Commonwealth Bank Of Australia · ASX:CBA
Commonwealth Bank Of Australia — H1 2012 Earnings Presentation
149 slides from Commonwealth Bank Of Australia's earnings presentation, Feb 15, 2012
Slide 1: 100 Years of Banking on Australia's Future: Results Presentation
100 YEARS OF BANKING ON AUSTRALIA’S FUTURE Results Presentation Ian Narev Chief Executive Officer David Craig Chief Financial Officer FOR THE HALF YEAR ENDED 31 DECEMBER 2011 For personal use only Results Presentation For the half year ended 31 December 2009 10 February Commonwealth Bank of Australi
Slide 2: Disclaimer
Notes For personal use only Disclaimer The material that follows is a presentation of general background information about the Group’s activities current at the date of the presentation, 31 December 2011. It is information given in summary form and does not purport to be complete. It is not intended
Slide 3: Agenda
Agenda For personal use only Ian Narev, CEO – Company Update David Craig, CFO – Financial Overview Ian Narev, CEO – Summary and Outlook Questions and Answers 3
Slide 4: Snapshot – 1H12 Results
Additional Information Snapshot – 1H12 Results1 For personal use only Financial Operating Performance by Division Cash earnings ($m) 3,576 +7% RBS ($m) 2,404 +7% ROE (Cash) 19.2% - BPB ($m) 897 +5% Cash EPS ($) 2.27 +6% IB&M ($m) 739 (13%) DPS ($) 1.37 +4% Bankwest ($m) 421 +14% Cost-to-Income 45.8%
Slide 5: Continuing momentum
Continuing momentum For personal use only vs Dec 11 Dec 10 Cash NPAT ($m) 3,576 7% Statutory profit ($m) 3,624 19% ROE – Cash (%) 19.2 - Cash Earnings per Share ($) 2.27 6% Dividend per Share ($) 1.37 4% 5
Slide 6: Notes
For personal use only 6 Notes
Slide 7: Effects of an unpredictable environment
Effects of an unpredictable environment Subdued system credit growth Preference for cash For personal use only % Deposits as % of financial assets 30.0 % 20.0 2012 Business Fcst 29 30 10.0 4-6% Households 3-5% 0.0 2-4% 20 19 -10.0 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Mar-08 Mar-09 Mar-10 Mar-11 Housin
Slide 8: Business unit profitability
Additional Information Business unit profitability For personal use only Operating Mvt Impairment Investment Tax & non- Cash Cash Mvt $m Performance Operating Expense Experience controlling NPAT NPAT Cash Performance interests Dec 11 Dec 10 NPAT RBS 2,404 7% (365) - (600) 1,439 1,397 3% BPB 897 5% (
Slide 9: Momentum drivers
Momentum drivers Cash NPAT ($m) For personal use only 78.9% customer satisfaction peer leading 2.74 products per customer C:I ratio to 38.3% Lending Assets 9%1 Improved margins +3% Banking income 12% Growing share of Income 7% Expense growth 3% new market inflows Flat cost
Slide 10: Notes
For personal use only 10 Notes
Slide 11: Momentum challenges
Momentum challenges Cash NPAT ($m) For personal use only Margin 9 bpts Markets income 45% since June +3% Equities & Weak equity markets Margin Lending Income 5% income 8% Expenses 10% 1,439 +10% +10% (24%) +15% +20% 551 547 1 272 336 268 RBS BPB IB&M WM NZ Bankwest 1 NZ result in NZD All
Slide 12: Notes
For personal use only 12 Notes
Slide 13: Maintaining a long term focus
Maintaining a long term focus For personal use only Investment Spend Investment Spend Profile Core $m Banking 29% 1,179 Productivity 1,075 & Growth 48% 1,020 1,036 4% Other 7% 12% Branch Refurbishment 638 Risk/Compliance 538 583 562 Technology Leader 647 537 474 541 437 FY08 FY09 FY10 FY11 1H12 1st
Slide 14: Building a culture of productivity
Additional Information Building a culture of productivity For personal use only Productivity improvement Mortgage Services Driving productivity savings through: (Loan Servicing) Leveraging technology Bankwest Calls-to-fulfilment ratio Process transformation Continuous Improvement CFS Investmen
Slide 15: Ongoing productivity focus
Ongoing productivity focus 1 Some examples Mortgage Services For personal use only FTEs 36% CFS Back office process 1,124 Home Loans serviced per FTE2 1,500 Investment consolidation – productivity Operations 53% 942 881 Infrastructure “Lean” process re- 1,100 and Process engineering – productivit
Slide 16: Notes
For personal use only 16 Notes
Slide 17: Strong funding and liquidity
Strong funding and liquidity 62% Deposit Funded Liquidity 1 For personal use only $bn Long term 133 Other wholesale Asia 4% 1% Europe 3% US 5% 93 Australia 6% 19% Short 19% term 62% wholesale Customer Deposits Dec 10 Current 1 Group liquid holdings as at 8 February 2012 17
Slide 18: Notes
For personal use only 18 Notes
Slide 19: Results Presentation: David Craig, CFO
100 YEARS OF BANKING ON AUSTRALIA’S FUTURE Results Presentation David Craig Chief Financial Officer FOR THE HALF YEAR ENDED 31 DECEMBER 2011 For personal use only Results Presentation For the half year ended 31 December 2009 10 February Commonwealth Bank of Australia ACN 123 123 124 2010 15 FEBRUARY
Slide 20: Notes
For personal use only 20 Notes
Slide 21: Solid profit growth
Solid profit growth For personal use only Dec 11 Dec 10 Dec 11 vs $m $m Dec 10 Operating income 10,049 9,704 4% Operating expenses (4,602) (4,408) 4% Operating performance 5,447 5,296 3% Investment experience 56 35 60% Loan Impairment expense (545) (722) (25%) Tax and non-controlling interest (1,382
Slide 22: Non-cash items
Additional Information For personal use only Non-cash items Dec 11 Dec 10 $m $m Hedging and IFRS volatility Unrealised accounting gains and losses arising from the application of “AASB 139 Financial 115 (216) Instruments: Recognition and Measurement” Other Bankwest Merger related amortisation (3
Slide 23: Statutory Profit
Statutory Profit For personal use only Dec 11 Dec 10 $m $m Cash NPAT 3,576 3,335 7% Hedging and IFRS volatility 115 (216) Other non-cash items (67) (67) Statutory NPAT 3,624 3,052 19% 23
Slide 24: Other Banking Income, Trading Income and Funds & Insurance
Additional Information Trading Income For personal use only Other Banking Income $m 426 Dec 11 Dec 10 Dec 11 $m $m vs Dec 10 291 306 291 241 Commissions 1,009 985 2% Lending Fees 735 707 4% 1H10 2H10 1H11 2H11 1H12 Other 216 168 29% Funds & Insurance Income $m Sub-total 1,960 1,860 5% 1,410 1,433 1,
Slide 25: Operating Income
Operating Income +4% For personal use only 1H12 vs 2H11 +2% Average FUM 4% Funds & +4% Insurance Income 26% (4%) Insurance Other Banking +5% 3% (7%) Commissions, Fees, Other $56m Income Trading Income ($50m) 17% IFRS hedging reclassification $90m Net Interest 4% +5% +1% Volume $237m Income
Slide 26: Group NIM movement and Australia NIM
Additional Information Group NIM 12 month movement Australia NIM For personal use only bpts bpts 12 (6) 217 (2) 215 231 229 212 (5) 4 221 224 219 218 221 214 213 211 204 209 209 1H11 Assets & Funding Increased Other IFRS 1H12 Dec 09 Jun 10 Dec 10 Jun 11 Dec 11 Mix Costs Liquids Volatility Underlying
Slide 27: Higher funding costs impacting Group NIM
Higher funding costs impacting Group NIM bpts For personal use only Group NIM (10) 225 5 (6) 219 (4) (4) 215 (4) 3 215 209 209 2H11 Assets & Mix Wholesale Deposit Increased Other1 IFRS 1H12 funding funding Liquids Volatility Underlying IFRS 1 Includes New Zealand and other unallocated items 27
Slide 28: Investment Spend
Additional Information Investment Spend For personal use only $m 1,179 1,075 1,036 1,020 486 785 378 410 615 647 527 229 697 626 693 405 418 258 FY07 FY08 FY09 FY10 FY11 1H12 Expensed Capitalised 28
Slide 29: Continued cost discipline
Continued cost discipline For personal use only $m +4% 76 39 61 18 +8% +3% +8% +3% Includes transition to Includes one-off 4,602 compliance costs and new CBD office Centenary year 4,408 premises at community support Darling Quarter programme 1H11 Staff IT Occupancy & Other 1H12 Equipment 29
Slide 30: Risk-rated portfolio, PD migration and arrears
Additional Information PD Ratings Migration Risk-Rated Portfolio Loan impairment expense to gross loans For personal use only 11 bpts Consumer 1 6 37 Exposures ($bn) 1 4 28 9 23 22 18 20 19 14 Total Upgrades 13 15 19 Downgrades - excluding defaults Total Defaults 24 Net 29 Mar 09 Mar 10 Mar 11 Sep 0
Slide 31: Sound credit quality
Sound credit quality Loan impairment expense to gross loans Consumer Arrears For personal use only bpts CBA Group 1 5.0% 30+ Days Six months annualised 4.0% (basis points) Personal Loans 3.0% 85 Credit Cards 2.0% Home Loans 1.0% 61 55 0.0% Dec 08 Jun 09 Dec 09 Jun 10 Dec 10 Jun 11 Dec 11 CBA domesti
Slide 32: Impaired assets and provisions vs peers
Additional Information 1 Impaired Assets to GLAs Individual Provisions to Impaired Assets For personal use only 1.38% 44.7% 1.32% 2 36.0% 30.4% 0.92% 24.2% 0.88% CBA Peer 3 Peer 2 Peer 1 CBA Peer 3 Peer 1 Peer 2 CBA at 31 December 2011, Peers at 30 September 2011 CBA at 31 December 2011, Peers at 30
Slide 33: Provisioning
Provisioning For personal use only Individual Provisions Collective Provisions $m $m 3,327 Overlay Dec 11 vs 3,043 2,984 movement Jun 11 $m Economic overlay Overlay 1,211 - 1,049 970 unchanged 2,169 2,125 2,097 Lower modelled outcome as credit (8) quality improves 922 Bankwest 704 598 528 Amortisati
Slide 34: Retail Banking Services and Home Loan Market Share
Additional Information Home Loan Market Share For personal use only Retail Banking Dec 11 Jun 11 Dec 11 vs Dec 11 vs Services $m $m Dec 10 Jun 11 25.87% 28% Home loans 1,470 1,533 7% (4%) 26% Consumer finance 914 866 9% 6% 24% Retail deposits 1,334 1,302 2% 2% 22% 23.96% 18.76% Distribution 176 156
Slide 35: Retail Banking Services
Retail Banking Services 1H12 vs 2H11 Operating Performance RBS Margin For personal use only Segment Income bpts 269 6% 256 239 234 233 239 2% 223 230 1% 1% 0% (4%) Home Consumer Retail Income Costs Operating Loan Finance Deposits Performance 1H06 1H07 1H08 1H09 1H10 1H11 2H11 1H12 Retail Deposit Mix
Slide 36: Notes
For personal use only 36 Notes
Slide 37: Increase in retail funding costs since June
Increase in retail funding costs since Jun 07 For personal use only Basis Risk 38% x 1.75% Wholesale Funding Deposit Funding 62% x 1.57% Jun 07 Dec 07 Jun 08 Dec 08 Jun 09 Dec 09 Jun 10 Dec 10 Jun 11 Jan 11 Dec 12 Current Increase in Wholesale Funding1 1.30% 1.75% Increase in Deposit Funding 1.45% 1
Slide 38: Business & Private Banking and Institutional Banking & Markets
Additional Information For personal use only Business & Private Dec 11 Dec 11 vs Institutional Banking & Dec 11 Dec 11 vs Banking $m Dec 10 Markets $m Dec 10 Corporate Financial Services 561 15% Institutional Banking 959 8% Regional and Agribusiness 247 12% Markets 205 (45%) Local Business Banking 4
Slide 39: BPB and IB&M Operating Performance
Corporate 1H12 Operating Performance – BPB 1H12 Business Lending Growth1 For personal use only Segment Income 1H12 vs 1H11 15% 5% 12.1% Bankwest total (2.6%) 12% 4% 8% 3% 6.9% 5.3% 5% 3.4% 2.8% (8%) (9.5%) BPB IB&M BWA BWA target CBA System CFS RAB LBB Private Equities Income Costs Operating legacy
Slide 40: Wealth Management
Additional Information For personal use only Wealth Management Dec 11 Dec 11 vs $m Dec 10 CFSGAM 379 - Colonial First State 296 (13%) CommInsure 343 (3%) Other (1) - Net operating income 1,017 (5%) Operating expenses (680) 10% Tax (88) (29%) Underlying profit after tax 249 (24%) Investment experienc
Slide 41: Wealth Management
Wealth Management 1H12 Operating Performance Platform* Quarterly Netflows For personal use only Segment Income 1H12 vs 1H11 $m 10% 1,220 0% 919 828 757 729 (3%) (5%) (13%) (26%) CFSGAM CFS CommInsure Income Costs Operating Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Performance * FirstChoice & Custom Solutio
Slide 42: Australian Deposits and Term maturity profile
Additional Information Australian Deposits Term maturity profile1 For personal use only $bn 372 $bn Weighted Average Maturity 3.6yrs 297 234 251 6 14 5 5 20 13 16 12 15 13 Peer 1 CBA/BWA Peer 2 Peer 3 FY 2012 2013 2014 2015 2016 >2016 Source: APRA Household Business and other Long Term Wholesale Deb
Slide 43: Funding & Liquidity
Funding & Liquidity For personal use only Funding Liquidity 2 $bn Source of funds Use of funds $bn 10 (16) 133 62% Deposit funded 7 Internal (11) 59 RMBS 21 (13) Bank, NCD, 34 Bills, RMBS, Supra Regulatory 2 Minimum Cash, Govt, 4 (4) $53bn 40 Semi-Govt IFRS & FX Equity Customer New long New short Li
Slide 44: December 2011 Basel III Common Equity
Additional Information December 2011 Basel III Common Equity For personal use only 1.2% 9.3% 1.0% 7.7% (0.9%) (0.4%) 0.5% 0.2% 7.1% 5 6 Basel II Deductions 1 Risk Weighted Dividend Other 3 Basel III Deductions Risk Weighted Basel III Dec 11 Assets 2 (net of DRP) Additional Assets Estimated Requireme
Slide 45: Strong capital position
Strong capital position Tier 1 Capital Movement For personal use only 13.2% Tier 1 Capital 9.9% 10.0% 0.3% 0.4% 9.7% 9.9% UK FSA equivalent of 13.2% Dec 10 Jun 11 Organic 1 Other 2 Dec 11 Dec 11 growth UK FSA Common Equity 7.7% Basel III Common Equity Ratio 2.2% 9.3% 7.7% (0.6%) Well placed
Slide 46: Notes
For personal use only 46 Notes
Slide 47: Results Presentation: Ian Narev, CEO
100 YEARS OF BANKING ON AUSTRALIA’S FUTURE Results Presentation Ian Narev Chief Executive Officer David Craig Chief Financial Officer FOR THE HALF YEAR ENDED 31 DECEMBER 2011 For personal use only Results Presentation For the half year ended 31 December 2009 10 February Commonwealth Bank of Australi
Slide 48: Economic forecasts
Additional Information For personal use only As at June* 2008 2009 2010 2011 2012 (f) 2013 (f) Credit Growth % – Total 11.7 3.1 3.2 2.7 3-5 5-7 Credit Growth % – Housing 9.5 6.5 8.0 6.0 4-6 5-7 Credit Growth % – Business 16.9 0.5 -3.9 -2.1 2-4 5½-7½ Credit Growth % – Other Personal 3.4 -7.0 3.1 0.3
Slide 49: Outlook
Outlook For personal use only Continued volatility Scenario based approach with conservative settings Australian economy Fundamentals remain strong Not immune from overseas challenges: actual and perceived Volatility and weak credit growth to continue Funding costs to continue to incre
Slide 50: Notes
For personal use only 50 Notes
Slide 51: A strong & sustainable business model
A strong & sustainable business model For personal use only Investing in technology Strong funding & liquidity Total Investment Spend profile Deposit Funding Liquids $m Spend (% of total) $bn 1,179 133 1,036 62% Core 60% 93 Banking 89 2nd half 638 Productivity 29% 562 56% & Growth 48% 1st half 541 6
Slide 52: Notes
For personal use only 52 Notes
Slide 53: Additional Media Presentation Slides
100 YEARS OF BANKING ON AUSTRALIA’S FUTURE ADDITIONAL MEDIA Results Presentation PRESENTATION SLIDES FOR THE HALF YEAR ENDED 31 DECEMBER 2011 For personal use only Results Presentation For the half year ended 31 December 2009 10 February Commonwealth Bank of Australia ACN 123 123 124 2010 15 FEBRUAR
Slide 54: Return on Equity (Cash)
Additional Information For personal use only Return on Equity (Cash) 21.5% 21.7% 20.4% 19.5% 19.2% 18.8% 18.7% 15.8% 1.1% 1.0% Return On Assets 2005 2006 2007 2008 2009 2010 2011 1H12 54
Slide 55: Bank profitability
Bank profitability 1 % ROE CBA Ranking For personal use only (Amongst ASX 100 companies) Indonesia China India CBA Rank2 Russia Australia Market Capitalisation (ASX) 2nd Canada Singapore Dividends Declared 2nd Spain France Taxes Paid 3rd Korea Britain Return-on-Equity (ROE) 32nd US Germany Return-on
Slide 56: Notes
For personal use only 56 Notes
Slide 57: Increase in retail funding costs since June
Increase in retail funding costs since Jun 07 For personal use only Increase in home + 1.64% loan (SVR) rate Increase in home +1.34% loan (SVR) rate Basis Risk + 1.39% +1.24% Basis Risk Wholesale +1.75% Wholesale Funding Funding +1.30% 38% 40% Deposit Deposit Funding Funding +1.57% +1.45% 62% 60% Ju
Slide 58: Notes
For personal use only 58 Notes
Slide 59: Stakeholders
Stakeholders Customer Product Holdings1 For personal use only 11.0m Super fund unit holders 4.3m 10.0m ? 3.0m 2.0m 4.0m 1.2m 1.0m 1.8m 500k 600k 360k 800k 52k Home Loans Credit Cards Retail savings CommInsure Personal Loans Business Funds CommSec Other Shareholders Employees and transactions relatio
Slide 60: Strong contributor to Australian economy
Strong contributor to Australian economy For personal use only Profitable bank Strong balance sheet AA- credit rating Attracts Debt & Equity investors at Safe place to deposit money lower cost and higher volume and transact Enables ample cost Pay good return to millions effective lending of deposit
Slide 61: Where does our income go?
Strong contributor to Australian economy Where does our income go? For personal use only Calendar 2011 Loan impairment ($bn) Expenses Cost of lending across Serving 14 million the economy customers 4.2 1.1 Tax expense 3.2 Australia’s 3rd largest tax payer1 4.8 2.0 Salaries Employing 5.1 Retained for
Slide 62: Supplementary Slides
100 YEARS OF BANKING ON AUSTRALIA’S FUTURE Results Presentation SUPPLEMENTARY SLIDES FOR THE HALF YEAR ENDED 31 DECEMBER 2011 For personal use only Results Presentation For the half year ended 31 December 2009 10 February Commonwealth Bank of Australia ACN 123 123 124 2010 15 FEBRUARY 2012 | COMMONW
Slide 63: Index
Index For personal use only Strategy 63 Business Performance 76 Risk and Credit Quality 95 Capital, Funding & Liquidity 113 Economic Indicators 124 Housing 141 63
Slide 64: CBA Overview
CBA Overview ROE (cash) Largest Australian Bank by market capitalisation For personal use only 21.5% 21.7% 20.4% AA- Credit Rating 18.8% 15.8% 18.7% 19.5% 19.2% Tier 1 Capital 9.9%; or 13.2% UK FSA Total Assets of $702bn 14 million customers 2005 2006 2007 2008 2009 2010 2011 1H12 52,000
Slide 65: Key growth opportunities
Key growth opportunities For personal use only Core Banking + technology leverage Improved customer satisfaction + peer leading products-per-customer ROE and PACC focus – not chasing volume for volume’s sake Business Banking Growth Strategy – well-placed for upturn in system growth Wealth
Slide 66: Products per Customer
Products per Customer For personal use only Average Number of Banking and Finance Products held by Customers (at the Financial Institution) 2.80 Average Products Held at Financial Institution CBA Group 2.74 CBA 2.70 Westpac Group 2.69 Peer 3 ANZ Group 2.60 2.65 Peer 1 NAB Group 2.50 2.49 Peer 2 2.40
Slide 67: Products per Customer (II)
Products per Customer (II) Average Product Composition between Commonwealth Bank, For personal use only the 4 Major Banking Groups and Bankwest 2.74 2.69 2.65 Insurance 0.35 0.30 0.29 2.49 Insurance Personal Lending 0.24 2.29 Home loan 0.20 0.25 0.08 0.22 0.23 Personal Lend 0.33 Cards 0.62 0.74 0.68
Slide 68: Core Banking Modernisation
Core Banking Modernisation For personal use only 2008 2009 2010 2011 2012 Largely Next Step complete Customer Retail Business Pre-Launch Records Deposits & Deposits & Lending Transactions Transactions Proof-of- Largest migration in 11 million Over 1 million Migration of concept Australian
Slide 69: Core Banking Modernisation benefits
Core Banking Modernisation For personal use only Enhanced Customer Experience Real-time banking, 24x7 Instant account opening Customised product offers Greater Efficiency Straight through processing Faster speed-to-market Lower cost-to-income Improved Risk Management Greater s
Slide 70: CBA in Asia – strong growth
CBA in Asia – strong growth For personal use only 2 Customer Numbers Cash NPAT (proprietary) 1 Lower funds under Drop in trading income Growth in PTBC and Growth in HZB profit management driven by mainly due to adverse PTCL performance offset by QLB declining equity markets market conditions +53% 26
Slide 71: CBA in Asia
CBA in Asia Country Representation as at December 2011 For personal use only China Bank of Hangzhou (20%) – 113 branches Qilu Bank (20%) – 81 branches County Banking (84%) – 3 Banks in Henan Beijing Province Beijing Representative Office Jinan BoCommLife JV (37.5%) – >150 distribution points Henan P
Slide 72: Sustainability progress
Sustainability progress People For personal use only Created strong momentum around our Diversity goals, particularly reflected in the significant progress towards our target of 35% of women in senior management roles by December 2014 (30.2% as at December 2011). Refreshed the Group’s Values and
Slide 73: Sustainability scorecard
Sustainability scorecard Metric 1H12 2011 2010 2009 For personal use only Customers Customer satisfaction Roy Morgan MFI retail customer satisfaction % (1) 78.9 75.2 75.6 73.0 (6-month moving average) (ranked 3rd) (ranked 4th ) (ranked 2nd) (ranked 3rd) Customer satisfaction DBM Business Financial S
Slide 74: Leading position, leading platforms
Leading position, leading platforms For personal use only Now integrated into Core Banking for real time banking 24x7 CommBiz Secure, online business and FirstChoice corporate Leading wealth banking platform online CommSec functionality 15 yrs as the market leading NetBank online retail Market leadi
Slide 75: Awards
Awards Catalyst Award for Gender Diversity Initiatives Australian’s Financial Institution of the Year – Major Bank For personal use only Chief Information Officer of the Year (Michael Harte) Chief Risk Officer of the Year (Alden Toevs) Bank of the Year 2011 Innovative Mortgage Product of
Slide 76: Index
Index For personal use only Strategy 63 Business Performance 76 Risk and Credit Quality 95 Capital, Funding & Liquidity 113 Economic Indicators 124 Housing 141 76
Slide 77: Dividends per Share
Dividends per Share For personal use only Interim 84% Final 84% Payout Ratio (cash) 88% 87% 61% 62% 63% 63% 84% 74% 61% cents 107 149 113 153 113 115 120 170 132 188 137 2007 2008 2009 2010 2011 2012 77
Slide 78: Business Unit Summary
Business Unit Summary Total Operating Income Expenses For personal use only $m 79 10,049 $m 66 (96) 103 7 2 (23) 54 4,602 230 (13) 25 10 22 73 9,704 4,408 1H11 RBS BPB IB&M WM NZ BW Other 1H12 1H11 RBS BPB IB&M WM NZ BW Other 1H12 Impairment Expense Cash Earnings $m $m 120 3,576 112 (25) (160) 49 (8
Slide 79: Market shares
Market shares Dec 11 Jun 11 Dec 10 For personal use only CBA BWA Combined CBA + BWA CBA + BWA Home loans 22.0% 3.9% 25.9% 25.8% 26.0% Credit cards 1 20.4% 2.7% 23.1% 22.9% 22.7% Personal lending 13.7% 0.9% 14.6% 14.8% 14.7% Household deposits 26.4% 3.0% 29.4% 30.0% 30.5% Retail deposits 22.7% 3.7% 2
Slide 80: RBS – six month periods
RBS – 6 month periods Dec 11 vs For personal use only $m Dec 11 Jun 11 Dec 10 Dec 10 (6 months) Net interest income Home loans 1,372 1,441 1,265 8% Consumer finance 680 660 621 10% Retail deposits 1,137 1,115 1,107 3% 3,189 3,216 2,993 7% Other banking income Home loans 98 92 106 (8%) Consumer finan
Slide 81: RBS
RBS For personal use only Cash Earnings $m Dec 11 vs Dec 10 Balances up 3% $m Home Loans 1,470 7% Roll off of lower margin 27 (73) fixed rate loans 27 Solid volume growth in 77 (112) Consumer both personal loans and 18% 914 9% 2% Finance credit cards 99 5% Margins improved 9% (3) 1,439 Bal
Slide 82: BPB – six month periods
BPB – 6 month periods Dec 11 vs For personal use only $m Dec 11 Jun 11 Dec 10 Dec 10 (6 months) Net interest income Corporate Financial Services 231 231 238 (3%) Regional & Agribusiness 142 139 136 4% Local Business Banking 281 269 264 6% Private Bank 91 94 86 6% Equities and Margin Lending 84 87 91
Slide 83: BPB
BPB For personal use only Dec 11 Cash Earnings $m vs Key segments Dec 10 $m 66 (22) 25 (20) Corporate Financial Increased lending 561 15% balances and higher Services new business margins 551 Regional & Increased deposit 247 12% balances in a highly Agribusiness competitive market 9% 3% (19%)
Slide 84: IB&M – six month periods
IB&M – 6 month periods Dec 11 vs For personal use only $m Dec 11 Jun 11 Dec 10 Dec 10 (6 months) Net interest income Institutional Banking 567 528 545 4% Markets 121 115 105 15% 688 643 650 6% Other banking income Institutional Banking 392 410 345 14% Markets 84 154 265 (68%) 476 564 610 (22%) Total
Slide 85: IB&M
IB&M Cash Earnings Dec 11 For personal use only $m vs Dec 10 $m Higher leasing 69 (165) Institutional income, lending 160 (5) 547 959 8% Banking margins and deposit 498 3% volumes 8% Challenging market Markets 205 (45%) conditions and (10) unfavourable CVA* (45%) Total banking 2% (83%) 1,164 (8%
Slide 86: WM – six month periods
WM – 6 month periods Dec 11 vs For personal use only $m Dec 11 Jun 11 Dec 10 Dec 10 (6 months) Net operating income CFSGAM 379 378 378 0% Colonial First State 296 347 342 (13%) CommInsure 343 283 352 (3%) Other (1) (1) - n/a 1,017 1,007 1,072 (5%) Operating expenses CFSGAM (224) (201) (190) 18% Colo
Slide 87: Wealth Management
Wealth Management Dec 11 For personal use only Cash Earnings $m vs Dec 10 Lower FUM (7% to $m $142bn) due to uncertain global 359 1 (46) environment; Expansion of CFSGAM 379 - capabilities and - distribution (9) (1) (61) Offset by improved (13%) 36 margins and strong (3%) (7) 272 investment -
Slide 88: New Zealand – six month periods
New Zealand – 6 month periods Dec 11 vs For personal use only NZ$M Dec 11 Jun 11 Dec 10 Dec 10 (6 months) Net interest income ASB 602 569 538 12% Other (8) (12) 2 Large Total NII 594 557 540 10% Other banking income ASB 161 189 178 (10%) Other (17) (17) (13) 31% Total OBI 144 172 165 (13%) Total ban
Slide 89: New Zealand
New Zealand For personal use only Dec 11 Cash Earnings NZ vs $m Dec 10 NZ$m Increased income ASB 787 6% due to improvements 22 (13) in margin 9 (4) (9) (6) 44 336 Favourable claims 50% 14% 7% (61%) Lge experience 2% Sovereign 140 7% Significant growth in new business 293 Disciplined cost 6%
Slide 90: Bankwest – six month periods
Bankwest – 6 month periods For personal use only $m Dec 11 vs Dec 11 Jun 11 Dec 10 Dec 10 (6 months) Net interest income 748 741 679 10% Other banking income 103 102 118 (13%) Total banking income 851 843 797 7% Operating expenses (430) (441) (428) 0% Loan Impairment expense (38) (60) (49) (22%) Net
Slide 91: Bankwest
Bankwest Cash Earnings For personal use only Dec 11 $m vs $m Dec 10 11 (19) Above system home 54 (2) Banking loan growth 268 851 7% Income Higher Retail lending - margins (22%) 20% 224 Strong focus on efficiency and cost 7% Operating management (430) - Expenses offsetting volume related cost i
Slide 92: Group Cash Earnings growth
Group Cash Earnings growth +7% For personal use only $m 381 (39) 3 (194) 177 (108) 3,576 21 3,335 1H11 Net OBI FM & Expenses Investment Impairments Tax & non- 1H12 Interest Insurance Experience controlling Income interests 92
Slide 93: CFS Global Asset Management
CFS Global Asset Management For personal use only Globally: $142bn FUM1, 902 people North America Japan $1.6bn FUM $3bn FUM 5 People 7 people Asia ex Japan Middle East $14.9bn FUM $6bn FUM 117 People UK & Europe Australia & New Zealand $23.2bn FUM $93.3bn FUM 198 People 575 People 35% FUM raised fro
Slide 94: RBS home lending growth profile
RBS home lending growth profile RBS Home Loan Balance to Dec 11 External refinancing similar to prior years For personal use only $bn 5% % of Total Balances 14 (34) 28 (3) 260 265 Jun 11 New Redraw & Repayments / External Dec 11 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec fundings interest Other
Slide 95: Index
Index For personal use only Strategy 63 Business Performance 76 Risk and Credit Quality 95 Capital, Funding & Liquidity 113 Economic Indicators 124 Housing 141 95
Slide 96: Regulatory Exposure Mix
Regulatory Exposure Mix For personal use only Regulatory Credit Exposure Mix1 CBA Peer 1 Peer 2 Peer 3 Residential Mortgages 56% 40% 40% 56% Corporate, SME & Spec Lending 27% 35% 40% 31% Bank 6% 7% 11% 4% Sovereign 7% 9% 6% 5% Qualifying Revolving 3% 4% 2% 3% Other Retail 1% 5% 1% 1% Total Advanced2
Slide 97: Loan Impairment Expense
Loan Impairment Expense For personal use only 6 Months Annualised (basis points) 1 722 6 Months ($m) 55 1,383 13 313 7 28 28 189 692 2 22 722 18 21 558 6 2 441 49 545 2 155 60 38 11 35 881 17 20 21 19 428 518 530 496 -1 -7 -32 -177 Dec 09 Jun 10 Dec 10 Jun 11 Dec 11 Dec 09 Jun 10 Dec 10 Jun 11 Dec 1
Slide 98: RBS home loan book quality very sound
RBS home loan book quality very sound For personal use only Portfolio average LVR* of 44% 68% of customers paying in advance – average 7 payments Maximum LVR of 95% for new and existing lower risk customers Mortgage insurance required for high risk loans above 80% LVR LMI insurance covers entire loa
Slide 99: RBS Home Loan Portfolio Profile
RBS Home Loan Portfolio Profile For personal use only Portfolio Dec 11 Quality Dec 11 1 1 Total Balances - Spot ($bn) 343 Total Balances – Average ($bn) 340 1, 3 Total Accounts (m) 1.4 Actual Losses YTD ($m) 39 2 1 Fundings ($bn) 28 Loss Rate (% annualised) 0.02 Variable Rate (%) 86 LVR – Portfolio
Slide 100: Group Consumer Arrears
Group Consumer Arrears Credit Cards Personal Loans For personal use only 2.0% 90+ days 3.0% 90+ days 2.0% 1.0% 1.0% 0.0% 0.0% Dec 08 Jun 09 Dec 09 Jun 10 Dec 10 Jun 11 Dec 11 Dec 08 Jun 09 Dec 09 Jun 10 Dec 10 Jun 11 Dec 11 Bankwest CBA ASB Bankwest CBA ASB Home Loans First Home Buyers 2.0% 1.5% 90+
Slide 101: Consumer Arrears (RBS)
Consumer Arrears (RBS) Home Loans Home Loans by State For personal use only 2.2% 30+ Days 2.0% 90+ Days 2.0% 1.8% 1.5% 1.6% 1.0% 1.4% 1.2% 0.5% 1.0% 0.8% 0.0% 0.6% Jan-09 Jun-09 Nov-09 Apr-10 Sep-10 Feb-11 Jul-11 Dec-11 Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec ACT NSW NT QLD SA 06/07 07/0
Slide 102: Modest uptick in home loan arrears
Modest uptick in home loan arrears 1 Home Loan Arrears Dynamic Delinquency For personal use only 90+ Days % 30+ Days % 1.8% 2.5% 1.6% 1.4% 2.0% 1.2% 1.5% 1.0% 0.8% 1.0% 0.6% 0.4% 0.5% 0.2% 0.0% 0.0% Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 ACT NSW NT Month of origination QLD SA TAS 3 Months-
Slide 103: Home Loan losses remain very low
Home Loan losses remain very low For personal use only 2.5% $ Losses/Average Gross Loans Historical home loan losses have been very low, 2.0% despite cyclical movements in house prices Strong portfolio credit quality a key driver of low loss rates Mortgage losses in 1H12 for the Group were 1.5
Slide 104: Home loan expected loss scenario
Home loan expected loss scenario Expected Loss outcomes Six-month Movement For personal use only $m Expected loss $m PD stress factor 45 45 105 Property value x1 x2 x4 x6 34 No decrease $23m $28m $37m $43m 737 576 10% decrease $55m $73m $101m $123m 20% decrease $132m $185m $272m $341m Previous Close
Slide 105: Home loan – Enhanced Stress Test
Home loan – Enhanced Stress Test For personal use only Enhancements (vs Expected Loss) Key Assumptions Explicit alignment to specific macroeconomic Year 1 Year 2 Year 3 factors such as unemployment and interest Unemployment 7.0% 10.5% 11.5% rates 1 Hours under-employed 11.4% 15.8% 18.4% Assumes
Slide 106: Sector Exposure by Industry
Sector Exposure by Industry 1 For personal use only Jun 11 Dec 11 Jun 11 Dec 11 Consumer 53.1% 52.7% Agriculture 2.2% 2.1% Mining 0.8% 1.0% Manufacturing 2.0% 2.0% Energy 1.0% 1.0% Construction 1.0% 1.0% Retail & Wholesale 2.4% 2.6% Transport 1.4% 1.5% Banks 11.6% 10.9% Finance – other 3.6% 3.7% Bus
Slide 107: Sector Exposures
Sector Exposures Commercial Exposures by Sector1 Top 20 Commercial Exposures2 ($m) For personal use only BBB+ AAA to A+ to $bn to Other Total AA- A- A- BBB- A- Banks 48.5 31.4 3.2 0.5 83.6 BBB+ A- Finance Other 10.3 9.4 3.0 5.3 28.0 AA- A- Property 0.2 5.1 9.0 34.1 48.4 A- Sovereign 56.5 1.9 0.6 0.2
Slide 108: Credit Risk Weighted Assets
Credit Risk Weighted Assets Tier 1 Capital Impacts For personal use only Volume Quality Tier 1 impact Tier 1 impact (3) 11 (45bpt) (6) +4bpt (13) (2) 1 1 (8) (2) (20) Mvt Credit RWAs +$11.7bn $258.4bn Tier 1 impact - Volume (45bpt) - Quality +4bpt $246.7bn Total Tier 1 Impact (41bpt) Jun11 Corporate
Slide 109: Risk Weighted Assets – Dec Half
Risk Weighted Assets – Dec 11 Half RWA Movement For personal use only Credit Risk RWA increased 5% to $258.4b. This was primarily due to: – The Group holding more liquid assets in the Bank portfolio Tier 1 ratio Total impact – Portfolio growth, particularly in the Corporate portfolio (bpts) – Part
Slide 110: Commercial Property Market
Commercial Property Market CBD Office Supply Pipeline1 CBD Vacancy Rates For personal use only Peak Previous Current 40% % of Total Stock Market 1990s 2nd Half 1st Half FY11 FY12 35% Sydney 22.4% 8.0% 8.5% 30% Perth 31.8% 5.4% 2.5% Melbourne 25.8% 6.0% 5.8% 25% Brisbane 14.3% 6.8% 6.3% 20% Adelaide
Slide 111: Regulatory Expected Loss
Regulatory Expected Loss Dec 10 Jun 11 Dec 11 For personal use only $m $m $m CBA (ex Bankwest) Regulatory Expected Loss (EL) – before tax 4,293 4,324 4,005 Eligible Provision 1 Collective provision 2 2,029 1,994 2,050 Individually assessed provisions 2 1,343 1,255 1,202 Other provisions 25 21 21 Sub
Slide 112: Capital Assigned to Interest Rate Risk in the Banking Book
Capital Assigned to Interest Rate Risk in Interest Rate Risk Banking Book - APS117 For personal use only 54 bpts 33 bpts 62 bpts 36 bpts 40 bpts $m $1,328 $1,363 Optionality Risk $922 Basis Risk Optionality Risk $822 $776 Basis Risk Repricing and Yield Curve Risk Repricing and Yield Curve Risk Embed
Slide 113: Index
Index For personal use only Strategy 63 Business Performance 76 Risk and Credit Quality 95 Capital, Funding & Liquidity 113 Economic Indicators 124 Housing 141 113
Slide 114: Regulatory Change
Regulatory Change 2011 2012 2013 2014 2015 2016 2017 2018 For personal use only LCR, NSFR LCR, NSFR LCR – effective Timetable LCR 2011 - 2015 observation Capital - APRA and capital - draft standards APRA draft NSFR - APRA observation and review NSFR - Effective and discussion and final papers standa
Slide 115: European comparison
European comparison For personal use only Basel II Tier 1 Capital 19.7% 20% 18.1% E 18% 16% 13.9% 13.8% 14% 13.2% 12.9% 12.9% 11.9% Europe Average 12.4% 12.1% 11.9% 11.6% Tier 1 : 12.8% 12% 11.0% 10.3% Europe Average 10.1% 9.7% 10% Core Tier 11: 11% 17.5% 8% 12.9% 6% 11.9% 11.3% 10.6% 11.0% 11.0% 10
Slide 116: UK Comparison
UK Comparison Key differences between the APRA and FSA method of calculating regulatory capital. For personal use only Impact on Bank’s Item Items impacting published total capital adequacy ratio ratio if FSA rules applied Under APRA rules, the minimum Loss Given Default (LGD) for residential real
Slide 117: UK Comparison
UK Comparison The following table estimates the impact on CBA Group capital, as at December 2011, of the For personal use only differences between the APRA Basel II guidelines and those of the UK regulator, Financial Services Authority (FSA) Common Equity Tier One Total Capital (1) Capital Capital R
Slide 118: Funding
Funding Wholesale Funding by Product 62% Deposit Funded For personal use only Structured MTN 2% 1% 7% 4% 5% 12% Customer Deposits Vanilla MTN 5% Commercial Paper 4% ST Wholesale Funding 4% 38% Debt Capital LT Wholesale maturing <12 months CDs 15% 62% LT Wholesale maturing >=12 months Securitisation
Slide 119: Funded Assets
Funded Assets For personal use only $bn Jun Dec $bn 11 11 21 10 (4) 2 4 Transactions 79 82 39 Equity Savings 82 89 Long term 115 wholesale Investments 176 189 Short term Other 12 10 115 wholesale Total Customer 349 370 606 635 639 Wholesale 220 230 funding Customer Total Funding 569 600 370 Deposits
Slide 120: Funding Overview
Funding Overview For personal use only Overview Well diversified Over 62% deposit funded Weighted average maturity of 3.6 years Responsible and responsive issuer with commitment to ongoing direct investor engagement Ratings across agencies and markets declining – CBA remains in upper echel
Slide 121: Replicating portfolio
Replicating portfolio For personal use only Actual and Forecast Scenario* 8% Forecast* 7% Replicating Portfolio Yield 6% 5% 4% Official Cash Rate 3% 2% 1% 2001 Current 2012 * Indicative forecast of the replicating portfolio in relation to hypothetical movements in the official cash rate, assuming th
Slide 122: 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 6% 6% Capital Cash 7% 10% Capital Home Loans 19% Home Loans 14% 48% Deposits 50% Deposits Other Lending 38% Other Lending 45% 12% Long Term Other Fair 13% Long Term 16% Value As
Slide 123: 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 52% of balance sheet is home loans, which are stable/long Cash 3% term 6% Capital Trading securities and other fair value
Slide 124: Index
Index For personal use only Strategy 63 Business Performance 76 Risk and Credit Quality 95 Capital, Funding & Liquidity 113 Economic Indicators 124 Housing 141 124
Slide 125: Economic summary
Economic CBA Economists summary of key indicators Summary For personal use only As at June 2008 2009 2010 2011 2012 (f) 2013 (f) Credit Growth % – Total 11.7 3.1 3.2 2.7 3-5 5-7 Credit Growth % – Housing 9.5 6.5 8.0 6.0 4-6 5-7 Credit Growth % – Business 16.9 0.5 -3.9 -2.1 2-4 5½-7½ Credit Growth %
Slide 126: Credit Drivers
Credit Drivers For personal use only CREDIT & SPENDING Asian exposure provides an offset to US % % and European weakness. (annual % change) 30 30 CBA Commodity-income-capex-export (f) drivers underpin positive medium-term Credit economic backdrop. 20 20 Balance sheets in aggregate are in good
Slide 127: Housing Credit
Housing Credit For personal use only HOUSING DEMAND & SUPPLY '000 '000 TIME TO BUY A DWELLING Index Index "Good Demand time" 200 200 140 140 150 150 100 100 Supply (rolling 4-qtr sum) "Bad time" Source: Melbourne Institute 60 60 100 100 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Sep-90 Sep-94 Sep-98
Slide 128: Other Personal Credit
Other Personal Credit For personal use only PERSONAL CREDIT & SAVINGS JOB CONCERNS & CREDIT % %pa %ch Net % -6 20 36 -20 Other Oth personal credit personal (3 month ended, lhs) credit (rhs) 2 10 18 17 10 0 0 53 Savings Job concerns* ratio (net % exp unemployment to rise) (inverse, lhs) *Source: (inv
Slide 129: Business Credit
Business Credit For personal use only BUSINESS CREDIT % (annual % change) % 24 45 Reintermediation Business spike credit (lhs) 16 26 8 8 0 -11 Business CBA investment (f) (rhs) -8 -30 Sep-88 Sep-93 Sep-98 Sep-03 Sep-08 Sep-13 Deleveraging by large corporates offsetting underlying credit growth fro
Slide 130: The Consumer
The Consumer Households worry about their finances But income growth is strong For personal use only PERSONAL CIRCUMSTANCES SENTIMENT & INCOME % (net % of respondents) % %pa 40 40 16 200 Disposable income (lhs) 20 20 8 165 Better in six months time Index 0 0 0 130 Better than six months ago -8 95 -2
Slide 131: The Unhappy Consumer
The Unhappy Consumer For personal use only PERSONAL CIRCUMSTANCES % (net % of respondents) % 40 40 Households generally are unhappy. 20 Better in six 20 Perceptions about household months time finances (which are important in Better driving spending decisions) are soft 0 0 than six despite solid
Slide 132: The Unhappy Consumer
The Unhappy Consumer For personal use only GREATEST FEAR Sentiment weakness in the face of % (% of respondents) % 30 30 income strength is surprising given that Unable to pay most household concerns have a Losing job mortgage/rent financial basis. Inability to provide necessities General feeling
Slide 133: The Unhappy Consumer
The Unhappy Consumer For personal use only Key influences pushing savings were: – wealth rebuild post GFC; – strong income growth – higher house prices; – job security fears. Some of these reasons for higher savings persist. So any fall in savings rate if income growth slows likely to be modes
Slide 134: Global Backdrop
Global Backdrop Sovereign debt concerns remain elevated Risk of structural step down in growth rates For personal use only SPREAD TO GERMAN BONDS GDP GROWTH & DEBT LEVELS % (10 year government bond) % %pa (1790-2009) %pa 12 12 6 6 Portugal 9 9 Advanced 4 economies 4 (median) Ireland 6 6 Italy 2 2 Sp
Slide 135: Asian Support
Asian Support For personal use only EFFECT OF EZ TURBULENCE TRADE & PRODUCTION (Jan'08=100) (devation from pre-crisis baseline after 2 yrs) Index Index % % 0 0 140 140 Emerging Asia industrial production 120 120 -1 -1 100 100 -2 -2 Advanced 80 economy 80 imports Source: IMF "Earthquake Scenario" Sou
Slide 136: Australia in Perspective
Australia in Perspective For personal use only Growth outperformance Stronger labour market Index Real GDP % Unemployment rate (Sep”08 = 100) 12 106 Australia 10 US US Euro Zone 102 8 UK UK NZ 6 Australia 98 Europe Japan 4 Japan 94 2 90 0 Mar-08 Mar-09 Mar-10 Mar-11 Jan-05 Jan-07 Jan-09 Jan-11 Sourc
Slide 137: Improving Balance Sheets
Improving Balance Sheets For personal use only % HOUSEHOLD INDICATORS BUSINESS INDICATORS (change since mid 2008) % (change since mid 2008) 8 9 4 0 0 -9 -4 -18 H/hold Wages Savings Debt H/hold Business Profit Return on Debt Business debt as % share rate service credit debt as % share capital service
Slide 138: Policy protection
Policy protection For personal use only Interest rates Fiscal policy can be used OFFICIAL INTEREST RATES GENERAL GOVERNMENT NET DEBT % % % (% of GDP) % 100 100 8 8 Advanced G-20 75 75 6 6 Australia Canada 50 50 Emerging G-20 4 4 25 25 NZ Australia US 2 2 0 0 Euro Japan UK Source: IMF Fiscal Monitor
Slide 139: The Mining Boom
The Mining Boom AUSTRALIA: SOME KEY INDICATORS For personal use only Index (1986/87=100) Index 320 1200 Capex pipeline (rhs) 240 800 Terms of trade (lhs) Resource exports 160 (lhs) 400 80 0 Mar 84 Mar 91 Mar 98 Mar 05 Mar 12 Mar 90 Mar 97 Mar 04 Mar 11 Mar 89 Mar 96 Mar 03 Mar 10 Robust income gro
Slide 140: New Zealand
New Zealand For personal use only % NZ GDP GROWTH Some signs of underlying momentum but 7 7 growth remains modest. Annual average % (f) 5 5 Support from earthquake reconstruction delayed until later in 2012 as aftershocks continue. 3 3 Household caution lingering. 1 1 Government austerity af
Slide 141: Index
Index For personal use only Strategy 63 Business Performance 76 Risk and Credit Quality 95 Capital, Funding & Liquidity 113 Economic Indicators 124 Housing 141 141
Slide 142: Australian Mortgage Market
Australian Mortgage Market Australia For personal use only Principal and interest amortising 25/30 year loan Variable interest rate set at bank’s discretion Limited pre-payment penalty Full recourse to borrower No tax deduction for owner occupied housing Lenders Mortgage Insurance (LMI)
Slide 143: Australia well placed relative to typical housing market concerns
Australia well placed relative to typical housing market concerns For personal use only Typical concerns Current position in Australia Unsustainable asset prices Prices supported by the excess of demand over supply Australia’s population continues to grow at above average rates Supply-side res
Slide 144: House prices undergoing a modest correction
House prices undergoing a modest correction For personal use only Established House Prices - Index Established House Prices - Growth HOUSE PRICES 3 Years 12 mths Index (Mar 05= 100) Index 200 200 to to Dec Mvt (%) Dec 11 Dec 11 Qtr Perth 175 175 Sydney 16.8% (2.7%) (1.0%) Melbourne Melbourne 21.1% (
Slide 145: House Prices & the Cycle
House Prices & the Cycle For personal use only The adjustment process ESTABLISHED HOUSE PRICES HOUSE PRICES Index (Sep'04 = 100) Index Index (peak=100) Index 170 170 Source: Rismark Source: ABS/CBA Jun Top 20% '90 of suburbs 100 100 145 145 Mar '95 Middle 60% 97 97 of suburbs 120 120 Current Mar Bot
Slide 146: Strong economic fundamentals minimize the downside risk to house prices
Strong economic fundamentals minimize the downside risk to Australian house prices Population growth has slowed But housing demand remains above supply For personal use only POPULATION DRIVERS HOUSING DEMAND & SUPPLY '000 '000 '000 '000 450 450 Demand 200 200 Net 300 migration 300 150 150 150 150 Su
Slide 147: Australian Housing Market vs US
Australian Housing Market vs US CBA/Australia United States For personal use only Unemployment ~5% ~8-10% No-Recourse Lending No Yes Variable vs Fixed ~85%/15% ~15%/85% Adjustable Rate Loans Minimal Widespread 1 Sub-Prime (% of mkt) Minimal ~36% 1 Securitisation % Minimal ~55% Account Ownership Reta
Slide 148: Notes: sources for results
Notes For personal use only Sources for results outlined in this pack 1 Retail MFI Customer Satisfaction – Roy Morgan Research. Australian Population 14+, % “Very Satisfied” or “Fairly Satisfied” with relationship with that main financial institution. 6 month rolling average. Top rated peer based on
Slide 149: Results Presentation
100 YEARS OF BANKING ON AUSTRALIA’S FUTURE Results Presentation Ian Narev Chief Executive Officer David Craig Chief Financial Officer FOR THE HALF YEAR ENDED 31 DECEMBER 2011 For personal use only Results Presentation For the half year ended 31 December 2009 10 February Commonwealth Bank of Australi
Commonwealth Bank of Australia — H1 2012 Earnings Presentation on 6ix