Westpac has to transfer a substantial portion of the operations it conducted via its branch entity in New Zealand to Westpac NZ to conform to the new operating model it has agreed with the Reserve Bank of New Zealand. The transfers will mean Westpac NZ may have additional funding requirements but the bank is expecting to meet these by borrowing within the banking group.Business activities that are required to be transferred are institutional customer deposits, transactional banking and customer lending, debt capital markets excluding debt securities team, and corporate advisory. Employees associated with such activities will also be transferred to the bank.As of 31 March 2010, the transfers entail movement of customer loans of around NZ$7.0 billion, customer deposits of around NZ$4.4 billion and term intra-group funding of approximately NZ$3.0 billion.The above business activities are expected to have generated revenues of around NZ$90 million in the six months ending March 2010 and net profit after tax of around NZ$50 million.The branch will retain its global intra-group financing functions as well as activities like financial markets operations for external customers, such as trading of capital markets products.The new model mainly aims at correcting a breach of conditions of registration that occurred when Westpac branch's liabilities, net of amounts due to related parties, exceeded the NZ$15 billion mark. Once that limit is reached, a bank is deemed to be "systemically important" and therefore can no longer operate as a branch.Apart from this breach, Westpac has also been in breach of another condition of registration that relates to the Reserve Bank's outsourcing policy. There were two changes required to be made to be fully compliant with the condition of registration. The bank managed to meet one of those requirements by December 2009 but is still working to remedy the other issue, which involves adding a back-up system and more legal controls to one of its products for a small number of business customers.