Frequently asked questions
Where does Westpac issue debt securities and what type of securities do you issue?
Westpac has a diversified funding base. We issue into the Australian and New Zealand domestic capital markets as well as the United States, Europe and Asia. Westpac funds using a variety of instruments with both short and long term maturities. Instruments include:
- Medium Term Notes
- Commercial Paper
- Certificates of Deposit
- Structured Notes
How does securitisation fit into the funding strategy?
Securitisation forms only a small part of Westpac's wholesale funding base, however it is an important component of our global funding programme that enables the Bank to target different markets and investor portfolios, in addition to increasing Westpac's funding capacity. Westpac is a benchmark quality issuer into the Global Markets (funding and securitisation) and the Bank's most recent transaction was the A$7billion Series 2007-1G WST Trust issued on 31 May 2007.
Where can I get an overview of Westpac?
A quick overview of Westpac is provided on our Fact Sheet.
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Does Westpac have any exposures to the US sub-prime market?
Westpac has no direct exposure to the US sub-prime mortgage market.
Westpac released 
an investor update (PDF 219kb) on 5 February 2008 on the impact of current market conditions on its business. The update reaffirmed that Westpac has no direct exposure to the US sub-prime mortgage market and given the Bank's conservative balance sheet and liquidity profile, it remains well positioned.
Investors should also refer to Westpac's market presentations for regular updates.
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How does Westpac manage liquidity?
Westpac manages liquidity within a Board approved framework and the requirements of the prudential regulator, APRA. This liquidity management framework is designed to ensure Westpac's funding position is sufficiently flexible to ensure liquidity under both normal market conditions and during a crisis situation. It is reviewed annually to ensure it is appropriate for our current and planned activities.
Key to this framework is a well diversified wholesale funding base, the maintenance of a portfolio of liquid assets and a crisis management action plan.
Diverse funding sources
Westpac's customer deposits provide the majority of our funding and represent a well-diversified and stable source of funds. Our wholesale funding base is well diversified across maturity, investor base, currency, geography and instrument. Having a diversified funding base reduces Westpac's reliance on any one funding source and ensures that, should a market become unavailable or market pricing increases, we are able to replace liquidity from a range of other sources or markets.
Portfolio of liquid assets
We hold a portfolio of liquid assets that could be sold during a crisis to meet funding requirements. These assets are held either in government or semi-government securities or investment grade paper, and the large majority are held domestically in Australia and New Zealand.
Westpac is also a participant in an Interbank Deposit Agreement with three other Australian banks. This agreement allows a bank experiencing liquidity problems to serve notice on the other participants. The other depositors are obligated to deposit an equal amount of up to $2billion each for a period of 30 days. At the conclusion of the 30 days the deposit holder can repay the deposit in cash or by assigning certain home mortgages to the value of the deposit. This agreement is intended to provide increased certainty of access to wholesale markets in times of crisis.
Crisis management action plan
We maintain a crisis management action plan that details the broad actions to be taken in the event of a funding crisis.
Liquidity management is the responsibility of Group Treasury.
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Where can I get information on the Australian economy?
Regular updates on the Australian economy are prepared by Westpac Economics.
Where can I get information on the Australian housing market?
Regular updates on the Australian housing market are prepared by Westpac Economics.
Is the Australian mortgage market similar to the US mortgage market?
The Australian mortgage market is very different to the US mortgage market. The key characteristics of the Australian mortgage market are:
- The majority of housing loans are variable rate loans
- Loan-to-value ratios are low
- For mortgage-insured loans, mortgage insurance covers the entire loan
- Interest payments on primary residences are not tax deductible, which generally leads to housing loans being paid off quickly
- Banks in Australia have recourse to the borrower's mortgage property
More information
More information, including annual reports and the latest market presentations, is available via our Analyst Centre or contact a member of our Global Funding team.
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