XML 283 R58.htm IDEA: XBRL DOCUMENT v3.22.2.2
Provisions for expected credit losses (Tables)
12 Months Ended
Sep. 30, 2022
Provisions for expected credit losses  
Provisions for ECL on loans and credit commitments by stage

    

2022

    

2021

Non-

Non-

Performing

performing

Performing

performing

$m

Stage 1

Stage 2

Stage 3

Total

Stage 1

Stage 2

Stage 3

Total

Consolidated

  

 

  

 

  

 

  

Provision for ECL on loans

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Housing

 

137

 

1,082

 

415

 

1,634

 

154

 

735

 

607

 

1,496

Personal

 

78

 

220

 

123

 

421

 

124

 

314

 

173

 

611

Business

 

502

 

811

 

838

 

2,151

 

495

 

822

 

1,172

 

2,489

Total provision for ECL on loans

 

717

 

2,113

 

1,376

 

4,206

 

773

 

1,871

 

1,952

 

4,596

Provisions for ECL on credit commitments

 

 

 

 

 

 

 

 

Housing

 

6

 

13

 

-

 

19

 

6

 

6

 

-

 

12

Personal

 

21

 

30

 

-

 

51

 

29

 

41

 

1

 

71

Business

 

141

 

185

 

23

 

349

 

128

 

173

 

19

 

320

Total provision for ECL on credit commitments

 

168

 

228

 

23

 

419

 

163

 

220

 

20

 

403

Total provisions for ECL on loans and credit commitments

 

885

 

2,341

 

1,399

 

4,625

 

936

 

2,091

 

1,972

 

4,999

Presented as provision for ECL on:

Loans (Note 10)

717

 

2,113

 

1,376

 

4,206

766

 

1,871

 

1,952

 

4,589

Loans included in assets held for sale (Note 38)

-

-

-

-

7

-

-

7

Credit commitments (Note 26)

168

228

23

419

161

220

20

401

Credit commitments included in liabilities held for sale (Note 38)

-

-

-

-

2

-

-

2

Total provisions for ECL on loans and credit commitments

885

2,341

1,399

4,625

936

2,091

1,972

4,999

Of which:

 

 

 

 

 

 

 

 

Individually assessed provisions

 

-

 

-

 

452

 

452

 

-

 

-

 

832

 

832

Collectively assessed provisions

 

885

 

2,341

 

947

 

4,173

 

936

 

2,091

 

1,140

 

4,167

Total provisions for ECL on loans and credit commitments

 

885

 

2,341

 

1,399

 

4,625

 

936

 

2,091

 

1,972

 

4,999

Gross loans1

614,762

 

121,845

 

7,246

 

743,853

636,551

69,348

9,496

715,395

Credit commitments

184,535

 

15,217

 

347

 

200,099

192,219

7,598

274

200,091

Gross loans and credit commitments

 

799,297

 

137,062

 

7,593

 

943,952

 

828,770

 

76,946

 

9,770

 

915,486

Coverage ratio on loans (%)

0.12

1.73

18.99

0.57

0.12

2.70

20.56

0.64

Coverage ratio on loans and credit commitments (%)

 

0.11

 

1.71

 

18.42

 

0.49

 

0.11

 

2.72

 

20.18

 

0.55

1.

Includes nil (2021: $1,022 million) gross loans classified as held for sale.

Note 11. Provisions for expected credit losses (continued)

    

2022

    

2021

Non-

Non-

Performing

performing

Performing

performing

$m

Stage 1

Stage 2

Stage 3

Total

Stage 1

Stage 2

Stage 3

Total

Parent Entity

  

 

  

 

  

 

  

Provision for ECL on loans

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Housing

 

102

 

1,005

 

369

 

1,476

 

114

 

669

 

552

 

1,335

Personal

 

69

 

194

 

112

 

375

 

111

 

270

 

151

 

532

Business

 

453

 

656

 

736

 

1,845

 

409

 

607

 

1,026

 

2,042

Total provision for ECL on loans

 

624

 

1,855

 

1,217

 

3,696

 

634

 

1,546

 

1,729

 

3,909

Provision for ECL on credit commitments

 

 

 

 

 

 

 

 

Housing

 

4

 

11

 

-

 

15

 

4

 

5

 

-

 

9

Personal

 

16

 

24

 

-

 

40

 

23

 

34

 

-

 

57

Business

 

133

 

173

 

23

 

329

 

119

 

150

 

19

 

288

Total provision for ECL on credit commitments

 

153

 

208

 

23

 

384

 

146

 

189

 

19

 

354

Total provisions for ECL on loans and credit commitments

 

777

 

2,063

 

1,240

 

4,080

 

780

 

1,735

 

1,748

 

4,263

Presented as provision for ECL on:

Loans (Note 10)

624

1,855

1,217

3,696

627

1,546

1,729

3,902

Loans included in assets held for sale (Note 38)

-

-

-

-

7

-

-

7

Credit commitments (Note 26)

153

208

23

384

144

189

19

352

Credit commitments included in liabilities held for sale (Note 38)

-

-

-

-

2

-

-

2

Total provisions for ECL on loans and credit commitments

777

2,063

1,240

4,080

780

1,735

1,748

4,263

Of which:

 

  

 

 

 

 

  

 

  

 

  

 

  

Individually assessed provisions

 

-

 

-

 

388

 

388

 

-

 

-

 

724

 

724

Collectively assessed provisions

 

777

 

2,063

 

852

 

3,692

 

780

 

1,735

 

1,024

 

3,539

Total provisions for ECL on loans and credit commitments

 

777

 

2,063

 

1,240

 

4,080

 

780

 

1,735

 

1,748

 

4,263

Gross loans1

537,339

111,450

6,624

655,413

552,793

61,814

8,730

623,337

Credit commitments

162,950

13,353

329

176,632

167,866

6,365

250

174,481

Gross loans and credit commitments

 

700,289

 

124,803

 

6,953

 

832,045

 

720,659

 

68,179

 

8,980

 

797,818

Coverage ratio on loans (%)

0.12

1.66

18.37

0.56

0.11

2.50

19.81

0.63

Coverage ratio on loans and credit commitments (%)

 

0.11

 

1.65

 

17.83

 

0.49

 

0.11

 

2.54

 

19.47

 

0.53

1.

Includes nil (2021: $1,022 million) gross loans classified as held for sale.

Movement in provisions for ECL on loans and credit commitments

Consolidated

Parent Entity

Non-

Non-

 

Performing

performing

 

Performing

performing

$m

    

Stage 1

    

Stage 2

    

Stage 3

    

Total

    

Stage 1

    

Stage 2

    

Stage 3

    

Total

Balance as at 30 September 2020

 

1,084

2,875

2,173

6,132

913

2,390

1,869

5,172

Transfers to Stage 1

 

1,246

(1,128)

(118)

-

1,058

(960)

(98)

-

Transfers to Stage 2

 

(200)

1,290

(1,090)

-

(173)

1,094

(921)

-

Transfers to Stage 3

 

(8)

(507)

515

-

(7)

(449)

456

-

Business activity during the year

122

(223)

(343)

(444)

110

(199)

(298)

(387)

Net remeasurement of provision for ECL

 

(1,284)

(200)

1,603

119

(1,121)

(140)

1,424

163

Write-offs

 

-

-

(836)

(836)

-

-

(739)

(739)

Exchange rate and other adjustments

 

(24)

(16)

68

28

-

(1)

55

54

Balance as at 30 September 2021

 

936

2,091

1,972

4,999

780

1,735

1,748

4,263

Transfers to Stage 1

 

912

(792)

(120)

-

748

(646)

(102)

-

Transfers to Stage 2

 

(235)

1,002

(767)

-

(198)

900

(702)

-

Transfers to Stage 3

 

(14)

(383)

397

-

(12)

(343)

355

-

Business activity during the year

 

354

(244)

(340)

(230)

328

(234)

(320)

(226)

Net remeasurement of provision for ECL

 

(1,066)

689

1,129

752

(875)

651

1,055

831

Write-offs

 

-

-

(934)

(934)

-

-

(851)

(851)

Exchange rate and other adjustments

 

(2)

(22)

62

38

6

-

57

63

Balance as at 30 September 2022

 

885

2,341

1,399

4,625

777

2,063

1,240

4,080

The provisions for ECL on loans and credit commitments can be further disaggregated into the following classes:

 

Consolidated

 Parent Entity

Non-

Non-

    

Performing

performing

    

Performing

performing

    

$m

Stage 1

Stage 2

Stage 3

Total

    

Stage 1

    

Stage 2

    

Stage 3

Total

Housing

Balance as at 30 September 2020

 

192

747

977

1,916

149

635

904

1,688

Transfers to Stage 1

 

283

(265)

(18)

-

246

(237)

(9)

-

Transfers to Stage 2

 

(36)

677

(641)

-

(32)

624

(592)

-

Transfers to Stage 3

-

(120)

120

-

-

(115)

115

-

Business activity during the year

42

(49)

(180)

(187)

39

(43)

(165)

(169)

Net remeasurement of provision for ECL

 

(322)

(253)

387

(188)

(284)

(190)

328

(146)

Write-offs

 

-

-

(76)

(76)

-

-

(63)

(63)

Exchange rate and other adjustments

 

1

4

38

43

-

-

34

34

Balance as at 30 September 2021

 

160

741

607

1,508

118

674

552

1,344

Transfers to Stage 1

206

(191)

(15)

-

166

(158)

(8)

-

Transfers to Stage 2

(32)

508

(476)

-

(29)

481

(452)

-

Transfers to Stage 3

-

(90)

90

-

-

(87)

87

-

Business activity during the year

41

(58)

(166)

(183)

38

(55)

(155)

(172)

Net remeasurement of provision for ECL

(229)

191

404

366

(187)

161

363

337

Write-offs

-

-

(45)

(45)

-

-

(35)

(35)

Exchange rate and other adjustments

(3)

(6)

16

7

-

-

17

17

Balance as at 30 September 2022

 

143

1,095

415

1,653

106

1,016

369

1,491

Note 11. Provisions for expected credit losses (continued)

Consolidated

Parent Entity

Non-

Non-

 

Performing

performing

 

Performing

performing

$m

    

Stage 1

    

Stage 2

    

Stage 3

    

Total

    

Stage 1

    

Stage 2

    

Stage 3

    

Total

Personal

 

Balance as at 30 September 2020

 

216

408

232

856

190

332

193

715

Transfers to Stage 1

476

(469)

(7)

-

403

(401)

(2)

-

Transfers to Stage 2

(98)

281

(183)

-

(92)

251

(159)

-

Transfers to Stage 3

(1)

(202)

203

-

(1)

(182)

183

-

Business activity during the year

27

(25)

(35)

(33)

28

(20)

(30)

(22)

Net remeasurement of provision for ECL

(468)

360

402

294

(394)

324

386

316

Write-offs

-

-

(461)

(461)

-

-

(438)

(438)

Exchange rate and other adjustments

1

2

23

26

-

-

18

18

Balance as at 30 September 2021

 

153

355

174

682

134

304

151

589

Transfers to Stage 1

353

(345)

(8)

-

281

(280)

(1)

-

Transfers to Stage 2

(86)

208

(122)

-

(81)

193

(112)

-

Transfers to Stage 3

-

(145)

145

-

-

(133)

133

-

Business activity during the year

18

(16)

(19)

(17)

17

(14)

(16)

(13)

Net remeasurement of provision for ECL

(337)

195

286

144

(266)

148

279

161

Write-offs

-

-

(350)

(350)

-

-

(337)

(337)

Exchange rate and other adjustments

(2)

(2)

17

13

-

-

15

15

Balance as at 30 September 2022

 

99

250

123

472

85

218

112

415

Consolidated

Parent Entity

Non-

Non-

 

Performing

performing

 

Performing

performing

$m

    

Stage 1

    

Stage 2

    

Stage 3

    

Total

    

Stage 1

    

Stage 2

    

Stage 3

    

Total

Business

Balance as at 30 September 2020

676

1,720

964

3,360

574

1,423

772

2,769

Transfers to Stage 1

487

(394)

(93)

-

409

(322)

(87)

-

Transfers to Stage 2

(66)

332

(266)

-

(49)

219

(170)

-

Transfers to Stage 3

(7)

(185)

192

-

(6)

(152)

158

-

Business activity during the year

53

(149)

(128)

(224)

43

(136)

(103)

(196)

Net remeasurement of provision for ECL

(494)

(307)

814

13

(443)

(274)

710

(7)

Write-offs

-

-

(299)

(299)

-

-

(238)

(238)

Exchange rate and other adjustments

(26)

(22)

7

(41)

-

(1)

3

2

Balance as at 30 September 2021

 

623

995

1,191

2,809

528

757

1,045

2,330

Transfers to Stage 1

353

(256)

(97)

-

301

(208)

(93)

-

Transfers to Stage 2

(117)

286

(169)

-

(88)

226

(138)

-

Transfers to Stage 3

(14)

(148)

162

-

(12)

(123)

135

-

Business activity during the year

295

(170)

(155)

(30)

273

(165)

(149)

(41)

Net remeasurement of provision for ECL

(500)

303

439

242

(422)

342

413

333

Write-offs

-

-

(539)

(539)

-

-

(479)

(479)

Exchange rate and other adjustments

3

(14)

29

18

6

-

25

31

Balance as at 30 September 2022

 

643

996

861

2,500

586

829

759

2,174

Reconciliation of impairment charges

Consolidated

Parent Entity  

$m

    

2022

    

2021

    

2022

    

2021

Loans and credit commitments:

 

  

 

  

 

  

 

  

Business activity during the year

 

(230)

 

(444)

 

(226)

 

(387)

Net remeasurement of provision for ECL

 

752

 

119

 

831

 

163

Impairment charges for debt securities at amortised cost

 

4

 

(25)

 

1

 

-

Impairment charges for debt securities at FVOCI

 

(2)

 

2

 

(2)

 

2

Impairment on due from subsidiaries

-

-

25

-

Recoveries

 

(189)

 

(242)

 

(180)

 

(225)

Impairment charges/(benefits) (Note 6)

 

335

 

(590)

 

449

 

(447)

Schedule of write-offs net of recoveries to average loans

Consolidated

%

    

2022

    

2021

Write-offs net of recoveries to average loans

    

    

Housing

0.01

0.01

Personal

 

1.28

 

1.46

Business

0.27

0.15

Total write-offs net of recoveries to average loans

 

0.10

 

0.08

Schedule of impact of overlays on the provision for ECL

Consolidated

Parent Entity  

$m

    

2022

    

2021

    

2022

    

2021

Modelled provision for ECL

 

3,925

 

4,352

 

3,504

 

3,712

Overlays

 

700

647

 

576

 

551

Total provision for ECL

 

4,625

 

4,999

 

4,080

 

4,263

Summary of key macroeconomic assumptions for base case scenario

Westpac Economics forecasts used for the different reporting periods are as follows:

Key macroeconomic assumptions for base case scenario

30 September 2022

30 September 2021

Annual GDP:

Australia

Forecast growth of 3.4% for calendar year 2022 and 1.0% for calendar year 2023

Forecast growth of 0.1% for calendar year 2021 and 7.4% for calendar year 2022

New Zealand

Forecast growth of 1.9% for calendar year 2022 and 1.6% for calendar year 2023

Forecast growth of 5.6% for calendar year 2021 and 2.3% for calendar year 2022

Commercial property index

Forecast price contraction of 4.7% for calendar year 2022 and 3.0% for calendar year 2023

Forecast price contraction of 0.7% for calendar year 2021 and 4.7% for calendar year 2022

Residential property prices:

Australia

Forecast price contraction of 6.5% for calendar year 2022 and 7.8% for calendar year 2023

Forecast price appreciation of 11.8% for calendar year 2021 and 5.0% for calendar year 2022

New Zealand

Forecast price contraction of 10% for calendar year 2022 and 5.0% for calendar year 2023

Forecast price appreciation of 20% for calendar year 2021 and 0% for calendar year 2022

Cash rate

Forecast cash rate of 3.35% at December 2022 and 3.6% at December 2023

Forecast to remain at 10bps over calendar years 2021 and 2022

Unemployment rate:

Australia

Forecast rate of 3.1% at December 2022 and 4.4% at December 2023

Forecast rate of 5.4% at December 2021 and 4% at December 2022

New Zealand

Forecast rate of 3.4% at December 2022 and 3.8% at December 2023

Forecast rate of 4.2% at December 2021 and 3.5% at December 2022

Summary of the the probability weighted scenarios

The following sensitivity table shows the reported provision for ECL based on the probability weighted scenarios and what the provisions for ECL would be assuming a 100% weighting to the base case scenario and to the downside scenario (with all other assumptions, held constant).

    

Consolidated

    

Parent Entity

$m

    

2022

    

2021

    

2022

    

2021

Reported probability-weighted ECL

 

4,625

 

4,999

 

4,080

 

4,263

100% base case ECL

 

2,983

 

3,411

 

2,582

 

2,877

100% downside ECL

 

6,680

 

7,399

 

5,947

 

6,354

Summary of macroeconomic scenario weightings

The following table indicates the weightings applied by the Group and Parent Entity:

Macroeconomic scenario weightings (%)

    

2022

    

2021

Upside

 

5

 

5

Base

 

50

 

55

Downside

 

45

 

40