Commonwealth Bank Of Australia · ASX:CBA
Commonwealth Bank Of Australia — FY2013 Earnings Presentation
156 slides from Commonwealth Bank Of Australia's earnings presentation, Aug 14, 2013
Slide 1: Commonwealth Bank of Australia 2013 Annual Results
For personal use only 0 14 AUGUST 2013 | COMMONWEALTH BANK OF AUSTRALIA | ACN 123 123 124 FIND OUT MORE VIA OUR APP
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, 14 August 2013. It is information given in summary form and does not purport to be complete. It is not intended t
Slide 3: Agenda
Agenda For personal use only Ian Narev, CEO – Company Update David Craig, CFO – Financial Overview Ian Narev, CEO – Outlook and Summary Questions and Answers 3
Slide 4: Our Strategy
Additional information Our Strategy For personal use only Customer Focus Capabilities People Technology Strength Productivity opportunities “One CommBank” Growth Continued growth in business and institutional banking Disciplined capability-led growth outside Australia TSR Outperformance 4
Slide 5: Overview
Overview For personal use only A strong financial result driven by long term strategic focus Customer satisfaction driving revenue momentum Productivity culture enabling investment Innovation underpinned by state-of-the-art technology core Conservative settings further strengthened 5
Slide 6: Cash earnings, ROE, EPS and DPS
Additional information Cash Earnings ($m) ROE - Cash (%) For personal use only 19.5 7,819 18.7 18.6 18.4 6,835 7,113 6,101 Jun 10 Jun 11 Jun 12 Jun 13 Jun 10 Jun 11 Jun 12 Jun 13 EPS (cents) DPS (cents) 485.8 364 438.7 449.4 320 334 395.5 290 Jun 10 Jun 11 Jun 12 Jun 13 Jun 10 Jun 11 Jun 12 Jun 13 6
Slide 7: A strong financial result
A strong financial result For personal use only Jun 13 vs Jun 13 Jun 12 Statutory Profit ($m) 7,677 8% Cash NPAT ($m) 7,819 10% ROE – Cash (%) 18.4% (20) bpts Cash Earnings per Share ($) 4.86 8% Dividend per Share ($) 3.64 9% 7
Slide 8: Business Unit Profitability
Additional information Business Unit Profitability For personal use only Mvt Loan Tax & non- Cash Cash Mvt $m Operating Operating impairment Investment controlling NPAT NPAT Cash performance performance expense experience interests Jun 13 Jun 12 NPAT RBS 4,884 10% (533) - (1,297) 3,054 2,703 13% BPB
Slide 9: Cash NPAT drivers
Cash NPAT drivers FY13 For personal use only Income 8% Operating performance 12% Lending balances 9% Expenses 3% CVA turnaround +$215m C:I ratio 180 bpts Deposit income 11% NII 10% LIE $9m (19%) +13% Business loans 4% 1 Avg FUA 13% Income 5% Expenses flat Net o
Slide 10: Customer satisfaction rankings
Additional information For personal use only Area Measure CBA Rank 1 Retail Roy Morgan 1st 2,6 Business DBM =1st 8 Wealth Wealth Insights 1st 9 10 ASB TNS; Camorra* =1st IFS MRI – Foreign Banks 7 1st (PT Bank Commonwealth) 1, 2, 6, 7, 8, 9, 10 Refer notes slide at back of this presentation for sourc
Slide 11: Peer leading customer satisfaction and products per customer
Peer leading customer satisfaction and products per customer Retail Customer Satisfaction Products per Customer For personal use only 84.0% CBA CBA 82.0% Peers 3.00 Peers 80.0% 2.80 78.0% 2.60 76.0% 74.0% 2.40 72.0% 2.20 70.0% 68.0% 2.00 Jun 07 Jun 13 Jun 07 Jun 13 % Satisfied ('Very Satisfied' or '
Slide 12: Products per Customer
Additional information Products per Customer3 Transaction Accounts Credit Cards For personal use only No. New Personal Transaction No. New 3.00 Accounts Credit Cards 2.83 +14% +17% 0.50 0.47 0.21 268k 0.21 757k 229k 0.73 662k 0.65 FY12 FY13 FY12 FY13 General Insurance Home & Contents 1.44 1.49 $m In
Slide 13: Strong momentum
Strong momentum Home Loans Household Deposits Business Lending For personal use only Balance Growth1 Balance Growth1,2 Balance Growth1 +160bpts +120bpts 5X 6.7% 6.5% 7.0% 5.1% 5.3% 1.4% System CBA System CBA System CBA 4 Transaction Banking Funds Management ASB No. IB&M Mandates/Wins $bn Platform3 N
Slide 14: Productivity metrics
Additional information Transactions per Sales and Converted Referrals per For personal use only Customer Service Representative Customer Service & Savings Specialist No. per week No. per week +4% +4% +13% +10% FY11 FY12 FY13 FY11 FY12 FY13 Personal Loans Direct Banking % funded same day Average call
Slide 15: Productivity culture enabling investment
Productivity culture enabling investment Examples1 Investment Spend For personal use only Customer Service FY13 Transactions per FTE 4% ~$1.2bn Sales and Converted Referrals per FTE 10% 16% % Personal Loans funded same day 11% 12% 53% Direct Banking call handling 3% time 19% % Deposit custom
Slide 16: Digital innovation timeline
Additional information FY13 For personal use only Video Property Bump on “Pi” & CommBiz CommSee QKR Conferencing Feb 2004 Guide App Dec 2011 Kaching “Leo” Mobile Jul 2010 Jul 2012 Dec 2012 Mar 2013 in branches Jun 2013 NetBank CommSec Better CommSec NetBank for mobile App for Business MyWealth Smart
Slide 17: Same day access to funds for merchants
For personal use only Same day access to funds, everyday, for merchant customers Market leading innovation enabled by Core Banking Material benefit to customer cash flows
Slide 18: CommBiz mobile app
For personal use only Real-time cash flow information for business customers Payment authorisation from anywhere 36,000 logins, >2,000 activations since launch in Mar 2013
Slide 19: Kaching
For personal use only Kaching World first social payments app for Apple and Android >1 million downloads, >$9 billion in transactions Now with QR code for bill payment; new card activation
Slide 20: Contactless payments
For personal use only Fast, simple in-store payments CBA led the market, first with cards and then with terminals Now ~20% of total card transactions and growing
Slide 21: Point-of-sale innovations
For personal use only World first innovations revolutionising point-of-sale experience Opening up opportunities to change the business model Pi launched and growing, Leo in rollout, Albert pilot coming soon
Slide 22: Online contract acceptance
For personal use only Online contract acceptance for Asset Finance and Business Transaction account opening Straight through processing – reduced errors, greater efficiency Document turn-around-times improved by 60%
Slide 23: Essential Super and MyWealth
For personal use only Essential Super - easy, low fee superannuation solution MyWealth - simplified investing in one powerful hub
Slide 24: Online presence
For personal use only More than 4.5 million active customers 1 Australia’s most visited business & finance site (NetBank) Refreshed, upgraded and redesigned online presence (Jun 13) Simpler navigation, single sign-on across sites, intelligent search 1. Source: Hitwise
Slide 25: Video conferencing in branches
1 For personal use only Rolled out to 1,016 CBA branches in the past six months On-the-spot customer access to a range of CBA specialists Customer needs addressed at first interaction Early results encouraging - especially in Merchant Facilities, Asset Finance and Mortgage Lending 1. Exclude
Slide 26: Notes
For personal use only 26 Notes
Slide 27: Mobile banking growth
For personal use only Mobile app users 250% in one year Mobile now >50% of all online account access Extra home loan payments online - Canstar Innovation Award Pay Trade Me sellers (NZ’s eBay equivalent) via mobile banking app
Slide 28: Snapshot – FY13 Results
Additional information Snapshot – FY13 Results1 For personal use only Financial Operating Performance by Division Cash earnings ($m) 7,819 10% Retail Banking Services ($m) 4,884 10% ROE (Cash) 18.4% (20) bpts Business and Private Banking ($m) 2,397 (1%) Cash EPS ($) 4.86 8% Institutional Banking & M
Slide 29: Conservative settings further strengthened
Conservative settings further strengthened Deposit Funding Wholesale Funding Tenor (years)1 For personal use only % of Total Funding Portfolio 3.8 63% 3.7 62% 3.6 61% Jun 11 Jun 12 Jun 13 Jun 11 Jun 12 Jun 13 Liquidity Capital 2 Common Equity Tier 1 Liquids ($bn) (Basel III International) 135 137 11
Slide 30: Notes
For personal use only 30 Notes
Slide 31: Financial Overview
For personal use only 14 AUGUST 2013 | COMMONWEALTH BANK OF AUSTRALIA | ACN 123 123 124
Slide 32: Notes
For personal use only 32 Notes
Slide 33: Strong profit growth
Strong profit growth For personal use only Jun 13 vs $m Jun 13 Jun 12 Jun 12 Operating income 21,345 20,001 7% Operating expenses (9,605) (9,196) 4% Operating performance 11,740 10,805 9% Investment experience 154 149 3% Loan impairment expense (1,082) (1,089) (1%) Tax and non-controlling interests
Slide 34: Non-cash Items
Additional information For personal use only Non-cash Items $m Jun 13 Jun 12 Hedging and IFRS volatility Unrealised accounting gains and losses arising from the application of “AASB 139 Financial Instruments: Recognition and Measurement” 27 124 Other Bankwest non-cash items (71) (89) Treasury
Slide 35: Statutory Profit
Statutory Profit For personal use only $m Jun 13 Jun 12 Cash NPAT 7,819 7,113 10% Hedging and IFRS volatility 27 124 Other non-cash items (169) (147) Statutory NPAT 7,677 7,090 8% 35
Slide 36: Other Banking Income and Net Trading Income
Additional information Other Banking Income Net Trading Income For personal use only $m 306 426 291 241 281 443 420 Jun 13 vs $m Jun 13 Jun 12 Jun 12 52 44 80 Commissions 1,990 1,997 - 124 87 2 120 102 23 Lending fees 1,053 997 6% 79 42 Other 315 411 (23%) 321 289 251 267 225 244 226 Sub-total 3,358
Slide 37: Operating Income
Operating Income For personal use only +7% FY13 vs FY12 Average FUA 13% Average inforce premiums 16% Funds & +9% Insurance Income 8% insurance Other banking +7% income Commissions, fees, other ($47m) 1% Trading income (ex CVA) $118m 18% CVA (Group)1 $223m Large Net interest +6% income Volume
Slide 38: Group NIM – six month movement
Additional information bpts 6 month NIM For personal use only bpts Group NIM 213 209 (6 Month Movement) 217 212 217 206 210 Deposits Jun 11 Dec 11 Jun 12 Dec 12 Jun 13 12 month NIM 3 1 3 (2) 2 217 210 1H13 Asset Funding Basis Portfolio Replicating 2H13 pricing costs risk mix portfolio 38
Slide 39: Group NIM – full year movement
Group NIM For personal use only 12 Month Movement bpts Wholesale (10) Deposits (11) 15 (21) 3 3 1 3 209 213 FY12 Asset Funding Basis Portfolio Replicating Other1 FY13 pricing costs risk mix portfolio 1 Includes Treasury, New Zealand, impact from change in Non lending IEA’s and other unallocated item
Slide 40: Investment Spend
Additional information Investment Spend For personal use only $m 1,286 1,237 1,179 1,075 1,020 1,036 639 655 783 638 538 583 563 434 647 582 537 541 437 474 349 FY07 FY08 FY09 FY10 FY11 FY12 FY13 1st Half 2nd Half 40
Slide 41: Expense Growth
Expense Growth Operating Expenses For personal use only $m Underlying +4% 36 9,605 +1.8% 64 62 80 86 9,363 47 9,196 254 (220) FY12 Productivity Inflation IT Other FY13 Growth and Software Investment Defined FY13 (ex amortisation underlying Volume Amortisation Spend Benefit and investment) Fund 41
Slide 42: Credit risk and arrears
Additional information PD Ratings Migration Risk-Rated Portfolio1 Loan Impairment Expense (Cash) to Gross Loans For personal use only 2 bpts Consumer 10 Adjusted for changes 5 37 to customer segment TCE ($bn) reporting 0 28 5 23 23 10 20 19 19 Total Upgrades Downgrades - excluding defaults 15 16 16
Slide 43: Sound credit quality
Sound credit quality Loan Impairment Expense (Cash) to Gross Loans1 Home Loan Arrears For personal use only 90+ days CBA Group1 (basis points) 1.0% 2 73 0.0% Dec 10 Jun 11 Dec 11 Jun 12 Dec 12 Jun 13 RBS Bankwest ASB 3 Troublesome and Impaired Assets 41 $bn 13.9 13.1 12.3 25 11.1 10.5 10.1 21 3 5.4
Slide 44: Provisioning ratios vs peers
Additional information Collective Provisions1 to Credit RWA2 Provisions for Impaired Assets3 to Impaired Assets4 For personal use only 50.00% 1.45% 1.25% 40.00% 1.05% 30.00% 0.85% 0.65% 20.00% FY08 FY09 FY10 FY11 FY12 FY13 FY08 FY09 FY10 FY11 FY12 FY13 CBA Peer 1 Peer 2 Peer 3 CBA Peer 1 Peer 2 Peer
Slide 45: Provisioning
Provisioning Individual Provisions Collective Provisions For personal use only $m $m 3,461 Economic overlay unchanged 3,043 2,837 2,858 Overlay 1,192 1,049 847 823 2,125 1,992 2,008 758 419 1,628 Bankwest 473 979 598 956 934 659 830 909 177 898 116 227 Consumer 808 157 920 969 847 812 Commercial 681
Slide 46: Retail Banking Services
Additional information Retail Banking Services Home Loan Market Share For personal use only Jun 13 vs $m Jun 13 Jun 12 28% 25.3% Home loans 3,206 22% 26% Consumer finance 2,057 10% 24% 22% Retail deposits 2,189 (11%) 18.7% 23.3% 20% Distribution 373 12% 18% Business products 122 11% 15.3% 16% 13.6%
Slide 47: Retail Banking Services
Retail Banking Services FY13 vs FY12 Customer satisfaction and products per customer For personal use only Segment Income Operating Performance 22% 83.0% 10% 3.00 8% 10% 2.90 70.1% 2.83 2.83 3% 2.71 2.72 2.63 2.50 2.55 2.36 2.29 (11%) Jun 08 Dec 08 Jun 09 Dec 09 Jun 10 Dec 10 Jun 11 Dec 11 Jun 12 De
Slide 48: MFI Customer Proportion
Additional information For personal use only MFI Customer Proportion 5 % CBA Other (incl BWA) 22.4 32.8 20.1 WBC 13.6 (incl SGB) 11.1 ANZ NAB 5 Refer notes slide at back of this presentation for source information. 48
Slide 49: Profitable Growth
Profitable Growth CBA Home Loan Growth1 Overview For personal use only $bn Fundings Balance growth (six monthly) (six monthly annualised) Profitable growth 5.8% +26% 21.1 5.1% 16.7 Optimise volume/margin 12.9 3.6% Credit card market share up 130bpts over 8.8 2.2% last two years Home Loans Jun 12
Slide 50: Business & Private Banking and Institutional Banking & Markets
Additional information Business & Private Banking Institutional Banking & Markets For personal use only Jun 13 vs Jun 13 vs $m Jun 13 $m Jun 13 Jun 12 Jun 12 Corporate Financial Services 1,284 - Institutional Banking 1,983 - Regional and Agribusiness 630 2% Markets 650 59% Local Business Banking 1,2
Slide 51: BPB and IB&M segment performance
Corporate BPB - FY13 vs FY12 Business Lending Growth (RBA)1 For personal use only Segment Income Operating Performance 10.7% 8% 7.0% 4% 4.1% 4.1% 2% 1.4% 0% 0% (1%) (1%) (3.7%) (8.1%) (12%) CFS RAB LBB Private Equities Income Costs Operating BPB IB&M CBA BWA BWA CBA System Bank & ML performance Tota
Slide 52: Wealth Management
Additional information Wealth Management Platform* Half Year Net Flows For personal use only $bn Jun 13 vs 4.2 $m Jun 13 Jun 12 CFSGAM 839 13% 2.0 1.7 1.7 1.8 1.4 Colonial First State* 780 19% CommInsure 660 3% Dec 10 Jun 11 Dec 11 Jun 12 Dec 12 Jun 13 Other (2) - * FirstChoice and Custom Solutions
Slide 53: Wealth Management
Wealth Management FY13 vs FY12 FUA 3 For personal use only Segment Income1 Operating Performance $bn +23% 11.3 240.4 19% 9.9 16.9 219.2 17% 6.1 13% 196.2 12% 9% 3% CFSGAM CFS CommInsure Income1 Costs2 Operating Jun 12 Net Investment Dec 12 Net Investment Jun 13 flows income flows income performance
Slide 54: Deposits, funding costs and term issuance
Additional information Australian Deposits Term Maturity Profile1 For personal use only $bn Total Deposits $bn (excl CD’s) 350 Weighted Average Maturity 3.8yrs 309 177 245 172 204 10 5 158 2 6 114 7 173 23 137 19 18 1 16 87 90 10 9 CBA Peer 3 Peer 2 Peer 1 FY 2014 2015 2016 2017 2018 >2018 Household
Slide 55: Funding & Liquidity
Funding & Liquidity 1 Funding Liquidity For personal use only $bn Source of funds Use of funds $bn 25 (29) 135 137 128 63% 58 58 Deposit 57 Funded 26 (27) 30 Reg 33 min 31 $62bn 7 2 (8) 44 49 40 4 Equity IFRS & FX Net short Customer New long Long term Lending Other Assets Jun 12 Dec 12 Jun 13 term f
Slide 56: Notes
For personal use only 56 Notes
Slide 57: Dividend per share
Dividend per share For personal use only 74.2% 75.0% 78.2% 73.9% 73.2% 75.0% 75.4% 89% 80% Payout 84% ratio (cash) 84% 70% 87% 88% 62% 61% 63% 63% 84% 74% 61% cents 107 149 113 153 113 115 120 170 132 188 137 197 164 200 2007 2008 2009 2010 2011 2012 2013 Interim Final 57
Slide 58: Peer Basel III CET1 (International)
Additional information Peer Basel III CET1 (International) For personal use only 13.2 12.1 11.4 11.2 11.1 11.0 10.6 10.6 10.4 10.3 10.2 10.1 10.0 10.0 10.0 Peer bank average CET1 ratio 9.7 9.6 9.6 (ex. Australian banks): 9.6% 9.4 9.4 9.3 9.3 9.3 8.7 8.6 8.5 8.5 8.5 8.4 8.4 8.2 8.1 8.0 7.7 1 1 1 Scot
Slide 59: Strong Capital Position
Strong Capital Position Basel III CET1 (International) For personal use only 10.6% 11.0% Basel III CET1 (International) of 9.8% Board 11.0%* vs peer average 9.6% >9% 6.9% +60% Up 60% since Jun 07 Jun 07 Jun 12 Dec 12 Jun 13 Basel III CET1 (APRA) 8.2% Basel III CET1 (International) 0.5% 0.7% 11
Slide 60: Notes
For personal use only 60 Notes
Slide 61: Financial Summary
Financial Summary Strong momentum Improving Cost-to-Income For personal use only % % Operating income Group C:I (Six Monthly) 7% 46.2 45.1 44.9 4% 2% FY11 FY12 FY13 Jun 12 Dec 12 Jun 13 Conservative settings further strengthened Delivering strong, sustainable returns Deposit funding Liquids Basel II
Slide 62: Notes
For personal use only 62 Notes
Slide 63: Outlook and Summary
For personal use only 14 AUGUST 2013 | COMMONWEALTH BANK OF AUSTRALIA | ACN 123 123 124
Slide 64: Economic Summary - Australia
Additional information For personal use only Economic Summary - Australia 2010 2011 2012 2013 2014 (f) 2015 (f) Credit Growth % – Total 3.0 2.7 4.4 3.1 4-6 4½-6½ Credit Growth % – Housing 8.0 6.0 5.0 4.6 5-7 5½-7½ Credit Growth % – Business -4.0 -2.2 4.4 0.9 2½-4½ 3-5 Credit Growth % – Other Persona
Slide 65: Outlook – external factors influencing momentum
Outlook – external factors influencing momentum For personal use only Confidence the key: – Chinese demand – Outlook for AUD – Global markets volatility – Stable policy environment Competition remains strong Limited short term upside for domestic economy 65
Slide 66: Notes
For personal use only 66 Notes
Slide 67: Summary – sticking to the strategy
Summary – sticking to the strategy For personal use only A strong, good quality, strategy-driven result: – Revenue growth underpinned by peer leading customer satisfaction – Productivity focus enabling investment – Technology-led innovation Already conservative settings further strengthened St
Slide 68: Additional information
For personal use only 69 91 107 119 133 14 AUGUST 2013 | COMMONWEALTH BANK OF AUSTRALIA | ACN 123 123 124
Slide 69: CBA Overview
CBA Overview Largest Australian bank by market capitalisation For personal use only AA- / Aa2 / AA- Credit Ratings (S&P, Moodys, Fitch) Basel III CET1 (International) 11.0% Total assets of $754bn ~14.6 million customers ~52,000 staff 1,166 branches #1 in household deposits #1 in ho
Slide 70: Strong contributor to Australian economy
Strong contributor to Australian economy Where does our income go? For personal use only FY13 ($bn) Loan impairment Expenses Cost of lending across Serving ~14.6 the economy million customers 4.5 1.1 Tax expense 3.0 Contributing to the community 5.1 2.0 Salaries Employing 5.8 Retained for capital ~5
Slide 71: Shareholder return
Shareholder return For personal use only +37% $ 3,385 67,722 14,954 49,383 Based on average retail shareholding (930 shares) Value as at FY13 FY13 Total 30 June 2012 Capital Gain Dividends Based on share price of $53.10 as at 30 June 2012 and $69.18 as at 28 June 2013. 71
Slide 72: Return on Equity
Return on Equity Return on Equity (Cash) For personal use only 600 21.5% 21.7% 550 20.4% 19.5% 500 18.7% 18.6% 18.4% 15.8% 450 1.1% 1.1% 400 Return on350 Assets 300 250 200 150 100 2006 2007 2008 2009 2010 2011 2012 2013 72
Slide 73: Bank Profitability
Bank Profitability ROE1 CBA Ranking For personal use only % (Amongst ASX 100 companies) Indonesia China Russia CBA Rank 2 Canada India Market capitalisation (ASX) 2nd Australia Singapore Dividends declared 2nd Japan South Korea United States Return-on-Equity (ROE) 25th United Kingdom France Return-o
Slide 74: Customer Satisfaction
Customer Satisfaction Retail Business For personal use only 84.0% 8 CBA CBA Peers Peers 82.0% 80.0% 78.0% 76.0% 7 74.0% 72.0% 70.0% 68.0% 6 Jun 07 Jun 13 Jun 11 Jun 13 % Satisfied ('Very Satisfied' or 'Fairly Satisfied')1 Customer Satisfaction2 - Average 1, 2 Refer notes slide at back of this presen
Slide 75: Business Customer Satisfaction
For personal use only 6.5 7.0 7.5 8.0 8.5 6.5 7.0 8.0 8.5 7.5 Jun 10 Jun 10 Aug 10 Aug 10 Oct 10 Oct 10 Dec 10 Dec 10 Feb 11 Feb 11 Apr 11 Apr 11 Jun 11 CBA Jun 11 CBA Aug 11 Aug 11 Oct 11 Oct 11 Dec 11 Micro Dec 11 Medium Feb 12 Feb 12 Apr 12 Apr 12 Peers Peers Jun 12 Jun 12 Aug 12 Aug 12 Oct 12 Oc
Slide 76: Australia's leading technology bank
Australia’s leading technology bank For personal use only #1 #1 >40% 5.61m Online In the youth of all payment app 11 banking segment transactions downloads1 #1 1.03m $9.30b #1 Social & Kaching Kaching Contactless Facebook downloads2 Transactions2 acceptance points 4.57m 2.61m MFI for #1 active onlin
Slide 77: Technology transformation
Technology transformation For personal use only Revitalised Best-in-class Supporting front-line online, mobile Innovating in One customer and social the back-end CommBank interface platforms Single view of NetBank Legacy system Deeper customer customer across replacement relationships
Slide 78: Leveraging Core Banking
Leveraging Core Banking Instant account opening For personal use only Enhanced Product loyalty pricing (eg NetBank Saver) Customer Tailored product offers (eg Term Deposit rollovers) Experience Product bundling (eg Kaching linked fee waivers) Faster speed-to-market at lower cost (re-usable
Slide 79: System reliability
System reliability For personal use only Significant Customer Impacting Incidents Total High Impact Incidents No. No. 400 48 338 42 314 27 153 150 14 93 10 67 4 1 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY07 FY08 FY09 FY10 FY11 FY12 FY13 79
Slide 80: CBA in Asia – strong growth
CBA in Asia – strong growth Cash NPAT1 For personal use only $m Stronger contribution from Growth driven by strong Higher institutional lending balances China investments and investment performance in and improved trading performance in Indonesian proprietary improved markets fixed income and rates
Slide 81: CBA in Asia – strong proprietary growth
CBA in Asia – strong proprietary growth 1 2 NPAT and Revenue Customers For personal use only IFS Asia (A$m) IFS Asia (‘000) 367 Cash NPAT CAGR: 36% 314 Revenue CAGR: 17% 251 +30% 225 198 +51% 104 365 +18% 80 292 +50% 239 45 53 162 189 30 Jun 09 Jun 10 Jun 11 Jun 12 Jun 13 Jun 09 Jun 10 Jun 11 Jun 12
Slide 82: CBA in Asia
CBA in Asia Country Representation as at June 2013 For personal use only China Bank of Hangzhou (20%) – 133 branches Qilu Bank (20%) – 85 branches County Banking – 7 banks in Henan (5 Banks @ 80% and 2 Banks @ 100% shareholding) and 3 banks in Hebei (100% Beijing shareholding) Hebei Jinan Beijing Re
Slide 83: CFSGAM – Global Reach
CFSGAM– Global Reach For personal use only Edinburgh London Frankfurt Toronto Paris New York Beijing Tokyo Shenzhen Hong Kong Australia and New Zealand Singapore AUM $107.8 billion UK, Europe and Middle East Jakarta AUM $38.8 billion Asia AUM $24.3 billion North America Sydney Auckland AUM $2.7 bill
Slide 84: Sustainability progress
Sustainability progress The Board-endorsed Sustainability Strategic Framework, with its five focus areas, supports the Group’s vision and the creation of enduring value for our customers, people, shareholders and the broader community. For personal use only Sustainable Business Practices Maintaine
Slide 85: Sustainability scorecard
Sustainability scorecard For personal use only Units FY13 FY12 FY11 FY10 FY09 % 83.0 79.0 75.2 75.6 73.0 Roy Morgan MFI retail customer satisfaction1 Rank 1st 2nd 4th 2nd 3rd Customer Avg. score 7.4 7.3 7.1 7.0 satisfaction DBM Business Financial Services Monitor2 n/a Rank =1st =1st =2nd =1st Avg. s
Slide 86: Transaction volumes
Transaction volumes Branch ATMs For personal use only m m 130 (deposits & withdrawals) (all transactions1) 325 302 83 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 m 2 m 3 EFTPOS Internet m m (all transactions, including credit cards) (
Slide 87: Products per Customer
Products per Customer For personal use only 3.00 2.90 2.84 2.66 Wealth 0.50 2.54 0.49 0.41 Personal Lending 0.44 0.09 Home loan 0.21 0.23 0.25 0.37 0.25 Cards 0.73 0.85 0.76 0.69 0.72 Deposit and transaction 1.49 1.32 1.34 accounts 1.28 1.21 CBA Peer 3 Peer 1 Peer 2 Bankwest Average Product Composit
Slide 88: Branch of the Future
Branch of the Future 3 pillars; For personal use only – Proud people – Simple and easy processes – Leading technology Achievements in the year; – New concept branches at 4 locations1 in Sydney and Melbourne – 132 Smart ATMs allowing anytime deposits – Dedicated small business capability with 123
Slide 89: Stakeholders
Stakeholders Customer Product Holdings1 For personal use only 12.0m Super fund unit holders ? 4.5m 10.5m 3.9m 2.1m 4.1m 1.7m 3.0m 1.8m 560k 650k 325k 1.2m 800k 52k Home Loans Credit Cards Retail Savings and Insurance Personal Loans Business Funds CommSec Shareholders Employees Transactions Relations
Slide 90: Notes
For personal use only 90 Notes
Slide 91: Market share
Market share 1 Jun 13 Dec 12 Jun 12 For personal use only % CBA BWA Group Group Group Home loans 21.3 4.0 25.3 25.1 25.2 Credit cards – RBA2 21.5 2.8 24.3 23.9 23.5 Other household lending3 15.8 1.1 16.9 16.5 16.4 Household deposits 25.9 2.9 28.8 28.8 28.9 Retail deposits4 22.5 2.9 25.4 25.3 25.4 Bu
Slide 92: Wholesale Funding Costs
Wholesale Funding Costs 1 2 Marginal Funding Costs Average Long Term Funding Costs For personal use only bpts Indicative Long Term Wholesale Funding Costs % Margin to BBSW 200 2.00 Peak 169 1.75 Dec 13 Jun 12 153 150 137 1.50 115 Jun 13 1.25 Margin to BBSW 106 99 Dec 12 100 109 1.00 82 92 0.75 51 74
Slide 93: Increase in retail bank funding costs
Increase in retail bank funding costs since Jun 07 For personal use only Basis 35% x 1.37% Risk Wholesale funding 3 Deposit 65% x 2.01% funding Jun 07 Dec 07 Jun 08 Dec 08 Jun 09 Dec 09 Jun 10 Dec 10 Jun 11 Dec 11 Jun 12 Dec 12 Jun 13 Dec 12 Jun 13 Increase in wholesale funding1 1.43% 1.37% Increase
Slide 94: RBS – Month Periods
RBS – 6 Month Periods Jun 13 vs For personal use only $m $m Jun 13 Dec 12 Jun 12 Jun 12 (6 months) Net interest income Home loans 1,557 1,444 1,198 30% Consumer finance 801 763 731 10% Retail deposits 875 928 993 (12%) Business products 32 27 23 39% 3,265 3,162 2,945 11% Other banking income Home lo
Slide 95: RBS
RBS Cash Earnings Financial Summary For personal use only FY13 vs $m $m FY13 FY12 Above system balance Home loans 3,206 22% growth 193 (258) Margin recovery 570 40 12 (98) Successful new 50 (158) Consumer customer acquisition 2,057 10% 10% (11%) 12% 11% 3,054 finance strategies 3% (9%) 14% B
Slide 96: BPB – Month Periods
BPB – 6 Month Periods Jun 13 vs For personal use only Jun 12 $m Jun 13 Dec 12 Jun 12 (6 months) Net interest income Corporate Financial Services 485 503 491 (1%) Regional & Agribusiness 272 269 259 5% Local Business Banking 512 495 486 5% Private Bank 121 120 112 8% Equities and Margin Lending 71 78
Slide 97: BPB
BPB Cash Earnings Financial Summary For personal use only FY13 vs $m $m FY13 FY12 Corporate Lending balances 1,513 (29) 1,488 Financial 1,284 - 11% offset by margin (5) (14) 23 Services compression in Deposits (1%) 0% 5% (4%) Margin growth in Lending Regional & 630 2% partly offset by margin Ag
Slide 98: IB&M – Month Periods
IB&M – 6 Month Periods For personal use only $m Jun 13 vs $m Jun 13 Dec 12 Jun 12 Jun 12 (6 months) Net interest income Institutional Banking 557 584 610 (9%) Markets 93 110 136 (32%) 650 694 746 (13%) Other banking income Institutional Banking 439 403 394 11% Markets 216 231 60 Large 655 634 454 44
Slide 99: IB&M
IB&M Cash Earnings Financial Summary For personal use only FY13 vs $m $m FY13 FY12 27 (61) Higher asset leasing, 215 - (70) lending fee income and Institutional deposit and lending 5% 0% 1,210 1,983 - 7% Banking balance growth, partly 1,098 1 23% offset by lower margins. 0% Large Favourable CVA1
Slide 100: WM – Month Periods
WM – 6 Month Periods Jun 13 vs For personal use only $m Jun 13 Dec 12 Jun 12 Jun 12 (6 months) Net operating income CFSGAM 433 406 364 19% Colonial First State* 401 379 357 12% CommInsure 327 333 300 9% Other (1) (1) 1 - 1,160 1,117 1,022 14% Operating expenses CFSGAM (240) (235) (215) 12% Colonial
Slide 101: Wealth Management
Wealth Management Cash Earnings Financial Summary For personal use only FY13 vs $m $m FY13 FY12 Average AUM 10% CFSGAM 13% from strong investment 839 performance in rising 17 (2) (125) equity markets 127 Improved market 3% (28) CFS* 780 19% conditions and solid net 96 (27) flows 687 629 19% 9%
Slide 102: New Zealand – Month Periods
New Zealand – 6 Month Periods Jun 13 vs For personal use only NZ$m Jun 13 Dec 12 Jun 12 Jun 12 (6 months) Net interest income ASB 698 666 649 8% Other 7 9 11 (36%) Total NII 705 675 660 7% Other banking income ASB 170 180 162 5% Other (16) (19) (19) 16% Total OBI 154 161 143 8% Total banking income
Slide 103: New Zealand
New Zealand Cash Earnings Financial Summary For personal use only FY13 vs NZ$m NZ$m FY13 FY12 Lending balances 121 (9) (9) ASB 9% (28) 21 800 Operating 1,775 7% Prudent margin 1% Income management across 19% the business 11% 26% Cost management 704 ASB and embedded Operating (748) 1% producti
Slide 104: Bankwest – Month Periods
Bankwest – 6 Month Periods For personal use only Jun 13 vs $m Jun 13 Dec 12 Jun 12 Jun 12 (6 months) Net interest income 776 761 707 10% Other banking income 100 110 100 - Total banking income 876 871 807 9% Operating expenses (409) (416) (420) (3%) Loan impairment expense (32) (86) (23) 39% Net pro
Slide 105: Bankwest
Bankwest Cash Earnings Financial Summary For personal use only FY13 vs $m $m FY13 FY12 23 (57) 84 (16) Higher home loan (3%) 561 527 volumes and 93% Banking 7% income 1,747 5% margins offset by 5% lower deposit margins Productivity gains Operating Lower IT costs (825) (3%) expenses Lower mar
Slide 106: Home Lending Growth Profile
Home Lending Growth Profile 1 Home Loan Balances Balance Growth by Channel For personal use only $bn % Six Monthly (Annualised) 8.5 28 (72) 63 6.7 (6) 5.8 5.8 5.2 5.1 4.6 4.2 3.6 3.6 3.2 3.0 3.0 2.4 2.6 285 2.2 272 Jun 12 New Redraw Repayments External Jun 13 Dec 11 Jun 12 Dec 12 Jun 13 fundings & i
Slide 107: Regulatory Exposure Mix
Regulatory Exposure Mix For personal use only Regulatory Credit Exposure Mix CBA Peer 1 Peer 2 Peer 3 Residential Mortgages 57% 34% 42% 57% Corporate, SME & Specialised Lending 26% 33% 41% 30% Bank 6% 14% 9% 4% Sovereign 7% 11% 5% 4% Qualifying Revolving 3% 3% 2% 3% Other Retail 1% 5% 1% 2% Total Ad
Slide 108: RBS home loan book quality very sound
RBS home loan book quality very sound For personal use only Portfolio dynamic LVR 1 of 48% and portfolio LVR 2 of 51% 80% of customers paying in advance of required monthly mortgage repayment 3 Maximum LVR of 95% for low risk customers Lenders Mortgage Insurance (LMI) is required for higher LVR loan
Slide 109: Home Loan Portfolio Profile
Home Loan Portfolio Profile Jun Dec Jun Jun Dec Jun For personal use only 13 12 12 13 12 12 Total Balances - Spot ($bn)1 373 359 353 Portfolio Dynamic LVR (%)6 48 49 48 Total Balances - Average ($bn)1 361 356 345 Customers in advance (%)7 80 81 82 Total Accounts (m) 1.4 1.4 1.4 Payments in advance (
Slide 110: Consumer Arrears (Group)
Consumer Arrears (Group) Credit Cards 1 Personal Loans 1 For personal use only 90+ days 2.0% 90+ days 2.0% 1.0% 1.0% 0.0% 0.0% Dec 10 Jun 11 Dec 11 Jun 12 Dec 12 Jun 13 Dec 10 Jun 11 Dec 11 Jun 12 Dec 12 Jun 13 RBS Bankwest ASB RBS Bankwest ASB Home Loans 1 RBS Home Loans 90+ days 2.0% 90+ days 1.0%
Slide 111: Consumer Arrears (RBS)
Consumer Arrears (RBS) Home Loans Home Loans by State For personal use only 2.5% 30+ days 30+ days 3.0% 2.0% 2.5% 2.0% 1.5% 1.5% 1.0% 1.0% 0.5% 0.5% Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jun 10 Dec 10 Jun 11 Dec 11 Jun 12 Dec 12 Jun 13 08/09 09/10 10/11 11/12 12/13 NSW/ACT SA/NT QLD VI
Slide 112: RBS Home Loans – LVR and Arrears by Vintage
RBS Home Loans – LVR and Arrears by Vintage Home Loan Dynamic LVR1 Profile Home Loan Arrears Rates by Vintage For personal use only 90+ days 70% Average 2.0% Dynamic LVR Jun 12 48% 60% Dec 12 49% Jun 13 48% 1.5% Proportion of Total Portfolio 50% FY08 40% FY09 1.0% 30% FY07 20% FY10 0.5% FY11 10% FY1
Slide 113: RBS Home Loans – Stress Test
RBS Home Loans – Stress Test Observations Key Assumptions For personal use only Base Year 1 Year 2 Year 3 Aggressive 3 year “stress test” scenario of Unemployment 5.3% 7.0% 10.5% 11.5% cumulative 32% house price decline and Hours under-employed1 7.9% 11.4% 15.8% 18.4% Cumulative House Prices n/a -
Slide 114: Credit Exposure by Industry
Credit Exposure by Industry 1 For personal use only 2 2 Jun 13 Jun 13 Jun 12 Jun 12 Consumer 54.9% 54.6% Agriculture 2.0% 2.0% Mining 1.5% 1.0% Manufacturing 1.8% 2.0% Energy 0.9% 1.1% Construction 0.8% 0.9% Retail & Wholesale 2.2% 2.3% Transport 1.7% 1.5% Banks 9.9% 10.7% Finance – other 3.5% 3.4%
Slide 115: Sector Exposures
Sector Exposures Commercial Exposures by Sector1 Top 20 Commercial Exposures 2 For personal use only AAA to A+ BBB+ to $bn Other Total AA- to A- BBB- A+ Banks 38.4 41.8 4.8 0.7 85.7 A+ A- Finance Other 11.5 11.3 2.4 4.9 30.1 AA+ BBB Property - 6.4 11.0 38.3 55.7 A- A- Sovereign 64.4 1.5 0.6 0.2 66.7
Slide 116: Commercial Property Market
Commercial Property Market CBD Office Supply Pipeline1 CBD Vacancy Rates For personal use only % of Total Stock 1991 Recession Previous Current Peak 1990s Previous Current 40% 40% (1st Half FY13) (2nd Half FY13) (1st Half FY13) (2nd Half FY13) 35% 35% 30% 30% 25% 25% 20% 20% 15% 15% 10% 10% 5% 5% 0%
Slide 117: Interest Rate Risk in the Banking Book
Interest Rate Risk in the Banking Book For personal use only 25bpts 27bpts 24bpts 29bpts 43bpts $1,303m Optionality $880m Risk Basis Risk $781m $922m $776m Optionality Risk Repricing and Yield Curve Basis Risk Risk Repricing and Yield Curve Risk Embedded Gain (offset to capital) Jun 11 Dec 11 Jun 12
Slide 118: Risk Weighted Assets
Risk Weighted Assets Total RWA Credit RWA – Driver Analysis3 For personal use only $bn $bn 4.2 0.6 (1.5) (1.9) 279.7 0.4 6.5 5.3 329.2 3 0.6 271.8 7.9 314.9 4 Jan 13 Credit Risk Traded IRRBB Operational Jun 13 Jan 13 Volume FX CRF Data Credit Jun 13 Market Risk Risk & & Quality Treatments Methodolog
Slide 119: Regulatory Change
Regulatory Change Area 2013 2014 2015 2016 2017 2018 For personal use only Bank capital Level 3 reforms Leverage ratio Capital Leverage ratio (Basel III) – to be – observation conservation – to be – implemented implemented period buffer implemented (CET1 min 4.5%) (publicly – to be disclosed) implem
Slide 120: CET1 (International)
CET1 (International) 2H13 Movement FY13 Movement For personal use only Mvts in bpts Mvts in bpts 268 (167) 136 (90) (51) 26 11.0% (31) 15 11.0% 34 10 10.6% 10 9.8% 1 4 2 3 Dec 12 Cash Dividend 1 Credit Foreign 2 Other 3 Jun 13 Jun 12 Cash Dividend Credit Bankwest Foreign Other Jun 13 NPAT RWA Exchan
Slide 121: CET1 (APRA)
CET1 (APRA) 2H13 Movement FY13 Movement For personal use only Mvts in bpts Mvts in bpts 124 (80) 244 (151) (19) 10 (13) (12) (44) 8.2% 23 10 (16) 8.1% 4 8.2% 7.5% 3 Dec 12 Cash Dividend 1 Credit Foreign 2 IRRBB 3 Other 4 Jun 13 Jun 12 Cash Dividend1 Credit RWA Bankwest 5 Foreign 2 IRRBB Other Jun 13
Slide 122: APRA & International Comparison
APRA & International Comparison The following table provides details of the impact on CBA Group capital, as at June 2013, of the For personal use only 1 differences between the APRA Basel III prudential requirements and the requirements of the Basel 2 Committee on Banking Supervision (BCBS) . 30 Jun
Slide 123: APRA & International Comparison
APRA & International Comparison For personal use only ♦ The APRA prudential requirements are more conservative than those of the BCBS, leading to lower capital ratios under APRA: 100% deduction is required from CET1 for equity investments in financial institutions and entities that are not consolida
Slide 124: Funding – Portfolio
Funding – Portfolio Funding Composition Wholesale Funding by Product For personal use only 1% 1% Customer Deposits Structured MTN 3% 4% 5% 11% 11% Vanilla MTN ST Wholesale Funding Commercial Paper 4% 2% LT Wholesale Funding maturing Debt Capital < 12 months 7% CDs LT Wholesale Funding maturing 33% >
Slide 125: Funding – Issuance and Maturity
Funding – Issuance and Maturity 1 Funding strategy driven by market and investor diversity, appropriate maturity profile and overall cost For personal use only Term wholesale funding requirement has eased materially since FY 2010 $bn 60 50 9 Weighted Average Maturity 3.8yrs 40 Expected 30 fundin
Slide 126: UK and US Balance Sheet Comparison
UK and US Balance Sheet Comparison For personal use only United Kingdom USA Assets Liab + Equity Assets Liab + Equity Cash 8% 7% Equity Cash 9% 10% Equity Home Loans 19% Home Loans 13% 54% Deposits 55% Deposits Other Lending 39% Other Lending 44% 9% Long Term Other Fair 17% 10% Long Term Other Fair
Slide 127: Australian Banks – Safe Assets, Secure Funding
Australian Banks – Safe Assets, Secure Funding For personal use only Commonwealth Bank Balance Sheet Comparisons Assets – CBA’s assets are safer because: Assets Liab + Equity 53% of balance sheet is home loans, which are stable/long Cash 3% term 6% Equity Trading securities and other fair value
Slide 128: Funded Assets
Funded Assets For personal use only $bn Jun Jun $bn 13 12 Transactions 88 81 27 2 (4) 4 7 Savings 107 91 45 Equity Long term 127 wholesale1 Investments 199 197 Short term Other 12 10 111 wholesale Total customer 406 379 deposits 653 682 689 Wholesale 238 232 funding Customer 406 deposits Total fundi
Slide 129: Replicating Portfolio
Replicating Portfolio Replicating portfolio provides partial economic hedge for certain liabilities and assets that display For personal use only imperfect correlation between the cash rate and the product interest rate Actual and Forecast Scenario1 Replicating Portfolio Yield Official Cash Rate 2
Slide 130: Leverage ratio
Leverage ratio ♦ Supplementary measure to the risk For personal use only based capital requirements proposed APRA’s view of industry levels by the Basel Committee (November 2011) – Monitors build up of excessive leverage – Ratio is Tier 1 Capital as a percentage of total exposures (on and off balanc
Slide 131: Regulatory Expected Loss
Regulatory Expected Loss Basel III Basel III Basel II Basel II For personal use only $m Jun 13 Dec 12 1 Dec 12 1 Jun 12 CBA Regulatory Expected Loss (EL) – before tax 5,682 5,497 5,497 3,961 Eligible Provision Collective provision 2 2,668 2,701 2,701 2,685 Individually assessed provisions 2,3 2,668
Slide 132: Full Year Dividend
Full Year Dividend Dividend per share For personal use only cents +9.0% 364 140% 334 320 290 120% 256 266 228 100% 80% Target 80% 75% 78% 75% Range 74% 74% 73% 75% 60% 70% 40% 20% FY07 FY08 FY09 FY10 FY11 FY12 FY13 0% Dividend per share Cash NPAT Payout Ratio 132
Slide 133: Australian economy remains in reasonable shape
Australian economy remains in reasonable shape Jobs growth and relatively low For personal use only GDP growth outperformance unemployment ECONOMIC GROWTH IN 2013 UNEMPLOYMENT RATE % % (annual % change) Australia 12 12 Austria United Belgium States Euro Canada France zone Germany Greece 8 8 Ireland
Slide 134: Some headwinds – a softer labour market
Some headwinds – a softer labour market For personal use only The labour market has weakened And job fears remain high LABOUR MARKET UNEMPLOYMENT & JOB SECURITY % '000 Index % 6.0 90 90 8.00 Unemployment rate GFC (lhs) Job concerns* period 5.5 60 (net % exp unemp. to rise) 60 6.75 (adv 12 mnths, lhs
Slide 135: Credit
Credit For personal use only Modest credit growth set to continue Economic growth prospects are CREDIT & SPENDING reasonably favourable. % % (annual % change) 30 30 CBA (f) Reduction in global tail risks has Credit 20 20 improved financial market sentiment. But downside risks persist. 10 10
Slide 136: Some headwinds – slower Chinese activity
Some headwinds – slower Chinese activity Slowdown fears overdone? For personal use only CHINA GDP GROWTH CHINA: KEY ECONOMIC INDICATORS % (quarterly % change) % (monthly % change) % 3 3 3 CBA TEI & THE CASH RATE %pa %pa 7.0 8 Fixed asset Cash trend rate investment 6.4 (lhs) 2 5 2 2 5.7 2 5.1 -2 1 1
Slide 137: Some headwinds - the mining capex peak
Some headwinds - the mining capex peak The capex “pothole” For personal use only The mining pipeline is dominated by large multi-year projects. MINING INVESTMENT % % (% of GDP) 10 10 CBA TEI & THE CASH RATE Source: RBA/CBA CBA %pa %pa (f) 7.0 Of the 8 A$268bn of committed resource Cash 8 6.4 8 r
Slide 138: Some headwinds – labour market risks
Some headwinds – labour market risks The real “pothole” – in the labour market? For personal use only RESOURCES EMPLOYMENT MINING CAPEX & JOBS % % % % (% of total employment) 3 9 12 12 Source: CBA/RBA Related to resource investment Jobs related to Related to resource 8 8 2 investment 6 resource extr
Slide 139: The growth transition needs to succeed: housing demographics
The growth transition needs to succeed Housing – supportive demographics For personal use only POPULATION DRIVERS MIGRATION PROGRAM '000 '000 '000 '000 210 210 HII 2012 450 annualised 450 Total Net Planning targets migration 140 140 300 300 150 150 70 70 Skilled 457 Natural visa increase 0 0 0 0 199
Slide 140: The growth transition needs to succeed: getting the mix right
The growth transition needs to succeed Getting the mix right For personal use only RESIDENTIAL CONSTRUCTION % (contribution to GDP during upswing) % 4 4 The typical residential construction upturn adds 2-3ppts to GDP growth over the usual 2-3 year cycle. 3 3 There are big second-round effects as
Slide 141: Residential construction-related lending trending higher
The growth transition needs to succeed Residential construction-related lending trending higher For personal use only CBA RES CONSTRUCTION INDICATOR CBA LAND PURCHASE INDICATOR* % (annual % change) % (annual % change) % % 160 160 80 80 *Purchase of residential blocks of land 80 80 40 40 0 0 0 0 -80
Slide 142: Non-mining capex – mixed signals
The growth transition needs to succeed Non-mining capex – mixed signals For personal use only CAPITAL STOCK CBA LENDING BY SECTOR (% of nominal GDP) % Index Index % (rolling annual total, start=100) 320 36 900 900 Mining Mining (rhs) 300 24 600 600 Non- "Other" Mining (ex (lhs) agriculture) 280 12 M
Slide 143: Excess demand for housing
The growth transition needs to succeed Getting the mix right - excess demand for housing For personal use only CBA: HOUSING DEMAND & SUPPLY The fundamentals favour a lift in '000 '000 residential construction. CBA TEI & THE CASH RATE 200 %pa 200 %pa 7.0 8 Supply Cash rate 6.4 (lhs) Demographic 5
Slide 144: Housing market - summary
Housing market - summary An orderly adjustment occurred in the Australian housing market after the Global Financial Crisis. For personal use only The adjustment was characterised by slower credit growth, increased savings and lower servicing ratios. Australian house prices underwent a modest c
Slide 145: An orderly adjustment in the Australian housing market
An orderly adjustment has occurred in the Australian housing market, as households repair their balance sheets Debt:income ratios have plateaued Household gearing has levelled out For personal use only HOUSEHOLD DEBT HOUSEHOLD GEARING % % (% of h/hold disposable income) (debt:assets) 200 200 24 24 1
Slide 146: Australian house prices are starting to rise again
Australian house prices are starting to rise again, after a period of stabilisation House prices House price growth For personal use only $'000 MEDIAN HOUSE PRICES $'000 3 Years 12 mths 6 mths (stratified median) 750 750 to to to change (%) Sydney June 13 June 13 June 13 Perth Sydney 6.9 6.2 5.1 500
Slide 147: Low vacancy rates, rent growth and affordability support house prices
Low vacancy rates, growth in rents, affordability trends and positive sentiment are all supportive of house prices Housing indicators Affordability & prices For personal use only HOUSING INDICATORS CBA AFFORDABILITY & PRICES % % % (annual % change) % 60 9.0 45 69 Housing CBA-HIA housing sentiment* a
Slide 148: Urbanisation rates important in assessing house prices
Urbanisation rates important in assessing house prices Urban population Density & house prices Dwelling prices For personal use only URBAN POPULATION DWELLING PRICES DENSITY & HOUSE PRICES (ratio to household income) (% in two largest cities) %80urban pop in 2 largest *Source: OECD/RBA New Zealand c
Slide 149: Australia's house price to income aligns with global norms
Australia’s house price to income aligns with global norms Dwelling price to income ratios* For personal use only 149
Slide 150: House price bubble characteristics not evident in Australia
Factors that typically characterise a house price bubble are not evident in Australia For personal use only Housing “Bubble” – Current position in Australia typical characteristics Unsustainable asset prices Prices supported by the excess of demand over supply Australia’s population continues to
Slide 151: Australian vs US housing markets
Significant differences between Australian and US housing markets minimise risk of a US style house price collapse CBA / Aust US Australian mortgage product For personal use only Principal and interest amortising 25/30 Unemployment 5.7%1 7.6%2 year loan Variable interest rate set at bank’s No-Re
Slide 152: Economic Summary – New Zealand
New Zealand For personal use only Economic Summary – New Zealand 2010 2011 2012 2013 2014 (f) 2015 (f) Credit growth (annual – June vs June) 0.7 1.5 2.5 4.1 4½-6½ 4½-6½ Household credit 2.5 1.1 1.8 5.1 4½-6½ 4-6 Business credit -7.9 1.1 4.0 1.6 3-5 5-7 Agriculture credit 2.3 -0.9 3.1 4.4 4-6 5-7 GDP
Slide 153: Customer Satisfaction - Sources
Customer Satisfaction - Sources 1 Roy Morgan Research Main Financial Institution (MFI) Retail Customer Satisfaction (June 2013). Australian population 14+, % “Very For personal use only Satisfied” or “Fairly Satisfied” with relationship with that MFI. 6-month rolling average. The ranking refers to C
Slide 154: Productivity Metrics - Definitions
Notes Productivity Metrics - Definitions For personal use only Customer service transactions per FTE - Average number of transactions completed per week in branch by Retail Customer Service Representatives. Sales and Converted Referrals per FTE - Average number of sales & converted referrals complet
Slide 155: Sustainability scorecard notes
Notes Sustainability scorecard For personal use only Complete definitions for scorecard metrics are available at www.commbank.com.au/sustainability2013 1 Proportion of each financial institution’s MFI retail customers surveyed by Roy Morgan Research that are either ‘Very Satisfied’ or ‘Fairly Satisf
Slide 156: For personal use only
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Commonwealth Bank of Australia — FY2013 Earnings Presentation on 6ix