Commonwealth Bank Of Australia · ASX:CBA

Commonwealth Bank Of Australia — FY2010 Earnings Presentation

123 slides from Commonwealth Bank Of Australia's earnings presentation, Aug 11, 2010

1. Slide 1: Results Presentation for the full year ended 30 June 2010

   Determined to be better than we‟ve ever been. For personal use only Ralph Norris CHIEF EXECUTIVE OFFICER David Craig CHIEF FINANCIAL OFFICER Results Presentation For the full year ended 30 June 2010 11 August 2010 Commonwealth Bank of Australia ACN 123 123 124

2. Slide 2: Disclaimer

   Disclaimer For personal use only The material that follows is a presentation of general background information about the Group‟s activities current at the date of the presentation, 11 August 2010. It is information given in summary form and does not purport to be complete. It is not intended to be r

3. Slide 3: Agenda

   Agenda For personal use only  Ralph Norris, CEO – Company Update and Outlook  David Craig, CFO – Financial Overview  Questions and Answers 3

4. Slide 4: Market shares

   Market shares Jun 10 Dec 09 Jun 09 1 For personal use only CBA BWA Combined CBA + BWA CBA + BWA 1 Home loans 22.6% 3.6% 26.2% 26.1% 25.2% Credit cards 2 19.6% 2.9% 22.5% 22.3% 21.6% Personal lending 13.8% 0.8% 14.6% 15.0% 15.7% Household deposits 28.3% 3.0% 31.3% 31.3% 32.3% Retail deposits 23.3% 4.

5. Slide 5: Overview

   Overview For personal use only  Another good financial result  Disciplined strategy execution continuing to deliver  Challenging operating environment – signs of momentum slowing  Global uncertainty continuing – conservative settings retained  Well placed for medium term 5

6. Slide 6: Snapshot – FY10 Results

   Snapshot – FY10 Results* Financial Operating Performance by Division For personal use only Cash earnings ($m) 6,101 +42% RBS ($m) 4,258 +15% ROE (Cash) 18.7% +370bpts IB&M ($m) 1,775 +3% Cash EPS (cents) 396 +34% BPB ($m) 1,582 +19% DPS (cents) 290 +27% Bankwest ($m) 840 +81% Cost-to-Income 45.7% (7

7. Slide 7: Another good financial result

   Another good financial result For personal use only Jun 10 vs Jun 09 Cash NPAT ($m) 6,101 42% Statutory NPAT ($m) 5,664 20% ROE 18.7% 370bpts Cash EPS (cents) 396 34% Dividend per Share (cents) 290 27% 7

8. Slide 8: Notes

   For personal use only Notes 8

9. Slide 9: Delivering for Shareholders

   Delivering for Shareholders 290 For personal use only Interim Final 84% Payout Ratio 87% 88% 84% 63% 63% 84% 74% 61% 59% cents per share 94 130 107 149 113 153 113 115 120 170 2006 2007 2008 2009 2010 9

10. Slide 10: Strategy continues to deliver

    Strategy continues to deliver 2 Retail MFI Customer Satisfaction 1 Business Customer Satisfaction For personal use only Gap to top-rated major banking group peer Jun 10 vs Jun 09 % Satisfied („very satisfied‟ or „fairly satisfied‟) 85% 3.0% (6 month rolling average) 80% 12.5% 0.9% 75% 70% -0.5% -1.1

11. Slide 11: Transformational change - scorecard

    Transformational change - scorecard Customer Satisfaction June 2006 June 2010 Progress For personal use only Retail 1 64.9% 75.6%  Business - TNS 2 56.5% 67.9%   5 Business - DBM n/a Ranked 1st FirstChoice 3 Ranked 2nd Ranked 1st  Share of Ombudsman Complaints 29.8% 15.1%  Market Shares 6 Home

12. Slide 12: Products per Customer

    Products per Customer Average Product Composition between Commonwealth Bank, For personal use only the 4 Major Banking Groups and Bankwest 2.56 2.54 2.44 Insurance 0.33 0.28 2.35 2.27 0.25 0.23 0.11 0.20 0.26 Personal Lending 0.21 0.24 0.34 0.51 Home loan 0.67 0.59 0.58 0.57 Credit Cards Managed fun

13. Slide 13: Customer satisfaction creating value

    Customer satisfaction creating value For personal use only Entire rated Over 1,000 deposits suite customer facing awarded Retail branch “60 Minute” staff added Cannex 5 Stars CommSee transformation home loans over 4yrs 75.6% rolled out programme launched New strategic 2.56 2.56 agenda launched acros

14. Slide 14: Bankwest

    Bankwest Comparable price-to-book values Retail customer growth For personal use only Number of retail customers (Acquiror / Target) (Bankwest) 1,036,000 Bendigo / Adelaide 2.6x 989,000 960,000 Bank of Queensland / Bendigo 2.5x 905,000 919,000 St George / Advance 2.1x 1 HBOS / Bankwest 1.9x Sep 08 D

15. Slide 15: Bankwest

    Bankwest For personal use only  A good business performing strongly: ► 100,000 extra customers since acquisition ► Income  25%; Costs  3%  Legacy book review: ► Comprehensive and in-depth ► Smaller, performing loans ► A legacy issue – predominantly East Coast ► Unrealistic security valuations ►

16. Slide 16: 2010 Awards

    2010 Awards  Australian Financial Institution of the Year (Retail Bank) For personal use only  Bank of the Year 2010  Financial Services Executive of the Year (Ralph Norris)  Money Minder of the Year (RBS)  Best Career Development Program  Margin Lender of the Year (CommSec)  Chief Informatio

17. Slide 17: Supporting Australia

    Supporting Australia Where does our net income go? For personal use only  Employing 45,000 people Expenses $bn Impairment  Serving 11 million Australian customers 4.0 2.1 Salaries for  $100 billion in new lending 4.6 2.9 Taxes 45,000 staff 1.6 4.5 Retained to  Paid $2.9 billion in taxes grow len

18. Slide 18: Key Earnings Drivers - FY11

    Key Earnings Drivers - FY11 For personal use only Driver FY11 Outlook ► Total Credit (%): 7½-9½ System ► Housing Credit (%): 8-10 Credit Growth* ► Business Credit (%): 7-9 ► Continued downward pressure from higher funding costs Margins ► Many variables – specific outlook hard to predict ► Trading In

19. Slide 19: Outlook

    Outlook For personal use only  Despite improvement, global outlook remains uncertain  Domestic economy relatively well-placed  Regulatory reform outcomes likely to be manageable  Given uncertainty, remain cautious on near-term outlook  However, medium to longer term outlook very good 19

20. Slide 20: Notes

    For personal use only Notes 20

21. Slide 21: David Craig, Chief Financial Officer

    Determined to be better than we‟ve ever been. For personal use only David Craig CHIEF FINANCIAL OFFICER Results Presentation For the full year ended 30 June 2010 11 August 2010 Commonwealth Bank of Australia ACN 123 123 124

22. Slide 22: Notes

    For personal use only Notes 22

23. Slide 23: Strong profit growth

    Strong profit growth For personal use only Jun 09 Jun 10 Pro forma Jun 10 vs $m $m Jun 09 Operating income 18,823 17,729 6% Operating expenses (8,601) (8,222) 5% Operating performance 10,222 9,507 8% Investment experience 236 (263) Large Impairment expense (2,075) (3,392) (39%) Tax and minorities (2

24. Slide 24: Other key information

    Other key information Reported and Pro forma comparatives For personal use only For added transparency and comparability, financial results for the prior year to June 2009 have been prepared on a pro forma Bankwest non-cash items Jun 10 Jun 09 basis, assuming the Bankwest and St Andrews acquisition

25. Slide 25: Statutory profit

    Statutory profit For personal use only Jun 10 Jun 09 $m $m Cash NPAT 6,101 4,308 42% Bankwest non-cash items (216) 614 NZ tax expense (171) - Hedging and AIFRS volatility 17 (245) Other non-cash items (67) 46 Statutory NPAT 5,664 4,723 20% 25

26. Slide 26: Business unit profitability

    Business unit profitability For personal use only Operating Impairment Investment Tax & Cash Cash FY10 Mvt FY10 Mvt $m Performance Expense Experience Minorities NPAT NPAT Cash Operating Jun 10 Jun 09 NPAT Performance RBS 4,258 (736) - (1,061) 2,461 2,107 17% 15% IB&M 1,775 (249) - (344) 1,182 166 La

27. Slide 27: Strong operating performance

    Strong operating performance* For personal use only  Strong volume growth  Double digit growth all businesses  FUA  6%  Banking Income  9%  Income  11%  Income  5%  Costs flat  Costs  3%  Costs 1% +15%  Income  7%  Income  25%  NZ Recession  Margins improved  Costs  3%  Break

28. Slide 28: Australia's leading bank for deposits

    Australia’s leading bank for deposits Total Deposits Balance Growth For personal use only $bn Combined Households and 319 Business Deposits 277 9.9% 175 191 207 168 6.0% 127 145 3.1% 2.4% 2.8% 144 109 64 62 CBA Peer 1 Peer 2 Peer 3 CBA Peer 1 Peer 2 Peer 3 Household Deposits Other Deposits Source: A

29. Slide 29: Strong six-month volume growth

    Strong six-month volume growth For personal use only Home Household Business Business Funds Under Lending Deposits Lending Deposits Administration % % % % % 17.9 SME Lending +7% 9.3 8.3 5.9 5.7 6.5 6.6 5.2 3.3 CBA System -3.7 Growth rates inclusive of Bankwest balances. All figures are six month bal

30. Slide 30: Other Banking Income

    Other Banking Income For personal use only 6 months Jun 10 Dec 09 Jun 09 Jun 10 vs Jun 10 vs $m $m $m Dec 09 Jun 09 Commissions 972 1,034 1,050 (6%) (7%) Lending Fees 716 719 779 - (8%) Trading Income 306 291 293 5% 4% Other 176 157 146 12% 21% Sub-total 2,170 2,201 2,268 (1%) (4%) AIFRS reclassific

31. Slide 31: Good volumes driving income growth

    Good volumes driving income growth Trading Income For personal use only  $m Total Operating Income 6% 442 346 293 291 306 919 233 (219) 72 89 18,823 17,729 2H08 1H09 2H09 1H10 2H10 Funds & Insurance Income $m 1,605 1,468 $m 1,410 1,433 1,286 Net Interest Net Interest Fee Other Funds & Jun 09 OBI Ju

32. Slide 32: Notes

    For personal use only Notes 32

33. Slide 33: Funding costs continue to increase

    Funding costs continue to increase For personal use only Indicative Long Term Wholesale Funding costs bpts 200 Jun 10 174 +1.46% 151 150 x 58% Increased 127 funding Deposit cost 100 83 Funding +1.22% 50 37 Jun 07 +0.89% 17 Wholesale x 42% 13 14 3 8 Funding* 1 year 2 year 3 year 4 year 5 year Jun 07

34. Slide 34: Group NIM

    Group NIM – 12 months For personal use only bpts (1) 4 (2) 5 (10) 9 213 208 205 FY 09 Deposits Assets Mix Sub total Replicating Treasury Other FY 10 Portfolio 34

35. Slide 35: Funding costs higher in 2H10

    Funding costs higher in 2H10 For personal use only NIM recovery as pricing NIM under bpts NIM decline as GFC adjusted for higher pressure from drives term funding funding costs and higher funding costs higher increased risk costs 219 218 216 208 205 198 Jun 06 Jun 07 Jun 08 Jun 09 Dec 09 Jun 10 Grou

36. Slide 36: Notes

    For personal use only Notes 36

37. Slide 37: RBS NIM particularly impacted

    RBS NIM particularly impacted For personal use only bpts (2) 17 (8) (24) 10 251 233 226 219 2H07 2H09 Funding Pricing Mix/Other 1H10 Funding Pricing 2H10 37

38. Slide 38: Notes

    For personal use only Notes 38

39. Slide 39: Higher funding costs impacted 2nd Half

    Higher funding costs impacted 2nd Half For personal use only Operating Income $m -3% (98) (47) (280) 135 13 -3% 9,550 9,273 1H10 3 less Fee Margin Volume Other 2H10 days changes impact impact 39

40. Slide 40: Investment Spend

    Investment Spend For personal use only 12 months to Jun 10 $m Growth Projects 595  Core banking modernisation  Awards Optimisation Productivity Projects 275  Darling Park 1  Collections transformation Regulatory and Risk Projects 166 1,036 40

41. Slide 41: Tight cost control : continued investment

    Tight cost control : continued investment For personal use only Operating Expenses Investment Spend $m $m +1% +1½% 6 1,075 64 (10) 59 1,020 1,036 785 378 410 615 4,268 4,333 527 4,214 697 626 405 258 Jun 09 Defined Other Dec 09 IT Other Jun 10 FY07 FY08 FY09 FY10 Benefits Expense Fund Capitalised Ex

42. Slide 42: Impairment Expense to Gross Loans

    Impairment Expense to Gross Loans 2 CBA Group 1 Consumer Margin (ex Bankwest) Lending For personal use only bpts bpts 85 61 55 40 41 32 32 12 24 20 23 27 15 19 16 28 Jun 07 Dec 07 Jun 08 Dec 08 Jun 09 Dec 09 Jun 10 Stat Jun 07 Dec 07 Jun 08 Dec 08 Jun 09 Dec 09 Jun 10 3 CBA Corporate (ex Bankwest) B

43. Slide 43: Impairment expense trending lower

    Impairment expense trending lower For personal use only 6 months annualised (basis points)* 6 months ($m) 1,951 344 85 1,441 270 1,383 15 113 61 207 313 12 55 5 189 692 9 13 28 7 1,337 441 1,121 58 18 881 47 35 428 17 251 -7 -177 Dec 08 Jun 09 Dec 09 Jun 10 Dec 08 Jun 09 Dec 09 Jun 10 pro forma cash

44. Slide 44: Strong provisioning coverage

    Strong provisioning coverage Total provisions to GLAs * Margin Individual Lending provisions to impaired assets For personal use only 43.1%* 3.01% 2.87% 38.2% 2.88% 2.33% 29.3% 27.2% 1.31% 1.20% 1.10% 1.06% Peer 3 Mar 10 CBA Jun 10 Peer 1 Mar 10 Peer 2 Mar 10 Peer 3 CBA Peer 1 Peer 2 Mar 10 Jun 10 M

45. Slide 45: Strong Balance Sheet Provisioning

    Strong Balance Sheet Provisioning Collective provisions ($m) Consumer arrears For personal use only 30 days + 3.7% CBA Personal Loans 3,452 3,461 3,225 Bankwest CBA Credit Cards 2.7% Granularity 1,351 1,192 CBA Home Loans* 2,474 Economic 1.7% Bankwest Home Loans 1,320 Model and data 0.7% Sep 07 Jun

46. Slide 46: Notes

    For personal use only Notes 46

47. Slide 47: Funding – a long term issue for Australia

    Funding – a long term issue for Australia For personal use only Systemic Issues CBA Position  Credit growth > deposit growth  Like peers, step-change in funding costs  Funding task > domestic capacity  Access to debt markets remains strong  Global funding increasingly expensive  CBA well regar

48. Slide 48: Notes

    For personal use only Notes 48

49. Slide 49: Asset growth largely deposit funded

    Asset growth largely deposit funded Funded Deposits Wholesale Funding Equity Funded For personal use only assets +$3bn assets FY09 FY10 Short term Long term 4 26 (25) 28 174 June 2010 151 127 593 83 $bn 560 37 13 14 17 June 2007 3 8 1yr 2yr 3yr 4yr 5yr Funded assets includes securitisation, bank acc

50. Slide 50: Other key information

    Other key information Term maturity profile* For personal use only $bn Weighted Average Maturity 3.8yrs 31 26 19 20 18 19 FY11 FY12 FY13 FY14 FY15 FY16+ Long Term Wholesale Debt Liquid Assets $bn 89 84 Internal RMBS Other 35 40 Bank, NCD, Bills, RMBS 11 13 Cash, CGS, Semi, Supra 28 22 16 Regulatory

51. Slide 51: Strong funding and capital positions

    Strong funding and capital positions Funding tenor1 Tier 1 capital movement For personal use only Years All movements in basis points 5.0 42 9.52% 4.4 9.10% (37) 9.15% 3.5 3.6 3.7 3.8 Jun 09 Dec 09 Jun 10 Dec 09 Organic Sub total On-market Jun 10 growth share purchase New Issuance Portfolio (DRP) Cu

52. Slide 52: Snapshot – FY10 Results

    Snapshot – FY10 Results* Financial Cash NPAT by division For personal use only Cash earnings ($m) 6,101 +42% RBS ($m) 2,461 17% ROE (Cash) 18.7% +370bpts IB&M ($m) 1,182 612% Cash EPS (cents) 396 +34% BPB ($m) 893 21% DPS (cents) 290 +27% Bankwest ($m) 60 1900% Cost-to-Income 45.7% (70bpts) Wealth M

53. Slide 53: Summary

    Summary For personal use only Cash NPAT  42% Another good financial result ROE 18.7% Strong volume growth CBA > System Higher funding costs 2nd Half NIM  10 bpts Tight cost control and continuing investment ($1bn) Tier 1 Ratio 9.2% Conservative settings $14bn pre-funded Clear, focussed strategy De

54. Slide 54: Notes

    For personal use only Notes 54

55. Slide 55: Supplementary Materials

    Determined to be better than we‟ve ever been. For personal use only Supplementary Materials For the full year ended 30 June 2010 11 August 2010 Commonwealth Bank of Australia ACN 123 123 124

56. Slide 56: Index

    Index For personal use only Overview and Strategy 56 Business Performance 70 Risk Management 89 Capital, Funding and Liquidity 101 Economic Overview 113 56

57. Slide 57: CBA Overview

    CBA Overview For personal use only  Largest Australian Bank by market cap. and 2nd largest listed company  AA Credit Rating  Tier 1 Capital Ratio of 9.2%; or 12.8% on UK FSA basis  Total Assets of $646bn  13 million customers; large distribution footprint  #1 in household deposits – over 31% s

58. Slide 58: A clear, focussed strategy

    A clear, focussed strategy For personal use only Customer Business Satisfaction Banking Australia’s finest financial services organisation Trust and Technology and Team Spirit Operational Excellence Profitable Growth 58

59. Slide 59: Disciplined strategy execution delivering results

    Disciplined strategy execution delivering results Technology and For personal use only Customer Business Trust and Profitable Operational Satisfaction Banking Team Spirit Growth Excellence Core Banking – Over 1,000 new front Outstanding Private targeting quantum Engagement now top line service Banki

60. Slide 60: Business Customer Satisfaction

    Business Customer Satisfaction For personal use only % of business % point change in each bank’s business customers customers who who are satisfied compared to: are satisfied 1 month ago 3 months ago 6 months ago 12 months ago June 2010 (May 10) (Mar 10) (Dec 09) (Jun 09) CBA 70.8 2.0 4.9 5.8 0.9 AN

61. Slide 61: Institutional Banking

    Institutional Banking Understanding Customers’ Business For personal use only Loyalty to Relationship Lower the Score the Higher the Satisfaction Lower the Score the Higher the Satisfaction More Less More Less Satisfied Satisfied Satisfied Satisfied Source : East & Partners' Institutional Banking Ma

62. Slide 62: Core Banking Modernisation

    Core Banking Modernisation For personal use only  Quantum improvements in customer service and efficiency Timetable  Term Deposits Completed  All Retail Deposits end-2010  On track and delivering  Lending Products mid-2012  Next Phase - ASB, BWA etc 2012-13  Early phases encouraging  All cus

63. Slide 63: Technology and Operational Excellence

    Technology and Operational Excellence NetBank For personal use only  Market leading online banking presence: Average Monthly Logons ► CommSec, NetBank, FirstChoice, 35.6m CommBiz, CommSee 29.3m 22.9m  Significant improvement in system reliability 18.5m  Back-office processing efficiencies FY07 FY

64. Slide 64: Online, real time secure business and corporate banking

    Online, real time secure business and corporate banking... CommBiz a more responsive and simplified approach to credit For personal use only New First Rate Saver attracts $1.3bn - extending to include FirstChoice term deposits Netbank Finest Online has delivered an independently reviewed, market lea

65. Slide 65: Market Shares and Balance Growth

    Market Shares and Balance Growth Market Shares For personal use only Home lending Business lending Household deposits Business deposits 26.2% 24.5% 31.3% 19.5% 19.2% 22.9% 22.5% 17.3% 20.7% 15.4% 23.6% 16.2% 12.9% 13.1% 14.0% 13.4% CBA / Peer 1 Peer 2 Peer 3 CBA / Peer 1 Peer 2 Peer 3 CBA / Peer 1 P

66. Slide 66: Home Loan Growth by Channel

    Home Loan Growth by Channel For personal use only 12 months ended 6 months ended 34% 22% 18% 16% 11% 11% 8% 8% 6% 5% 4.6% 4.4% 3.3% 4.3% 4.2% Jun 09 Jun10 Jun 10 Broker Branch Premium Total CBA Total Market Note : Width of channel columns reflects relative proportion of total CBA balances. Total CBA

67. Slide 67: Strong position in Small Business

    Strong position in Small Business One of the Group‟s 5 key strategic priorities For personal use only   Significant investment and development: ► 23 new Business Banking Centres ► 154 local business bankers in branches ► 24/7 access to business bankers ► Significant online and systems enhancements

68. Slide 68: Sustainability scorecard

    Sustainability scorecard Metric 2010 2009 2008 2007 For personal use only Customers Customer satisfaction Roy Morgan Research MFI retail customer 75.6 73.0 70.1 70.5 satisfaction % & rank (6-month to June rolling avg) 3rd 4th equal 4th 5th Customer satisfaction TNS Business Finance Monitor customer

69. Slide 69: Sustainability progress

    Sustainability progress People For personal use only  Established new Diversity Strategy including a goal to increase representation of women in leadership to 35% by December 2014.  Significant progress on the Indigenous Employment Strategy, with 130 new Indigenous staff employed. Customers  Prog

70. Slide 70: Index

    Index For personal use only Overview and Strategy 56 Business Performance 70 Risk Management 89 Capital, Funding and Liquidity 101 Economic Overview 113 70

71. Slide 71: Group NIM

    Group NIM – 6 months For personal use only bpts Product Margins --0 - (6) (4) 218 208 Dec 09 Deposits Assets Replicating Balance Sheet Jun 10 & Mix portfolio positioning 71

72. Slide 72: RBS

    RBS – 6 month periods Jun 10 vs For personal use only Jun 10 Dec 09 Jun 09 Jun 09 Net interest income Home loans 1,122 1,091 856 31% Consumer finance 594 549 511 16% Retail deposits 1,092 1,248 1,146 (5%) 2,808 2,888 2,513 12% Other banking income Home loans 93 99 85 9% Consumer finance 205 212 265

73. Slide 73: Retail Banking Services

    Retail Banking Services For personal use only  Customer satisfaction gains Jun 10 Jun 10 vs $m Jun 09 supporting strong business performance Home loans 2,405 38% Consumer finance 1,560 8%  Solid volume growth in Home Loans and Deposits Retail deposits 2,797 (9%) Distribution 290 29%  Higher fundi

74. Slide 74: IB&M

    IB&M – 6 month periods Jun 10 vs For personal use only Jun 10 Dec 09 Jun 09 Jun 09 Net interest income Institutional Banking 558 569 571 (2%) Global Markets 93 114 192 (52%) 651 683 763 (15%) Other banking income Institutional Banking 388 330 218 78% Markets 173 342 259 (33%) 561 672 477 18% Total b

75. Slide 75: Institutional Banking and Markets

    Institutional Banking and Markets For personal use only  Strong NPAT result with an increase of Jun 10 Jun 10 vs 7% in operating income and 85% $m Jun 09 decrease in loan impairment Institutional Banking 1,845 16%  Solid revenue growth: Markets 722 (10%) ► Improved margins and fee income, Total ba

76. Slide 76: BPB

    BPB – 6 month periods Jun 10 vs For personal use only Jun 10 Dec 09 Jun 09 Jun 09 Net interest income Corporate Financial Services 269 279 272 (1%) Regional & Agribusiness 116 120 111 5% Local Business Banking 242 215 197 23% Private Bank 61 62 55 11% Equities Margin Lending 108 108 101 7% Other 25

77. Slide 77: Business and Private Banking

    Business and Private Banking For personal use only Jun 10 Jun 10 vs  Double digit revenue growth in all $m Jun 09 segments Corporate Financial Services 1,034 11%  Operating performance  19%: Regional and Agribusiness 374 11% Local Business Banking 685 10% ► Good volume growth in Private Bank 238

78. Slide 78: New Zealand

    New Zealand – 6 month periods Jun 10 vs For personal use only NZ$M Jun 10 Dec 09 Jun 09 Jun 09 Net interest income ASB 468 440 451 4% Other (5) (4) 5 Large Total NII 463 436 456 2% Other banking income ASB 135 207 254 (47%) Other (16) (15) - - Total OBI 119 192 254 (53%) Total banking income ASB 603

79. Slide 79: New Zealand

    New Zealand For personal use only  ASB NZD Cash NPAT  13% Jun 10 Jun 10 vs NZ$m Jun 09 due to: ASB 1,311 (11%) ► Break fees $100m Sovereign 251 (7%) ► Trading income down Other (28) (Large) ► Recession in NZ Total operating income 1,534 (12%) Operating expenses (829) (5%)  Sovereign NZD cash NPAT

80. Slide 80: WM

    WM – 6 month periods Jun 10 vs Jun 10 Dec 09 Jun 09 For personal use only Jun 09 Net operating income CFS GAM 333 330 271 23% Colonial First State 333 318 263 27% CommInsure 337 364 329 2% Other (2) (1) 1 Large 1,001 1,011 864 16% Operating expenses CFS GAM (188) (170) (173) 9% Colonial First State

81. Slide 81: Wealth Management

    Wealth Management  CFS GAM: For personal use only Jun 10 Jun 10 vs ► FUM 4% to $144bn $m Jun 09 ► Strong investment performance - 76% of funds outperforming over 5 years CFS GAM 663 4%  Colonial First State: Colonial First State 651 17% ► Retail FUA 10% to $74bn CommInsure 701 (3%) ► FirstChoice

82. Slide 82: Wealth Management

    Wealth Management Funds under Administration FirstChoice net flows solid For personal use only +6% Quarterly Net Flows $1,069m $15bn $186bn ($5bn) ($1bn) $180bn $890m $935m $872m $169bn $2bn $702m Jun 09 Net Inv Dec 09 Net Inv Jun 10 Jun 09 Sep 09 Dec 09 Mar 10 Jun 10 flows Returns flows Returns Str

83. Slide 83: Global Asset Management

    Global Asset Management For personal use only Globally: $144bn FUM*, 925 people North America Japan $1.6bn FUM $4.0bn FUM 3 People Asia ex China & Japan Middle East $16.0bn FUM $6.3bn FUM 111 People UK & Europe Australia & New Zealand $19.6bn FUM $96.7bn FUM 174 People 637 People 33% FUM raised from

84. Slide 84: Bankwest

    Bankwest – 6 month periods For personal use only Jun 10 vs Jun 10 Dec 09 Jun 09 Jun 09 Net interest income 760 727 591 29% Other banking income 112 121 168 (33%) Total banking income 872 848 759 15% Operating expenses (437) (443) (483) (10%) Impairment expense (441) (313) (113) Large Net profit befo

85. Slide 85: Bankwest

    Bankwest For personal use only  Income growth underpinned by Jun 10 Jun 10 vs strong retail lending volumes and $m Jun 09 margin management Net interest income 1,487 33%  Disciplined cost management – Other banking income 233 (7%) expenses down 3% Total banking income 1,720 25%  Significant cost-

86. Slide 86: Bankwest integration

    Bankwest integration For personal use only Integration costs - composition $286m $16m Restructuring Property $24m $101m IT $145m Operations / other Annual expense synergies – 2012 composition $240m pa IT $18m East Coast Operating Store Rollout $88m $48m efficiencies, other (cessation) $26m $60m Prop

87. Slide 87: Bankwest High level timeline

    Bankwest High level timeline  Acquisition of Bankwest and St Andrew‟s announced Oct 08 For personal use only By  Steering committee and governance structure established  Due diligence commenced, regulatory approvals obtained Transaction December completion 2008  Jon Sutton appointed BWA MD, new

88. Slide 88: Asia Targeted growth strategy

    Asia Targeted growth strategy 2010 Cash For personal use only China Branches Staff NPAT $m* Qilu Bank (20%) 74 1,822 Bank of Hangzhou (20%) 93 3,202 Shanghai Branch 13 143 Beijing Representative office 5 BoCommLife JV 115 First State Cinda Fund Management Company 72 Japan Branch India Mumbai Branch

89. Slide 89: Index

    Index For personal use only Overview and Strategy 56 Business Performance 70 Risk Management 89 Capital, Funding and Liquidity 101 Economic Overview 113 89

90. Slide 90: Exposure mix

    Exposure mix For personal use only Regulatory exposure mix 1 CBA Peer 1 Peer 2 Peer 3 Residential Mortgages 60% 41% 39% 53% Corporate, SME & Spec Lending 27% 36% 42% 36% Bank 5% 6% 12% 4% Sovereign 5% 7% 4% 3% Qualifying Revolving 2% 4% 2% 3% Other Retail 1% 6% 1% 1% Total Advanced 2 100% 100% 100%

91. Slide 91: Credit Quality

    Credit Quality First Home Buyers ASB arrears For personal use only 30 days+ arrears rate 90 days + (3 months on book) 2.5% 1.00% 2.0% 0.80% 1.5% 0.60% 0.40% 1.0% 0.20% 0.5% 0.00% 0.0% Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 FHB Portfol

92. Slide 92: Home Lending

    Home Lending  70% of customers paying in advance Portfolio LVR Distribution For personal use only (average 9 payments) % of Portfolio by LVR band  Portfolio average LVR: 80 70 ► 52% based on original values 60 50 LVR at origination ► 43% based on current values 40 LVR at current market value* 30 

93. Slide 93: Home Loan stress test

    Home Loan stress test High stress scenario Expected Loss outcomes For personal use only Expected loss $m PD stress factor Unemployment rise to: 10% Property value x1 x2 x4 x6 Interest rates rise to: 14% No decrease 11 16 24 32 10% decrease 33 50 77 102 Property values drop: 30% 20% decrease 100 154

94. Slide 94: Sector exposures

    Sector exposures For personal use only Jun 10 Jun 09 Jun 10 Jun 09 Consumer 54.8% 51.5% Agriculture 2.4% 2.4% Mining 0.7% 1.0% Manufacturing 2.3% 2.7% Energy 1.1% 1.5% Construction 1.0% 1.1% Retail & Wholesale 2.4% 2.6% Transport 1.4% 1.5% Banks 10.2% 10.4% Finance – other 4.1% 5.0% Business Service

95. Slide 95: Sector exposures

    Sector exposures 1 2 Sector Exposures – Jun 10 Top 20 Commercial Exposures For personal use only BBB+ AAA to A+ to $bn to Other Total BB- Note 1 AA- A- BBB- A- BBB+ Banks 37.0 27.1 2.2 0.4 66.7 AA+ BBB+ BB Finance Other 10.0 8.7 3.8 5.6 28.1 BBB+ A- Property 0.3 4.8 6.8 36.4 48.3 BBB A- Sovereign 29

96. Slide 96: Commercial Property market

    Commercial Property market CBD Office Supply Pipeline* CBD Vacancy Rates For personal use only Current Previous Peak 40% % of Total Stock Market (Q2 2010) (Q4 2009) 1990s 35% Sydney 7.9% 8.2% 22.4% Perth 8.6% 7.7% 31.8% 30% Melbourne 6.3% 6.4% 25.8% 25% Brisbane 10.6% 10.2% 14.3% 20% Adelaide 7.8% 8

97. Slide 97: Historical loss rates in the last recession

    Historical loss rates in the last recession 4 For personal use only Institutional Banking 3 Small Business Loss Rate (%) Business Banking 2 Personal Loans Credit cards 1 Home Loans 0 1982 1984 1986 1988 1990 1992 1994 97

98. Slide 98: Risk Weighted Assets – Jun-10 Half

    Risk Weighted Assets – Jun-10 Half RWA Movement (%) For personal use only ■ Credit RWAs relatively flat as a result of: Total Tier 1 ratio  Growth in non-retail RWAs driven by update to impact (bpt) credit risk factors Credit Risk (1)% 5 Traded Market Risk (13)% 2  Offset by review and disaggregat

99. Slide 99: Bankwest Legacy Book Review

    Bankwest Legacy Book Review For personal use only  A comprehensive, in-depth review: ► ~1,100 individual files (66% of book now reviewed) ► Results extrapolated to remaining, lower risk segment ► Independent insolvency firms engaged ► Specialist management team reviews across key industry sectors 

100. Slide 100: Bankwest Portfolio Overview

     Bankwest Portfolio Overview Total Exposures by Sector Troublesome Business Exposures by Sector For personal use only Jun 10 Jun 09 5% 5% Agriculture 2% Consumer 60.0% 57.9% 27% 2% Construction 6% Energy Agriculture 3.1% 3.1% Finance - Bank Mining 0.3% 0.3% Finance - Other Manufacturing Manufacturing

101. Slide 101: Index

     Index For personal use only Overview and Strategy 56 Business Performance 70 Risk Management 89 Capital, Funding and Liquidity 101 Economic Overview 113 101

102. Slide 102: UK Comparison

     UK Comparison For personal use only The following table estimates the impact on CBA Group capital, as at June 2010, of the differences between the APRA Basel II guidelines and those of the UK regulator, Financial Services Authority (FSA) Net Tier 1 Total Fundamental Capital Capital Capital1 June 201

103. Slide 103: UK Comparison

     UK Comparison Key differences between the APRA and FSA method of calculating regulatory capital. For personal use only  Impact on Bank’s Item Items impacting published total capital adequacy ratio ratio if FSA rules applied Under APRA rules, the minimum Loss Given Default (LGD) for residential real

104. Slide 104: European comparison

     European The Group‟s Tier 1 Capital Ratio compares favourably to comparison international peers For personal use only Basel II Tier 1 Capital 16.4% 16.3% 16% E 14% 13.2% Europe 12.8% 12.8% 11.5% 11.3% 11.2% 10.7% 10.6% P Average 12% Tier 1 : 11.4% 10.3% 10.1% 10.0% 10% 9.4% 9.2% 8.7% Europe Average

105. Slide 105: Constructive dialogue on key reforms

     Constructive dialogue on key reforms Capital For personal use only  Basel III  Tier 1 capital – qualifying assets, hybrids  Deductions methodology – Tier 1 impact  Leverage ratio  Rating agency models changing  APRA Review of Conglomerates  APRA Review of General and Life insurers Liquidity 

106. Slide 106: Regulatory Change: Liquidity, funding, capital

     Regulatory Change: Liquidity, funding, capital For personal use only Impact of Initial Basel 3 proposal (Dec 2009) Subsequent Basel 3 proposal (July 2010) change on CBA Liquidity Coverage Ratio (LCR)  Definition of liquid assets excludes most existing liquid  Definition of liquid assets widened to

107. Slide 107: Interest Rate Risk in Banking Book

     Interest Capital Assigned to Interest Rate Risk in Rate Risk Banking Book - APS117 For personal use only 51 bpts 0 bpts 26 bpts 54 bpts 33 bpts $1,286m $1,328m Optionality -$70m $716m Basis Risk (ie zero) $822m Optionality Repricing and Basis Risk Yield Curve Risk Repricing and Yield Curve Risk Embe

108. Slide 108: Funding

     Funding Wholesale Funding by Product 58% Deposit Funded For personal use only $bn 2% 1% Structured MTN 16% 5% 3% 5% Vanilla MTN 5% 4% Commercial Paper Structured Finance 5% 36% Debt Capital 58% CDs 24% 18% Securitisation Bank Acceptance 4% 3% Deposits from other financial institutions Customer Depos

109. Slide 109: Replicating Portfolio

     Replicating Portfolio For personal use only Actual and Forecast Scenario* 8% Forecast* 8% 7% 7% 6% Replicating Portfolio Yield 6% 5% 5% 4% 4% Official Cash Rate 3% 3% 2% 2% 1% 1% 2001 Current 2012 * Indicative forecast of the replicating portfolio in relation to hypothetical movements in the officia

110. Slide 110: UK and US balance sheet comparison

     UK and US balance sheet comparison For personal use only United Kingdom USA Assets Liab + Equity Assets Liab + Equity Cash 6% 6% Capital Cash 7% Capital 9% Home Loans 18% Home Loans 15% 48% Deposits 47% Deposits Other Lending 37% Other Lending 46% 12% Long Term Other Fair 16% Long Term 16% Other Fai

111. Slide 111: Australian Banks – safe assets, secure funding

     Australian Banks – safe assets, secure funding For personal use only Commonwealth Bank Balance sheet comparisons Assets – CBA’s assets are safer because: Assets Liab + Equity  52% of balance sheet is home loans, which are stable/long Cash 3% term 6% Capital  Trading securities and other fair value

112. Slide 112: Regulatory Expected Loss

     Regulatory Expected Loss For personal use only Jun 09 Dec 09 Jun 10 $m $m $m CBA (ex Bankwest) Regulatory Expected Loss (EL) – before tax 3,960 4,276 4,332 Eligible Provision 1 Collective provision 2 2,247 2,339 2,036 Individually assessed provisions 2 1,109 1,204 1,172 Other provisions 30 30 25 Sub

113. Slide 113: Index

     Index For personal use only Overview and Strategy 56 Business Performance 70 Risk Management 89 Capital, Funding and Liquidity 101 Economic Overview 113 113

114. Slide 114: Economic Summary

     Economic CBA Economists summary of key indicators Summary For personal use only As at June 2007 2008 2009 2010 2011 (f) 2012 (f) Credit Growth % – Total 15.5 12.0 3.3 2.8 7½-9½ 7-9 Credit Growth % – Housing 12.9 9.8 7.0 8.2 8-10 7-9 Credit Growth % – Business 19.2 17.1 0.5 -5.0 7-9 8-10 Credit Growt

115. Slide 115: Global Backdrop

     Global Backdrop For personal use only Growth outperformance Stronger labour market Real GDP Growth Unemployment Rate Year-ended 2009 Sources : ABS; CEIC; Thomson Reuters Sources : ABS; Thomson Reuters 115

116. Slide 116: Global Backdrop

     Global Backdrop Recovery with downside risks Recovery with an Asian Skew For personal use only % WORLD GROWTH % WORLD GROWTH IN 2010-2011 (annual % change) (% deviation from normal*) 8 8 Source: IMF World *1998-07 average Long-run Advanced economies 6 average 6 Euro area United States 4 4 Asian NICs

117. Slide 117: Domestic Drivers

     Domestic Drivers A Capex recovery & a large funding need Mining capex boom For personal use only THE CONSTRUCTION PIPELINE ADVANCED MINING PROJECTS $bn $bn $bn $bn (real value of work yet to be done) 80 80 120 120 Source: ABARE Engineering construction 60 60 90 90 40 40 60 60 Public Non- Residential

118. Slide 118: Domestic Drivers

     Domestic Drivers Residential land supply Housing demand and supply For personal use only RESIDENTIAL LAND SUPPLY HOUSING DEMAND & SUPPLY '000 % '000 '000 60 30 200 200 Number of Demand residential lots HI (lhs) 2010 45 20 30 10 150 150 15 0 Supply House prices (rhs) Source: UDIA/CBA 0 -10 100 100 20

119. Slide 119: Many factors supporting house prices

     Many factors supporting house prices Population drivers Migration program For personal use only POPULATION DRIVERS '000 '000 MIGRATION PROGRAM '000 '000 210 210 450 450 Net Total migration 140 140 300 300 70 70 150 150 Skilled Natural 457 increase visa 0 0 0 0 1990/91 1995/96 2000/01 2005/06 2010/11

120. Slide 120: Many factors supporting house prices

     Many factors supporting house prices Australians more cautious in spending Dwelling prices For personal use only DWELLING PRICES CONSUMER SPENDING (ratio to household income) % (% of GDP) % 75 75 6 6 United 70 States 70 Capital cities 65 65 4 4 Australia- 60 60 wide 2 2 55 55 Australia *Source: RP D

121. Slide 121: Domestic Drivers

     Domestic Drivers Housing equity withdrawal Aust H/H Assets by Risk For personal use only HOUSING EQUITY WITHDRAWAL AUST H/H ASSETS BY RISK $bn $bn % % (% of total) 2400 2400 75 75 Cumulative increase in dwelling wealth Fairly safe 1600 Cumulative 1600 50 50 rise in Cumulative housing debt housing eq

122. Slide 122: Note

     Note For personal use only Sources for Customer Satisfaction and related results outlined in this pack 1 Retail MFI Customer Satisfaction – Roy Morgan Research. Australian Population 14+, % “Very Satisfied” or “Fairly Satisfied” with relationship with that MFI institution. 6 month rolling average. 2

123. Slide 123: Results Presentation for the full year ended 30 June 2010

     Determined to be better than we‟ve ever been. For personal use only Ralph Norris CHIEF EXECUTIVE OFFICER David Craig CHIEF FINANCIAL OFFICER Results Presentation For the full year ended 30 June 2010 11 August 2010 Commonwealth Bank of Australia ACN 123 123 124

Commonwealth Bank of Australia — FY2010 Earnings Presentation on 6ix