Document and Entity Information
Document and Entity Information | 6 Months Ended |
Mar. 31, 2020 | |
Document and Entity Information | |
Entity Registrant Name | WESTPAC BANKING CORP |
Document Type | 6-K |
Document Period End Date | Mar. 31, 2020 |
Entity Central Index Key | 0000719245 |
Current Fiscal Year End Date | --09-30 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | Q2 |
Amendment Flag | false |
Consolidated income statement
Consolidated income statement - AUD ($) $ in Millions | 6 Months Ended | ||
Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | |
Income statement | |||
Calculated using the effective interest rate method | $ 14,412 | $ 15,900 | $ 16,618 |
Calculated using the effective interest rate method, percentage movement from prior period | (9.00%) | ||
Calculated using the effective interest rate method, percentage movement from same period in prior year | (13.00%) | ||
Other | $ 272 | 354 | 350 |
Other Interest income, percentage movement from prior period | (23.00%) | ||
Other Interest income, percentage movement from same period in prior year | (22.00%) | ||
Total interest income | $ 14,684 | 16,254 | 16,968 |
Total interest income, percentage movement from prior period | (10.00%) | ||
Total interest income, percentage movement from same period in prior year | (13.00%) | ||
Interest expense | $ (5,684) | (7,610) | (8,705) |
Interest expense, percentage movement from prior period | (25.00%) | ||
Interest expense, percentage movement from same period of prior year | (35.00%) | ||
Net interest income | $ 9,000 | 8,644 | 8,263 |
Net interest income, percentage movement from prior period | 4.00% | ||
Net interest income, percentage movement from same period of prior year | 9.00% | ||
Net fee income | $ 755 | 829 | 826 |
Net fee income, percentage movement from prior period | (9.00%) | ||
Net fee income, percentage movement from same period of prior year | (9.00%) | ||
Net wealth management and insurance income | $ 465 | 703 | 326 |
Net wealth management and insurance income, percentage movement from prior period | (34.00%) | ||
Net wealth management and insurance income, percentage movement from same period of prior year | 43.00% | ||
Trading income | $ 460 | 492 | 437 |
Trading income, percentage movement from prior period | (7.00%) | ||
Trading income, percentage movement from same period in prior year | 5.00% | ||
Other income | $ (76) | 2 | 127 |
Net operating income before operating expenses and impairment charges | $ 10,604 | 10,670 | 9,979 |
Net operating income before operating expenses and impairment charges, percentage movement from prior period | (1.00%) | ||
Net operating income before operating expenses and impairment charges, percentage movement from same period of prior year | 6.00% | ||
Operating expenses | $ (6,181) | (5,015) | (5,091) |
Operating expenses, percentage movement from prior period | 23.00% | ||
Operating expenses, percentage movement from same period of prior year | 21.00% | ||
Impairment charges | $ (2,238) | (461) | (333) |
Profit before income tax | $ 2,185 | 5,194 | 4,555 |
Profit before income tax, percentage movement from prior period | (58.00%) | ||
Profit before income tax, percentage movement from same period of prior year | (52.00%) | ||
Income tax expense | $ (994) | (1,580) | (1,379) |
Income tax expense, percentage movement from prior period | (37.00%) | ||
Income tax expense, percentage movement from same period of prior year | (28.00%) | ||
Net profit for the period | $ 1,191 | 3,614 | 3,176 |
Net profit for the period, percentage movement from prior period | (67.00%) | ||
Net profit for the period, percentage movement from same period of prior year | (63.00%) | ||
Net profit attributable to non-controlling interests (NCI) | $ (1) | (3) | (3) |
Net profit attributable to non-controlling interests (NCI), percentage movement from prior period | (67.00%) | ||
Net profit attributable to non-controlling interests (NCI), percentage movement from same period of prior year | (67.00%) | ||
Net profit attributable to owners of Westpac Banking Corporation (WBC) | $ 1,190 | $ 3,611 | $ 3,173 |
Net profit attributable to owners of WBC, percentage movement from prior period | (67.00%) | ||
Net profit attributable to owners of WBC, percentage movement from same period of prior year | (62.00%) | ||
Earnings per share (cents) | |||
Basic | $ 0.332 | $ 1.041 | $ 0.923 |
Earnings per share, basic, percentage movement from prior period | (68.00%) | ||
Earnings per share, basic, percentage movement from same period of prior year | (64.00%) | ||
Diluted | $ 0.332 | $ 0.999 | $ 0.895 |
Earnings per share, diluted, percentage movement from prior period | (67.00%) | ||
Earnings per share, diluted, percentage movement from same period of prior year | (63.00%) |
Consolidated statement of compr
Consolidated statement of comprehensive income - AUD ($) $ in Millions | 6 Months Ended | ||
Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | |
Statements of comprehensive income | |||
Net profit for the period | $ 1,191 | $ 3,614 | $ 3,176 |
Net profit for the period, percentage movement from prior period | (67.00%) | ||
Net profit for the period, percentage movement from same period of prior year | (63.00%) | ||
Gains/(losses) recognised in equity on: | |||
Debt securities measured at fair value through other comprehensive income (FVOCI) | $ (143) | (111) | 65 |
Debt securities measured at fair value through other comprehensive income (FVOCI), percentage movement from prior period | 29.00% | ||
Cash flow hedging instruments | $ 145 | (11) | (192) |
Transferred to income statement | |||
Debt securities measured at FVOCI | $ (28) | (4) | (25) |
Debt securities measured at FVOCI, percentage movement from same period of prior year | 12.00% | ||
Cash flow hedging instruments | $ 128 | 117 | 80 |
Cash flow hedging instruments, percentage movement from prior period | 9.00% | ||
Cash flow hedging instruments, percentage movement from same period of prior year | 60.00% | ||
Foreign currency translation reserve | (10) | ||
Foreign currency translation reserve, percentage movement from same period of prior year | (100.00%) | ||
Loss allowance on debt securities measured at FVOCI | $ 1 | ||
Exchange differences on translation of foreign operations (net of associated hedges) | $ 265 | 127 | 55 |
Exchange differences on translation of foreign operations (net of associated hedges), percentage movement from prior period | 109.00% | ||
Income tax on items taken to or transferred from equity: | |||
Debt securities measured at FVOCI | $ 50 | 34 | (14) |
Debt securities measured at FVOCI, percentage movement from prior period | 47.00% | ||
Cash flow hedging instruments | $ (80) | (31) | 33 |
Cash flow hedging instruments, percentage movement from prior period | 158.00% | ||
Items that will not be reclassified subsequently to profit or loss | |||
Gains/(losses) on equity instruments measured at FVOCI | $ (18) | 10 | 1 |
Own credit adjustment on financial liabilities designated at fair value (net of tax) | 344 | (8) | (2) |
Remeasurement of defined benefit obligation | 54 | (125) | (151) |
Other comprehensive income for the period (net of tax) | 718 | (2) | (160) |
Total comprehensive income for the period | $ 1,909 | 3,612 | 3,016 |
Total comprehensive income for the period, percentage movement from prior period | (47.00%) | ||
Total comprehensive income for the period, percentage movement from same period of prior year | (37.00%) | ||
Attributable to: | |||
Owners of Westpac Banking Corporation | $ 1,905 | 3,608 | 3,012 |
Owners of Westpac Banking Corporation, percentage movement from prior period | (47.00%) | ||
Owners of Westpac Banking Corporation, percentage movement from same period of prior year | (37.00%) | ||
Non-controlling interests | $ 4 | 4 | 4 |
Total comprehensive income for the period | $ 1,909 | $ 3,612 | $ 3,016 |
Consolidated balance sheet
Consolidated balance sheet - AUD ($) $ in Millions | Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 |
Assets | |||
Cash and balances with central banks | $ 45,815 | $ 20,059 | $ 19,486 |
Cash and balances with central banks, percentage movement from prior period | 128.00% | 3.00% | |
Cash and balances with central banks, percentage movement from same period of prior year | 135.00% | (25.00%) | |
Collateral paid | $ 5,339 | $ 5,930 | 6,103 |
Collateral paid, percentage movement from prior period | (10.00%) | ||
Collateral paid, percentage movement from same period of prior year | (13.00%) | ||
Trading securities and financial assets measured at fair value through income statement (FVIS) | $ 26,280 | 31,781 | 29,307 |
Trading securities and financial assets measured at fair value through income statement (FVIS), percentage movement from prior period | (17.00%) | ||
Trading securities and financial assets measured at fair value through income statement (FVIS), percentage movement from same period of prior year | (10.00%) | ||
Derivative financial instruments | $ 56,661 | 29,859 | 21,765 |
Derivative financial instruments, percentage movement from prior period | 90.00% | ||
Derivative financial instruments, percentage movement from same period of prior year | 160.00% | ||
Investment securities | $ 85,789 | 73,401 | 68,536 |
Investment securities, percentage movement from prior period | 17.00% | ||
Investment securities, percentage movement from same period of prior year | 25.00% | ||
Loans | $ 719,678 | 714,770 | 714,297 |
Loans, percentage movement from prior period | 1.00% | ||
Loans, percentage movement from same period of prior year | 1.00% | ||
Other financial assets | $ 5,849 | 5,367 | 6,444 |
Other financial assets, percentage movement from prior period | 9.00% | ||
Other financial assets, percentage movement from same period of prior year | (9.00%) | ||
Current tax assets | 72 | ||
Current tax assets, percentage movement from same period of prior year | (100.00%) | ||
Life insurance assets | $ 2,574 | 9,367 | 9,374 |
Life insurance assets, percentage movement from prior period | (73.00%) | ||
Life insurance assets, percentage movement from same period of prior year | (73.00%) | ||
Investment in associates | $ 101 | 129 | 115 |
Investment in associates, percentage movement from prior period | (22.00%) | ||
Investment in associates, percentage movement from same period of prior year | (12.00%) | ||
Property and equipment | $ 4,170 | 1,155 | 1,200 |
Deferred tax assets | $ 2,623 | 2,048 | 1,723 |
Deferred tax assets, percentage movement from prior period | 28.00% | ||
Deferred tax assets, percentage movement from same period of prior year | 52.00% | ||
Intangible assets | $ 11,943 | 11,953 | 11,850 |
Intangible assets, percentage movement from same period of prior year | 1.00% | ||
Other assets | $ 840 | 807 | 790 |
Other assets, percentage movement from prior period | 4.00% | ||
Other assets, percentage movement from same period of prior year | 6.00% | ||
Total assets | $ 967,662 | 906,626 | 891,062 |
Total assets, percentage movement from prior period | 7.00% | ||
Total assets, percentage movement from same period of prior year | 9.00% | ||
Liabilities | |||
Collateral received | $ 12,728 | 3,287 | 1,889 |
Deposits and other borrowings | $ 582,920 | 563,247 | 555,007 |
Deposits and other borrowings, percentage movement from prior period | 3.00% | ||
Deposits and other borrowings, percentage movement from same period of prior year | 5.00% | ||
Other financial liabilities | $ 33,996 | 29,215 | 29,013 |
Other financial liabilities at fair value through income statement, percentage movement from prior period | 16.00% | ||
Other financial liabilities at fair value through income statement, percentage movement from same period of prior year | 17.00% | ||
Derivative financial instruments | $ 48,089 | 29,096 | 23,384 |
Derivative financial instruments, percentage movement from prior period | 65.00% | ||
Derivative financial instruments, percentage movement from same period of prior year | 106.00% | ||
Debt issues | $ 185,835 | 181,457 | 188,759 |
Debt issues, percentage movement from prior period | 2.00% | ||
Debt issues, percentage movement from same period of prior year | (2.00%) | ||
Current tax liabilities | $ 31 | 163 | |
Current tax liabilities, percentage movement from prior period | (81.00%) | ||
Life insurance liabilities | $ 604 | 7,377 | 7,503 |
Life insurance liabilities, percentage movement from prior period | (92.00%) | ||
Life insurance liabilities, percentage movement from same period of prior year | (92.00%) | ||
Provisions | $ 4,669 | 3,169 | 2,764 |
Provisions, percentage movement from prior period | 47.00% | ||
Provisions, percentage movement from same period of prior year | 69.00% | ||
Deferred tax liabilities | $ 45 | 44 | |
Deferred tax liabilities, percentage movement from prior period | 2.00% | ||
Other liabilities | $ 5,292 | 2,238 | 2,072 |
Other liabilities, percentage movement from prior period | 136.00% | ||
Other liabilities, percentage movement from same period of prior year | 155.00% | ||
Total liabilities excluding loan capital | $ 874,209 | 819,293 | 810,391 |
Total liabilities excluding loan capital, percentage movement from prior period | 7.00% | ||
Total liabilities excluding loan capital, percentage movement from same period of prior year | 8.00% | ||
Loan capital | $ 25,807 | 21,826 | 16,736 |
Loan capital, percentage movement from prior period | 18.00% | ||
Loan capital, percentage movement from same period of prior year | 54.00% | ||
Total liabilities | $ 900,016 | 841,119 | 827,127 |
Total liabilities, percentage movement from prior period | 7.00% | ||
Total liabilities, percentage movement from same period of prior year | 9.00% | ||
Net assets | $ 67,646 | 65,507 | 63,935 |
Net assets, percentage movement from prior period | 3.00% | ||
Net assets, percentage movement from same period of prior year | 6.00% | ||
Share capital: | |||
Ordinary share capital | $ 40,503 | 37,508 | 36,351 |
Ordinary share capital, percentage movement from prior period | 8.00% | ||
Ordinary share capital, percentage movement from same period of prior year | 11.00% | ||
Treasury shares and Restricted Share Plan (RSP) treasury shares | $ (586) | (553) | (557) |
Treasury shares and RSP treasury shares, percentage movement from prior period | 6.00% | ||
Treasury shares and RSP treasury shares, percentage movement from same period of prior year | 5.00% | ||
Reserves | $ 1,688 | 1,311 | 1,141 |
Reserves, percentage movement from prior period | 29.00% | ||
Reserves, percentage movement from same period of prior year | 48.00% | ||
Retained profits | $ 25,985 | 27,188 | 26,949 |
Retained profits, percentage movement from prior period | (4.00%) | ||
Retained profits, percentage movement from same period of prior year | (4.00%) | ||
Total equity attributable to owners of WBC | $ 67,590 | 65,454 | 63,884 |
Total equity attributable to owners of WBC, percentage movement from prior period | 3.00% | ||
Total equity attributable to owners of WBC, percentage movement from same period of prior year | 6.00% | ||
NCI | $ 56 | 53 | 51 |
NCI, percentage movement from prior period | 6.00% | ||
NCI, percentage movement from same period of prior year | 10.00% | ||
Total shareholders' equity and NCI | $ 67,646 | $ 65,507 | $ 63,935 |
Total shareholders' equity and NCI, percentage movement from prior period | 3.00% | ||
Total shareholders' equity and NCI, percentage movement from same period of prior year | 6.00% |
Consolidated statement of chang
Consolidated statement of changes in equity - AUD ($) $ in Millions | Total equity attributable to owners of WBC | Share capital | Reserves | Retained profits | Non-controlling interests | Total | |
Impact on adoption of new accounting standards | $ (725) | $ 2 | $ (727) | $ (725) | |||
Restated opening balance | 63,796 | $ 35,561 | 1,079 | 27,156 | $ 52 | 63,848 | |
Balance at Sep. 30, 2018 | 64,521 | 35,561 | 1,077 | 27,883 | 52 | 64,573 | |
Net profit for the year | 3,173 | 3,173 | 3 | 3,176 | |||
Net other comprehensive income for the year | (161) | (8) | (153) | 1 | (160) | ||
Total comprehensive income for the period | 3,012 | (8) | 3,020 | 4 | 3,016 | ||
Transactions in capacity as equityholders | |||||||
Dividends on ordinary shares | [1] | (3,227) | (3,227) | (3,227) | |||
Dividend reinvestment plan | 330 | 330 | 330 | ||||
Other equity movements | |||||||
Share-based payment arrangements | 70 | 70 | 70 | ||||
Purchase of shares (net of issue costs) | (31) | (31) | (31) | ||||
Net (acquisition)/disposal of treasury shares | (66) | (66) | (66) | ||||
Other | (5) | (5) | |||||
Total contributions and distributions | (2,924) | 233 | 70 | (3,227) | (5) | (2,929) | |
Balance at Mar. 31, 2019 | 63,884 | 35,794 | 1,141 | 26,949 | 51 | 63,935 | |
Net profit for the year | 3,611 | 3,611 | 3 | 3,614 | |||
Net other comprehensive income for the year | (3) | 130 | (133) | 1 | (2) | ||
Total comprehensive income for the period | 3,608 | 130 | 3,478 | 4 | 3,612 | ||
Transactions in capacity as equityholders | |||||||
Dividends on ordinary shares | [1] | (3,239) | (3,239) | (3,239) | |||
Dividend reinvestment plan | 1,159 | 1,159 | 1,159 | ||||
Other equity movements | |||||||
Share-based payment arrangements | 38 | 38 | 38 | ||||
Purchase of shares (net of issue costs) | (2) | (2) | (2) | ||||
Net (acquisition)/disposal of treasury shares | 4 | 4 | 4 | ||||
Other | 2 | 2 | (2) | ||||
Total contributions and distributions | (2,038) | 1,161 | 40 | (3,239) | (2) | (2,040) | |
Balance at Sep. 30, 2019 | 65,454 | 36,955 | 1,311 | 27,188 | 53 | 65,507 | |
Net profit for the year | 1,190 | 1,190 | 1 | 1,191 | |||
Net other comprehensive income for the year | 715 | 317 | 398 | 3 | 718 | ||
Total comprehensive income for the period | 1,905 | 317 | 1,588 | 4 | 1,909 | ||
Transactions in capacity as equityholders | |||||||
Share issuances | 2,751 | 2,751 | 2,751 | ||||
Dividends on ordinary shares | [1] | (2,791) | (2,791) | (2,791) | |||
Dividend reinvestment plan | 273 | 273 | 273 | ||||
Other equity movements | |||||||
Share-based payment arrangements | 60 | 60 | 60 | ||||
Purchase of shares (net of issue costs) | (29) | (29) | (29) | ||||
Net (acquisition)/disposal of treasury shares | (33) | (33) | (33) | ||||
Other | (1) | (1) | |||||
Total contributions and distributions | 231 | 2,962 | 60 | (2,791) | (1) | 230 | |
Balance at Mar. 31, 2020 | $ 67,590 | $ 39,917 | $ 1,688 | $ 25,985 | $ 56 | $ 67,646 | |
[1] | First Half 2020 reflects the 2019 final dividend of 80 cents per share ($2,791 million) (Second Half 2019: 2019 interim dividend of 94 cents per share ($3,239 million) and First Half 2019: 2018 final dividend of 94 cents per share ($3,227 million)), all fully franked at 30%. |
Consolidated statement of cha_2
Consolidated statement of changes in equity (Parenthetical) - AUD ($) $ in Millions | 6 Months Ended | ||
Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | |
Consolidated statement of changes in equity | |||
Interim dividend (in dollars per share) | $ 0.94 | ||
Interim dividend | $ 3,239 | ||
Final dividend (in dollars per share) | $ 0.80 | $ 0.94 | |
Final dividend | $ 2,791 | $ 3,227 | |
Dividend tax rate (as a percent) | 30.00% | 30.00% | 30.00% |
Consolidated cash flow statemen
Consolidated cash flow statement - AUD ($) $ in Millions | 6 Months Ended | ||
Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | |
Cash flows from operating activities | |||
Interest received | $ 14,637 | $ 16,389 | $ 16,704 |
Interest received, percentage movement from prior period | (11.00%) | ||
Interest received, percentage movement from same period in prior year | (12.00%) | ||
Interest paid | $ (6,183) | (7,709) | (8,777) |
Interest paid, percentage movement from prior period | (20.00%) | ||
Interest paid, percentage movement from same period in prior year | (30.00%) | ||
Dividends received excluding life business | $ 1 | 2 | 4 |
Dividends received excluding life business, percentage movement from prior period | (50.00%) | ||
Dividends received excluding life business, percentage movement from same period in prior year | (75.00%) | ||
Other non-interest income received | $ 1,947 | 1,568 | 2,297 |
Other non-interest income received, percentage movement from prior period | 24.00% | ||
Other non-interest income received, percentage movement from same period in prior year | (15.00%) | ||
Operating expenses paid | $ (4,250) | (4,127) | (4,953) |
Operating expenses paid, percentage movement from prior period | 3.00% | ||
Operating expenses paid, percentage movement from same period in prior year | (14.00%) | ||
Income tax paid excluding life business | $ (1,762) | (1,529) | (1,877) |
Income tax paid excluding life business, percentage movement from prior period | 15.00% | ||
Income tax paid excluding life business, percentage movement from same period in prior year | (6.00%) | ||
Life business: | |||
Receipts from policyholders and customers | $ 1,133 | 1,154 | 1,035 |
Receipts from policyholders and customers, percentage movement from prior period | (2.00%) | ||
Receipts from policyholders and customers, percentage movement from same period in prior year | 9.00% | ||
Interest and other items of similar nature | $ 11 | 2 | 4 |
Interest and other items of similar nature, percentage movement from same period in prior year | 175.00% | ||
Dividends received | $ 182 | 502 | 51 |
Dividends received, percentage movement from prior period | (64.00%) | ||
Payments to policyholders and suppliers | $ (1,189) | (1,407) | (843) |
Payments to policyholders and suppliers, percentage movement from prior period | (15.00%) | ||
Payments to policyholders and suppliers, percentage movement from same period in prior year | 41.00% | ||
Income tax paid | $ (1) | (44) | (50) |
Income tax paid, percentage movement from prior period | (98.00%) | ||
Income tax paid, percentage movement from same period in prior year | (98.00%) | ||
Cash flows from operating activities before changes in operating assets and liabilities | $ 4,526 | 4,801 | 3,595 |
Cash flows from operating activities before changes in operating assets and liabilities, percentage movement from prior period | (6.00%) | ||
Cash flows from operating activities before changes in operating assets and liabilities, percentage movement from same period in prior year | 26.00% | ||
Net (increase)/decrease in: | |||
Collateral paid | $ 877 | 371 | (1,218) |
Collateral paid, percentage movement from prior period | 136.00% | ||
Trading securities and financial assets measured at FVIS | $ 8,114 | (2,203) | (5,426) |
Derivative financial instruments | $ 4,966 | 4,937 | 2,668 |
Derivative financial instruments, percentage movement from prior period | 1.00% | ||
Derivative financial instruments, percentage movement from same period in prior year | 86.00% | ||
Loans | $ (694) | (2,399) | (1,789) |
Loans, percentage movement from prior period | (71.00%) | ||
Loans, percentage movement from same period in prior year | (61.00%) | ||
Other financial assets | $ 1 | 570 | (234) |
Other financial assets, percentage movement from prior period | (100.00%) | ||
Life insurance assets and liabilities | $ (143) | (130) | (4) |
Life insurance assets and liabilities, percentage movement from prior period | 10.00% | ||
Other assets | $ 69 | (15) | 2 |
Net increase/(decrease) in: | |||
Collateral received | 8,900 | 1,324 | (317) |
Deposits and other borrowings | 12,908 | 8,685 | (7,572) |
Other financial liabilities | 2,627 | 454 | 1,009 |
Other liabilities | $ 8 | 3 | (8) |
Deposits and other borrowings, percentage movement from prior period | 49.00% | ||
Other financial liabilities, percentage movement from same period in prior year | 160.00% | ||
Other liabilities, percentage movement from prior period | 167.00% | ||
Net cash provided by/(used in) operating activities | $ 42,159 | 16,398 | (9,294) |
Net cash provided by/(used in) operating activities, percentage movement from prior period | 157.00% | ||
Cash flows from investing activities | |||
Proceeds from investment securities | $ 14,984 | 6,796 | 12,972 |
Proceeds from investment securities, percentage movement from prior period | 120.00% | ||
Proceeds from investment securities, percentage movement from same period in prior year | 16.00% | ||
Purchase of investment securities | $ (25,568) | (10,143) | (19,384) |
Purchase of investment securities, percentage movement from prior period | 152.00% | ||
Purchase of investment securities, percentage movement from same period in prior year | 32.00% | ||
Proceeds/(Payments) from disposal of controlled entities, net of cash disposed | (1) | ||
Proceeds from disposal of controlled entities, net of cash disposed, percentage movement from same period in prior year | (100.00%) | ||
Proceeds from disposal of associates | 1 | 44 | |
Proceeds from disposal of associates, percentage movement from prior period | (100.00%) | ||
Proceeds from disposal of associates, percentage movement from same period in prior year | (100.00%) | ||
Purchase of associates | $ (2) | (9) | (16) |
Purchase of associates, percentage movement from prior period | (78.00%) | ||
Purchase of associates, percentage movement from same period in prior year | (88.00%) | ||
Proceeds from disposal of property and equipment | $ 23 | 106 | 51 |
Proceeds from disposal of property and equipment, percentage movement from prior period | (78.00%) | ||
Proceeds from disposal of property and equipment, percentage movement from same period in prior year | (55.00%) | ||
Purchase of property and equipment | $ (57) | (188) | (92) |
Purchase of property and equipment, percentage movement from prior period | (70.00%) | ||
Purchase of property and equipment, percentage movement from same period in prior year | (38.00%) | ||
Purchase of intangible assets | $ (427) | (511) | (395) |
Purchase of intangible assets, percentage movement from prior period | (16.00%) | ||
Purchase of intangible assets, percentage movement from same period in prior year | 8.00% | ||
Net cash provided by/(used in) investing activities | $ (11,047) | (3,948) | (6,821) |
Net cash provided by/(used in) investing activities, percentage movement from prior period | 180.00% | ||
Net cash provided by/(used in) investing activities, percentage movement from same period in prior year | 62.00% | ||
Cash flows from financing activities | |||
Proceeds from debt issues (net of issue costs) | $ 27,063 | 22,191 | 39,293 |
Proceeds from debt issues (net of issue costs), percentage movement from prior period | 22.00% | ||
Proceeds from debt issues (net of issue costs), percentage movement from same period in prior year | (31.00%) | ||
Redemption of debt issues | $ (36,224) | (36,585) | (26,728) |
Redemption of debt issues, percentage movement from prior period | (1.00%) | ||
Redemption of debt issues, percentage movement from same period in prior year | 36.00% | ||
Payments for the principal portion of lease liabilities | $ (284) | ||
Issue of loan capital (net of issue costs) | $ 2,225 | 4,245 | 690 |
Issue of loan capital (net of issue costs), percentage movement from prior period | (48.00%) | ||
Redemption of loan capital | $ (251) | (11) | (1,651) |
Redemption of loan capital, percentage movement from same period in prior year | (85.00%) | ||
Proceeds from issuances of shares | $ 2,751 | ||
Purchase of shares on exercise of employee options and rights | $ (4) | (2) | (4) |
Purchase of shares on exercise of employee options and rights, percentage movement from prior period | 100.00% | ||
Shares purchased for delivery of employee share plan | $ (25) | (27) | |
Shares purchased for delivery of employee share plan, percentage movement from same period in prior year | (7.00%) | ||
Purchase of RSP treasury shares | $ (44) | (3) | (66) |
Purchase of RSP treasury shares, percentage movement from same period in prior year | (33.00%) | ||
Net sale/(purchase) of other treasury shares | $ 11 | 7 | |
Net sale/(purchase) of other treasury shares, percentage movement from prior period | 57.00% | ||
Payment of dividends | $ (2,518) | (2,080) | (2,897) |
Payment of dividends, percentage movement from prior period | 21.00% | ||
Payment of dividends, percentage movement from same period in prior year | (13.00%) | ||
Dividends paid to NCI | $ (1) | (5) | |
Dividends paid to NCI, percentage movement from same period in prior year | (80.00%) | ||
Net cash provided by/(used in) financing activities | $ (7,301) | (12,238) | 8,605 |
Net cash provided by/(used in) financing activities, percentage movement from prior period | (40.00%) | ||
Net increase/(decrease) in cash and balances with central banks | $ 23,811 | 212 | (7,510) |
Effect of exchange rate changes on cash and balances with central banks | 1,945 | 361 | 208 |
Cash and balances with central banks as at beginning of the period | 20,059 | 19,486 | 26,788 |
Cash and balances with central banks as at the end of the period | $ 45,815 | $ 20,059 | $ 19,486 |
Cash and bank balances at central banks, percentage change from prior period | 128.00% | 3.00% | |
Cash and bank balances at central banks, percentage change from same period of prior year | 135.00% | (25.00%) |
Financial statements preparatio
Financial statements preparation | 6 Months Ended |
Mar. 31, 2020 | |
Financial statements preparation | |
Financial statements preparation | Note 1. Financial statements preparation This general purpose Interim Financial Report for the half year ended 31 March 2020 has been prepared in accordance with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001 (Cth) and is also compliant with International Accounting Standard IAS 34 Interim Financial Reporting. The Interim Financial Report does not include all the notes of the type normally included in an annual financial report. Accordingly, this Interim Financial Report is to be read in conjunction with the Annual Financial Report for the year ended 30 September 2019 and any relevant public announcements made by Westpac during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001 (Cth) and the ASX Listing Rules. The Interim Financial Report complies with current Australian Accounting Standards (AAS) as they relate to interim financial reports. The Interim Financial Report was authorised for issue by the Board of Directors on 4 May 2020. All amounts have been rounded in accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, to the nearest million dollars, unless otherwise stated. Comparative revisions Comparative information has been revised where appropriate to enhance comparability. Critical accounting assumptions and estimates In preparing the Interim Financial Report, the application of the Group’s accounting policies requires the use of judgement, assumptions and estimates. The areas of judgement, assumptions and estimates in the Interim Financial Report, including the key sources of estimation uncertainty, are consistent with those in the Annual Financial Report for the year ended 30 September 2019 except for as noted below: Goodwill As at 31 March 2020, the carrying value of the net assets of the Group was more than its market capitalisation which is an indicator of impairment. As a result, an impairment test was performed which determined that goodwill is recoverable, and no impairment should be recognised. We have reassessed the base assumptions and revised them where we consider it necessary in order to provide a reasonable estimate of the value-in-use of the business units and Group in the current environment. We have revised the assumptions used at 30 September 2019 as reported in our Annual Report from a zero growth rate beyond 2 year forecasts to a 2% growth rate beyond 3.5 year forecasts. Given the uncertainty of a rapidly changing economic environment, market sentiment, and regulatory and industry responses, the forecasts are likely to change. This will continue to be reviewed and a further impairment test will be performed at year end. Provisions for expected credit losses (ECL) Details on specific judgements in relation to the impact of COVID-19 on the calculation of provisions for ECL are included in Note 10. Compliance, regulation and remediation provisions Details on specific judgements in relation to material compliance, regulation and remediation provisions are included in Note 14. Amendments to Accounting Standards effective this period AASB 16 Leases (AASB 16) was adopted by the Group on 1 October 2019. AASB 16 requires all operating leases of greater than 12 months duration be presented on balance sheet by the lessee as a right-of-use (ROU) asset and lease liability. There are no significant changes to lessor accounting. The Group adopted the standard using the simplified approach to transition with no restatement of comparative information and no effect on retained earnings. The lease liabilities are measured at the present value of the remaining lease payments, discounted at the lessee’s incremental borrowing rate at 1 October 2019. On transition to the new standard, the lease liability recognised in other liabilities was $3.3 billion. The associated ROU assets of $3.2 billion were measured at an amount equal to the lease liability, less previously recognised accrued lease payments of $0.1 billion. The ROU assets are recognised in property and equipment. All leases on balance sheet give rise to a combination of interest expense on the lease liability and depreciation of the ROU asset. Interest expense is recognised in net interest income on an effective yield basis. Depreciation expense is recognised in operating expenses on a straight-line basis over the lease term. Extension options are included in a number of lease contracts. The extension options are only included in the lease term if the lease is reasonably certain to be extended, which is assessed by the Group at the lease commencement date. The assessment is reviewed if a significant event or significant change in circumstances occurs which affects this assessment and is within the control of the Group. The Group used the incremental borrowing rate based on the remaining maturity of leases at the date of transition as the discount rate when determining present value. The weighted average incremental borrowing rate applied was 2.1%. Operating lease commitments disclosed under AASB 117 Leases as at 30 September 2019 were $3.7 billion compared to the lease liabilities of $3.3 billion recognised under AASB 16 as at 1 October 2019. The difference is principally due to the discounting of the contractual lease payments under AASB 16. AASB Interpretation 23 Uncertainty over Income Tax Treatments (Interpretation 23) was adopted by the Group on 1 October 2019. Interpretation 23 clarifies the recognition and measurement criteria in AASB 112 Income Taxes (AASB 112) where there is uncertainty over income tax treatments, and requires an assessment of each uncertain tax position as to whether it is probable that a taxation authority will accept the position. Where it is not considered probable, the effect of the uncertainty will be reflected in determining the relevant taxable profit or loss, tax bases, unused tax losses and unused tax credits or tax rates. The amount will be determined as either the single most likely amount or the sum of the probability weighted amounts in a range of possible outcomes, whichever better predicts the resolution of the uncertainty. Judgements will be reassessed as and when new facts and circumstances are presented. Interpretation 23 did not have a material impact on the Group. AASB 2019-3 Amendments to Australian Accounting Standards – Interest rate benchmark reform (AASB 2019-3) was early adopted, as permitted by the standard, by the Group on 1 October 2019. AASB 2019-3 makes amendments to AASB 9, AASB 139 and AASB 7 which allows the Group to apply certain exceptions to the standard hedging requirements in respect of hedge relationships that are impacted by a market wide interest rate benchmark reform. Specifically the exceptions allow the Group to: · Assume that the interest rate benchmark on which the hedged cash flows are based is not altered as a result of the reform when determining whether a forecast transaction is highly probable; · Assume that interest rate benchmark of the hedged item / instrument are not altered for the life of the hedge when assessing whether a hedge is expected to continue to be highly effective; · A hedge relationship impacted by uncertainty arising from benchmark interest rate reform is not required to pass the 80%-125% effectiveness test, however any actual ineffectiveness must be recorded in the Income Statement; and · The determination of a designated component of an exposure in portfolio hedges is only required to be made the first time that component is designated, and not when the portfolio is de-designated and re-designated. The exceptions allowed by the amendments are being applied to the Group’s LIBOR linked hedge relationships that mature after the LIBOR discontinuance date of 31 December 2021. The Group’s LIBOR transition project has commenced focusing on identification of exposures and internal processes that will be affected by the changes. A key assumption made when performing hedge accounting at the reporting date is that both the hedged item and instrument will be amended from existing LIBOR linked floating rates to new alternative reference rates (ARRs) on the same date. Where actual differences between those dates arise hedge ineffectiveness will be recorded in the income statement. On 9 April 2020, the IASB issued an exposure draft for Interest Rate Benchmark Reform - Phase 2 which considers the issues that will affect financial reporting when an existing benchmark interest rate is replaced by an ARR. The Group continues to monitor these developments and the expected impact. The table below summarises the exposures Westpac currently has in hedging relationships maturing after 31 December 2021 which will be impacted by the IBOR reform and the quantum of those risks. The extent of the risk exposure also reflects the notional amounts of related hedging instruments. Notional hedged exposure Benchmark (A$bn) US LIBOR 53 GBP LIBOR 2 CHF LIBOR 2 JPY LIBOR 2 Future developments in accounting standards The following new standards and interpretations which may have a material impact on the Group have been issued but are not yet effective, and unless otherwise stated, have not been early adopted by the Group. AASB 17 Insurance Contracts was issued on 19 July 2017 and will be effective for the 30 September 2022 year end unless early adopted. This will replace AASB 4 Insurance Contracts , AASB 1023 General Insurance Contracts and AASB 1038 Life Insurance Contracts . The main changes under the standard are: · the scope of the standard may result in some contracts that are currently “unbundled”, i.e. accounted for separately as insurance and investment contracts being required to be “bundled” and accounted for as an insurance contract; · portfolios of contracts (with similar risks which are managed together) will be required to be disaggregated to a more granular level by both the age of a contract and the likelihood of the contract being onerous in order to determine the recognition of profit over the contract period (i.e. the contractual service margin). The contractual service margin uses a different basis to recognise profit to the current Margin on Services approach for life insurance and therefore the pattern of profit recognition is likely to differ; · risk adjustments, which reflect uncertainties in the amount and timing of future cash flows, are required for both general and life insurance contracts rather than just general insurance contracts under the current accounting standards; · the contract boundary, which is the period over which profit is recognised, differs and is determined based on the ability to compel the policyholder to pay premiums or the substantive obligation to provide coverage/services. For some general insurance contracts (e.g. some lender mortgage insurance and reinsurance contracts) this may result in the contract boundary being longer. For life insurance, in particular term renewable contracts, the contract boundary is expected to be shorter. Both will be impacted by different patterns of profit recognition compared to the current standards; · a narrower definition of what acquisition costs may be deferred; · an election to recognise changes in assumptions regarding discount rate in other comprehensive income rather than in profit and loss; · an election to recognise changes in the fair value of assets supporting policy liabilities in other comprehensive income rather than through profit and loss; · reinsurance contracts and the associated liability are to be determined separately to the gross contract liability and may have different contract boundaries; and · additional disclosure requirements. The standard is expected to result in a reduction in the level of deferred acquisition costs, however the quantum of this and the profit and loss impacts to the Group are not yet practicable to determine. On 26 June 2019, the IASB issued an exposure draft proposing a number of amendments to the insurance contracts standard. These amendments were approved by the IASB, with some minor modifications, on 17 March 2020. These amendments include: · deferral of acquisition costs for anticipated renewals outside of the initial contract boundary; · further clarity on the contractual service margin; · ability to recognise a gain in the P&L for reinsurance contracts, to offset losses from onerous contracts on initial recognition; and · additional transitional provisions. In addition, the effective date of the standard will be deferred by two years to be applicable to the Group for the 30 September 2024 financial year. A revised Conceptual Framework (Framework) was issued in May 2019. This will be effective for the Group for the 30 September 2021 financial year. The revised Framework includes new definitions and recognition criteria for assets, liabilities, income and expenses and other relevant financial reporting concepts. The changes are not expected to have a material impact on the Group. Other amendments to existing standards that are not yet effective are not expected to have a material impact to the Group. |
Segment reporting
Segment reporting | 6 Months Ended |
Mar. 31, 2020 | |
Segment reporting | |
Segment reporting | Note 2. Segment reporting Operating segments are presented on a basis consistent with information provided internally to Westpac’s key decision makers and reflects the management of the business, rather than the legal structure of the Group. Internally, Westpac uses ‘cash earnings’ in assessing the financial performance of its divisions. Management believes this allows the Group to: · more effectively assess current year performance against prior years; · compare performance across business divisions; and · compare performance across peer companies. Cash earnings is viewed as a measure of the level of profit that is generated by ongoing operations and is therefore considered in assessing distributions, including dividends. Cash earnings is neither a measure of cash flow nor net profit determined on a cash accounting basis, as it includes both cash and non-cash adjustments to statutory net profit. To determine cash earnings, three categories of adjustments are made to statutory results: · material items that key decision makers at Westpac believe do not reflect ongoing operations; · some items that are not considered when dividends are recommended, such as the amortisation of intangibles, impact of Treasury shares and economic hedging impacts; and · accounting reclassifications between individual line items that do not impact statutory results. Reportable operating segments The operating segments are defined by the customers they service and the services they provide: · Consumer: - is responsible for sales and service of banking and financial products and services to consumer customers in Australia; - is also responsible for the Group's Australian insurance business, which covers the manufacture and distribution of life, general and lenders mortgage insurance; and - operates under the Westpac, St.George, BankSA, Bank of Melbourne, RAMS and BT brands. · Business : - is responsible for sales and service of banking and financial products and services for SME and commercial business customers in Australia. SME and commercial business customers typically have facilities up to approximately $200 million; - is responsible for Private Wealth, serving the banking needs of high net worth customers across the banking brands; - is responsible for the manufacture and distribution of investments (including margin lending and equities broking), superannuation and retirement products as well as wealth administration platforms; and - operates under the Westpac, St.George, BankSA, Bank of Melbourne and BT brands. · Westpac Institutional Bank (WIB): - is responsible for delivering a broad range of financial products and services to commercial, corporate, institutional and government customers with connections to Australia and New Zealand; - services include financing, transactional banking, financial and debt capital markets; - customers are supported throughout Australia, as well as via branches and subsidiaries located in New Zealand, US, UK and Asia; and - is also responsible for Westpac Pacific, providing a range of banking services in Fiji and Papua New Guinea. · Westpac New Zealand: - responsible for sales and service of banking, wealth and insurance products to customers in New Zealand; - customer base includes consumer, business and institutional customers; and - operates under the Westpac brand for banking products, the Westpac Life brand for life insurance products and the BT brand for wealth products. · Group Businesses include: - Treasury, which is responsible for the management of the Group’s balance sheet including wholesale funding, capital and management of liquidity. Treasury also manages the interest rate and foreign exchange risks inherent in the balance sheet, including managing the mismatch between Group assets and liabilities. Treasury’s earnings are primarily sourced from managing the Group’s balance sheet and interest rate risk (excluding Westpac New Zealand) within set risk limits; - Group Technology 1 , which comprises functions for the Australian businesses, is responsible for technology strategy and architecture, infrastructure and operations, applications development and business integration; - Core Support 2 , which comprises functions performed centrally, including Australian banking operations, property services, strategy, finance, risk, compliance, legal, human resources, and customer and corporate relations; - Following the Group’s decision to restructure the Wealth division and to exit its Advice business in 2019, the remaining Advice activities (including associated remediation) and support functions have been transferred to Group Businesses; and - Group Businesses also includes earnings on capital not allocated to divisions, for certain intra-group transactions that facilitate presentation of performance of the Group’s operating segments, earnings from non-core asset sales, earnings and costs associated with the Group’s fintech investments, and certain other head office items such as centrally held provisions. 1. Costs are fully allocated to other divisions in the Group. 2. Costs are partially allocated to other divisions in the Group, with costs attributed to enterprise activity retained in Group Businesses. Revisions to segment results In 2020, Westpac implemented a change to the presentation of its divisional financial information. The change has no impact on the Group’s overall results or balance sheet with impacts on divisional results and balance sheets only. Comparative divisional financial information has been restated for this change. The change realigned divisional earnings and balance sheet disclosures for the Consumer and Business divisions for customer migrations following a refinement to Westpac’s definition of a small to medium size enterprise customer. The change is aimed at providing a more tailored service to the customers, by aligning them to the division that is best able to meet their needs. The change moves approximately 49,000 customers from the Business to Consumer division. The tables present the segment results on a cash earnings basis for the Group: Half Year March 2020 Westpac Westpac New Institutional Zealand Group $m Consumer Business Bank ($A) Businesses Group Net interest income 4,177 2,438 655 940 456 8,666 Net fee income 272 272 283 67 (139) 755 Net wealth management and insurance income (13) 382 - 78 34 481 Trading income 48 62 301 18 - 429 Other income 6 (10) 19 4 (9) 10 Net operating income before operating expenses and impairment charges 4,490 3,144 1,258 1,107 342 10,341 Operating expenses (2,024) (1,468) (654) (516) (1,498) (6,160) Impairment (charges)/benefits (448) (805) (315) (200) (470) (2,238) Profit before income tax 2,018 871 289 391 (1,626) 1,943 Income tax expense (608) (267) (113) (110) 149 (949) Net profit attributable to NCI - - (1) - - (1) Cash earnings for the period 1,410 604 175 281 (1,477) 993 Net cash earnings adjustments - (63) - 11 249 197 Net profit attributable to owners of WBC 1,410 541 175 292 (1,228) 1,190 Balance sheet Loans 388,820 166,212 80,416 84,778 (548) 719,678 Deposits and other borrowings 210,775 146,952 112,478 70,725 41,990 582,920 Half Year Sept 2019 Westpac Westpac New Institutional Zealand Group $m Consumer Business Bank ($A) Businesses Group Net interest income 4,094 2,538 700 915 317 8,564 Net fee income 296 233 291 88 (79) 829 Net wealth management and insurance income 231 455 - 96 (82) 700 Trading income 49 52 338 12 (8) 443 Other income 8 (19) (19) (7) 53 16 Net operating income before operating expenses and impairment charges 4,678 3,259 1,310 1,104 201 10,552 Operating expenses (1,901) (1,460) (631) (486) (512) (4,990) Impairment (charges)/benefits (317) (194) (31) 24 57 (461) Profit before income tax 2,460 1,605 648 642 (254) 5,101 Income tax expense (737) (483) (176) (181) 32 (1,545) Net profit attributable to NCI - - (2) - (1) (3) Cash earnings for the period 1,723 1,122 470 461 (223) 3,553 Net cash earnings adjustments - (40) - 4 94 58 Net profit attributable to owners of WBC 1,723 1,082 470 465 (129) 3,611 Balance sheet Loans 392,149 169,432 75,353 78,005 (169) 714,770 Deposits and other borrowings 210,625 146,531 101,262 60,801 44,028 563,247 Half Year March 2019 Westpac Westpac New Institutional Zealand Group $m Consumer Business Bank ($A) Businesses Group Net interest income 3,915 2,487 743 945 299 8,389 Net fee income 309 234 319 75 (111) 826 Net wealth management and insurance income 194 444 - 81 (396) 323 Trading income 44 54 357 25 (16) 464 Other income 7 14 6 53 21 101 Net operating income before operating expenses and impairment charges 4,469 3,233 1,425 1,179 (203) 10,103 Operating expenses (1,867) (1,394) (653) (453) (674) (5,041) Impairment (charges)/benefits (272) (70) (15) (14) 38 (333) Profit before income tax 2,330 1,769 757 712 (839) 4,729 Income tax expense (694) (531) (210) (188) 193 (1,430) Net profit attributable to NCI - - (3) - - (3) Cash earnings for the period 1,636 1,238 544 524 (646) 3,296 Net cash earnings adjustments - (5) - (5) (113) (123) Net profit attributable to owners of WBC 1,636 1,233 544 519 (759) 3,173 Balance sheet Loans 390,846 168,580 76,485 78,608 (222) 714,297 Deposits and other borrowings 207,179 141,258 95,690 62,374 48,506 555,007 Reconciliation of cash earnings to reported results Half Year Half Year Half Year % Mov't March Sept March Mar 20 - Mar 20 - $m Sept 19 Mar 19 Cash earnings 993 3,553 3,296 Fair value (gain)/loss on economic hedges 219 90 (125) large Ineffective hedges 24 15 5 large Adjustments related to Pendal (63) (40) (5) large Treasury shares 17 (7) 2 large large Total cash earnings adjustment (post-tax) 197 58 (123) large large Net profit attributable to owners of WBC 1,190 3,611 3,173 |
Net interest income
Net interest income | 6 Months Ended |
Mar. 31, 2020 | |
Net interest income | |
Net interest income | Note 3. Net interest income 1 Half Year Half Year Half Year % Mov't March Sept March Mar 20 - Mar 20 - $m Sept 19 Mar 19 Interest income Calculated using the effective interest rate method Cash and balances with central banks 114 141 193 (19) (41) Collateral paid 69 99 102 (30) (32) Investment securities 881 961 958 (8) (8) Loans 13,336 14,679 15,350 (9) (13) Other financial assets 12 20 15 (40) (20) Total interest income calculated using the effective interest rate method 14,412 15,900 16,618 (9) (13) Other Net ineffectiveness on qualifying hedges 35 21 7 67 large Trading securities and financial assets measured at FVIS 234 328 334 (29) (30) Loans 3 5 9 (40) (67) Total other 272 354 350 (23) (22) Total interest income 14,684 16,254 16,968 (10) (13) Interest expense Calculated using the effective interest rate method Collateral received (19) (37) (20) (49) (5) Deposits and other borrowings (2,860) (3,843) (4,124) (26) (31) Debt issues (1,829) (2,407) (2,299) (24) (20) Loan capital (430) (390) (386) 10 11 Other financial liabilities (87) (131) (143) (34) (39) Total interest expense calculated using the effective interest rate method (5,225) (6,808) (6,972) (23) (25) Other Deposits and other borrowings (295) (427) (551) (31) (46) Trading liabilities 2 177 (27) (888) large large Debt issues (68) (110) (53) (38) 28 Bank Levy (196) (198) (193) (1) 2 Other interest expense 3 (77) (40) (48) 93 60 Total other (459) (802) (1,733) (43) (74) Total interest expense (5,684) (7,610) (8,705) (25) (35) Net interest income 9,000 8,644 8,263 4 9 1. Interest income includes items relating to estimated customer refunds, payments, associated costs and litigation, recognised as a reduction of interest income of $132 million (Second Half 2019: $146 million; First Half 2019: $226 million). 2. Includes net impact of Treasury balance sheet management activities. 3. Included in other interest expense for 31 March 2020 is $32 million interest expense on lease liabilities due to the adoption of AASB 16 by the Group from 1 October 2019. Comparatives have not been restated. Refer to Note 1 for further details. |
Non-interest income
Non-interest income | 6 Months Ended |
Mar. 31, 2020 | |
Non-interest income | |
Non-interest income | Note 4. Non-interest income 1 Half Year Half Year Half Year % Mov't March Sept March Mar 20 - Mar 20 - $m Sept 19 Mar 19 Net fee income Facility fees 372 355 375 5 (1) Transactions fees 582 601 624 (3) (7) Other non-risk fee income (86) (17) (59) large 46 Fee income 868 939 940 (8) (8) Credit card loyalty programs (62) (58) (63) 7 (2) Transaction fee related expenses (51) (52) (51) (2) - Fee expenses (113) (110) (114) 3 (1) Net fee income 755 829 826 (9) (9) Net wealth management and insurance income Wealth management income 384 308 (32) 25 large Life insurance premium income 688 736 707 (7) (3) General insurance and lenders mortgage insurance (LMI) net premium earned 247 242 240 2 3 Life insurance investment and other income 2 (4) 383 26 large large General insurance and LMI investment and other income 24 27 25 (11) (4) Total insurance premium, investment and other income 955 1,388 998 (31) (4) Life insurance claims and changes in life insurance liabilities (574) (852) (414) (33) 39 General insurance and LMI claims and other expenses (300) (141) (226) 113 33 Total insurance claims, changes in insurance liabilities and other expenses (874) (993) (640) (12) 37 Net wealth management and insurance income 465 703 326 (34) 43 Trading income 460 492 437 (7) 5 Other income Dividends received from other entities 1 2 4 (50) (75) Net gain/(loss) on sale of associates - - 38 - (100) Net gain/(loss) on disposal of assets 2 59 2 (97) - Net gain/(loss) on derivatives held for risk management purposes 3 (23) 17 (28) large (18) Net gain/(loss) on financial instruments measured at fair value (92) (83) 44 11 large Net gain/(loss) on disposal of controlled entities - - 3 - (100) Rental income on operating leases 29 34 38 (15) (24) Share of associates' net profit/(loss) (14) (13) (10) 8 40 Other 21 (14) 36 large (42) Total other income (76) 2 127 large large Total non-interest income 1,604 2,026 1,716 (21) (7) 1. Non-interest income includes estimated customer refunds, payments, associated costs and litigation, recognised as a reduction of non-risk fee income, wealth management income and other income of $129 million (Second Half 2019: $235 million, First Half 2019: $625 million). Refer to Note 14 for further details. 2. Includes policyholder tax recoveries. 3. Income from derivatives held for risk management purposes reflects the impact of economic hedges of foreign currency capital and earnings. |
Operating expenses
Operating expenses | 6 Months Ended |
Mar. 31, 2020 | |
Operating expenses | |
Operating expenses | Note 5. Operating expenses 1 Half Year Half Year Half Year % Mov't March Sept March Mar 20 - Mar 20 - $m Sept 19 Mar 19 Staff expenses Employee remuneration, entitlements and on-costs 2,155 2,081 2,239 4 (4) Superannuation expense 207 184 194 13 7 Share-based payments 47 51 57 (8) (18) Restructuring costs 35 77 155 (55) (77) Total staff expenses 2,444 2,393 2,645 2 (8) Occupancy expenses Operating lease rentals 64 315 343 (80) (81) Depreciation of property and equipment 2 388 113 109 large large Other 62 69 74 (10) (16) Total occupancy expenses 514 497 526 3 (2) Technology expenses Amortisation and impairment of software assets 3 468 385 334 22 40 Depreciation and impairment of IT equipment 2 125 61 68 105 84 Technology services 348 405 405 (14) (14) Software maintenance and licences 193 186 185 4 4 Telecommunications 99 98 109 1 (9) Data processing 44 45 38 (2) 16 Total technology expenses 1,277 1,180 1,139 8 12 Other expenses Professional and processing services 600 607 453 (1) 32 Amortisation and impairment of intangible assets and deferred expenditure 3 4 5 (25) (40) Postage and stationery 83 92 87 (10) (5) Advertising 122 116 129 5 (5) Non-lending losses 969 67 (9) large large Other expenses 169 59 116 186 46 Total other expenses 1,946 945 781 106 149 Total operating expenses 6,181 5,015 5,091 23 21 1. Operating expenses include estimated costs associated with AUSTRAC proceedings including a provision for a potential penalty of $900 million and customer refunds, payments, associated costs and litigation of $302 million (Second Half 2019: $112 million; First Half 2019: $84 million). Refer to Note 14. 2. These balances include depreciation of right-of-use assets for the half year ended 31 March 2020 of $317 million due to the adoption of AASB 16 by the Group from 1 October 2019. Comparatives have not been restated. Refer to Note 1 for further details. 3. Impairment of software assets was $75 million (Second Half 2019: $9 million; First Half 2019: $16 million) . |
Income tax
Income tax | 6 Months Ended |
Mar. 31, 2020 | |
Income tax | |
Income tax | Note 6. Income tax The income tax expense is reconciled to the profit before income tax as follows: Half Year Half Year Half Year % Mov't March Sept March Mar 20 - Mar 20 - $m Sept 19 Mar 19 Profit before income tax 2,185 5,194 4,555 (58) (52) Tax at the Australian company tax rate of 30% 656 1,558 1,367 (58) (52) The effect of amounts which are not deductible/(assessable) in calculating taxable income: Hybrid capital distributions 30 31 41 (3) (27) Life insurance: Tax adjustment on policyholder earnings (24) 8 - large - Adjustment for life business tax rates 1 (1) - large - Dividend adjustments - - (1) - (100) Other non-assessable items (1) (1) (13) - (92) Other non-deductible items 295 7 5 large large Adjustment for overseas tax rates 10 (16) (16) large large Income tax (over)/under provided in prior periods - (5) (5) (100) (100) Other items 27 (1) 1 large large Total income tax expense 994 1,580 1,379 (37) (28) Effective income tax rate large large |
Earnings per share
Earnings per share | 6 Months Ended |
Mar. 31, 2020 | |
Earnings per share | |
Earnings per share | Note 7. Earnings per share Basic earnings per share (EPS) is calculated by dividing the net profit attributable to shareholders by the weighted average number of ordinary shares on issue during the period, adjusted for treasury shares. Diluted EPS is calculated by adjusting the basic EPS by assuming all dilutive potential ordinary shares are converted. Half Year March 2020 Half Year Sept 2019 Half Year March 2019 $m Basic Diluted Basic Diluted Basic Diluted Net profit attributable to shareholders 1,190 1,190 3,611 3,611 3,173 3,173 Adjustment for RSP dividends 1 (2) (2) (4) (4) (2) (2) Adjustment for potential dilution: Distributions to convertible loan capital holders 2 - - - 136 - 154 Adjusted net profit attributable to shareholders 1,188 1,188 3,607 3,743 3,171 3,325 Weighted average number of ordinary shares (millions) Weighted average number of ordinary shares on issue 3,579 3,579 3,470 3,470 3,442 3,442 Treasury shares (including RSP share rights) 1 (5) (5) (6) (6) (6) (6) Adjustment for potential dilution: Share-based payments - 1 - 1 - 1 Convertible loan capital 2 - - - 283 - 278 Adjusted weighted average number of ordinary shares 3,574 3,575 3,464 3,748 3,436 3,715 Earnings per ordinary share (cents) 33.2 33.2 104.1 99.9 92.3 89.5 1. Some RSP share rights have not vested and are not ordinary shares but do receive dividends. These RSP dividends are deducted to show the profit attributable to ordinary shareholders. RSP share rights were antidilutive for all periods presented. 2. The Group has issued convertible loan capital which may convert into ordinary shares in the future. These convertible loan capital instruments were dilutive for the half year September 2019 and half year March 2019. Diluted EPS for these periods were therefore calculated as if the instruments had been converted at the beginning of the respective period or, if later, the instruments’ issue date. For Half Year March 2020, these instruments were antidilutive. |
Average balance sheet and inter
Average balance sheet and interest rates | 6 Months Ended |
Mar. 31, 2020 | |
Average balance sheet and interest rates | |
Average balance sheet and interest rates | Note 8. Average balance sheet and interest rates Half Year March 2020 Half Year Sept 2019 Half Year March 2019 Average Average Average Average Average Average balance Interest rate balance Interest rate balance Interest rate $m $m % $m $m % $m $m % Assets Interest earning assets Collateral paid 13,126 69 1.1 11,368 99 1.7 10,275 102 2.0 Trading securities and financial assets measured at FVIS 27,237 234 1.7 30,174 328 2.2 27,968 334 2.4 Investment securities 72,352 881 2.4 67,250 961 2.9 60,305 958 3.2 Loans and other receivables 1 700,256 13,500 3.9 694,373 14,866 4.3 696,112 15,574 4.5 Total interest earning assets and interest income 812,971 14,684 3.6 803,165 16,254 4.0 794,660 16,968 4.3 Non-interest earning assets Derivative financial instruments 30,617 27,818 24,090 Life insurance assets 6,831 10,026 9,192 All other assets 2 61,945 61,244 59,212 Total non-interest earning assets 99,393 99,088 92,494 Total assets 912,364 902,253 887,154 Liabilities Interest bearing liabilities Collateral received 6,579 19 0.6 4,849 37 1.5 2,378 20 1.7 Deposits and other borrowings 512,522 3,155 1.2 508,112 4,270 1.7 505,459 4,675 1.9 Loan capital 22,182 430 3.9 18,419 390 4.2 17,942 386 4.3 Other interest bearing liabilities 3 201,285 2,080 2.1 207,779 2,913 2.8 203,600 3,624 3.6 Total interest bearing liabilities and interest expense 742,568 5,684 1.5 739,159 7,610 2.1 729,379 8,705 2.4 Non-interest bearing liabilities Deposits and other borrowings 52,823 49,765 48,772 Derivative financial instruments 30,279 27,574 25,556 Life insurance liabilities 5,611 8,018 7,286 All other liabilities 4 13,405 13,611 12,761 Total non-interest bearing liabilities 102,118 98,968 94,375 Total liabilities 844,686 838,127 823,754 Shareholders' equity 67,625 64,078 63,348 NCI 53 48 52 Total equity 67,678 64,126 63,400 Total liabilities and equity 912,364 902,253 887,154 Loans and other receivables 1 Australia 587,528 11,401 3.9 589,007 12,657 4.3 589,849 13,274 4.5 New Zealand 83,841 1,738 4.1 80,074 1,799 4.5 78,432 1,851 4.7 Other overseas 28,887 361 2.5 25,292 410 3.2 27,831 449 3.2 Deposits and other borrowings Australia 426,021 2,333 1.1 426,878 3,325 1.6 424,715 3,698 1.7 New Zealand 56,464 516 1.8 55,038 601 2.2 54,400 634 2.3 Other overseas 30,037 306 2.0 26,196 344 2.6 26,344 343 2.6 1. Loans and other receivables are net of Stage 3 provisions, where interest income is determined based on their carrying value. Stage 1 and 2 provisions are not included in the average interest earning assets balance, as interest income is determined based on the gross value of loans and other receivables. 2. Includes property and equipment, intangible assets, deferred tax assets, non-interest bearing loans relating to mortgage offset accounts and all other non-interest earning financial assets. 3. Includes net impact of Treasury balance sheet management activities and the Bank Levy. 4. Includes other financial liabilities, provisions, current and deferred tax liabilities and other liabilities. |
Loans
Loans | 6 Months Ended |
Mar. 31, 2020 | |
Loans | |
Loans | Note 9. Loans As at As at As at % Mov't 31 March 30 Sept 31 March Mar 20 - Mar 20 - $m Sept 19 Mar 19 Australia Housing 445,663 449,201 447,164 (1) - Personal 19,854 21,247 22,463 (7) (12) Business 155,322 152,360 152,424 2 2 Total Australia 620,839 622,808 622,051 - - New Zealand Housing 52,037 47,731 47,499 9 10 Personal 1,610 1,709 1,855 (6) (13) Business 32,021 29,285 29,990 9 7 Total New Zealand 85,668 78,725 79,344 9 8 Total other overseas 18,361 16,845 16,539 9 11 Total loans 724,868 718,378 717,934 1 1 Provisions for expected credit losses (ECL) on loans (Note 10) (5,190) (3,608) (3,637) 44 43 Total net loans 1,2 719,678 714,770 714,297 1 1 1. Total net loans include securitised loans of $9,029 million as at 31 March 2020 (30 September 2019: $7,737 million; 31 March 2019: $8,901 million). The level of securitised loans excludes loans where Westpac is the holder of related debt securities. 2. Total net loans include assets pledged for the covered bond programs of $39,348 million as at 31 March 2020 (30 September 2019: $38,832 million; 31 March 2019: $37,548 million). |
Provisions for expected credit
Provisions for expected credit losses | 6 Months Ended |
Mar. 31, 2020 | |
Provisions for expected credit losses | |
Provisions for expected credit losses | Note 10. Provisions for expected credit losses Loans and credit commitments The following table shows the provision for ECL on loans and credit commitments by stage: As at As at As at % Mov’t 31 March 30 Sept 31 March Mar 20 - Mar 20 - $m Sept 19 Mar 19 Performing - Stage 1 1,181 884 916 34 29 Performing - Stage 2 2,878 1,674 1,711 72 68 Non performing - Stage 3 1,707 1,355 1,358 26 26 Total provision for ECL on loans and credit commitments 5,766 3,913 3,985 47 45 Presented as: Provision for ECL on loans (Note 9) 5,190 3,608 3,637 44 43 Provision for ECL on credit commitments (Note 14) 576 305 348 89 66 Total provision for ECL on loans and credit commitments 5,766 3,913 3,985 47 45 Of which: Individually assessed provisions 606 412 433 47 40 Collectively assessed provisions 5,160 3,501 3,552 47 45 Total provision for ECL on loans and credit commitments 5,766 3,913 3,985 47 45 Movement in provision for ECL on loans and credit commitments Non- Collectively Individually Consolidated Performing performing assessed assessed $m Stage 1 Stage 2 Stage 3 provisions provisions Total Balance as at 30 September 2018 - - - 2,631 422 3,053 Restatement for adoption of AASB 9 877 1,884 1,272 (2,631) (422) 980 Balance as at 1 October 2018 877 1,884 1,272 - - 4,033 Transfers to Stage 1 701 (678) (23) - - - Transfers to Stage 2 (123) 469 (346) - - - Transfers to Stage 3 (3) (290) 293 - - - Business activity during the period 87 (25) (217) - - (155) Net remeasurement of provision for ECL (628) 342 844 - - 558 Write-offs - - (499) - - (499) Exchange rate and other adjustments 5 9 34 - - 48 Balance as at 31 March 2019 916 1,711 1,358 - - 3,985 Transfers to Stage 1 757 (726) (31) - - - Transfers to Stage 2 (119) 487 (368) - - - Transfers to Stage 3 (2) (331) 333 - - - Business activity during the period 92 6 (113) - - (15) Net remeasurement of provision for ECL (757) 532 803 - - 578 Write-offs - - (655) - - (655) Exchange rate and other adjustments (3) (5) 28 - - 20 Balance as at 30 September 2019 884 1,674 1,355 - - 3,913 Transfers to Stage 1 600 (583) (17) - - - Transfers to Stage 2 (131) 466 (335) - - - Transfers to Stage 3 (2) (334) 336 - - - Business activity during the period 120 114 (50) - - 184 Net remeasurement of provision for ECL (297) 1,527 911 - - 2,141 Write-offs - - (537) - - (537) Exchange rate and other adjustments 7 14 44 - - 65 Balance as at 31 March 2020 1,181 2,878 1,707 - - 5,766 The following table provides further details of the provision for ECL by class and stage: Non- Performing performing $m Stage 1 Stage 2 Stage 3 Total Housing 154 324 570 1,048 Personal 256 535 254 1,045 Business 506 852 534 1,892 Balance as at 31 March 2019 916 1,711 1,358 3,985 Housing 163 354 591 1,108 Personal 268 459 248 975 Business 453 861 516 1,830 Balance as at 30 September 2019 884 1,674 1,355 3,913 Housing 195 544 583 1,322 Personal 267 562 319 1,148 Business 719 1,772 805 3,296 Balance as at 31 March 2020 1,181 2,878 1,707 5,766 Impact of COVID-19 on the provision for ECL for the half year ending 31 March 2020 COVID-19 has had a significant impact on global and domestic economies and, as such, many of the Group’s customers. The current and prospective rapid deterioration in the economy due to COVID-19 has resulted in a significant increase in the provision for ECL. The following table attributes the net remeasurement of provision for ECL for the period. $m Consolidated Modelled provision for ECL using updated economic inputs / weightings 1,135 COVID-19 overlay 446 Impact of COVID-19 on the provision for ECL as at 31 March 2020 1,581 Other net movements 560 Total net remeasurement of the provision for ECL for the half year ending 31 March 2020 2,141 Details of these changes, which are based on reasonable and supportable information up to the date of this report are provided below. Modelled provision for ECL The modelled provision for ECL is a probability weighted estimate based on three scenarios which together are representative of the Group’s view of the forward-looking distribution of potential loss outcomes. The increase in provisions as a result of changes in modelled ECL are reflected through the “net remeasurement of provision for ECL” line in the “movement in provision for ECL on loans and credit commitments” table. Of the $2,141 million, total remeasurement in provisions, $1,135 million relates to updates made to the modelling inputs to address the COVID-19 impacts on the Group’s customers. “Other net movements” includes changes in modelling inputs and portfolio changes not related to COVID-19 including migration from stage 2 (performing) to stage 3 (non performing). The base case scenario uses current Westpac Economics forecasts and reflects the latest available macroeconomic view which shows a deterioration in the short term, with a subsequent recovery. The latest view considers both the economic and societal impacts of COVID-19, the Australian Government stimulus measures implemented to cushion the impacts, including the JobKeeper package and the New Zealand Government stimulus package. The Westpac Australian Economics forecast assumes the following: · a short-term contraction in annual GDP of 8.2% in June 2020 quarter improving to a contraction of 5% over the remainder of 2020 and a recovery to positive growth of 4% over 2021, moderating to growth of 2.7% in the year to June 2022; · a rapid decline in the commercial property price index incorporating a significant peak to trough fall from first quarter 2020 to first quarter 2021, returning to positive growth in first quarter 2022; · a decline of 10%-15% in residential property prices over 2020 with a further fall of approximately 5% in 2021. By June 2021 house property prices are assumed to stabilise; and · a short-term increase in the unemployment rate to 9%, reducing to 7% by the end of 2020. The downside scenario is a more severe scenario with expected credit losses higher than those under the current base case scenario. The more severe loss outcome for the downside is generated under a recession scenario in which the combination of negative GDP growth, declines in commercial and residential property prices and an increase in the unemployment rate simultaneously impact expected credit losses across all portfolios from the reporting date. The assumptions in this scenario and relativities to the base case scenario 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 based on the probability weighted scenarios and what the provisions for ECL would be assuming a 100% weighting is applied to the base case scenario and to the downside scenario (with all other assumptions, including customer risk grades, held constant). $m Consolidated Reported probability-weighted ECL 100% base ECL 100% downside ECL The following table indicates the weightings applied by the Group at 31 March 2020, 30 September 2019 and 31 March 2019: Macroeconomic scenario weightings (%) 31 March 2020 30 Sept 2019 31 March 2019 Upside Base Downside The increase in weighting to the downside scenario since 30 September 2019 reflects the significant risk regarding the economic assumptions used in the base case. In particular, the current base case economic forecast indicates a relatively short and sharp economic impact followed by a subsequent recovery. There is a risk that the economic impacts of COVID-19 could be deeper or more prolonged which would result in higher credit losses than those modelled under the base case. The COVID-19 pandemic is leading to material structural shifts in the behaviour of the economy and customers, and unprecedented actions by banks, governments and regulators in response. ECL models are expected to be subject to a higher than usual level of uncertainty during this period. In this environment there is a heightened need for the application of judgement in order to reflect these evolving relationships and risks. This judgement has been applied in the form of the revision to scenario weightings and a COVID-19 overlay. COVID-19 overlay While the impacts on the broad economy are included in the assumptions used in the economic scenarios and the weightings applied to these scenarios, these general economy wide impacts will not reflect the specific impact on individual customers. As the full impacts of the COVID-19 pandemic were yet to be felt at the balance date, the Group is yet to see the anticipated increase in delinquencies, downgrades and defaults. As these likely future downgrades are not currently captured in the modelled outcome, the Group has specifically considered the likely industry specific and retail customer impacts and raised a $446 million overlay in addition to the modelled provision. The COVID-19 overlay reflects that the ECL model does not yet fully capture loans and credit commitments for which there has been a significant increase in credit risk as a result of COVID-19, as we have not yet observed any significant impact to customer credit ratings. We expect that the treatment of these loans and credit commitments will evolve as the situation unfolds and more data is available to model or understand the credit risk/loss implications from the COVID-19 pandemic and the mitigating impact of government stimulus packages. Over time we expect this overlay to reduce as the impact will be better reflected in the modelled outcome. We note that while deferral of payments by customers in hardship arrangements is generally treated as an indication of a significant increase in credit risk (SICR), the deferral of payments under the current COVID-19 support packages for mortgages and business loans has not, in isolation, been treated as an indication of SICR. These packages are available to customers who have had income losses as a result of COVID-19 and who otherwise had up to date payment status prior to the onset of COVID-19. The relief packages allow for a deferral of payments for a short term. During this period, the deferred interest will be capitalised and the deferred principal along with the capitalised interest, will be repaid over the remaining term of the loan. These packages have been designed to provide short-term cash flow support while the most significant COVID-19 restrictions are in place. As these are expected to be short-term in nature there is an expectation that most customers making use of the arrangements will subsequently return to normal trading or employment arrangements. Accordingly, at this stage, we do not consider that customers making use of the packages have necessarily experienced a significant increase in credit risk as this assessment is based on changes in lifetime probability of default. This is consistent with the ‘IFRS 9 and COVID-19’ guidance issued by the IASB on 27 March 2020. The Group will reassess this treatment as the situation evolves and the longer-term impacts of the COVID-19 pandemic become clearer. Beyond the specific COVID-19 support packages it is likely that some customers will move into general hardship arrangements and will thus be treated as having experienced a SICR. As an alternative to treating all customers who are making use of the COVID-19 support packages as having experienced a significant increase in credit risk, the Group has considered the likely impacts at a portfolio level and raised a provision for lifetime ECL for our business and retail segments where a SICR has likely occurred as described below. Business lending (including institutional) Industry segments have been rated as high, medium or low risk based on the likely economic impact of COVID-19 on that industry based on judgement. The Group has assessed that the most severely impacted customers are those in industries impacted by social distancing, travel, supply chain disruption, and industries adjacent to these. The high impacted industries include transport, manufacturing, retail trade, entertainment and hospitality, travel, tourism, food and beverage. The most significant second order impacts are on commercial real estate and construction. In determining which exposures in high and medium rated industries should be included in determining the ECL overlay we have considered factors such as whether exposures are investment or non-investment risk grade, potential to raise capital or attract additional funding and capacity to take other measures to support their businesses. We considered the increase in provisions that would arise if we were to increase the modelled provisions for these customers to the expected lifetime ECL (stage 2) in significantly stressed macroeconomic conditions using current customer risk grades. For the medium rated industries, a similar comparison was performed to consider the increase in a 12-month ECL (stage 1) in moderately stressed macroeconomic conditions. We then applied judgement to estimate the necessary increase in provisions. Based on this judgement we have identified $54.1 billion of high rated business portfolio exposures on which a lifetime ECL overlay has been determined. This has resulted in a $257 million overlay for high rated industries which is included in stage 2 provisions. A $41 million overlay for medium rated industries is included in stage 1 provisions. The judgements and assumptions used in estimating the overlays will be reviewed and refined as the COVID-19 pandemic evolves. We expect the overlay to be reduced as we observe customer risk grade migration through the portfolio. Retail lending The structural increase in long term unemployment is expected to result in longer term increases in stage 2 balances and losses. A portfolio level increase in the stage 2 population of 2% for Australian retail and 2.5% for New Zealand retail (representing the expected medium-term increase in unemployment) is assumed to derive this overlay. This approach assumes that the Group’s customer base is representative of the wider community and reflects that whilst individual customer impacts are not yet reflected in customer credit scores there has been a SICR for a proportion of the portfolio. We have identified $11.5 billion of retail exposures on which a lifetime ECL overlay has been determined. This has resulted in a $57 million overlay which is included in stage 2 provisions. It is important to note that the $65.6 billion of exposures for business and retail portfolios referred to in determining the ECL overlay are still performing. While some of these exposures may experience a credit deterioration in the future others will not. In addition to the above items, we also considered whether other modelled outcomes reflect expected future losses in the current climate. A further overlay of $91 million has been raised on retail portfolios to adjust modelled provisions on the basis that the models do not currently capture expected impacts of COVID-19 on collections and auto finance asset prices or expected changes to the traditional delinquency trends in personal lending in the current circumstances. Investment Securities – debt securities The following tables reconcile the provision for ECL on debt securities. Debt Debt securities at securities at amortised Total debt $m FVOCI 1 cost securities Balance as at 30 September 2018 - - - Restatement for adoption of AASB 9 2 9 11 Balance as at 1 October 2018 2 9 11 Stage 1 - change in the provision during the period - 1 1 Balance as at 31 March 2019 2 10 12 Stage 1 - change in the provision during the period - (1) (1) Balance as at 30 September 2019 2 9 11 Stage 1 - change in the provision during the period 1 10 11 Stage 2 - change in the provision during the period - 3 3 Balance as at 31 March 2020 3 22 25 1. Impairment on debt securities at FVOCI is recognised in the income statement with a corresponding amount in other comprehensive income (refer to Note 15). There is no reduction of the carrying value of the debt securities which remains at fair value . Reconciliation of impairment charges Half Year Half Year Half Year March Sept March $m Provisions raised Net changes in provisions 2,338 562 404 Recoveries (100) (101) (71) Impairment charges 2,238 461 333 of which relates to: Loans and credit commitments 2,224 462 332 Debt securities at FVOCI 1 1 - - Debt securities at amortised cost 13 (1) 1 Impairment charges 2,238 461 333 1. Impairment on debt securities at FVOCI is recognised in the income statement with a corresponding amount in other comprehensive income (refer to Note 15). There is no reduction of the carrying value of the debt securities which remains at fair value. |
Credit Quality
Credit Quality | 6 Months Ended |
Mar. 31, 2020 | |
Credit Quality | |
Credit Quality | Note 11. Credit Quality The loans and credit commitments balance in stage 3 (non-performing) is represented by those loans and credit commitments which are in default. A default occurs when Westpac considered that the customer is unlikely to repay its credit obligations in full, irrespective of recourse by the Group to actions such as realising security, or the customer is more than 90 days past due on any material credit obligation. This definition of default is aligned to the APRA regulatory definition of default. These can be disaggregated into impaired loans and credit commitments (which is where the customer is unlikely to pay its credit obligations in full including restructured loans) and items 90 days past due, or otherwise in default but not impaired. Impaired loans and credit commitments include: · housing and business loans with insufficient security to cover the principal and interest payments owing (aligned to an impaired internal credit risk grade); · personal loans which are greater than 90 days past due; and · restructured loans (the original contractual terms have been modified to provide for concessions for a customer facing financial difficulties). Items 90 days past due, or otherwise in default but not impaired include: · currently 90 days or more past due but well secured 1 ; · assets that were, but are no longer 90 days past due but are yet to satisfactorily demonstrate sustained improvement to allow reclassification; and · other assets in default and not impaired, including those where an order for bankruptcy or similar legal action has been taken (e.g. appointment of an Administrator or Receiver). Further detail of these balances is as follows: Impaired loans and credit commitments Australia New Zealand Other Overseas Total As at As at As at As at As at As at As at As at As at As at As at As at March Sept March March Sept March March Sept March March Sept March $m Housing and Business: Gross amount 1,267 1,215 1,204 175 62 105 259 50 11 1,701 1,327 1,320 Impairment provisions 2 (530) (491) (513) (73) (26) (40) (161) (17) (5) (764) (534) (558) Net 737 724 691 102 36 65 98 33 6 937 793 762 Personal Gross amount 402 384 379 33 20 19 1 1 - 436 405 398 Impairment provisions 3 (285) (233) (215) (26) (15) (17) - - - (311) (248) (232) Net 117 151 164 7 5 2 1 1 - 125 157 166 Restructured Gross amount 14 16 12 - 12 16 3 3 3 17 31 31 Impairment provisions 2 (3) (6) (6) - (3) (3) (1) (1) (1) (4) (10) (10) Net 11 10 6 - 9 13 2 2 2 13 21 21 Total impaired exposures: Gross amount 1,683 1,615 1,595 208 94 140 263 54 14 2,154 1,763 1,749 Impairment provisions 2, 4 (818) (730) (734) (99) (44) (60) (162) (18) (6) (1,079) (792) (800) Net 865 885 861 109 50 80 101 36 8 1,075 971 949 Items 90 days past due, or otherwise in default, but not impaired As at As at As at % Mov't 31 March 30 Sept 31 March Mar 20 - Mar 20 - $m Sept 19 Mar 19 Australia 4,965 4,684 4,295 6 16 New Zealand 389 340 192 14 103 Other overseas 55 64 35 (14) 57 Total 4 5,409 5,088 4,522 6 20 1. The estimated net realisable value of security to which the Group has recourse is sufficient to cover all principal and interest. 2. Includes individually assessed provisions and collectively assessed provisions on impaired exposures 3. Includes collectively assessed provisions on impaired exposures. 4. The impairment provision of $1,079 million for impaired exposures (30 September 2019: $792 million; 31 March 2019: $800 million) and the impairment provision of $628 million for items 90 days past due, or otherwise in default and not impaired (30 September 2019: $563 million; 31 March 2019: $558 million) equates to the stage 3 provisions for ECL on loans and credit commitments of $1,707 million (30 September 2019: $1,355 million; 31 March 2019: $1,358 million). |
Deposits and other borrowings
Deposits and other borrowings | 6 Months Ended |
Mar. 31, 2020 | |
Deposits and other borrowings | |
Deposits and other borrowings | Note 12. Deposits and other borrowings As at As at As at % Mov't 31 March 30 Sept 31 March Mar 20 - Mar 20 - $m Sept 19 Mar 19 Australia Certificates of deposit 21,029 26,259 31,123 (20) (32) Non-interest bearing, repayable at call 44,557 43,341 42,690 3 4 Other interest bearing at call 274,071 247,161 222,733 11 23 Other interest bearing term 141,933 158,564 168,313 (10) (16) Total Australia 481,590 475,325 464,859 1 4 New Zealand Certificates of deposit 3,452 1,058 858 large large Non-interest bearing, repayable at call 9,526 6,368 6,110 50 56 Other interest bearing at call 25,822 22,291 23,488 16 10 Other interest bearing term 31,925 31,084 31,918 3 - Total New Zealand 70,725 60,801 62,374 16 13 Other overseas Certificates of deposit 14,638 11,414 11,383 28 29 Non-interest bearing, repayable at call 1,007 824 800 22 26 Other interest bearing at call 1,834 1,610 1,323 14 39 Other interest bearing term 13,126 13,273 14,268 (1) (8) Total other overseas 30,605 27,121 27,774 13 10 Total deposits and other borrowings 582,920 563,247 555,007 3 5 |
Fair values of financial assets
Fair values of financial assets and liabilities | 6 Months Ended |
Mar. 31, 2020 | |
Fair values of financial assets and financial liabilities | |
Fair values of financial assets and financial liabilities | Note 13. Fair values of financial assets and liabilities Fair Valuation Control Framework The 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 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 Group categorises all fair value instruments according to the hierarchy described below. Valuation techniques The Group applies market accepted valuation techniques in determining the fair valuation of over the counter (OTC) derivatives. This includes credit valuation adjustments (CVA) and funding valuation adjustments (FVA), 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: Level 1 instruments The fair value of financial instruments traded in active markets 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. Instrument Balance sheet category Includes Valuation Exchange traded products Derivatives Exchange traded interest rate futures and options and commodity, energy and carbon futures All these instruments are traded in liquid, active markets where prices are readily observable. No modelling or assumptions are used in the valuation. Foreign exchange products Derivatives FX spot and futures contracts Equity products Derivatives Trading securities and financial assets measured at FVIS Other financial liabilities Listed equities and equity indices Non-asset backed debt instruments Trading securities and financial assets measured at FVIS Investment securities Other financial liabilities Australian Commonwealth and New Zealand government bonds Life insurance assets and liabilities Life insurance assets Life insurance liabilities Listed equities, exchange traded derivatives and short sale of listed equities within controlled managed investment schemes Level 2 instruments The fair value for financial instruments that are not actively traded are 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. Instrument Balance sheet category Includes Valuation Interest rate products Derivatives Interest rate and inflation swaps, swaptions, caps, floors, collars and other non-vanilla interest rate derivatives 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 future 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. Foreign exchange products Derivatives FX swap, FX forward contracts, FX options and other non-vanilla FX derivatives Derived from market observable inputs or consensus pricing providers using industry standard models. Other credit products Derivatives Single Name and Index credit default swaps (CDS) Valued using an industry standard model that incorporates the credit spread as its principal input. Credit spreads are obtained from consensus data providers. If consensus prices are not available, these are classified as Level 3 instruments. Commodity products Derivatives Commodity, energy and carbon derivatives Valued using industry standard models. The models calculate the expected future value of deliveries and payments and discount them back to a present value. The model inputs include forward curves, volatilities implied from market observable inputs, discount curves and underlying spot and futures prices. The significant inputs are market observable or available through a consensus data service. If consensus prices are not available, these are classified as Level 3 instruments. Equity products Derivatives Exchange traded equity options, OTC equity options and equity warrants Due to low liquidity exchange traded options are Level 2. Valued using industry standard models based on observable parameters such as stock prices, dividends, volatilities and interest rates. Asset backed debt instruments Trading securities and financial assets measured at FVIS investment securities Australian residential mortgage backed securities (RMBS) denominated in Australian dollar and other asset backed securities (ABS) Valued using an industry approach to value floating rate debt with prepayment features. Australian RMBS are valued using prices sourced from a consensus data provider. 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 Other financial liabilities State and other government bonds, corporate bonds and commercial paper 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. Loans at fair value Loans Fixed rate bills and syndicated loans Discounted cash flow approach, using a discount rate which reflects the terms of the instrument and the timing of cash flows, adjusted for creditworthiness, or expected sale amount. Certificates of deposit Deposits and other borrowings Certificates of deposit Discounted cash flow using market rates offered for deposits of similar remaining maturities. Debt issues at fair value Debt issues Debt issues 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 Westpac’s implied credit worthiness. Life insurance assets and liabilities Life insurance assets Life insurance liabilities Corporate bonds, over the counter derivatives, units in unlisted unit trusts, life insurance contract liabilities, life investment contract liabilities and external liabilities of managed investment schemes controlled by statutory life funds Valued using observable market prices or other widely used and accepted valuation techniques utilising observable market input. 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. Instrument Balance sheet category Includes Valuation Debt instruments Trading securities and financial assets measured at FVIS Investment securities Certain asset backed debt instruments, offshore non- asset backed debt instruments and debt securities issued via private placement These securities are evaluated by an independent pricing service or based on third party revaluations. Due to their illiquidity and/or complexity these are classified as Level 3 assets. Equity investments Trading securities and Financial assets measured at FVIS Investment securities Strategic equity investments Valued using valuation techniques appropriate to the investment, including the use of recent arm’s length transactions where available, discounted cash flow approach, reference to the net assets of the entity or to the most recent fund unit pricing. Due to their illiquidity, complexity and/or use of unobservable inputs into valuation models, they are classified as Level 3 assets. The following tables summarise the attribution of financial instruments measured at fair value to the fair value hierarchy: As at 31 March 2020 $m Level 1 Level 2 Level 3 Total Financial assets measured at fair value on a recurring basis Trading securities and financial assets measured at FVIS 5,252 20,808 220 26,280 Derivative financial instruments 17 56,620 24 56,661 Investment securities 15,320 69,206 152 84,678 Loans - 246 22 268 Life insurance assets 600 1,974 - 2,574 Total financial assets measured at fair value on a recurring basis 21,189 148,854 418 170,461 Financial liabilities measured at fair value on a recurring basis Deposits and other borrowings - 38,794 - 38,794 Other financial liabilities 261 10,239 - 10,500 Derivative financial instruments 14 48,031 44 48,089 Debt issues - 6,295 - 6,295 Life insurance liabilities - 604 - 604 Total financial liabilities measured at fair value on a recurring basis 275 103,963 44 104,282 As at 30 Sept 2019 $m Level 1 Level 2 Level 3 Total Financial assets measured at fair value on a recurring basis Trading securities and financial assets measured at FVIS 10,440 21,121 220 31,781 Derivative financial instruments 7 29,828 24 29,859 Investment securities 11,163 61,284 134 72,581 Loans - 239 21 260 Life insurance assets 1,097 8,270 - 9,367 Total financial assets measured at fair value on a recurring basis 22,707 120,742 399 143,848 Financial liabilities measured at fair value on a recurring basis Deposits and other borrowings - 38,413 - 38,413 Other financial liabilities 262 5,108 - 5,370 Derivative financial instruments 8 29,059 29 29,096 Debt issues - 5,819 - 5,819 Life insurance liabilities - 7,377 - 7,377 Total financial liabilities measured at fair value on a recurring basis 270 85,776 29 86,075 As at 31 March 2019 $m Level 1 Level 2 Level 3 Total Financial assets measured at fair value on a recurring basis Trading securities and financial assets measured at FVIS 10,039 19,037 231 29,307 Derivative financial instruments 10 21,735 20 21,765 Investment securities 10,796 56,816 112 67,724 Loans - 394 19 413 Life insurance assets 1,255 8,119 - 9,374 Total financial assets measured at fair value on a recurring basis 22,100 106,101 382 128,583 Financial liabilities measured at fair value on a recurring basis Deposits and other borrowings - 43,119 - 43,119 Other financial liabilities 211 4,715 - 4,926 Derivative financial instruments 10 23,344 30 23,384 Debt issues - 3,934 - 3,934 Life insurance liabilities - 7,503 - 7,503 Total financial liabilities measured at fair value on a recurring basis 221 82,615 30 82,866 Reconciliation of non-market observables The following table summarises the changes in financial instruments measured at fair value derived from non-market observable valuation techniques (Level 3): Half Year March 2020 Trading securities and financial assets Total Total measured at Investment Level 3 Level 3 $m FVIS Securities Other 1 assets Derivatives liabilities Balance as at beginning of period 220 134 45 399 29 29 Gains/(losses) on assets and (gains)/losses on liabilities recognised in: Income statements (3) - 10 7 10 10 Other comprehensive income - (18) - (18) - - Acquisitions and issues 5 36 9 50 6 6 Disposals and settlements (9) - (18) (27) (1) (1) Foreign currency translation impacts 7 - - 7 - - Balance as at end of period 220 152 46 418 44 44 Unrealised gains/(losses) recognised in the income statement for financial instrument held as at end of period (4) - 14 10 (16) (16) 1. Other is comprised of derivative financial assets and certain loans . Transfers into and out of Level 3 have occurred due to changes in observability in the significant inputs into the valuation models used to determine the fair value of the related financial instruments. Transfers in and transfers out are reported using the end of period fair values. No transfers in or transfers out have occurred during the period. Significant unobservable inputs Sensitivities to reasonably possible changes in non-market observable valuation assumptions would not have a material impact on the Group’s reported results. Day one profit or loss The closing balance of unrecognised day one profit for the period was $3 million (30 September 2019: $3 million profit; 31 March 2019: $4 million). Financial instruments not measured at fair value The following table summarises the estimated fair value of financial instruments not measured at fair value for the Group: As at 31 March 2020 As at 30 Sept 2019 As at 31 March 2019 Carrying Fair Carrying Fair Carrying Fair $m amount value amount value amount value Financial assets not measured at fair value Cash and balances with central banks 45,815 45,815 20,059 20,059 19,486 19,486 Collateral paid 5,339 5,339 5,930 5,930 6,103 6,103 Investment securities 1,111 1,111 820 820 812 812 Loans 719,410 721,740 714,510 716,130 713,884 714,341 Other financial assets 5,849 5,849 5,367 5,367 6,444 6,444 Total financial assets not measured at fair value 777,524 779,854 746,686 748,306 746,729 747,186 Financial liabilities not measured at fair value Collateral received 12,728 12,728 3,287 3,287 1,889 1,889 Deposits and other borrowings 544,126 544,506 524,834 525,516 511,888 512,544 Other financial liabilities 23,496 23,496 23,845 23,845 24,087 24,087 Debt issues 2 179,540 175,610 175,638 176,838 184,825 185,423 Loan capital 25,807 23,636 21,826 22,076 16,736 16,655 Total financial liabilities not measured at fair value 785,697 779,976 749,430 751,562 739,425 740,598 2. The estimated fair value of debt issues includes the impact of changes in Westpac’s credit spreads since origination A detailed description of how fair value is derived for financial instruments not measured at fair value is disclosed in Note 22 of the 2019 Annual Report . |
Provisions, contingent liabilit
Provisions, contingent liabilities, contingent assets and credit commitments | 6 Months Ended |
Mar. 31, 2020 | |
Provisions, contingent liabilities, contingent assets and credit commitments | |
Provisions, contingent liabilities, contingent assets and credit commitments | Note 14. Provisions, contingent liabilities, contingent assets and credit commitments 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. Provisions raised by the Group are set out in the table in the “Provisions” section below. Where it is not probable there will be an outflow of economic resources or where a liability cannot be reliably estimated a contingent liability may exist. Provisions Half Year March 2020 Annual leave Litigation Provision for Compliance, Long and other and non- impairment Lease regulation and service employee lending on credit restoration Restructuring remediation $m leave benefits losses commitments obligations provisions provisions Total Balance as at beginning of period 456 614 38 305 24 160 1,572 3,169 Additions 37 447 920 271 200 17 639 2,531 Utilisation (24) (619) (22) - (7) (67) (215) (954) Reversal of unutilised provisions - (8) (2) - (1) - (76) (87) Other 1 12 (3) - - - - 10 Balance as at end of period 470 446 931 576 216 110 1,920 4,669 Litigation and non-lending loss provisions A provision for a potential penalty in relation to the AUSTRAC civil proceedings. On 20 November 2019, AUSTRAC commenced civil proceedings in the Federal Court of Australia against Westpac in relation to alleged contraventions of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth). These proceedings relate to non-reporting of a large number of International Funds Transfer Instructions (IFTIs), alleged failings in relation to record keeping and the passing on of certain data required in IFTIs, failure to comply with correspondent banking obligations, AML/CTF Program failures and contraventions of ongoing customer due diligence. AUSTRAC has alleged over 23 million contraventions of the AML/CTF Act. In 1H20, AUSTRAC and Westpac took part in a Court ordered mediation on a confidential and without prejudice basis. While discussions continue, the Court has ordered a timetable for the next steps in the proceedings being the filing of a Statement of Agreed Facts and Admissions by 8 May 2020, the filing of Westpac’s Defence by 15 May 2020 and the filing of AUSTRAC’s Reply to the Defence by 5 June 2020. The outcome of the proceedings will be determined by the Federal Court, having regard to established legal principles including in relation to the setting of civil penalties. In the prior periods FY18 and FY19, the AUSTRAC matter was disclosed as a contingent liability as Westpac was unable to determine a reliable measurement of the liability. At balance date, Westpac has considered the available information and has made a provision of $900 million for a potential penalty in relation to the AUSTRAC civil proceedings. The provision has been recognised in circumstances where there remains considerable uncertainty on the approach the Court might take in assessing the appropriate penalty and where there remains a prospect that Westpac and AUSTRAC could agree a penalty which could be recommended to the Court on a joint basis (which the Court would have regard to but not be obliged to accept). The Court’s decision on an appropriate penalty will involve balancing many different competing and complex factors and the exercise of discretion. The actual penalty paid by Westpac following either a settlement and joint submission on a penalty, or a hearing, and in each case as determined by the Court, may be materially higher or lower than the provision. The timing of any penalty paid by Westpac is uncertain. Compliance, regulation and remediation provisions Provisions for the Half Year 2020 in respect of compliance, regulation and remediation include: · estimated customer refunds associated with certain ongoing advice service fees charged by the Group’s salaried financial planners; · estimated customer refunds associated with certain ongoing advice service fees charged by authorised representatives of the Group’s wholly owned subsidiaries Securitor Financial Group (Securitor) Limited and Magnitude Group Pty Ltd (Magnitude); · refunds for certain Consumer and Business customers that had interest only loans that did not automatically switch, when required, to principal and interest loans; and · refunds to certain business customers who were provided with business loans where they should have been provided with loans covered by the National Consumer Credit Protection Act 2009 (Cth). Certain compliance, regulation and remediation provisions are described further as follows: Estimated customer refunds associated with certain ongoing advice service fees charged by the Group’s salaried financial planners At balance date, Westpac has a provision of $204 million for customer refunds associated with certain ongoing advice service fees charged by the Group’s salaried financial planners during the period 2008 to 2018. At balance date, Westpac has paid a cumulative total of $72 million to customers. A number of estimates and judgements continue to be applied in measuring the provision at 1H20. These include: · Total fees received by the Group in respect of salaried financial planners in the period 2008 to 2018 were approximately $634 million; and · The proportion of total fees that are estimated to be refunded is 27%. The key assumption in this estimate relates to the nature and extent of records to evidence that services were provided for the 2016-2018 cohort. The provision includes estimated interest and estimated program costs. Ongoing advice service fees charged by authorised representatives of Securitor and Magnitude At balance date, Westpac has a provision of $586 million relating to estimated customer remediation costs (including interest on refunded fees and additional costs to run the remediation program) where customers of authorised representatives of the Group’s wholly owned subsidiaries Securitor and Magnitude paid ongoing advice service fees to those representatives and where it is not clear that the services were provided. The ongoing advice service fees were charged during the period from 2008 to 2018. At balance date, Westpac has not commenced payment to customers and has utilised $26.3 million of provisions in relation to project costs. A number of estimates and judgements continue to be applied in measuring the provision at 1H20. They include: · Total fees received by authorised representatives from their customers in the period 2008 to 2018 were approximately $880 million; and · The proportion of fees that are estimated to be refundable under the current proposed remediation methodology is 33%. The key assumptions in this estimate include: – The basis for refunding customers of the authorised representatives; and – The nature, extent and availability of records to evidence that service was provided. It is possible that the final outcome could be below or above the provision, if the actual outcome differs 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. Restructuring provisions During FY19, the Group realigned its major BT businesses into the Consumer and Business divisions and exited the provision of personal financial advice by Westpac Group salaried financial planners and authorised representatives. The Group now has a referral model for financial advice and continues to carry a provision for remaining separation and redundancy costs. Lease restoration obligations The addition to the lease restoration provision reflects a reassessment of the cost of making good leasehold premises at the end of the Group’s property leases. The increase in the expected make-good cost has been treated as an addition to the cost of associated leasehold improvements and is being depreciated over the remaining life of those assets. 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 resource is remote. Regulatory actions Regulators, statutory authorities and other bodies routinely conduct investigations, reviews and inquiries involving the financial services sector, both in Australia and overseas. These investigations and reviews may consider a range of subject matter, and in Australia, a number of investigations and reviews have recently considered, and continue to consider, potential misconduct in credit and financial services. Domestic regulators such as ASIC, APRA, ACCC, AUSTRAC, the OAIC, the ATO and the Fair Work Ombudsman, as well as certain international regulators such as the Reserve Bank of New Zealand, Financial Markets Authority in New Zealand, Hong Kong Monetary Authority, Monetary Authority of Singapore and National Futures Association are also currently conducting investigations, reviews and inquiries (some of which are industry-wide) that involve or may involve the Group in the future. These investigations, reviews and inquiries are separately considering a range of matters, including ongoing advice services fees (including the process of charging such fees), responsible lending, residential mortgages, credit portfolio management, compliance with superannuation laws, privacy and information governance, the provision of financial advice, competition law conduct, anti-money laundering and counter-terrorism financing processes and procedures, and financial markets conduct (including trading activity). Westpac has also received various notices and requests for information from regulators as part of both industry wide an Westpac-specific investigations, reviews and inquiries. These investigations, reviews and inquiries, which may be conducted by a regulator, and in some cases also by an external third party retained either by the regulator or by the Group (including where a matter has been self-identified by the Group), may result in litigation (including class action proceedings against the Group), fines, infringement notices, enforceable undertakings, imposition of additional capital requirements, civil or criminal penalties, revocation, suspension or variation of conditions of relevant regulatory licences or other enforcement or administrative action being taken by regulators or other parties. Where possible, an assessment of the likely cost to the Group of these investigations, reviews and inquiries, together with any actions that may be taken, has been made on a case-by-case basis for the purpose of the financial statements but cannot always be reliably estimated, in some cases due to the investigation, review or inquiry being at an early stage. Ongoing advice services One regulatory action currently underway involves an investigation by ASIC into ongoing advice services provided by the Group’s salaried financial planners and by authorised representatives of the Group’s wholly owned subsidiaries Securitor and Magnitude. ASIC commenced its investigation in 2019 and is examining a range of matters, including whether Westpac had appropriate systems and processes in place to ensure that customers received the advice services that they had paid for. The Group is continuing to remediate affected customers and has raised provisions in respect of refunds and other amounts payable to customers of authorised representatives of Securitor and Magnitude and to customers of the Group’s salaried financial planners. Further information on these provisions Westpac has made is set out in the ‘Provisions’ section above. ASIC’s investigation relates to the period between 2013 and 2019. ASIC has issued notices to which the Group has responded. ASIC has not given the Group any indication of what action it will take following the conclusion of this investigation. Any action ASIC may take could potentially involve the commencement of Court proceedings and, if contraventions are established, result in the Group being required to pay a significant financial penalty. However, no provision has yet been made in relation to any financial penalty that might arise in the event that ASIC were to elect to pursue enforcement proceedings, as any potential future liability of that kind cannot be reliably estimated at this time. Consumer credit insurance ASIC is also currently conducting an investigation into Westpac’s past sales practices in relation to Consumer Credit Insurance (CCI). This investigation follows ASIC’s industry-wide review of CCI sales practices between the period 2011 and 2018. ASIC has issued notices to which the Group has responded. Westpac ceased selling CCI products in branch and contact centre channels in November 2018, and ceased online sales in June 2019. ASIC’s investigation is a separate matter to the Federal Court class action proceedings commenced against Westpac and two subsidiaries by Slater & Gordon in connection with its ‘Get your insurance back campaign’. Further information about this class action proceeding is set out in the ‘Litigation’ section below. ASIC has not given the Group any indication of what action it will take following the conclusion of this investigation. Any action ASIC may take could potentially involve the commencement of Court proceedings and, if contraventions are established, result in the Group being required to pay a significant financial penalty. However, no provision has yet been made in relation to any financial penalty that might arise in the event that ASIC were to elect to pursue enforcement proceedings, as any potential future liability of that kind cannot be reliably estimated at this time. Interest only loans Another regulatory action currently underway involves ASIC investigating the Group in connection with certain mortgage loans where, due to operational errors, the Group did not switch the customers’ repayments to principal and interest at the expiry of the contractual interest-only period. Westpac announced in December 2017 that it would be remediating customers affected by the error. Westpac has raised a provision for this customer remediation activity (see the ‘Provisions’ section above for more details). ASIC has issued notices to which the Group has responded. ASIC has not given the Group any indication of what action it will take following the conclusion of this investigation. Any action ASIC may take could potentially involve the commencement of Court proceedings and, if contraventions are established, result in the Group being required to pay a significant financial penalty. However, no provision has yet been made in relation to any financial penalty that might arise in the event that ASIC were to elect to pursue enforcement proceedings, as any potential future liability of that kind cannot be reliably estimated at this time. Threshold Transaction Reporting Westpac has identified deficiencies in certain systems and controls relevant to its obligation to file threshold transaction reports (TTRs) under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth). This has, over a number of years, resulted in instances where the Group has failed to report TTRs, as well as instances where the Group filed TTRs with incomplete or inaccurate information. The Group has self-reported these TTR deficiencies to AUSTRAC and is keeping AUSTRAC apprised of the status of its investigations. To date, the remediation has involved the late reporting of 17,870 TTRs to AUSTRAC. Additionally, there are multiple TTR reporting scenarios which based on the preliminary analysis undertaken to date (which has not been finally quantified or resolved), could amount to an estimated 60,000 to 90,000 TTRs that have not been reported to AUSTRAC. The potential outcomes of these matters remain uncertain and accordingly, no provision has been recognised. Litigation There are ongoing Court proceedings, claims and possible claims for and against the Group. Contingent liabilities exist in respect of actual and potential claims and proceedings, including those listed below. An assessment of the Group’s likely loss has been made on a case-by-case basis for the purpose of the financial statements but cannot always be reliably estimated, including in relation to those listed below. · In August 2016, a class action was filed in the United States District Court for the Southern District of New York against Westpac and a number of other Australian and international banks and brokers alleging misconduct in relation to the bank bill swap reference rate. In April 2019, an amended claim was filed by the Plaintiffs. Westpac is defending the proceedings, which are now moving through the pre-trial stages. A provision has been recognised for anticipated costs of further steps in the proceedings, including discovery. · On 22 December 2016, ASIC commenced Federal Court proceedings against BT Funds Management Limited (BTFM) and Westpac Securities Administration Limited (WSAL) in relation to a number of superannuation account consolidation campaigns conducted between 2013 and 2016. ASIC has alleged that in the course of some of these campaigns, customers were provided with personal advice in contravention of a number of Corporations Act 2001 (Cth) provisions, and selected 15 specific customers as the focus of their claim. In December 2018 the primary Court handed down a judgment in which it held that no personal advice had been provided and that BTFM and WSAL did not contravene the relevant personal advice provisions although it did make a finding that BTFM and WSAL had each contravened section 912A(1)(a) of the Corporations Act. In February 2019, ASIC filed an appeal against this decision. On 28 October 2019, the Full Federal Court handed down its decision in ASIC’s favour and made findings that BTFM and WSAL each provided personal advice on relevant calls made to 14 of the 15 customers and made declarations of consequential contraventions of the Corporations Act (including section 912A(1)(a)). BTFM and WSAL have applied to the High Court of Australia, which has granted special leave to appeal and will hear an appeal in relation to the Full Federal Court’s decision. The High Court will set a date for a hearing of this appeal in due course. If this appeal is unsuccessful, the matter will be remitted to the Federal Court for a hearing on penalties and any other orders sought by ASIC. No provision has been recognised in relation to this matter. · On 1 March 2017, ASIC commenced litigation in relation to certain Westpac home loans to consumers (including certain interest only loans) alleging contraventions of the National Consumer Credit Protection Act 2009 (Cth). The proceedings were heard in May 2019. On 13 August 2019, the Court handed down its judgment in the proceedings, and dismissed ASIC’s case. ASIC filed an appeal in relation to the decision, which was heard in February 2020. Judgment on this appeal is pending. No provision has been recognised in relation to this matter. · On 12 October 2017, a class action against Westpac and Westpac Life Insurance Services Limited (WLIS) was filed in the Federal Court of Australia. The class action was filed on behalf of customers who, since February 2011, obtained insurance issued by WLIS on the recommendation of financial advisers employed within the Westpac Group. The plaintiffs have alleged that aspects of the financial advice provided by those advisers breached fiduciary and statutory duties owed to the advisers’ clients, including the duty to act in the best interests of the client, and that WLIS was knowingly involved in those alleged breaches. Westpac and WLIS are defending the proceedings. The matter has been set down for an initial trial in May 2021. No provision has been recognised in relation to this matter. · On 21 February 2019, a class action against Westpac was commenced in the Federal Court of Australia in relation to Westpac’s responsible lending obligations. The Applicants filed a Further Amended Originating Application and Further Amended Statement of Claim on 11 February 2020. The claims allege that Westpac did not comply with its responsible lending obligations when entering into home loans with the Applicants and group members (as defined in the proceedings). The allegations in respect of the Applicants and group members include that, during the period from 1 January 2011 to 17 February 2018, Westpac failed to conduct reasonable inquiries about the customers’ financial situation, requirements and objectives, failed to take reasonable steps to verify the customer’s financial situation, and failed to conduct compliant assessments of suitability. The Applicants also allege that their loans were unsuitable. Westpac is defending the proceedings. No provision has been recognised in relation to this matter. · On 5 September 2019, a class action against BTFM and WLIS was commenced in the Federal Court of Australia in relation to aspects of BTFM’s BT Super for Life cash investment option. The claim follows other industry class actions as part of Slater and Gordon’s ‘Get your super back’ campaign. It is alleged in the proceedings that BTFM failed to adhere to a number of obligations under the general law, the relevant trust deed and the Superannuation Industry (Supervision) Act 1993 (Cth), and that WLIS was knowingly concerned with BTFM’s alleged contraventions. The damages sought by the claim are unspecified. BTFM and WLIS are defending the proceedings. No provision has been recognised in relation to this matter. · Westpac has been served with two shareholder class actions filed by Phi Finney McDonald and Johnson Winter & Slattery in Australia relating to market disclosure issues connected to Westpac’s monitoring of financial crime over the relevant period and matters which are the subject of the recent AUSTRAC proceedings. The claims are brought on behalf of certain shareholders who acquired an interest in Westpac securities between 16 December 2013 and 19 November 2019. On 31 January 2020, a US class action was filed against Westpac and our current and former CEO by Rosen Law Firm on behalf of purchasers of Westpac securities between 11 November 2015 and 19 November 2019. That claim also relates to market disclosure issues connected to Westpac’s monitoring of financial crime over the relevant period and matters which are the subject of the recent AUSTRAC proceedings. The three respective class actions largely overlap in terms of subject matter and do not identify the amount of any damages sought, however, given the time period in question in each of the relevant proceedings, and the nature of the claims it is likely that the damages sought from the applicants in those proceedings will be significant. Westpac is defending these class actions and no provision has been recognised in relation to those potential exposures. · On 28 February 2020, a class action was commenced against Westpac Banking Corporation and two Westpac subsidiaries in the Federal Court of Australia in relation to Westpac’s sale of consumer credit insurance (CCI). The claim follows other industry class actions as part of Slater and Gordon’s ‘Get your insurance back’ campaign. It is alleged in the proceedings that the Westpac entities failed to adhere to a number of obligations in selling CCI in conjunction with credit cards, personal loans and flexi loans. The damages sought by the claim are unspecified. The Westpac entities are defending the proceedings. Westpac no longer sells CCI products. No provision has been recognised in relation to this matter. Internal reviews and remediation As in prior periods, Westpac is continuing to undertake a number of reviews to identify and resolve prior issues that have the potential to impact our customers and reputation. These internal reviews continue to identify a number of issues in respect of which we are taking steps or will take steps to put things right so that our customers are not at a disadvantage from certain past practices, including making compensation/remediation payments to customers and/or providing refunds where identified. These issues include compliance with lending obligations (including responsible lending) which is an area of industry focus, the provision of credit in accordance with the National Consumer Credit Protection Act 2009 (Cth), the processing of corporate actions, the charging of certain Wealth fees and the way some product terms and conditions are operationalised. By undertaking these reviews we can also improve our processes and controls. An assessment of the Group’s likely loss has been made on a case-by-case basis for the purpose of the financial statements but cannot always be reliably estimated. Contingent liabilities may exist in respect of actual or potential claims (which could be brought by customers or regulators), compensation/ remediation payments and/or refunds identified as part of these reviews. Australian Financial Complaints Authority Contingent liabilities may also exist in relation to customer complaints brought before the Australian Financial Complaints Authority (AFCA). AFCA has the power to make determinations about complaints and can award compensation up to certain thresholds. AFCA has a broader jurisdiction than previous dispute resolution bodies which it has replaced and, up until 30 June 2020, can also consider customer complaints dating back to 1 January 2008. Financial Claims Scheme Under the Financial Claims Scheme (FCS), the Australian Government provides depositors a free guarantee of deposits in eligible ADIs up to and including $250,000. The FCS applies to an eligible ADI if APRA has applied for the winding up of the ADI and the responsible Australian Government minister has declared that the FCS applies to the ADI. The Financial Claims Scheme (ADIs) Levy Act 2008 provides for the imposition of a levy to fund the excess of certain APRA FCS costs connected to an ADI, including payments by APRA to deposit holders in a failed ADI. The levy would be imposed on liabilities of eligible ADIs to their depositors and cannot be more than 0.5% of the amount of those liabilities. A contingent liability may exist in respect of any levy imposed under the FCS. Contingent tax risk Tax and regulatory authorities in Australia and in other jurisdictions are reviewing the taxation treatment of certain transactions (both historical and present-day transactions) undertaken by the Group in the course of normal business activities and the claiming of tax incentives and indirect taxes such as GST. The Group also responds to various notices and requests for information it receives from tax and regulatory authorities. These reviews, notices and requests may result in additional tax liabilities (including interest and penalties). The Group has assessed these and other taxation claims arising in Australia and elsewhere, including seeking independent advice. Settlement risk The Group is subject to a credit risk exposure in the event that another counterparty fails to settle for its payments clearing activities (including foreign exchange). The Group seeks to minimise credit risk arising from settlement risk in the payments system by aligning our processing method with the legal certainty of settlement in the relevant clearing mechanism. Parent Entity guarantees and undertakings The Parent Entity makes the following guarantees and undertakings to subsidiaries: · letters of comfort for certain subsidiaries which recognise that Westpac has a responsibility that those subsidiaries continue to meet their obligations; and · guarantees to certain wholly owned subsidiaries which are Australian financial services or credit licensees to comply with legislative requirements. Each guarantee is capped at $40 million per year and can only be utilised if the entity concerned becomes legally obliged to pay for a claim under the relevant licence. The Parent Entity has a right to recover any funds payable under the guarantees from the relevant subsidiary. Contingent assets The credit commitments shown in the following table also constitute contingent assets. These commitments would be classified as loans in the balance sheet on the contingent event occurring. Undrawn credit commitments The Group enters into various arrangements with customers which are only recognised in the balance sheet when called upon. These arrangements include commitments to extend credit, bill endorsements, financial guarantees, standby letters of credit and underwriting facilities. They expose the 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. Some of the arrangements can be cancelled by the 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 Group uses the same credit policies when entering into these arrangements as it does for on-balance sheet instruments. Refer to Note 21 of the 2019 Annual Report for further details of liquidity risk and credit risk management. Undrawn credit commitments excluding derivatives are as follows: As at As at As at % Mov't 31 March 30 Sept 31 March Mar 20 - Mar 20 - $m Sept 19 Mar 19 Undrawn credit commitments Letters of credit and guarantees 1 14,746 15,150 15,804 (3) (7) Commitments to extend credit 2 175,794 176,002 176,242 - - Other 158 188 431 (16) (63) Total undrawn credit commitments 190,698 191,340 192,477 - (1) 1. Standby letters of credit 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 Group may hold cash as collateral for certain guarantees issued. 2. Commitments to extend credit include all obligations on the part of the Group to provide credit facilities. As facilities may expire without being drawn upon, the notional amounts do not necessarily reflect future cash requirements. In addition to the commitments disclosed above, at 31 March 2020 the Group had offered $5.2 billion (30 September 2019: $5.0 billion; 31 March 2019: $5.5 billion) of facilities to customers, which had not yet been accepted. |
Shareholders' equity
Shareholders' equity | 6 Months Ended |
Mar. 31, 2020 | |
Shareholders' equity | |
Shareholders' equity | Note 15. Shareholders’ equity As at As at As at 31 March 30 Sept 31 March $m Share capital Ordinary share capital, fully paid 40,503 37,508 36,351 RSP treasury shares held 1 (616) (572) (569) Other treasury shares held 2 30 19 12 Total treasury shares held (586) (553) (557) Total share capital 39,917 36,955 35,794 NCI 56 53 51 Ordinary Shares Westpac does not have authorised capital and the ordinary shares have no par value. Ordinary shares entitle the holder to participate in dividends and, in the event of Westpac winding up, to a share of the proceeds in proportion to the number of and amounts paid on the shares held. Each ordinary share entitles the holder to one vote, either in person or by proxy, at a shareholder meeting. Reconciliation of movement in number of ordinary shares Half Year Half Year Half Year March Sept March Balance as at beginning of period 3,489,928,773 3,447,571,023 3,434,796,711 Share issuances 3 110,919,861 - - Dividend reinvestment plan 4 10,836,236 42,357,750 12,774,312 Issued shares for the period 121,756,097 42,357,750 12,774,312 Balance as at end of period 3,611,684,870 3,489,928,773 3,447,571,023 Ordinary shares purchased on market Half Year March 2020 Consolidated Number Average price ($) For share-based payment arrangements: Employee share plan (ESP) 931,524 RSP 5 1,820,433 Westpac Performance Plan (WPP) - share rights exercised 151,111 As treasury shares: Treasury shares purchased 114,376 Treasury shares sold (551,659) Net number of ordinary shares purchased/(sold) on market 2,465,785 1. 31 March 2020: 4,578,297 unvested shares held (30 September 2019: 4,784,213, 31 March 2019: 4,803,772). 2. 31 March 2020: 1,284,249 shares held (30 September 2019: 1,721,532, 31 March 2019: 2,029,795). 3. The average price per share for the issuance of shares was $24.81. 4. The price for the issuance of shares in relation to the dividend re-investment plan for the FY2019 dividend was $25.17, 2019 interim dividend was $27.36, and 2018 final dividend was $25.82. 5. Ordinary shares allocated to employees under the RSP are classified as treasury shares until the shares vest. Reconciliation of movement in reserves Half Year Half Year Half Year March Sept March $m Available-for-sale securities reserve Balance as at beginning of period - - 37 Impact on adoption of AASB 9 - - (37) Balance as at end of period - - - Debt securities at FVOCI reserve Balance as at beginning of period (22) 59 - Impact on adoption of AASB 9 - - 33 Net gains/(losses) from changes in fair value (140) (111) 64 Income tax effect 42 33 (21) Transferred to income statement (28) (4) (25) Income tax effect 8 1 7 Loss allowance on debt securities measured at FVOCI 1 - - Exchange differences (3) - 1 Balance as at end of period (142) (22) 59 Equity securities at FVOCI reserve Balance as at beginning of period 17 7 - Impact on adoption of AASB 9 - - 6 Net gains/(losses) from changes in fair value (18) 10 1 Balance as at end of period (1) 17 7 Share-based payment reserve Balance as at beginning of period 1,642 1,604 1,534 Share-based payment expense 60 38 70 Balance as at end of period 1,702 1,642 1,604 Cash flow hedge reserve Balance as at beginning of period (129) (204) (125) Net gains/(losses) from changes in fair value 145 (11) (192) Income tax effect (43) 4 56 Transferred to income statement 128 117 80 Income tax effect (37) (35) (23) Balance as at end of period 64 (129) (204) Foreign currency translation reserve Balance as at beginning of period (179) (306) (351) Exchange differences on translation of foreign operations 707 (112) 423 Gains/(losses) on net investment hedges (442) 239 (368) Transferred to income statement - - (10) Balance as at end of period 86 (179) (306) Other reserves Balance as at beginning of period (18) (19) (18) Transactions with owners (3) 1 (1) Balance as at end of period (21) (18) (19) Total reserves 1,688 1,311 1,141 |
Notes to the cash flow statemen
Notes to the cash flow statements | 6 Months Ended |
Mar. 31, 2020 | |
Notes to the cash flow statements | |
Notes to the cash flow statements | Note 16. Notes to the consolidated cash flow statement % Mov't Half Year Half Year Half Year Mar 20 - Mar 20 - $m March 2020 Sept 2019 March 2019 Sept 19 Mar 19 Reconciliation of net cash provided by/(used in) operating activities to net profit for the period Net profit for the period 1,191 3,614 3,176 (67) (63) Adjustments: Depreciation, amortisation and impairment 984 563 516 75 91 Impairment charges 2,338 562 404 large large Net decrease/(increase) in current and deferred tax (769) 7 (548) large 40 (Increase)/decrease in accrued interest receivable 82 303 (171) (73) large (Decrease)/increase in accrued interest payable (663) (185) (156) large large (Decrease)/increase in provisions 1,307 405 738 large 77 Other non-cash items 56 (468) (364) large large Cash flows from operating activities before changes in operating assets and liabilities 4,526 4,801 3,595 (6) 26 Net (increase)/decrease in derivative financial instruments 4,966 4,937 2,668 1 86 Net (increase)/decrease in life insurance assets and liabilities (143) (130) (4) 10 large (Increase)/decrease in other operating assets: Collateral paid 877 371 (1,218) 136 large Trading securities and financial assets measured at FVIS 8,114 (2,203) (5,426) large large Loans (694) (2,399) (1,789) (71) (61) Other financial assets 1 570 (234) (100) large Other assets 69 (15) 2 large large (Decrease)/increase in other operating liabilities: Collateral received 8,900 1,324 (317) large large Deposits and other borrowings 12,908 8,685 (7,572) 49 large Other financial liabilities 2,627 454 1,009 large 160 Other liabilities 8 3 (8) 167 large Net cash provided by/(used in) operating activities 42,159 16,398 (9,294) 157 large Non-cash financing activities Half Year Half Year Half Year % Mov't March Sept March Mar 20 - Mar 20 - $m Sept 19 Mar 19 Shares issued under the dividend reinvestment plan 273 1,159 330 (76) (17) Increase in lease liabilities 88 - - - - Businesses disposed in Half Year March 2020 There were no businesses disposed of during the half year March 2020. Businesses disposed in Half Year March 2019 Westpac sold its interest in Ascalon Capital Managers (Asia) Limited and Ascalon Capital Managers Limited on 8 February 2019, for a combined profit of $3 million recognised in non-interest income. The total cash consideration paid, net of transaction costs and cash held, was $1 million. Restricted cash Certain of our foreign operations are required to maintain reserves or minimum balances with central banks in their respective countries of operation, totalling $307 million (30 September 2019: $330 million; 31 March 2019: $330 million) which are included in cash and balances with central banks. |
Subsequent events
Subsequent events | 6 Months Ended |
Mar. 31, 2020 | |
Subsequent events | |
Subsequent events | Note 17. Subsequent events On 2 April 2020, a decision was made by the RBNZ to freeze the distribution of dividends on ordinary shares by all banks in New Zealand during the period of economic uncertainty caused by COVID-19. This impacts the Group’s ability to pay dividends from New Zealand to Australia. On 4 May 2020, the Board deferred the decision on determining an interim dividend and no dividend will be paid in June 2020. On 4 May 2020, Westpac announced a new Specialist Businesses division will be created which will include the following businesses: Wealth Platforms, Superannuation and Retirement Products, Investments, Insurance, Auto Finance and Westpac Pacific. The decision will impact the Group’s operating segments in future reporting periods. These businesses will undergo a strategic review. No other matters have arisen since the half year ended 31 March 2020, which are not otherwise dealt with in this 2020 Interim Financial Report, that have significantly affected or may significantly affect the operations of the Group, the results of its operations or the state of affairs of the Group in subsequent periods. |
Financial statements preparat_2
Financial statements preparation (Policies) | 6 Months Ended |
Mar. 31, 2020 | |
Financial statements preparation | |
Financial statements preparation | Financial statements preparation This general purpose Interim Financial Report for the half year ended 31 March 2020 has been prepared in accordance with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001 (Cth) and is also compliant with International Accounting Standard IAS 34 Interim Financial Reporting. The Interim Financial Report does not include all the notes of the type normally included in an annual financial report. Accordingly, this Interim Financial Report is to be read in conjunction with the Annual Financial Report for the year ended 30 September 2019 and any relevant public announcements made by Westpac during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001 (Cth) and the ASX Listing Rules. The Interim Financial Report complies with current Australian Accounting Standards (AAS) as they relate to interim financial reports. The Interim Financial Report was authorised for issue by the Board of Directors on 4 May 2020. All amounts have been rounded in accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, to the nearest million dollars, unless otherwise stated. |
Comparative revisions | Comparative revisions Comparative information has been revised where appropriate to enhance comparability. |
Critical accounting assumptions and estimates | Critical accounting assumptions and estimates In preparing the Interim Financial Report, the application of the Group’s accounting policies requires the use of judgement, assumptions and estimates. The areas of judgement, assumptions and estimates in the Interim Financial Report, including the key sources of estimation uncertainty, are consistent with those in the Annual Financial Report for the year ended 30 September 2019 except for as noted below: Goodwill As at 31 March 2020, the carrying value of the net assets of the Group was more than its market capitalisation which is an indicator of impairment. As a result, an impairment test was performed which determined that goodwill is recoverable, and no impairment should be recognised. We have reassessed the base assumptions and revised them where we consider it necessary in order to provide a reasonable estimate of the value-in-use of the business units and Group in the current environment. We have revised the assumptions used at 30 September 2019 as reported in our Annual Report from a zero growth rate beyond 2 year forecasts to a 2% growth rate beyond 3.5 year forecasts. Given the uncertainty of a rapidly changing economic environment, market sentiment, and regulatory and industry responses, the forecasts are likely to change. This will continue to be reviewed and a further impairment test will be performed at year end. Provisions for expected credit losses (ECL) Details on specific judgements in relation to the impact of COVID-19 on the calculation of provisions for ECL are included in Note 10. Compliance, regulation and remediation provisions Details on specific judgements in relation to material compliance, regulation and remediation provisions are included in Note 14. |
Amendments to Accounting Standards effective this period | Amendments to Accounting Standards effective this period AASB 16 Leases (AASB 16) was adopted by the Group on 1 October 2019. AASB 16 requires all operating leases of greater than 12 months duration be presented on balance sheet by the lessee as a right-of-use (ROU) asset and lease liability. There are no significant changes to lessor accounting. The Group adopted the standard using the simplified approach to transition with no restatement of comparative information and no effect on retained earnings. The lease liabilities are measured at the present value of the remaining lease payments, discounted at the lessee’s incremental borrowing rate at 1 October 2019. On transition to the new standard, the lease liability recognised in other liabilities was $3.3 billion. The associated ROU assets of $3.2 billion were measured at an amount equal to the lease liability, less previously recognised accrued lease payments of $0.1 billion. The ROU assets are recognised in property and equipment. All leases on balance sheet give rise to a combination of interest expense on the lease liability and depreciation of the ROU asset. Interest expense is recognised in net interest income on an effective yield basis. Depreciation expense is recognised in operating expenses on a straight-line basis over the lease term. Extension options are included in a number of lease contracts. The extension options are only included in the lease term if the lease is reasonably certain to be extended, which is assessed by the Group at the lease commencement date. The assessment is reviewed if a significant event or significant change in circumstances occurs which affects this assessment and is within the control of the Group. The Group used the incremental borrowing rate based on the remaining maturity of leases at the date of transition as the discount rate when determining present value. The weighted average incremental borrowing rate applied was 2.1%. Operating lease commitments disclosed under AASB 117 Leases as at 30 September 2019 were $3.7 billion compared to the lease liabilities of $3.3 billion recognised under AASB 16 as at 1 October 2019. The difference is principally due to the discounting of the contractual lease payments under AASB 16. AASB Interpretation 23 Uncertainty over Income Tax Treatments (Interpretation 23) was adopted by the Group on 1 October 2019. Interpretation 23 clarifies the recognition and measurement criteria in AASB 112 Income Taxes (AASB 112) where there is uncertainty over income tax treatments, and requires an assessment of each uncertain tax position as to whether it is probable that a taxation authority will accept the position. Where it is not considered probable, the effect of the uncertainty will be reflected in determining the relevant taxable profit or loss, tax bases, unused tax losses and unused tax credits or tax rates. The amount will be determined as either the single most likely amount or the sum of the probability weighted amounts in a range of possible outcomes, whichever better predicts the resolution of the uncertainty. Judgements will be reassessed as and when new facts and circumstances are presented. Interpretation 23 did not have a material impact on the Group. AASB 2019-3 Amendments to Australian Accounting Standards – Interest rate benchmark reform (AASB 2019-3) was early adopted, as permitted by the standard, by the Group on 1 October 2019. AASB 2019-3 makes amendments to AASB 9, AASB 139 and AASB 7 which allows the Group to apply certain exceptions to the standard hedging requirements in respect of hedge relationships that are impacted by a market wide interest rate benchmark reform. Specifically the exceptions allow the Group to: · Assume that the interest rate benchmark on which the hedged cash flows are based is not altered as a result of the reform when determining whether a forecast transaction is highly probable; · Assume that interest rate benchmark of the hedged item / instrument are not altered for the life of the hedge when assessing whether a hedge is expected to continue to be highly effective; · A hedge relationship impacted by uncertainty arising from benchmark interest rate reform is not required to pass the 80%-125% effectiveness test, however any actual ineffectiveness must be recorded in the Income Statement; and · The determination of a designated component of an exposure in portfolio hedges is only required to be made the first time that component is designated, and not when the portfolio is de-designated and re-designated. The exceptions allowed by the amendments are being applied to the Group’s LIBOR linked hedge relationships that mature after the LIBOR discontinuance date of 31 December 2021. The Group’s LIBOR transition project has commenced focusing on identification of exposures and internal processes that will be affected by the changes. A key assumption made when performing hedge accounting at the reporting date is that both the hedged item and instrument will be amended from existing LIBOR linked floating rates to new alternative reference rates (ARRs) on the same date. Where actual differences between those dates arise hedge ineffectiveness will be recorded in the income statement. On 9 April 2020, the IASB issued an exposure draft for Interest Rate Benchmark Reform - Phase 2 which considers the issues that will affect financial reporting when an existing benchmark interest rate is replaced by an ARR. The Group continues to monitor these developments and the expected impact. The table below summarises the exposures Westpac currently has in hedging relationships maturing after 31 December 2021 which will be impacted by the IBOR reform and the quantum of those risks. The extent of the risk exposure also reflects the notional amounts of related hedging instruments. Notional hedged exposure Benchmark (A$bn) US LIBOR 53 GBP LIBOR 2 CHF LIBOR 2 JPY LIBOR 2 |
Future developments in accounting standards | Future developments in accounting standards The following new standards and interpretations which may have a material impact on the Group have been issued but are not yet effective, and unless otherwise stated, have not been early adopted by the Group. AASB 17 Insurance Contracts was issued on 19 July 2017 and will be effective for the 30 September 2022 year end unless early adopted. This will replace AASB 4 Insurance Contracts , AASB 1023 General Insurance Contracts and AASB 1038 Life Insurance Contracts . The main changes under the standard are: · the scope of the standard may result in some contracts that are currently “unbundled”, i.e. accounted for separately as insurance and investment contracts being required to be “bundled” and accounted for as an insurance contract; · portfolios of contracts (with similar risks which are managed together) will be required to be disaggregated to a more granular level by both the age of a contract and the likelihood of the contract being onerous in order to determine the recognition of profit over the contract period (i.e. the contractual service margin). The contractual service margin uses a different basis to recognise profit to the current Margin on Services approach for life insurance and therefore the pattern of profit recognition is likely to differ; · risk adjustments, which reflect uncertainties in the amount and timing of future cash flows, are required for both general and life insurance contracts rather than just general insurance contracts under the current accounting standards; · the contract boundary, which is the period over which profit is recognised, differs and is determined based on the ability to compel the policyholder to pay premiums or the substantive obligation to provide coverage/services. For some general insurance contracts (e.g. some lender mortgage insurance and reinsurance contracts) this may result in the contract boundary being longer. For life insurance, in particular term renewable contracts, the contract boundary is expected to be shorter. Both will be impacted by different patterns of profit recognition compared to the current standards; · a narrower definition of what acquisition costs may be deferred; · an election to recognise changes in assumptions regarding discount rate in other comprehensive income rather than in profit and loss; · an election to recognise changes in the fair value of assets supporting policy liabilities in other comprehensive income rather than through profit and loss; · reinsurance contracts and the associated liability are to be determined separately to the gross contract liability and may have different contract boundaries; and · additional disclosure requirements. The standard is expected to result in a reduction in the level of deferred acquisition costs, however the quantum of this and the profit and loss impacts to the Group are not yet practicable to determine. On 26 June 2019, the IASB issued an exposure draft proposing a number of amendments to the insurance contracts standard. These amendments were approved by the IASB, with some minor modifications, on 17 March 2020. These amendments include: · deferral of acquisition costs for anticipated renewals outside of the initial contract boundary; · further clarity on the contractual service margin; · ability to recognise a gain in the P&L for reinsurance contracts, to offset losses from onerous contracts on initial recognition; and · additional transitional provisions. In addition, the effective date of the standard will be deferred by two years to be applicable to the Group for the 30 September 2024 financial year. A revised Conceptual Framework (Framework) was issued in May 2019. This will be effective for the Group for the 30 September 2021 financial year. The revised Framework includes new definitions and recognition criteria for assets, liabilities, income and expenses and other relevant financial reporting concepts. The changes are not expected to have a material impact on the Group. Other amendments to existing standards that are not yet effective are not expected to have a material impact to the Group. |
Financial statements preparat_3
Financial statements preparation (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Financial statements preparation | |
Summary of Libor exposures in hedging relationships | The table below summarises the exposures Westpac currently has in hedging relationships maturing after 31 December 2021 which will be impacted by the IBOR reform and the quantum of those risks. The extent of the risk exposure also reflects the notional amounts of related hedging instruments. Notional hedged exposure Benchmark (A$bn) US LIBOR 53 GBP LIBOR 2 CHF LIBOR 2 JPY LIBOR 2 |
Segment reporting (Tables)
Segment reporting (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Segment reporting | |
Schedule of segment results on a cash earnings basis | Half Year March 2020 Westpac Westpac New Institutional Zealand Group $m Consumer Business Bank ($A) Businesses Group Net interest income 4,177 2,438 655 940 456 8,666 Net fee income 272 272 283 67 (139) 755 Net wealth management and insurance income (13) 382 - 78 34 481 Trading income 48 62 301 18 - 429 Other income 6 (10) 19 4 (9) 10 Net operating income before operating expenses and impairment charges 4,490 3,144 1,258 1,107 342 10,341 Operating expenses (2,024) (1,468) (654) (516) (1,498) (6,160) Impairment (charges)/benefits (448) (805) (315) (200) (470) (2,238) Profit before income tax 2,018 871 289 391 (1,626) 1,943 Income tax expense (608) (267) (113) (110) 149 (949) Net profit attributable to NCI - - (1) - - (1) Cash earnings for the period 1,410 604 175 281 (1,477) 993 Net cash earnings adjustments - (63) - 11 249 197 Net profit attributable to owners of WBC 1,410 541 175 292 (1,228) 1,190 Balance sheet Loans 388,820 166,212 80,416 84,778 (548) 719,678 Deposits and other borrowings 210,775 146,952 112,478 70,725 41,990 582,920 Half Year Sept 2019 Westpac Westpac New Institutional Zealand Group $m Consumer Business Bank ($A) Businesses Group Net interest income 4,094 2,538 700 915 317 8,564 Net fee income 296 233 291 88 (79) 829 Net wealth management and insurance income 231 455 - 96 (82) 700 Trading income 49 52 338 12 (8) 443 Other income 8 (19) (19) (7) 53 16 Net operating income before operating expenses and impairment charges 4,678 3,259 1,310 1,104 201 10,552 Operating expenses (1,901) (1,460) (631) (486) (512) (4,990) Impairment (charges)/benefits (317) (194) (31) 24 57 (461) Profit before income tax 2,460 1,605 648 642 (254) 5,101 Income tax expense (737) (483) (176) (181) 32 (1,545) Net profit attributable to NCI - - (2) - (1) (3) Cash earnings for the period 1,723 1,122 470 461 (223) 3,553 Net cash earnings adjustments - (40) - 4 94 58 Net profit attributable to owners of WBC 1,723 1,082 470 465 (129) 3,611 Balance sheet Loans 392,149 169,432 75,353 78,005 (169) 714,770 Deposits and other borrowings 210,625 146,531 101,262 60,801 44,028 563,247 Half Year March 2019 Westpac Westpac New Institutional Zealand Group $m Consumer Business Bank ($A) Businesses Group Net interest income 3,915 2,487 743 945 299 8,389 Net fee income 309 234 319 75 (111) 826 Net wealth management and insurance income 194 444 - 81 (396) 323 Trading income 44 54 357 25 (16) 464 Other income 7 14 6 53 21 101 Net operating income before operating expenses and impairment charges 4,469 3,233 1,425 1,179 (203) 10,103 Operating expenses (1,867) (1,394) (653) (453) (674) (5,041) Impairment (charges)/benefits (272) (70) (15) (14) 38 (333) Profit before income tax 2,330 1,769 757 712 (839) 4,729 Income tax expense (694) (531) (210) (188) 193 (1,430) Net profit attributable to NCI - - (3) - - (3) Cash earnings for the period 1,636 1,238 544 524 (646) 3,296 Net cash earnings adjustments - (5) - (5) (113) (123) Net profit attributable to owners of WBC 1,636 1,233 544 519 (759) 3,173 Balance sheet Loans 390,846 168,580 76,485 78,608 (222) 714,297 Deposits and other borrowings 207,179 141,258 95,690 62,374 48,506 555,007 |
Schedule of reconciliation of cash earnings to net profit | Half Year Half Year Half Year % Mov't March Sept March Mar 20 - Mar 20 - $m Sept 19 Mar 19 Cash earnings 993 3,553 3,296 Fair value (gain)/loss on economic hedges 219 90 (125) large Ineffective hedges 24 15 5 large Adjustments related to Pendal (63) (40) (5) large Treasury shares 17 (7) 2 large large Total cash earnings adjustment (post-tax) 197 58 (123) large large Net profit attributable to owners of WBC 1,190 3,611 3,173 |
Net interest income (Tables)
Net interest income (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Net interest income | |
Schedule of net interest income | Note 3. Net interest income 1 Half Year Half Year Half Year % Mov't March Sept March Mar 20 - Mar 20 - $m Sept 19 Mar 19 Interest income Calculated using the effective interest rate method Cash and balances with central banks 114 141 193 (19) (41) Collateral paid 69 99 102 (30) (32) Investment securities 881 961 958 (8) (8) Loans 13,336 14,679 15,350 (9) (13) Other financial assets 12 20 15 (40) (20) Total interest income calculated using the effective interest rate method 14,412 15,900 16,618 (9) (13) Other Net ineffectiveness on qualifying hedges 35 21 7 67 large Trading securities and financial assets measured at FVIS 234 328 334 (29) (30) Loans 3 5 9 (40) (67) Total other 272 354 350 (23) (22) Total interest income 14,684 16,254 16,968 (10) (13) Interest expense Calculated using the effective interest rate method Collateral received (19) (37) (20) (49) (5) Deposits and other borrowings (2,860) (3,843) (4,124) (26) (31) Debt issues (1,829) (2,407) (2,299) (24) (20) Loan capital (430) (390) (386) 10 11 Other financial liabilities (87) (131) (143) (34) (39) Total interest expense calculated using the effective interest rate method (5,225) (6,808) (6,972) (23) (25) Other Deposits and other borrowings (295) (427) (551) (31) (46) Trading liabilities 2 177 (27) (888) large large Debt issues (68) (110) (53) (38) 28 Bank Levy (196) (198) (193) (1) 2 Other interest expense 3 (77) (40) (48) 93 60 Total other (459) (802) (1,733) (43) (74) Total interest expense (5,684) (7,610) (8,705) (25) (35) Net interest income 9,000 8,644 8,263 4 9 1. Interest income includes items relating to estimated customer refunds, payments, associated costs and litigation, recognised as a reduction of interest income of $132 million (Second Half 2019: $146 million; First Half 2019: $226 million). 2. Includes net impact of Treasury balance sheet management activities. 3. Included in other interest expense for 31 March 2020 is $32 million interest expense on lease liabilities due to the adoption of AASB 16 by the Group from 1 October 2019. Comparatives have not been restated. Refer to Note 1 for further details. |
Non-interest income (Tables)
Non-interest income (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Non-interest income | |
Schedule of non-interest income | Note 4. Non-interest income 1 Half Year Half Year Half Year % Mov't March Sept March Mar 20 - Mar 20 - $m Sept 19 Mar 19 Net fee income Facility fees 372 355 375 5 (1) Transactions fees 582 601 624 (3) (7) Other non-risk fee income (86) (17) (59) large 46 Fee income 868 939 940 (8) (8) Credit card loyalty programs (62) (58) (63) 7 (2) Transaction fee related expenses (51) (52) (51) (2) - Fee expenses (113) (110) (114) 3 (1) Net fee income 755 829 826 (9) (9) Net wealth management and insurance income Wealth management income 384 308 (32) 25 large Life insurance premium income 688 736 707 (7) (3) General insurance and lenders mortgage insurance (LMI) net premium earned 247 242 240 2 3 Life insurance investment and other income 2 (4) 383 26 large large General insurance and LMI investment and other income 24 27 25 (11) (4) Total insurance premium, investment and other income 955 1,388 998 (31) (4) Life insurance claims and changes in life insurance liabilities (574) (852) (414) (33) 39 General insurance and LMI claims and other expenses (300) (141) (226) 113 33 Total insurance claims, changes in insurance liabilities and other expenses (874) (993) (640) (12) 37 Net wealth management and insurance income 465 703 326 (34) 43 Trading income 460 492 437 (7) 5 Other income Dividends received from other entities 1 2 4 (50) (75) Net gain/(loss) on sale of associates - - 38 - (100) Net gain/(loss) on disposal of assets 2 59 2 (97) - Net gain/(loss) on derivatives held for risk management purposes 3 (23) 17 (28) large (18) Net gain/(loss) on financial instruments measured at fair value (92) (83) 44 11 large Net gain/(loss) on disposal of controlled entities - - 3 - (100) Rental income on operating leases 29 34 38 (15) (24) Share of associates' net profit/(loss) (14) (13) (10) 8 40 Other 21 (14) 36 large (42) Total other income (76) 2 127 large large Total non-interest income 1,604 2,026 1,716 (21) (7) 1. Non-interest income includes estimated customer refunds, payments, associated costs and litigation, recognised as a reduction of non-risk fee income, wealth management income and other income of $129 million (Second Half 2019: $235 million, First Half 2019: $625 million). Refer to Note 14 for further details. 2. Includes policyholder tax recoveries. 3. Income from derivatives held for risk management purposes reflects the impact of economic hedges of foreign currency capital and earnings. |
Operating expenses (Tables)
Operating expenses (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Operating expenses | |
Schedule of operating expenses | Note 5. Operating expenses 1 Half Year Half Year Half Year % Mov't March Sept March Mar 20 - Mar 20 - $m Sept 19 Mar 19 Staff expenses Employee remuneration, entitlements and on-costs 2,155 2,081 2,239 4 (4) Superannuation expense 207 184 194 13 7 Share-based payments 47 51 57 (8) (18) Restructuring costs 35 77 155 (55) (77) Total staff expenses 2,444 2,393 2,645 2 (8) Occupancy expenses Operating lease rentals 64 315 343 (80) (81) Depreciation of property and equipment 2 388 113 109 large large Other 62 69 74 (10) (16) Total occupancy expenses 514 497 526 3 (2) Technology expenses Amortisation and impairment of software assets 3 468 385 334 22 40 Depreciation and impairment of IT equipment 2 125 61 68 105 84 Technology services 348 405 405 (14) (14) Software maintenance and licences 193 186 185 4 4 Telecommunications 99 98 109 1 (9) Data processing 44 45 38 (2) 16 Total technology expenses 1,277 1,180 1,139 8 12 Other expenses Professional and processing services 600 607 453 (1) 32 Amortisation and impairment of intangible assets and deferred expenditure 3 4 5 (25) (40) Postage and stationery 83 92 87 (10) (5) Advertising 122 116 129 5 (5) Non-lending losses 969 67 (9) large large Other expenses 169 59 116 186 46 Total other expenses 1,946 945 781 106 149 Total operating expenses 6,181 5,015 5,091 23 21 1. Operating expenses include estimated costs associated with AUSTRAC proceedings including a provision for a potential penalty of $900 million and customer refunds, payments, associated costs and litigation of $302 million (Second Half 2019: $112 million; First Half 2019: $84 million). Refer to Note 14. 2. These balances include depreciation of right-of-use assets for the half year ended 31 March 2020 of $317 million due to the adoption of AASB 16 by the Group from 1 October 2019. Comparatives have not been restated. Refer to Note 1 for further details. 3. Impairment of software assets was $75 million (Second Half 2019: $9 million; First Half 2019: $16 million) . |
Income tax (Tables)
Income tax (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Income tax | |
Schedule of reconciliation to profit before income tax | Half Year Half Year Half Year % Mov't March Sept March Mar 20 - Mar 20 - $m Sept 19 Mar 19 Profit before income tax 2,185 5,194 4,555 (58) (52) Tax at the Australian company tax rate of 30% 656 1,558 1,367 (58) (52) The effect of amounts which are not deductible/(assessable) in calculating taxable income: Hybrid capital distributions 30 31 41 (3) (27) Life insurance: Tax adjustment on policyholder earnings (24) 8 - large - Adjustment for life business tax rates 1 (1) - large - Dividend adjustments - - (1) - (100) Other non-assessable items (1) (1) (13) - (92) Other non-deductible items 295 7 5 large large Adjustment for overseas tax rates 10 (16) (16) large large Income tax (over)/under provided in prior periods - (5) (5) (100) (100) Other items 27 (1) 1 large large Total income tax expense 994 1,580 1,379 (37) (28) Effective income tax rate large large |
Earnings per share (Tables)
Earnings per share (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Earnings per share | |
Schedule of earnings per share | Half Year March 2020 Half Year Sept 2019 Half Year March 2019 $m Basic Diluted Basic Diluted Basic Diluted Net profit attributable to shareholders 1,190 1,190 3,611 3,611 3,173 3,173 Adjustment for RSP dividends 1 (2) (2) (4) (4) (2) (2) Adjustment for potential dilution: Distributions to convertible loan capital holders 2 - - - 136 - 154 Adjusted net profit attributable to shareholders 1,188 1,188 3,607 3,743 3,171 3,325 Weighted average number of ordinary shares (millions) Weighted average number of ordinary shares on issue 3,579 3,579 3,470 3,470 3,442 3,442 Treasury shares (including RSP share rights) 1 (5) (5) (6) (6) (6) (6) Adjustment for potential dilution: Share-based payments - 1 - 1 - 1 Convertible loan capital 2 - - - 283 - 278 Adjusted weighted average number of ordinary shares 3,574 3,575 3,464 3,748 3,436 3,715 Earnings per ordinary share (cents) 33.2 33.2 104.1 99.9 92.3 89.5 1. Some RSP share rights have not vested and are not ordinary shares but do receive dividends. These RSP dividends are deducted to show the profit attributable to ordinary shareholders. RSP share rights were antidilutive for all periods presented. 2. The Group has issued convertible loan capital which may convert into ordinary shares in the future. These convertible loan capital instruments were dilutive for the half year September 2019 and half year March 2019. Diluted EPS for these periods were therefore calculated as if the instruments had been converted at the beginning of the respective period or, if later, the instruments’ issue date. For Half Year March 2020, these instruments were antidilutive. |
Average balance sheet and int_2
Average balance sheet and interest rates (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Average balance sheet and interest rates | |
Summary of the average daily balances of the Group's interest earning assets and interest bearing liabilities | Half Year March 2020 Half Year Sept 2019 Half Year March 2019 Average Average Average Average Average Average balance Interest rate balance Interest rate balance Interest rate $m $m % $m $m % $m $m % Assets Interest earning assets Collateral paid 13,126 69 1.1 11,368 99 1.7 10,275 102 2.0 Trading securities and financial assets measured at FVIS 27,237 234 1.7 30,174 328 2.2 27,968 334 2.4 Investment securities 72,352 881 2.4 67,250 961 2.9 60,305 958 3.2 Loans and other receivables 1 700,256 13,500 3.9 694,373 14,866 4.3 696,112 15,574 4.5 Total interest earning assets and interest income 812,971 14,684 3.6 803,165 16,254 4.0 794,660 16,968 4.3 Non-interest earning assets Derivative financial instruments 30,617 27,818 24,090 Life insurance assets 6,831 10,026 9,192 All other assets 2 61,945 61,244 59,212 Total non-interest earning assets 99,393 99,088 92,494 Total assets 912,364 902,253 887,154 Liabilities Interest bearing liabilities Collateral received 6,579 19 0.6 4,849 37 1.5 2,378 20 1.7 Deposits and other borrowings 512,522 3,155 1.2 508,112 4,270 1.7 505,459 4,675 1.9 Loan capital 22,182 430 3.9 18,419 390 4.2 17,942 386 4.3 Other interest bearing liabilities 3 201,285 2,080 2.1 207,779 2,913 2.8 203,600 3,624 3.6 Total interest bearing liabilities and interest expense 742,568 5,684 1.5 739,159 7,610 2.1 729,379 8,705 2.4 Non-interest bearing liabilities Deposits and other borrowings 52,823 49,765 48,772 Derivative financial instruments 30,279 27,574 25,556 Life insurance liabilities 5,611 8,018 7,286 All other liabilities 4 13,405 13,611 12,761 Total non-interest bearing liabilities 102,118 98,968 94,375 Total liabilities 844,686 838,127 823,754 Shareholders' equity 67,625 64,078 63,348 NCI 53 48 52 Total equity 67,678 64,126 63,400 Total liabilities and equity 912,364 902,253 887,154 Loans and other receivables 1 Australia 587,528 11,401 3.9 589,007 12,657 4.3 589,849 13,274 4.5 New Zealand 83,841 1,738 4.1 80,074 1,799 4.5 78,432 1,851 4.7 Other overseas 28,887 361 2.5 25,292 410 3.2 27,831 449 3.2 Deposits and other borrowings Australia 426,021 2,333 1.1 426,878 3,325 1.6 424,715 3,698 1.7 New Zealand 56,464 516 1.8 55,038 601 2.2 54,400 634 2.3 Other overseas 30,037 306 2.0 26,196 344 2.6 26,344 343 2.6 1. Loans and other receivables are net of Stage 3 provisions, where interest income is determined based on their carrying value. Stage 1 and 2 provisions are not included in the average interest earning assets balance, as interest income is determined based on the gross value of loans and other receivables. 2. Includes property and equipment, intangible assets, deferred tax assets, non-interest bearing loans relating to mortgage offset accounts and all other non-interest earning financial assets. 3. Includes net impact of Treasury balance sheet management activities and the Bank Levy. 4. Includes other financial liabilities, provisions, current and deferred tax liabilities and other liabilities. |
Loans (Tables)
Loans (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Loans | |
Financial assets | |
Schedule of financial assets | As at As at As at % Mov't 31 March 30 Sept 31 March Mar 20 - Mar 20 - $m Sept 19 Mar 19 Australia Housing 445,663 449,201 447,164 (1) - Personal 19,854 21,247 22,463 (7) (12) Business 155,322 152,360 152,424 2 2 Total Australia 620,839 622,808 622,051 - - New Zealand Housing 52,037 47,731 47,499 9 10 Personal 1,610 1,709 1,855 (6) (13) Business 32,021 29,285 29,990 9 7 Total New Zealand 85,668 78,725 79,344 9 8 Total other overseas 18,361 16,845 16,539 9 11 Total loans 724,868 718,378 717,934 1 1 Provisions for expected credit losses (ECL) on loans (Note 10) (5,190) (3,608) (3,637) 44 43 Total net loans 1,2 719,678 714,770 714,297 1 1 1. Total net loans include securitised loans of $9,029 million as at 31 March 2020 (30 September 2019: $7,737 million; 31 March 2019: $8,901 million). The level of securitised loans excludes loans where Westpac is the holder of related debt securities. 2. Total net loans include assets pledged for the covered bond programs of $39,348 million as at 31 March 2020 (30 September 2019: $38,832 million; 31 March 2019: $37,548 million). |
Provisions for expected credi_2
Provisions for expected credit losses (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Provisions for expected credit losses | |
Schedule of impact of COVID-19 to the provision for ECL | The following table attributes the net remeasurement of provision for ECL for the period. $m Consolidated Modelled provision for ECL using updated economic inputs / weightings 1,135 COVID-19 overlay 446 Impact of COVID-19 on the provision for ECL as at 31 March 2020 1,581 Other net movements 560 Total net remeasurement of the provision for ECL for the half year ending 31 March 2020 2,141 |
Summary of the the probability weighted scenarios | $m Consolidated Reported probability-weighted ECL 100% base ECL 100% downside ECL |
Summary of macroeconomic scenario weightings | Macroeconomic scenario weightings (%) 31 March 2020 30 Sept 2019 31 March 2019 Upside Base Downside |
Schedule of impairment charges | Half Year Half Year Half Year March Sept March $m Provisions raised Net changes in provisions 2,338 562 404 Recoveries (100) (101) (71) Impairment charges 2,238 461 333 of which relates to: Loans and credit commitments 2,224 462 332 Debt securities at FVOCI 1 1 - - Debt securities at amortised cost 13 (1) 1 Impairment charges 2,238 461 333 1. Impairment on debt securities at FVOCI is recognised in the income statement with a corresponding amount in other comprehensive income (refer to Note 15). There is no reduction of the carrying value of the debt securities which remains at fair value. |
Loans and credit commitments | |
Provisions for expected credit losses | |
Schedule of provision for ECL | As at As at As at % Mov’t 31 March 30 Sept 31 March Mar 20 - Mar 20 - $m Sept 19 Mar 19 Performing - Stage 1 1,181 884 916 34 29 Performing - Stage 2 2,878 1,674 1,711 72 68 Non performing - Stage 3 1,707 1,355 1,358 26 26 Total provision for ECL on loans and credit commitments 5,766 3,913 3,985 47 45 Presented as: Provision for ECL on loans (Note 9) 5,190 3,608 3,637 44 43 Provision for ECL on credit commitments (Note 14) 576 305 348 89 66 Total provision for ECL on loans and credit commitments 5,766 3,913 3,985 47 45 Of which: Individually assessed provisions 606 412 433 47 40 Collectively assessed provisions 5,160 3,501 3,552 47 45 Total provision for ECL on loans and credit commitments 5,766 3,913 3,985 47 45 |
Schedule of changes in the provision for ECL | Non- Collectively Individually Consolidated Performing performing assessed assessed $m Stage 1 Stage 2 Stage 3 provisions provisions Total Balance as at 30 September 2018 - - - 2,631 422 3,053 Restatement for adoption of AASB 9 877 1,884 1,272 (2,631) (422) 980 Balance as at 1 October 2018 877 1,884 1,272 - - 4,033 Transfers to Stage 1 701 (678) (23) - - - Transfers to Stage 2 (123) 469 (346) - - - Transfers to Stage 3 (3) (290) 293 - - - Business activity during the period 87 (25) (217) - - (155) Net remeasurement of provision for ECL (628) 342 844 - - 558 Write-offs - - (499) - - (499) Exchange rate and other adjustments 5 9 34 - - 48 Balance as at 31 March 2019 916 1,711 1,358 - - 3,985 Transfers to Stage 1 757 (726) (31) - - - Transfers to Stage 2 (119) 487 (368) - - - Transfers to Stage 3 (2) (331) 333 - - - Business activity during the period 92 6 (113) - - (15) Net remeasurement of provision for ECL (757) 532 803 - - 578 Write-offs - - (655) - - (655) Exchange rate and other adjustments (3) (5) 28 - - 20 Balance as at 30 September 2019 884 1,674 1,355 - - 3,913 Transfers to Stage 1 600 (583) (17) - - - Transfers to Stage 2 (131) 466 (335) - - - Transfers to Stage 3 (2) (334) 336 - - - Business activity during the period 120 114 (50) - - 184 Net remeasurement of provision for ECL (297) 1,527 911 - - 2,141 Write-offs - - (537) - - (537) Exchange rate and other adjustments 7 14 44 - - 65 Balance as at 31 March 2020 1,181 2,878 1,707 - - 5,766 |
Schedule of provision for ECL by class and stage | Non- Performing performing $m Stage 1 Stage 2 Stage 3 Total Housing 154 324 570 1,048 Personal 256 535 254 1,045 Business 506 852 534 1,892 Balance as at 31 March 2019 916 1,711 1,358 3,985 Housing 163 354 591 1,108 Personal 268 459 248 975 Business 453 861 516 1,830 Balance as at 30 September 2019 884 1,674 1,355 3,913 Housing 195 544 583 1,322 Personal 267 562 319 1,148 Business 719 1,772 805 3,296 Balance as at 31 March 2020 1,181 2,878 1,707 5,766 |
Debt securities | |
Provisions for expected credit losses | |
Schedule of changes in the provision for ECL | The following tables reconcile the provision for ECL on debt securities. Debt Debt securities at securities at amortised Total debt $m FVOCI 1 cost securities Balance as at 30 September 2018 - - - Restatement for adoption of AASB 9 2 9 11 Balance as at 1 October 2018 2 9 11 Stage 1 - change in the provision during the period - 1 1 Balance as at 31 March 2019 2 10 12 Stage 1 - change in the provision during the period - (1) (1) Balance as at 30 September 2019 2 9 11 Stage 1 - change in the provision during the period 1 10 11 Stage 2 - change in the provision during the period - 3 3 Balance as at 31 March 2020 3 22 25 1. Impairment on debt securities at FVOCI is recognised in the income statement with a corresponding amount in other comprehensive income (refer to Note 15). There is no reduction of the carrying value of the debt securities which remains at fair value . |
Credit Quality (Tables)
Credit Quality (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Credit Quality | |
Schedule of credit quality of loans and credit commitments | The loans and credit commitments balance in stage 3 (non-performing) is represented by those loans and credit commitments which are in default. A default occurs when Westpac considered that the customer is unlikely to repay its credit obligations in full, irrespective of recourse by the Group to actions such as realising security, or the customer is more than 90 days past due on any material credit obligation. This definition of default is aligned to the APRA regulatory definition of default. These can be disaggregated into impaired loans and credit commitments (which is where the customer is unlikely to pay its credit obligations in full including restructured loans) and items 90 days past due, or otherwise in default but not impaired. Impaired loans and credit commitments include: · housing and business loans with insufficient security to cover the principal and interest payments owing (aligned to an impaired internal credit risk grade); · personal loans which are greater than 90 days past due; and · restructured loans (the original contractual terms have been modified to provide for concessions for a customer facing financial difficulties). Items 90 days past due, or otherwise in default but not impaired include: · currently 90 days or more past due but well secured 1 ; · assets that were, but are no longer 90 days past due but are yet to satisfactorily demonstrate sustained improvement to allow reclassification; and · other assets in default and not impaired, including those where an order for bankruptcy or similar legal action has been taken (e.g. appointment of an Administrator or Receiver). Further detail of these balances is as follows: Impaired loans and credit commitments Australia New Zealand Other Overseas Total As at As at As at As at As at As at As at As at As at As at As at As at March Sept March March Sept March March Sept March March Sept March $m Housing and Business: Gross amount 1,267 1,215 1,204 175 62 105 259 50 11 1,701 1,327 1,320 Impairment provisions 2 (530) (491) (513) (73) (26) (40) (161) (17) (5) (764) (534) (558) Net 737 724 691 102 36 65 98 33 6 937 793 762 Personal Gross amount 402 384 379 33 20 19 1 1 - 436 405 398 Impairment provisions 3 (285) (233) (215) (26) (15) (17) - - - (311) (248) (232) Net 117 151 164 7 5 2 1 1 - 125 157 166 Restructured Gross amount 14 16 12 - 12 16 3 3 3 17 31 31 Impairment provisions 2 (3) (6) (6) - (3) (3) (1) (1) (1) (4) (10) (10) Net 11 10 6 - 9 13 2 2 2 13 21 21 Total impaired exposures: Gross amount 1,683 1,615 1,595 208 94 140 263 54 14 2,154 1,763 1,749 Impairment provisions 2, 4 (818) (730) (734) (99) (44) (60) (162) (18) (6) (1,079) (792) (800) Net 865 885 861 109 50 80 101 36 8 1,075 971 949 Items 90 days past due, or otherwise in default, but not impaired As at As at As at % Mov't 31 March 30 Sept 31 March Mar 20 - Mar 20 - $m Sept 19 Mar 19 Australia 4,965 4,684 4,295 6 16 New Zealand 389 340 192 14 103 Other overseas 55 64 35 (14) 57 Total 4 5,409 5,088 4,522 6 20 1. The estimated net realisable value of security to which the Group has recourse is sufficient to cover all principal and interest. 2. Includes individually assessed provisions and collectively assessed provisions on impaired exposures 3. Includes collectively assessed provisions on impaired exposures. 4. The impairment provision of $1,079 million for impaired exposures (30 September 2019: $792 million; 31 March 2019: $800 million) and the impairment provision of $628 million for items 90 days past due, or otherwise in default and not impaired (30 September 2019: $563 million; 31 March 2019: $558 million) equates to the stage 3 provisions for ECL on loans and credit commitments of $1,707 million (30 September 2019: $1,355 million; 31 March 2019: $1,358 million). |
Deposits and other borrowings (
Deposits and other borrowings (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Deposits and other borrowings | |
Schedule of total deposits and other borrowings | As at As at As at % Mov't 31 March 30 Sept 31 March Mar 20 - Mar 20 - $m Sept 19 Mar 19 Australia Certificates of deposit 21,029 26,259 31,123 (20) (32) Non-interest bearing, repayable at call 44,557 43,341 42,690 3 4 Other interest bearing at call 274,071 247,161 222,733 11 23 Other interest bearing term 141,933 158,564 168,313 (10) (16) Total Australia 481,590 475,325 464,859 1 4 New Zealand Certificates of deposit 3,452 1,058 858 large large Non-interest bearing, repayable at call 9,526 6,368 6,110 50 56 Other interest bearing at call 25,822 22,291 23,488 16 10 Other interest bearing term 31,925 31,084 31,918 3 - Total New Zealand 70,725 60,801 62,374 16 13 Other overseas Certificates of deposit 14,638 11,414 11,383 28 29 Non-interest bearing, repayable at call 1,007 824 800 22 26 Other interest bearing at call 1,834 1,610 1,323 14 39 Other interest bearing term 13,126 13,273 14,268 (1) (8) Total other overseas 30,605 27,121 27,774 13 10 Total deposits and other borrowings 582,920 563,247 555,007 3 5 |
Fair values of financial asse_2
Fair values of financial assets and financial liabilities (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Fair values of financial assets and financial liabilities | |
Summary of attribution of financial instruments measured at fair value to the fair value hierarchy | As at 31 March 2020 $m Level 1 Level 2 Level 3 Total Financial assets measured at fair value on a recurring basis Trading securities and financial assets measured at FVIS 5,252 20,808 220 26,280 Derivative financial instruments 17 56,620 24 56,661 Investment securities 15,320 69,206 152 84,678 Loans - 246 22 268 Life insurance assets 600 1,974 - 2,574 Total financial assets measured at fair value on a recurring basis 21,189 148,854 418 170,461 Financial liabilities measured at fair value on a recurring basis Deposits and other borrowings - 38,794 - 38,794 Other financial liabilities 261 10,239 - 10,500 Derivative financial instruments 14 48,031 44 48,089 Debt issues - 6,295 - 6,295 Life insurance liabilities - 604 - 604 Total financial liabilities measured at fair value on a recurring basis 275 103,963 44 104,282 As at 30 Sept 2019 $m Level 1 Level 2 Level 3 Total Financial assets measured at fair value on a recurring basis Trading securities and financial assets measured at FVIS 10,440 21,121 220 31,781 Derivative financial instruments 7 29,828 24 29,859 Investment securities 11,163 61,284 134 72,581 Loans - 239 21 260 Life insurance assets 1,097 8,270 - 9,367 Total financial assets measured at fair value on a recurring basis 22,707 120,742 399 143,848 Financial liabilities measured at fair value on a recurring basis Deposits and other borrowings - 38,413 - 38,413 Other financial liabilities 262 5,108 - 5,370 Derivative financial instruments 8 29,059 29 29,096 Debt issues - 5,819 - 5,819 Life insurance liabilities - 7,377 - 7,377 Total financial liabilities measured at fair value on a recurring basis 270 85,776 29 86,075 As at 31 March 2019 $m Level 1 Level 2 Level 3 Total Financial assets measured at fair value on a recurring basis Trading securities and financial assets measured at FVIS 10,039 19,037 231 29,307 Derivative financial instruments 10 21,735 20 21,765 Investment securities 10,796 56,816 112 67,724 Loans - 394 19 413 Life insurance assets 1,255 8,119 - 9,374 Total financial assets measured at fair value on a recurring basis 22,100 106,101 382 128,583 Financial liabilities measured at fair value on a recurring basis Deposits and other borrowings - 43,119 - 43,119 Other financial liabilities 211 4,715 - 4,926 Derivative financial instruments 10 23,344 30 23,384 Debt issues - 3,934 - 3,934 Life insurance liabilities - 7,503 - 7,503 Total financial liabilities measured at fair value on a recurring basis 221 82,615 30 82,866 |
Summary of movements between fair value hierarchy levels | Half Year March 2020 Trading securities and financial assets Total Total measured at Investment Level 3 Level 3 $m FVIS Securities Other 1 assets Derivatives liabilities Balance as at beginning of period 220 134 45 399 29 29 Gains/(losses) on assets and (gains)/losses on liabilities recognised in: Income statements (3) - 10 7 10 10 Other comprehensive income - (18) - (18) - - Acquisitions and issues 5 36 9 50 6 6 Disposals and settlements (9) - (18) (27) (1) (1) Foreign currency translation impacts 7 - - 7 - - Balance as at end of period 220 152 46 418 44 44 Unrealised gains/(losses) recognised in the income statement for financial instrument held as at end of period (4) - 14 10 (16) (16) 1. Other is comprised of derivative financial assets and certain loans . |
Schedule of financial instruments not measured at fair value | As at 31 March 2020 As at 30 Sept 2019 As at 31 March 2019 Carrying Fair Carrying Fair Carrying Fair $m amount value amount value amount value Financial assets not measured at fair value Cash and balances with central banks 45,815 45,815 20,059 20,059 19,486 19,486 Collateral paid 5,339 5,339 5,930 5,930 6,103 6,103 Investment securities 1,111 1,111 820 820 812 812 Loans 719,410 721,740 714,510 716,130 713,884 714,341 Other financial assets 5,849 5,849 5,367 5,367 6,444 6,444 Total financial assets not measured at fair value 777,524 779,854 746,686 748,306 746,729 747,186 Financial liabilities not measured at fair value Collateral received 12,728 12,728 3,287 3,287 1,889 1,889 Deposits and other borrowings 544,126 544,506 524,834 525,516 511,888 512,544 Other financial liabilities 23,496 23,496 23,845 23,845 24,087 24,087 Debt issues 2 179,540 175,610 175,638 176,838 184,825 185,423 Loan capital 25,807 23,636 21,826 22,076 16,736 16,655 Total financial liabilities not measured at fair value 785,697 779,976 749,430 751,562 739,425 740,598 2. The estimated fair value of debt issues includes the impact of changes in Westpac’s credit spreads since origination |
Provisions, contingent liabil_2
Provisions, contingent liabilities, contingent assets and credit commitments (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Provisions, contingent liabilities, contingent assets and credit commitments | |
Schedule of changes in provisions | Half Year March 2020 Annual leave Litigation Provision for Compliance, Long and other and non- impairment Lease regulation and service employee lending on credit restoration Restructuring remediation $m leave benefits losses commitments obligations provisions provisions Total Balance as at beginning of period 456 614 38 305 24 160 1,572 3,169 Additions 37 447 920 271 200 17 639 2,531 Utilisation (24) (619) (22) - (7) (67) (215) (954) Reversal of unutilised provisions - (8) (2) - (1) - (76) (87) Other 1 12 (3) - - - - 10 Balance as at end of period 470 446 931 576 216 110 1,920 4,669 |
Summary of undrawn credit commitments | As at As at As at % Mov't 31 March 30 Sept 31 March Mar 20 - Mar 20 - $m Sept 19 Mar 19 Undrawn credit commitments Letters of credit and guarantees 1 14,746 15,150 15,804 (3) (7) Commitments to extend credit 2 175,794 176,002 176,242 - - Other 158 188 431 (16) (63) Total undrawn credit commitments 190,698 191,340 192,477 - (1) 1. Standby letters of credit 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 Group may hold cash as collateral for certain guarantees issued. 2. Commitments to extend credit include all obligations on the part of the Group to provide credit facilities. As facilities may expire without being drawn upon, the notional amounts do not necessarily reflect future cash requirements. In addition to the commitments disclosed above, at 31 March 2020 the Group had offered $5.2 billion (30 September 2019: $5.0 billion; 31 March 2019: $5.5 billion) of facilities to customers, which had not yet been accepted. |
Shareholders' equity (Tables)
Shareholders' equity (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Shareholders' equity | |
Summary of share capital by class | As at As at As at 31 March 30 Sept 31 March $m Share capital Ordinary share capital, fully paid 40,503 37,508 36,351 RSP treasury shares held 1 (616) (572) (569) Other treasury shares held 2 30 19 12 Total treasury shares held (586) (553) (557) Total share capital 39,917 36,955 35,794 NCI 56 53 51 Reconciliation of movement in number of ordinary shares Half Year Half Year Half Year March Sept March Balance as at beginning of period 3,489,928,773 3,447,571,023 3,434,796,711 Share issuances 3 110,919,861 - - Dividend reinvestment plan 4 10,836,236 42,357,750 12,774,312 Issued shares for the period 121,756,097 42,357,750 12,774,312 Balance as at end of period 3,611,684,870 3,489,928,773 3,447,571,023 Ordinary shares purchased on market Half Year March 2020 Consolidated Number Average price ($) For share-based payment arrangements: Employee share plan (ESP) 931,524 RSP 5 1,820,433 Westpac Performance Plan (WPP) - share rights exercised 151,111 As treasury shares: Treasury shares purchased 114,376 Treasury shares sold (551,659) Net number of ordinary shares purchased/(sold) on market 2,465,785 1. 31 March 2020: 4,578,297 unvested shares held (30 September 2019: 4,784,213, 31 March 2019: 4,803,772). 2. 31 March 2020: 1,284,249 shares held (30 September 2019: 1,721,532, 31 March 2019: 2,029,795). 3. The average price per share for the issuance of shares was $24.81. 4. The price for the issuance of shares in relation to the dividend re-investment plan for the FY2019 dividend was $25.17, 2019 interim dividend was $27.36, and 2018 final dividend was $25.82. 5. Ordinary shares allocated to employees under the RSP are classified as treasury shares until the shares vest. |
Schedule of reconciliation of movement in reserves | Half Year Half Year Half Year March Sept March $m Available-for-sale securities reserve Balance as at beginning of period - - 37 Impact on adoption of AASB 9 - - (37) Balance as at end of period - - - Debt securities at FVOCI reserve Balance as at beginning of period (22) 59 - Impact on adoption of AASB 9 - - 33 Net gains/(losses) from changes in fair value (140) (111) 64 Income tax effect 42 33 (21) Transferred to income statement (28) (4) (25) Income tax effect 8 1 7 Loss allowance on debt securities measured at FVOCI 1 - - Exchange differences (3) - 1 Balance as at end of period (142) (22) 59 Equity securities at FVOCI reserve Balance as at beginning of period 17 7 - Impact on adoption of AASB 9 - - 6 Net gains/(losses) from changes in fair value (18) 10 1 Balance as at end of period (1) 17 7 Share-based payment reserve Balance as at beginning of period 1,642 1,604 1,534 Share-based payment expense 60 38 70 Balance as at end of period 1,702 1,642 1,604 Cash flow hedge reserve Balance as at beginning of period (129) (204) (125) Net gains/(losses) from changes in fair value 145 (11) (192) Income tax effect (43) 4 56 Transferred to income statement 128 117 80 Income tax effect (37) (35) (23) Balance as at end of period 64 (129) (204) Foreign currency translation reserve Balance as at beginning of period (179) (306) (351) Exchange differences on translation of foreign operations 707 (112) 423 Gains/(losses) on net investment hedges (442) 239 (368) Transferred to income statement - - (10) Balance as at end of period 86 (179) (306) Other reserves Balance as at beginning of period (18) (19) (18) Transactions with owners (3) 1 (1) Balance as at end of period (21) (18) (19) Total reserves 1,688 1,311 1,141 |
Notes to the consolidated cash
Notes to the consolidated cash flow statement (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Notes to the cash flow statements | |
Summary of reconciliation of net cash provided by/(used in) operating activities to net profit | % Mov't Half Year Half Year Half Year Mar 20 - Mar 20 - $m March 2020 Sept 2019 March 2019 Sept 19 Mar 19 Reconciliation of net cash provided by/(used in) operating activities to net profit for the period Net profit for the period 1,191 3,614 3,176 (67) (63) Adjustments: Depreciation, amortisation and impairment 984 563 516 75 91 Impairment charges 2,338 562 404 large large Net decrease/(increase) in current and deferred tax (769) 7 (548) large 40 (Increase)/decrease in accrued interest receivable 82 303 (171) (73) large (Decrease)/increase in accrued interest payable (663) (185) (156) large large (Decrease)/increase in provisions 1,307 405 738 large 77 Other non-cash items 56 (468) (364) large large Cash flows from operating activities before changes in operating assets and liabilities 4,526 4,801 3,595 (6) 26 Net (increase)/decrease in derivative financial instruments 4,966 4,937 2,668 1 86 Net (increase)/decrease in life insurance assets and liabilities (143) (130) (4) 10 large (Increase)/decrease in other operating assets: Collateral paid 877 371 (1,218) 136 large Trading securities and financial assets measured at FVIS 8,114 (2,203) (5,426) large large Loans (694) (2,399) (1,789) (71) (61) Other financial assets 1 570 (234) (100) large Other assets 69 (15) 2 large large (Decrease)/increase in other operating liabilities: Collateral received 8,900 1,324 (317) large large Deposits and other borrowings 12,908 8,685 (7,572) 49 large Other financial liabilities 2,627 454 1,009 large 160 Other liabilities 8 3 (8) 167 large Net cash provided by/(used in) operating activities 42,159 16,398 (9,294) 157 large |
Schedule of non-cash financing activities | Half Year Half Year Half Year % Mov't March Sept March Mar 20 - Mar 20 - $m Sept 19 Mar 19 Shares issued under the dividend reinvestment plan 273 1,159 330 (76) (17) Increase in lease liabilities 88 - - - - |
Financial statements preparat_4
Financial statements preparation - Leases (Details) - AUD ($) $ in Billions | 12 Months Ended | |
Sep. 30, 2019 | Oct. 01, 2019 | |
Financial statements preparation | ||
Total lease commitments | $ 3.7 | |
AASB 16 Leases | Adjustment | ||
Financial statements preparation | ||
ROU assets included in property and equipment | $ 3.2 | |
Lease liabilities recognised in other liabilities | 3.3 | |
Increase in the provision for lease restoration obligations upon adoption of AASB 16 | $ 0.1 | |
Weighted average incremental borrowing rate | 2.10% | |
AASB 16 Leases | Adjustment | Retained profits | ||
Financial statements preparation | ||
Impact on adoption of AASB 16 | $ 0 |
Financial statements preparat_5
Financial statements preparation - Libor exposures in hedging relationships (Details) - LIBOR $ in Billions | Mar. 31, 2020AUD ($) |
USD | |
Summary of Libor exposures in hedging relationships | |
Notional hedged exposure | $ 53 |
GBP | |
Summary of Libor exposures in hedging relationships | |
Notional hedged exposure | 2 |
CHF | |
Summary of Libor exposures in hedging relationships | |
Notional hedged exposure | 2 |
JPY | |
Summary of Libor exposures in hedging relationships | |
Notional hedged exposure | $ 2 |
Segment reporting - Segment res
Segment reporting - Segment results (Details) $ in Millions | 6 Months Ended | ||
Mar. 31, 2020AUD ($)customer | Sep. 30, 2019AUD ($) | Mar. 31, 2019AUD ($) | |
Segment reporting | |||
Maximum facilities for SME and Commercial business customers | $ 200 | ||
Approximate number of customers moved from the Business to Consumer division | customer | 49,000 | ||
Segment results | |||
Net interest income | $ 9,000 | $ 8,644 | $ 8,263 |
Net fee income | 755 | 829 | 826 |
Net wealth management and insurance income | 465 | 703 | 326 |
Trading income | 460 | 492 | 437 |
Net operating income before operating expenses and impairment charges | 10,604 | 10,670 | 9,979 |
Operating expenses | (6,181) | (5,015) | (5,091) |
Impairment (charges)/benefits | (2,238) | (461) | (333) |
Profit before income tax | 2,185 | 5,194 | 4,555 |
Income tax expense | (994) | (1,580) | (1,379) |
Net profit attributable to NCI | (1) | (3) | (3) |
Net profit attributable to owners of WBC | 1,190 | 3,611 | 3,173 |
Loans | 719,678 | 714,770 | 714,297 |
Deposits and other borrowings. | 582,920 | 563,247 | 555,007 |
Consumer | |||
Segment results | |||
Net profit attributable to owners of WBC | 1,410 | 1,723 | 1,636 |
Loans | 388,820 | 392,149 | 390,846 |
Deposits and other borrowings. | 210,775 | 210,625 | 207,179 |
Business | |||
Segment results | |||
Net profit attributable to owners of WBC | 541 | 1,082 | 1,233 |
Loans | 166,212 | 169,432 | 168,580 |
Deposits and other borrowings. | 146,952 | 146,531 | 141,258 |
Westpac Institutional Bank | |||
Segment results | |||
Net profit attributable to owners of WBC | 175 | 470 | 544 |
Loans | 80,416 | 75,353 | 76,485 |
Deposits and other borrowings. | 112,478 | 101,262 | 95,690 |
Westpac New Zealand | |||
Segment results | |||
Net profit attributable to owners of WBC | 292 | 465 | 519 |
Loans | 84,778 | 78,005 | 78,608 |
Deposits and other borrowings. | 70,725 | 60,801 | 62,374 |
Group Businesses | |||
Segment results | |||
Net profit attributable to owners of WBC | (1,228) | (129) | (759) |
Loans | (548) | (169) | (222) |
Deposits and other borrowings. | 41,990 | 44,028 | 48,506 |
Operating segments (cash earnings) | |||
Segment results | |||
Net interest income | 8,666 | 8,564 | 8,389 |
Net fee income | 755 | 829 | 826 |
Net wealth management and insurance income | 481 | 700 | 323 |
Trading income | 429 | 443 | 464 |
Other income | 10 | 16 | 101 |
Net operating income before operating expenses and impairment charges | 10,341 | 10,552 | 10,103 |
Operating expenses | (6,160) | (4,990) | (5,041) |
Impairment (charges)/benefits | (2,238) | (461) | (333) |
Profit before income tax | 1,943 | 5,101 | 4,729 |
Income tax expense | (949) | (1,545) | (1,430) |
Net profit attributable to NCI | (1) | (3) | (3) |
Net profit attributable to owners of WBC | 993 | 3,553 | 3,296 |
Operating segments (cash earnings) | Consumer | |||
Segment results | |||
Net interest income | 4,177 | 4,094 | 3,915 |
Net fee income | 272 | 296 | 309 |
Net wealth management and insurance income | (13) | 231 | 194 |
Trading income | 48 | 49 | 44 |
Other income | 6 | 8 | 7 |
Net operating income before operating expenses and impairment charges | 4,490 | 4,678 | 4,469 |
Operating expenses | (2,024) | (1,901) | (1,867) |
Impairment (charges)/benefits | (448) | (317) | (272) |
Profit before income tax | 2,018 | 2,460 | 2,330 |
Income tax expense | (608) | (737) | (694) |
Net profit attributable to owners of WBC | 1,410 | 1,723 | 1,636 |
Operating segments (cash earnings) | Business | |||
Segment results | |||
Net interest income | 2,438 | 2,538 | 2,487 |
Net fee income | 272 | 233 | 234 |
Net wealth management and insurance income | 382 | 455 | 444 |
Trading income | 62 | 52 | 54 |
Other income | (10) | (19) | 14 |
Net operating income before operating expenses and impairment charges | 3,144 | 3,259 | 3,233 |
Operating expenses | (1,468) | (1,460) | (1,394) |
Impairment (charges)/benefits | (805) | (194) | (70) |
Profit before income tax | 871 | 1,605 | 1,769 |
Income tax expense | (267) | (483) | (531) |
Net profit attributable to owners of WBC | 604 | 1,122 | 1,238 |
Operating segments (cash earnings) | Westpac Institutional Bank | |||
Segment results | |||
Net interest income | 655 | 700 | 743 |
Net fee income | 283 | 291 | 319 |
Trading income | 301 | 338 | 357 |
Other income | 19 | (19) | 6 |
Net operating income before operating expenses and impairment charges | 1,258 | 1,310 | 1,425 |
Operating expenses | (654) | (631) | (653) |
Impairment (charges)/benefits | (315) | (31) | (15) |
Profit before income tax | 289 | 648 | 757 |
Income tax expense | (113) | (176) | (210) |
Net profit attributable to NCI | (1) | (2) | (3) |
Net profit attributable to owners of WBC | 175 | 470 | 544 |
Operating segments (cash earnings) | Westpac New Zealand | |||
Segment results | |||
Net interest income | 940 | 915 | 945 |
Net fee income | 67 | 88 | 75 |
Net wealth management and insurance income | 78 | 96 | 81 |
Trading income | 18 | 12 | 25 |
Other income | 4 | (7) | 53 |
Net operating income before operating expenses and impairment charges | 1,107 | 1,104 | 1,179 |
Operating expenses | (516) | (486) | (453) |
Impairment (charges)/benefits | (200) | 24 | (14) |
Profit before income tax | 391 | 642 | 712 |
Income tax expense | (110) | (181) | (188) |
Net profit attributable to owners of WBC | 281 | 461 | 524 |
Operating segments (cash earnings) | Group Businesses | |||
Segment results | |||
Net interest income | 456 | 317 | 299 |
Net fee income | (139) | (79) | (111) |
Net wealth management and insurance income | 34 | (82) | (396) |
Trading income | (8) | (16) | |
Other income | (9) | 53 | 21 |
Net operating income before operating expenses and impairment charges | 342 | 201 | (203) |
Operating expenses | (1,498) | (512) | (674) |
Impairment (charges)/benefits | (470) | 57 | 38 |
Profit before income tax | (1,626) | (254) | (839) |
Income tax expense | 149 | 32 | 193 |
Net profit attributable to NCI | (1) | ||
Net profit attributable to owners of WBC | (1,477) | (223) | (646) |
Net cash earnings adjustment | |||
Segment results | |||
Net profit attributable to owners of WBC | 197 | 58 | (123) |
Net cash earnings adjustment | Business | |||
Segment results | |||
Net profit attributable to owners of WBC | (63) | (40) | (5) |
Net cash earnings adjustment | Westpac New Zealand | |||
Segment results | |||
Net profit attributable to owners of WBC | 11 | 4 | (5) |
Net cash earnings adjustment | Group Businesses | |||
Segment results | |||
Net profit attributable to owners of WBC | $ 249 | $ 94 | $ (113) |
Segment reporting - Reconciliat
Segment reporting - Reconciliation of cash earnings to net profit (Details) - AUD ($) $ in Millions | 6 Months Ended | ||
Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | |
Segment reporting | |||
Net profit attributable to owners of WBC | $ 1,190 | $ 3,611 | $ 3,173 |
Net profit attributable to owners of WBC, percentage movement from prior period | (67.00%) | ||
Net profit attributable to owners of WBC, percentage movement from same period of prior year | (62.00%) | ||
Operating segments (cash earnings) | |||
Segment reporting | |||
Net profit attributable to owners of WBC | $ 993 | 3,553 | 3,296 |
Net profit attributable to owners of WBC, percentage movement from prior period | (72.00%) | ||
Net profit attributable to owners of WBC, percentage movement from same period of prior year | (70.00%) | ||
Net cash earnings adjustment | |||
Segment reporting | |||
Net profit attributable to owners of WBC | $ 197 | 58 | (123) |
Fair value gain/(loss) on economic hedges | |||
Segment reporting | |||
Net profit attributable to owners of WBC | $ 219 | 90 | (125) |
Net profit attributable to owners of WBC, percentage movement from prior period | 143.00% | ||
Ineffective hedges | |||
Segment reporting | |||
Net profit attributable to owners of WBC | $ 24 | 15 | 5 |
Net profit attributable to owners of WBC, percentage movement from prior period | 60.00% | ||
Adjustments relating to Pendal | |||
Segment reporting | |||
Net profit attributable to owners of WBC | $ (63) | (40) | (5) |
Net profit attributable to owners of WBC, percentage movement from prior period | 58.00% | ||
Treasury shares | |||
Segment reporting | |||
Net profit attributable to owners of WBC | $ 17 | $ (7) | $ 2 |
Net interest income (Details)
Net interest income (Details) - AUD ($) $ in Millions | 6 Months Ended | ||
Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | |
Interest income | |||
Total interest income | $ 14,684 | $ 16,254 | $ 16,968 |
Interest income, percentage movement from prior period | (10.00%) | ||
Interest income, percentage movement from same period of prior year | (13.00%) | ||
Interest expense | |||
Total interest expense | $ (5,684) | (7,610) | (8,705) |
Interest expense, percentage movement from prior period | (25.00%) | ||
Interest expense, percentage movement from same period of prior year | (35.00%) | ||
Net interest income | $ 9,000 | 8,644 | 8,263 |
Net interest income, percentage movement from prior period | 4.00% | ||
Net interest income, percentage movement from same period of prior year | 9.00% | ||
Customer refunds recognised in interest income | $ 132 | 146 | 226 |
Interest expense on lease liabilities | 32 | ||
Calculated using the effective interest rate method | |||
Interest income | |||
Cash and balances with central banks | $ 114 | 141 | 193 |
Cash and balances with central banks, percentage movement from prior period | (19.00%) | ||
Cash and balances with central banks, percentage movement from same period in prior year | (41.00%) | ||
Collateral paid | $ 69 | 99 | 102 |
Collateral paid, percentage movement from prior period | (30.00%) | ||
Collateral paid, percentage movement from same period in prior year | (32.00%) | ||
Investment securities | $ 881 | 961 | 958 |
Investment securities, percentage movement from prior period | (8.00%) | ||
Investment securities, percentage movement from same period in prior year | (8.00%) | ||
Loans | $ 13,336 | 14,679 | 15,350 |
Loans, percentage movement from prior period | (9.00%) | ||
Loans, percentage movement from same period in prior year | (13.00%) | ||
Other financial assets | $ 12 | 20 | 15 |
Other financial assets, percentage movement from prior period | (40.00%) | ||
Other financial assets, percentage movement from same period in prior year | (20.00%) | ||
Total interest income | $ 14,412 | 15,900 | 16,618 |
Interest income, percentage movement from prior period | (9.00%) | ||
Interest income, percentage movement from same period of prior year | (13.00%) | ||
Interest expense | |||
Collateral received | $ (19) | (37) | (20) |
Collateral received, percentage movement from prior period | (49.00%) | ||
Collateral received, percentage movement from same period in prior year | (5.00%) | ||
Deposits and other borrowings | $ (2,860) | (3,843) | (4,124) |
Deposits and other borrowings, percentage movement from prior period | (26.00%) | ||
Deposits and other borrowings, percentage movement from same period in prior year | (31.00%) | ||
Debt issues | $ (1,829) | (2,407) | (2,299) |
Debt issues, percentage movement from prior period | (24.00%) | ||
Debt issues, percentage movement from same period in prior year | (20.00%) | ||
Loan capital | $ (430) | (390) | (386) |
Loan capital, percentage movement from prior period | 10.00% | ||
Loan capital, percentage movement from same period in prior year | 11.00% | ||
Other financial liabilities | $ (87) | (131) | (143) |
Other financial liabilities, percentage movement from prior period | (34.00%) | ||
Other financial liabilities, percentage movement from same period in prior year | (39.00%) | ||
Total interest expense | $ (5,225) | (6,808) | (6,972) |
Interest expense, percentage movement from prior period | (23.00%) | ||
Interest expense, percentage movement from same period of prior year | (25.00%) | ||
Other | |||
Interest income | |||
Net ineffectiveness on qualifying hedges | $ 35 | 21 | 7 |
Net effectiveness on qualifying hedges, percentage movement from prior period | 67.00% | ||
Trading securities and financial assets measured at FVIS | $ 234 | 328 | 334 |
Trading securities and financial assets designated at fair value, percentage movement from prior period | (29.00%) | ||
Trading securities and financial assets designated at fair value, percentage movement from same period in prior year | (30.00%) | ||
Loans | $ 3 | 5 | 9 |
Loans, percentage movement from prior period | (40.00%) | ||
Loans, percentage movement from same period in prior year | (67.00%) | ||
Total interest income | $ 272 | 354 | 350 |
Interest income, percentage movement from prior period | (23.00%) | ||
Interest income, percentage movement from same period of prior year | (22.00%) | ||
Interest expense | |||
Deposits and other borrowings | $ (295) | (427) | (551) |
Deposits and other borrowings, percentage movement from prior period | (31.00%) | ||
Deposits and other borrowings, percentage movement from same period in prior year | (46.00%) | ||
Trading liabilities | $ 177 | (27) | (888) |
Debt issues | $ (68) | (110) | (53) |
Debt issues, percentage movement from prior period | (38.00%) | ||
Debt issues, percentage movement from same period in prior year | 28.00% | ||
Bank levy | $ (196) | (198) | (193) |
Bank levy, percentage movement from prior period | (1.00%) | ||
Bank levy, percentage movement from same period in prior year | 2.00% | ||
Other interest expense | $ (77) | (40) | (48) |
Other interest expense, percentage movement from prior period | 93.00% | ||
Other interest expense, percentage movement from same period in prior year | 60.00% | ||
Total interest expense | $ (459) | $ (802) | $ (1,733) |
Interest expense, percentage movement from prior period | (43.00%) | ||
Interest expense, percentage movement from same period of prior year | (74.00%) |
Non-interest income (Details)
Non-interest income (Details) - AUD ($) $ in Millions | 6 Months Ended | ||
Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | |
Net fee income | |||
Facility fees | $ 372 | $ 355 | $ 375 |
Facility fees, percentage movement from prior period | 5.00% | ||
Facility fees, percentage movement from same period in prior year | (1.00%) | ||
Transactions fees | $ 582 | 601 | 624 |
Transactions fees, percentage movement from prior period | (3.00%) | ||
Transactions fees, percentage movement from same period in prior year | (7.00%) | ||
Other non-risk fee income | $ (86) | (17) | (59) |
Other non-risk fee income percentage movement from same period in prior year | 46.00% | ||
Fee income | $ 868 | 939 | 940 |
Fee income, percentage movement from prior period | (8.00%) | ||
Fee income, percentage movement from same period in prior year | (8.00%) | ||
Credit card loyalty programs | $ (62) | (58) | (63) |
Credit card loyalty programs, percentage movement from prior period | 7.00% | ||
Credit card loyalty programs, percentage movement from same period in prior year | (2.00%) | ||
Transaction fee related expenses | $ (51) | (52) | (51) |
Transaction fee related expenses, percentage movement from prior period | (2.00%) | ||
Fee expenses | $ (113) | (110) | (114) |
Fee expenses, percentage movement from prior period | 3.00% | ||
Fee expenses, percentage movement from same period in prior year | (1.00%) | ||
Net fee income | $ 755 | 829 | 826 |
Net fee income, percentage movement from prior period | (9.00%) | ||
Net fee income, percentage movement from same period of prior year | (9.00%) | ||
Net wealth management and insurance income | |||
Wealth management income | $ 384 | 308 | (32) |
Wealth management income percentage movement from prior period | 25.00% | ||
Total insurance premium, investment and other income | $ 955 | 1,388 | 998 |
Total insurance premium, investment and other income percentage movement from prior period | (31.00%) | ||
Total insurance premium, investment and other income percentage movement from same period in prior year | (4.00%) | ||
Life insurance claims and changes in life insurance liabilities | $ (574) | (852) | (414) |
Life insurance claims and changes in life insurance liabilities, percentage movement from prior period | (33.00%) | ||
Life insurance claims and changes in life insurance liabilities, percentage movement from same period in prior year | 39.00% | ||
Total insurance claims, changes in insurance liabilities and other expenses | $ (874) | (993) | (640) |
Total insurance claims, changes in insurance liabilities and other expenses, percentage movement from prior period | (12.00%) | ||
Total insurance claims, changes in insurance liabilities and other expenses, percentage movement from same period in prior year | 37.00% | ||
Net wealth management and insurance income | $ 465 | 703 | 326 |
Net wealth management and insurance income, percentage movement from prior period | (34.00%) | ||
Net wealth management and insurance income, percentage movement from same period of prior year | 43.00% | ||
Trading income | $ 460 | 492 | 437 |
Trading income, percentage movement from prior period | (7.00%) | ||
Trading income, percentage movement from same period in prior year | 5.00% | ||
Other income | |||
Dividends received from other entities | $ 1 | 2 | 4 |
Dividends received from other entities, percentage movement from prior period | (50.00%) | ||
Dividends received from other entities, percentage movement from same period in prior year | (75.00%) | ||
Net gain/(loss) on sale of associates | 38 | ||
Net gain/(loss) on sale of associates, percentage movement from same period in prior year | (100.00%) | ||
Net gain/(loss) on disposal of assets | $ 2 | 59 | 2 |
Net gain/(loss) on disposal of assets, percentage movement from prior period | (97.00%) | ||
Net gain/(loss) on derivatives held for risk management purposes | $ (23) | 17 | (28) |
Net gain/(loss) on derivatives held for risk management purposes, percentage movement from same period in prior year | (18.00%) | ||
Net gain/(loss) on financial instruments measured at fair value | $ (92) | (83) | 44 |
Net gain/(loss) on financial instruments measured at fair value, percentage movement from prior period | 11.00% | ||
Net gain/(loss) on disposal of controlled entities | 3 | ||
Net gain/(loss) on disposal of controlled entities, percentage movement from same period in prior year | (100.00%) | ||
Rental income on operating leases | $ 29 | 34 | 38 |
Rental income on operating leases, percentage movement from prior period | (15.00%) | ||
Rental income on operating leases, percentage movement from same period in prior year | (24.00%) | ||
Share of associates' net profit/(loss) | $ (14) | (13) | (10) |
Share of associates' net profit/(loss), percentage movement from prior period | 8.00% | ||
Share of associates' net profit/(loss), percentage movement from same period in prior year | 40.00% | ||
Other | $ 21 | (14) | 36 |
Other, percentage movement from same period in prior year | (42.00%) | ||
Total other income | $ (76) | 2 | 127 |
Total non-interest income | $ 1,604 | 2,026 | 1,716 |
Total non-interest income, percentage movement from prior period | (21.00%) | ||
Total non-interest income, percentage movement from same period in prior year | (7.00%) | ||
Compliance, regulation and remediation provisions | $ 129 | 235 | 625 |
Life insurance | |||
Net wealth management and insurance income | |||
Life insurance premium income | $ 688 | 736 | 707 |
Life insurance premium income percentage movement from prior period | (7.00%) | ||
Life insurance premium income percentage movement from same period in prior year | (3.00%) | ||
Life insurance investment and other income | $ (4) | 383 | 26 |
General insurance and LMI | |||
Net wealth management and insurance income | |||
General insurance and lenders mortgage insurance (LMI) net premium earned | $ 247 | 242 | 240 |
General insurance and lenders mortgage insurance (LMI) net premium earned percentage movement from prior period | 2.00% | ||
General insurance and lenders mortgage insurance (LMI) net premium earned percentage movement from same period in prior year | 3.00% | ||
General insurance and LMI investment and other income | $ 24 | 27 | 25 |
General insurance and LMI investment and other income, percentage movement from prior period | (11.00%) | ||
General insurance and LMI investment and other income percentage movement from same period in prior year | (4.00%) | ||
General insurance and LMI claims and other expenses | $ (300) | $ (141) | $ (226) |
General insurance and LMI claims and other expenses percentage movement from prior period | 113.00% | ||
General insurance and LMI claims and other expenses percentage movement from same period in prior year | 33.00% |
Operating expenses (Details)
Operating expenses (Details) - AUD ($) $ in Millions | 6 Months Ended | ||
Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | |
Staff expenses | |||
Employee remuneration, entitlements and on-costs | $ 2,155 | $ 2,081 | $ 2,239 |
Employee remuneration, entitlements and on-costs, percentage movement from prior period | 4.00% | ||
Employee remuneration, entitlements and on-costs, percentage movement from same period in prior year | (4.00%) | ||
Superannuation expense | $ 207 | 184 | 194 |
Superannuation expense, percentage movement from prior period | 13.00% | ||
Superannuation expense, percentage movement from same period in prior year | 7.00% | ||
Share-based payments | $ 47 | 51 | 57 |
Share-based payments, percentage movement from prior period | (8.00%) | ||
Share-based payments, percentage movement from same period in prior year | (18.00%) | ||
Restructuring costs | $ 35 | 77 | 155 |
Restructuring costs, percentage movement from prior period | (55.00%) | ||
Restructuring costs, percentage movement from same period in prior year | (77.00%) | ||
Total staff expenses | $ 2,444 | 2,393 | 2,645 |
Total staff expenses, percentage movement from prior period | 2.00% | ||
Total staff expenses, percentage movement from same period in prior year | (8.00%) | ||
Occupancy expenses | |||
Operating lease rentals | $ 64 | 315 | 343 |
Operating lease rentals, percentage movement from prior period | (80.00%) | ||
Operating lease rentals, percentage movement from same period in prior year | (81.00%) | ||
Depreciation of property and equipment | $ 388 | 113 | 109 |
Other | $ 62 | 69 | 74 |
Other, percentage movement from prior period | (10.00%) | ||
Other, percentage movement from same period in prior year | (16.00%) | ||
Total occupancy expenses | $ 514 | 497 | 526 |
Total occupancy expenses, percentage movement from prior period | 3.00% | ||
Total occupancy expenses, percentage movement from same period in prior year | (2.00%) | ||
Technology expenses | |||
Amortisation and impairment of software assets | $ 468 | 385 | 334 |
Amortisation and impairment of software assets, percentage movement from prior period | 22.00% | ||
Amortisation and impairment of software assets, percentage movement from same period in prior year | 40.00% | ||
Depreciation and impairment of IT equipment | $ 125 | 61 | 68 |
Depreciation and impairment of IT equipment, percentage movement from prior period | 105.00% | ||
Depreciation and impairment of IT equipment, percentage movement from same period in prior year | 84.00% | ||
Technology services | $ 348 | 405 | 405 |
Technology services, percentage movement from prior period | (14.00%) | ||
Technology services, percentage movement from same period in prior year | (14.00%) | ||
Software maintenance and licences | $ 193 | 186 | 185 |
Software maintenance and licences, percentage movement from prior period | 4.00% | ||
Software maintenance and licences, percentage movement from same period in prior year | 4.00% | ||
Telecommunications | $ 99 | 98 | 109 |
Telecommunications, percentage movement from prior period | 1.00% | ||
Telecommunications, percentage movement from same period in prior year | (9.00%) | ||
Data processing | $ 44 | 45 | 38 |
Data processing, percentage movement from prior period | (2.00%) | ||
Data processing, percentage movement from same period in prior year | 16.00% | ||
Total technology expenses | $ 1,277 | 1,180 | 1,139 |
Total technology expenses, percentage movement from prior period | 8.00% | ||
Total technology expenses, percentage movement from same period in prior year | 12.00% | ||
Other expenses | |||
Professional and processing services | $ 600 | 607 | 453 |
Professional and processing services, percentage movement from prior period | (1.00%) | ||
Professional and processing services, percentage movement from same period in prior year | 32.00% | ||
Amortisation and impairment of intangible assets and deferred expenditure | $ 3 | 4 | 5 |
Amortisation and impairment of intangible assets and deferred expenditure, percentage movement from prior period | (25.00%) | ||
Amortisation and impairment of intangible assets and deferred expenditure, percentage movement from same period in prior year | (40.00%) | ||
Postage and stationery | $ 83 | 92 | 87 |
Postage and stationery, percentage movement from prior period | (10.00%) | ||
Postage and stationery, percentage movement from same period in prior year | (5.00%) | ||
Advertising | $ 122 | 116 | 129 |
Advertising, percentage movement from prior period | 5.00% | ||
Advertising, percentage movement from same period in prior year | (5.00%) | ||
Non-lending losses | $ 969 | 67 | (9) |
Other expenses | $ 169 | 59 | 116 |
Other expenses, percentage movement from prior period | 186.00% | ||
Other expenses, percentage movement from same period in prior year | 46.00% | ||
Total other expenses | $ 1,946 | 945 | 781 |
Total other expenses, percentage movement from prior period | 106.00% | ||
Total other expenses, percentage movement from same period in prior year | 149.00% | ||
Total operating expenses | $ 6,181 | 5,015 | 5,091 |
Total operating expenses, percentage movement from prior period | 23.00% | ||
Total operating expenses, percentage movement from same period of prior year | 21.00% | ||
Depreciation of right-of-use assets included in depreciation of property and equipment | $ 317 | ||
Software assets | |||
Other expenses | |||
Impairment | 75 | 9 | 16 |
AUSTRAC proceedings | |||
Other expenses | |||
Provision for a potential penalty | 900 | ||
Provision for customer refunds, payments, associated costs and litigation | $ 302 | $ 112 | $ 84 |
Income tax (Details)
Income tax (Details) - AUD ($) $ in Millions | 6 Months Ended | ||
Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | |
Income tax expense reconciled to profit before income tax | |||
Profit before income tax | $ 2,185 | $ 5,194 | $ 4,555 |
Profit before taxes, percentage movement from prior period | (58.00%) | ||
Profit before taxes, percentage movement from same period in prior year | (52.00%) | ||
Tax at the Australian company tax rate of 30% | $ 656 | 1,558 | 1,367 |
Tax at the Australian company tax rate of 30%, percentage movement from prior period | (58.00%) | ||
Tax at the Australian company tax rate of 30%, percentage movement from same period in prior year | (52.00%) | ||
Australian company tax rate (as a percent) | 30.00% | ||
The effect of amounts which are not deductible/(assessable) in calculating taxable income | |||
Hybrid capital distributions | $ 30 | 31 | 41 |
Hybrid capital distributions, percentage movement from prior period | (3.00%) | ||
Hybrid capital distributions, percentage movement from same period in prior year | (27.00%) | ||
Life insurance: Tax adjustment on policyholder earnings | $ (24) | 8 | |
Life insurance: Adjustment for life business tax rates | $ 1 | (1) | |
Dividend adjustments | (1) | ||
Dividend adjustments, percentage movement from same period in prior year | (100.00%) | ||
Other non-assessable items | $ (1) | (1) | (13) |
Other non-assessable items, percentage movement from same period in prior year | (92.00%) | ||
Other non-deductible items | $ 295 | 7 | 5 |
Adjustment for overseas tax rates | $ 10 | (16) | (16) |
Income tax (over)/under provided in prior years | (5) | (5) | |
Income tax (over)/under provided in prior years, percentage movement from prior period | (100.00%) | ||
Income tax (over)/under provided in prior years, percentage movement from same period in prior year | (100.00%) | ||
Other items | $ 27 | (1) | 1 |
Total income tax expense | $ 994 | $ 1,580 | $ 1,379 |
Total income tax expense, percentage movement from prior period | (37.00%) | ||
Total income tax expense, percentage movement from same period of prior year | (28.00%) | ||
Effective income tax rate (as a percent) | 45.49% | 30.42% | 30.27% |
Earnings per share (Details)
Earnings per share (Details) - AUD ($) $ / shares in Units, shares in Millions, $ in Millions | 6 Months Ended | ||
Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | |
Earnings per share | |||
Net profit attributable to shareholders | $ 1,190 | $ 3,611 | $ 3,173 |
Adjustment for RSP dividends - Basic | (2) | (4) | (2) |
Adjustment for RSP dividends - Diluted | (2) | (4) | (2) |
Adjustment for potential dilution: Distributions to convertible loan capital holders | 136 | 154 | |
Adjusted net profit attributable to shareholders - Basic | 1,188 | 3,607 | 3,171 |
Adjusted net profit attributable to shareholders - Diluted | $ 1,188 | $ 3,743 | $ 3,325 |
Weighted average number of ordinary shares on issue | 3,579 | 3,470 | 3,442 |
Treasury shares (including RSP share rights) | (5) | (6) | (6) |
Adjustment for potential dilution: Share-based payments | 1 | 1 | 1 |
Adjustment for potential dilution: Convertible loan capital | 283 | 278 | |
Adjusted weighted average number of ordinary shares - Basic | 3,574 | 3,464 | 3,436 |
Adjusted weighted average number of ordinary shares - Diluted | 3,575 | 3,748 | 3,715 |
Earnings per ordinary share (cents) - Basic | $ 0.332 | $ 1.041 | $ 0.923 |
Earnings per ordinary share (cents) - Diluted | $ 0.332 | $ 0.999 | $ 0.895 |
Average balance sheet and int_3
Average balance sheet and interest rates (Details) - AUD ($) $ in Millions | 6 Months Ended | ||
Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | |
Average balance sheet and interest rates | |||
Average Balance - Interest earning assets | $ 812,971 | $ 803,165 | $ 794,660 |
Total interest income | $ 14,684 | $ 16,254 | $ 16,968 |
Average Rate - Interest earning assets (as a percent) | 3.60% | 4.00% | 4.30% |
Average Balance - Non-Interest earning assets | $ 99,393 | $ 99,088 | $ 92,494 |
Average Balance - Total assets | 912,364 | 902,253 | 887,154 |
Average Balance - Interest bearing liabilities | 742,568 | 739,159 | 729,379 |
Interest Expense | $ 5,684 | $ 7,610 | $ 8,705 |
Average Rate - Interest bearing liabilities (as a percent) | 1.50% | 2.10% | 2.40% |
Average Balance - Non-interest bearing liabilities | $ 102,118 | $ 98,968 | $ 94,375 |
Average Balance - Total liabilities | 844,686 | 838,127 | 823,754 |
Average Balance - Shareholders' equity | 67,625 | 64,078 | 63,348 |
Average Balance - Non-controlling interests | 53 | 48 | 52 |
Average Balance - Total equity | 67,678 | 64,126 | 63,400 |
Average Balance - Total liabilities and equity | 912,364 | 902,253 | 887,154 |
Collateral received | |||
Average balance sheet and interest rates | |||
Average Balance - Interest bearing liabilities | 6,579 | 4,849 | 2,378 |
Interest Expense | $ 19 | $ 37 | $ 20 |
Average Rate - Interest bearing liabilities (as a percent) | 0.60% | 1.50% | 1.70% |
Deposits and other borrowings | |||
Average balance sheet and interest rates | |||
Average Balance - Interest bearing liabilities | $ 512,522 | $ 508,112 | $ 505,459 |
Interest Expense | $ 3,155 | $ 4,270 | $ 4,675 |
Average Rate - Interest bearing liabilities (as a percent) | 1.20% | 1.70% | 1.90% |
Average Balance - Non-interest bearing liabilities | $ 52,823 | $ 49,765 | $ 48,772 |
Deposits and other borrowings | Australia | |||
Average balance sheet and interest rates | |||
Average Balance - Interest bearing liabilities | 426,021 | 426,878 | 424,715 |
Interest Expense | $ 2,333 | $ 3,325 | $ 3,698 |
Average Rate - Interest bearing liabilities (as a percent) | 1.10% | 1.60% | 1.70% |
Deposits and other borrowings | New Zealand | |||
Average balance sheet and interest rates | |||
Average Balance - Interest bearing liabilities | $ 56,464 | $ 55,038 | $ 54,400 |
Interest Expense | $ 516 | $ 601 | $ 634 |
Average Rate - Interest bearing liabilities (as a percent) | 1.80% | 2.20% | 2.30% |
Deposits and other borrowings | Other overseas | |||
Average balance sheet and interest rates | |||
Average Balance - Interest bearing liabilities | $ 30,037 | $ 26,196 | $ 26,344 |
Interest Expense | $ 306 | $ 344 | $ 343 |
Average Rate - Interest bearing liabilities (as a percent) | 2.00% | 2.60% | 2.60% |
Loan capital | |||
Average balance sheet and interest rates | |||
Average Balance - Interest bearing liabilities | $ 22,182 | $ 18,419 | $ 17,942 |
Interest Expense | $ 430 | $ 390 | $ 386 |
Average Rate - Interest bearing liabilities (as a percent) | 3.90% | 4.20% | 4.30% |
Other interest bearing liabilities | |||
Average balance sheet and interest rates | |||
Average Balance - Interest bearing liabilities | $ 201,285 | $ 207,779 | $ 203,600 |
Interest Expense | $ 2,080 | $ 2,913 | $ 3,624 |
Average Rate - Interest bearing liabilities (as a percent) | 2.10% | 2.80% | 3.60% |
Derivative financial instruments | |||
Average balance sheet and interest rates | |||
Average Balance - Non-interest bearing liabilities | $ 30,279 | $ 27,574 | $ 25,556 |
Life insurance liabilities | |||
Average balance sheet and interest rates | |||
Average Balance - Non-interest bearing liabilities | 5,611 | 8,018 | 7,286 |
Other liabilities | |||
Average balance sheet and interest rates | |||
Average Balance - Non-interest bearing liabilities | 13,405 | 13,611 | 12,761 |
Collateral paid | |||
Average balance sheet and interest rates | |||
Average Balance - Interest earning assets | 13,126 | 11,368 | 10,275 |
Total interest income | $ 69 | $ 99 | $ 102 |
Average Rate - Interest earning assets (as a percent) | 1.10% | 1.70% | 2.00% |
Trading securities and financial assets measured at FVIS | |||
Average balance sheet and interest rates | |||
Average Balance - Interest earning assets | $ 27,237 | $ 30,174 | $ 27,968 |
Total interest income | $ 234 | $ 328 | $ 334 |
Average Rate - Interest earning assets (as a percent) | 1.70% | 2.20% | 2.40% |
Investment securities | |||
Average balance sheet and interest rates | |||
Average Balance - Interest earning assets | $ 72,352 | $ 67,250 | $ 60,305 |
Total interest income | $ 881 | $ 961 | $ 958 |
Average Rate - Interest earning assets (as a percent) | 2.40% | 2.90% | 3.20% |
Loans and other receivables | |||
Average balance sheet and interest rates | |||
Average Balance - Interest earning assets | $ 700,256 | $ 694,373 | $ 696,112 |
Total interest income | $ 13,500 | $ 14,866 | $ 15,574 |
Average Rate - Interest earning assets (as a percent) | 3.90% | 4.30% | 4.50% |
Loans and other receivables | Australia | |||
Average balance sheet and interest rates | |||
Average Balance - Interest earning assets | $ 587,528 | $ 589,007 | $ 589,849 |
Total interest income | $ 11,401 | $ 12,657 | $ 13,274 |
Average Rate - Interest earning assets (as a percent) | 3.90% | 4.30% | 4.50% |
Loans and other receivables | New Zealand | |||
Average balance sheet and interest rates | |||
Average Balance - Interest earning assets | $ 83,841 | $ 80,074 | $ 78,432 |
Total interest income | $ 1,738 | $ 1,799 | $ 1,851 |
Average Rate - Interest earning assets (as a percent) | 4.10% | 4.50% | 4.70% |
Loans and other receivables | Other overseas | |||
Average balance sheet and interest rates | |||
Average Balance - Interest earning assets | $ 28,887 | $ 25,292 | $ 27,831 |
Total interest income | $ 361 | $ 410 | $ 449 |
Average Rate - Interest earning assets (as a percent) | 2.50% | 3.20% | 3.20% |
Derivative financial instruments | |||
Average balance sheet and interest rates | |||
Average Balance - Non-Interest earning assets | $ 30,617 | $ 27,818 | $ 24,090 |
Life insurance assets | |||
Average balance sheet and interest rates | |||
Average Balance - Non-Interest earning assets | 6,831 | 10,026 | 9,192 |
Other | |||
Average balance sheet and interest rates | |||
Average Balance - Non-Interest earning assets | $ 61,945 | $ 61,244 | $ 59,212 |
Loans (Details)
Loans (Details) - AUD ($) $ in Millions | Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 |
Financial assets | |||
Loans | $ 719,678 | $ 714,770 | $ 714,297 |
Loans, percentage movement from prior period | 1.00% | ||
Loans, percentage movement from same period of prior year | 1.00% | ||
Securitised loans | $ 9,029 | 7,737 | 8,901 |
Assets pledged for covered bond programs | 39,348 | 38,832 | 37,548 |
Gross amount | |||
Financial assets | |||
Loans | $ 724,868 | 718,378 | 717,934 |
Loans, percentage movement from prior period | 1.00% | ||
Loans, percentage movement from same period of prior year | 1.00% | ||
Provision for ECL on loans | |||
Financial assets | |||
Loans | $ 5,190 | 3,608 | 3,637 |
Loans, percentage movement from prior period | 44.00% | ||
Loans, percentage movement from same period of prior year | 43.00% | ||
Australia | Gross amount | |||
Financial assets | |||
Loans | $ 620,839 | 622,808 | 622,051 |
Australia | Housing | Gross amount | |||
Financial assets | |||
Loans | $ 445,663 | 449,201 | 447,164 |
Loans, percentage movement from prior period | (1.00%) | ||
Australia | Personal | Gross amount | |||
Financial assets | |||
Loans | $ 19,854 | 21,247 | 22,463 |
Loans, percentage movement from prior period | (7.00%) | ||
Loans, percentage movement from same period of prior year | (12.00%) | ||
Australia | Business | Gross amount | |||
Financial assets | |||
Loans | $ 155,322 | 152,360 | 152,424 |
Loans, percentage movement from prior period | 2.00% | ||
Loans, percentage movement from same period of prior year | 2.00% | ||
New Zealand | Gross amount | |||
Financial assets | |||
Loans | $ 85,668 | 78,725 | 79,344 |
Loans, percentage movement from prior period | 9.00% | ||
Loans, percentage movement from same period of prior year | 8.00% | ||
New Zealand | Housing | Gross amount | |||
Financial assets | |||
Loans | $ 52,037 | 47,731 | 47,499 |
Loans, percentage movement from prior period | 9.00% | ||
Loans, percentage movement from same period of prior year | 10.00% | ||
New Zealand | Personal | Gross amount | |||
Financial assets | |||
Loans | $ 1,610 | 1,709 | 1,855 |
Loans, percentage movement from prior period | (6.00%) | ||
Loans, percentage movement from same period of prior year | (13.00%) | ||
New Zealand | Business | Gross amount | |||
Financial assets | |||
Loans | $ 32,021 | 29,285 | 29,990 |
Loans, percentage movement from prior period | 9.00% | ||
Loans, percentage movement from same period of prior year | 7.00% | ||
Other overseas | Gross amount | |||
Financial assets | |||
Loans | $ 18,361 | $ 16,845 | $ 16,539 |
Loans, percentage movement from prior period | 9.00% | ||
Loans, percentage movement from same period of prior year | 11.00% |
Provisions for expected credi_3
Provisions for expected credit losses - Summary (Details) - Loans and credit commitments - AUD ($) $ in Millions | Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | Oct. 01, 2018 |
Provisions for ECL on loans and credit commitments | ||||
Provisions for expected credit losses | ||||
Provisions for expected credit losses | $ 5,766 | $ 3,913 | $ 3,985 | $ 4,033 |
Provisions for expected credit losses, percentage movement from prior period | 47.00% | |||
Provisions for expected credit losses, percentage movement from same period in prior year | 45.00% | |||
Provisions for ECL on loans and credit commitments | Collectively assessed | ||||
Provisions for expected credit losses | ||||
Provisions for expected credit losses | $ 5,160 | 3,501 | 3,552 | 0 |
Provisions for expected credit losses, percentage movement from prior period | 47.00% | |||
Provisions for expected credit losses, percentage movement from same period in prior year | 45.00% | |||
Provisions for ECL on loans and credit commitments | Individually assessed | ||||
Provisions for expected credit losses | ||||
Provisions for expected credit losses | $ 606 | 412 | 433 | 0 |
Provisions for expected credit losses, percentage movement from prior period | 47.00% | |||
Provisions for expected credit losses, percentage movement from same period in prior year | 40.00% | |||
Provisions for ECL on loans and credit commitments | Performing - Stage 1 | ||||
Provisions for expected credit losses | ||||
Provisions for expected credit losses | $ 1,181 | 884 | 916 | 877 |
Provisions for expected credit losses, percentage movement from prior period | 34.00% | |||
Provisions for expected credit losses, percentage movement from same period in prior year | 29.00% | |||
Provisions for ECL on loans and credit commitments | Performing - Stage 2 | ||||
Provisions for expected credit losses | ||||
Provisions for expected credit losses | $ 2,878 | 1,674 | 1,711 | 1,884 |
Provisions for expected credit losses, percentage movement from prior period | 72.00% | |||
Provisions for expected credit losses, percentage movement from same period in prior year | 68.00% | |||
Provisions for ECL on loans and credit commitments | Non-performing - Stage 3 | ||||
Provisions for expected credit losses | ||||
Provisions for expected credit losses | $ 1,707 | 1,355 | 1,358 | $ 1,272 |
Provisions for expected credit losses, percentage movement from prior period | 26.00% | |||
Provisions for expected credit losses, percentage movement from same period in prior year | 26.00% | |||
Provision for ECL on loans | ||||
Provisions for expected credit losses | ||||
Provisions for expected credit losses | $ 5,190 | 3,608 | 3,637 | |
Provisions for expected credit losses, percentage movement from prior period | 44.00% | |||
Provisions for expected credit losses, percentage movement from same period in prior year | 43.00% | |||
Provision for ECL on credit commitments | ||||
Provisions for expected credit losses | ||||
Provisions for expected credit losses | $ 576 | $ 305 | $ 348 | |
Provisions for expected credit losses, percentage movement from prior period | 89.00% | |||
Provisions for expected credit losses, percentage movement from same period in prior year | 66.00% |
Provisions for expected credi_4
Provisions for expected credit losses - Changes (Details) - Provisions for ECL on loans and credit commitments - Loans and credit commitments - AUD ($) $ in Millions | Oct. 01, 2018 | Sep. 30, 2018 | Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | Mar. 31, 2019 |
Provisions for expected credit losses | ||||||
Provisions for Impairment, carrying amount immediately before initial adoption of AASB 9 | $ 3,053 | |||||
Restatement for adoption of AASB 9 | $ 980 | |||||
Balance at the beginning of the period | $ 3,913 | $ 3,985 | $ 4,033 | |||
Due to changes in credit quality: | ||||||
Business activity during the year | 184 | (15) | $ (155) | |||
Net remeasurement of provision for ECL | 2,141 | 578 | 558 | |||
Write-offs | (537) | (655) | (499) | |||
Exchange rate and other adjustments | 65 | 20 | 48 | |||
Balance at the end of the period | 4,033 | 5,766 | 3,913 | 3,985 | 3,985 | |
Collectively assessed | ||||||
Provisions for expected credit losses | ||||||
Provisions for Impairment, carrying amount immediately before initial adoption of AASB 9 | 2,631 | |||||
Restatement for adoption of AASB 9 | (2,631) | |||||
Balance at the beginning of the period | 3,501 | 3,552 | 0 | |||
Due to changes in credit quality: | ||||||
Balance at the end of the period | 0 | 5,160 | 3,501 | 3,552 | 3,552 | |
Individually assessed | ||||||
Provisions for expected credit losses | ||||||
Provisions for Impairment, carrying amount immediately before initial adoption of AASB 9 | 422 | |||||
Restatement for adoption of AASB 9 | (422) | |||||
Balance at the beginning of the period | 412 | 433 | 0 | |||
Due to changes in credit quality: | ||||||
Balance at the end of the period | 0 | 606 | 412 | 433 | 433 | |
Performing - Stage 1 | ||||||
Provisions for expected credit losses | ||||||
Provisions for Impairment, carrying amount immediately before initial adoption of AASB 9 | 0 | |||||
Restatement for adoption of AASB 9 | 877 | |||||
Balance at the beginning of the period | 884 | 916 | 877 | |||
Due to changes in credit quality: | ||||||
Transfers to Stage 1 | 600 | 757 | 701 | |||
Transfers to Stage 2 | (131) | (119) | (123) | |||
Transfers to Stage 3 | (2) | (2) | (3) | |||
Business activity during the year | 120 | 92 | 87 | |||
Net remeasurement of provision for ECL | (297) | (757) | (628) | |||
Exchange rate and other adjustments | 7 | (3) | 5 | |||
Balance at the end of the period | 877 | 1,181 | 884 | 916 | 916 | |
Performing - Stage 2 | ||||||
Provisions for expected credit losses | ||||||
Provisions for Impairment, carrying amount immediately before initial adoption of AASB 9 | 0 | |||||
Restatement for adoption of AASB 9 | 1,884 | |||||
Balance at the beginning of the period | 1,674 | 1,711 | 1,884 | |||
Due to changes in credit quality: | ||||||
Transfers to Stage 1 | (583) | (726) | (678) | |||
Transfers to Stage 2 | 466 | 487 | 469 | |||
Transfers to Stage 3 | (334) | (331) | (290) | |||
Business activity during the year | 114 | 6 | (25) | |||
Net remeasurement of provision for ECL | 1,527 | 532 | 342 | |||
Exchange rate and other adjustments | 14 | (5) | 9 | |||
Balance at the end of the period | 1,884 | 2,878 | 1,674 | 1,711 | 1,711 | |
Non-performing - Stage 3 | ||||||
Provisions for expected credit losses | ||||||
Provisions for Impairment, carrying amount immediately before initial adoption of AASB 9 | $ 0 | |||||
Restatement for adoption of AASB 9 | 1,272 | |||||
Balance at the beginning of the period | 1,355 | 1,358 | 1,272 | |||
Due to changes in credit quality: | ||||||
Transfers to Stage 1 | (17) | (31) | (23) | |||
Transfers to Stage 2 | (335) | (368) | (346) | |||
Transfers to Stage 3 | 336 | 333 | 293 | |||
Business activity during the year | (50) | (113) | (217) | |||
Net remeasurement of provision for ECL | 911 | 803 | 844 | |||
Write-offs | (537) | (655) | (499) | |||
Exchange rate and other adjustments | 44 | 28 | 34 | |||
Balance at the end of the period | $ 1,272 | $ 1,707 | $ 1,355 | $ 1,358 | $ 1,358 |
Provisions for expected credi_5
Provisions for expected credit losses - Provision for ECL by class and stage (Details) - Loans and credit commitments - AUD ($) $ in Millions | Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 |
Provisions for expected credit losses | |||
Provisions for expected credit losses | $ 5,766 | $ 3,913 | $ 3,985 |
Performing - Stage 1 | |||
Provisions for expected credit losses | |||
Provisions for expected credit losses | 1,181 | 884 | 916 |
Performing - Stage 2 | |||
Provisions for expected credit losses | |||
Provisions for expected credit losses | 2,878 | 1,674 | 1,711 |
Non-performing - Stage 3 | |||
Provisions for expected credit losses | |||
Provisions for expected credit losses | 1,707 | 1,355 | 1,358 |
Housing | |||
Provisions for expected credit losses | |||
Provisions for expected credit losses | 1,322 | 1,108 | 1,048 |
Housing | Performing - Stage 1 | |||
Provisions for expected credit losses | |||
Provisions for expected credit losses | 195 | 163 | 154 |
Housing | Performing - Stage 2 | |||
Provisions for expected credit losses | |||
Provisions for expected credit losses | 544 | 354 | 324 |
Housing | Non-performing - Stage 3 | |||
Provisions for expected credit losses | |||
Provisions for expected credit losses | 583 | 591 | 570 |
Personal | |||
Provisions for expected credit losses | |||
Provisions for expected credit losses | 1,148 | 975 | 1,045 |
Personal | Performing - Stage 1 | |||
Provisions for expected credit losses | |||
Provisions for expected credit losses | 267 | 268 | 256 |
Personal | Performing - Stage 2 | |||
Provisions for expected credit losses | |||
Provisions for expected credit losses | 562 | 459 | 535 |
Personal | Non-performing - Stage 3 | |||
Provisions for expected credit losses | |||
Provisions for expected credit losses | 319 | 248 | 254 |
Business | |||
Provisions for expected credit losses | |||
Provisions for expected credit losses | 3,296 | 1,830 | 1,892 |
Business | Performing - Stage 1 | |||
Provisions for expected credit losses | |||
Provisions for expected credit losses | 719 | 453 | 506 |
Business | Performing - Stage 2 | |||
Provisions for expected credit losses | |||
Provisions for expected credit losses | 1,772 | 861 | 852 |
Business | Non-performing - Stage 3 | |||
Provisions for expected credit losses | |||
Provisions for expected credit losses | $ 805 | $ 516 | $ 534 |
Provisions for expected credi_6
Provisions for expected credit losses - Impact of COVID-19 to Provision of ECL (Details) - AUD ($) $ in Millions | 6 Months Ended | ||
Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | |
Provisions for expected credit losses | |||
Modelled provision for ECL using updated economic inputs / weightings | $ 1,135 | ||
COVID-19 overlay | 446 | ||
Impact of COVID-19 on the provision for ECL as at 31 March 2020 | 1,581 | ||
Other net movements | 560 | ||
Total net remeasurement of the provision for ECL for the half year ending 31 March 2020 | $ 2,141 | ||
June 2020 quarter | |||
Provisions for expected credit losses | |||
Percentage of GDP growth (contraction) | (8.20%) | ||
Estimate of unemployment rate used in sensitivity analysis | 9.00% | ||
Over 2020 | |||
Provisions for expected credit losses | |||
Percentage of GDP growth (contraction) | (5.00%) | ||
Estimate of unemployment rate used in sensitivity analysis | 7.00% | ||
Over 2021 | |||
Provisions for expected credit losses | |||
Percentage of GDP growth (contraction) | 4.00% | ||
Percentage of change in residential property prices | (5.00%) | ||
Over 2022 | |||
Provisions for expected credit losses | |||
Percentage of GDP growth (contraction) | 2.70% | ||
Minimum | Over 2020 | |||
Provisions for expected credit losses | |||
Percentage of change in residential property prices | (10.00%) | ||
Maximum | Over 2020 | |||
Provisions for expected credit losses | |||
Percentage of change in residential property prices | (15.00%) | ||
COVID-19 economic overlay | |||
Provisions for expected credit losses | |||
Adjustment to ECL based on probability weighted scenario | $ 446 | ||
Upside scenario | |||
Provisions for expected credit losses | |||
Percentage of weight assigned to scenario | 5.00% | 10.00% | 10.00% |
Base case scenario | |||
Provisions for expected credit losses | |||
Percentage of weight assigned to scenario | 55.00% | 62.50% | 65.00% |
Downside scenario | |||
Provisions for expected credit losses | |||
Percentage of weight assigned to scenario | 40.00% | 27.50% | 25.00% |
Provision for ECL | Reported probability-weighted ECL | |||
Provisions for expected credit losses | |||
Adjustment to ECL based on probability weighted scenario | $ 5,766 | ||
Provision for ECL | 100% base case ECL | |||
Provisions for expected credit losses | |||
Adjustment to ECL based on probability weighted scenario | 4,476 | ||
Provision for ECL | 100% downside ECL | |||
Provisions for expected credit losses | |||
Adjustment to ECL based on probability weighted scenario | 7,902 | ||
Business and Retail Portfolios | Performing | |||
Provisions for expected credit losses | |||
Amount of exposure | $ 65,600 | ||
Retail Portfolios | Performing - Stage 2 | Australia | |||
Provisions for expected credit losses | |||
Percentage increase in portfolio level | 2.00% | ||
Retail Portfolios | Performing - Stage 2 | New Zealand | |||
Provisions for expected credit losses | |||
Percentage increase in portfolio level | 2.50% | ||
Loans and credit commitments | High risk industries | |||
Provisions for expected credit losses | |||
Financial assets | $ 54,100 | ||
Loans and credit commitments | COVID-19 economic overlay | High risk industries | |||
Provisions for expected credit losses | |||
Adjustment to ECL based on probability weighted scenario | 257 | ||
Loans and credit commitments | COVID-19 economic overlay | Medium/low risk industries | |||
Provisions for expected credit losses | |||
Adjustment to ECL based on probability weighted scenario | 41,000 | ||
Loans and credit commitments | Retail Portfolios | Performing - Stage 2 | |||
Provisions for expected credit losses | |||
Amount of exposure | 11,500 | ||
Loans and credit commitments | Retail Portfolios | Performing - Stage 2 | COVID-19 economic overlay | |||
Provisions for expected credit losses | |||
Adjustment to ECL based on probability weighted scenario | $ 57 |
Provisions for expected credi_7
Provisions for expected credit losses - Debt securities (Details) - Provision for ECL - Debt securities - AUD ($) $ in Millions | Oct. 01, 2018 | Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 |
Provisions for expected credit losses | |||||
Provisions for Impairment, carrying amount immediately before initial adoption of AASB 9 | $ 0 | ||||
Restatement for adoption of AASB 9 | $ 11 | ||||
Balance at the beginning of the period | $ 11 | $ 12 | |||
Stage 1 - change in the provision during the year | 11 | (1) | $ 1 | ||
Stage 2 - change in the provision during the year | 3 | ||||
Balance at the end of the period | 11 | 25 | 11 | 12 | |
FVOCI | |||||
Provisions for expected credit losses | |||||
Provisions for Impairment, carrying amount immediately before initial adoption of AASB 9 | 0 | ||||
Restatement for adoption of AASB 9 | 2 | ||||
Balance at the beginning of the period | 2 | 2 | |||
Stage 1 - change in the provision during the year | 1 | ||||
Balance at the end of the period | 2 | 3 | 2 | 2 | |
Amortised cost | |||||
Provisions for expected credit losses | |||||
Provisions for Impairment, carrying amount immediately before initial adoption of AASB 9 | $ 0 | ||||
Restatement for adoption of AASB 9 | 9 | ||||
Balance at the beginning of the period | 9 | 10 | |||
Stage 1 - change in the provision during the year | 10 | (1) | 1 | ||
Stage 2 - change in the provision during the year | 3 | ||||
Balance at the end of the period | $ 9 | $ 22 | $ 9 | $ 10 |
Provisions for expected credi_8
Provisions for expected credit losses - Reconciliation of provision for impairment charges (Details) - AUD ($) $ in Millions | 6 Months Ended | ||
Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | |
Reconciliation of provision for impairment charges | |||
Net changes in provisions | $ 2,338 | $ 562 | $ 404 |
Recoveries | (100) | (101) | (71) |
Impairment charges | 2,238 | 461 | 333 |
Loans and credit commitments | |||
Reconciliation of provision for impairment charges | |||
Impairment charges | 2,224 | 462 | 332 |
Debt securities | FVOCI | |||
Reconciliation of provision for impairment charges | |||
Impairment charges | 1 | ||
Debt securities | Amortised cost | |||
Reconciliation of provision for impairment charges | |||
Impairment charges | $ 13 | $ (1) | $ 1 |
Credit Quality - Impaired loans
Credit Quality - Impaired loans and credit commitments (Details) - Credit risk - Non-performing - Stage 3 - AUD ($) $ in Millions | Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 |
Loans and credit commitments | Provisions for ECL on loans and credit commitments | |||
Credit quality | |||
Loans and credit commitments | $ (1,707) | $ (1,355) | $ (1,358) |
Loans and credit commitments | Impaired | |||
Credit quality | |||
Loans and credit commitments | 1,075 | 971 | 949 |
Loans and credit commitments | Impaired | Australia | |||
Credit quality | |||
Loans and credit commitments | 865 | 885 | 861 |
Loans and credit commitments | Impaired | New Zealand | |||
Credit quality | |||
Loans and credit commitments | 109 | 50 | 80 |
Loans and credit commitments | Impaired | Other overseas | |||
Credit quality | |||
Loans and credit commitments | 101 | 36 | 8 |
Loans and credit commitments | Impaired | Gross amount | |||
Credit quality | |||
Loans and credit commitments | 2,154 | 1,763 | 1,749 |
Loans and credit commitments | Impaired | Gross amount | Australia | |||
Credit quality | |||
Loans and credit commitments | 1,683 | 1,615 | 1,595 |
Loans and credit commitments | Impaired | Gross amount | New Zealand | |||
Credit quality | |||
Loans and credit commitments | 208 | 94 | 140 |
Loans and credit commitments | Impaired | Gross amount | Other overseas | |||
Credit quality | |||
Loans and credit commitments | 263 | 54 | 14 |
Loans and credit commitments | Impaired | Provisions for ECL on loans and credit commitments | |||
Credit quality | |||
Loans and credit commitments | (1,079) | (792) | (800) |
Loans and credit commitments | Impaired | Provisions for ECL on loans and credit commitments | Australia | |||
Credit quality | |||
Loans and credit commitments | (818) | (730) | (734) |
Loans and credit commitments | Impaired | Provisions for ECL on loans and credit commitments | New Zealand | |||
Credit quality | |||
Loans and credit commitments | (99) | (44) | (60) |
Loans and credit commitments | Impaired | Provisions for ECL on loans and credit commitments | Other overseas | |||
Credit quality | |||
Loans and credit commitments | (162) | (18) | (6) |
Loans and credit commitments | 90 days past due or otherwise in default, not impaired | Provisions for ECL on loans and credit commitments | |||
Credit quality | |||
Loans and credit commitments | (628) | (563) | (558) |
Housing and business | Impaired | |||
Credit quality | |||
Loans and credit commitments | 937 | 793 | 762 |
Housing and business | Impaired | Australia | |||
Credit quality | |||
Loans and credit commitments | 737 | 724 | 691 |
Housing and business | Impaired | New Zealand | |||
Credit quality | |||
Loans and credit commitments | 102 | 36 | 65 |
Housing and business | Impaired | Other overseas | |||
Credit quality | |||
Loans and credit commitments | 98 | 33 | 6 |
Housing and business | Impaired | Gross amount | |||
Credit quality | |||
Loans and credit commitments | 1,701 | 1,327 | 1,320 |
Housing and business | Impaired | Gross amount | Australia | |||
Credit quality | |||
Loans and credit commitments | 1,267 | 1,215 | 1,204 |
Housing and business | Impaired | Gross amount | New Zealand | |||
Credit quality | |||
Loans and credit commitments | 175 | 62 | 105 |
Housing and business | Impaired | Gross amount | Other overseas | |||
Credit quality | |||
Loans and credit commitments | 259 | 50 | 11 |
Housing and business | Impaired | Provisions for ECL on loans and credit commitments | |||
Credit quality | |||
Loans and credit commitments | (764) | (534) | (558) |
Housing and business | Impaired | Provisions for ECL on loans and credit commitments | Australia | |||
Credit quality | |||
Loans and credit commitments | (530) | (491) | (513) |
Housing and business | Impaired | Provisions for ECL on loans and credit commitments | New Zealand | |||
Credit quality | |||
Loans and credit commitments | (73) | (26) | (40) |
Housing and business | Impaired | Provisions for ECL on loans and credit commitments | Other overseas | |||
Credit quality | |||
Loans and credit commitments | (161) | (17) | (5) |
Personal | Impaired | |||
Credit quality | |||
Loans and credit commitments | 125 | 157 | 166 |
Personal | Impaired | Australia | |||
Credit quality | |||
Loans and credit commitments | 117 | 151 | 164 |
Personal | Impaired | New Zealand | |||
Credit quality | |||
Loans and credit commitments | 7 | 5 | 2 |
Personal | Impaired | Other overseas | |||
Credit quality | |||
Loans and credit commitments | 1 | 1 | |
Personal | Impaired | Gross amount | |||
Credit quality | |||
Loans and credit commitments | 436 | 405 | 398 |
Personal | Impaired | Gross amount | Australia | |||
Credit quality | |||
Loans and credit commitments | 402 | 384 | 379 |
Personal | Impaired | Gross amount | New Zealand | |||
Credit quality | |||
Loans and credit commitments | 33 | 20 | 19 |
Personal | Impaired | Gross amount | Other overseas | |||
Credit quality | |||
Loans and credit commitments | 1 | 1 | |
Personal | Impaired | Provisions for ECL on loans and credit commitments | |||
Credit quality | |||
Loans and credit commitments | (311) | (248) | (232) |
Personal | Impaired | Provisions for ECL on loans and credit commitments | Australia | |||
Credit quality | |||
Loans and credit commitments | (285) | (233) | (215) |
Personal | Impaired | Provisions for ECL on loans and credit commitments | New Zealand | |||
Credit quality | |||
Loans and credit commitments | (26) | (15) | (17) |
Restructured | Impaired | |||
Credit quality | |||
Loans and credit commitments | 13 | 21 | 21 |
Restructured | Impaired | Australia | |||
Credit quality | |||
Loans and credit commitments | 11 | 10 | 6 |
Restructured | Impaired | New Zealand | |||
Credit quality | |||
Loans and credit commitments | 9 | 13 | |
Restructured | Impaired | Other overseas | |||
Credit quality | |||
Loans and credit commitments | 2 | 2 | 2 |
Restructured | Impaired | Gross amount | |||
Credit quality | |||
Loans and credit commitments | 17 | 31 | 31 |
Restructured | Impaired | Gross amount | Australia | |||
Credit quality | |||
Loans and credit commitments | 14 | 16 | 12 |
Restructured | Impaired | Gross amount | New Zealand | |||
Credit quality | |||
Loans and credit commitments | 12 | 16 | |
Restructured | Impaired | Gross amount | Other overseas | |||
Credit quality | |||
Loans and credit commitments | 3 | 3 | 3 |
Restructured | Impaired | Provisions for ECL on loans and credit commitments | |||
Credit quality | |||
Loans and credit commitments | (4) | (10) | (10) |
Restructured | Impaired | Provisions for ECL on loans and credit commitments | Australia | |||
Credit quality | |||
Loans and credit commitments | (3) | (6) | (6) |
Restructured | Impaired | Provisions for ECL on loans and credit commitments | New Zealand | |||
Credit quality | |||
Loans and credit commitments | (3) | (3) | |
Restructured | Impaired | Provisions for ECL on loans and credit commitments | Other overseas | |||
Credit quality | |||
Loans and credit commitments | $ (1) | $ (1) | $ (1) |
Credit Quality - Financial asse
Credit Quality - Financial assets in default, but not impaired (Details) - Loans and credit commitments - AUD ($) $ in Millions | Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 |
Credit quality | |||
Provisions for expected credit losses | $ 5,766 | $ 3,913 | $ 3,985 |
Non-performing - Stage 3 | |||
Credit quality | |||
Provisions for expected credit losses | 1,707 | 1,355 | 1,358 |
Credit risk | Non-performing - Stage 3 | 90 days past due or otherwise in default, not impaired | Gross amount | |||
Credit quality | |||
Provisions for expected credit losses | $ 5,409 | 5,088 | 4,522 |
Provisions for expected credit losses, percentage movement from prior period | 6.00% | ||
Provisions for expected credit losses, percentage movement from same period in prior year | 20.00% | ||
Credit risk | Non-performing - Stage 3 | 90 days past due or otherwise in default, not impaired | Gross amount | Australia | |||
Credit quality | |||
Provisions for expected credit losses | $ 4,965 | 4,684 | 4,295 |
Provisions for expected credit losses, percentage movement from prior period | 6.00% | ||
Provisions for expected credit losses, percentage movement from same period in prior year | 16.00% | ||
Credit risk | Non-performing - Stage 3 | 90 days past due or otherwise in default, not impaired | Gross amount | New Zealand | |||
Credit quality | |||
Provisions for expected credit losses | $ 389 | 340 | 192 |
Provisions for expected credit losses, percentage movement from prior period | 14.00% | ||
Provisions for expected credit losses, percentage movement from same period in prior year | 103.00% | ||
Credit risk | Non-performing - Stage 3 | 90 days past due or otherwise in default, not impaired | Gross amount | Other overseas | |||
Credit quality | |||
Provisions for expected credit losses | $ 55 | $ 64 | $ 35 |
Provisions for expected credit losses, percentage movement from prior period | (14.00%) | ||
Provisions for expected credit losses, percentage movement from same period in prior year | 57.00% |
Deposits and other borrowings_2
Deposits and other borrowings (Details) - AUD ($) $ in Millions | Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 |
Deposits and other borrowings | |||
Deposits and other borrowings | $ 582,920 | $ 563,247 | $ 555,007 |
Deposits and other borrowings., percentage change from prior period | 3.00% | ||
Deposits and other borrowings., percentage change from same period of prior year | 5.00% | ||
Australia | |||
Deposits and other borrowings | |||
Deposits and other borrowings | $ 481,590 | 475,325 | 464,859 |
Deposits and other borrowings., percentage change from prior period | 1.00% | ||
Deposits and other borrowings., percentage change from same period of prior year | 4.00% | ||
Australia | Certificates of deposit | |||
Deposits and other borrowings | |||
Deposits and other borrowings | $ 21,029 | 26,259 | 31,123 |
Deposits and other borrowings., percentage change from prior period | (20.00%) | ||
Deposits and other borrowings., percentage change from same period of prior year | (32.00%) | ||
Australia | Non-interest bearing, repayable at call | |||
Deposits and other borrowings | |||
Deposits and other borrowings | $ 44,557 | 43,341 | 42,690 |
Deposits and other borrowings., percentage change from prior period | 3.00% | ||
Deposits and other borrowings., percentage change from same period of prior year | 4.00% | ||
Australia | Other interest bearing at call | |||
Deposits and other borrowings | |||
Deposits and other borrowings | $ 274,071 | 247,161 | 222,733 |
Deposits and other borrowings., percentage change from prior period | 11.00% | ||
Deposits and other borrowings., percentage change from same period of prior year | 23.00% | ||
Australia | Other interest bearing term | |||
Deposits and other borrowings | |||
Deposits and other borrowings | $ 141,933 | 158,564 | 168,313 |
Deposits and other borrowings., percentage change from prior period | (10.00%) | ||
Deposits and other borrowings., percentage change from same period of prior year | (16.00%) | ||
New Zealand | |||
Deposits and other borrowings | |||
Deposits and other borrowings | $ 70,725 | 60,801 | 62,374 |
Deposits and other borrowings., percentage change from prior period | 16.00% | ||
Deposits and other borrowings., percentage change from same period of prior year | 13.00% | ||
New Zealand | Certificates of deposit | |||
Deposits and other borrowings | |||
Deposits and other borrowings | $ 3,452 | 1,058 | 858 |
New Zealand | Non-interest bearing, repayable at call | |||
Deposits and other borrowings | |||
Deposits and other borrowings | $ 9,526 | 6,368 | 6,110 |
Deposits and other borrowings., percentage change from prior period | 50.00% | ||
Deposits and other borrowings., percentage change from same period of prior year | 56.00% | ||
New Zealand | Other interest bearing at call | |||
Deposits and other borrowings | |||
Deposits and other borrowings | $ 25,822 | 22,291 | 23,488 |
Deposits and other borrowings., percentage change from prior period | 16.00% | ||
Deposits and other borrowings., percentage change from same period of prior year | 10.00% | ||
New Zealand | Other interest bearing term | |||
Deposits and other borrowings | |||
Deposits and other borrowings | $ 31,925 | 31,084 | 31,918 |
Deposits and other borrowings., percentage change from prior period | 3.00% | ||
Other overseas | |||
Deposits and other borrowings | |||
Deposits and other borrowings | $ 30,605 | 27,121 | 27,774 |
Deposits and other borrowings., percentage change from prior period | 13.00% | ||
Deposits and other borrowings., percentage change from same period of prior year | 10.00% | ||
Other overseas | Certificates of deposit | |||
Deposits and other borrowings | |||
Deposits and other borrowings | $ 14,638 | 11,414 | 11,383 |
Deposits and other borrowings., percentage change from prior period | 28.00% | ||
Deposits and other borrowings., percentage change from same period of prior year | 29.00% | ||
Other overseas | Non-interest bearing, repayable at call | |||
Deposits and other borrowings | |||
Deposits and other borrowings | $ 1,007 | 824 | 800 |
Deposits and other borrowings., percentage change from prior period | 22.00% | ||
Deposits and other borrowings., percentage change from same period of prior year | 26.00% | ||
Other overseas | Other interest bearing at call | |||
Deposits and other borrowings | |||
Deposits and other borrowings | $ 1,834 | 1,610 | 1,323 |
Deposits and other borrowings., percentage change from prior period | 14.00% | ||
Deposits and other borrowings., percentage change from same period of prior year | 39.00% | ||
Other overseas | Other interest bearing term | |||
Deposits and other borrowings | |||
Deposits and other borrowings | $ 13,126 | $ 13,273 | $ 14,268 |
Deposits and other borrowings., percentage change from prior period | (1.00%) | ||
Deposits and other borrowings., percentage change from same period of prior year | (8.00%) |
Fair values of financial asse_3
Fair values of financial assets and financial liabilities - Hierarchy (Details) - Recurring - AUD ($) $ in Millions | Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 |
Fair values of financial assets and financial liabilities | |||
Financial assets measured at fair value on a recurring basis | $ 170,461 | $ 143,848 | $ 128,583 |
Financial liabilities measured at fair value on a recurring basis | 104,282 | 86,075 | 82,866 |
Level 1 | |||
Fair values of financial assets and financial liabilities | |||
Financial assets measured at fair value on a recurring basis | 21,189 | 22,707 | 22,100 |
Financial liabilities measured at fair value on a recurring basis | 275 | 270 | 221 |
Level 2 | |||
Fair values of financial assets and financial liabilities | |||
Financial assets measured at fair value on a recurring basis | 148,854 | 120,742 | 106,101 |
Financial liabilities measured at fair value on a recurring basis | 103,963 | 85,776 | 82,615 |
Level 3 | |||
Fair values of financial assets and financial liabilities | |||
Financial assets measured at fair value on a recurring basis | 418 | 399 | 382 |
Financial liabilities measured at fair value on a recurring basis | 44 | 29 | 30 |
Deposits and other borrowings | |||
Fair values of financial assets and financial liabilities | |||
Financial liabilities measured at fair value on a recurring basis | 38,794 | 38,413 | 43,119 |
Deposits and other borrowings | Level 2 | |||
Fair values of financial assets and financial liabilities | |||
Financial liabilities measured at fair value on a recurring basis | 38,794 | 38,413 | 43,119 |
Other financial liabilities | |||
Fair values of financial assets and financial liabilities | |||
Financial liabilities measured at fair value on a recurring basis | 10,500 | 5,370 | 4,926 |
Other financial liabilities | Level 1 | |||
Fair values of financial assets and financial liabilities | |||
Financial liabilities measured at fair value on a recurring basis | 261 | 262 | 211 |
Other financial liabilities | Level 2 | |||
Fair values of financial assets and financial liabilities | |||
Financial liabilities measured at fair value on a recurring basis | 10,239 | 5,108 | 4,715 |
Derivative financial instruments | |||
Fair values of financial assets and financial liabilities | |||
Financial liabilities measured at fair value on a recurring basis | 48,089 | 29,096 | 23,384 |
Derivative financial instruments | Level 1 | |||
Fair values of financial assets and financial liabilities | |||
Financial liabilities measured at fair value on a recurring basis | 14 | 8 | 10 |
Derivative financial instruments | Level 2 | |||
Fair values of financial assets and financial liabilities | |||
Financial liabilities measured at fair value on a recurring basis | 48,031 | 29,059 | 23,344 |
Derivative financial instruments | Level 3 | |||
Fair values of financial assets and financial liabilities | |||
Financial liabilities measured at fair value on a recurring basis | 44 | 29 | 30 |
Debt issues | |||
Fair values of financial assets and financial liabilities | |||
Financial liabilities measured at fair value on a recurring basis | 6,295 | 5,819 | 3,934 |
Debt issues | Level 2 | |||
Fair values of financial assets and financial liabilities | |||
Financial liabilities measured at fair value on a recurring basis | 6,295 | 5,819 | 3,934 |
Life insurance liabilities | |||
Fair values of financial assets and financial liabilities | |||
Financial liabilities measured at fair value on a recurring basis | 604 | 7,377 | 7,503 |
Life insurance liabilities | Level 2 | |||
Fair values of financial assets and financial liabilities | |||
Financial liabilities measured at fair value on a recurring basis | 604 | 7,377 | 7,503 |
Trading securities and financial assets measured at FVIS | |||
Fair values of financial assets and financial liabilities | |||
Financial assets measured at fair value on a recurring basis | 26,280 | 31,781 | 29,307 |
Trading securities and financial assets measured at FVIS | Level 1 | |||
Fair values of financial assets and financial liabilities | |||
Financial assets measured at fair value on a recurring basis | 5,252 | 10,440 | 10,039 |
Trading securities and financial assets measured at FVIS | Level 2 | |||
Fair values of financial assets and financial liabilities | |||
Financial assets measured at fair value on a recurring basis | 20,808 | 21,121 | 19,037 |
Trading securities and financial assets measured at FVIS | Level 3 | |||
Fair values of financial assets and financial liabilities | |||
Financial assets measured at fair value on a recurring basis | 220 | 220 | 231 |
Derivative financial instruments | |||
Fair values of financial assets and financial liabilities | |||
Financial assets measured at fair value on a recurring basis | 56,661 | 29,859 | 21,765 |
Derivative financial instruments | Level 1 | |||
Fair values of financial assets and financial liabilities | |||
Financial assets measured at fair value on a recurring basis | 17 | 7 | 10 |
Derivative financial instruments | Level 2 | |||
Fair values of financial assets and financial liabilities | |||
Financial assets measured at fair value on a recurring basis | 56,620 | 29,828 | 21,735 |
Derivative financial instruments | Level 3 | |||
Fair values of financial assets and financial liabilities | |||
Financial assets measured at fair value on a recurring basis | 24 | 24 | 20 |
Investment securities | |||
Fair values of financial assets and financial liabilities | |||
Financial assets measured at fair value on a recurring basis | 84,678 | 72,581 | 67,724 |
Investment securities | Level 1 | |||
Fair values of financial assets and financial liabilities | |||
Financial assets measured at fair value on a recurring basis | 15,320 | 11,163 | 10,796 |
Investment securities | Level 2 | |||
Fair values of financial assets and financial liabilities | |||
Financial assets measured at fair value on a recurring basis | 69,206 | 61,284 | 56,816 |
Investment securities | Level 3 | |||
Fair values of financial assets and financial liabilities | |||
Financial assets measured at fair value on a recurring basis | 152 | 134 | 112 |
Loans | |||
Fair values of financial assets and financial liabilities | |||
Financial assets measured at fair value on a recurring basis | 268 | 260 | 413 |
Loans | Level 2 | |||
Fair values of financial assets and financial liabilities | |||
Financial assets measured at fair value on a recurring basis | 246 | 239 | 394 |
Loans | Level 3 | |||
Fair values of financial assets and financial liabilities | |||
Financial assets measured at fair value on a recurring basis | 22 | 21 | 19 |
Life insurance assets | |||
Fair values of financial assets and financial liabilities | |||
Financial assets measured at fair value on a recurring basis | 2,574 | 9,367 | 9,374 |
Life insurance assets | Level 1 | |||
Fair values of financial assets and financial liabilities | |||
Financial assets measured at fair value on a recurring basis | 600 | 1,097 | 1,255 |
Life insurance assets | Level 2 | |||
Fair values of financial assets and financial liabilities | |||
Financial assets measured at fair value on a recurring basis | $ 1,974 | $ 8,270 | $ 8,119 |
Fair values of financial asse_4
Fair values of financial assets and financial liabilities - Non-market observable valuation techniques Level 3 (Details) - AUD ($) $ in Millions | 6 Months Ended | ||
Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | |
Day one profit or loss | |||
Closing balance of unrecognised day one profit (loss) | $ 3 | $ 3 | $ 4 |
At fair value | Level 3 | |||
Assets | |||
Balance at the beginning of the period | 399 | ||
Gains/(losses) on assets recognised in: Income statements | 7 | ||
Gains/(losses) on assets recognised in: Other comprehensive income | (18) | ||
Acquisition and issues | 50 | ||
Disposal and settlements | (27) | ||
Foreign currency translation impacts | 7 | ||
Balance at the end of the period | 418 | ||
Unrealised gains/(losses) recognised in the income statements for financial instruments held as at end of year | 10 | ||
Liabilities | |||
Balance at the beginning of the year | 29 | ||
(Gains)/losses on liabilities recognised in: Income statements | 10 | ||
Acquisition and issues | 6 | ||
Disposal and settlements | (1) | ||
Balance at the end of the year | 44 | ||
Unrealised gains/(losses) recognised in the income statements for financial instruments held as at end of year | (16) | ||
At fair value | Level 3 | Derivative financial instruments | |||
Liabilities | |||
Balance at the beginning of the year | 29 | ||
(Gains)/losses on liabilities recognised in: Income statements | 10 | ||
Acquisition and issues | 6 | ||
Disposal and settlements | (1) | ||
Balance at the end of the year | 44 | ||
Unrealised gains/(losses) recognised in the income statements for financial instruments held as at end of year | (16) | ||
At fair value | Level 3 | Trading securities and financial assets measured at FVIS | |||
Assets | |||
Balance at the beginning of the period | 220 | ||
Gains/(losses) on assets recognised in: Income statements | (3) | ||
Acquisition and issues | 5 | ||
Disposal and settlements | (9) | ||
Foreign currency translation impacts | 7 | ||
Balance at the end of the period | 220 | ||
Unrealised gains/(losses) recognised in the income statements for financial instruments held as at end of year | (4) | ||
At fair value | Level 3 | Investment securities | |||
Assets | |||
Balance at the beginning of the period | 134 | ||
Gains/(losses) on assets recognised in: Other comprehensive income | (18) | ||
Acquisition and issues | 36 | ||
Balance at the end of the period | 152 | ||
At fair value | Level 3 | Other securities | |||
Assets | |||
Balance at the beginning of the period | 45 | ||
Gains/(losses) on assets recognised in: Income statements | 10 | ||
Acquisition and issues | 9 | ||
Disposal and settlements | (18) | ||
Balance at the end of the period | 46 | ||
Unrealised gains/(losses) recognised in the income statements for financial instruments held as at end of year | $ 14 |
Fair values of financial asse_5
Fair values of financial assets and financial liabilities - Not measured at fair value (Details) - Not measured at fair value - AUD ($) $ in Millions | Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 |
Fair values of financial assets and financial liabilities | |||
Financial assets, Carrying Amount | $ 777,524 | $ 746,686 | $ 746,729 |
Financial liabilities, Carrying Amount | 785,697 | 749,430 | 739,425 |
Financial assets, Fair Value | 779,854 | 748,306 | 747,186 |
Financial liabilities, Fair Value | 779,976 | 751,562 | 740,598 |
Collateral received | |||
Fair values of financial assets and financial liabilities | |||
Financial liabilities, Carrying Amount | 12,728 | 3,287 | 1,889 |
Financial liabilities, Fair Value | 12,728 | 3,287 | 1,889 |
Deposits and other borrowings | |||
Fair values of financial assets and financial liabilities | |||
Financial liabilities, Carrying Amount | 544,126 | 524,834 | 511,888 |
Financial liabilities, Fair Value | 544,506 | 525,516 | 512,544 |
Other financial liabilities | |||
Fair values of financial assets and financial liabilities | |||
Financial liabilities, Carrying Amount | 23,496 | 23,845 | 24,087 |
Financial liabilities, Fair Value | 23,496 | 23,845 | 24,087 |
Debt issues | |||
Fair values of financial assets and financial liabilities | |||
Financial liabilities, Carrying Amount | 179,540 | 175,638 | 184,825 |
Financial liabilities, Fair Value | 175,610 | 176,838 | 185,423 |
Loan capital | |||
Fair values of financial assets and financial liabilities | |||
Financial liabilities, Carrying Amount | 25,807 | 21,826 | 16,736 |
Financial liabilities, Fair Value | 23,636 | 22,076 | 16,655 |
Cash and balances with central banks | |||
Fair values of financial assets and financial liabilities | |||
Financial assets, Carrying Amount | 45,815 | 20,059 | 19,486 |
Financial assets, Fair Value | 45,815 | 20,059 | 19,486 |
Collateral paid | |||
Fair values of financial assets and financial liabilities | |||
Financial assets, Carrying Amount | 5,339 | 5,930 | 6,103 |
Financial assets, Fair Value | 5,339 | 5,930 | 6,103 |
Investment securities | |||
Fair values of financial assets and financial liabilities | |||
Financial assets, Carrying Amount | 1,111 | 820 | 812 |
Financial assets, Fair Value | 1,111 | 820 | 812 |
Loans | |||
Fair values of financial assets and financial liabilities | |||
Financial assets, Carrying Amount | 719,410 | 714,510 | 713,884 |
Financial assets, Fair Value | 721,740 | 716,130 | 714,341 |
Other financial assets | |||
Fair values of financial assets and financial liabilities | |||
Financial assets, Carrying Amount | 5,849 | 5,367 | 6,444 |
Financial assets, Fair Value | $ 5,849 | $ 5,367 | $ 6,444 |
Provisions, contingent liabil_3
Provisions, contingent liabilities, contingent assets and credit commitments - Provisions and Contingent liabilities (Details) | Nov. 20, 2019AUD ($) | Mar. 31, 2020AUD ($) | Sep. 30, 2018AUD ($) |
Reconciliation of changes in other provisions | |||
Balance at beginning of the year | $ 3,169,000,000 | ||
Additions | 2,531,000,000 | ||
Utilisation | (954,000,000) | ||
Reversal of unutilised provisions | (87,000,000) | ||
Other | 10,000,000 | ||
Balance at end of the year | 4,669,000,000 | ||
Maximum deposits insured under FCS | $ 250,000 | ||
Maximum percentage of FCS levy | 0.50% | ||
Guarantees | |||
Reconciliation of changes in other provisions | |||
Maximum contingent liability | $ 40,000,000 | ||
Long service leave | |||
Reconciliation of changes in other provisions | |||
Balance at beginning of the year | 456,000,000 | ||
Additions | 37,000,000 | ||
Utilisation | (24,000,000) | ||
Other | 1,000,000 | ||
Balance at end of the year | 470,000,000 | ||
Annual leave and other employee benefits | |||
Reconciliation of changes in other provisions | |||
Balance at beginning of the year | 614,000,000 | ||
Additions | 447,000,000 | ||
Utilisation | (619,000,000) | ||
Reversal of unutilised provisions | (8,000,000) | ||
Other | 12,000,000 | ||
Balance at end of the year | 446,000,000 | ||
Litigation and non-lending losses | |||
Reconciliation of changes in other provisions | |||
Balance at beginning of the year | 38,000,000 | ||
Additions | 920,000,000 | ||
Utilisation | (22,000,000) | ||
Reversal of unutilised provisions | (2,000,000) | ||
Other | (3,000,000) | ||
Balance at end of the year | 931,000,000 | ||
Provisions for credit commitments | |||
Reconciliation of changes in other provisions | |||
Balance at beginning of the year | 305,000,000 | ||
Additions | 271,000,000 | ||
Balance at end of the year | 576,000,000 | ||
Lease restoration obligations | |||
Reconciliation of changes in other provisions | |||
Balance at beginning of the year | 24,000,000 | ||
Additions | 200,000,000 | ||
Utilisation | (7,000,000) | ||
Reversal of unutilised provisions | (1,000,000) | ||
Balance at end of the year | 216,000,000 | ||
Restructuring provisions | |||
Reconciliation of changes in other provisions | |||
Balance at beginning of the year | 160,000,000 | ||
Additions | 17,000,000 | ||
Utilisation | (67,000,000) | ||
Balance at end of the year | 110,000,000 | ||
Provision in relation to the AUSTRAC civil proceedings | |||
Reconciliation of changes in other provisions | |||
Number of contraventions alleged | 23,000,000 | ||
Provision for potential liability | 900,000,000 | ||
Compliance, regulation and remediation provisions | |||
Reconciliation of changes in other provisions | |||
Balance at beginning of the year | 1,572,000,000 | ||
Additions | 639,000,000 | ||
Utilisation | (215,000,000) | ||
Reversal of unutilised provisions | (76,000,000) | ||
Balance at end of the year | 1,920,000,000 | ||
Provision for customer refunds associated with certain ongoing advice service fees charged by the Group's salaried financial planners during the period 2008 to 2018 | 204,000,000 | ||
Paid to date | 72,000,000 | ||
Approximate total fees received in by the group in respect of salaried financial planners in the period 2008 to 2018 | $ 634,000,000 | ||
Percentage of fees estimated to be refunded | 27.00% | ||
Ongoing advice service fees charged by authorised representatives of Securitor and Magnitude | |||
Reconciliation of changes in other provisions | |||
Provisions in relation to project costs | 26,300,000 | ||
Total fees received by authorised representatives from their customers in the period 2008 to 2018 | $ 880,000,000 | ||
Percentage of fees estimated to be refunded | 33.00% | ||
Provision for customer remediation costs | $ 586,000,000 |
Provisions, contingent liabil_4
Provisions, contingent liabilities, contingent assets and credit commitments - Undrawn credit commitments (Details) - AUD ($) $ in Millions | 6 Months Ended | ||
Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | |
Undrawn credit commitments | |||
Letters of credit and guarantees | $ 14,746 | $ 15,150 | $ 15,804 |
Letters of credit and guarantees, percentage change from prior period | (3.00%) | ||
Letters of credit and guarantees, percentage change from same period of prior year | (7.00%) | ||
Commitments to extend credit | $ 175,794 | 176,002 | 176,242 |
Other | $ 158 | 188 | 431 |
Other, percentage change from prior period | (16.00%) | ||
Other, percentage change from same period of prior year | (63.00%) | ||
Total undrawn credit commitments | $ 190,698 | 191,340 | 192,477 |
Total undrawn credit commitments, percentage change from same period of prior year | (1.00%) | ||
Commitments to customers, which had not yet been accepted | $ 5,200 | $ 5,000 | $ 5,500 |
Shareholders' equity - Share ca
Shareholders' equity - Share capital (Details) - AUD ($) $ in Millions | Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 |
Shareholders' equity | |||
Ordinary share capital, fully paid | $ 40,503 | $ 37,508 | $ 36,351 |
Restricted Share Plan (RSP) treasury shares held | (616) | (572) | (569) |
Other treasury shares held | 30 | 19 | 12 |
Total treasury shares held | (586) | (553) | (557) |
Total share capital | 39,917 | 36,955 | 35,794 |
NCI | $ 56 | $ 53 | $ 51 |
Number of unvested RSP treasury shares held | 4,578,297 | 4,784,213 | 4,803,772 |
Number of other treasury shares held | 1,284,249 | 1,721,532 | 2,029,795 |
Shareholders' equity - Movement
Shareholders' equity - Movement in number of ordinary shares (Details) | 6 Months Ended | |||
Mar. 31, 2020AUD ($)$ / sharesshares | Sep. 30, 2019$ / sharesshares | Mar. 31, 2019$ / sharesshares | Mar. 31, 2018$ / shares | |
Reconciliation of movement in number of ordinary shares | ||||
Share issuances | $ | $ 2,751,000,000 | |||
Ordinary shares | ||||
Shareholders' equity | ||||
Par value | $ 0 | |||
Number of votes per ordinary shares | 1 | |||
Reconciliation of movement in number of ordinary shares | ||||
Number of shares outstanding at beginning of period | shares | 3,489,928,773 | 3,447,571,023 | 3,434,796,711 | |
Share issuances | $ | $ 110,919,861 | |||
Dividend reinvestment plan | shares | 10,836,236 | 42,357,750 | 12,774,312 | |
Issued shares for the period | shares | 121,756,097 | 42,357,750 | 12,774,312 | |
Number of shares outstanding at end of period | shares | 3,611,684,870 | 3,489,928,773 | 3,447,571,023 | |
Average price per share | $ 24.81 | |||
Dividend reinvestment plan - price per share for current year interim dividend | $ 27.36 | |||
Dividend reinvestment plan - price per share for prior year final dividend | $ 25.17 | $ 25.82 |
Shareholders' equity - Ordinary
Shareholders' equity - Ordinary shares purchased on market (Details) | 6 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Share-based payments | |
Treasury shares purchased - average price | $ / shares | $ 24.52 |
Treasury shares sold - average price | $ / shares | $ 25.17 |
Ordinary shares | |
Share-based payments | |
Number of treasury shares purchased | 114,376 |
Number of treasury shares sold | (551,659) |
Net number of ordinary shares purchased/(sold) on market | 2,465,785 |
Employee Share Plan (ESP) | |
Share-based payments | |
Average share price, ordinary shares | $ / shares | $ 26.46 |
Employee Share Plan (ESP) | Ordinary shares | |
Share-based payments | |
Number of ordinary shares purchased on market | 931,524 |
RSP | |
Share-based payments | |
Average share price, ordinary shares | $ / shares | $ 24.46 |
RSP | Ordinary shares | |
Share-based payments | |
Number of ordinary shares purchased on market | 1,820,433 |
Westpac Performance Plan (WPP) | Share rights | |
Share-based payments | |
Average share price, ordinary shares | $ / shares | $ 27.51 |
Westpac Performance Plan (WPP) | Share rights | Ordinary shares | |
Share-based payments | |
Number of ordinary shares purchased on market | 151,111 |
Shareholders' equity - Reconcil
Shareholders' equity - Reconciliation of movement in reserves (Details) - AUD ($) $ in Millions | 6 Months Ended | ||
Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | |
Available-for-sale securities reserve | |||
Opening balance | $ 0 | $ 0 | $ 37 |
Impact on adoption of AASB 9 | (37) | ||
Net gains/(losses) from changes in fair value | 0 | 0 | 0 |
Closing balance | 0 | 0 | |
Debt securities at FVOCI reserve | |||
Opening balance | (22) | 59 | |
Impact on adoption of AASB 9 | 33 | ||
Net gains/(losses) from changes in fair value | (140) | (111) | 64 |
Loss allowance on debt securities measured at FVOCI | 1 | ||
Income tax effect | 42 | 33 | (21) |
Transferred to income statement | (28) | (4) | (25) |
Income tax effect | 8 | 1 | 7 |
Exchange differences | 3 | (1) | |
Closing balance | (142) | (22) | 59 |
Equity securities at FVOCI reserve | |||
Opening balance | 17 | 7 | |
Impact on adoption of AASB 9 | 6 | ||
Net gains/(losses) from changes in fair value | (18) | 10 | 1 |
Closing balance | (1) | 17 | 7 |
Share-based payment reserve | |||
Opening balance | 1,642 | 1,604 | 1,534 |
Share-based payment expense | 60 | 38 | 70 |
Closing balance | 1,702 | 1,642 | 1,604 |
Cash flow hedge reserve | |||
Opening balance | (129) | (204) | (125) |
Net gains/(losses) from changes in fair value | 145 | (11) | (192) |
Income tax effect | (43) | 4 | 56 |
Cash flow hedging instruments | 128 | 117 | 80 |
Income tax effect | (37) | (35) | (23) |
Closing balance | 64 | (129) | (204) |
Foreign currency translation reserve | |||
Opening balance | (179) | (306) | (351) |
Exchange differences on translation of foreign operations (net of associated hedges) | 707 | (112) | 423 |
Gains/losses on net investment hedges | (442) | 239 | (368) |
Transferred to income statements | (10) | ||
Closing balance | 86 | (179) | (306) |
Other reserves | |||
Opening balance | (18) | (19) | (18) |
Transactions with owners | (3) | 1 | (1) |
Closing balance | (21) | (18) | (19) |
Total other reserves | $ 1,688 | $ 1,311 | $ 1,141 |
Notes to the cash flow statem_2
Notes to the cash flow statements - Reconciliation of operating activities (Details) - AUD ($) $ in Millions | 6 Months Ended | ||
Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | |
Reconciliation of net cash provided by/(used in) operating activities to net profit for the year | |||
Net profit for the period | $ 1,191 | $ 3,614 | $ 3,176 |
Net profit for the period, percentage movement from prior period | (67.00%) | ||
Net profit for the period, percentage movement from same period of prior year | (63.00%) | ||
Adjustments: | |||
Depreciation, amortisation and impairment | $ 984 | 563 | 516 |
Depreciation, amortisation and impairment, percentage movement from prior period | 75.00% | ||
Depreciation, amortisation and impairment, percentage movement from same period in prior year | 91.00% | ||
Impairment charges | $ 2,338 | 562 | 404 |
Net decrease/(increase) in current and deferred tax | $ (769) | 7 | (548) |
Net decrease/(increase) in current and deferred tax, percentage movement from same period in prior year | 40.00% | ||
(Increase)/decrease in accrued interest receivable | $ 82 | 303 | (171) |
(Increase)/decrease in accrued interest receivable, percentage movement from prior period | (73.00%) | ||
(Decrease)/increase in accrued interest payable | $ (663) | (185) | (156) |
(Decrease)/increase in provisions | $ 1,307 | 405 | 738 |
(Decrease)/increase in provisions, percentage movement from same period in prior year | 77.00% | ||
Other non-cash items | $ 56 | (468) | (364) |
Cash flows from operating activities before changes in operating assets and liabilities | $ 4,526 | 4,801 | 3,595 |
Cash flows from operating activities before changes in operating assets and liabilities, percentage movement from prior period | (6.00%) | ||
Cash flows from operating activities before changes in operating assets and liabilities, percentage movement from same period in prior year | 26.00% | ||
Net (increase)/decrease in derivative financial instruments | $ 4,966 | 4,937 | 2,668 |
Net (increase)/decrease in derivative financial instruments, percentage movement from prior period | 1.00% | ||
Net (increase)/decrease in derivative financial instruments, percentage movement from same period in prior year | 86.00% | ||
Net (increase)/decrease in life insurance assets and liabilities | $ (143) | (130) | (4) |
Net (increase)/decrease) in life insurance assets and liabilities, percentage movement from prior period | 10.00% | ||
(Increase)/decrease in other operating assets: | |||
Collateral paid | $ 877 | 371 | (1,218) |
Collateral paid, percentage movement from prior period | 136.00% | ||
Trading securities and other financial assets designated at fair value | $ 8,114 | (2,203) | (5,426) |
Loans | $ (694) | (2,399) | (1,789) |
Loans, percentage movement from prior period | (71.00%) | ||
Loans, percentage movement from same period in prior year | (61.00%) | ||
Other financial assets | $ 1 | 570 | (234) |
Other financial assets, percentage movement from prior period | (100.00%) | ||
Other assets | $ 69 | (15) | 2 |
(Decrease)/increase in other operating liabilities: | |||
Collateral received | 8,900 | 1,324 | (317) |
Deposits and other borrowings | $ 12,908 | 8,685 | (7,572) |
Deposits and other borrowings, percentage movement from prior period | 49.00% | ||
Other financial liabilities | $ 2,627 | 454 | 1,009 |
Other financial liabilities, percentage movement from same period in prior year | 160.00% | ||
Other liabilities | $ 8 | 3 | (8) |
Other liabilities, percentage movement from prior period | 167.00% | ||
Net cash provided by/(used in) operating activities | $ 42,159 | $ 16,398 | $ (9,294) |
Net cash provided by/(used in) operating activities, percentage movement from prior period | 157.00% |
Notes to the cash flow statem_3
Notes to the cash flow statements - Non-cash financing activities and restricted cash (Details) - AUD ($) $ in Millions | 6 Months Ended | ||
Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | |
Non-cash financing activities | |||
Shares issued under the dividend reinvestment plan | $ 273 | $ 1,159 | $ 330 |
Shares issued under the dividend reinvestment plan, percentage movement from prior period | (76.00%) | ||
Shares issued under the dividend reinvestment plan, percentage movement from same period in prior year | (17.00%) | ||
Increase in lease liabilities | $ 88 | ||
Gains (losses) recognised when control of subsidiary is lost | 3 | ||
Minimum balances with central banks | $ 307 | $ 330 | 330 |
Ascalon Capital Managers (Asia) Limited and Ascalon Capital Managers Limited | |||
Non-cash financing activities | |||
Gains (losses) recognised when control of subsidiary is lost | 3 | ||
Cash consideration received (paid), net of transaction costs and cash held | $ 1 |