Commonwealth Bank Of Australia · ASX:CBA
Commonwealth Bank Of Australia — FY2024 Earnings Presentation
128 slides from Commonwealth Bank Of Australia's earnings presentation, Aug 14, 2024
Slide 1: Results Presentation and Investor Discussion Pack
Results Presentation and Investor Discussion Pack For the full year ended 30 June 2024 Commonwealth Bank of Australia
Slide 2: Important information
Important information The material in this presentation is general background information about the Group and its activities current as at the date of the presentation, 14 August 2024. It is information given in summary form and does not purport to be complete. Information in this presentation is no
Slide 3: Contents
Contents CEO & CFO presentations 4 Overview & strategy 40 Financial overview 55 Home & consumer lending 74 Business & corporate lending 87 Funding, liquidity & capital 95 Economic overview 113 Sources, glossary & notes 121
Slide 4: Results presentation
Results presentation Matt Comyn, Chief Executive Officer
Slide 5: Supporting our customers and communities
Supporting our customers and communities Delivering better outcomes • Provided 132,000 tailored payment arrangements for customers most in need of support1 Supporting • Proactive alerts helping to deliver bonus interest to >80% of our customer Goal Saver balances2 customers • Access3 for >6m custome
Slide 6: Impact of higher rates
Impact of higher rates Huge impact still being absorbed by the economy Impact in FY24 vs FY22 Total balances4,5,6 Retail balances by age6 $bn $bn % Deposits Loans Mortgages4 Deposits5 Age, years 18 – 24 42.0 322 Retail 455 33.3 32.0 25 – 34 22% 10% 11.8 14.7 Wholesale funding providers1 Other 35 – 4
Slide 7: Cost of living impacts unevenly felt
Cost of living impacts unevenly felt Last six months even tougher for younger customers Prices vs Dec 19 Spending4,5 Saving4,6 Contribution to Price Essentials Discretionary Year on year change: CPI growth1 change1 Apr – Jun 24 New dwellings 38% Age, years Oct – Dec 23 Rents: 15% Other: 15% 3.3% -1.
Slide 8: Higher spending and saving
Higher spending and saving Past four years experienced differently by different age cohorts Spending1 Saving2 Age, years Age, years 20 – 24 35 – 44 65+ Total 20 – 24 35 – 44 65+ Total 140 163 128 121 147 121 CPI: 1193 139 116 WPI: 1134 135 100 118 100 Jan 20 Jan 21 Jan 22 Jan 23 Jan 24 Jan 20 Jan 21
Slide 9: Building a brighter future for all
Building a brighter future for all Consistent, disciplined execution of our strategy Global best digital Leadership in Australia’s Reimagined products Simpler, better Our strategy experiences and recovery and transition and services foundations technology How we deliver on our Grow the economy Help
Slide 10: Core franchise
Core franchise Building stronger, deeper customer relationships Better understanding of 2 customer needs and risk 2 • Technology leader, history of innovation Stronger customer relationships • Leading decisioning technology 1 and frequency of engagement • Higher quality, lower risk lending • Persona
Slide 11: Customer engagement
Customer engagement Net Promoter Scores1 across key segments Consumer Business Institutional3 20 consecutive months at #1 28 consecutive months at #12 19 consecutive months at #1 8 consecutive months of growth #1 #2 #1 Peers Peers Peers Jun 23 Jun 24 Jun 23 Jun 24 Jun 23 Jun 24 Consumer mobile app C
Slide 12: Core franchise
Core franchise Building stronger, deeper customer relationships – strengthening long-term franchise MFI share1 Transaction accounts Stable deposits Retail Total retail accounts2 Retail & SME deposits in NSFR3 ($bn) More than 1 in 3 #1 +29% Australians 35.5% 11.2m CBA Next 300 highest 16.4% 8.7m peer
Slide 13: Performance summary
Performance summary Consistent, disciplined execution • Record consumer NPS1 for any major bank through focus on loyalty and fixing breakpoints Customer • NPS1 leadership for consumer mobile app, consumer and business digital, consumer and institutional performance • Increased total number of transa
Slide 14: This result
This result1 Delivering through customer focus and disciplined execution Leading MFI share Transaction accounts 35.5% Retail MFI2 ~ +500k retail accounts3 6% Statutory NPAT 25.5% Business MFI2 ~ +110k business accounts Jun 24 Jun 24 vs Jun 23 2% Cash NPAT Deposit funding CET1 Level 2 77% 12.3% 8c Ca
Slide 15: Financials
Financials1 Cash NPAT down 2% with income flat, higher expenses – margin stabilising Operating income Operating expenses Pre-provision profit Cash NPAT Disciplined volume growth Inflation and Flat revenue and higher Lower loan with margin stabilising technology costs operating expenses impairment ex
Slide 16: Balance sheet strength
Balance sheet strength Long-term, conservative approach to balance sheet risk management Deposit funding Long-term funding Liquid assets Capital % of total funding Weighted average maturity, yrs Average1, $bn CET1 ratio, Level 2 4 77% 5.2yrs $177bn 12.3% 5.1 69% 10.7%3 137 55% 3.5 5.0%2 50 Pre- Pre-
Slide 17: Credit quality
Credit quality Higher TIA and arrears – portfolio quality sound – well provisioned TIA Home loan arrears2 Provisioning3 Troublesome & Impaired Assets (TIA) 90+ days, % Total provisions vs Central ECL4 Jun 24 % of TCE: 0.72% 0.51% 0.63% Historic avg1: 0.91% Historic avg1: 0.65% $8.7bn 0.65% $6.14bn 0
Slide 18: Key highlights
Key highlights By division RBS BB Retail MFI share1 Total transaction accounts2 Business MFI share1 Volumes Jun 24 FY24 #1 1.25m Next highest peer vs Jun 23 +5% Next highest peer growth Mkt share accounts 62.1% 25.4% 25.5% 1.2x +$68bn +9% 11.2m 45.8% system over 5yrs vs Jun 23 23.1% 35.5% 10.7m 18.7
Slide 19: Business Banking
Business Banking Differentiated proposition – continuous innovation Smart Capital Growth Flexi Business CommBank Yello Smart Health Account Investment Account for Business Real Estate Private health, Medicare Flexibility to manage your Flexibility to manage your Extending one of Australia’s Making r
Slide 20: Global best digital experiences
Global best digital experiences Market leading digital ecosystem – building deeper, stronger customer relationships Net Promoter Score1 CommBank app Monthly app logins Consumer mobile app active customers2 per active customer3 Jun 24 Increase in active Increase in app #1 customers since 2014 ~3x eng
Slide 21: Supporting our customers
Supporting our customers Helping our customers to keep safe and secure • More than halved customer scam losses in FY24 NameCheck • Invested >$800m to protect against fraud, scams, financial, cyber crime1 • Dedicated customer CommBank Safe scams teams in retail and business bank • First bank to integ
Slide 22: Results presentation
Results presentation Alan Docherty, Chief Financial Officer
Slide 23: Results overview
Results overview Long-term franchise strengthened as we respond to changes in our operating context Operating context Management response Long-term franchise implications • Economy proving resilient to higher rates • Proactively supporting our customers • Focus on customer advocacy • Uneven househol
Slide 24: Statutory vs cash NPAT
Statutory vs cash NPAT1 Statutory NPAT of $9.5 billion, includes loss on PTBC Indonesian divestment $m FY23 FY24 Statutory NPAT – continuing operations 10,096 9,481 Non-cash items: Includes PT Bank Commonwealth, CommInsure General Insurance, Count - Transaction costs and gains and (losses) on dispos
Slide 25: FY24 result
FY24 result1 Cash NPAT down 2% vs FY23, income flat as margins stabilised FY24 vs 2H24 vs $m FY24 FY23 1H24 Flat adjusting Operating income 27,174 0.1% (0.9%) for day count Operating expenses 12,218 3.0% 3.3% Operating performance 14,956 (2.1%) (4.2%) Loan impairment expense 802 (27.6%) (6.7%) Cash
Slide 26: Operating income
Operating income1 Stable revenue over the year • Volume driven growth in retail, business and • Volume growth2 +3.4% institutional fee income • Margin compression (8bpts) • Higher Markets trading and sales income +0.1% (232) 271 27,135 27,174 Avg. volume growth Home loans 2% Business loans 3 9% 4 In
Slide 27: Operating income
Operating income1 Stabilisation of margin in 2H24, volatility in other operating income FY24 vs FY23 2H24 vs 1H24 Breakdown: Stabilisation of margins in 2H24 NII – volume/margin change (ex. day count) ($232m) +$141m NII – day count – ($125m) 2 fewer days in 2H24 Net interest income ($232m) +$16m Vol
Slide 28: Group margin
Group margin Hedging returns offsetting impact of deposit competition Stable quarterly margin trends in 2H24 (excluding impact of excess liquids held to repay Term Funding Facility) Lower home lending margins +1bpt (1) (7) 3 1 5 - 200 199 Deposit pricing and mix (6) Higher earnings on capital Wholes
Slide 29: Operating expenses
Operating expenses Inflation driving cost growth – increased technology investment and other costs offset by productivity Cost to income 42.9% 44.6% Contribution to mvt: +4.0% +0.1% +3.0% including one off items1 276 127 (387) +4.1% 467 12,129 11,646 • Increased capitalised software amortisation Cum
Slide 30: Credit risk
Credit risk Cost of living pressures impacting arrears, TIA includes small number of single name exposures Loan impairment expense Arrears2 Troublesome and impaired assets Loan loss rate, bpts1 90+ days $bn FY22 FY23 FY24 Home loans Personal loans Credit cards % of TCE: 0.72% 0.51% 0.49% 0.63% Consu
Slide 31: Provisioning
Provisioning1 Strong provision coverage maintained during period of high interest rates Total credit provisions Provisions and scenarios $bn Jun 24 TP/CRWA: 1.29% 1.64%2 1.66%2 $6.14bn $6.14bn 7.88 6.06 4.80 2.94 3.07 Corporate 3.96 3.12 3.07 Consumer $bn Pre-COVID $bn Jun 19 Dec 23 Jun 24 Central R
Slide 32: Provisioning through the cycle
Provisioning through the cycle Forward-looking approach – customer, macroeconomic and sectoral considerations Economic cycle • AASB 9 requires a forward-looking approach to loan loss provisioning to dampen pro-cyclical provisioning behaviour through forward-looking adjustments (FLAs) and GDP multipl
Slide 33: Funding
Funding Term Funding Facility fully repaid, conservative settings maintained Deposit funding Funding composition Illustrative market-implied % of total funding cost of equity4 vs debt5 % of total funding Liquids as a % of total assets Jun 24 55% 69% 77% 10% 14% 14% WAM1 3.5yrs 5.1yrs 5.2yrs Short-te
Slide 34: Capital
Capital Strong capital position maintained Movements in bpts Organic capital generated (net of dividend) Level 1 (+17bpts / $0.8bn) 12.4% 12.3% (76) 104 (11) (3) (14) >11% target 12.3% operating range5 10.25% APRA minimum6 Credit Risk1 (5) MTM changes (HQLA) (6) IRRBB (9) Non-cash loss on disposals
Slide 35: Dividends
Dividends Long-term sustainable returns • Final dividend of $2.50, 4% increase on 2H23 dividend Sustainable returns Dividend per share (cents) • DRP with no discount and expected to be fully neutralised • Full year payout ratio of 79%, upper end of target payout 450 465 range. 2H24 payout ratio of 8
Slide 36: Our long-term approach
Our long-term approach Long-term approach to key settings, strengthened over time Long-term approach to key settings Funding Structural hedges Investment Franking Capital management MFI led deposit growth Net interest earnings supported Ongoing investment in Maintain healthy franking Tightly manage
Slide 37: Supporting sustainable returns
Supporting sustainable returns Our long-term approach supports strong, sustainable shareholder returns Superior shareholder returns Strong return on equity and Disciplined capital management Delivering superior and generation of organic capital and continued investment sustainable shareholder return
Slide 38: Economic outlook
Economic outlook Australia well positioned, but downside risks remain • Economy still absorbing shocks of past few years - Higher interest rates lowering household demand and growth - Inflation lower, but slower rate of decrease - Households making spending and saving sacrifices • Risks remain aroun
Slide 39: Summary
Summary Supporting customers – providing strength and stability – delivering for all stakeholders Customers Net Promoter Score1 Rank Market share Rank • Supporting and protecting our customers Consumer #1 Household deposits2 #1 Business #2 Home lending3 #1 Consumer digital #1 Business deposits2 #1 •
Slide 40: Overview & strategy
Overview & strategy
Slide 41: Why CBA?
Why CBA? Leading franchise – strong balance sheet settings – supporting sustainable returns Retail MFI share1 Home lending share2 Household deposits share3 Business MFI share1 Next highest peer Deposit funding Business deposits 62.1% Peers as at March 20244 market share5 45.8% 77% 71% 67% 66% 22% 20
Slide 42: How we contribute to Australia
How we contribute to Australia1 Supporting our customers, the community and the economy Customers & domestic debt investors2 Our people • Leading retail bank with >25% share of market3 • Over 53,000 people employed, predominantly • Includes ~$20bn interest paid to Australian savers in Australia and
Slide 43: Our strategy
Our strategy Building tomorrow’s bank today for our customers Our purpose Building a brighter future for all Our priorities Leadership in Australia’s Reimagined products Global best digital Simpler, recovery and transition and services experiences and technology better foundations Extend retail and
Slide 44: Reimagining banking
Reimagining banking Franchise strength – supporting our customers across their lifecycle CBA MFI share CBA Retail MFI share1 Young adults and migrants1 Next highest peer 62.1% 45.8% 57.0% 46.4% 44.2% 45.8% 43.7% 14.2% 8.9% Jun 23 Jun 24 Jun 23 Jun 24 Young adults Migrants 34.2% CBA Peers 29.9% 35.5%
Slide 45: Engaged customers
Engaged customers Strong customer engagement, deeper relationships – key driver of growth Retail MFI share1 Retail transaction accounts2 Home loan balances3 Jun 24 Home loans linked 16.4% 11.8% 11.6% 35.5% vs Jun 23 +5% to a transaction account >97% Peer 3 Peer 1 Peer 2 Retail 11,178 554 566 34.4% 3
Slide 46: Reimagining banking
Reimagining banking Extending our market leading digital ecosystem CommBank app CommBank Yello Travel Booking Australia’s most popular banking app1 Rewards & recognition for customers Kids pocket money app & prepaid card Search, book & pay for travel via the app Simpler, better, easier to use Person
Slide 47: Reimagining banking
Reimagining banking Business Banking – differentiated proposition, continuous innovation Smart Terminals Smart Hospitality Stream Working Capital Smart Smart Integrated Smart Mini POS integrations1 Leading Pay At Table payment experience Hospitality POS integration technology Diversified working cap
Slide 48: Global best digital experiences
Global best digital experiences Building on a history of innovation to reimagine banking Strong foundations Establishing leadership Reimagining banking 24/7 NetBank Core banking Customer CommBank Market first offerings CommBank app 5.0 Full functionality Real-time banking Engagement Engine app 4.0 F
Slide 49: Global best digital experiences
Global best digital experiences Market leading digital ecosystem – CommBank app 5.0 and CommBank Yello CommBank app CommBank Yello Simpler, more personalised app experience Rewarding our customers, highly personalised • Personalised, dynamic navigation • Australian banking first • Enhanced search fu
Slide 50: Global best digital experiences
Global best digital experiences Reimagining banking using our world-class data, AI and analytics platform Delivering more personalised customer experiences Making things easier for our people • Customer Engagement Engine (CEE) launched in 2015 • +60 Gen AI use cases identified to simplify operations
Slide 51: Home loans – experience
Home loans – experience1 Enhancing customer experience through simple, scalable and digitised processes • Application experience – simple online applications with fast initial approval Simple and • Pre-populated inputs – to make it easy for customers and lenders to progress at first attempt seamless
Slide 52: Supporting our customers
Supporting our customers Helping our customers today Bill Sense Benefits finder • Expanded and easier access to hardship support • Supporting home loan customers in hardship • Flexible payment plans, repayment pauses, deferrals and interest only • Proactive customer contact; fixed rate roll off, int
Slide 53: Cost of providing cash services
Cost of providing cash services Challenging commercial model ATM withdrawals1 Digital payments2 Revenue and costs from cash services Monthly average Monthly average Annual $m • Free ATM withdrawals at major banks since 20173 Consumer ~20 Business ~40 • Monthly cash withdrawal volumes halved4 (51%) +
Slide 54: Our commitment to sustainability
Our commitment to sustainability Building a brighter future for all Climate Engaging Supporting Strengthening Conducting strategy our people our customers our communities business responsibly • Approved six new sector-level • New Enterprise Agreement with • Over $800m7 spent to prevent • $2m in gran
Slide 55: Financial overview
Financial overview
Slide 56: Overview – FY24 result
Overview – FY24 result1 Key outcomes summary Financial Balance sheet, capital & funding Statutory NPAT ($m) 9,481 (6.1%) Capital – CET12,5 (Int’l) 19.1% Flat Cash NPAT ($m) 9,836 (2.3%) Capital – CET12 (APRA) 12.3% +10bpts ROE (cash) 13.6% (30bpts) Total assets ($bn) +0.1% 1,254 EPS cents (cash) 588
Slide 57: Overview – FY24 result
Overview – FY24 result Key financial outcomes Cash NPAT1,2 ($m) NIM1 Cost to income1,2 Cash ROE1,2 (2%) (8bpts) +130bpts (30bpts) 10,072 9,836 2.07% 1.99% 43.7% 45.0% 13.9% 13.6% FY23 FY24 FY23 FY24 FY23 FY24 FY23 FY24 Cash EPS1,2 (cents) DPS (cents) CET1 (APRA) CET1 (International)3 (8c) +15c +10bp
Slide 58: Cash NPAT by division
Cash NPAT By division1 RBS2 BB IB&M NZ (NZD)3 vs FY23 vs FY23 vs FY23 vs FY23 • Income (3%) • Income +4% • Income +3% • Income (5%) • Costs +4% • Costs +5% • Costs +3% • Costs +3% • Impairment expense -$270m • Impairment expense -$55m • Impairment benefit -$32m • Impairment expense +$6m (4%) +4% +5%
Slide 59: Balance sheet
Balance sheet1 Disciplined and targeted lending growth, switching to higher yielding deposits stabilised in 2H24 Jun 24 vs Jun 24 vs $bn Jun 23 Dec 23 Jun 24 Dec 23 Jun 23 Group lending Home loans 652.2 650.5 664.7 2.2% 1.9% +1.8% Consumer finance 17.0 17.5 16.8 (4.1%) (1.6%) +2.3% Business loans2 1
Slide 60: Volume growth
Volume growth Disciplined approach to growth – focus on sustainable returns Home lending1,2 Business lending1,2,3 Household deposits1,4 Business deposits1,5 CBA CBA (excl. IB&M) CBA CBA System CBA (incl. IB&M) System System System (incl. Institutional lending) 7.2% 4.6% 10.0% 5.4% 6.6% 4.5% 8.1% 7.7
Slide 61: Market share
Market share1 Strong market shares % Jun 23 Dec 23 Jun 24 Home lending2,9 Household deposits3,9 Home loans – RBA2 25.1 24.5 24.5 CBA Peers CBA Peers 40% 40% Break in series Home loans – APRA3 25.8 25.3 25.2 Break in series from Jun 21 Break in series from Jun 21 from Mar 19 30% Break in series from
Slide 62: Group margin – 12 months
Group margin – 12 months Competitive pressures and deposit switching partly offset by hedging returns Increased deposit price competition and higher wholesale Home lending (5) funding costs partly offset by Earnings on capital 4 Consumer finance (1) benefit of rising rates Lower NZ earnings (1) (6)
Slide 63: Group margin
Group margin Hedge earnings continue to increase due to higher interest rates Replicated portfolio (RP) & equity hedge1 Liquidity & basis risk • In FY24, RP and equity hedge earnings benefitted from higher rates Liquidity • Earnings outlook continues to improve with higher exit tractor rates • Ever
Slide 64: Deposit switching
Deposit switching Rate of switching stabilised Domestic retail deposits1,2 Domestic business deposits1,2,3 $bn $bn Non-interest bearing mvt %4 Non-interest bearing mvt %4 1Q24 2Q24 3Q24 4Q24 1Q24 2Q24 3Q24 4Q24 (4.3%) (3.3%) (2.5%) (2.4%) (8.5%) 2.1% (4.7%) 9.1% 196 201 189 188 185 178 177 176 167 1
Slide 65: Deposit composition
Deposit composition Deposit mix trends stabilised over 2H24 Domestic retail deposits1,2 Domestic business deposits1,2,3 $bn $bn $326bn $316bn $321bn $430bn $433bn $416bn 16% 12% 11% 15% 16% 14% $330bn 17% 17% 17% 10% $197bn 15% 11% 57% 53% 55% 45% 46% 47% 39% 62% 36% 25% 25% 27% 32% 29% 24% 27% Dec
Slide 66: Margins by division
Margins by division1 Deposit mix and competitive pressures impacting margins RBS2 BB IB&M (ex Markets)3 NZ (ASB)4 Lower margins due to increased Lower lending margins reflecting Increase reflecting Increase reflecting higher earnings on competition and unfavourable deposit increased competition and
Slide 67: Other operating income
Other operating income1 Higher volume driven fees and Markets trading income Other operating income Trading income FY24 vs FY23 • Non-recurrence of losses on minority interests in FY23 • Higher Structured Asset Finance rental income, partly offset by 4,350 • Non-recurrence of Structured Asset Financ
Slide 68: Sequential half operating income
Sequential half operating income1 Lower other operating income and two fewer days, partly offset by volume growth • Lower Markets trading and sales income • 2 fewer days ($125m) • Timing of dividend income from minority interests, partly offset by • Volume growth2 +0.7% • Higher volume driven fee in
Slide 69: Sequential half operating expenses
Sequential half operating expenses1 Technology and FTE related growth driving cost uplift Cost to income1 44.0% 45.2% Contribution to mvt: +2.6% +1.4% (2.2%) (135) +1.8% 155 87 6,118 6,011 • Higher remediation costs and operational losses Cumulative cost savings • Timing of marketing and launch cost
Slide 70: Cost approach
Cost approach Ongoing productivity savings creating capacity for long-term investment Cost reduction Investment spend Cumulative savings1 Cost approach Continued focus on productivity & growth Capitalised software ($bn) 1.9 1.8 1.9 2.1 1.7 1.4 1.4 1.3 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 1,998 2,
Slide 71: Loan losses
Loan losses Loan impairment expense remains low Loan loss rate1 Loan loss rate by business unit1,2 bpts bpts 9 8 13 19 Consumer Corporate 7 4 FY23 FY24 1H24 2H24 41 33 25 23 76 19 21 20 19 50 16 16 15 15 16 12 12 12 43 24 7 9 9 23 13 11 20 8 10 14 6 6 6 15 26 17 19 17 18 18 18 18 18 17 26 16 4 11 16
Slide 72: Provisions
Provisions1 Peer-leading provision coverage of 1.66% Provision coverage2/CRWA Provisions by stage % Credit Credit Stage 2 exposures Total exposures provisions by credit grade3 provision 1.66 1.59 coverage 1.51 $m Jun 23 Jun 24 Jun 23 Jun 24 1.25 Stage 1 921,565 941,150 1,709 1,795 $191bn $188bn Coll
Slide 73: Financial performance by division
Financial performance1 By division RBS2 BB IB&M ASB (NZD) FY24 FY24 FY24 FY24 Cost to income Cost to income Cost to income Cost to income 35.0% 37.5% 32.0% 43.6% 43.4% 36.8% 39.8% 31.5% FY23 FY24 FY23 FY24 FY23 FY24 FY23 FY24 12,790 54% of 38% of 11% of 13% of Group Group Group Group NPAT 8,573 NPAT
Slide 74: Home & consumer lending
Home & consumer lending
Slide 75: Home loans – disciplined execution
Home loans – disciplined execution Disciplined strategic and operational execution in a competitive market Consistent market share performance1 Fundings weighted towards proprietary distribution, reduction in owner occupied and fixed rate lending 24% 25% 22% 21% Fundings mix2 Fundings mix3 Fundings
Slide 76: Home loans – CBA
Home loans – CBA1 A disciplined approach to portfolio quality, growth and sustainable returns Portfolio1 Jun 23 Dec 23 Jun 24 New business1 Jun 23 Dec 23 Jun 24 8 Total balances – spot ($bn) 584 582 596 Total funding ($bn) 72 67 69 Total balances – average ($bn) 577 580 587 Average funding size ($’0
Slide 77: Home loans – CBA ex BWA
Home loans – CBA ex BWA1 A disciplined approach to portfolio quality, growth and sustainable returns Portfolio1 Jun 23 Dec 23 Jun 24 New business1 Jun 23 Dec 23 Jun 24 7 Total balances – spot ($bn) 494 491 500 Total funding ($bn) 60 55 55 Total balances – average ($bn) Average funding size ($’000)8
Slide 78: Home loans – serviceability assessment
Home loans – serviceability assessment1 90% of the book originated under tightened standards since FY16 Key serviceability changes by year2 New loan assessment (from FY16)3 • Increased serviceability buffer and buffers on existing debts • All income used in application to assess serviceability is ve
Slide 79: Home loans – borrowing capacity
Home loans – borrowing capacity1 Improved borrowing capacity from recent changes to individual income tax rates and thresholds2 Borrowing capacity3 Application gross income band7 % of applicants with Change in maximum borrowing capacity3 – indexed Dec 16 additional capacity to borrow4 6 months to Ju
Slide 80: Home loans – resilience
Home loans – resilience1 Credit quality remains sound – higher savings buffers, lower DLVR Customers in advance2 Average payments in advance2,3 Offset and redraw balances % of customers # of payments $bn 80% 37 36 134 78% 119 126 78% 78% 109 29 29 57 59 Redraw4 52 54 Offset 57 65 69 75 Jun 21 Jun 22
Slide 81: Home loans – savings and repayment buffers
Home loans – savings and repayment buffers Higher savings and repayment buffers Repayment buffers Jun 23 Repayment buffers Dec 23 (Payments in advance1, % of accounts) Jun 24 (Payments on time1, % of accounts) 33% 34% 33% 22% 22% 20% 20% 20% 5% 22% 6% 6% 20%20% 16%16%16% 5% Residual 3% 3% Structural
Slide 82: Home loans – portfolio DLVR
Home loans – portfolio DLVR1 Strong portfolio DLVR of 43% – supported by growth in house prices Dynamic LVR bands2 Average dynamic LVR3 Jun 23 Negative equity4 Dec 23 % of total portfolio balances Jun 23 45% Jun 24 Proportion of balances in negative equity • 63% of customers ahead of repayments Dec
Slide 83: Home loans – impaired loans, losses and insurance
Home loans – impaired loans, losses and insurance1 Modest increase in impaired home loans, predominantly well secured – portfolio losses remain low Impaired home loans2 Impaired home loans – by state3 Higher Australian impaired home loans due to an increase in predominantly well secured home loans a
Slide 84: Home loans – arrears (30+ days)
Home loans – arrears (30+ days) Increase in arrears as higher cost of living impacting some borrowers Portfolio Product Repayment and interest type 30+ days Group 30+ days1 Owner occupied 30+ days1 Principal & interest Variable BWA Investment Interest only Portfolio ASB Fixed 2.0% 1.5% 1.5% CBA 1.5%
Slide 85: Home loans – arrears (90+ days)
Home loans – arrears (90+ days) Increase in arrears as higher cost of living impacting some borrowers Portfolio Product Repayment and interest type 90+ days Group 90+ days1 Owner occupied 90+ days1 Principal & interest Variable BWA Investment Interest only Portfolio ASB Fixed CBA 0.8% 0.8% 0.8% 0.6%
Slide 86: Consumer finance – arrears
Consumer finance – arrears1 Elevated ASB arrears due to delays in collections during system implementation Credit cards Portfolio Group Portfolio Group By year 2020 BWA BWA 2021 Group 30+ days Group 90+ days Group 90+ days ASB ASB 2022 6.0% CBA 2.0% CBA 2023 1.4% 2024 1.5% 4.0% 1.0% 0.8% 2.0% 0.5% 0
Slide 87: Business & corporate lending
Business & corporate lending
Slide 88: Portfolio quality
Portfolio quality1 Portfolio quality metrics sound Exposures by industry1 Corporate portfolio quality Group TCE by geography Investment grade AAA A+ BBB+ to to to Jun 23 Dec 23 Jun 24 TCE $bn AA- A- BBB- Other Jun 24 Australia 82.2% 80.6% 81.5% 69.3% Gov. admin & defence 156.8 17.1 0.5 0.0 174.5 67.
Slide 89: Total committed exposure
Total committed exposure1 Close monitoring of key sectors Provisions to total Group TCE ($bn) TIA ($bn) TIA % of TCE committed exposure % Dec 23 Jun 24 Dec 23 Jun 24 Dec 23 Jun 24 Dec 23 Jun 24 Consumer 776.2 793.0 2.0 2.5 0.3% 0.3% 0.4% 0.4% Government administration & defence 206.9 174.5 0.0 0.0 0
Slide 90: Commercial property
Commercial property Moderate growth, well secured portfolio, market conditions easing • Softening in yields and capital values has started to ease, although vacancies Group exposure Jun 23 remain high for Office property in specific metropolitan Sydney and Melbourne Dec 23 locations. Jun 24 • Mainta
Slide 91: Agriculture & forestry
Agriculture & forestry Sector performing well – underpinned by sound fundamentals • The portfolio grew ~8% this year, mostly in the livestock and mixed farming Group exposure Jun 23 sectors. Dec 23 Jun 24 • Weather conditions have been favourable, with good subsoil moisture. 32.5 30.0 31.2 There wer
Slide 92: Entertainment, leisure & tourism
Entertainment, leisure & tourism Stable performance • Portfolio growth has focused on higher quality, well secured and diversified Group exposure Jun 23 operators. Dec 23 Jun 24 • LVRs are well positioned, typically lower than 55%. 18.2 16.1 16.6 • Spending on Hospitality has increased in the year,
Slide 93: Wholesale & retail trade
Wholesale & retail trade Essential spending driving retail consumption, wholesale trade impacted by single name exposure Wholesale trade Retail trade • Portfolio growth of ~6% across the year. • Portfolio growth of ~2% across the year, predominantly within non-discretionary sectors. 64% of Retail Ex
Slide 94: Construction
Construction Sector remains challenged • Portfolio growth focused on supporting existing clients. Group exposure Jun 23 Dec 23 • Residential and commercial builders have largely worked through the loss Jun 24 making fixed priced contracts that challenged the sector. 13.1 12.5 11.8 10.8 • Civil and n
Slide 95: Funding, liquidity & capital
Funding, liquidity & capital
Slide 96: Funding overview
Funding overview Long-term conservative funding settings maintained – TFF fully repaid Funding composition Wholesale funding2 Funding profile % of total funding Long-term as % of total wholesale funding TFF now fully repaid 74% Maturity4 FY24 61% Short-term Issuance 80 7% 7% 9% wholesale1 26% 18% 18
Slide 97: Deposit funding
Deposit funding Highest share of stable customer deposits in Australia Customer deposits vs peers1 Customer deposits by segment4 ($bn) ($bn) % of total funding 68% 77% 67% 71% 66% 819 825 834 5 yr 834 80 10% ASB & Other 77 80 CAGR 174 652 651 IB&M 164 153 154 18% 570 1% 597 94 155 216 216 26% Other
Slide 98: Balance sheet composition
Balance sheet composition1 CBA has stable, high quality assets and conservative funding settings Europe US CBA Assets – CBA has a stable, high quality asset profile: Assets Liab + Equity Assets Liab + Equity Assets Liab + Equity • High proportion of well secured home lending assets 6% 4% 7% 15% 10%
Slide 99: Wholesale funding
Wholesale funding Wholesale funding diversified across differing products, currencies and tenor – TFF fully repaid Portfolio mix Short-term funding by product4 Jun 24 39% 61% Short-term funding 1 Certificates of deposit 49% Long-term funding2 Dec 23 30% 58% 12% Commercial paper 23% Term Funding Faci
Slide 100: Funding and liquidity metrics
Funding and liquidity metrics1 Funding and liquidity metrics remain well above regulatory minimums post repayment of TFF NSFR NSFR (%) NSFR requirements specify banks must maintain a sufficient profile of Jun 24 stable funding to meet their assets and off-balance sheet activities 3.6 (0.1) (7.2) 0.6
Slide 101: Capital overview
Capital overview Strong capital position maintained CET1 CET1 Dividend per share (cents) CET1 APRA International +541% Payout Ratio (cash NPAT basis)1 Level 2 Level 1 450 465 130% 431 385 120% 19.1% Assets 298 350 110% +185% 88% 79% 100% 71% 68% 75% 90% 12.3% 12.4% 71% 80% 70% 60% 50% Jun 24 Jun 24
Slide 102: CET1 – International
CET1 – International APRA’s revised capital framework remains more conservative than Basel framework CET1 International adjustments1 Level 2 Definition of Risk weighting equity investments, deferred tax assets, capitalised expenses which are fully deducted from CET1 1.7% capital under APRA rules 19.
Slide 103: Capital – summary
Capital – summary Strong capital position maintained Key capital ratios (%) Jun 23 Dec 23 Jun 24 • CET1 capital ratio of 12.3% • 2024 interim and final dividends – DRP neutralised CET1 capital ratio 12.2 12.3 12.3 • Progress on the previously announced $1bn on-market share buy-back Additional Tier 1
Slide 104: RWA drivers
RWA drivers Higher RWA driven by higher IRRBB and CRWA growth, partly offset by lower Market Risk RWA CET1 (Level 2) Total Risk Weighted Assets (RWA)3 bpts $bn (76) 104 (11) (3) (14) 464 1.7 (1.1) 3.3 0.0 468 12.3% 12.3% 10 8 Market Risk IRRBB 40 44 Credit Risk1 (5) IRRBB (9) 45 45 Market Risk 3 Op
Slide 105: Capital management
Capital management Disciplined & balanced approach to optimise growth, reinvestment, shareholder returns & flexibility Capital generation Capital flexibility Reinvested in the Group Distributed to shareholders Retained Franchise growth Investment1 Dividends Capital return Surplus retained Credit RWA
Slide 106: Total Capital
Total Capital Well placed to meet APRA requirements for loss-absorbing capacity (LAC) • Total capital ratio at 30 Jun 24 of 20.9%, $12.5bn above 1 Jan 26 requirement of 18.25%. • With 6.6% of Tier 2 at 30 Jun 24 CBA is well positioned to meet the 1 Jan 26 LAC requirement of 6.5%. 30 Jun 2024 1 Jan 2
Slide 107: Share count
Share count Lower share count supports higher shareholder returns and dividends Number of shares (m)1 Dividend per share ($) CBA Peers CBA Peers 4.65 Capital raisings for 3,470 strengthening 3,103 3,008 during GFC 1.75 1.30 1.67 1,776 1.23 1.42 1,516 1,674 0.64 1,506 0.54 1,260 Increase due to acqui
Slide 108: Capital management – share buy-back
Capital management – share buy-back $9.3bn buy-backs in last three years • $282 million of current $1 billion on-market share buy-back CBA capital management activities completed to date Last 3 years Share buy-back Dividend impact1 • Buy-back period extended by 12 months to allow for flexibility in
Slide 109: Capital – divestments/buy-backs
Capital – divestments/buy-backs Announced divestment program – $9.3bn returned to shareholders in last three years Divestments CET1 Associated Completed buy-back ~$11bn PT Bank Commonwealth May 24 $10bn General Insurance Sep 22 On-market $1bn Bank of Hangzhou (HZB)1 Jun 22 (in progress) Colonial Fir
Slide 110: CET1 – Level 1
CET1 – Level 1 Strong CET1 Level 1 of 12.4% CET1 (Level 1)1 Level 1 vs Level 2 bpts CBA vs Peers RWA of L2 banking subsidiaries 170bpts 10bpts 30bpts Higher reserves and retained earnings at L2 (120bpts) Elim. of investments in reg. subsidiaries at L2 (60bpts) (30bpts) (10bpts) Goodwill and intangib
Slide 111: Capital – regulatory changes
Capital – regulatory changes A number of regulatory changes in progress Change Implementation Details Minor amendments to • Revised APS 330 on public disclosure requirements which aligns with both APRA’s new capital framework and the Basel Committee’s APS 112, 113 internationally agreed minimum requ
Slide 112: Regulatory expected loss
Regulatory expected loss1 For non-defaulted exposures, eligible provisions in excess of regulated expected losses added back to Tier 2 Capital Jun 23 Dec 23 Jun 24 $m Defaulted Non-defaulted Defaulted Non-defaulted Defaulted Non-defaulted Regulatory expected loss (EL) 1,253 2,377 1,506 2,399 1,708 2
Slide 113: Economic overview
Economic overview
Slide 114: Key Australian economic indicators (June FY)
Key Australian economic indicators1 (June FY) GDP % Headline CPI % Unemployment rate % Financial year average Year on year, June quarter June quarter average GDP Nominal GDP 6.1 6.0 5.2 4.0 4.5 3.8 3.6 4.3 11.8 9.7 3.8 3.8 3.1 2.6 2.1 5.3 4.2 1.4 1.5 4.5 2021 2022 2023 2024 2025 2021 2022 2023 2024
Slide 115: The Australian economy
The Australian economy Slowing economic growth, population growth providing tailwinds Economy growing well below trend1 GDP per capita has fallen for five quarters1 Population growth has been a tailwind1 GDP growth Quarterly growth in GDP and GDP per capita Population growth (annual change) % % % 0.
Slide 116: The Australian economy
The Australian economy Cost of living pressures continuing to impact consumers Real per capita consumption declining1 Consumers winding back discretionary spend1 Renters feeling the pain2 Real household consumption (index = 100, Q4 19) Household consumption (annual growth contribution) Per capita ho
Slide 117: The Australian economy
The Australian economy Inflationary pressures moderating Inflation elevated but trending lower1 Certain categories keeping inflation higher1 Wide difference between essential and discretionary1 Inflation (annual change) Inflation (annual change), June quarter 24 vs June quarter 23 Inflation (annual
Slide 118: The Australian economy
The Australian economy Labour market loosening, support for households in FY25 through tax cuts and energy rebates Labour demand weakening1 Unemployment to continue to lift2 Consensus of economists expect rate cuts3 Labour demand and supply Unemployment rate (with CBA forecast) RBA cash rate Index %
Slide 119: Housing sector
Housing sector Higher house prices as supply is constrained House prices rose over the past year1 Reaching fresh record highs1 Driven by large lift in investor lending2 Dwelling prices (8 capital cities) Dwelling prices (8 capital cities) Housing loan approvals (excluding refinancing) % % Index $bn
Slide 120: Key New Zealand economic indicators (June FY)
Key New Zealand economic indicators (June FY)1 GDP % CPI % Unemployment rate % Financial year average Year on year, June quarter June quarter average 5.5 GDP Nominal GDP 7.3 4.6 6.0 4.0 3.6 8.6 3.3 6.0 8.0 6.2 3.3 3.3 4.3 2.6 3.0 3.2 0.7 0.0 2021 2022 2023 2024 2025 2021 2022 2023 2024 2025 2021 202
Slide 121: Sources, glossary & notes
Sources, glossary & notes
Slide 122: Sources and notes
Sources and notes Slide 5 11. CBA generates returns to over 830,000 direct shareholders and indirectly to over 13 million Australians through their superannuation. Slide 9 1. Source: APRA Monthly Authorised Deposit-taking Institution Statistics (MADIS). CBA Business lending multiple is based on Busi
Slide 123: Sources and notes
Sources and notes Slide 20 1. Refer to glossary at the back of this presentation for further details. 2. The total number of customers that have logged into the CommBank app at least once in the month of June. 3. The total number of logins to the CommBank app divided by the number of customers who h
Slide 124: Sources and notes
Sources and notes Slide 49 1. CBA won Canstar's Bank of the Year – Digital Banking award for 2024 (for the 15th year in a row). Awarded June 2024. 2. CBA was awarded both the ‘Most Innovative Major Consumer Bank’ and ‘Best Digital Consumer Bank (Major)’ (for the 6th year in a row) by RFI Global’s Ba
Slide 125: Sources and notes
Sources and notes Slide 60 1. Percentage growth calculations are based on actual numbers on a non-annualised basis. 2. Source: RBA Lending and Credit Aggregates. 3. Business including select financial businesses. CBA excludes Cash Management Pooling Facilities. Historic CBA balances restated to refl
Slide 126: Glossary
Glossary Term Description Term Description Cash Profit The Profit Announcement (PA) discloses the net profit after tax on both a statutory and cash basis. The statutory basis is MFI share – Individuals aged 18-24 years old. prepared in accordance with the Corporations Act 2001 (Cth) and the Australi
Slide 127: Our reporting suite
Our reporting suite Committed to transparent reporting Annual Report Climate Report Corporate Governance Profit Announcement Pillar 3 Report Statement Investor Discussion Pack Sustainability Reporting Appendix Modern Slavery and Human Trafficking Statement 127
Slide 128: Contact us
Contact us Investor Relations Media Relations Investor Centre Melanie Kirk Danny John For more information Investor Relations Media Relations commbank.com.au/investors +61 2 9118 7113 +61 2 9595 3219 CBAInvestorRelations@cba.com.au Media@cba.com.au 128
Commonwealth Bank of Australia — FY2024 Earnings Presentation on 6ix