CSFB ConferenceCSFB Conference

David WillisGroup Executive

6 October 2000

2

AgendaAgenda

• Business Snapshot

• Strategic Fit

• Future Growth

3

assisting and advising on the management

of cash, funding, capital and market risk

for companies and institutions operating

or investing in Australia and New Zealand.

We describe our business as ...We describe our business as ...

4

StructuralView

Asi

an B

usin

ess

Con

sum

er

Ene

rgy

& U

tiliti

es

Gov

ernm

ent

Hea

lth

Indu

stria

ls

New

Eco

nom

y

Pro

pert

y

Res

ourc

es

Ban

ks

Med

ia

NB

FIs

We view our customers strategically &We view our customers strategically &structurally (2800 customers)structurally (2800 customers)

StrategicView Globals Regionals SMEs

5

We meet our customers’ financial needsWe meet our customers’ financial needs

Advice Corporate, Resource, Property andRisk Advice

Loans, Bonds, Securitisation,Structured and Project Debt, Leasing,Loan Syndication, Equity

TransactionServices

(Payments & Cash)

FinancialMarkets

Foreign Exchange (Options andDerivatives), Interest Rate DerivativeFixed Interest / Debt Securities,Commodities, Structured Hedging

Domestic and International ClearingInternational Payment & Trade Services

Customer View Product View

Funding(Debt and Equity)

6

We have global reach with centralisedWe have global reach with centralisedoperations (1,200 staff)operations (1,200 staff)

New York31 Staff

London70 Staff

Asia80 Staff

Australia776 Staff

NewZealand246 Staff

7

We have a well diversified andWe have a well diversified andquality risk profilequality risk profile

40

14

36

14

0

10

20

30

40

50

Australia NorthAmerica

Greater Asia NewZealand

Europe

Country of Ultimate Risk(Committed exposure - March 2000)

$b

0%

20%

40%

60%

80%

100%

AAA, AA A BBB BB & Below

(March 2000)Total Committed Exposure

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With declining impaired assetsWith declining impaired assets

402

314268

0

100

200

300

400

Total Westpac Institutional Bank

31 Mar 99 30 Sept 99 31 Mar 00

$M

9

269

374 395

0

100

200

300

400

500

FY 97 FY 98 FY 99

15%

11%

20%

0%

5%

10%

15%

20%

25%

FY 97 FY 98 FY 99

Core Earnings ROE

The business is providing quality,The business is providing quality,growing returnsgrowing returns

$M

10

Fit within the Westpac GroupFit within the Westpac Group

• Strategic fit

• Structural fit

• Group contribution

• Leverage across the Group

11

We are supporting the Group’s strategicWe are supporting the Group’s strategicimperativesimperatives

• Understanding our strengths

• Being more efficient

• Finding new opportunities

• Getting closer to customers

• Backing our people

12

We are aligned to the Group structureWe are aligned to the Group structure

Processing and Technology

Pro

du

ct

Other Bank Product

InstitutionalCustomersC

ust

om

er

BusinessCustomers

ConsumerCustomers

InstitutionalBank

Product

Mike Hawker

David Clarke

David Willis

Jerry Gross

Dav

id M

org

an, C

EO

13

87%

13%

75%

25%

Operating Income Economic Profit

We are making a valuable contributionWe are making a valuable contributionto Group earnings to Group earnings ( Year to 30 September 1999)( Year to 30 September 1999)

Institutional Bank Rest of Group

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We are leveraging product expertise &We are leveraging product expertise &distribution across the Groupdistribution across the Group

Consumer &Business

Corporate &InstitutionalCustomers

Products FinancialMarkets

CorporateFinance

TransactionServices

Funds Mgt/Insurance

$82 M $10 M $73 M $250 M

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Positioned for growthPositioned for growth

• Increase share of wallet

• Driving efficiency

• Providing eBusiness platform

• Other growth opportunities

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Our customer franchise providesOur customer franchise providescompetitive advantagecompetitive advantage

Source: East and Partners Corporate BankingReport, April 2000

23.1

13.7

10.1 9.8 9.8

4.6 4.2 4.2 4.4

0

5

10

15

20

25

Wes

tpac

NA

B

CB

A

AN

Z

Deu

tsch

e

Cit

iban

k

Mac

qu

arie

CS

FB

Mer

rill

Lyn

ch

% R

espo

nden

ts

Principal Banker

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Source: East and Partners CorporateBanking Report,April 2000, Top 500

Our product franchise is also anOur product franchise is also anadvantageadvantage

NAB20.7%Deutsche

10.5%

Others29.5%

ANZ16.6%

Westpac22.6%

On Balance Sheet

Transaction Services

CBA13.5%

NAB18.1%

Others25.4%

Westpac19.1%

DMG7.3%

ANZ16.6%

Financial Markets

CBA13.1%

ANZ11.6%

NAB14.1%

Others23.6%

DMG10.4%

Westpac27.2%

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We are leveraging this position toWe are leveraging this position toincrease our share of walletincrease our share of wallet

Each 0.5 products per customer = approx $300 M revenues

Products Per Customer

1.92.0

2.2

1.0

2.0

3.0

Dec-99 Mar-00 Current

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We are driving efficiency in the scaleWe are driving efficiency in the scaleparts of the businessparts of the business

200

300

400

500

600

700

800

96/97 97/98 98/99

Revenue Expenses

$M

20

IT E

nab

led

Tra

nsf

orm

atio

n

• e-enable core systems & processes• web site & Intranet.• Supply chain

• Increase business scope• Reconfigure business networks

§ New value networks§ New value propositions§ New business models

Low

High

Potential for new customersand Likelihood of alliances

Create a NewBusiness

Extend theEnterprise

EnhanceBusinessExecution

Low High

We are developing an e-BusinessWe are developing an e-Businessplatform in 3 areasplatform in 3 areas

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u StateStreetu yieldbroker.comu FXallu e-Bondsu On-line FXu On-line Researchu Nostro/AUD on-lineu ImpEx - trade finance on-lineu Internet site redevelopment

Globalportal

Regionalportal

Proprietaryapplication

üüü ü ü ü ü ü ü

Examples of this e-Platform includeExamples of this e-Platform include

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Beyond this we will pursue otherBeyond this we will pursue otheropportunities for growthopportunities for growth

DomesticConsolidation

DomesticConvergence

RegionalConsolidation

• In-marketacquisitions Ø customers Ø distribution Ø in-market synergies Ø scale

• Bancassurance

- Acquisitions/ Alliances Ø products Ø size

• Media/Telco/Technology

- Alliances Ø customers Ø distribution

• Joint Venture/Alliance/Merger

Ø high growth GDP Ø attractive customer segments Ø large population Ø lower competitive intensity Ø stable environment

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• Strategic fit

• Enhance shareholder value

• Not be unduly distracting

These opportunities will be subject toThese opportunities will be subject tostrict criteriastrict criteria

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• The strength of our franchise

• The quality of our book

• Our distribution capability

• Our e-Business platform

• Our share of wallet potential

In summary we are differentiated byIn summary we are differentiated by

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