FINS5530 2022 Term 2 Group Assignment
Instructions and Guidelines
Introduction
Banks are subjected to a wide array of risks during their operations. Risk management
is about understanding and managing the Bank's risk environment and taking measures,
where necessary, to ensure that risks are contained to acceptable levels, while making sure
loss-absorption buffers are sufficient. In addition, the analysis of banks must also consider
the current status of a country’s financial system and overall economy.
Financial statements offer a window into the operation and management of a bank. The
financial statements for banks can look very different from those reported by most
companies. The nature of banking operations means that there will be unique items on a
bank’s balance sheet. In addition, banks are also subject to some unique accounting
standards and financial regulations. Purpose
This term-long project will allow you to apply several finance theory and financial modelling
techniques to a real bank. Thus, you will need to draw on the knowledge you acquire during
lectures and the skills you practice. You will also be asked to critically analyse bank decision
making.
An additional learning outcome is for teams to learn to collaborate effectively, incorporate
different perspectives, produce quality work according to an agreed plan, and provide
constructive feedback to each other. Setting the scene
As an expert team in banking, you and your team members are asked to identify and
analyse bank financial risk by the usage of information provided by financial statements and
other public disclosures. Your team are required to read Westpac Banking Corporation
(Westpac)’s 2021 Annual Report and its Pillar 3 capital disclosures, conduct relevant
research, and write a detailed consulting report.


Timeline
Students will form consulting teams to combine their perspectives and skill sets to work on
a detailed and critical analysis of several risk aspects of this bank.
Assessment Tasks Due date (11:59 PM) Weight Deliverable
Group Self Registration Friday of Week 3 n/a Self-Registration via the Group
Builder tool on Moodle
Team Resume and
Contract
Friday of Week 5 n/a Team Resume and Contract
Submission
Final submission Friday of Week 10 20% Final team consulting report
submission
Team Evaluation Monday of Week 10 5% Team evaluation survey

Consulting report
Your team’s job is to deliver a consulting report on how well the bank is managing the three
risk topics including a) Credit Risk, b) Liquidity Risk, and c) Capital Adequacy along the
following dimensions:
1. What is the approximate risk level for each risk area?
2. What are the main strategies that the bank has used to control/manage each of the
relevant risk area?
3. Compared to the previous year, do you think the bank has had a good management
in each of the risk area?
4. Any suggestions/improvements you could make for its risk management strategies?
Your manager has analysed these questions and broken them up into smaller and more
specific questions and tasks for you and your teammates to address in the consulting report:
a) Credit Risk Management
1. Examine the composition of the bank’s asset portfolio and analyse the credit
exposures and credit quality of assets held.
2. Compare Westpac’s data to its peers (the other ‘big four’ banks in Australia), assess
and comment on whether Westpac’s credit risk is within or below peer range. (Hint:
some simple measures you can use include the provision coverage ratio, the loan
loss rate, and/or total impairment provisions ratio et al.
3. What are the main strategies that the bank has used to control/manage credit risk in
the context of the COVID pandemic?
4. In terms of Environmental, Social, and Governance (ESG) concerns, discuss and
comment on Westpac’s strategies on sustainable lending and investments.
b) Liquidity Risk Management
1. Analyse and comment on the composition of the bank’s total funding.
2. Comment on the bank’s Net Stable Funding Ratio and Liquidity Coverage Ratio
relative to the minimum regulatory requirements.
3. What are the strategies used by the bank to keep these ratios in compliance with the
regulatory requirements in the context of the COVID pandemic?
4. Is there room for improvement, i.e., the potential for better management of funding?
c) Capital Adequacy Management
1. Present the key capital ratios for each quarter in the 2021 reporting year and the
preceding year (Note: Westpac reporting year ends on 30 September of the year.
Thus, Q4 reporting quarter is for the financial period ending 30 September, Q3
reporting quarter is for the financial period ending 30 June, and so on).
2. Comment on the trajectory of the capital ratios over the 2-year period. What does
this tell you about the capital risk of the Bank relative to the APRA requirements in
the context of the COVID pandemic?
3. On 14 Feb 2021, Westpac announced that it has successfully completed a $3.5 billion
off-market share buy-back. Comment on the implication of the buyback on the
bank’s capital management.
4. Are there any recommendations your team has for the bank’s capital management
and disclosure?

General Instructions:
• This is a group assignment. Each group should have a minimum of 4 to a maximum of 5
members. You are expected to work collaboratively on this assignment.
• You are required to register yourself into a group via the group builder tool on Moodle.
The sooner you finalize your group, the more time you have on this assignment.
• You are encouraged to include tables and graphs in your report. You should avoid direct
screenshots of tables and graphs from the annual report.
• You may also use the textbook or other online resources as references. All sources must
be carefully cited in a reference list.
• To write a successful report, please carefully read the marking criteria in the last page.




Submission Format:
• Your written report should have a maximum of 12 pages in length. Tables and graphs
are counted into the page limit. Reference list, table of content, and cover page are not
included in the page limit.
• You can include formulas, middle-step work, notes or raw data in the Appendix, which is
not included in the page limit. However, main graphs and tables should always be
included in the body of the report, NOT in the Appendix.
• Line spacing should be at least 1.5. Front should be Arial or Calibri with a size of 12.
Margin should be Moderate or Normal.
• A general report structure should be used. Your report should include an introduction
and conclusion with appropriate headings to facilitate reading.
• All materials used in this report must be referenced in Harvard format. Any assessment
submitted without a reference list will not be marked. For details and assistance on
Harvard referencing, see https://student.unsw.edu.au/harvard-referencing

Submission Guide:
• Final report Due date: the assignment should be submitted electronically on Moodle by
the Friday of Week 10 at 11:59 pm.
• You are required to submit your assignment as a group TWICE:
1) Submit through the Turnitin link to check for copying and plagiarism.
2) Submit through the Assignment Submission link for grading purpose.
• The submission should be done by one member from your team and only assignments
with BOTH submissions will be graded.
• A penalty of 5% grade deduction will apply for each day of late submission after the due
date.

Team Evaluation:
You will each provide a confidential evaluation of each of your fellow group members by
completing a team evaluation survey via the Group Assignment Submission Link on Moodle
individually. Self and peer evaluation increase your ability to critically evaluate and reflect
on your own learning and skills development. By honestly reflecting on your own
performance, as well as the performance of each member of the group, you may find that
you will be able to discover strategies that will help you work more effectively in your next
group work task.
A 5% penalty will apply for not completing the survey. Please make sure your response in
the survey is a fair reflection of each group member's contribution. If you give a too high or
too low rating, you will provide an explanation of your reasons for doing so. The team
evaluation scores can affect your final grade in this assessment.
Below is the list of questions included in the team evaluation survey:
• For each person, indicate the extent to which you agree with the statement, using
a scale of 1-5 (1=strongly disagree; 2=disagree; 3=neutral; 4=agree; 5=strongly
agree):
• Attends group meetings regularly and arrives on time.
• Contributes meaningfully to group discussions.
• Prepares work in a quality manner.
• Demonstrates a cooperative and supportive attitude.
• Rate each team member's overall contribution to the Group Assignment.
• Justify your rating of contribution. Were the behaviours of any of your team
members particularly valuable or detrimental to the team? Please justify the rating
for any team member that you deemed to have not performed or contributed
equally to your Group Assignment.

Some Useful Links:
https://www.westpac.com.au/about-westpac/investor-centre/financial-
information/annual-reports/
https://www.westpac.com.au/about-westpac/investor-centre/financial-
information/regulatory-disclosures/
https://www.westpac.com.au/about-westpac/investor-centre/
https://www.apra.gov.au/news-and-publications

Detailed Marking Criteria
Criteria
Poor
<50% (Fail)
Below Average
50% - 64% (Pass)
Average
65% - 74% (Credit)
Above Average
75% - 84% (Distinction)
Exceptional
≥ 85% (HD)
Demonstrates
knowledge and
understanding of
bank risks and risk
management (30%)
Show little understanding
and reasoning.
Does not demonstrate
understanding of bank
risks and risk
management.

Show some thinking and
reasoning but most ideas are
based on general knowhow.
Main points lack detailed
development and
understanding of bank risks
and risk management.
Content indicates thinking and
reasoning with understanding of
bank risks and risk management.
Main points are present with
some detail and development.
Content indicates articulated
thinking and good
understanding of bank risks and
risk management.
Main points well developed with
quality supporting details.

Content indicates clear, logical
and insightful understanding of
bank risks and risk management.
Main points well developed with
high qualitive and quantitative
support.
Critical analysis of
issues applying
theory and
academic concepts
(30%)
Limited or no application
of theory or constructive
analysis.
No evidence of critical
thinking and research.
Some application of theory or
data but mainly descriptive.
Ideas are vague with little
evidence of critical thinking and
research.
Theory and analysis of data was
clearly connected to the
application of the bank with
original thought on a few ideas.
Some research and critical
thinking are present.
Develops ideas with clear link to
theory with sufficient and firm
evidence and original thinking.
Critical thinking is weaved into
points.
Develops ideas with clear link to
theory with synthesis of ideas, in-
depth analysis and evidences of
original thought and support for
the topic.
Reveals high degree of critical
thinking.
Recommends
solution based on
evidence and
theory (20%)
No or inappropriate
recommendations are
made.
There are some
recommendations (too many
or too few), may not be clearly
linked to relevant evidence
and theoretical concepts.
There are relevant market
recommendations, with partial
links to theoretical concepts plus
evidence through support.
The recommendations are
relevant to analysis and well
supported with appropriate links
to theoretical concepts showing
evidence through relevant
support.
The recommendations are
strongly linked to evidence and
highly appropriate links to
theoretical concepts showing
evidence through relevant
support.
Evidence of
Teamwork,
organization and
structure (20%)
No evidence of teamwork
demonstrated. Unclear,
uncoordinated, or centred
written style, formats, and
tones.
Serious errors.
Fails to follow most or all
format and assignment
requirements.
Team demonstrates limited
cohesion in writing. Somewhat
unclear, uncoordinated, or
centred written style, formats,
and tones.
Many ideas are difficult to
follow; Includes irrelevant
material or go off track.
Fails to follow most format
and assignment requirements.
Team demonstrates some
cohesion in writing.
Each paragraph has a mainly
clear focus.
Some points remain misplaced
and stray from the topic.
Transitions evident but not used
throughout essay.
Meets most format and
assignment requirements with
some assembly errors.
Team demonstrates good
cohesion in writing.
Writing is coherent and logically
organized with transitions used
between ideas and paragraphs
to create coherence. Overall
unity of ideas is present.
Meets format and assignment
requirements. Report is neat and
correctly assembled.
Team demonstrates excellent
cohesion in writing.
Assists comprehension and insight
with seamless integration of
sections.
Writing shows high degree of
attention to logic and reasoning of
points. Unity clearly leads the
reader to the conclusion and stirs
thought regarding the topic.
Meets all format and assignment
requirements and evidence
attention to detail. Report is neat
and correctly assembled with
professional look.