Company: WEBNF
Filing Date: 2025-08-14
Form Type: 6-K
Source: 0001104659-25-077854
Chunk: 2

Company: WESTPAC BANKING CORP
Filing Date: 2025-08-14
Form: 6-K
Chunk 2
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 of 1.85%, up 5 basis points. The increase was driven by: |

| - | Liquids,                                                                   
 3 basis points higher, reflecting reductions in liquid and trading assets; |

| - | Deposits,                                                                                       
 1 basis point higher. Proactive margin management and the continuing benefit of higher earnings 
 on hedged deposits more than offset a mix shift towards lower margin savings accounts and       
 competition for term deposits; and                                                              |

| - | Loans,                                                                                     
 1 basis point higher. Higher spreads on mortgage lending in New Zealand provided a benefit 
 while Australian mortgage margins were stable. A mix shift towards higher margin business  
 lending was offset by narrower spreads due to competition.                                 |

| · | Treasury                                                                                   
 and Markets contribution of 14 basis points, up from 12 basis points, reflected favourable 
 interest rate positioning in a more volatile market environment.                           |

| · | Notable                                                                                    
 Items related to economic hedges of term funding added 2 basis points. These items reverse 
 over time.                                                                                 |

Non-interest income rose 4%, supported by stronger Markets revenue.

Expenses were up 3%, reflecting wage and salary
growth, investment in bankers and the planned increase in UNITE investment. We are pursuing targeted productivity initiatives through
our Fit for Growth program to constrain cost growth.

The financial resilience of our customers is
reflected in improved credit quality metrics across all segments. Impairment charges were low at 5 basis points of average gross loans.

Core net interest margin is calculated by excluding Notable
Items and Treasury and Markets.

Financial strength

The CET1 capital ratio was 12.3% as at June 30,
2025, above the target operating range of 11.0% to 11.5%. The modest rise in CET1 reflects earnings in the quarter and a reduction in
Interest Rate Risk in the Banking Book Risk Weighted Assets (“RWA”) more than offsetting the 1H25 dividend payment and lending
growth.

The Group has completed 71% of the
previously announced $3.5 billion on market share buyback.

The quarterly average liquidity coverage ratio
was 134% and net stable funding ratio was 114% for 3Q25.

Credit impairment provisions were $5.1 billion
as at June 30, 2025, $1.9 billion above expected losses of the base case economic scenario. The ratio of CAP to credit RWA was little
changed at 1.25%.