Investor Presentaiton

Internationally comparable capital ratio reconciliation. Capital, funding and liquidity APRA's Basel III capital requirements are more conservative than those of the Basel Committee on Banking Supervision (BCBS), leading to lower reported capital ratios by Australian banks. In July 2015, APRA published a study that compared the major banks' capital ratios against a set of international peers¹. The following details the adjustments from this study and how Westpac's APRA Basel III CET1 capital ratio aligns to an internationally comparable ratio. Westpac's CET1 capital ratio (APRA basis) Equity investments 11.3 Balances below prescribed threshold are risk weighted, compared to a 100% CET1 deduction under APRA's requirements Balances below prescribed threshold are risk weighted, compared to a 100% CET1 deduction under APRA's requirements 0.1 0.4 Interest rate risk in the banking book (IRRBB) APRA requires capital to be held for IRRBB. The BCBS does not have a Pillar 1 capital requirement for IRRBB 1.4 Deferred tax assets Residential mortgages Unsecured non-retail exposures Non-retail undrawn commitments Specialised lending Currency conversion threshold Capitalised expenses Loss given default (LGD) of 15%, compared to the 20% LGD floor under APRA's requirements. APRA also applies a correlation factor for mortgages higher than the 15% factor prescribed in the Basel rules LGD of 45%, compared to the 60% or higher LGD under APRA's requirements Credit conversion factor of 75%, compared to 100% under APRA's requirements Use of internal-ratings based (IRB) probabilities of default (PD) and LGDs for income producing real estate and project finance exposures, reduced by application of a scaling factor of 1.06. APRA applies higher risk weights under a supervisory slotting approach, but does not require the application of the scaling factors 2.0 0.7 0.5 0.6 Increase in the A$ equivalent concessional threshold level for small business retail and small to medium enterprise corporate exposures 0.2 APRA requires these items to be deducted from CET1. The BCBS only requires exposures classified as intangible assets under relevant accounting standards to be deducted from CET1 Internationally comparable CET1 capital ratio Internationally comparable Tier 1 capital ratio Internationally comparable total regulatory capital ratio 1 Methodology aligns with the APRA study titled "International capital comparison study", dated 13 July 2015. 0.4 17.6 20.6 27.8 91 Westpac Group 2022 Full Year Results Presentation & Investor Discussion Pack Westpac GROUP

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