WNZL Disclosure Statement – 30 September 2023

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ASX
Release


27 November 2023

Westpac New Zealand Limited Disclosure Statement

Westpac Banking Corporation (“Westpac”) today provides the attached Westpac New
Zealand Limited Disclosure Statement for the year ended 30 September 2023.










For further information:

Hayden Cooper Justin McCarthy
Group Head of Media Relations General Manager, Investor Relations
0402 393 619 0422 800 321


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



Level 18, 275 Kent Street
Sydney, NSW, 2000

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Classification: PROTECTED

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Westpac New Zealand Limited 3
Contents
Annual report5
Directors’ statement6
Financial statements
Income statement7Note 17 Deposits and other borrowings37
##T
Statement of comprehensive income7Note 18 Other financial liabilities38
Balance sheet8Note 19 Debt issues39
Statement of changes in equity9Note 20 Provisions40
Statement of cash flows10Note 21 Loan capital41
Note 1 Financial statements preparation11Note 22 Share capital42
Note 2 Net interest income14Note 23 Related entities43
Note 3 Non-interest income15Note 24 Derivative financial instruments46
Note 4 Operating expenses16Note 25 Fair values of financial assets and financial liabilities52
Note 5 Auditor’s remuneration16Note 26 Offsetting financial assets and financial liabilities56
Note 6 Impairment charges/(benefits)16
Note 7 Income tax expense17
Note 27 Credit related commitments, contingent assets and
contingent liabilities
58
Note 8 Imputation credit account17Note 28 Segment reporting59
Note 9 Trading securities and financial assets measured at FVIS18
Note 10 Investment securities18
Note 29 Securitisation, covered bonds and other transferred
assets
60
Note 11 Loans19Note 30 Structured entities61
Note 12 Provision for expected credit losses19Note 31 Capital management63
Note 13 Credit risk management27
Note 14 Other financial assets34
Note 32 Risk management, funding and liquidity risk and
market risk
64
Note 15 Deferred tax assets35Note 33 Notes to the statement of cash flows74
Note 16 Intangible assets36
Registered bank disclosures
i. General information75vi. Credit exposures to connected persons95
ii. Additional financial disclosures81
iii. Asset quality82
iv. Capital adequacy and regulatory liquidity ratios86
vii. Insurance business, securitisation, funds management,
other fiduciary activities, and marketing and distribution of
insurance products
96
v. Concentration of credit exposures to individual counterparties94viii. Risk management policies97
Conditions of registration
102
Independent auditor’s report108
Independent assurance report114

Glossary of terms
4 Westpac New Zealand Limited
Certain information contained in this Disclosure Statement is required by the Registered Bank Disclosure Statements (New Zealand Incorporated
Registered Banks) Order 2014 (as amended) (‘Order’).
In this Disclosure Statement, reference is made to:
– Westpac New Zealand Limited (otherwise referred to as the ‘Bank’);
– Westpac New Zealand Limited and its controlled entities (otherwise referred to as the ‘Banking Group’). Controlled entities of the Bank as at 30
September 2023 are set out in Note 23;
– Westpac Banking Corporation (otherwise referred to as the ‘Ultimate Parent Bank’);
– Ultimate Parent Bank and its controlled entities (otherwise referred to as the ‘Ultimate Parent Bank Group’); and
– New Zealand Branch of the Ultimate Parent Bank (otherwise referred to as the ‘NZ Branch’).
Words and phrases not defined in this Disclosure Statement, but defined by the Order, have the meaning given by the Order when used in this
Disclosure Statement.
The Disclosure Statement also uses the following terms as defined below.
ADIAuthorised deposit-taking institutionFitchFitch Ratings
ALCOAsset and Liability CommitteeFVIS
Fair value through income statement
ALMAsset and liability risk managementFVOCI
Fair value through other comprehensive income
AMAAdvanced Measurement ApproachFXForeign exchange
GSTGoods and services tax
ANZSIC
Australian and New Zealand Standard Industrial
Classification
IAPIndividually assessed provisions
APRAAustralian Prudential Regulation AuthorityICAAPInternal capital adequacy assessment process
IRBInternal Rating Based
APS 222
APRA’s Prudential Standard 222 Associations with
Related Entities
IRRBBInterest rate risk in the banking book
AT1Additional Tier 1 capitalLGDLoss given default
BKBMBank bill benchmark rateLVRLoan-to-value ratio
BoardBoard of Directors of the BankMoody'sMoody's Investors Services
BPRsBanking Prudential RequirementsNaRNet interest income-at-risk
BRCCBoard Risk and Compliance CommitteeNIINet interest income
BS13Reserve Bank document 'Liquidity Policy'
CAPCollectively assessed provisions
NZ IFRS
New Zealand equivalents to International
Financial Reporting Standards
CCCFACredit Contracts and Consumer Finance Act 2003OCIOther comprehensive income
CCFCredit Conversion Factor PDProbability of default
CGUCash generating unitPIEPortfolio investment entities
CREDCOCredit Risk CommitteeReserve BankReserve Bank of New Zealand
CRGCustomer risk gradeRISKCOExecutive Risk Committee
EADExposure at defaultRMBSResidential mortgage-backed securities
ECLExpected credit lossesRWARisk weighted assets
ELEExtended licensed entityS&PS&P Global Ratings
ESGEnvironmental, social and governanceSMESmall and medium-sized enterprises
SPPISolely payments of principal and interest
Financial
statements
Consolidated financial statements
VaRValue-at-Risk

Annual report
Westpac New Zealand Limited 5
Pursuant to section 211(3) of the Companies Act 1993, the shareholder of Westpac New Zealand Limited has agreed that the Annual Report of Westpac
New Zealand Limited need not comply with the requirements of paragraphs (a), and (e) to (j) of subsection (1) and subsection (2) of section 211.
Accordingly, there is no information to be included in the Annual Report other than the financial statements for the year ended 30 September 2023
and the independent auditor’s report on those financial statements.
For and on behalf of the Board of Directors:
P.M. Greenwood
Chair
24 November 2023
C.A. McGrath
Chief Executive
24 November 2023

Directors’ Statement
6 Westpac New Zealand Limited
Each Director of the Bank believes, after due enquiry, that, as at the date on which this Disclosure Statement is signed, the Disclosure Statement:
(a)contains all the information that is required by the Order; and
(b) is not false or misleading.
Each Director of the Bank believes, after due enquiry, that over the year ended 30 September 2023, except as noted on pages 80 and 106:
(a)the Bank has complied in all material respects with each condition of registration that applied during that period;
(b) credit exposures to connected persons were not contrary to the interests of the Banking Group; and
(c)the Bank had systems in place to monitor and control adequately the Banking Group’s material risks, including credit risk, concentration of
credit risk, interest rate risk, currency risk, equity risk, liquidity risk, operational risk and other business risks, and that those systems were
being properly applied.
This Disclosure Statement has been signed by all the Directors:
Philippa Greenwood
Catherine McGrath
David Green
Robert Hamilton
David Havercroft
Ian Samuel Knowles
Jonathan MasonChristine Parker
Michael Rowland
Dated this 24th day of November 2023

Income statement for the year ended 30 September 2023
Westpac New Zealand Limited 7
THE BANKING GROUP
$ millionsNote20232022
Interest income:
Calculated using the effective interest method2 6,116 3,704
Other2 127 37
Total interest income2 6,243 3,741
Interest expense2 (3,590) (1,450)
Net interest income 2,653 2,291
Non-interest income
Net fees and commissions3 234 252
Other3 14 16
Total non-interest income 248 268
Net operating income 2,901 2,559
Operating expenses4 (1,291) (1,131)
Impairment (charges)/benefits6 (135) 27
Profit before income tax expense 1,475 1,455
Income tax expense7 (416) (408)
Net profit attributable to the owner of the Bank 1,059 1,047
The above income statement should be read in conjunction with the accompanying notes.
Statement of comprehensive income for the year ended 30 September 2023
THE BANKING GROUP
$ millions20232022
Net profit attributable to the owner of the Bank 1,059 1,047
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Gains/(losses) recognised in equity on:
Investment securities
(3) (313)
Cash flow hedging instruments
1
(95) 288
Transferred to income statement:
Cash flow hedging instruments
1
32 236
Income tax on items taken to or transferred from equity:
Investment securities
1 88
Cash flow hedging instruments
18 (147)
Items that will not be reclassified subsequently to profit or loss
Remeasurement of defined benefit obligation recognised in equity (net of tax)
4 6
Net other comprehensive income/(expense) for the year (net of tax)
(43) 158
Total comprehensive income attributable to the owner of the Bank
1,016 1,205
1
Comparative amounts have been revised to align to the current year's basis of presentation. The restatement for 2022 comparatives results in a $208 million
increase in transferred to income statement and a corresponding decrease in gains/(losses) recognised in equity in relation to cash flow hedging instruments.
The above statement of comprehensive income should be read in conjunction with the accompanying notes.

Balance sheet as at 30 September 2023
8 Westpac New Zealand Limited
THE BANKING GROUP
$ millionsNote20232022
Assets
Cash and balances with central banks33 9,233 10,820
Collateral paid 33 42
Trading securities and financial assets measured at FVIS9 2,661 2,118
Derivative financial instruments 24 312 169
Investment securities10 6,651 5,623
Loans11, 12 99,328 96,882
Other financial assets14 314 263
Due from related entities23 2,578 2,606
Property and equipment 396 402
Deferred tax assets15 77 39
Intangible assets16 934 785
Other assets 123 69
Total assets 122,640 119,818
Liabilities
Collateral received 303 82
Deposits and other borrowings17 82,196 80,848
Other financial liabilities18 6,172 4,348
Derivative financial instruments 24 71 118
Due to related entities23 2,733 2,961
Debt issues19 18,597 19,933
Current tax liabilities 199 58
Provisions20 229 233
Other liabilities 330 374
Loan capital21 2,666 2,083
Total liabilities 113,496 111,038
Net assets 9,144 8,780
Shareholder's equity
Share capital22 7,300 7,300
Reserves 90 137
Retained profits 1,754 1,343
Total shareholder's equity 9,144 8,780
The above balance sheet should be read in conjunction with the accompanying notes.
Signed on behalf of the Board of Directors.
P.M. Greenwood
24 November 2023
J.P. Mason
24 November 2023

Statement of changes in equity for the year ended 30 September 2023
Westpac New Zealand Limited 9
THE BANKING GROUP
Reserves
InvestmentCash FlowTotal
Share SecuritiesHedgeRetainedShareholder's
$ millionsCapital ReserveReserve
1
ProfitsEquity
As at 30 September 2021 7,300 (60) 45 1,078 8,363
Year ended 30 September 2022
Net profit attributable to the owner of the Bank - - - 1,047 1,047
Net gains/(losses) from changes in fair value - (313) 288 - (25)
Income tax effect - 88 (81) - 7
Transferred to income statement - - 236 - 236
Income tax effect - - (66) - (66)
Remeasurement of defined benefit obligations - - - 8 8
Income tax effect - - - (2) (2)
Total comprehensive income/(expense) for the year
ended 30 September 2022 - (225) 377 1,053 1,205
Transactions with owner:
Dividends paid on ordinary shares (refer to Note 22) - - - (788) (788)
As at 30 September 2022 7,300 (285) 422 1,343 8,780
Year ended 30 September 2023
Net profit attributable to the owner of the Bank - - - 1,059 1,059
Net gains/(losses) from changes in fair value - (3) (95) - (98)
Income tax effect - 1 27 - 28
Transferred to income statement - - 32 - 32
Income tax effect - - (9) - (9)
Remeasurement of defined benefit obligations - - - 6 6
Income tax effect - - - (2) (2)
Total comprehensive income/(expense) for the year
ended 30 September 2023 - (2) (45) 1,063 1,016
Transactions with owner:
Dividends paid on ordinary shares (refer to Note 22) - - - (652) (652)
As at 30 September 2023 7,300 (287) 377 1,754 9,144
1
Comparative amounts have been revised to align to the current year's basis of presentation. The restatement for 2022 comparatives results in a $208 million
increase in transferred to income statement and a corresponding decrease in net gains/(losses) from changes in fair value.
The above statement of changes in equity should be read in conjunction with the accompanying notes.

Statement of cash flows for the year ended 30 September 2023
10 Westpac New Zealand Limited
THE BANKING GROUP
$ millionsNote20232022
Cash flows from operating activities
Interest received 6,218 3,756
Interest paid (3,051) (1,212)
Non-interest income received 232 223
Operating expenses paid (1,178) (982)
Income tax paid (290) (278)
Cash flows from operating activities before changes in operating assets and liabilities 1,931 1,507
Net (increase)/decrease in:
Collateral paid 9 143
Trading securities and financial assets measured at FVIS (550) 153
Loans (2,327) (4,581)
Other financial assets 27 3
Due from related entities (795) 920
Other assets (2) (1)
Net increase/(decrease) in:
Collateral received 221 (106)
Deposits and other borrowings 1,348 1,481
Other financial liabilities 1,130 1,286
Due to related entities (167) 466
Other liabilities 9 13
Net movement in external and related entity derivative financial instruments 492 266
Net cash provided by/(used in) operating activities33 1,326 1,550
Cash flows from investing activities
Proceeds from investment securities 547 310
Purchase of investment securities (1,633) (1,668)
Purchase of intangible assets (209) (171)
Purchase of property and equipment (77) (27)
Net cash provided by/(used in) investing activities (1,372) (1,556)
Cash flows from financing activities
Proceeds from debt issues19 7,827 13,602
Repayments of debt issues19 (9,290) (10,297)
Payments for the principal portion of lease liabilities (47) (62)
Issue of loan capital (net of issue costs)21 592 590
Redemption of loan capital21 - (1,178)
Dividends paid to ordinary shareholder22 (652) (788)
Net movement in due to related entities 29 (54)
Net cash provided by/(used in) financing activities (1,541) 1,813
Net increase/(decrease) in cash and cash equivalents (1,587) 1,807
Cash and cash equivalents at the beginning of the year 10,820 9,013
Cash and cash equivalents at the end of the year33 9,233 10,820
The above statement of cash flows should be read in conjunction with the accompanying notes. Details of the reconciliation of net cash provided
by/(used in) operating activities to net profit are provided in Note 33.

Notes to the financial statements
Westpac New Zealand Limited 11
Note 1 Financial statements preparation
The Bank was incorporated as Westpac New Zealand Limited under the Companies Act 1993 (Company Number 1763882) on 14 February 2006. The
head office of the Bank is situated at Westpac on Takutai Square, 16 Takutai Square, Auckland 1010, New Zealand and the address for service of
process on the Bank is Stephen O’Brien - General Counsel, Westpac on Takutai Square, 53 Galway Street, Auckland 1010, New Zealand.
The Bank is a locally incorporated subsidiary of the Ultimate Parent Bank providing consumer and business banking to New Zealand customers.
The financial statements are for the Banking Group.
These financial statements were authorised for issue by the Board of Directors of the Bank on 24 November 2023. The Board has the power to
amend and reissue the financial statements.
The principal accounting policies are set out below and in the relevant notes to the financial statements. These accounting policies provide details of
the accounting treatments adopted for complex balances and where accounting standards provide policy choices. These policies have been
consistently applied to all the years presented, unless otherwise stated.
a.Basis of preparation
(i) Basis of accounting
These financial statements are general purpose financial statements prepared in accordance with:
the requirements of the Financial Markets Conduct Act 2013; and
the requirements of the Order.
These financial statements comply with Generally Accepted Accounting Practice, applicable NZ IFRS and other authoritative pronouncements of the
External Reporting Board, as appropriate for for-profit entities. These financial statements also comply with International Financial Reporting
Standards, as issued by the International Accounting Standards Board.
All amounts in these financial statements have been rounded to the nearest million dollars unless otherwise stated.
(ii) Historical cost convention
These financial statements have been prepared under the historical cost convention, as modified by applying fair value accounting to financial
assets and financial liabilities (including derivative instruments) measured at FVIS or in FVOCI.
(iii) Comparative revisions
Comparative information has been revised where appropriate to conform to changes in presentation in the current year and to enhance
comparability. Where there has been a material restatement of comparative information the nature of, and the reason for, the restatement is
disclosed in the relevant note.
(iv) Changes in accounting policy
Broker trail commission
During the current financial year, the Banking Group revised its treatment of ongoing trail commission payable to mortgage brokers. The Banking
Group recognised a liability of $132 million within other financial liabilities equal to the present value of the expected future trail commission payable
and a corresponding increase in capitalised brokerage costs in loans. Comparatives have not been revised for this change in accounting policy as
the impact of the change is not material to the financial statements.
(v) Standards adopted during the year ended 30 September 2023
No new accounting standards have been adopted by the Banking Group for the year ended 30 September 2023. There have been no amendments to
existing accounting standards that have a material impact on the Banking Group.
(vi) Business combinations
Business combinations are accounted for using the acquisition method of accounting. Acquisition cost is measured as the aggregate of the fair value
at the date of acquisition of the assets given, equity instruments issued or liabilities incurred or assumed. Acquisition-related costs are expensed as
incurred (except for those costs arising on the issue of equity instruments which are recognised directly in equity).
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured at fair value on the acquisition
date. Goodwill is measured as the excess of the acquisition cost, the amount of any non-controlling interest and the fair value of any previous
Banking Group’s equity interest in the acquiree, over the fair value of the identifiable net assets acquired.
(vii) Foreign currency translation
Functional and presentation currency
The financial statements are presented in New Zealand dollars which is the Banking Group’s functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. FX
gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in the income statement, except when deferred in OCI for qualifying cash flow hedges.

Notes to the financial statements
12 Westpac New Zealand Limited
Note 1 Financial statements preparation (continued)
(viii) Reserves
Investment securities reserve
This comprises the changes in the fair value of debt securities measured at FVOCI (except for interest income, impairment charges and FX gains and
losses which are recognised in the income statement), net of any related hedge accounting adjustments and tax. These changes are transferred to
non-interest income in the income statement when the asset is disposed.
Cash flow hedge reserve
This comprises the fair value gains and losses associated with the effective portion of designated cash flow hedging instruments, net of tax.
b.Principles of consolidation
The Banking Group subsidiaries are entities which the Bank controls and consolidates as it is exposed to, or has rights to, variable returns from its
involvement with the entities, and can affect those returns through its power over the entities.
All transactions between entities within the Banking Group are eliminated. Subsidiaries are fully consolidated from the date on which control
commences and are de-consolidated from the date that control ceases.
c.Financial assets and financial liabilities
(i) Recognition
Financial assets and financial liabilities, other than regular way transactions, are recognised when the Banking Group becomes a party to the terms
of the contract, which is generally on the settlement date (the date payment is made or cash advanced). Purchases and sales of financial assets in
regular way transactions are recognised on the trade date (the date on which the Banking Group commits to purchase or sell an asset).
(ii) Derecognition
Financial assets are derecognised when the rights to receive cash flows from the asset have expired, or when the Banking Group has either
transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full under a ‘pass through’
arrangement and transferred substantially all the risks and rewards of ownership.
There may be situations where the Banking Group has partially transferred the risks and rewards of ownership but has neither transferred nor
retained substantially all the risks and rewards of ownership. In such situations, the asset continues to be recognised on the balance sheet to the
extent of the Banking Group’s continuing involvement in the asset.
Financial liabilities are derecognised when the obligation is discharged, cancelled or expires. Where an existing financial liability is replaced by
another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, the exchange or
modification is treated as a derecognition of the original liability and the recognition of a new liability, with the difference in the respective carrying
amounts recognised in the income statement.
The terms are deemed to be substantially different if the discounted present value of the cashflows under the new terms (discounted using the
original effective interest rate) is at least 10% different from the discounted present value of the remaining cash flows of the original financial
liability. Qualitative factors such as a change in the currency the instrument is denominated in, a change in the interest rate from fixed to floating
and conversion features are also considered.
(iii) Classification and measurement basis
Financial assets
Financial assets are grouped into the following classes: cash and balances with central banks, collateral paid, trading securities and financial assets
measured at FVIS, derivative financial instruments, investment securities, loans, other financial assets and due from related entities.
Financial assets are classified based on a) the business model within which the assets are managed, and b) whether the contractual cash flows of
the instrument represent SPPI.
The Banking Group determines the business model at the level that reflects how groups of financial assets are managed. When assessing the
business model the Banking Group considers factors including how performance and risks are managed, evaluated and reported and the frequency
and volume of, and reason for, sales in previous periods and expectations of sales in future periods.
When assessing whether contractual cash flows are SPPI, interest is defined as consideration primarily for the time value of money and the credit
risk of the principal outstanding. The time value of money is defined as the element of interest that provides consideration only for the passage of
time and not consideration for other risks or costs associated with holding the financial asset. Terms that could change the contractual cash flows
so that they may not meet the SPPI criteria include contingent and leverage features, non-recourse arrangements, and features that could modify
the time value of money.

Notes to the financial statements
Westpac New Zealand Limited 13
Note 1 Financial statements preparation (continued)
Debt instruments
If the debt instruments have contractual cash flows which represent SPPI on the principal balance outstanding they are classified at:
amortised cost if they are held within a business model whose objective is achieved through holding the financial asset to collect these cash
flows; or
FVOCI if they are held within a business model whose objective is achieved both through collecting these cash flows and selling the financial
asset; or
FVIS if they are held within a business model whose objective is achieved through selling the financial asset.
Debt instruments are classified and measured at FVIS where the contractual cash flows do not represent SPPI on the principal balance outstanding
or where it is designated at FVIS to eliminate or reduce an accounting mismatch.
Debt instruments at amortised cost are initially recognised at fair value and subsequently measured at amortised cost using the effective interest
method. They are presented net of provision for ECL determined using the ECL model. Refer to Notes 6 and 12 for further details.
Debt instruments at FVOCI are measured at fair value with unrealised gains and losses recognised in OCI except for interest income, impairment
charges and FX gains and losses, which are recognised in the income statement. Impairment on debt instruments at FVOCI is determined using the
ECL model and is recognised in the income statement with a corresponding amount in OCI. There is no reduction of the carrying value of the debt
security which remains at fair value.
The cumulative gain or loss recognised in OCI is subsequently recognised in the income statement when the instrument is derecognised.
Debt instruments at FVIS are measured at fair value with subsequent changes in fair value recognised in the income statement.
Financial liabilities
Financial liabilities are grouped into the following classes: collateral received, deposits and other borrowings, other financial liabilities, derivative
financial instruments, due to related entities, debt issues and loan capital.
Financial liabilities are measured at amortised cost if they are not held for trading or designated at FVIS, otherwise they are measured at FVIS.
Financial assets and financial liabilities measured at FVIS are recognised initially at fair value. All other financial assets and financial liabilities are
recognised initially at fair value plus or minus directly attributable transaction costs respectively.
Further details of the accounting policy for each category of financial asset or financial liability mentioned above are set out in the note for the
relevant item.
The Banking Group’s policies for determining the fair value of financial assets and financial liabilities are set out in Note 25.
d.Critical accounting assumptions and estimates
Applying the Banking Group’s accounting policies requires the use of judgement, assumptions and estimates which impact the financial information.
The significant assumptions and estimates used are discussed in the relevant notes below.
Note 7Income tax expense
Note 12Provision for expected credit losses
Note 15Deferred tax assets
Note 16Intangible assets
Note 20Provisions
Note 25Fair value of financial assets and financial liabilities
Impact of climate-related risks
The Banking Group has considered the potential risk of climate change on its financial statements. Refer to Note 32 for further details.
e.Future developments in accounting standards
There are no new standards or amendments to existing standards that are not yet effective that are expected to have a material impact on the
Banking Group.

Notes to the financial statements
14 Westpac New Zealand Limited
Note 2 Net interest income
Accounting policy
Interest income and interest expense for all interest earning financial assets and interest bearing financial liabilities at amortised cost or FVOCI,
detailed within the table below, are recognised using the effective interest method. Net income from Treasury’s interest rate and liquidity
management activities are included in net interest income.
The effective interest method calculates the amortised cost of a financial instrument by discounting the financial instrument’s estimated future
cash receipts or payments to their present value and allocates the interest income or interest expense, including any fees, costs, premiums or
discounts integral to the instrument, over its expected life.
Interest income is calculated based on the gross carrying amount of financial assets in stages 1 and 2 of the Banking Group’s ECL model and on the
carrying amount net of the provision for ECL for financial assets in stage 3.
THE BANKING GROUP
$ millions
Note20232022
Interest income
Calculated using the effective interest method
Cash and balances with central banks 533 161
Collateral paid 3 -
Investment securities 161 92
Loans 5,419 3,451
Total interest income calculated using the effective interest method 6,116 3,704
Other
Trading securities and financial assets measured at FVIS 107 33
Due from related entities23 20 4
Total other 127 37
Total interest income 6,243 3,741
Interest expense
Calculated using the effective interest method
Collateral received 9 -
Deposits and other borrowings 2,523 771
Due to related entities23 47 21
Debt issues 265 167
Loan capital 175 122
Other financial liabilities 234 43
Total interest expense calculated using the effective interest method 3,253 1,124
Other
Deposits and other borrowings 147 58
Due to related entities23 12 8
Debt issues 170 39
Other interest expense
1
8 221
Total other 337 326
Total interest expense 3,590 1,450
Net interest income 2,653 2,291
1
Includes the net impact of Treasury's interest rate and liquidity management activities.

Notes to the financial statements
Westpac New Zealand Limited 15
Note 3 Non-interest income
Accounting policy
Non-interest income includes net fees and commissions income and other income.
Net fees and commissions income
When another party is involved in providing goods or services to a Banking Group customer, the Banking Group assesses whether the nature of the
arrangement with its customer is as a principal provider or an agent of another party. Where the Banking Group is acting as an agent for another
party, the income earned by the Banking Group is the net consideration received (i.e. the gross amount received from the customer less amounts
paid to a third party provider). As an agent, the net consideration represents fees and commissions income for facilitating the transaction
between the customer and the third party provider with primary responsibility for fulfilling the contract.
Fees and commissions income
Fees and commissions income is recognised when the performance obligation is satisfied by transferring the promised good or service to the
customer. Fees and commissions income includes facility fees, transaction fees and commissions and other non-risk fee income. Commissions
income includes commissions received for the distribution of general and life insurance products.
Facility fees include certain line fees, annual credit card fees and fees for providing customer bank accounts. They are recognised over the term of
the facility/period of service on a straight line basis.
Transaction fees and commissions are earned for facilitating banking transactions such as FX fees, telegraphic transfers and issuing bank cheques.
Fees and commissions for these one-off transactions are recognised once the transaction has been completed. Transaction fees and commissions
are also recognised for credit card transactions including interchange fees net of scheme charges. These are recognised once the transaction has
been completed, however, a component of interchange fees received is deferred as unearned income as the Banking Group has a future service
obligation to customers under the Banking Group’s credit card reward programmes.
Other non-risk fee income includes advisory and underwriting fees which are recognised when the related service is completed.
Income which forms an integral part of the effective interest rate of a financial instrument is recognised using the effective interest method and
recorded in interest income (for example, loan origination fees).
Fees and commissions expenses
Fees and commissions expenses include incremental external costs that vary directly with the provision of goods or services to customers. An
incremental cost is one that would not have been incurred if a specific good or service had not been provided to a specific customer. Fees and
commissions expenses which form an integral part of the effective interest rate of a financial instrument are recognised using the effective interest
method and recorded in net interest income. Fees and commissions expenses include the costs associated with credit card loyalty programmes
which are recognised as an expense when the services are provided on the redemption of points.
THE BANKING GROUP
$ millions20232022
Net fees and commissions
Facility fees 44 41
Transaction fees and commissions
1
249 263
Other non-risk fee income
2
15 14
Fees and commissions income 308 318
Credit card loyalty programmes (35) (35)
Transaction fees and commissions related expenses (39) (31)
Fees and commissions expenses (74) (66)
Net fees and commissions 234 252
Other
Net ineffectiveness on qualifying hedges - 5
Other 14 11
Total other 14 16
Total non-interest income 248 268
1
Includes transaction fees and commissions due from related entities. Refer to Note 23.
2
Includes management fees due from related entities. Refer to Note 23.
Deferred income in relation to the credit card loyalty programmes for the Banking Group was $27 million as at 30 September 2023 (30 September
2022: $31 million). This will be recognised as fees and commissions income as the credit card reward points are redeemed.
There were no other material contract assets or contract liabilities for the Banking Group.

Notes to the financial statements
16 Westpac New Zealand Limited
Note 4 Operating expenses5967-2 04-18
THE BANKING GROUP
$ millionsNote20232022
Staff expenses 686 635
Lease expense 24 20
Depreciation 82 88
Technology services and telecommunications 213 145
Purchased services 82 81
Software amortisation costs 60 47
Related entities - management fees23 5 5
Other 139 110
Total operating expenses 1,291 1,131
Note 5 Auditor’s remuneration5967-2 04-18
THE BANKING GROUP
$'000s20232022
Audit and audit related services
Audit and review of financial statements
1
3,075 2,957
Other audit related services
2,3
821 923
Total remuneration for audit and other audit related services 3,896 3,880
Other services
4
303 -
Total remuneration for non-audit services 303 -
Total remuneration for audit, other audit related services and non-audit services 4,199 3,880
1
Fees for the annual audit of the financial statements, the review or other procedures performed on the interim financial statements and Sarbanes-Oxley reporting
undertaken in the role of auditor.
2

Assurance or agreed upon procedures over the issue of comfort letters and debt issuance programmes.
3
As at 30 September 2023, $304,514 out of other audit related services was paid to PwC Australia for the issue of comfort letters and work on the Banking Group's
debt issuance programme (30 September 2022: $414,366).
4
Fees for system pre-implementation and data migration assessment.
It is the Banking Group’s policy to engage the external auditor on assignments additional to their statutory audit duties only if their independence is not impaired or
seen to be impaired, and where their expertise and experience with the Banking Group is important.
Note 6 Impairment charges/(benefits)
Accounting policy
Impairment charges are based on an expected loss model which measures the difference between the current carrying amount and the present value
of expected future cash flows taking into account past experience, current conditions and multiple probability-weighted macroeconomic scenarios for
reasonably supportable future economic conditions. Further details of the calculation of ECL and the critical accounting assumptions and estimates
relating to impairment charges are included in Note 12.
Impairment charges are recognised in the income statement, with a corresponding amount recognised as follows:
Loans at amortised cost: as a reduction of the carrying value of the financial asset through an offsetting provision account (refer to Note 12);
Investment securities: in reserves in OCI with no reduction of the carrying value of the debt security (refer to the statement of changes in equity);
and
Credit commitments: as a provision (refer to Note 20).
Uncollectable loans
A loan may become uncollectable in full or part if, after following the Banking Group’s loan recovery procedures, the Banking Group remains unable to
collect that loan’s contractual repayments. Uncollectable amounts are written off against their related provision for ECL, after all possible repayments
have been received.
Where loans are secured, amounts are generally written off after receiving the proceeds from the security, or in certain circumstances, where the net
realisable value of the security has been determined and this indicates that there is no reasonable expectation of full recovery, write-off may be earlier.
Unsecured consumer loans are generally written off after 180 days past due.
The Banking Group may subsequently be able to recover cash flows from loans written off. In the period which these recoveries are made, they are
recognised in the income statement.

Notes to the financial statements
Westpac New Zealand Limited 17
Note 6 Impairment charges/(benefits) (continued)
THE BANKING GROUP
$ millions20232022
Provisions raised/(released):
Performing 78 (38)
Non-performing 46 1
Bad debts written-off/(recovered) directly to the income statement 11 10
Impairment charges/(benefits) 135 (27)
of which relates to:
Loans and credit commitments 135 (27)
Impairment charges/(benefits) 135 (27)
Impairment charges/(benefits) on all other financial assets are not material to the Banking Group.
Note 7 Income tax expense
Accounting policy
The income tax expense for the year comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it
relates to items recognised directly in OCI, in which case it is recognised in the statement of comprehensive income.
Current tax is the tax payable for the year using enacted or substantively enacted tax rates and laws. Current tax also includes adjustments to tax
payable for previous years.
Goods and services tax
Revenue, expenses and assets are recognised net of GST except to the extent that GST is not recoverable from the New Zealand Inland Revenue.
In these circumstances, GST is recognised as part of the expense or the cost of the asset.
Critical accounting assumptions and estimates
Significant judgement is required in determining the current tax liability. There may be transactions with uncertain tax outcomes and provisions
are determined based on the expected outcomes.
THE BANKING GROUP
$ millions
2023
2022
Income tax expense
Current tax:
Current year 437 384
Prior year adjustments 1 (4)
Deferred tax (refer to Note 15)
Current year (21) 24
Prior year adjustments
(1) 4
Total income tax expense
416
408
Profit before income tax 1,475 1,455
Tax calculated at tax rate of 28%
413 407
Expenses not deductible for tax purposes
3 1
Total income tax expense 416 408
The effective tax rate for the year ended 30 September 2023 was 28.2% (30 September 2022: 28.0%).
Note 8 Imputation credit account
THE BANKING GROUP
$ millions20232022
Imputation credits available for use in subsequent reporting periods
100 971
The Bank and Westpac Securities NZ Limited ('WSNZL') were previously part of an imputation group ('ICA group') with the Ultimate Parent Bank.
On 1 July 2023, the Bank and WSNZL exited the ICA group. While the imputation credits of the ICA group continue to be available for use by the
Ultimate Parent Bank, those imputation credits are no longer accessible by any Banking Group members. Accordingly, the imputation credit
balance of the Banking Group as at 30 September 2023 excludes imputation credits of the ICA group.

Notes to the financial statements
18 Westpac New Zealand Limited
Note 9 Trading securities and financial assets measured at FVIS
Accounting policy
Trading securities
Trading securities include actively traded debt (government and other) and those acquired for sale in the near term. The instruments are
measured at fair value.
Reverse repurchase agreements
Securities purchased under these agreements are not recognised on the balance sheet, as the Banking Group has not obtained the risks and
rewards of ownership. The cash consideration paid is recognised as a reverse repurchase agreement, which forms part of a trading portfolio that
is measured at fair value.
Fair value gains and losses on these financial assets are recognised in the income statement. Interest earned from debt securities is recognised in
interest income (refer to Note 2).
THE BANKING GROUP
$ millions20232022
Government and semi-government securities
1,114 954
Other debt securities
1,503
1,164
Reverse repurchase agreements
44
-
Total trading securities and financial assets measured at FVIS 2,661 2,118
Note 10 Investment securities
Accounting policy
Investment securities include debt securities (government and other) that are measured at FVOCI. These instruments are classified based on the
criteria disclosed under the heading “Financial assets and financial liabilities” in Note 1.
Debt securities measured at FVOCI
Includes debt instruments that have contractual cash flows which represent SPPI on the principal balance outstanding and they are held within a
business model whose objective is achieved both through collecting these cash flows or selling the financial asset.
These securities are measured at fair value with unrealised gains and losses recognised in OCI except for interest income, impairment charges and
FX gains and losses and fair value hedge adjustments which are recognised in the income statement.
Impairment is measured using the same ECL model applied to financial assets measured at amortised cost. Impairment is recognised in the
income statement with a corresponding amount in OCI with no reduction of the carrying value of the debt security which remains at fair value.
Refer to Note 12 for further details.
The cumulative gain or loss recognised in OCI is subsequently recognised in the income statement when the instrument is disposed.
THE BANKING GROUP
$ millions20232022
Government and semi-government securities
4,0883,656
Other debt securities2,5631,967
Total investment securities6,6515,623

Notes to the financial statements
Westpac New Zealand Limited 19
Note 11 Loans
Accounting policy
Loans are financial assets initially recognised at fair value plus directly attributable transaction costs and fees.
Loans are subsequently measured at amortised cost using the effective interest method where they have contractual cash flows which represent
SPPI on the principal balance outstanding and they are held within a business model whose objective is achieved through holding the loans to
collect these cash flows. They are presented net of any provision for ECL.
Loan products that have both mortgage and deposit facilities are presented gross on the balance sheet, segregating the asset and liability
component, because they do not meet the criteria to be offset. Interest earned on these products is presented on a net basis in the income
statement as this reflects how the customer is charged.
The following table shows loans disaggregated by types of credit exposure:
THE BANKING GROUP
$ millions20232022
Residential mortgages
1
65,766 63,869
Other retail 2,648 2,829
Corporate 31,222 30,459
Other
194 121
Total gross loans 99,830 97,278
Provision for ECL on loans (refer to Note 12) (502) (396)
Total net loans 99,328 96,882
1
During the current financial year, the Banking Group revised its treatment of ongoing trail commission payable to mortgage brokers. The Banking Group recognised
a liability within other financial liabilities equal to the present value of the expected future trail commission payable and a corresponding increase in capitalised
brokerage costs in loans. The balance as at 30 September 2023 was $132 million for the Banking Group. Refer also to Note 1(iv).
Note 12 Provision for expected credit losses
Accounting policy
Note 6 provides details of impairment charges/(benefits).
Impairment applies to all financial assets at amortised cost, debt securities measured at FVOCI and credit commitments.
The ECL is recognised as follows:
Loans at amortised cost: as a reduction of the carrying value of the financial asset through an offsetting provision account (refer to Note 11);
Investment securities: in reserves in OCI with no reduction of the carrying value of the debt security itself (refer to the statement of changes
in equity); and
Credit commitments: as a provision (refer to Note 20).
Measurement
The Banking Group calculates the provision for ECL based on a three stage approach. The provision for ECL is a probability-weighted estimate of
the cash shortfalls expected to result from defaults over the relevant timeframe. They are determined by evaluating a range of possible outcomes
and taking into account the time value of money, past events, current conditions and forecasts of future economic conditions.
The models use three main components to determine the ECL (as well as the time value of money) including:
PD: the probability that a counterparty will default;
LGD: the loss that is expected to arise in the event of a default; and
EAD: the estimated outstanding amount of credit exposure at the time of the default.
Model stages
The three stages are as follows:
Stage 1: 12 months ECL - performing
For financial assets where there has been no significant increase in credit risk since origination a provision for 12 months ECL is recognised.
Stage 2: Lifetime ECL – performing
For financial assets where there has been a significant increase in credit risk since origination but where the asset is still performing a provision for
lifetime ECL is recognised. The indicators of a significant increase in credit risk are described on the following page.

Notes to the financial statements
20 Westpac New Zealand Limited
Note 12 Provision for expected credit losses (continued)
Accounting policy (continued)
Stage 3: Lifetime ECL – non-performing
Financial assets in Stage 3 are those that are in default. A default occurs when:
The Banking Group considers that the customer is unable to repay its credit obligations in full, irrespective of recourse by the Banking Group
to action such as realising security. Indicators include a breach of contract with the Banking Group such as a default on interest or principal
payments, a borrower experiencing significant financial difficulties or observable economic conditions that correlate to defaults on an
individual basis; or
The customer is more than 90 days past due on any material credit obligation.
A provision for lifetime ECL is recognised on these financial assets.
Collective and individual assessment
Financial assets that are in Stages 1 and 2 are assessed on a collective basis. This means that they are grouped in pools of similar assets with
similar credit risk characteristics including the type of product and CRG. Financial assets in Stage 3 are assessed on an individual basis and
calculated collectively for those below a specified threshold.
Expected life
In considering the lifetime timeframe for ECL in Stages 2 and 3, the standard generally requires use of the remaining contractual life adjusted,
where appropriate, for prepayments, extension and other options. For certain revolving credit facilities which include both a drawn and undrawn
component (e.g. credit cards and revolving lines of credit), the Banking Group’s contractual ability to demand repayment and cancel the undrawn
commitment does not limit the exposure to credit losses to the contractual notice period. For these facilities, lifetime is based on historical
behaviour.
Movement between stages
Financial assets may move in both directions through the stages of the impairment model. Financial assets previously in Stage 2 may move back to
Stage 1 if it is no longer considered that there has been a significant increase in credit risk. Similarly, financial assets in Stage 3 may move back to
Stage 1 or Stage 2 if they are no longer assessed to be non-performing.
Critical accounting assumptions and estimates
Key judgements include when a significant increase in credit risk has occurred, the estimation of forward-looking macroeconomic information and
overlays. Other factors which can impact the provision include the borrower’s financial situation, the realisable value of collateral, the Banking
Group’s position relative to other claimants, the reliability of customer information and the likely cost and duration of recovering the loan.
Significant increase in credit risk
Determining when a financial asset has experienced a significant increase in credit risk since origination is a critical accounting judgement which is
based on the change in the PD since origination. In determining whether a change in PD represents a significant increase in risk, relative changes
in PD and absolute PD thresholds are both considered based on the portfolio of the exposure.
The Banking Group does not rebut the presumption that instruments that are 30 days past due have experienced a significant increase in credit
risk, but this is used as a backstop rather than the primary indicator.
Forward-looking macroeconomic information
The measurement of ECL for each stage and the assessment of significant increase in credit risk consider information about past events and
current conditions as well as reasonable and supportable projections of future events and economic conditions. The estimation of forward-
looking information is a critical accounting judgement. The Banking Group considers three future macroeconomic scenarios including a base case
scenario along with upside and downside scenarios.
The macroeconomic variables used in these scenarios, based on current economic forecasts, include (but are not limited to) unemployment
rates, real gross domestic product growth rates, base interest rates and residential property price indices.
Base case scenario
This scenario utilises the internal Westpac Economic forecasts used for strategic decision making and forecasting.
Upside scenario
This scenario represents a modest improvement on the base case scenario.
Downside scenario
The downside scenario is a more severe scenario with ECL higher than those under the base case scenario. This scenario assumes a
recession with a combination of negative GDP growth, declines in commercial and residential property prices and an increase in the
unemployment rate, which simultaneously impact ECL across all portfolios from the reporting date.

Notes to the financial statements
Westpac New Zealand Limited 21
Note 12 Provision for expected credit losses (continued)
Accounting policy (continued)
The three macroeconomic scenarios are probability weighted and together represent the Banking Group’s view of the forward looking distribution
of potential loss outcomes. The weighting applied to each of the three macroeconomic scenarios takes into account historical frequency, current
trends, and forward-looking conditions.
The macroeconomic variables and probability weightings of the three macroeconomic scenarios are subject to the approval of the Banking
Group’s Chief Financial Officer and Chief Risk Officer with oversight from the Board of Directors (and its Committees).
Overlays
Where appropriate, adjustments will be made to modelled outcomes to reflect reasonable and supportable information not already incorporated
in the models.
Judgements can change with time as new information becomes available which could result in changes to the provision for ECL.
Loans and credit commitments
The following tables reconcile the provisions for ECL on loans and credit commitments by stage for the Banking Group.
THE BANKING GROUP
20232022
PerformingNon-performingPerformingNon-performing
Stage 1Stage 2Stage 3Stage 3Stage 1Stage 2Stage 3Stage 3
$ millions
CAPCAPCAPIAP
Total
CAPCAPCAPIAP
Total
Provision for ECL on loans
Residential mortgages 37 139 61 10 247 40 87 43 9 179
Other retail 11 34 12 1 58 12 36 13 1 62
Corporate 28 123 34 12 197 33 92 13 17 155
Total provision for ECL on
loans (refer to Note 11)
76 296 107 23 502 85 215 69 27 396
Provision for ECL on credit
commitments
1
Residential mortgages 5 8 - - 13 6 4 - - 10
Other retail 4 8 - - 12 5 7 - - 12
Corporate 6 18 - - 24 7 14 - - 21
Total provision for ECL on
credit commitments (refer to
Note 20)
15 34 - - 49 18 25 - - 43
Total provision for ECL on
loans and credit commitments
91 330 107 23 551 103 240 69 27 439
Gross loans 76,135 22,924 709 62 99,830 85,362 11,374 482 60 97,278
Credit commitments 25,376 3,800 25 1 29,202 27,303 2,180 26 1 29,510
Gross loans and credit
commitments
101,511 26,724 734 63 129,032 112,665 13,554 508 61 126,788
Coverage ratio on loans (%) 0.10 1.29 15.09 37.10 0.50 0.10 1.89 14.32 45.00 0.41
Coverage ratio on loans and credit
commitments (%)
0.09 1.23 14.58 36.51 0.43 0.09 1.77 13.58 44.26 0.35
1
Includes provision for ECL on related entity credit commitments of $5 million (30 September 2022: $4 million) classified as Due to Related Entities in the Balance
Sheet.

Notes to the financial statements
22 Westpac New Zealand Limited
Note 12 Provision for expected credit losses (continued)
Movements in components of loss allowance
The reconciliation of the provision for ECL for loans and credit commitments has been determined by an aggregation of monthly movements over
the year. The key line items in the reconciliation represent the following:
“Transfers between stages” lines represent transfers between Stage 1, Stage 2 and Stage 3 prior to remeasurement of the provision for ECL.
“New financial assets originated” line represents new accounts originated during the year.
“Financial assets derecognised during the period” line represents loans derecognised due to final repayments during the year.
“Other charges/(credits) to the income statement” line represents the impact on the provision for ECL due to changes in credit quality during
the year (including transfers between stages), changes in portfolio overlays, changes due to forward-looking economic scenarios and partial
repayments and additional drawdowns on existing facilities over the year.
Amounts written off represent a reduction in the provision for ECL as a result of derecognition of exposures where there is no reasonable
expectation of full recovery.
THE BANKING GROUP
PerformingNon-performing
Stage 1Stage 2Stage 3Stage 3
$ millions
CAPCAPCAPIAP
Total
Provision for ECL on loans and credit commitments as at 30
September 2022
103 240 69 27 439
Transfers to Stage 1 228 (220) (8) - -
Transfers to Stage 2 (17) 51 (33) (1) -
Transfers to Stage 3 CAP - (37) 41 (4) -
Transfers to Stage 3 IAP - (2) (14) 16 -
Reversals of previously recognised impairment charges - - - (9) (9)
New financial assets originated 17 - - - 17
Financial assets derecognised during the year (8) (43) (23) - (74)
Changes in CAP due to amounts written off - - (24) - (24)
Other charges/(credits) to the income statement (232) 341 99 6 214
Total charges/(credits) to the income statement for ECL (12) 90 38 8 124
Amounts written off from IAP - - - (12) (12)
Total provision for ECL on loans and credit commitments as
at 30 September 2023
91 330 107 23 551
THE BANKING GROUP
PerformingNon-performing
Stage 1Stage 2Stage 3Stage 3
$ millions
CAPCAPCAPIAP
Total
Provision for ECL on loans and credit commitments as at 30
September 2021
102 279 75 69 525
Transfers to Stage 1 141 (122) (19) - -
Transfers to Stage 2 (12) 52 (39) (1) -
Transfers to Stage 3 CAP - (24) 26 (2) -
Transfers to Stage 3 IAP - (7) (6) 13 -
Reversals of previously recognised impairment charges - - - (6) (6)
New financial assets originated 16 - - - 16
Financial assets derecognised during the year (11) (27) (19) - (57)
Changes in CAP due to amounts written off - - (23) - (23)
Other charges/(credits) to the income statement (133) 89 74 3 33
Total charges/(credits) to the income statement for ECL 1 (39) (6) 7 (37)
Amounts written off from IAP - - - (49) (49)
Total provision for ECL on loans and credit commitments as
at 30 September 2022
103 240 69 27 439

Notes to the financial statements
Westpac New Zealand Limited 23
Note 12 Provision for expected credit losses (continued)
Movements in components of loss allowance – by types of credit exposure
The provision for ECL on loans and credit commitments can be further disaggregated into the following types of credit exposure:
THE BANKING GROUP
PerformingNon-performing
Stage 1Stage 2Stage 3Stage 3
$ millions
CAPCAPCAPIAP
Total
Residential mortgages
Provision for ECL as at 30 September 2022 46 91 43 9 189
Transfers to Stage 1 94 (90) (4) - -
Transfers to Stage 2 (2) 22 (20) - -
Transfers to Stage 3 CAP - (6) 8 (2) -
Transfers to Stage 3 IAP - - (9) 9 -
Reversals of previously recognised impairment charges - - - (5) (5)
New financial assets originated 5 - - - 5
Financial assets derecognised during the year (1) (4) (12) - (17)
Changes in CAP due to amounts written off - - - - -
Other charges/(credits) to the income statement (100) 134 55 4 93
Total charges/(credits) to the income statement for ECL (4) 56 18 6 76
Amounts written off from IAP - - - (5) (5)
Total provision for ECL on loans and credit commitments as
at 30 September 2023
42 147 61 10 260
Other retail
Provision for ECL as at 30 September 2022 17 43 13 1 74
Transfers to Stage 1 69 (66) (3) - -
Transfers to Stage 2 (6) 13 (7) - -
Transfers to Stage 3 CAP - (13) 13 - -
Transfers to Stage 3 IAP - - (1) 1 -
Reversals of previously recognised impairment charges - - - (1) (1)
New financial assets originated 5 - - - 5
Financial assets derecognised during the year (2) (11) (3) - (16)
Changes in CAP due to amounts written off - - (23) - (23)
Other charges/(credits) to the income statement (68) 76 23 - 31
Total charges/(credits) to the income statement for ECL (2) (1) (1) - (4)
Amounts written off from IAP - - - - -
Total provision for ECL on loans and credit commitments as
at 30 September 2023
15 42 12 1 70
Corporate
Provision for ECL as at 30 September 2022 40 106 13 17 176
Transfers to Stage 1 65 (64) (1) - -
Transfers to Stage 2 (9) 16 (6) (1) -
Transfers to Stage 3 CAP - (18) 20 (2) -
Transfers to Stage 3 IAP - (2) (4) 6 -
Reversals of previously recognised impairment charges - - - (3) (3)
New financial assets originated 7 - - - 7
Financial assets derecognised during the year (5) (28) (8) - (41)
Changes in CAP due to amounts written off - - (1) - (1)
Other charges/(credits) to the income statement (64) 131 21 2 90
Total charges/(credits) to the income statement for ECL (6) 35 21 2 52
Amounts written off from IAP - - - (7) (7)
Total provision for ECL on loans and credit commitments as
at 30 September 2023
34 141 34 12 221
The above movements in components of loss allowance table does not include ‘Other’ credit exposures on the basis that the provision for ECL is
nil.

Notes to the financial statements
24 Westpac New Zealand Limited
Note 12 Provision for expected credit losses (continued)
THE BANKING GROUP
PerformingNon-performing
Stage 1Stage 2Stage 3Stage 3
$ millions
CAPCAPCAPIAP
Total
Residential mortgages
Provision for ECL as at 30 September 2021 46 70 46 8 170
Transfers to Stage 1 43 (36) (7) - -
Transfers to Stage 2 (2) 28 (26) - -
Transfers to Stage 3 CAP - (3) 3 - -
Transfers to Stage 3 IAP - - (5) 5 -
Reversals of previously recognised impairment charges - - - (1) (1)
New financial assets originated 5 - - - 5
Financial assets derecognised during the year (2) (3) (12) - (17)
Changes in CAP due to amounts written off - - - - -
Other charges/(credits) to the income statement (44) 35 44 - 35
Total charges/(credits) to the income statement for ECL - 21 (3) 4 22
Amounts written off from IAP - - - (3) (3)
Total provision for ECL on loans and credit commitments
as at 30 September 2022
46 91 43 9 189
Other retail
Provision for ECL as at 30 September 2021 21 62 23 1 107
Transfers to Stage 1 84 (76) (8) - -
Transfers to Stage 2 (6) 16 (10) - -
Transfers to Stage 3 CAP - (14) 14 - -
Transfers to Stage 3 IAP - - - - -
Reversals of previously recognised impairment charges - - - - -
New financial assets originated 4 - - - 4
Financial assets derecognised during the year (4) (13) (3) - (20)
Changes in CAP due to amounts written off - - (23) - (23)
Other charges/(credits) to the income statement (82) 68 20 1 7
Total charges/(credits) to the income statement for ECL (4) (19) (10) 1 (32)
Amounts written off from IAP - - - (1) (1)
Total provision for ECL on loans and credit commitments
as at 30 September 2022
17 43 13 1 74
Corporate
Provision for ECL as at 30 September 2021 35 147 6 60 248
Transfers to Stage 1 14 (10) (4) - -
Transfers to Stage 2 (4) 8 (3) (1) -
Transfers to Stage 3 CAP - (7) 9 (2) -
Transfers to Stage 3 IAP - (7) (1) 8 -
Reversals of previously recognised impairment charges - - - (5) (5)
New financial assets originated 7 - - - 7
Financial assets derecognised during the year (5) (11) (4) - (20)
Changes in CAP due to amounts written off - - - - -
Other charges/(credits) to the income statement (7) (14) 10 2 (9)
Total charges/(credits) to the income statement for ECL 5 (41) 7 2 (27)
Amounts written off from IAP - - - (45) (45)
Total provision for ECL on loans and credit commitments
as at 30 September 2022
40 106 13 17 176
The above movements in components of loss allowance table does not include ‘Other’ credit exposures on the basis that the provision for
ECL is nil.

Notes to the financial statements
Westpac New Zealand Limited 25
Note 12 Provision for expected credit losses (continued)
Impact of overlays on the provision for ECL on loans and credit commitments
The following table attributes the provision for ECL on loans and credit commitments between modelled ECL and portfolio overlays.
Portfolio overlays are used to capture risk of increased uncertainty relating to forward-looking economic conditions, or areas of potential risk and
uncertainty in the portfolio, that are not captured in the underlying modelled ECL.
THE BANKING GROUP
$ millions20232022
Modelled provision for ECL on loans and credit commitments 505 313
Overlays 46 126
Total provision for ECL on loans and credit commitments 551 439
Details of changes related to forward-looking economic inputs and portfolio overlays, based on reasonable and supportable information up to
the date of this disclosure statement, are provided below.
Modelled provision for ECL on loans and credit commitments
The modelled provision for ECL on loans and credit commitments is a probability weighted estimate based on three scenarios which together
represent the Banking Group’s view of the forward-looking distribution of potential loss outcomes. The changes in provisions as a result of
changes in modelled ECL are reflected through the “Other charges/(credits) to the income statement” line in the “Movements in components of
loss allowance” table. A recalibration of a residential mortgage model was performed during the year, increasing the sensitivity from forward-
looking macroeconomic factors, which is included within the change in provision as a result of changes in modelled ECL. Portfolio overlays are
used to capture potential risk and uncertainty in the portfolio that are not captured in the underlying modelled ECL.
The base case scenario uses the following Westpac Economic forecasts:
Key economic assumptions for
base case scenario
30 September 202330 September 2022
Annual GDPForecast growth of
0.8% for calendar year 2023 and
0.2% for calendar year 2024.
Forecast growth of
1.9% for calendar year 2022 and
1.6% for calendar year 2023.
Residential property pricesForecast annual price contraction of
-1.0% for calendar year 2023 and
price appreciation of
+7.7% for calendar year 2024.
Forecast annual price contraction of
-10.0% for calendar year 2022 and
-5.0% for calendar year 2023.
Cash rateForecast cash rate of
5.75% at December 2023 and
5.25% at December 2024.
Forecast cash rate of
4.00% at December 2022 and
4.00% at December 2023.
Unemployment rateForecast rate of
4.3% at December 2023 and
5.2% at December 2024.
Forecast rate of
3.4% at December 2022 and
3.8% at December 2023.
The downside scenario is a more severe scenario with ECL higher than the base case. This scenario assumes a recession with a combination of
negative GDP growth, declines in commercial and residential property prices and an increase in the unemployment rate, which simultaneously
impact ECL across all portfolios from the reporting date. The assumptions used in this scenario and relativities to the base case will be monitored
having regard to the emerging economic conditions and updated where necessary. The upside scenario represents a modest improvement to
the base case.
The following sensitivity table shows the reported provision for ECL on loans and credit commitments based on the probability weighted
scenarios and what the provision for ECL on loans and credit commitments would be assuming a 100% weighting is applied to the base case
scenario and to the downside scenario (with all other assumptions held constant).
THE BANKING GROUP
$ millions20232022
Reported probability-weighted ECL551439
100% base case ECL417330
100% downside ECL719578

Notes to the financial statements
26 Westpac New Zealand Limited
Note 12 Provision for expected credit losses (continued)
If 1% of the stage 1 gross exposure from loans and credit commitments (calculated on a 12-month ECL) was reflected in stage 2 (calculated on a
lifetime ECL) the provision for ECL on loans and credit commitments would increase by $14 million (30 September 2022: $23 million) based on
applying the average provision coverage ratios by stage to the movement in the gross exposure by stage.
The following table indicates the weightings applied by the Banking Group as at 30 September 2023 and 30 September 2022.
THE BANKING GROUP
Macroeconomic scenario weightings (%)20232022
Upside55
Base5050
Downside4545
Portfolio overlays
Portfolio overlays are used to address areas of risk, including significant uncertainties that are not captured in the underlying modelled ECL.
Determination of portfolio overlays requires expert judgement and is thoroughly documented and subject to comprehensive internal governance
and oversight. Overlays are continually reassessed and if the risk is judged to have changed (increased or decreased), or is subsequently captured
in the modelled ECL, the overlay will be released or remeasured.
The Banking Group’s total portfolio overlays as at 30 September 2023 were $46 million (30 September 2022: $126 million) and comprise:
$29 million on residential mortgages and other retail portfolios (30 September 2022: $52 million) to reflect the expected, lagged impact of
increasing interest rates. The overlay was decreased due to loans moving onto higher interest rates where the credit outcomes are
considered to be included in the modelled outcome;
$14 million on the corporate portfolio (30 September 2022: $30 million), established to reflect delayed emergence of credit stresses following
COVID disruptions. The quantum of the overlay reflects the estimate of the remaining delayed emergence; and
$3 million (30 September 2022: $4 million) reflecting other related risks.
Other overlays held at 30 September 2022 have been released on the basis that these are considered to be reflected in the modelled outcome.
Impact of changes in gross carrying amount on the provision for ECL
Stage 1 gross carrying amount had a net decrease of $9.2 billion (30 September 2022: increased by $0.7 billion), primarily driven by a model
recalibration for residential mortgages and underlying portfolio movement from the residential mortgages and corporate portfolios,
including derecognitions and repayments, partially offset by new lending during the period and exposures transferred from Stage 2 for
releases in overlays. The Stage 1 ECL decrease is in line with Stage 1 exposure movement to Stage 2, primarily driven by a model recalibration
for residential mortgages, underlying portfolio movements and a more negative economic outlook.
Stage 2 gross carrying amount increased by $11.6 billion (30 September 2022: increased by $3.5 billion), primarily driven by a model
recalibration for residential mortgages and underlying portfolio movement from the residential mortgages and corporate portfolios, partially
offset by exposures transferred to Stage 1 for releases in overlays. Stage 2 ECL increases are driven by a model recalibration for residential
mortgages, underlying portfolio movements and a more negative economic outlook from the residential mortgages and corporate portfolios.
Stage 3 gross carrying amount increased by $0.2 billion (30 September 2022: decreased by $0.1 billion), driven by increases in 90 days past
due exposures from the residential mortgages portfolio and customer downgrades from the corporate portfolio, offset by releases due to
write-offs from the other retail portfolio. Stage 3 ECL increases are in line with the increase in Stage 3 exposures.
Refer to Note iii. Asset quality of the Registered bank disclosures for further details.
Write-offs still under enforcement activity
The amount of current year write-offs which remain subject to enforcement activity was $23 million (30 September 2022: $18 million).

Notes to the financial statements
Westpac New Zealand Limited 27
Note 13 Credit risk management
IndexNote nameNote number
Credit risk management framework13.1
Credit risk ratings system13.2
Credit concentrations and maximum exposure to credit risk13.3
Credit quality of financial assets13.4
Credit risk
The risk of financial loss where a customer or counterparty
fails to meet their financial obligations to the Banking
Group.
Credit risk mitigation, collateral and other credit enhancements13.5
13.1 Credit risk management framework
Please refer to Note 32.1 for details of the Banking Group’s overall Risk Management Framework.
The Banking Group maintains a Credit Risk Management Framework, a Credit Risk Management Strategy, and a Credit Risk Appetite Statement,
and a number of supporting policies that define roles and responsibilities, acceptable practices, limits and key controls.
The Banking Group’s Credit Risk Management Framework describes the principles, methodologies, systems, roles and responsibilities, reports
and key controls for managing credit risk.
The BRCC, RISKCO and CREDCO monitor the risk profile, performance and management of the Banking Group’s credit portfolio on at least a
quarterly basis, and the development and review of key credit risk policies on at least an annual basis; other management reviews occur
monthly or more frequently.
The Banking Group’s Credit Risk Rating System Policy describes the credit risk rating system philosophy, design, key features and uses of rating
outcomes.
All models materially impacting the risk rating process are periodically reviewed in accordance with the Banking Group’s model risk policies.
An annual review is performed of the Credit Risk Rating System for approval by the Banking Group’s Chief Risk Officer and noting by the BRCC.
The Credit Risk Rating System Policy is annually approved by the BRCC.
Specific credit risk estimates (including PD, LGD and EAD) are reviewed by CREDCO and are overseen, reviewed annually and approved by the
Banking Group’s Chief Risk Officer.
In determining the provision for ECL, the forward-looking economic inputs and the probability weightings of the forward-looking scenarios as
well as any adjustments made to the modelled outcomes are subject to the approval of the Banking Group’s Chief Financial Officer and the Chief
Risk Officer with oversight from the Board (and its Committees).
Policies for delegating credit approval authorities and formal limits for the extension of credit are established throughout the Banking Group.
Credit policies are established and maintained throughout the Banking Group. They include policies governing the origination, evaluation,
approval, documentation, settlement and ongoing management of credit risks.
Sector policies guide credit extension where industry-specific guidelines are considered necessary (e.g. acceptable financial ratios or permitted
collateral).
The Ultimate Parent Bank’s Related Entity Risk Management Policy and supporting policies govern credit exposures to related entities to
minimise the spread of credit risk between the Ultimate Parent Bank Group entities to comply with the Ultimate Parent Bank’s prudential
requirements prescribed by APRA.
Climate change-related credit risks are considered in line with the Ultimate Parent Bank’s Climate Change Position Statement and Action Plan.
Climate change risks are managed in line with the Banking Group’s Risk Management Framework which is supported by the Banking Group’s
Sustainability Risk Management Framework, the Banking Group’s ESG Credit Risk Policy and the Bank’s Board Risk Appetite Statements. Where
appropriate, these are applied at the portfolio, customer, and transaction level.
CREDCO oversees work to identify and manage the potential impact on credit exposures from climate change-related transition and physical
risks across the Banking Group.
The Banking Group’s ESG Credit Risk Policy details the overall approach to managing ESG risks in the credit risk process for applicable
transactions.

Notes to the financial statements
28 Westpac New Zealand Limited
Note 13 Credit risk management (continued)
13.2 Credit risk ratings system
The principal objective of the credit risk rating system is to reliably assess the credit risk to which the Banking Group is exposed. The Banking Group
has two main approaches to this assessment:
Transaction-managed customers
Transaction managed customers are generally customers with business lending exposures. They are individually assigned a CRG, corresponding to
their expected PD. Each facility is assigned an LGD. The Banking Group’s risk rating system has a tiered scale of risk grades for both non-defaulted
customers and defaulted customers. Non-defaulted CRGs are mapped to Moody’s and S&P external senior ranking unsecured ratings.
The following table shows the Banking Group’s high level CRG’s for transaction-managed portfolios mapped to the Banking Group’s credit quality
disclosure categories and to their corresponding external rating.
Transaction-managed
Financial Statement DisclosureBanking Group’s CRGMoody’s RatingS&P Rating
StrongAAaa – Aa3AAA – AA-
BA1 – A3A+ – A-
CBaa1 – Baa3BBB+ – BBB-
Good/satisfactoryDBa1 – B1BB+ – B+
Banking Group Rating
WeakEWatchlist
FSpecial Mention
GSubstandard/Default
HDoubtful/Default
Program-managed portfolio
The program-managed portfolio generally includes retail products including mortgages, personal lending (including credit cards) as well as certain
SME lending. These customers are grouped into pools of similar risk. Pools are created by analysing similar risk characteristics that have historically
predicted that an account is likely to go into default. Customers grouped according to these predictive characteristics are assigned a PD and LGD
relative to their pool. The credit quality of these pools is based on a combination of behavioural factors, delinquency trends, PD estimates and loan to
valuation ratio (housing loans only).
Program-managed (‘PM’)
Financial Statement DisclosureAdvanced PM Model
1
Simplified PM Approach
2
StrongStage 1 facilities with PM Risk Grade between 13 and 10-
Good/satisfactoryStage 1 facilities with PM Risk Grade between 9 and 6Stage 1
Stage 2 facilities with PM Risk Grade between 13 and 6Stage 2 and 0 - 29 days past due
WeakAll facilities with PM Risk Grade between 5 and 1Stage 2 and 30 or more days past due
All facilities with PM Risk Grade equal to 0/DefaultStage 3/Default
1
Used for Residential Mortgages, Credit Cards & SME lending.
2
Used for Personal lending.

Notes to the financial statements
Westpac New Zealand Limited 29
Note 13 Credit risk management (continued)
13.3 Credit concentrations and maximum exposure to credit risk
Credit risk is concentrated when a number of counterparties are engaged in similar activities, have similar economic characteristics and thus may
be similarly affected by changes in economic or other conditions.
The Banking Group monitors its credit portfolio to allow it to manage risk concentrations and rebalance the portfolio.
Individual customers or groups of related customers
The Banking Group has large exposure limits governing the aggregate size of credit exposure normally acceptable to individual customers and
groups of related customers. These limits are tiered by CRG.
Specific industries
Exposures to businesses, governments and other financial institutions are classified into a number of industry clusters based on related ANZSIC
codes and are monitored against the Banking Group’s industry risk appetite limits.
Individual countries
The Banking Group has limits governing risks related to individual countries, such as political situations, government policies and economic
conditions that may adversely affect either a customer’s ability to meet its obligations to the Banking Group, or the Banking Group’s ability to
realise its assets in a particular country.
Maximum exposure to credit risk
The maximum exposure to credit risk (excluding collateral received) is represented by the carrying amount of on-balance sheet financial assets
and undrawn credit commitments as set out in the following table.
THE BANKING GROUP
$ millions20232022
Financial assets
Cash and balances with central banks9,23310,820
Collateral paid3342
Trading securities and financial assets measured at FVIS2,6612,118
Derivative financial instruments312169
Investment securities6,6515,623
Loans99,32896,882
Other financial assets314263
Due from related entities2,5782,606
Total financial assets121,110118,523
Undrawn credit commitments
Letters of credit and guarantees1,6141,609
Commitments to extend credit27,58827,901
Total undrawn credit commitments29,20229,510
Total maximum credit risk exposure150,312148,033

Notes to the financial statements
30 Westpac New Zealand Limited
Note 13 Credit risk management (continued)
Concentration of credit exposures
THE BANKING GROUP
$ millions20232022
Analysis of on-balance sheet credit exposures by geographical areas
New Zealand
1
117,230
114,990
Overseas
1
4,382
3,929
Subtotal121,612118,919
Provision for ECL on loans(502)(396)
Total on-balance sheet credit exposures121,110118,523
Analysis of on-balance sheet credit exposures by industry sector
Accommodation, cafes and restaurants384395
Agriculture9,0839,263
Construction445495
Finance and insurance7,4396,029
Forestry and fishing436506
Government, administration and defence15,46816,086
Manufacturing2,2302,212
Mining168218
Property8,2548,097
Property services and business services1,1331,040
Services1,5621,384
Trade2,2242,210
Transport and storage8881,181
Utilities2,2571,894
Retail lending66,97865,197
Subtotal118,949116,207
Provision for ECL on loans(502)(396)
Due from related entities2,5782,606
Other financial assets85106
Total on-balance sheet credit exposures121,110118,523
Analysis of off-balance sheet credit exposures by geographical areas
New Zealand28,69129,001
Overseas511
509
Total off-balance sheet credit exposures29,20229,510
Analysis of off-balance sheet credit exposures by industry sector
Accommodation, cafes and restaurants55126
Agriculture607628
Construction528502
Finance and insurance2,5951,874
Forestry and fishing134183
Government, administration and defence834967
Manufacturing1,5741,551
Mining79106
Property1,5031,651
Property services and business services527806
Services1,1441,293
Trade1,8652,196
Transport and storage451789
Utilities1,6971,777
Retail lending15,60915,061
Total off-balance sheet credit exposures 29,20229,510
1
Comparatives have been restated to correctly reflect the geographical classification of on-balance sheet credit exposures. The restatement for 2022 comparative
results in a $915 million decrease in New Zealand credit exposures from $115,905 million to $114,990 million and $915 million increase in overseas credit exposures
from $3,014 million to $3,929 million.
ANZSIC has been used as the basis for disclosing industry sectors.

Notes to the financial statements
Westpac New Zealand Limited 31
Note 13 Credit risk management (continued)
13.4 Credit quality of financial assets
The following table shows the credit quality of gross credit risk exposures measured at amortised cost or at FVOCI to which the impairment
requirements of NZ IFRS 9 apply. The credit quality is determined by reference to the credit risk ratings system (refer to Note 13.2) and
expectations of future economic conditions under multiple scenarios:
THE BANKING GROUP
20232022
$ millions
Stage 1Stage 2Stage 3Total
1
Stage 1Stage 2Stage 3Total
1
Loans - Residential Mortgages
Strong
49,193 - - 49,193 55,768--55,768
Good/satisfactory
1,306 14,591 - 15,897 1,5696,000-7,569
Weak
- 167 509 676 -172360532
Total Loans - Residential Mortgages
50,499 14,758 509 65,766 57,3376,17236063,869
Loans - Other retail
Strong
1,070 - - 1,070 1,124--1,124
Good/satisfactory
793 648 - 1,441 937573-1,510
Weak
1 77 59 137 213558195
Total Loans - Other retail
1,864 725 59 2,648 2,063708582,829
Loans - Corporate
Strong
12,064 - - 12,064 12,869--12,869
Good/satisfactory
11,514 6,246 - 17,760 12,9723,560-16,532
Weak
- 1,195 203 1,398 -9341241,058
Total Loans - Corporate
23,578 7,441 203 31,222 25,8414,49412430,459
Loans - Other
Strong
194 - - 194 121--121
Good/satisfactory
- - - - ----
Weak
- - - - ----
Total Loans - Other
194 - - 194 121--121
Investment Securities
Strong
6,651 - - 6,651 5,623--5,623
Good/satisfactory
- - - - ----
Weak
- - - - ----
Total Investment Securities
6,651 - - 6,651 5,623--5,623
All other financial assets
Strong
10,056 - - 10,056 11,532--11,532
Good/satisfactory
31 49 - 80 2516-41
Weak
- 3 2 5 -213
Total all other financial assets
10,087 52 2 10,141 11,55718111,576
Undrawn credit commitments
Strong
21,515 - - 21,515 22,615--22,615
Good/satisfactory
3,860 3,557 - 7,417 4,6772,032-6,709
Weak
1 243 26 270 1114827186
Total undrawn credit commitments
25,376 3,800 26 29,202 27,3032,1802729,510
Total strong
100,743 - - 100,743 109,652 - - 109,652
Total good/satisfactory
17,504 25,091 - 42,595 20,180 12,181 - 32,361
Total weak
2 1,685 799 2,486 13 1,391 570 1,974
Total on- and off-balance sheet
118,249 26,776 799 145,824 129,845 13,572 570 143,987
1
This credit quality disclosure differs to that of credit risk concentration as it relates only to financial assets measured at amortised costs or at FVOCI and
therefore excludes trading securities and financial assets measured at FVIS, and derivative financial instruments.
Details of collateral held in support of these balances are provided in Note 13.5.

Notes to the financial statements
32 Westpac New Zealand Limited
Note 13 Credit risk management (continued)
13.5 Credit risk mitigation, collateral and other credit enhancements
The Banking Group uses a variety of techniques to reduce the credit risk arising from its lending activities.
This includes the Banking Group having processes in place to ensure that it has direct, irrevocable and unconditional recourse to collateral and other
credit enhancements through obtaining legally enforceable documentation.
The Banking Group includes the effect of credit risk mitigation through eligible guarantees within the calculation applied to LGD. Due to system
limitations, the value of the guarantee is not always separately recorded, and therefore, neither this value nor a close alternative is available for
disclosure under Clause 7 of Schedule 11 to the Order.
Collateral
The table below describes the nature of collateral or security held for each relevant class of financial asset:
Financial assetsNature of collateral
Loans – residential mortgages
1
Housing loans are secured by a mortgage over property and additional security may take the form of
guarantees and deposits.
Loans – other retail
1
Personal lending (including credit cards and overdrafts) is predominantly unsecured. Where security is
taken, it is restricted to eligible motor vehicles, caravans, campers, motor homes and boats.
SME loans may be secured, partially secured or unsecured. Security is typically taken by way of a mortgage
over property and/or a general security agreement over business assets or other assets.
Loans – corporate
1
Business loans may be secured, partially secured or unsecured. Security is typically taken by way of a
mortgage over property and/or a general security agreement over business assets or other assets.
Other security such as guarantees or standby letters of credit may also be taken as collateral, if
appropriate.
Trading securities and financial
assets measured at FVIS, due from
related entities and derivative
financial instruments
These exposures are carried at fair value which reflects the credit risk.
For trading securities, no collateral is sought directly from the issuer or counterparty; however this may be
implicit in the terms of the instrument (such as an asset-backed security). The terms of debt securities
may include collateralisation.
Master netting agreements are typically used to enable the effects of derivative assets and derivative
liabilities with the same counterparty to be offset when measuring these exposures. Additionally,
collateralisation agreements are also typically entered into with major institutional counterparties to avoid
the potential build-up of excessive mark-to-market positions.
1
This includes collateral held in relation to associated credit commitments.
Management of risk mitigation
The Banking Group mitigates credit risk through controls covering:
Collateral and valuation
management
The Ultimate Parent Bank manages collateral under collateralisation agreements centrally for all
branches of the Ultimate Parent Bank and the Bank.
The estimated realisable value of collateral held in support of loans is based on a combination of:
formal valuations currently held for such collateral; and
management’s assessment of the estimated realisable value of all collateral held.
This analysis also takes into consideration any other relevant knowledge available to management at the
time. Updated valuations are obtained when appropriate.
The Banking Group revalues collateral related to financial markets positions on a daily basis and has
formal processes in place to promptly call for collateral top-ups, if required. These processes include
margining for non-centrally cleared customer derivatives where required under APRA Prudential
Standard CPS226. The collateralisation arrangements are documented via the Credit Support Annex of
the International Swaps and Derivatives Association dealing agreements and Global Master Repurchase
Agreements for repurchase transactions.

Notes to the financial statements
Westpac New Zealand Limited 33
Note 13 Credit risk management (continued)
Other credit enhancements
The Banking Group only recognises guarantees, standby letters of credit, or credit derivative protection
from entities meeting minimum eligibility requirements (provided they are not related to the entity with
which the Banking Group has a credit exposure) including but not limited to:
Sovereign;
Australia and New Zealand public sector;
Authorised deposit-taking institutions and overseas banks with a minimum risk grade equivalent of
A3 / A-; and
Other entities with a minimum risk grade equivalent of A3 / A-.
Credit Portfolio Management manages the Banking Group’s corporate, sovereign and bank credit
portfolios through monitoring the exposure and any offsetting hedge positions.
Offsetting
Creditworthy customers domiciled in New Zealand may enter into formal agreements with the Banking
Group, permitting the Banking Group to set-off gross credit and debit balances in their nominated
accounts. Cross-border set-offs are not permitted.
Close-out netting is undertaken with counterparties with whom the Banking Group has entered into a
legally enforceable master netting agreement for their off-balance sheet financial market transactions in
the event of default.
Further details of offsetting are provided in Note 26.
Collateral held against loans
The Banking Group analyses the coverage of the loan portfolio which is secured by the collateral that it holds. Coverage is measured as follows:
CoverageSecured loan to collateral value ratio
Fully securedLess than or equal to 100%
Partially securedGreater than 100% but not more than 150%
Unsecured
Greater than 150%, or no security held (e.g. can include credit cards, personal loans, and exposure to highly rated
corporate entities)

Notes to the financial statements
34 Westpac New Zealand Limited
Note 13 Credit risk management (continued)
The Banking Group's loan portfolio has the following coverage from collateral held:
THE BANKING GROUP
20232022
%
Residential
Mortgages
1
Other
Retail
Corporate Other Total
Residential
Mortgages
1
Other
Retail
Corporate Other Total
Performing Loans
Fully secured
100 46 70 56 89 100 48 71 53 90
Partially secured
- 2 9 1 3 - 2 11 3 3
Unsecured
- 52 21 43 8 - 50 18 44 7
Total 100 100 100 100 100 100 100 100 100 100
Non-performing loans
Fully secured
94 62 57 - 82 94 66 33 - 77
Partially secured
6 7 28 - 12 6 1 37 - 13
Unsecured
- 31 15 - 6 - 33 30 - 10
Total 100 100 100 - 100 100 100 100 - 100
1
For the purposes of collateral classifications, residential mortgages are classified as fully secured, unless they are non-performing in which case they may be
classified as partially secured. Refer to Note iv. Additional mortgage information of the Registered bank disclosures for LVR analysis of residential mortgages.
Details of the carrying value and associated provision for ECL are disclosed in Note 11, Note iii. Asset quality of the Registered bank disclosures and
Note 12 respectively. The credit quality of loans is disclosed in Note 13.4.
Collateral held against financial assets other than loans
THE BANKING GROUP
$ millions20232022
Cash, primarily for derivatives 303 82
Securities under reverse repurchase agreements
1
786 57
Total other collateral held
1,089 139
1
Securities received as collateral are not recognised on the Banking Group's balance sheet.
Note 14 Other financial assets
THE BANKING GROUP
$ millions20232022
Accrued interest receivable 229
157
Trade debtors 2
2
Other
83
104
Total other financial assets 314 263

Notes to the financial statements
Westpac New Zealand Limited 35
Note 15 Deferred tax assets
Accounting policy
Deferred tax accounts for temporary differences between the carrying amounts of assets and liabilities in the financial statements and their values
for taxation purposes.
Deferred tax is determined using the enacted or substantively enacted tax rates and laws which are expected to apply when the assets will be
realised or the liabilities settled.
Deferred tax assets and liabilities have been offset where they relate to the same taxation authority, the same taxable entity or group and where
there is a legal right and intention to settle on a net basis.
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available to utilise the assets.
Deferred tax is not recognised for the following temporary differences:
the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither the accounting nor
taxable profit or loss; and
the initial recognition of goodwill in a business combination.
Critical accounting assumptions and estimates
On a similar basis to that described in Note 7, determining deferred tax assets and liabilities is considered one of the Banking Group’s critical
accounting assumptions and estimates.
THE BANKING GROUP
$ millions20232022
Deferred tax assets/(liabilities) comprise the following temporary differences:
Provision for ECL on loans 140 111
Provision for ECL on credit commitments 14 12
Cash flow hedges (147) (165)
Provision for employee entitlements 20 20
Compliance, regulation and remediation provisions 12 18
Software, property and equipment (33) (43)
Lease liabilities 64 78
Other temporary differences 7 8
Net deferred tax assets 77 39
The deferred tax (charge)/credit in income tax expense comprises the following temporary
differences:
Provision for ECL on loans 29 (21)
Provision for ECL on credit commitments 2 (3)
Provision for employee entitlements 2 -
Compliance, regulation and remediation provisions (6) (3)
Software, property and equipment 10 5
Lease liabilities (14) (3)
Other temporary differences (1) (3)
Total deferred tax (charge)/credit in income tax expense 22 (28)
The deferred tax (charge)/credit in OCI comprises the following temporary differences:
Cash flow hedges 18 (147)
Provision for employee entitlements (2) (2)
Total deferred tax (charge)/credit in OCI 16 (149)

Notes to the financial statements
36 Westpac New Zealand Limited
Note 16 Intangible assets
Accounting policy
Indefinite life intangible assets
Goodwill
Goodwill acquired in a business combination is initially measured at cost, generally being the excess of:
i.the consideration paid; over
ii.the net fair value of the identifiable assets, liabilities and contingent liabilities acquired.
Subsequently, goodwill is not amortised but rather tested for impairment. Impairment is tested at least annually or whenever there is an
indication of impairment. An impairment charge is recognised when a CGU’s carrying value exceeds its recoverable amount. Recoverable amount
means the higher of the CGU’s fair value less costs to sell and its value-in-use.
The Banking Group’s CGUs represent the smallest identifiable group of assets that generate cash inflows that are largely independent of the cash
inflows from other assets or group of assets. They reflect the level at which the Banking Group monitors and manages its operations.
Finite life intangible assets
Finite life intangibles such as computer software which are recognised initially at cost and subsequently at amortised cost less any impairment.
IntangibleUseful lifeDepreciation method
GoodwillIndefiniteNot applicable
Computer software3 to 5 yearsStraight-line or diminishing balance method (using the Sum of the Years Digits)
Critical accounting assumptions and estimates
Judgement is required in determining the fair value of assets and liabilities acquired in a business combination. A different assessment of fair
values would have resulted in a different goodwill balance and different post-acquisition performance of the acquired entity.
When assessing impairment of intangible assets, significant judgement is needed to determine the appropriate cash flows and discount rates to
be applied to the calculations. The significant assumptions applied to the value-in-use calculations are outlined below.
THE BANKING GROUP
$ millions20232022
Goodwill 477 477
Computer software
457 308
Total intangible assets
934 785
Goodwill has been allocated to the Consumer Banking and Wealth CGU, which is a single CGU.
Impairment testing and results
Impairment testing is performed at least once a year, or whenever there is an indication of impairment, by comparing the recoverable amount of
each CGU with the carrying amount. The primary test for the recoverable amount is determined based on value-in-use which refers to the present
value of expected cash flows under its current use.
Impairment testing in the current year confirmed that the Banking Group continues to have considerable headroom when determining whether
goodwill is recoverable, and no impairment should be recognised.

Notes to the financial statements
Westpac New Zealand Limited 37
Note 16 Intangible assets (continued)
Significant assumptions used in recoverable amount calculations
The assumptions made for goodwill impairment testing for the Consumer Banking and Wealth CGU are provided in the following table and are
based on past experience and management’s expectations for the future. In the current year and given the present economic environment, the
Banking Group has reassessed these assumptions and revised them where necessary in order to provide a reasonable estimate of the value-in-
use of the CGU.
Discount rateCash flows
Equity rate / adjusted pre-tax equity rateForecast period / terminal growth rate
2023202220232022
Consumer Banking and Wealth11.5% / 15.2%10.5% / 13.8%3 years / 2%3 years / 2%
The Banking Group discounts the projected cash flows by the adjusted pre-tax equity rate.
The cash flows used are based on management approved forecasts. These forecasts utilise information about current and future economic
conditions, observable historical information and management expectations of future business performance. The terminal value growth rate
represents the growth rate applied to extrapolate cash flows beyond the forecast period and reflects the midpoint of the Reserve Bank’s inflation
target over the medium term.
There are no reasonably possible changes in assumptions for Consumer Banking and Wealth CGU that would result in an indication of impairment
or have a material impact on the Banking Group’s reported results.
Note 17 Deposits and other borrowings
Accounting policy
Deposits and other borrowings are initially recognised at fair value and subsequently either measured at amortised cost using the effective
interest method or at fair value.
Deposits and other borrowings are designated at fair value if they are managed on a fair value basis, reduce or eliminate an accounting mismatch,
or contain an embedded derivative.
Where they are measured at fair value, any changes in fair value (except those due to changes in credit risk) are recognised in the income
statement. The change in the fair value that is attributable to changes in credit risk is recognised in OCI except where it would create an
accounting mismatch, in which case it is also recognised in the income statement.
Interest expense incurred is recognised in net interest income using the effective interest method.
Non-interest bearing relates to instruments which do not carry an entitlement to interest.
THE BANKING GROUP
$ millions20232022
Certificates of deposit 2,413 2,939
Non-interest bearing, repayable at call 12,009 14,391
Other interest bearing:
At call 29,302 31,245
Term
38,472 32,273
Total deposits and other borrowings 82,196 80,848
Deposits at fair value 2,413 2,939
Deposits at amortised cost 79,783 77,909
Total deposits and other borrowings 82,196 80,848

Notes to the financial statements
38 Westpac New Zealand Limited
Note 18 Other financial liabilities
Accounting policy
Other financial liabilities include liabilities measured at amortised cost as well as liabilities which are measured at FVIS. Financial liabilities
measured at FVIS include liabilities designated at FVIS (i.e. certain repurchase agreements).
Repurchase agreements
Where securities are sold subject to an agreement to repurchase at a predetermined price, they remain recognised on the balance sheet in their
original category (i.e. trading securities and financial assets measured at FVIS or investment securities).
The cash consideration received is recognised as a liability (repurchase agreements). Repurchase agreements are designated at fair value when
they are managed as part of a trading portfolio, otherwise they are measured on an amortised cost basis.
Where a repurchase agreement is designated at fair value, any changes in fair value (except those due to change in credit risk) are recognised in
the income statement as they arise. The change in fair value that is attributable to credit risk is recognised in OCI except where it would create an
accounting mismatch, in which case it is also recognised in the income statement.
THE BANKING GROUP
$ millions20232022
Repurchase agreements
1
5,094 3,967
Interbank placements 4 4
Accrued interest payable 853 293
Trade creditors and other accrued expenses
2
207 73
Other 14 11
Total other financial liabilities 6,172 4,348
Other financial liabilities at fair value 44 -
Other financial liabilities at amortised cost 6,128 4,348
Total other financial liabilities 6,172 4,348
1
Repurchase agreements include those under the Funding for Lending Programme and Term Lending Facility. Refer to Note 32.2.2 for further details.
2
During the current financial year, the Banking Group revised its treatment of ongoing trail commission payable to mortgage brokers. The Banking Group
recognised a liability within other financial liabilities equal to the present value of the expected future trail commission payable and a corresponding increase in
capitalised brokerage costs in loans. The balance as at 30 September 2023 was $132 million for the Banking Group. Refer also to Note 1(iv).

Notes to the financial statements
Westpac New Zealand Limited 39
Note 19 Debt issues
Accounting policy
Debt issues are bonds, notes and commercial paper that have been issued by the Banking Group.
Debt issues are initially measured at fair value and subsequently either measured at amortised cost using the effective interest method or at fair
value.
Debt issues are designated at fair value if they reduce or eliminate an accounting mismatch or contain an embedded derivative.
Where they are measured at fair value, any changes in fair value (except those due to changes in credit risk) are recognised in the income
statement. The change in the fair value that is attributable to changes in credit risk is recognised in OCI except where it would create an
accounting mismatch, in which case it is also recognised in the income statement.
Interest expense incurred is recognised within net interest income using the effective interest method.
In the following table, the distinction between short-term (12 months or less) and long-term (greater than 12 months) debt is based on the original
maturity of the underlying security.
THE BANKING GROUP
$ millions20232022
Short-term debt
Commercial paper 1,471 5,490
Total short-term debt 1,471 5,490
Long-term debt
Non-domestic medium-term notes 8,564 7,515
Covered bonds 4,994 3,563
Domestic medium-term notes 3,568 3,365
Total long-term debt 17,126 14,443
Total debt issues 18,597 19,933
Debt issues at fair value 1,471 5,490
Debt issues at amortised cost 17,126 14,443
Total debt issues 18,597 19,933
THE BANKING GROUP
$ millions20232022
Movement reconciliation
Balance at beginning of the year
19,933 16,304
Issuances
7,827
13,602
Maturities, repayments, buy-backs and reductions
(9,290)
(10,297)
Total cash movements (1,463) 3,305
FX translation impact
(41)
1,394
Fair value adjustments
9
(10)
Fair value hedge accounting adjustments
59
(1,106)
Other
1
100
46
Total non-cash movements 127 324
Balance at end of the year 18,597 19,933
1
Includes items such as amortisation of issue costs.

Notes to the financial statements
40 Westpac New Zealand Limited
Note 20 Provisions
Accounting policy
Provisions are recognised for present obligations arising from past events where a payment (or other economic transfer) is likely to be necessary
to settle the obligation and can be reliably estimated.
Employee benefits – annual leave and other employee benefits
The provision for annual leave and other employee benefits (including long service leave, wages and salaries, inclusive of non-monetary benefits,
and any associated on-costs (e.g. payroll tax)) is calculated based on expected payments.
Provision for ECL on credit commitments
The Banking Group is committed to provide facilities and guarantees as explained in Note 27. If it is probable that a facility will be drawn and the
resulting asset will be less than the drawn amount then a provision for impairment is recognised. The provision for impairment is calculated using
the same methodology as the provision for ECL (refer to Note 12).
Compliance, regulation and remediation provisions
The compliance, regulation and remediation provisions relate to matters pertaining to the provision of services to our customers identified both as
a result of regulatory action and internal reviews. An assessment of the likely cost to the Banking Group of these matters (including applicable
customer refunds) is made on a case-by-case basis and specific provisions are made where appropriate.
Critical accounting assumptions and estimates
The financial reporting of provisions for compliance, regulation and remediation involves a significant degree of judgement in relation to
identifying whether a present obligation exists and also in estimating the probability, timing, nature and quantum of the outflows that may arise
from past events. These judgements are made based on the specific facts and circumstances relating to the individual events. Specific
judgements in respect of material items are included in the discussion below.
THE BANKING GROUP
$ millions
Annual leave
and other
employee
benefits
Provision for
ECL on credit
commitments
(refer to Note
12)
Compliance,
regulation and
remediation
provisions
Lease
restoration
obligations
OtherTotal
Balance as at 30 September 2022
95 39 65 33 1 233
Additions 87 5 10
-
3 105
Utilisation
(78) - (6) (1) - (85)
Reversal of unutilised provisions
- -
(15) (8) (1) (24)
Balance as at 30 September 2023 104 44 54 24 3 229
Compliance, regulation and remediation provisions
The compliance, regulation and remediation provisions relate to matters pertaining to the provision of services to our customers identified as a
result of regulatory action and internal reviews, including the Banking Group’s review of processes for some products relating to the requirements
of the CCCFA.
All potential claims and other liabilities are assessed on a case-by-case basis. A provision has been recognised where the Banking Group has
conducted an assessment which determines the likelihood of loss as probable and where its potential loss can be reliably estimated.
A number of different estimates and judgements have been applied in measuring the provision at 30 September 2023, including the number of
impacted customers, the refund per customer and the additional costs to run the remediation program. It is possible that the actual outcome for
these matters may differ from the assumptions used in estimating the provision. Remediation processes may change over time as further facts
emerge and such changes could result in a change to the final exposure.
Where a provision has not been recognised, a contingent liability may exist. Refer to Note 27 for further details on contingent liabilities.

Notes to the financial statements
Westpac New Zealand Limited 41
Note 21 Loan capital
Accounting policy
Loan capital is comprised of debt instruments which qualify for inclusion as regulatory capital under the Reserve Bank BPRs. Loan capital is
initially measured at fair value and subsequently measured at amortised cost using the effective interest method. Interest expense incurred is
recognised in net interest income.
THE BANKING GROUP
$ millions20232022
Additional Tier 1 loan capital - Convertible subordinated perpetual notes 1,494 1,493
Tier 2 loan capital - Subordinated notes
1,172 590
Total loan capital 2,666 2,083
THE BANKING GROUP
$ millions20232022
Movement reconciliation
Balance at beginning of the year
2,083 2,579
Issuances
1
592 590
Maturities, repayments, buy-backs and reductions
- (1,178)
Total cash movements 592 (588)
FX translation impact - 90
Fair value hedge accounting adjustments (13) -
Other (amortisation of bond issue costs, etc) 4 2
Total non-cash movements (9) 92
Balance at end of the year 2,666 2,083
1
Consists of $600 million in loan capital issuances (30 September 2022: $600 million) and is net of $8 million in issuance costs (30 September 2022: $8 million)
and nil in loan capital held by related entities (30 September 2022: $2 million).
Additional Tier 1 loan capital (AT1)
A summary of the key terms and features of the AT1 notes is provided below:
$Issue dateCounterpartyInterest rateOptional redemption date
NZ$1,500 million notes
1
22 September 2017NZ BranchNZ 90 day bank bill
rate + 3.9594% p.a.
21 September 2027 and every fifth
anniversary thereafter

1
The AT1 notes were issued by the Bank and rank equally amongst themselves and are subordinated to the claims of depositors and senior or less subordinated
creditors of the Bank, but rank ahead of the Bank’s ordinary shares.
In accordance with the Reserve Bank BPRs, the Bank’s AT1 notes are subject to a transitional phase-out from 1 January 2022 until 1 July 2028, with
the maximum eligible amount declining by 12.5% each year. The base amount was fixed at the total nominal amount of the Bank’s AT1 notes
outstanding as at 30 September 2021, being NZ$1,500 million. The total value able to be recognised as AT1 capital is set out in BPR110, with the lower
of the outstanding amount or 75.0% of the base amount able to be recognised between 1 January 2023 and 31 December 2023 in line with the
phase-out schedule.
Interest payable
Quarterly interest payments on the AT1 notes are at the absolute discretion of the Bank and will only be paid if the payment conditions are satisfied,
including that the interest payment will not result in the Bank becoming insolvent immediately following the interest payment; not result in a breach of
the Reserve Bank Prudential Standards; and the payment date not falling on the date of a capital trigger event or non-viability trigger event. Interest
payments are non-cumulative. If interest is not paid in full, the Bank may not determine or pay any dividends on its ordinary shares or undertake a
discretionary buy back or capital reduction of the Bank’s ordinary shares (except in limited circumstances).
Redemption
The Bank may elect to redeem all or some of the AT1 notes for their face value on 21 September 2027 and every fifth anniversary thereafter, subject to
the Reserve Bank’s prior written approval. Early redemption of all of the AT1 notes for certain tax or regulatory reasons is permitted subject to the
Reserve Bank’s prior written approval.
Conversion
If a capital trigger event or non-viability trigger event occurs, the Bank must convert some or all of the AT1 notes into a variable number of ordinary
shares issued by the Bank (calculated with reference to the net assets of the Bank and the total number of ordinary shares on issue at the conversion
date) that is sufficient, in the case of a capital trigger event, to return the Bank’s Common Equity Tier 1 capital ratio to above 5.125% as determined by
the Bank in consultation with the Reserve Bank; or, in the case of a non-viability trigger event, to satisfy the direction of the Reserve Bank or the
decision of the statutory manager of the Bank. A capital trigger event occurs when the Bank determines, or the Reserve Bank notifies in writing that it
believes, the Bank’s Common Equity Tier 1 Capital ratio is equal to or less than 5.125%. A non-viability trigger event occurs when the Reserve Bank or
the statutory manager (appointed pursuant to section 117 of the Banking (Prudential Supervision) Act 1989) directs the Bank to convert or write off all
or some of its AT1 notes.

Notes to the financial statements
42 Westpac New Zealand Limited
Note 21 Loan capital (continued)
If conversion of the AT1 notes does not occur within five business days of a capital trigger event or a non-viability trigger event, holders’ rights in
relation to the AT1 notes will be immediately and irrevocably terminated.
The Bank is able to elect to convert all the AT1 notes for certain tax or regulatory reasons (or in certain other circumstances).
Tier 2 loan capital
A summary of the key terms and features of the subordinated notes is provided below:
$Issue dateInterest rateMaturity dateOptional redemption date
NZ$600 million
notes
1
16 September
2022
Fixed at 6.19% until 16 September
2027. Resets on 16 September
2027 to a floating rate: New
Zealand 90 day Bank Bill Rate +
2.10% p.a.
16 September 2032
16 September 2027 and every quarterly
interest payment date thereafter
NZ$600 million
notes
1
14 August 2023
Fixed at 6.73% until 14 February
2029. Resets on 14 February 2029
to a floating rate: New Zealand 90
day Bank Bill Rate + 2.00% p.a.
14 February 2034
14 February 2029 and every quarterly
interest payment date thereafter
1
The subordinated notes were issued by the Bank. The 2022 and 2023 subordinated notes rank equally with each other and amongst themselves and are subordinated
to the claims of depositors and senior or less subordinated creditors of the Bank, but rank ahead of the AT1 notes and the Bank's ordinary shares.
Common features of subordinated notes
Interest payable
Quarterly interest payments on the subordinated notes are subject to the Bank being solvent at the time of, and immediately following, the interest
payment.
Early redemption
The Bank may elect to redeem all or some of the 2022 or 2023 subordinated notes for their face value together with accrued interest (if any) on the first
optional redemption date specified above or any interest payment date thereafter, subject to the Reserve Bank’s prior written approval. Early
redemption of all of the 2022 or 2023 subordinated notes for certain tax or regulatory reasons is permitted on an interest payment date subject to the
Reserve Bank’s prior written approval.
Note 22 Share capital4-18
Accounting policy
Share capital
Ordinary shares are recognised at the amount paid up per ordinary share, net of directly attributable issue costs.
Ordinary shares fully paid
THE BANKING GROUP
20232022
Number ofNumber of
Shares AuthorisedShares Authorised
and Issuedand Issued
Balance as at 1 October 7,300,001,000 7,300,001,000
Share capital issued - -
Balance as at 30 September 7,300,001,000 7,300,001,000
In accordance with the Reserve Bank document BPR110, ordinary share capital is classified as Common Equity Tier 1 capital.
The ordinary shares have no par value. Subject to the constitution of the Bank, each ordinary share of the Bank carries the right to one vote on a
poll at meetings of shareholders, the right to an equal share in dividends authorised by the Board and the right to an equal share in the
distribution of the surplus assets of the Bank in the event of liquidation.
On 16 February 2023 and 17 August 2023, the Bank declared and paid dividends of $326 million and $326 million respectively to its immediate
parent company, Westpac New Zealand Group Limited (30 September 2022: $465 million on 21 February 2022 and $323 million on 19 August 2022).
Total imputation credits of $127 million (30 September 2022: nil) were attached to the dividend declared and paid to Westpac New Zealand Group
Limited on 17 August 2023.

Notes to the financial statements
Westpac New Zealand Limited 43
Note 23 Related entities
Related entities
The Banking Group’s related parties are those it controls or can exert significant influence over. Examples include subsidiaries, associates, joint
ventures and superannuation plans as well as key management personnel and their related parties.
Banking Group
The Bank is a controlled entity of Westpac New Zealand Group Limited. The ultimate parent bank of the Bank is Westpac Banking Corporation.
The Banking Group consists of the Bank and all its controlled entities. As at 30 September 2023, the Bank had the following controlled entities:
Name of entityPrincipal activityNotes
Westpac NZ Operations Limited (‘WNZOL’)Holding company
Aotearoa Financial Services LimitedNon-active company
Number 120 LimitedFinance company, currently non-active
Red Bird Ventures Limited
1
Corporate venture capital company
The Home Mortgage Company LimitedResidential mortgage company, currently non-active
Westpac New Zealand Staff Superannuation Scheme Trustee LimitedTrustee company
Westpac (NZ) Investments Limited (‘WNZIL’)Property company
Westpac Securities NZ Limited (‘WSNZL’)Funding company
Westpac Securitisation Management NZ Limited
2
Securitisation management company
Westpac NZ Covered Bond Holdings Limited (‘WNZCBHL’)Holding company9.5% owned
3
Westpac NZ Covered Bond Limited (‘WNZCBL’)Guarantor9.5% owned
3
Westpac NZ Securitisation Holdings Limited (‘WNZSHL’)Holding company9.5% owned
4
Westpac NZ Securitisation Limited (‘WNZSL’)Funding company9.5% owned
4
Westpac Cash PIE FundPortfolio investment entityNot owned
5
Westpac Notice Saver PIE FundPortfolio investment entityNot owned
5
Westpac Term PIE FundPortfolio investment entityNot owned
5
1
Red Bird Ventures Limited holds 35.03% diluted (37.1% undiluted) (30 September 2022: 29.6% diluted (31.87% undiluted)) equity in Akahu Technologies Limited,
an associate, which is not a controlled entity.
2
On 14 June 2023, WNZOL acquired all 1,000 shares in Westpac NZ Securitisation No.2 Limited (‘WNZSL2’) from WNZSHL, at which point WNZSL2 became a wholly-
owned subsidiary of WNZOL, and on 15 June 2023, WNZSL2 was renamed Westpac Securitisation Management NZ Limited. The Bank was previously considered to
control WNZSL2 based on contractual arrangements in place.
3
The Banking Group, through its subsidiary, WNZOL, has a qualifying interest of 9.5% in WNZCBHL and its wholly-owned subsidiary company, WNZCBL. The Bank is
considered to control both WNZCBHL and WNZCBL based on contractual arrangements in place, and as such both WNZCBHL and WNZCBL are consolidated within
the financial statements of the Banking Group.
4
The Banking Group, through its subsidiary WNZOL, has a qualifying interest of 9.5% in WNZSHL and its wholly-owned subsidiary company, WNZSL. The Bank is
considered to control WNZSHL and WNZSL based on contractual arrangements in place, and as such WNZSHL and WNZSL are consolidated within the financial
statements of the Banking Group.
5
Westpac Term PIE Fund, Westpac Cash PIE Fund and Westpac Notice Saver PIE Fund (collectively referred to as the ‘PIE Funds’) were established as unit trusts.
The PIE Funds are PIEs, where BT Funds Management (NZ) Limited (‘BTNZ’) (an indirectly wholly-owned subsidiary of the Ultimate Parent Bank) is the manager and
issuer. The manager has appointed the Bank to perform all customer management and account administration for the PIE Funds. The Bank is the PIE Funds’ registrar
and administration manager. The Bank does not hold any units in the PIE Funds, however is considered to control them, and as such the PIE Funds are consolidated
in the financial statements of the Banking Group.
Other than as disclosed above, there have been no changes in the ownership percentages since 30 September 2022.
All entities in the Banking Group are 100% owned unless otherwise stated. All the entities within the Banking Group have a balance date of
30 September and are incorporated in New Zealand except the PIE Funds which have a balance date of 31 March.
Nature of transactions
The Banking Group has transactions with members of the Ultimate Parent Bank Group on commercial terms, including the provision of
management, distribution and administrative services.
Loan finance and current account banking facilities are provided by the Ultimate Parent Bank to members of the Banking Group on normal
commercial terms. The interest earned on these loans and the interest paid on deposits are at market rates.
The NZ Branch provides financial market services, foreign currency, trade and interest rate risk products to the Banking Group and its customers,
which includes derivative transactions (refer to Note 24).
Effective 1 October 2014, the Bank and the NZ Branch entered into an agreement whereby the Bank will reimburse the NZ Branch for any credit
losses incurred by it due to certain customers of the Bank defaulting on certain financial market and international products. The Banking Group
receives commission from the sale of these products to customers for providing this guarantee.

Notes to the financial statements
44 Westpac New Zealand Limited
Note 23 Related entities (continued)
This is treated as a financial guarantee for accounting purposes. Financial guarantee contracts are recognised as financial liabilities (recorded
within provisions) when a payment under a contract has become probable. The liability is initially measured at fair value and subsequently at the
higher of the amount of the loss allowance determined in accordance with NZ IFRS 9 and the amount initially recognised less, when appropriate,
the cumulative amount of income recognised.
The value of the exposures guaranteed at 30 September 2023 is $902 million (30 September 2022: $1,057 million), for which a liability has been
recognised of $5.3 million (30 September 2022: $4.3 million).
Refer to Note 21 for details of the loan capital transactions undertaken by the Banking Group with related entities.
Transactions with related entities
THE BANKING GROUP
$ millionsNote20232022
Ultimate Parent Bank
Interest income
1
2 20 4
Interest expense:
Loan capital 132 122
Other
2
2 59 29
Non-interest income:
Commissions received 47 46
Management fees received 7 3
Operating expenses - management fees4 5 5
Immediate Parent Company
Dividends paid22 652 788
Other controlled entities of the Ultimate Parent Bank
Non-interest income:
Distribution fees received on managed fund products 8 15
Distribution fees received on life and general insurance products
3
- 5
Management fees received 3 3
Operational cost recharges 4 8
1
Includes interest income on reverse repurchase agreements.
2
Includes interest expense on other funding provided by and repurchase agreements with the NZ Branch.
3
On 28 February 2022, the sale of Westpac Life-NZ- Limited (renamed Fidelity Insurance Limited on 28 February 2022) to Fidelity Life Assurance Company Limited
was completed, at which point Westpac Life-NZ- Limited ceased to be a controlled entity.
Due from and to related entities
THE BANKING GROUP
$ millions20232022
Due from related entities
Ultimate Parent Bank 2,569 2,602
Other controlled entities of the Ultimate Parent Bank 9 4
Total due from related entities 2,578 2,606
Due from related entities at fair value
1
2,017 2,155
Due from related entities at amortised cost 561 451
Total due from related entities 2,578 2,606
Due to related entities
Ultimate Parent Bank 2,569 2,895
Other controlled entities of the Ultimate Parent Bank 164 66
Total due to related entities 2,733 2,961
Due to related entities at fair value
2
1,180 2,200
Due to related entities at amortised cost 1,553 761
Total due to related entities 2,733 2,961
1
Consists of reverse repurchase agreements of $742 million (30 September 2022: $57 million) and derivative financial instruments of $1,275 million (30 September
2022: $2,098 million) (refer to Note 24).
2
Consists of repurchase agreements of $404 million (30 September 2022: $1,326 million) and derivative financial instruments of $776 million (30 September 2022:
$874 million) (refer to Note 24).

Notes to the financial statements
Westpac New Zealand Limited 45
Note 23 Related entities (continued)
Key management personnel compensation
Key management personnel are those who, directly or indirectly, have authority and responsibility for planning, directing and controlling the
activities of the Banking Group. This includes all Executive/Non-Executive Directors and members of the executive team.
THE BANKING GROUP
$'000s20232022
Salaries and other short-term benefits 9,366 9,105
Post-employment benefits 641 627
Termination benefits - 684
Share-based payments
1
1,631 1,672
Total key management personnel compensation 11,638 12,088
Loans to key management personnel 1,491 3,805
Deposits from key management personnel 6,135 8,397
Interest income on amounts due from key management personnel 146 54
Interest expense on amounts due to key management personnel 73 56
1
Equity-settled remuneration is based on the amortisation over the performance and vesting period (normally two to four years). It is calculated using the fair
value at the grant date of hurdled and unhurdled share rights granted during the four years ending 30 September 2023.
The Directors have received remuneration from the Banking Group and these amounts are included in the table above.
Loans and deposits with key management personnel
All loans and deposits are made in the ordinary course of business of the Banking Group. Loans are on terms that range between variable, fixed
rate up to five years and interest only loans, all of which are in accordance with the Banking Group’s lending policies.
As at 30 September 2023, no amounts have been written off and no individual provision has been recognised in respect of loans given to key
management personnel and their related parties (30 September 2022: nil). These loans have been included within the loan portfolio when
determining collectively assessed provisions.
Other key management personnel transactions
All other transactions with key management personnel, their related entities and other related parties are conducted in the ordinary course of
business. These transactions principally involve the provision of financial, investment and insurance services.

Notes to the financial statements
46 Westpac New Zealand Limited
Note 24 Derivative financial instruments
Accounting policy
Derivative financial instruments are instruments whose values are derived from the value of an underlying asset, reference rate or index and
include forwards, futures, swaps and options. Derivatives with related parties are included in due from/due to related entities.
The Banking Group uses derivative financial instruments for our ALM activities.
Trading derivatives
Derivatives which are used in our ALM activities but are not designated into a hedge accounting relationship are considered economic hedges.
These derivatives are measured at FVIS and are disclosed as trading derivatives.
Hedging derivatives
Hedging derivatives are those which are used in our ALM activities and have also been designated into one of two hedge accounting relationships:
fair value hedge; or cash flow hedge. These derivatives are measured at fair value. These hedge designations and the associated accounting
treatment are detailed below.
For more details regarding the Banking Group’s ALM activities, refer to Note 32.
Fair value hedges
Fair value hedges are used to hedge the exposure to changes in the fair value of an asset or liability.
Changes in the fair value of derivatives and the hedged asset or liability in fair value hedges are recognised in non-interest income. The carrying
value of the hedged asset or liability is adjusted for the changes in fair value related to the hedged risk.
If a hedge is discontinued, any fair value adjustments to the carrying value of the asset or liability are amortised to net interest income over the
period to maturity. If the asset or liability is sold, any unamortised adjustment is immediately recognised in net interest income.
Cash flow hedges
Cash flow hedges are used to hedge the exposure to variability of cash flows attributable to an asset, liability or future forecast transaction.
For effective hedges, changes in the fair value of derivatives are recognised in the cash flow hedge reserve through OCI and subsequently
recognised in net interest income when the cash flows attributable to the asset or liability that was hedged impact the income statement.
For hedges with some ineffectiveness, the changes in the fair value of the derivatives relating to the ineffective portion are immediately recognised
in non-interest income.
If a hedge is discontinued, any cumulative gain or loss remains in OCI. It is amortised to net interest income over the period which the asset or
liability that was hedged also impacts the income statement.
If a hedge of a forecast transaction is no longer expected to occur, any cumulative gain or loss in OCI is immediately recognised in net interest
income.

Notes to the financial statements
Westpac New Zealand Limited 47
Note 24 Derivative financial instruments (continued)
The carrying values of derivative instruments are set out in the tables below:
THE BANKING GROUP
2023
TradingHedging
Total derivatives carrying
value
$ millions
AssetsLiabilitiesAssetsLiabilitiesAssetsLiabilities
Interest rate contracts
Swap agreements
31(19)1,115(352)1,146(371)
Total interest rate contracts
31(19)1,115(352)1,146(371)
FX contracts
Cross currency swap agreements (principal and
interest)
82(5)359(471)441(476)
Total FX contracts
82(5)359(471)441(476)
Total of gross derivatives
113(24)1,474(823)1,587(847)
Total of net derivatives
113(24)1,474(823)1,587(847)
Consisting of:
Derivatives held with external counterparties
19(18)293(53)312(71)
Derivatives held with related parties
94(6)1,181(770)1,275(776)
THE BANKING GROUP
2022
TradingHedging
Total derivatives carrying
value
$ millions
AssetsLiabilitiesAssetsLiabilitiesAssetsLiabilities
Interest rate contracts
Swap agreements
35-1,185(315)1,220(315)
Total interest rate contracts
35-1,185(315)1,220(315)
FX contracts
Cross currency swap agreements (principal and
interest)
64823399(700)1,047(677)
Total FX contracts
64823399(700)1,047(677)
Total of gross derivatives
683231,584(1,015)2,267(992)
Total of net derivatives
683231,584(1,015)2,267(992)
Consisting of:
Derivatives held with external counterparties
--169(118)169(118)
Derivatives held with related parties
683231,415(897)2,098(874)

Notes to the financial statements
48 Westpac New Zealand Limited
Note 24 Derivative financial instruments (continued)
Hedge accounting
The Banking Group designates derivatives into hedge accounting relationships in order to manage the volatility in earnings and capital that would
otherwise arise from interest rate and FX risks that may result from differences in the accounting treatment of derivatives and underlying
exposures. These hedge accounting relationships and the risks they are used to hedge are described below.
The Banking Group enters into one-to-one hedge relationships to manage specific exposures where the terms of the hedged item significantly
match the terms of the hedging instrument. The Banking Group also uses dynamic hedge accounting where the hedged items are part of a
portfolio of assets and/or liabilities that frequently change. In this hedging strategy, the exposure being hedged and the hedging instruments may
change frequently rather than there being a one-to-one hedge accounting relationship for a specific exposure.
Fair value hedges
Interest rate risk
The Banking Group hedges its interest rate risk to reduce exposure to changes in fair value due to interest rate fluctuations over the hedging
period. Interest rate risk arising from fixed rate debt issuances and fixed rate bonds classified as investment securities at FVOCI is hedged with
single currency fixed to floating interest rate derivatives. The Banking Group also hedges its benchmark interest rate risk from fixed rate foreign
currency denominated debt issuances using cross currency swaps. In applying fair value hedge accounting the Banking Group primarily uses one-
to-one hedge accounting to manage specific exposures.
The Banking Group also uses a dynamic hedge accounting strategy for fair value portfolio hedge accounting of some fixed rate mortgages to
reduce exposure to changes in fair value due to interest rate fluctuations over the hedging period. These fixed rate mortgages are allocated to
time buckets based on their expected repricing dates and the fixed-to-floating interest rate derivatives are designated according to the capacity
in the relevant time buckets.
The Banking Group hedges the benchmark interest rate which generally represents the most significant component of the changes in fair value.
The benchmark interest rate is a component of interest rate risk that is observable in the relevant financial markets, for example, Secured
Overnight Financing Rate (‘SOFR’) for USD interest rates and BKBM for NZD interest rates. Ineffectiveness may arise from timing or discounting
differences on repricing between the hedged item and the derivative. For portfolio hedge accounting, ineffectiveness also arises from prepayment
risk (i.e. the difference between actual and expected prepayment of loans). In order to manage the ineffectiveness from early repayments and
accommodate new originations the portfolio hedges are de-designated and redesignated periodically.
Cash flow hedges
Interest rate risk
The Banking Group’s exposure to the volatility of interest cash flows from customer deposits and loans is hedged with interest rate derivatives
using a dynamic hedge accounting strategy called macro cash flow hedges. Customer deposits and loans are allocated to time buckets based on
their expected repricing dates. The interest rate derivatives are designated according to the gross asset or gross liability positions for the relevant
time buckets. The Banking Group hedges the benchmark interest rate which generally represents the most significant component of the changes
in fair value. The benchmark interest rate is a component of interest rate risk that is observable in the relevant financial markets, for example,
Bank Bill Swap Rate for AUD interest rates, SOFR for USD interest rates and BKBM for NZD interest rates. Ineffectiveness may arise from timing or
discounting differences on repricing between the hedged item and the interest rate derivative. Ineffectiveness also arises if the notional values of
the interest rate derivatives exceed the aggregate notional exposure for the relevant time buckets. The hedge accounting relationship is reviewed
on a monthly basis and the hedging relationships are de-designated and redesignated if necessary.
FX risk
The Banking Group’s exposure to foreign currency principal and credit margin cash flows from fixed rate foreign currency debt issuances is
hedged through the use of cross currency derivatives in a one-to-one hedging relationship to manage the changes between the foreign currency
and NZD. In addition, for floating rate foreign currency debt issuances, the Banking Group hedges from foreign floating to NZD floating interest
rates. Ineffectiveness may arise from timing or discounting differences on repricing between the hedged item and the cross currency derivative.
Economic hedges
As part of the Banking Group’s ALM activities, economic hedges may be entered into to hedge long-term funding transactions for risk
management purposes. These hedges do not qualify for hedge accounting and are therefore not included in the hedging instrument disclosures
below.

Notes to the financial statements
Westpac New Zealand Limited 49
Note 24 Derivative financial instruments (continued)
Hedging instruments
The following tables show the carrying value of hedging instruments and a maturity analysis of the notional amounts of the hedging instruments in
one-to-one hedge relationships categorised by the types of hedge relationships and the hedged risk.
THE BANKING GROUP
2023
Notional amounts Carrying value
$ millions
Hedging
instrument Hedged risk
Within 1
year
Over 1 year
to 5 years
Over 5
years TotalAssetsLiabilities
One-to-one hedge relationships
Fair value hedges Interest rate swap
Interest rate risk
5839771,7533,313149(14)
Cross currency swap Interest rate risk 3,86710,20245914,528(260)(752)
Cash flow hedges Cross currency swap FX risk3,93410,20245914,595619281
Total one-to-one hedge relationships8,38421,3812,67132,436508(485)
Macro hedge relationships
Portfolio fair value hedges Interest rate swap Interest rate risk N/AN/AN/A24,600129(57)
Macro cash flow hedges Interest rate swap Interest rate risk N/AN/AN/A22,604837(281)
Total macro hedge relationships N/AN/AN/A47,204966(338)
Total of gross hedging derivatives N/AN/AN/A79,6401,474(823)
Impact of netting arrangements N/AN/AN/AN/A--
Total of net hedging derivatives N/AN/AN/AN/A1,474(823)
THE BANKING GROUP
2022
Notional amounts Carrying value
$ millionsHedging instrument Hedged risk
Within 1
year
Over 1 year
to 5 years
Over 5
years TotalAssetsLiabilities
One-to-one hedge relationships
Fair value hedges Interest rate swap
Interest rate risk
3471,004-1,35139(3)
Cross currency swap Interest rate risk 2699,8901,91112,070(17)(708)
Cash flow hedges Cross currency swap FX risk3042,4563433,1034168
Total one-to-one hedge relationships92013,3502,25416,524438(703)
Macro hedge relationships
Portfolio fair value hedges Interest rate swap Interest rate risk N/AN/AN/A23,800264(14)
Macro cash flow hedges Interest rate swap Interest rate risk N/AN/AN/A20,230882(298)
Total macro hedge relationships N/AN/AN/A44,0301,146(312)
Total of gross hedging derivatives N/AN/AN/A60,5541,584(1,015)
Impact of netting arrangements N/AN/AN/AN/A--
Total of net hedging derivatives N/AN/AN/AN/A1,584(1,015)

Notes to the financial statements
50 Westpac New Zealand Limited
Note 24 Derivative financial instruments (continued)
The following table shows the weighted average exchange rate related to significant hedging instruments in one-to-one hedge relationships:
THE BANKING GROUP
Weighted average hedged rate
Hedging instrumentHedged risk Currency pair20232022
Cash flow hedges Cross currency swapFX riskCHF:NZD
0.66130.6730
EUR:NZD
0.59430.5965
HKD:NZD
5.11145.1114
USD:NZD
0.67210.6947
Impact of hedge accounting on the balance sheet and reserves
The following tables show the carrying amount of hedged items in a fair value hedge relationship and the component of the carrying amount related to
accumulated fair value hedge accounting (‘FVHA’) adjustments.
THE BANKING GROUP
20232022
$ millions
Carrying amount of
hedged item
Accumulated FVHA
adjustment included
in carrying amount
Carrying amount of
hedged item
Accumulated FVHA
adjustment included in
carrying amount
Interest rate risk
Investment securities
2,585(93)1,325(57)
Loans
24,417(182)23,456(343)
Debt issues and loan capital
(14,664)1,006(10,973)1,052
There were no accumulated FVHA adjustments (30 September 2022: nil) included in the above carrying amounts relating to hedged items that
have ceased to be adjusted for hedging gains and losses.
The pre-tax impact of cash flow hedges on reserves is detailed below:
THE BANKING GROUP
20232022
$ millions
Interest rate
riskFX risk Total
Interest rate
risk
1
FX risk
1
Total
Cash flow hedge reserve
Balance at beginning of the year
603(16)587146(83)63
Net gains/(losses) from changes in fair value
212(307)(95)454(166)288
Transferred to net interest income
(231)263323233236
Balance at end of year
584(60)524603(16)587
1
Comparative amounts have been revised to align to the current year's basis of presentation. The restatement for 2022 comparatives results in a $208 million
increase in transferred to income statement and a corresponding decrease in net gains/(losses) from changes in fair value.
There were no balances remaining in the cash flow hedge reserve (30 September 2022: nil) relating to hedge relationships for which hedge
accounting is no longer applied.

Notes to the financial statements
Westpac New Zealand Limited 51
Note 24 Derivative financial instruments (continued)
Hedge effectiveness
Hedge effectiveness is tested prospectively at inception and during the lifetime of hedge relationships. For one-to-one hedge relationships this testing uses a
qualitative assessment of matched terms where the critical terms of the derivatives used as the hedging instrument match the terms of the hedged item. In
addition, a quantitative effectiveness test is performed for all hedges which could include regression analysis, dollar offset and/or sensitivity analysis.
Retrospective testing is also performed to determine whether the hedge relationship remains highly effective so that hedge accounting can continue to be
applied and also to determine any ineffectiveness. These tests are performed using regression analysis and the dollar offset method.
The following tables provide information regarding the determination of hedge effectiveness:
THE BANKING GROUP
2023
$ millions
Hedging
instrument Hedged risk
Change in fair value of
hedging instrument
used for calculating
ineffectiveness
Change in value of
the hedged item
used for calculating
ineffectiveness
Hedge
ineffectiveness
recognised in non-
interest income
Fair value hedges
Interest rate swap Interest rate risk (130)1388
Cross currency swap Interest rate risk 62(59)3
Cash flow hedges
Interest rate swap Interest rate risk (28)17(11)
Cross currency swap FX risk(45)45-
Total
(141)141-
THE BANKING GROUP
2022
$ millionsHedging instrument Hedged risk
Change in fair value of
hedging instrument used
for calculating
ineffectiveness
Change in value of the
hedged item used for
calculating
ineffectiveness
Hedge
ineffectiveness
recognised in non-
interest income
Fair value hedges
Interest rate swap Interest rate risk 355(363)(8)
Cross currency swap Interest rate risk (1,103)1,1041
Cash flow hedges
Interest rate swap Interest rate risk 470(458)12
Cross currency swap FX risk66(66)-
Total
(212)2175

Notes to the financial statements
52 Westpac New Zealand Limited
Note 25 Fair values of financial assets and financial liabilities
Accounting policy
The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.
On initial recognition, the transaction price generally represents the fair value of the financial instrument unless there is observable information
from an active market to the contrary. Where significant unobservable information is used, the difference between the transaction price and the
fair value (day one profit or loss) is recognised in the income statement over the life of the instrument or when the inputs become observable.
Critical accounting assumptions and estimates
The majority of valuation models used by the Banking Group employ only observable market data as inputs. However, for certain financial
instruments, data may be employed which is not readily observable in current markets.
The availability of observable inputs is influenced by factors such as:
product type;
depth of market activity;
maturity of market models; and
complexity of the transaction.
Where unobservable market data is used, more judgement is required to determine fair value. The significance of these judgements depends on
the significance of the unobservable input to the overall valuation. Unobservable inputs are generally derived from other relevant market data and
adjusted against:
standard industry practice;
economic models; and
observed transaction prices.
In order to determine a reliable fair value for a financial instrument, management may apply adjustments to the techniques previously described.
These adjustments reflect the Banking Group’s assessment of factors that market participants would consider in setting the fair value.
These adjustments incorporate bid/offer spreads, credit valuation adjustments and funding valuation adjustments.
Fair Valuation Control Framework
The Banking Group uses a Fair Valuation Control Framework where the fair value is either determined or validated by a function independent of the
transaction. This framework formalises the policies and procedures used to achieve compliance with relevant accounting, industry and regulatory
standards. The framework includes specific controls relating to:
the revaluation of financial instruments;
independent price verification;
fair value adjustments; and
financial reporting.
A key element of the framework is the Revaluation Committee, comprising senior valuation specialists from within the Ultimate Parent Bank Group.
The Revaluation Committee reviews the application of the agreed policies and procedures to assess that a fair value measurement basis has been
applied.
The method of determining fair value differs depending on the information available.
Fair value hierarchy
A financial instrument’s categorisation within the valuation hierarchy is based on the lowest level input that is significant to the fair value
measurement.
The Banking Group categorises all fair value instruments according to the hierarchy described below.
Valuation techniques
The Banking Group applies market accepted valuation techniques in determining the fair valuation of over-the-counter derivatives. This includes
credit valuation adjustment and funding valuation adjustment, which incorporate credit risk and funding costs and benefits that arise in relation to
uncollateralised derivative positions, respectively.
The specific valuation techniques, the observability of the inputs used in valuation models and the subsequent classification for each significant
product category are outlined as follows:

Notes to the financial statements
Westpac New Zealand Limited 53
Note 25 Fair values of financial assets and financial liabilities (continued)
Financial instruments measured at fair value
Level 1 instruments
The fair value of financial instruments traded in active markets is based on recent unadjusted quoted prices. These prices are based on actual arm’s
length basis transactions.
The valuations of Level 1 instruments require little or no management judgement.
InstrumentBalance sheet categoryIncludesValuation
Debt instrumentsTrading securities and
financial assets
measured at FVIS
Investment securities
New Zealand
Government bonds
These instruments are traded in liquid, active markets where
prices are readily observable. No modelling or assumptions
are used in the valuation.
Level 2 instruments
The fair value for financial instruments that are not actively traded is determined using valuation techniques which maximise the use of observable
market prices. Valuation techniques include:
the use of market standard discounting methodologies;
option pricing models; and
other valuation techniques widely used and accepted by market participants.
InstrumentBalance sheet categoryIncludesValuation
Interest rate
products
Derivative financial instruments
Due from related entities
Due to related entities
Interest rate swaps,
forwards and options
– derivative financial
instruments
Industry standard valuation models are used to calculate the
expected future value of payments by product, which is
discounted back to a present value. The model’s interest rate
inputs are benchmark interest rates and active broker quoted
interest rates in the swap, bond and futures markets. Interest
rate volatilities are sourced from brokers and consensus data
providers. If consensus prices are not available, these are
classified as Level 3 instruments.
FX products
Derivative financial instruments
Due from related entities
Due to related entities
FX swaps – derivative
financial instruments
Derived from market observable inputs or consensus pricing
providers using industry standard models. If consensus
prices are not available, these are classified as Level 3
instruments.
Non-asset backed
debt instruments
Trading securities and financial
assets measured at FVIS
Investment securities
Due from related entities
Due to related entities
Other financial liabilities
Local authority and
NZ public securities,
other bank issued
certificates of deposit,
commercial paper, other
government securities,
off-shore securities and
corporate bonds
Repurchase
agreements and reverse
repurchase agreements
over non-asset backed
debt securities
Valued using observable market prices which are sourced from
independent pricing services, broker quotes or inter-dealer
prices. If prices are not available from these sources, these are
classified as Level 3 instruments.
Deposits and
other borrowings
at fair value
Deposits and other borrowingsCertificates of deposit
Discounted cash flow using market rates offered for
deposits of similar remaining maturities.
Debt issues at fair
value
Debt issuesCommercial paper
Discounted cash flows, using a discount rate which reflects
the terms of the instrument and the timing of cash flows
adjusted for market observable changes in the Banking
Group’s implied creditworthiness.

Notes to the financial statements
54 Westpac New Zealand Limited
Note 25 Fair values of financial assets and financial liabilities (continued)
Level 3 instruments
Financial instruments valued where at least one input that could have a significant effect on the instrument’s valuation is not based on observable
market data due to illiquidity or complexity of the product. These inputs are generally derived and extrapolated from other relevant market data and
calibrated against current market trends and historical transactions.
These valuations are calculated using a high degree of management judgement.
As at 30 September 2023, the Banking Group has no financial instruments valued under this category (30 September 2022: nil).
The following table summarises the attribution of financial instruments measured at fair value to the fair value hierarchy:
THE BANKING GROUP
20232022
$ millionsLevel 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Financial assets measured at fair value on a
recurring basis
Trading securities and financial assets measured at FVIS792,582-2,661 86 2,032 - 2,118
Derivative financial instruments-312-312 - 169 - 169
Investment securities2,2874,364-6,651 1,982 3,641 - 5,623
Due from related entities-2,017-2,017 - 2,155 - 2,155
Total financial assets measured at fair value2,3669,275-11,641 2,068 7,997 - 10,065
Financial liabilities measured at fair value on a
recurring basis
Deposits and other borrowings at fair value
1
-2,413-2,413 - 2,939 - 2,939
Other financial liabilities
1
-44-44 - - - -
Derivative financial instruments-71-71 - 118 - 118
Due to related entities-1,180-1,180 - 2,200 - 2,200
Debt issues at fair value
1
-1,471-1,471 - 5,490 - 5,490
Total financial liabilities measured at fair value-5,179-5,179 - 10,747 - 10,747
1
There are no differences between the fair values disclosed and the contractual outstanding amount payable at maturity for these financial liabilities measured at
fair value on a recurring basis.
Analysis of movements between fair value hierarchy levels
The Banking Group considers transfers between levels, if any, to have occurred at the end of the reporting period. During the year, there were no
material transfers between levels of the fair value hierarchy (30 September 2022: no material transfers between levels).
Financial instruments not measured at fair value
For financial instruments not measured at fair value on a recurring basis, fair value has been derived as follows:
InstrumentValuation
Loans
Where available, the fair value of loans is based on observable market transactions; otherwise fair value is
estimated using discounted cash flow models. For variable rate loans, the discount rate used is the current
effective interest rate. The discount rate applied for fixed rate loans reflects the market rate for the maturity of the
loan and the creditworthiness of the borrower.
Deposits and other
borrowings
Fair values of deposit liabilities payable on demand (interest free, interest bearing and savings deposits)
approximate their carrying value. Fair values for term deposits are estimated using discounted cash flows, applying
market rates offered for deposits of similar remaining maturities.
Due to related entities
The carrying value of due to related entities approximates the fair value. These items are either short-term in nature or
re-price frequently, and are of a high credit rating.
Debt issues and
loan capital
The fair values of these instruments are calculated based on quoted market prices, where available. Where quoted
market prices are not available, fair values are calculated using a discounted cashflow model. The discount rates
applied reflect the terms of the instruments and the timing of the estimated cash flows and are adjusted for any
changes in the Banking Group’s credit spreads.
All other financial assets
and financial liabilities
For all other financial assets and financial liabilities, the carrying value approximates the fair value. These items are
either short-term in nature or re-price frequently, and are of a high credit rating.

Notes to the financial statements
Westpac New Zealand Limited 55
Note 25 Fair values of financial assets and financial liabilities (continued)
The following table summarises the estimated fair value and fair value hierarchy of the Banking Group’s financial instruments not measured at fair value:
THE BANKING GROUP
2023
Fair Value
$ millions
Carrying
Amount
Level 1Level 2Level 3Total
Financial assets not measured at fair value
Cash and balances with central banks 9,233 9,233 - - 9,233
Collateral paid 33 33 - - 33
Loans 99,328 - - 98,254 98,254
Other financial assets 314 - - 314 314
Due from related entities
561 - 554 7
561
Total financial assets not measured at fair value 109,469 9,266 554 98,575 108,395
Financial liabilities not measured at fair value
Collateral received 303 303 - - 303
Deposits and other borrowings 79,783 - 78,057 1,741 79,798
Other financial liabilities 6,128 - 6,128 - 6,128
Due to related entities 1,553 - 1,553 -
1,553
Debt issues
1
17,126 - 16,962 - 16,962
Loan capital
1
2,666 - 1,162 1,625
2,787
Total financial liabilities not measured at fair value 107,559 303 103,862 3,366 107,531
THE BANKING GROUP
2022
Fair Value
$ millions
Carrying
Amount
Level 1Level 2Level 3Total
Financial assets not measured at fair value
Cash and balances with central banks 10,820 10,820 - - 10,820
Collateral paid 42 42 - - 42
Loans 96,882 - - 95,528 95,528
Other financial assets 263 - - 263 263
Due from related entities 451 - 446 5 451
Total financial assets not measured at fair value 108,458 10,862 446 95,796 107,104
Financial liabilities not measured at fair value
Collateral received 82 82 - - 82
Deposits and other borrowings 77,909 - 75,487 2,408 77,895
Other financial liabilities 4,348 - 4,348 - 4,348
Due to related entities 761 - 761 - 761
Debt issues
1
14,443 - 14,242 - 14,242
Loan capital
1
2,083 - 599 1,625
2,224
Total financial liabilities not measured at fair value 99,626 82 95,437 4,033 99,552
1
The estimated fair value of debt issues and level 3 loan capital includes the impact of changes in the Banking Group's credit spreads since origination.

Notes to the financial statements
56 Westpac New Zealand Limited
Note 26 Offsetting financial assets and financial liabilities
Accounting policy
Financial assets and financial liabilities are presented net on the balance sheet when the Banking Group has a legally enforceable right to offset
them in all circumstances and there is an intention to settle the asset and liability on a net basis, or to realise the asset and settle the liability
simultaneously. The gross assets and liabilities behind the net amounts reported on the balance sheet are disclosed in the following table.
Some of the Banking Group’s offsetting arrangements are not enforceable in all circumstances. The amounts in the tables below may not tie back
to the balance sheet if there are balances which are not subject to offsetting or enforceable netting arrangements. The amounts presented in this
note do not represent the credit risk exposure of the Banking Group. Refer to Note 13 for information on credit risk management. The offsetting
and collateral arrangements and other credit risk mitigation strategies used by the Banking Group are further explained in the ‘Management of risk
mitigation’ section under Note 13.5.
THE BANKING GROUP
2023
Amounts Subject to Enforceable Netting Arrangements
Amounts Offset on the Balance Sheet Amounts Not Offset on the Balance Sheet
$ millions
Gross
Amounts
Amounts
Offset
Net Amounts
Reported on
the Balance
Sheet
Other
Recognised
Financial
Instruments
Cash
Collateral
Financial
Instrument
CollateralNet Amount
Assets
Reverse repurchase agreements
1
44 - 44 - - (44) -
Derivative financial instruments
312 - 312 - (303) - 9
Due from related entities - reverse
repurchase agreements
2
742 - 742 - - (742) -
Due from related entities - derivative
financial instruments
2
1,275 - 1,275 (776) - - 499
Total assets 2,373 - 2,373 (776) (303) (786) 508
Liabilities
Repurchase agreements
3
5,094 - 5,094 - - (5,094)
-
Derivative financial instruments
71 - 71 - (33) (38) -
Due to related entities - repurchase
agreements
4
404 - 404 - - (404) -
Due to related entities - derivative
financial instruments
4
776 - 776 (776) - - -
Total liabilities 6,345 - 6,345 (776) (33) (5,536) -
1
Forms part of trading securities and financial assets measured at FVIS (refer to Note 9).
2
Forms part of due from related entities on the balance sheet (refer to Note 23).
3
Forms part of other financial liabilities on the balance sheet (refer to Note 18).
4
Forms part of due to related entities on the balance sheet (refer to Note 23).

Notes to the financial statements
Westpac New Zealand Limited 57
Note 26 Offsetting financial assets and financial liabilities (continued)
THE BANKING GROUP
2022
Amounts Subject to Enforceable Netting Arrangements
Amounts Offset on the Balance SheetAmounts Not Offset on the Balance Sheet
$ millions
Gross
Amounts
Amounts
Offset
Net Amounts
Reported on
the Balance
Sheet
Other
Recognised
Financial
Instruments
Cash
Collateral
Financial
Instrument
CollateralNet Amount
Assets
Derivative financial instruments
169 - 169 - (77) - 92
Due from related entities - reverse
repurchase agreements
1
57 - 57 - - (57) -
Due from related entities - derivative
financial instruments
1
2,098 - 2,098 (874) - - 1,224
Total assets 2,324 - 2,324 (874) (77) (57) 1,316
Liabilities
Repurchase agreements
2
3,967 - 3,967 - - (3,967) -
Derivative financial instruments 118 - 118 - (33) - 85
Due to related entities - repurchase
agreements
3
1,326 - 1,326 - - (1,326) -
Due to related entities - derivative
financial instruments
3
874 - 874 (874) - - -
Total liabilities 6,285 - 6,285 (874) (33) (5,293) 85
1
Forms part of due from related entities on the balance sheet (refer to Note 23).
2
Forms part of other financial liabilities on the balance sheet (refer to Note 18).
3
Forms part of due to related entities on the balance sheet (refer to Note 23).
Other recognised financial instruments
These financial assets and financial liabilities are subject to master netting agreements which are not enforceable in all circumstances, so they are
recognised gross on the balance sheet. The offsetting rights of the master netting arrangements can only be enforced if a predetermined event
occurs in the future, such as a counterparty defaulting.
Cash collateral and financial instrument collateral
These amounts are received or pledged under master netting arrangements against the gross amounts of assets and liabilities. Financial
instrument collateral typically comprises securities which can be readily liquidated in the event of counterparty default. The offsetting rights of the
master netting arrangement can only be enforced if a predetermined event occurs in the future, such as a counterparty defaulting.

Notes to the financial statements
58 Westpac New Zealand Limited
Note 27 Credit related commitments, contingent assets and contingent liabilities
Accounting policy
Undrawn credit commitments
The Banking Group enters into various arrangements with customers which are only recognised on the balance sheet when called upon.
These arrangements include commitments to extend credit, bill endorsements, financial guarantees, standby letters of credit and underwriting
facilities.
Contingent assets
Contingent assets are possible assets whose existence will be confirmed only by uncertain future events. Contingent assets are not recognised on
the balance sheet but are disclosed if an inflow of economic benefits is probable.
Contingent liabilities
Contingent liabilities are possible obligations whose existence will be confirmed only by uncertain future events, and present obligations where
the transfer of economic resources is not probable or cannot be reliably measured. Contingent liabilities are not recognised on the balance sheet
but are disclosed unless the outflow of economic resources is remote.
Undrawn credit commitments
Undrawn credit commitments expose the Banking Group to liquidity risk when called upon and also to credit risk if the customer fails to repay the
amounts owed at the due date. The maximum exposure to credit loss is the contractual or notional amount of the instruments disclosed below.
Some of the arrangements can be cancelled by the Banking Group at any time. The actual liquidity and credit risk exposure varies in line with
drawings and may be less than the amounts disclosed. The Banking Group uses the same credit policies when entering into these arrangements
as it does for on-balance sheet instruments. Refer to Note 13 and Note 32 for further details on credit risk management and liquidity risk.
THE BANKING GROUP
$ millions
20232022
Letters of credit and guarantees
1,2
1,614 1,609
Commitments to extend credit
3
27,588 27,901
Total undrawn credit commitments 29,202 29,510
1
Standby letters of credit and guarantees are undertakings to pay, against presentation documents, an obligation in the event of a default by a customer.
Guarantees are unconditional undertakings given to support the obligations of a customer to third parties. The Banking Group may hold cash as collateral for
certain guarantees issued.
2
Letters of credit and guarantees includes the value of exposures guaranteed by the Bank to NZ Branch, as disclosed in Note 23 Related entities.
3
Commitments to extend credit include all obligations on the part of the Banking Group to provide credit facilities. As facilities may expire without being drawn
upon, the notional amounts do not necessarily reflect future cash requirements.
Contingent assets
The credit commitments shown in the table above also constitute contingent assets. These commitments would be classified as loans on the balance
sheet on the contingent event occurring.
Contingent liabilities
All potential claims and other liabilities are assessed on a case-by-case basis. A provision will be recognised where the Banking Group has
conducted an assessment which determines the likelihood of loss as probable and where its potential loss can be reliably estimated. A contingent
liability exists in respect of actual or potential claims where the likely loss is not assessed as probable, where the law is uncertain or, in rare
circumstances, where the outflow of resources cannot be reliably estimated.
The Banking Group is exposed to contingent risks and liabilities arising from the conduct of its business, including: actual and potential disputes,
claims and legal proceedings; investigations, inquiries and reviews (formal and informal) carried out by regulatory authorities; and internal
investigations and reviews, one such internal review being a review of processes for some products relating to the requirements of the CCCFA.
The scope of reviews (internal and external), investigations and inquiries can be wide-ranging and can result in litigation (including class action
proceedings and enforcement proceedings), fines and penalties, customer remediation and/or other sanctions and reputational damage.
Guarantees
As disclosed in Note 23, the Bank has an agreement with the NZ Branch whereby the Bank will reimburse the NZ Branch for any credit losses
incurred by it due to certain customers of the Bank defaulting on certain financial market and international products.

Notes to the financial statements
Westpac New Zealand Limited 59
Note 28 Segment reporting
Accounting policy
Operating segments are presented on a basis that is consistent with information provided internally to the Banking Group’s chief operating
decision-maker and reflect the management of the business, rather than the legal structure of the Banking Group. The chief operating decision-
maker is the person or group that allocates resources to and assesses the performance of the operating segments of an entity. The Banking Group
has determined that the Bank’s executive team is its chief operating decision-maker.
Inter-segment revenue and costs are eliminated at head office. Income and expenses directly associated with each segment are included in
determining business segment performance.
The Banking Group’s segment reporting incorporates Consumer Banking and Wealth and Institutional and Business Banking sectors within New
Zealand. On this basis, no geographical segment reporting is provided.
The operating segment results have been presented on a management reporting basis and consequently internal charges and transfer pricing
adjustments have been reflected in the performance of each operating segment. Intersegment pricing is determined on a cost recovery basis.
The Banking Group does not rely on any single major customer for its revenue base.
An investments and insurance unit provided funds management and insurance services until 28 February 2022 when the sale of Westpac Life-NZ-
Limited to Fidelity Life Assurance Company Limited was completed. From 1 March 2022, it only provided funds management services. As at 30
September 2023, the investments unit is no longer reported as a main operating segment.
Segment comparative information for the year ended 30 September 2022 has also been restated to ensure consistent presentation with the current
reporting period. This reflects changes to expense allocations between segments during the period.
The Banking Group’s operating segments are defined by the customers they serve and the services they provide. The Banking Group has identified the
following main operating segments:
Consumer Banking and Wealth provides financial services predominantly for individuals; and
Institutional and Business Banking provides a broad range of financial services for commercial, corporate, property finance, agricultural,
institutional and government customers.
Reconciling items primarily represent:
business units that do not meet the definition of a reportable operating segment under NZ IFRS 8 Operating Segments;
elimination entries on consolidation of the results, assets and liabilities of the Banking Group’s controlled entities in the preparation of the
consolidated financial statements of the Banking Group; and
results of certain business units excluded for management reporting purposes, but included within the consolidated financial statements of the
Banking Group for statutory financial reporting purposes.
THE BANKING GROUP
ConsumerInstitutional
Banking andand BusinessReconciling
$ millionsWealthBankingItemsTotal
Year ended 30 September 2023
Net interest income1,2001,216237
2,653
Net fee and commissions
Facility fees2718(1)
44
Transaction fees and commissions1647312
249
Other non-risk fee income621(12)
15
Fees and commissions expenses(75)-1
(74)
Net fee and commissions122112-234
Other non-interest income
--1414
Total non-interest income12211214248
Net operating income1,3221,3282512,901
Operating expenses(734)(508)(49)
(1,291)
Impairment (charges)/benefits
(77)(53)(5)(135)
Profit before income tax5117671971,475
As at 30 September 2023
Total gross loans60,00439,911(85)99,830
Total deposits and other borrowings
44,98034,8032,41382,196

Notes to the financial statements
60 Westpac New Zealand Limited
Note 28 Segment reporting (continued)
THE BANKING GROUP
ConsumerInstitutional
Banking andand BusinessReconciling
$ millionsWealthBankingItemsTotal
Year ended 30 September 2022 (restated)
Net interest income1,1401,09952
2,291
Net fee and commissions
Facility fees24143
41
Transaction fees and commissions178769
263
Other non-risk fee income719(12)
14
Fees and commissions expenses(66)--
(66)
Net fee and commissions143109-252
Other non-interest income
--1616
Total non-interest income14310916268
Net operating income1,2831,208682,559
Operating expenses(625)(436)(70)(1,131)
Impairment (charges)/benefits
324-27
Profit before income tax661796(2)1,455
As at 30 September 2022
Total gross loans57,96839,684(374)97,278
Total deposits and other borrowings43,57434,3352,93980,848
Note 29 Securitisation, covered bonds and other transferred assets
The Banking Group enters into transactions in the normal course of business by which financial assets are transferred to counterparties or structured
entities. Depending on the circumstances, these transfers may result in derecognition of the assets in their entirety, partial derecognition or no
derecognition of the assets subject to the transfer. For the Banking Group’s accounting policy on derecognition of financial assets, refer to Note 1.
Securitisation
Securitisation is the process of selling a group of assets (or an interest in the assets or the cashflow arising from the assets) to a special purpose entity
which then issues interest bearing debt securities for funding and liquidity purposes.
Securitisation of its own assets is used by the Banking Group as a funding and liquidity tool.
In October 2008, the Banking Group set up WNZSL as a structured entity for the purpose of structuring assets that are eligible for repurchase by the
Reserve Bank as part of the Bank’s internal residential mortgage-backed securitisation programme.
Under the internal residential mortgage-backed securitisation programme, the Bank periodically sells the rights (but not the obligations) under eligible
housing loans to WNZSL. The purchase by WNZSL of the housing loans is funded by the proceeds of the issuance of RMBS.
The Bank is obliged to repurchase any housing loan sold to and held by WNZSL where the housing loan does not meet the eligibility criteria of the
programme. It is not envisaged that any liability resulting in material loss to the Banking Group will arise from these obligations.
Covered bonds
The Banking Group has a covered bond programme under which it may issue bonds (Covered Bonds). The Banking Group transfers, via assignment,
from time to time housing loans originated by the Bank to a bankruptcy remote structured entity, WNZCBL. WNZCBL is a special purpose entity which
holds the rights to, but not the obligations under, the pool of housing loans held by it (the Portfolio). The payments of all amounts due in respect of the
Covered Bonds have been unconditionally guaranteed by the Bank. In addition, WNZCBL (the CB Guarantor) has guaranteed payments of interest and
principal under the Covered Bonds pursuant to a financial guarantee which is secured by WNZCBL granting security over the Portfolio and its other
assets. Recourse against the CB Guarantor under its guarantee is limited to the Portfolio and such assets.
The intercompany loan made by the Bank to WNZCBL to fund the initial and all subsequent purchases of eligible housing loans and the liability
representing the intercompany loan from WNZCBL to the Bank are fully eliminated in the Banking Group’s financial statements.

Notes to the financial statements
Westpac New Zealand Limited 61
Note 29 Securitisation, covered bonds and other transferred assets (continued)
The Banking Group is obliged to repurchase any housing loans sold to and held by WNZCBL (pursuant to the Bank’s Global Covered Bond
Programme) in certain circumstances including (but not limited to) where:
it is discovered that there has been a material breach of a sale warranty (or any such sale warranty is materially untrue);
the loan becomes materially impaired or is enforced prior to the second monthly covered bond payment date falling after the assignment of the
loan; or
at the cut-off date relating to the loan, there were arrears of interest and that loan subsequently becomes a delinquent loan prior to the second
monthly covered bond payment date falling after the assignment of the loan.
It is not envisaged that any liability resulting in material loss to the Banking Group will arise from these obligations.
Repurchase agreements
Where securities are sold subject to an agreement to repurchase at a predetermined price, they remain recognised on the balance sheet in their
original category (i.e. trading securities and financial assets measured at FVIS or investment securities). Repurchase agreements are designated at fair
value when they are managed as part of a trading portfolio, otherwise they are measured on an amortised cost basis.
The cash consideration received is recognised as a liability (repurchase agreements). Refer to Note 18 for further details.
The following table presents the Banking Group’s assets transferred and their associated liabilities:
THE BANKING GROUP
For those liabilities that only have recourse to
the transferred assets:
$ millions
Carrying
amount of
transferred
assets
Carrying
amount of
associated
liabilities
Fair value of
transferred
assets
Fair value of
associated
liabilities
Net fair value
position
2023
Securitisation - own assets
1
15,096 15,098 15,105 15,098 7
Covered bonds
2
7,540 5,045 n/an/an/a
Repurchase agreements 6,993 5,498 n/an/an/a
Total 29,629 25,641 15,105 15,098 7
2022
Securitisation - own assets
1
15,075 15,066 15,079 15,066 13
Covered bonds
2
7,528 3,576 n/an/an/a
Repurchase agreements 6,395 5,293 n/an/an/a
Total 28,998 23,935 15,079 15,066 13
1
The most senior rated securities at 30 September 2023 of $13,800 million (30 September 2022: $13,800 million) qualify as eligible collateral for repurchase
agreements with the Reserve Bank. The Bank complies with the Reserve Bank’s guidelines for its overnight reverse repurchase agreement facility and open market
operations, which allows banks in New Zealand to offer RMBS as collateral for the Reserve Bank’s repurchase agreements.
2
The difference between the carrying values of the covered bonds and the assets pledged allows for the immediate issuance of additional covered bonds if required.
These additional assets can be repurchased by the Bank at its discretion, subject to the conditions set out in the transaction documents. The Portfolio is comprised
of housing loans up to a value of $7,500 million as at 30 September 2023 (30 September 2022: $7,500 million). Over time, the composition of the Portfolio will
include, in addition to housing loans, accrued interest (representing accrued and unpaid interest on the outstanding housing loans) and cash (representing
collections of principal and interest from the underlying housing loans).
Note 30 Structured entities
Accounting policy
Structured entities are generally created to achieve a specific, defined objective and their operations are restricted such as to only purchasing
specific assets. Structured entities are commonly financed by debt or equity securities that are collateralised by and/or indexed to their
underlying assets. The debt and equity securities issued by structured entities may include tranches with varying levels of subordination.
Structured entities are classified as subsidiaries and consolidated if they meet the definition in Note 1. If the Banking Group does not control a
structured entity then it will not be consolidated.

Notes to the financial statements
62 Westpac New Zealand Limited
Note 30 Structured entities (continued)
The Banking Group engages in various transactions with both consolidated and unconsolidated structured entities that are mainly involved in
securitisations, asset backed structures and managed funds.
Consolidated structured entities
Securitisation and covered bonds
The Banking Group uses structured entities to securitise its financial assets through the Covered Bond Programme and the Bank’s internal
residential mortgage-backed securitisation programme. Refer to Note 29 for further details.
Funds managed by a member of the Ultimate Parent Bank Group
As disclosed in Note 23, the PIE Funds are consolidated within the financial statements of the Banking Group.
Non-contractual financial support
The Banking Group does not provide non-contractual financial support to these consolidated structured entities.
Unconsolidated structured entities
The Banking Group has interests in various unconsolidated structured entities including debt instruments, liquidity arrangements, lending, loan
commitments and certain derivatives.
Interests exclude non-complex derivatives (e.g. interest rate swap agreements) and lending to a structured entity with recourse to a wider
operating entity, not just the structured entity.
The Banking Group’s main interests in unconsolidated structured entities, which arise in the normal course of business, are loans and other credit
commitments. The Banking Group lends to unconsolidated structured entities, subject to the Banking Group’s collateral and credit approval
processes, in order to earn interest and fees and commissions income. The structured entities are mainly securitisation entities.
The following table shows the Banking Group’s interests in unconsolidated structured entities and its maximum exposure to loss in relation to
those interests. The maximum exposure does not take into account any collateral or hedges that will reduce the risk of loss.
For on-balance sheet instruments, including debt instruments in and loans to unconsolidated structured entities, the maximum exposure to loss
is the carrying value; and
For off-balance sheet instruments, including liquidity facilities and loan and other credit commitments, the maximum exposure to loss is the
notional amounts.
THE BANKING GROUP
20232022
$ millionsFinancing to Securitisation VehiclesFinancing to Securitisation Vehicles
Assets
Loans
4,368
3,892
Total on-balance sheet exposures4,3683,892
Total notional amounts of off-balance sheet exposures
1,777
1,322
Maximum exposure to loss
6,145
5,214
Size of structured entities
1
6,145
5,214
1
Represented by the total assets or market capitalisation of the entity, or if not available, the Banking Group’s total committed exposure (for lending arrangements
and external debt holdings).
Non-contractual financial support
The Banking Group does not provide non-contractual financial support to these unconsolidated structured entities.

Notes to the financial statements
Westpac New Zealand Limited 63
Note 31 Capital management
The primary objectives of the Banking Group’s capital management activities are to ensure that the Banking Group complies with the regulatory
capital requirements prescribed by the Reserve Bank, maintains strong credit ratings and a strong capital position to support its business objectives
and maximises shareholder value.
The Banking Group manages and adjusts its capital structure in light of changing economic conditions and the risk characteristics of its activities. To
maintain or adjust the capital structure, the Banking Group may adjust the amount of dividend payments to its shareholders, reduce discretionary
expenditure, return or issue capital to its shareholders or issue capital securities.
Three independent processes, undertaken by Directors and senior management of the Bank, are designed to manage the Banking Group’s capital
adequacy to support its current and future activities:
1.The Banking Group actively monitors its capital adequacy as part of the annual Banking Group ICAAP and reports this to senior management
and the Bank’s Board. This process supports the Board approved risk appetite statement, which outlines the target debt rating, target capital
ratios and the degree of earnings volatility that the Banking Group determines to be acceptable. The Bank sets its target capital ratios at a
higher level than required by the regulator, which both reduces the risk of breaching the conditions of registration and provides investor
confidence.
2.The Banking Group calculates the capital required to be held for its current risk profile and forecasts the estimated capital position based on
expected future activities. The forecast capital required is assessed against the target ranges that have been approved by the Board in regard
to capital ratios. The Banking Group also reviews its capital positions in this process against other stakeholder requirements to ensure capital
efficiency.
3.The Ultimate Parent Bank Group takes capital considerations into account during its Board Strategy Review, which is an annual process where
the current strategic direction of the Ultimate Parent Bank Group is reviewed and refined.
The following tables show the Banking Group’s capital summary and capital ratios.
THE BANKING GROUP
20232022
$ millionsUnauditedUnaudited
Tier 1 capital
Common Equity Tier 1 capital
Total shareholder's equity 9,144 8,780
Less deductions from Common Equity Tier 1 capital (1,422) (1,276)
Total Common Equity Tier 1 capital 7,722 7,504
Additional Tier 1 capital instruments
1
1,125 1,313
Total Tier 1 capital 8,847 8,817
Total Tier 2 capital 1,204 600
Total capital 10,051 9,417
1
Classified as a liability and excludes capitalised transaction costs. Additional Tier 1 capital instruments and Tier 2 capital instruments are itemised in Note 21. Further
details on convertibility for Additional Tier 1 capital instruments are noted in Note 21.
THE BANKING GROUP
Reserve Bank20232022
% Minimum RatiosUnauditedUnaudited
Capital ratios
Common Equity Tier 1 capital ratio4.511.111.0
Tier 1 capital ratio6.012.713.0
Total capital ratio8.014.413.9
Prudential capital buffer ratio4.56.45.9
The above table shows the capital adequacy ratios for the Banking Group based on the BPRs. Refer to Note iv. Capital adequacy and regulatory liquidity
ratios of the Registered bank disclosures for further details.
Reserve Bank Capital Review
On 5 December 2019, the Reserve Bank announced changes to the capital adequacy framework that applies to New Zealand incorporated registered
banks (including the Bank). The new framework includes the following components:
Progressively increasing the total capital requirements from 10.5% of RWA to 18% for domestic systemically important banks (including the
Bank) and 16% for all other banks over a seven-year period ending 1 July 2028, including:
oIncreasing the Tier 1 capital requirement from 8.5% to 16% of RWA for domestic systemically important banks and 14% for all other
banks;
oIncreasing the AT1 limit from 1.5% to 2.5% of the Tier 1 capital requirement; and
oMaintaining the existing Tier 2 capital limit of 2% of the total capital requirement.

Notes to the financial statements
64 Westpac New Zealand Limited
Note 31 Capital management (continued)
These ratios include the minimum capital ratios that banks must maintain and the prudential capital buffer above the minimum capital ratios
that banks must maintain to avoid restrictions on distributions (among other things).
Eligible Tier 1 capital under the new framework comprises common equity and redeemable perpetual preference shares. Existing AT1
instruments are being progressively phased out by 1 July 2028;
The RWA for Sovereign and Banks asset classes are classified under a standardised approach from 1 January 2022;
Credit IRB RWA is subject to a floor of 85% of the standardised requirement from 1 January 2022;
The IRB scalar increased from 1.06 to 1.2 from 1 October 2022; and
The scalar for standardised exposures reduced from 1.06 to 1.0 from 1 October 2022.
The increases in the required level of bank capital started to come into effect on 1 July 2022 and will be fully implemented on 1 July 2028. The
prudential capital buffer was increased from 2.5% to 3.5% on 1 July 2022, with a further increase of 1.0% to 4.5% effective on 1 July 2023. The new
definitions of eligible capital came into effect on 1 October 2021.
Changes to Operational Risk measurement from AMA to Standardised Approach applied with effect from 1 July 2022 pursuant to a change to the
Bank's conditions of registration.
Note 32 Risk management, funding and liquidity risk and market risk
Financial instruments are fundamental to the Banking Group’s business of providing banking and financial services. The associated financial risks
(including credit risk, funding and liquidity risk and market risk) are a significant proportion of the total risks faced by the Banking Group.
This note details the financial risk management policies, practices and quantitative information of the Banking Group’s principal financial risk
exposures.
Principal risksNote nameNote number
OverviewRisk management frameworks32.1
Credit riskRefer to Note 13 Credit risk management13
Liquidity modelling32.2.1
Sources of funding32.2.2
Assets pledged as collateral32.2.3
Contractual maturity of financial liabilities32.2.4
Funding and liquidity risk
The risk that the Banking Group cannot meet its payment
obligations or that it does not have the appropriate amount,
tenor and composition of funding and liquidity to support its
assets.
Expected maturity32.2.5
VaR32.3.1
Market risk
The risk of an adverse impact on the Banking Group’s
financial performance or financial position resulting from
changes in market factors, such as FX rates, commodity
prices and equity prices, credit spreads and interest rates.
This includes interest rate risk in the banking book which is
the risk of loss in earnings or economic value in the banking
book as a consequence of movements in interest rates.
Non-traded market risk32.3.2
32.1 Risk management frameworks
The Board is responsible for approving the Banking Group’s Risk Appetite Statement and, through the BRCC, the Risk Management Framework and
the Risk Management Strategy. The Board is also responsible for monitoring the effectiveness of risk management by the Banking Group. The
Banking Group is wholly owned by the Ultimate Parent Bank and, therefore, a member of the group of companies comprising the Ultimate Parent
Bank Group. Accordingly, the Banking Group’s Risk Management Framework is closely aligned with the Ultimate Parent Bank’s Risk Management
Framework.
The Board has delegated authority to the BRCC to:
review and recommend the Banking Group’s Risk Appetite Statement to the Board for approval;
approve the Banking Group’s Risk Management Framework and Risk Management Strategy;
review and monitor the risk profile and controls of the Banking Group consistent with the Banking Group’s Risk Appetite Statement;
approve frameworks, policies and processes for managing risk (consistent with the Banking Group’s Risk Management Framework, Risk
Management Strategy and Risk Appetite Statement); and
review and, where appropriate, approve risks beyond the approval discretion provided to management.
For each of its primary financial risks, the Banking Group maintains risk management frameworks and a number of supporting policies that define
roles and responsibilities, acceptable practices, limits and key controls:

Notes to the financial statements
Westpac New Zealand Limited 65
Note 32 Risk management, funding and liquidity risk and market risk (continued)
RiskRisk management framework and controls
Funding and
liquidity
risk
- Funding and liquidity risk is measured and managed in
accordance with the policies and processes defined in the BRCC
approved Liquidity Risk Management Framework which is part
of the Banking Group’s Board-approved Risk Management
Framework.
- Responsibility for managing the Banking Group's liquidity and
funding positions in accordance with the Liquidity Risk
Management Framework is delegated to Treasury, under the
oversight of the Banking Group’s ALCO and the Financial
Markets and Treasury Risk unit.
- The Banking Group’s Liquidity Risk Management Framework
sets out the Banking Group’s funding and liquidity risk appetite,
roles and responsibilities of key people managing funding and
liquidity risk within the Banking Group, risk reporting and
control processes and limits and targets used to manage the
Banking Group’s balance sheet.
- Treasury undertakes an annual funding review that outlines the
Banking Group's balance sheet funding strategy over a three
year period. This review encompasses trends in global markets,
peer analysis, wholesale funding capacity, expected funding
requirements and a funding risk analysis. This strategy is
continuously reviewed to take account of changing market
conditions, investor sentiment and estimations of asset and
liability growth rates.
- The Banking Group monitors the composition and stability of its
funding to allow it to remain within the Banking Group’s funding
risk appetite and comply with regulatory requirements.
- The Banking Group holds a portfolio of liquid assets for several
purposes, including as a buffer against unforeseen funding
requirements. The level of liquid assets held takes into account
the liquidity requirements of the Banking Group's balance sheet
under normal and stress conditions.
- Treasury also maintains a contingent funding plan that outlines
the steps that should be taken by the Banking Group in the
event of an emerging ‘funding crisis’. The plan is aligned with
the Banking Group’s broader Liquidity Crisis Management Policy
which is approved by the BRCC.
- Daily liquidity risk reports are reviewed by Treasury and the
Financial Markets and Treasury Risk unit. Liquidity reports are
presented to ALCO monthly and to the RISKCO and BRCC
quarterly.
Market risk
- Market risk is measured and managed in accordance with the
policies and processes defined in the BRCC approved Market
Risk Management Framework which is part of the Banking
Group’s Board-approved Risk Management Framework.
- Responsibility for managing the Banking Group’s non-traded
market risk in accordance with the Market Risk Management
Framework is delegated to Treasury, under the oversight of the
Banking Group’s ALCO and the Financial Markets and Treasury
Risk unit.
- The Banking Group’s Market Risk Management Framework sets
out the Banking Group’s market risk appetite, roles and
responsibilities of key people managing market risk within the
Banking Group, risk reporting and control processes and limits
and targets used to manage market risk.
- The Banking Group’s Market Risk Management Framework
makes a distinction between traded and non-traded market risk
for the purposes of risk management, measurement and
reporting.
- The Banking Group’s Market Risk Management Framework does
not allow for traded market risk, including equity and commodity
price risks. Any traded market risk activities are conducted by the
Ultimate Parent Bank’s financial markets business through its NZ
Branch and in accordance with the Ultimate Parent Bank’s Market
Risk Management Framework.
- Non-traded market risk arises from banking book activities and
is primarily comprised of IRRBB. The Banking Group does not
carry material foreign exchange risks due to the risks being
hedged.
- Market risk is managed using VaR limit, NaR and structural risk
limits (including credit spread and interest rate basis point
value limits) as well as scenario analysis and stress testing.
- Daily market risk reports are reviewed by Treasury, and the
Financial Markets and Treasury Risk unit. Key market risk
metrics are presented to ALCO monthly and to RISKCO and
BRCC quarterly.
Climate change risk
The Banking Group recognises climate change as a major threat to our collective wellbeing and is committed to transparency and action across its
business to address climate change. While this is not a material financial risk as at 30 September 2023 (30 September 2022: not a material financial
risk), climate change risk is evolving and is expected to have a more significant impact on the Banking Group’s material financial risks in the future.
The two main sources of financial risks arising from climate change are physical risks and transition risks. Physical risks emanating from climate
change can be event-driven (acute) such as increased severity of extreme weather events (e.g., cyclones, droughts, floods, and fires). They can also
relate to longer-term shifts (chronic) in precipitation and temperature and increased variability in weather patterns or other long-term changes such
as sea level rise. Transition risks are risks associated with the transition to a lower-carbon global economy, the most common of which relate to
policy and legal actions, technology changes, market responses, and reputational considerations.
The Banking Group seeks to understand the potential for climate-related transition and physical risks to impact its business, including their possible
impact on credit risk, regulatory and reporting obligations, and our reputation.
The Banking Group has voluntarily published a Climate Report (formally named Climate Risk Report) each year since 2020, based on the
recommendations of the Task Force on Climate-related Financial Disclosures (‘TCFD’). The Banking Group is working to transition current reporting
to the Aotearoa New Zealand Climate Standards issued by the External Reporting Board (‘XRB climate standards’), with a first XRB climate
standards-compliant report to be released for the year ending 30 September 2024. A summary of the Banking Group’s approach to managing
climate change risks against the four TCFD pillars is described below.

Notes to the financial statements
66 Westpac New Zealand Limited
Note 32 Risk management, funding and liquidity risk and market risk (continued)
Governance:
The Bank’s Board is responsible for considering the social, ethical, and environmental impact of the Banking Group’s activities and setting
standards and monitoring compliance with the Banking Group's sustainability policies and practices. The Bank’s RISKCO oversees material
risks, including climate-related risks. The Bank’s CREDCO, a subcommittee of RISKCO, oversees climate-related risks that present a credit
risk to the Banking Group. In October 2023, the charters of the Bank’s Board, Board Audit Committee and BRCC were updated to include
further governance responsibilities in relation to climate-related risks and opportunities, disclosures, scenarios and promotion of the Bank’s
long-term resilience to climate risks.
The Banking Group is also represented on the Ultimate Parent Bank Group’s Climate Change Financial Risk Committee which oversees work to
identify and manage the potential impact on credit exposures from climate change-related transition and physical risks across the Ultimate
Parent Bank Group and reports to the Ultimate Parent Bank Group’s CREDCO.
Strategy:
The Banking Group has integrated climate-related risks and opportunities into its wider business strategy. It focuses on the most relevant
aspects of climate change on its business, and their implications on its customers, communities, and the Banking Group.
During the year ended 30 September 2022, the Ultimate Parent Bank joined the United Nations-convened Net Zero Banking Alliance reinforcing
its commitment to the global transition to a net-zero economy by 2050.
The Bank commissioned an Agribusiness climate change report, which identified a range of viable options for the agri sector to decarbonise and
adapt to the physical impacts of climate change. During the year ended 30 September 2023, the Bank launched a Sustainable Farm Loan that
supports customers to achieve the Westpac Sustainable Farm Standard, an all-of-farm sustainability criteria designed for the Bank by
AsureQuality (equivalent to the Sustainable Agriculture Finance Initiative (‘SAFI’) Phase One Guidance for Livestock). The Sustainable Farm
Loan encourages on-farm sustainability and resilience across the whole farm including climate change mitigation and adaptation and
sustainable land management.
As a signatory to the Net Zero Banking Alliance (‘NZBA’), the Ultimate Parent Bank has committed to align the Ultimate Parent Bank Group’s
lending portfolio with pathways to net zero by 2050 or sooner; and set 2030 emissions reduction targets for certain material, high emitting
sectors, aligned to limiting global warming to 1.5°C above pre-industrial levels by 2100. As subsidiaries of the Ultimate Parent Bank Group, the
Banking Group is covered by the Ultimate Parent Bank’s NZBA commitment and targets.
The Banking Group continues to evolve its ability to conduct climate-related scenario analysis.
Risk Management:
Climate change risks are managed in accordance with the Banking Group’s Risk Management Framework which is supported by the Banking
Group’s Sustainability Risk Management Framework (SRMF), the Banking Group’s ESG Credit Risk Policy and the Bank’s Board Risk Appetite
Statements. The SRMF sets out the overall approach to climate risk, defining roles and responsibilities in accordance with the Three Lines of
Defence standard. This framework is reviewed annually and has evolved to meet the Banking Group’s changing needs and expectations.
The Banking Group regularly reviews its operating environment and maintains an Emerging Risk Landscape. This helps the Banking Group to
understand how emerging risks like Climate Change are evolving, and to determine whether its current responses are sufficient or require
adjustment.
Metrics and Targets:
The Banking Group monitors its climate-related risks through metrics and targets covering its exposure to coastal hazards, sustainable finance,
and its own operational emissions.
The Banking Group’s suite of metrics and targets is evolving as the understanding of risks improves, better data becomes available and
supporting processes and data infrastructure develop. Financed emissions are a particular focus in this area.
In December 2022, the External Reporting Board published climate standards for mandatory climate-related disclosures, taking effect for
accounting periods commencing from 1 January 2023. The standards establish disclosure requirements for selected New Zealand entities, including
large registered banks, and are aligned to the recommendations of the TCFD. A workstream has been initiated to ensure the specific requirements of
the standards are met.
The Banking Group has considered the impact of climate-related risks on its financial position and performance and while the effects of climate
change represent a source of uncertainty, the Banking Group has concluded that climate-related risks do not have a material impact on the
judgements, assumptions and estimates for the year ended 30 September 2023 (30 September 2022: no material impact). Refer to Note 13.1 for
further information on how climate change risk is considered as part of credit risk.
For a comprehensive and detailed outline of the Banking Group’s approach to climate-related risks, refer to the Risk Management section of the
Climate Report (unaudited) for September 2023 and prior iterations which can be accessed at www.westpac.co.nz/about-us/legal-information-
privacy/disclosure-statements/.

Notes to the financial statements
Westpac New Zealand Limited 67
Note 32 Risk management, funding and liquidity risk and market risk (continued)
32.2 Funding and liquidity risk
The Banking Group aims to maintain a mix of retail and wholesale funding, with emphasis on the value of core funding consistent with the principles
inherent in BS13.
32.2.1 Liquidity modelling
The Banking Group is subject to the conditions of BS13. The following metrics are calculated and reported on a daily basis in accordance with BS13:
the level of liquid assets held;
the one-week mismatch ratio;
the one-month mismatch ratio; and
the one-year core funding ratio.
In addition, the Banking Group calculates the following liquidity ratios in accordance with the Ultimate Parent Bank’s liquidity risk framework under
APRA Prudential Standard APS 210 Liquidity:
liquidity coverage ratio; and
net stable funding ratio.
32.2.2 Sources of funding
Sources of funding are regularly reviewed to maintain a wide diversification by currency, geography, product and term. Sources include, but are not
limited to:
deposits;
debt issues;
loan capital;
proceeds from sale of marketable securities;
repurchase agreements with central bank;
related entities;
principal repayments on loans;
interest income; and
fees and commissions income.
Term Lending Facility and Funding for Lending Programme
From 26 May 2020 until the extended date of 28 July 2021, the Reserve Bank made available a Term Lending Facility (‘TLF’), to offer loans for a
maximum term of five years at the rate of the Official Cash Rate, with access to the funds linked to banks’ lending under the TLF Scheme. As at 30
September 2023, the balance is $69 million under the TLF (30 September 2022: $96 million).
On 11 November 2020, the Reserve Bank announced that additional stimulus would be provided through a Funding for Lending Programme (‘FLP’),
commencing in December 2020. The FLP provides funding to banks at the prevailing OCR for a term of three years, secured by high quality collateral.
The size of funding available under the FLP includes an initial allocation of 4% of each bank’s eligible loans (as defined by the Reserve Bank). A
conditional additional allocation of up to 2% of eligible loans is also available, subject to growth in eligible loans, for a total size of up to 6% of eligible
loans. The FLP ran from 7 December 2020 to 6 June 2022 for the initial allocations and ended on 6 December 2022 for the additional allocations. The
FLP term sheet is available on the Reserve Bank’s website. As at 30 September 2023, the balance is $4,981 million under the FLP (30 September 2022:
$3,871 million).
Liquid assets
The following table shows the Banking Group’s qualifying liquid assets held for the purpose of managing liquidity risk. These assets are eligible for
repurchase agreements with the Reserve Bank and are held in cash, government, local government and highly rated investment grade securities.
The level of liquid asset holdings is reviewed frequently and is consistent with regulatory, balance sheet and market condition requirements.
THE BANKING GROUP
$ millions20232022
Cash and balances with central banks9,23310,820
Supranational securities2,3351,900
NZ Government securities2,490788
NZ public securities3,0592,544
NZ corporate securities1,7381,236
Total on-balance sheet liquid assets18,85517,288
In addition, the Banking Group has $6,161 million (30 September 2022: $7,397 million) of own originated loans that are self-securitised via the
Bank’s internal residential mortgage-backed securitisation programme. The AAA rated internal RMBS held are eligible for repurchase with the
Reserve Bank under certain circumstances.

Notes to the financial statements
68 Westpac New Zealand Limited
Note 32 Risk management, funding and liquidity risk and market risk (continued)
Concentration of funding
THE BANKING GROUP
$ millions20232022
Funding consists of
Collateral received 303 82
Deposits and other borrowings 82,196 80,848
Other financial liabilities
1
5,098 3,971
Due to related entities
2
1,922 2,060
Debt issues
3
18,597 19,933
Loan capital 2,666 2,083
Total funding 110,782 108,977
Analysis of funding by geographical areas
3
New Zealand 91,749 88,873
Australia 730 709
United Kingdom 9,938 8,220
United States of America 3,016 5,810
China 2,822 2,775
Other 2,527 2,590
Total funding 110,782 108,977
Analysis of funding by industry sector
Accommodation, cafes and restaurants 402 553
Agriculture 1,775 1,821
Construction 2,478 2,645
Finance and insurance 40,027 40,056
Forestry and fishing 164 180
Government, administration and defence 3,539 3,204
Manufacturing 1,896 2,297
Mining 55 68
Property services and business services 7,212 7,882
Services 6,223 5,328
Trade 2,232 2,053
Transport and storage 978 750
Utilities 1,085 1,056
Households 36,511 34,917
Other
4
4,283 4,107
Subtotal 108,860 106,917
Due to related entities
2
1,922 2,060
Total funding 110,782 108,977
1
Other financial liabilities, as presented above, are in respect of repurchase agreements and interbank placements.
2
Amounts due to related entities, as presented above, are in respect of deposits and borrowings and exclude amounts which relate to derivative financial
instruments and other liabilities.
3
The geographic region used for debt issues is based on the nature of the debt programmes. The nature of the debt programmes is used as a proxy for the location
of the original purchaser. Where the nature of the debt programmes does not necessarily represent an appropriate proxy, the debt issues are classified as 'Other’.
These instruments may have subsequently been on-sold.
4
Includes deposits from non-residents.
ANZSIC has been used as the basis for disclosing industry sectors.

Notes to the financial statements
Westpac New Zealand Limited 69
Note 32 Risk management, funding and liquidity risk and market risk (continued)
32.2.3 Assets pledged as collateral
The Banking Group is required to provide collateral to other financial institutions, as part of standard terms, to secure liabilities. In addition to
assets supporting the Covered Bond Programme disclosed in Note 29, the carrying value of these financial assets pledged as collateral is:
THE BANKING GROUP
$ millions20232022
Cash
33 42
Securities pledged under repurchase agreements:
Trading securities and financial assets measured at FVIS
1
14 -
Investment securities
2
510 1,397
Residential mortgage-backed securities
3
6,469 4,998
Total amount pledged to secure liabilities (excluding Covered Bond Programme) 7,026 6,437
1
As at 30 September 2023, $14 million of trading securities were pledged as collateral to the NZ Branch, which is recorded within due to related entities on the
balance sheet (30 September 2022: nil).
2
As at 30 September 2023, $389 million of investment securities were pledged as collateral to the NZ Branch, which is recorded within due to related entities on the
balance sheet (30 September 2022: $1,397 million) and $121 million of investment securities were pledged to third parties which is recorded within other financial
liabilities on the balance sheet (30 September 2022: nil).
3
As at 30 September 2023, the Banking Group has undertaken repurchase agreements with the Reserve Bank, under the Funding for Lending Programme and Term
Lending Facility, using residential mortgage-backed securities. For the Funding for Lending Programme, the repurchase cash amount at 30 September 2023 is $4,981
million (30 September 2022: $3,871 million), which is recorded within other financial liabilities on the balance sheet, with underlying securities to the value of $6,387
million provided under the arrangement (30 September 2022: $4,883 million). For the Term Lending Facility, the repurchase cash amount at 30 September 2023 is $69
million (30 September 2022: $96 million), which is recorded within other financial liabilities on the balance sheet, with underlying securities to the value of $82 million
provided under the arrangement (30 September 2022: $115 million).
32.2.4 Contractual maturity of financial liabilities
The following table presents cash flows associated with financial liabilities, payable at the balance sheet date, by remaining contractual maturity. The
amounts disclosed in the table are the future contractual undiscounted cash flows, whereas the Banking Group manages inherent liquidity risk based on
expected cash flows.
Cash flows associated with these financial liabilities include both principal payments as well as fixed or variable interest payments incorporated into the
relevant coupon period. Principal payments reflect the earliest contractual maturity date. Derivative financial instruments designated for hedging
purposes are expected to be held for their remaining contractual lives, and reflect gross cash flows over the remaining contractual term.
Derivatives held for trading and certain liabilities classified in “Other financial liabilities” which are measured at FVIS are not managed for liquidity
purposes on the basis of their contractual maturity, and accordingly these liabilities are presented in either the on demand or up to 1 month columns.
Only the liabilities that the Banking Group manages based on their contractual maturity are presented on a contractual undiscounted basis in the
following table.

Notes to the financial statements
70 Westpac New Zealand Limited
Note 32 Risk management, funding and liquidity risk and market risk (continued)
THE BANKING GROUP
2023
OverOver
1 Month3 MonthsOver 1
Year
OnUp toand Up toand Up toand Up toOver
$ millions
Demand1 Month3 Months1 Year5 Years5 YearsTotal
Financial liabilities
Collateral received-303----303
Deposits and other borrowings39,7887,25712,70921,8082,014-83,576
Other financial liabilities4265-2,2733,440-5,982
Derivative financial instruments:
Held for trading 18-----18
Held for hedging purposes (net settled)--24(14)1(7)
Held for hedging purposes (gross settled):
Cash outflow--21908823891,400
Cash inflow--(6)(885)(22)(375)(1,288)
Due to related entities:
Non-derivative balances1,50340432-18-1,957
Derivative financial instruments:
Held for trading 6-----6
Held for hedging purposes (net settled)-46140(5)174-355
Held for hedging purposes (gross settled):
Cash outflow-21672726,0441016,505
Cash inflow--(6)(19)(5,531)(109)(5,665)
Debt issues-3547295,58413,69148420,842
Loan capital--19583043,1193,500
Total undiscounted financial liabilities41,3198,65013,70729,99820,2003,610117,484
Total contingent liabilities and commitments
Letters of credit and guarantees1,614-----1,614
Commitments to extend credit27,588-----27,588
Total undiscounted contingent liabilities and
commitments
29,202-----29,202

Notes to the financial statements
Westpac New Zealand Limited 71
Note 32 Risk management, funding and liquidity risk and market risk (continued)
THE BANKING GROUP
2022
OverOver
1 Month3 MonthsOver 1 Year
OnUp toand Up toand Up toand Up toOver
$ millions
Demand1 Month3 Months1 Year5 Years5 YearsTotal
Financial liabilities
Collateral received -82 - - - -82
Deposits and other borrowings43,2776,96011,87317,7441,656 -81,510
Other financial liabilities483 -964,296 -4,479
Derivative financial instruments:
Held for hedging purposes (net settled) -3 -1 - -4
Held for hedging purposes (gross settled):
Cash outflow -915891,8504022,365
Cash inflow - -(5)(7)(1,743)(370)(2,125)
Due to related entities:
Non-derivative balances6851,32643 -3122,087
Derivative financial instruments:
Held for trading (22) - - - - -(22)
Held for hedging purposes (net settled) -783421981331
Held for hedging purposes (gross settled):
Cash outflow -25452706,1511,4797,970
Cash inflow - -(5)(28)(5,282)(1,457)(6,772)
Debt issues -6702,6133,49512,9681,94421,690
Loan capital - -9281492,3062,492
Total undiscounted financial liabilities43,9449,16514,67121,73020,2744,307114,091
Total contingent liabilities and commitments
Letters of credit and guarantees1,609 - - - - -1,609
Commitments to extend credit27,901 - - - - -27,901
Total undiscounted contingent liabilities and
commitments
29,510 - - - - -29,510

Notes to the financial statements
72 Westpac New Zealand Limited
Note 32 Risk management, funding and liquidity risk and market risk (continued)
32.2.5 Expected maturity
The following table presents the balance sheet based on expected maturity dates. The liability balances in the following table will not agree to the
contractual maturity tables due to the analysis below being based on expected rather than contractual maturities, the impact of discounting and the
exclusion of interest accruals beyond the reporting period. Deposits are presented in the following table on a contractual basis, however as part of our
normal banking operations, the Banking Group expects a large proportion of these balances to be retained.
THE BANKING GROUP
20232022
Due within
Greater
than
Due withinGreater than
$ millions
12 months12 months
Total
12 months12 months
Total
Assets
Cash and balances with central banks9,233-9,23310,820-10,820
Collateral paid33-3342-42
Trading securities and financial assets measured at
FVIS
1,6759862,6611,3257932,118
Derivative financial instruments12718531258111169
Investment securities1,4755,1766,6515585,0655,623
Loans15,50983,81999,32814,44382,43996,882
Due from related entities1,7138652,5781,3221,2842,606
All other assets4971,3471,8444691,0891,558
Total assets30,26292,378122,64029,03790,781119,818
Liabilities
Collateral received303-30382-82
Deposits and other borrowings80,3461,85082,19679,2831,56580,848
Derivative financial instruments962713115118
Due to related entities2,0337002,7332,1038582,961
Debt issues6,16612,43118,5976,54113,39219,933
Loan capital-2,6662,666-2,0832,083
All other liabilities3,5023,4286,9303994,6145,013
Total liabilities92,35921,137113,49688,41122,627111,038
32.3 Market risk
32.3.1 VaR
The Banking Group uses VaR as one of the mechanisms for controlling non-traded market risk.
VaR is a statistical estimate of the potential loss in earnings over a specified period of time and to a given level of confidence based on historical
market movements. The confidence level indicates the probability that the loss will not exceed the VaR estimate on any given day.
VaR seeks to take account of all material market variables that may cause a change in the value of the portfolio, including interest rates, FX rates,
price changes, volatility and the correlations between these variables. Daily monitoring of current exposures and VaR and structural concentration
limit utilisation is conducted independently by the Financial Markets and Treasury Risk unit.
Daily stress testing and backtesting of VaR results are performed to support model integrity and to analyse extreme or unexpected movements. A
review of the potential profit and loss outcomes is also undertaken to monitor any skew created by the historical data.
The key parameters of VaR are:
Holding period1 day
Confidence level99%
Period of historical data used1 year

Notes to the financial statements
Westpac New Zealand Limited 73
Note 32 Risk management, funding and liquidity risk and market risk (continued)
32.3.2 Non-traded market risk
Non-traded market risk includes IRRBB – the risk to interest income from a mismatch between the duration of assets and liabilities that arises in
the normal course of business activities.
NII sensitivity is managed in terms of the NaR. A simulation model is used to calculate the Banking Group’s potential NaR. This combines the
underlying balance sheet data with assumptions about run off and new business, expected repricing behaviour and changes in wholesale market
interest rates.
To provide a series of potential future NII outcomes, simulations use a range of interest rate scenarios over one to three year time horizons. This
includes 100 and 200 basis point shifts up and down from the current market yield curves in Australia and New Zealand. Additional stressed
interest rate scenarios are also considered and modelled.
A comparison between the NII outcomes from these modelled scenarios indicates the sensitivity to interest rate changes.
Net interest income-at-Risk
The following table depicts potential NII outcome assuming a worst case 100 basis point rate shock (up and down) with a 12 months time horizon
(expressed as a percentage of reported NII):
THE BANKING GROUP
20232022
% (increase)/decrease
in NII
As at
Maximum
Exposure
Minimum
Exposure
Average
ExposureAs at
Maximum
Exposure
Minimum
Exposure
Average
Exposure
NaR2.522.520.841.691.123.580.981.91
VaR – IRRBB
1
The table below depicts VaR for IRRBB:
THE BANKING GROUP
20232022
$ millions
As at
Maximum
Exposure
Minimum
Exposure
Average
ExposureAs at
Maximum
Exposure
Minimum
Exposure
Average
Exposure
Interest rate risk1.72.91.22.0 1.7 3.3 0.8 1.8
1
IRRBB VaR includes interest rate risk and other basis risks used for internal management purposes.
Risk mitigation
IRRBB stems from the ordinary course of banking activities, including structural interest rate risk (the mismatch between the duration of assets
and liabilities) and capital management.
The Banking Group hedges its exposure to such interest rate risk using derivatives. Further details on the Banking Group’s use of hedge accounting
are discussed in Note 24.

Notes to the financial statements
74 Westpac New Zealand Limited
Note 33 Notes to the statement of cash flows
Accounting policy
Cash and cash equivalents include cash held at branches and in ATMs, balances with overseas banks in their local currency, balances with central
banks and balances with other financial institutions.
Cash and cash equivalents
THE BANKING GROUP
$ millions20232022
Cash and cash equivalents comprise:
Cash and balances with central banks:
Cash on hand 202 289
Balances with central banks 9,031 10,531
Cash and cash equivalents at end of the year 9,233 10,820
Reconciliation of net cash provided by/(used in) operating activities to net profit attributable to the owner
of the Bank
THE BANKING GROUP
$ millions20232022
Net profit attributable to the owner of the Bank 1,059 1,047
Adjustments:
Impairment charges/(benefits) 135 (27)
Computer software amortisation costs 60 47
Depreciation 82 88
(Gain)/loss from hedging ineffectiveness - (5)
Movement in accrued interest receivable (85) (76)
Movement in accrued interest payable 611 238
Movement in current and deferred tax 126 130
Share-based payments 3 3
Other non-cash items (60) 62
Cash flows from operating activities before changes in operating assets and liabilities 1,931 1,507
Movement in collateral paid 9 143
Movement in trading securities and financial assets measured at FVIS (550) 153
Movement in loans (2,327) (4,581)
Movement in other financial assets 27 3
Movement in due from related entities (795) 920
Movement in other assets (2) (1)
Movement in collateral received 221 (106)
Movement in deposits and other borrowings 1,348 1,481
Movement in other financial liabilities 1,130 1,286
Movement in due to related entities (167) 466
Movement in other liabilities 9 13
Net movement in external and related entity derivative financial instruments 492 266
Net cash provided by/(used in) operating activities 1,326 1,550

Registered bank disclosures
Westpac New Zealand Limited 75
This section contains the additional disclosures required by the Order.
i. General information (Unaudited)
Ultimate Parent Bank
The Ultimate Parent Bank is incorporated in Australia under the Australian Corporations Act 2001 and its address for service of process is Level 18,
Westpac Place, 275 Kent Street, Sydney, New South Wales 2000, Australia.
Limits on material financial support by the Ultimate Parent Bank
The Ultimate Parent Bank is an ADI under the Banking Act 1959 (Commonwealth of Australia) (‘Australian Banking Act’) and, as such, is subject to
prudential regulation and supervision by APRA. APRA has the power to prescribe prudential requirements which may affect the ability of the
Ultimate Parent Bank to provide material financial support to the Bank. Pursuant to current APRA requirements, and unless APRA provides
otherwise, the Ultimate Parent Bank must comply with, among other prudential requirements, APS 222.
On 20 August 2019 APRA released the final revised standard for APS 222 which came into effect on 1 January 2022. Key changes include revisions to
the limit for exposure to ADIs (or overseas based equivalents) from 50% of Total Regulatory Capital to 25% of Tier 1 Capital. The revised standard
also included changes to the requirements for entities to be included in the Ultimate Parent Bank Extended Licensed Entity (Level 1). APS 222
includes the following prudential requirements:
the Ultimate Parent Bank’s exposure to the Bank (being an overseas equivalent of an ADI as defined in APS 222) must not exceed 25% of the
Ultimate Parent Bank’s Level 1 capital base (as defined in APS 222);
the Ultimate Parent Bank must not hold unlimited exposures to the Bank; and
the Ultimate Parent Bank must not enter into cross-default provisions whereby a default by the Bank on an obligation (whether financial or
otherwise) triggers or is deemed to trigger a default of the Ultimate Parent Bank in its obligations;
when determining limits on acceptable levels of exposure to the Bank, the Ultimate Parent Bank must have regard to:
-the level of exposures that would be approved for unrelated entities of broadly equivalent credit status; and
-the impact on the Ultimate Parent Bank’s stand-alone capital and liquidity positions in the event of a failure of the Bank or any other related
entity to which it is exposed.
Under APS 222, APRA has the ability to set specific limits on the Ultimate Parent Bank’s exposure to related entities, which include the Bank.
The Ultimate Parent Bank complies with the requirements set by APRA in respect of the extent of financial support that is provided to the Bank.
Section 13A(3) of the Australian Banking Act provides that, in the event that the Ultimate Parent Bank becomes unable to meet its obligations or
suspends payment, the assets of the Ultimate Parent Bank in Australia are to be available to satisfy the liabilities of the Ultimate Parent Bank in the
following order:
first, certain obligations of the Ultimate Parent Bank to APRA (if any) arising under Division 2AA of Part II of the Australian Banking Act in respect
of amounts payable by APRA to holders of 'protected accounts' (as defined in Australian Banking Act) as part of the Financial Claims Scheme for
the Australian Government guarantee of ‘protected accounts’ (including most deposits) up to A$250,000 per account holder in the winding-up
of the Ultimate Parent Bank;
second, APRA's costs (if any) in exercising its powers and performing its functions relating to the Ultimate Parent Bank in connection with the
Financial Claims Scheme;
third, the Ultimate Parent Bank’s liabilities (if any) in Australia in relation to ‘protected accounts’ that account-holders keep with the Ultimate
Parent Bank;
fourth, the Ultimate Parent Bank’s debts (if any) to the Reserve Bank of Australia;
fifth, the Ultimate Parent Bank’s liabilities (if any) under an emergency financial ‘industry support contract’ that is certified by APRA in accordance
with the Australian Banking Act; and
sixth, the Ultimate Parent Bank’s other liabilities (if any) in the order of their priority apart from the above.
Under section 16 of the Australian Banking Act, on the winding-up of an ADI, APRA’s cost of being in control of an ADI’s business, or having an
administrator in control of an ADI’s business, is a debt due to APRA. Debts due to APRA shall have, subject to section 13A(3) of the Australian Banking
Act, priority over all other unsecured debts of that ADI.
APRA requires that the ELE of the Ultimate Parent Bank limit its non-equity exposures to New Zealand banking subsidiaries to 5% of the Ultimate
Parent Bank’s Level 1 Tier 1 capital, as part of an initiative to reduce Australian bank non-equity exposure to their respective New Zealand banking
subsidiaries and branches.
The ELE consists of the Ultimate Parent Bank and its subsidiary entities that have been approved by APRA to be included in the ELE for the purposes
of measuring capital adequacy.

Registered bank disclosures
76 Westpac New Zealand Limited
i. General information (Unaudited) (continued)
Exposures for the purposes of this limit include all committed, non-intraday, non-equity exposures including derivatives and off-balance sheet
exposures. For the purposes of assessing this exposure, the 5% limit excludes equity investments and holdings of capital instruments in New
Zealand banking subsidiaries. As at 30 September 2023, the ELE’s non-equity exposures to New Zealand banking subsidiaries affected by the limit
were below 5% of Level 1 Tier 1 capital of the Ultimate Parent Bank.
APRA has also confirmed the terms on which the Ultimate Parent Bank ‘may provide contingent funding support to a New Zealand banking
subsidiary during times of financial stress’. APRA has confirmed that, at this time, only covered bonds meet its criteria for contingent funding
arrangements.
Voting securities and power to appoint directors
The Bank is a wholly-owned subsidiary of Westpac New Zealand Group Limited, a New Zealand incorporated company, which in turn is a wholly-
owned subsidiary of Westpac Overseas Holdings No. 2 Pty Limited, an Australian incorporated company. Westpac Overseas Holdings No. 2 Pty
Limited is, in turn, a wholly-owned subsidiary of the Ultimate Parent Bank.
At 30 September 2023, Westpac New Zealand Group Limited has a direct qualifying interest in 100% of the voting securities of the Bank. Westpac
Overseas Holdings No. 2 Pty Limited and the Ultimate Parent Bank have an indirect qualifying interest in 100% of the voting securities of the Bank.
The Ultimate Parent Bank has the power under the Bank’s constitution to directly appoint up to 100% of the Board from time to time by giving
written notice to the Bank.
Priority of financial liabilities in the event of liquidation
In the unlikely event that the Bank was put into liquidation or ceased to trade, claims of secured creditors and those classes of creditors set out in
the Seventh Schedule of the Companies Act 1993 would rank ahead of the claims of unsecured creditors in accordance with the priorities set out in
that Schedule. Deposits from customers are unsecured and rank equally with other unsecured unsubordinated liabilities of the Bank, and such
liabilities would rank ahead of any subordinated instruments issued by the Bank to the extent of any such subordination.
Guarantee arrangements
No material obligations of the Bank are guaranteed as at the date the Directors signed this Disclosure Statement.
Westpac New Zealand Group Limited does not guarantee any of the obligations of the Bank or any member of the Banking Group.
Directorate
The Directors of the Bank at the time this Disclosure Statement was signed were:
Name: Philippa Mary Greenwood, LLB
Non-executive: Yes
Country of Residence: New Zealand
Primary Occupation: Director
Secondary Occupations: None
Board Audit Committee Member: No
Independent Director: Yes
External Directorships: Director of Fisher & Paykel Healthcare Corporation Limited, The A2 Milk
Company Limited, and ALP Studios Limited.
Name: Catherine Anne McGrath, LLB, BCom
Non-executive: No
Country of Residence: New Zealand
Primary Occupation: Chief Executive, Westpac New Zealand
Limited
Secondary Occupations: Director
Board Audit Committee Member: No
Independent Director: No
External Directorships: Director of BT Funds Management (NZ) Limited.
Name: David John Green
Non-executive: Yes
Country of Residence: New Zealand
Primary Occupation: Director
Secondary Occupations: None
Board Audit Committee Member: Yes
Independent Director: Yes
External Directorships: Director of Casa Verde Investments Limited, Abner & Hobson Limited,
MyFarm UF1 GP Limited, BT Funds Management (NZ) Limited and EROAD Limited.