Commonwealth Bank Of Australia · ASX:CBA
Commonwealth Bank Of Australia — FY2016 Earnings Presentation
73 slides from Commonwealth Bank Of Australia's earnings presentation, Aug 10, 2016
Slide 1: Results Presentation for the Full Year Ended 30 June 2016
RESULTS PRESENTATION Results Presentation FOR THE FULL YEAR ENDED 30 JUNE 2016 For the half year ended 31 December 2009 COMMONWEALTH BANK OF AUSTRALIA | ACN 123 123 124 | 10 AUGUST 2016 10 February Commonwealth Bank of Australia ACN 123 123 124 2010
Slide 2: Disclaimer & Important Notice
Disclaimer & Important Notice Disclaimer The material in this presentation is general background information about the Group and its activities current as at the date of the presentation, 10 August 2016. It is information given in summary form and does not purport to be complete. It is not intended
Slide 3: CBA Snapshot FY16
CBA snapshotSnapshot FY16 1 Financial at 30 June 20161 To excel at securing and enhancing Cash earnings ($m) 9,450 3% the financial wellbeing of ROE (Cash) 16.5% (170) bps people, businesses and communities Cash EPS ($) 5.55 - DPS ($) 4.20 - Integrity Accountability Cost-to-Income 42.4% (40) bps Col
Slide 4: Divisional Contributions
Divisional Contributions Cash NPAT FY16 1 Income 8% C:I 150 bpts to 32.6% C:I 30 bpts to 41.7% Reduced impairment credit Business loans 6% Loan impairment 18% Home loans 9% C:I 110 bpts to 37.3% Markets2 14% Loan impairment 46% + 11% Loan impairment 51% Funds
Slide 5: Ongoing volume growth
Ongoing volume growth Balance Growth 1 12 months to Jun 16 Driven by continued strong growth in Transaction Accounts ASB – strong growth across the Above system growth in board: housing, business, rural 2H16 12.7% BPB > system in 2H16 IB&M < system in 2H16 9.5% 8.8% 8.8% 9.1% 6.7% 7.0% 6.6% 6.6% 6.1
Slide 6: Operating Income up 5%
Operating Income up 5% $m +5.3% Funds & Insurance +3% +4.7% before FX Average FUA 4% Insurance income flat 2,811 2,730 4,860 Other Banking Income +1% 4,811 FVA / CVA ($35m) Trading (ex FVA/CVA) 8% OBI (ex Trading) flat 16,935 15,827 Net Interest Income +7% Volume 8% Margin (2) bpts FY1
Slide 7: Underlying expenses up 3%
Underlying expenses up 3% Total Operating Expenses $m +4.4% Underlying +3.0% 71 65 71 250 (21) 10,293 10,429 9,993 FY15 Staff Amortisation Other FY16 Investment FX FY16 underlying Spend increase 7
Slide 8: Investment spend
Investment spend Gross Investment Spend Investment Spend $m % of total 1,373 1,286 1,246 Branches 1,237 11% 12% 12% 1,179 1,182 & Other 24% 692 30% Risk & 639 37% Compliance 2nd Half 638 655 593 651 65% 58% Productivity 647 681 51% & Growth 1st Half 541 582 589 595 FY11 FY12 FY13 FY14 FY15 FY16 FY14
Slide 9: Group NIM
Group NIM 12 Month Movement 214 bpts 209 207 210 206 206 FY14 FY15 FY16 2 - - 209 (2) 207 (2) 206 206 ex Treasury Group NIM 3bps ex Treasury & Markets & Markets FY15 Asset Funding Portfolio Capital & Treasury & FY16 pricing costs & mix Other Markets Basis risk 9
Slide 10: Underlying Group NIM down 1bpt
Underlying Group NIM down 1bpt 1 6 Month Movement bpts 212 207 208 206 209 204 206 205 Dec 14 Jun 15 Dec 15 Jun 16 208 1 2 206 (3) (1) (1) 206 205 ex Treasury & Markets 1H16 Asset Funding Portfolio Capital & Treasury 2H16 pricing costs & mix Other & Markets Basis risk 1. Excluding Treasury and Marke
Slide 11: Sound credit quality
Sound credit quality Loan Impairment Expense Consumer (bpts) 19 18 18 18 CBA Group (bpts) 17 17 FY11 FY12 FY13 FY14 FY15 FY16 Corporate (bpts) 30 24 Uptick largely in 13 13 73 commodity and 43 related sectors 1Q16 2Q16 3Q16 4Q16 24 23 20 13 11 FY11 FY12 FY13 FY14 FY15 FY16 41 Troublesome and Impaire
Slide 12: Strong provisioning
Strong provisioning Individual Provisions Collective Provisions $m $m 2,779 2,762 2,818 695 Economic Overlay 762 755 Overlay unchanged 1,127 187 Bankwest 347 264 944 389 887 209 1,077 267 941 981 128 169 Consumer 128 610 566 492 Commercial 729 762 859 Jun 14 Jun 15 Jun 16 Jun 14 Jun 15 Jun 16 12
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Slide 14: Funding and Liquidity
Funding and Liquidity Funding Long Term Funding Portfolio Tenor (years)4 $bn Source of funds Use of funds 3.9 4.1 3.8 66% Deposit (27) Funded 38 Jun 15 Dec 15 Jun 16 Liquidity 5 1 $bn 120% 123% 120% LCR NSFR (56) 132 140 134 40 >100% 66 66 59 CLF6 (1) (3) 8 66 74 75 HQLA6 Equity FX Customer Short te
Slide 15: Funding - Portfolio
Funding - Portfolio Term Wholesale Funding by Currency1 Wholesale Funding by Product Vanilla MTN 28% Jun 16 AUD CP 17% CDs 12% Jun 15 USD 2 FI Deposits 11% EUR Covered Bonds 8% Jun 14 Other 7% Other Structured MTN 6% Jun 13 Debt Capital 6% 0% 20% 40% 60% 80% 100% Securitisation 5% Term Wholesale Fun
Slide 16: Deposits
Deposits Deposits vs Peers1 Deposits in LCR calculation2 441 June 2016 ($bn) As at 31 March 2016 ($bn) 160 369 Other 210 308 deposits 140 187 244 CBA overweight more stable deposits 194 120 138 CBA Household 231 Peer 1 182 100 deposits 114 106 Peer 2 Peer 3 CBA Peer 3 Peer 2 Peer 1 80 $bn Jun 16 Jun
Slide 17: Funding
Funding Funding Composition Average Long Term Funding Costs 200 Margin to BBSW (bpts) Customer Deposits 66% 175 ST Wholesale Funding1 14% 150 LT Wholesale Funding > 12 months 10% 125 LT Wholesale Funding ≤ 12 months 3% 100 Predicted LT Covered Bonds 3% 75 funding costs if current Hybrids 2% 50 marke
Slide 18: Strong Capital Position
Strong Capital Position CET1 bps Estimated increase in Mortgage risk weight average risk weight for the change has no impact on Group’s mortgage portfolio1 the Group’s internationally 14.4% comparable ratio. 118 (6) 10.6% 100 10.2% (72) 9.6% 9.1% 8.0% Jun 15 Dec 15 Dec 15 Cash RWA Jun 16 Higher CET1
Slide 19: APRA Capital Ratios
APRA Capital Ratios 14.1% 14.3% 12.7% 2.0% 1.9% 11.5% 1.5% 2.0% 1.7% 2.1% 2.0% 1.5% 10.2% 10.6% 9.1% 8.0% Jun 15 Dec 15 Jun 16 Regulatory Minimum CET1 Tier 1 Tier 2 19
Slide 20: APRA & International Comparison
APRA & International Comparison The following table provides details on the differences, as at 30 June 2016, between the APRA Basel III capital requirements and internationally comparable capital ratio1. CET1 Basel III (APRA) 10.6% Equity investments 0.8% Capitalised expenses 0.1% Deferred tax asset
Slide 21: International Peer Basel III CET1
International Peer Basel III CET1 G-SIBs in dark grey 17.7 APRA top quartile 1 14.9 14.7 14.5 14.4 14.0 13.9 13.5 13.5 13.5 13.2 13.0 12.9 12.5 12.4 12.1 12.1 11.9 11.8 11.6 11.6 11.4 11.4 11.4 11.3 11.3 11.1 10.8 10.8 10.7 10.6 10.6 10.5 10.3 10.3 10.2 10.110.1 Santander 3 Intesa Sanpaolo 3 BNP Par
Slide 22: Dividends
Dividends Payout ratio (cash) 75.0% 78.2% 73.9% 73.2% 75.8% 75.9% 75.1% 75.1% 76.5% 81% 81% 82% 90% 81% 70% 71% 84% 70% 84% 71% 87% 62% 62% 63% 63% 84%74% cents 113 153 113 115 120 170 132 188 137 197 164 200 183 218 198 222 198 222 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Interim Final 22
Slide 23: Leverage Ratio
Leverage Ratio CBA Leverage Ratio well above prescribed Basel Committee minimum $m Jun 16 Leverage ratio introduced to constrain the build-up of leverage in the banking system. Tier 1 Capital 48,553 Scheduled to be introduced as a minimum requirement Total Exposures 980,846 from 1 January 2018. Leve
Slide 24: Liquidity Coverage Ratio
Liquidity Coverage Ratio LCR Qualifying Liquid Assets1 LCR 120% at 30 Jun 2016 Committed Liquidity Facility reduced by $7.5bn $bn The Group’s Net Stable Funding Ratio (NSFR) is 140 currently above the 100% requirement 134 132 Liquidity Coverage Change Jun 16 Jun 15 Ratio ($bn) ($bn) Internal 4
Slide 25: Regulatory Change
Regulatory Change APRA 2016 2017 2018 2019 Leverage ratio Disclosure requirements only Implementation CCB + D-SIB Implemented 1 Jan 2016 CCB CET1 2.5% + D-SIB CET1 1.0% Countercyclical Implemented 1 Jan 2016 – not material Capital Buffer (CCyB) Response to FSI Implementation from 1 Jul 2016 – increa
Slide 26: UK and US Balance Sheet Comparison
UK and US Balance Sheet Comparison 1,2 United Kingdom USA Assets Liab + Equity Assets Liab + Equity Cash & Cash & 9% 8% Equity 12% 12% Equity equivalents equivalents Home Loans 20% Home Loans 13% 57% Deposits Deposits 58% Other Lending 40% Other Lending 39% 8% Long Term3 Other Fair Other Fair 16% Lo
Slide 27: Australian Banks – Safe Assets, Secure Funding
Australian Banks – Safe Assets, Secure Funding Commonwealth Bank Balance Sheet Comparisons Assets – CBA has a safe, conservative asset profile: Assets Liab + Equity 51% of balance sheet is home loans, which are stable/long Cash & equivalents 3% term. 7% Equity Trading securities and other fair v
Slide 28: Strategy
Strategy
Slide 29: CBA Overview
CBA Overview Australia NZ Other Total People, Customers 13.1m 2.3m 0.5m 15.9m Customers & Staff 41,400 5,800 4,500 51,700 Delivery Branches 1,131 133 145 1,409 ATMs 4,381 445 172 4,998 Retail #1 Customer Business = #1 Satisfaction Internet Banking #1 Main Financial Institution (MFI) #1 Market Home L
Slide 30: Our Strategy
Our Strategy Customer Focus People Productivity Technology Strength Capabilities “One CommBank” Growth Opportunities Continued growth in business and institutional banking Disciplined capability-led growth outside Australia TSR Outperformance 30
Slide 31: Customer focus - more needs met
Customer focus - more needs met Retail Customer Satisfaction Customer Needs Met % Satisfied ('Very Satisfied' or 'Fairly Satisfied') (#) 87% 82.8% 3.2 3.15 3.0 82% 2.8 77% 2.6 72% 2.4 67% 2.2 62% 2.0 Jun 06 Jun 16 Jun 06 Jun 16 CBA Peers Refer notes slide at back of this presentation for source info
Slide 32: Customer needs met
Customer needs met By Age By Channel 3.35 3.43 3.35 3.15 4.16 2.70 2.59 3.29 3.15 2.21 1.54 14 - 17 18 - 24 25 - 34 35 - 49 50 - 64 65+ Total Overall Non-Internet Mobile App Website and 18+ Users Only Users Mobile App Users Share of Product Wealth – Share of Product Wealth Share of 8.30 product 12.8
Slide 33: Transaction Banking
Transaction Banking 1 Group Transaction Balances Strong growth across divisions $m FY16 v FY15 40% + 22% 34% 126,780 20% Group 103,528 14% +22% 14% 88,351 Ex 15% offset 14% 17% 9% accounts 2 FY14 FY15 FY16 RBS BPB IB&M BWA NZ RBS New Transaction Accounts3 Innovation & Simplicity # + 29% Real time
Slide 34: World class technology & operations
World classWorld technology & operations class technology & operations Revitalised State-of-the- Innovation The Digital front-line art Core Culture Future Single view of Legacy system Innovation Lab Simple, personalised digital experiences customer across replacement Leading apps for chann
Slide 35: Productivity + Efficiency + Investment
Productivity + Efficiency + Investment Productivity Cost-to-Income Reinvestment (%) ($m) Asset Finance 73% Approval (Turnaround time) +10% 44.6 SME Loan 1,373 72% Approval - IFS (Turnaround time) Branches 12% & Other 42.8 1,246 42.4 Risk & Colonial 37% Compliance Customer 85% Requests (Turnaro
Slide 36: Distribution Transformation
Distribution Transformation Small Business Video Conferencing 165 dedicated specialists Access to CBA specialists, 58k conversations in FY16 almost 60k calls in FY16 Express Branches 82 sites and growing Concierge Supported by tablets and Self Service software to enhance 700+ Intelligent Deposit cus
Slide 37: Self Service and Digital
Self Service and Digital Digital adoption increasing Sales rapidly growing Total # logons (Six Monthly) Digital contribution to total sales2 on NetBank and CommBank App (m)1 21% +41% 808 840 10% 672 709 597 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 Mobile % of Online logi
Slide 38: Transaction volumes
Transaction volumes Branch ATM1 m (deposits & withdrawals) m (all transactions) 130 325 261 59 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Point of Sale2 Internet3 m (all transactions, including credit ca
Slide 39: Transaction volumes
Transaction volumes By Number By $ Value FY16 FY16 % of total % of total 65% 52% 34% 23% 10% 9% 5% 2% Branch ATM PoS Internet Branch ATM PoS Internet 39
Slide 40: CBA in Asia and South Africa
CBA in Asia and South Africa China ♦ Bank of Hangzhou (20%): 189 branches ♦ Qilu Bank (20%): 120 branches ♦ County Banking (Henen & Hebei): - 15 branches (10 @ 100% holding, 5 @ 80% holding) - 8 sub-branches (2 @ 100% holding, 6 @ 80% holding) ♦ CBA Beijing, Shanghai and Hong Kong branches ♦ BoCommL
Slide 41: Credit Exposure & Mortgages
Credit Exposure & Mortgages
Slide 42: Market share
Market share Home Loan Market Share Jun % Market Share1 Jun 16 Dec 15 15 Home loans 25.3 25.1 25.2 CBA Peer 1 Credit cards – RBA2 24.4 24.7 24.3 Peer 2 Peer 3 27% Other household lending3 16.8 16.9 17.4 Household deposits4 29.2 29.1 29.0 25.3% 25% Business lending – RBA 16.9 17.0 17.0 18.7 18.7 18.8
Slide 43: Credit Exposures by Industry
Credit Exposures by Industry TCE TIA $m TIA % of TCE Jun 15 Jun 16 Jun 15 Jun 16 Jun 15 Jun 16 Consumer 54.2% 54.9% 1,353 1,405 0.25% 0.24% Sovereign 8.4% 9.0% - - - - Banks 8.6% 6.8% 10 10 0.01% 0.01% Property 6.3% 6.6% 562 544 0.90% 0.79% Finance – Other 4.6% 5.2% 87 64 0.19% 0.12% Retail & Wholes
Slide 44: Sector Exposures
Sector Exposures Exposures by Industry Top 20 Commercial Exposures BBB+ A- AAA A+ AA- TCE $bn to Other Jun 16 to AA- to A- BBB- BBB- A- BBB+ Sovereign 87.3 6.8 0.2 0.3 94.6 BBB BBB- AA- Banks 31.7 29.7 8.0 2.4 71.8 AA- AAA Property 1.7 5.8 14.3 47.4 69.2 A A+ AA- Finance - Other 22.9 19.0 9.3 3.1 54
Slide 45: Commercial Property
Commercial Property Overview Group Exposure 65.9 69.2 Date Legend Exposure of $69.2bn (6.6% of Group TCE) diversified 62.5 across sectors/geography/counterparties. Jun 16 Dec 15 Jun 15 32% of the portfolio investment grade, majority of sub- investment grade exposures secured (96%). 34 32 32 Po
Slide 46: Mining, Oil and Gas
Mining, Oil and Gas Overview Group Exposure Exposure of $16.0bn (1.5% of Group TCE), $2.8bn Date Legend 79 reduction from Dec 15 due to active portfolio 74 Jun 16 Dec 15 Jun 15 70 management, repayments and limited origination. Portfolio continues to perform acceptably: 18.8 18.6 70% investmen
Slide 47: Agriculture
Agriculture Overview Group Exposure Exposure of $19.7bn (1.9% of Group TCE) is well Date Legend 18.5 19.7 diversified by geography, sector and client base. Jun 16 Dec 15 18.2 Jun 15 Australian agriculture portfolio performing well. NZ dairy portfolio: 13 11 12 Represents 0.7% of Group TCE. C
Slide 48: Offshore Exposure
Offshore Exposure Overview Offshore Exposure Exposure of $147bn (14.1% of Group TCE) with 70% to Date Legend 164 Banks, Sovereigns and Other Finance sectors. Jun 16 Dec 15 Jun 15 148 147 Excluding Banks, Sovereigns and Other Finance: Exposure of $43bn with $22bn to Mining, Retail & 91 91 90 Wh
Slide 49: Australian Home Loan Portfolio
Australian Home Loan Portfolio1 Jun Dec Jun Jun Dec Jun Portfolio1 New Business1 15 15 16 15 15 16 Total Balances - Spot ($bn) 383 393 409 Total Funding ($bn) 94 50 101 Total Balances - Average ($bn) 371 388 395 Average Funding Size ($’000) 274 302 300 Total Accounts (m) 1.7 1.7 1.8 Serviceability B
Slide 50: Australian Home Loans
Australian Home Loans Balance Growth State Profile FY16 Balance Growth % of Portfolio $bn 31 (90) 101 10.5% 17% (16) 33% 26% 409 7.9% 18% 6% 383 5.4% 4.7% 4.2% Jun 15 New Redraw & Repayments External Jun 16 NSW/ACT VIC/TAS QLD WA SA/NT Fundings Interest / Other Refinance Determined by location of th
Slide 51: RBS Home Loan Growth Profile
RBS Home Loan Growth Profile Home Loan Balances Broker Share of Fundings1 $bn 54% 28 (79) 52% 52% 87 51% 50% (12) 47% 46% 345 45% 321 42% 40% 38% 39% Jun 15 New Redraw & Repayments External Jun 16 Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 fundings interest / Other refinance Market CBA Home Loan Dyna
Slide 52: Group Consumer Arrears
Group Consumer Arrears Consumer Portfolios Home Loans Personal Loans Bankwest 2.0% 90+ days 2.0% 90+ days 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 16 Jun 13 Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 Credit Cards Personal Loans Bankwest 90+ day
Slide 53: Australian Investment Home Loans
Australian Investment Home Loans Arrears New Business Profile (%) 1.00% 90+ days Owner Occupied 3 3 2 Line of Credit Portfolio 0.80% 31 32 Investor Investment Loan 37 0.60% 0.40% Owner Occupied 60 66 66 0.20% 0.00% Jun 13 Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 FY15 1H16 FY16 Borrower Profile Inve
Slide 54: Australian Home Loans – Stress Test
Australian Home Loans – Stress Test Assumptions and Outcomes Net Losses $m Assumptions (%) Base Year 1 Year 2 Year 3 2,5301 (93) 4 2,441 Cash Rate 2.0 1.0 0.5 0.5 Unemployment 5.8 7.5 9.5 11.0 Hours under- 10.2 12.4 15.3 17.4 Dec 15 Change in Portfolio Movements Jun 16 employed Valuations Cumulative
Slide 55: Economic Indicators
Economic Indicators
Slide 56: Economic Indicators
Economic Indicators 2011 2012 2013 2014 2015 2016 2017 World GDP 4.2 3.4 3.3 3.4 3.1 3.0 3.2 Australia Credit Growth % – Total 2.6 4.4 3.1 5.0 5.9 6.2 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 3.4 4.4 6.6 5-7 Credit Growth % – Other Personal
Slide 57: Australia remains well placed, but exposed to global uncertainty
Australia remains well placed, but exposed to global uncertainty GDP1 Unemployment Rate2 Global Interest Rates1 (annual % change) (%) (%) 12 8 6 6 2 8 4 -2 2 4 -6 0 -10 0 -2 Mar 05 Nov 08 Jul 12 Mar 16 Jan 05 Sep 07 May 10 Jan 13 Sep 15 Jan 05 Sep 07 May 10 Jan 13 Sep 15 Australia is into its 25th y
Slide 58: Chinese economic growth is slowing
Chinese economic growth is slowing China: GDP1 Export Shares2 (annual % change) (% of share of annual exports) 16 40 12 30 CBA 8 (f) 20 4 10 0 0 1998 2004 2010 2016 Jan 00 Mar 03 May 06 Jul 09 Sep 12 Nov 15 We expect the Chinese economy to China and the rest of emerging Asia drive grow by 6% in 2017
Slide 59: Growth in China is shifting away from resource-intensive industries
Growth in China is shifting away from resource- intensive industries China GDP growth by industry1 Short term overseas arrivals2 (annual % change) (rolling annual total millions) 20% 1.5 Industry New Zealand China Services UK India Japan 15% Agriculture 1.0 10% 0.5 5% 0% 0.0 Mar 07 Jun 09 Sep 11 Dec
Slide 60: The domestic growth transition continues
The domestic growth transition continues Growth drivers from mining peak1 Progress on the transition2 (cumulative contribution to GDP since end 2012) % of Ch in GDP '000 12 Other (non-mining) 5.0 Drop in mining capex Mining-related job losses 110 GDP Rise in resource exports 8 Downturn in mining cap
Slide 61: But the transition is uneven
But the transition is uneven Dwelling construction1 Transition drivers1 (index; end 2012=100) (rolling annual total ‘000) (index, end 2012=100) 250 Approvals 120 Residential construction 200 Non-mining capex 100 150 80 Government Commencements capex 100 60 Sep 89 Sep 95 Sep 01 Sep 07 Sep 13 Jun 12 J
Slide 62: Consumer spending has lifted & the lower currency is supporting service industries
Consumer spending has lifted & the lower currency is supporting service industries Employment & the consumer1 Some “surprises”1 (annual % change) (smoothed annual % change) 5 Consumer 4 spending 6 Consumer spending 3 3 2 Non-resource exports 1 Jobs growth 0 0 -1 -3 Mar 08 Mar 10 Mar 12 Mar 14 Mar 16
Slide 63: There is an income threat because of the declines in commodity prices
There is an income threat because of the declines in commodity prices Per capita income1 Income & the terms-of-trade1 (real net national disposable income % per annum) (annual % change) 8 12 44 Nominal GDP, 4 8 (lhs) 28 0 4 12 -4 0 -4 Terms of trade %pa, (rhs) -8 -4 -20 Sep 95 Sep 98 Sep 01 Sep 04 S
Slide 64: The housing market is slowing
The housing market is slowing Population growth1 CBA: Housing demand & supply2 (moving annual total ‘000) (‘000) 500 Total Supply 200 200 Net migration 400 Natural increase 300 100 100 Demand 200 Pent-up demand 0 0 100 Excess supply 0 -100 -100 Jun 91 Dec 94 Jun 98 Dec 01 Jun 05 Dec 08 Jun 12 Dec 15
Slide 65: Dwelling price growth diverges
Dwelling price growth diverges Dwelling prices2 Housing credit growth2 (annual % change) (annual % change) 50 36 40 30 27 Melbourne Sydney 20 Owner-occupier housing 18 10 Total housing 0 9 Perth -10 Brisbane Investor housing -20 0 Jan 06 Jan 08 Jan 10 Jan 12 Jan 14 Jan 16 Jan 02 Jan 05 Jan 08 Jan 11
Slide 66: Household balance sheets remain strong
Household balance sheets remain strong Saving ratio1 Cash holdings2 (%) (deposits as % of GDP) 12 60 9 Savings ratio Households 40 6 Consumer spending Business 3 (exc financial) 20 0 -3 0 Sep 98 Sep 02 Sep 06 Sep 10 Sep 14 Mar 88 Mar 93 Mar 98 Mar 03 Mar 08 Mar 13 The household savings rate remains
Slide 67: Households in better shape in net terms
Households in better shape in net terms Household Wealth and Liabilities1 (% of annual household disposable income) 750 Net Wealth 600 450 Dwellings 300 Financial Assets 150 Liabilities 0 Mar 00 Mar 04 Mar 08 Mar 12 Mar 16 Household net worth has improved despite an increase in debt, driven by a lar
Slide 68: Factors that typically characterise a house price bubble are not evident in Australia
Factors that typically characterise a house price bubble are not evident in Australia Housing “Bubble” – Current position in Australia typical characteristics Unsustainable asset prices Prices were supported by underbuilding in past years but demand and supply are now more in balance. Dwelling p
Slide 69: New Zealand
New Zealand Global dairy trade auction results1 NZ short term arrivals2 (USD/tonne) (monthly, seasonally adjusted ‘000) 6,000 300 Whole Milk Powder 280 5,000 CWC 260 RWC 4,000 240 3,000 220 Lions tour 200 2,000 GDT overall price 180 1,000 160 Jul 08 Jul 09 Jul 10 Jul 11 Jul 12 Jul 13 Jul 14 Jul 15 J
Slide 70: New Zealand
New Zealand NZ CPI inflation1 OCR forecasts2 (%) (ASB forecast and implied market pricing) 6 4.0 (f) Annual % 5 3.5 4 3 3.0 OCR implied by current 2 2.5 market pricing 1 2.0 ASB Economics Forecast 0 (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 Jun 1
Slide 71: New Zealand
New Zealand NZ household lending growth1 NZ median house price2 (% annual change) (3 month moving average $‘000) 20 800 15 700 Mortgage lending Auckland 10 600 5 500 NZ Wellington 0 400 -5 300 Canterbury/Westland Consumer Credit -10 200 Jan 94 Jan 98 Jan 02 Jan 06 Jan 10 Jan 14 Jan 05 Jan 07 Jan 09
Slide 72: Glossary of Key Definitions
Glossary of Key Definitions Capital & Other Funding & Risk Risk Weighted The value of the Group’s On and Off Balance Sheet Liquidity coverage The LCR is a quantitative liquidity measure that is part of Assets or RWA assets are adjusted by risk weights calculated ratio (LCR) the Basel III reforms. It
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Commonwealth Bank of Australia — FY2016 Earnings Presentation on 6ix