Commonwealth Bank Of Australia · ASX:CBA
Commonwealth Bank Of Australia — H1 2006 Earnings Presentation
131 slides from Commonwealth Bank Of Australia's earnings presentation, Feb 15, 2006
Slide 1: Presentation of Half Year Results for 31 December 2005
Presentation of Half Year Results for 31 December 2005 Ralph Norris Michael Cameron Chief Executive Officer Chief Financial Officer 15 February 2006
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, 15 February 2006. It is information given in summary form and does not purport to be complete. It is not intended to be relied upon as advice
Slide 3: Agenda
Agenda Half Year Results – Ralph Norris – Highlights – Outlook Half Year Results – Michael Cameron Questions 3
Slide 4: Other Key Information Notes
Other Key Information Notes Which new Bank In launching Which new Bank (WnB) the Bank said that, subject to market conditions continuing over the three years of the program, it would target: Cash EPS growth exceeding 10% CAGR 4-6% CAGR productivity improvements Profitable market share growth a
Slide 5: Highlights
Highlights Dec 05 vs Dec 05 vs Dec 05 Jun 05 Dec 04 Cash NPAT $2,061m 17% 19% Cash EPS (excl HK) 149.5cps 13% 13% Dividend 94c - 11% Which new Bank benefits $506m 20% 68% 5
Slide 6: Notes
Notes ow Which Bank ConmonwealthBank 7,
Slide 7: Good half year result
Good half year result 2500 Scorecard Dec 05 2000 145 $2,061m (25) 86 $1,916 Volume Growth 2 14 80 1500 $1,759m Interest Margin Non Int.Income 1000 Expenses 500 Provisions Tax 0 Cash EPS Cash Jun 05 Banking Funds Banking Funds Mgt Insurance Insurance S/H S/h WnB WnB Cash Profit Gain on
Slide 8: Other Key Information Notes
Other Key Information Notes The payout ratio (cash basis) is calculated according to the following criteria: Payout ratio = DPS (in $) x number of shares (end of period) Cash NPAT 94c x 1,289 i.e. = 58.8% 2,061 * Payout ratio excluding HK sale = 63.2% 8
Slide 9: Highlights - dividend
Highlights - dividend Dividend (cents per share) 200 112 104 160 82 85 120 Cents 80 94 85 79 68 69 40 0 2002 2003 2004 2005 2006 First Half Second Half 9
Slide 10: Other Key Information Notes
Other Key Information Notes Dec 05 Jun 05 Dec 04 Jun 04 Jun 03 Banking Home loans 18.9% 19.0% 18.9% 18.9% 19.2% Credit cards 21.8% 22.8% 22.8% 22.7% 22.8% Retail deposits 22.9% 23.0% 23.6% 23.6% 24.2% Personal lending (1) 16.0% 16.7% 16.7% 15.0% N/A (2) Business lending 13.0% 12.8% 13.1% 13.8% N/A T
Slide 11: Highlights - market position
Highlights - market position Dec 05 Jun 05 Home Loans 18.9% 19.0% NZ Lending 23.2% 23.0% Credit Cards 21.8% 22.8% (1) (1) Funds Mgt. – Aust. Retail 14.7% 14.6% Transaction Services (corporate) 22.1% 22.1% Transaction Services (commercial) 25.1% 24.8% Personal Lending 16.0% 16.7% NZ Dep
Slide 12: Notes
Notes ow Which Bank ConmonwealthBank 7,
Slide 13: Which new Bank
Which new Bank Financial targets are being exceeded CommSee deployment and technical training complete CommWay delivering faster processes Customer satisfaction not yet acceptable 13
Slide 14: Notes
Notes ow Which Bank ConmonwealthBank 7,
Slide 15: Which new Bank
Which new Bank Strength of Relationship 6.1 6.1 5.8 5.8 5.8 5.9 5.9 5.8 5.7 5.7 5.4 Jun 03 Sep 03 Dec 03 Mar 04 Jun 04 Sep 04 Dec 04 Mar 05 Jun 05 Sep 05 Dec 05 Source: Research International 15
Slide 16: Notes
Notes ow Which Bank ConmonwealthBank 7,
Slide 17: CEO Priorities
CEO Priorities Customer Service Business Banking Technology Trust & Team Spirit Superior operating and financial results 17
Slide 18: Notes
Notes ow Which Bank ConmonwealthBank 7,
Slide 19: 2006 outlook
2006 outlook Global Economy – Economic growth expected to remain solid – Oil prices and rate of growth in China will influence domestic economy Domestic Economy – Business credit growth strong – Consumer credit growth moderated, particularly housing – Credit quality, employment and business conf
Slide 20: Notes
Notes ow Which Bank ConmonwealthBank 7,
Slide 21: Michael Cameron Half Year Results
Michael Cameron Half Year Results 21
Slide 22: Notes
Notes ow Which Bank ConmonwealthBank 7,
Slide 23: Highlights - NPAT growth
Highlights - NPAT growth 6 months Dec 05 Jun 05 Dec 04 Dec 05 vs Dec 05 vs $M $M Jun 05 Dec 04 NPAT (statutory) 1,999 1,688 1,712 18% 17% Add back AIFRS non cash items 62 71 21 (13%) Large NPAT (cash) 2,061 1,759 1,733 17% 19% Less profit on sale (145) 0 0 - - Hong Kong business NPAT (cash excluding
Slide 24: Other Key Information Notes
Other Key Information Notes Contributions to profit Dec 05 Jun 05 Dec 04 $M $M $M Banking 1,589 1,509 1,404 Funds Management 183 181 170 Insurance 103 89 67 NPAT (underlying) 1,875 1,779 1,641 Shareholder invest. Returns (after tax) 41 66 111 Initiatives incl. WnB (after tax) 0 (86) (19) Profit on s
Slide 25: Highlights - underlying profit by business
Highlights - underlying profit by business Dec 05 Jun 05 Dec 04 $M $M $M Banking 1,589 1,509 1,404 Funds Management 183 181 170 Insurance 103 89 67 Total AIFRS 1,875 1,779 1,641 AIFRS Impact 45 23 23 Underlying AGAAP equivalent (1) 1,920 1,802 1,664 (1) 7% growth Dec 05 vs June 05 15% growth Dec 05
Slide 26: Other Key Information Notes
Other Key Information Notes Balance of capitalised software costs $million Dec 05 Jun 05 Dec 04 Jun 04 Dec 03 Capitalised software 188 182 163 107 73 Expense ratios Dec 05 Jun 05 Dec 04 Jun 04 Dec 03 Banking Expense to income 48.1 50.7 50.5 56.4 62.1 Underlying Expense to Income 48.1 48.6 50.2 50.8
Slide 27: Highlights - productivity
Highlights - productivity Expense ratios (1) WnB Target 54.7% CAGR = 5.7% 47.2%(2) (3) 50.4% Banking 48% CAGR = 8.4% (4) Insurance 40.5% 42% 0.87% Funds CAGR = 6.8% (5) 0.74% Mgt 0.73%(2) Jun 03 Dec 05 (1) On a cash basis (3) Expense to income (5) Expense to average funds under administration (2) AG
Slide 28: Other Key Information Notes
Other Key Information Notes Dec 05 Jun 05 Dec 04 Comparable expenses $M $M $M Staff expenses 1,386 1,339 1,334 Occupancy and equipment 310 308 305 IT services 502 476 480 Postage and stationery 109 108 112 Fees and commissions 314 295 319 Advertising, marketing etc. 146 152 136 Other 200 200 155 Tot
Slide 29: Operating expenses by half year
Operating expenses by half year 3500 21 20 15 Compliance3000 Projects $M 2500 2000 Other 1500 2,947 2,826 2,857 $M 1000 +1% +3% 500 0 Dec 04 Jun 05 Dec 05 29
Slide 30: Other Key Information Notes
Other Key Information Notes Which New Bank estimates 2006 Benefits 2004 2005 Est. Targets (1) 200 620 900 Actual 237 724 (1) These were the original full year targets set out in the September 2003 presentation Investment 2004 2005 2006 Total spend Act. Act. Est. Original 660 510 310 1,480 Revised 63
Slide 31: Which new Bank – Benefits
Which new Bank – Benefits 550 2004/05 $724m (target was $620m) 506 423 215 2003/04 156 301 $237m 117 174 65 267 291 63 184 27 109 36 0 Dec 03 Jun 04 Dec 04 Jun 05 Dec 05 Cost Saving Revenue Benefit 31
Slide 32: Other Key Information Notes
Other Key Information Notes P&L Impact Dec 05 Jun 05 Dec 04 Investment spend for the period (gross) 148 346 255 Less provision utilised (28) (40) (57) Less investment capitalised (35) (84) (70) Net WnB expense 85 222 128 Less normal project spend (85) (100) (100) Incremental WnB expense before tax 0
Slide 33: Which new Bank - Expenditure
Which new Bank - Expenditure Dec 05 P&L Impact $M Investment spend for the period (gross) 148 Less provision utilised (28) Less investment capitalised (35) Net WnB expense 85 Less normal project spend (85) Incremental WnB expense 0 33
Slide 34: Notes
Notes ow Which Bank ConmonwealthBank 7,
Slide 35: Segment Results : Banking
Segment Results : Banking new! Which Bank ConmonwealthBank 7,
Slide 36: Other Key Information Notes
Other Key Information Notes Dec 05 Jun 05 Dec 04 Av interest earning assets ($m) (1) 267,169 250,357 239,150 Net int income (excl securitisation 3,247 3,028 2,928 ($m) Net interest Margin (AIFRS) (bp) 2.41% 2.44% 2.43% % of operating Income Dec 05 Jun 05 Dec 04 Net interest income 57% 55% 56% Other
Slide 37: Banking - underlying profit
Banking - underlying profit 13% underlying profit Underlying profit up 5% since June 05 growth on pcp 216 (46) (59) 1,589 (12) (19) Margin maintained in 1,404 1,509 competitive market Strong growth in net interest income Dec Jun NII Other Expenses BDD Tax & Dec Cost to income ratio 04 05 inc
Slide 38: Other Key Information Notes
Other Key Information Notes Reconciliation of Net Dec 05 Jun 05 Dec 04 Dec 05 vs Dec 05 vs Interest Margin Jun 05 Dec 04 Net Interest Income on 3,241 3,033 2,933 7% 11% AGAAP equivalent basis(1) Average interest earnings 267,169 250,357 239,150 7% 12% assets (excl securitisation) Net interest pro-fo
Slide 39: Banking – margins maintained
Banking – margins maintained Half year average NIM (bp) Half year average NIM (bp) 246bp 243bp 244bp 244bp (1bp) 1bp (3bp) 241bp 241bp Jun 04 Dec 04 Jun 05 Dec 05 Jun 05 Funding Asset Other (1) Dec 05 AGAAP AIFRS AIFRS AIFRS AIFRS Mix Mix AIFRS (1) includes negative 2bps impact from increase in liqu
Slide 40: Notes
Notes Product Category Inclusions Home Loans Investment/owner occupied home loans and secured lines of credit Retail Deposits Retail savings accounts, transaction accounts, cash management accounts and other personal investment accounts Personal Loans Personal loans and credit cards Corporate and Bu
Slide 41: Banking - Revenue by product
Banking - Revenue by product Dec 05 vs Dec 05 vs Dec 05 Jun 05 Dec 04 Home Loans 701 14% 21% Retail Deposits 1,325 4% 6% Personal Loans 537 5% 14% Corporate & Business Transactions 486 4% 1% Financial Markets 454 15% 8% Lending & Finance 561 (10%) (3%) Other 109 (38%) (10%) Offshore Banking 527 13%
Slide 42: Other Key Information Notes
Other Key Information Notes AIFRS Impact of hedging derivatives Dec 05 $M Net Interest Income 55 Other banking income (69) Net Impact (14) 42
Slide 43: Other Banking income – key components
Other Banking income – key components Dec 05 Jun 05 Dec 04 Dec 05 vs Dec 05 vs $M $M $M Jun 05 Dec 04 Commissions & Fees 815 768 777 6% 5% Lending Fees 389 384 349 1% 11% Trading Income 244 221 219 10% 11% Other 37 89 38 (58%) (3%) Total AGAAP 1,485 1,462 1,383 2% 7% Hedging derivatives (69) - - - -
Slide 44: Other Key Information Notes
Other Key Information Notes Dec 05 Jun 05 Dec 04 Dec 05 v Dec 05 v Jun 05 Dec 04 Domestic growth profile ($bn) Loan Funded 21.3 20.9 22.5 2% (5%) Reduction 15.2 12.6 13.0 21% 17% Net Growth 6.1 8.3 9.5 Total home lending Australian Home Lending assets ($bn) 136.0 129.9 121.7 5% 12% Securitisation ($
Slide 45: Banking - Home Lending (domestic)
Banking - Home Lending (domestic) Spot Balances (including securitisation) $136bn Orderly market slow down $122bn $130bn CBA balance growth: +12% vs Dec 04 +5% vs Jun 05 Dec 04 Jun 05 Dec 05 Market Share Market share steady at 18.9% 20% 19.1% 19.0% 18.9% 19.0% Margin remains stable 19% 1
Slide 46: Notes
Notes ow Which Bank ConmonwealthBank 7,
Slide 47: Home Loan Growth by Channel
20% Home 18% Loan Growth by Channel (Balances sourced from each channel as a % of total CBA housing growth) 16% 14% 30% 12% 27.9% 16.3% 14.0% 10% 7.9% 8.2% 7.9% 8% 7.1% 6.7% 6.2% 6% 5.7% 4.7% 4% 2.8% 2% 1.5% 1.0% 0.8% 0% Dec 04 Jun 05 Dec 05 Brokers Branch Premium Total CBA Total Market 47
Slide 48: Other Key Information Notes
Other Key Information Notes Household Deposits (APRA) - Balance Growth Dec 05 Jun 05 Dec 04 Dec 05 v Dec 05 v ($bn) ($bn) ($bn) Jun 05 Dec 04 CBA 80.5 76.5 75.6 5.1% 6.5% WBC 38.7 36.6 35.5 5.8% 8.9% ANZ 28.7 26.8 25.8 7.1% 11.0% NAB 36.7 34.1 33.3 7.4% 10.2% SGB 28.1 26.5 26.5 5.9% 6.2% Subtotal 21
Slide 49: Banking - Deposits (domestic)
Banking - Deposits (domestic) Balances $123bn $127bn $119bn Market remains competitive Total deposits (ex CDs) up 3% Dec 04 Jun 05 Dec 05 Strong inflows into Netbank Saver & Streamline Market Share (1) 34% 30.7% 30.3% 29.8% 29.6% 30% Over 50% of Netbank inflows are new to the Bank 26% 23.9%
Slide 50: Other Key Information Notes
Other Key Information Notes Half ending Personal lending Dec 05 Jun 05 Dec 04 Dec 05 Dec 05 gross balances $M $M $M v v Jun 04 Dec 04 Credit cards 6,707 6,507 6,298 3.1% 6.5% Personal loans* 3,992 4,659 4,172 (14.3%) (4.3%) Margin loans 4,664 4,311 3,847 8.2% 21.2% Total Personal Lending 15,363 15,4
Slide 51: Banking – Personal Lending (domestic)
Banking – Personal Lending (domestic) Personal Lending Balances (1) CBA Balance growth $15.5bn $15.4bn $14.3bn +7% vs Dec 04 -1% vs Jun 05 Personal Lending market share and balance growth affected by Dec 04 Jun 05 Dec 05 DEET buy-back 28% Market Share (2) Credit card market share loss 24%
Slide 52: Notes
Notes ow Which Bank ConmonwealthBank 7,
Slide 53: Banking – Business Lending
Banking – Business Lending CBA Business, Corporate and Institutional Lending Balances (1) Buoyant and competitive $78.2bn $68.4bn market $64.7bn Above market growth in balance +21% vs Dec 04 Dec 04 Jun 05 Dec 05 +14% vs Jun 05 CBA Business Lending Market Share (2) 14% Expanding capabilitie
Slide 54: Notes
Notes ow Which Bank ConmonwealthBank 7,
Slide 55: Banking – Business Deposits
Banking – Business Deposits Business Deposits(1) 350 277.1 20.0% 272.7 254.6 19.0% Business deposits growth of 300 18.0% 4% over last 6 months 250 17.0% 15.5% 15.6% versus market growth of 2% 200 15.3% 16.0% $bn 15.0% 150 14.0% Quoted term deposit book 100 13.0% 12.0% performing well 50 11.0% 39
Slide 56: Other Key Information Notes
Other Key Information Notes (1) Dec 05 Jun 05 Dec 04 RWA $202,667m $189,559m $180,673m Charge for BDD (6 mths) $188m $176m $146m Charge for BDD to RWA (annualised) 0.19% 0.19% 0.16% (2) Gross Impaired Assets $396m $395m $445m Individually assessed provisions $179m $157m $180m Collective provisions $
Slide 57: Banking – bad and doubtful debts
Banking – bad and doubtful debts Bad debt expense to RWA Gross impaired assets to RWA (annualised) 0.21% 1.40% 0.19% 0.19% 0.19% 0.16% 0.15% 1.20% 188 176 1.00% CB A % to RW A 154 150 0.80% A NZ 146 NA B W BC 126 0.60% 0.40% 0.20% 0.00% Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec 00 00 01 01 02
Slide 58: Other Key Information Notes
Other Key Information Notes For the half ending ASB: New Zealand Dec 05 v Dec 05 v NZ$M Dec 05 Jun 05 Dec 04 Jun 05 Dec 04 Net interest income 392 395 381 (1.0%) 2.9% Other income 175 137 131 27.7% 33.6% Total operating income 567 532 512 6.6% 11.1% Operating expenses (243) (234) (236) 3.8% 3.0% Cha
Slide 59: Banking – New Zealand (ASB)
Banking – New Zealand (ASB) Operational Lending* Balances (Spot – in NZD) Market remained competitive 40 35 $33.3bn $36.6bn $30.1bn 30 Cash profit up 25 20 15 +19% vs Dec 04 10 5 +9% vs Jun 05 0 Dec 04 Jun 05 Dec 05 * Operational lending = excludes treasury & structured finance Lending bal
Slide 60: Notes
Notes ow Which Bank ConmonwealthBank 7,
Slide 61: Segment Results: Funds Management
Segment Results: Funds Management 61
Slide 62: Other Key Information Notes
Other Key Information Notes Dec 05 Jun 05 Dec 04 FUA Av. FUA ($bn) 130 121 112 Spot. FUA ($bn) 137 123 117 Margins Operating income/ av. FUA 1.10 1.08 1.09 Net income/ av. FUA 0.95 0.93 0.97 Expenses Operating expenses/ av.FUA 0.70 0.71 0.73 Market shares Platforms (latest is Sep 05)* 11.2% 10.8% 10
Slide 63: Funds Management
Funds Management Underlying profit before tax up300 Underlying profit after tax 77 (61) +22% vs Dec 04 250 +7% vs Jun 05 (14) 200 181 183 170 After tax profit affected by loss 150 of transitional tax relief 100 Funds under administration grew 11% to $137bn 50 Positive net fund flow and 0
Slide 64: Other Key Information Notes
Other Key Information Notes Total net flows Dec 05 Jun 05 Dec 04 $M $M $M FirstChoice & Avanteos 3,936 2,970 3,142 Cash Mgt. (255) (458) (6) Other retail (2,316) (1,965) (1,493) Wholesale 1,189 (640) (1,869) Property (366) 79 (44) International 583 294 984 Other (1) (76) (674) 136 Total 2,695 (394)
Slide 65: Funds Management – net funds flows
Funds Management – net funds flows Retail net flows ($m) (source Plan for Life) First Choice continued to 1000 CBA Industry 8000 attract record retail flows 7000 and reaches $20bn 6000 5000 industry CBA 0 4000 Turnaround of flows into 3000 wholesale funds 2000 1000 -1000 0 Good International i
Slide 66: Notes
Notes ow Which Bank ConmonwealthBank 7,
Slide 67: Investment Performance
Investment Performance December 2005 Gross performance and quartile ranking 1yr % pa Quartile 3yr % pa Quartile Aust. Share – Core 27.1% 1 24.3% 1 Imputation 24.3% 2 22.1% 3 Property Securities 16.7% 1 19.8% 1 Global Resources 48.3% 1 30.0% 1 Diversified 16.6% 3 12.6% 4 Australian Bond 6.2% 2 5.9% 2
Slide 68: Notes
Notes ow Which Bank ConmonwealthBank 7,
Slide 69: Segment Results: Insurance
Segment Results: Insurance 69
Slide 70: Other Key Information Notes
Other Key Information Notes 6 months ended Dec 05 Jun 05 Dec 04 Claims expense as % of net earned premium General 51% 72% 60% Life 49% 47% 53% Sources of profit $M $M $M Planned profit margins 69 60 62 Experience variations 19 28 (1) Other 2 (8) - General insurance operating margin 13 6 7 Operating
Slide 71: Insurance Results - total
Insurance Results - total Underlying profit : Underlying profit up 16% since June 05 +54% on Dec 04 4 103 100 11 +16% on Jun 05 89 (1) 80 67 After adjusting for sale of HK, 60 operating income up 8% on prior half 40 20 Largest life insurer in Australia and New Zealand 0 Dec Jun Dec Austral
Slide 72: Notes
Notes ow Which Bank ConmonwealthBank 7,
Slide 73: Capital Management
Capital Management new! Which Bank ConmonwealthBank 7,
Slide 74: Other Key Information Notes
Other Key Information Notes Credit Ratings Long Term Short Term Affirmed Standard & Poors' AA- A-1 + Jun 05 Moody's Investor Services Aa3 P-1 Jun 05 Fitch Ratings AA F1+ Jun 05 Dec 05 Jun 05 Dec 04 Adjusted Common Equity $M $M $M Tier One Capital 15,292 14,141 13,487 Deduct: Eligible loan capital (3
Slide 75: Capital ratios
Capital ratios 11% 11% 10% 9.60% 9.75% 9.81% 10% 9% 9% 8% 8% 7% 7% 7.46% 7.46% 7.54% 6% 6% 5% 5% 4% 4% 3% 3% 4.76% 4.91% 5.00% 2% 2% 1% 1% 0% 0% Dec 2004 Jun 2005 Dec 2005 Adjusted Common Equity Tier one capital Tier two capital Target Range 75
Slide 76: Other Key Information Notes
Other Key Information Notes Surplus capital in Life Companies Dec 05 Jun 05 Dec 04 $M $M $M Australia Statutory Funds 251 102 138 Shareholder Funds 62 168 144 Sub-Total 313 270 282 NZ 51 47 54 Other IFS 58 132 121 Other (including CFS) (245) 131 123 General Insurance 30 23 15 Sub-Total (106) 333 313
Slide 77: Generation and use of Tier 1 capital
Generation and use of Tier 1 capital 1.02% (0.60%) 8.5% 8.0% (0.48%) 0.11% 0.03% 7.54% 7.46% 7.5% 7.0% 6.5% 6.0% Tier 1 June Cash Ord. Growth in DRP Currency Tier 1 Dec 2005 NPAT Dividends RWA $221m and Other 2005 $14,141 $2,061m ($1,211m) $13,108m Movements $15,290m $78m 77
Slide 78: Notes
Notes ow Which Bank ConmonwealthBank 7,
Slide 79: Capital Management update
Capital Management update Sale of CMG-Asia On market buyback Hybrid considerations Introduction of new APRA prudential standards expected 1 July 2006: – EMVONA deducted from Tier 1 capital (decreases Tier 1 by approx 57bp) – Potential Tier 1 deduction for capitalised software expenses (decre
Slide 80: Notes
Notes ow Which Bank ConmonwealthBank 7,
Slide 81: Compliance projects
Compliance projects Implementation for IFRS, Sarbanes Oxley and Basel II is on target Dec 2005 half project spend was $20m (Dec 04:$15m), with $30-40m projected for full year (Full Year 05:$36m) Unit pricing systems and process improvements cost $11m for the half, expected full year cost of ar
Slide 82: Notes
Notes ow Which Bank ConmonwealthBank 7,
Slide 83: AIFRS
AIFRS ow Which Bank ConmonwealthBank 7,
Slide 84: Other Key Information Notes
Other Key Information Notes Description of AIFRS Impacts 1. Reclassification of Securitisation income from other banking income to net interest income 2. Netting of Fees and Commissions against interest income, and measuring on an effective yield basis 3. On reclassification of hybrid instruments fr
Slide 85: Major AIFRS Impacts
Major AIFRS Impacts Half Year Ended 31 Dec 05 30 Jun 05 31 Dec 04 Dec 05 vs Dec 05 vs $M $M $M Jun 05 Dec 04 Net profit After Tax ("underlying basis) (AIFRS) 1,875 1,779 1,641 5% 14% AIFRS Impact 45 23 23 Net profit After Tax ("underlying basis) (AGAAP equivalent) 1,920 1,802 1,664 7% 15% Net profit
Slide 86: Other Key Information Notes
Other Key Information Notes Description of AIFRS Impacts 1. Reclassification of Securitisation income from other banking income to net interest income 2. Netting of Fees and Commissions against interest income, and measuring on an effective yield basis 3. On reclassification of hybrid instruments fr
Slide 87: Major AIFRS Impacts
Major AIFRS Impacts Half Year Ended 31 Dec 05 30 Jun 05 31 Dec 04 $M $M $M Net Interest Income Reclassification of Securitisation OBI (1) 37 40 31 (2) Income Deferral - Banking 8 (5) (6) Hybrid Instruments (3) (57) - - Hedging & Derivatives (4) 55 - - Other Banking Income Reclassification of Securit
Slide 88: Other Key Information Notes
Other Key Information Notes Description of AIFRS Impacts 1. Reclassification of Securitisation income from other banking income to net interest income 2. Netting of Fees and Commissions against interest income, and measuring on an effective yield basis 3. On reclassification of hybrid instruments fr
Slide 89: Major AIFRS Impacts
Major AIFRS Impacts Half Year Ended 31 Dec 05 30 Jun 05 31 Dec 04 $M $M $M Operating Expenses - comparable business Volume Expense Deferral - Funds Mangement (5) (18) (8) (6) Share-Based Compensation & Other - Banking (6) 10 17 19 Bad and Doubtful Debts Expense Movement in General Reserve for Credit
Slide 90: Notes
Notes ow Which Bank ConmonwealthBank 7,
Slide 91: Highlights
Highlights Dec 05 vs Dec 05 vs Dec 05 Jun 05 Dec 04 Cash NPAT $2,061m 17% 19% Cash EPS (excl HK) 149.5cps 13% 13% Dividend 94c - 11% Which new Bank benefits $506m 20% 68% 91
Slide 92: Presentation of Half Year Results for 31 December 2005
Presentation of Half Year Results for 31 December 2005 Ralph Norris Michael Cameron Chief Executive Officer Chief Financial Officer 15 February 2006
Slide 93: Supplementary materials
Supplementary materials new! Which Bank ConmonwealthBank 7,
Slide 94: Economy
Economy ow Which Bank ConmonwealthBank 7,
Slide 95: GDP, unemployment and cash rates
GDP, unemployment and cash rates 95
Slide 96: Credit growth
Credit growth Housing Loan Approvals* $b $b H Total, Credit by Sector* 18 “ 15 Year-emed percentage change % % 12 12 9 9 Established 50 Housing °0 6 Py ain\. dwellings 6 0 3 (> ee Q 1995 1997 1999 2001 2003 2005 10 10 * Escludes refinancing; inclides investors and owner-occupiers ‘Source: ABS P Esta
Slide 97: Spreads
Spreads Aus. BBB Corporates US BBB Corporates ~ 35bp over swaps ~ 50bp over swaps 97
Slide 98: Banking
Banking ow Which Bank ConmonwealthBank 7,
Slide 99: Summary - CBA Growth vs Market
Summary - CBA Growth vs Market Home Lending Credit Cards 5.2% 7.0% 14.0% 12.6% 5.7% 5.8% 10.9% 6.0% 5.1% 5.2% 12.0% 5.0% 4.7% 10.0% 7.6% 4.0% 8.0% 3.0% 6.0% 5.4% 4.4% 2.0% 4.0% 3.1% 1.0% 2.0% 0.0% 0.0% CBA W BC ANZ NAB SGB CBA W BC ANZ NAB SGB Personal Lending (ex DEET) Household Deposits 6.0% 5.6%
Slide 100: Loan Growth
Loan Growth Dec 05 Jun 05 Dec 04 Dec 05 vs Dec 05 vs $bn $bn $bn $bn Jun 05 Dec 04 Retail Lending Home Lending (incl securitisation) 136.0 129.9 121.7 5% 12% Home Lending (excl securitisation) 126.9 119.1 115.3 7% 10% Personal Loans 10.5 10.7 10.3 (2%) 2% Business, Corporate & Institutional Interest
Slide 101: Banking 8% growth in lending assets over the period
Banking 8% growth in lending assets over the period* Lending assets in $bn 254.9 +6% v. 17.3 235.9 Dec 2004 224.2 16.8 +3% 205.9 16.3 +3% +28% v. 15 +9% 72 Dec 2004 191.3 13.7 +9% 63.5 +13% Bank Acceptances 58.8 +8% 55.9 +5% 16 +8% v. 52.7 +6% 15.7 +2% Institutional & Corporate 14.8 +6% Dec 2004 13.
Slide 102: Deposit Growth
Deposit Growth Dec 05 Jun 05 Dec 04 Dec 05 vs Dec 05 vs $bn $bn $bn $bn Jun 05 Dec 04 Australian Deposits Transaction Deposits 31.2 30.5 29.4 2% 6% Savings Deposits 36.3 34.2 33.6 6% 8% Investment Deposits 54.0 52.3 50.6 3% 7% Deposits not bearing interest 6.2 5.8 5.9 6% 5% Certificates of Deposits
Slide 103: Deposits cannibalisation is being well managed
Deposits cannibalisation is being well managed Retail Deposits Strong growth across-the-board: Contribution to Growth - Six months to Dec 05 – Streamline 23% – Term Deposits 23% – NetBank Saver 50% NetBank Saver: – Focus on attracting new money whilst minimising internal switching NetBank
Slide 104: Home Loans – LVR Profile
Home Loans – LVR Profile LVR Profile Strong LVR profile 90% % of loans at <60% LVR: 80% 70% 70% if based on 60% original security 50% value 40% 79% if based on 30% current market 20% values 10% 0% 0-60 60-75 75-80 80-90 90+ LVR on original security value LVR at current market value Australia
Slide 105: Home Loans – Low-Docs
Home Loans – Low-Docs Low Doc as Proportion of Portfolio Low-doc $m % of portfolio Total Portfolio $1.2b <1% New business per month <$50M 1% Approx 0.9% of total portfolio Self employed applicants only – min. 2 years in same industry Restrictions on certain high risk postcodes (LVRs 60%-80% on
Slide 106: Banking – Well positioned in Bond Markets
Banking – Well positioned in Bond Markets Current Insto League Table rankings Past Insto League Table PUBLIC DOMESTIC NON-GOVERNMENT BOND LEAGUE TABLE (INCLUDING SELF-LED DEALS) 1Jan 2005 - 31 December 2005 rankings Rank Bookrunner A$m Deals 2004 1 Commonwealth Bank of Australia 7,446 35 A$6.989 bil
Slide 107: Notable PBS Transactions in 2005
Notable PBS Transactions in 2005 Syndicated Acquisition Securitisation of Non-Conforming Syndicated Term Facility Syndicated Term & and Refinance Facility Mortgages A$475m Revolving Facilities A$2,450m A$550m A$2.4b Joint Lead Arranger, Underwriter Joint Lead Manager & Joint an Bookrunner Joint Arra
Slide 108: Funds Management
Funds Management ow Which Bank ConmonwealthBank 7,
Slide 109: Well diversified product mix – platforms rapidly growing share
Well diversified product mix – platforms rapidly growing share Source – Internal Analysis 109
Slide 110: Fund excess returns over benchmark
Fund excess returns over benchmark 10% 1 Year Outperformance Dec-05 Dec-04 8% 6% 10% 4% 8% 2% 6% Cents 0% 4% -2% 2% Cents -4% 0% -6% -2% -8% -4% -10% -6% Wholesale Wholesale Wholesale Wholesale Wholesale Wholesale Wholesale Wholesale MIF Future Wholesale Wholesale Imputation Diversified Property Aus
Slide 111: Insurance
Insurance ow Which Bank ConmonwealthBank 7,
Slide 112: Funds Management & Insurance Investment Mandate Structure
Funds Management & Insurance Investment Mandate Structure The Bank has $1.5bn of shareholders funds across its insurance and funds management business, which is invested in: Australia New Zealand Asia Total Local equities 3% 1% 0% 2% International equities 0% 7% 15% 2% Property 24% 1% 8% 18% Other G
Slide 113: Capital Management
Capital Management new! Which Bank ConmonwealthBank 7,
Slide 114: Preference share information
Preference share information Preference share dividends paid Franked/ 31/12/2005 30/06/2005 31/12/2005 30/06/2004 31/12/2003 31/12/2003 Inputed PERLS 20 19 20 20 18 18 F PERLS II 17 17 17 15 F Trust Preferred Securities 21 22 20 23 17 ASB Capital prefs 5 5 4 4 4 4 I ASB Capital No.2 prefs 9 7 I CBA
Slide 115: Credit Risk Management
Credit Risk Management new! Which Bank ConmonwealthBank 7,
Slide 116: The Bank remains well provisioned
The Bank remains well provisioned 2,100 500 450 1,800 400 1,500 350 $millions 300 1,200 250 % 900 200 600 150 100 300 50 0 0 Jun 95 Jun 96 Jun 97 Jun 98 Jun 99 Jun 00* Jun 01 Jun 02 Jun 03 Jun 04 Jun 05 Dec 05 1 Individually Assessed Provision 1 Collective Provision (LHS) 1 General Reserve for Credi
Slide 117: Banking - Top commercial exposures
Banking - Top 20 commercial exposures ($m) A A AA+ A- The largest exposure will be reduced by $650m (to $556m) through syndication within the next 3 months A- BBB+ S&P Rating or Equivalent A- BBB- A- BBB- A- BBB A- A+ BBB- A- AAA BBB+ BBB- A+ 0 200 400 600 800 1000 1200 1400 Top 20 exposures – exclu
Slide 118: Banking - Quality of commercial risk-rated exposures
Banking - Quality of commercial risk- rated exposures Quality of commercial risk-rated exposures: There is security over 84% of the non-investment grade exposure 100% 80% 37 36 33 34 32 33 60% 15 16 18 16 16 17 40% 17 18 16 22 19 17 67% investment grade 20% 35 34 28 30 32 29 0% Jun 03 Dec 03 Jun 04
Slide 119: Banking Arrears in consumer book remain low
Banking Arrears in consumer book remain low Consumer loans past due 90 days or more 31/12/2005 30/06/2005 31/12/2004 30/06/2004 $m $m $m $m Home lending 154 183 176 168 Other Loans 119 119 94 78 Total 273 302 270 246 Home lending portfolio quality 31/12/2005 30/06/2005 31/12/2004 30/06/2004 $m $m $m
Slide 120: Banking - Total geographic exposure (commercial + consumer)
Banking - Total geographic exposure* (commercial + consumer) Home loans = $150bn Total exposure : $398bn Other Balance Sheet loans = $115bn Other exposure = $133bn At 30 Jun 05 Total exposure = $382bn Home loans = $140bn Other loans = $98bn Other exposure = $144bn International = 13% New Zealand = 1
Slide 121: Banking - Total outstandings (commercial + consumer)
Banking - Total outstandings* (commercial + consumer) At 30 Jun 05 Total Outstandings Total outstandings = $314.7bn $324.7 bn* Consumer = 51.1% Telecoms = 0.3% Agriculture = 2.7% Construction = 0.9% Energy = 1.4% Finance = 23.2% Government = 2.1% Leasing = 2.8% Motor vehicle manufacturing = 0.1% Oth
Slide 122: Banking – International commercial exposures
Banking – International commercial exposures* International exposure by Industry At 30 Jun 05 Total exposure = $54bn Total exposure : $61bn Finance = 84% Government = 3% Other commercial = 9% Specific industries = 4% Aviation Technology Telcos Energy Leasing Construction Automobile Total non-finance
Slide 123: Banking Credit Exposure - Agriculture Sector
Banking Credit Exposure - Agriculture Sector At 30 Jun 05 Total exposure: $10,285m Total exposure = $9,928m Australia = 64% New Zealand = 36% 31 Dec 30 Jun 05 05 Rating $m $m AAA to A- 372 297 BBB+ to BBB- 1,405 1,374 BB to BB- 3,094 3,030 < BB- 5,414 5,227 TOTAL 10,285 9,928 *Total exposure = balan
Slide 124: Banking Credit Exposure - Aviation Sector
Banking Credit Exposure - Aviation Sector At 30 Jun 05 Total exposure: $2,430m Total exposure = $2,240m Australia = 83% New Zealand = 7% 31 Dec 30 Jun Other = 10% 05 05 Rating $m $m AAA to A- 757 654 BBB+ to BBB- 1,438 1,317 BB to BB- 151 185 < BB- 84 84 TOTAL 2,430 2,240 *Total exposure = balance f
Slide 125: Banking Credit Exposure - Energy Sector
Banking Credit Exposure - Energy Sector At 30 Jun 05 Total exposure = $5,875m Total exposure: $7,462m Australia = 68.7% New Zealand = 15.0% Asia = 5.4% Europe = 10.7% Americas = 0.2% 31 Dec 30 Jun 05 05 Rating $m $m AAA to A- 2,661 1,265 BBB+ to BBB- 4,062 3,838 BB to BB- 464 385 < BB- 275 387 TOTAL
Slide 126: Banking Credit Exposure - Telcos Sector
Banking Credit Exposure - Telcos Sector At 30 Jun 05 Total exposure = $1,170m Total exposure: $1,138m Australia = 70% New Zealand = 12% Europe = 18% 31 Dec 30 Jun 05 05 Rating $m $m AAA to A- 869 596 BBB+ to BBB- 23 574 BB to BB- 141 0 < BB- 105 0 TOTAL 1,138 1,170 *Total exposure = balance for unco
Slide 127: Awards Received
Awards Received PBS 2005 Insto League Tables No. 1 Lead Arranger and Syndicator in Project Finance in Australia & New Zealand Finance Asia Magazine 2005 Awards Best Local Bond House in Australia CFO Magazine – Best Business Bank Awards 2005 Project Finance Deal of the Year East & Partn
Slide 128: Awards Received
Awards Received Wealth Management Personal Investor Magazine Awards Fund Manager of the Year Term Life Product of the Year Trauma Product of the Year Money Magazine – Best of the Best Best Income Protection Insurance Winner Best Australian Shares Super Funds – CFS FirstChoice Personal
Slide 129: Awards Received
Awards Received RBS Money Magazine – 2005/06 Gold Winner of “Best of the Best Reverse Mortgage Award – Equity Unlock” Gold Winner of “Best of the Best Premium Banking Package” – Award for Wealth Package Gold Winner “Cheapest Home Loan” – Homepath – 2005 & 2006 Bronze Winner “best reverse M
Slide 130: Awards Received
Awards Received ASB University of Auckland Customer Satisfaction Survey New Zealand‟s no.1 major bank for the 7th consecutive year UK Banker Magazine „2005 Bank of the Year‟ in New Zealand for the 4th consecutive year Business Finance Monitor Ranked no. 1 in overall performance by a busi
Slide 131: Presentation of Half Year Results for 31 December 2005
Presentation of Half Year Results for 31 December 2005 Ralph Norris Michael Cameron Chief Executive Officer Chief Financial Officer 15 February 2006
Commonwealth Bank of Australia — H1 2006 Earnings Presentation on 6ix