These are the slides that my team presented to UBS at the Finals. We changed our slides style according to an investment banker’s feedback. In this round, on top of using the DCF and multiples (comparable company and precedent transaction), we are required to determine the offer price using past trading range and analyst price targets. And this time, we are representing Saint George bank. (Sell-side)

1. An Analysis of theWestpac Offer to St. George The Dream Team

2. Agenda 2

3. Our Team

4. Brief Background of the Westpac Offer Consideration Proposal to exchange 1.25 WBC ordinary shares for each SGB ordinary share All-scrip merger A Scheme of Arrangement (“Scheme”) is to be effected subject to SGB shareholders’ vote Senior management team to be drawn from both banks SGB Chairman appointed as Deputy Chairman with two other SGB Directors to join the WBC Board Operating model for the merged entity is to retain all WBC and SGB brands and branches/ATM networks A two-week “Exclusivity Period” to conduct reciprocal due diligence and negotiate a Merger Implementation Agreement Break fee of $100m is proposed Conditions precedent An Independent Expert’s Report concluding the Scheme SGB shareholders’ vote Court approval and other regulatory rulings and consents

5. St. George: Current Position in Market Capitalisation Currently 5th Largest 5

7. Integration risks involved

8. Staff resistance due to job security issues6

9. Westpac Offer: Risks Considerations Customer Attrition Issue: Existing customers leave SGB resulting in shrinking market share and damaging its reputation Recommendations: Customer relations management Media publicity management Retain SGB branches and ATM networks to maintain presence Integration Risks Issues: Concerns over disruptions to operations during the integration process Culture integration issues – SGB “Big enough but small enough” to be customer-focused Recommendations: Appoint transformation advocates from both SGB and WBC Utilise WBC’s market -leading risk management systems 7

10. Proposed Merged Operations Merged Westpac and St. George Business Model Product & Operations Technology Core/Support Opportunities for Growth after merging with WBC Cross-selling to within the wider distribution channel in retail banking segment Extension of wealth management segment More prominent presence in NSW and other states 8

12. Better consolidation of products and operations

14. Westpac : “A professional, aspirational bank with a social conscience”

15. St. George: “A bank with humanity”Distinct Brand Personalities 9

18. Share Price PerformanceIncrease Better 10

19. Valuation 11

20. Valuation Summary 12 WBC Offer: 32.46 Current SGB: 26.65

21. Synergies Total Benefits: $222 million Assumptions: Cost Synergies - 25% of operating expenses (Empirical evidence of 20-30%) Restructuring Costs - 161.5% of cost synergies (Average of precedent transactions) Funding Benefits - 48% of Deposits and other borrowings at 60 bp (May 2008) Revenue Synergies - 25% of SGB revenue $2.3 billion realised over 10 years. Who Benefits? Both St. George and Westpac 13

22. Implied Value 14 Implied Value is NEGATIVE considering Synergies

23. EPS vs. Exchange Ratio Analysis Westpac Offer 15 SGB Current EPS

24. Next Steps for St. George 16

25. Alternatives and Impact 17

26. Alternatives and Impact Renegotiate SGB renegotiates terms to benefit SGB stakeholders: Higher offer price Retention of key SGB senior management team SGB final dividend to be declared to SGB shareholders No break fee of $100m at the moment Confidentiality Agreement WBC’s Potential Reaction: Proceed to renegotiate additional terms taking into consideration of WBC’s maximum offer price Accept Agree on Merger Implementation Agreement WBC Offer is communicated to SGB shareholders and prepare for shareholders’ vote In the mean time, regulatory and government approval processes are underway If SGB shareholders vote in favour of the merger proposition, a Court Approval needs to be obtained Subsequent to the Court Approval, merger becomes official 18

27. Alternatives and Impact Reject SGB continues to grow organically, however, explore alternative funding sources WBC’s Potential Reactions: Offer a higher premium to sweeten the merger deal Abandon the merger proposition entirely Hostile takeover SGB’s Defensive Action: Super-majority shareholder voting Delay SGB appoints experts to perform in-depth reviews of the merger proposition WBC’s Potential Reactions: Further negotiations to convince SGB Board If delay too long, WBC may change the WBC Offer or abandon the merger proposition entirely SGB’s Defensive Action: Negotiate for “SGB Review Period” clause including a Confidentiality Agreement 19

28. Other Matters Exclusivity Period Include an exclusivity period of two weeks to conduct reciprocal due diligence and negotiate a Merger Implementation Agreement Break Fee Exclude the break fee of $100million as proposed by WBC to allow SGB to have more optimal alternatives for consideration 20

29. Key Messages to St. George Shareholder’s WBC Offer Renegotiate the WBC Offer and additional terms with WBC All scrip-merger Scheme of Arrangement Merits of the merger proposition Benefit from cheaper cost of funding using WBC’s AA credit rating Cross-selling opportunities in the largest retail and wealth management network in Australia Outcome of the merger proposition Accretive EPS Retain SGB brand and branch/ATM networks Be part of the largest market capitalisation in Australian banking history 21

30. Other Considerations 22

31. Other Considerations Potential Bidders for SGB Other Big Four Banks – CBA, NAB and ANZ – may counter-bid the offer to acquire SGB. This will increase the premium that WBC has to offer in order to clinch the deal. CBA Huge cash surplus and high share prices However, facing domestic competition issues NAB Previously a major shareholder in SGB Could make an offer for SGB if it opts to forego overseas expansion However, massive capital investment has been injected overseas ANZ Previously a major shareholder in SGB However, ANZ changed its strategic focus and moved on to expanding in the Asian region 23

32. Other Considerations Government Approval on the Proposed Merger Issues: Possibility of monopoly subsequent to the merger ACCC may view each Australian state as a separate banking market – NSW is the main issue WBC and SGB, combined, will be the largest amongst all the Big Four Banks in Australia The merger would lessen competition in the wealth management sector – possibility of reduced product diversity for consumers The state of Australian banking industry “Four Pillars” policy maintained Impacts on national interests Recommendations: Merger plan, demonstrating the impacts of the merger on various aspects, need government approval Bring in government lobbyists 24

33. Final Recommendation Renegotiate with WBC Offer price Retention of key SGB senior management team SGB final dividend to be declared to SGB shareholders No break fee of $100m at the moment Confidentiality Agreement 25

34. Thank you 26

35. GDP Forecast 27 European Exchange Rate Crisis. Asian Financial Crisis. Global Financial Crisis. Assumption: Lowest GDP could happen is -200% of 2007. Assumption: It follows 1995 and 1996 when the economy falls from the maximum. Assumption: The movement from one year to another year is on a gradual basis to the maximum (120% of 2007) as the economy recovers.

36. Relative Valuation Approach