Commonwealth Bank Of Australia · ASX:CBA
Commonwealth Bank Of Australia — FY2017 Earnings Presentation
144 slides from Commonwealth Bank Of Australia's earnings presentation, Aug 9, 2017
Slide 1: Results Presentation & Investor Discussion Pack
Results Presentation & Investor Discussion Pack For the full year ended 30 June 2017 Ian Narev, Chief Executive Officer Rob Jesudason, Chief Financial Officer Commonwealth Bank of Australia | ACN 123 123 124 | 9 August 2017
Slide 2: This result
This result Jun 17 vs Jun 16 Statutory Profit ($m) 9,928 7.6% Cash NPAT ($m) 9,881 4.6% Cash Earnings per Share ($) 5.74 3.5% Dividend per Share ($) 4.29 2.1% ROE – Cash 16.0% (from 16.5%) 2
Slide 3: Managing for today’s environment
Managing for today’s environment Positive Jaws Strength Returns FY17 vs FY16 International +9 cents Underlying1 15.6% 16.0% 429 4.8% 129% 67% 3.8% 10.1% APRA 2.4% Income Expense Operating Deposit LCR CET1 ROE Dividend Perform. funding (cash) (cents) 1. In order to present an underlying view of the r
Slide 4: Delivering for all our stakeholders
Delivering for all our stakeholders 16.6 ~800,000 million customers Our Our shareholders Customers Shareholders Our Our $3.9bn Community People 51,800 in taxes Australia’s largest people in 11 taxpayer countries 4
Slide 5: Delivering for our customers
Delivering for our customers Satisfied Customers Dissatisfied Customers Retail MFI1 Retail MFI1 Excludes neutral Excludes neutral responses 82.7% 9.8% responses Customer Satisfaction Rank Retail #1 3.8% Business = #1 Wealth #1 Internet #1 70.5% International #1 Jun 07 Jun 09 Jun 11 Jun 13 Jun 15 Jun
Slide 6: Delivering for our customers
Delivering for our customers 1 FY17 NT $652m QLD $197bn in total new lending 1.6k $21bn $605k 53k 37k 330,000 new home loans WA 13k $850m $15bn 914k 9k $6bn in new loans to rural customers 36k SA 420k $832m 337k 217k $6bn 513k 15k 100k Insured more than 6m customers $526m NSW 3 245k 83k 1.6m $53bn 8
Slide 7: Delivering for our customers – One CommBank
Delivering for our customers – One CommBank Smarter Proprietary % of Total Flows 62,000 customer insights each week analytics Home lending (RBS) More 62% 43,000 video-conferencing referrals in FY17 leads More 57% 93 new branch lenders in FY17 lenders 54% Insurance 8% growth in home & contents insura
Slide 8: Delivering for our customers - Financial Wellbeing
Delivering for our customers - Financial Wellbeing Spend Tracker Savings Jar CommSec $10 Trade Developed in the CommBank lab – with the help of our customers Tracking everyday Watch your small change Making share investing expenses to make add up to bigger savings accessible and affordable budgeting
Slide 9: Delivering for our shareholders
Delivering for our shareholders CBA Market Capitalisation Australian Overseas owned investors ~80% 20% Australians investing in funds Super funds 80% for millions of Australians ~800,000 retail investors Jun 07 Jun 09 Jun 11 Jun 13 Jun 15 Jun 17 All figures are approximates 9
Slide 10: Delivering for our shareholders
Delivering for our shareholders Our Owners Total Return (10yrs) 1 +165% $124,500 Average shareholding $54,000 850 shares 75% of profit returned to shareholders $23,500 $47,000 ~800,000 retail investors Millions more via super funds Jun 07 Share Price Dividend Jun 17 Increase Reinvestment All figures
Slide 11: Delivering for our shareholders - Return on Equity
Delivering for our shareholders - Return on Equity 16.0% 21.7 20.4 FY17 19.5 18.7 18.4 18.2 18.7 18.2 16.5 16.0 16.1 15.8 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1H17 2H17 11
Slide 12: Delivering for our community – strength for all stakeholders
Delivering for our community – strength for all stakeholders Australia’s largest taxpayer A responsible corporate citizen $3.9bn in taxes1 in FY17 $272m invested in the community FY17 Equivalent to 260 schools; 6 hospitals Almost 575,000 students in Start Smart Banking levy a further impost Employer
Slide 13: Delivering for our community - strength
Delivering for our community - strength CET1 Jun 07 Jun 17 389% Deposit funding 54% 67% Long term funding % 49% 60% Assets WAM – new issuance 1 3.4 yrs 5.2 yrs 122% 2 Liquid assets $15bn $142bn CET1 (APRA) 4.5% 10.1% 2007 2009 2011 2013 2015 2017 1. Weighted Average Maturity of wholesale funding - i
Slide 14: Key themes
Key themes • Continuing to leverage our customer franchise • Strategic approach to costs and investment • Adjusting for the environment • Further strengthening our balance sheet 14
Slide 15: This result
This result Jun 17 vs $m Jun 16 1 Underlying Ex Visa $397m (1H17) Operating Income 25,940 5.4% 3.8% Volume ↑ 6% Margin ↓ 3 bpts Operating Expense 11,078 6.2% 2.4% Ex Amort. $393m (1H17) Investment* ↑35% (2H17) * expensed Operating Performance 14,862 4.9% Benign conditions (15 bpts in FY17)
Slide 16: Underlying operating income up 3.8%
Underlying operating income up 3.8% $m +5.4% +5.4% +0.3% +3.8% 397 25,940 +3.9% 9 263 25,543 665 24,606 FY16 Net Other Funds FY17 Visa FY17 Interest Banking & Underlying Income Income Insurance 16
Slide 17: Net Interest Income – balancing volume and margin
Net Interest Income – balancing volume and margin $m Margin (3 bpts) +5 bpts (4 bpts) (2 bpts) +5.6% 417 (334) (2 bpts) (167) (189) +3.9% 938 Wholesale (4) 17,600 16,935 Home Loans +6% Bus/Corp Loans +5% 1 FY16 Volume Asset Funding NZ Capital/ FY17 Pricing Costs Other 1. Average interest earning ass
Slide 18: Margin flat this half or +2 bpts ex Treasury & Markets
Margin flat this half or +2 bpts ex Treasury & Markets bpts Group NIM Down 3 bpts over 12 months 215 214 211 212 213 209 ex Treasury +2 bpts & Markets FY15 FY16 FY17 1 (1) 213 211 (2) 3 211 (1) Deposits Liquids (3) Business lending competition offsetting home loan repricing 1H17 Asset Funding Portfo
Slide 19: Other Banking Income up 5.4%
Other Banking Income1 up 5.4% $m Volume growth +5.7% (24.5%) +6.7% 62 (134) +12.1% 68 +5.4% 5,123 267 Derivative Valuation Adj. +$85m Trading (ex DVA) ($23m) Lower sales 4,860 • Higher realised loss on NZ earnings hedge • Higher credit card purchases • Lower revaluation gains on • Lower loyalty cost
Slide 20: Funds & Insurance income flat
Funds & Insurance income flat $m Funds Insurance Avg FUA +6% Income Income Avg AUM +4% FX ↓3% +0.9% (1.1%) Margins ↓lower 69 (78) +0.3% 18 2,811 2,820 Avg Inforce premiums +1% Increased income protection claims FY16 Funds Underlying Insurance Loss FY17 Income income Recognition 20
Slide 21: Managing costs whilst investing through the cycle
Managing costs whilst investing through the cycle $m FY17 vs FY16 $m 2H17 vs 1H17 Investment Spend ($m) 600 679 Underlying Positive jaws Capitalised 323 306 +2.4% Expensed 277 373 +34.7% +6.2% 1H17 2H17 46 10,685 393 11,078 +0.4% 10,434 123 82 +2.2% 5,284 5,401 51 (30) 96 +34.7% FY16 Staff Tech. & I
Slide 22: Divisional contributions
Divisional contributions FY17 vs FY16 Cost-to- 1 % of Group Operating Operating Operating Cash Business Unit LIE Income NPAT Income Expenses Performance NPAT FY17 RBS 50.2% 6.8% 2.3% 8.9% 5.4% 9.3% 30.8% BPB 16.6% 3.4% 4.2% 2.8% (58.0%) 7.7% 39.1% IB&M 13.2% (1.3%) (0.9%) (1.6%) (74.6%) 9.7% 37.6% W
Slide 23: RBS
RBS Volume Revenue Lower growth Margins up 6.8% cost-to-income 12 months Home loan repricing and improved deposit margins in 2H17 partially offset by mix changes2 9.3% 6.9% 32.1% System1 6.6% 292 290 291 6.8% 6.7% 30.8% 5.8% 2.3% Home Household 2H16 1H17 2H17 Rev. Exp. NPAT FY16 FY17 Loans Deposits
Slide 24: BPB and IB&M
Corporate Volume BPB - investment in IB&M – low growth Margins1 the frontline impairments 12 months BPB IB&M Favourable deposit mix in 2H17 offsetting lending competition and 9.7% shift to fee-based products BPB +5.8% 7.7% IB&M flat LIE 198 191 down 190 74.6% 4.4% 3.3% 4.2% 3.4% (1.3%) (0.9%) System
Slide 25: Wealth
Wealth Funds Insurance Profit lower Insurance Income General Insurance Offset by FX and lower margins $m Net Event Claims $m – mix and remediation (12.7%) +9.5% Includes higher +4.2% loss recognition 502 (+$78m) 206 +5.0% 438 2nd Half 43 141 76 1st 30 $bn Half Rev. Exp. NPAT 4 AUM FUA FY16 FY17 FY16
Slide 26: Impairment expense remains low
Impairment expense remains low 142 CBA Group Corporate (bpts)1 Group 73 41 29 25 21 Consumer 20 16 16 19 18 15 8 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 Pro Forma 1. Cash LIE as a percentage of average GLAA (bpts). FY09 includes Bankwest on a pro-forma basis and is based on LIE for the year. St
Slide 27: Consumer arrears
Consumer arrears 90+ days 1.46% 1.41% Personal Loans • Improving profile 1.20% • Remains elevated in WA 1.03% 1.01% 0.99% Credit Cards • Seasonally higher 2nd half 0.60% WA Home Loans 0.50% 0.54% Home Loans1 0.49% • Increased provisions • Remains low • Elevated in WA • Rigorous stress testing 2 Ex W
Slide 28: Total provisions of $3.7bn
Total provisions of $3.7bn $m $bn Total Provisions 3.7 3.7 Individual provisions Collective provisions IP 0.9 1.0 2.8 2.7 CP 2,818 2,747 Jun 16 Jun 17 Overlay 695 711 980 Economic overlay 944 unchanged Bankwest 187 184 209 198 169 211 Consumer 1,077 1,112 566 571 Corporate 859 740 Jun 16 Jun 17 Jun
Slide 29: Further strengthening our balance sheet
Further strengthening our balance sheet Deposit funding 67% NSFR 107% target range 108 - 110% (FY19) Wholesale funding tenor – portfolio 4.1 yrs Wholesale funding tenor – new 5.2 yrs Wholesale funding – long term 60% LCR 129% target range 115-130% RWA optimisation +25 bpts RWA1 contribution to CET1
Slide 30: Funding and liquidity
Funding and liquidity Deposit Funding Wholesale Funding LCR • Transaction account growth • Lengthening portfolio • Liquid assets increased • NSFR 107% • More long term funding • CLF reduced Portfolio (yrs) 67% New Issuance (yrs) 66% 5.2 129% 63% 4.2 4.1 120% 120% 4.1 3.8 58% 60% Long Term Long Term
Slide 31: Optimising the balance sheet
Optimising the balance sheet Corporate Credit RWAs1 Group RWA2 Movement CET1 (APRA) impact ($bn) (bpts) 10.8 Negative to capital Positive to capital 25 3.5 1.5 Dec 15 Jun 16 Dec 16 Jun 17 Dec 15 Jun 16 Dec 16 Jun 17 (6) (11) (7.4) (57) 1. Includes Advance IRB Corporate, SME Corporate and Specialised
Slide 32: CET1 of 10.1% – organic growth +72 bpts
CET1 of 10.1% – organic growth +72 bpts International Organic Growth +72 bpts 15.6% APRA benchmark 25 (23) 10.5% 9.9% (67) 114 (29) 10.1% 15 bpts remaining (FY18)1 Includes (34 bpts) for higher mortgage risk weights per APRA (25.25%) 2 Dec 16 Dec 16 Cash Underlying 3 Colonial Model Jun 17 1 Jan 2020
Slide 33: Dividend
Dividend cents per share Cash NPAT Payout Ratio 429 Up 420 420 2.1% Payout Ratio Net of DRP 401 364 334 320 290 256 266 228 75% 74% 73% 76% 76% 75% 75% 77% 75% 78% 74% 76%1 67%1 64% 61%1 62% 2 53% 53% 55% 55% 52% 47% FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 1. DRP Neutralised: 2H10, 1H
Slide 34: Managing for unquestionably strong
Managing for unquestionably strong DRP 1.5% discount 1 Organic generation (average 52 bpts pa last 5 years) APRA 10.5% Balance sheet optimisation benchmark Non-recourse debt (-15 bpts in FY18 then completed) 1. Represents cash NPAT less dividends (net of DRP), and movements in RWA (excluding
Slide 35: Summary
Summary • Continuing to leverage our customer franchise • Strategic approach to costs and investment • Adjusting for the environment • Further strengthening our balance sheet 35
Slide 36: Outlook
Outlook • Economic indicators generally positive • Ongoing concerns about job security, wage growth and cost of living • Need continuing broad productive business investment – next wave post mining and construction investment • For CBA, on-going focus on strength, customer engagement and technology,
Slide 37: Group Overview
Group Overview ConmonwealthBank 7,
Slide 38: CBA overview
CBA overview Our people Technology Financial and and strength customers innovation • 51,800 people serving 16.6m customers • 1st Australian bank to go real-time, 24x7 • ~800,000 shareholders • #1 in retail customer satisfaction • 15m customers using real time banking • Total assets of $976bn • =#1 i
Slide 39: Customer focus
Customer focus Our Vision Our Values Strategic Capabilities People Technology To excel at securing and Integrity enhancing the financial Accountability wellbeing of Collaboration Productivity Strength people, businesses and Excellence communities Service Our “One CommBank” Growth Continued growth in
Slide 40: Delivering for customers
Delivering for customers Retail Customer Satisfaction Customer Satisfaction Rankings % Satisfied ('Very Satisfied' or 'Fairly Satisfied') 1 82.7% Business = #1 Wealth #1 70.5% IFS #1 CBA Jun 07 Peers Jun 17 Internet #1 1. Equal first for micro, small and medium business segments, outright first for
Slide 41: Our customer franchise
Our customer franchise Customer lifecycle by age 46.5% Serving 16.6 million customers 44.4% MFI for 1 in 3 Australians 41.3% MFI Share Jun 17 Jun 12 Leading market shares in home lending 30.0% 25.2% and household deposits 28.8% 34.2% 28.5% 18.8% 13.8% 11.9% Highest share-of-wallet amongst peer 27.4%
Slide 42: Customer needs met
Customer needs met Overall Share of Product Wealth share of product 3.07 11.0% 9.4% Share of 8.2% 8.0% 8.23 product CBA Peer 3 Peer 1 Peer 2 4.17 11.0% Wealth 3.07 2.15 Lending & 1.88 60.1% CBA 0.46 Cards 1.13 Peers Deposits 2.17 67.7% 1.47 Products held Products Jun 07 Jun 17 at CBA held anywhere R
Slide 43: Delivering for customers – business
Delivering for customers – business Customer Satisfaction Customer Satisfaction (DBM) (DBM, Large) 4 years* Micro = #1 #1 Small = #1 Medium = #1 CBA Peers Large #1 Jun 14 Jun 17 * Outright or equal 1st Refer notes slide at back of this presentation for source information 43
Slide 44: Australia’s leading technology bank
Australia’s leading technology bank More satisfied customers Leader in real-time Forefront of innovation Group transaction balances 97% Internet Banking +38.0% 95% 94.0% +12.7% 93% 91% 89% CBA 87% Peers 85% Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 Dec 16 Jun 17 FY15 FY16 FY17 • 6.2 million active online c
Slide 45: Innovating in Business – business insights
Innovating in Business – business insights Providing business clients with customised insights to enhance their financial success. Daily IQ 2.0 enables clients to: • identify opportunities to optimise their cash flow • compare their key performance metrics to their industry • identify business risks
Slide 46: Business & Private Banking
Business & Private Banking Investing in people Investing in technology Investing in products • >80% of BBL1 now digitally enabled via • 100 new business banking staff NetBank and CommBiz • 250% increase in client contact • >85% of BBL re-draws completed online in key growth locations across volume o
Slide 47: Innovating in Albert
Innovating in Albert Number of devices 85,000+ 64% new devices merchants to CBA 98% 85,000+ 75,000+ 65,000+ 55,000+ 43,000+ 44 18 apps in total new apps in FY17 Jun 16 Sep 16 Dec 16 Mar 17 Jun 17 47
Slide 48: Innovating in retail – Youth app
Innovating in retail – Youth app A fun and safe way to help younger customers to save and spend responsibly View accounts & balances Set savings goals Set and complete jobs View School Banking tokens 22,222 downloads and 7,764 registrations since launch Apr 17 48
Slide 49: Innovating in Wealth - simplicity
Innovating in Wealth - simplicity Retail Life Insurance CBA Retirement Calculator CFS Pension Statements Customers can now estimate New online statements provide Enhancing the underwriting and better understand their more personalised content with process by offering customers retirement income and
Slide 50: Innovating in IFS
Innovating in IFS South Africa Indonesia Money Transfer Key Partnerships • 10 year partnership • 1,000 locations • 10 million loyalty customers • 10,000 till points • On the spot account • On the spot account creation via 710 African Rainbow Capital creation, card issuance self-service kiosks (Pick
Slide 51: Collaborating on emerging technologies
Collaborating on emerging technologies Developed a Quantum computer First to enable Mobile to mobile payments simulator to create quantum software between Australia and the UK, in partnership with before the hardware has been built Barclays Collaborating with Stockland, Payment partnerships Universi
Slide 52: Delivering for customers – real time, digital banking
Delivering for customers – real time, digital banking Digital - transactions Digital - sales Repositioning branches 54% of all transactions by 26% of retail product 50% smaller footprint value now digital sales now digital – 226 locations Digital transactions by value 54% Digital contribution to tot
Slide 53: The digital revolution – customer take-up
The digital revolution – customer take-up CommBank app users1 CommBank app CommBank app Monthly unique customers (m) Logons per week (m) Transactions per week ($bn)2 30 6.1 27 4.4 24 5.5 4.1 21 4.6 3.7 3.4 18 3.8 3.0 15 2.7 3.0 2.5 2.0 10 1.5 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 Dec 16 Jun 17 Jun 14 D
Slide 54: The digital revolution – transaction migration
The digital revolution – transaction migration A better bill experience Accounts with e-statements New bill registrations Total Accounts with e-statements (cumulative) (m) 600% uplift 14.8 600k 500k 12.0 400k 9.7 8.8 300k 200k Launch of Better Bill Experience 100k 0k 1 2 Jun 141 Jun 15 Jun 16 Jun 17
Slide 55: The digital revolution – customer experience & security
The digital revolution – customer experience & security Cardless Cash Tap & Pay Lock, Block & Limit Cumulative volume of unique transactions (m)1 Volume of transactions per quarter (m)2 Number of accounts enrolled (k)3 17.3 3.7 716 635 3.3 541 12.6 2.7 465 363 8.5 1.8 5.3 1.2 215 0.6 0.7 2.7 0.1 1.2
Slide 56: CBA in Asia and South Africa
CBA in Asia and South Africa China Bank of Hangzhou (18%): 196 branches Qilu Bank (20%): 128 branches County Banking (Henan & Hebei)1: - 15 branches (10 @ 100% holding, 5 @ 80% holding) - 8 sub-branches (2 @ 100% holding, 6 @ 80% holding) CBA Beijing, Shanghai and Hong Kong branches BoComm
Slide 57: Corporate responsibility
Corporate responsibility Improving our Empowering & Building a strong A healthy & Environmental customers’ supporting our and responsible engaged workforce stewardship experience communities business • Independent • Start Smart classes • 44% women in • $1.02 billion climate • 2,768 employees Custome
Slide 58: Supporting the transition to a low carbon economy
Supporting the transition to a low carbon economy LOW ENERGY – WIND CARBON POWER At A$650 million, our climate bond is BUILDINGS Australia’s largest $A climate bond issued by a bank LOW CARBON TRANSPORT Our lending exposure to renewable energy generation has grown to $2.8 billion $1.4 billion $2.2 b
Slide 59: Corporate responsibility – performance data
Corporate responsibility – performance data FY17 FY16 FY15 Employees completing ESG training 2,768 1,786 - Environment Renewable energy lending exposure ($bn) 2.8 2.2 1.4 Dependent on Business lending emissions intensity (kgCO2-e/AUD) client FY17 data1 0.29 0.28 Total greenhouse gas emissions (Group
Slide 60: Financials
Financials ConmonwealthBank 7,
Slide 61: CBA in FY17
CBA in FY17 Strength and Returns Delivering for all our Stakeholders Cash NPAT up 4.6% to $9,881m Australia’s largest taxpayer - $3.9bn2 in FY17 1 Cost-to-Income improved to 41.8% Serving 16.6 million customers CET1 (APRA) of 10.1% MFI for one in three Australians International CET1 of 15.6% #1 in
Slide 62: FY17 - result overview
FY17 - result overview1 Financial Balance Sheet, Capital & Funding Statutory NPAT ($m) 9,928 7.6% Capital – CET1 (Int’l)3 15.6% 120 bpts Cash earnings ($m) 9,881 4.6% Capital – CET1 (APRA) 10.1% (50) bpts ROE % (cash) (50) bpts Total assets ($bn) 976 4.6% 16.0 Total liabilities ($bn) 913 4.6% EPS $
Slide 63: Result overview
Result overview Cash Earnings ($m) NIM Underlying1 C:I Cash ROE +4.6% (3) bpts (60) bpts (50) bpts 9,881 214 16.5% 211 42.4% 16.0% 9,445 41.8% FY16 FY17 FY16 FY17 FY16 FY17 FY16 FY17 Cash EPS (cents) DPS (cents) CET1 (APRA) CET1 (International)2 +3.5% +9 cents (50) bpts +120 bpts 574.4 429 15.6% 554
Slide 64: Statutory NPAT up 7.6%
Statutory NPAT up 7.6% $m Jun 17 Jun 16 Cash NPAT 9,881 9,445 4.6% Hedging and IFRS volatility1 73 (199) NZ revenue hedge Bankwest non-cash items (3) (27) Treasury shares valuation adjustment (23) 4 Total non-cash items 47 (222) Statutory NPAT 9,928 9,223 7.6% 1. Unrealised accounting gains and
Slide 65: Banking levy
Banking levy1 $m Total liabilities 898,722 • Applicable to ADIs with liabilities >A$100bn, i.e. major banks and Macquarie Bank Exclusions: Financial Claims Scheme deposits (238,500) • Effective from 1 Jul 17 with the first report due Feb 18 & first payment due Derivatives (32,094) Mar 18 Tier 1 capi
Slide 66: Corporate tax rates by country of CBA’s key operations
Corporate tax rates by country of CBA’s key operations CBA Group 30.3% after Effective tax rate Banking Levy1 28.4% 35.0% 30.0% 28.0% 25.0% 19.0% 17.0% 16.5% USA Australia New Zealand Indonesia United Kingdom Singapore Hong Kong 1. The illustrative estimated annualised cost of the new Australian ban
Slide 67: Divisional contributions
Divisional contributions $m Operating Performance $m Cash NPAT FY17 vs FY16 FY17 vs FY16 Operating Income less Operating Expenses RBS 635 +8.9% RBS 424 +9.3% BPB 66 +2.8% BPB 117 +7.7% IB&M (29) (1.6%) IB&M 116 +9.7% WM (33) (4.6%) WM (59) (9.6%) ASB ASB 100 +7.1% 119 +13.0% (NZD) (NZD) BWA (8) (0.7
Slide 68: Our total income – benefiting all our stakeholders
Our total income – benefiting all our stakeholders $26.0bn Salaries $6.3bn 51,800 employees globally, 41,600 in Australia Including products and services from Expenses $4.8bn >5,000 small and medium-sized businesses Tax $3.9bn Australia’s largest tax payer LIE $1.1bn Reinvested $2.5bn Supporting Aus
Slide 69: Total income drivers
Total income drivers $m +5.1% Funds & Insurance 0.3% Average FUA 5.6% 26,005 24,747 Insurance income (1.1%) 2,820 2,811 Visa 397 65 141 Investment Experience 1 4,860 5,123 Other Banking Income 5.4% Derivative Valuation Adjustment (DVA) +$85m Trading (ex DVA) (2.0%) Commissions 12.1% 16,935 17,600 Ne
Slide 70: Over 12 months, Group NIM down 3 bpts
Over 12 months, Group NIM down 3 bpts bpts 214 5 (4) (2) 211 (2) Wholesale (4) FY16 Asset Funding NZ Capital & FY17 pricing costs Other 70
Slide 71: Volume growth
Volume growth1 Household Deposits Home Lending Business Lending2 Market share1 ex Bankwest 35% Market share1 30% 28.8% 26% 25.2% 25% 23.0% 23.2% 21% CBA 20% CBA Peers Peers 15% 14.2% 16% 14.8% 10% 13.5% 14.5% Jun 07 Jun 17 11% Jun 07 Jun 17 6.6% 6.7%3 6.7% 5.3% 4.4% 3.4% 3.1% 3.3% 1.4% 0.8% 1.2% 0.3
Slide 72: Market share
Market share1 % Jun 17 Dec 16 Jun 16 Home loans2 25.2 25.2 25.2 Credit cards – RBA3 24.3 24.4 24.4 Other household lending4 17.0 16.9 16.8 Household deposits 28.8 29.0 29.2 Business lending – RBA 16.5 16.6 16.9 Business lending – APRA 18.6 18.6 18.8 Business deposits – APRA 20.3 19.8 20.2 Asset fina
Slide 73: Other banking income higher
Other banking income higher Other banking income Trading income $m $m 5,520 4,860 414 1,087 1,149 4,811 1,039 11 Derivative 397 Visa Valuation Adj. Other 558 548 1,149 378 404 Trading Trading 1,039 1,087 424 1,078 Lending fees 1,005 1,010 783 734 654 Sales Commissions 2,209 2,215 2,482 (39) (74) FY1
Slide 74: Strategic approach to costs: positive jaws + continuing to invest
Strategic approach to costs: positive jaws + continuing to invest Operating 8.7% Performance 1 Underlying 7.3% Revenue Growth 5.5% 6.0% 5.4% 5.3% Expense Growth 5.4% 4.8% 5.3% 4.3% 3.8% 2.4% FY14 FY15 FY16 FY17 1. In order to present an underlying view of the result, FY17 growth rates have been adju
Slide 75: Strategic approach to costs: positive jaws + continuing to invest
Strategic approach to costs: positive jaws + continuing to invest Cost to Income Gross investment spend Investment spend (%) $m % of total 42.8% 1,373 1,246 1,279 10% Branches 12% 12% & Other 42.4% 692 30% 37% 37% Risk & 651 679 2nd Half Compliance underlying1 41.8% 58% 53% Productivity 681 51% & Gr
Slide 76: Increased risk & compliance spend
Increased risk & compliance spend ($m) Spend over FY13-17 Cumulative 5 years CAGR 29% 3,645 Examples • AML (Anti-Money Laundering) • FATCA (Foreign Account Tax Compliance Act) 2,752 • Stronger Super • Future Of Financial Advice • Common Reporting Standard 1,939 AML • Invested more than $230m in our
Slide 77: Credit Quality & Risk Management
Credit Quality & Risk Management
Slide 78: CBA home loan portfolio - overview and historical losses
CBA home loan portfolio - overview and historical losses Losses to average gross loans 2.5% FY17 losses of 3 bpts CBA Home Loans1 Group Total Loan Losses 2 Portfolio dynamic LVR3 of 50% 2.0% Maximum LVR of 95% all loans4 1.5% Limited low doc lending (with LMI)5 Servicing buffer +2.25% or m
Slide 79: Home loan portfolio – Australia
Home loan portfolio – Australia Portfolio1 Jun 16 Dec 16 Jun 17 New Business1 Jun 16 Dec 16 Jun 17 Total Balances - Spot ($bn) 409 423 436 Total Funding ($bn) 51 53 49 Total Balances - Average ($bn) 395 416 423 Average Funding Size ($’000)6 299 311 309 Total Accounts (m) 1.8 1.8 1.8 Serviceability B
Slide 80: Home loan portfolio – RBS
Home loan portfolio – RBS Portfolio1 Jun 16 Dec 16 Jun 17 New Business1 Jun 16 Dec 16 Jun 17 Total Balances - Spot ($bn) 345 357 368 Total Funding ($bn) 43 47 41 Total Balances - Average ($bn) 332 351 357 Average Funding Size ($’000)6 299 313 305 Total Accounts (m) 1.5 1.5 1.5 Serviceability Buffer
Slide 81: Australian home loans – portfolio growth profile
Australian home loans – portfolio growth profile $bn Balance Growth State Profile FY17 FY17 Balance Growth % of Portfolio 33 (92) 6% 102 16% 34% 18% (16) 10.5% 26% 436 409 8.1% 6.4% 2.6% 2.0% Jun 16 New Redraw & Repayments / External Jun 17 NSW/ACT VIC/TAS QLD WA SA/NT Fundings Interest Other Refina
Slide 82: RBS Payments in advance
RBS Payments in advance1 Payments in advance (% of accounts) Residual: have less than 1 month 6% repayment buffer Structural: loans that structurally 9% restrict payments in advance e.g. fixed rate loans etc 4% New Accounts: loans that are less than one year on book 29% 16% Investment loans: incenti
Slide 83: Serviceability
Serviceability Across the system, whilst gross household debt has risen, net Key Origination Interest rate buffers built into debt has remained stable Requirements1 serviceability tests 2 RBS % of annual household Serviceability 10% disposable income 80% cap on less certain income sources % (e.g.
Slide 84: Interest only
Interest only Arrears Payments in Advance 90+ days (Jun 17) 1.00% Maximum LVR of 80% at Portfolio Portfolio origination Interest Only Interest Only Interest Only – Owner Occupied Assessed on a P&I basis over 0.80% the residual term of the loan 66 Borrower profile skewed toward 0.60% higher inc
Slide 85: Investor lending
Investor lending Growth1 Income Profile2 Arrears2 Year on year (%) Applicant Gross Income Band 16% 50% 1.00% 90+ days Fundings (6 Months to Jun 17) 45% 12% 40% 0.80% Owner Occupied 35% Investment Loans 7.5% 8% 30% 0.60% 6.3% 25% 4% 5.7% 20% 0.40% 5.1% 15% Owner Occupied 0% Portfolio 10% 0.20% Invest
Slide 86: CBA home loan portfolio arrears
CBA home loan portfolio arrears Arrears by BU Arrears by Year Arrears by Vintage Group 90+ days1 Group 90+ days1 Australia2 90+ days 1.8% 1.8% 2.0% Group Bankwest RBS ASB 2013 2014 2015 2016 2017 1.5% 1.2% 1.2% FY07-FY10 FY13 FY12 1.0% FY14 0.6% 0.6% FY11 0.5% FY15 Excluding WA FY16 FY17 0.0% 0.0% 0
Slide 87: Portfolio arrears – Australian Home Loans by State
Portfolio arrears – Australian Home Loans by State Home loan arrears Western Australia 90+ days 1.50% % of Portfolio Rigorous stress testing 16% 34% WA 18% Credit policy tightening eg LVR caps, insurance 6% 1.00% 26% QLD requirements SA/NT Tailored treatments by segment National 0.50% National
Slide 88: WA economic overview
WA economic overview Unemployment Employment Jobs by Sector Unemployment rates (%) WA Employment Growth WA Jobs by sector (% of total) (annual % change) 0 2 4 6 8 10 12 7.0 12 Health Construct AUSTRALIA Retail Education Part-time Mining Prof serv 5.3 6 Accomm Gov admin WA Manufact Transp Pers 3.7 0
Slide 89: Loan to Value Ratio (LVR) and portfolio insurance
Loan to Value Ratio (LVR) and portfolio insurance Home Loan Dynamic LVR1 Portfolio Insurance Profile2 % of Australian Home Loan portfolio 70% Insurance with Genworth or QBE for higher risk loans above 80% New excess of loss 60% Average LVR re-insurance Dynamic LVR 22% 50% % of Total Portfolio Accoun
Slide 90: Home loans stress test – Australia
Home loans stress test – Australia Assumptions and Outcomes Summary Assumptions (%) Base Year 1 Year 2 Year 3 3 year scenario of cumulative 31% house price decline, peak 11% unemployment and a reduction Cash Rate 1.5 1.0 0.5 0.5 in the cash rate to 0.5%. Unemployment 5.8 7.5 9.5 11.0 Total net l
Slide 91: Consumer arrears
Consumer arrears Credit Cards Personal Loans 1.8% Group 90+ days 1.8% Group 90+ days 1.2% Group 1.2% Bankwest RBS 0.6% 0.6% ASB 0.0% 0.0% Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 Dec 16 Jun 17 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 Dec 16 Jun 17 Credit Cards Personal Loans 3.0% 4.0% Group 30+ days Group 30+ d
Slide 92: Regulatory exposure mix
Regulatory exposure mix Regulatory Credit Exposure Mix Portfolio CBA Peer 1 Peer 2 Peer 3 Residential Mortgages 56% 41% 45% 58% Corporate, SME, Specialised Lending 27% 31% 38% 29% Bank 4% 5% 5% 2% Sovereign 9% 15% 10% 7% Qualifying Revolving 3% 3% 1% 2% Other Retail 1% 5% 1% 2% Total 100% 100% 100%
Slide 93: Sector exposures
Sector exposures Exposures by Industry Top 20 Commercial Exposures AAA A+ BBB+ TCE $bn Other Jun 17 A- to AA- to A- to BBB- BBB AAA Sovereign 98.8 6.2 0.5 0.1 105.6 A+ Property 2.1 6.0 15.3 47.1 70.5 A- BBB+ Banks 30.3 26.7 6.7 2.3 66.0 BBB AA- Finance - Other 22.9 22.2 7.3 2.4 54.8 BBB- Retail & Wh
Slide 94: Credit exposures by industry
Credit exposures by industry Group TCE TIA $m TIA % of TCE Corporate Portfolio Quality Dec 16 Jun 17 Dec 16 Jun 17 Dec 16 Jun 17 % of book rated investment grade Consumer 54.8% 55.4% 1,409 1,578 0.24% 0.26% TCE ($bn) 68.7 68.7 69.2 Sovereign 9.5% 9.7% - - - - 500 Property 6.7% 6.5% 630 693 0.87% 0.9
Slide 95: TIAs relatively low and stable
TIAs relatively low and stable $bn Troublesome & Impaired 0.76% % of TCE Impaired 3.4 3.1 3.2 2.9 0.60% 0.63% 0.60% Troublesome 3.6 3.1 3.5 3.3 Jun 14 Jun 15 Jun 16 Jun 17 % of book rated investment grade 69.9% 69.2% 7.0 68.3% 68.7% 6.6 6.5 6.0 Jun 14 Jun 15 Jun 16 Jun 17 $bn Jun 14 Jun 15 Jun 16 Ju
Slide 96: Mining, oil & gas – lower exposure
Mining, oil & gas – lower exposure Overview Group Exposure Exposure of $14.7bn (1.4% of Group TCE), $0.2bn 70 73 70 Jun 16 reduction on prior half due to ongoing active portfolio Dec 16 management and repayments. Jun 17 Relatively stable performance over the past 12 months: 16.0 14.9 14.7 70%
Slide 97: Commercial property – lower exposure
Commercial property – lower exposure Overview Group Exposure 72.0 70.5 Jun 16 Exposure has reduced in the half year, though remains diversified 69.2 Dec 16 across sectors and by counterparties. Jun 17 86.3% of Commercial Property exposure to investors and REITS, 13.7% to developments (down from
Slide 98: Residential apartments – weighted to Sydney
Residential apartments – weighted to Sydney Overview1 Profile (Jun 17) Total Residential Apartment Development1 Apartment Development exposure reduced $12.3bn (17% of CP) $4.5bn (0.4% of TCE) $0.7bn (-14%) for the half Other Perth $0.3bn Facilities being repaid on time from pre-sale $0.2bn Inves
Slide 99: Retail trade
Retail trade Overview Group Exposure Exposure of $12.2bn (1.1% of Group TCE), $0.4bn reduction on 35 31 Jun 16 prior half. 29 Dec 16 Personal and household good retailing accounts for $6.3bn 11.6 12.6 12.2 Jun 17 (0.6% of Group TCE) Increased online retailing will present additional challenges
Slide 100: Agriculture – NZ Dairy portfolio quality improving
Agriculture – NZ Dairy portfolio quality improving Overview Group Exposure Jun 16 Exposure of $21.7bn (2.0% of Group TCE) is well diversified 21.2 21.7 by geography, sector and client base. 19.7 Dec 16 Australian agriculture portfolio performing well. Jun 17 14 NZ dairy portfolio: 12 12 Repr
Slide 101: Capital, Funding & Liquidity
Capital, Funding & Liquidity
Slide 102: Capital drivers
Capital drivers Capital – CET1 (APRA) 18 5 2 (23) (3) 114 (34) 8 9.9% (67) 10.1% Dec 16 Dividends Cash Underlying IRRBB Market Colonial Other APRA Other Jun 17 APRA (Net of DRP) NPAT Credit RWA RWA Debt Mortgages Regulatory APRA RWA Changes Treatments Total Risk Weighted Assets Credit Risk Weighted
Slide 103: Residential mortgage risk weights
Residential mortgage risk weights Residential mortgage risk weights by country Group IRB residential mortgage risk weights 25% 25% 25% 22% Includes Australian performing residential 24.7% mortgages at 25.25%4 17% 16% 16% 16.3% 16.1% 12% 11% 10% 7% 1 2 3 3 3 France Canada Sweden Norway Hong Kong Spai
Slide 104: Interest rate risk in the banking book
Interest rate risk in the banking book bpts 43 13 27 48 20 56 52 1,880 1,712 1,401 Optionality Risk 1,181 Optionality Risk Basis Risk 868 596 Basis Risk Repricing & Yield 388 Curve Risk Repricing & Yield Curve Risk $m Embedded Gain Embedded Gain (offset to capital) (offset to capital) Jun 14 Dec 14
Slide 105: Dividends over time
Dividends over time Payout ratio (cash) 74.2% 75.0% 78.2% 73.9% 73.2% 75.8% 75.9% 75.1% 75.2%1 76.5% 75.0% 81% 82% 80% 81% 90% 81% 70% 71% 70% 84% 70% 84% 71% 88% 87% 62% 62% 63% 61% 63% 84%74% cents 107 149 113 153 113 115 120 170 132 188 137 197 164 200 183 218 198 222 198 222 199 230 FY07 FY08 FY
Slide 106: International CET1 ratios
International CET1 ratios 20.0 G-SIBs in dark grey 15.6 15.3 15.2 APRA top quartile 1 14.9 14.7 14.5 14.2 14.1 14.0 14.0 14.0 13.5 13.4 13.2 13.0 13.0 13.0 12.9 12.8 12.5 12.4 12.4 12.1 12.0 11.9 11.6 11.5 11.3 11.3 11.2 11.2 10.9 3 10.8 10.7 10.6 10.5 3 Intesa Sanpaolo 3 China Construct. Bank Stand
Slide 107: APRA and International comparison
APRA and International comparison The following table provides details on the differences, as at 30 June 2017, between the APRA Basel III capital requirements and internationally comparable capital ratio1. CET1 APRA 10.1% Equity investments Balances below prescribed threshold are risk weighted, comp
Slide 108: CET1 – Internationally comparable
CET1 – Internationally comparable (bpts) Internationally Comparable1 CET1 impacted by APRA increase in risk weights for Australian residential mortgages implemented effective 30 June 2017 28 5 (10) 6 (70) 150 15.4% (89) 15.6% Dec 16 Dec 16 Cash Underlying Market Colonial Other Mortgage Jun 17 Int'l
Slide 109: Regulatory expected loss
Regulatory expected loss $m Jun 16 Dec 16 Jun 17 Regulatory Expected Loss (EL) 4,430 4,698 4,736 Eligible Provisions (EP) Collective Provisions1 2,562 2,561 2,486 Specific Provisions1,2 1,801 1,900 1,856 General Reserve for Credit Losses adjustment 552 532 589 Less: ineligible provisions (standardis
Slide 110: Leverage ratio – above Basel minimum
Leverage ratio – above Basel minimum CBA Leverage Ratio well above prescribed Basel Committee minimum Leverage ratio introduced to constrain the build-up of leverage in $m Jun 17 the banking system. Tier 1 Capital 52,684 Scheduled to be introduced as a minimum requirement from 1 January 2018. Total
Slide 111: Capital conservation buffer (CCB)
Capital conservation buffer (CCB)1 The Australian major banks are Domestic % of earnings able to Systemically Important Banks (D-SIBs). be used for CET1 ratio Value range From 1 January 2016, D-SIBs are required discretionary to hold 1% additional capital in the form of payments CET1 (called the D
Slide 112: Replicating portfolio
Replicating portfolio Actual and Forecast Scenario Replicating Portfolio Yield Official Cash Rate 2002 Jun 02 Jun 03 Jun 04 Jun 05 Jun 06 Jun 07 Jun 08 Jun 09 Jun 10 Jun 11 Jun 12 Jun 13 Jun 14 Jun 15 Jun 16 Jun 17 Jun 18 Jun 19 Replicating portfolio provides partial economic hedge for certain liabi
Slide 113: Funding overview
Funding overview 12 months to June 2017 $bn Source of funds Use of funds Core Funding Gap ($8bn) New 5.2 yrs NSFR Portfolio 4.1 yrs 107% 67% Deposit (35) (29) Funded 43 LCR 129% 43 (4) (2) (18) 3 (1) Equity Long Term Long Term Short Term Collateral Customer Lending HQLA Other Issuances 1 Maturities
Slide 114: Deposit funding
Deposit funding Deposits vs Peers1 Deposits in LCR calculation2 June 2017 ($bn) As at 31 March 2017 ($bn) 160 CBA 140 Peer 1 CBA overweight more Peer 2 stable deposits Peer 3 120 482 408 100 Other deposits 239 316 80 212 264 60 196 150 40 Household deposits 243 196 20 120 114 - CBA Peer 3 Peer 2 Pee
Slide 115: Deposit funding – transactions
Deposit funding – transactions Group Transaction Balances1 Growth across divisions FY17 v FY16 +38.0% 142,916 27.0% 126,780 103,528 Group 17.9% 12.7% $m 1.7% 4.9% 3.7% FY15 FY16 FY17 RBS BPB IB&M 2 BWA NZ 3 RBS New Transaction Accounts4 Retail Deposit Mix # ‘000 +5.7% 248,915 +22.4% 235,446 43,422 5
Slide 116: Funding costs vs cash rate
Funding costs vs cash rate • RBA cash rate and lending rates track similar though not identical path - reflecting global markets • Spread between funding costs and lending rates narrowed as not all funding costs are passed on 116
Slide 117: Wholesale Funding – overview
Wholesale Funding – overview Funding composition Average long term funding costs Margin to BBSW (bpts) Customer Deposits 67% 2.00 1 1.75 Predicted LT funding costs ST Wholesale Funding 13% if current market rates 1.50 remain unchanged LT Wholesale Funding > 12 months 10% 1.25 LT Wholesale Funding ≤
Slide 118: Wholesale Funding – portfolio
Wholesale Funding – portfolio Term Wholesale Funding profile – issuance and maturity $bn Issuance Maturity 50 Weighted average maturity 4.1 years 40 30 20 10 Jun 14 Jun 15 Jun 16 Jun 17 Jun 18 Jun 19 Jun 20 Jun 21 Jun 22 Jun 23 > Jun 23 Long Term Wholesale Debt Covered Bond Securitisation Term Whole
Slide 119: Liquidity Coverage Ratio (LCR)
Liquidity Coverage Ratio (LCR) • LCR 129% at 30 Jun 2017 • Committed Liquidity Facility reduced by $10.2bn on 1 Jan 2017 to $48.3bn • The Group’s Net Stable Funding Ratio (NSFR) is 107% 120% 135% 129% 154.7 141.7 133.6 111.4 114.8 110.1 18.7 96.2 21.9 15.3 Net Cash Outflows 75.1 93.4 Liquid Assets 2
Slide 120: Balance sheet comparisons
Balance sheet comparisons1,2 UK USA Australia Comparison Assets Liab + Equity Assets Liab + Equity Assets Liab + Equity Assets – CBA has a safe, conservative asset profile: 4% 51% of balance sheet is home loans, which are 9% 8% 7% stable/long term. 13% 11% Trading securities and other fair value
Slide 121: Regulatory change timetable
Regulatory change timetable APRA 2017 2018 2019 2020 2021 Competition Unquestionably strong1 Financial System Increase in ADIs to target unquestionably strong capital ratios, which will also Release of final prudential Implementation Inquiry mortgage cover “Basel IV” proposals. Discussion papers, dr
Slide 122: Economic Overview
Economic Overview
Slide 123: Key economic indicators (June FY)
Additional Key economic indicators (June FY) information GDP % CPI% Unemployment Rate % GDP Nominal GDP 6.2 5.5 3.1 5.9 2.7 4.5 2.7 5.8 2.6 2.6 4.2 2.5 5.6 2.4 3.5 1.9 5.5 1.8 1.7 1.7 2.4 1.4 5.2 1.7 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 2014 2015
Slide 124: Key economic indicators (June FY)
Key economic indicators (June FY) 2013 2014 2015 2016 2017 2018 2019 World GDP 3.3 3.4 3.2 3.1 3.2 3.5 3.5 Australia Credit Growth % – Total 3.1 5.0 5.9 6.1 5.4 4½ - 6½ 4½ - 6½ Credit Growth % – Housing 4.6 6.4 7.3 6.7 6.6 4½ - 6½ 4½ - 6½ Credit Growth % – Business 1.2 3.4 4.4 6.5 4.4 5-7 5-7 Credit
Slide 125: The global backdrop is improving
The global backdrop is improving Global Growth1 Global Policy Settings2 (average annual % change) Official Interest Rates (%) 8 8 6 6 Australia 4 4 NZ 2 2 Euro Canada US 0 0 UK Japan -2 -2 2004-07 2008-16 2017-19 Jan 07 Jan 09 Jan 11 Jan 13 Jan 15 Jan 17 Policy makers are becoming increasingly confi
Slide 126: The global backdrop is improving
The global backdrop is improving Labour Markets1 Commodity Prices2 Unemployment rate (%) CBA commodity price index 12 Euro zone 400 8 UK Australia 300 4 US 200 Japan 0 100 Jan 05 Jan 07 Jan 09 Jan 11 Jan 13 Jan 15 Jan 17 Sep 04 Sep 07 Sep 10 Sep 13 Sep 16 Global growth is generating job gains and Co
Slide 127: Rising debt levels are a significant global risk
Rising debt levels are a significant global risk Global Debt1 Global Debt1 % of GDP % of GDP 100 300 Mature market government debt 75 240 Emerging market non- financial corporates 180 50 Mar 99 Mar 03 Mar 07 Mar 11 Mar 15 Mar 99 Mar 03 Mar 07 Mar 11 Mar 15 Global debt continues to rise and now stand
Slide 128: Australia remains well placed
Australia remains well placed The longest expansion Favourable momentum1 Years of continuous growth Composite PMI (index) 59 Finland (1992-07) UK (1991-08) 56 Australia France (1975-92) Global US (1991-08) 53 China Canada (1991-08) 50 Netherlands (1983-08) Australia (1991-) 47 0 10 20 30 May 16 Sep
Slide 129: Growth positives
Growth positives Resources Infrastructure Mining output by sector (index, QIII’12=100) State public capex (index, trend, Dec’12=100) 130 130 175 VIC 150 110 110 Iron ore NSW TAS Coal WA 125 90 90 Oil & gas SA 100 Other QLD 75 70 70 Sep 12 Sep 14 Sep 16 Dec 12 Dec 14 Dec 16 Mar 14 Mar 16 New capacity
Slide 130: Growth positives
Growth positives Asian income growth1 Labour market2 Asian income growth proxy (%) (Australian GDP exposed to Asian income growth, % pa) 2.0 7.0 Unemployment rate 1.5 6.4 (rhs) 6 1.0 5.8 3 0.5 5.2 0 0.0 4.6 Employment (qtly % ch) -0.5 (lhs) 4.0 -3 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Sep 00 Sep
Slide 131: Growth disappointments
Growth disappointments Residential construction Business capex Dwelling construction (rolling annual total, ‘000) Business investment (% of GDP) 16 Non- Mining 12 200 Dwelling commencements 8 150 Mining 4 Building approvals 100 0 Sep 86 Sep 95 Sep 04 Sep 13 Sep 00 Sep 03 Sep 06 Sep 09 Sep 12 Sep 15
Slide 132: Growth risks
Growth risks Household debt1 Household income2 Australia: Debt (% of GDP) H/hold disposable income per capita (annual % change) 12 120 Households 9 Non-financial 80 corporates 6 Financial corporates 3 40 0 Government 0 -3 Mar 99 Mar 03 Mar 07 Mar 11 Mar 15 Mar 04 Mar 07 Mar 10 Mar 13 Mar 16 Governme
Slide 133: Growth risks
Growth risks Savings ratio Wages growth (%) Wage measures (annual % change) 20 15 6 AWE 10 4 5 2 WPI 0 0 -5 Dec 97 Dec 01 Dec 05 Dec 09 Dec 13 Dec 17 Sep 72 Sep 80 Sep 88 Sep 96 Sep 04 Sep 12 The decline in the savings ratio has supported consumer Wages growth has continued to slow due to elevated l
Slide 134: Housing fundamentals suggest price growth should slow
Housing fundamentals suggest price growth should slow Credit growth1 Housing supply and demand2 Sales activity3 Credit growth (three months ended annualised rate, %) CBA: Housing demand & supply (‘000) Dwelling turnover (‘000) 12 % '000 Investor Supply 9 600 200 housing % of dwelling stock 8 Demand
Slide 135: Dwelling price momentum has eased
Dwelling price momentum has eased Dwelling prices1 Dwelling price momentum2 (annual change %) Dwelling prices (annual % change) 50 24 8 capital cities 40 30 12 Melbourne 20 Sydney 0 10 0 -12 Price -10 momentum Brisbane Perth -24 -20 Jan 98 Jan 02 Jan 06 Jan 10 Jan 14 Jan 06 Jan 08 Jan 10 Jan 12 Jan
Slide 136: Typical housing bubble factors not evident in Australia
Typical housing bubble factors not evident in Australia Housing “Bubble” – Current position in Australia typical characteristics Unsustainable asset prices • Strong building in recent years means that demand and supply are now more in balance • Price growth has slowed in some areas but remains solid
Slide 137: New Zealand
New Zealand Global dairy trade auction results1 NZ short term arrivals2 (USD/tonne) (monthly, seasonally adjusted) 6,000 Whole Milk Powder 340 Lions tour 5,000 320 300 Masters Games 4,000 280 CWC 260 RWC 3,000 240 220 Lions tour 2,000 GDT overall price 200 180 1,000 160 08 09 10 11 12 13 14 15 16 05
Slide 138: New Zealand
New Zealand NZ CPI inflation1 OCR forecasts2 (%) (ASB forecast and implied market pricing, %) 6 4.0 (f) 5 Annual % 3.5 4 3 3.0 2 OCR implied by current 2.5 market pricing 1 2.0 0 ASB Economics Forecast (peak of 3.5% in 2020) quarterly change -1 1.5 Jun 00 Jun 03 Jun 06 Jun 09 Jun 12 Jun 15 Sep 13 Ju
Slide 139: New Zealand
New Zealand NZ household lending growth1 NZ median house price2 (annual % change) (3 month moving average, $’000) 1000 20 900 15 800 Auckland Mortgage lending 10 700 600 5 NZ 500 Wellington 0 400 -5 Consumer Credit 300 Canterbury/Westland 200 -10 Jan 05 Jan 07 Jan 09 Jan 11 Jan 13 Jan 15 Jan 17 Mar
Slide 140: Customer metrics
Customer metrics 1 Roy Morgan Research Retail Main Financial Institution (MFI) Customer Satisfaction. Australian population 14+, % “Very Satisfied” or “Fairly Satisfied” with relationship with that MFI. 6 month rolling average to June 2017. Peers includes ANZ, NAB and Westpac. CBA excludes Bankwest.
Slide 141: CBA overview metrics
CBA overview metrics Sources for ‘CBA overview’ slide 38 Our people and customers 1 Customer satisfaction – Retail: Roy Morgan Research Retail Main Financial Institution (MFI) Customer Satisfaction. Australian population 14+, % “Very Satisfied” or “Fairly Satisfied” with relationship with that MFI.
Slide 142: Technology metrics
Technology metrics Sources for ‘Australia’s leading technology bank’ slide 44 1 Customer satisfaction – internet banking services: Roy Morgan Research. Australian population 14+. Proportion of customers who conducted internet banking via website or app with their Main Financial Institution in the la
Slide 143: Glossary
Glossary Capital & Other Funding & Risk Risk Weighted Assets or The value of the Group’s On and Off Balance Sheet assets are Liquidity coverage ratio The LCR is the first quantitative liquidity measure that is part of the Basel III RWA adjusted by risk weights calculated according to various APRA (L
Slide 144: Disclaimer
Disclaimer Disclaimer The material in this presentation is general background information about the Group and its activities current as at the date of the presentation, 9 August 2017. It is information given in summary form and does not purport to be complete. It is not intended to be relied upon as
Commonwealth Bank of Australia — FY2017 Earnings Presentation on 6ix