How did Westpac navigate the GFC?

1.Longer-term funding provides more stable funding, but costs more than short-term term funding.

2. Market rates can change, deposits became more expensive than wholesale funding due to short-term high demand.

Treasury Lessons from the GFC

1. A greater focus on funding stability, rather than asset growth was required.

2. Funding incredibly hard to secure in a downturn, Bank’s now focus on issuing bonds globally rather than in home markets.

3. Banks ensure ongoing presence in foreign markets in case of another downturn. (Roadshows)

1. Deposit Mix: Deposits can be a very stable source of funding (brand matters)

2. WSF Amount: Issue smaller amounts spread over many years to reduce refinancing risk. No lumpy repayments due.

3. WSF Duration:

Longer = more stable but expensive

Shorter = less stable but cheaper

Try to match against asset duration

1. Brand always matters – not just in times of stress.

2. A bank can not operate in silos. Treasury relies heavily on business insights to fund the bank safely.