Commonwealth Bank Of Australia · ASX:CBA

Commonwealth Bank Of Australia — Credit Suisse Asian Investment Conference 2009

23 slides from Commonwealth Bank Of Australia's conference presentation, Mar 27, 2009

  1. Slide 1: Strength in uncertain times

    Commonwealth Bank of Australia For personal use only Strength in uncertain times Ralph Norris, CEO 27 March 2009 Credit Suisse Asian Investment Conference Hong Kong Commonwealth Bank of Australia ACN 123 123 124

  2. Slide 2: Disclaimer

    Disclaimer For personal use only The material that follows is a presentation of general background information about the Bank’s activities as at 31 December 2008. It is information given in summary form and does not purport to be complete. It is not intended to be relied upon as advice to investors

  3. Slide 3: Agenda for today

    Agenda for today ….. For personal use only  Global crisis: - Current state-of-play  Australia: - Relatively well placed  CBA: - Strength in uncertain times 3

  4. Slide 4: CBA Snapshot

    CBA Snapshot For personal use only  AA Credit Rating – one of 12 banks worldwide  Market Capitalisation of $44.5bn – top 3 Australian listed company*  Six Month Cash Earnings of $2 billion; ROE of 15%  Total Assets of $619 billion  Tier 1 capital ratio of 8.75%; FSA equivalent of 11.7%  Domest

  5. Slide 5: Global crisis - state of play

    Global crisis - state of play For personal use only World GDP Growth 2009  “Worst (economic) performance in our lifetimes” (evolution of forecasts) %pa 12 China  70%+ of developed world in recession 8 Asia (ex. Japan & China)  World growth forecast <0% in 2009* 4 Industrial Countries 0  Asset pr

  6. Slide 6: Australia – sound economic fundamentals

    Australia – sound economic fundamentals For personal use only Household Spending Stimulus  Growth slowing, unemployment rising % (% of disposable income) 6  Deregulatory reform – diversified, flexible, open, 4 low inflation, high productivity economy 2  Strong population growth 0  75% of exports

  7. Slide 7: CBA - Strength in uncertain times

    CBA - Strength in uncertain times For personal use only  Proactive management response  Financial performance  Sound risk management  Strong capital position  Prudent approach to funding and liquidity  Low risk strategy - on track and delivering 7

  8. Slide 8: Proactive management response

    Proactive management response For personal use only  Co-ordinated risk management:  Overseen by CFO and CRO  Daily management meetings during liquidity crunch  Weekly Executive Risk Committee meetings  Extensive and ongoing portfolio review – across sectors/industries/geographies  Ongoing stre

  9. Slide 9: Sound financial performance

    Sound financial performance For personal use only Half Dec 08 vs Year to Dec 07 Dec 08 Operating Income ($m) 8,016 15% Statutory NPAT ($m) 2,573 9% Cash NPAT ($m) 2,013 (16%) Cash EPS (cents) 146.3 (19%) Return on Equity – Cash (%) 15.0 (580)bpts Dividend per Share – Fully Franked (cents) 113 unchan

  10. Slide 10: Strong growth in key markets

    Strong growth in key markets For personal use only Balance Growth CBA + CBA Dec 08 vs Dec 07 BankWest Market Share Market Share % % % Dec 08 vs CBA System Dec 08 Dec 08 Dec 07 Home Lending* 15.8 7.9 20.3 1.35 23.3 Household Deposits* 21.7 19.0 29.1 0.64 32.6 Business Lending 8.8 11.9 13.5 (0.40) 18.

  11. Slide 11: Competitive environment

    Competitive environment For personal use only Share of approvals (number)  Non-bank models under pressure 90 % % 30 85 25  Flight-to-quality 80 20  Foreign banks scaling back 75 15 70 10  Credit growth slowing, but major banks Jan 99 Jan 01 Jan 03 Jan 05 Jan 07 Jan 09 gaining share Banks (LHS) N

  12. Slide 12: Impairment expense

    Impairment expense For personal use only Impairment Expense: 6 months annualised (basis points) 81  Increases driven by small number of 14 Overlay single-name exposures Loans  Only modest underlying deterioration 20 Single Names (x5) Provisions: 32 19 ABC Notes  Prudent increase in line with cycl

  13. Slide 13: Consumer credit quality

    Consumer credit quality For personal use only Home loan arrears*  Home lending: 30+ Days %  Portfolio quality remains sound 1.5%  Small uptick in arrears off low base 1.3% 1.1%  70% of customers paid in advance, 0.9% for an average of 7 months 0.7%  Portfolio average LVR of 37% Jan Feb Mar Apr

  14. Slide 14: Australian housing market

    Australian housing market For personal use only Housing Demand & Supply  Sub-prime (non-conforming) ~1% of market '000 200 Demand  Full recourse to borrowers  Demand drivers: 150 Supply  Chronic undersupply  1st home buyers 100 Sep-90 Sep-94 Sep-98 Sep-02 Sep-06  Interest rate cuts Affordabili

  15. Slide 15: Commercial Credit Quality

    Commercial Credit Quality For personal use only Risk-Rated Exposures  Book quality remains sound:  No systemic issues 32% Other 31%  68% investment grade BBB+ to BBB- 19% 21%  No exposure to foreign sub-prime 68% 19% A+ to A- 18% investment  Net CDO/CLO exposure ~$50m grade  Relatively small p

  16. Slide 16: Strong financial services sector

    Strong financial services sector For personal use only  Effective regulatory regime Credit Ratings of Largest 100 Banks By assets, log scale  Major banks:  4 of 12 global AA rated banks  All rated in top 20 global safest banks*  Profitable  Well capitalised  Conservative/focus on core busines

  17. Slide 17: CBA in a strong capital position

    CBA in a strong capital position For personal use only Domestic Peer Comparison  One of the most strongly capitalised Tier 1 Capital Ratios 1 banks in the world 8.75% 8.35% 8.29% 8.32%  Tier 1 ratio of 8.75% as at Dec 08 – 7.71% 7.35% 7.58% UK FSA equivalent of 11.7%  Buffer of $4.2bn to board mi

  18. Slide 18: Funding and liquidity

    Funding and liquidity For personal use only Source of Funding*  AA credit rating 20%  Highly respected funding team 2% 59% 5% 12%  FY09 funding task completed 2% (including Bankwest funding) Retail Funding Long Term Wholesale maturing in FY09 Short Term W holesale Long Term Wholesale maturing aft

  19. Slide 19: Strong customer satisfaction gains

    Strong customer satisfaction gains For personal use only Closing the gap to top rated peer Strong gains in Business Customer Satisfaction Roy Morgan Research MFI Customer Satisfaction1 12 month movement2 84% 11.0% 80% 76% 10.3% 4.8% 5.2% 7.8% 5.4% 4.1% 72% 68% Dec 07 Feb 08 Apr 08 Jun 08 Aug 08 Oct

  20. Slide 20: Determined to be different

    Determined to be different For personal use only  Only major to improve customer satisfaction year on year Customer Service  Gap to Number 1 peer reduced from 10.3% to 5.4% in 12 mths  Strongest customer satisfaction gains of the major banks Business Banking  Dedicated Group Executive appointed

  21. Slide 21: Profitable growth

    Profitable growth For personal use only  Low-risk strategic agenda  Targeted investment and acquisition programme  Focus on key growth opportunities / markets  Earnings accretive investments  Well positioned for medium to longer term 21

  22. Slide 22: Outlook

    Outlook For personal use only  Increasingly difficult global and domestic outlook  Domestic economy to continue to slow, with broad customer impacts  Government stimulatory actions to soften impact  Group remains cautious about the short to medium term outlook  Continued focus on managing for d

  23. Slide 23: Strength in uncertain times

    Commonwealth Bank of Australia For personal use only Strength in uncertain times Ralph Norris, CEO 27 March 2009 Credit Suisse Asian Investment Conference Hong Kong Commonwealth Bank of Australia ACN 123 123 124

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