Commonwealth Bank Of Australia · ASX:CBA
Commonwealth Bank Of Australia — Morgan Stanley Asia Pacific Summit 2007
23 slides from Commonwealth Bank Of Australia's conference presentation, Nov 14, 2007
Slide 1: David Craig, Chief Financial Officer
For personal use only David Craig CHIEF FINANCIAL OFFICER 14 November 2007 Commonwealth Bank of Australia ACN 123 123 124 MORGAN STANLEY ASIA PACIFIC SUMMIT 2007 SINGAPORE
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, 14 November 2007. It is information given in summary form and does not purport to be complete. It is not intended to be
Slide 3: Overview
Overview For personal use only Good 2007 result - all businesses delivered double digit profit growth Substantial progress on our five strategic priorities Momentum maintained through the September quarter Global credit issues effectively managed 3
Slide 4: Agenda
Agenda For personal use only Financial results 2007 Strategic Update September quarter 4
Slide 5: Strong 2007 financial results
Strong 2007 financial results For personal use only Jun 07 vs Jun 07 Jun 06 Cash NPAT ($m) * 4,604 18% Cash EPS (cents) * 353.0 16% Return on Equity – Cash (%) 22.1 80 bpts Income ($m) 13,159 11% Expense ($m) 6,427 7% Final Dividend ($ per share) 1.49 15% * Excludes profit on sale of Hong Kong Insur
Slide 6: All businesses performing well
All businesses performing well For personal use only Jun 07 Jun 06 Jun 07 vs $m $m Jun 06 Australian Retail 1,840 1,678 10% Business, Corp and Institutional 1,529 1,236 24% AIFRS volatility 2 (41) Large Asia Pacific 390 356 10% Hedging and AIFRS volatility 59 17 Large Other (57) (19) Large Banking 3
Slide 7: Revenue growth outstrips costs
Revenue growth outstrips costs For personal use only 30% Jun 07 vs Jun 06 25% 24% 23% 23% 20% 20% 19% 18% 17% 16% 15% 15% 11% Investment 10% 10% 10% 10% 10% Spend 10% 7% 2% 5% 5% 5% 4% 5% 2% 1% 0% Australian BCI a Asia Pacific a Banking Funds Insurance b c Group d Retail Management b a Excludes hedg
Slide 8: All brands performing strongly
All brands performing strongly For personal use only Banking Funds Mgt Insurance 8
Slide 9: Agenda
Agenda For personal use only Financial results 2007 Strategic Update September quarter 9
Slide 10: Good progress on strategic priorities
Good progress on strategic priorities For personal use only Customer Service Business Banking Technology & Operational Excellence Trust & Team Spirit Profitable Growth Î Superior operating and financial results Î Australia’s finest financial services organisation 10
Slide 11: Customer Service trends improving
Customer Service trends improving For personal use only % customers satisfied Complaints down 43% in 2007, and (Roy Morgan Research) continuing to decline 82% Customer Satisfaction at 10 year high* 72% 31 products rated 5 Stars by Cannex – more than any competitor CBA 62% Key recent actions;
Slide 12: On a journey...Australian Retail Banking
On a journey...Australian Retail Banking For personal use only Introduction of Management KPI’s CommSee linked to customer Branch satisfaction refurbishment Sales & Service Introduction of Program initiatives for our Saturday trading people Measurement of customer advocacy Revenue Oper
Slide 13: Business Banking – recent growth encouraging
Business Banking – recent growth encouraging For personal use only Growth in Lending to Non-Financial Corporations* Long term growth strategy 160% progressing to plan 150% 140% Encouraging volume & share 130% 120% growth through September Quarter 110% 100% Key recent actions; 90% Mar-06 Mar-07
Slide 14: Online and business banking platforms
CommBiz – online, real time secure business and corporate banking For personal use only FirstChoice – chosen by 50% of IFA’s Netbank – 2m active customers CommSec CommSee – 95% visibility of customer 14
Slide 15: IT efficiency savings enabling strategic business investment
IT efficiency savings enabling strategic business investment For personal use only 20% IT Efficiency Ratio 1 Saved over $100m of IT expense IT Efficiency Ratio trending below 15% 20.3% 17.3% 15% through September 16.5% 15.5% 15.0% 14.4% Successfully delivering large 10% 2006 Q1 2007 Q2 2007 Q3
Slide 16: Trust & Team Spirit improving
Trust & Team Spirit improving For personal use only Index CARES Survey Continued improvement in the 1.5 culture: 1.4 ¾ Increasing focus on customer 1.3 ¾ Positive momentum in people 1.2 engagement scores 1.1 ¾ Improved employee benefits 1.0 ¾ Increasing sense of pride 0.9 Nov 03 Nov 04 May 05 Nov
Slide 17: Opportunities for Profitable Growth
Opportunities for Profitable Growth For personal use only Asian expansion plans progressing well: ¾ Indonesia - ANK acquisition - acquired JV partner stake in CMG Astra ¾ China - Further capital investment in Hangzhou - Cinda/CFS fund management JV launched ¾ Vietnam - Branch licence applied for
Slide 18: Agenda
Agenda For personal use only Financial results 2007 Strategic Update September quarter 18
Slide 19: September quarter results
September quarter results For personal use only Movements since Dec-06 RBS: volumes strong; Market share* bps ¾ home loan market share up in six consecutive months (to Sep) Home loans +17 Personal loans Steady PBS: CommSec and Institutional banking growth strong Credit cards -56 WM: FUA up 5.4
Slide 20: Well positioned with liquidity and funding
Well positioned with liquidity and funding For personal use only No exposure to CLOs / CDOs or material Source of funding as at 30 June 07 direct exposure to US subprime 21% 2 sponsored ABCP conduits with standby Short term wholesale facilities totalling $2.5bn – currently Long term wholesale 55
Slide 21: Credit quality remains strong
Credit quality remains strong For personal use only Gross impaired assets to RWA Loan impairment expense as % of 1.20% RWA down from 0.20% (’06) to 0.19% 1.00% Stable through September quarter 0.80% 0.60% CBA ANZ NAB Limited private equity participation 0.40% WBC 0.20% 67% of commercial loan
Slide 22: Outlook
Outlook For personal use only Economic outlook for Australia remains positive Housing credit growth expected to remain at similar levels to 2007 Some slowing expected in business and personal credit growth Financial services industry will remain competitive Given outlook and business mix,
Slide 23: David Craig, Chief Financial Officer
For personal use only David Craig CHIEF FINANCIAL OFFICER 14 November 2007 Commonwealth Bank of Australia ACN 123 123 124 MORGAN STANLEY ASIA PACIFIC SUMMIT 2007 SINGAPORE
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