Commonwealth Bank Of Australia · ASX:CBA
Commonwealth Bank Of Australia — H1 FY2008 Earnings Presentation
113 slides from Commonwealth Bank Of Australia's earnings presentation, Feb 13, 2008
Slide 1: Results Presentation
Results Presentation For personal use only For the half year ended 31 December 2007 Ralph Norris CHIEF EXECUTIVE OFFICER David Craig CHIEF FINANCIAL OFFICER 13th February 2008 Commonwealth Bank of Australia ACN 123 123 124
Slide 2: Disclaimer
Disclaimer For personal use only The material that follows is a presentation of general background information about the Bank’s activities current at the date of the presentation, 13 February 2008. It is information given in summary form and does not purport to be complete. It is not intended to be
Slide 3: Agenda
Agenda For personal use only Ralph Norris, CEO – Results and Company Update David Craig, CFO – Detailed Financials Ralph Norris, CEO – Outlook Questions and Answers 3
Slide 4: Notes
For personal use only Notes 4
Slide 5: Overview
Overview For personal use only ► A solid operating result in a difficult environment ► Good business momentum maintained ► Strong volume and market share growth ► Strategy on track and delivering ► Well positioned in challenging times 5
Slide 6: Other key information
Other key information Notes For personal use only Some overall Bank indicators 6 months Dec 07 Jun 07 Dec 06 Jun 06 Number of branches 1,010 1,010 1,010 1,005 Weighted av. No. of shares (cash) 1,306m 1,293m 1,284m 1,285m Net tangible assets per share ($) 12.14 11.65 10.23 9.42 Risk weighted assets (
Slide 7: A solid operating result
A solid operating result For personal use only Dec 07 vs Dec 07 Dec 06 Operating Income ($m) 6,974 8% Cash NPAT ($m) 2,385 4% Cash EPS (cents) 180.7 2% Return on Equity – Cash (%) 20.8 (180)bpts Dividend per Share - Fully Franked (cents) 113 6% 7
Slide 8: Market shares
Market shares Notes For personal use only Dec 07 Jun 07 Dec 06 Retail Banking Services Home loans 18.8% 18.5% 18.4% Credit cards 18.6% 18.8% 19.3% Personal lending 16.7% 16.4% 16.4% Retail deposits 22.0% 21.6% 21.9% Household deposits 28.9% 29.0% 28.8% Premium Business Services Business lending - AP
Slide 9: Strong volume growth and share gains
Strong volume growth and share gains For personal use only 12 months Since Jun 07 CBA Volume Market Growth Share Home Lending 14% 0.3% Retail Deposits 12% 0.4% Business Lending 24% 0.2% Business Deposits 38% 0.7% FirstChoice 36% 0.4% 9
Slide 10: Notes
For personal use only Notes 10
Slide 11: Strategy on track and delivering
Strategy on track and delivering For personal use only Customer Service X Customer satisfaction at 10 year high X New branch operating model delivering stronger results X Improved customer experience at new design branches Business Banking X Strong volume and market share outcomes X Improving custom
Slide 12: Notes
For personal use only Notes 12
Slide 13: Retail Banking Services
Retail Banking Services For personal use only Customer satisfaction at Home loan market share 85% 10 year high* 19.20% recovery continues 19.0% 19.00% institution customers 80% 18.8% % main financial 18.8% 18.80% 18.7% 75% 18.60% 18.5% 70% 18.4% 18.40% 65% CBA 18.20% 60% Source: RBA/APRA Jun 06 Aug
Slide 14: Most improved customer satisfaction
Most improved customer satisfaction For personal use only Business Customers* Customer Satisfied Movement Dec 07 % 6 Months % 12 months % ANZ 77.6 Ç 0.7 Ç 1.9 Commonwealth 65.7 Ç 5.0 Ç 7.4 NAB 72.2 Ç 2.8 Ç 3.5 Westpac 73.8 Ç 4.3 Ç 7.2 St George 79.7 Ç 0.3 È 0.4 * Source: TNS Business Finance Monitor
Slide 15: Premium Business Services
Premium Business Services For personal use only Strong growth in Institutional Banking Deposits growth well above system Monthly lending growth v market Six months to Dec 07 1.60 18% 15.4% 16% Market Top 4 1.50 14% 1.40 12% 1.30 10% 9.1% 9.0% Index 9.3% 1.20 8% 8.6% 1.10 6% 4.3% 4% 1.00 2% 0.90 0% J
Slide 16: Notes
For personal use only Notes 16
Slide 17: Wealth Management
Wealth Management For personal use only Funds under Administration up 24% FirstChoice FUA up 36% $m 36% $15b 45,000 10.0% $24b 40,000 9.0% 35,000 8.0% 7.0% 30,000 6.0% 25,000 5.0% $200b 20,000 4.0% $161b 15,000 3.0% 10,000 2.0% 5,000 1.0% 0 0.0% Jun 02 Dec 02 Jun 03 Dec 03 Jun 04 Dec 04 Jun 05 Dec 0
Slide 18: Digital platforms: CommBiz, FirstChoice, NetBank, CommSec
CommBiz – online, real time secure business and corporate banking FirstChoice – chosen by 50% of IFA’s For personal use only NetBank – 2M active customers and growing. The only financial services platform to enter Australia’s top-ten most accessed websites CommSec – Australia’s leading retail broker
Slide 19: Other highlights
Other highlights For personal use only Further IT savings – efficiency IT efficiency ratio ratio trending below 15% Encouraging improvements in 20.3% Group-wide referrals 16.7% 15.2% 14.5% Market share maintained in NZ Banking despite aggressive FY06 1H07 2H07 1H08 competition Group-wide conve
Slide 20: Notes
For personal use only Notes 20
Slide 21: Results Presentation
Results Presentation For personal use only For the half year ended 31 December 2007 David Craig CHIEF FINANCIAL OFFICER 13th February 2008 Commonwealth Bank of Australia ACN 123 123 124
Slide 22: Notes
For personal use only Notes 22
Slide 23: Financials
Financials For personal use only Group Result Business Unit Summaries Capital and Basel II Key Messages 23
Slide 24: Notes
For personal use only Notes 24
Slide 25: Group financial summary
Group financial summary For personal use only Dec 07 Dec 06 Dec 07 vs $m $m Dec 06 Operating income 6,974 6,472 8% Shareholder investment returns 42 85 (51%) Income 7,016 6,557 7% Operating expenses 3,378 3,144 7% Loan impairment expense 333 195 71% Net profit before tax 3,305 3,218 3% Tax and Minor
Slide 26: Other key information
Other key information For personal use only Defined benefit superannuation plan income/(expense): This amount is influenced by actuarial estimates of the long-term return on plan assets, the discount rate applied to plan liabilities, and the cost of additional member benefits accrued during the pe
Slide 27: Non cash items – a quick explanation
Non cash items – a quick explanation For personal use only Dec 07 Dec 06 $m $m Defined benefit superannuation plan income/(expense) (4) 4 Treasury shares (13) (38) One-off AIFRS mismatches - (46) Reclassified Hedging and AIFRS volatility 3 (25) Total non cash items (14) (105) 27
Slide 28: Notes
For personal use only Notes 28
Slide 29: A solid operating result
A solid operating result For personal use only Dec 07 Dec 06 Dec 07 vs $m $m Dec 06 Cash NPAT 2,385 2,296 4% Shareholder investment returns after tax (28) (61) Underlying NPAT 2,357 2,235 Extra funding costs after tax 70 Underlying NPAT excluding extra funding costs 2,427 2,235 9% 29
Slide 30: Notes
For personal use only Notes 30
Slide 31: Extra funding costs
Extra funding costs* For personal use only Basis risk Long term wholesale funding costs bpts bpts 0.80% 70 0.007 68 70 0.70% 31 Dec 07 60 0.006 61 0.60% 60 50 0.005 50 0.50% 50 Margin to BBSW 42 42 40 0.004 38 40 0.40% Ç 37bpts 30 0.003 30 0.30% Ç 27bpts 23 20 0.002 20 0.20% 17 13 14 1 Jul 07 15 15
Slide 32: Funding Profile
Funding Profile Notes For personal use only Geographic distribution 3% Australia 18% Europe Misc 42% 4% Other Asia 5% Japan Hong Kong United States 13% United Kingdom 3% 12% Long term wholesale funding 35 (contractual maturity profile) 30 25 58% > 3yrs AUD (bil) 20 15 10 5 0 1< 3 3<5 5<7 7 < 10 > 10
Slide 33: Funding – well positioned
Funding – well positioned For personal use only Source of funding No direct sub-prime exposure 25% Short term wholesale Strong retail funding (13% annualised Long term wholesale deposit growth YTD Dec 07) 54% Securitisation 17% Retail Diversified wholesale funding 4% No reliance on securitis
Slide 34: Notes
For personal use only Notes 34
Slide 35: Results by Business Unit
Results by Business Unit For personal use only Dec 07 Dec 06 Dec 07 vs $m $m Dec 06 Retail Banking Services 949 881 8% Premium Business Services 724 724 - Wealth Management 380 299 27% International Financial Services 296 233 27% Other: Corporate centre 104 181 (42%) Eliminations/Unallocated (68) (2
Slide 36: Other key information
Other key information Notes For personal use only 6 months % of total group operating income Dec 07 Jun 07 Dec 06 Net interest income 56% 54% 54% Other banking income 22% 24% 26% Funds Mgt. income 16% 15% 14% Insurance income 6% 7% 6% Total 100% 100% 100% Av interest earning assets ($m) * 352,107 32
Slide 37: Positive Jaws in all business units
Positive “Jaws” in all business units For personal use only Dec 07 vs Dec 06 30% 60% 52% Excluding 25% asset sales in FY07 22% 22% 20% 17% 16% 15% 13% 10% 10% 8% 8% 8% 8% 7% 5% 5% 4% 2% 0% * * * RBS PBS WM IFS Group Income Expenses NPAT * Excludes shareholder investment returns 37
Slide 38: Notes
For personal use only Notes 38
Slide 39: Underlying NIM down 4bpts
Underlying NIM down 4bpts For personal use only bpts Extra funding costs Underlying NIM È 4bpts ¾ Basis spread È2 ¾ Wholesale funding È1 216 (3) 5 217 È3 (2) 1 212 A further 3bpts of extra funding costs for short dated hedging in Other Banking Income Asset pricing and mix È2 Jun 07 Extra Asset
Slide 40: Notes
For personal use only Notes 40
Slide 41: Costs up 7%, or 3% since Jun
Costs up 7%, or 3% since Jun 07 For personal use only Movement Dec 07 vs Dec 06 $m GST credits (64) Used Used to to fund fund extra extra investment investment Incremental investment spend 62 Investment Investment for for growth growth CPI increases 126 (staff, (staff, property, property, IT IT etc)
Slide 42: Other key information
Other key information Notes For personal use only $m Dec 07 Jun 07 Dec 06 Profit and loss 302 285 240 Capitalised 136 150 110 Cash investment spend 438 435 350 42
Slide 43: Continuing to invest
Continuing to invest For personal use only 1H08 Investment spend ($m) Expensed Capitalised Total Business Banking Growth Strategy Growth Online and Customer Systems 110 80 190 projects Home loan Top Ups Motor Insurance Underwriting Product and System Rationalisation (WM) Productivity Hom
Slide 44: Notes
For personal use only Notes 44
Slide 45: Financials
Financials For personal use only Group Result Business Unit Summaries Capital and Basel II Key Messages 45
Slide 46: Other key information
Other key information For personal use only Dec 07 Jun 07 Dec 06 Dec 07 vs Dec 06 Net interest income Home loans 645 637 631 2% Consumer finance 374 374 368 2% Retail deposits 1,124 1,028 1,043 8% 2,143 2,039 2,042 5% Other banking income Home loans 69 56 56 23% Consumer finance 157 223 174 (10%) Re
Slide 47: Retail Banking Services
Retail Banking Services For personal use only Dec 07 Dec 07 vs Strong volume growth: $m Dec 06 ¾ Home loans Ç 14% Home loans 714 4% ¾ Deposits Ç 12% Consumer finance 531 (2%) Retail deposits 1,462 6% Good market share outcomes Distribution 53 4% Total banking income 2,760 4% Efficiency gains h
Slide 48: Home loan stress testing and arrears
Notes For personal use only Home loan stress testing Credit card arrears (Net of insured and securitised losses) 4.00 Expected loss PD stress factor $m 3.00 Property value x1 x2 x4 x6 % 2.00 No decrease 14.0 18.4 25.2 29.5 10% decrease 33.1 44.9 63.6 76.2 1.00 20% decrease 67.1 93.9 136.5 166.4 0.00
Slide 49: Sound consumer credit quality
Sound consumer credit quality For personal use only Home loan arrears 1.40 Arrears rates trending lower in all 1.20 1.00 portfolios 0.80 % 0.60 0.40 Home loan stress test: 0.20 ¾ Under most stressed 0.00 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec conditions – potential loss of 0
Slide 50: Other key information
Other key information For personal use only Dec 07 Jun 07 Dec 06 Dec 07 vs Dec 06 Net interest income Institutional Banking 469 417 374 25% Private Client Services 121 100 88 38% Corporate Financial Services 354 324 331 7% Agribusiness 53 49 51 4% Local Business Banking 99 87 89 11% 1,096 977 933 17
Slide 51: Premium Business Services
Premium Business Services For personal use only Excluding “Loy Yang”: Dec 07 Dec 07 vs $m Dec 06 ¾ PBS profit Ç 8% Institutional Banking 891 10% Private Client Services 314 38% ¾ Institutional Ç 22% Business Banking Corporate Financial Services 586 7% Strong PCS result underpinned by CommSec gro
Slide 52: Other key information
Other key information For personal use only Annualised loan impairment expense to average gross loans and acceptances (Commercial and Consumer) 0.14% 0.15% 0.14% 0.20% 0.15% 0.15% 0.16% 0.16% 0.13% 0.13% Dec 04 Jun 05 Dec 05 Jun 06 Dec 06 Jun 07 Dec 07 146 176 188 210 195 239 333 52
Slide 53: Commercial Credit Quality
Commercial Credit Quality For personal use only Gross impaired assets to RWA 0.60% Portfolio quality remains sound 0.40% Small number of well-publicised CBA ANZ exposures driven by market NAB conditions 0.20% WBC Exposures to Financial Institutions 0.00% Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun
Slide 54: Other key information
Other key information For personal use only Dec 07 Jun 07 Dec 06 Dec 07 vs Dec 06 Net operating income CFS GAM 431 356 305 41% Colonial First State 378 354 306 24% CommInsure 321 327 320 - Other (4) 5 (9) (56%) 1,126 1,042 922 22% Operating expenses CFS GAM 191 170 140 36% Colonial First State 211 2
Slide 55: Wealth Management
Wealth Management For personal use only CFS GAM: ¾ Underlying profit up 47% Dec 07 Dec 07 vs $m Dec 06 ¾ FUM up 28% to $164bn ¾ Business diversification CFS GAM 431 41% ¾ Improved margins Colonial First State 378 24% ¾ 32% of AWG now sold down CommInsure 321 - Colonial First State: Other (4) (56
Slide 56: Other key information
Other key information For personal use only Dec 07 Jun 07 Dec 06 Dec 07 vs Dec 06 Net interest income ASB 400 372 336 19% Other 42 18 23 83% 442 390 359 23% Other banking income ASB 156 118 148 5% Other 27 20 21 29% 183 138 169 8% Total banking income ASB 556 490 484 15% Other 69 38 44 57% 625 528 5
Slide 57: International Financial Services
International Financial Services For personal use only Dec 07 Dec 07 vs Strong banking income growth $m Dec 06 ASB 556 15% ASB profit Ç 12% in NZD Other 69 57% Total banking income 625 18% Growing contribution from Asian Funds management income 22 5% operations Insurance income 120 4% Total op
Slide 58: Notes
For personal use only Notes 58
Slide 59: Financials
Financials For personal use only Group Result Business Unit Summaries Capital and Basel II Key Messages 59
Slide 60: Capital treatment – Basel I
Capital treatment – Basel I For personal use only AIFRS APRA S&P Accounting Tier 1 Tier 2 Total ACE Shareholders' Equity Ordinary Share Capital 3 3 3 3 Other Equity Instruments 3 3 3 Reserves General Reserve & Capital Reserve 3 3 3 3 Asset Revaluation Reserve 3 3 3 Other reserve accounts 3 Retained
Slide 61: Capital Overview
Capital Overview For personal use only Basel II advanced accreditation received December 2007 Risk management benefits: ¾ More sophisticated internal systems ¾ More flexible decision-making Capital impacts: ¾ Increased capital ratios (Total and Tier 1) ¾ New ratios comfortably within or above
Slide 62: Capital treatment – Basel II
Capital treatment – Basel II For personal use only AIFRS APRA Accounting Tier 1 Tier 2 Total Shareholders' Equity Ordinary Share Capital 3 3 3 Other Equity Instruments 3 3 3 Reserves General Reserve & Capital Reserve 3 3 3 Asset Revaluation Reserve 3 3 3 Other reserve accounts 3 Retained Earnings 3
Slide 63: Capital ratios (pre DRP share purchase)
Capital ratios (pre DRP share purchase) For personal use only Basel I Proforma Basel II 12% 11.27% Total 11% Capital 9.78% 9.76% 9.84% Target 10% Range ^ 9% 8% 7% Tier 1 7.43% 7.62% 7.14% Target 7.06% 6% Range 5% ACE Target 4% Range 3% 4.70% 4.79% 4.79% 4.79%* 2% 1% 0% Dec 06 Jun 07 Dec 07 1 Jan 08
Slide 64: Notes
For personal use only Notes 64
Slide 65: Capital ratios (post DRP share purchase)
Capital ratios (post DRP share purchase) For personal use only Basel I Proforma Basel II Before DRP share After DRP share Before DRP share purchase After DRP share purchase# 12% purchase purchase# 11.27% 11.06% Total 11% Capital 10% 9.84% 9.67% Target Range ^ 9% 8% 7% Tier 1 7.43% 7.62% 7.35% Target
Slide 66: Notes
For personal use only Notes 66
Slide 67: Financials
Financials For personal use only Group Result Business Unit Summaries Capital and Basel II Key Messages 67
Slide 68: Notes
For personal use only Notes 68
Slide 69: Key Messages
Key Messages For personal use only A solid operating result Strong volume growth driving market share gains Sound consumer credit quality – increased commercial provisioning driven by market conditions Continuing to invest for growth Very strong capital position Well positioned in a chal
Slide 70: Notes
For personal use only Notes 70
Slide 71: Agenda
Agenda For personal use only Ralph Norris, CEO – Results and Company Update David Craig, CFO – Detailed Financials Ralph Norris, CEO – Outlook Questions and Answers 71
Slide 72: System credit growth
System credit growth For personal use only Jun 07 Jun 08 Jun 09 Actual Forecast* Forecast* Housing credit 12.9% 10.5-12.5% 12-14% Other personal credit 16.2% 8-10% 6.5-8.5% Business credit 18.9% 18.5-20.5% 13-15% * CBA economist forecast for the Australian market as at February 2008 72
Slide 73: Outlook
Outlook For personal use only Continuing global uncertainty: ¾ Slowing economic growth in US ¾ Continuing sub-prime fall-out Volatility expected to continue through calendar 2008 Domestic economy remains strong: ¾ Low unemployment, good GDP growth, exposure to Asia/commodities ¾ Inflation and
Slide 74: Notes
For personal use only Notes 74
Slide 75: Supplementary materials
Supplementary materials For personal use only For the half year ended 31 December 2007 13th February 2008 Commonwealth Bank of Australia ACN 123 123 124
Slide 76: Economy
For personal use only Economy
Slide 77: GDP, unemployment and cash rates
GDP, unemployment and cash rates For personal use only 77
Slide 78: Credit growth
For personal use only Credit growth 78
Slide 79: Spreads
Spreads For personal use only Aus. BBB Corporates US BBB Corporates ~ 35bpts over swaps ~ 50bpts over swaps 79
Slide 80: Group
For personal use only Group
Slide 81: Fully franked dividends
Fully franked dividends For personal use only Dividend (cents per share) 280 240 200 149 160 130 Cents 112 104 120 82 85 107 113 80 94 79 85 Second Half 68 69 40 First Half 0 2002 2003 2004 2005 2006 2007 2008 Payout Ratio (cash basis) 73.9% 73.9% 74.9% 71.0% 73.0% 81
Slide 82: Expenses
Expenses For personal use only 6 months Dec 07 Jun 07 Dec 06 Dec 07 vs Dec 07 vs $m $m $m Jun 07 Dec 06 Staff expenses 1,780 1,642 1,587 8% 12% Occupancy and equipment 373 353 335 6% 11% IT Services 416 456 427 (9%) (3%) Postage and stationery 108 104 109 4% (1%) Fees and commissions 390 375 316 4%
Slide 83: CBA growth vs market (6 months to Dec 07)
CBA growth vs market (6 months to Dec 07) For personal use only Home lending Personal lending 6.9% 5.7% 5.7% 4.8% 5.8% 5.8% 5.3% 5.2% 3.8% 2.5% 1.9% 1.0% 0.3% CBA WBC ANZ NAB SGB CBA WBC ANZ NAB SGB -0.9% Credit cards Household deposits 10.7% 9.6% 10.0% 5.4% 9.9% 4.4% 4.3% 9.4% 4.1% 7.4% 8.9% 3.4% 1
Slide 84: Home loans (domestic)
Home loans (domestic) For personal use only Dec 07 Jun 07 Dec 06 Domestic growth profile ($bn) Loan funded 32.3 27.1 25.1 Reduction 21.3 16.5 19.1 Net growth 11.1 10.6 6.0 Total Home lending assets ($bn) Australian home lending assets ($bn) 172.5 161.4 150.8 Securitisation ($bn) (13.2) (15.6) (10.8)
Slide 85: Home loan balance growth by channel
Home loan balance growth by channel For personal use only Home Loan Growth by Channel 18% 15.8% 13.3% 13% 11.5% 8% 7.0% 6.8% 6.5% 5.8% 5.0% 5.2% 5.2% 4.1% 3.0% 3.3% 3% 0.01% -0.5% -2% Dec 06 Jun 07 Dec 07 Broker Branch Premium Total CBA Total Market Note : Width of channel columns reflects relative
Slide 86: Market Share Trends
Market Share Trends For personal use only Home Loans Household Deposits RBA/APRA APRA 19.2% 30.2% 19.0% 29.8% 18.8% 29.4% 18.6% 29.0% 18.4% 18.2% 28.6% 18.0% 28.2% Jun 05 Dec 05 Jun 06 Dec 06 Jun 07 Dec 07 Jun 05 Dec 05 Jun 06 Dec 06 Jun 07 Dec 07 Business Lending Business Deposits Loans to Non-Fina
Slide 87: Sustainability
Sustainability For personal use only Greenhouse emissions 17% since 2001 Targeting lower paper and water usage Environment Launch of Generation Sustainability Fund UN Principles for Responsible Investment Online statements + Culture of Trust and Team Spirit Long Term Diversity – women
Slide 88: Replicating Portfolio
Replicating Portfolio For personal use only Scenario future tightening monetary policy Current Portfolio Yield Replicating Port folio Yield Target Cash Rat e 2001 2007 2011 Replicating Portfolio Yield Scenario future easing monetary policy Target Cash Rate Replicat ing Port f olio Yield Target Cash
Slide 89: Variable Home Loan Margin – impact of market volatility
Variable Home Loan Margin – impact of market volatility* For personal use only bpts Basis risk 70 0.007 Locked in for 3 years 0.006 Profitability and increasing 5 0.005 50 0.004 0 Margin È 8bpts 0.003 30 0.002 Ç 27bpts È 8bpts -5 0.001 10 5 0 Dec 06 Jun 07 Dec 07 (8) 10 Long term wholesale funding c
Slide 90: Credit Quality
For personal use only Credit Quality
Slide 91: Summary
Summary For personal use only Dec 07 Jun 07 Dec 06 Risk Weighted Assets (RWA) $272,609m $245,347m $234,569m Gross Loans and Acceptances (GLA) $347,682m $321,653m $299,085m Charge for Loan Impairment Expense (LIE) - 6 mths $333m $239m $195m LIE to RWA (annualised) 0.26% 0.20% 0.17% LIE to GLA (annual
Slide 92: The Bank remains well provisioned
The Bank remains well provisioned For personal use only 1,500 0.50% 1,200 0.40% 900 0.30% $m 600 0.20% 300 0.10% 0 0.00% Dec 05 Jun 06 Dec 06 Jun 07 Dec 07 Collective Provision (LHS) Individually Assessed Provision (LHS) Total Loan Provisions / Gross Loans and Acceptances (RHS) The General Reserve f
Slide 93: Credit quality
Credit quality For personal use only Home loan delinquencies by state New mortgagee in possession cases (30+ days) 1.60% 100 1.40% 1.20% NSW/ACT 80 1.00% Qld 60 SA/NT % 0.80% Vic/Tas 0.60% 40 WA 0.40% 20 0.20% 0.00% 0 Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 06 06 07 07 07 07 07 07 07
Slide 94: Home loans – LVR Profile
Home loans – LVR Profile For personal use only Original LVR 100.0% Strong LVR profile 90.0% 80.0% 70.0% 60.0% 80%+ % of loans at <60% LVR: 50.0% 60-80% 40.0% 0-60% 30.0% 60% if based on 20.0% 10.0% original security values 0.0% Dec 05 Jun 06 Dec 06 Jun 07 Current Market LVR 70% if based on 1
Slide 95: Top Commercial Exposures – Dec
Top 20 Commercial Exposures – Dec 07 For personal use only S&P’s Rating Equivalent Top 20 as % of Total Committed Exposures BBB+ A- Var ei d BBB- BBB+ 4.0% A 3.5% AA- A 3.0% BBB 2.5% A 2.0% A- BBB+ 1.5% A- 1.0% BB+ A- 0.5% BBB 0.0% A- BB+ FY03 FY04 FY05 FY06 FY07 1H08 BBB- BBB+ 0 200 400 600 800 1,0
Slide 96: Quality of commercial risk-rated exposures
Quality of commercial risk-rated exposures For personal use only Quality of commercial risk-rated exposures: There is security over 82% of the non-investment grade exposure 100% 80% 36 33 34 34 33 32 33 33 33 60% 15 16 16 16 17 20 20 19 17 40% 17 18 18 22 20 17 17 17 18 67% investment grade 20% 35 3
Slide 97: Total geographic exposure
Total geographic exposure For personal use only Total exposure* : $515.5bn International 13% At 30 June 07 Total exposure = $471.2bn New Zealand International = 14% 13% New Zealand = 13% Australia = 73% Australia 74% *Total exposure = balance for uncommitted facilities; greater of limit or balance f
Slide 98: Total industry exposure
Total industry exposure For personal use only Business Services 0.8% At 30 June 07 Agriculture 2.2% Construction 0.9% Consumer = 45.9% Other, 5.40% Transport & storage, Culture & Recreation Agriculture = 2.3% 1.0% 1.70% Business Services = 0.8% Retail & Wholesale, Finance - Banks Construction = 1.0%
Slide 99: International commercial exposure
International commercial exposure For personal use only Total exposure* : $68.0bn At 30 June 07 Total exposure = $65.7bn Finance = 80% Government = 2% Other commercial = 13% Other Commercial 17% Specific industries = 5% Government 11% Specific Industries 6% Aviation Technology Telcos Energy Leasing
Slide 100: Credit Exposure - Property Sector
Credit Exposure - Property Sector For personal use only At 30 June 07 Total exposure = $27.8bn Total exposure*: $35.6bn Australia = 80% New Zealand = 17% Other = 3% Dec 07 Jun 07 Dec 06 Rating $bn $bn $bn Other 5% New Zealand AAA to A- 5.7 3.3 3.2 14% BBB+ to BBB- 8.3 7.5 7.3 BB to BB- 11.8 8.6 8.2
Slide 101: Credit Exposure – Finance (Banks)
Credit Exposure – Finance (Banks) For personal use only At 30 Jun 07 Total exposure = $64.9bn Total exposure*: $59.2bn Australia = 28% New Zealand = 8% Other = 64% Dec 07 Jun 07 Dec 06 Rating $bn $bn $bn AAA to A- 56.9 62.1 53.3 BBB+ to BBB- 1.9 2.4 1.3 Australia 38% BB to BB- 0.3 0.3 0.3 Other 57%
Slide 102: Credit Exposure – Finance (Other)
Credit Exposure – Finance (Other) For personal use only At 30 Jun 07 Total exposure = $39.4bn Total exposure*: $39.1bn Australia = 72% New Zealand = 6% Other = 22% Dec 07 Jun 07 Dec 06 Rating $bn $bn $bn AAA to A- 31.2 32.4 28.0 Other 22% BBB+ to BBB- 5.5 5.0 3.6 BB to BB- 2.1 1.6 1.6 New Zealand 5%
Slide 103: Credit Exposure - Agriculture Sector
Credit Exposure - Agriculture Sector For personal use only At 30 Jun 07 Total exposure*: $11.5bn Total exposure = $11.0bn Australia = 57% New Zealand = 43% Dec 07 Jun 07 Dec 06 Rating $bn $bn $bn New AAA to A- 0.3 0.2 0.3 Zealand BBB+ to BBB- 2.0 1.8 1.7 44% BB to BB- 3.4 3.2 3.1 < BB- 5.8 5.8 5.4 A
Slide 104: Credit Exposure - Energy Sector
Credit Exposure - Energy Sector For personal use only At 30 Jun 07 Total exposure = $6.8bn Total exposure*: $9.2bn Australia = 66% New Zealand = 10% Other = 24% Dec 07 Jun 07 Dec 06 Rating $bn $bn $bn AAA to A- 1.8 0.8 1.1 Other 29% BBB+ to BBB- 6.8 5.4 5.2 BB to BB- 0.5 0.5 0.5 < BB- 0.1 0.1 0.2 Au
Slide 105: Funds Management and Insurance
For personal use only Funds Management and Insurance
Slide 106: Wealth Management
Wealth Management For personal use only Number of Funds in each Asset Class Out Performing Benchmark (3 years) 100% 100% 100% 100% 93% 86% 71% 65% 67% 60% 52% 20% Domestic Global Property Fixed Cash Hedge Infrastructure Direct Listed Global Emerging Global Average Equities Resources Securities Inter
Slide 107: Funds under Administration
Funds under Administration For personal use only Half Year to Dec 2007 Investment Opening income and Closing Funds Under Administration balance Inflows Outflows Netflows other e balance $m $m $m $m $m $m FirstChoice 39,545 10,924 (7,402) 3,522 (253) 42,814 Cash management 3,130 1,016 (1,211) (195) 1
Slide 108: Capital Management
For personal use only Capital Management
Slide 109: ACE calculation
ACE calculation For personal use only Credit Ratings Long Term Short Term Affirmed/Upgraded Standard & Poors' AA A-1 + Dec 07 Moody's Investor Services Aa1 P-1 Dec 07 Fitch Ratings AA F1+ Dec 07 Dec 07 Jun 07 Dec 06 Adjusted Common Equity * $M $M $M Tier One Capital 19,810 17,512 16,553 Add: Deferre
Slide 110: Basel I ACE movement in half year ended Dec
Basel I ACE movement in half year ended Dec 07 For personal use only 6.0% 0.87% (0.55%) 5.5% 0.08% (0.47%) 5.0% 4.79% (0.07%) (0.03%) 4.62% 4.5% 4.0% 3.5% 3.0% ACE Cash Ordinary DRP (2) Growth in Investment Other ACE Jun 07 NPAT Dividends (1) $224m RWA in non ($85m) Dec 07 $11,790m $2,385m ($1,487m)
Slide 111: Basel I Tier movement in half year Dec
Basel I Tier 1 movement in half year Dec 07 For personal use only 9.0% 0.87% (0.55%) 8.5% (0.71%) 8.0% 0.53% 7.5% 0.08% (0.16%) 0.07% 7.27% 7.14% 7.0% 6.5% 6.0% 5.5% 5.0% Tier 1 PERLS IV(1) Cash Ord. Growth in DRP(3) Investment(4) Currency Tier 1 Jun 07 $1,443m NPAT Dividends(2) RWA $224m and Acquis
Slide 112: Hybrid instrument information
Hybrid instrument information For personal use only Hybrid dividends Franked/ Dec 07 Jun 07 Dec 06 Jun 06 Imputed PERLS * - - - 13 F PERLS II 20 19 19 18 F PERLS III 31 31 29 13 F PERLS IV 23 Trust Preferred Securities 2003 18 17 21 22 N/A Trust Preferred Securities 2006 25 27 27 - N/A ASB Capital p
Slide 113: Results Presentation
Results Presentation For personal use only For the half year ended 31 December 2007 Ralph Norris CHIEF EXECUTIVE OFFICER David Craig CHIEF FINANCIAL OFFICER 13th February 2008 Commonwealth Bank of Australia ACN 123 123 124
Commonwealth Bank of Australia — H1 FY2008 Earnings Presentation on 6ix