Westpac Banking Corporation's (Westpac) top-line was above our estimate, benefiting from lower interest expenses. However, higher employee costs and impairment losses resulted in lower-thananticipated bottom-line. Although we are cautious of the impact of the ongoing weak economic environment on Westpac, the bank's fundamentals offer scope for optimism in the wake of signs of economic recovery and robust growth in Westpac's average interest bearing assets in FY 2009. Hence, we maintain Westpac common stock a HOLD, despite the target price not supporting a HOLD at current levels. We will reassess our common stock rating for Westpac in our next full update report. We continue to anticipate a positive currency impact on the ADR over the next 6-24 months. However, given our fundamental outlook and current price levels, we maintain the ADR (1 ADR = 5 common shares) a HOLD. We will reassess our ADR rating for Westpac in our next full update report.

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