Commonwealth Bank Of Australia · ASX:CBA
Commonwealth Bank Of Australia — Investor Presentation (June 2004)
24 slides from Commonwealth Bank Of Australia's investor presentation, Jun 23, 2004
Slide 1: Critical Success Drivers
Critical Success Drivers Commonwealth Bank Stuart Grimshaw Group Executive, Investment and Insurance Services 23 June 2004
Slide 2: Disclaimer
Disclaimer The material that follows is a presentation of general background information about the Bank’s activities current at the date of the presentation, 23 June 2004. It is information given in summary form and does not purport to be complete. It is not intended to be relied upon as advice to i
Slide 3: Outline
Outline Investment and Insurance Services Our Business Model » Our Critical Success Drivers » The markets we operate in » Life insurance Asset management Platforms » Advice « Conclusion
Slide 4: Outline
Outline « Investment and Insurance Services Our Business Model » Our Critical Success Drivers » The markets we operate in » Life insurance Asset management Platforms » Advice « Conclusion
Slide 5: Our business model involves competing across all elements of the value chain
Our business model involves competing across all elements of the value chain iS products and services by value chain element General Dealer group Direct Insurance -- |i services « Research Master Trust * Compliance | Life ||" FirstChoice: * Technology 2 : : : = Se Insurance SS : a Aligned Wrap Advis
Slide 6: Our Competitive Advantages
Our Competitive Advantages Value Chain Participation across all elements of the value chain Capture all margins Flexible pricing Multi-channel strategy International distribution capabilities Number 1 in Australian Retail Managed Funds Number 1 in Life Insurance Market leading platform inflows Exper
Slide 7: Wealth Management Value Chain Margin Trends
Wealth Management Value Chain Margin Trends Illustrative of Funds Management Industry Margin . . Stable to Stable to Trends Stable to Falling Falling Increasing Fee for Service Customer Pays 200 bps
Slide 8: Outline
Outline Investment and Insurance Services » Our Business Model « Our Critical Success Drivers « The markets we operate in Life insurance = Asset management » Platforms » Advice « Conclusion
Slide 9: We expect continued strong growth in the life insurance market
We expect continued strong growth in the life insurance market Life Insurance In Force Premiums (December 1990 — December 2003) 4500 - Observations 4000 4 » Return to rational pricing 3500 4 » Continued strong growth 3000 4 / Market still under-insured Flight to security / safety Fewer competitors R
Slide 10: We are the market leader in life insurance in Australia
We are the market leader in life insurance in Australia Product Category Market Share Key Drivers of Success December 2003 » Scale Competitive, rational pricing Disability 11.1% Income A“ Product enhancements Lump Sum 13.8% » Integrated technology solutions 4 » Emphasis on service improvement Group
Slide 11: Outline
Outline ia Investment and Insurance Services » Our Business Model Our Critical Success Drivers The markets we operate in Life insurance Asset management » Platforms » Advice Conclusion 14
Slide 12: The Australian managed funds industry has a history of strong growth
The Australian managed funds industry has a history of strong growth Total Funds Management Market ($m) 1991 to 2003 actuals, 2003 to 2013 forecasts 1,600,000 5 1,400,000 - 1,200,000 - 1,000,000 800,000 + 600,000 + 400,000 | 200,000 1991 ~ o oa eae 2) 2) a nae c OO }) oo ¢o oo Sf N NO ON Wholesale 2
Slide 13: We perform well across our diversified product mix
We perform well across our diversified product mix Funds Under Management by Asset Sector May 2004 100% = $101.5B Other Australian Equities i 1% Fixed ’ ° 24% Interest & | Cash 40% si - Equities Listed & 18% Direct Property 17% international Number 1 in Australian Retail Managed Funds Market leader
Slide 14: Retention is a key priority for retail funds
Retention is a key priority for retail funds Net Funds Flow Market versus Commonwealth Bank Drivers December 2002 — December 2003 40- » Staff changes 35 = Research ratings 30 » Correction of overweighting in Aussie Equities N a Legacy business Nn ° Mitigation Strategies = fond o a Strategic alliance
Slide 15: Our brand and customer service ratings continue to be strong
Our brand and customer service ratings continue to be strong Newspoll Survey — Fund Manager Preference November 2003 Who would you invest your money with? 50% 7 : ° + colonial First State = BT AMP =~ AXA =Merc/ING ~~ Perpetual * Leading brand 45% + Recognised in the market for customer service Winne
Slide 16: Outline
Outline Investment and Insurance Services » Our Business Model x Our Critical Success Drivers « The markets we operate in Life insurance = Asset management « Platforms » Advice « Conclusion
Slide 17: Platforms capture the majority of retail funds
Platforms capture the majority of retail funds Retail Market Flows Observations 1998 to 2003 actuals, 2004 to 2006 forecasts . Platform success driven by: aso « Adviser productivity improvements Greater choice for investors and advisers More convenience $billion Creation of new margins Consolidated
Slide 18: We are well represented in the platform market
We are well represented in the platform market | “avanteos FirstChoice has been the fastest growing platform in the market since its launch two years ago Over $6 billion FUA (June 2004) Competitive pricing Award-winning service Recent enhancements offering more functionality and investment options N
Slide 19: Outline
Outline fd ee Investment and Insurance Services » Our Business Model Our Critical Success Drivers The markets we operate in Life insurance Asset management » Platforms » Advice Conclusion 19
Slide 20: We are prepared for the challenges in financial planning
We are prepared for the challenges in financial planning Market observations Rapidly ageing population Inadequate savings to support retirement Inadequate protection of investor's assets Access to product choice for investors and advisers Quality of advice Increasingly sophisticated investors wantin
Slide 21: We will continue to invest in our advice channel
We will continue to invest in our advice channel Our focus is on enhancing our quality of advice, improving productivity and increasing total sales Multi-channel strategy Career development for advisers All channels are important ~ minimise risk and maximise Financial Wisdom «> outcome Leverage and
Slide 22: Outline
Outline « Investment and Insurance Services » Our Business Model Our Critical Success Drivers « The markets we operate in Life insurance Asset management = Platforms » Advice « Conclusion 22
Slide 23: Conclusion
Conclusion » There is significant value in having an end to end value chain presence « We are building on our leading position in investments and insurance manufacturing « We are leading the market in our platform capabilities » We are further strengthening and broadening our significant distributio
Slide 24: Commonwealth Bank
Commonwealth Bank Investment and Insurance Services 23 June 2004 eee ey
Commonwealth Bank of Australia — Investor Presentation (June 2004) on 6ix