Westpac Banking Corporation (WBC) Earnings Call Transcript & Summary

[ Welcome, ladies and ] gentlemen, to the Westpac Banking Corporation 2023 Annual General Meeting. Before into this important safety message, for those attending in person, in an abundancy [indiscernible] of the Brisbane Convention and Exhibition Center staff. Please take a moment to note your nearest emergence that taking photos, video or using any recording device is prohibited. It would also be appreciated if you could switch off your mobile phone and electronic devices or place them on silent. [Presentation]

Well, good morning, ladies and gentlemen, and welcome to the 2023 Annual General Meeting of Westpac Banking Corporation. My name is Tim Hartin, and I am Westpac's Company Secretary. We are delighted to introduce [indiscernible], [indiscernible] and [indiscernible] to officially welcome us to country.

Good morning, everybody. I'd like to introduce myself first. My name is [indiscernible] Bowden. I'm a proud [indiscernible] person from New South Wales, Northern New South Wales. This is my grand daughter Chilara, from Yuggera Country and [indiscernible] from Yuggera Country. [indiscernible] Banner's granddaughter. So where am I? I've lived in [indiscernible] Yuggera for the last 50 years. I have strong connections to the Yuggera nation through my three children, 8 grand children and one great grandchild. And I believe we have some Tiwi Island people here today rather than sisters, I'd like to welcome them to Brisbane, Mianjin. I'm here today to acknowledge the traditional owners on behalf of indigenous people of country and nonindigenous people to show gratitude and respect for the traditional owners of the beautiful lands in which we live and celebrate their enduring knowledge to connection to country. We honor the wisdom and pay respect to the Elders past and present who walk before us who walk beside us and who will walk after us. This year's [indiscernible] is for the Elders. May we pay respects for the holders we have lost. And for those who continue fighting across all nations may we pay respect to them. We would like to be recognized for our culture, our language and our ceremony, along with our spiritual connection to our country. I'd like to extend that respect to all people who gather here today, acknowledge the spirit of peace and reconciliation. This is aboriginal land, always was and always will be. And I'd like to give the mic over to [indiscernible]. She would like to say something. And I'm very nervous. I'm sorry.

Welcome. Welcome to my country, and thank you all for having us.

Yes. Thank you, everybody. I happy to have a really enjoyable day. Thanks for inviting us. It was a pleasure. Thank you.

Well, thank you very much, [indiscernible],and Chilara. We are, of course, very pleased to be meeting here on [indiscernible] and Yuggera country, and thank you for joining us today. At today's AGM, shareholders may participate in person through the AGM online platform and by telephone. And before I introduce your Chairman, I'll run through a few procedural matters, which are intended to provide shareholders as a whole an opportunity to participate in today's meeting. For each item of business, we'll handle questions in this order. Firstly, in person, then from the telephone and finally, from the online platform. And time permitting, we may come back to remaining questions in the room for each item of business. If you are attending here in person and wish to ask a question, please respect that we want to hear from as many shareholders as possible. And if you're here in person, you should have received a colored card at registration. A red voting card allows you to speak and vote. Blue cardholders cannot -- can speak, but cannot vote and yellow cards are for visitors who observe today's meeting but cannot speak or vote. If you do wish to ask a question, please approach a microphone attendant and show them your red or blue card. If you have a mobility restriction, please raise your hand and a microphone will come to you. All resolutions today will be decided by a poll. And if you're here in person, please mark your voting card to cast your vote for each resolution. Link Market Services is the returning officer responsible for overseeing the voting process for this meeting and can, of course, assist with any questions. Completed voting cards must be placed in one of the ballot boxes under the supervision of the returning officer. And you can do this at any time after the Chairman opens the polls. Voting will close 15 minutes after the meeting has concluded, and the results of the polls will be devised to the ASX and also available on Westpac's website. For shareholders participating online or by telephone, our online AGM guide provides all the information you need to vote and to ask questions. And this guide is located on our website and on our online platform. And we do ask that you submit one online question at a time. Please also note that you cannot vote over the phone. For shareholders on the telephone, please press star, 1 when the Chairman calls for the questions on the respective items of business. If you do have any issues using the online platform, please check the online guide, or alternatively call Link Market Services on 1800-990-363. For telephone participants, press star 0 on your keypad for assistance. I'll now hand over to your Chairman, John McFarlane.

Well, thank you, Tim. I've been advised that a quorum is present, and I therefore declare the 2023 Annual General Meeting of Westpac Banking Corporation open. I also declare the polls open. I'd like to extend a warm welcome to everybody joining today in person, online and on the telephone. I'd now like to introduce my fellow directors. On my left, is Audette Exel, Peter Nash, Nora Scheinkestel, Chris Lynch; Margaret Seale and Michael Ullmer. On my right is Tim Hartin, Westpac's Company Secretary. Next to Tim is Peter King, our Chief Executive Officer; then Steven Gregg, who will become new Chair at the end of this meeting, Nerida Caesar and Tim Burroughs. Seated in the front row are our executive team together with Westpac's auditor, Colin Heath of PWC. If you have any questions in relation to the audit, I will ask Colin to respond. Before we move to the matters in the notice of meeting, both the CEO and I would like to address the meeting. Now I'm particularly delighted with holding this year's meeting in Brisbane. The hybrid format will allow shareholders to participate either in person are online. When I joined Westpac just under 4 years ago, in what was a difficult period for the company, we set up an agenda that would transform the company during my time frame and well beyond. Fortunately, we've made good progress and are now set up for the journey beyond. Initially, we set up radically simplifying the business portfolio of the group, to focus on our main franchise in Australia and New Zealand, where we have natural strengths. We've since sold 10 businesses and also following some years of erosion of our market position, we made it a priority for the company to maintain or grow its position in key markets. As a result, our position has now stabilized, and we have the potential to maintain or enhance us going forward. So turning to the year just gone. We've just seen our best financial and operating performance in the last 5 years. Profit after tax in 2023 was $7.2 billion, up 26% on a statutory basis. Return on tangible equity was solid at 11.4%, well above the cost of equity. Income was strong, up 10%. Credit impairment charges almost doubled off a very low base, reflecting the effects of interest rate rises and inflation on our customers. While costs were down 1%, excluding notable items and businesses sold, they were up underlying 2%. Now this is the area where we expect to derive the greatest benefit from systems rationalization in the future. Our capital position remains strong with a core equity Tier 1 ratio of 12.4%, well ahead of our target operating range of 11% to 11.5%. The success capital position provided us with the flexibility to reward shareholders with an increased final dividend of $0.72 and a $1.5 billion buyback. These are important beginnings for the group, but by no means the end. Following several historical acquisitions that were not fully integrated, Westpac remains operationally and technologically complex compared to peers. So for us to achieve best practice, this can't continue. So during my tenure as Chair, the group has had limited investment capacity to address this particular issue due to more pressing priorities. We've had to prioritize our investment capacity primarily to reducing operational and nonfinancial risks. Our total annual investment spend has been an average of some $2 billion over recent years. However, more than 60% of this has been directed towards necessary risk and regulatory matters and operational risk improvement, including the delivery of the customers' outcomes and risk excellence program or CORE program. Now this program has been integral to improving the risk management following the deficiencies identified by both internal and regulatory assessments. The Board has oversight of the program and accountability is reflected in executive remuneration outcomes. Now I'm pleased to report we're on track to complete all activities under the integrated plan by the end of this calendar year. Now given we remain committed to ongoing improvement in risk management and culture, work will continue this financial year to ensure change is sustainable and effective. Beyond this current year, we intend to direct investment to other strategic priorities. Unfortunately, the group now has the capacity to carry out this forward program. So over the next 4 years, we will now finally integrate our diverse systems and move into a single origination processing and technology platform. When completed, we expect this will have considerable benefit for customers through better service for our people through simpler and more efficient processes and for shareholders through lower costs and revenue upside. Now I know shareholders are concerned about climate change and believe our support for a just transition to a net 0 future is appropriate for our customers into the country. We look forward to continuing our dialogue with shareholders on this important matter later in the meeting and beyond. So to this effect, we are today putting two shareholders our own advisory resolution on climate change, which we hope shareholders will support. Now this is my final year as your Chairman. And reflecting on my time here, we've radically simplified the group and set it on a path for further simplification. More recently, we've improved performance and capital strength with higher returns for shareholders. We sold 10 nonstrategic businesses to focus on our natural strength in consumer business and institutional banking in Australia and New Zealand. As a result, we consolidated our international institutional network in a fewer locations. Notwithstanding this, I'm conscious that the past few years have taken their toll on our share value, which I deeply regret. As I've outlined, we've taken and are taking further action to correct this, and believe it will achieve the desired outcome. Coming to the Board, I'm pleased that Steven Gregg has joined as Chairman elect to replace me. He's a seasoned Chairman with strong banking credentials. Steven has aligned his current directorships to ensure he has the capacity to allocate the time necessary for a major regulated bank. In the year, there have been a few additional changes to the Board. Tim Burroughs and Michael Ullmer with strong banking and investment banking credentials respectively, joined the Board as nonexecutive directors, and are already making a strong contribution to the company. All three are standing for election at this year's AGM. Mike Hawker, retired from the Board during the year, and Chris Lynch as well as me, are retiring today following the AGM. So on behalf of the Board and shareholders, I'd like to thank Mike and Chris for their contribution to Westpac during the time here. I would particularly like to thank our customers for their support. They can be assured of our continued support as we go forward. I would also extend my appreciation to you, our shareholders, for staying with us through what has been an incredibly difficult and turbulent time for the group. But I believe it will pay off. So to the Board, the management team and employees, I thank you for your hard work and dedication during the year, and I wish you well for the future. In closing, I genuinely believe we've made progress as a group that we've seen the worst, but still require further improvement. So notwithstanding near-term uncertainties on the economic front, and the scale of investment required to undertake a major program, looking beyond these, I am confident that for Westpac, the best is yet to come. Now let me hand over to Peter King, our Chief Executive. Thank you.

Well, thank you, Chairman. Good morning, and welcome to shareholders in the room and online. It is great to be back in Queensland. This is an exciting time for this state. Tourism is rebounding. You have big plans in infrastructure, and of course, we can now call Brisbane and Olympic City. Westpac is also expanding in Queensland. Our Gold Coast Technology Hub houses over 100 engineers working on our award-winning digital app. More broadly, Australia is navigating challenging economic environment. The economy bounced back strongly from the pandemic. However, the recovery in activity and high inflation has driven up interest rates. We recognize it's been a difficult time for many people with some customers needing our help to manage cost of living pressures. At the end of our financial year in 2023, 13,000 customers were in hardship. And our message to any customer who needs help, is to call us early. Our thoughts are also with those impacted by Cyclone Jasper, and once again, if you need help, please contact us. Turning to the financial. This year, we strengthened the balance sheet and improved financial performance. Net profit rose 26% to $7.2 billion, while pre-provision profit was up 24%. The key features of this result was strong revenue growth of 10%, well-managed costs, which declined 1% and a higher impairment charge, which rose to 9 basis points of loans. The increase in revenue was driven by higher interest margins and solid growth in Home and Business loans. Benefits of our cost reset program exceeded inflationary pressures. However, costs were higher in the second half and we have taken action to limit expense growth going forward. The rising impairment charge reflected a modest deterioration in credit quality. The stronger net profit allowed us to pay dividends of $1.42 per share, which is up 14% on 2022. And this represented a payout ratio of 69% of net profit. Total shareholder return has improved and is positive over 1 and 3 years. How we acknowledge it's been a challenging period for relative share price performance. Turning to the balance sheet. Our capital position is the strongest I've seen in my nearly 3 decades of the group. Our CET1 ratio of 12.4% is well above the top of the target range of 11.5%. And this supported us commencing a $1.5 billion share buyback last week. The buyback is in addition to $5 billion of dividends for 2023. After 3 years of hard work and as the Chairman said, we are a simpler and stronger bank. Our operating structure is set up for growth. With the portfolio simplification complete, we've wound down the Specialist Business division, which now sees 4 divisions: Consumer, Business and Wealth, Institutional and New Zealand. And they are supported by centralized teams, particularly in technology and operations. We also made good progress in customer experience, although we know there is more to do. This year, the Westpac App was recognized by Forrester as the best banking app in Australia. It's used 5 million times a day, and with new budgeting tools helping customers manage the cost of living pressures. And this has also supported solid household deposit growth. In Mortgages, the completion of the single origination platform and process simplification have improved service. And this sees us targeting mortgage growth in line with system in financial year '24. Business customers via EFTPOS Air, can now use their mobile phone as a payment terminal, and also get paid the same day. And we're extending this capability to multi-devices so the service can be used by larger businesses. In Institutional Banking, we're making progress to reclaim the leading domestic bank position. Financial markets now ranks first in several key product categories, including Government and semi-government bond issuance, with market share increasing to 20%. We've also seen momentum in both lending and transactional banking in the institutional bank. Risk is at the heart of everything we do and we've made good progress on improving our risk management capabilities. Our customer outcomes and risk excellence program is in its third year, and our focus in 2024 turns to ensuring the changes are embedded across the business. And the CORE program remains a top priority for the company. Another priority is fighting back against scammers. We're scaling up to detect and halt scams, including adding new features to make payments safer. We know banking is changing, in particularly the shift to digital. 96% of transactions are now digital, and customers are using branches less. Notwithstanding this, access to cash remains important. We've bolstered our physical presence in several ways. Customers can now make cash transactions in any branch across any group brand. We've entered a new 10-year arrangement with Australia Post, which provides access to over 3,400 sites across Australia. And we're also providing access to approximately 7,000 fee-free ATMs Australia-wide. Becoming a more sustainable bank makes good business sense. We believe climate change will impact the economy and customers, and therefore, it is a risk that must be managed. Through our refreshed sustainability strategy, we are responding to climate change in three ways. Firstly, reducing our own emissions. And we now source the equivalent of 100% of Australian electricity from renewables. Second, setting up targets and pathways for the largest emitting sectors. And we've now set targets in 8 of the 9 sectors, and our focus is working with customers as they transition to 0. Third, collaborating with regulators government and industry on key national initiatives. Part of the group's sustainability strategy is to respect and advance human rights, including indigenous reconciliation. We've long advocated for reconciliation having launched our first reconciliation action plan in 2010. In 2019, we supported the Uluru Statement from the heart. We're also a founding member of Jawun more than 20 years ago. And through this partnership, 1,000 Westpac employees have completed secondments to indigenous communities and projects. This year, we supported the Voice to Parliament with a $1.75 million donation. Diverse voices and points of view are important to us, and we believe it leads to better decisions and outcomes. We know there are different views on this topic, and we also made it a point of not telling our people how to vote. And of course, we respect the result of the referendum. So in conclusion, Westpac is well placed. We're entering 2024 in a strong financial position, ready to navigate slower economic growth, some revenue headwinds and higher costs. We will strive to make banking easier, more intuitive and digital for customers. Accelerating the simplification of our processes and technology is key to achieving those outcomes. We intend to reduce the size of our technology stack by 2/3. And the aim is to lift service and productivity, grow in key markets and improve returns. Finally, thank you to our departing Chairman to our people and to you, our shareholders. Thank you.

Well, thank you, Peter. We'll now wait a few moments while the photographers and those with recording devices leave the room. Several shareholders submitted questions ahead of the meeting with the main themes focused on financial performance, climate change and Westpac's support for the Voice to Parliament. Peter and I have dealt with these themes in our addresses. Now moving to today's meeting. We request that questions asked today are relevant to shareholders and to the items of business. Questions on customer or personal matters will not be addressed during this meeting. Where you have a banking issue or question, one of our customer representatives here will contact you separately. Senior management and [indiscernible] Westpac's customer advocate are also available to meet shareholders outside in the full year after the meeting. Now since there are three climate change resolutions, to ensure the orderly running of the meeting, I will take all questions and discussion on climate change when we get to those items later. The Notice of Meeting has been distributed, and I'll take it as read. And so we'll now move to the matters of the meeting that are declared in the notice. I'll introduce each item of business separately and then respond to the questions related to that specific item. Now the first item of business concerns the receipt and consideration of the financial report, the directors' report and the auditor's report of Westpac Banking Corporation for the year ending 30th September 2023. If you'd like to ask a question in the room, please to one of the microphones or request a roving microphone. If you're online, please submit your questions now. If you're on the phone, please star 1 on your key pad. So we'll now move to questions on the financial reports. Could I take the first question, please.

Mr. Chairman, I would like to introduce you to Mr. Michael Sanderson.

Good day. APRAs increased the minimum capital requirements and introduced a brand-new capital buffer last Tuesday. The media has been silent. I need to do some critical looking, I think. This is almost double the CET1 requirement. It's gone from 4.5% to 8%. Is this an indication that APRA believes the bank's lack self-discipline? How will this impact Westpac?

Well, thank you, and good to see you again. Thank you very much for your question.

Good to see you too, John.

Yes. Thank you. Look, I've been in banking for 48 years, and I've been in Australia since '97. I remember the days when we operated on 4.25% capital, and we're now operating on 11.5% or thereabouts, which obviously has lowered the return of the banks, but strengthened their underlying basic. Then these numbers are broadly in line with global numbers. There's nothing specific really about Australia. And therefore, all the banks are required to conform to these measures. I will say though, if you take the total capital of the 4 major Australian banks. They are the strongest banks in the world by a long way. So while the regulators are making us very safe here, they're also making it harder to fill us to produce returns. But nevertheless, that's what we need to deal with. And so we've got a strong capital ratio in excess of our requirements. In general, we'll use that for dividends because we've got plenty of franking credits, and we'll use it for buybacks where we have excess credits. We don't really want to operate excess capital because it lowers the return and lowers our share price. And so you make a great point here. Now we are going to try and find a way of being lean and agile in this area without being in excess.

What do you think the APRA introduced this capital buffer? This is new, that's not...

Peter, do you want to have a go at that?

Thanks, Mr. Sanders. So out of the GFC, actually, there was a lot of International Regulation on capital and actually on the 1st of January this year, Basel, what we call locally Basel III was put into Australia. And as I said in my remarks, we've got a capital ratio of 12.4%. So it's well above those minimum numbers. So it's a response to the GFC that took a long time to come into regulation. They're also doing work on AT1 hybrid capital and thinking about whether that needs a trigger that's a bit higher, but that's work in progress. And they've done work on quite a technical area called Interest Rate Risk in the banking book. But we already hold capital for those. So I think the Australian system, including Westpac is well capitalized. It's not so much, it's not really a new requirement. It came in and was well flagged at the start of this year.

The banks have plenty of capital. I personally pushed back quite a lot on any move to increase the requirements in capital because bank's confidence is about profitability, not just about capital strength and the bank needs to be both. Next question, please.

Just 1 more clarification. Relates to shares, CET consisted liquid forms of capital, one of which is retained earnings. Will you be retaining more earnings, therefore, the share dividend be reduced proportionately?

Well, I think, as I said, it's best if we don't operate with too much excess capital over minimum requirements so that we can maximize the dividend and the payout to shareholders. So, so I don't think that we would want to, unless we've got a use for it internally going forward, it's not advisable for us to maximize our retained earnings. Thank you. Again, good to see you again. Can I have the next question, please.

Mr. Chairman, I'd like to introduce Paul Donahue.

Good morning. My name is Paul Donahue, and I'm here today to represent both the Australian Shareholders Association and the New Zealand Shareholders Association. I'm holding just over 6 million proxy votes from more than 1,000 retail shareholders worth approximately $133 million.

Welcome. Thank you.

First question relates to the recent technology outage. So on Tuesday, 4 of December, Westpac experienced an 8-hour outage, which impacted online access to accounts and payment processing. This was explained by the bank as a routine technology update. If the update was really routine, what would it cause such a large outage? And what a Westpac not switch over to a full [indiscernible] platform to ensure continuity of service and reduce the impact to customers?

No, thank you very much. That's a very good question. And can I apologize personally for that disruption. It shouldn't happen. Unfortunately, these things periodically do happen in banking. But Peter will give you some insight into what happened here.

Thank you, Mr. Donahue. It was a routine upgrade to customer data that is performed regularly during the year. Unfortunately, what happened was we had an issue with it. The solution was to roll back in terms of going back to the database. It just did take us a little while longer than what we thought. So what we did was we pulled the App down. It was ATMs, FPOS was still available but we know we have to do better. And like any incident like this, we will review it and review, make changes to the specifics, but also look across to make sure that we pick up the learnings.

It is clearly not good enough. And as we go more electronic, even more so.

Okay. And second question, on the topic of consumer stress. Most economists agree there's a lag between increasing interest rates and seeing an impact in the economy. Despite all the monetary tightening, consumers seem to be remarkably resilient. Do you have a view on how much delayed impact is yet to flow through to consumer behavior?

Peter, would you like to have a go?

Yes. I think, so maybe a broader answer. If we look at our different portfolios, credit cards. The amount of stress in credit cards actually reduced in the 6 months. So that was not an outcome I was expecting. I would have thought it would increase. Mortgages has gone up. So I think that's where most of the stress is, but even the delinquency levels that we have are pretty low by historical standards. The business stress has gone up a little bit. Why is it? Because of responsible lending requirements and the buffers that we had in. So we we're including higher interest rate assumptions when we lent historically. Will that, it all depends on unemployment as we look forward. So if unemployment increases, it will get tougher. And as I said in my opening remarks, we're prepared to help customers, and we encourage them to call us early actually.

Can I have the next question, please?

Mr. Chairman, I would like to introduce Ms. Antonia Burke.

Thank you, Chair. My name is Antonia Burke, and I come from a community called [ Pillingepi ] or the English name is Garden Point. It's on the North Coast of the Tiwi Islands, which is just above Darwin. There are about 350 people that live in our community. About 85% are traditional owners who have been there forever. I grew up there with my family. And on the Tiwi Islands, there's about 2,500 people spread across 3 communities and outstations. So we've traveled down here today to meet with you and have a conversation with you. Thank you for allowing us to be here. In April this year, Tiwi People filed a human rights complaint to Westpac using your grievance mechanism over its involvement in financing Santos' Barossa gas project. Westpac dismissed Tiwi People's human rights complaint. Westpac refused an invitation to talk about the human rights complaint with us on Tiwi Country or even to engage with us directly. Westpac said that direct engagement with Santos is a more appropriate and effective course than continued direct engagement with Tiwi people. In your reconciliation action plan, Westpac acknowledges the importance of free prior informed consent, in supporting self-determination for indigenous peoples. Westpac even identifies it as the most salient human rights issues to focus on. Thank you for putting it in there. Westpac, even says, as a bank and a lender in Australia, we have an important role to play in supporting self-determination. Free prior and informed consent has been recognized as an important principle for supporting self-determination for aboriginal [indiscernible] peoples. Again, thank you for putting that in there. But despite claiming to be committed to self-determination and FP, Westpac is refusing to even meet with Tiwi people. The people who have been directly impacted and will be continuously impacted by the project that it's financing. It seems like Westpac's reconciliation action plan is a little more than corporate window dressing. Given that your peers at the Commonwealth Bank are engaging with us directly about our human rights complaint, which we also lodged with them at the highest level, and on an ongoing basis, will you commit to a dialogue with us on the Tiwi Islands and actually connect to where your money is going?

Well, I can give you a quick and easy answer to that. So Anthony, could you stand out? Anthony runs the business connected to this, and he will meet you with you here just after the meeting.

And what's Anthony's role?

He is one of the senior people running the group's businesses. And he ran institutional banking and that runs business banking and wealth. So he's the right person here to talk to you and please control of overlending in areas, particularly in mining and fossil fuels.

Is there a reason, though, that we haven't met up until now, why did we have to come here to talk to you about a project that you're financing on the Tiwi Islands, which is impacting our home. Why we have to come here to meet Anthony, why didn't you come to us?

Can I first say, look, you've come along way, and I really appreciate that you've done that, and I'm sorry that you had to come all this way. I'm not, I wasn't aware of it personally, okay, but I'm aware of it now, and we'll deal with it now, and we will meet with you. But in general, we won't talk specifically about individual customers because we can't do for privacy reasons. But in general, we -- you know that we are bringing down our fossil fuel exposures quite significantly. But we've got Anthony here. He is the right person who's also responsible for all our renewable programs in the group including fossil fuel reduction. So he is the right person here, and he will meet with you.

Thank you very much. Will Westpac also provide assurance that the loan will be properly assessed in accordance with your governance model and FPEC, especially considering the ongoing court proceedings and the potential impact on the community?

Well, I can't comment on any specific project alone. It's not appropriate for us to do that. But I'll make some general comments. These facilities come in 2 ways. There's either a project where we finance it directly or don't finance it directly or we've got a general relationship with a customer that we lend to for general purposes. In the first, we do know what we're doing, and we do know about the project and we can make a specific decision. And I'm not speaking particularly about this one. But where it's a general amount of money we lend to a customer that is not related to project finance, we have no control over where that money goes afterwards, but we do assess it. Now the way we're going forward with this is that we've committed that we will only support customers who have transition plans that are acceptable to us by the end of 2015, and if they are not acceptable to us, we will not continue to finance them. Now Peter, I don't know if there's anything else you want to add here?

I'd just add, thank you for coming down. As the Chairman said, we really can't talk about individual customer situations. But to your question about will we apply our policies to all customers? Yes, we will. And it will only be able to engage on Westpac-specific issues. We can't speak about the customer issues when we speak to you.

Mr. Chairman. I will now Introducing Ben Galen.

My name is Ben Galan from the Finance Sector Union who represent Westpac employees. I'd like to also acknowledge the traditional owners of the land in which we meet today and pay my respects to the elders past and present. Last week, a significant number of our members, your employees had their personal data exposed when payroll information was mistakenly sent to an unrelated external superannuation fund, so not the default or nominated fund. This has caused enormous distress to impacted employees who have lost confidence that the personal data is secure. We understand that measures have been taken to correct this data exposure and Westpac has reported human error as the cause. However, our members are concerned that this type of error exposes a larger risk. Members are feeling the impact of the well over 1,000 staff positions lost over the past 12 months and the systemic cost cutting and simplification of functions and roles within these impacted areas of the business. We're hearing countless reports of ever-increasing workloads and a new culture emerging at Westpac, where excessive and unrecognized hours of work have become the norm. So my question is this, in light of these growing and unsustainable pressures of doing more with less, what assurances can you give us that Westpac is able to manage the risk of incidents like the data breach experienced by our members last week.

Well, thank you. And Peter will deal with the second part of that, which is the workload, et cetera. And I'll deal with the first. Look, I apologize to our people for that mistake. It was an internal payroll era where some superannuation payments were directed not to their own super fund but to another super fund by mistake. And that's what happened here. And of course, that resulted in that fund setting up new accounts for those employees. We contacted the super fund to stop the payments and redirect it back to employees' correct superfund, so we did repair the damage here. We confirmed with the super fund and who incorrectly opened accounts and got them to close the accounts and required the data only to be retained if there was any remediation required for the benefit of the individuals, but no longer to retain the data. So the data is safe. And of course, you're absolutely correct. This shouldn't happen. It was a payroll mistake. And essentially, we sent the money to the wrong super fund. And we've put in new controls to make sure this doesn't happen again. But Peter, do you want to deal with the other side?

I think the -- thank you, Ben. And I think there's 2 parts to that question. One is about how we pay people on is workloads. Just on how we pay people. We're investing significantly in a new time and labor management process, including time sheets so we can capture accurately the work that's going on. That will give us information and I think better information to manage the business as well as appropriately pay people. In relation to workload, that's an ongoing conversation we have with all the teams. We encourage team leaders to have those conversations with the teams. And where we do see it, we do increase resources. So it's -- yes, we have had lower numbers this year, but there's been asset sales where we've had people leave the company and some productivity initiatives. But we're aware of it, and we encourage our leaders to engage directly with the teams on workload.

Thank you for that. I suppose just to sort of finalize on that. It's that assurances, I suppose, that our members are looking for that the changes that have occurred and the big changes that have occurred in the last year aren't going to lead to sort of more of those types of problems or types of various those types of data breaches that we?

I wouldn't link the 2. This was an individual error in terms of this payroll. It did happen sometimes. And we've jumped on it to get the money back, close the accounts and engage with the company on security of data, and so that's all done. In relation to more broadly, just risk management, I spoke about the core program in my opening remarks. We have lifted our risk management capability, and we will do more in the coming year.

Can I have the next question, please?

Mr. Chairman, I'd like to introduce Mr. Paul Fanning.

John and Peter, I missed the first half of your address, John saw a digital copy of you addressed. So what a great time you've had as Chair and been dynamic and many things have come and gone during that time. I've been too many AGMs in the past, probably not for the last 3 or 4 years. I draw your eyes to 3 pages in the annual report, which composed of 3 questions. One is Page 5, Page 11 and Page 21. Question one. shareholders of all shapes and sizes are concerned by credit provisions and the credit provisions obviously being way above the expected losses, both the CAP and also the CAP to credit RWA, risk-weighted assets and the stress exposures. What interested sectors seemed to be most impacted and how are you controlling this, well did a CFO responds to this? Or are you going to hand it over to Peter.

Okay, Peter?

Okay. Now do you want me to the 2 questions [indiscernible]?

We'll do one at a time.

That's all right. So in terms of -- where we're at in terms of the economic cycle is we've got a loan impairment charge at 9 basis points of loans. It is -- it has increased from last year, but we would expect an impairment charge over a cycle of 15 to 20 basis points. So it's actually quite low. And that's probably been one of the striking outcomes in this result that impairments have not been as high as what we thought. But we do focus on credit provisioning, so that we did increase credit provisioning this year in part because we've seen a little bit of stress coming through in the portfolio, in part because the forward economic forecasts are a little bit worse than they were last year, and that says your credit provisions. So at this point, actually, we feel like the portfolio is in decent shape. The credit coverage is good in terms of collective provisioning and the charges are okay. Just to give you a context, the stress exposure the number there at 1.286% -- 1.26%, that peaked at 3.2% in the GC. So it's in a long-term historical sense, it's still pretty low.

But Peter, just on the -- can I just -- for the benefit of shareholders, you asked quite a good but a very technical question. And then the expected losses average across the cycle to the numbers that Peter talked about. But they range from a very low number to a very high number in difficult circumstances. This is actually quite a low period that we're in at the moment. And therefore, it's surprising although, in fact, this range of numbers is the lowest I've seen since '97. So it's really quite low.

Just before I move off this question, are there any particular nominated sectors that you are or the bank is concerned?

We haven't -- so I think we've seen specific companies having challenges as opposed to sectors. Now we did see construction. So you think about the property building companies that had fixed price contracts and then labor and materials went up, but that's been work through, an accommodator will be an example. But when we step back and look at the big portfolio, it's been more specific to customers as opposed to sectors. We are seeing mortgage stress.

It was interesting. Now question 2 relates to Page 11. Clearly, Peter and John, the business back and WIB carried the results for the FY '23. But your New Zealand business seems to be suffering. What are the causes? And how is the bank team to address them? It was in the pan just for this year? Or is the exchange -- exchange issues or?

Probably. But I'll start there and then Peter can go into more detail. Both in Australia and New Zealand, we had the equivalent of regulatory undertakings that we had to reallocate money to, which increased the amount of cost in New Zealand, investment in New Zealand directed in a way from other things. As a consequence, we've had most subdued returns in New Zealand than we would normally have. Now fortunately, that all ended in the year just gone. And so hopefully, now we're really expecting far better results out of New Zealand. I don't know, if you want to say anything?

Just a couple of things. New Zealand had an asset sale in the previous year that wasn't repeated. So that was a one-off and that impacted their revenue. But the biggest change there was actually in the impairment line, that was the business where the impairment charge increased year-on-year. So in terms of the performance of the business that grow its loans, a good job on managing margins. So we feel like it's in a good position. It's through the regulatory projects that John referred to. So we want to see a better performance out of that next year. Consumer is all about mortgages. So there is extreme competition in the mortgage market. And that has seen the margin in the consumer business come down quite a bit. We will do what we can. We've increased some of our pricing on the basic product. Some of that reduced some of the discounts in the fully featured product, but that is a very competitive market at the moment, and we'll see how it goes over time.

So we think it's going to be all right. There was another thing. The regulator in New Zealand has increased capital requirements very aggressively, probably the highest in the world actually. And that, obviously, was a low return during the period as well.

I was aware of that, John. Look, just for the breakout of the -- your main divisions, in the accounts towards the back of this, in the income statements, can you please go back and perhaps give a bit of breakout in the metrics or the numbers of each of the divisions. Now the only place where I would see that would probably be more in the analyst pack, which was given on the results day. But it doesn't seem to be making it into the annual report. I assume someone in the group secretary that's writing the report, and then it's [ inspected ] by each of the executive. Can we perhaps get -- I was desperately trying to look for some breakout numbers on the New Zealand division, but I couldn't find them.

In 5 rows in front of you is our CFO. Michael, just put your hand up. Just have a chat with Michael after the meeting.

And Michael is the?

CFO.

Oh, the CFO. Oh, he's there.

He's always open for feedback.

But I'll make another point. Look I think this is -- we don't want it to get too thick.

I realize that. Look, John, I'm probably a bit picky, and probably both you have seen me here before. Okay. Page 21. You're talking here about EPS, dividends per share over 1, 2, 3, 4, 5 years. Look, I'm a great one for TSR, total shareholder return. And the banks collect that were including Westpac, the TSR over 5 to 10 years, has been really been that crash shot. If you've been a shareholder for say, 10 years or 15 years or 20 years, yes, okay. But the last 5 to 10 years, the total shareholder return has really not been very startling. And I've talked to other people in the past about TSR. And I think, really, on or around Page 21, I would encourage the bank and probably encourage Michael, as CFO, to perhaps put some TSR metrics in there, too, in addition to the EPS and DPS -- any comments?

Yes. I think there are 2 points I'd make. We've had a period of negative to low or 0 interest rates around the world, which is the worst possible environment for a bank. And therefore, you're absolutely correct. Banking results, globally actually, have been subdued, particularly in Australia. But with the rising interest rates, that's been beneficial to the bank. And therefore, you started to see that upward slope that you're seeing on that page. I think it's fair to say though, in order for this to really go well so that you get your TSR up, it's harder to get the earners growth up or to get the return up or both. And therefore, that's what we're working on. And we actually are reasonably confident that those things will happen over the medium term.

So John, next year, we'll see some TSR metrics appear in [indiscernible]?

Okay. Thank you. That's noted.

We'll pick it up. There is some.

Sorry to be a bit picky, Peter. Thank you very much.

All right. Well, thank you very much. Next question, please.

Mr. Chairman, I would like to introduce Mr. Simon Munkara.

Good morning. My name is Simon Munkara, and I'm a traditional owner from the [ Jikilaruwu Clan ] which is on the West Coast of Bathurst Island and the Tiwi Island. My question is about you committed to human rights. Santos operation will have an impact on my country, on my family and our or way of life. We spent a lot of time writing to you, using you, [indiscernible] mechanism to make a real complaint about a loan that you entered into. And based on your response to us, it's really clear that you're not interested in hearing from us and what it means to us. You haven't done your due diligence with Tiwi people. You are responsible and obligate to find about how your decisions are going to have an impact on people. That's what the United Nation demands and you are committed to that. The way you people have treated us is so disrespectful. You haven't tried to talk to us or meet with us. And yet, you say you'll talk directly to Santos about Tiwi people. The Santos still trying to go ahead. So your talks have failed. But you don't tell us about those talks. And you're hiding beyond confidentiality. You have called our request unreasonable. What is so unreasonable about having a conversation about a loan that will contribute to the direct harm on my human rights? You said that corporate loan to Santos doesn't contribute to harming me or my family. How did you come to that conclusion? Are you even contacted to where your money is going?

Well, look, thank you. Again, you've come a long way, and I really appreciate it. That -- we could probably help you here if we didn't have these privacy requirements because we can't actually tell you anything specific. So -- and I can't even comment that we have a relationship with Santos. However, with our obligation, therefore, is to the customer. And if the customer actually has this issue with you, really, that's where it really should be addressed. Now, you did make the point, though, that we haven't met you. And I've already confirmed that we will meet you and Anthony is here. He will meet you right after the meeting. And you can start the dialogue from me here. He's bound by these problems we've got on privacy, and he can't be specific about any individual client or loan. But I also made the point more generally. Where it's a project financed to a specific location, we know about that location, et cetera, and we know the finance is directed there, and we can make a specific decision related to it. But where the finance goes generally to the company at the center, we don't know where that money actually goes, and that -- because it's just a general pool of funds, and it then goes into whatever areas they want to put the funds and it's all into mingled. So that's one of the problems we have in dealing with this kind of circumstance. But that's it. But Anthony will definitely meet with you. And I'm sorry, we haven't met with you before, but we will do so now. And thank you for coming all this way. Can I have the next question, please?

Mr. Chairman, I would like to introduce Mr. Ron [indiscernible].

It's good to see you again, John. I appreciate the work that you've done over the last few years, and same with Peter. My concern relates to the balance sheet and the momentum in these higher margins that you're referring to. Now I may be wrong, but the profit before tax in 2018 was [ $11,731 million ]. The profit before tax this year is [ $10,305 million ]. Now that's a decrease of 13.83% in the last 5 years. It's not a growth. It's a decline. But at the same time, the amount of interest-bearing loans has gone up 21.47%. In other words, we're in a higher exposure, we were earning more profit for lending less money 5 years ago. Now this is a concern to me because as a shareholder, we will look for better returns. And it seems to me that there are 3 elements that are missing here that we're not addressing. There's the task of making money. There's the individuals, which are the customers and the staff. And we seem to be leaning more towards the customers and the staff, and forgetting that shareholders need to see a return on their money. If we're lending more, we should be making more. We should certainly should be earning a bigger profit now if we've lending a lot more money. So something is going wrong, where we've taken our eyes off the ball. And I know that you've got a difficult job dealing with indigenous matters and meddling governments. We're in the business of making money when it's all said and done. We've got a lot of shareholders and retirees and everybody who's working in the workforce is involved in superannuation. So we must keep our eye on the task of making money, not at the expense of the individuals or the investors or the clients, but the balance has to be there. And this is what I feel we're missing at the moment. We have taken our eyes off the ball in terms of profitability.

No, look, you are very correct in the numbers that you quoted, that we made slightly less money this year than we did in 2018 but there's an explanation for that. And of course, you've seen it in the past years. In 2019, we had a very significant regulatory issue, if you remember with AUSTRAC as a consequence and other regulatory matters. And of course, in 2020, we had an enforceable undertaking by prudential regulator, APRA. Now that required us, a, to pay an enormous penalty relating to the AUSTRAC matter, which reduced the profits. And at the same time, we increased our investment spend to $2 billion per year, which is a cost increase, and therefore, a profit reduction in order to deal with the underlying risk issues associated with that. And that's the explanation for the reduction in profit over these years. Fortunately, although I'm sure that it will take -- whether we can get credit for it or not, it's gone up since Peter and I came, just as a matter of interest. Now that might be a pure luck, but it has gone up. And in fact, we are conscious of it. And the fact that we're dealing with this historical matter, where we didn't integrate those acquisition technology and processes in the past, which has caused really quite a cost burden in the organization. Once we deal with that, then we should actually start to see more normal times and therefore better times. And so we are working on it. I'm pretty confident it will happen. Can we have the next question, please?

Mr. Chairman, I would like to introduce Mr. Pirrawayingu.

I do want to acknowledge the traditional owners, the brothers and sisters of this land that we are on and pay my respect to the past, present and the future leaders. [indiscernible] that we're in your presence, the AGM meeting. And we are respectful that you have invited us and the investors that are here. It's a privilege to be here. We thank you for this. I am a senior elder and a traditional owner of the Munupi Clan on the Tiwi Islands. Up until a few months ago, I was the mayor of the Tiwi Islands, and more importantly, my responsibility lies in protecting my family, country, culture and the surrounding sea country. Obviously, we live on an island surrounded by sea, so members of my community and my family route to you to make a complaint. My question is about your loan to Santos, which you say is not connected to the Barossa gas project. You say it's a corporate loan, and you don't know how Santos will use your money. This seems to us like a trick to avoid responsibility for contributing to this harmful project. Are you saying to us and everyone in this room that you don't know how Santos is using Westpac's money? Surely, this would be considered negligent. Surely, you would have to know how someone is going to spend USD 25 million of your shareholders' money, and if they can even pay it back. There's another question. We've met with the CEO of the Commonwealth Bank, and we were honored to have his presence, to meet with him directly. We would like to meet with -- directly with Mr. King for a respectful dialogue. That's the second.

We'll do the second first.

Sure. I'll come and join you with Anthony.

Okay. And on your first, we didn't confirm anything about Santos or whether this was a general loan, we're not able to do that. But I was explaining, in general, the problem that we have, in dealing with this kind of question. We do understand the issue that you have with this. And therefore, I think the best thing to do is for Peter and Anthony to sit down with you because you've paid respect to us. So thank you for that. And we will bear respect to you as a consequence. Thank you. Can we have the next question, please?

Mr. Chairman, I'd like to introduce Mr. [indiscernible].

Good morning, Mr. Chairman. Good morning, Mr. King. I would like to congratulate you, Mr. King, on doing a great job over the last 4 years. I think you all have done a very good job with the constraints that we've had. Currently, we've seen the interest rates being previously at an all-time low. Now we're seeing interest rate and the cash rate increasing. And related to the financial statement where we are now, over the next 12 months, looking forecasting ahead, what do you see as the home loan sector and the amount that potentially could be loaned out over the next 12 months, knowing that our cash rate has increased and potentially will increase more to affect the interest rate to the home loan owner? What value do you put on that over the next 12 months as far as borrowings?

Peter?

Yes. Our forecast for loans in aggregate across business and mortgages is to grow around 4%, pretty similar in mortgages. So not stellar growth in any sense, but I think it would match effectively real GDP growth plus a little bit of inflation is what we're thinking about in the mortgage market.

And how do you see promoting that to be a leader in getting more home loans out there? How do you see promoting that so that number of 4% could go for 6%?

We will do it. As the Chairman said, one of our aspirations is to grow our system, and if we can to take a little bit of system, but we've got to be cautious about that at the moment because it is a very competitive market. In terms of that, we'll be battling in the refinance market. We'll also be battling in the new acquisition market using all our channels. We've improved our service by getting down to one mortgage origination system, which is improving our speed, yes. There's more work to do there. So I don't think it's promotion that's the issue. It's speed and service, and that's what we're focused on.

We could get 6% without any problem if we discounted the price. And by discounting the price, we would make less margin, and that will not be in your interest. So we're working this tight rope at the moment to try and find a way of getting around system growth at decent margins and therefore, pushing the margin down aggressively will hurt the return and so for Peter's assessment of this is a good one.

Thank you for that. But would you see if there was an increase in numbers, even if there was a small marginal decrease in the profit of the interest that your funnel would open up and you'd get more customers in? And this is relating back to customer service and long-term for the share price to increase. So opening the funnel, being more accessible with the loans, that would drive it up over 12 months, 24 months, 36 and so on.

Absolutely, being faster to market, having the best products and the best relationship with our clients, aside from price -- pricing is exactly the way to deal with that. I don't know if there's anything you'll add?

I think our 2 big metrics are growth and return, and we want to grow and improve return, that's what gets the share price up. So that's what we're after.

Okay. Well, and my second point, in relation to bank branches nationally, as we've seen with a number of banks closing down branches, regional and other. Is that something that's a program for you over the next 12 months, closing more branches? Because it is related back to my first question, getting people through the door, getting loans signed and credit cards and other products. Is that on the agenda over the next 12 months, closing any more branches?

How we think about -- so the big service channels for us now are digital, 96% of our traffic is coming through digital. That's why the rating in the app, the capability app is critical. We've invested heavily there and we will continue to do that. In relation to physical, that depends on how customers use them.

But there's also -- Peter, there's also a lot of people that don't use digital, who may be a little bit more older, who still need accessibility to branches so that they can do their business of loans, credit cards, business lines, et cetera. So there's no real way to monitor that. You may have the 96% through the digital area and platform. But it's not recorded on how many people have not accessed or don't want to use the access of the digital platform.

What we said -- so the third, really, the new channel that's coming up is video. So video in your home.

Oh, wonderful.

Video on your home, and you can do transactions such as home loans from your home effectively, so.

Well, that's terrific. And I'm sure customers will love...

Couple of other bankers are doing that and some of the branches that have closed the bank is they're actually gone to being video bankers.

And lastly on this topic. We've seen ANZ stock cash deposits in their branches. Is that something that you're also going to be advocating in the future, with less cash or not to deposit cash in bank branches?

No, we're -- as I said upfront, we've got the Australia post arrangement. We've got cash in our branches, and we've got an ATM network. We recognize a lot of people, particularly small businesses, require cash. I think that will change over time. I actually think with some of the new capabilities such as making your phone a merchant terminal, we will see businesses, small businesses, community groups, charity groups be able to move to digital as well because you don't need another piece of hardware. It's just your phone and you download an app and you can exchange money. So I think that's the long-term trend in my mind. It will continue to go digital, but cash will always have a role in Australia.

I mean, look, you do miss an important point, though. I mean, look, I'm 76. And certainly, we -- there's a principle here, we should deal with our clients the way they want to deal with us, not the way we want to deal with them. And that's really important. The problem we get, of course, is that people are just not using the branches. And therefore, we're trying to find that balance here by sticking to the principle but also rewarding shareholders with lower costs, and that's the issue we're trying to manage. It's quite difficult.

Mr. McFarlane, thank you for that. The point is that it's still having accessibility by phone to make appointments, that's one. I think that all in all, if there's that customer-centric like how you've just said, that the customers to deal the way the customers want, not the way the bank wants, well, then you've won the business, if that's the way that you operate.

Certainly, that's the principle. Can we have the next question, please?

Mr. Chairman, I would like to now introduce, Mr. Craig Caulfield.

Good morning, Mr. McFarlane. Thank you for your service and all the best in your retirement. And can I also thank the Board of Westpac because I've attended for several years, and one thing you always do is meet the shareholders, the small shareholders, at the end of the AGM. So that's something we appreciate, where we can ask some other questions that might come live. Commissioner Hayne exposed some tragic farm repositions at the Royal Commission. One example on display was testimony from Tasmania Farmers, Michael and Dimity Hirst. Michael said with some emotion, ANZ never showed any compassion. Commissioner Hayne, nearly 5 years ago now, specifically recommended nationally consistent farm debt mediation scheme, replacing the inconsistent schemes we have across states. Every major and second-tier bank has agreed to a national farm debt mediation scheme. Treasury Jim Chalmers announced all recommendations from the Royal Commission are now complete. That's not true. Westpac says on Page 14, your strategy is to advocate for positive change and speak up for what's right. Two questions, please. First, is Adele Ferguson correct when she quoted in the age on the 6th of February 2019, maybe we're just supposed to wait? And secondly, will Westpac robustly advocate for a nationally consistent farm debt mediation scheme to support our farmers and implement this before the next AGM?

Peter?

Yes, I don't know the Adele Ferguson, I'm sorry. I can't really comment on that, sorry. In relation to farm debt management, as you say, part of our strategy will advocate. I can have a look at that. It's not an area I've actually had to look out for a little while in terms of a nationally consistent approach. But it really needs a government-led approach to get it national because it's got to be across states and federal. So I don't think we can implement it ourselves, but certainly, I can inquire and speak to the people that we know will make those decisions.

And I've just seen Anthony making notes on that. So thank you.

You could still use your persuasive influence through the Australian Bankers Association. I've raised this at other AGMs. The Commonwealth Bank, Matt Comyn said, absolutely, we're happy to have national farm debt mediation, and quote him on it, Bendigo Bank has said the same. All of every bank has said it, and I can find quotes over 5 years. It's like there is no incentive. So it's not on your radar, it's not so important. But we've got increasing interest rates. Our rural sector is very important. So it's looking ahead for another year or 2 years, and there will be disputes over bank loans with farmers, and we need to have that protection in place, that's been promised. All the bankers have promised. You promised it, yes. Commissioner Hayne promised it, yes. The Australian Bankers Association promised it, yes. But there's no traction. So I'm seeking to give you a little nudge.

Yes, I can sense that.

Yes. And as Peter, you didn't know, just last week, because the Chairman of the Australian Bankers Association was Peter, but he's no longer the Chairman, but he's still a member. And so he can talk to the Chairman, who's now National Australia Bank, and advanced that issue. So he's taken a note.

Yes, you're probably wanting to nudge, I've been -- I've been a few different ways.

That's for you.

Next question.

Mr. Chairman, I would like to introduce Ms. [ Myra ] Caulfield.

Good morning, Mr. McFarlane, Board members and fellow shareholders. I'm really concerned about how Australians are getting scanned of their money so easily. It's happened to some of my friends, and I'm sure to shareholders in this room. I was recently in a queue at a bank, and both the person ahead of me and behind me were expressing how money had been taken out of their accounts illegally. In October, at the Commonwealth Bank AGM, I asked a question about how Commonwealth Bank are protecting customers from being scammed. The CEO, Matt Comyn said they have developed software technology called NameCheck. This technology of matching account names to account numbers has substantially reduced Commonwealth Bank customers from being scammed. Mr. Comyn said Commonwealth Bank had made the software technology available to all banks in Australia. My question is, did Westpac introduce this NameCheck technology to protect their customers back in October?

I'm going to pass that to Peter, and I might ask the Chairman of the Risk Committee, because you had from us quite a bit to see if there is another comment once Peter makes his comment. But one of the problems about the online banking in Australia is sometimes, it doesn't have that name check. In other places, you get that name check, which is actually quite useful.

Yes. Maybe I'll just -- I'll come back to the specific question, but just talk a little bit about scam. So there's really the big foreign scams, investment scans business e-mail compromise, remote access to your computer and romance scams. They're the ones where people lose a significant amount of money with investments dominating. So they are -- you get an offer to invest on a social media platform. It turns out it's a fraud or a scam. And so to me, this has got to be an ecosystem approach. We need people to been more -- less trusting is probably the best way to describe it. Question things. If the return is too good, it probably is, we need to see more from social media platforms to take this down. Telcos are being used in a way to send messages and the banks have got a big role in doing what we can to stop it as well. So we think about it in that way. We stopped last year, we prevented scams for $235 million. So people have proposed, basically, to move money and we stopped it. It's -- we're about 66% of stopping it. So not where we needed to be. We've got a full core press on what we can do there. Coming back to your specific on name check, we have a capability called Westpac Verify, and broadly how that works, if you're paying to someone that we don't recognize based on historical payments, we'll send you a text and say, check it, and we hold the payment for 4 hours. So we've had that live. I don't have the exact date for a majority of this year. The ABI has just agreed to having a more consistent approach across major banks, customer-owned banks, regional banks through the NPP. So that's work in progress. And we're working on exposing some of our algorithms and thinking when you make a payment. So did you get this in WhatsApp? Are you trying to -- caravans are a big scam at the moment. So you're buying a caravan, have you seen it? Those type of questions, we're looking to push into the payment process next year. So payments will take a little bit longer, but we think it's the right balance to have a little bit of friction in the system to do that. So we do have an equivalent of the CBA capability called Westpac Verify.

I mean, this is a major societal problem. Audette, do you have any general comments on?

Thank you so much for your important question. I think Peter has given you a very detailed response. But as Chair of the Risk Committee, I will give you a couple of comments. First of all, thank you for raising an issue that is so important to our customers. And as we think about managing risk, both financial and nonfinancial, our customers sit at the heart of that, and we are aware that scams are increasing and the technological risk and other forms of cyber risk are also increasing. So these matters are really at the heart of what we do. Customers are our #1 pillar in terms of the way we think. So I can assure you that these issues receive very great amount of focus from both the Risk Committee and the Board. Thank you for raising it.

Does that mean you have invested a certain amount of money for scamming?

I don't know off the top of my head, but it'd be in the tens of millions of dollars we're investing. One of the things I forgot to say actually was we're blocking transfers to digital currency exchanges. That's one of the big ways that investment scams are getting out of the country.

There are 2 parts to this, is that there's the scammer, there's the customer and there's the bank. It's interesting. I've been involved with financial literacy in Australia for quite a long time. And the levels of financial literacy are not adequate here. There are people, if they're offered a very high return at a 0 risk, they will take it. Now that doesn't exist, okay, for example. And in fact, you won't believe this, but there are clients that we've had who we found it to be a scam. We've told the client, it's a scam, don't make the payment, and they make the payment and lose the money. So that actually is happening here. And it's -- and therefore, I do think we would benefit from more awareness by the community in terms of -- if the bank warns you, against doing it, you should actually take notice. I mean, my personal view is we shouldn't make that payment on behalf of the client, even though we're instructed to do so, because we know it's a scam. And therefore, that's the only way to avoid. But the problem is the client will go somewhere else and make the payment. And that's a big issue for us. Next question, please.

Mr. Chairman, I would like to introduce you to Mr. Michael Sanderson.

First up was the second question. A couple of comments. On scam, I think you need to change the language. There are scams and there are digital scams. The digital scams can go across jurisdictional. They are different. They are a monster. You're comparing a Lambretta with the road train. I think any transaction of a digital nature that goes outside the jurisdiction, there should be a great firewall. The other word is privacy. [ Start off with ] a shield, now uses a weapon or a form of cover. Again, misuse of the technology or the definition. But anyway, that's just a couple of comments. I've just got Mr. Matt Comyn, would like to make a quick comment.

The role of banks, clearly, is to take depositors into lend funds. We also do create deposits in the system and expand the money supply, when we lend money.

Yes. This time, you had another CEO address you.

Oh, very high tech.

Just for those -- yes, yes. That's amazing, what digital can do when used properly. Just for those who didn't know, Mr. Comyn said, we also did create deposits in the system. We expand money supply when we lend money, all banks do it. And we -- I think I gave a hypothetical answer last night and Mr. King was able to say that's hypothetical. Where does Westpac represent -- is the microphone on? Okay. Where does Westpac represent these created deposits in their annual report and what are they called?

I'm not sure I understand the question, but...

They're part of deposits, they're part of wholesale funding, they're part of equity. So they're not a specific pace. I know you've raised this question before last year. The role of money supply in the country is really through what the RBA does with interest rates through the capital requirements of the banks, through the lending policies that we have. So all that goes into money supply. So it's not -- they're not anywhere in particular in the balance sheet. It's part of the fact that we're an intermediary in the economy.

Okay. Isn't that misleading to call something that banks create from nothing a deposit? Wouldn't it be more informative and honest if they appeared in the balance sheet under heading, say, pseudo liabilities?

Oh, maybe you should call Mr. Comyn. I've got his mobile number.

Well, I [indiscernible]. There's a line labeled [indiscernible] deposits or Clayton's deposits?

I think a deposit in -- when we take a deposit, we owe someone, and that's how we think about deposits.

Okay. A related question. The fundamental purpose of the RBA overnight cash rate is to set the interest rate that banks pay each other on bank -- on other bank funds that they hold. The RBA cash rate is not just an expense, it's an income also, so when you're holding somebody else's money, you got to pay them a few quid. That's old, isn't it, gee, and vice versa.

That's not technically correct, what you said, but it's a surrogate for that. But Peter will going to explain it.

The first point, in the curve for interest rates is the RBA cash rate. And it's also used broadly in the exchange settlement account with the Reserve Bank, where you've got funds you need to deposit with them. So it creates the starting point for the interest rate curve in the economy.

But the risk between banks is interbank bank rate.

Interbank rate, which is a cash flow?

No, not necessarily.

It's different.

Okay. My ignorance, [indiscernible].

It's the [ glideball ] or whatever.

Can Westpac explain the linkage and how the RBA cash rate impacts on these Clayton's deposits that it creates in order to balance its balance sheet? So I personally -- it's quite simplistic. You create something to balance the balance sheet because you've expanded money supply. What is the linkage between the RBA cash rate and that, see, those deposits?

Yes. This is de ja vu because we had this conversation last year.

No, it's different.

So I think it might be best if we just took it offline.

No, I'd like it online because everyone in Australia needs to know. Everyone has got a mortgage out there, the current [indiscernible].

I don't accept the characterization you're giving of deposits. So that's sure. So I don't accept that. In relation to the rate of -- the rate we pay for deposits is on our website. All deposits are equal, depends on the product, and we pay them that interest rate.

Even the pseudo deposits that you create?

I don't accept -- I don't accept that characterization.

So you're saying, what meant is, we do create deposits in the system where we create -- we expand money supply is fundamentally wrong?

I'm not going to comment on that.

This idea is not hypothetical.

I don't understand where we're going with this line of thinking. I just don't understand...

Where we're going, where we're going, we'll put it quite simply, there is no linkage. Every time interest rates goes up, so does any profit.

But the deposit is money a customer gives us specifically. We then give -- we will then use that money however we want or we'll lend it or whatever. But there is a specific amount of money comes to us, and then it will leave us for some purpose, whether it's expenses or it's a loan or it's an investment or whatever. But on both sides of the balance sheet, the recall, we get the deposit, we get the loan.

With respect, John, you're conflating the deposits -- this deposit, with the deposits that are created. I'm specifically talking about the deposits that are created by the bank, that we know appear in the deposit column, that don't represent offshore borrowing, don't represent depositor's deposits. They are a creation of the bank that enables it to balance its balance sheet.

We don't accept that.

I don't accept that either. I've been doing this for 48 years.

I have a couple of other questions, but probably [indiscernible] on different subject.

Next question, please.

Mr. Chairman, I would like to introduce Mr. Neil Davis.

You have a very difficult job, of course, because a lot of what you've been talking about today also depends on hope and depends on luck because some of the things that you have to deal with now, very complicated with scams and with artificial intelligence and those sorts of things, the replacement of heads on people so that they can sell something and people think it's real. So you've got a big job. But when you write a report, sometimes you put things in that are a big worry, and I would like to address one of those. In Mr. King's report, his letter, Page 8. We still have a higher cost bank relative to other -- our peers. And then you go on to say that we have to address that and reverse it. My questions are, I'd like to know, in dollars and cents, how much it costs Westpac in cents to earn $1. And I'd also like to know what you know about the other peers and how we are relative to them because long ago, a CEO for St.George Bank made the point that he was going to reduce that amount of cost and improve the bank. And I'm looking forward to that, because in '19 -- sorry, in 2015, in March, this bank had a huge spike. The share price was $39, then, of course, COVID hit us, and we ended up with a bank price of around $15, low price. The current price is about $22. To put it bluntly, the bank's been wallowing along with their bit. Do you agree?

Well, you made 2 points. On the first question that you asked, it's in the high [ 40s ] of cents at the moment. And our aim is to get back to the low 40s of cents for $1 going forward. So that's a specific answer to your first question. Now, it is fair to say that we've had better times in Australia and for the bank. All we can do is take the position we inherit and try and make it better, which is what we've been trying to do. We actually have made it better. We think it can be better than this, and we're investing to make it even better going forward. And I won't be here, but I'm reasonably confident that, that will happen. I don't know, Peter, if you wanted to say anything?

We're third in the cost-to-income ratio, 49.4%, and the best is 44%. So it's about 5%.

And we need that to come [indiscernible] and low 40s is about to go. And let me -- if it becomes more digital, more electronic over time, that number could be even lower.

Well, I'm certainly hoping so and I'm sure everybody here is hoping for that, too.

Next question, please.

Mr. Chairman, I would like to introduce you to Mr. Justin Goodfellow.

Hello, there. Gentleman over here talked about bank closures and yet, your answers were -- my question was mostly answered. Might serve as a case study, what I've kind of talked to you about. I've come up from Surfers Paradise for the day and all the talk in Surfers is about the closure of the branch there. The lights are on at night, but everything is all closed up. I was -- got into some discussions with some elderly friends down there. One of them has got a few mobility issues, and he -- he used to be able to go down the escalator and cross the street. Now he's got filage of [ tram rolled ] and a long walk to a branch. The discussion got heated. And I told him that's why I was a shareholder and not a customer, whereas he's a customer, not a shareholder. He -- I also suggested to him that banks offering bank services is a bit of an archaic idea. And he shot back that he's been a branch in Surfers for the 50 years that he can remember, including when it was Bank of Southern State. I was interested in the causation side of it. Are -- did customers stop using banks -- going into banks because, banks are just not providing the services anymore in branches or the other way around. The chicken and egg side of it is in a causation way for me as a shareholder. And also, I understand that costs to cut when a branch is closed, but then those costs seem to be used up in fighting cyber crime and scams. So I'm interested in whether it turns out to be a zero-sum game in the branches, it'd be better off remaining open. So anyway, the causation side of it, I'm interested in too, I think is an interesting study in that and whether services being cut, stops customers going in or the other way around. So I wanted to ask, am I right? If I was right in telling him that banks providing bank services an old-fashioned idea. Or is he right in that Westpac should continue to have a branch in the tourist capital of the country?

That was a good question. But I'd like to repeat the principle. Customers should be able to deal with us any way they want, not the way we want. And of course, that is dislocated when you get that circumstance. So Peter, over to you.

Well, I think on the question of causation, we look at how much branches are being used. And we look at alternate services around it, and we do rely on Australia Post, who can do broadly 90% of what is being done in a branch at the moment. So the activity in the branch. So that's how we look at the footprint. I would encourage you not to think about branches and cyber because we're 96% transactions online. The cyber investment will happen no matter how many branches we have because that's just where we're going. But that's how we think about it. And we're increasingly going to become a digital economy, not just banking. I think banking was at the forefront. If you go back 5 years ago, now government services are going digital. Every corporate I talk to is going digital. Small businesses will be digital. And in an AI world, I think scale and data will play a critical role. So we've got to match that. And so we've got to think about alternates for service, and that's the video banking that I spoke about. So obviously, you can't get cash out of video banking, but there are other ways to do that.

Yes. I've got an instinct about this. I think people will use the most convenient way of dealing with the bank. And certainly, for my purposes, I find online on the iPad or the iPhone or on the computer by far the most convenient way of dealing with the bank, other than getting cash. And it works really well. And so I do think convenience, I think, is a big, big factor and how people think about banks. Can I have the next question, please?

Mr. Chairman, I would like to introduce Mr. George Balmer.

Mr. Chairman, thank you for your time today. I had two questions. One was the advisability of critical donations using shareholders' funds. Particularly to the voice. Obviously, some of the shareholders would say, yes. Some would say, no. But using the shareholders' money to support one side of it, I thought was a very unwise decision.

Yes. Okay. Thank you. That's a good question. Peter, do you want to start?

Yes. I think, as I said in my opening remarks, we have a long-held position here on reconciliation. It started in 2010. We supported the [indiscernible] from the heart in 2019. And we see it more as a social issue about reconciliation and bringing up the experience of Indigenous Australia and also acknowledge that not everyone has the same view there. So we did think very hard about it. It was a management recommendation to the Board. It didn't get up and we respect that. But we feel like this is an area that we've had a long-held position in. We do, do a lot of work in it, and we thought it was a modest donation for a position we've held for...

It wasn't political. It was societal. And it's interesting. When I joined banking, the mission was purely about rewarding shareholders. But as times going on, that society is -- governments have been advocating this and companies have been embracing contribution to society, including the rewarding shareholders. And it's interesting, there's a lot of evidence that says that a company that is actually admired by society and rewards society in general has -- recruits -- is the most attractive place to work, recruits the most talent and actually it produces the highest per tons. So actually, there is evidence to support societal given by banks and other companies in favor of shareholder returns. And that's developed over quite a long period of time, but that's the state we play today.

Yes, there's been more rewards to the directors than there is to the shareholders. But the second question was, the ANZ Bank looking taking over Suncorp. Does Westpac have any thoughts that they might take over somebody like Bendigo Bank or Bank of Queensland to expand their facilities?

Well, I've got a few minutes left to answer that question because I won't be here after that. But -- no, I will say this. The answer is that, in general, the way banking is going for consumers is online and digital, not more branches and people. So in general, that will be an important factor in the bank thinking about this going forward.

I think -- no, we don't have any plans today. But if you look at, we will learn a lot about how the regulators think about bank mergers, and I think that will guide the future for industry consolidation going forward. So we'll have to, I think, wait until February to see how the regulators are thinking about this area.

But my advice to my successor and to Peter were that to happen is integrate it straight away and don't leave it for several years before you do it. So next question, please.

Mr. Chairman, I would like to introduce Mr. Trevor Gibb.

Thanks, Chairman. Just a situation there. Thank you to Westpac for the helicopter service. I've been associated with Surf Life Saving since 1966 through the years. Just a question here in regards to the finance for it. Is there any thoughts of expanding it further, like I'm talking about the Midwest Coast or Western Australia?

I don't -- that would depend on what Surf Life Saving wants to do. I'm not aware that we're in discussions. We've been proud to celebrate the 50 years this year. But if Surf Life Saving came to us, that's something we would consider.

That's a good example of us making a good contribution to the society.

We certainly appreciate it because there are a number of rescues and that have been steadily increasing over the years within the flags and outside the flags. So thank you for Westpac.

Well, thank you very much.

Thank you for what you do as banking Surf Life Saving.

Yes, absolutely.

It's a pleasure.

Mr. Chairman, I would like to introduce Mr. Paul Donahue.

I've got two questions. So first one is on risk culture. You mentioned that issue with the regulators back in 2019. I saw in the annual report, there's a program now where 34,000 positive risk behaviors have been recognized, which is encouraging. But digging a little deeper into probably more significant examples of positive or negative behavior. Those that actually resulted in remuneration adjustments. So the report says that 313 employees received increased remuneration for exceptional risk outcomes, which is good. But 299 received negative remuneration adjustments for falling short of risk compliance or conduct expectations. So that's close enough to 50-50, good versus bad behavior. If Westpac's risk culture is improving, shouldn't we see more examples of positive behavior that are worthy of some sort of remuneration recognition?

So I'll take your questions about risk rather than remuneration. Again -- and so the Chairman of the Risk Committee has been very, very busy these days. So I think she will deal with that.

Thank you, and thank you, Chair. Thank you, Mr. Donahue. So and I definitely echo your hope that we are going to be seeing more rewards for a great risk behavior. I think it's a really important part of the risk framework that we are reporting -- we are rewarding great behavior as well as understanding if something goes wrong and calling that out. So as part of this enormous program that we've been running in the last 3 years, which you've heard about the Customer Outcomes Risk Excellence program. Looking at the culture, it's right at the heart of what we're doing. We know that risk culture is the heart of a great culture in a bank. And so our focus very much is exactly in the direction you're talking about, which is ensuring that all our teams, our amazing teams around Australia and New Zealand have the tools that they need and the support that they need to ensure that we manage risk in an incredibly good way. So we should see plenty more rewards coming forward as the program has worked its way through.

Okay. Looking forward to that. My second question is on technology skills in the Board. So you published a Board's skills matrix and it shows that only 2 directors have deep experience with technology. Given Westpac's stated ambition of simplifying your complex technology landscape, would it not be sensible to seek out directors with more experience in this area? I'll note that, none of the 3 directors up for election today appear to have deep technology skills.

Okay. This -- I mean finding the right balance on the Board is always important here. And therefore, when you are trying to recruit non-executive directors, you've got an eye on the current situation and where the priorities are. With my retirement and with Mike Hawker's retirement this year, we're losing quite a bit of banking capability. And therefore, as a priority, it was very important that we filled that in, and we've recruited 2 people with very strong banking credentials to fill that specific slot. It is true though. We do have strong banking credentials on the Board anyway. And we do have strong technological factors on the Board also at the moment. But the Board has noted that and actually has made it a priority for us going forward to address that. We do have the capability in the Board. And of course, we do have capability in the bankers on banking technology. So it's not as if we're just bankers. We actually do have some technology capability. But we've noted that, and that is a priority for us going forward. Next question, please.

Mr. Chairman, I would like to introduce Ms. Rita Mazalevskis.

Good morning, Board. Technology and scams and cyber seems to be a flavor of the day. On Page 47 of the annual report under cyber risk, it says the risk that the group or its third party's data or technology are inappropriately accessed, manipulated or damaged from cybersecurity threats and vulnerabilities. And through the bank's risk appetite and mitigation says we proactively manage our cyber risk exposure to limit the likelihood of inappropriate access, manipulation or damage to our third-party data and technology. Then on Page 27, under protecting customers and preventing crime, it states that since 2015, we have continuously invested in our people, processes and technology to keep customers safe and that our specialist teams monitor for suspicious activity around the clock. And that, amongst other things, work closely with law enforcement to identify and report criminal activity. It also says no systems are infallible and are susceptible to human error and third-party risks and threat activity is constantly evolving. Would you be able to tell us what percentage of the bank's business is undertaken through third parties? And how does the bank manage cyber risk exposure of any third parties to safeguard customers' data? And isn't it true the bank can't protect customers' data 100%, which is accessed unauthorized and can be abused through third parties and their systems?

Thank you, Rita. And thank you for reading the whole report.

That's all right. I've got more.

And Peter will help with that.

Well, I think it's right. You can never design a system that is 100% full proof, particularly with the challenge we have in cyber, and that's not just Westpac that is, those business. And so we're in the business of managing risk. I don't have the percentage of reliant suppliers. But if I give you some examples, we will rely on software providers, we will rely on legal firms. We use some processing firms to do parts of our business as well as other IT.

Mortgage brokers.

Yes, mortgage brokers. And we see supplier risk in resilience, and data and cyber protection is something we need to manage. The banking regulators just put out a new standard asking that we were demanding that we look at it as an industry, we're well in front of that piece of work. So we will assess suppliers, we will go in and apply our tests. In bringing a supplier into the group, we will test them about how they're going. That will be lifted for the industry through this new CPS 230 because there will be a requirement on the industry to look at key supply chain pieces. So it's -- the reason is here in the risk factors, it is risk, supplier is a big part of it, and we assess it pretty deeply.

But we're not highlighting as one of the most important risks at this point in time.

So does that mean that your systems are not linked with the third-party providers? You just do random tests?

No, we will go in and look at the -- assess their capability to manage data, keep it private. We will encrypt data when we're moving it between organizations. That's -- there's steps that go into it.

Okay. And just on top of that, does the bank report any of these data breaches of customers' personal information through the general data protection regulator in the EU, which would include examples of identity theft and fraud?

In our sustainability data sheet, we've got our reporting to the Australian OIAC. So that's what we're reporting in the data sheet. The GDPR, no, I don't think we report it, not because -- we don't want to. But the Australian regulator is where we report to.

Mr. Chairperson, I would like to introduce Mr. Grad [indiscernible]

I guess I might mumble because my wife says I always mumble. And I'm not might being very clear. But I'm just 1 year younger than you, Mr. McFarland. And I'll just try to point out a little bit of my history. I'm pretty well technology savvy. And -- but I still find it difficult, why the disruption to Westpac took so long to recover. Because when I worked in something similar industry, like in the power station, we used to upgrade one server, leave the other server alone, do all the running for a few days on one server to find any fault. And if we found any problem, it was -- it didn't never take too long to change over to the backup server.

You're absolutely correct. That's how it should work.

So why did it take about well over a day or more.

Well, it took us 8 hours because we had to roll back a large database.

But normally, you have to switch it back. But why were -- did you update both servers?

Both. Both Were involved. So we had to involve that.

Yes. If both were updated in other words, which is poor practice for a starter.

Thank you.

The other thing I want to point out, when -- in the past, hardware used to be our safeguard when it came to hacking. Software is like -- I'm only a hobby as a shareholder, but software is like a, in shareholders language is like a lagging indicator. You just keep fixing stuff that's been exposed to you. You're never going to be ahead of it. You'll be possibly ahead temporarily and someone will hack into it. The other thing I want to point out is you're talking about what was it the verification thing. Scott Pape, investment writer, try to get this introduced well over a year ago and the Banking Association was against it. That's my understanding. He pointed out quite a few times. And for some reason, the Banking Association was against it. The other thing I'd like to point out, I always find it difficult to find, believe that a lot of customers want to go digital. Usually, it's some form of duress introduced like in the Internet technology terminology, denial of service. You close a bank branches here or there. And even though I -- I'm a Westpac customer, and I still prefer to do, I get my statement in a printed format because I think it's safer than the digital format because if anyone's going to open my mail, it's going to be a local issue. It's not going to be an international issue problem. The other thing is, this might sound old fashioned. But why do -- when I get a statement, a written statement, why do I have an envelope with a window that exposes most of my details. Why don't -- again, why can't I get an envelope with no title, initial for Christian name and that's bad -- at least I'll have to repay for the bloody envelope to find out some detail.

Thank you. Well, thank you for your observations. And you had one question about the envelope.

One. Can I just -- sorry. I'm only a hobby as shareholder. But if Westbank going to reduce the fees for trading like under $1,000 because CBI they only have to pay $5 or up to $1,000 trading.

Okay. Peter?

Well, we'll take that one as a comment. So Anthony will pick that up one on the trading. On the Westpac Verify, both the Australian Bankers Association and the Customer Owned Banking Association, so the 2 major Banking Associations have committed to checking the names. That was recent. It's in the last couple of weeks that happened.

Next question, please.

That's -- why has it taken so long because we couldn't get the industry there, but we have.

Yes. Well, like America did years ago, and we're just doing that now.

Well, you can thank Peter for that because he actually is the Chairman of the Association.

Mr. Chairman, I would like to introduce Mr. [indiscernible]

Mr. Chairman, thank you again. This is relating to one of your shareholders that brought up earlier, the difference in profits from 2019 to where we are now. I'd like to ask the Board, if I may, is this a reflection of when Brian Hartzer was CEO and with the AUSTRAC fine of $900 million, plus the improvement in your financial crimes program initiative, an asset write back of $70 million. The improvement in financial crimes program, $130 million. And the reimbursement to customers of wrongful charges of $260 million, which is a total of about $1.43 billion. Is that a reflection of the profits from 2019 to where we are now and that's been extracted to pay all of those things back, and that's why we're seeing a lower profit where we are now?

You're nearly right. But some of these issues that happened in 2019 actually took place over a very long time frame, unreported transactions, et cetera. So it wasn't specific to an individual period. It was really accumulated over quite a time. Given that it's taken us quite a long time really to address it. But we're looking the back of it now. And this year, we'll see the end of it.

So that potentially is -- will be all paid out by the end of this year?

We've actually had around $2 billion of refunds in aggregate, and we've got a probably about $150 million to go. So we're a long way through that program. The only other point I'd add is the low interest rate environment really impacted the bank's margin. So if you think about the response to COVID, the cash rate was taken to 10 basis points, we hit deposit floors and our margin really contracted. That was another piece that impacted our performance in the last 3 to 4 years.

Is there a way to sort of make that money up over the next 24, 36 months with other bank instruments that can either be traded? I'm not sure in the back-end room, whether or not you trade currency or whether you trade the property certificates or equal value back to back on the loans to hopefully make up that shortfall over the next 3, 4 years? Is that possible?

Yes. Look, in general, we are in all of those businesses or most of the ones you mentioned. And therefore, that gives us a diversification and other opportunities to make money. We are a very active trader. We've got the Head of Institutional Banking sitting at the front of you and she runs a massive trading operation here and in elsewhere across the world. No, just here. Okay. So we do take advantage of that, but it's not specifically to make up for the issues. It's just good business, and we advance it as per normal.

Mr. Chairman, I would like to introduce Mr. Philip [indiscernible]

Thank you, Mr. Chairman, for the opportunity to ask the question. And my primary question is going to be around the social governance issue. But wish that you could just indulge me for a second first. And I'd like to big thank you to the bank. My elderly mother of 88 years recently had to go through a move-in between home and needed some banking. She's fairly deaf, struggles a lot with the technology. But she went into the branch at Bribie Island and got the ultimate level of service. The person in there helped her through everything. They called me to work through some certain things when she couldn't understand it. And so I'm very appreciative that some of the service does still exist and is available for us. So thank you very much for that. Now to get on to my actual question, sorry. I'm involved in a social services group that deals with domestic violence victims. And a key issue that we run into is that victims need to change their banking details. One of the side effects of the security protocols that are in place is that they then text the other part of the account with the new address details. And you can imagine how much that causes an issue. Some of the banks are looking at ways to try and deal with this. I was just wondering, has Westpac got any initiatives in place for helping people with victims of domestic violence?

Thanks for pointing it out. Peter?

Yes. So yes, it's a focus area for us. It normally starts with us actually creating new accounts, but we're very cautious about not sending those details to the other party. As I said before, no system is perfect. So occasionally, we get that wrong, and we will help sort that out. But it's a big focus for us. We have a team that specializes in it. And unfortunately, there's more instances in society.

I'm conscious that we've taken a lot of questions on the annual report. And we're nearing the time where we actually have to do the other business, but I will take a question. But I do think -- could I ask -- could you ask essential questions from now on so that we can move on to the other items of business. Thank you.

Mr. Chairman, I would like to introduce Ms. Rita Mazalevskis..

Hello. On the 12th of December, the News reported that the Victoria County Court facility is privately owned, maintained and operated by the Liberty Group, a whole-owned subsidiary of Challenger Limited and that the Liberty Group consists of ABN AMRO, NM Rothschild & Sons, Multiplex (Construction) and Honeywell Limited. Just before I walked in here today, I was contacted and haven't had time to confirm the following, but I was informed that the Mirvac Group owns or is an owner of the Supreme Court of WA. And that BlackRock owns or is an owner of Mirvac. Furthermore, the annual report, Page 304 states, the BlackRock Group has been a substantial shareholder of Westpac since April 2017. These ownerships extend and have tentacles across the realm of property systems, for example, with Landgate, the titles office in Perth and PEXA, the electronic settlement system. So with these significant intertwined relationships, how is this not considered a horrific conflict of interest when the position of parties are not transparent or on an equal footing and as the Attorney General's website states, no party should be in a worse position and vulnerable innocent borrowers are ultimately forced into the court system and deem they have no prospects of success?

Okay. Look, I think it's quite a stretch to make that assertion. But I can't comment specifically on the Mirvac or whoever else. I would just say to you that BlackRock is the largest investment manager in the world and actually own stakes in nearly everybody. And so I can't imagine for the life of me, that's a serious conflict of interest for that institution.

Yes. But if they're somehow linked into a Supreme Court system and the bank's customers going to court with the bank and a shareholder and -- they also are a shareholder of the bank, how can it not be a conflict of interest?

Because it just doesn't -- it's so remote that...

Yes, they're on the property. I can't imagine they have anything to do with the judicial system in Western Australia.

No.

Like to say, I haven't had a chance to look at it, but I definitely will and I'm more than happy to get back to you.

Thanks for pointing that out. And I think this is the final question. Is it?

Mr. Chairman, I'd like to introduce you to Mr. Michael Sanderson.

Grand Finale. Coober Pedy wasn't there [ among the weight ]. On the 10th of February, Westpac gave the impression to a Senate Committee, the media and towns, it was about to debank that Westpac would pause regional branch closures, pending the outcome of the Senate's inquiry into bank closures in regional Australia. Westpac stated, this is an e-mail to the committee. In response to the committee's request, Westpac will postpone 8 regional branch closures that were announced in February 2023. In this weaselly worded undertaking, Westpac failed to mention that it was still proceeding with the bulk of its planned closures, a further 13 Westpac and Westpac-owned branches that unless you were following the issue closely, you would not have known about. A week after the announcement on the 17th of February Westpac debank Coober Pedy. This [indiscernible] also made the Senate Committee and the majority of the media look like a bunch of mugs. Westpac's decision to reverse the closure of the 8 regional banks proves that they were viable branches all along. Will Westpac apologize to the residents of Coober Pedy and do the right thing and reopen the branch?

Peter?

Well, I think we were very clear in our communication about what we were and weren't doing. Whenever we look at closing a branch in regional Australia, we're also looking at alternatives. So Australia Post and ATMs. So I think we were clear in our communication. And we also considered alternate banking solutions in those cities when we no longer have a bank.

With respect, Peter, the Senate Committee reacted as if you complied with their request for a moratorium on closure of all branches. The e-mail did not reflect that. So what you're saying is fundamentally incorrect. The media also misinterpreted differently. So how can you say that the message was clear when the Senate Committee didn't get it, the media didn't get it nor did the general public?

We were very clear in our communication.

You were. On same matter -- same related matter, not the same matter. The ACCC in the Suncorp ANZ determination stated, there is an accommodative and synchronized approach between major banks, which was not unexpected and is enabled by the oligopoly market. There are about another 3 comments in that vein, in that determination. When New Zealand established the publicly owned Kiwibank, it is my understanding that the big 4 Australian banks stopped all branch closures immediately and did so for the following 6 years. The big 4s synchronized approach was sacrificing a service on the sacred altar of seeing profit. Kiwibank entered the market offering a profitable service where it was claimed it was unprofitable to operate. This demonstrates that regional banks are profitable and are an essential service that communities need, use and support. Would it improves Westpac's moral compass? Clarify its social obligations and the Board's thought process if a publicly owned Postbank was established here in Australia?

I think that's a matter for government. So Australia Post is owned by the government, whether they want to go into financial services or not is for them. I think you've heard me talk about how we think about services and digital and physical and transition over time. And we will work with communities as we transition. I don't think this is a trend in terms of digital trend that's going to slow down. It's going to be something that impacts financial services, corporate and government services. So we've got to help transition into the digital world.

But you're wrong in saying that these were coordinated by the major banks. That is not the correct -- not the case. In fact, it's illegal to do so.

There's a lot of things that are illegal. I go back to the letter that the 4 major banks wrote to the parliament authorizing the -- effectively authorizing the Banking Rule Commission. You talk to each other. It's in black and white and probably a few other colors as well. But you talk -- the ACCC made that quote, not me. And as I said, there was 4 references to oligopoly type interaction.

Yes, references, opinions, not facts.

Okay. Well, the Kiwibank, you all were closing them. Kiwibank starts up. You all stopped, as I said. I'll leave it there.

Thank you for your comment. And also having been in business a long time, good luck with governments running commercial enterprises. It doesn't work very well in most other cases, but thank you.

You're not prepared to say here that will reopen Coober Pedy.

We've made our decision.

Thank you. Right. There are no more questions in the room. We've got no questions on the phone. And we've got five questions online, which we'll now take.

Mr. Chairman, we have a question from Kevin Charles Daly. I'm a client of Westpac Online Investing, and I'm satisfied with its performance. Yet I never seem to see it mentioned AGM. So can you provide a short summary as to how it is going financially within the Westpac Group?

Peter?

I think it's a small business for us. But what I'm going to do on that question is actually get a banker to give you a call to work out how we can improve the service.

Okay. Next question. Thanks.

Mr. Chairman, we have a question from Stephen Maine. Westpac has borrowed $29.8 billion from the Reserve Bank through its term finance facility on a 3-year deal at a fixed rate of 0.1%, which is repayable on June 30, 2024. Is it our intention to wait until the end of June to repay that facility given that a $29.8 billion loan at the current official RBA rate of 4.35% would cost $1.3 billion a year in interest or $3.55 million a day? We will repay $89.4 million in total over the 3-year term of the loan. Whilst -- may I please have the question back. We'll move on to the next question, Mr. Chairman. We've got a question from Hillary Brook. With the 2023 Federal Referendum Voice Department now completed and the results in. Do you think Westpac could stick to banking services and not enter the realms of political school lobbying? It is noted, you did not tell staff how to vote on saying that you were pushing your customers that way?

Well, thank you. We've given -- we've already addressed that question, we'll move on to the next question.

Mr. Chairman, we have a question from Ian Delfin. In regard to Westpac Verify, does Westpac offer an alternative to sending an SMS, particularly if a customer is overseas and doesn't have access to their Australian phone? That is, can an email address be used as an alternate mean of contact, which the customer can nominate before traveling overseas?

Peter?

I actually don't know the answer to that. But I think, again, I'll pick that up and we'll have a look at it. If there's problems with people being overseas, we need to get a way to do them. I might just comment on the TFF even though we've got part of the question, we only have $12 billion left to repay in the term funding facility. The cost of that was actually 3 years, 10 basis points plus the hedging costs. So it's not just 10 basis points, but we're well through refinancing the majority of our TFF and we'll accommodate that in our normal wholesale funding program. So it will be accommodated between now and the end of June.

Okay. Next question. Thanks.

Mr. Chairman, we have a question from Jeanine Marie. When will the management of the balance sheet and the business model that balance sheet is invested into see a share price challenging in $30 and not $20?

And the value of the enterprise is the amount of capital invested plus the present value of future excess returns, and that gives you the theoretical value of the enterprise. So in order to get the price from $22 to $30, a number of things have to happen. We have to increase the amount of capital invested in the business or we increase the present value of excess returns. And therefore, that requires us to produce more earnings -- more risk-adjusted earnings and higher returns, which is really the agenda that we are pursuing. Can I have the next question, please?

Mr. Chairman, there are no further questions for this item of business.

Well, that -- thank you. Well, that concludes the discussion of this item of business. Yes?

Mr. Chairman, sorry to interrupt, but I did have one more question. I'll only be very brief.

Okay.

My family, we dealt with the Bank of New South Wales in the '60s and '70s. I'd like to share the exceptional customer service that my father received. We're in agriculture, Banana growers. And I thought it was pertinent to share this quick story. Whenever there was any issues with 5, 10 employees at the time, if my father had any issue where bananas were being transported and he is running short of money, he'd make one quick prior call to the bank and they passed whatever he needed. That was exceptional customer service. Now we relate that to where we are today. The customer is everything. The dollar starts and ends with your customer. You will see the reflection in your share price because of your customers. It's not about the shareholder. Shareholders may be upset with that comment, but it's not about the shareholder. The more you focus on your customer, exceptional service, exceptional care, fix the legacy issues, your share prices will skyrocket. And any remunerations that any of your Board of Directors and Executive and Nonexecutive one will be passed in flying colors. So I'll leave you with a thought that customer service and customer care is your paramount program, first and end. So I wanted to share that with you, I think it's vital, it's important. We've seen shares go from $20 to $24 and back. So to see a great change and you being the leaders, you're a statesman, Mr. McFarlane. Peter, you've done an exceptional job. I'm sure that you can implement these strategies over the next 12 months, 2 years and be the #1 bank in Australia without a doubt. The last question I have is, after we finish the Annual General Meeting, will the entire Board meet us in the foyer for a cup of tea and coffee and have some time together?

Thank you. We intend to do that.

Wonderful, wonderful.

And thank you for your comment. I have to agree with you by the way. So congratulations. Okay, the next item of business is to adopt the remuneration report for the year ended the 30th of September 2023. If you'd like to ask a question in the room, online or on the phone, please do so now. Well, voting on this resolution is advisory, we take shareholder feedback very seriously, and we'll continue to engage with shareholders. Our remuneration strategy is to attract and retain talented employees. We reward them for achieving high performance and delivering superior long-term results for our customers and our shareholders. This year, we've introduced a revised executive remuneration framework designed to comply with APRA, our main regulators new Prudential CPS 511 standard. Details of the required framework are contained in our remuneration report. The Board recommends you vote in favor of this resolution, and I will now take questions on the 2023 remuneration report. Can I have the first question, please?

Mr. Chairman, I would like to introduce Mr. Craig Coffield.

Thank you, Mr. McFarland. Two items. One is ACSI's Louise Davidson has recently mentioned that recommending taking away the monetary rewards and leaving share rewards in STVR and LTVR. The REM report, despite all the good work that's put into it, and it's a very complex document, most shareholders, the average person doesn't really understand it. And of course, you've got regulatory requirements that you need to meet. But if it can be simplified, would be wonderful. And I think that's one way of simplifying it. It also reaffirms that the rewards going to the executives, et cetera, are being paid in company shares. So they're going to have an increasing interest in looking after the welfare of the company instead of cash. And each of those cash rewards have got their various measures against them. So it's quite complex, and that's a way of simplifying. So I'm just affirming what Louise Davidson had said, I'd be interested in feedback on that.

Thank you. Look, I'm going to ask the Chairman of the Remuneration Committee to talk about our philosophy on remuneration. But I would say to you that a lot of the constraints other than regulatory that we face on remuneration are from shareholders. So for example, we used to run relatively simple systems, either with deferred shares or with options, et cetera. We're not able to do that anymore because we can't get shareholder support for simple structure. So I'll just leave that comment, but ask Nora, if she might make a few comments.

Thanks, Chairman, and thank you, [ Mr. Coffield ] for your questions and your comments. And believe me, we're all aligned. We keep working on trying to simplify the document. And we think we're getting better, but there's a lot more that we can do, and we'll certainly try to keep on doing that. We also agree completely with your views on the importance of having significant equity in the hands of our executives so that they do share the shareholder experience. And in fact, part of the change the Chairman referred to about the new executive framework that's become effective as of 1 October, is, in fact, to even increase further the amount of equity that's in our executives' hands and to defer vesting even longer. Part of that is to meet the new regulatory requirements. But a strong factor in doing that was because we think it supports strategy and has our executives feeling very invested in the stock of the company. So we're completely agreed with your perspective.

And in fact, most banks have moved in this direction. So it's a sort of industry thing.

Yes, I understand. A second part question on the REM report. Something I've raised before and with other banks is the Net Promoter Score that's used for determining the customer outcomes and customer is a big focus at Westpac. The Net Promoter Score is not really a good measure. It's your prime measure and yes, you look at other things. But you really need a system of metrics to weigh things. A customer that's really unhappy that set of property repossessed. Well, when they do a Net Promoter Score of 1, it doesn't have the same gravity and weight as someone that said, have a good afternoon, and they said Net Promoter Score 10. That is too isolated measure to feed in to the remuneration going back to the executives.

Yes. Okay. I'm going to also ask a question to, but I'd just say this that, as the regulatory environment has advanced, it's become much more prescriptive in terms of our flexibility. And we've had to move to, for example, scorecards for executive remuneration. And Nora, you might say something about that.

And again, we agree Net Promoter Score has got its limitations, but it's a data point. If you actually look in the scorecard in the REM report, the customer component actually only accounts for 10% and Net Promoter Score is just 1 of 3 measures that are listed there. So we do look at things like speed of service and the satisfaction of our customers using the new digital app, particularly given the high percentage, as Peter mentioned, that are now interacting with us digitally. So we accept its limitations. It's a data point, which we think is still important, but we look much more holistically at customers data and other inputs to tell us whether we're meeting our customer needs.

But it's become very much a science now because it's quite complex. So thank you. So can I have the next question, please?

Mr. Chairman, I would like to introduce Mr. Paul Donahue.

My question is about Board discretion on the short-term variable reward outcomes. So this year, the Board exercised discretion to make upward adjustments to the STVR for 2 group executives. I understand this related to outstanding performance in risk management. What was that behavior not captured in the scorecard, in the hurdles? And what did these 2 executives do to justify Board discretion?

I'll pass that to the Chairman of Remuneration Committee.

So you're quite rash, it is a part of the core components of the scorecard. We had, in fact, 30% of the scorecard that was dedicated to both our Customer Outcomes and Risk Excellence program and broader risk measures. But the modifier is used when we believe that people have demonstrated exceptional performance in an area. In the case of executives that are awarded for exceptional risk outcomes, that comes from the risk function assesses that and makes a recommendation first to Peter and that, in turn, comes through to the Board. And that will be a range of factors that are observed both again, data and observation. The sorts of things that might go into that are, for example, in our employee surveys where they've got really high scores from employees saying that they feel comfortable in calling out issues, or that when they do that they're taken seriously and aren't, or material reductions in high-risk incidents occurring in their function, or else that we've seen people adopt really innovative tools to both -- to affect behavioral change and then to be able to validate that and to show you that, in fact, silos have been broken down that communications have improved and customer outcomes have benefited from that. So it's a range of factors that all build a picture of exceptional performance.

Then another question. Thank you.

Mr. Chairman, I'd like to introduce Mr. Paul Fanning.

Thank you, Peter, and John and I think Nora you might be at the end of a couple more questions. I'm speaking about the Rem Report. And look, as John you have already indicated, the Rem Report is a complex document, but I'm not taking a few minutes there in the last 20 minutes looking at it, and it seems to be -- I'm looking at Page 70 and 71, and for the benefit of the audience, 70 and 71 of the full report, probably gives quite a good overview of the framework for FY '24 onwards. Yes, it takes a bit of reading and a bit of concentration, but I think it's reasonably quite good and continued a little bit on Page 72. My questions relate to pages 78 and pages 86 of the Director's report. Nora, well through the Chair, of course. Can you please give a little bit of a cut or the difference is between 4.4% total realized remuneration of CEO and group executives. And Page -- and Table 8.2, Rem details CEO and group executives. Because I know one is obviously what is taxable in the financial year ended and the other is something else. Now I know these are 2 tables probably written in a regulatory framework, but I think we probably just need a bit of color on that.

Sure. And this is part of the complexity that we try to navigate our way through and help shareholders with as well. So the accounting standards require us to value all sorts of components of the remuneration packages in ways that reflect value for often components that the executive may never receive because, for example, on long-term variable reward grants, they appear to have been given to the executive, but unless the executive first satisfies the conditions, and secondly, then serves the time, they will never receive that. However, the accounting standards appropriately require us to say the theoretical value of what an executive might be able to earn in time if they're around and satisfy all the requirements. We think it's actually quite important for shareholders to know what people actually get paid. And so the realized remuneration reflects what people have actually gotten paid some of the other tables give a theoretical possible value, but it might never end up in the hands of the executive.

So Nora, in summary, 8.2 is a theoretical concept.

It's an accounting standard. Perhaps the CFO would get cranky with me if I said it was some sort of fantasy.

Okay. That relates. I mean even, for example, the fixed rem is different between Table 4.4 and 8.2. I can understand the LTR and the SBR would vary between Table 4.4 and Table 8.2, because we're looking at an accounting standard and 8.2, where 4.4 is realized. But when we actually see the fixed rem, for example, Scott Collary, 2023, fixed rem, $1,234,741 million. Now if I go to Table 8. 2, we also have Scott Collary, and sorry, Scott will point you out an example, but it reaches a different figure $1,118,272 million.

So if we don't make your life hard enough as it is, we then force you to read the footnotes. And as you'll see, there's a half page of footnotes on 87. And one of those, the very first one stays that fixed remuneration or the number that's in the table actually isn't really just fixed remuneration. It includes a whole lot of other stuff, including sacrificed benefits, et cetera. So it's meant to give a very complete picture, but I'm very happy to meet you after the meeting, perhaps with both head of HR and the CFO, if you've got any further questions on reconciling the table.

Okay. I'll wrap -- closes off quite quickly. For example, Peter, I'm going to pull you out as I've read heading here. Fixed rent, Table 4.4, $2.507 million fixed and yet the fixed rem in 8.2 is $2.437 million.

Yes. And so again, I think it is in the details of that footnote but it includes all sorts of other items. I'd be very happy to go through the details with you, sir, after the meeting.

Thank you. okay, next question.

There are no further questions for this item of business.

Well, thank you. That concludes the discussion of this item of business. The direct votes cast and the position of proxy votes received on Item 2 prior to this meeting will now appear on the screen. So I will now formally propose Resolution 2. The resolution is now displayed on the screen. If you've not completed your voting card for this resolution or voted on the online platform, please do so now. Next item of business is Item 3, seeking shareholder approval regarding the CEO's long-term variable reward for the 2024 financial year. If you'd like to ask a question on the room, online or on the phone, please do so now. A summary of the CEO's long-term variable reward is provided in the notice of meeting with further detail in the 2023 remuneration report. As outlined earlier, the Board has made some changes to the executive remuneration framework this year. It's therefore proposed that the 2024 long-term variable reward for the CEO be allocated as performance rights as well as restricted rights. Restricted rights are being introduced in 2024 to reinforce our focus on the group risk culture. The Board strongly believes that the CEO should have a high proportion of remuneration paid in equity to align his interest with shareholders. And the Board recommends this resolution to you. And I'll now take any questions on this item, Resolution 3.

Mr. Chairman, we have an online question from Stephen Mayne. Could CEO, Peter Nash, summarize his past LTI grants as to whether they have vested or lapsed. Also, has he ever sold any ordinary shares in the company or bought any on market without relying on an incentive scheme to build his equity position in the company. Please don't say look it up in the annual report and through ASX announcements. It's complicated, and our excellent CEO is always right across the detail and could actually summarize the situation in 60 seconds.

Well, I'll say it's Peter King, that's the CEO. So sorry, Peter Nash. Thank you, Stephen. And the short answer is I've been here for 30 years. So I would have sold Westpac's stock over that time. But since I became CEO, I haven't sold, I have accumulated stock through the STI that goes into stock to build up to my minimum shareholder requirements, which if we approve the ground here, I'll get to next year. So that's broadly where I'm at. I haven't sold anything since I've been CEO.

And the vesting? He asked about the vesting of...

Well, there hasn't been any LTI vested for the last 8 years.

Okay. Thank you. Can I take the next question, please?

Mr. Chairman, there are no further questions for this item of business.

Good. Well, thank you. That concludes discussion on this item of business. The direct votes cast and the position of proxy votes received on Item 3 prior to the meeting will now appear on the screen. And I will now propose Resolution 3. If you've not completed your voting card for this resolution or voted on the online platform, please do so now. The fourth item of business is the election of directors. Tim Burroughs, Michael Ullmer and Steven Gregg, were appointed as directors during the year and are each seeking election at this meeting in accordance with the constitution. The Board other than the director concerned, has considered the performance of each director standing for election and recommends that Tim Burroughs, Michael Ullmer and Steven Gregg be submitted for election to the Board. First, moving to the election of Tim Burroughs. Tim was appointed the director in March 2023, and Tim will now address the meeting.

Thank you, Chair. Is that sound working? Good. Good afternoon, shareholders. My name is Tim Burroughs, and I was appointed, as the Chair just said to the Board, in March this year, and this resolution allows you to decide if I should continue as a Director. I've worked my whole career in financial services. I qualified as a Chartered Accountant, but moved into investment banking over 40 years ago. I've worked predominantly in Australia for British, American, and Australian banks and investment banks. My investment banking roles have involved acting as Corporate Financial Adviser to large companies and company boards and management. While I have a lot of experience advising on transactions, including takeovers, asset sales and purchases, capital raisings and restructurings. My key role has been to provide external advice and perspective on corporate strategy to examine how that strategy can generate value and consider how that value is provided to shareholders as the owners. These are all topics you've commented on through the meeting already. Over the years, I've advised many of the largest companies in Australia and New Zealand and work with most of the major and regional banks. So I am very familiar with the operation of the banking industry, the drivers of valuation of banks, the importance of a sound capital structure, how return on that capital drives value and the challenges to achieving consistent good returns. Since retiring from full-time and paid employment, I've continued to provide advice on an unpaid basis to benefit a charity. I've sat on and chaired not-for-profit boards, but this is my only public company Board. I accepted the position because I have a huge respect for Westpac, and I'm proud to be on the Board. I'm also a Member of the Board Risk Committee and joining the Board Remuneration Committee. Westpac has a great history, but I'm more interested in its future. The bank has experienced a challenging few years, and I believe my experience and skills can help in the ongoing task of building its future. As we've heard today, much has been done, but there is more to do. We operate in a sector with quality competitors. And appropriately, we are subject to significant regulatory oversight. I have experienced many cycles in company life. And in my view, there is no alternative but to choose a sound strategy and trust its execution to good people. You focus on your customers, as we heard repeatedly, deliver quality and fairly priced products and operate efficiently. All of this is not easy and takes a great deal of work, and I would be grateful of your support allowed me to play a part in that work. Thank you very much.

Well, thank you, Tim. I'll now take any questions on Tim's election. Can I take the first question, please?

Mr. Chairman, we have an online question from Stephen Mayne. Welcome to Tim Burroughs as a new Director, and could you comment on whether he knew any of our directors before being appointed? It is always helpful for investors to have access to some exit perspectives from retiring independent directors. We've heard from Chairman, John McFarlane, but in their final contributions as Westpac directors, could Michael Hawker and Chris Lynch, please comment on what they regard as the best decisions Westpac made during their time on the Board and do they have any regrets?

Okay. I will take the question on Tim, if there's a question. I don't recall a lot, what that question was? But given that the others are not related to this item of business, I won't take that question. So can I have the next question, please?

Mr. Chairman, there are no further questions for this item of business.

Okay. So the direct votes cast and the position of proxy votes received on Item 4A prior to the meeting will now appear on the screen. And I'll now formally propose Resolution 4A. This resolution is now displayed on the screen. And if you've not completed your voting card for this resolution or voted on the online platform, please do so now. Now moving to the election of Michael Ullmer. Michael was appointed as a director in April '23, and he will now address the meeting.

Thank you, Chair. Good afternoon, shareholders. It was an honor to be invited to join the Board of Westpac, and I've served as a director since April of this year. I've spent the majority of my executive career in banking and financial services. In the first half of my career, I was a partner with 2 of the major accounting firms, and in that context was responsible for the audit of 2 of the major banks in Australia. I also undertook a wide range of risk and strategic assignments for financial institutions here in Australia and throughout the Asia Pacific. For the second half of my career, I was a Senior Bank Executive. First, with the Commonwealth Bank, where I was Chief Financial Officer; and then the Group Executive Incharge of Institutional and Business Banking. And finally, with National Australia Bank, where I was a Member of their Board as Finance Director; and then Deputy Group Chief Executive Officer. My experience positions me well to contribute to Board discussions on strategic and operational issues as well as on financial and risk management issues, particularly through my role on the Board Audit and Risk Committees. In addition, I welcome the opportunity to share with management the lessons from a long career in banking. I've always admired Westpac. It has a storied position as Australia's first bank and has paid a pivotal role in the development of our economy. As a result, Westpac has a tremendous franchise and is recognized for its support of the community. In more recent times, though, Westpac has encountered major challenges, and management are well progressed with an extensive remediation program to strengthen risk management and risk culture. I have been impressed with the comprehensive response and commitment demonstrated by management in ensuring this work positions Westpac to compete vigorously in the market, help our customers create -- to create better futures and deliver superior returns for you, our shareholders. Again, I believe my experience will assist in the Board oversight of this work. I'll ask you for your support of my election today and assure you of my commitment to play my part on your behalf in restoring Westpac's competitive position. Thank you.

Thank you, Michael. I'll now take any questions on Michael's election.

Mr. Chairman, I would like to introduce Mr. Paul Fanning.

Thank you, John. And this question applies equally to the election and reelection process of all directors. The notice of meeting actually says there is a skills metrics for like talents that the Board members bring to the Board but I've been frantically trying to pick through the annual report to try to find where it might be.

It's on page...

It is supposedly is in the corporate governance report, too, which I don't have a copy of. I'm might thought maybe it's in the directors report. I don't know.

Yes, it is. It's on the corporate governance statement. It looks like this.

What page?

Well, you can have this.

It's not in the annual report.

It's not in the annual report.

Isn't it? Because in the case that it should be in there.

It's in the corporate governance. I mean, it's effectively for shareholders but it's in a separate.

Page 15, okay. So thank you very much.

Okay, good. Any other question?

Mr. Chairman, we have an online question from Stephen Mayne. In 2019, Treasury Wine Estates voluntary move to annual elections for directors in line with best practice that occurs in both the U.S. and the U.K. dual listed companies like News Corp and Rio Tinto or do this due to the laws in the U.S. and U.K. and BHP has continued doing it even after its U.K. DLC ended in 2021. As a long-serving ongoing director can Michael Ullmer and the new Chair, Steven Gregg, comment on whether Westpac will seriously consider following this TWE and BHP lead by voluntarily moving to annual elections of directors at the next AGM. Doesn't it make sense to improve boardroom accountability to shareholders.

I won't pass that question on, but I will say that I have experienced in both annual elections and in 3-year elections of directors. And each has advantages and disadvantages. The benefit of an annual election is to give shareholders the opportunity to evaluate each director every single year. It's also quite a massive dislocation potentially on the stability of the Board, where that not to be exercised prudently. The benefit of a 3-year election is the director can settle in and make a contribution over a longer period of time than an individual. Here, and generally, that is the Australian model, as clearly, both have advantages and disadvantages. And at this point in time, it is not a common practice in Australia, but there are occasions where companies do that, but they tend to have U.K. links in order for that to be the case. So I'll leave that for my successor, Steven, to determine whether he wants to follow that in the future, and that could be something that Steven can ask at next year's Annual General Meeting. So can I take the next question, please?

Mr. Chairman, there are no further questions for this item of business.

Well, thank you. The direct votes cast and the position of proxy votes received on Item 4B will now appear on the screen. And I'll now formally approves Resolution 4B. If you've not completed your voting card for this resolution or voted on the online platform, please do so now. And finally, the election of Steven Gregg. Steven was appointed as a Director and Chairman elect in November '23. Steven will address the meeting.

Good morning, ladies and gentlemen. It is an honor to have joined the Westpac Board as a director just over one month ago. Today, I seek your support for my election to the Board of Directors, and I'll also be taking over as Chair from John, which is a great honor. Thank you. My family has been banking with Westpac for over 70 years, and I personally feel a very strong affinity with the bank. I also have a meaningful shareholding in Westpac and have had that for many years. As Australia's oldest company and bank, Westpac plays a significant role in the economy and community, which is what I do recognize strongly. My reflection as an outside observer, and with my initial experience as a director is that Westpac is in a period of transition, having endured a tough few years. Now is a time to look forward with clarity and ambition. The company's foundations are strong and is well positioned to compete and grow. Westpac has great potential. I believe the experience and perspectives I bring from more than 30 years as an executive in the global financial services industry, plus more than a decade as a Director and Chair of a number of companies, will help realize this potential. I have held senior, corporate and investment banking roles in Australia, Europe and the U.S. including time at ABN AMRO, Chase Manhattan, Lehman Brothers and AMP Morgan Grenfell. My last job as an executive was leading ABN AMRO in Great Britain, which was a very important part of my career. I manage a large and complex bank. Following that, I joined McKinsey as a partner, advising clients, boards and chief executives in the wholesale and corporate banking sectors across Asia and Australia. I've also held chair and directorships across a range of industries and companies that are relevant to my position at Westpac. In this regard, I currently chair Ampol, one of the country's largest energy companies and The Lottery Corporation. As announced, I'll be stepping down from my role at The Lottery Corporation in the first quarter of 2024 in order to focus on fulfilling my role here at Westpac. In this regard, I have also recently stepped down from my Directorship at Challenger Financial Services. Previously, I was a Chair of Goodman Fielder, Australia's largest listed food company at a challenging and very pivotal period. I oversaw a significant restructure and a sale in 2014, which derives significant value for shareholders. My experience at Ampol, which is the forefront of energy transition in this country, has been formative and relevant, and has equipped me very well to assist in meeting the challenges ahead of us at Westpac. In addition to helping customers and the economy in general, transition to net zero. In summary, I believe there are many opportunities ahead for Westpac. It has undergone significant change in recent times, and has emerged as a stronger and more customer-focused bank. Together with my fellow directors and the management team, I look forward to leading this great company into its next chapter. And importantly, to improve performance and shareholder returns. I ask for your support today in the election of a director of Westpac and as my role as Chair and your representative of this terrific company. Many thanks for your support.

Thank you, Steven. I will now take any question on Steven's election. Can I have the first question, please?

Mr. Chairman, we have an online question from Stephen Mayne. Under the Westpac Constitution, external nominations for the Board must be lodged at least 35 business days before the AGM. With a rushed pre-Christmas AGM on December 14, the latest nomination date this year was October 26. However, Westpac didn't release its full year results until November 6, the same day it released the Notice of Meeting, as the new Chair will Steven Gregg a February or January AGM in the future, so that Board nominations closed, as you've told shareholders about your performance for the year. Why the rush?

Stephen, I don't think we will be doing that, but I'll take that on notice, and I'll discuss that with the company's secretary to see what the most appropriate time maybe that at the moment, we'll be keeping it at the same time. Okay. Next question, please.

Mr. Chairman, we have a question from Stephen Mayne. Could new Director and Chair elect, Steven Gregg; and the outgoing Chair, John McFarlane, comment on the recruitment process that led to Steven's appointment to the Board, was a headhunter involved and did the full Board interview any other candidates? Which of the exiting Westpac directors did Steven know before engaging with the recruitment process? And were any of our major shareholders consulted about the plan to pursue an external candidate as the next Chair?

Okay. Thank you. This was quite a long process in that -- given that I was planning to step down, I gave more than a year notice that I was planning to and we announced that at the last AGM. So post that, we've had 12 months to do with that. And a subcommittee of the Board was set up that did not involve me and did not involve anyone who might have been a candidate to be elected and that oversaw the process of the election. Then we looked externally and internally over that period and considered internal and external candidates. It was a difficult process. There are many people who are not prepared to be a Director or a Chair of a regulated entity. And therefore, the pool is not as big as you might think it is. But nevertheless, we did have options. And we looked at all the options considered them seriously. The whole Board met Steven as part of his qualification. And at the end of the day that we had a choice. The principle here, a lot of people think we should always appoint just internally, whereas actually the obligation on us is to take the best person in the world available to us, whether they're internal or external. So we went through that process, and we did have options, and the Board unanimously decided that Steven was the best candidate. So in -- we didn't normally approach individual shareholders in this process. But actually, Steven, before he took the job, did actually approach shareholders in order to see whether or not he should pursue this and/or whether he felt shareholders would be supportive so that there was, in fact, some external consultation. Look, we've actually got an incredibly good candidate here, and Steven, he's not only got enormous financial services experience but he's also got amazing directorship experience and successful directorship experience here. And we couldn't wish for a better candidate and I wish you well. Next question, please. There's a question in the room?

Mr. Chairman, I would like to introduce Ms. Rita Mazalevskis.

Just a quick one. Steven, more out of curiosity. What time frame were you at Lehman Brothers.

What time frame? I was there, to your point, probably 10 years before it went bankrupt. So I was there for enough -- 1997.

It's just more out of curiosity. So I'm assuming you -- we would be in good stead having someone like you in this position to foresee anything like that, which might come up on the bank.

A very different time and very different circumstance.

Thank you, Rita. Another question?

Mr. Chairman, there are no further questions for this item of business.

Okay. So the direct votes cast on the position of proxies received on Item 4C prior to the meeting will now appear on the screen. And I'll now formally approve Resolution 4C. If you've not completed your voting card or voted on the online program, please do so now. Now can I thank everybody for respecting the fact that we wish it to have all the discussion on climate change in this part. Now I really do appreciate that. And we're quite happy to have a comprehensive discussion now without time limit on this. So the next item of business relates to Westpac's 2023 Climate Change Position Statement and action plan. As I mentioned earlier, we're putting a nonbinding advisory resolution regarding our climate strategy to this AGM. Climate change is an important matter for Westpac customers and the economy, and we're playing our part. So given this and the significant focus of many shareholders in this matter, we decided that a resolution of our own was the best way to reinforce our commitment and support constructive discussion. Resolution seek support for our 2023 climate change position statement, an action plan, which is included in our '23 Annual Report and our Climate Report and is summarized in our Annual Report. Our climate change position statement and action plan sets out our position details our strategy for reducing carbon footprint and how we're working with customers to help them reduce their impact. It also includes the action we're taking to help us achieve our ambition of becoming a net zero bank. Now while listed items advisory, we do value the feedback and the Board will take the outcome of the vote into account when consider our future climate change plans. The Board recommends you do vote in favor of this resolution. And just before I do take the question, the Board has very little exposure to fossil fuels. But nevertheless, we do have exposure. So I will take the questions on this side only.

Mr. Chairman, I would like to introduce Mr. Roydon Ascott.

Mr. Chairman, I'm a retired regional manager with Westpac in Queensland. And my question relates to the transition plan assessments in the annual report. On the 7th of November last, the Australian media announced a proposal by Westpac to consider a restriction on their lending to our farmers and grazing customers if they are engaged in land clearing. This is not specifically detailed in the Transition Plan Assessments. Westpac's decision to implement and set such as zero deforestation target for agricultural lending is completely concerning and unnecessary. As Australia already has in place, stringent native vegetation protection laws set and enforced by our state governments. Will the Board of Directors and the Chief Executive Officer, seriously reconsider this matter in the best interest and protection of our widespread rural producers. And I say with respect, also shouldn't the Board reflect upon its reputation as a supportive corporate citizen in a region of Australia.

Thank you. It wasn't quite reported accurately. So Peter, why don't you...

Yes. Well, firstly, thank you for the question. In relation to agriculture, we continue to have aspirations to support that sector and grow in it. So that's the first point. In relation to no deforestation, we're aware of the legal rules. We have set out a policy that talks about clearing of natural forests, not regrowth. And we will work within the national rules as well as the policy that we set out, but we do think it is important that we focus on the land as well as how it's used. So I think we have a 2-year transition plan where we use that to engage. We already are engaging. We see farmers managing their land in the way that we've -- they're doing it well today, and we think they already meet the requirements, but we will engage over the next 2 years if something that comes into fruition in the next little while. And feedback such as yours on state requirements, I think we will pick up. We have picking out.

Peter, going forward, I ask that the new Board specifically pays attention and gives empathy and understanding to the widespread rural community of Australia. Without them, we're in deep trouble. You know that anyhow.

Yes.

The Darling Downs in Queensland last week, we sent 3 747 jet planes full of 80 containers each, of farm produce to Hong Kong. Now that's just the start of our program in the area of Queensland. It's a very important part of Westpac's customer service and particularly in the lending area to observe those farmers.

Thank you. Can I take the next question, please?

Mr. Chairman, I would like to introduce Ms. Rachel Deans.

Thank you. In July 2022, Westpac loaned $125 million to Woodside in a deal that does not mature until 2025. This is a company which plans to increase oil and gas production by 45% by 2027. It also plans to develop 5 new oil and gas projects, the cumulative emissions of which adds up to 2 billion tonnes of CO2 equivalent, which is over 4x Australia's yearly emissions. In June of this year, Woodside reached the final investment decision on the Trion oil field in the Gulf of Mexico. Woodside will invest over $7 billion in developing and operating Trion. Over its lifetime, it will emit almost half as much as Australia does in an entire year. This is the second new oilfield that Woodside has locked in since the international energy agency said new oil and gas fields were incompatible with limiting warming to 1.5 degrees. Westpac has actually ruled out direct financing new oil and gas fields that are incompatible with the International Energy Agency's net zero scenario, but continues to loan money to Woodside, a company investing in these very projects anyway. So if Westpac accepts that new oil and gas is incompatible with 1.5 degrees, how does it ensure that the company's finances are not using this money to fund new oil and gas projects.

Chief Executive will answer that.

Well, thank you. As we've said earlier in the meeting, we can't comment on specific customers and I'll make that point again. In terms of our policy, so as you know, we've said by the end of 2025, we want the big emitting sectors, particularly oil and gas, to have credible transition plans. And we look at things like strategy, capital allocation, whether they're scope, their plans, look at Scope 1 and 2 and 3. So that's what we are focused on, making sure that companies have those plans. And then at that point, we will make decisions about how we support, work with or not with those style companies.

In follow-up to that, I mean, Westpac does seem fine to be publicly disclosing its renewable customers, but I appreciate you might not be able to on this front. But it is really about like rather than specific clients, it's more generally, if our current clients are developing new oil and gas, how do we kind of ensure they're not spending our money on these projects now, between now and 2025, because that is -- there is obviously time that we can pump money into these projects that are just completely incompatible with a safe climate, and we are already seeing those impacts today in terms of bushfires and other things going on in Australia?

So just when we speak about a company in our annual reports, they approved to it. So that's an important point. But in relation to oil and gas policy, we set out, we'll look at transition plans, Scope 1, 2 and 3, and that's what we're looking at in terms of how we assess companies.

Thank you. Next question, please?

Mr. Chairman, I would like to now introduce Ms. Isabel Fish.

Thank you. I'm Isabel Fish. I'm a shareholder, a financial sector union member, and a really proud Westpac employee of the last 11 years. I'd like to start by acknowledging that we're on stolen lands, and I pay my respects to the elders. So over the last 11 years, there have been so many times that I have been incredibly proud to work for this company. The work we've done through progressing women's rights, the support for indigenous Australians through the Jawun investment, through the indigenous voice department, and our indigenous business banking. And as we embrace digitalization, I'm so proud of the innovative ways that we're coming up to give financial services to more Australians that need it. However, my colleagues and I, were deeply dismayed to learn that Westpac continues to fuel climate crisis by financially supporting companies that are expanding the fossil fuel industry. Westpac said that it stepped up its actions and commitments as the climate crisis becomes more urgent. But it's hard to reconcile that with the fact that this bank continues to directly prop up companies that are making the problem worse. Westpac is right, the climate crisis is urgent. And the bank should be acting like it is by refusing new finance to companies with no intention of transitioning away from fossil fuels. We urgently need to transition away from fossil fuels to clean renewable energy. The bank needs to draw a line in the sand and show genuine climate leadership until the fossil fuel industry that enough is enough. And the fossil fuel industry needs to hear loud and clear that our bank will not financially support any company or projects that risk flowing up our increasingly shrinking carbon budget, and our hopes for a livable planet for future generations. Westpac employees were not consulted about this latest climate policy, and they haven't been given any chance to have any input into the bank's fossil lending policies and what they should look like. But I want to continue to be proud to work for this company. I want my bank, Westpac to not provide finance to any new fossil fuel projects or companies building them, which are not compatible with a stable living environment. So I ask that Westpac commits to involving workers and our finance sector union, when developing climate policies in the future. So my question, will you commit to consulting, listening to and engaging with us when it comes to your fossil fuel lending policies?

Well, thank you for your service and for your eloquence, Peter?

Well, I think you are giving us feedback today. Seriously, thank you for turning up today. Thank you for the positive recognition and thank you for the feedback on the kind policy. As you can imagine, these -- we actually take broad stakeholder feedback on these within the company and outside the company, and I'd be pleased to receive the feedback you have on our policies. I don't think we'll be in a position to put our policies to employees more broadly, but I certainly would welcome your feedback.

Thank you. Will you work with us at the Finance Sector Union on these policies, if not directionally with the employees?

Well, we'd invite all employees to give us feedback. The FSU represents a subset of our employees, but we'd like to hear from all employees.

Thank you. Next question, please.

Mr. Chairman, I'd like to introduce Ms. Kate Patterson.

Good afternoon. Firstly, I'd like to acknowledge the first people of these lands where we meet. It always was and always will be original land. I've been our Westpac customer since primary school, an investor throughout that time. And I'm now deciding whether this bank represents the values I want to be my children's bank. And I do note that Chair, John McFarlane, you mentioned earlier, you have quite significantly reduced fossil fuel exposures and that this action climate change plan is a step forward. However, my question as an investor is whether our ongoing fossil fuel lending still makes sense, commercial sense in a time when the climate emergency is becoming a real household emergency for so many Australians, and also so many of our housing lending portfolio. Our fossil fuel exposure accounts for less than 0.8% of our total lending portfolio with oil and gas extraction customers making up 0.2%, a very small part of the portfolio. Yet according to the 2023 Climate Report, our oil and gas customers account for 19% of our finance emissions with many of our customers, as we've noted, plans to grow those oil and gas projects. So this small percentage of clients is doing outside damage to the rest of our lending portfolio, including the viability and resilience of Westpac's housing portfolio, which is over 50% of our total exposure. So research has shown that in Australia, 1 in 25 homes will be uninsurable by 2030, that's over 0.5 million homes. So why is our bank continuing to turn a blind eye for this tiny percentage of its customer base, when those investments are doing an outsized damage to the rest of our portfolio, including homeowners.

Thank you. I'll make -- we've broadly answered the question, but I'll make some more general points on this. There are people that want us to move and close down all fossil fuel exposures now. Now we couldn't do that because there are some committed facilities which are legally binding and therefore that takes time to wind down. So even if we wanted to, there's still exposures, but then you get the question of renewal and new exposures. The issue is this. Australia wants to move to green, but cannot move from brown to green today. It can only move to that over a period of time. We've got the government expanding the use of electric vehicles, increasing the demand for electricity. We are shrinking the amount of coal for generation, which is a good thing. The issue that we've got, though is, there is still cars on the road that use diesel and use petrol. And we've also got power that is produced by coal gas power stations, and combined with that, you've got a government that is willing to have nuclear meds and nuclear submarines, but no nuclear power as part of that equation, which could accelerate that move to green, which makes it a bit more difficult. And so for that reason, fossil fuels are going to be with us for some time. And you then have this choice of not doing it at all or moving and accepting the government's policy is that we should transition towards a better future, which is what we're embracing. Look, I'd make the other point is if we pulled out, it would still get financed by somebody else. And I think it's better that it's financed with people who -- banks who have got commitments to the future to reduce and become net zero, and to ensure that any facilities that we grant are actually strenuously screened such that they are acceptable to us in an acceptable form of transition for Australia for the future. So I think that's a more risk -- well, it's a more difficult decision and people will disagree with that. It's a more responsible position in that we believe we are a responsible supplier. And if we didn't do it, it would go to perhaps irresponsible suppliers with less commitment. So I do think, while not everybody is going to agree with us, I just think we're doing the right thing here in order to find a transition here. And I think that -- I believe in that, and I think the alternative is not better is my view.

I think we perhaps do disagree on some of those positions. And I think acknowledging that you've all had long and successful careers and that no doubt, you are able to tell the difference between a transition plan that presents a glossy story, I would like to understand the transparency and accountability that we can expect to see for transition plans that aren't due for 2 years as you're continuing to invest in these fossil fuel organizations. How can we believe that those organizations are credibly transitioning to net zero when they also have expansion plans?

Yes. Well, look, I think that the bit of evidence I would initially look to is when you look at our historical fossil fuel exposures, they've come down systematically over quite a period of time. And so that should be a bit of good news to that question. We expect the same to -- it doesn't need to say every year, they go down. But we expect over time that will continue to go down over time, and you'll see the evidence of that in our disclosures. On the other hand, we do think gas is going to be with us if there's no use of nuclear power here, and we are accelerating investment into renewals very fast as we can. And our own power usage is 100% renewal -- renewable. So we are trying to facilitate green power as fast as we can. But that green power cannot happen quickly enough to avoid the use of gas. We can avoid the use of coal, but we can't avoid the use of gas. And therefore, we just need to recognize that as a declining reality over time and to recognize, we're going to be exposed for some time, but it will decline.

Ladies and gentlemen, I would like to introduce Ms. Nishtha Aggarwal.

My name is Nishtha Aggarwal. I'm the financed emissions analyst at Climate Energy Finance. I'd like to acknowledge Westpac for their progress and leadership in establishing a sustainable finance framework this year ahead of the market and ahead of an initial taxonomy to be released next year. And we promised to continue assessing the credibility of the eligibility criteria outlined in this framework from a real emissions reduction perspective. I'd like to ask a question regarding your 56% emissions intensity reduction target for your mortgage book and how you plan to incentivize and lead the electrification and energy efficiency upgrades of Australian homes. We know that your 56% target -- will Westpac will actually be able to achieve that target passively by leveraging existing national efforts to decarbonize the grid as the energy market operator forecasts a 60% emissions reduction decline in the power grid by 2030 compared to 2021 levels, consistent with your target? So being Australia's second largest mortgage share market -- mortgage market shareholder, how is Westpac going to drive additional electrification and energy efficiency upgrades for its customers?

Thank you. Peter?

So I think first thing is rating of housing. So we're working with national authorities on how do we get effectively an energy rating for a house. And that helps level set people, and hopefully we'll get them interested in how they improve it. We'll do it through products. So if you think about EV loans for cars. We're looking at other products for mortgages, including to help them electrify their home. So we haven't got those at the moment, but we're working on those. In our digital app, we've actually got a carbon footprint tracker. So again, looking at the data and helping people understand their footprint, could be flying, or other things. So I think education is a big bet, consistency of measurement product features. And then I think there's a societal issue, because those who are well off will be able to finance it themselves. I think there's a piece for advocating with government to help those who can't afford this process to help them as well.

And that was my sort of follow-up point there. Just around the policy advocacy to remove the barriers to finance, especially for low-income households. What's my question here? I guess it's -- what are you doing in regards of that? And will you be transparent in that policy advocacy in this year's reports?

What are we doing? Well, we've got -- on one hand, we've got responsible lending laws. So we've got to manage that. And then we've got government assistance. So we'll be encouraging governments to help out in the right way.

Thank you. Next question.

Mr. Chairman, I would like to introduce Mr. [ Kyle Robertson ].

Thank you, Board. Thank you, Board. Nice to see you again, Mr. King. Nice to see you again, Mr. McFarlane. I did have a question that I wanted to answer -- sorry, I did have a question that I want to ask. However, I do want to address something you just said before, Mr. McFarlane. You said -- and you said this last year in your opening statement regarding climate change that some want to see fossil fuel financing from Westpac shut off overnight. I want to make very clear to every shareholder in the room that the resolution of Item 6 is not asking the bank to do that. It's asking the bank to have a clear plan for how its fossil fuel customers are aligned with the Paris Agreement, not to cut our finance overnight. It's a very clear distinction. It's one that -- not Westpac necessarily, but other peers have made of resolutions from market forces before, and I do want to make that very clear and correct the right...

No, we are aware of that. Thank you for that. We're conscious of that.

So on that topic, I did just want to address one thing very specifically, which is, as Rachel said before, Westpac has ruled out directly financing new oil and gas projects that are not compatible with the International Energy Agency's Net Zero by 2050 scenario. So I suppose my question is, does Westpac consider that new oil and gas or expanded oil and gas is incompatible with 1.5 degrees?

Well, again, we will work on client transition plans with customers, and we'll be looking at their plans to offset Scope 1, 2 and 3 emissions. And we've said we won't finance expansion in our new or greenfield in -- in oil and gas. So we'll be using our policy.

I do appreciate that, but that wasn't an answer to my question. The question was, do you consider new oil and gas fields to be incompatible with 1.5 degrees?

It will depend on what's in the 1.5 degree and what was approved before and after. And that's why we'll be doing it at a client level, very -- where we've got a couple of exposures in that area, and we'll be working with those clients pretty closely.

You know that's more a question for government than for us, of course.

Not necessarily. It's your policy.

Indeed. Thank you. Any other questions?

Mr. Chairman, I would like to introduce Ms. [ Jenk McNichol ].

This meeting is incredibly timely when we're talking about climate, when our fellow Australians up north are being belted by giant cyclone and people are being rescued off roads with helicopters. In Westpac's climate reporting this year, the bank signaled its attention to guide its oil and gas customers' transition away from fossil fuels with the rationale that these companies need finance to assist them in the transition. But according to the International Energy Agency, oil and gas producers account for just 1% of total energy -- clean energy investment globally, with more than half of that coming from just 4 companies out of the thousands that exist globally. Instead of investing in clean energy and managing down their oil and gas operations, oil and gas companies continue to pour over $1 trillion into oil and gas supply every year, far more than what the International Energy Agency says is required in a 1.5-degree centigrade scenario. The oil and gas industry invests just 2.5% of its capital expenditure on clean energy. So my question is that given the oil and gas industry, including Westpac's clients are spending vastly more on growing their fossil fuel operations, what concerns should Westpac have that the companies we bank will use its finance to lock in dangerous and risky fossil fuel expansion projects instead of renewables, as the data clearly shows us?

Okay. Well, I think the way we think about that question is back to the climate transition plan. So we've asked clients to have them in place by the end of 2025. We will assess whether they're credible, and that work will happen between us and the clients. And that will be part of it in areas like electricity generation, we're already lending more -- much more than we are to traditional electricity generation. So that's an example where we're definitely seeing capital employed to renewables. But oil and gas, there's work to do.

We know the risks from worsening climate change are potentially catastrophic, as people up north are finding out. And what we do in the next few years matters. So regardless of what Westpac is doing -- going to require from October 2025, what should Westpac do to commit to assessing all its fossil fuel finance decisions for alignment with 1.5 degrees centigrade before then?

Well, thank you. But I think the policy is clear about what we will do in the next 2 years, and that's the policy we will be applying.

But I did make the point earlier that our fossils exposures have been coming down over a period and will continue to come down over time. Can I have the next question, please?

Mr. Chairman, I would like to introduce you to Mr. [ Morgan Pickett ].

I'm here as a proxy. And I've been instructed to ask a question written by [ Greg Mullens Ayo ], Australian Fire Service Medal recipient and firefighter. Mr. [ Mullens ] is also a former Commissioner of Fire & Risk in New South Wales and Founder of Emergency Leaders for Climate Action. And I quote Mr. Mullens. "During my 5 decades of fighting fires, I've watched with growing alarm as bushfires in Australia have become more intense and unpredictable, supercharged by climate change. This summer and next, Australians will yet again face escalating heat waves and fire conditions worsened by pollution from 2 centuries of burning coal, oil and gas. Continuing to lend or invest in polluting industries that harm us all is reckless and immoral. There is no longer any question that out of control climate change is approaching dangerous tipping points. Supporting these industries in any way shows no regard for Australians who are living through more intense and frequent fires and floods or those who will inevitably face them in the summers to come. Westpac can no longer pass the buck on this or give blatantly greenwashed answers to stakeholders. We know Westpac continues to lend, invest in and profit from industries whose operations are worsening the climate crisis they claim they want to fix. Our financial institutions must stop bankrolling the expansion including coal, oil and gas projects and start using their financial might to help secure a safer future for Australians. Mr. Chairman, when will Westpac stop providing finance to projects and companies that are expanding fossil fuels that are causing Australians immeasurable harm?"

Thank you, and we'll note all the comments, but we've already addressed that, and I don't think we need to address it again.

So the answer is you'll continue to finance fossil fuel expansion?

No. We've talked about new oil and gas projects. And we talked about transitioning existing ones. So Peter?

I think well, the key point is -- Point 6 of our committed exposure is to the fossil fuel energy change, we've said we are out of thermal coal in 2025. We've said for oil and gas customers, they have to have transition plans, credible transition plans by the end of 2025. We said we won't finance new and greenfield oil and gas. And so the policies are pretty clear, and transition is very important here.

Interesting point you made, the kind of moving the goalpost from your climate policy last year and that you were expecting those transition plans prior or by 2025. Now you're saying by the end of [indiscernible].

That's not right.

Another point...

That's not right.

My second question, if you'll indulge me. The iron and steel industry is responsible for 7% of global greenhouse gas emissions due to the use of metallurgical coal during production. With research showing that decarbonizing the industry is now possible by 2040 and the International Energy Agency's dating in its net zero by 2050 report that existing sources of production are sufficient to cover demand through 2050 for coking coal. Westpac is continuing to arrange finance for companies expanding metallurgical coal production like it did this year, when it participated in arranging a $4 billion bond for BHP. BHP has applied to extend the life of Australia's largest metallurgical coal mine peak downs by up to 93 years. This would see BHP continue to dig up and sell highly polluting coal beyond this century despite the global commitment to reach net 0 emissions by 2050. Despite the massive impact metallurgical coal has on the climate, Westpac will not require its met coal mining clients to have emissions reduction plans aligned with global climate goals in order to receive new forms of finance. Why won't Westpac expect credible transition plans for metallurgical coal miners like it will for oil and gas clients?

Peter?

Well, I think -- so you're right, the policy is for credible transition plans on oil and gas. I think we will look at critical -- sorry, credible transition plans over time for other high emitting sectors. I hope you're right that there is a technological solution to produce steel in time, because that means met coal use will come down. I do hope you're right. But I also think the providers of capital to those companies will also look at the transition plans for those companies as well.

It's not a matter of if I'm right, it's the International Energy Agency, which...

Let's hope they're right.

Any other questions?

Mr. Chairman, I would like to introduce Mr. [ Paul Donahue ].

Westpac's climate report mentions the difficulty that some of your customers in oil and gas will have in meeting the 2025 deadline for a credible transition plan. Given that 2025 is not that far away and some of your customers don't appear to be making much of a move towards the transition plan, what are the funding ramifications for those customers when we get to that deadline? I'm talking in terms of new and existing lending facilities.

Yes. Well, I think on -- if you take oil and gas, we've already made it clear about the new -- what we won't do from a new perspective. On client transition plans, we'll be working very hard with them over the next 2 years to make sure they are credible. And if they're not, then we will work -- then there'll be implications. I don't want to talk about what they are because it's company-specific. But if they're not meeting what we need, then we will be taking action.

So without getting into company specifics, is it reasonable to assume there'll be no new lending to those customers?

I think if you look at credit facilities today, we have a whole heap of covenants in credit facilities. And if they're not met, then where we'll go and look at them and work out the way forward, this will be the same approach with credible transition plans.

Thank you.

Second question. This one is about the National Energy Security calls in your criteria for lending to oil and gas. The climate report says that your positions on the funding oil and gas customers are subject to something called Natural Energy Security, which is defined as circumstances where an Australian or New Zealand government or regulator determines or takes a public position that additional supply is necessary for energy security and Westpac's funding is able to support such supply. Quite an open-ended statement there with a fair bit of room for maneuver. We've got a few questions about this. Can you clarify, when you're talking about governments, is that federal rather than state governments, so not a fossil fuel-friendly state government having a position? And what regulators might make such determination? And what sort of scenario did you have in mind when you're forming that exemption?

Well, I think -- so just to be, we haven't had any directions. But as we thought forward and we engage with governments, both state and federal and New Zealand and Australia, energy security is important for the country. If we get to a situation where that's at risk, they may direct us to do something. So we're not trying -- we're just trying to be clear that if we run it the way we want to run it, that's the policy, if there is direction from the country about a short-term need, say, for energy, then we would need to be part of the solution.

Thank you. Next question.

Mr. Chairman, I would like to introduce Ms. [ Ken Miller ].

In 2022, Eastern Australia suffered from unprecedented and catastrophic flooding events, damaging tens of thousands of homes and businesses and causing an estimated $6.8 billion in insured losses, making it one of the country's largest natural catastrophic claims events ever. In 2022, Westpac proudly claimed that it had donated just over $2 million to natural disaster relief. But Westpac made almost 4x that amount in fees from arranging deals to companies expanding fossil fuels in 2022. With the natural disasters increasing in frequency and severity, the question is, is Westpac planning on arranging more deals for its fossil fuel clients to help pay for the natural disaster relief packages it donates in future years?

The 2 are not linked, but Peter?

Well, in terms of the natural disaster relief, that was directly to small business customers and consumer customers for what they needed at the time. In relation to the oil and gas, the fossil fuel, I think we've covered that well in the previous questions.

Yes. But the 2 aren't linked. We're not doing 1 because of the other. We're doing both.

Transparency in your profits from fossil fuel deals compared to your disaster relief, that was the basis of the question.

Yes. There's a question, should we give more to disaster relief. So we'll note that. Thank you.

Mr. Chairman, I would like to introduce Mr. [ Noel Johnson ].

I was not going to speak, but I have been a long-term shareholder, both personally and in my superannuation fund. I was born in Brisbane. Six generations of us here, and I consider this my land. Australia, a land of drought and flooding rains. So it's opportune that I follow on from the previous speaker. My property was flooded last year, 2022. And it's not because of climate change, it's because Brisbane is built on a flood plain. We had a geologist out near our place from the university who drilled down 60 meters and said, this is Moreton Bay mud. This whole area used to be a flood plain thousands or tens of thousands of years ago. And I knew I took the risk building near a creek because I like the views, but I've got 5 meters of water over my house. I do not blame climate change for that. And as far as our policy goes, I don't think you're going to get to net zero because, quite frankly, I do not believe that fossil fuels are the problem. Surprise, I disagree with the previous speakers. The problem is simply overpopulation. The world took thousands of years to get to the first 1 billion people. And then we accelerated to hundreds of years, and we're down to the point that every couple of decades, we're adding 1 billion people, and they all require resources. And everyone is concentrating on electricity, fossil fuels instead of the real problem is that we need to have a sustainable population. Now I am a shareholder. And as far as I am concerned, as part owner of this company, I'm happy to direct the Board to invest whatever funds I have into fossil fuels because I think they're helping the gantry. And as for nuclear, maybe, just maybe, people would consider doing it if they realize thorium reactors, which are nuclear, do not explode or blow up. And they cannot be used for making plutonium and atomic weapons. But everyone seems to want to build uranium-based reactors. Now moving on to my comments about the fossil fuels. People seem to forget that oil and gas have a lot more uses than just for burning. We have artificial plants down the front. And most plastics come from gas or from oil-based products. Many of our clothes, unless they're natural fibers, are synthetic. They come from oil- and gas-based products. The vehicles we drive in, the seats we sit on. Quite frankly, our lifestyle will be diminished. And there are those who tell us that we can substitute fossil-based products with products grown vegetation that has been processed. Trouble is, if we use vegetation to produce oil-based synthetics, we're going to run out of farmland for food. Remember, we're getting 1 billion extra people every couple of decades, and everyone's got to be fed. And quite frankly, all this talk about clearing pasture land for graziers and food doesn't make sense to me. People object to that, and yet up in Cape York Daintree, we had untold acreage, a pristine rainforest destroyed to put in wind farms. And we're having wind farms and solar panels taking over worthwhile agricultural land. Yes. If it's so cheap and so economical, perhaps your customers should start putting solar panels all over the buildings in the cities because they're the ones using the electricity. And as I said, I didn't prepare a speech. So I'm thinking on the run. I basically think that the fossil fuels have a place into the future. And most people forget our chance of getting to net zero is almost 0 because the largest blow to China does not have to reach 2050 time frame. It uses most of the fuels. It's getting most of its oil and gas from Russia at the moment. And our coal and our gas surprisingly have lower CO2 levels, the most of the coal supplies throughout the world. So when we stop supplying inferior quality coal, including the Chinese own coal -- and they have vast reserves, but it's poor quality coal -- causes much more pollution than burning a ton of our coal. And moving on. Sorry, I've lost my train of thought. Apart from the pollution that will come from them, everyone wants to buy things cheaply because of the cost of living. But guess what? We're buying everything from China, which is probably the most polluting country in the world. And as for my comments, I do have a science degree. I had worked for decades in the agricultural field. I do know a lot about grazing animals. And in retirement, I've spent lots of time with green groups and environmental groups. And yes, I own shares in Woodside. Guess what? I use the profits to support and buy into companies that are producing chemicals and minerals needed for new energy and for batteries. But I see our gas as being required for many years to come. And all this talk about stopping the nation's most profitable industries to go into renewables, which I do not believe can be that profitable because Woodside would stop tomorrow producing gas if it could make more money out of solar panels. And finally, I'd just like to thank the Board for their attention. And I really wish people would look at the overall problem instead of just focusing on 1 small fragment, which is fossil fuels. It's a worldwide problem. There are lots of interactions. And what we do in Australia will make no difference because we only account for 1% or 2% of all global pollution. I thank you for your time.

Thank you for -- you've obviously thought about this deeply. Next question, please? Yes.

Mr. Chairman, I would like to introduce Ms. Nishtha Aggarwal.

I was going to keep my question for 6B. But since we're bringing up transition plans, I'll raise it here. So I'd just like to highlight, there is a significant difference between requiring customers to disclose emissions at Scopes 1, 2 and 3 versus having that requirement for them to credibly reduce those emissions that are because of systemic climate change. And it was pleasing to see in the climate report, Westpac acknowledged the significant challenges that the oil and gas industry does have incredibly reducing those Scope 3 emissions that occurred downstream from the use of oil and gas products. Australia has the opportunity to go from 1% to 2% emissions to actually play a leading role in helping the region decarbonize by 8% to 9% emissions by becoming a renewable energy superpower. My question is, would you be willing to bring forward those implications that you mentioned earlier, Mr. King? Would you be willing to take an evidence-based and agile approach and bring forward those implications potentially to next year if that trajectory does not change, we don't see the possibility of emissions reduction in that sector change?

Well, we said that the policy is to -- you said 2025, but practically, we will be working with customers with haste now. So no, I'm not going to change the policy, but I am indicating we're working pretty hard. And we called out the 20 clients that we're particularly focused on in incredible transition plans. That's happening now.

Yes. No, I appreciate that. And I appreciate the reporting this year on how Westpac's engagement with those customers is going. Just the second question is around the transition plan task force, which is quickly becoming global best practice when it comes to transition plan disclosure. ASIC will be becoming involved in that space by 2025. Do you have plans to sort of align either Westpac's and your customers' sort of disclosure framework to that kind of a gold standard, the transition plan task force?

I think this is a space where there are a lot of emerging standards, many, and we will look at all of them, including the ones that you mentioned. The best thing we can get to actually is one. One of the challenges I think we've got is there's just too many. So we're going to get to the best one and get there quickly.

Thank you. Any more questions in the room? Yes.

Mr. Chairman, I would like to introduce Mr. [ Ian Poteas ].

I'm a small shareholder. I would like to know, firstly, may I congratulate that previous gentleman who started to talk a little bit of sense, first bit we've heard today. I would like to know whether the Board are going to be quick and ready to finance some coal-fired power stations when there's other claptrap that we've been hearing about today falls in the big heap that it will?

Thank you. Peter?

And I hope all of those people [indiscernible] planning to walk home today.

So in relation to power generation, most of the capital that we have been deploying is into renewables. This is about 80% of power generation. In relation to new coal-fired power stations, I don't think they'll be built in the country. They're too long lead times. There's a chance of gas, but I don't think coal-fired power stations will be built.

Okay. I don't think there are any more questions in the room. So we've got questions online.

Mr. Chairman, we have a question online from [ Helen Tower ]. Fossil fuels are still an important part of our energy security and for the ongoing prosperity of this country, Westpac should still finance oil and gas projects.

I think that's a statement.

Yes, thank you very much for that comment. We'll note that. Next question, please.

Mr. Chairman, we have a question from Stephen Mayne. Did any of the 5 main proxy advisers, ACSI, Ownership Matters, Glass Lewis, ISS and ASA recommend a vote against the Board's recommendation on any of today's climate-related resolutions? If so, what reasons do they give? And have there been any material protest votes on climate matters? Also, please disclose the proxy votes now rather than waiting until all the questions have been asked. AGM best practice is now to release the proxies to the ASX along with the formal addresses. Will Steven Gregg commit to doing this next year, moving on from this old school hold back the proxies approach that we've seen today?

Okay. There are 2 questions there. All of them voted in favor of Resolution 5. And secondly, with respect to the future, I think I'll leave that to Steven Gregg next year rather than now. Now can you remind me about the question?

Any more questions? It's fine. Any more questions?

But I had a comment on that. I just forgot what it was. Okay. Next question.

Mr. Chairman, we have a question from [ Leo Geiser ]. Not a question, but a comment in response to the Chairman's implied advocacy of nuclear power. If we were to consider the cost effectiveness of nuclear power, this is why nuclear power is not currently on the table in Australia.

Yes. I'm not promoting nuclear power, I simply made the point that if nuclear power is not embraced, then alternative sources will have to be used. That's simply the point I was making. If you're going to assess any form of production of electricity, you need to use the most renewable and the best available, whether it be nuclear or something else. Next question.

Mr. Chairman, we have a question from [ Helen Tower ]. Will you please take a balanced view on this topic? Regardless of the other questions posed, we still need fossil fuels for some time to come until we have nuclear?

Yes. I think we've answered the question. Essentially, we've said that the country cannot move from brown to green instantaneously, and we'll have to get there over time. The sensible thing for us to do is back people who will do that sensibly and recognize it will take time. And therefore, we will back the transition. So now Steven Gregg made the point that we should put the proxy votes up before you get the chance to vote. Now I can't imagine that that's what we would like. Stephen Mayne said that we should put the proxy votes up before you get the chance to vote on the discussion. I can't imagine that is what you would like to happen. But if you do let us know, and we will do that, but it's not common practice. Shareholders tend to be able to want to express their opinion. And that's the way we conduct it at the moment. It's very unusual actually to put the proxies up before the discussion and before the votes. So again, I don't think that is likely. But I know Steven has got very interesting views in this kind of thing, and he'll probably advance that once again next year, and then Steven can take that question. Can I take the next question, please?

Mr. Chairman, we have a question from [ Helen Tower ]. Thank you, Chairman, for not being pushed on this issue.

Okay. I mean, thank you very much. Next question, please.

Mr. Chairman, there's no further questions for this item of business.

Okay. So that concludes the items -- discussion on this. The direct votes cast and the position of proxy votes received on Item 5 prior to this meeting will now appear on the screen. So this resolution is now displayed on the screen. If you've not completed your voting card for this resolution or voted on the online platform, do so now. The next item of business is Item 6, which has been requisitioned by a group of shareholders. Under the Corporations Act, shareholders can propose to move a resolution at the general meeting. In this case, Market Forces and Australian Ethical Investments Limited put forward the resolutions in Item 6 with more than 100 signatories. The Notice of Meeting contains an explanation on why the resolutions are being put forward, along with the Board's view. The resolutions are not recommended by the Board. And as previously stated, this year, we put forward our nonbinding own advisory resolution on our climate change position and plans, which has clearly received your support. We therefore recommend shareholders vote against resolutions in Item 6. Resolution 6A is required to be passed as a special resolution, and Item 6B is conditional on 6A passing. So Resolution 6B requires that Westpac disclose in future annual reporting, whether Westpac will require fossil fuel companies to have transition plans in place before '25 to be eligible to receive new financing, which is a question we've already answered. And have a question how Westpac will assess those plans. So I now invite Kyle Robertson from Market Forces to speak to the meeting and resolutions in Item 6. So Kyle, welcome again.

Thank you again, Mr. Chairman. Thank you, Chairman and the Board, and greetings to my fellow shareholders. This resolution presents our bank with an opportunity to take decisive action and stop contributing to the climate crisis. It was filed by hundreds of shareholders who are disappointed that Westpac is still yet to live up to its commitments to the Paris Agreement and are calling for climate leadership from this bank. The reason for the resolution is simple. If Westpac continues to provide or arrange finance for companies that aren't transitioning away from fossil fuels, then our bank is recklessly endangering our climate, our economy and the safety of our communities. This resolution is certainly not asking for the bank to cut off all fossil fuel funding immediately. This resolution is not even calling for the bank to implement a new policy. It's simply requested the bank take its existing policy and apply it across its full fossil fuel and energy portfolio. Articulated in its 2023 climate change position statement and action plan, Westpac has already committed to requiring a credible 1.5-degree aligned transition plan from its upstream oil and gas customers from the first of October 2025. And without a credible plan, Westpac is not going to arrange bonds or provide corporate finance to those companies. And this should be the expectation of all fossil fuel companies. It cannot just apply to 1 subsector. It should apply to any new finance that our bank can provide or arrange for those companies, which enables them to grow or expand their operations. And finally, to avoid Westpac doing more damage to our climate, it should be implemented as soon as possible. The overwhelming majority of fossil fuel companies in the world are not transitioning their businesses. Instead, they are increasing their production. If Westpac doesn't require them to reduce their emissions, it risks financially enabling them to trigger climate catastrophe. Terrifyingly, it looks like this is where we're headed. Just last month, the U.N. stated that the world is on track to produce almost 70% more fossil fuels that is compatible with even a catastrophic 2 degrees of warming. At 2 degrees of warming, 99% of the world's coral reefs will be devastatingly impacted and may not recover, but that is just 1 example. Given this context, it is completely reasonable to require fossil fuel companies to have a credible emission reduction plan by the start of 2025. The IPCC and the International Energy Agency have both warned that emissions from existing and committed fossil fuels means that there's no room for any new coal, oil and gas projects in a world hoping to maintain a safe climate. Yet, Westpac continues to provide or arrange finance for companies developing new fossil fuels, while Australians suffer increasingly severe climate disasters. This year, Westpac participated in arranging of $1.3 billion bond to Santos, and this is a bond that won't mature until 2033. Santos has 5 new and expanded oil and gas projects in its pipeline. And its plans will see an increase of the company's emissions of 40% by the end of this decade. In October, our bank loaned over $100 million to JERA Global Partners, one of the biggest world's biggest gas producers, traders and power producers. And JERA is actively trying to lock countries like Bangladesh and Vietnam into an energy system dependent on new gas rather than renewables. It's also a project partner in the Barossa project, I should note. But these examples are just some of many. Westpac has loaned over $5 billion to fossil fuel expansion since the Paris Agreement. And as the Chairman and Peter King pointed out earlier, fossil fuel companies do represent a very small portion of our lending portfolio. But the reckless and irresponsible business strategies of some of those companies are endangering the other 99%-plus of our customers. Our home loan portfolio makes up over 50% of our total lending business. And Australian homeowners are already feeling the horrific impacts of climate change with increasing regularity. Having already borne the brunt of the black summer bushfires and the unprecedented 2022 flooding events, Australians are sadly having to adapt to more of the same as climate change worsens. But it is avoidable, and Westpac does have a role to play. Our bank will continue to shoot itself in the foot if it continues enabling fossil fuel companies to pursue their expansion projects and condemn not only all Australians, but also this company to a less prosperous, more insecure and increasingly dire future. With the evidence concretely pointing to what needs to be done, this resolution offers Westpac the chance of the critical decade to be a global leader on climate in the finance sector.

Well, thank you, Mr. Robertson. Thank you for putting that proposal to us. Good Scottish name, by the way. So I now invite questions in relation to Resolution 6A. And can I take the first question, please?

Mr. Chairman, I would like to introduce Mr. [ Rat Filjic ].

Okay, this is not quite related to this -- what's up on the screen. I actually want to make a plea to the Board and the management team to ensure that we have a guarantee that we will always have a hybrid meeting. The way I understand, when Treasury wrote the documentation and electronic things for the Corporation Act, there's nothing in the Corporation Act to prevent you forcing us -- not so much the management team, but the T20 can demand to change the constitution and force us to all to go online. That's one of my biggest fear. So how do we change the constitution so that we get us retailers and investors that who want to attend here currently overwritten by the T20? Because it happened to me in 1 company. The major shareholders decided we will only have online, and that was it. So is there some way -- or do I put it -- make a suggestion that we alter the constitution, directing into the future, Chair?

Well, look, thank you very much. Look, I think we prefer to see shareholders face-to-face has been our policy. Where that's not been possible, we've used hybrid or online. And certainly, that is our policy that we will use hybrid. And at the moment, I don't detect any change in that. And so I think you can be sure. I think what happens in the future will be what happens in the future. But certainly, our policy is to have a hybrid.

Because I made a recommendation to Treasury that these folks should be a hybrid meeting. And the only person who can speculate that it's got to be online, even the Federal Health Minister or the State Health Minister. But that was all ignored by Treasury.

Well, you're here today, so good. So it's working.

So I'd like to see some change in the constitution, if it's possible. A bit of a guarantee.

Well, we'll take note of that, and we do have some influence. Any other questions on this item?

Mr. Chairman, we have an online question from Stephen Mayne. Congratulations on getting 91.4% support on the previous items supporting your climate action plan. This should have been disclosed 5 hours ago. You were clearly doing well in this area. However, I'm puzzled why this Board, the Australian Shareholders Association and so many other boards are opposed to Australian shareholders being allowed to put up opinion-based resolutions, which are common in the U.S. What are you afraid of? This is not to endorse the contingent resolution, but to support a constitutional amendment to allow shareholder opinions to be lodged. Please support a yes vote on this constitutional change like you did with the voice.

Yes. Well look, Stephen, thank you very much. It isn't what we're going to do, but we note your request. Can I take the next question, please?

Mr. Chairman, there are no further questions for this item of business.

Well, that concludes discussion of this item of business. The direct votes cast and the position of proxy votes received on Item 6A prior to the meeting will now appear on the screen. I will now formally propose Resolution 6A as a special resolution. If you've not completed your voting card for this resolution or voted on the online platform, please do so now. And the direct and proxy votes received show an against vote for Item 6A, which will not be materially impacted by any votes cast today. So as Resolution 6A will not be passed, Resolution 6B will not be put to the meeting. So this completes the business of the meeting.

If I can just make a quick comment, please. On behalf of the shareholders and the Board, I'd like to formally thank you and Chris Lynch for your service over the last few years. It's been a wonderful ride, and I wish you both the best in the future. So thank you to both you and Chris.

Thank you. The polls will close in 15 minutes on all resolutions. The results will be available later today and can be obtained by visiting the ASX on Westpac's website. For your convenience, please remain seated until you -- until directed to vacate your seats. Although I think the -- you'll be able to get out quite safely when I look at the room. Link Market Services staff will collect completed voting cards, which should be placed in one of the ballot boxes. If you haven't completed and submitted your voting card on the online platform, please do so now. And so I now declare the meeting closed, subject to the finalization of the poll. If you'd like to stay for refreshments with the directors and senior execs, please follow the directions of our staff. So thank you all for attending, particularly those who have come a long way, and we wish you a very happy, safe and happy holiday period. And it's goodbye from me, and hello to him.