Shareholder information
Financial glossary
Dividends
Ex dividend date
The first day of trading when shares trade without the entitlement to the dividend. To be entitled to a dividend a shareholder must have purchased shares before the ex dividend date. Shares are quoted ex-dividend four business days before the Record date.
Record date
The date on which Westpac's register of Shareholders is closed in order to determine entitlement to a dividend.
Cash earnings ($m)
The Westpac Group uses a measure of performance referred to as “Cash Earnings”. To calculate Cash Earnings Westpac adjusts the statutory results for the items outlined below. This allows the Group to more effectively assess performance for the current period against prior periods and to compare performance across business divisions and across peer companies.
Net profit attributable to equity holders adjusted for the impact of the economic hedges related to TPS, other significant items, earnings from Treasury shares, gains/losses on ineffective hedges, the impact of unrealised New Zealand earnings hedges gains/losses, and the impact of integration costs and the amortisation of certain intangibles in relation to the merger with St.George.
Shareholder value
Earnings per ordinary share (cents)
Net profit attributable to the owners of WBC divided by the weighted average ordinary shares (statutory basis).
Weighted average ordinary shares (underlying)
Weighted average number of fully paid ordinary shares listed on the ASX for the relevant period.
Weighted average ordinary shares (statutory)
Weighted average number of fully paid ordinary shares listed on the ASX for the relevant period less Westpac shares held by the Group ('Treasury shares').
Cash earnings per ordinary share (cents)
Cash earnings divided by the weighted average ordinary shares (underlying basis).
Fully franked dividends per ordinary share (cents)
Dividend paid out of income which carry a credit for Australian company income tax paid by Westpac.
Dividend payout ratio net profit (%)
Ordinary dividend per share divided by net profit per share attributable to the owners of WBC.
Return on equity (ROE) (%)
Net profit attributable to the owners of Westpac divided by the average adjusted ordinary equity.
Cash return on equity (%)
Cash earnings divided by the average ordinary equity.
Economic profit ($m)
Cash earning less a capital charge calculated at 11% of average ordinary equity plus a value on franking credits calculated as 70% of the Group's Australia tax expense.
Average ordinary equity ($m)
Average total equity less average non-controlling interests.
Productivity and efficiency
Operating expenses ($m)
Operating expenses do not include impairment losses on loans.
Expense to income ratio (%)
Operating expenses divided by net operating income.
Total banking group expense to income ratio (%)
Total banking operating expenses divided by total banking operating revenue. Total banking business includes Westpac Retail & Business Banking, St.George Bank, Westpac Institutional Bank including Premium Business Group (excluding margin lending, Broking and PPM), Private Bank (part of BTFG), New Zealand banking operations, Pacific Bank and the Group Businesses.
Full time equivalent staff (FTE)
A calculation based on the number of hours worked by full and part time employees as part of their normal duties. For example, the full time equivalent of 1 FTE is 76 hours paid work per fortnight.
Business performance
Net interest spread (%)
The difference between the average yield on all interest bearing assets and the average rate paid on interest bearing liabilities.
Net interest margin (%)
The net interest spread plus the benefit of net non-interest bearing liabilities and equity.
Average interest earning assets ($m)
The average balance of assets held by the Group that generate interest income. Where possible, daily balances are used to calculate the average balance for the period.
Average interest bearing liabilities ($m)
The average balance of liabilities owed by the Group that incur an interest expense. Where possible, daily balances are used to calculate the average balance for the period.
Capital adequacy
Total capital ratio (%)
Total capital ratio as defined by The Australian Prudential Regulation Authority (APRA) divided by risk weighted assets (RWA).
Tier 1 capital ratio (%)
Total Tier 1 capital as defined by APRA divided by Risk Weighted Assets.
Risk Weighted Assets (RWA) ($m)
Assets (both on and off-balance sheet) of Westpac are assigned within a certain category and amounts included in these categories are multiplied by a risk weighting. The resulting weighted values are added together to arrive at total risk weighted assets.
Asset quality
Individually assessed provisions
Provisions raised for losses that have already been incurred on loans that are known to be impaired and are individually significant. The estimated losses on these impaired loans will be based on expected future cash flows discounted to their present value and as this discount unwinds, interest will be recognised in the statement of financial performance.
Collectively assessed provisions
Loans not found to be individually impaired or significant will be collectively assessed in pools of similar assets with similar risk characteristics. The size of the provision is an estimate of the losses already incurred and will be estimated on the basis of historical loss experience for assets with credit characteristics similar to those in the collective pool. The historical loss experience will be adjusted based on current observable data.
Impaired assets
Includes exposures that have deteriorated to the point where full collection of interest and principal is in doubt, based on a conservative assessment of the customer’s outlook, cashflow, and the net realisation of value of assets to which recourse is held:
- facilities 90 days or more past due, and not well secured - exposures where contractual payments are 90 or more days in arrears and the net realisable value of assets to which recourse is held may not be sufficient to allow full collection of interest and principal, including overdrafts or other revolving facilities that remain continuously outside approved limits by material amounts for 90 or more calendar days;
- non-accrual assets - exposures with individually assessed impairment provisions held against them, excluding restructured loans;
- restructured assets - exposures where the original contractual terms have been formally modified to provide for concessions of interest or principal for reasons related to the financial difficulties of the customer;
- other assets acquired through security enforcement (includes other real estate owned) - includes the value of any other assets acquired as full or partial settlement of outstanding obligations through the enforcement of security arrangements; and
- any other assets where the full collection of interest and principal is in doubt.
90 days past due - well secured
Includes facilities where:
- contractual payments of interest and/or principal are 90 or more calendar days overdue, including overdrafts or other revolving facilities that remain continuously outside approved limits by material amounts for 90 or more calendar days; or
- an order has been sought for the customer’s bankruptcy or similar legal action has been instituted which may avoid or delay repayment of its credit obligations; and
- the estimated net realisable value of assets/security to which Westpac has recourse is sufficient to cover repayment of all principal and interest, and interest is being taken to profit on an accrual basis.
These facilities, while in default, are not treated as impaired for accounting purposes.
Other
Accounting reclassifications
Adjustments made for accounting treatments that have the effect of grossing up the income statement (primarily between income and tax expense/profits attributable to non-controlling interests). Key reclassifications include gross ups for policyholder tax recoveries and the impact of Treasury shares. These adjustments have no impact on Cash Earnings.
Net Promoter Score (NPS)
Refers to an external measure of customer advocacy which looks at how willing our customers are to recommend Westpac to their family and friends.
(Net Promoter Scoresm and NPSsm is a service mark of Bain and Company Inc, Satmetrix Systems Inc. and Mr Frederick Reichheld.)
