Commonwealth Bank Of Australia · ASX:CBA

Commonwealth Bank Of Australia — FY2011 Earnings Presentation

136 slides from Commonwealth Bank Of Australia's earnings presentation, Aug 10, 2011

1. Slide 1: Results Presentation for the Full Year Ended 30 June 2011

   DETERMINED TO BE BETTER THAN WE‟VE EVER BEEN. Results Presentation Ralph Norris Chief Executive Officer David Craig Chief Financial Officer FOR THE FULL YEAR ENDED 30 JUNE 2011 For personal use only Results Presentation For the half year ended 31 December 2009 10 February Commonwealth Bank of Austra

2. 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, 10 August 2011. It is information given in summary form and does not purport to be complete. It is not intended t

3. Slide 3: Agenda

   Agenda For personal use only  Ralph Norris, CEO – Company Update and Outlook  David Craig, CFO – Financial Overview  Questions and Answers 3

4. Slide 4: Snapshot – FY11 Results

   Additional Information Snapshot – FY11 Results* For personal use only Financial Operating Performance by Division Cash earnings ($m) 6,835 +12% RBS ($m) 4,605 +8% ROE (Cash) 19.5% +80bpts BPB ($m) 1,717 +8% Cash EPS ($) 4.39 +11% IB&M ($m) 1,639 (7%) DPS ($) 3.20 +10% Bankwest ($m) 771 +12% Cost-to-

5. Slide 5: Overview

   Overview For personal use only  A good result in a difficult year  Continued disciplined approach to execution of strategy underpins result  Strong financial position – capital, funding and provisions  Supporting our customers in uncertain times  Challenging year ahead 5

6. Slide 6: Return on Equity (Cash)

   Additional Information For personal use only Return on Equity (Cash) 21.5% 21.7% 20.4% 18.8% 19.5% 18.7% 15.8% 2005 2006 2007 2008 2009 2010 2011 6

7. Slide 7: Another good financial result

   Another good financial result For personal use only Jun 11 vs Jun 10 Cash NPAT ($m) 6,835 12% Statutory NPAT ($m) 6,394 13% ROE - Cash 19.5% +80bpts Cash EPS ($) 4.39 11% Dividend per Share ($) 3.20 10% 7

8. Slide 8: Notes

   For personal use only 8 Notes

9. Slide 9: Strategy delivering results

   Strategy delivering results Customer Satisfaction Business Banking For personal use only  Gap to No. 1 closed from 12.5% to 3.6%  Market share up from 12.1% to 18.1%  Highest products-per-customer of peer group*  Significant improvement in satisfaction  No 1 in key Wealth & Business segments 

10. Slide 10: Notes

    For personal use only 10 Notes

11. Slide 11: Customer Satisfaction

    Customer Satisfaction 1 2 Retail MFI Customer Satisfaction Products per customer For personal use only Major Banks Major Banks Rank 2.70 1st 2.64 78.8% 77.4% 2.60 75.2% 2.50 Average number of products at the Financial Institution 2.40 2.30 64.9% 2.20 2.10 Rank 2.08 4th 2.00 Jun 06 Jun 11 Jun 07 Jun

12. Slide 12: 2011 Awards

    Additional Information 2011 Awards For personal use only  Bank of the Year 2011  Australian‟s Financial Institution of the Year – Major Bank  Credit Card Issuer of the Year  Chief Information Officer of the Year (Michael Harte)  Banking Website of the Year  Chief Risk Officer of the Year (Alde

13. Slide 13: Business Banking Growth Strategy

    Business Banking Growth Strategy BPB For personal use only Interest Earning Assets  Investment delivering dividends: $bn 7% 67.7  Business Bankers in branches 15% 63.1 55.0  Extended footprint  CommBiz  Supporting our business customers with FY09 FY10 FY11 above system lending growth BPB Cash N

14. Slide 14: Leading position, leading platforms

    Additional Information Leading position, For personal use only leading platforms 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 onl

15. Slide 15: Core Banking – transformational change

    Core Banking – transformational change For personal use only 2008 2009 2010 2011 2012 Underway Next Step Customer Retail Business Pre-Launch Records Deposits & Deposits & Lending Transactions Transactions  Largest migration in  Migration of  Migration of  Proof-of- Australian banking  11 millio

16. Slide 16: CBA in Asia – strong growth

    Additional Information CBA in Asia – strong growth For personal use only 2 Customer Numbers Cash NPAT (proprietary) 1 Strong Hangzhou result Strong performance and VIB contribution PTBC branch/front offset by strengthening AUD demand in First State included from line expansion and and investment in

17. Slide 17: CBA in Asia

    CBA in Asia Country Representation For personal use only New developments in FY11 China Bank of Hangzhou (20%) – 107 branches Qilu Bank (20%) – 81 branches Beijing County Banking (84%) – 3 Banks Beijing Representative Office Jinan Henan BoCommLife JV (37.5%) Opened 3 County Shanghai Tokyo Banks in H

18. Slide 18: Our results in context

    Additional Information Our results in context For personal use only ROE 2 CBA 28.8 30.9 1 2 28.0 28.1 Rank 19.5 Market Capitalisation (ASX) 2nd Return-on-Assets (ROA) 69th CBA 3 BHP Rio Tinto Woolworths Telstra Return-on-Equity (ROE) 26th 2 ROA Dividends Declared 2nd 15.2 13.7 11.4 9.8 Taxes Paid 4t

19. Slide 19: Transformational change - scorecard

    Transformational change - scorecard Jun 06 Jun 11 Progress For personal use only Customer Satisfaction Retail 1 64.9% 75.2%   3 Business - DBM n/a Ranked equal 2nd  4 FirstChoice Ranked 2nd Ranked 1st 5 Market Shares Home Lending 18.7% 25.7%  Business Lending 12.1% 18.1%  Household Deposits 29.

20. Slide 20: Key Earnings Drivers

    Additional Information Key Earnings Drivers For personal use only Driver FY12 Outlook ► Total Credit: 3-5% System ► Housing Credit: 4-6% Credit Growth* ► Business Credit: 2-4% ► Elevated funding costs Margins ► Many variables – specific outlook hard to predict Other Banking Income ► Likely subdued o

21. Slide 21: Outlook

    Outlook For personal use only  A challenging environment:  Fragile consumer and business confidence  Political and regulatory uncertainty  International instability  Subdued system credit growth  Intense competition  Continuation of our disciplined approach in FY12, with focus on:  Productiv

22. Slide 22: Notes

    For personal use only 22 Notes

23. Slide 23: Strength in uncertain times

    Strength in uncertain times For personal use only Where does net income go?  Strong capital and funding, FY11 $bn conservative provisioning Serving Expenses Loan Australia‟s 4th 11 million Impairment largest tax  Strong operating performance Australians payer and industry leading ROE 4.0 1.3 3.0 T

24. Slide 24: Notes

    For personal use only 24 Notes

25. Slide 25: Results Presentation – David Craig, CFO

    DETERMINED TO BE BETTER THAN WE‟VE EVER BEEN. Results Presentation David Craig Chief Financial Officer FOR THE FULL YEAR ENDED 30 JUNE 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 10 AUGUST 20

26. Slide 26: Notes

    For personal use only 26 Notes

27. Slide 27: Good profit growth

    Good profit growth For personal use only Jun 11 Jun 10 Jun 11 vs $m $m Jun 10 Operating income 19,538 18,823 4% Operating expenses (8,891) (8,601) 3% Operating performance 10,647 10,222 4% Investment experience 121 236 (49%) Impairment expense (1,280) (2,075) (38%) Tax and non-controlling interest (

28. Slide 28: Non-cash items

    Additional Information Non-cash items For personal use only Jun 11 Jun 10 $m $m Bankwest  Merger related amortisation (81) 25  Integration expenses (66) (29)  Impairment charge - (212) (147) (216) Hedging and IFRS volatility  Unrealised accounting gains and losses arising from the application of

29. Slide 29: Statutory Profit

    Statutory Profit For personal use only Jun 11 Jun 10 $m $m Cash NPAT 6,835 6,101 12% Bankwest non-cash items (147) (216) Hedging and IFRS volatility (265) 17 NZ tax expense - (171) Other non-cash items (29) (67) Statutory NPAT 6,394 5,664 13% 29

30. Slide 30: Other Banking Income

    Additional Information Other Banking Income Trading Income For personal use only $m FY11 FY10 Jun 11 442 426 $m $m vs Jun 10 293 291 306 291 Commissions 1,946 2,006 (3%) Lending Fees 1,467 1,435 2% Dec 08 Jun 09 Dec 09 Jun 10 Dec 10 Jun 11 Other 351 333 5% Funds & Insurance Income Sub-total 3,764 3,

31. Slide 31: Operating Income up 4%

    Operating Income up 4% +4% For personal use only $m 19,538 Average FUA balances  5% 18,823 Insurance Income  9% Funds & +2% Insurance Other Banking (3%) Commissions, Fees, Other ($10m) flat Income Trading Income 1 $120m  20% IFRS hedging reclassification ($239m) Net Interest Income +7% Volume $47

32. Slide 32: Change in Funding costs and Australia NIM

    Additional Information For personal use only Change in Funding costs since June 2007 Australia NIM 229 231 IFRS 218 219 Deposit +1.54% Increased Funding x 61% funding cost +1.31% 224 221 Underlying 213 211 Wholesale +0.94% Funding* x 39% Jun 07 Dec 07 Jun 08 Dec 08 Jun 09 Dec 09 Jun 10 Dec 10 Jun 11

33. Slide 33: Group NIM

    Group NIM For personal use only bpts 12 month movement 6 month movement +2bpts 4 219 225 215 213 5 (2) 218 (4) 3 212 208 208 210 210 213 215 203 204 FY10 Assets Deposits* Treasury New Group IFRS FY11 Dec 09 Jun 10 Dec 10 Jun 11 & mix and Zealand Underlying Hedging Other Volatility Underlying IFRS Un

34. Slide 34: Continuing to invest

    Additional Information Continuing to invest For personal use only Investment Spend Investment Spend Profile $m 1,179 % of Total Investment Spend 1,075 1,036 1,020 Core 486 Productivity 785 378 Banking 410 & Growth 30% 615 42% 527 10% 697 626 693 13% 5% Other 405 Branch 258 Risk / refurbishment compl

35. Slide 35: Continued cost discipline

    Continued cost discipline For personal use only +2% +1% $m 271 (57) 76 Includes salary 8,601 increases of 4% 8,815 8,891 FY10 BAU BAU Investment FY11 Staff Expense Other 35

36. Slide 36: Provisions and Troublesome Exposures

    Additional Information Individual Provisions ($m) Troublesome Exposures 1 For personal use only $bn 8.5 7.7 7.2 6.8 2,169 2,125 6.2 2.8 5.5 1.7 2.8 1,992 1.0 1.3 2.3 1,822 2.9 1,729 4.5 4.9 5.5 5.7 4.9 4.5 922 2.9 979 Bankwest 956 bpts 2 101 166 197 238 275 248 263 620 733 Jun 08 Dec 08 Jun 09 Dec 0

37. Slide 37: Credit Quality

    Credit Quality 1 Loan Impairment Expense to Gross Loans Collective Provisions For personal use only $m Six months annualised Jun 11 vs (basis points) 3,461 3,327 Dec 10 $m 3,043 85 Economic overlay 1,192 strengthened +50 1,211 1,049 Lower modelled 61 outcome as credit (36) 55 quality improves 758 70

38. Slide 38: Business unit profitability

    Additional Information Business unit profitability For personal use only Operating Impairment Investment Tax & non- Cash Cash Mvt Mvt $m Performance Expense Experience controlling NPAT NPAT Cash Operating interests Jun 11 Jun 10 NPAT Performance RBS 4,605 (558) - (1,202) 2,845 2,461 16% 8% BPB 1,717

39. Slide 39: Business unit operating performance

    Business unit operating performance 1 For personal use only  Deposit balances  8%  Income  5%  Income  15%  Cost:Income now <39%  Markets income  11%  Margins stronger  Cash NPAT  16%  Costs flat  Cash NPAT  28% +8%  Lending growth > system  FUA  5%  Income  5%  Costs  3%  Inc

40. Slide 40: Retail Banking Services

    Additional Information For personal use only Retail Banking Jun 11 Jun 11 vs Home Loan Market Share Services $m Jun 10 28% Bankwest Home loans 2,893 20% 26% acquisition Consumer finance 1,700 9% 24% 22% Retail deposits 2,609 (7%) 20% St George Distribution 306 11% 18% acquisition 16% Total banking i

41. Slide 41: Retail Banking Services

    Retail Banking Services FY11 Operating Performance RBS Margin For personal use only Income 8% bpts NIM recovering but still below pre-GFC levels 7% 269 20% 256 4% 239 234 233 239 9% 219 223 (7%) Home Consumer Retail Income Costs Operating Loan Finance Deposits Performance 1H06 1H07 1H08 1H09 1H10 2H

42. Slide 42: Notes

    For personal use only 42 Notes

43. Slide 43: Retail Banking Services

    Retail Banking Services Loan Impairment Expense1 Cost-to-Income For personal use only bpts 41 46.6% 46.1% 32 42.9% 27 24 23 23 39.5% 20 19 38.7% 16 Jun 07 Dec 07 Jun 08 Dec 08 Jun 09 Dec 09 Jun 10 Dec 10 Jun 11 2007 2008 2009 2010 2011 Consumer Arrears Strategy & Execution 5.0% 30+ Days %  Profitab

44. Slide 44: Business & Private Banking and IB&M

    Additional Information For personal use only Business & Private Jun 11 Jun 11 vs Institutional Banking & Jun 11 Jun 11 vs Banking $m Jun 10 Markets $m Jun 10 Corporate Financial Services 1,084 13% Institutional Banking 1,828 (2%) Regional and Agribusiness 426 8% Markets 639 (11%) Local Business Bank

45. Slide 45: Corporate

    Corporate FY11 Operating Performance – BPB FY11 Business Lending Growth For personal use only Income Bankwest total (13.8%) 13% 8% 9% 8% 8.0% 5% 6% 4.7 3% 2.1% (3.3%) (3.8%) (12%) (21.8%) CFS RAB LBB Private Equities Income Costs Operating BPB IB&M BWA BWA new CBA System Bank & ML Performance de-ris

46. Slide 46: Notes

    For personal use only 46 Notes

47. Slide 47: Corporate

    Corporate 1 Loan Impairment Expense Cost-to-Income - BPB For personal use only bpts 177 % 48.8 96 44.9 72 43.7 48 39 26 36 20 9 Jun 07 Dec 07 Jun 08 Dec 08 Jun 09 Dec 09 Jun 10 Dec 10 Jun 11 2009 2010 2011 Risk-Rated Portfolio Strategy & Execution 10  Profitable growth Exposure ($b) 0 -10  SME foc

48. Slide 48: Wealth Management

    Additional Information For personal use only Wealth Management Jun 11 Jun 11 vs $m Jun 10* CFSGAM 756 14% Colonial First State 689 6% CommInsure 635 (5%) Other (1) 67% Net operating income 2,079 5% Operating expenses (1,280) 7% Tax (218) 6% Underlying profit after tax 581 - Investment experience 61

49. Slide 49: Wealth Management

    Wealth Management FY11 Operating Performance FirstChoice net flows strong For personal use only Income $m Quarterly Net Flows 14% 940 872 6% 7% 5% 2% 603 513 440 (5%) CFSGAM CFS CommInsure Income Costs Operating Jun 10 Sep 10 Dec 10 Mar 11 Jun 11 Performance Strong investment performance – 5 years S

50. Slide 50: Term maturity profile and funding

    Additional Information Term maturity profile1 Funding tenor2 For personal use only $bn Weighted Average Maturity 3.6yrs Years 5.0 4.4 4.4 3.7 3.8 3.6 3.9 3.6 7 6 14 5 22 15 12 14 12 16 FY 2012 2013 2014 2015 2016 >2016 Dec 09 Jun 10 Dec 10 Jun 11 Long Term Wholesale Debt Government Guaranteed New Is

51. Slide 51: Deposit funded

    Deposit funded Funded Deposits Wholesale Equity Funded IFRS & Total For personal use only assets Funding assets FX on funded Jun 10 Jun 11 debt issues assets 1 Short term Long term 2 $bn (8) Liquid Assets 26 4 2 (11) $bn 101 61% Deposit 86 Funded 40 41 2% 1% 30 Regulatory 13% 26 Minimum 4% 31 $53bn

52. Slide 52: Notes

    For personal use only 52 Notes

53. Slide 53: Strong capital position

    Strong capital position Tier 1 Capital movement For personal use only  Tier 1 Capital 10.01% 13.7% 0.38% (0.08%) 10.01% 9.71%  UK FSA equivalent of 13.7% 9.15%  Well placed for Basel III: Jun 10 Dec 10 Organic Other 1 Jun 11 Jun 11 growth UK FSA  Strong organic growth Basel III Common Customer E

54. Slide 54: Snapshot – FY11 Results

    Additional Information Snapshot – FY11 Results* For personal use only Financial Cash NPAT by Division Cash earnings ($m) 6,835 +12% RBS ($m) 2,845 +16% ROE (Cash) 19.5% +80bpts BPB ($m) 1,039 +16% Cash EPS ($) 4.39 +11% IB&M ($m) 1,004 (14%) DPS ($) 3.20 +10% Bankwest ($m) 463 Large Cost-to-Income 4

55. Slide 55: Profitable growth, well placed

    Profitable growth, well placed A good profit result Margins recovering For personal use only Cash NPAT FY11 bpts Australia NIM +12% Positive “Jaws” (ex IFRS) 4% 224 221 6,835 213 211 6,101 3% $m Investment 2% FY10 FY11 Income Expenses Dec 09 Jun 10 Dec 10 Jun 11 Impairment expense lower Strong capit

56. Slide 56: Results Presentation Supplementary Slides

    DETERMINED TO BE BETTER THAN WE‟VE EVER BEEN. Results Presentation Supplementary Slides FOR THE FULL YEAR ENDED 30 JUNE 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 10 AUGUST 2011 | COMMONWEAL

57. Slide 57: Index

    Index For personal use only Strategy 57 Business Performance 63 Risk and Credit Quality 86 Capital, Funding & Liquidity 104 Economic Indicators 114 Housing 129 57

58. Slide 58: CBA Overview

    CBA Overview For personal use only  Largest Australian Bank by market cap. and 2nd largest listed company  AA Credit Rating  Tier 1 Capital Ratio of 10.01%; or 13.7% on UK FSA basis  Total Assets of $668bn  13 million customers; large distribution footprint  #1 in household deposits – 30% shar

59. Slide 59: Sources of growth

    Sources of growth For personal use only  Core Banking – efficiency improvement, enhanced customer satisfaction  Business Banking Growth Strategy – well-placed for upturn in system growth  Peer leading products-per-customer  Wealth Management – exposure to eventual rebound in equity markets  Tar

60. Slide 60: Sustainability progress

    Sustainability progress People For personal use only  Solid progress towards the target of 35% of women in senior management roles by December 2014 (28.2% as at June 2011)  Launched the Group‟s Diversity Policy in June 2011, outlining the approach to creating and maintaining an inclusive and colla

61. Slide 61: Sustainability scorecard

    Sustainability scorecard Metric 2011 2010 2009 2008 For personal use only Customers Customer satisfaction Roy Morgan MFI retail customer satisfaction % (1) 75.2 75.6 73.0 70.1 (6-month moving average) (ranked 4th ) (ranked 2nd) (ranked 3rd) (ranked equal 3rd) Customer satisfaction DBM Business Finan

62. Slide 62: Core Banking Modernisation

    Core Banking Modernisation For personal use only  Real-time banking, 24x7 Enhanced Customer Experience   Instant account opening  Customised product offers  Straight through processing Greater Efficiency   Faster speed-to-market  Lower cost-to-income Improved Risk Management   Greater s

63. Slide 63: Index

    Index For personal use only Strategy 57 Business Performance 63 Risk and Credit Quality 86 Capital, Funding & Liquidity 104 Economic Indicators 114 Housing 129 63

64. Slide 64: Return on Assets

    Return on Assets For personal use only Assets ($bn) Cash NPAT ($bn) Group ROA (%) 1.1% 1.0% 64

65. Slide 65: Dividends per Share

    Dividends per Share For personal use only Interim 84% Final 84% Payout Ratio 87% 88% 62% 63% 63% 84% 74% 61% cents 107 149 113 153 113 115 120 170 132 188 2007 2008 2009 2010 2011 65

66. Slide 66: Margins – Six Monthly

    Margins – Six Monthly For personal use only NIM recovery as pricing NIM under bpts NIM decline as GFC Asset re-pricing adjusted for higher pressure from drives term funding for higher funding costs and higher funding costs higher funding costs increased risk costs 225 219 218 216 212 208 205 218 198

67. Slide 67: Group Margin – Six Month Movement

    Group Margin – Six Month Movement For personal use only bpts 223 2 225 3 1 212 7 208 215 215 203 204 2H10 1H11 Assets & Bankwest New Sub-total IFRS 2H11 Mix Zealand Volatility IFRS Underlying 67

68. Slide 68: RBS – Six month periods

    RBS – 6 month periods Jun 11 vs For personal use only Jun 11 Dec 10 Jun 10 Jun 10 (6 months) Net interest income Home loans 1,441 1,265 1,122 28% Consumer finance 660 621 594 11% Retail deposits 1,115 1,107 1,092 2% 3,216 2,993 2,808 15% Other banking income Home loans 87 100 93 (6%) Consumer financ

69. Slide 69: Retail Banking Services

    Retail Banking Services For personal use only  Strong business performance with Jun 11 Jun 11 vs $m Jun 10 income growing faster than expenses Home loans 2,893 20% Consumer finance 1,700 9%  Solid volume growth and margin improvement in the lending Retail deposits 2,609 (7%) portfolios Distributio

70. Slide 70: Growth profile

    Growth profile RBS Home Loan Balance Growth 2011 External refinancing similar to prior years For personal use only $bn 28 5% % of Total Balances (63) 52 (6) External refinancing - 250 limited impact on net 261 balance growth Opening New Redraw & Repayments / External Closing Jul Aug Sep Oct Nov Dec

71. Slide 71: Efficiency improvements in Mortgage processing

    Efficiency improvements in Mortgage processing 1 2 Mortgage Services Home Loan settlements For personal use only FTEs per mortgage services FTE per day 1,567 1,451 12 9 1,130 1,093 955 2007 2008 2009 2010 2011 Feb 09 Jun 11 3 Home Loans serviced Home Loans total turn around time4 per mortgage servic

72. Slide 72: IB&M – Six month periods

    IB&M – 6 month periods Jun 11 vs For personal use only Jun 11 Dec 10 Jun 10 Jun 10 (6 months) Net interest income Institutional Banking 528 545 558 (5%) Markets 115 105 93 24% 643 650 651 (1%) Other banking income Institutional Banking 410 345 401 2% Markets 154 265 173 (11%) 564 610 574 (2%) Total

73. Slide 73: Institutional Banking and Markets

    Institutional Banking and Markets For personal use only  IB&M Cash NPAT  14% due to: Jun 11 Jun 11 vs $m Jun 10 ► Operating Income  5% due to lower markets trading income as a Institutional Banking 1,828 (2%) result of lower domestic market volatility and the effect of decline in Markets 639 (11%

74. Slide 74: BPB – Six month periods

    BPB – 6 month periods Jun 11 vs For personal use only Jun 11 Dec 10 Jun 10 Jun 10 (6 months) Net interest income Corporate Financial Services 258 270 271 (5%) Regional & Agribusiness 133 132 129 3% Local Business Banking 260 255 241 8% Private Bank 54 56 55 (2%) Equities and Margin Lending 86 91 92

75. Slide 75: Business and Private Banking

    Business and Private Banking For personal use only  Solid performance in business Jun 11 Jun 11 vs $m Jun 10 banking segments Corporate Financial Services 1,084 13%  Cash net profit after tax  16% Regional and Agribusiness 426 8% reflecting: Local Business Banking 774 9% ► Solid volume growth in

76. Slide 76: New Zealand – Six month periods

    New Zealand – 6 month periods Jun 11 vs For personal use only NZ$M Jun 11 Dec 10 Jun 10 Jun 10 (6 months) Net interest income ASB 569 538 468 22% Other (12) 2 (5) Large Total NII 557 540 463 20% Other banking income ASB 189 178 135 40% Other (17) (13) (16) 6% Total OBI 172 165 119 45% Total banking

77. Slide 77: New Zealand

    New Zealand For personal use only Jun 11 Jun 11 vs  ASB NZD Cash NPAT  42%: NZD $m Jun 10 ► Improved lending margins, with floating rate home loans up from 37% ASB 1,528 17% of all home loans in Jun-10 to 59% in Sovereign 257 2% Jun-11 ► Lower impairment expense due to Other (23) 18% improving ass

78. Slide 78: WM – Six month periods

    WM – 6 month periods Jun 11 vs For personal use only Jun 11 Dec 10 Jun 10 Jun 10 (6 months) Net operating income CFSGAM 378 378 333 14% Colonial First State 347 342 333 4% CommInsure 283 352 322 (12%) Other (1) - (2) 50% St Andrew's Insurance - - 15 Large 1,007 1,072 1,001 1% Operating expenses CFSG

79. Slide 79: Wealth Management

    Wealth Management For personal use only Jun 11 Jun 11 vs  CFSGAM: $m Jun 10* ► FUM 3% to $149bn CFSGAM 756 14% ► Strong investment performance - 83% of funds outperforming over 5 Colonial First State 689 6% years CommInsure 635 (5%)  Colonial First State: Other (1) 67% ► Retail FUA 6% to $78bn ►

80. Slide 80: CFS Global Asset Management

    CFS Global Asset Management For personal use only Globally: $149bn FUM1, 901 people North America Japan $1.6bn FUM $3.5bn FUM 5 People 5 people Asia ex Japan Middle East $17.2bn FUM $6.7bn FUM 114 People UK & Europe Australia & New Zealand $21.8bn FUM $97.8bn FUM 188 People 589 People 34% FUM raised

81. Slide 81: Bankwest integration

    Bankwest integration 1 For personal use only Total integration costs Timetable $246m  Acquisition announced Oct 08 Restructuring  Governance structure established $18m By  Due diligence commenced, Property December  Regulatory approvals obtained IT $93m $41m 2008  New CEO, CFO and CRO appointed

82. Slide 82: Bankwest – Six month periods

    Bankwest – 6 month periods For personal use only Jun 11 vs Jun 10 Jun 11 Dec 10 Jun 10 cash earnings (6 months) Net interest income 741 679 679 9% Other banking income 102 118 112 (9%) Total banking income 843 797 791 7% Operating expenses (441) (428) (437) 1% Impairment expense (60) (49) (441) (86%

83. Slide 83: Bankwest

    Bankwest For personal use only  Income  5%: Jun 11 Jun 11 vs ► Above system Home Loan growth $m Jun 10 ► Higher Deposit margins ► Managing down higher risk exposures Net interest income 1,420 6% in business lending Other banking income 220 (6%)  Disciplined cost management – Total banking income

84. Slide 84: Products per Customer

    Products per Customer Average Product Composition between Commonwealth Bank, For personal use only the 4 Major Banking Groups and Bankwest 2.64 2.63 2.54 2.44 0.32 0.30 Insurance 0.25 0.24 2.25 0.20 0.26 0.11 0.21 Personal Lending 0.23 0.30 0.57 0.71 0.64 0.59 Home loan 0.56 Credit Cards Managed fun

85. Slide 85: Market shares

    Market shares Jun 11 Dec 10 Jun 10 For personal use only CBA BWA Combined CBA + BWA CBA + BWA 1 Home loans 22.0% 3.7% 25.7% 25.9% 26.1% Credit cards 2 19.9% 2.8% 22.6% 22.7% 22.5% Personal lending 14.0% 0.9% 14.9% 14.6% 14.6% Household deposits 27.0% 2.9% 30.0% 30.5% 31.3% Retail deposits 23.2% 3.7%

86. Slide 86: Index

    Index For personal use only Strategy 57 Business Performance 63 Risk and Credit Quality 86 Capital, Funding & Liquidity 104 Economic Indicators 114 Housing 129 86

87. Slide 87: Regulatory Exposure Mix

    Regulatory Exposure Mix For personal use only Regulatory Exposure Mix 1 CBA Peer 1 Peer 2 Peer 3 Residential Mortgages 57% 42% 41% 58% Corporate, SME & Spec Lending 26% 35% 41% 32% Bank 6% 7% 10% 3% Sovereign 7% 7% 5% 3% Qualifying Revolving 3% 4% 2% 3% Other Retail 1% 5% 1% 1% Total Advanced 2 100%

88. Slide 88: Loan Impairment Expense

    Loan Impairment Expense CBA Group 1 Lending 2 MarginConsumer For personal use only bpts bpts Six months annualised 37 (basis points) Group 28 20 23 85 18 20 19 15 13 61 55 Jun 07 Dec 07 Jun 08 Dec 08 Jun 09 Dec 09 Jun 10 Dec 10 Jun 11 pro forma 40 Corporate 3 32 bpts 28 185 19 4 22 Group 15 28 24 96

89. Slide 89: Loan Impairment Expense

    Loan Impairment Expense For personal use only 6 months annualised (basis points)* 722 6 months ($m) 61 1,441 1,383 5 55 113 9 207 313 13 28 189 692 7 28 722 49 558 18 2 22 441 47 6 2 1,121 155 60 35 881 17 20 21 428 518 530 -1 -32 -7 -177 Jun 09 Dec 09 Jun 10 Dec 10 Jun 11 Jun 09 Dec 09 Jun 10 Dec 1

90. Slide 90: Arrears

    Arrears Home Loans * Credit cards * For personal use only 90+ Days % 90+ Days % 2.0% 1.6% 1.5% 1.4% 1.2% 1.0% 1.0% 0.5% 0.8% 0.0% 0.6% Jun 09 Sep 09 Dec 09 Mar 10 Jun 10 Sep 10 Dec 10 Mar 11 Jun 11 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun NSW QLD VIC WA Portfolio ACT NT TAS SA 06/07 07/08

91. Slide 91: RBS home loan book quality very sound

    RBS home loan book quality very sound For personal use only Portfolio average LVR of 44% based on current market values Average LVR of 54% on new loans taken out over the past 12 months 69% of customers paying in advance of requirements, by an average 7 payments Maximum LVR of 95% for new and existi

92. Slide 92: 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 % 3.0% 2.0% 2.5% 1.5% 2.0% 1.0% 1.5% 1.0% 0.5% 0.5% 0.0% 0.0% Jun 09 Sep 09 Dec 09 Mar 10 Jun 10 Sep 10 Dec 10 Mar 11 Jun 11 Dec-07 Dec-08 Dec-09 Dec-10 Month of origination NSW QLD V

93. Slide 93: Home Loan Arrears

    Home Loan Arrears LMI vs non-LMI Impact of Natural Disasters For personal use only 90+ days arrears 30+ days arrears 2.2% 2% 2.0% 1% 1.8% 9 bpts 1.6% 3 bpts 0% 1.4% Feb 08 Aug 08 Feb 09 Aug 09 Feb 10 Aug 10 Feb 11 Jun 11 Dec 10 Jan 11 Feb 11 Mar 11 Apr 11 May 11 Jun 11 1 „Not Insured‟ LMI Low deposi

94. Slide 94: Home Loan losses remain very low

    Home Loan losses remain very low For personal use only $ Losses/Average Gross Loans 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 CBA Home Loans Group CBA Home Loans repre

95. Slide 95: Even “high stress” losses would be modest

    Even “high stress” losses would be modest Expected Loss outcomes Six-month Movement For personal use only $m 44 59 Expected loss $m PD stress factor 24 19 Property value x1 x2 x4 x6 566 576 No decrease 14 17 24 29 10% decrease 35 48 69 86 Previous Closed Market Existing New Current 20% decrease 87 1

96. Slide 96: Genworth Financial

    Genworth Financial For personal use only  APRA Regulated  Highly rated: AA- by S&P and A1 by Moody's  Strong Capital Position:  Solvency Ratio significantly above regulatory minimum  Regular stress testing against "extreme" stress scenarios  High quality liquid investments  Ring fenced from U

97. Slide 97: CBA Home Loan Portfolio Profile

    CBA Home Loan Portfolio Profile For personal use only Portfolio Jun 11 Quality Jun 11 1 1 Total Balances - Spot ($bn) 336 Total Balances – Average ($bn) 330 1, 3 Total Accounts (m) 1.4 Actual Losses ($m) 67 2 1 Fundings ($bn) 52 Loss Rate (%) 0.02% Fixed Rate (%) 13 LVR – Portfolio Avg (%) 44% 2 Var

98. Slide 98: Sector Exposures

    Sector Exposures For personal use only 1 Dec 10 Jun 11 Dec 10 Jun 11 Consumer 54.9% 53.1% Agriculture 2.3% 2.2% Mining 0.8% 0.8% Manufacturing 2.1% 2.0% Energy 1.1% 1.0% Construction 1.0% 1.0% Retail & Wholesale 2.5% 2.4% Transport 1.4% 1.4% Banks 10.8% 11.6% Finance – other 3.9% 3.6% Business Servi

99. Slide 99: Sector Exposures

    Sector Exposures 1 2 Sector Exposures* – Jun 11 Top 20 Commercial Exposures – Jun 11 For personal use only BBB+ AAA to A+ to $bn to Other Total AA- A- BBB- Banks 49.1 30.6 3.1 0.4 83.2 Finance Other 7.8 8.6 3.4 5.2 25.0 Note 1 Property 0.3 4.3 8.1 34.0 46.7 Note 2 Sovereign 50.2 1.3 0.3 0.3 52.1 Man

100. Slide 100: Commercial Property Market

     Commercial Property Market CBD Office Supply Pipeline* CBD Vacancy Rates For personal use only Peak Previous Current 40% % of Total Stock Market 1990s (1st Half (2nd Half FY11) FY11) 35% Sydney 22.4% 7.8% 8.0% 30% Perth 31.8% 7.1% 5.4% Melbourne 25.8% 6.3% 6.0% 25% Brisbane 14.3% 8.3% 6.8% 20% Adela

101. Slide 101: Risk Weighted Assets – June Half

     Risk Weighted Assets – June 11 Half ■ RWA Movement For personal use only Credit RWAs increased by $2b primarily as a result of:  Growth in commercial portfolio and lower risk retail exposures;  Re-rating of a Spanish RMBS securitisation exposure by Moody‟s Tier 1 ratio Total impact from A to BB+;

102. Slide 102: Regulatory Expected Loss

     Regulatory Expected Loss Jun 10 Dec 10 Jun 11 For personal use only $m $m $m CBA (ex Bankwest) Regulatory Expected Loss (EL) – before tax 4,332 4,293 4,324 Eligible Provision 1 Collective provision 2 2,036 2,029 1,994 Individually assessed provisions 2 1,172 1,343 1,255 Other provisions 25 25 21 Sub

103. Slide 103: Interest Rate Risk in the Banking Book

     Interest Capital Assigned to Interest Rate Risk in Rate Risk Banking Book - APS117 For personal use only 26 bpts 54 bpts 33 bpts 62 bpts 36 bpts $1,328m $1,363m $716m Optionality Risk $822m $776m Basis Risk Optionality Risk Basis Risk Repricing and Yield Curve Risk Repricing and Yield Curve Risk Emb

104. Slide 104: Index

     Index For personal use only Strategy 57 Business Performance 63 Risk and Credit Quality 86 Capital, Funding & Liquidity 104 Economic Indicators 114 Housing 129 104

105. Slide 105: Regulatory Change

     Regulatory Change 2011 2012 2013 2014 2015 2016 2017 2018 For personal use only LCR, NSFR LCR – effective Timetable LCR, NSFR LCR 2011 - 2015 observation and capital - and capital - APRA draft APRA final NSFR - APRA observation and review NSFR - Effective standards standards – Dec 2012 Minimum capit

106. Slide 106: European comparison

     European The Group‟s Tier 1 Capital Ratio compares favourably to comparison international peers For personal use only Basel II Tier 1 Capital 18.2% 18.1% 18% E 16% Europe 14.0% 13.9% 13.7% 13.5% 14% 13.5% Average 12.2% 11.9% 11.8% 11.6% Tier 1 : 12.7% 12% 11.3% 10.4% 10.2% 9.9% 9.8% Europe 10% Avera

107. Slide 107: 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

108. Slide 108: UK Comparison

     UK Comparison For personal use only The following table estimates the impact on CBA Group capital, as at June 2011, of the differences between the APRA Basel II guidelines and those of the UK regulator, Financial Services Authority (FSA) Common Tier One Total Equity Capital Capital Capital1 June 11

109. Slide 109: Funding

     Funding Wholesale Funding by Product 61% Deposit Funded For personal use only 4% 5% Structured MTN 2% 1% 7% 13% Customer Deposits 4% Vanilla MTN 4% Commercial Paper 4% ST Wholesale Funding Debt Capital LT Wholesale maturing <12 months 41% 13% CDs LT Wholesale maturing >=12 months 61% Securitisation

110. Slide 110: Funded Assets

     Funded Assets For personal use only Jun Jun $bn 10 11 26 4 (8) 2 (11) Transactions 83 89 37 Equity Savings 79 82 115 Long term wholesale Investments 157 176 Other 5 2 Short term 105 wholesale Total Retail 324 349 593 617 606 Wholesale 235 220 funding Total Funding 559 569 349 Retail Equity 34 37 Tot

111. Slide 111: 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

112. Slide 112: 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% Capital 10% Home Loans Home Loans 15% 19% 48% Deposits Deposits 50% Other Lending 36% Other Lending 45% 12% Long Term Other Fair Long Term 17% 14% Value as

113. Slide 113: 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% Capital  Trading securities and other fair value

114. Slide 114: Index

     Index For personal use only Strategy 57 Business Performance 63 Risk and Credit Quality 86 Capital, Funding & Liquidity 104 Economic Indicators 114 Housing 129 114

115. Slide 115: 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 -2.4 2-4 6-8 Credit Growth % –

116. Slide 116: Credit Drivers

     Credit Drivers For personal use only % CREDIT & SPENDING %  Asian exposure more important than US (annual % change) 30 30 / European weakness. CBA (f)  Commodity-income-capex-export Credit drivers underpin positive medium-term 20 20 backdrop and higher rates.  Balance sheets are in good shape. 10

117. Slide 117: Housing Credit

     Housing Credit For personal use only HOUSING DEMAND & SUPPLY TIME TO BUY A DWELLING '000 '000 Index Index Demand 200 200 140 140 150 150 100 100 Supply (rolling 4-qtr sum) Source: Melbourne Institute 100 100 60 60 Sep-90 Sep-94 Sep-98 Sep-02 Sep-06 Sep-10 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10  Housing

118. Slide 118: Other Personal Credit

     Other Personal Credit For personal use only SENTIMENT & INCOME PERSONAL CREDIT & SAVINGS %pa % %pa 16 200 -6 20 GDI Other personal (lhs) credit 8 165 (rhs) 2 10 Index 0 130 10 0 -8 95 Consumer confidence* Savings (rhs) ratio * Source: WBC/Melbourne Institute (inverse, lhs) -16 60 18 -10 Mar-90 Mar-9

119. Slide 119: 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

120. Slide 120: Australia in Perspective

     Australia in Perspective For personal use only Growth outperformance Stronger labour market REAL GDP UNEMPLOYMENT RATE Index (Sep'08= 100) % 105 12 Lehman Australia collapse US Euro US zone NZ UK 100 8 Europe Australia 95 UK 4 Japan Japan 90 0 Mar-08 Mar-09 Mar-10 Mar-11 Jan-05 Jan-07 Jan-09 Jan-11

121. Slide 121: Global Backdrop

     Global Backdrop Sovereign debt concerns rise Risk of structural step down in growth rates For personal use only FINANCING NEEDS GDP GROWTH & DEBT LEVELS % (advanced economies, % of GDP) % %pa (1790-2009) %pa 30 30 6 6 Gross Issuance 20 20 Advanced 4 economies 4 Debt (median) rollover 10 10 2 2 0 0 B

122. Slide 122: Base Level of Growth “Locked In”

     Base Level of Growth “Locked In” A rising terms of trade is still boosting incomes The capex boom rolls on For personal use only THE TERMS OF TRADE THE CAPEX PIPELINE $bn $bn Index Index (value of work yet to be done) 125 125 150 150 100 100 100 100 50 50 75 75 0 0 50 50 Sep-84 Sep-89 Sep-94 Sep-99

123. Slide 123: Overdone Deleveraging

     Overdone Deleveraging For personal use only VIEWS ON GEARING ATTITUDE TO RISK SOURCES OF FINANCE % (% of responents) % % (net % saying yes) % % (net % saying attractive) % 90 90 40 40 60 60 Source: Deloittes CFO Survey Aim to increase Bank gearing over next year? 20 20 Optimally 60 geared 60 30 30 C

124. Slide 124: The Capex Boom

     The Capex Boom Mainly mining For personal use only  Value of advanced mining projects rose ADVANCED MINING PROJECTS through the GFC and have since lifted further $bn $bn 200 200  Some AUD174bn worth of mining projects are at an advanced stage Source: ABARE 150 150 Mining Multipliers Output Employm

125. Slide 125: Asian Reliance

     Asian Reliance For personal use only INDUSTRIAL PRODUCTION WORLD IMPORTS Index (Jan'08=100) Index Index (Jan'08=100) Index 140 140 130 130 Source: BEPA Emerging Emerging Asia Asia 120 120 115 115 US 100 100 100 100 Japan 80 80 85 85 Eurozone Index Jan. 2008 = 100 Advanced Source: BEPA economies 60 6

126. Slide 126: Consumer Caution

     Consumer Caution Income growth is strong but confidence is low Households worry about their finances For personal use only SENTIMENT & INCOME PERSONAL CIRCUMSTANCES %pa % (net % of respondents) % 16 200 40 40 Disposable income (lhs) 8 165 20 20 Better in six months time Index 0 130 0 0 Better than s

127. Slide 127: Consumer Caution

     Consumer Caution For personal use only Credit Growth Household Savings Ratio % SAVING RATIO % 25.0 20 20 20.0 15 15 15.0 10.0 10 10 5.0 5 5 0.0 -5.0 0 0 -10.0 2001 2006 2011 -5 -5 Housing Business Total Sep-72 Sep-80 Sep-88 Sep-96 Sep-04 Source: RBA Source: ABS 127

128. Slide 128: New Zealand

     New Zealand For personal use only  NZ Growth better than expected at start % of 2011 NZ GDP GROWTH 7 7  Strong earnings from key export A nnual average % commodities but some drags as well: (f) 5 5 – earthquake reconstruction delayed until late 2011/ early 2012; 3 3 – household caution lingering;

129. Slide 129: Index

     Index For personal use only Strategy 57 Business Performance 63 Risk and Credit Quality 86 Capital, Funding & Liquidity 104 Economic Indicators 114 Housing 129 129

130. Slide 130: 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 reflect the balance of supply and demand  Australia‟s population continues to grow  Supply-side restraints - limited new land r

131. Slide 131: House prices undergoing a modest correction

     House prices undergoing a modest correction For personal use only CBA Established House Prices Australian House Prices - ABS* $'000 800 3 Years 12 mths to to Jun Mvt (%) Jun 11 Jun 11 Qtr 600 Sydney 15% (0.7%) 0.4% 400 Melbourne 21% (2.0%) (0.1%) Brisbane 2% (3.6%) (0.3%) 200 Adelaide 8% (2.1%) (0.8

132. Slide 132: House Prices & the Cycle

     House Prices & the Cycle The adjustment process For personal use only ESTABLISHED HOUSE PRICES HOUSE PRICES Index (peak=100) Index Index (Sep'04 = 100) Index 170 170 Source: Rismark Jun '90 Top 20% 100 100 of suburbs Mar 145 145 '95 Current 97 97 120 120 Mar '08 Middle 60% of suburbs Bottom 20% Sour

133. Slide 133: Strong economic fundamentals minimize 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 500 '000 '000 '000 '000 Natural Increase Demand 400 450 H2 '10 450 (annual rate) 20

134. Slide 134: Australian Housing Market vs US

     Australian Housing Market vs US CBA/Australia United States For personal use only Unemployment ~5% ~10% No-Recourse Lending No Yes Variable vs Fixed 87%/13% 15%/85% Adjustable Rate Loans Minimal Widespread 1 Sub-Prime (% of mkt) Minimal ~36% Securitisation % Minimal ~55% Account Ownership Retained b

135. Slide 135: Note – Sources for Customer Satisfaction results

     Note For personal use only Sources for Customer Satisfaction 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. 2 P

136. Slide 136: Results Presentation – Closing Slide

     DETERMINED TO BE BETTER THAN WE‟VE EVER BEEN. Results Presentation Ralph Norris Chief Executive Officer David Craig Chief Financial Officer FOR THE FULL YEAR ENDED 30 JUNE 2011 For personal use only Results Presentation For the half year ended 31 December 2009 10 February Commonwealth Bank of Austra

Commonwealth Bank of Australia — FY2011 Earnings Presentation on 6ix