lower over medium term

Major countries’ policy rates (%) Australian dollar (AUD/USD)

Australia UK Canada US Euro fair value band* AUD/USD actual & forecast

% USD USD 8 1.20 1.20 *based on commodity prices, 2yr swap spread, Fore- and external debt 7 1.10 casts 1.10

6 1.00 1.00

5 0.90 0.90

latest: 4 0.80 0.92 0.80

3 0.70 0.70

2 0.60 0.60

1 0500.50 0500.50

0 0.40 0.40 Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13 Apr-14 Apr-91 Apr-95 Apr-99 Apr-03 Apr-07 Apr-11 Apr-15

Sources: RBA, OECD, Westpac Economics. Sources: RBA, Westpac Economics.

Westpac Group | May 2014 | European Investor Roadshow 33 Labour market showing some signs of improvement in early 2014

Unemployment rates (%) Cumulative change in industry employment (‘000)

household services mining Australia Canada UK US Euro ‘000 construction goods distribution 500 % 400 14 300

200

100 12 0

-100

10 -200 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Sources: ABS, Westpac Economics

8 Cumulative change in industry employment (‘000)

business services public admin manufacturing other ‘000 500 6 400

300

200 4 100

0

2 -100 Mar-98 Mar-02 Mar-06 Mar-10 Mar-14 -200 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14

Sources: OECD, Westpac Economics. Sources: ABS, Westpac Economics

Westpac Group | May 2014 | European Investor Roadshow 34 Credit growth picking up at a modest pace

Business confidence and consumer confidence (net balance) Australian private sector credit growth (% ann)

Consumer (lhs) Business * (rhs) Housing Total credit Business

net bal. net bal. % ann % ann 25 25 monthly f/cs 130 30 end '15 20 20 120 20

15 15 110 10

10 10 100 0

5 5 90 -10

0 0 80 -20

* rebased to avg 0 70 -30 -5 -5

60 -40 -10 -10 Apr-02 Apr-06 Apr-10 Apr-14 Jan-94 Jan-98 Jan-02 Jan-06 Jan-10 Jan-14

Sources: Westpac MI, NAB, Westpac Economics. Sources: RBA, Westpac Economics

Westpac Group | May 2014 | European Investor Roadshow 35 Chinese growth remains a positive for Australia

• As a $US7 trillion economy, China grew at 10%. As a $US10 trillion Real GDP %ann 2012 2013 2014f 2015f economy, Westpac expects China to grow at 7% China 7.7 7.7 7.3 7.6 • Represents an equivalent incremental contribution to global absorptive capacity, at higher levels of energy, protein, metal and consumer goods demand per head Chinese real GDP increments: 4 scenarios (% of 2012 GDP) • Were China to slow immediately to a 5% pace (a big downside shock that we do not envisage), it would still double its 2012 size by 2025 % of 2012 GDP % of 2012 GDP 35 35 • Chinese authorities have shown a clear commitment to maintaining growth 8% CAGR above 7% but will be less tolerant of strong credit driven expansions – the double digit growth rates that have featured regularly over the past 20 History & 7% CAGR 30 30 years are now unlikely to occur 6% CAGR • Australia’s economic linkages with China continue to grow, led by trade 5% CAGR 25 25 – China now accounts for over 25% of Australia ’ s exports – Investment, tourism and migration flows also significant. Tourism arrivals from China are now 11% of all arrivals, with a CAGR of 13.1% 20 20 between 2005 and 2013, against total arrivals growing at 1.9%. China was Australia's third largest source of foreign direct investment in the latest financial year. 15 15 • Australia will continue to benefit as Chinese households progressively expand their living standards and their consumption basket 10 10

5 5

0 0 1993 1998 2003 2008 2013 2018 2023 2028

Source: Westpac Economics.

Westpac Group | May 2014 | European Investor Roadshow 36 Chinese growth remains a positive for Australia

China’s share of selected elements of world activity (%)

% 1980 2000 2010 25

20

15

10

5

0 Household Gross fixed Exports 1 Imports 1 Manufacturing Construction Services value PPP GDP Nominal USD CO2 emissions 2 Energy use 3 consumption capital formation value added value added added GDP

Sources: UN, IMF, IEA, Westpac Economics. All national accounts related shares are in 2005 constant US dollars. 1 Goods & services. 2 From fossil fuel combustion. 3 Total primary energy supply.

Major countries nominal export shares (% GDP) Chinese imports – total and key primary products (index)

% GDP index Total imports index 2000 2007 2011 Ex China, nominal national 800 800 60 accounts basis for goods and CrudeCrude oiloil services. For China, goods 700 Iron ore 700 50 only, value-added estimates. 600 Food 600 40 500 500 Value of total imports and 30 400 food and volume of non-food 400 raw materials. 300 300 20 200 200 10 100 100 0 0 0 AUD FRA DEU JPY KRW SEK TKL GBP USD BRL INR CNY Jan-01 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13

Source: CEIC, OECD, Westpac Economics, Dragonomics. Source: CEIC, Westpac Economics.

Westpac Group | May 2014 | European Investor Roadshow 37 A strong economic picture in New Zealand

• The New Zealand economy is experiencing a strong upturn driven New Zealand GDP growth and forecast (%) by earthquake-related construction activity, last year’s rise in house prices, a four decade high in the terms of trade, and buoyant % % 7 7 business investment activity. Annual economic growth is expected Westpac to peak at around 4%. 6 forecast 6 5 5 • Post-earthquake reconstruction in Canterbury is now in full swing, 4 4 and residential construction activity is also ramping up in Auckland. 3 3 • The s trong economy i s s tarti ng t o provok e d omesti tiifltic inflation 2 2 pressures – construction costs in particular are starting to rise. 1 1 0 0 • Rising interest rates and the unwind of the Canterbury rebuild are -1 -1 expected to cause slower economic growth over the second half of -2 -2 this decade. -3 -3 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 Source: Statistics NZ, Westpac Economics

Earthquake-related construction activity in Christchurch ($bn)

$bn $bn 1.6 1.6 Residential 1.4 Estimate Forecast 1.4 Commercial 1.2 1.2 Infrastructure 1.0 1.0 0.8 0.8 0.6 0.6 0.4 0.4 0.2 0.2 0.0 0.0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Source: Westpac Economics

Westpac Group | May 2014 | European Investor Roadshow 38 New Zealand housing market beginning to slow

• House price inflation peaked at 10% in 2013, but is now slowing. New Zealand house price inflation (annual %) Westpac is forecast 5.5% house price inflation in 2014, and 1% in ann % ann % 2015. 30 30 • Since 1 October 2013 the Reserve Bank has required banks to limit Westpac 20 20 high-LVR lending to just 10% of total new mortgage lending. forecast Turnover of smaller houses fell sharply, and house prices stagnated in early-2014. However, there is tentative evidence that prices have 10 10 subsequently resumed their upward trajectory. • Higher fixed mortgage rates are also affected the housing market. 0 0 Financial markets moved last year to price in a substantial OCR hiking cycle. -10 -10

• Offsetting these negative forces, net immigration is booming. The -20 -20 rate of population growth is expected to rise to rise to 1. 6% in 2014, 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 up from 0.7% in 2012. Source: QV, Statistics NZ, Westpac Economics

New Zealand Official Cash Rate (%) % 9 8 7 6 Westpac forecast 5 4 3 2 1 0 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017

Source: RBNZ, Westpac Economics

Westpac Group | May 2014 | European Investor Roadshow 39 SECURED FUNDING

COVERED BONDS AND SECURITISATION Covered bonds offer diversity

• Westpac issues covered bonds through its US$40bn covered bond Covered pool highlights (as at 31 March 2014) programme Total pool loan balance A$25,338,692,789 – West pac al so mai nt ai ns RCB/N -bon d capa bility Average loan size A$240,956 – Westpac Securities New Zealand EUR5billion covered bond programme is separate, and guaranteed by Westpac New Zealand Weighted average current LVR (unindexed/indexed) 61.0% / 58.8% Limited as well as the covered bond guarantor Weighted average seasoning 55 months • A$$,19.3bn of covered bonds issued since November 2011, with Owner occupied security 76.0% benchmark transactions in US, EUR and AUD Moody’s collateral score1 7.3% • In Australia, covered bond issuance is capped at 8% of Australian Moody’s market risk / collateral risk1 10.7% / 4.9% assets Min. overcollateralisation required (Fitch/Moody’s) 11.7% / 7.8% – Limits balance sheet encumbrance Min. WBC rating to maintain AAA (Fitch/Moody’s) A+ / A3 – 40% of Westpac’s covered bond capacity utilised (including over- collateralisation) Westpac covered bond maturity profile – Weighted average tenor is 5.5 years for issuance since October as at 31 March 2014 (A$bn) 2011 to 31 March 2014 for the Australian covered bond programme – Maturity profile well managed, with view to maintaining capacity 5.6 4.6 4.1

3.0 202.0

< 1 yr 1yr - 2yrs 2yr - 3yrs 3yr - 4yrs 4yr - 5yrs 5yr - 10yrs > 10 yrs 1 The collateral score is Moody’s opinion of how much credit enhancement is needed to protect investors from the credit deterioration of assets in a cover pool in order to reach a theoretical Aaa expected loss, assuming those assets are otherwise unsupported. The higher the credit quality of the cover pool, the lower the collateral score. Source: Moodys Covered Bond Programme Performance Overview 31 December 2013

Westpac Group | May 2014 | European Investor Roadshow 41 Westpac Covered Bond Programme

Issuer Westpac Banking Corporation

Issuer rating AA-/Aa2/AA- by S&P / Moody’s / Fitch

Format Legislative Covered Bond

Covered Bond rating Aaa / AAA by Moody’s / Fitch

Programme size US$40 billion

MtMatur ity opti ons SftSoft and dHdBllt Hard Bullet

Covered Bond Guarantor Westpac Covered Bond Trust, a special purpose vehicle (trust)

Covered Bond Guarantor has guaranteed payments of interest and principal under the Covered Bonds Covered Bond Guarantee secured over the Mortgage Loans and its other assets (limited in recourse to its assets)

LVR cap in asset coverage 80% (subject to indexation) test

Asset percentage Subject to rating agency requirerequirementsments, programme maximum 95%

Collateral Prime Australian residential mortgages

Listing London Stock Exchange

Westpac Group | May 2014 | European Investor Roadshow 42 Programme features

Covered Bonds are issued by Westpac, backed by an unconditional and irrevocable guarantee by the Covered Structure Bond Guarantor (the “CBT Guarantor”), which is limited in recourse to the assets in the Westpac Covered Bond TtTrust

Security comprises a pool of Australian residential mortgages which meet the eligibility criteria (the “cover pool”). It also includes certain other assets such as cash and investments (subject to legislative and rating agency limits). Security Mortgages in the cover pool sold to the CBT Guarantor to ensure that covered bondholders have a priority claim over the cover pool in the event of Issuer insolvency

Prior to service of a Notice to Pay on the CBT Guarantor, an Asset Coverage Test will be run monthly to ensure the CBT Guarantor has sufficient assets to support the outstanding covered bonds. Defaulted loans will have nil value applied to them and remainin g loans ad justed b y the Asset Percenta ge. The Asset Percenta ge will be confirmed b y Overcollateralisation the rating agencies quarterly and is subject to a maximum of 95%, which represents a minimum level of overcollateralisation of just over 5%. Following service of a Notice to Pay on the CBT Guarantor, an Amortisation Test is run monthly to ensure the CBT Guarantor has sufficient assets to meet the covered bond obligations

PricewaterhouseCoopers monitors the calculation of the Asset Coverage Test and the Amortisation Test on at least an annual basis. Asset Monitor They also provide the asset monitor reporting requirements in relation to the legislation on at least a six monthly basis. This includes verification of the asset register and provision of any other information APRA requires

The Total Return Swap and Covered Bond Swap will be used to hedge any exposure of the CBT Guarantor to Hedging interest rate and currency risks

Westpac Group | May 2014 | European Investor Roadshow 43 Westpac cover pool

Covered Bond Pool eligibility criteria Covered pool loan statistics as at 31 March 2014

At the time of sale, each loan: Total pool loan balance1 A$25, 338, 692, 789 • Is denominated and payable only in AUD in Australia • Is secured by a mortgage that constitutes a first ranking Australian mortgage Number of loans 105,159 (second allowed as long as first held with the CBT Guarantor) Average loan size A$240,956 • Is secured by a mortgage over a property which has erected on it a residential dwelling Max loan size A$2,000,000 • Was approved and originated by the seller in the ordinary course of business • Is a loan under which the outstanding principal balance owed by the borrower Weighted average current LVR (unindexed) 61% is not more than AUD$2,000,000 • Is a loan under which the relevant borrower is required to repay the loan Weighted average current LVR (indexed) 58.8% within 30 years of the relevant cut-off date Mortgage Insured 14.8% • Is not a delinquent mortgage or a defaulted loan and no legal demand has been served on the relevant borrower in respect of a payment on the loan 90 day + arrears 0.01% • The sale of an interest in, or the sale of an interest in any related security, does not contravene or conflict with any law Weigggghted average seasoning 55 months • The relevant borrower is a resident of Australia • Not a loan with an interest only payment period of >10 years Weighted average remaining term to maturity 274 months

• The related mortgage has been or will be stamped Weighted average interest rate 5.3% • Where applicable, all progress drawings have been made by the borrower andthd the res idtildidential dwelli ng has been comp ltdleted; an d Fixed / floating split (by bal) 18.6% / 81.4% • The borrower has made at least one monthly payment or two fortnightly payments in respect of the loan Interest only (by bal) 26.9%

Owner occupied security 76.0%

1 Pool loan balance excludes cash balances of A$4,661,307,211. Loans included in the cover pool are currently only originated by Westpac Retail and Business Banking.

Westpac Group | May 2014 | European Investor Roadshow 44 Cover pool statistics as at 31 March 2014

Loan to value ratio by balance (%) Geographic distribution by state

40 Current LVR (unindexed) Current LVR (indexed)

30

20 Northern Territory $258.0m, Queensland 10 1.0% $3,466.0m, 13.6%

Western Australia South Australia 0 $3,309.8m, 13.1% 0-50% 50-55% 55-60% 60-65% 65-70% 70-75% 75-80% 80-100% > 100% $1,256.6m, 5.0% New South Wales $9,227.7m, 36.4%

Portfolio seasoning Australian Capital Territory 30 20,000 % of pool by balance (lhs) Victoria $676.0m, 2.7% 18, 000 $6, 839. 9m 25 Number of loans (rhs) 16,000 27% Tasmania 20 14,000 $304.5m, 1.2% 12,000 15 10,000 8,000 10 6,000 % of pool by 4,000 Dis tr ibuti on b y regi on VlValue of fl loans (A$ (A$)m) 5 value 2,000 - 0 Metropolitan 19,835 78.3% < 6 1yr - 2yrs - 3yrs - 4yrs - 5yrs - 6yrs - 7yrs - 8yrs - 9yrs - > 10 6Mth mths - 2yrs 3yrs 4yrs 5yrs 6yrs 7yrs 8yrs 9yrs 10yrs yrs 1yr Non-Metropolitan 5,503 21.7%

Westpac Group | May 2014 | European Investor Roadshow 45 Cover pool statistics as at 31 March 2014 (cont.)

Mortgage principal balance distribution Interest rate split (%)

% of pool (lhs) Number of loans (rhs) 30 30,000 18.6 25 25,000 20 20,000

15 15,000 Fixed 10 10, 000 Floating 5 5,000 - -

81.4 > 1.5m - 1.5m 0-100K 00-300k 00-400k 00-500k 00-750k 50k -1m 00-200k mm 1 22 33 44 55 77 1

Years to maturity (legal) Interest only expiry date remaining period

% of pool by balance (lhs) Number of loans (rhs) % of interest only loans by balance (lhs) Number of loans (rhs) 100 100, 000 90 90,000 40 10,000 80 80,000 8,000 70 70,000 30 60 60,000 6,000 50 50,000 20 40 40,000 4,000 30 30, 000 10 20 20,000 2,000 10 10,000 - 0 - 0 < 1 yr 1yr - 5yrs 5yrs - 10yrs > 10 yrs < 6 mths 6 mths - 1yr - 2yrs 2yrs - 3yrs 3yrs - 4yrs 4yrs - 5yrs > 5 yrs 1yr

Westpac Group | May 2014 | European Investor Roadshow 46 Securitisation an important part of the Group’s funding

• Securitisation is an important part of the Westpac has been a consistent RMBS issuer Group’s funding – A$11.5bn in outstanding issuance at 31 Original RMBS and ABS issuance by calendar year (A$bn) March 2014, represents 2% of the Group’s total funding, mostly RMBS 10 WST Crusade A$1.2bn Auto ABS in WST Trust Dec 2012 - first for a Series 2013-1, issuance 9 major Australian bank A$2.1bn in Feb 8 2013, and – Provides additional diversity to funding 8.3 WST Trust 7 2013-2 in Oct and investor base 7.0 Westpac re-opens 6 domestic RMBS 2013 $A2.25 – Only major Australian bank to have an 5 5.7 5.9 market with first 5.7 major bank deal active Auto ABS capability 4 since 2009 4.4 4.4 – Westpac’s RMBS and Auto ABS 3 transactions have been well supported 2 1 191.9 2.0 bthAby the Aus tlidtralian domes tic mar ktket, as 1.0 1.1 1.2 1.0 well as offshore investors - 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 • Westpac has outstanding securitisation transactions under both the WST and Crusade programmes Post St.George merger Minimal changes to Lloyd’s Bella securitisations Following the completion of the acquisition of Capital Finance – Westpac Securitisation Trust (WST) • Securitisation management and Australia Limited ("CFAL") and the Bella securitisations on 31 Programme is Westpac’s programme for execution integrated into one team securitising Westpac-originated December 2013 as part of acquisition of Lloyds Banking Group’s • Crusade RMBS Programme is Australian business, it is intended that the only changes to the residential mortgages currently in run off existing Bella securitisations will be: – Crusade Programme is Westpac’s • Crusade ABS platforms and • The interest rate swaps have been novated to Westpac Banking vehicle for securitising St.George infrastructure utilised for Auto ABS Corporation originated residential mortgages and • New securitisation RMBS pools • The Trust Manager has been replaced with Westpac auto loans currently sourced solely from Securitisation Management Limited ("WSM"). WSM also Westpac originated mortgage – Bella securitisation programme acquired manages Westpac's WST RMBS programme, the Crusade ABS pools (auto) programme and Westpac's covered bond programme 31 December 2013

Westpac Group | May 2014 | European Investor Roadshow 47 WST RMBS performance

Key pool comparison statistics (issuance) High quality product

WST WST WST WST WST WST WST 2013-2 2013-1 2012-1 2011-3 2011-2 2011-1 2009-1  All WST transactions backed by prime Pricing Date Sep-13 Feb-13 May-12 Oct-11 Jun-11 Feb-11 Dec-09 residential mortgages

Tranche A A A A A A A  Consistently outperforms both the Australian Prime SPIN Index WAL (yrs) 3.0 3.0 3.0 3.0 2.9 2.9 2.6  Consistent pool characteristics and Price (bps) 85 85 140 125 100 100 130 transaction structures Notes Issued A$m 2,070 1,932 1,058 1,472 2,024 920 1,840  Low LVRs Average Loan Size A$'000 256 245 211 251 243 270 198  Long seasoning Wtd Avg LVR 62% 61% 63% 63% 63% 64% 58%

LVR > 80% 10.8% 6.4% 3.1% 1.9% 2.3% 1.4% 0.5% Performance of Avg WST vs the Major Max LVR 95% 94.6% 94.4% 95% 95% 95% 93% Bank Prime SPIN 4 Wtd Avg Seasoning mths 37.1 45.4 42.0 37.0 35.8 30.2 39.7 WST Arrears

Low Doc Loans 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% SPIN 3 Major Bank SPIN Interest Only Loans 24.3% 9.6% 5.1% 6% 5% 4% 25% Regional Bank SPIN NSW & ACT 35.2% 36.2% 37.6% 40% 39% 43% 41% 2 VIC 26.6% 25.0% 25.5% 25% 25% 28% 24%

Metro / Non-metro 78%/22% 76%/24% 76% / 24% 77% / 23% 77% / 23% 86% / 14% 78% / 22% 1 LMI Coverage 13% 16% 19% 14% 16% 5% 6%

S&P Credit Support Pre-LMI (Old Criteria) - - - 3.6% 3.7% 3.2% 0 S&P Credit Support Pre-LMI (New Criteria 5.0% 4.3% 4.3% 4.4% 7.2% - - / RFC) Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Credit Support Provided 8.0% 8.0% 8.0% 8.0% 8.0% 8.0% 8.0% Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13

Source: Presales, Bloomberg, Westpac ABS Strategy Source: Standard and Poor’s RMBS Performance Watch

Westpac Group | May 2014 | European Investor Roadshow 48 Crusade ABS transaction comparison

• Crusade ABS – 100% auto receivables • Credit enhancement in excess of minimum required by rating agencies • Long seasoning • 12 month revolving period

Deal Crusade ABS 2013-1 Crusade ABS 2012-1 SMART 2013-3 REDS 2013-1 EHP Bella 2012-1 (Issue Date) (Dec 13) (Dec 12) (Sep 13) (May 2013) (May 2012) Size $1.0bn $1.2bn $500m $900m $453m ‘AAA’ Credit Enhancement 16% 15% 16. 5% 20% 23% Motor Vehicles: 83% Cars, Trucks, Buses: 53% Cars, Trucks, Buses: 64% Collateral Auto: 100% Auto: 100% Other: 17% Other: 47% Other: 36% Number of Contracts 52,309 59,609 15,410 16,199 13,048 W.A. Yield 11% 11% 8% 8% 9% W.A. Seasoning (mth) 22 19 9 18 15 W.A. Remaining term (mth) 39 41 44 34 37 W.A. Balloon 8% 8% 14% 13% 15% % of Pool with Balloon 31% 32% 49% 40% 53% New vs. Used New: 70% New: 69% New: 59% New: 62% New: 70%1 Used: 30% Used: 31% Used: 41% Used: 38% Used: 30%1 Average Loan Size A$ 19, 117 20, 131 32, 122 54, 864 34, 344 Max Loan Size A$ 240,946 262,970 901,527 867,594 780,586 Receivable Contracts Finance Lease 12% Finance Lease 12% Finance Lease 11% Finance Lease 7% Finance Lease 11% Goods Loan 15% Goods Loan 14% Goods Loan 49% Hire Purchase 22% Goods Loan 43% Specific Security Agreement Hire Purchase 5% Hire Purchase 8% Hire Purchase 7% Hire Purchase 35% 70% Consumer Finance 68% Consumer Finance 66% CL/LConsumer Loan / Lease 22% Nova te d Lease 12%

Lease Gov Status 11%

Adverse Credit History 0% 0% 0% 0% 0% Novated receivables 12% 12% 21% 0% 12%

1 Denotes the split of new and used Cars and Light Commercial Vehicles only (57% of the collateral pool)

Westpac Group | May 2014 | European Investor Roadshow 49 ADDITIONAL INFORMATION Limited asset encumbrance

• Westpac has limited asset encumbrance Westpac’s asset encumbrance • Covered bond capacity has legislated cap in Australia and New Zealand 100% 100.0% – In Australia, capped at 8% of Australian assets, providing $48bn total 90% 90.0% capacity (including 80% 80.0% overcollateralisation) 70% 70.0% – In NZ, capped at 10% of Westpac New Zealand Ltd assets, providing $7bn 60% 60.0% total capacity 50% 50.0% • RMBS and ABS are primarily issued at tenors that match the underlyyging assets 40% 40.0% (i.e. match funded) Total 11.0% 30% 30.0% (inc remaining • Covered bonds used mainly to access covered bond longer dated funding, with average issue 20% 20.0% capacity) tenor around 5 years 10% 10.0% Total 6.8 %

0% 0.0% Westpac Total Assets (1H14) Westpac Encumbered Assets 1H14 Loans - housing and personal

Loans - business Australia & NZ covered bond pools

Cash and balances with central banks Securitised mortgages

Receivables due from other financial institutions Auto loans

Trading securities, other financial assets at fair value & Assets purchased under agreement to resell available-for-sale securities Derivative financial instruments Remaining covered bond capacity (Aust. & NZ) Life insurance and other assets

Westpac Group | May 2014 | European Investor Roadshow 51 Tier 2 Capital comparison

Characteristic Basel III compliant Tier 2 Old-style Tier 2 (specifically Lower Tier 2)

Absor b l osses on a " gone Gone concern capital Gone concern capital concern" basis  

Non-discretionary, Must pay securities subject to solvency tests; deferred Must pay securities subject to solvency tests; deferred   cumulative payments payments accumulate with compounding payments accumulate with compounding

Minimum term of at least 5 years; straight line amortisation Minimum term of at least 5 years; straight line amortisation Minimum Term   over final four years over final four years

Call Right Can call after a minimum of five years with APRA's approval Can call after a minimum of five years with APRA's approval

Incentive to redeem No step-ups or other incentives to redeem early Step-up in margin permitted

Rank ahead of claims of ordinary shareholders and Rank ahead of claims of ordinary shareholders and hybrid Ranking in a Winding Up   Additional Tier 1 capital holders1 Tier 1 capital holders

• Conversion or permanent write-off in contractual terms • Conversion or write-off only after Additional Tier 1 (some or all as necessa ry to retu rn to viability) Not app licab l e. H ow ev er APRA has pow er s un der th e CiWitConversion or Write-Off at • Conversion is most likely principal loss absorption Banking Act to direct banks not to make payment on Lower Point of Non Viability (PONV)  mechanism due to tax inefficiencies of write-off alternative Tier 2 instruments • If Conversion is not possible, rights of Holders will be terminated • APRA notifies Westpac that it believes conversion or write-off or a public sector injection of capital (or equivalent support), is necessary because, without it, PONV Trigger Event  Westpac would become non-viable N/a • No explicit APRA guidance regarding likely triggers. Non viability could be expected to include serious impairment of financial position, insolvency, capital ratios and liquidity

1 APRA requires that new Basel III compliant Tier 2 instruments must be the most subordinated claim in a winding-up after Common Equity Tier 1 and Additional Tier 1 instruments. As Westpac has old-style perpetual "Upper Tier 2" instruments on issue that rank behind "old style" Lower Tier 2 instruments, any new Basel III Tier 2 instruments must rank equally with "old-style" Upper Tier 2 instruments. Once all "old style" Lower Tier 2 instruments have been redeemed all Tier 2 instruments will rank equally.

Westpac Group | May 2014 | European Investor Roadshow 52 Tier 2 Capital comparison1,2

US Canada UK Scandinavia Australia

Senior to Senior to Additional Senior to Additional Senior to Additional Senior to Additional Ranking Tier 1 Capital Tier 1 Capital Tier 1 Capital Tier 1 Capital Tier 1 Capital

Step-ups Not permitted Not permitted Not permitted Not permitted Not permitted

20% p.a. beginning 20% p.a. beginning 20% p.a. beginning 20% p.a. beginning 4 years prior to 5 years prior to 5 years prior to 5 years prior to 5 years prior to maturity on a Capital amortisation maturity (no credit maturity (no credit maturity (no credit maturity (no credit straight-line in final year) in final year) in final year) in final year) amortised basis

Tax Event / Tax Event / Tax Event / Tax Event / Tax Event / Early redemption Regulatory Event Regulatory Event Regulatory Event Regulatory Event Regulatory Event

Point of Non-Viability

RltRegulatory RltRegulatory RltRegulatory RltRegulatory Definition n.a. Discretion Discretion Discretion Discretion

Approach n.a Contractual Statutory Statutory Contractual

Disc losure n.a T&CditiTerms & Conditions Ris k fac tor Ris k fac tor T&CditiTerms & Conditions

Primary loss Conversion into ordinary Conversion into absorption n.a Write-down Write-down shares ordinary shares mechanism

1 Source UBS. 2 For Westpac, the rating for a Basel III compliant Tier 2 instrument is anticipated to be A3 (Moody’s)/BBB+ (S&P).

Westpac Group | May 2014 | European Investor Roadshow 53 High quality portfolio with bias to secured consumer lending

Asset composition as at 31 March 2014 (%)

Cash and balances with central banks Total assets On balance sheet lending

Receivables due from other financial institutions

Trading securities, financial assets at fair value and 4 Housing available-for-sale securities 18 Derivative financial instruments 11 Business 1 Loans Institutional 2 11 66 Life insurance assets 1 77 Other consumer 2 Goodwill 4 2 Other assets

Exposure by risk grade as at 31 March 2014 ($m) Standard and Poor’s risk grade Australia NZ / Pacific Asia Americas Europe Group % of Total AAA to AA- 82, 486 8, 747 844 6, 746 1, 048 99, 871 12% A+ to A- 29,924 5,219 6,547 2,442 1,637 45,769 5% BBB+ to BBB- 50,829 7,791 7,666 1,151 1,679 69,116 8% BB+ to BB 60,324 9,314 1,743 242 44 71,667 9% BB- to B+ 58,174 8,620 - 44 37 66,875 8%

1 Exposure by booking office.

Westpac Group | May 2014 | European Investor Roadshow 54 Diversification across industries and large exposures

Exposures at default1 by sector ($m) Top 10 exposures to corporations and NBFIs6 as a % of TCE5 (%)

Finance & insurance 2 Largest corporation/NBFI single name exposure represents less than 0.2% of TCE Property 3

2.0 2.0 1.9 Wholesale & Retail Trade 141.4 113.3 1.3 1.2 Manufacturing 1.1 1.1

Government admin. & defence

Property & business services FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 1H14 Services

Agriculture, forestry & fishing Top 10 exposures to corporations & NBFIs6 as at 31 March 2014 ($m)

Transport & storage 1H13 2H13 1H14 A- A Utilities A+

Construction 4 A A- Accommodation, cafes equivalent A & restaurants or gg BBB- Mining BBB-

Other BBB S&P ratin A- 0 20,000 40,000 60,000 80,000 100,000 0 300 600 900 1,200 1,500

1 Exposures at default represents an estimate of the amount of committed exposure expected to be drawn by the customer at the time of default. Chart 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 Includes St.George from 2009 onwards. 6 Non-Bank Financial Institutions.

Westpac Group | May 2014 | European Investor Roadshow 55 Commercial property portfolio performing well

Commercial property exposures size ($bn) and % of TCE Commercial property portfolio by sector and region (%)

18 Commercial property exposure ($bn) 9.6 10 9 16 9.1 Commercial Property as % of TCE 10 17 17 8.0 46 10 7.7 54 40 55 7.1 6.9 6.7 6.7 8 6.5 6.8 6.6 19 12 Update19 pie charts for 30 Sept 2013 6 9 5

7 63 61 56 Commercial offices & diversified groups Commercial offices & diversified groups 54 53 51 51 52 54 NSW & ACT VIC 7 50 48 9 7 Retail RetailQLD SA & NT NSW & ACT VIC Residential Residential WAQLD NZSA & Pacific & NT 10 -2 Industrial IndustrialInstitutionalWA NZ & Pacific 1H09 2H09 1H10 2H10 1H11 2H11 1H12 2H12 1H13 2H13 1H14 Institutional

Commercial property portfolio TCE classified as stressed (%) Commercial property markets

• Improvement in the commercial property market has been underpinned 15. 2 15. 5 by improved liquidity in the sector 13.7 • Investment market has remained very active over 1H14, with strong 12.5 11.7 interest in properties offering secure, long term cash flows from a 9.7 variety of buyers 7.7 • Leasing market has been more subdued, although signs of improving 6.4 demand are expected from mid 2014 4.5 • While investment activity has been strong and there is some evidence 3.0 of prime yields firming, capital growth overall remains low, with total returns continuing to be driven by income • While the availability of debt finance for commercial property has 2H09 1H10 2H10 1H11 2H11 1H12 2H12 1H13 2H13 1H14 improved, underwriting standards have remained diligent

Westpac Group | May 2014 | European Investor Roadshow 56 Australian unsecured lending portfolio performing well

• Unsecured consumer asset quality has Australian unsecured lending 90+ days delinquencies (%) remained strong as continuing low interest rates have assisted debt serviceability and CditdCredit cards Pll(lAtL)Personal loans (excl Auto Loans) the Group’s sound approach to credit 3.00 decisioning has been maintained Total unsecured lending Auto loans 2.50 • Overall Australian consumer unsecured delinquencies increased 9bps to 115bps 2.00 1.55 ((pdown 17bps 1H13/1H14 ) 1501.50 1.15 • Changes in delinquencies in 1H14 reflect 1.00 0.99 normal seasonal trends 0.93 0.50 • Australian credit card 90+ days delinquencies were up 6bps to 99bps (down - 13bps 1H13/1H14) Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 – Average payments to balance ratio continued to trend upwards, increasing Australian unsecured lending portfolio Australian credit card average 99bps to 48.7%, reflecting ongoing as at 31 March 2014 ($bn and %) payments to balance ratio1 (%) consumer caution towards debt Credit cards Personal Loans Auto Loans 48.7 • Australian personal loan portfolio (including auto loans) 90+ days delinquencies were up 21.7 11bps to 117bps (down 15bps 1H13/1H14) 7.4 – Auto loan portfolio increased to $7.4bn following acquisition of Lloyds 34 4.4.55 45 – Australian auto loan 90+ days 21 delinquencies were up 17bps to 93bps (down 7bps 1H13/1H14) 9.8

1H14 1H07 2H07 1H08 2H08 1H09 2H09 1H10 2H10 1H11 2H11 1H12 2H12 1H13 2H13 1H14

1 Cards average payments to balance ratio is calculated using the average payment received compared to the average statement balance at the end of the reporting month.

Westpac Group | May 2014 | European Investor Roadshow 57 Wholesale funding portfolio

• Westpac’s wholesale funding strategy is focused on diversity and Wholesale funding composition1 as at 31 March 2014 (%) flexibility • Able to issue in a broa d range o f forma ts, tenors an d currenc ies, 0 including covered bonds 2 3 15 • Westpac is the only Australian bank that is SEC registered 1 9 2 − A comparative advantage over peers − SEC reg itistere ddd dea ls are inc lddithidluded in the index; have grea ter 5 reach into investor base, including retail investors; deliver greater liquidity for investors and have a higher level of disclosure 23 requirements 11 − Westpac also maintains its ability to issue in US 144A format

14 15 Term wholesale funding by currency2 as at 31 March 2014 (%)

2 6 Domestic Certificates of deposits 8 AUD USD 32 Commercial Paper Medium term notes

EUR JPY 16 Covered bonds Securitisation

GBP Other Hybrids 144A SEC Registered Samurai 35 Interbank deposits Other

1 At FX spot currency translation. 2 Based on spot FX currency translation. Includes all debt issuance with contractual maturity greater than 13 months, excluding US Commercial Paper. USD issuance includes issuance in the US, Asia and other regions where USD buyers are located.

Westpac Group | May 2014 | European Investor Roadshow 58 Westpac – Australia’s First Bank

Westpac’s leading suite of brands and divisions Westpac balance sheet as at 31 March 2014 (A$) Total assets $734.2bn AtliFiilSiAustralian Financial Services Net loans $564.6bn Westpac Retail & St.George BT Westpac Westpac Westpac Business Banking Banking Financial Institutional New Pacific and Customer deposits $388.9bn Group Group Bank Zealand Group Equity $48.0bn Westpac market share as at 31 March 2014 (()%) Household deposit market share1 23% Housing credit market share2 23% Australia Business credit market share2 19% Wealth platforms market share3 20% Household deposit market share4 21% New Zealand Group (inc. Consumer lending market share4 20% Treasury) 0% Top 10 banks in Australia by total resident assets5 (A$) Australian Financial Westpac Pacific 2% Services, 66% Westpac Retail & Westpac Westpac New Business Banking Zealand 34% CBA 11% NAB Westpac: ANZ Contribution to Westpac St.George Macquarie Bank 1H14 NPAT Institutional Banking Bank Group Suncorp-Metway bdiiiby division (%) 21% 20% Bendigo and Adelaide Bank ING Bank (Australia) Bank of Queensland BT Financial Group HSBC Bank Australia 12% 0 200,000 400,000 600,000 800,000

1 APRA Banking Statistics 2 Reserve Bank of Australia. 3 Plan for Life June December 2013. 4. Reserve Bank of New Zealand 5. APRA Banking Statistics February 2014

Westpac Group | May 2014 | European Investor Roadshow 59 Appendix 1: Cash earnings adjustments

Cash earnings adjustment (A$m) 1H14 2H13 1H13

RtdNPATReported NPAT 36223,622 34643,464 32873,287

TPS revaluations - 1 8

Treasury shares 13 13 29

Ineffective hedges 17 3 (23)

Fair value gain/(loss) on economic hedges 46 (36) 57

Buyygback of government guaranteed debt (()30) -43

Fair value amortisation of financial instruments 9 35 32

Amortisation of intangible assets1 70 75 75

Acquisition transaction and integration expenses 25 - -

Cash earnings 3,772 3,555 3,508

1. The merger with St.George and the acquisition of JO Hambro Capital Management (JOHCM) and select businesses of Lloyds Banking Group (Lloyds) resulted in the recognition of identifiable intangible assets. These assets include intangibles related to core deposits , customer relationships , managementot of contracts and distribution relationships .

Westpac Group | May 2014 | European Investor Roadshow 60 Appendix 2: Cash earnings adjustments by segment

Westpac BT St.George Westpac Retail & Financial New Pacific Group 1H14 Segment Results (A$m) Banking Institutional Group Business Group Zealand Banking Businesses Group Bank Banking (Australia)

Reported NPAT 1,251 713 427 752 393 65 21 3,622

TPS revaluations ------

Treasury shares ------13 13

Ineffective hedges ------17 17

Fair value gain/(loss) on economic hedges ------46 46 and own credit

Buyback of government guaranteed debt ------(30) (30)

Fair value amortisation of financial ------9 9 instruments1

Amortisation of intangible assets2 -5911- -- -70

Acquisition transaction and integration ------25 25 expenses

Cash earnings 1,251 772 438 752 393 65 101 3,772

1 Amor tisati on of f ai r val ue adj ust ment s recogni sed on merger with St. George. 2 The merger w ith St. George an d the acqu is ition of JO H amb ro C ap ita l Managemen t (JOHCM) and select businesses of Lloyds Banking Group (Lloyds) resulted in the recognition of identifiable intangible assets. These assets include intangibles related to core deposits, customer relationships, management of contracts and distribution relationships.

Westpac Group | May 2014 | European Investor Roadshow 61 Appendix 3: CET1 APRA to BCBS Basel III reconciliation

• APRA has maintained the conservative stance adopted under its Basel II capital standards, resulting in a significant variance between capital measured under APRA and fully harmonised Basel III • Key differences in the calculation of CET1 capital ratios between APRA’ s Basel III and fully harmonised Basel III under BCBS are detailed below • In March 2014 the BCBS released a report on its assessment of Basel III regulations in Australia. No changes have been made to the fully harmonised Basel III calculations compared to prior periods. Any required changes will be made once APRA have clarified outstanding questions arising from this report

Common Description equity tier 1 ratio Westpac’s common equity tier 1 capital ratio under APRA Basel III 8.82%

Under BCBS, supervisors have the option of applying concessional thresholds when determining the capital requirements of deferred tax assets, investments in non-consolidated subsidiaries (NCS) and equity investinvestmentsments in commercial entities held in the banking book. Risk weighted asset treatments apply in lieu of common equity deductions if these items are individually less than 10% and together less than 15% of common equity. To the extent the amounts are greater than the concessional thresholds, common equity deductions apply

+107bps APRA has chosen not to apply this concessional treatment and requires a 100% deduction from common equity for deferred tax assets, investments in non-consolidated financial institutions, NCS, equity investments, and all under-writing positions in financial and commercial institutions held for more than 5 business days

Westpac’s common equity tier 1 capital ratio would increase if APRA applied concessional thresholds

Mortgage risk weights under APRA are based on a minimum loss given default (LGD) of 20%, whereas BCBS sets a minimum LGD of 10%. The actual LGD used must be supported by historical data but APRA’s higher minimum means that Australian mortgage risk weights are typically higher +73bps tthanhan tthosehose cacalculatedlculated ususinging tthehe lowerlower BCBSBCBS LGDLGD minimumminimum

APRA applies a risk weighted asset requirement to Interest rate risk in the banking book (IRRBB). This is not currently considered under BCBS +24bps standards Other differences, including treatment of specialised lending +40bps Westpac’s fully harmonised Basel III common equity tier 1 capital ratio under BCBS 11.26%

Westpac Group | May 2014 | European Investor Roadshow 62 Appendix 4: Definitions

Financial performance Asset quality

Core earnings Operating profit before income tax and impairment charges Stressed Stressed loans are Watchlist and Substandard, 90 days past due well loans secured and impaired assets AIEA Average interest earning assets Impaired assets can be classified as Net interest The difference between the average yield on all interest bearing spread assets and the average rate paid on all interest bearing liabilities 1. Non-accrual assets: Exposures with individually assessed impairment provisions held against them, excluding restructured loans Net interest Net interest income divided by average interest-earning assets 2. Restructured assets: exposures where the original contractual terms margin have been formally modified to provide concessions of interest or Impaired princ ipa l for reasons re la te d to the fi nanci al diffi cu lties o f the cus tomer Full-time A calculation based on the number of hours worked by full and assets 3. 90 days past due (and not well secured): exposures where contractual equivalent part-time employees as part of their normal duties. For example, payments are 90 days or more in arrears and not well secured employees the full-time equivalent of one FTE is 76 hours paid work per (FTE) fortnight 4. other assets acquired through security enforcement 5. any other assets where the full collection of interest and principal is in Data based on Roy Morgan Research, Respondents aged 14+. doubt Wealth penetration is defined as the number of Australians who have Managed Investments, Superannuation or Insurance with A loan facility where payments of interest and/or principal are 90 or more 90 days past each group and who also have a Deposit or Transaction Account, calendar days past due and the value of the security is sufficient to cover due - well Mortgage, Personal Lending or Major Card with that group as a the repayment of all principal and interest amounts due, and interest is secured proportion of the total number of Australians who have a Deposit or being taken to profit on an accrual basis Transaction Account, Mortgage, Personal Lending or Major Card Watchlist with that group. Home and Contents penetration is defined as the Loan facilities where customers are experiencing operating weakness and number of Australians who have Household Insurance (Building, and Wealth and financi al diffi cult y bu t are no t expec te d to incur loss o f in teres t or pri nc ipa l contents and valuable items) within the Group and who also have substandard Home and a Deposit or Transaction Account, Mortgage, Personal Lending or Contents Provisions raised for losses that have already been incurred on loans that Major Card with that group as a proportion of the total number of Individually Penetration are known to be impaired and are individually significant. The estimated Australians who have a Deposit or Transaction Account, Mortgage, assessed Metrics losses on these impaired loans will be based on expected future cash flows Personal Lending or Major Card with that group. 12 month provisions discounted to their present value and as this discount unwinds, interest will average to Sep 2013. WRBB includes Bank of Melbourne (until Jul or IAPs be recognised in the statement of financial performance 2011), BT , Challenge Bank , RAMS (until Dec 2011) , Rothschild , and Westpac. St.George includes Advance Bank, Asgard, Loans not found to be individually impaired or significant will be collectively BankSA, Bank of Melbourne (from Aug 2011), Dragondirect, Collectively assessed in pools of similar assets with similar risk characteristics. The size Sealcorp, St.George and RAMS (from Jan 2012). Westpac Group assessed of the provision is an estimate of the losses already incurred and will be includes Bank of Melbourne, BT, Challenge Bank, RAMS, provisions estimated on the basis of historical loss experience of assets with credit Rothschild, Westpac, Advance Bank, Asgard, BankSA, Barclays, or CAPs characteristics similar to those in the collective pool. The historical loss Dragondirect, Sealcorp and St.George experience will be adjusted based on current observable data

Westpac Group | May 2014 | European Investor Roadshow 63 Contacts

For further information For further information go to: www.westpac.com.au/investorcentre Curt Zuber Treasurer, Westpac Banking Corporation and click on ‘Fixed income investors’ +61 2 8253 4230 or visit our Bloomberg page ‘WBCT’ [email protected]

JDJoanne Dawson Deputy Treasurer, Westpac Banking Corporation +61 2 8204 2777 [email protected]

Guy Volpicella Executive Director, Structured Funding and Capital +61 2 8254 9261 [email protected]

Alexander Bischoff Director, Global Funding +61 2 8253 4314 [email protected]

Jacqueline Boddy Director, Debt Investor Relations +61 2 8253 3133 [email protected]

Westpac Group | May 2014 | European Investor Roadshow 64