Bond WestPac Bank 2.894% ( US961214EM13 ) in USD

WestPac Bank

100 % ▲

Australia

US961214EM13 ( in USD )

2.894% per year ( payment 2 times a year)

03/02/2030

Prospectus brochure of the bond Westpac Banking US961214EM13 en USD 2.894%, maturity 03/02/2030

2 000 USD

1 500 000 000 USD

961214EM1

BBB+ ( Lower medium grade - Investment-grade )

Baa1 ( Lower medium grade - Investment-grade )

04/02/2026 ( In 91 days )

Westpac Banking Corporation is Australia's second-largest bank by assets, offering a diverse range of financial services including personal and business banking, wealth management, and institutional banking across Australia, New Zealand, and the Pacific Islands.

The Bond issued by WestPac Bank ( Australia ) , in USD, with the ISIN code US961214EM13, pays a coupon of 2.894% per year.
The coupons are paid 2 times per year and the Bond maturity is 03/02/2030

The Bond issued by WestPac Bank ( Australia ) , in USD, with the ISIN code US961214EM13, was rated Baa1 ( Lower medium grade - Investment-grade ) by Moody's credit rating agency.

The Bond issued by WestPac Bank ( Australia ) , in USD, with the ISIN code US961214EM13, was rated BBB+ ( Lower medium grade - Investment-grade ) by Standard & Poor's ( S&P ) credit rating agency.

424B5 1 a2240587z424b5.htm 424B5
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TABLE OF CONTENTS
TABLE OF CONTENTS
Table of Contents
CALCULATION OF REGISTRATION FEE

Maximum
Title of each class of securities
aggregate offering
Amount of
to be registered

price

registration fee(1)

Subordinated Debt Securities

US$1,500,000,000

US$194,700

Ordinary Shares

(2)

(3)

(1)
The registration fee of US$194,700 is calculated in accordance with Rule 457(r) of the US Securities Act of 1933, as amended.
(2)
Represents an indeterminate number of fully paid ordinary shares in the capital of the registrant, which we refer to as the Ordinary Shares, that
may be issued from time to time upon conversion of the 2.894% Subordinated Notes due 2030, which we refer to as the notes.
(3)
Pursuant to Rule 457(i) under the Securities Act, no separate registration fee is required for the Ordinary Shares underlying the notes because no
additional consideration is to be received in connection with the exercise of the conversion privilege.
Table of Contents
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-228294
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED NOVEMBER 9, 2018)
US$1,500,000,000
Westpac Banking Corporation
(ABN 33 007 457 141)
2.894% Subordinated Notes due 2030
Subject, upon the occurrence of a Non-Viability Trigger Event, to Conversion or possible
Write-off, as more fully described in the accompanying prospectus
We are offering US$1,500,000,000 aggregate principal amount of our 2.894% subordinated notes due February 4, 2030, which we refer to as the notes. From and including January 31,
2020, which we refer to as the Issue Date, to but excluding the interest payment date on February 4, 2025, which we refer to as the Reset Date, the notes will bear interest at a rate of 2.894%
per year, and on and after the Reset Date to but excluding February 4, 2030, which we refer to as the Maturity Date, the notes will bear interest at a fixed rate per year equal to the 5-Year
U.S. Treasury Rate plus the Spread (rounded to three decimal places with 0.0005 rounded upwards) (each as defined herein). Interest will be payable semi-annually in arrears on February 4 and
August 4 of each year, subject in each case to the applicable business day convention set forth in this prospectus supplement, and certain solvency conditions described herein, beginning on
August 4, 2020. Interest will accrue on the notes from and including the Issue Date. We may redeem all, but not less than all, of the notes at our option on the Reset Date as described herein
and under "Description of the Subordinated Debt Securities--Redemption of Subordinated Debt Securities--General" in the accompanying prospectus. We may also redeem all, but not less
than all, of the notes if specified events occur involving Australian taxation or regulation as described herein and under "Description of the Subordinated Debt Securities--Redemption of
Subordinated Debt Securities--Redemption for Taxation Reasons" and "Description of the Subordinated Debt Securities--Redemption of Subordinated Debt Securities--Redemption for
Regulatory Reasons" in the accompanying prospectus. Redemption is subject to the prior written approval of the Australian Prudential Regulation Authority, which we refer to as APRA (which
may or may not be given).
The notes will be our direct, unsecured and subordinated obligations as described under "Description of the Subordinated Debt Securities--Ranking", "Description of the Subordinated
Debt Securities--Additional Provisions--Status and Subordination" and "Description of the Subordinated Debt Securities--Additional Provisions--Winding-Up" in the accompanying
prospectus. The notes will constitute a separate series of Subordinated Debt Securities as described in the accompanying prospectus.
The notes are complex financial instruments and are not a suitable or appropriate investment for all investors. In some jurisdictions, regulatory authorities have adopted or published
laws, regulations or guidance that limit or prohibit the offer or sale of securities such as these securities to certain types of investors. By purchasing, or making or accepting an offer to
purchase, these notes from us and/or the underwriters in the United States, each prospective investor represents, warrants, agrees with and undertakes to us and to each underwriter that it
qualifies as a "qualified institutional buyer" as defined in Rule 144A of the Securities Act. See "Plan of Distribution" in the accompanying prospectus.
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The notes are subject, upon the occurrence of a Non-Viability Trigger Event, to Conversion or possible Write-off (each as defined in Section 4 under "Description of the Subordinated
Debt Securities--Additional Provisions" in the accompanying prospectus), as more fully described in the accompanying prospectus. If any notes are Converted following a Non-Viability
Trigger Event, it is likely that the Maximum Conversion Number (as defined herein) will apply and limit the number of Ordinary Shares to be issued. In this case, the value of the Ordinary
Shares received is likely to be significantly less than the Outstanding Principal Amount (as defined in Section 4 under "Description of the Subordinated Debt Securities--Additional Provisions"
in the accompanying prospectus) of those notes. The Australian dollar may depreciate in value against the U.S. dollar by the time of Conversion. In that case, the Maximum Conversion
Number is more likely to apply.
If Conversion of the notes (or a percentage of the Outstanding Principal Amount of the notes) does not occur for any reason within five ASX Business Days after the Non-Viability
Trigger Event Date (each as defined in Section 4 under "Description of the Subordinated Debt Securities--Additional Provisions" in the accompanying prospectus), the notes (or a percentage of
the Outstanding Principal Amount of the notes to be Converted) will be Written-off and the holders' rights in relation to the notes (including with respect to payments of interest or accrued
interest, and the repayment of Outstanding Principal Amount and, upon Conversion, the receipt of Ordinary Shares (as defined in Section 4 under "Description of the Subordinated Debt
Securities--Additional Provisions" in the accompanying prospectus) issued in respect of such notes) will be immediately and irrevocably written-off and terminated with effect on and from the
Non-Viability Trigger Event Date, as described under "Description of the Subordinated Debt Securities--Additional Provisions" in the accompanying prospectus.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or
adequacy of this prospectus supplement or the accompanying prospectus. Any representation to the contrary is a criminal offense.
Investing in the notes involves risks. To read about certain factors you should consider before investing in the notes, see "Forward-
Looking Statements" on page S-v and "Risk Factors" beginning on page S-14 of this prospectus supplement, and the risk factors set forth in
our Annual Report on Form 20-F for the financial year ended September 30, 2019 filed with the Securities and Exchange Commission, which
we refer to as the 2019 Form 20-F, and which is incorporated by reference in this prospectus supplement and the accompanying prospectus.
The notes will not be protected accounts or deposit liabilities of Westpac Banking Corporation for the purpose of the Banking Act 1959 of Australia, which we refer to as the
Australian Banking Act, or the financial claims scheme established under the Australian Banking Act (an Australian Government scheme that protects depositors of banks like Westpac from
potential loss due to their failure), which we refer to as the FCS, are not subject to the depositor protection provisions of the Australian Banking Act, and are not insured or guaranteed by
(1) the Commonwealth of Australia or any governmental agency of Australia, (2) the United States Federal Deposit Insurance Corporation or any other governmental agency or instrumentality
of the United States, (3) any compensation scheme of the Commonwealth of Australia or the United States, or (4) any other jurisdiction or party.

Per Note
Total

Public Offering Price(1)

100.000% US$
1,500,000,000
Underwriting Discount(2)

0.350% US$
5,250,000
Proceeds to Westpac (before expenses)

99.650% US$
1,494,750,000
(1)
Plus accrued interest from January 31, 2020 if settlement occurs after that date.
(2)
The underwriters have agreed to reimburse us for certain of our expenses relating to this offering. See "Underwriting (Conflicts of Interest)" on page S-38 for
further information.
The notes will not be listed on any securities exchange. Currently, there is no public market for the notes.
The underwriters expect that the notes will be ready for delivery in book-entry form only through The Depository Trust Company and its participants, including Euroclear
Bank SA/NV and Clearstream Banking S.A., on or about January 31, 2020.
Joint Book-Running Managers
BofA

Citigroup
HSBC
UBS Investment Bank
Westpac Banking Corporation
Securities
Co-Managers
BMO Capital Markets

ICBC Standard Bank

Scotiabank
January 23, 2020
TABLE OF CONTENTS

Page

PROSPECTUS SUPPLEMENT

SPECIAL NOTICE TO INVESTORS REGARDING AUTOMATIC CONVERSION OR WRITE-OFF
UPON THE OCCURRENCE OF A NON-VIABILITY TRIGGER EVENT
S-ii
PRESENTATION OF INFORMATION
S-iv
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FORWARD-LOOKING STATEMENTS
S-v
SUMMARY
S-1
RISK FACTORS
S-14
USE OF PROCEEDS
S-27
CAPITALIZATION
S-28
DESCRIPTION OF THE NOTES
S-29
TAXATION
S-37
UNDERWRITING (CONFLICTS OF INTEREST)
S-38
WHERE YOU CAN FIND MORE INFORMATION
S-45
INCORPORATION OF INFORMATION WE FILE WITH THE SEC
S-45
CURRENCY OF PRESENTATION AND EXCHANGE RATES
S-47
VALIDITY OF SECURITIES
S-47
EXPERTS
S-47
EXPENSES
S-48

PROSPECTUS

ABOUT THIS PROSPECTUS

1
FORWARD-LOOKING STATEMENTS

1
WESTPAC BANKING CORPORATION

4
USE OF PROCEEDS

6
DESCRIPTION OF THE SUBORDINATED DEBT SECURITIES

7
DESCRIPTION OF ORDINARY SHARES

47
TAXATION

49
PLAN OF DISTRIBUTION

59
WHERE YOU CAN FIND MORE INFORMATION

61
INCORPORATION OF INFORMATION WE FILE WITH THE SEC

61
ENFORCEABILITY OF FOREIGN JUDGMENTS IN AUSTRALIA

62
CURRENCY OF PRESENTATION AND EXCHANGE RATES

62
VALIDITY OF SECURITIES

63
EXPERTS

63
LIMITATION ON INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM'S LIABILITY

63
S-i
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SPECIAL NOTICE TO INVESTORS REGARDING AUTOMATIC CONVERSION OR WRITE-OFF
UPON THE OCCURRENCE OF A NON-VIABILITY TRIGGER EVENT
The notes are subject, upon the occurrence of a Non-Viability Trigger Event, to Conversion or possible Write-off, as more fully described
in the accompanying prospectus. If any notes are Converted following a Non-Viability Trigger Event, it is likely that the Maximum Conversion
Number will apply and limit the number of Ordinary Shares to be issued. In this case, the value of the Ordinary Shares received is likely to be
significantly less than the Outstanding Principal Amount of those notes. The Australian dollar may depreciate in value against the U.S. dollar
by the time of Conversion. In that case, the Maximum Conversion Number is more likely to apply.
If Conversion of the notes (or a percentage of the Outstanding Principal Amount of the notes) does not occur for any reason within five
ASX Business Days after the Non-Viability Trigger Event Date, the notes (or a percentage of the Outstanding Principal Amount of the notes to
be Converted) will be Written-off and the holders' rights in relation to the notes (including with respect to payments of interest or accrued
interest, and the repayment of Outstanding Principal Amount and, upon Conversion, the receipt of Ordinary Shares issued in respect of such
notes) will be immediately and irrevocably written-off and terminated with effect on and from the Non-Viability Trigger Event Date, as
described under "Description of the Subordinated Debt Securities--Additional Provisions" in the accompanying prospectus.
You should rely only on information contained or incorporated by reference in this prospectus supplement, the accompanying prospectus and any
free writing prospectus with respect to the offering of the notes filed by us with the Securities and Exchange Commission, which we refer to as the SEC.
We have not, and the underwriters have not, authorized anyone to provide you with different or additional information. If anyone provides you with
different, additional or inconsistent information, you should not rely on it. You should assume that the information in this prospectus supplement, the
accompanying prospectus and any free writing prospectus with respect to the offering of the notes filed by us with the SEC and the documents
incorporated by reference herein and therein is only accurate as of the respective dates of such documents. Our business, financial condition, results of
operations and prospects may have changed since those dates.
We are offering to sell, and are seeking offers to buy, the notes only in jurisdictions where offers and sales of the notes are permitted. The
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distribution of this prospectus supplement and the accompanying prospectus and the offering of the notes in certain jurisdictions may be restricted by
law. Persons outside the United States who come into possession of this prospectus supplement and the accompanying prospectus must inform
themselves about and observe any restrictions relating to the offering of the notes and the distribution of this prospectus supplement and the
accompanying prospectus outside the United States. This prospectus supplement and the accompanying prospectus do not constitute, and may not be
used in connection with, an offer to sell, or a solicitation of an offer to buy, any notes offered by this prospectus supplement and the accompanying
prospectus by any person in any jurisdiction in which it is unlawful for such person to make such an offer or solicitation.
None of this prospectus supplement, the accompanying prospectus or any related free writing prospectus is a prospectus for the purposes of the
Prospectus Regulation (as defined below). This prospectus supplement, the accompanying prospectus and any related free writing prospectus have been
prepared on the basis that any offer of notes in any Member State of the European Economic Area (the "EEA") will only be made to a legal entity
which is a qualified investor under the Prospectus Regulation ("Qualified Investors"). Accordingly any person making or intending to make an offer in
that Member State of notes which are the subject of the offering contemplated in this prospectus supplement, the accompanying prospectus and any
related free writing prospectus may only do so with respect to Qualified Investors. Neither Westpac nor the underwriters have authorized, nor do they
S-ii
Table of Contents
authorize, the making of any offer of notes other than to Qualified Investors in the EEA. The expression "Prospectus Regulation" means Regulation
(EU) 2017/1129.
PROHIBITION OF SALES TO EEA RETAIL INVESTORS--The notes are not intended to be offered, sold or otherwise made available to
and should not be offered, sold or otherwise made available to any retail investor in the EEA. For these purposes, a retail investor means a person who is
one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU, as amended ("MiFID II"); or (ii) a customer within
the meaning of Directive (EU) 2016/97 ("IDD"), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of
MiFID II; or (iii) not a qualified investor as defined in the Prospectus Regulation. Consequently no key information document required by Regulation
(EU) No 1286/2014 (as amended, the "PRIIPs Regulation") for offering or selling the notes or otherwise making them available to retail investors in the
EEA has been prepared and therefore offering or selling the notes or otherwise making them available to any retail investor in the EEA may be unlawful
under the PRIIPs Regulation.
S-iii
Table of Contents
PRESENTATION OF INFORMATION
This document is in two parts. The first part is this prospectus supplement, which describes the specific terms of the offering of the notes and also
adds to and updates information contained in the accompanying prospectus and the documents incorporated by reference in this prospectus supplement
and the accompanying prospectus. The second part is the accompanying prospectus which gives more general information about our Debt Securities,
including our Subordinated Debt Securities, some of which may not apply to this offering.
If the information in this prospectus supplement is inconsistent with information contained in the accompanying prospectus or any document
incorporated by reference in this prospectus supplement or the accompanying prospectus on or prior to the date hereof, you should rely on the
information contained in this prospectus supplement.
Unless otherwise indicated, or the context otherwise requires, references in this prospectus supplement to the "Group", "we", "us" and "our" or
similar terms are to Westpac Banking Corporation and its controlled entities (within the meaning of Section 50AA of the Corporations Act 2001 of
Australia, which we refer to as the Australian Corporations Act), and references to "Westpac" are to Westpac Banking Corporation (ABN
33 007 457 141).
We publish our consolidated financial statements in Australian dollars. In this prospectus supplement, unless otherwise stated or the context
otherwise requires, references to "dollars", "$", or "A$" are to Australian dollars, references to "US$", "USD" or "U.S. dollars" are to United States
dollars and references to "NZ$", "NZD" or "NZ dollars" are to New Zealand dollars.
Certain amounts that appear in this prospectus supplement may not sum due to rounding.
S-iv
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FORWARD-LOOKING STATEMENTS
This prospectus supplement contains or incorporates by reference statements that constitute "forward-looking" statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, which we refer to as the Securities Act. Forward-looking statements are statements about
matters that are not historical facts. Forward-looking statements appear in a number of places in this prospectus supplement and the accompanying
prospectus and the information incorporated by reference herein and therein and include statements regarding our intent, belief or current expectations
with respect to our business and operations, market conditions, results of operations and financial condition, including, without limitation, future loan
loss provisions and financial support to certain borrowers. Words such as "will", "may", "expect", "intend", "seek", "would", "should", "could",
"continue", "plan", "estimate", "anticipate", "believe", "probability", "risk", "aim" or other similar words are used to identify forward-looking
statements. These forward-looking statements reflect our current views with respect to future events and are subject to change, certain risks,
uncertainties and assumptions which are, in many instances, beyond our control, and have been made based upon management's expectations and beliefs
concerning future developments and their potential effect upon us. There can be no assurance that future developments will be in accordance with our
expectations or that the effect of future developments on us will be those anticipated. Actual results could differ materially from those expected,
depending on the outcome of various factors, including, but not limited to, those set forth in this prospectus supplement, our 2019 Form 20-F and the
other documents incorporated by reference in this prospectus supplement or the accompanying prospectus. Those factors include, but are not limited to:
·
the effect of, and changes in, laws, regulations, taxation or accounting standards or practices and government policy, particularly changes
to liquidity, leverage and capital requirements;
·
regulatory investigations and other actions, inquiries, litigation, fines, penalties, restrictions or other regulator imposed conditions,
including as a result of our actual or alleged failure to comply with laws (such as financial crime laws), regulations or regulatory policy;
·
internal and external events which may adversely impact our reputation;
·
information security breaches, including cyberattacks;
·
reliability and security of our technology and risks associated with changes to technology systems;
·
the stability of Australian and international financial systems and disruptions to financial markets and any losses or business impacts we
or our customers or counterparties may experience as a result;
·
market volatility, including uncertain conditions in funding, equity and asset markets;
·
adverse asset, credit or capital market conditions;
·
an increase in defaults in credit exposures because of a deterioration in economic conditions;
·
the conduct, behavior or practices of us or our staff;
·
changes to our credit ratings or the methodology used by credit rating agencies;
·
levels of inflation, interest rates (including low or negative rates), exchange rates and market and monetary fluctuations;
·
market liquidity and investor confidence;
·
changes in economic conditions, consumer spending, saving and borrowing habits in Australia, New Zealand and other countries
(including as a result of tariffs and protectionist trade
S-v
Table of Contents
measures) in which we or our customers or counterparties conduct our or their operations and our ability to maintain or to increase
market share, margins and fees, and control expenses;
·
the effects of competition, including from established providers of financial services and from non-financial services entities, in the
geographic and business areas in which we conduct our operations;
·
the timely development and acceptance of new products and services and the perceived overall value of these products and services by
customers;
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·
the effectiveness of our risk management policies, including internal processes, systems and employees;
·
the incidence or severity of Westpac-insured events;
·
the occurrence of environmental change (including as a result of climate change) or external events in countries in which we or our
customers or counterparties conduct our or their operations;
·
changes to the value of our intangible assets;
·
changes in political, social or economic conditions in any of the major markets in which we or our customers or counterparties operate;
·
the success of strategic decisions involving diversification or innovation, in addition to business expansion activity, business acquisitions
and the integration of new businesses;
·
our ability to incur additional indebtedness and any limitations contained in the agreements governing such indebtedness; and
·
various other factors beyond our control.
All forward-looking statements speak only as of the date made. We are under no obligation to update any forward-looking statements contained or
incorporated by reference in this prospectus supplement, whether as a result of new information, future events or otherwise.
S-vi
Table of Contents
SUMMARY
This summary highlights selected information about us and this offering. It does not contain all of the information that may be important to you in
deciding whether to purchase the notes. We encourage you to read the entire prospectus supplement, the accompanying prospectus and the documents
that we have filed with the SEC that are incorporated by reference prior to deciding whether to purchase the notes.
Westpac Banking Corporation
We are one of the four major banking organizations in Australia and one of the largest banking organizations in New Zealand. We provide a broad
range of banking and financial services in these markets, including consumer, business and institutional banking and wealth management services.
We have branches, affiliates and controlled entities throughout Australia, New Zealand, Asia and in the Pacific region, and maintain branches and
offices in some of the key financial centers around the world.
We were founded in 1817 and were the first bank established in Australia. In 1850 we were incorporated as the Bank of New South Wales by an
Act of the New South Wales Parliament. In 1982, we changed our name to Westpac Banking Corporation following our merger with the Commercial
Bank of Australia. On August 23, 2002, we were registered as a public company limited by shares under the Australian Corporations Act. Our principal
office is located at 275 Kent Street, Sydney, New South Wales, 2000, Australia. Our telephone number for calls within Australia is (+61) 2 9155 7713
and our international telephone number is (+61) 2 9155 7713.
As at September 30, 2019, we had total assets of A$907 billion. Our market capitalization as of January 21, 2020 was approximately
A$90.7 billion.
Our business is focused in Australia and New Zealand, operating under multiple brands. The Group operates through an extensive branch and
ATM network, significant online capability, and call centers supported by specialist relationship and product managers. Our operations comprise the
following key divisions:
·
Consumer is responsible for sales and service to consumer customers in Australia. Consumer is also responsible for the Group's
insurance business which covers the manufacture and distribution of life, general and lenders mortgage insurances. The division also uses
a third party to manufacture certain general insurance products. Banking products are provided under the Westpac, St.George, BankSA,
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Bank of Melbourne, and RAMS brands, while insurance products are provided under Westpac and BT brands. Consumer works with
Business and Westpac Institutional Bank, which we refer to as WIB, in the sales, service, and referral of certain financial services and
products including superannuation, platforms, auto lending and foreign exchange. The revenue from these products is mostly retained by
the product originators.
·
Business provides business banking and wealth facilities and products for customers across Australia. Business is responsible for
manufacturing and distributing facilities to small to medium enterprise, which we refer to as SME, and Commercial business customers
(including Agribusiness) generally for up to A$150 million in exposure. SME customers include relationship managed and non-
relationship managed SME customers (generally between A$100,000-A$250,000 facilities). The division offers a wide range of banking
products and services to support their borrowing, payments and transaction needs. In addition, specialist services are provided for cash
flow finance, trade finance, automotive and equipment finance and property finance. The division is also responsible for Private Wealth
and the manufacture and distribution of investments (including margin lending and equities broking), superannuation and retirement
products as well as wealth administration platforms. Business operates under the Westpac, St.George, BankSA, Bank of Melbourne, and
BT brands. Business works with
S-1
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Consumer and WIB in the sale, referral and service of select financial services and risk management products (including corporate
superannuation, foreign exchange and interest rate hedging). The revenue from these products is mostly retained by the product
originators.
·
WIB delivers a broad range of financial products and services to commercial, corporate, institutional and government customers
operating in, or with connections to Australia and New Zealand. WIB operates through dedicated industry relationship and specialist
product teams, with expert knowledge in transactional banking, and financial and debt capital markets. Customers are supported
throughout Australia and via branches and subsidiaries located in New Zealand, the US, UK and Asia. WIB is also responsible for
Westpac Pacific, providing a full range of banking services in Fiji and PNG. WIB works with all the Group's divisions in the provision
of markets related financial needs, including foreign exchange and fixed interest solutions.
·
Westpac New Zealand is responsible for sales and service of banking, wealth and insurance products for consumer, business and
institutional customers in New Zealand. Westpac conducts its New Zealand banking business through two banks: Westpac New Zealand
Limited, which is incorporated in New Zealand, and Westpac Banking Corporation (New Zealand Branch), which is incorporated in
Australia. Westpac New Zealand operates via an extensive network of branches and ATMs across both the North and South Islands.
Business and institutional customers are also served through relationship and specialist product teams. Banking products are provided
under the Westpac brand, while insurance and wealth products are provided under Westpac Life and BT brands, respectively. New
Zealand also maintains its own infrastructure, including technology, operations and treasury.
·
Group Businesses include:
·
Treasury, which is responsible for the management of the Group's balance sheet, including wholesale funding, capital and the
management of liquidity. Treasury also manages the interest rate risk and foreign exchange risks inherent in the balance sheet,
including managing the mismatch between the Group's assets and liabilities. Treasury's earnings are primarily sourced from
managing the Group's balance sheet and interest rate risk (excluding Westpac New Zealand) within set risk limits;
·
Group Technology, which is responsible for technology strategy and architecture, infrastructure and operations, applications
development and business integration in Australia;
·
Core Support, which comprises functions performed centrally, including Australian banking operations, property services,
strategy, finance, risk, compliance, legal, human resources and customer and corporate relations; and
·
Following the Group's decision to restructure its wealth operations and exit its Advice business in March 2019, the residual
Advice operations (including associated remediation) and certain support functions of BTFG Australia have been transferred to
Group Businesses.
Group Technology costs are fully allocated to other divisions in the Group. Core Support costs are partially allocated to other
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divisions, while Group Head Office costs are retained in Group Businesses. Group Businesses also includes earnings on capital
not allocated to divisions, certain intra-group transactions that facilitate the presentation of the performance of the Group's
divisions, gains/losses from most asset sales, earnings and costs associated with the Group's Fintech investments, and certain
other head office items such as centrally raised provisions.
S-2
Table of Contents
Recent Developments
AUSTRAC civil proceedings
On November 20, 2019, AUSTRAC filed a Statement of Claim and commenced civil proceedings against Westpac in relation to an alleged
23 million contraventions since 2011 of its obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act, which we refer to as
the AML/CTF Act. Under the AML/CTF Act, the maximum penalty per contravention varies from $17 million to $21 million, depending on when
during the relevant period it occurred. AUSTRAC claims that the alleged contraventions are the result of systemic failures in Westpac's control
environment, indifference by senior management, and inadequate oversight by its Board. The proceedings relate to non-reporting of 19.5 million
International Funds Transfer Instructions, which we refer to as IFTIs, and additionally, alleged failings in relation to record keeping and the passing on
to AUSTRAC of certain data required in IFTIs, failure to comply with correspondent banking obligations (including with respect to correspondent
banks that disclose higher money laundering and financing of terrorism risks, such as themselves having correspondent banking relationships with high
risk or sanctioned countries), AML/CTF Program failures and contraventions of our ongoing customer due diligence obligations in relation to 12
customers who were allegedly not monitored with a view to identifying, mitigating and managing child exploitation risks. See "Risk Factors--Risks
relating to our business--Our failure to comply with obligations pertaining to the prevention of financial crime, including the alleged failures subject to
the AUSTRAC civil proceedings initiated in November 2019, could have a material adverse effect on our business and reputation".
On December 9, 2019, the parties appeared in the Federal Court for a case management hearing in relation to the proceedings. The parties jointly
told the Court that discussions regarding a Statement of Agreed Facts had commenced, and the Court adjourned the matter to be listed for a case
management hearing on March 2, 2020. Westpac is determined to resolve this matter with AUSTRAC and urgently fix its issues around financial crime
compliance.
AUSTRAC response plan
On November 24, 2019, Westpac released a Response Plan in relation to the issues raised by AUSTRAC in its Statement of Claim. The Response
Plan included a comprehensive set of actions across three areas:
·
Immediate fixes, including closing the LitePay product, which was a technology platform that facilitated low value international
payments, and the closing of the relevant Westpac Australasian Cash Management Product which was the technology platform at the core
of Westpac's failing to identify and report on IFTIs to AUSTRAC;
·
Lifting our standards, including priority screening and improving cross-industry data sharing; and
·
Protecting people, including investments to reduce the human impact of financial crime.
Westpac stated that it was committed to implementing its Response Plan as a matter of urgency and that it would work constructively with
AUSTRAC throughout this process. Westpac estimates that the commitments in its Response Plan will increase expenses by $80 million (pre-tax) in its
financial year 2020 when the majority will be incurred or paid for.
On November 28, 2019 and December 20, 2019, Westpac released details of the newly appointed Westpac Board Financial Crime Committee and
the appointment of Promontory and an Accountability Review advisory panel. Promontory will provide its assurance over Westpac's assessment of
management accountability and the adequacy of Westpac's Financial Crime Program, and the Accountability Review advisory panel will provide
recommendations on Board risk governance and
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Board accountability as part of Westpac's broader response plan. Westpac will make the recommendations of the Accountability Review advisory
panel's review public.
On December 9, 2019, Westpac also released a further update and advised that it had made a number of changes to its transaction monitoring and is
continuing to review its processes and report to AUSTRAC suspicious matters that are identified.
Executive and Board changes
On November 26, 2019, Westpac announced that following the AUSTRAC Statement of Claim, Brian Hartzer would be stepping down as CEO
with Chief Financial Officer, Peter King, taking over as acting CEO and Chief Operating Officer, Gary Thursby, acting as CFO. These changes were
effective from December 2, 2019.
In addition, Westpac also announced that Director Ewen Crouch would not seek re-election at Westpac's Annual General Meeting and that
Chairman Lindsay Maxsted was bringing forward his retirement as Chairman to the first half of 2020.
On January 23, 2020, Westpac announced the appointment of John McFarlane to the Westpac Board as Non-Executive Director and Chairman-
Elect, succeeding Lindsay Maxsted on April 2, 2020. Mr. McFarlane has more than 44 years' experience in financial services, including a 10-year
tenure as CEO of Australia and New Zealand Banking Group Limited (ANZ) and most recently as Chairman at Barclays plc. Mr. McFarlane will
commence his role as Non-Executive Director in February 2020, subject to regulatory approvals.
ASIC investigation
ASIC has also recently commenced an investigation concerning possible breaches of legislation it administers arising from AUSTRAC's actions in
relation to Westpac. Given it is in its early stages, it is unclear on the nature of any enforcement action that may be taken by ASIC, if any. For a
description of ASIC's powers, see "Risk factors--Our businesses are highly regulated and we have been or could be adversely affected by failing to
comply with laws, regulations or regulatory policy" in our 2019 Form 20-F.
APRA investigation and capital overlay
On December 17, 2019, APRA announced that it had formally commenced an investigation into possible breaches of the Australian Banking Act
by Westpac. APRA stated that it would focus on conduct that led to matters alleged in the AUSTRAC Statement of Claim and the actions taken to
rectify and remediate issues after they were identified, and examine whether Westpac, its directors and/or senior managers breached the Australian
Banking Act (including the Banking Executive Accountability regime), or contravened prudential standards.
In addition, APRA announced that it would (i) impose a $500 million increase in Westpac's capital requirements to reflect the heightened
operational risk profile of Westpac and (ii) commence an extensive review program focused on Westpac's risk governance, including risk management,
accountability, remuneration, and culture. For a description of APRA's powers, see "Risk factors--Our businesses are highly regulated and we have
been or could be adversely affected by failing to comply with laws, regulations or regulatory policy" in our 2019 Form 20-F.
Westpac is committed to cooperating with APRA in all aspects of its investigation and review. The additional $500 million operational risk capital
requirement, which was implemented through an increase in risk-weighted assets, applies from December 31, 2019 and will bring the total operational
risk capital add-ons that Westpac is required to hold to $1 billion. This change is expected to reduce
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Westpac's Level 2 common equity tier 1 (CET1) capital ratio by approximately 16 basis points, based on the Group's balance sheet as at September 30,
2019.
Class Action against Westpac Banking Corporation
On December 17, 2019, Westpac was served with a class action filed by Phi Finney McDonald on behalf of certain shareholders who acquired an
interest in Westpac securities between December 16, 2013 and November 19, 2019 (inclusive). The claim relates to market disclosure issues connected
to Westpac's monitoring of financial crime over the relevant period and matters which are the subject of the AUSTRAC civil proceedings described
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above. The claim does not identify the amount of any damages sought. Westpac will be defending the claims.
Financial crime
As part of our routine procedures, we regularly detect and remediate financial crime non-compliance issues and as part of the AUSTRAC Response
Plan and other procedures we may find previously undetected issues. Some of these issues could be the subject of possible regulatory action against
Westpac and could result in significant monetary penalties. In addition to the matters specified in the Statement of Claim and the AUSTRAC Response
Plan described above, Westpac continues to progress a program of work to improve its management of financial crime risks (including Anti-Money
Laundering and Counter-Terrorism Financing (AML/CTF), sanctions, Anti-Bribery and Corruption, FATCA and Common Reporting Standards). This
work includes a review of our AML/CTF policies, the completeness of data feeding into our AML/CTF systems and our AML/CTF processes and
controls. Westpac has been regularly updating AUSTRAC on progress and continues to implement a number of improvements to its AML/CTF
Program, governance, policies, systems and controls together with related remediation work in respect of certain controls and reporting practices. These
efforts relate to enhancements to, or are in response to issues with, matters such as customer on-boarding, customer and payment screening, ongoing
customer due diligence, transaction monitoring and regulatory reporting (including in relation to IFTIs, Suspicious Matter Reports and Threshold
Transaction Reports).
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The Offering
The following is a brief summary of some of the terms of this offering. For a more complete description of the terms of the notes, see "Description
of the Notes" in this prospectus supplement and "Description of the Subordinated Debt Securities" in the accompanying prospectus.
Issuer
Westpac Banking Corporation.

Notes Offered
US$1,500,000,000 aggregate principal amount of notes due 2030.

Reset Date
The interest payment date on February 4, 2025.

Maturity Date
The notes will mature on February 4, 2030.

Interest Rate
From and including the Issue Date to but excluding the Reset Date, the
notes will bear interest on the Outstanding Principal Amount at a rate of
2.894% per year, and on and after the Reset Date to but excluding the
Maturity Date, the notes will bear interest on the Outstanding Principal
Amount at a fixed rate per year equal to the 5-Year U.S. Treasury Rate
plus the Spread (rounded to three decimal places with 0.0005 rounded
upwards).

Interest Payment Dates
Interest on the notes will be payable semi-annually in arrears on
February 4 and August 4 of each year, subject in each case to the
applicable business day convention set forth below, and certain
solvency conditions described herein, beginning on August 4, 2020.
Interest will accrue on the notes from and including the Issue Date.

Any payment of principal or interest with respect to the notes required
to be made on an interest payment date that is not a business day in
New York, London and Sydney will be made on the next succeeding
business day, and no interest will accrue on that payment for the period
from and after the Interest Payment Date to the date of payment on the
next succeeding business day.

Payments under Section 3.1(b) under "Description of the Subordinated
Debt Securities--Additional Provisions" in the accompanying
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Document Outline

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