Investor Discussion Pack

Investor Discussion Pack David Morgan, Chief Executive Officer May 2002

Disclaimer The material contained in the following presentation is intended to be general background information on Westpac Banking Corporation and its activities as at 13 May 2002. The information is supplied in summary form and is therefore not necessarily complete. Also, it is not intended that it be relied upon as advice to investors or potential investors, who should consider seeking independent professional advice depending upon their specific investment objectives, financial situation or particular needs.

Another record result $m 1,100 900 700 500 701 Net Profit After Tax & EPS CAGR 755 1H99 1H02 EPS 14% NPAT 13% 818 897 924 979 1,018 1H99 2H99 1H00 2H00 1H01 2H01 1H02 cents 60 55 50 45 40 35 30 NPAT (LHS) EPS (RHS) 2

Strong and balanced Double digit growth in key earnings measures Core earnings +14% Net profit +10% Economic profit +12% EPS +10% Dividends +13% Expense to income down from 52% to 49% Return on equity steady at 21% Credit quality sound, provisioning strengthened 3

And meeting performance targets Measure EPS Growth ROE Cost growth TSR (rolling 3yr) Capital Risk profile Target Greater than or equal to 10% 18-22% Less than or equal to 2% Top quartile Tier 1, 6.0 6.5 AA- rating Result 10% 21% 1% 77 th percentile 6.8% # Maintained # Approximately 6.5% post Rothschild 4

Points of differentiation May 2002 5

Points of differentiation Clear focus on core markets Market share stable/growing across products Superior cost momentum Highest quality loan book and strongest provisioning Strategic flexibility Leader in balancing all stakeholder needs 6

Clear focus on core markets Australia, New Zealand and near Pacific Broad 7 million customer base with significant untapped potential Comprehensive product set across Institutional Business Consumer 7

Market share stable/growing across products $m 110000 108000 106000 104000 102000 100000 98000 96000 94000 92000 Total Lending Market Share * 17.0% 16.5% 16.0% 15.5% 15.0% Mar-01 Apr-01 May- 01 Jun-01 Jul-01 Aug-01Sep-01Oct-01 Nov-01Dec-01Jan-02 Feb-02 Total loans & acceptances Market share * Source: APRA 8

Market share stable/growing across products % growth 20 15 10 5 0 Mortgages Outstandings 1 12% 2 15% Credit cards (Bank issued) 4% Business lending 7% Deposits (excluding CDs) Housing - owner occupied Credit card outstandings Business lending Deposits (excluding CDs) Market share 1 % 15.6 18.6 18.3 20.3 0 5 10 15 20 25 2 1 Australia 2 Adjusted for securitisation 9

Superior cost momentum % 60 55 50 45 Expense to Income * 49.4% 1H99 2H99 1H00 2H00 1H01 2H01 1H02 * Excludes goodwill 10

Superior cost momentum Initiative $m Outsourcing Organisational simplification Other programs Completed initiatives give us a pipeline of future expense saves Progressive cost savings 2002 58 nom 5 63 2003 75 65 59 199 2004 82 65 100 247 2005 103 65 110 278 11

Highest quality loan book % Impaired assets to loans & acceptances 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Sep-95 Sep-96 Sep-97 Sep-98 Sep-99 Sep-00 Sep-01 WBC ANZ CBA NAB 12

Strongest provisioning % 60 55 50 45 40 35 30 25 20 Specific provisions to impaired assets Sep-95 Sep-96 Sep-97 Sep-98 Sep-99 Sep-00 Sep-01 % 2.6 2.4 2.2 2.0 1.8 1.6 1.4 1.2 1.0 General provisions to nonhousing performing loans Sep-95 Sep-96 Sep-97 Sep-98 Sep-99 Sep-00 Sep-01 WBC ANZ CBA NAB WBC ANZ CBA NAB 13

Strategic flexibility Robust capital position 6.75% Tier 1 Disciplined and patient in acquisitions Positioned as a strong buyer in a buyers market Balance between growth and return ROE 21% Net Profit growth 10% 14

Leader in balancing all stakeholder needs Community/Environment Best listed company in SMH/Age Good Reputation Index Staff Strong employee commitment Shareholders Customers Improved customer service & satisfaction +20% Return on Equity +10% EPS Growth 15

Leader in balancing all stakeholder needs Top 3 bank worldwide on social and environmental performance (Dow Jones Sustainability Index) Only major Australian company with 5 star social and environmental rating (Corporate Monitor Sustainability Rating-Ethical Investor April 2002) No. 1 listed company on good reputation (SMH/AGE Good Reputation Index 2001) Best corporate governance disclosure (Annual Report Awards 2001) 16

Market feedback May 2002 17

Market feedback Where is the future growth to come from? Can you sustain 5 7% revenue growth? Non-interest income growth? What is happening to margins? What is Westpac s wealth management strategy and how does Rothschild fit? How does the AGC sale deliver increased value? How will excess capital be managed? 18

Future growth $m 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 Revenue growth the key driver 1H99 2H99 1H00 2H00 1H01 2H01 1H02 CAGR Revenue 7% Expenses 1% (excl. goodwill) Core earnings 14% 19

Percent in Segment Future growth Built on deeper customer relationships 1 Value Shift % -ve Economic Profit +ve 25 20 15 10 5 0 Low Customer Value Segments Mar-99 Mar-02 1 Australian personal and business customers Australia High 20

Future growth Operating Income $m 1H01 1H02 % Change Operating income as reported 3,281 3,522 7 One off and non-cash items Embedded value uplift (36) (60) Policy holder tax recoveries 16 (14) Property management rights (28) Sale of 60 Martin Place (26) Net other (9) Normalised operating income 3,233 3,413 6 21

Future growth Strong wealth management business $m 1H01 1H02 % Change Reported after tax profit 109 124 14 Embedded value uplift (post tax) (28) (46) Total 81 78 Property mgt rights to property trust (28) - Core after tax performance 53 78 47 Operating profit after tax by line of % 1H01 1H02 business Change Funds management 41 53 29 Life insurance & risk 17 23 35 Other 51 48 (6) 22

Margins $bn 2.2 2.0 1.8 1.6 1.4 1.2 Net interest income & margin trends Margin (%) 3.5 3.0 2.5 2.0 1.5 1H98 2H98 1H99 2H99 1H00 2H00 1H01 2H01 1H02 4.0 Net interest income Interest margin 23

Margins 150 145 140 135 130 Interest Bearing Assets (Average - $bn) 140.0 125 1H01 Impact of acceptances 7.5 142.0 2H01 Reported interest bearing assets (excluding acceptances impact) Bill acceptances impact 3.25 3.00 2.75 3.14 Margin (%) 3.10 1H01 2H01 1H02 Reported margin 3.05 2.90 Adjusted margin 15 basis points 24

Wealth management strategy Customers Increase customer share of wallet Access customers outside Westpac Distribution Aggressively grow planner numbers Access independent planner force Enhance sales & service platform Bundling Platform Master trust Enhance bundling/ wrap capability Manufacture Development & execution excellence Enhance product range Structured investments Investment Mgt Scale Solid performance International alliances Fund ratings = Rothschild value added 25

Wealth management strategy Number of advisers/planners 1,200 1,000 800 600 400 200 0 Advisor/planner numbers up 22% March 2001 to March 2002 1 Sep-95 Sep-96 Sep-97 Sep-98 Sep-99 Sep-00 Sep-01 Mar-02 Sep-02 Sep-03 Business & regional advisors Priority advisors & financial planners Consumer advisors Direct business advisors Womens advisory Westpac targets 1. Excludes impact of Rothschild acquisition 26

Rothschild - a springboard for growth Builds on successful organic growth Expands distribution size and capability Strengthens the product platform, while accessing and integrating best of breed products Achieves a balance between growth and profitable returns 27

AGC sale delivering value Tighter focus on core businesses Consistent with customer centric strategy Stacks up against strict valuation criteria Provides additional strategic flexibility Re-balance portfolio into higher growth businesses 28

Key elements of AGC sale Sale of shares in AGC Australia Sale of New Zealand receivables book NZ$837 Re-acquisition of business portfolio through exercise of marketing rights Profit on sale a minimum of $750 million Implied multiples: Price/earnings 14-15 times Price to book 2.4 times 29

AGC sale delivering value Pro-forma EPS impact of recent transactions $m Consensus earnings 1 TOPrS distribution Net AGC earnings change 2 Incremental Rothschild earnings Earnings on surplus capital Share buy-back impact on capital Adjusted market estimates Average shares on issue Adjusted market forecast EPS EPS growth 2001 1,858 3 102.8 2002* 2,115 (45) (53) 6 22 (10) 2,035 1,808 112.6 10% 2003 2,372 (45) (157) 20 38 (3) 2,225 1,790 124.3 10% 2004 # 2,644 (45) (145) 23 20 2,497 1,802 138.5 11% Consensus from nine Australian bank analysts AGC earnings forgone less earnings on the run-up of business finance portfolio from the exercise of marketing rights Actual * Excludes contribution from gain on sale of AGC. # Excludes impact of any capital management initiatives. 30

AGC sale delivering value - using the proceeds Invest in organic growth Strategic acquisitions Other capital management initiatives We will pursue the option(s) delivering the greatest long run shareholder value. 31

Actively managing capital Target ranges re-affirmed 50 million share buy-back representing 2.7% of issued capital Intention to access additional hybrid capital in time Increased dividend payout ratio Intend to hold capital at upper levels of target ranges at this point in cycle 32

Actively managing capital Capital impact of recent transactions 7.5 7.0 6.5 6.0 5.5 5.0 7.5 7.0 6.5 6.0 5.5 5.0 Tier 1 6.8 (0.25) 0.90 (0.70) 6.75 Rothschild AGC Buy-back Tangible Ordinary Equity 6.67 (0.25) 0.89 (0.70) 6.61 Rothschild AGC Buy-back Mar 02 Pro-forma Mar 02 6.5% 6.0% 5.8% 5.6% Target range Target range 33

Conclusion May 2002 34

Strategy is delivering Disciplined and consistent execution Customer centric strategy deepening relationships Benefits of efficiency programs continuing to flow Balancing all stakeholder needs is enhancing sustainability of returns 35

Strengthened the management team David Clarke Group Executive Business & Consumer Banking Michael Coomer Group Executive eit & Operations Mike Pratt Group Executive WestpacTrust & Pacific Bank David Morgan Chief Executive Officer Philip Chronican Chief Financial Officer Phil Coffey Group Executive Institutional Bank Ann Sherry Group Executive People & Performance 36

Outlook Australian economy remains robust GDP growth to June 2003 ~4% Housing to slow; business investment & exports up Unemployment down from 7% peak, to 6% in 2002 Credit growth slowing to 6% - 8% range Inflation back in 2% - 3% range Further rises in official rates expected No signs of portfolio stress across segments or industries Scenario consistent with maintaining earnings momentum, a high ROE and double-digit EPS growth 37

Supplementary Information 2 May 2002

Economic profit & return on ordinary equity $m 700 500 300 100 397 # 272 # 493 565 584 614 652 % 22 20 18 16 14 1H99 2H99 1H00 2H00 1H01 2H01 1H02 Economic Profit (LHS) ROOE (RHS) # Would have been $451m if dividend had been fully franked. 39

Core earnings up 14% $m 1H01 1H02 % Change Net interest income 2,032 2,160 6 Non-interest income 1,249 1,362 9 Operating income 3,281 3,522 7 Expenses (1,714) (1,739) 1 Core earnings 1,567 1,783 14 Bad debts (176) (271) 54 Goodwill (49) (49) - NPBT 1,342 1,463 9 Tax and OEI (418) (445) 6 NPAT 924 1,018 10 40

Margin impact of bill acceptances In the latest results (1H02), reported margins were impacted by a substantial movement in Bill Acceptances (short-term marketable money market lending instruments) into interest earning assets in lieu of Acceptances of Customers. This was the result of the bank funding the transactions on balance sheet, rather than on-selling the bills into the market. There was no change in the accounting treatment of income derived from Acceptances that is, the customer margin is almost entirely reflected in non-interest income and there was no impact on reported operating revenue or net profit. However, the movement in the assets resulted in the dilution of margins by approximately 15 basis points. The table below provides background on this estimate. Assumptions ($m) Interest earning assets Interest bearing liabilities Earning rate Paying (deposit) rate Interest spread Interest margin Reported 149,489 137,267 6.26% 3.66% 2.60% 2.90% Adjusted 142,038 129,816 6.35% 3.62% 2.73% 3.05% Adjustment/ Impact 7,451 7,451 14 bp 15 bp 41

Business unit contributions $m 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0-200 1,567 1H01 Core earnings 1,783 1H02 11% 12% 13% 10% 35% 2% 2% Large Wealth management Aust. Business Products Aust. Consumer Products Aust. Business & Regional Banking Distribution Aust. Consumer Distribution New Zealand Retail Institutional Bank Other 42

Expense growth in target range $m 1H01 1H02 % Change Salaries & other staff expenses 888 823 (7) Equipment & occupancy 315 291 (8) Other expenses 511 625 22 Operating expenses (excl goodwill) 1,714 1,739 1 FTE 29,241 26,704 (9) Productivity ratio 1 3.87 4.49 16 1. Net operating income/salaries and other staff expenses less restructuring expenses. 43

Tax breakdown $m 1H01 1H02 % Change Tax expense as reported 416 443 6 Tax expense as a % NPBT 31.0% 30.3% One off adjustments Policy holder tax recoveries 16 (14) Offshore provision not tax effected (20) Normalised Tax expense 432 409 (5) Normalised tax expense as a 31.8% 28.2% % of reported NPBT 1 1. Adjusted for policy holder tax recoveries 44

Credit environment Signs that the corporate downgrades and defaults are easing Business Banking credit remains sound Future bad debt expense linked to consumer debt and interest rates Westpac maintains leading coverage ratios and asset quality AGC sale further improves the quality of the book 45

Breakdown of portfolio by customer segment* 100% 80% 60% 40% 20% 0% 4% 5% 5% 30% 32% 34% 66% 63% 61% 1H 01 FY 01 1H 02 Refer to next slide for further detail. Business / Institutional Consumer Mortgages Other Consumer * % of Total Exposure - 31 March 2002 46

Business / corporate risk grade profile * 80% 60% 40% 20% 0% 66% 63% 61% 1.2% 1.5% 1.3% 17% 18% 19% 14% 13% 13% 14% 12% 9% 19% 18% 19% 1H 01 FY 01 1H 02 AAA to AA- A+ to A- BBB+ to BBB- BB+ to B+ <B+ * % of Total Exposure - 31 March 2002 47

Controlled single name exposure concentrations Credit exposures* to Top 10 corporations and NBFIs S&P Rating or Equivalent AAA A+ BBB+ A A- A A+ A+ AA- BBB- Corporates & NBFIs 1 2 3 4 5 6 7 8 9 10 0.0 0.1 0.2 0.3 0.4 0.5 0.6 * Customer exposure as a percentage of Total Committed Exposure - March 2002. 48

Diversified industry exposure Credit exposure to governments, corporations and businesses as a percent of total committed exposure* Substantial non-bank financiers Property Government Durable products manufacture Other agriculture & services Business technical services Retailing Electricity, gas & water Grain, sheep & poultry Petroleum refining & chemicals Hotels & restaurants Non-residential construction Transport & storage Metal mining & services Transport & equipment services Hospitals & health services Insurance Motor vehicle trade Recreation services Wholesaling Forestry, printing & paper products Food manufacture Telecommunications Residential construction Other manufacturing 0 1 2 3 4 5 6 7 * 31 March 2002, excluding banks. 49

High quality loan book % 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Stressed loans by category % of total commitments 1996 1997 1998 1999 2000 2001 1H 02 Watchlist & substandard Impaired 90 days past due well secured 50

Business banking portfolio * Impaired assets ratio at historical low Delinquencies relatively stable No signs of any systemic credit problems % 2.5 2.0 1.5 1.0 0.5 0.0 % 2.5 2.0 1.5 1.0 Impaired assets to total committed exposure 1.91 2.07 1.80 1.53 1.01 0.71 1.47 0.51 1.28 0.37 0.32 1996 1997 1998 1999 2000 2001 1H 02 90 day delinquencies 0.97 0.5 0.0 1998 1999 2000 2001 1H 02 * Australian business banking portfolio. 51

Mortgage and other consumer loan portfolios * Mortgages of represent more than 51% of total loans & acceptances Other consumer loans represent less than 8% of total loans & acceptances % % 1.5 1.0 0.5 0.0 2.5 2.0 1.5 1.0 0.5 1.04 Other Consumer Loans - 90 day delinquencies 1.68 Mortgage Loans - 90 day delinquencies 0.77 0.64 0.92 0.38 0.81 0.26 0.25 0.79 0.23 1.23 0.21 1996 1997 1998 1999 2000 2001 1H 02 1.48 0.0 1996 1997 1998 1999 2000 2001 1H 02 * Australia 52

Provisioning coverage $m % 1800 1600 1400 1200 1000 800 600 400 200 0 FY98 FY99 Fy00 1H01 Fy01 1H02 Specific provision (LHS) General provision (LHS) GP/Non housing performing loans (RHS) 2.4 2.2 2 1.8 1.6 1.4 1.2 1 53

Growth in priority customers Number of Customers 1400 1100 000 s 800 500 Priority Customers * 17% growth between March 2001 March 2002 1H98 2H98 1H99 2H99 1H00 2H00 1H01 2H01 1H02 * Priority customers are those with whom we have significant, typically multi-product, relationships. 54

Online growth 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 Mar-00 On-line Banking 1,400,000* 110,000 105,000* Mar-02 Dec-01 Sep-01 Jun-01 Mar-01 Dec-00 Sep-00 Jun-00 On-line Broking - Australia 90,000 70,000 50,000 30,000 10,000-10,000 Mar-02 Dec-01 Sep-01 Jun-01 Mar-01 Dec-00 Sep-00 Jun-00 Mar-00 Australia New Zealand * 31 March 2002 55

Financial impact AGC Statement of financial performance normalised 1 Statement of financial position 6 months to 31 Mar 02 At at Mar 31 Mar 02 Net interest income 269 Loans and advances 10,201 Non-interest income 29 Specific provisions -27 Net operating income 298 General provision -157 Operating expenses -84 Loans & advances net of provisions 10,017 Underlying performance 214 Total assets 10,164 Bad and doubtful debts -68 Tax -45 Total liabilities 9,191 Net profit after tax 101 Net assets 973 Business finance receivables 4,522 Risk weighted assets (RWA) 10,205 Estimated net RWA released 4,749 1. Normalised for sale of assets/leased assets not involved in sale to GE. 56

% 7.5 6.5 5.5 4.5 3.5 Capital ratios 5.7 6.1 TOE / RAA 6.7 5.8% - 5.6% 1 5.6 1H01 2H01 1H02 6.3 Tier 1 ratio 6.8 6.5% - 6.0% 1 1. Target range 57

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