Commonwealth Bank Of Australia · ASX:CBA
Commonwealth Bank Of Australia — H1 FY2016 Earnings Presentation
164 slides from Commonwealth Bank Of Australia's earnings presentation, Feb 10, 2016
Slide 1: Results Presentation for the Half Year Ended 31 December 2015
For personal use only RESULTS PRESENTATION Results Presentation FOR THE HALF YEAR ENDED 31 DECEMBER 2015 For the half year ended 31 December 2009 COMMONWEALTH BANK OF AUSTRALIA | ACN 123 123 124 | 10 FEBRUARY 2016 10 February Commonwealth Bank of Australia ACN 123 123 124 2010
Slide 2: Disclaimer
Notes 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, 10 February 2016. It is information given in summary form and does not purport to be complete. It is not intended
Slide 3: Our Vision and Values
Our Vision and Values For personal use only Our Vision Our Values Integrity To excel at Accountability securing and enhancing Collaboration the financial wellbeing of people, businesses and Excellence communities Service 3
Slide 4: Snapshot 1H16
Additional Snapshot 1H16 1 information Financial Operating Performance 3 For personal use only Cash earnings ($m) 4,804 4% Group ($m) 7,146 6% ROE (Cash) 17.2% (140) bpts Retail Banking Services ($m) 3,466 8% Cash EPS ($) 2.84 1% Business and Private Banking ($m) 1,219 5% DPS ($) 1.98 - Institutiona
Slide 5: Cash NPAT up 4%
Cash NPAT up 4% For personal use only Dec 15 vs Dec 15 Dec 14 Statutory Profit ($m) 4,618 2% Cash NPAT ($m) 4,804 4% ROE – Cash (%) 17.2% (140) bpts Cash Earnings per Share ($) 2.84 1% Dividend per Share ($) 1.98 - 5
Slide 6: Business Unit Summary
Additional information Business Unit Summary 1H16 vs 1H15 For personal use only % of Cost-to- 1 Operating Operating Cash Business Unit Group Costs LIE Income Income Performance NPAT NPAT Dec 15 RBS 45% 7% 4% 8% 14% 8% 33% BPB 17% 5% 4% 5% 13% 5% 38% IB&M 13% 1% 12% (5%) 44% (6%) 37% 2 IB&M 13% 8% 12
Slide 7: All divisions contributing
All divisions contributing Cash NPAT 1H16 1 For personal use only Income 7% C:I 80 bpts to 32.8% Transaction Deposits 29% Income 5% C:I 70 bpts to 41.5% Deposits 10% Slower lending volumes +8% Subdued lending growth Income (ex CVA/FVA) 8% Lending (avg) 17% Loan imp
Slide 8: MFI Share
Additional information MFI Share MFI Share MFI Share by Age For personal use only % Overall 34.1% 34.0 34.2 34.1 Dec 14 Jun 15 42.7% Dec 15 45.2% 42.5% Opportunity 20.0 19.4 19.4 Gap MFI Share 13.3 13.5 13.7 30.2% 29.4% 11.4 11.6 11.8 28.1% CBA Peer 3 Peer 1 Peer 2 14-17 18-24 25-34 35-49 50-64 65+
Slide 9: Continued focus on the customer
Continued focus on the customer For personal use only Ranking Customer Satisfaction - Retail #1 Customer Satisfaction - Business = #1 Customer Satisfaction - Wealth #2 Customer Satisfaction - IFS #1 Customer Satisfaction - Internet #1 Refer notes slide at back of this presentation for source informa
Slide 10: Notes
For personal use only 10 Notes
Slide 11: Customer focus - more needs met
Customer focus - more needs met Retail Customer Satisfaction Customer Needs Met For personal use only % Satisfied ('Very Satisfied' or 'Fairly Satisfied') (#) 3.2 86% 83.9% 3.11 84% 3.0 82% 2.8 80% 78% 2.6 76% 74% 2.4 72% 2.2 70% 68% 2.0 Dec 07 Dec 15 Dec 08 Dec 15 CBA Peers Refer notes slide at bac
Slide 12: Market Share
Additional Market Share 1 information % Dec 15 Jun 15 Dec 14 For personal use only Home loans 25.1 25.3 25.4 Credit cards – RBA2 24.4 24.3 25.1 Other household lending3 16.6 16.3 16.6 Household deposits4 29.3 29.5 29.1 Business lending – RBA 17.0 17.1 17.1 Business lending - APRA 18.6 18.8 18.5 Busi
Slide 13: Ongoing volume growth
Ongoing volume growth Balance Growth1 For personal use only Continued strong growth 12 months to Dec 15 Reflects long in Transaction Accounts term investment in frontline A balanced Growth in line volume/margin outcome with system Good growth in 12.0% 10.6% target sectors 9.3% 7.7% 7.7% 7.8% 7.4% 6.
Slide 14: Deposits
Additional information Deposits Deposits vs Peers1 Treatment of Deposits in LCR For personal use only Dec 15 $bn calculation2 $bn As at 30 September 2015 ($bn) 427 160 CBA overweight more 364 140 stable deposits CBA Other 120 202 295 Peer 1 deposits Peer 2 184 100 Peer 3 245 80 183 140 60 Household
Slide 15: Transaction Banking
Transaction Banking Group Transaction Balances Strong growth across divisions For personal use only $m 1H16 v 1H15 +21% 34% 29% 97,327 Group 80,758 21% +21% 71,039 14% 15% Ex 5% offset 9% accounts 2% 1 1H14 1H15 1H16 RBS BPB IB&M BWA NZ RBS New Transaction Accounts 2 • Fast, simple processes in real
Slide 16: Our Strategy
Additional information Our Strategy Customer Focus For personal use only People Productivity Technology Strength Capabilities “One CommBank” Growth Continued growth in business and institutional banking Opportunities Disciplined capability-led growth outside Australia TSR Outperformance 16
Slide 17: Continuous Innovation
Continuous Innovation 2010 – 2015 1H16 For personal use only Everyday settlement, Online origination, MyWealth, • Innovating in Wealth, ASB & IFS Pi & Leo, Touch ID, Portfolio View, Small Business • Expanding the digital wallet app, Daily IQ, PayTag, Tap&Pay, VC in branches, Apps for smart watches a
Slide 18: Notes
For personal use only 18 Notes
Slide 19: Continuous Innovation
Continuous Innovation Wealth ASB TYME For personal use only Clever Kash – Rapid cycle testing of Portfolio View - SMSF cashless interactive digital strategy Complete view of moneybox solutions investment portfolio - R&D + partnerships + 37% increase in Mobile shares, cash, property banking licence a
Slide 20: Notes
For personal use only 20 Notes
Slide 21: Exploring new opportunities
Exploring new opportunities Supporting Australia’s growing digital economy For personal use only Quantum Blockchain Cyber Security Supporting Australian Driving collaboration Partnership with UNSW researchers in and innovation through in a centre of expertise developing the world’s the R3 partnershi
Slide 22: Notes
For personal use only 22 Notes
Slide 23: Productivity
Productivity Case Study Enabling Reinvestment For personal use only Gross Investment Spend ($m) % of total Retail Collections & Other 13% Risk & 24% 12% 12% 28% Customer Solutions1 Compliance 36% Productivity & Growth 63% 60% 52% Continuous improvement culture, 1H14 1H15 1H16 process simplification
Slide 24: Notes
For personal use only 24 Notes
Slide 25: Strength to support our customers
Strength to support our customers Deposit Wholesale For personal use only Capital Funding Funding Liquidity3 Basel III % of Total Funding Portfolio Tenor2 $bn Common Equity Tier 1 (years) 14.3% LCR 116% 123% Internationally comparable1 140 10.2% 64% 3.9 3.9 9.2% 63% 66 CLF 136 HQLA4,5 74 assets Dec
Slide 26: Notes
For personal use only 26 Notes
Slide 27: Results Presentation - Chief Financial Officer
For personal use only RESULTS PRESENTATION FOR THE HALF YEAR ENDED 31 DECEMBER 2015 Results Presentation D AV I D C R A I G CHIEF FINANCIAL OFFICER For the half year ended 31 December 2009 COMMONWEALTH BANK OF AUSTRALIA | ACN 123 123 124 | 10 FEBRUARY 2016 10 February Commonwealth Bank of Australia
Slide 28: Non-cash items
Additional information Non-cash items For personal use only $m Dec 15 Dec 14 Cash NPAT 4,804 4,623 Non-cash items Hedging and IFRS volatility Unrealised accounting gains and losses arising from (151) (42) the application of “AASB 139 Financial Instruments: Recognition and Measurement” Other Bank
Slide 29: Good operating result
Good operating result For personal use only Dec 15 vs $m Dec 15 Dec 14 Dec 14 Operating income 12,362 11,647 6% Operating expenses (5,216) (4,914) 6% Operating performance 7,146 6,733 6% Investment experience 58 80 (28%) Loan impairment expense (564) (440) 28% Tax and non-controlling interests (1,83
Slide 30: Other Banking Income
Additional information Other Banking Income Other Banking Income Trading Income For personal use only $m $m 496 519 529 2,479 2,386 30 2,245 26 202 262 Other 108 206 Trading 529 496 179 Trading 519 200 Lending 528 562 537 fees 357 Sales 293 320 Commissions 1,081 1,127 1,159 1H14 1H15 1H16 (67) CVA /
Slide 31: Operating Income up 6%
Operating Income up 6% $m +6% For personal use only +5% before FX Funds & Insurance +10% Average FUA 7% 1,519 Insurance income 17% 1,386 2,386 2,479 Other Banking Income +4% FVA / CVA ($97m) Trading (ex FVA/CVA) 13% OBI (ex Trading) 7% 8,364 Net Interest Income +6% 7,875 Volume 9% Margin
Slide 32: Group NIM Movement
Additional information Group NIM 12 Month Movement For personal use only bpts 211 1 (1) 206 (5) 209 Group NIM 5bpts ex Treasury & Markets 204 ex Treasury & Markets 1H15 Funding Basis Capital & 1H16 costs risk Other 32
Slide 33: Group NIM flat
Group NIM flat bpts Group NIM (Six Months) For personal use only 214 6 Month Movement 214 214 209 12 month NIM 211 bpts 206 206 210 210 209 204 204 1H14 2H14 1H15 2H15 1H16 1 1 206 206 (2) Group NIM 1bpt ex Treasury & Markets ex Treasury 204 204 & Markets Group NIM ex Treasury & Markets flat 2H15
Slide 34: Continuing to Invest
Additional information Continuing to Invest Gross Investment Spend Investment Spend For personal use only $m % of total 1,286 1,246 1,237 1,179 1,182 Branches 13% 12% 12% & Other 639 655 651 24% 28% Risk & 2nd Half 638 593 36% Compliance 63% Productivity 681 60% 647 52% & Growth 1st Half 541 582 589
Slide 35: Underlying expenses up 3.8%
Underlying expenses up 3.8% $m For personal use only Underlying + 3.8% + 6.1% 69 5,216 44 60 5,103 34 95 4,914 1H15 Staff Amortisation Other 1H16 Investment FX 1H16 underlying Spend increase 35
Slide 36: Credit quality
Additional information Credit quality Commercial Portfolio Quality LIE to Gross Loans For personal use only Consumer (bpts) % of book rated investment grade 67.5 68.8 68.3 69.8 69.9 69.8 500 TCE ($bn) 400 Other 19 18 18 17 17 16 300 BBB 200 A 100 AAA/AA 0 Jun 13 Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 FY
Slide 37: Sound credit quality
Sound credit quality Loan Impairment Expense Consumer Arrears For personal use only CBA Group (bpts) Personal Loans 90 Days+ Credit Cards Home Loans 1.34% 1.09% 1.06% 1.05% 73 1.21% 0.91% 0.92% 0.89% 0.52% 0.49% 0.52% 0.47% Jun 13 Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 41 Troublesome and Impaired Assets
Slide 38: Provision coverage
Additional information Provision coverage Collective Provisions to Credit RWA For personal use only CBA Peer 1 1.5% Peer 2 Peer 3 1.0% 0.5% FY09 FY10 FY11 FY12 FY13 FY14 FY15 1H16 Total Provisions to Credit RWA CBA Peer 1 2.0% Peer 2 Peer 3 1.0% 0.0% FY09 FY10 FY11 FY12 FY13 FY14 FY15 1H16 Charts ba
Slide 39: Strong provisioning
Strong provisioning Individual Provisions Collective Provisions For personal use only $m $m 2,763 2,762 2,801 1,116 Overlay 790 755 774 357 887 909 264 232 Bankwest 306 219 267 128 132 Consumer 983 128 942 981 631 558 492 Commercial 725 762 812 Dec 14 Jun 15 Dec 15 Dec 14 Jun 15 Dec 15 39
Slide 40: RBS
Additional information RBS Retail Banking Services Home Loan Market Share For personal use only CBA Peer 1 1H16 vs Peer 2 Peer 3 $m 1H16 1H15 27% Home loans 2,081 8% 25% 25.1% Consumer finance 1,278 6% 23.2% 23% Retail deposits 1,498 7% 21% Distribution 223 9% 19% Other 80 (9%) Total banking income
Slide 41: Retail Banking Services
Retail Banking Services 1H16 vs 1H15 Cost-to-Income Ratio For personal use only Segment Income Operating Performance % 8% 8% (260 bpts) 7% 7% 6% 4% 35.4 33.6 32.8 Home Consumer Retail Income Costs Operating Dec 13 Dec 14 Dec 15 loans finance deposits performance RBS Margin Retail Deposit Mix bpts $b
Slide 42: Corporate
Additional information Corporate Business & Private Banking Institutional Banking & Markets For personal use only 1H16 vs 1H16 vs $m 1H16 $m 1H16 1H15 1H15 Corporate Financial Services 709 7% Institutional Banking 1,127 5% Regional and Agribusiness 322 (1%) Markets 311 (13%) Local Business Banking 5
Slide 43: Corporate
Corporate BPB – 1H16 vs 1H15 IB&M –1H16 vs 1H15 For personal use only Segment Income Operating Performance Segment Income Operating Performance 10% 5% 5% 7% 4% 16% 5% 12% 4% 8% 5% (1%) (13%) (5%) 1% CFS RAB LBB Private Comm Income Costs Operating Bank Sec performance Institutional Markets Markets In
Slide 44: Wealth Management
Additional information Wealth Management Wealth Management Insurance Inforce For personal use only 1H16 vs $m +4% $m 1H16 1H15 67 24 CFSGAM 437 9% 2,472 2,381 Colonial First State (CFS)1 467 4% CommInsure (CI) 390 15% Dec 14 Life General Dec 15 Insurance Insurance Total operating income 1,294 9% Spo
Slide 45: Wealth Management
Wealth Management 1H16 vs 1H15 FUA For personal use only Segment Income1 Operating Performance $bn +5% 10% 15% 9% 4.1 133.9 6% 1.7 9% 128.1 4% CFSGAM CFS CI Income1 Costs2 Operating Dec 14 Net Markets & Dec 15 performance3 Spot flows other General Insurance Claims CFSGAM Funds Performance Net Event
Slide 46: Funding
Additional information Funding Funding Composition Average Long Term Funding Costs For personal use only Margin to BBSW (bpts) Customer Deposits 64% 2.00 200 1.75 175 ST Wholesale Funding 1 17% 1.50 150 LT Wholesale Funding ≥ 12 months 9% 1.25 125 Covered Bonds 4% 1.00 100 Predicted LT LT Wholesale
Slide 47: Funding and Liquidity
Funding and Liquidity Funding Liquidity 2 For personal use only $bn $bn Source of funds Use of funds LCR 116% 120% 123% 136 140 132 16 (15) 64% Deposit 66 Funded CLF 70 66 22 (30) HQLA3 66 66 74 (1) 2 7 (1) Equity IFRS & FX Net short Customer New long 1 Long term 1 Lending Other Assets Dec 14 Jun 15
Slide 48: Dividend per Share
Additional information Dividend per Share For personal use only Payout 75.0% 78.2% 73.9% 73.2% 75.8% 75.9% 75.1% 75.1% ratio (cash) 81% 81% 90% 81% 70% 71% 84% 70% 84% 71% 87% 62% 62% 63% 63% 84%74% cents 113 153 113 115 120 170 132 188 137 197 164 200 183 218 198 222 198 FY08 FY09 FY10 FY11 FY12 FY
Slide 49: Interim Dividend
Interim Dividend cents per share For personal use only 140% 198 198 183 120% 164 100% 137 132 113 120 113 80% 84% Cash NPAT 71% 71% Payout Ratio 70% 70% 60% 63% 62% 62% 63% 40% 1H08 1H09 1H10 1H11 1H12 1H13 1H14 1H15 1H16 20% 49 0%
Slide 50: Pro-forma Capital
Additional information Pro-forma Capital For personal use only From July 2016 - Mortgage risk weight change has Entitlement offer increases average no impact on the Group’s (Aug-15) raised risk weight for the internationally comparable ratio. $5.1bn or 131 Group’s mortgage Capital raising strengthen
Slide 51: Strong Capital Position
Strong Capital Position bpts CET1 For personal use only 14.3% 122 (28) (38) 131 (77) 10.2% 9.2% 9.1% 8.0% Dec 14 Jun 15 Share Jun 15 Cash Underlying 1 Other 2 Dec 15 APRA Dec 15 APRA APRA Issue Final NPAT Credit RWA APRA Min Int'l 3 Dividend 2016 (Net of DRP) 1 Excludes impact of FX and change in re
Slide 52: Notes
For personal use only 52 Notes
Slide 53: International Peer Basel III CET1
International Peer Basel III CET1 Peer bank top quartile G-SIBs in dark grey For personal use only 18.3 12.7%1 16.0 14.3 14.2 14.0 13.7 13.5 13.2 13.2 12.7 12.7 12.4 12.3 12.0 11.8 11.6 11.5 11.4 11.3 11.2 11.1 11.1 11.0 11.0 10.9 10.8 10.7 10.7 10.6 10.6 10.6 10.4 10.3 10.3 10.3 9.9 9.8 9.7 Santand
Slide 54: Notes
For personal use only 54 Notes
Slide 55: Summary
Summary A volume driven income result Good operating performance For personal use only 1H16 vs 1H15 (Income less operating expense, $m) +6% +8% 1H16 vs 1H15 FUA F&I +10% +7% 3,466 OBI +4% Volume +5% NII +6% +5% +7% +9% 1,219 +13% +1% 968 462 741 550 1 2 Total Operating Income RBS BPB IB&M WM NZ BW C
Slide 56: Notes
For personal use only 56 Notes
Slide 57: Results Presentation - Chief Executive Officer
For personal use only RESULTS PRESENTATION FOR THE HALF YEAR ENDED 31 DECEMBER 2015 IAN NAREVResults Presentation CHIEF EXECUTIVE OFFICER For the half year ended 31 December 2009 COMMONWEALTH BANK OF AUSTRALIA | ACN 123 123 124 | 10 FEBRUARY 2016 10 February Commonwealth Bank of Australia ACN 123 12
Slide 58: Notes
For personal use only 58 Notes
Slide 59: Supporting jobs and growth
Supporting jobs and growth For personal use only $6 billion in salaries and wages to 41,000 Australians and 51,000 people overall $4 billion to 6,000 SME partners and suppliers Over $3 billion in tax, representing more than 4.5% of Australia's total corporate tax $5.5 billion in dividends to
Slide 60: Economic Indicators
Additional information Economic Indicators 2011 2012 2013 2014 2015 2016 2017 For personal use only World GDP 4.2 3.4 3.3 3.4 3.1 3.1 3.3 Australia Credit Growth % – Total 2.6 4.4 3.1 5.0 6.0 5½-6½ 4¾-6¾ Credit Growth % – Housing 6.1 5.0 4.6 6.4 7.3 6-7 5-7 Credit Growth % – Business -2.3 4.4 1.2 3.
Slide 61: Outlook
Outlook For personal use only Steady transition, driven by sound monetary policy and lower AUD Global volatility warrants caution, but overreaction also a threat Long term policy needed for on-going transition: tax, infrastructure, spending Financial services a prevailing strength – must be
Slide 62: Result quality
Additional information Result quality Group NIM ROE 1 For personal use only 2.4 Cash basis % 2.3 Pre-Capital CBA raising 2.2 Peers 17.2% 2.1 15.9% 2.0 13.3% 1.9 1.8 10.0% 1.7 Sep 12 Mar 13 Sep 13 Mar 14 Sep 14 Mar 15 Sep 15 CBA Peer 3 Peer 1 Peer 2 CBA ROE for 1H16 Capitalised Software Capital 2 3 $
Slide 63: Summary
Summary For personal use only Operating momentum across all businesses from ongoing customer focus Continuing commitment to invest – adapting a strong franchise for the future Circumspect about global volatility. Long-term strategies and policies needed for continuing economic transition in Au
Slide 64: Supplementary Slides
For personal use only RESULTS PRESENTATION FOR THE HALF YEAR ENDED 31 DECEMBER 2015 S U P P L E M E N TA R Y S L I D E S O v e r v i e w, C u s t o m e r s & P e o p l e 65 Technology & Innovation 80 Strength – Capital, Funding & Risk 100 Business Performance 130 Economic Indicators 147 Results Pres
Slide 65: CBA Overview
CBA Overview Australia NZ Other Total For personal use only People, Customers 13.0m 2.2m 0.5m 15.7m Customers & Staff 41,400 5,700 4,600 51,700 Delivery Branches 1,148 134 147 1,429 ATMs 4,393 460 174 5,027 Retail #1 Customer Business = #1 Satisfaction Internet Banking #1 Main Financial Institution
Slide 66: Broad contributor to Australian wellbeing
Broad contributor to Australian wellbeing Operating Loan impairment For personal use only Income 1H16 Expenses Including ~6,000 Cost of lending SME partners and across the economy suppliers $0.6bn $2.1bn $1.8bn Tax expense Salaries Australia’s largest tax Employing ~41,400 $3.1bn $1.4bn payer people
Slide 67: Creating jobs and opportunities
Creating jobs and opportunities For personal use only Providing direct employment Employing over 1 in 11 people to ~41,400 people in Australia, working in the Australian ~51,700 people globally financial services sector Paid over $2bn to ~6,000 Paid $2.5bn in wages to suppliers in 1H16 – Aus
Slide 68: Our People
Our People Employee Engagement Index Score Women in Executive Manager and above For personal use only % Annual % roles Measure 35% 34% 81% 81% 33% 80% 80% 31% 30% 28% 26% FY12 FY13 FY14 FY15 FY10 FY11 FY12 FY13 FY14 FY15 1H16 Lost Time Injury Frequency Rate Employee Turnover – Voluntary Rate % 2.7 2
Slide 69: Our Stakeholders
Our Stakeholders Customer Product Holdings1 For personal use only 14.8m Super fund unit holders ? 5.1m 11.0m 4.7m 2.2m 4.2m 1.7m 3.3m 865k 1.8m 646k >300k 1.1m ~800k 51,700 Home Loans Credit Cards Retail Savings Insurance Personal Loans Business Funds CommSec Shareholders Employees and Transactions
Slide 70: Delivering consistent returns
Delivering consistent returns Cash ROE For personal use only CBA Ranking1 Market Return Return Dividend Taxes Cap on on declared Paid (ASX) Equity Assets 1st 1st 1st 29th 80th 600 19.2% 19.2% 18.7% 18.6% Return 1.1% on 500 17.9% Assets 17.2% 400 1.0% 300 200 100 - 1H11 1H12 1H13 1H14 1H15 1H16 1 Mos
Slide 71: Investing in Australia
Investing in Australia $2m 55,056 For personal use only 65 In grants to 228 Visitors to the Spirit Cricket clubs youth focused of Anzac Centenary sponsored organisations Experience 88,248 $470k 184 Calls to our Raised for the Australians Indigenous Clown Doctors recognised as customer ‘Australians o
Slide 72: Corporate Responsibility
Corporate Responsibility Our vision is to excel at securing and enhancing the financial wellbeing of people, businesses and communities. In November 2015, we For personal use only have launched a set of practical guidelines to clarify what our vision and values mean for our people on a day-to-day ba
Slide 73: Assessed Carbon Emissions
Assessed Carbon Emissions During 1H16 the Group (supported by Ernst & Young) undertook a detailed assessment of the carbon emissions arising from our business lending. The detailed diagnostics and resulting insights provide us with a robust quantitative basis to For personal use only identify and ac
Slide 74: Corporate Responsibility
Corporate Responsibility The way we do business For personal use only Released Wealth Released Human Rights Awarded Employer of Updated Group Management Responsible Position Statement Choice for Gender Equality Environment Policy Investing framework formalising our commitments from the Workp
Slide 75: Corporate Responsibility
Corporate CorporateResponsibility Responsibility Our role in society For personal use only Expanded digital wallet giving Start Smart financial literacy Supported 115 community Partnered with the Australian our customers more program on track to reach organisations across National Committee
Slide 76: Sustainability Scorecard
Sustainability Scorecard Units 1H16 FY15 FY14 FY13 FY12 FY11 For personal use only % 83.9 84.2 83.2 83.0 79.0 75.2 Roy Morgan MFI Retail Customer Satisfaction Rank 1st 1st 1st 1st 2nd 4th satisfaction Customer Avg. score 7.4 7.5 7.4 7.4 7.3 7.1 DBM Business Financial Services Monitor Rank =1st =1st
Slide 77: Customer needs met
Customer needs met By Age Internet Banking For personal use only Age Band Products per Customer 4.17 14 – 17 1.41 3.11 3.15 18 – 24 2.66 2.25 25 – 34 3.33 35 – 49 3.38 50 – 64 3.34 65+ 2.49 Overall Non-Internet Mobile App Website and Users Only Users Mobile App Total 18+ 3.11 Users Share of Product
Slide 78: Business Customer Satisfaction
Business Customer Satisfaction For personal use only 8.0 7.0 CBA Peers 6.0 Dec 12 Dec 13 Dec 14 Dec 15 Customer Satisfaction - Average Refer notes slide at back of this presentation for source information 78
Slide 79: Business Customer Satisfaction
Business Customer Satisfaction Micro Small For personal use only 7.8 7.8 7.6 7.6 7.4 7.4 7.2 7.2 7.0 7.0 6.8 6.8 6.6 6.6 6.4 6.4 6.2 6.2 6.0 Dec 12 Dec 13 Dec 14 Dec 15 Dec 12 Dec 13 Dec 14 Dec 15 Medium Large 8.0 8.2 7.8 8.0 7.8 7.6 7.6 7.4 7.4 7.2 7.2 7.0 7.0 6.8 6.8 6.6 6.6 6.4 6.4 Dec 12 Dec 13
Slide 80: Australia's leading technology bank
Australia’s leading technology bank For personal use only 5.4m active #1 #1 #1 online users Free Social Online financial & Banking app Facebook (CANSTAR) #1 #1 #1 Customer Banking Internet Satisfaction App Business Bank (Internet Banking (Money Magazine) (AB+F) Services) Refer notes slide at back of
Slide 81: Customer Satisfaction - Online
Customer Satisfaction - Online Internet Banking Website For personal use only 97% Satisfaction with Internet Banking Services via "Website" or "App“ 95% 97% 92.6% 93% 91% 95% 89% 87% 93% 92.2% 85% Dec 14 Jun 15 Dec 15 91% Apps 97% 95% 89% 91.8% 93% 91% 87% 89% 87% 85% 85% Dec 14 Jun 15 Dec 15 Dec 14
Slide 82: Accelerated change, more reliable systems
Accelerated change, more reliable systems For personal use only High impact system incidents 400 System changes per month 338 3,963 314 153 150 1,514 93 67 44 41 19 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 1H16 82
Slide 83: World class technology & operations
World class World technology & operations class technology & operations For personal use only Revitalised State-of-the- Innovation The Digital front-line art Core Culture Future Single view of Legacy system Innovation Lab Simple, personalised customer across replacement digital experiences
Slide 84: Distribution Transformation
Distribution Transformation Smaller, smarter branch design For personal use only Video Conferencing 68 express Self Service 1 In all branches - branches – access to CBA focus on specialists self service ~ 32,000 calls in 1H16 Tablets and software for branch Over 597 Intelligent concierges to Deposit
Slide 85: Property app
Property app Guiding customers through the home buying journey For personal use only October 2015 Estimated market prices and suburb insights Search tools, calculators, real time property listings Simplified conditional pre-approval with instant response Note: Android version launched in Octob
Slide 86: Innovating in Business
Innovating in Business Albert For personal use only Global first-to-market EFTPOS tablet Mar 15 Transforming the way merchants interact with their customers Market leading platform enabling merchants to easily access solutions for their businesses Now with 17,000+ devices in market across 15
Slide 87: Innovating in Business
Innovating in Business Asset Finance Simple Business Overdraft For personal use only 1 Industry leading online quote tool Launch of new Simple Business for car and equipment finance Overdraft product Instant customised quotes – Online application for an request a call back or apply unsecured
Slide 88: Growing Small Business
Growing Small Business For personal use only Ranked =1st in Dedicated Launch of Simple Business 1 Small Business DBM Micro small business Overdraft - simple and easy Bank of the business banking application (up to $50k), Year (Canstar) customer capability in approved in 30mins and funded satisfactio
Slide 89: Innovating in Wealth Management
Innovating in Wealth Management Enhanced experience for both customers and advisors For personal use only Portfolio View CFS Retail First Net SMSF Platforms Investor September 2015 August 2015 June 2015 Complete view of investment portfolio - Colonial First State shares, cash, First to market – now
Slide 90: Innovating in NZ
Innovating in NZ For personal use only Clever Kash – cashless interactive moneybox, helping children understand the value of money as we move towards a cashless society ASB’s mobile app users up 37% in last 12 months 1st in Mobile app satisfaction at 88%1 Launched re-designed and responsive
Slide 91: Growing the Digital Wallet
Growing the Digital Wallet Self-serve options Loyalty cards Merchant offers For personal use only July 2015 July 2015 August 2015 Browse and apply for Store your loyalty Tailored merchant a wider range of cards in the offers when shopping products from the CommBank app in select Westfield CommBank a
Slide 92: Growing Mobile
Growing MobileGrowing Mobile Mobile % of Online logins Mobile % of Online Sales For personal use only 1 NetBank & App RBS 78% 40% 24% 43% Jun 12 Jun 13 2 Jun 14 Jun 15 Dec 15 Jun 14 Dec 14 Jun 15 Dec 15 1 RBS Products included: Savings & Transaction accounts (QNA), Credit Cards (exc. limit increases
Slide 93: Growing Mobile
Additional information Growing Mobile Growing Mobile Cardless Cash Tap & Pay Pay Tag For personal use only Total number of Number of cards Number of Pay Tags in transactions (quarterly figures) 1 market 361K 313K 5.3m 385K 256K 245K 176K 2.7m 155K 0.1m 1.2m 90K Jun 14 Dec 14 Jun 15 Dec 15 Mar 15 Jun
Slide 94: Growing Online
Growing Online Personal loans1 Transaction accounts1, 2 For personal use only % of Sales Online % of Sales Online 22% 24% 15% 17% 19% 12% 10% 8% Jun 14 Dec 14 Jun 15 Dec 15 Jun 14 Dec 14 Jun 15 Dec 15 Business transaction accounts1,2 Credit cards1, 2 % of Sales Online % of Sales Online 46% 7% 39% 6%
Slide 95: Self service acceleration
Self service acceleration Intelligent Deposit Machines (IDMs) Accounts with e-statements For personal use only % of deposits completed via IDM in branches Transactions and Savings (% of total) that have had a machine for > 1 month1 59% 60% 54% 35% 50% 40% Dec 11 Jun 12 Dec 12 Jun 13 Dec 13 Jun 14 De
Slide 96: Transaction volumes
Transaction volumes Branch ATM For personal use only m (deposits & withdrawals) m (all transactions1) 130 325 268 62 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 1H16 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 1H16 x2 x2 Point of Sale2 Internet3 (all transac
Slide 97: Transaction volumes
Transaction volumes Number % Value % For personal use only Percentage of total transactions by number Percentage of total transactions by $ value 64% 65% 52% 50% 36% 34% 21%23% 12% 10% 10% 10% 4% 4% 3% 2% Internet Point of sale ATM Branch Internet Point of sale ATM Branch Dec 14 Dec 15 Dec 14 Dec 15
Slide 98: The Shingo Institute
The Shingo Institute The Shingo Institute For personal use only Shingo Institute Shingo Principles Recognises world-class, lean • Create Value for Customers organisations and operational excellence • Focus on Process Undertake a complete assessment of an organisation’s culture and how well it drives
Slide 99: CBA awarded Shingo Silver Medallion
CBA awarded Shingo Silver Medallion The Shingo Institute Silver Medallion awarded to CBA’s Retail Bank For personal use only Collections & Customer Solutions Team The Silver Retail Collections & Medallion Customer Solutions 75% reduction in “time-to-yes” for Highest Shingo contract variation req
Slide 100: RBS Home Loan Portfolio
RBS Home Loan Portfolio Dec Jun Dec Dec Jun Dec For personal use only Portfolio1 New Business1 14 15 15 14 15 15 Total Balances - Spot ($bn) 310 321 331 Total Funding ($bn) 40 80 44 Total Balances - Average ($bn) 306 311 326 Average Funding Size ($’000) 267 274 304 Total Accounts (m) 1.5 1.5 1.5 Ser
Slide 101: Australian Home Loan Portfolio
Australian Home Loan Portfolio1 Dec Jun Dec Dec Jun Dec Portfolio1 New Business1 For personal use only 14 15 15 14 15 15 Total Balances - Spot ($bn) 370 383 393 Total Funding ($bn) 46 94 50 Total Balances - Average ($bn) 365 371 388 Average Funding Size ($’000) 269 274 302 Total Accounts (m) 1.7 1.7
Slide 102: Australian Home Loan Portfolio
Australian Home Loan Portfolio Strong Portfolio Quality For personal use only Portfolio losses continue to be low (1H16: 2.4bpts) 78% of customers paying in advance2 by 29 months on average, including offset facilities Mortgage offset balances up 22% in 1H16 to $27 billion Regular stress testing und
Slide 103: Australian Home Loans
Australian Home Loans Balance Growth State Profile For personal use only 1H16 Balance Growth % of Portfolio 15 18% 50 (47) 32% (8) 26% 4.3% 18% 6% 383 393 3.2% $bn 1.9% 1.9% 1.4% Jun 15 New Redraw & Repayments External Dec 15 NSW/ACT SA/NT QLD VIC/TAS WA Fundings Interest & Other Refinance Arrears A
Slide 104: Australian Investment Home Loans
Australian Investment Home Loans Overview Relatively low arrears For personal use only Arrears (90+ days) Owner Occupied 1.00% Portfolio Modest balance growth <10% 0.80% Investment Loan 0.60% Arrears lower than overall portfolio 0.40% 0.20% Strong borrower profile – skewed to 0.00% Dec 13 Jun
Slide 105: RBS Home Loan Growth Profile
RBS Home Loan Growth Profile Home Loan Balances Broker Share of Fundings1 For personal use only $bn 53% 52% 44 14 (42) 50% 51% (6) 47% 331 44% 44% 321 39% 39% 38% Jun 15 New Redraw Repayments External Dec 15 Dec 13 Mar 14 Jun 14 Sep 14 Dec 14 Mar 15 Jun 15 Sep 15 Dec 15 fundings & / Other refinance
Slide 106: RBS Consumer Arrears
RBS Consumer Arrears Home Loans Home Loans by State For personal use only 30+ days 30+ days 2011 2012 WA NSW/ACT 3.0% 3.0% 2013 2014 SA/NT QLD 2.5% 2015 2.5% VIC/TAS National 2.0% 2.0% 1.5% 1.5% 1.0% 1.0% 0.5% 0.5% 0.0% 0.0% Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Dec 12 Jun 13 Dec 13 Ju
Slide 107: Group Consumer Arrears
Group Consumer Arrears Consumer Portfolios Home Loans For personal use only 90+ days 90+ days 2.0% Personal Loans 2.0% Bankwest Credit Cards RBS Home Loans ASB 1.0% 1.0% 0.0% 0.0% Jun 13 Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Jun 13 Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Credit Cards Personal Loans 90+ days
Slide 108: Australian Home Loans – Stress Test
Australian Home Loans – Stress Test Assumptions and Outcomes Net Losses For personal use only $m Assumptions (%) Base Year 1 Year 2 Year 3 490 2,343 19 2,362 1,983 (130) Cash Rate 2.0 1.0 0.5 0.5 Unemployment 6.1 7.5 9.5 11.0 Hours under- 10.7 13.1 16.1 18.4 Jun 15 Revised Add AddBankwest Bankwest J
Slide 109: Regulatory Exposure Mix
Regulatory Exposure Mix For personal use only Regulatory Credit Exposure Mix Portfolio CBA Peer 1 Peer 2 Peer 3 Residential Mortgages 55% 35% 40% 55% Corporate, SME, Specialised Lending 27% 33% 40% 31% Bank 5% 12% 10% 3% Sovereign 9% 13% 8% 7% Qualifying Revolving 3% 2% 1% 2% Other Retail 1% 5% 1% 2
Slide 110: Credit Exposures by Industry
Credit Exposures by Industry Jun 15 Dec 15 For personal use only Jun 15 Dec 15 Consumer 54.2% 54.0% Agriculture 1.8% 1.8% Mining 1.9% 1.8% Manufacturing 1.7% 1.8% Energy 0.9% 1.1% Construction 0.9% 0.8% Retail & Wholesale 2.3% 2.3% Transport 1.5% 1.5% Banks 8.6% 7.8% Finance – other 4.6% 5.1% Busine
Slide 111: Sector Exposures
Sector Exposures Commercial Exposures by Industry Top 20 Commercial Exposures For personal use only AAA A+ BBB+ A- to to to AA- TCE $bn AA- A- BBB- Other Dec 15 BBB+ Banks 30.9 38.5 9.7 2.2 81.3 BBB AA Finance Other 22.9 17.4 9.8 3.0 53.1 A Property 1.6 6.0 13.5 44.8 65.9 A BBB- Sovereign 82.7 6.7 0
Slide 112: Commercial Property
Commercial Property Overview Group Exposure For personal use only Exposure of $65.9bn (6.4% of Group TCE) diversified across sectors/geography/counterparties % of Group % of Portfolio rated % of Portfolio TCE investment grade impaired Less than 0.3% of total exposures impaired; less than 3% of s
Slide 113: Mining, Oil and Gas
Mining, Oil and Gas Overview Group Exposure For personal use only Exposure of $18.9bn (1.8% of Group TCE) % of Group % of Portfolio rated % of Portfolio TCE investment grade impaired Sound portfolio that continues to perform acceptably notwithstanding recent deterioration in commodity prices: 79
Slide 114: Interest Rate Risk in the Banking Book
Interest Rate Risk in the Banking Book For personal use only bpts 43 47 43 13 27 48 $1,303m $1,403m $1,181m $388m $868m $1,401m Optionality Risk Optionality Risk Basis Basis Risk Risk Repricing & Yield Repricing & Yield Curve Risk Curve Risk Embedded Gain Embedded Gain (offset to capital) (offset to
Slide 115: Liquidity Coverage Ratio
Liquidity Coverage Ratio LCR Qualifying Liquid Assets1 For personal use only LCR 123% at 31 Dec 2015 $bn HQLA increased 12% while Net Cash Outflows increased 3% 136 140 132 Liquidity Coverage Dec 15 Jun 15 Change Ratio ($bn) 43 Internal High Quality Liquid Assets 74 66 12% 43 41 RMBS Committed L
Slide 116: Funding - Portfolio
Funding - Portfolio Term Wholesale Funding by Currency1 Wholesale Funding by Product For personal use only Vanilla MTN 25% Dec 15 Commercial Paper 16% AUD Certificate of Deposit 14% Jun 15 USD FI Deposits 2 13% Covered Bonds 10% EUR Jun 14 Securitisation 5% Other Debt Capital 5% Jun 13 Structured MT
Slide 117: Funded Assets
Funded Assets Dec Jun For personal use only $bn $bn 15 15 Transactions 2 97 89 22 2 1 7 (1) Savings 190 176 60 Equity Investments 196 195 Long term1 144 wholesale (incl IFRS Other 17 18 MTM & FX) Total customer 500 478 843 842 138 Short term deposits 811 wholesale Wholesale 282 280 funding Customer
Slide 118: APRA & International Comparison
APRA & International Comparison The APRA Basel III capital requirements are more conservative than those of the Basel Committee on For personal use only Banking Supervision (BCBS), leading to lower reported capital ratios. In July 2015, APRA published a study that compared the major banks’ capital r
Slide 119: APRA & International Comparison
APRA & International Comparison The following table provides details on the differences, as at 31 December 2015, between the APRA For personal use only Basel III capital requirements and internationally comparable capital ratios1. CET1 Basel III (APRA) 10.2% Equity investments 0.9% Capitalised expen
Slide 120: Strong Capital – International Basis
Strong Capital – International Basis 17.5% For personal use only In July 2015, APRA published a study 1.6% Tier 2 15.3% that compared the major banks’ 1.6% Tier 1 13.9% capital ratios against a set of 2.3% 0.1% international peers 0.7% 0.6% Aust. CBA’s internationally comparable major bank ratio
Slide 121: Colonial Group Debt
Colonial Group Debt For personal use only Capital benefit from % Colonial Group Colonial Group phased 10.2 debt maturity profile out as existing debt (transitional relief) matures First tranche matured in 1 April 2015 ($350m). Impact on CET1 Remaining debt to mature across FY17 and FY18 Timing
Slide 122: D-SIB and CCB
D-SIB and CCB For personal use only In December 2013, APRA announced % of earnings that the Australian major banks are able to be used CET1 ratio Value for discretionary domestic systemically-important banks payments (D-SIBs) PCR + 3.5%, Above top of CCB 100% and above From 1 January 2016, D-SIB
Slide 123: Replicating Portfolio
Replicating Portfolio Actual and Forecast Scenario 1 For personal use only Replicating Portfolio Yield Official Cash Rate 2002 1H16 FY18 Replicating portfolio provides partial economic hedge for certain liabilities and assets that display imperfect correlation between the cash rate and the product i
Slide 124: UK and US Balance Sheet Comparison
UK and US Balance Sheet Comparison 1,2 United Kingdom USA For personal use only Assets Liab + Equity Assets Liab + Equity Cash & 8% 8% Cash & Equity equivalents Equity 12% 12% equivalents Home Loans 17% Home Loans 13% 57% Deposits Deposits 57% 43% Other Lending 39% Other Lending 7% Long Term3 Other
Slide 125: Australian Banks – Safe Assets, Secure Funding
Australian Banks – Safe Assets, Secure Funding Commonwealth Bank Balance Sheet Comparisons For personal use only Assets – CBA has a safe, conservative asset profile: Assets Liab + Equity 51% of balance sheet is home loans, which are stable/long Cash & equivalents 4% term. 7% Equity Trading secur
Slide 126: Regulatory Expected Loss
Regulatory Expected Loss For personal use only $m Dec 15 Jun 15 Dec 14 Regulatory Expected Loss (EL) 4,214 4,083 4,281 Eligible Provisions (EP) Collective Provisions1 2,656 2,599 2,613 Specific Provisions1,2 1,649 1,656 1,956 General Reserve for Credit Losses adjustment 386 346 321 less ineligible p
Slide 127: Leverage Ratio
Leverage Ratio CBA Leverage Ratio well above prescribed Basel Committee minimum For personal use only Leverage ratio introduced to constrain the build-up of leverage in the banking system. Reconciliation ($m) – APRA basis Dec 15 Scheduled to be introduced as a minimum requirement Tier 1 Capital 47,9
Slide 128: Regulatory Change
Regulatory Change APRA 2015 2016 2017 2018 2019 For personal use only Leverage ratio First disclosed Implementation CCB + D-SIB Implementation 1 Jan 2016 – CCB CET1 2.5% + D-SIB CET1 1.0% Counter Cyclical Implementation 1 Jan 2016 – CCYB CET1 0% Capital Buffer LCR Implementation Level 3 Implementati
Slide 129: RWA & Capital Usage
RWA & Capital Usage Total Risk Weighted Assets Credit Risk Weighted Assets For personal use only $bn $bn 6.7 392.7 Underlying movement 335.0 0.4 2.5 2.9 9.7 0.6 0.1 329.6 1.1 15.8 319.2 368.7 CET1 impact bpts (43) (3) (18) (1) (65) CET1 impact bpts (27) (1) - (28) (8) (7) (43) Jun 15 Credit Risk Tra
Slide 130: RBS – Six Month Periods
RBS – 6 Month Periods $m Dec 15 vs Dec 15 vs For personal use only Dec 15 Jun 15 Dec 14 Jun 15 Dec 14 Net interest income Home loans 1,971 1,752 1,809 13% 9% Consumer finance 997 954 925 5% 8% Retail deposits 1,238 1,179 1,157 5% 7% Other 30 32 40 (6%) (25%) 4,236 3,917 3,931 8% 8% Other banking inc
Slide 131: Retail Banking Services
Retail Banking Services $m Dec 15 Dec 15 vs Jun 15 Dec 15 vs Dec 14 For personal use only Higher lending margins, due to Improved margins from investor Home loans 2,081 12% 8% investor and variable rate pricing and variable rate pricing Increased credit card spend due to Favourable unsecured
Slide 132: BPB – Six Month Periods
BPB – 6 Month Periods 1 Dec 15 vs Dec 15 vs $m Dec 15 Jun 15 Dec 14 Jun 15 Dec 14 For personal use only Corporate Financial Net interest income 554 520 516 7% 7% Services Regional & Agribusiness 279 274 281 2% (1%) Local Business Banking 478 457 459 5% 4% Private Bank 150 135 134 11% 12% CommSec 77
Slide 133: Business and Private Banking
Business and Private Banking $m Dec 15 Dec 15 vs Jun 15 Dec 15 vs Dec 14 For personal use only Strong Deposit balance growth and Corporate Financial Solid Commercial Lending and Deposit 709 7% 7% solid Lending balance growth partly Services balance growth offset by decline in Global Markets Co
Slide 134: IB&M – Six Month Periods
IB&M – 6 Month Periods For personal use only Dec 15 vs Dec 15 vs $m Dec 15 Jun 15 Dec 14 Jun 15 Dec 14 Net interest income Institutional Banking 724 666 670 9% 8% Markets 61 58 48 5% 27% 785 724 718 8% 9% Other banking income Institutional Banking 403 432 404 (7%) - Markets 250 216 308 16% (19%) 653
Slide 135: Institutional Banking and Markets
Institutional Banking and Markets For personal use only $m Dec 15 Dec 15 vs Jun 15 Dec 15 vs Dec 14 Growth in average lending Increase in average lending and leasing balances; partly Institutional Banking 1,127 3% 5% and leasing balances; partly offset by lower leasing and offset by lower margin
Slide 136: WM – Six Month Periods
WM – 6 Month Periods Dec 15 vs Dec 15 vs For personal use only $m Dec 15 Jun 15 Dec 14 Jun 15 Dec 14 Total operating income CFSGAM 437 445 402 (2%) 9% CFS1 467 415 451 13% 4% CI 390 298 338 31% 15% 1,294 1,158 1,191 12% 9% Operating expenses CFSGAM (291) (269) (257) 8% 13% CFS1 (307) (440) (295) (30
Slide 137: Wealth Management
Wealth Management $m Dec 15 Dec 15 vs Jun 15 Dec 15 vs Dec 14 For personal use only Average AUM 2% (spot 3%), Average AUM 6% (spot weaker global investment 2%), investment CFSGAM 437 (2%) markets, offset by investment 9% outperformance, benefit of a outperformance and benefit of a lower AUD
Slide 138: CFSGAM – Global Reach
CFSGAM – Global Reach For personal use only Australia and New Zealand AUM $109.9 billion1 UK, Europe and Middle East AUM $58.8 billion Asia (incl. Japan) AUM $20.7 billion Joint venture North America AUM $5.8 billion2 Spot 1 Assets under management indicated above includes Realindex Investments whic
Slide 139: Open Advice Review
Open Advice Review Program Progress For personal use only • Offer to review advice provided to all Financial Wisdom Independent Reports program and Commonwealth Financial Planning customers Promontory Financial Group Expert outcomes publicly between September 2003 and July 2012 • Opened 3 July 2014.
Slide 140: NZ – Six Month Periods
NZ – 6 Month Periods For personal use only Dec 15 vs Dec 15 vs NZ$m Dec 15 Jun 15 Dec 14 Jun 15 Dec 14 Net interest income ASB 844 820 823 3% 3% Other (16) (5) 4 Large Large 828 815 827 2% - Other banking income ASB 228 191 186 19% 23% Other (18) (17) (16) 6% 13% 210 174 170 21% 24% Total banking in
Slide 141: New Zealand
New Zealand NZ$m Dec 15 Dec 15 vs Jun 15 Dec 15 vs Dec 14 For personal use only Lending 5% and retail Lending 10% and retail ASB Operating deposits 4% (spot) deposits 14% (spot) 1,114 6% 7% Income Higher other banking Market pressure on lending income and deposit margins Inflation
Slide 142: Bankwest – Six Month Periods
Bankwest – 6 Month Periods For personal use only $m Dec 15 vs Dec 15 vs Dec 15 Jun 15 Dec 14 Jun 15 Dec 14 Net interest income 833 823 835 1% - Other banking income 107 107 109 - (2%) Total banking income 940 930 944 1% - Operating expenses (390) (389) (398) - (2%) Loan impairment benefit 16 24 26 (
Slide 143: Bankwest
Bankwest $m Dec 15 Dec 15 vs Jun 15 Dec 15 vs Dec 14 For personal use only Modest growth across key Balance growth across products reflecting challenging key product lines market conditions Total banking income 940 1% - Lower net interest margin Lower Business Lending and due to competitive
Slide 144: CBA in Asia and South Africa
CBA in Asia and South Africa China ♦ Bank of Hangzhou (20%): 171 branches For personal use only ♦ Qilu Bank (20%): 113 branches ♦ County Banking - Henan: 7 banks and 7 branches (5 banks and 6 branches @ 80% and 2 banks and 1 branch @ 100% holding) - Hebei: 8 banks (5 banks @ 80% and 3 banks @ 100% s
Slide 145: IFS – Continued growth
IFS – Continued growth 1 Revenue Direct Proprietary Customers For personal use only A$m ‘000 300 600 250 500 200 400 150 300 100 200 50 100 - - Dec 10 Jun 13 Dec 15 Jun 11 Dec 12 Jun 14 Dec 15 Proprietary Loans & Inforce Premium Proprietary Income Spot (A$m) A$m 12% 2% 120 16% 2,500 Lending Balances
Slide 146: CVA / FVA
CVA / FVA CVA/FVA ($67m) in 1H16 largely driven by movement in counterparty credit spreads For personal use only Drivers 1H16 Weaker AUD FX Rates Counterparty CVA1 Credit Spreads Falling AUD and USD Widening spreads EXPOSURE Interest interest rates Rates ($67m) Commodity Commodity prices Prices lowe
Slide 147: Australia remains well placed
Australia remains well placed Australia is now well into its 24th year of continuous economic growth. The lower Australian dollar is For personal use only helping and Australian policy makers retain some firepower. GDP1 Unemployment Rate2 Global Interest Rates1 (annual % change) (%) (%) 10 12 8 6 6
Slide 148: Chinese economic growth is slowing
Chinese economic growth is slowing The global economy has become increasingly dependent on China and the rest of emerging Asia to For personal use only drive economic growth and commodity demand. Therefore, the slowdown in Chinese economy is a concern. We expect the Chinese economy to grow by 6½% in
Slide 149: Growth in China is shifting away from resource-intensive industries
Growth in China is shifting away from resource-intensive industries For personal use only China is transitioning from infrastructure/investment led growth to consumption/services led growth. This process means lower demand for resource-based goods. However, the transition also offers opportunities t
Slide 150: The domestic growth transition continues
The domestic growth transition continues The transition from mining to non-mining led growth is proceeding. We are further through the mining For personal use only capex downturn than most were expecting. Australia is currently 70% of the way through the anticipated decline in mining capex. At the s
Slide 151: But the transition is uneven
But the transition is uneven For personal use only A major residential construction boom is underway. Building houses is an effective generator of jobs and activity. But other parts of the transition have failed to fire. Businesses have been reluctant to invest and governments have cut capex. Dwelli
Slide 152: Consumer spending has lifted & the lower currency is supporting service industries
Consumer spending has lifted & the lower currency is supporting service industries For personal use only Other parts of the transition are more encouraging. An improvement in the labour market is positive for consumer spending, despite the weakness in wages growth. The Australian dollar is declining
Slide 153: Income threat from declines in commodity prices
There is an income threat because of the declines in commodity prices For personal use only Income weakness is a key source of risk to the economy in 2016. Falling commodity prices are driving the terms-of-trade lower. And a falling term-of-trade weighs on incomes. Real gross domestic income per cap
Slide 154: The housing market is slowing
The housing market is slowing Population growth slowed as migration has eased. Therefore, the underlying demand for new dwellings For personal use only has stepped down. Housing supply is now running ahead of housing demand satisfying some past backlog. Dwelling construction will still remain high i
Slide 155: Dwelling price growth stabilising nationally
Dwelling price growth stabilising nationally For personal use only Dwelling price growth varies widely by region. House and apartment price growth is now stabilising, rather than lifting. Higher dwelling prices and a nudge up in variable mortgage rates is reducing the incentive for owner-occupiers.
Slide 156: Household balance sheets remain strong
Household balance sheets remain strong Volatility in global markets remains high, driven by concerns about US Federal Reserve interest rate For personal use only rises and uncertainty over China’s growth story. But Australian businesses and households are well placed to deal with these global risks.
Slide 157: Households in better shape in net terms
Households in better shape in net terms For personal use only Household net worth has improved despite an increase in debt, driven by a large increase in the value of residential assets. Financial assets have also been improving. Households would be vulnerable to a fall in asset values and/or a rise
Slide 158: Factors that characterise a house price bubble are not evident
Factors that typically characterise a house price bubble are not evident in Australia Housing “Bubble” – Current position in Australia For personal use only typical characteristics Unsustainable asset prices Prices supported by underbuilding in previous years leading to pent-up demand for dwelling
Slide 159: New Zealand
New Zealand Dairy prices weakened over 2014 and 2015. A gradual recovery is expected over 2016, with the lagged For personal use only impact of the lower NZD/USD further boosting local currency revenues. Meanwhile, tourism (2nd biggest foreign exchange earner) is going from strength to strength. Chi
Slide 160: New Zealand
New Zealand For personal use only The inflation environment remains very subdued, even with the impact of the NZ dollar depreciation. The RBNZ has cut the Official Cash Rate from 3.5% to 2.5%. Risks are the RBNZ will eventually cut the OCR even further in 2016. NZ CPI inflation1 OCR forecasts2 (%) (
Slide 161: New Zealand
New Zealand Auckland-only investor lending restrictions and nationwide tax changes (including the requirement for all For personal use only investors to have tax numbers to complete property transactions) are biting in the Auckland housing market. The relaxing of ex-Auckland lending restrictions is,
Slide 162: Customer Metrics - Sources
Customer Metrics - Sources 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 December 2015. Peers includes ANZ, NAB and Westpac. CBA excl
Slide 163: Technology - Sources
Technology - Sources Sources for ‘Australia’s leading technology bank’ (slide 80) For personal use only 1 Free financial app: CommBank app on iOS and Android in Australia. Sources are the Apple App Store and the Google Play Store. 2 Social and Facebook: CBA’s combined following across Facebook, Twit
Slide 164: Results Presentation
For personal use only RESULTS PRESENTATION Results Presentation FOR THE HALF YEAR ENDED 31 DECEMBER 2015 For the half year ended 31 December 2009 COMMONWEALTH BANK OF AUSTRALIA | ACN 123 123 124 | 10 FEBRUARY 2016 10 February Commonwealth Bank of Australia ACN 123 123 124 2010
Commonwealth Bank of Australia — H1 FY2016 Earnings Presentation on 6ix