Commonwealth Bank Of Australia · ASX:CBA
Commonwealth Bank Of Australia — H1 2007 Earnings Presentation
104 slides from Commonwealth Bank Of Australia's earnings presentation, Feb 14, 2007
Slide 1: Presentation of 2007 Interim Profit Announcement
Presentation of 2007 Interim Profit Announcement For the Half Year ended 31 December 2006 14 February 2007 Ralph Norris David Craig CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER Commonwealth Bank of Australia ACN 132 123 124
Slide 2: Disclaimer
Disclaimer The material that follows is a presentation of general background information about the Bank’s activities current at the date of the presentation, 14 February 2007. It is information given in summary form and does not purport to be complete. It is not intended to be relied upon as advice
Slide 3: Agenda
Agenda Ralph Norris, CEO – Results & Company Update David Craig, CFO – Detailed Financials Ralph Norris, CEO – Outlook Questions and Answers 3
Slide 4: Notes
Notes ConmonwealthBank y 4
Slide 5: Overview
Overview Good result driven by focus on profitable growth All businesses performing well Credit quality remains excellent Significant progress on 4 strategic initiatives Momentum in business – both strategic & earnings 5
Slide 6: Other key information
Other key information Notes Cash NPAT ($m) Dec 06 Jun 06 Dec 05 Jun 05 Cash NPAT 2,271 1,992 2,061 1,759 Less: Profit on sale of Hong Kong 0 0 (145) 0 Cash NPAT (excl HK sale) 2,271 1,992 1,916 1,759 Some overall Bank indicators Dec 06 Jun 06 Dec 05 Jun 05 Dec 04 Number of branches 1,010 1,005 1,007
Slide 7: Strong Financial Results
Strong Financial Results Dec 06 vs Dec 06 Dec 05 Cash NPAT* 2,271 19% Cash EPS* 174.7 17% Return on Equity – Cash 22.3% 60bpts Income 6,438 11% Expense 3,144 6% Fully Franked Dividend 107c 14% * Excludes profit on sale of Hong Kong in December 05 7
Slide 8: Notes
Notes ConmonwealthBank y 8
Slide 9: All Brands Performing Strongly
All Brands Performing Strongly Banking Funds Mgt Insurance 9
Slide 10: Market Shares
Market Shares Notes Dec 06 Jun 06 Dec 05 Banking Home loans 18.2% 18.7% 18.8% Credit cards 19.4% 20.3% 21.4% Retail deposits 21.9% 22.2% 22.9% Personal lending 16.4% 16.1% 16.0% Business lending - RBA 12.9% 13.1% 13.4% Business lending - APRA 12.5% 12.1% 12.5% Asset finance 13.9% 14.5% 15.1% NZ lend
Slide 11: CEO Priorities & Measures
CEO Priorities & Measures Customer Service Business Banking Technology & Operational Excellence Trust & Team Spirit Î Superior operating and financial results Î Australia’s finest financial services organisation 11
Slide 12: Other key information
Other key information Notes Indexed # of customer complaints 1.4 1.2 1.0 0.8 47% decline since Dec 05 0.6 29% decline year to date 0.4 Jun 05 Sep 05 Dec 05 Mar 06 Jun 06 Sep 06 Dec 06 12
Slide 13: Customer Service improves
Customer Service improves Roy Morgan Research 90% (% of MFI Customers Satisfied) 4000 leaders trained in Cohen Brown sales and service 80% methodology 70% Increased investment in branch network 60% Jun 05 Dec 05 Jun 06 Dec 06 800 new customer facing roles AC Neilsen (% of MFI Customers Satisfi
Slide 14: Notes
Notes ConmonwealthBank y 14
Slide 15: Business Banking making good progress
Business Banking making good progress Business Finance Monitor: SME (% of MFI Customers Satisfied) Recruitment & training of new 100% in branch Business Bankers 90% commenced 80% 70% First new Business Banking Centre opened (8 additional 60% planned by July 2007) 50% Jun 04 Dec 04 Jun 05 Dec 05
Slide 16: Notes
Notes ConmonwealthBank y 16
Slide 17: Local Business Banking website
Local Business Banking website 17
Slide 18: Notes
Notes ConmonwealthBank y 18
Slide 19: Technology & Operational Excellence
Technology & Operational Excellence IT Efficiency Ratio* Implemented new shared (Rolling 2 month average since Jun 06) services approach to Enterprise IT 21% FY05 Average $64 million of annualised savings 20% locked in in first half 19% $23m reduction in consultant and contractor spend 18% Z
Slide 20: Notes
Notes ConmonwealthBank y 20
Slide 21: Trust & Team Spirit improving
Trust & Team Spirit improving LTIFR 15 Improved internal staff engagement scores 12.3 Improvements in key people 11.2 metrics days 10.4 10 – LTIFR 9 – Staff turnover 8 7.6 Building pride through strong community engagement and 5 Sep 05 Dec 05 Sep 06 Dec 06 Jun 06 Mar 06 involvement of our peop
Slide 22: Other key information
Other key information Notes China Indonesia Staff 3,073 80 - CBA 738 PT Bank Commercial number and Astra CMG JV 2,993 - Jinan and Hangzhou City Commercial Banks 18 First State Investments 40 First State Cinda Fund Management Company Branches 70 Hangzhou City >20 PTBC has more than Commercial Bank 20
Slide 23: Asian growth continues
Asian growth continues China 11% Jinan City Commercial Bank 19.9% Hangzhou City Commercial Bank Beijing and Shanghai – Representative offices China Life CMG – JV life insurance First State Cinda Fund Management Company Japan Branch Hong Kong Branch First State Investments Vietnam Representative offi
Slide 24: Notes
Notes ConmonwealthBank y 24
Slide 25: Presentation of 2007 Interim Profit Announcement
Presentation of 2007 Interim Profit Announcement For the Half Year ended 31 December 2006 14 February 2007 David Craig CHIEF FINANCIAL OFFICER Commonwealth Bank of Australia ACN 132 123 124 25
Slide 26: Non cash items
Non cash items Notes Dec 06 Jun 06 Dec 05 $M $M $M Defined benefit superannuation plan (income) / expense (4) 6 19 Treasury Shares 38 57 43 One off AIFRS mismatch 46 - - 80 63 62 Defined benefit superannuation plan (income) / expense: This amount is influenced by actuarial estimates of the long-te
Slide 27: Good result – cash NPAT up 19%
Good result – cash NPAT up 19% Dec 06 Dec 05 Dec 06 vs $M $M Dec 05 Operating Income 6,438 5,801 11% Shareholder investment returns 85 64 33% Income 6,523 5,865 11% Operating expenses 3,144 2,967 6% Loan impairment expenses 195 188 4% Net Profit Before Tax 3,184 2,710 17% Tax & Minorities 913 794 15
Slide 28: Other key information
Other key information Notes 6 months Dec 06 Jun 06 Dec 05 Dec 06 vs Dec 06 vs Contribution to profit $M $M Jun 06 Dec 05 $M Banking 1,867 1,638 1,589 14% 17% Funds Management 232 217 183 7% 27% Insurance 111 112 103 1% 8% NPAT (underlying) 2,210 1,967 1,875 12% 18% Shareholder invest. Returns 61 25
Slide 29: All businesses performing well
All businesses performing well 6 months Dec 06 Dec 05* Dec 06 vs $M $M Dec 05 Australian Retail 912 842 8% Business, Corp and Institutional 762 589 29% Asia Pacific 202 184 10% Other (9) (26) 65% Banking 1,867 1,589 17% Funds Management 232 183 27% Insurance 111 103 8% Shareholder Investment Returns
Slide 30: Other key information
Other key information Notes Dec 06 Jun 06 Dec 05 % of operating Income Net interest income 54% 54% 56% Other banking income 26% 26% 25% Funds Mgt. income 14% 14% 12% Insurance income 6% 6% 7% Total 100% 100% 100% 30
Slide 31: Revenue growth outstrips costs
Revenue growth outstrips costs Dec 06 vs Dec 05 30% 29% 27% 25% 25% 20% 18% * 18% 18% 17% 15% 15% 15% 11% 11% 11% 10% 10% 10% 8% 6% 5% 5% 4% 4% 0% 0%* 0% Australian BCI ASB (NZD) Banking Funds Insurance Group Retail Management * Excludes volume expenses & HK operations Income Expenses NPAT 31
Slide 32: Other key information
Other key information Notes Dec 06 Jun 06 Dec 05 Dec 06 vs Dec 06 vs Jun 06 Dec 05 Av interest earning assets ($m)* 306,868 282,553 267,169 9% 15% Net int income (excl securitisation) 3,432 3,202 3,218 7% 7% ($m) Net interest Margin (AIFRS) (bpts) 222 229 239 7bpts 17bpts * Has been adjusted to remo
Slide 33: Banking profit up 17%
Banking profit up 17% Net Interest Income Cash profit up 17% since Dec 05 Volume Ç 14% 233 (94) Liquids È 2% (7) (84) $1,867m Price È 5% 230 NII Ç 7% $1,589m Other income Ç16% – Sale of Loy Yang $79m – Commissions & fees Ç 6% – Trading income Ç 25% Dec 05 NII Other Expenses Loan Tax & Dec 06 Cas
Slide 34: Margin Analysis
Margin Analysis Notes Dec 06 vs Jun 06 Bpts Average 90 day bill rate change +53 Average Cash rate exchange +45 34
Slide 35: Underlying NIM down 4bpts since June
Underlying NIM down 4bpts since June NII only 54% of operating income Liquidity Liquid assets > $4bn – dilutive È 3bpts Core Lending & Deposits to NIM but positive to other income È 4bpts 229bpts (3) Pricing 4bpts È due to home (4) loan & credit cards 1 (2) 1 222bpts Cash rate – deposit marg
Slide 36: Other key information
Other key information Dec 06 vs Dec 06 vs Dec 06 Jun 06 Dec 05 Jun 06 Dec 05 NII Home loans 644 627 633 3% 2% Consumer finance 351 366 366 4% 4% Retail deposits 1,061 963 965 10% 10% 2,056 1,956 1,964 5% 5% Other income Home loans 87 74 77 18% 13% Consumer finance 191 195 173 2% 10% Retail deposits
Slide 37: Australian Retail
Australian Retail Good volume growth: Dec 06 Dec 06 vs Home loans Ç 10% $M Dec 05 Deposits Ç 8% Net interest income 2,056 5% Not participating in Other banking income 615 3% unprofitable zero rate balance Total banking income 2,671 4% transfers in cards Operating expenses 1,206 - Investmen
Slide 38: Notes
Notes ConmonwealthBank y 38
Slide 39: Australian Retail snapshot
Australian Retail snapshot ABA Market Home Loan Growth by State Cannex Awards for 6 months to Dec 06 12.4% 7.3% 5.5% 4.3% 2.8% NSW VIC QLD WA SA % of CBA Book 38% 27% 17% 10% 4% % Consumer 90 days past due* Deposit Mix 0.7% 3% 7% 0.6% 0.5% Netbank Saver 32% 0.4% Investment Deposits 0.3% 39% Transact
Slide 40: Other key information
Other key information Dec 06 vs Dec 06 vs Dec 06 Jun 06 Dec 05 Jun 06 Dec 05 NII Corporate Banking 303 282 276 7% 10% Financial Markets 240 261 235 8% 2% Lending & Finance 435 382 370 14% 18% 978 925 881 6% 11% Other income Corporate Banking 212 184 210 15% 1% Financial Markets 418 347 362 20% 15% L
Slide 41: Business, Corporate & Institutional
Business, Corporate & Institutional Strong asset growth of 20% Dec 06 Dec 06 vs $M Dec 05 Institutional average lending balances Ç 22% Net interest income 978 11% Other banking income 920 21% Margins stable over last six months Total banking income 1,898 15% Operating expenses 833 5% Strong
Slide 42: Other key information
Other key information Notes 6 months Dec 06 Jun 06 Dec 05 Dec 06 vs Dec 06 vs $M $M $M Jun 06 Dec 05 ASB: New Zealand NZ$m Net Interest Income 437 412 392 6% 11% Other Income 190 169 175 12% 9% Total Operating Income 627 581 567 8% 11% Operating Expenses (267) (252) (243) 6% 10% Impairment losses (4
Slide 43: Asia Pacific
Asia Pacific ASB contributed $195m Dec 06 Dec 06 vs $M Dec 05 ASB NPAT Ç 15% in NZD Net interest income 362 - Other banking income 188 13% Acquiring ANK (Arta Niaga Total banking income 550 4% Kencana) in Indonesia subject to regulatory approvals Operating expenses 260 3% Loan Impairment 5 58%
Slide 44: Other key information
Other key information Notes Loan Impairment expense to RWA (annualised) 126 146 176 188 210 195 0.19% 0.19% 0.19% 0.17% 0.16% 0.15% Jun 04 Dec 04 Jun 05 Dec 05 Jun 06 Dec 06 44
Slide 45: Credit – maintained high standards
Credit – maintained high standards Gross impaired assets to RWA Credit standards maintained 1.20% Limited participation in private 1.00% equity deals 0.80% CBA ANZ 0.60% Conservative approach to low 0.40% NAB WBC doc loans (1.8% of home loans) 0.20% On market value, 79% of home 0.00% Dec Jun
Slide 46: Other key information
Other key information Notes 6 months ended Dec 06 Jun 06 Dec 05 FUA Av. FUA ($bn) 158 148 130 Spot. FUA ($bn) 168 152 137 Margins Operating income/ av. FUA 1.13 1.14 1.10 Net income/ av. FUA 0.95 0.97 0.95 Expenses Operating expenses/ av.FUA 0.71 0.72 0.70 Operating expenses to net Income 56.1 57.3
Slide 47: Funds Management
Funds Management FUA grew 22% to $168bn Dec 06 Dec 06 vs $M Dec 05 72% of funds Total operating income 898 25% outperformed benchmark over the half Shareholder investment 4 43% returns Funds management Retained No.1 position income 902 24% in retail net flows Volume expenses 144 45% First Ch
Slide 48: Other key information
Other key information Notes 6 months ended Dec 06 Jun 06 Dec 05 Claims expense as % of net earned premium General Insurance 50% 57% 51% Life Insurance 47% 41% 49% Sources of profit $M $M $M Planned profit margins 94 77 69 Experience variations 7 29 19 Other 0 (2) 2 General insurance operating margin
Slide 49: Insurance
Insurance Underlying profit Ç 18% Dec 06 Dec 06 vs $M Dec 05 * Inforce premiums Ç 16% Total operating income 382 11% Good claims experience Shareholder investment 81 45% particularly Group Risk returns Total Insurance Income 463 16% Planned profit margins up 45% (ex Hong Kong) Volume expense
Slide 50: Notes
Notes ConmonwealthBank y 50
Slide 51: Investing for Growth & Productivity
Investing for Growth & Productivity Growth Half Year ended Dec 06 Jun 06 – Business banking growth strategy – New & refurbished branches P&L 240 235 – Roll out of Commbiz Capitalised 110 130 – Improving cross sell of WM products Total Inv Spend 350 365 Productivity – Insurance and WM product & syste
Slide 52: Capital treatment
Capital treatment 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 GRCL 3 3 3 Asset Revaluation Reserve 3 3 3 Other reserve accounts 3 Retained Earnings 3 3 3 3 Mino
Slide 53: Capital ratios
Capital ratios ACE AIFRS Adjustments 11% Total 9.81% 9.66% 9.66% 9.78% Capital 10% Target 9% Range 8% Tier 1 7% 7.54% 7.56% 7.56% 7.06% Target 6% Range 5% ACE Target 4% Range 3% 5.00% 4.70% 2% 4.50% 4.39% 1% 0% Dec 2005 Jun 2006 Jul 2006 Dec 2006 Adjusted Common Equity Total Capital Tier one capital
Slide 54: Notes
Notes ConmonwealthBank y 5A
Slide 55: Summary
Summary Good result driven by focus on profitable growth All businesses performing well Credit quality remains good Continuing to invest for growth & productivity Strong capital position provides flexibility Delivering to our shareholders : ROE 22.3%, EPS growth 17% 55
Slide 56: Notes
Notes ConmonwealthBank y 56
Slide 57: Outlook
Outlook Domestic economy expected to support double digit system credit growth Earnings momentum maintained into second half Strategic initiatives continuing to deliver Financial market to remain competitive - committed to profitable growth Outlook for earnings growth and credit quality re
Slide 58: Presentation of 2007 Interim Profit Announcement
Presentation of 2007 Interim Profit Announcement For the Half Year ended 31 December 2006 14 February 2007 Ralph Norris David Craig CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER Commonwealth Bank of Australia ACN 132 123 124 58
Slide 59: Supplementary materials
Supplementary materials ConmonwealthBank Y
Slide 60: Economy
Economy ConmonwealthBank Y 60
Slide 61: GDP, unemployment and cash rates
GDP, unemployment and cash rates 61
Slide 62: Credit growth
Credit growth 20 10 Credit by Sector” Year-endec percentage change Housing | A Va Personal i Business 1995 1999 2003 2007 10 15 12 a Housing Loan Approvals* Total 1904 1997 2000 2003 2006 * Exchdes refinancing; incudes investors and owner-occuplers Source: ABS. Established House Prices* 1980/00 = 10
Slide 63: Spreads
Spreads Aus. BBB Corporates US BBB Corporates ~ 35bp over swaps ~ 50bp over swaps 63
Slide 64: ConmonwealthBank Y
ConmonwealthBank Y 64
Slide 65: Group
Group ConmonwealthBank Y 65
Slide 66: Fully franked dividends
Fully franked dividends Dividend (cents per share) 240 200 160 130 112 Cents 104 120 82 85 107 80 94 79 85 68 69 Second Half 40 First Half 0 2002 2003 2004 2005 2006 2007 Payout Ratio (cash basis) 73.9% 73.9% 74.9% 71% 66
Slide 67: Revenue growth outstrips costs
Revenue growth outstrips costs 6 month period – Dec 06 vs Jun 06 30% 25% 24% 20% 19% 15% 14% 12% 12% 11% 10% 8% 8% 8% 7% 7% 7% 6% 6% 5% 4% 4% 4% 2% 3% 2% 0% (1)% -5% Australian BCI ASB (NZD) Banking Funds Insurance * Group Retail Management * * excludes volume expenses Income Expenses NPAT 67
Slide 68: Other key information
Other key information Notes 6 months Dec 06 Jun 06 Dec 05 Dec 06 vs Dec 06 vs Comparable expenses $M $M $M Jun 06 Dec 05 Staff expenses 1,587 1,437 1,386 10% 15% Occupancy and equipment 335 311 310 8% 8% IT Services 439 483 502 9% 13% Postage and Stationery 109 107 109 2% - Fees and commissions 316
Slide 69: Group operating expenses
Group operating expenses 22 (20) 26 $3,144m 41 48 $3,027m Operating CPI & General Increased FTE's Volume expenses Unit Pricing Other Operating expenses HY June salary increases (FM & Ins) Compliance expenses HY Dec 06 Initiative 06 69
Slide 70: Banking
Banking ConmonwealthBank Y 70
Slide 71: Banking Revenue by Product
Banking Revenue by Product 6 months Dec 06 vs Dec 06 vs Dec 06 Jun 06 Dec 05 Jun 06 Dec 05 Other Asia Pacific 1% Home Loans 11% 14% Home Loans 731 701 710 4% 3% Consumer Finance 542 561 539 3% 1% Lending & Finance Retail Deposits 1,398 1,314 1,314 6% 6% 14% Corporate Banking 515 466 486 11% 6% Retai
Slide 72: Other banking income
Other banking income Dec 06 Jun 06 Dec 05 Dec 06 vs Dec 06 vs $M $M $M Jun 06 Dec 05 Commissions & Fees 859 820 815 5% 5% Lending Fees 417 411 389 1% 7% Trading Income 306 261 244 17% 25% Other 159 138 37 15% 330% 1,741 1,630 1,485 7% 17% Non trading derivatives (63) (39) (40) 62% 58% Other banking
Slide 73: Summary - CBA Growth vs Market
Summary - CBA Growth vs Market* 6 months to Dec 2006 Home Lending Credit Cards 7.0% 12.0% 5.8% 6.7% 6.0% 9.4% 8.9% 5.0% 4.9% 4.1% 3.7% 4.4% 6.8% 4.0% 3.5% 5.7% 5.9% 6.0% 3.0% 5.8% 2.0% 1.0% 1.4% 0.0% 0.0% CBA WBC ANZ NAB SGB CBA WBC ANZ NAB SGB Personal Lending Household Deposits 15.0% 12.0% 9.9% 10
Slide 74: Home Loans (Domestic)
Home Loans (Domestic) Dec 06 vs Dec 06 vs Dec 06 Jun 06 Dec 05 Jun 06 Dec 05 Domestic growth profile ($bn) Loan Funded* 25.1 24.8 22.9 1% 10% Reduction* 19.1 16 16.7 19% 14% Net Growth* 6.0 8.8 6.1 32% - Total Home Lending assets ($bn) Australian Home Lending assets ($bn) 150.8 144.8 136.0 4% 11% Se
Slide 75: Home Loan Growth by Channel (Half Year)
Home Loan Growth by Channel (Half Year) (Balances sourced from each channel as a % of total CBA housing growth) 12% 20% 14.0% 14.8% 11.5% 10% 8% 7.1%* 6.5% 6.7% 6.1% 6% 4.7% 4.7% 4.1% 4% 2.8% 2.8% 3.0% 2% 0.8% 0.01% 0% Dec 05 Jun 06 Dec 06 Brokers Branch Premium Total CBA Total Market * Market growt
Slide 76: Home Loans – LVR Profile
Home Loans – LVR Profile LVR Profile Strong LVR profile 90% % of loans at <60% LVR: 80% 70% 68% if based on 60% original security value 50% 79% if based on 40% current market values 30% 20% The majority of loans 10% >80% LVR are 0% mortgage insured 0-60 60.1-75 75.1 -80 80.1 -90 90.1+ LVR
Slide 77: Home Loan Portfolio – stress tested
Home Loan Portfolio – stress tested Stress test scenario consistent with experience of UK recession of the late 1980s / early 1990s. Market Value Stress – Up to 6 fold increase in PD, due Expected Loss PD Stress Factor $m to unemployment of 10% & Property Value x1 x2 x4 x6 interest rates of 14% No
Slide 78: Home Loans – Portfolio Quality
Home Loans – Portfolio Quality 30+ & 90+ Day Delinquencies Portfolio credit quality remains sound 1.40% Delinquencies while up 1.20% 1.00% slightly are broadly in line 0.80% with seasonal expectations 0.60% 0.40% 0.20% Home Loan collection will 0.00% Jun 03 Dec 03 Mar 04 Jun 04 Dec 04 Mar 05 J
Slide 79: Low doc loans prudently managed
Low doc loans prudently managed LVR for Low-Doc Loans Low doc only represents 1.8% of portfolio at $2,387m 100% Low Doc not available 4% - 5% of new approvals are low 80% doc loans LMI at customer cost Low Doc specific credit criteria in 60% place to ensure risks are minimised Pooled LMI cover
Slide 80: Why we don’t offer zero % balance transfers
Why we don’t offer zero % balance transfers Monthly Cash Flow per Card * 0% offers appear value $ $ destroying with roll-over to low- 40 110 rate card margins 90 30 20 50 10 On marginal cost basis, 10 customer break-even for 0 -10 “genuine” customers between -10 12-24 months (est.) -50 -20 -30 -
Slide 81: Funds Management & Insurance
Funds Management & Insurance 81
Slide 82: Well diversified product mix – growing share
Well diversified product mix – growing share Funds Under Administration 31 Dec 2006 Total FUA = $168 billion ($137bn as at Dec 05) First Internationally Choice/Avanteos sourced 21% (19% as at Dec 05) 26% (18% as at Dec 05) (2% as at Dec 05) Other 2% Property 8% Cash Mgt 2% (3% as at Dec 05) (10% as
Slide 83: Investment performance
Investment performance December 2006 Gross performance and quartile ranking 1yr % pa Quartile 3yr % pa Quartile Aust. Share – Core 23.8% 3 26.4% 1 Geared Share Fund 41.1% 2 52.5% 1 Imputation 22.5% 4 24.8% 3 Property Securities 38.5% 1 29.9% 1 Global Resources 22.1% 1 26.6% 1 Diversified 16.0% 3 16.
Slide 84: Other key information
Other key information Total net flows 6 months ended Dec 06 Jun 06 Dec 05 $M $M $M FirstChoice 2,977 4,075 3,714 Avanteos 693 5,322 222 Cash Mgt. (281) (389) (255) Other retail (1,951) (2,138) (2,316) Australian Retail 1,438 6,870 1,365 Wholesale 1,084 100 1,189 Property (1,296) (704) (366) Internat
Slide 85: Funds mgt funds flows
Funds mgt funds flows FirstChoice Funds Under Administration Balance & Market Share FUA Market Share: Plan for Life All Master Funds – Administrator View Continued strong inflows into First Choice, balance 35,000 10.0% Ç 48% 9.0% 30,000 8.0% Wholesale & International 25,000 7.0% continued to att
Slide 86: Funds Management & Insurance Investment Mandate Structure
Funds Management & Insurance Investment Mandate Structure The Bank has $2.1bn of shareholders funds across its insurance and funds management business, which is invested in: Australia New Zealand Asia Total Local equities 1% 1% 0% 1% International equities 0% 4% 9% 1% Property 24% 1% 25% 19% Growth
Slide 87: Capital Management
Capital Management ConmonwealthBank Y 87
Slide 88: ACE calculation
ACE calculation Credit Ratings Long Term Short Term Affirmed Standard & Poors' AA- A-1 + Dec 06 Moody's Investor Services Aa3 P-1 Dec 06 Fitch Ratings AA F1+ Dec 06 Dec 06 Jun 06 Dec 05 Adjusted Common Equity * $M $M $M Tier One Capital 16,553 16,354 15,290 Add: Deferred Income Tax 39 - - Equity inv
Slide 89: ACE
ACE 5.5% 0.97% (0.59%) 5.0% 0.11% (0.35%) 0.17% 4.70% 4.50% (0.11%)* 4.5% 4.39% 4.0% 3.5% 3.0% ACE June Impact of ACE July Cash Ordinary DRP Growth in Investment Other ACE Dec 2006 AIFRS 2006 NPAT Dividends $248m RWA in non $4m 2006 $9,743m ($247m) $9,496m $2,271m ($1,380m) ($18,131m) consolidated $
Slide 90: Tier 1 capital
Tier 1 capital 9.0% 0.97% (0.59%) 8.5% 8.0% (0.58%) 7.56% 7.5% 0.11% (0.35%) (0.06%) 7.06% 7.0% (9 basis points) 6.5% Tier 1 Jun Cash Ord. Growth in DRP Acquisition of Currency Tier 1 Dec 2006 NPAT Dividends RWA $248m infrastructure and Other 2006 $16,354m $2,271m ($1,380m) ($18,131m) (AWG plc) Move
Slide 91: Hybrid instrument information
Hybrid instrument information Hybrid dividends Franked/ Dec 06 Jun 06 Dec 05 Imputed PERLS * - 13 19 F PERLS II 19 18 17 F PERLS III 29 13 - F Trust Preferred Securities 2003 21 22 21 N/A Trust Preferred Securities 2006 27 - N/A ASB Capital prefs 5 5 5 I ASB Capital No.2 prefs 8 8 9 I CBA Capital 8
Slide 92: Credit Risk
Credit Risk ConmonwealthBank Y 92
Slide 93: Summary
Summary Dec 06 Jun 06 Dec 05 RWA $234,569 $216,438m $202,667m Charge for Bad Debts (6 mths) $195m $210m $188m Charge for Bad Debts to RWA (annualised) 0.17% 0.19% 0.19% Gross Impaired Assets $338m $326m $396m Individually assessed provisions $171m $171m $179m Collective provisions $1,040m $1,046m $1
Slide 94: The Bank remains well provisioned
The Bank remains well provisioned 2,100 550 500 1,800 450 1,500 400 350 $millions 300% 1,200 900 250 200 600 150 100 300 50 0 0 Jun 96 Dec 96 Jun 97 Dec 97 Jun 98 Dec 98 Jun 99 Dec 99 Jun 00* Dec 00* Jun 01 Dec 01 Jun 02 Dec 02 Jun 03 Dec 03 Jun 04 Dec 04 Jun 05 Dec 05 Jun 06 Dec 06 (1) General Rese
Slide 95: Banking - Top commercial exposures
Banking - Top 20 commercial exposures ($m) A BBB- BBB- BBB+ BBB- A- S&P Rating or Equivalent A- AA- BBB- A BBB- BBB A- A- BBB BBB+ BBB BBB BBB+ A- 0 100 200 300 400 500 600 700 800 900 Top 20 exposures – excludes finance and government – comprise 2.5% of committed exposures (2.5% as at Dec 06, 2.7%
Slide 96: Banking - Quality of commercial risk-rated exposures
Banking - Quality of commercial risk- rated exposures 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 60% 15 16 16 16 17 20 17 40% 17 18 18 22 20 17 17 67% investment grade 20% 35 30 32 32 29 31 30 0% Dec 03 Ju
Slide 97: Banking - Total geographic exposure (commercial + consumer)
Banking - Total geographic exposure* (commercial + consumer) Home loans = $166.0bn (excl securitised) Total exposure : $443bn Other Balance Sheet loans = $133.3 bn Other exposure = $143.7bn International 14% At 30 Jun 06 Total exposure = $417bn Home loans = $154.5bn Other loans = $125.8bn New Zealan
Slide 98: Banking - Total outstandings (commercial + consumer)
Banking - Total outstandings* (commercial + consumer) At 30 Jun 06 Total Outstandings Total outstandings = $341.8bn $359.0 bn* Consumer = 47.0% Telecoms = 0.3% Telecommunication Agriculture 2.6% Agriculture = 2.6% 0.2% Construction = 1.1% Construction 1.0% Energy = 1.5% Energy 1.4% Finance = 26.5% G
Slide 99: Banking – International commercial exposures
Banking – International commercial exposures* International exposure by Industry At 30 Jun 06 Total exposure = $72.1bn Total exposure : $62.4bn Finance = 86% Government = 2% Other commercial = 9% Other Commercial 13% Specific industries = 3% Government 2% Specific Industries 5% Aviation Technology T
Slide 100: Banking Credit Exposure - Agriculture Sector
Banking Credit Exposure - Agriculture Sector At 30 Jun 06 Total exposure: $11,011m Total exposure = $10,152m Australia = 63% New Zealand = 37% 31 Dec 30 Jun 06 06 New Rating $m $m Zealand 40% AAA to A- 255 333 BBB+ to BBB- 1,614 1,320 Australia BB to BB- 3,155 3,022 60% < BB- 5,987 5,477 TOTAL 11,01
Slide 101: Banking Credit Exposure - Aviation Sector
Banking Credit Exposure - Aviation Sector At 30 Jun 06 Total exposure: $3,828m Total exposure = $3,087m Australia = 76% New Zealand = 12% Other = 12% 31 Dec 30 Jun Other 14% 06 06 New Rating $m $m Zealand AAA to A- 1,127 1,140 11% BBB+ to BBB- 2,561 1,516 BB to BB- 70 313 < BB- 70 118 Australia TOTA
Slide 102: Banking Credit Exposure - Energy Sector
Banking Credit Exposure - Energy Sector At 30 Jun 06 Total exposure = $6,889m Total exposure: $7,027m Australia = 69.8% New Zealand = 10.4% Asia = 2.4% Europe = 15.6% Americas Americas = 1.8% 31 Dec 30 Jun Europe 2.7% 06 06 16.2% Rating $m $m AAA to A- 1,140 1,601 Asia 3.2% BBB+ to BBB- 5,178 4,588
Slide 103: Banking Credit Exposure - Telcos Sector
Banking Credit Exposure - Telcos Sector At 30 Jun 06 Total exposure = $1,391m Total exposure: $990m Australia = 77% New Zealand = 12% Europe = 7% Asia = 4% Asia 7% 31 Dec 30 Jun 06 06 Europe 12% Rating $m $m AAA to A- 593 856 New Zealand 6% BBB+ to BBB- 134 277 BB to BB- 192 150 < BB- 71 108 TOTAL 9
Slide 104: Presentation of 2007 Interim Profit Announcement
Presentation of 2007 Interim Profit Announcement For the Half Year ended 31 December 2006 14 February 2007 Ralph Norris David Craig CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER Commonwealth Bank of Australia ACN 132 123 124 104
Commonwealth Bank of Australia — H1 2007 Earnings Presentation on 6ix