WBC - Westpac

[Snoopy]

Westpac Group (WBC)	FY2016	FY2015	FY2014	FY2013	FY2012
Normalized Profit {A}	$7,605m	$7,527m	$7,338m	$6,792m	$6,328m
Shares on Issue EOFY {B}	3,313m	3,140m	3,114m	3,087m	3,043m
Earnings Per Share {A}/{B}	$2.30	$2.40	$2.36	$2.20	$2.08

A lower year on year result in FY2016 is not enough to obscure a longer term trend.

Conclusion: Pass Test

Westpac produce their own 'Cash Earnings' figure that backs out temporary exchange rate and hedged asset valuation movements. However, in my judgement this is insufficient to produce a real background picture of how WBC operates. Thus I have composed my own take on producing normalised operational figures, as detailed in the table below:

	FY2019	FY2018	FY2017	FY2016	FY2015	Reference
WBC declared 'Cash Profit'	$6,849m	$8,065m	$8,062m	$7,822m	$7,820m	AR2019 p158, AR2017 p136
less Retrospective Bank Levy Adjustment (1)	$0m	$0m	0.7($373m-$95m)	0.7x($351m)	0.7x($331m)	My post 153
add 'Naughty Bank' Customer Remediation (2)	$958m	$281m	$0m	$0m	$0m	My post 139
add Wealth Division Reset (2)	$172m	$0m	$0m	$0m	$0m	My post 139
add Insurance Arm Adjustment (2)	$58m	$0m	$0m	$0m	$0m	My post 139
less Pendal Dividend Received (3)	($16m)	($13m)	($37m)	($34m)	($61m)	My post 164
less 'Ordinary Person Savings Advice' reversed	$90m	$53m	$10m	($7m)	($11m)	My post 235
add 'BTFG' wind down back office saving	0.7x$20m	0.7x$20m	0.7x$20m	0.7x$20m	0.7x$20m	My post 234
equals WBC post Pendal & Advice Business sale 'Normalised Profit'	$8,124m	$8,400m	$7,854m	$7,549m	$7,544m

As you can see by my references, this post is a long awaited conglomeration of a series of my other posts. It is the best I can do for now and I am generally satisfied with the result. But as you can read in the notes below, there are a couple of loose ends that maybe readers can solve.

Notes

(1) Australia implemented a tax deductible 'Bank Levy' during 2017. This was applied to ANZ, CBA, WBC, NAB and MacQuarie Banks. This means the full levy was not paid by Westpac over 2017 and was not paid at all over FY2015 and FY2016. Government taxation policy should IMO not be used to distort the operational performance of the bank over comparable periods. To compensate for this, have made an adjustment in each of FY2017, FY2016 and FY2015. The adjustment restates the result assuming that the bank levy applied equally over all five years that I am comparing.

(2) I am not fully convinced by my 'Insurance Arm Adjustment' , which is really a fudge factor because two comparable references to figures in two different parts of AR2019 that should add up to $1130m do not. Other information I have found that might support my argument is slide 75 on the 2019 Investor presentation. In the bottom RH corner there is information on insurance income. If you add up the General, Loan Mortgage Insurance and NZ 'Insurance Income' over FY2019 I get $267m, while over FY2018 the total was $334m. That is a drop of $67m over the year. That doesn't equal my $58m drop in the table above. (I should note here that the drop I am referring to would be caused by a change in the balance of premiums and claims.) Personally I didn't know Westpac was in the insurance market in NZ until today, although it seems all Westpac NZ is underwritten by IAG. So it may be a very small commission only operation? A drop of $9m in NZ would leave $58m as the drop in the Australian market, as in my table. OK I admit I am grasping at straws here to make things balance!

(3) If you look in the Annual Report references in the table above, you will see that in deriving their 'cash' result, WBC have already made adjustments for their changing shareholding in Pendal Group. So why have I made additional adjustments? If you look in my post 228 it appears these were only capital valuation adjustments. Of particular interest is FY2016 where no adjustment was made by Westpac. Yet I know for sure that Westpac was entitled to a dividend of value $34.060m that found its way into the Westpac coffers that year (my post 164). This to me is proof that those Pendal dividends paid to Westpac have not been adjusted out by Westpac, which is why I have done it separately.
There is one other odd twist to this tale. If you go to note 4 in AR2019, the table of 'Non-interest income', you can see that 'dividends received from subsidiaries' are only recorded in the 'Parent Entity' and not the 'Consolidated Entity'. Could it be that the reason Westpac did not remove dividends from Pendal when they did their cash calculation adjustments be because those dividends never found their way into the 'Consolidated Entity' in the first place? If true, that would explain why Westpac ignored the dividends when they made their 'Cash Calculation' adjustment. But that begs another question. By what accounting standard would Westpac be allowed to ring fence external dividends from their 'Consolidated Entity'. I find this particular situation baffling. But I have stuck to my belief that these dividends should be removed from the Consolidated result.

SNOOPY

[Snoopy]

Westpac Group (WBC)	FY2016	FY2015	FY2014	FY2013	FY2012
Normalized Profit {A}	$7,605m	$7,527m	$7,338m	$6,792m	$6,328m
Shares on Issue EOFY {B}	3,313m	3,140m	3,114m	3,087m	3,043m
Earnings Per Share {A}/{B}	$2.30	$2.40	$2.36	$2.20	$2.08

A lower year on year result in FY2016 is not enough to obscure a longer term trend.

Conclusion: Pass Test

It has been a long wait since my post 154 on 13th March with the first Buffett test. But at last we can progress.

Westpac Group (WBC)	FY2019	FY2018	FY2017	FY2016	FY2015
Normalized & Adjusted Profit {A}	$8,124m	$8,400m	$7,854m	$7,549m	$7,544m
Shares on Issue EOFY {B}	3,490m	3,435m	3,394m	3,346m	3,184m
Earnings Per Share {A}/{B}	$2.33	$2.45	$2.31	$2.26	$2.37

No rising 'eps' trend is apparent 'longer term'. There are two setbacks within five years

Conclusion: Fail Test

SNOOPY

[Snoopy]

I aim to assess whether the 'Westpac Group' is a suitable candidate to which to apply the (Mary) 'Buffett' growth model .

WBC, incorporated in Australia, but also listed on the NZX describes their operation of their business in the FY2015 Annual Report as follows:

"to be one of the world's great service companies helping our customers, communities and people to prosper and grow"

It would be an oversimlification to think of Westpac just as a traditional bank. They have a strong wealth and insurance business through associated company BT Group, in which they sold down their controlling stake in FY2015. The business is based around strong Australian and New Zealand geographic foundations. The New Zealand business is a self contained unit.

The business objectives are to support:

1/ Australian and New Zealand consumers.
2/ Australian and New Zealand businesses, both large and small
2/ Regional Trade and Capital Flows for business customers via the WIB ("Westpac Institutional Banking Division".)
3/ A 'digital ready infrastructure' for the future.

Major Competitors in this sector are listed in order by $A revenue (interest income).

1/ Commonwealth Bank of Australia: $33,817m
2/ Westpac Bank: $31,822m
3/ ANZ Bank: $29.951m
4/ National Australia Bank $27,629m

Conclusion: As number two in the market, WBC passes the first Buffett Point test.

An overseeing body shake up of the Australian big four banks has seen Westpac put up as 'Available for Sale' their last 10% link with their listed wealth management associate - Pendal Group - and realign some residual wealth management in house functions under the in house broad based 'Persomal' and 'Business' customer units.

'Personal' incorporates Bank Accounts, Home Loans, Credit Cards, Personal Loans, and International & Travel. They offer consumers share trading, Insurance (including mortgage insurance) and superannuation services (investing in other peoples managed funds and listed shares.)

'Business' for small to medium enterprises adds invoicing, merchant services, business loans, business insurances and forex services.

'A third business unit Westpac Institutional Bank' (WIB) looks after corporate and government banking requirements.

Westpac continues to claim they aspire :

"To be one of the world’s great service companies, helping our customers, communities and people to prosper and grow.”

Westpac use their 'Net Promoter Score' (NPS) to claim they are number 2 (of the big four banks) for consumers and number 1 for business. The Australian NPS scores are negative. (-7.3 for consumers and -4.5 for business: refer slide 38 in FY2019 Result Presentation). These NPS scores can vary between -100 and +100, withj a level above +30 considered to be 'good'. So even though Westpac does well in reference to other banks, these scores show most Westpac customers would not recommend Westpac's services to others. That doesn't tie in with the vision of being a 'great service company'. The corporate business fares much better with an NPS score of +51. Perhaps that shows where the real service strength of Westpac lies?

Major Competitors in the Australasian banking sector are listed in order by $A revenue for FY2019 (interest income + non-interest income).

1/ Commonwealth Bank of Australia: $34,588m +$4,994m + $1,073m + $150m = $40,805m
2/ Westpac Bank: $33,222m + $1,655m + $1,029m + $929m + $129m = $36,964m
3/ ANZ Bank: $31,077m + $4,058m + $126m + $262m = $35,523m
4/ National Australia Bank: $29,203m + $4,373m = $33,576m

Conclusion: As number two in the market by turnover, WBC passes the first Buffett Point test.

SNOOPY

[Snoopy]

Westpac continues to claim they aspire :

To be one of the world’s great service companies, helping our customers, communities and people to prosper and grow.”

Westpac Bank continued to explore multi-year lows yesterday with the share price declining to $A22.95. This coincided with the Reserve Bank of Australia emergency benchmark rate cut from 0.75% to 0.5%, combined with the agreement of the big banks to pass all of this rate cut onto their customers.

Traditionally lowering the base interest rate has been seen as being bad for banks. But lowering the base interest rate may stop some marginal loans going bad. So I am not sure that this latest rate cut is bad for banks at his point in the business cycle. An uncertain economic outlook is negative for growth. But I would argue that the big Aussie banks are not priced for growth at the moment.

I view bank shares in 2020 as a kind of 'bond alternative'. You are primarily in there for the dividend payout, with no expectation of capital growth. Looking after the Westpac customers that have loans I would see as increasing the security of the 'underlying bond'. So I see the cut in base interest rates as good for WBC shareholders at today's prices.

SNOOPY

[Yoda]

Is this the same Westpac that sold 30 mil shares in ATM on 31/5/17?
They must be gutted today. Maybe it's more complicated than that.......

[Snoopy]

Is this the same Westpac that sold 30 mil shares in ATM on 31/5/17? They must be gutted today. Maybe it's more complicated than that.......

Westpac run a wealth management business where they manage fund based share portfolios on behalf of clients. Despite only holding a minority stake in what used to be a fully owned wealth management subsidiary, BT, BT is still classed as a 'related corporate body' to Westpac (apparently!). Thus if BT make changes to their clients portfolios, then Westpac must report this to the NZX. All these funds will be in trust for clients. So I expect that selling 30m ATM shares will make not one jot of difference to shareholders in 'Westpac Group'. It was probably a smart move on BT's part though. I don't think that the A2 company will be able to get hold of enough 'A2 milk raw product' to drive the volumes of sales and future profits that an A2 share price nearing $4 implies.

SNOOPY

[Yoda]

Westpac run a wealth management business where they manage fund based share portfolios on behalf of clients. Despite only holding a minority stake in what used to be a fully owned wealth management subsidiary, BT, BT is still classed as a 'related corporate body' to Westpac (apparently!). Thus if BT make changes to their clients portfolios, then Westpac must report this to the NZX. All these funds will be in trust for clients. So I expect that selling 30m ATM shares will make not one jot of difference to shareholders in 'Westpac Group'. It was probably a smart move on BT's part though. I don't think that the A2 company will be able to get hold of enough 'A2 milk raw product' to drive the volumes of sales and future profits that an A2 share price nearing $4 implies.

SNOOPY

Thanks Snoopy, very helpful. I imagine there could be quite a drop in SP if they miss their future targets.

[Snoopy]

Westpac run a wealth management business where they manage fund based share portfolios on behalf of clients. Despite only holding a minority stake in what used to be a fully owned wealth management subsidiary, BT, BT is still classed as a 'related corporate body' to Westpac (apparently!). Thus if BT make changes to their clients portfolios, then Westpac must report this to the NZX. All these funds will be in trust for clients.

I am attempting to unpick the 'Wealth Management' side of WBC from what is left.

From:

https://www.pendalgroup.com/about/corporate-approach/

We learn that what was "BT Financial Group Australia" , a part of Westpac, is an unrelated business to "BT Investment Management Limited", the listed entity.

I need to 'unpick the wealth business' because:

1/ Westpac have reduced their links to the separately listed wealth management arm "BT Investment Management Limited" (BTIM, now renamed 'Pendal Group') to around 10%, with the expectation that this residual holding will be sold.

2/ Westpac have also disestablished their internal wealth management division "BT Financial Group Australia".

This means historical comparisons are going to be difficult from here on in. Westpac have redone their comparatives for FY2018 and FY2017 to account for this latter change at least. But I want to do the full exercise for FY2016 and FY2015 as well.

So let's get on with this unpicking exercise...

-------------

The following information may be gleaned from the respective annual reports under the note for "Investments in Subsidiaries and Associates."

--------

1/ The separately listed wealth business was first partially floated on 10th December 2007. On that date 40% of "BT Investment Management Ltd" (BTIM) (BTT.AX) was floated to the public. A net gain of $141m, pre tax, was generated on this sale (AR2008 p82/p141).

2/ On 23rd June 2015 Westpac reduced their 60.8% holding in BTIM to 31.0% with an institutional and retail offer. Westpac made a gain in two ways doing this. The gain included a 'realised gain' of the 28% of BTIM sold ($492m) and an 'unrealised gain' of the 31% interest retained ($544m). This resulted in a total pre-tax gain of: $492m + $544m = $1,036m (AR2015 p77/p135/p245).

3/ On 26th May 2017 Westpac sold a further 19% of BTIM (carrying value $471m) reducing their holding to 10% (residual carrying value $242m). The result was a net gain (net of transaction costs before tax) of $279m (AR2017 p139/p227).

	Market Value	Book value	Profit on Transacction
Shares Sold	$630m	- $471m	=$159m	(Gross proceeds on sale of 19% stake)
Shares Retained	add $375m	-$242m	=$133m	(Mark to market revaluation of residual stake)
Shares Total	$1,005m	-$713m
	less		($13m)	(Former associate profit transferred to profit or loss)
	equals		$279m	(Total Gain as a Result of BTIM sales)

In the the end of year accounts for FY2017, the remaining 10% of BTIM owned was reclassified from an 'associate' to an 'available for sale security' at a market value of $375m (This is the value of the 'residual stake' at the time of the sale of the other 19%).

4/ In FY2018 there was a $104m write down in the residual value of 'Pendal Group' (p160 AR2018). (Name Change Note: A decade on from the float, following approval from its own shareholders, BT Investment Management Limited (BTIM) changed its own company name to "Pendal Group Limited" (PDL.AX) on 27 April 2018).

The accounting value at EOFY2018 of the 10% residual stake on the books was therefore:

$375m - $104m = $271m

This writedown must have been because the price of Pendal shares showed a 'significant or prolonged decline in fair value below cost'. Before the implementation of AASB 9 in FY2019, these changes in value were only made in exceptional circumstances. Nevertheless the fall in Pendal share price from $11.5 (EOFY2017) to $8.79 (EOFY2018), while substantial, represents a loss in capital value of 'only' $69.1m for Westpac's stake. I don't know why the recorded loss blew out to $104m.

5/ Over FY2019, WBC continues to own their 10% residual shareholding in Pendal. However the residual shareholding remains on the 'may be sold' list. Consequently Westpac has elected to remove any contribution from Pendal from what they term their 'cash earnings' (p147 WBC Annual Result Presentation 2019). 'Cash Earnings' is a construct by Westpac which they consider best reflects the performance of their underlying business. 'Cash Earnings' in this sense is a bit of a misnomer because the now excluded 'Pendal dividend received' is indeed cash!

-------

Now we return to figures associated with the FY2018 WBC balance date of 30th September 2018 (after the Pendal name change). At that time the Westpac internally owned and managed fund business arm was still called "BT Financial Group Australia"! But this is not really remarkable, because "BT Investment Management Limited"(BTIM) (now Pendal) and "BT Financial Group Australia" were truly distinct and separate entities.

By EOFY2019, what was the Westpac division "BT Financial Group Australia" has been split up and the business sub units reallocated within other Westpac divisions. The effect of this can be demonstrated by looking at two different reporting perspectives the reallocation of FY2018 earnings between Westpac divisions in accordance with the table below:

Westpac Business Unit Cash Earnings	FY2018 (from AR2019 p157)	FY2018 (from AR2018 p155)	Difference
Consumer Bank	$3,423m	$3,140m	+$283m (+9.0%)
Business Bank	$2,756m	$2,159m	+$597m (+28%)
BT Financial Group	$0m	$645m	-$645m (-100%)
Westpac Institutional Bank	$1,093m	$1,086m	+$7m (+0.65%)
Group Business	($141m)	$101m	-$242m (NM)
Total Australian Cash Earnings	$8,065m	$8,065m	$0m

As you can see from AR2019 retrospective reallocation, what was the remaining BT business unit, the 'BT Financial Group' has been 'written out of history' a year down the track.

As was reported in the news at the time:

https://www.smh.com.au/business/bank...19-p515cr.html

"Westpac will continue to provide life insurance and a wealth management platform, Panorama, under the BT banner and will refer clients seeking financial advice to a panel of firms, as it would with people needing accounting or legal advice."

So Westpac still owns the "BT brand" and will still use the BT label on certain products.

"Chief executive Brian Hartzer on Tuesday said selling investment advice had become unprofitable, citing rising costs and the impact of the Future of Financial Advice (FOFA) laws, which banned advisers from receiving commissions on investment products."

This is an extraordinary thing to say when just one year earlier Westpac's internal wealth management division made cash profits of $645m (see above table). However, Hartzer must have only talking about giving 'personal advice'. Only the small bit of the internal wealth business ('personal advice') that hasn't been reallocated (see above table) has been on sold to "Viridian Advisory". So who are 'Viridian Advisory'?

-------

"Viridian Advisory will take over part of the bank's advice arm while the rest of Westpac's BT Financial Group businesses - private wealth, superannuation, life insurance and investments - will be rolled into its consumer and business banking divisions."

"The change would result in about 900 job losses, Mr Hartzer said, with Viridian offering employment to about 175 BT salaried positions (including 90 financial advice staff , and other management and support staff)."

"Viridian's chief executive and co-founder, Glenn Calder, said the deal with Westpac would set the firm up for "strong growth", 2as the industry focused on fees for service and the provision of quality advice."

--------

Through all of this I have not found any mention of how much Viridian paid to WBC to take over the personal advice business. Considering it was loss making, maybe only a token amount? In the annual results presentation for FY2019 on slide 17, a sale of $10m of 'financial planning assets' was reported. This exit from the "financial planning business" is expected to lead to a $50m loss in 'non-interest income' (slide 28 ARP2019). Nevertheless,

"quitting financial advice is predicted to remove about $280 million in annual costs"

for Westpac.

Some more background on Viridian may be found here:

From:

https://www.professionalplanner.com....-for-9-months/

-------

Viridian is an unlisted company which currently (prior to the Westpac advisor buyout) has six offices across four states and a “ten or twelve-year history”, according to Calder. Most of the employees are former Westpac staff who banded together to purchase the business from the bank.

“The nucleus of our company comes from Westpac,” he said. “All of our staff and some of our clients are shareholders and you need to be a connected party to have an ownership stake in Viridian.”

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SNOOPY

[Snoopy]

I am attempting to unpick the 'Wealth Management' side of WBC from what is left.

--------

1/ The separately listed wealth business was first partially floated on 10th December 2007. On that date 40% of what used to be called "BT Investment Management Ltd" (BTIM) (BTT.AX) was floated to the public. A net gain of $141m, pre tax, was generated on this sale (AR2008 p82/p141).

2/ On 23rd June 2015 Westpac reduced their 60.8% holding in BTIM to 31.0% with and institutional and retail offer. This resulted in a pre-tax gain of $1,036m (AR2015 p77/p135/p245). This gain included the realised gain of the 28% of BTIM sold ($492m) and the unrealised gain of the 31% interest retained ($544m).

3/ On 26th May 2017 Westpac sold a further 19% of BTIM (carrying value $471m) reducing their holding to 10% (residual carrying value $242m). The result was a net gain (net of transaction costs before tax) of $279m (AR2017 p139/p227).

$630m - $471m =	$159m	(Gross proceeds on sale of 19% stake)
add $375m - $242m =	$133m	(Mark to market revaluation of residual stake)
less	($13m)	(Former associate profit transferred to profit or loss)
equals	$279m	(Total Gain as a Result of BTIM sales)

In the the end of year accounts for FY2017, the remaining 10% of BTIM owned was reclassified from an 'associate' to an 'available for sale security' at a market value of $375m.

4/ In FY2018 there was a $104m write down in the residual value of 'Pendal Group' (p160 AR2018). (Name Change Note: A decade on from the float, following approval from its own shareholders, BT Investment Management Limited (BTIM) changed its company name to "Pendal Group Limited" (PDL.AX) on 27 April 2018).

The accounting value at EOFY2018 of the 10% residual stake on the books was therefore:

$375m - $104m = $271m

5/ In FY2019, WBC continues to own their 10% residual shareholding in Pendal. However it remains on the 'may be sold' list and Westpac has elected to remove any contribution from Pendal from their cash earninmgs (p147 WBC Annual Result Presentation).

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Dividends Paid to Westpac by Pendal Group (PDL.ASX)

Financial Year	Ex-dividend date	Dividend per Share	Dividend Payout	Westpac %ge Shareholding	Payout to Westpac	Sum over Financial Year Payout to Westpac
----------	----------	----------	----------	----------	----------	----------
FY2015	03-12-2014	19cps (35% Franked)	$52.891m	60.76%	$32.137m
	13-05-2015	17cps (40% Franked)	$47.159m	60.76%	$28.634m	$60.771m
----------	----------	----------	----------	----------	----------	----------
FY2016	02-12-2015	20cps (40% Franked)	$57.206m	31.04%	$17.757m
	26-05-2016	18cps (40% Franked)	$52.521m	31.04%	$16.303m	$34.060m
----------	----------	----------	----------	----------	----------	----------
FY2017	08-12-2016	24cps (35% Franked)	$71.365m	29.54%	$21.081m
	25-05-2017	19cps (30% Franked)	$54.653m	29.54%	$16.144m	$37.225m
----------	----------	----------	----------	----------	----------	----------
FY2018	07-12-2017	26cps (25% Franked)	$78.191m	8.99%	$7.029m
	25-05-2018	22cps (15% Franked)	$65.565m	8.99%	$5.894m	$12.523m
----------	----------	----------	----------	----------	----------	----------
FY2019	06-12-2018	30cps (15% Franked)	$89.873m	10.40%	$9.347m
	23-05-2019	20cps (10% Franked)	$59.897m	10.40%	$6.229m	$15.576m
----------	----------	----------	----------	----------	----------	----------
FY2020	05-12-2019	25cps (10% Franked)	$76.078m	9.55%	$7.265m

Notes

1/ The 23rd June 2015 'sell down' of Pendal shares by Westpac was after the 17cps ex-dividend date of 13th May 2015. This means that the whole 172,100,801 Pendal shares previously owned by Westpac qualified for that dividend.

2/ The 26th May 2017 'sell down' of Pendal shares was after the 25th May 2017 19cps ex-dividend date. This means that the whole 90,814,493 Pendal shares previously held by Westpac qualified for that dividend.

SNOOPY

[Snoopy]

Dividends Paid to Westpac by Pendal Group (PDL.ASX)

When a company has an 'associate' stake in another, dividends from that associate reduce the book value of the associate stake. But alongside that effect, associate profits -in proportion to the share of the associate held- increase the value of the associate stake. It is that share of associate profits that I wish to table here

'Westpac' share of Pendal dividend (column 5) figures are from my post 164.

Financial Year	Pendal Total Comprehensive Income	Westpac Pendal Holding EOFY	Westpac Share of Pendal 'NPAT'	less Westpac Share of Pendal dividend	equals Associate (Pendal) Annual Valuation Adjustment
2014		60.76%
2015	$186.691m	31.04% (from 23/06/2015)	$15.718m	$0m	$15.718m
2016	$58.981m	29.54%	$17.423m	($34.060m)	($16.637m)
2017	$154.698m	8.99% (from 26/05/2017) (1)	$34.637m	($37.225m)	($2.588m)
2018	$224.361m	9.69%	$21.741m	($12.523m)	$9.218m
2019	$156.994m	9.55%	$14.993m	($15.576m)	($0.523m)

(1) Note 'sale of stake' date is one day after the ex-dividend date.

Sample Calculations

FY2015

1/ Split year into two 'equity stake' periods: 266days + 99days = 365days
2/ Split profit into two periods: $136.054m + $50.637m = $186.691m
3/ Work out Westpac share of profit after Pendal becomes an Associate:

(0 x $136.054m) + (0.3104 x $50.637m) = $15.718m

FY2016

1/ Work out Westpac share of profit:

(0.2954 x $58.981m) = $17.423m

FY2017

1/ Split year into two 'equity stake' periods: 238days + 127days = 365days
2/ Split profit into two periods: $100.872m + $53.826m = $154.698m
3/ Work out Westpac share of profit:

(0.2954 x $100.872m) + (0.0899 x $53.826m) = $34.637m

SNOOPY