Commonwealth Bank Of Australia · ASX:CBA

Commonwealth Bank Of Australia — Corporate Update (June 2009)

14 slides from Commonwealth Bank Of Australia's corporate update, Jun 12, 2009

  1. Slide 1: Funding Costs for Home Loans

    For personal use only Funding Costs for Home Loans 12 June 2009 1

  2. Slide 2: Overall Funding Costs continue to increase

    Overall Funding Costs continue to increase For personal use only • The cost of long term wholesale funding is still at record levels • As old wholesale funding matures and is replaced by new more expensive funding, the Bank average cost of funding continues to increase. • The cost of retail funding

  3. Slide 3: Standard Variable Rate Comparison

    Standard Variable Rate Comparison For personal use only SVR CBA 5.64% CBA (after change) 5.74% ANZ 5.81% NAB 5.74% Westpac 5.81% St George 5.79% Suncorp 5.80% BankWest 5.70% Bank of Queensland 5.89% Bendigo 5.90% HSBC 5.74% Source: Canstar Cannex 3

  4. Slide 4: CBA Standard Variable Home Loan Rate - comparison

    CBA Standard Variable Home Loan Rate - comparison For personal use only 10.00% 0.30% 9.00% 0.25% Standard Variable Home Loan Rates 8.00% [use LHS] 0.20% 7.00% 0.15% CBA 6.00% 0.10% ANZ 5.00% 0.05% NAB SGB 4.00% 0.00% WBC 3.00% -0.05% 2.00% CBA’s Standard Variable -0.10% Home Loan Rate 1.00% Vs -0.15

  5. Slide 5: Funding Costs for Variable Rate Home Loans

    Funding Costs for Variable Rate Home Loans For personal use only Funding Cost for Variable Rate Home Loans = Cash Rate + Long Term Funding Cost + Basis Risk Cost 5

  6. Slide 6: Long Term Funding

    Long Term Funding - Costs have increased from Aug 07, and still remain very high For personal use only Credit Spreads for AA Australian bank senior debt in Secondary Markets 2.750% 2.500% 2.250% 2.000% 1.750% 1.500% AA Aust Banks 5yr - not guaranteed 1.250% AA Aust Banks 3yr - not guaranteed AA Aust

  7. Slide 7: Basis Risk Cost

    Basis Risk Cost – has reduced in recent months but remains high For personal use only 1.00% 0.80% Cost of OIS (spot) 0.60% 0.40% Cost of OIS (3mth moving average) 0.20% Long term average cost of OIS prior to Credit Crisis 0.00% Jun 07 Aug 07 Oct 07 Dec 07 Mar 08 May 08 Jul 08 Sep 08 Nov 08 Jan 09 Ma

  8. Slide 8: The cost of funding the home loan portfolio will continue to rise

    The cost of funding the home loan portfolio will continue to rise as the older cheap term funding matures and must be replaced by more expensive new term funding For personal use only Total wholesale funding costs 9.0% 8.0% Portfolio Long Term Funding Cost OIS cost - the cost of hedging BBSW and Cas

  9. Slide 9: Funding Costs for Fixed Rate Home Loans

    Funding Costs for Fixed Rate Home Loans For personal use only Funding Cost for Fixed Rate Home Loans = Fixed Interest Swap + Rate Long Term Funding Cost 9

  10. Slide 10: Fixed Interest Swap Rate

    3 Year Fixed Interest Swap Rate For personal use only 8.00% 7.00% 6.00% 3 year sw ap rate 3 year swap rate has 5.00% increased 0.80% This period saw in 4 months reductions in fixed home loan rates due to decreases in the fixed 4.00% interest swap rates 3.00% Target Cash Rate 2.00% 1-Jul-08 1-Oct-08

  11. Slide 11: Deposit Funding – Extreme Competition has driven up costs

    Deposit Funding – Extreme Competition has driven up costs Average Interest rates on deposits v cash rate For personal use only 8.00% 7.00% Official Cash Rate 6.00% 5.00% 4.00% Deposit Interest Expense 3.00% 2.00% 1.00% 0.00% Jul 07 Oct 07 Jan 08 Apr 08 Jul 08 Oct 08 Jan 09 Apr 09 Note: this is note

  12. Slide 12: Retail Term Deposit Rates are well above wholesale rates

    Retail Term Deposit Rates are well above wholesale rates For personal use only Headline Term Deposit rates v 6 Month BBSW 10.00% Current 6 month TD rate of 3.8% v 6 Month BBSW of 3.3% 8.00% 6.00% 6 month BBSW 4.00% 2.00% 0.00% Margin to BBSW (average per month) -2.00% Jul 07 Jul 07 Jul 08 Oct 07 Jan

  13. Slide 13: Source of funding CBA FY09

    Source of funding CBA FY09 For personal use only Deposit Funding Retail Funding Long Term Wholesale maturing in next 12m Short Term Wholesale Long Term Wholesale maturing after 12m Structured Funding with first call <12mth Securitisation 13

  14. Slide 14: Australian Banks have passed on much larger rate cuts than overseas

    Australian Banks have passed on much larger rate cuts than overseas For personal use only * From start of easing cycle to end December 2008. Source: RBA 14

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