Commonwealth Bank Of Australia · ASX:CBA
Commonwealth Bank Of Australia — FY2014 Earnings Presentation
159 slides from Commonwealth Bank Of Australia's earnings presentation, Aug 13, 2014
Slide 1: Full Year Ended 30 June 2014
FOR THE FULL YEAR ENDED 30 JUNE 2014 For personal use only IAN NAREV DAVID CRAIG CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER COMMONWEALTH BANK OF AUSTRALIA | ACN 123 123 124 | 13 AUGUST 2014
Slide 2: Disclaimer
Notes Disclaimer For personal use only The material that follows is a presentation of general background information about the Group’s activities current at the date of the presentation, 13 August 2014. It is information given in summary form and does not purport to be complete. It is not intended t
Slide 3: Agenda
Agenda For personal use only Ian Narev, CEO – Company Update David Craig, CFO – Financial Overview Ian Narev, CEO – Outlook and Summary Questions and Answers 3
Slide 4: Our vision and values
Additional information Vision and values Our vision and values For personal use only Vision To excel at securing and enhancing the financial wellbeing of people, businesses and communities Integrity: Have the courage to do and say what’s right Collaboration: Listen and work as one inclusive team Val
Slide 5: Overview
Overview For personal use only Consistent strategic focus driving growth: – Engaged people committed to customer service – Productivity driving service, efficiency and reinvestment – Leading technology creating innovative solutions – Strength – being there for our customers Continuing NPAT, ROE,
Slide 6: Notes
For personal use only 6 Notes
Slide 7: Continuing growth
Continuing growth For personal use only Jun 14 vs Jun 14 Jun 13 Statutory Profit ($m) 8,631 13% Cash NPAT ($m) 8,680 12% ROE – Cash (%) 18.7 50 bpts Cash Earnings per Share ($) 5.36 11% Dividend per Share ($) 4.01 10% 7
Slide 8: Business Units
Additional information Business Units FY14 vs FY13 For personal use only % of Cost-to- Business Operating Operating Cash 1 Group Costs LIE Income Unit Income Performance NPAT NPAT Jun 14 RBS 40% 9% 4% 12% 6% 12% 36% BPB 18% 2% 2% 2% (10%) 4% 37% IB&M 14% 4% 9% 1% (60%) 5% 35% 2 Wealth 9% 9% 9% 10% n
Slide 9: All divisions contributing
All divisions contributing Cash NPAT FY14 For personal use only Markets (ex-CVA) 17% Income 2% Income 9% Avg Lending 9% Expenses 3% C:I lower - now 36.0% Deposit NIM lower Business loans 12% +12% 3,472 Business loans 4% 3 Avg FUA 19% Lending 5% Costs 2% Avg Inforce
Slide 10: Market Share
Additional Market Share 1 information % Jun 14 Dec 13 Jun 13 For personal use only Home loans 25.3 25.3 25.3 Credit cards – RBA2 24.9 24.7 24.4 Other household lending3 18.8 18.2 16.9 Household deposits4 28.6 28.6 28.8 Retail deposits5 25.4 25.4 25.5 Business lending – RBA 17.8 18.0 18.0 Business le
Slide 11: Volume growth continues
Volume growth continues 1 Home Lending Household Deposits Business Lending For personal use only Balance Growth Balance Growth Balance Growth 9.1% 9.0% 3.9% 4.2% 6.2% 6.7% 3.5% System CBA System CBA System BPB IB&M Business Deposits Credit Cards ASB Balance Growth Balance Growth Business & Rural Bal
Slide 12: Our strategy
Additional information Our strategy Customer Focus For personal use only People Productivity Technology Strength Capabilities “One CommBank” Growth Continued growth in business and institutional banking Opportunities Disciplined capability-led growth outside Australia TSR Outperformance 12
Slide 13: Consistent strategy
Consistent strategy For personal use only People and Engaged people committed to Culture customer service Improved efficiency enabling better service Productivity and reinvestment Technology Leading technology, innovative solutions Supporting our customers - strong balance Strength sheet, capital an
Slide 14: Customer Satisfaction
Additional information Customer Satisfaction Retail Customer Satisfaction1 Needs met per Customer2 For personal use only 86% 3.20 CBA CBA 84% Peers Peers 3.00 82% 80% 2.80 78% 2.60 76% 74% 2.40 72% 2.20 70% 68% 2.00 Jun 07 Jun 14 Jun 07 Jun 14 % Satisfied ('Very Satisfied' or 'Fairly Satisfied')1 Av
Slide 15: Long term focus on customers
Long term focus on customers For personal use only Area Measure CBA Rank Retail Roy Morgan Research 1 1st 4 Business DBM =1st Wealth Wealth Insights 6 1st IFS MRI – Foreign Banks 7 1st (PT Bank Commonwealth) 1, 4, 6, 7 Refer notes slide at back of this presentation for source information 15
Slide 16: Notes
For personal use only 16 Notes
Slide 17: Further significant upside
Further significant upside 3 MFI share3 CBA MFI share by age For personal use only % Overall 33.1% 32.8 33.1 45% 42% Opportunity 41% gap 20.1 20.2 MFI Share 13.6 13.5 11.1 11.4 29% 29% 27% Jun Jun Jun Jun Jun Jun Jun Jun 13 14 13 14 13 14 13 14 14-17 18-24 25-34 35-49 50-64 65+ CBA Peer 3 Peer 1 Pee
Slide 18: Notes
For personal use only 18 Notes
Slide 19: Productivity culture
Productivity culture For personal use only Local efficiency rather than offshoring Productivity Savings 94% of staff trained in ($m) Capability productivity habits 280 Certification of key staff 220 Qualifications in Lean and Six Sigma Visual Management Team Focus Boards bringing process impro
Slide 20: Productivity Metrics
Additional information Productivity Metrics Customer Service Personal Loans Asset Finance For personal use only Telling transactions per CSR per week % funded same day Credit approval time (minutes) +11% +14% (66%) +8% +6% (61%) Jun 12 Jun 13 Jun 14 Jun 12 Jun 13 Jun 14 Jun 12 Jun 13 Jun 14 Home Ins
Slide 21: Service, efficiency, reinvestment
Service, efficiency, reinvestment Service Improvements - Examples 1 Case Study – Asset Finance For personal use only Turnaround Times Approval Volumes Volume per 23% HomeSeeker time FTE Home Asset Finance loan Insurance Credit conditional (66%) +64% +188% Claims Approval approval (14%) (66%) (75%) J
Slide 22: Customer Satisfaction - Online
Additional information Customer Satisfaction - Online Customer Satisfaction - Website 3 For personal use only Customer Satisfaction – Internet Banking 6 97.0% 94.0% Satisfaction with Internet Banking Services 95.0% via "Website" or "App“ 6 93.0% 97.0% 91.0% 95.0% 89.0% 93.1% 87.0% CBA Peers 93.0% 85
Slide 23: Leading technology, innovative solutions
Leading technology, innovative solutions For personal use only Digital NetBank for Better Lock & Kaching for property Everyday mobile Business Android Insights FaceBook settlement origination Limit Mar 2013 in PEXA Dec 2013 May 2014 Feb 2011 Nov 2012 Jun 2013 Video New CommSec CommBank Cardless Prop
Slide 24: Leading technology, innovative solutions: Innovation
Leading technology, innovative solutions Innovation New CommBank app MyWealth For personal use only ~3 million registrations Winner of Canstar Innovation ~11 million logons per week Excellence Award 2014 1 ~$2bn in transactions per week ~100k customers since launch 1 Feb 13 24
Slide 25: Rate of innovation increasing for consumers
Rate of innovation increasing for consumers For personal use only Lock & Limit (May 14) Cardless Cash (May 14) 1 ■ Block or limit transactions ■ Withdraw up to $200 a day ■ Real time, 24/7 ■ Via CommBank app ■ Via CommBank app ■ Over 3,300 ATMs nationally 1 ■ 40,000 enrolments to date ■ 140k withdra
Slide 26: Contactless Tap & Pay
Leading technology, innovative solutions Contactless Tap & Pay For personal use only Contactless mobile payments Fast in-store payments using Near Field Communication CBA market leading in cards and $25 million+ in spend 1 terminals 1 1 million+ transactions Now 22% of all credit transac
Slide 27: Rate of innovation increasing for businesses
Rate of innovation increasing for businesses For personal use only Small Business App + Emmy (Apr 14) Daily IQ (Mar 14) 1 All-in-one small business payment solution iPad app for CommBiz customers On-the-spot payments, instant invoicing and more Business insights, cash flow reporting, industr
Slide 28: Notes
For personal use only 28 Notes
Slide 29: Strength to support our customers
Strength to support our customers Deposit Funding Wholesale Funding Tenor For personal use only % of Total Funding Years Portfolio Tenor1 63% 64% 3.8 3.8 62% 3.7 Jun 12 Jun 13 Jun 14 Jun 12 Jun 13 Jun 14 Liquids 2 Capital Liquids ($bn) Common Equity Tier 1 (Basel III International) 3 139 137 11.0% 1
Slide 30: Property Transactions
Additional information Notes Property Transactions For personal use only $m Jun 14 Property Transactions P&L impact – pre-tax 44 Investment experience – sale of units Non cash item – sale of management rights 24 30
Slide 31: Tailoring the portfolio
Tailoring the portfolio Property Transactions For personal use only 3 transactions completed CET1 since Dec 13 Transaction (APRA) Benefit1 (bpts) On strategy and well executed Internalisation of Kiwi - Income Property Trust Frees up ~$1bn in capital Internalisation of CFS +24 Retail Property T
Slide 32: Notes
For personal use only 32 Notes
Slide 33: David Craig, Chief Financial Officer
FOR THE FULL YEAR ENDED 30 JUNE 2014 For personal use only DAVID CRAIG CHIEF FINANCIAL OFFICER COMMONWEALTH BANK OF AUSTRALIA | ACN 123 123 124 | 13 AUGUST 2014
Slide 34: Notes
For personal use only 34 Notes
Slide 35: A strong financial result
A strong financial result For personal use only 1 Jun 14 vs $m Jun 14 Jun 13 Jun 13 Operating income 22,166 20,667 7% Operating expenses (9,499) (9,010) 5% Operating performance 12,667 11,657 9% Investment experience 235 154 53% Loan impairment expense (953) (1,082) (12%) Tax and non-controlling int
Slide 36: Non-cash items
Additional information Non-cash items For personal use only $m Jun 14 Jun 13 Hedging and IFRS volatility Unrealised accounting gains and losses arising from 6 27 the application of “AASB 139 Financial Instruments: Recognition and Measurement” Other Bankwest non-cash items (56) (71) Treasury sh
Slide 37: Statutory Profit up 13%
Statutory Profit up 13% For personal use only $m Jun 14 Jun 13 Cash NPAT 8,680 7,760 +12% Hedging and IFRS volatility 6 27 Other non-cash items (55) (169) Statutory NPAT 8,631 7,618 +13% 37
Slide 38: Other Banking Income
Additional information Other Banking Income Other Banking Income Net Trading Income For personal use only $m 1 Jun 14 vs $m Jun 14 Jun 13 426 291 241 281 443 420 508 414 Jun 13 26 Commissions 2,130 1,990 7% 52 80 44 189 158 Lending fees 1,083 1,053 3% 124 87 120 102 23 42 Other 188 250 (25%) 321 289
Slide 39: Income growth across all key lines
Income growth across all key lines Operating Income For personal use only $m +7% Funds & insurance Average FUA 16% Insurance income 11% +7% 2,752 2,567 Funds management margin 7bpts 4,323 4,156 +4% Other banking income Commissions/fees/other $108m 3% 1 Trading (underlying) $136m 64% CVA 2
Slide 40: Operating income
Additional information Operating income For personal use only $m Underlying +4.9% +1.5% +0.9% +7.3% 317 178 936 68 22,166 21,671 20,667 FY13 Underlying Underlying FY14 FX Benefit Timing 1 FY14 Banking Funds & Underlying Benefits Income Insurance Income 1 Includes the full period benefit of asset re-
Slide 41: 2nd Half income growth
2nd Half income growth Operating Income For personal use only $m Flat Underlying +3% Funds & insurance 11,067 11,099 Underlying (ex Property) +3% 1,389 (2%) 1,363 Other banking income 2,234 (6%) 2,089 Trading - CVA ($50m) Trading – Other ($44m) VIB ($50m) Underlying flat 7,444 +3% 7,647 Net interest
Slide 42: Group NIM
Additional information Group NIM For personal use only 12 Month Movement bpts 4 (3) (2) 1 1 213 214 1 FY13 FY13 Asset pricing Funding costs Basis risk Portfolio mix Other FY14 FY14 1 Includes Treasury, Replicating Portfolio, impact from change in Non Lending IEA’s and other unallocated items 42
Slide 43: Group NIM flat in the half
Group NIM flat in the half bpts Group NIM (Six Months) For personal use only bpts Group NIM 213 214 217 214 214 206 210 Jun 12 Dec 12 Jun 13 Dec 13 Jun 14 12 month NIM 2 (2) (5) 5 214 214 1 1H14 1H14 Asset pricing Funding costs Portfolio mix Other 2H14 2H14 1 Includes Treasury, Replicating Portfolio
Slide 44: Investment Spend
Additional information Investment Spend Investment Spend For personal use only $m 1,286 1,237 1,179 1,182 1,075 1,020 1,036 639 655 593 638 538 583 563 647 582 589 537 541 437 473 FY08 FY09 FY10 FY11 FY12 FY13 FY14 1st Half 2nd Half 44
Slide 45: Productivity benefiting underlying expenses
Productivity benefiting underlying expenses Operating Expenses For personal use only $m +5.4% Underlying 9,499 +0.8% +1.7% +0.9% 70 +0.3% 83 +1.7% 32 9,159 155 9,010 253 Cost-to-income (280) 176 44.6% 43.6% 42.9% 1 1 FY12 FY13 FY14 1 FY13 Productivity Staff Other FY14 FX Investment Amortisation Soft
Slide 46: Credit Quality
Additional information Credit Quality Commercial Portfolio Quality1 Loan Impairment Expense (Cash) to Gross Loans For personal use only TCE ($bn) bpts Consumer 2,3 400 300 26 200 19 18 17 17 100 0 Jun 12 Dec 12 Jun 13 Dec 13 Jun 14 FY10 FY11 FY12 FY13 FY14 AAA/AA A BBB Other Group Consumer Arrears L
Slide 47: Sound credit quality
Sound credit quality Loan Impairment Expense Home Loan Arrears For personal use only CBA Group 90+ days (basis points) 1 1.0% 2 73 0.0% Jun 12 Dec 12 Jun 13 Dec 13 Jun 14 RBS Bankwest ASB 3 Troublesome and Impaired Assets 41 $bn 12.3 11.1 10.5 10.1 9.5 25 3 5.5 8.2 21 4.9 4.7 7.0 20 3 4.5 4.3 16 3.9
Slide 48: Provision Coverage
Additional information Provision Coverage Collective Provisions1 to Credit RWA2 Provisions for Impaired Assets3 to Impaired Assets4 For personal use only 1.60% 50.0% 1.40% 40.0% 1.20% 30.0% 1.00% 0.80% 20.0% FY09 FY10 FY11 FY12 FY13 FY14 FY09 FY10 FY11 FY12 FY13 FY14 CBA Peer 1 Peer 2 Peer 3 CBA Pee
Slide 49: Provisions
Provisions Individual Provisions Collective Provisions For personal use only $m $m 2,837 2,858 2,779 823 Economic Overlay 847 762 overlay 2,008 portion unchanged 1,628 419 347 Bankwest 473 934 659 1,127 909 941 898 227 389 Consumer 157 128 847 812 610 Commercial 619 707 729 Jun 12 Jun 13 Jun 14 Jun
Slide 50: RBS
Additional information RBS Retail Banking Services Home Loan Market Share For personal use only Jun 14 vs $m Jun 14 Jun 13 28% Home loans 3,553 11% 26% 25.3% Consumer finance 2,279 11% 24% Retail deposits 2,273 3% 22% 23.2% Distribution 409 12% 20% Other 109 (3%) 18% Total banking income 8,623 9% 16
Slide 51: Retail Banking Services
Retail Banking Services Jun 14 vs Jun 13 Cost-to-Income Ratio For personal use only Segment Income Operating Performance Six Monthly (%) 11% 11% 12% 37.4 37.0 9% 35.0 3% 4% Home Consumer Retail Income Costs Operating Jun 13 Dec 13 Jun 14 loans finance deposits performance RBS Margin Retail Deposit M
Slide 52: Corporate
Additional information Corporate Business & Private Banking Institutional Banking & Markets For personal use only Jun 14 vs Jun 14 vs $m Jun 14 $m Jun 14 Jun 13 Jun 13 Corporate Financial Services 1,250 6% Institutional Banking 2,028 5% Regional and Agribusiness 727 1% Markets 651 - Local Business B
Slide 53: Corporate
Corporate BPB – Jun 14 vs Jun 13 IB&M – Jun 14 vs Jun 13 For personal use only Segment Income Operating Performance Segment Income Operating Performance 17% 9% 6% 2% 2% 2% 3% 5% 4% 1% 1% 0% 0% CFS RAB LBB Private Income Costs Operating Institutional Markets Markets Income Costs Operating Bank perfor
Slide 54: Wealth Management
Additional Wealth Management 1 information Wealth Management Platform3 Net Flows For personal use only $bn 4.2 Jun 14 vs $m Jun 14 Jun 13 CFSGAM 739 14% 2.0 2.0 2.1 1.7 1.7 1.8 Colonial First State2 829 6% CommInsure 707 7% Jun 11 Dec 11 Jun 12 Dec 12 Jun 13 Dec 13 Jun 14 Total operating income 2,27
Slide 55: Wealth Management
Wealth Management 1 Jun 14 vs Jun 13 FUA For personal use only Segment Income2 Operating Performance $bn +13% 14% 3.3 5.2 10% 18.5 9% 9% 3.0 245.0 253.5 7% 6% 223.5 CFSGAM CFS CommInsure Income2 Costs3 Operating Jun 13 Net Investment Dec 13 Net Investment Jun 14 flows income flows income performance
Slide 56: Funding
Additional information Funding Australian Deposits Term Maturity Profile1 For personal use only $bn Total Deposits $bn (excl CD’s) Weighted Average maturity 3.8yrs 376 326 3 265 7 187 2 221 174 6 168 27 6 123 2 21 21 189 152 15 97 98 11 12 CBA Peer 3 Peer 2 Peer 1 FY 2015 2016 2017 2018 2019 >2019 H
Slide 57: Funding and Liquidity
Funding and Liquidity Funding Liquidity 1 For personal use only $bn $bn Source of funds Use of funds 38 (31) 135 137 139 64% 52 58 58 Deposit Funded (41) 34 31 Reg min 33 30 $69bn 49 56 3 (7) 44 3 1 Equity IFRS & FX Net short term Customer New long term Long term 2 Lending Other Assets funding depos
Slide 58: Dividend per Share
Additional information Dividend per Share Payout For personal use only ratio (cash) 1 1 74.2% 75.0% 78.2% 73.9% 73.2% 75.8% 75.9% 75.1% 1 1 90% 81% 81% 84% 70% 84% 1 71% 87% 88% 1 62% 62% 63% 63% 84% 74% 61% cents 107 149 113 153 113 115 120 170 132 188 137 197 164 200 183 218 FY07 FY08 FY09 FY10 FY
Slide 59: Dividend
Dividend cents per share 401 +10% For personal use only 140% 364 334 120% 320 290 100% 256 266 228 80% 80% Target 78% 76% 1 76% 1 Range 74% 75% 74% 73% 75% 70% 60% 40% 20% FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 0% Column1 Cash NPAT Payout Ratio 1 FY12 and FY13 payout ratios restated following retro
Slide 60: Notes
For personal use only 60 Notes
Slide 61: Strong Capital Position
Strong Capital Position 12.1% 11.0% For personal use only CET1 9.8% 6.9% 9.3% 8.2% 7.5% +70bpts +107% 4.5% 47 23 12.1% 11.4% Jun 07 Jun 12 Jun 13 Jun 14 Internationally harmonised 1 52 28 9.3% Strong organic growth APRA 8.5% Jun 14 DRP to be 8.0% neutralised Dec 13 Organic Listed Property Jun 14
Slide 62: Notes
For personal use only 62 Notes
Slide 63: International Peer Basel III CET1
International Peer Basel III CET1 For personal use only 15.2 13.5 12.9 Peer bank average CET1 ratio 12.1 (ex. Australian banks): 11.5 11.3 11.3 11.1 11.1 10.9 10.7 10.6 10.5 10.5 10.5 10.4% 10.4 10.4 10.3 10.2 10.1 10.1 10.0 10.0 10.0 9.9 9.9 9.9 9.8 9.8 9.7 9.6 9.5 9.5 9.4 9.2 9.1 8.6 8.2 2 Barclay
Slide 64: CBA vs peers in each jurisdiction
Additional information CBA vs peers in each jurisdiction Under UK regime Under European regime Under Canadian regime For personal use only 13.5 13.7 12.4 11.5 11.5 11.1 10.5 10.4 10.2 10.1 9.9 10.0 10.0 9.9 9.8 9.5 9.4 9.7 9.2 8.2 CBA RBS CBA UBS Deutsche BBVA CBA RBC Barclays Lloyds SocGen Santande
Slide 65: CBA CET1 under various regulatory regimes
CBA CET1 under various regulatory regimes 1 For personal use only +4.4% +2.2% +3.1% +3.4% 13.7% 1.3%2 1.2%2 12.4% 12.7% 12.1% 11.5% 8.0% 9.3% D-SIB buffer 1.0% CBA if regulated in Singapore CBA if regulated in Canada CBA if regulated in Europe Internationally harmonised CCB 2.5% CBA if regulated in
Slide 66: Result quality
Additional information Result quality 1 Group NIM ROE For personal use only 2.6 Cash basis % 18.8% 2.5 2.4 16.5% 2.3 15.5% 2.2 14.6% 2.1 2.0 1.9 1.8 Mar 11 Sep 11 Mar 12 Sep 12 Mar 13 Sep 13 Mar 14 Jun 14 CBA Peer 3 Peer 1 Peer 2 CBA Peers CBA ROE for 2H14 2 2 Capitalised Software Capital APRA CET1
Slide 67: Financial Summary
Financial Summary A strong result All divisions contributing For personal use only FY14 vs FY13 Cash NPAT Growth FY14 +12% +12% 3,472 +9% +7% +4% +5% 1,526 +17% +21% +19% 1,258 692 680 742 $m 1 2 Operating Operating Cash RBS BPB IB&M WM BWA NZ Income Performance NPAT Productivity, efficiency, reinve
Slide 68: Notes
For personal use only 68 Notes
Slide 69: Ian Narev, Chief Executive Officer
FOR THE FULL YEAR ENDED 30 JUNE 2014 For personal use only IAN NAREV CHIEF EXECUTIVE OFFICER COMMONWEALTH BANK OF AUSTRALIA | ACN 123 123 124 | 13 AUGUST 2014
Slide 70: Economic Indicators
Additional information Economic Indicators Economic Summary – Australia For personal use only 2015 2016 2010 2011 2012 2013 2014 (f) (f) Credit Growth % – Total 3.0 2.7 4.4 3.1 5.1 4-6 4½-6½ Credit Growth % – Housing 8.0 6.0 5.0 4.6 6.4 5¼-7¼ 5½-7½ Credit Growth % – Business -4.0 -2.2 4.4 1.0 3.5 2½
Slide 71: Outlook
Outlook For personal use only Domestically: – Strong foundations, but confidence remains fragile – Lower interest rates a positive for housing/construction, offsetting reduced investment in resource sector – Increased production from investments in resource sector Recent relative stability in gl
Slide 72: Notes
For personal use only 72 Notes
Slide 73: Summary
Summary Consistent strategic focus on the customer: For personal use only – People Leading customer satisfaction – Productivity Sustained productivity gains – Technology Rate of innovation increasing – Strength Strong balance sheet Continuing growth: – Cash NPAT +12% – ROE +50bpts – EPS +11% – D
Slide 74: Supplementary Slides
FOR THE FULL YEAR ENDED 30 JUNE 2014 For personal use only PAGE Overview, Customers & People 75 Technology & Innovation 87 Strength – Capital, Funding & Risk 97 Business Performance 123 Economic Indicators 139 SUPPLEMENTARY SLIDES COMMONWEALTH BANK OF AUSTRALIA | ACN 123 123 124 | 13 AUGUST 2014
Slide 75: CBA Overview
CBA Overview For personal use only Largest Australian bank by market capitalisation AA- / Aa2 / AA- Credit Ratings (S&P, Moodys, Fitch) Basel III CET1 (International) 12.1% Total assets of $791bn ~15 million customers ~52,000 staff 1,150 branches (includes Bankwest) #1 in household d
Slide 76: Strong contributor to Australian economy
Strong contributor to Australian economy Operating Income For personal use only FY14 Loan impairment Expenses Cost of lending across Serving ~15 million the economy customers $1.0bn $4.0bn Tax expense $3.2bn Australia’s 3rd largest Salaries tax payer, equivalent to Employing ~42,000 $5.5bn $2.0bn 4%
Slide 77: Creating jobs and opportunities
Creating jobs and opportunities Providing direct Accounting for 1 in 10 For personal use only employment to ~42,000 people working in the people in Australia, Australian financial ~52,000 people globally services sector Paid $4bn to ~6,000 Paid $4bn in wages suppliers in FY14 – to Australian househo
Slide 78: Return on Equity
Return on Equity Cash ROE For personal use only 600 550 20.4% 19.5% 500 18.7% 18.4% 18.2% 18.7% 15.8% 1.1% 450 1.0% 400 Return on 350 Assets 300 250 200 150 100 2008 2009 2010 2011 2012 2013 2014 78
Slide 79: Bank Profitability
Bank Profitability ROE1 CBA Ranking For personal use only % Indonesia (Amongst ASX 100 companies) China Russia CBA Canada Rank2 India Market capitalisation (ASX) 2nd Australia Singapore South Korea Dividends declared 1st Japan United States Taxes Paid 3rd United Kingdom France Return-on-Equity (ROE)
Slide 80: Our stakeholders
Our stakeholders Customer Product Holdings1 For personal use only 14.4m Super fund unit holders ? 5.0m 10.9m 4.5m 2.2m 4.2m 1.8m 3.2m 812k 1.8m 720k 335k 1.2m 800k 52k Home Loans Credit Cards Retail Savings and Insurance Personal Loans Business Funds CommSec Shareholders Employees Transactions Relat
Slide 81: Home Loan Growth Profile
Home Loan Growth Profile Home Loan Balances RBS Channel Growth 1 For personal use only $bn 28 8.7% (77) 73 7.1% (7) 6.2% 6.0% 5.9% 4.7% 5.2% 4.4% 285 302 Jun 13 New Redraw Repayments External Jun 14 fundings & interest / Other refinance FY13 FY14 RBS Broker RBS Proprietary RBS System Excludes Bankwe
Slide 82: Customer Satisfaction
Customer Satisfaction Retail Customer Satisfaction1 Business Customer Satisfaction4 For personal use only 86% 8.0 CBA CBA 84% Peers Peers 82% 80% 78% 7.0 76% 74% 72% 70% 68% 6.0 Jun 07 Jun 14 Jun 11 Jun 14 % Satisfied ('Very Satisfied' or 'Fairly Satisfied')1 Customer Satisfaction - Average 1, 4 Ref
Slide 83: Business Customer Satisfaction
Business Customer Satisfaction 5 Micro Small For personal use only 7.8 7.8 7.6 7.6 7.4 7.4 7.2 7.2 7.0 7.0 6.8 6.8 6.6 6.6 6.4 6.4 6.2 6.2 Jun 11 Jun 12 Jun 13 Jun 14 Jun 11 Jun 12 Jun 13 Jun 14 CBA Peers CBA Peers Medium Large 8.0 8.5 7.8 8.0 7.6 7.4 7.5 7.2 7.0 7.0 6.8 6.5 6.6 6.4 6.0 Jun 11 Jun 1
Slide 84: Sustainability Progress
Sustainability Progress During the financial year, the Board-endorsed sustainability framework with its five focus areas has continued to support the Group’s vision and the creation of enduring value for our customers, people, shareholders and the broader community. For personal use only • New Board
Slide 85: Sustainability Scorecard
Sustainability Scorecard Units FY14 FY13 FY12 FY11 FY10 FY09 For personal use only Roy Morgan MFI Retail customer % 83.2 83.0 79.0 75.2 75.6 73.0 Satisfaction1 Rank 1st 1st 2nd 4th 2nd 3rd Customer Avg. score 7.4 7.4 7.3 7.1 7.0 satisfaction DBM Business Financial Services Monitor2 n/a Rank =1st =1s
Slide 86: Customer needs met
Customer needs met 8 Products per Customer 2 Products per Customer2 Wealth Product Penetration For personal use only Wealth Share of Lending and Cards 8.08 3.00 3.04 product Deposits CBA 12.3% 2.83 4.00 2.72 0.49 12.3% 2.63 0.50 2.50 0.47 Peer 3 11.3% 0.47 2.29 0.49 0.21 0.22 3.04 2.15 0.48 0.21 0.4
Slide 87: Australia's leading technology bank
Australia’s leading technology bank For personal use only 5.0m #1 #1 active online 1 2 Mobile finance app Social & Facebook customers #1 #1 2.6m Customer Customer unique app users Satisfaction – Satisfaction – website 3 Apps 4 MFI for #1 #1 1 in 3 Customer Satisfaction – In the youth 5 Australians 7
Slide 88: Technology transformation
Technology transformation For personal use only Putting the customer at the centre of everything we do Revitalised front- Best-in-class Innovating in the Securing the line customer online, mobile & back-end digital future interface social platforms Single view of customer Legacy system replaceme
Slide 89: Leading technology, innovative solutions
Leading technology, innovative solutions CommBiz Mobile Small Business App + Emmy For personal use only + Next generation app, powered by Pi Real time account balances and transaction history On-the-spot payments, instant invoicing, cash flow reporting etc Create, view and authorise payments
Slide 90: Leading technology, innovative solutions
Leading technology, innovative solutions Online Origination – Everyday Online Origination - Business For personal use only 1 1 Launched Jun 14 Account opening in <60 seconds Real-time online customer Simple, seamless process across verification and account opening all devices (desktop, table
Slide 91: Leading technology, innovative solutions
Leading technology, innovative solutions Motor Insurance Origination ASB For personal use only Launched Jun 14 ASB app satisfaction at 82%, 4% Intuitive & easy to use, any device ahead of competitors 1 Doubled digital sales since launch ASB PayTag trial underway Motor insurance sales thr
Slide 92: Transaction volumes
Transaction volumes Branch ATMs For personal use only (deposits & withdrawals) m m (all transactions1) 130 325 282 77 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2 3 EFTPOS Internet m (all transactions, including credit card
Slide 93: Transaction volumes
Transaction volumes % of total transactions NetBank logins via mobile device* For personal use only 70% FY14 Weekly By number By value 65% 4% 60% 13% 10% 55% 39% 21% 62% 50% 47% 4% 45% 40% EFTPOS ATM 35% Internet Branch Apr 12 Jan 13 Jun 14 * Tablet and mobile 93
Slide 94: Self service and digital
Self service and digital Accounts with e-statements Accounts with e-statements For personal use only Credit Cards (% of total) Transactions and Savings (% of total) 31% 45% 35% 19% Dec 11 Jun 12 Dec 12 Jun 13 Dec 13 Jun 14 Dec 11 Jun 12 Dec 12 Jun 13 Dec 13 Jun 14 Intelligent Deposit Machines (IDMs)
Slide 95: Branch of the Future
Branch of the Future Video conferencing facilities in all branches - 1 Proud People, Leading Technology, For personal use only Simple & Easy Processes access to CBA specialists (financial planning, lending, investing, business banking, agri- business) ~ 60,000 referrals in FY14 Dedicated small b
Slide 96: High impact system incidents
High impact system incidents For personal use only 400 338 314 153 150 93 67 44 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 96
Slide 97: RBS Home Loan Book Quality
RBS Home Loan Book Quality Sound Portfolio dynamic LVR1 of 48% For personal use only 76% of customers paying in advance of required monthly mortgage repayment 2 Maximum LVR of 95%3 for low risk customers Low Deposit Premium (LDP) available to low risk customers for higher LVR loans Lenders Mortgage
Slide 98: RBS Home Loan Portfolio
RBS Home Loan Portfolio Jun 14 Jun 13 Jun 14 Jun 13 For personal use only Total Balances - Spot ($bn) 302 285 Total Funding ($bn)1 73 63 Total Balances - Average ($bn) 293 278 Average Funding Size ($’000)1 254 244 Total Accounts (m) 1.5 1.4 Serviceability Buffer (%)8 1.5 1.5 Variable Rate - % of bal
Slide 99: RBS Home Loans – LVR & Arrears
RBS Home Loans – LVR & Arrears Home Loan Dynamic LVR1 Profile Home Loan Arrears Rates by Vintage For personal use only 90+ days 70.0% Average Dynamic 2.0% LVR1 60.0% Jun 13 48% Dec 13 49% 50.0% Jun 14 48% 1.5% Proportion of Total Portfolio 40.0% FY09 FY08 1.0% 30.0% FY07 20.0% FY10 0.5% FY11 10.0% F
Slide 100: Consumer Arrears (Group)
Consumer Arrears (Group) Credit Cards 1 Personal Loans 1 For personal use only 90+ days 90+ days 2.0% 2.0% 1.0% 1.0% 0.0% 0.0% Jun 12 Dec 12 Jun 13 Dec 13 Jun 14 Jun 12 Dec 12 Jun 13 Dec 13 Jun 14 RBS Bankwest ASB RBS Bankwest ASB Home Loans 1 RBS Home Loans 2.0% 90+ days 2.0% 90+ days 1.0% 1.0% 0.0
Slide 101: Consumer Arrears (RBS)
Consumer Arrears (RBS) Home Loans Home Loans by State For personal use only 2.2% 30+ days 30+ days 3.0% 2.0% 2.5% 1.8% 1.6% 2.0% 1.4% 1.5% 1.2% 1.0% 1.0% 0.8% 0.5% 0.6% 0.0% Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jun 11 Dec 11 Jun 12 Dec 12 Jun 13 Dec 13 Jun 14 09/10 10/11 11/12 12/13 1
Slide 102: RBS Home Loans – Stress Test
RBS Home Loans – Stress Test Observations Key Assumptions For personal use only Base Year 1 Year 2 Year 3 Unemployment 5.9% 7.0% 10.5% 11.5% Aggressive 3 year “stress test” scenario of Hours under-employed1 9.4% 11.4% 15.8% 18.4% cumulative 32% house price decline and Cumulative House Prices n/a -
Slide 103: Credit Exposures by Industry
Credit Exposures by Industry 1 Jun 14 Jun 14 Jun 13 Jun 13 For personal use only Consumer 55.8% 54.9% Agriculture 2.0% 2.0% Mining 1.5% 1.5% Manufacturing 1.8% 1.8% Energy 1.0% 0.9% Construction 0.8% 0.8% Retail & Wholesale 2.2% 2.2% Transport 1.5% 1.7% Banks 9.0% 9.9% Finance – other 3.4% 3.5% Busi
Slide 104: Sector Exposures
Sector Exposures Commercial Exposures by Industry 1,2 Top 20 Commercial Exposures2 For personal use only AAA A+ BBB+ $m $bn Other Total to AA- to A- to BBB- A- Banks 35.7 39.0 5.8 1.0 81.5 BBB+ A Finance Other 10.8 13.5 3.1 3.8 31.2 A+ A- Property 0.8 6.4 11.9 39.2 58.3 A+ A- Sovereign 64.5 5.1 0.6
Slide 105: Commercial Property Market
Commercial Property Market CBD Office Supply Pipeline1 CBD Vacancy Rates For personal use only % of Total Stock 40% 1991 Recession Previous Current Peak 1990s Previous Current 40% (1st Half FY14) (2nd Half FY14) (1st Half FY14) (2nd Half FY14) 35% 35% 30% 30% 25% 25% 20% 20% 15% 15% 10% 10% 5% 5% 0%
Slide 106: Interest Rate Risk in the Banking Book
Interest Rate Risk in the Banking Book For personal use only 25bpts 27bpts 24bpts 29bpts 43bpts 47bpts 43bpts $1,303m $1,403m $1,181m $880m Optionality Risk $781m Basis Risk $922m $776m Optionality Repricing and Risk Yield Curve Basis Risk Risk Repricing & Yield Curve Risk Embedded Gain (offset to c
Slide 107: Risk Weighted Assets
Risk Weighted Assets Total Risk Weighted Assets Credit Risk Weighted Assets For personal use only $bn $bn 6.9 ( 0.7) ( 2.8) 2.2 (1.1) 0.1 337.7 (0.6) 6.9 (0.5) 289.1 334.2 282.2 Dec 13 Credit Risk Traded IRRBB Operational Jun 14 Dec 13 Dec 13 Volume CRE & 3 FX Credit Quality Data & Jun 14 Treatments
Slide 108: Regulatory Exposure Mix
Regulatory Exposure Mix For personal use only Regulatory Credit Exposure Mix CBA Peer 1 Peer 2 Peer 3 Residential Mortgages 58% 37% 41% 56% Corporate, SME & Specialised Lending 25% 33% 40% 30% Bank 5% 13% 9% 4% Sovereign 8% 9% 8% 5% Qualifying Revolving 3% 3% 1% 3% Other Retail 1% 5% 1% 2% Total Adv
Slide 109: Regulatory expected loss
Regulatory expected loss For personal use only $m Jun 14 Dec 13 Jun 13 CBA Regulatory Expected Loss (EL) 4,669 4,516 5,682 Eligible Provision Collective provision 1 2,574 2,698 2,668 Individually assessed provisions 1,2 1,980 2,192 2,668 Other provisions 40 24 31 Subtotal 4,594 4,914 5,367 General R
Slide 110: APRA & international comparison
APRA & international comparison For personal use only The following table provides details of the impact on CBA Group capital, as at 30 June 2014, of the differences between the APRA Basel III prudential requirements 1 and the requirements of the Basel Committee on Banking Supervision (BCBS).1 Tier
Slide 111: APRA & international comparison
APRA & international comparison For personal use only ♦ The APRA prudential requirements are more conservative than those of the BCBS, leading to lower capital ratios under APRA: 100% deduction is required from CET1 for equity investments in financial institutions and entities that are not consolida
Slide 112: CET1 Movement
CET1 Movement International APRA For personal use only Mvts in Mvts in bpts bpts (74) 12.1% (28) 23 5 144 11.4% (66) 7 9.3% (18) 129 28 8.5% Dec 13 Dec 13 Cash Dividend 1 Credit Listed Property Other Jun Jun 14 14 Dec 13 Dec 13 Cash Dividend 1 Credit Listed Property IRRBB Jun 14 Jun 14 NPAT (net of
Slide 113: Colonial Group Debt
Colonial Group Debt For personal use only Capital benefit from Colonial Group Colonial Group debt will debt maturity profile % be phased out as existing debt matures 9.3 No immediate capital 1 Impact on CET1 impact and strong capital generation will mitigate impact in future periods Timing of
Slide 114: D-SIB and CCB Buffer
D-SIB and CCB Buffer For personal use only In December 2013, APRA announced % of earnings that the Australian major banks are able to be used for discretionary domestic systemically-important banks CET1 ratio Value payments (D-SIBs) Above top of PCR + 3.5%, 100% CCB and above From 1 January 2016
Slide 115: Leverage Ratio
Leverage Ratio ♦ Supplementary measure to the risk For personal use only based capital requirements proposed APRA’s view of industry levels by the Basel Committee (November 2011) – Monitors build up of excessive leverage – Ratio is Tier 1 Capital as a percentage of total exposures (on and off balanc
Slide 116: Funding - Portfolio
Funding - Portfolio Funding Composition Wholesale Funding by Product For personal use only 1% 2% Customer Deposits 6% 5% Structured MTN 3% 10% 10% Vanilla MTN ST Wholesale Funding Commercial Paper 2% 4% LT Wholesale Funding maturing Debt Capital < 12 months 9% 31% CDs LT Wholesale Funding maturing >
Slide 117: Funding – Issuance and Maturity
Funding – Issuance and Maturity 1 Funding strategy driven by market and investor diversity, appropriate maturity profile and overall cost For personal use only Term wholesale funding requirement has eased materially since FY 2010 $bn 60 50 9 40 Weighted Average Maturity 3.8yrs 7 Expected 30 3 fu
Slide 118: Replicating Portfolio and Funding Costs
Replicating Portfolio and Funding Costs 2 Replicating Portfolio 1 Average Long Term Funding Costs For personal use only Actual and Forecast Scenario % Margin to BBSW Portfolio average cost Indicative spot market cost Replicating Portfolio Yield 2.00 Predicted funding costs if 1.75 current market rat
Slide 119: Funded Assets
Funded Assets For personal use only $bn Jun Jun $bn 14 13 Transactions 102 88 3 7 3 1 34 49 Equity Savings 127 107 Investments 196 199 Long term1 136 wholesale Other 14 11 Total customer 439 405 737 738 deposits 690 114 Short term wholesale Wholesale 250 239 funding Total funding 689 644 Customer 43
Slide 120: 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 7% 7% Equity 10% Equity Cash 12% Home Loans 21% Home Loans 10% 55% Deposits 53% Deposits 40% Other Lending Other Lending 43% 8% Long Term Other Fair 16% 10% Long Term Other Fair
Slide 121: 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 4% term 6% Equity Trading securities and other fair value
Slide 122: Regulatory Change
Regulatory Change 2015 2016 2018 For personal use only Leverage ratio Capital conservation buffer Capital observation period (publicly disclosed) to be implemented (CET1 2.5%) Leverage ratio Level 3 reforms D-SIB surcharge to be implemented to be implemented to be implemented (CET1 1.0%) Capital ♦ S
Slide 123: CFSGAM – Global Reach
CFSGAM – Global Reach For personal use only Edinburgh London Frankfurt Toronto Paris New York Beijing Tokyo Dubai Hong Kong Shenzhen Singapore Australia and New Zealand AUM $100.8 billion* Jakarta UK, Europe and Middle East AUM $50.4 billion Asia AUM $15.9 billion Sydney North America Melbourne Auck
Slide 124: RBS – Half Year Periods
RBS – 6 Month Periods Jun 14 vs Jun 14 vs For personal use only $m $m Jun 14 Dec 13 Jun 13 Dec 13 Jun 13 Net interest income Home loans 1,681 1,665 1,567 1% 7% Consumer finance 891 858 804 4% 11% Retail deposits 976 890 874 10% 12% Other 24 19 20 26% 20% 3,572 3,432 3,265 4% 9% Other banking income
Slide 125: Retail Banking Services
Retail Banking Services FY14 vs FY13 2H14 vs 1H14 For personal use only FY14 vs 2H14 vs $m FY14 FY13 2H14 1H14 Home loans 3,553 11% Solid funding growth 1,781 1% Solid balance growth Improved margins Improved margins & solid Consumer finance 2,279 11% 1,150 2% balance growth Strong growth
Slide 126: BPB – Half Year Periods
BPB – 6 Month Periods Jun 14 vs Jun 14 vs For personal use only $m Jun 14 Dec 13 Jun 13 Dec 13 Jun 13 Net interest income Corporate Financial Services 470 462 448 2% 5% Regional & Agribusiness 311 311 310 - - Local Business Banking 519 533 529 (3%) (2%) Private Bank 124 122 122 2% 2% CommSec 72 73 7
Slide 127: BPB
BPB FY14 vs FY13 2H14 vs 1H14 For personal use only FY14 vs 2H14 vs $m FY14 FY13 2H14 1H14 Strong Lending and Deposit Strong Lending and Deposit balance growth partly offset balance growth partly offset by Corporate Financial by margin compression in 1,250 6% 625 - margin compression in Deposits
Slide 128: IB&M – Half Year Periods
IB&M – 6 Month Periods For personal use only $m Jun 14 vs Jun 14 vs $m Jun 14 Dec 13 Jun 13 Dec 13 Jun 13 Net interest income Institutional Banking 635 615 551 3% 15% Markets 82 89 93 (8%) (12%) 717 704 644 2% 11% Other banking income Institutional Banking 387 391 412 (1%) (6%) Markets 207 273 217 (
Slide 129: IB&M
IB&M FY14 vs FY13 2H14 vs 1H14 For personal use only FY14 vs 2H14 vs $m FY14 FY13 2H14 1H14 Growth in average balances and higher Growth in average lending Institutional Banking 2,028 5% lending margins partly 1,022 2% and deposit balances offset by margin compression for deposits Strong tradi
Slide 130: WM – Half Year Periods
WM – 6 Month Periods 1 For personal use only Jun 14 vs Jun 14 vs $m Jun 14 Dec 13 Jun 13 Dec 13 Jun 13 Total operating income CFSGAM 371 368 338 1% 10% Colonial First State2 408 421 400 (3%) 2% CommInsure 357 350 327 2% 9% 1,136 1,139 1,065 - 7% Operating expenses CFSGAM (241) (227) (188) 6% 28% Col
Slide 131: Wealth Management
Wealth Management 1 FY14 vs FY13 2H14 vs 1H14 For personal use only FY14 vs 2H14 vs $m FY14 FY13 2H14 1H14 Average AUM 17%, Average AUM 4%, benefiting benefiting from strong CFSGAM from positive investment market 739 14% investment performance in 371 1% performance, partly offset by rising equ
Slide 132: NZ – Half Year Periods
NZ – 6 Month Periods For personal use only Jun 14 vs Jun 14 vs NZ$m Jun 14 Dec 13 Jun 13 Dec 13 Jun 13 Net interest income ASB 755 743 693 2% 9% Other 14 5 (2) large large Total NII 769 748 691 3% 11% Other banking income ASB 160 177 167 (10%) (4%) Other (15) (15) (16) - (6%) Total OBI 145 162 151 (
Slide 133: New Zealand
New Zealand FY14 vs FY13 2H14 vs 1H14 For personal use only FY14 vs 2H14 vs NZ$m FY14 FY13 2H14 1H14 Lending 5% and retail Continued improvement in ASB Operating deposits 6% funding conditions Income 1,899 8% Improvement in funding 948 - Lower fee income and conditions trading performanc
Slide 134: Bankwest – Half Year Periods
Bankwest – 6 Month Periods For personal use only Jun 14 vs Jun 14 vs $m Jun 14 Dec 13 Jun 13 Dec 13 Jun 13 Net interest income 773 804 776 (4%) - Other banking income 103 103 100 - 3% Total banking income 876 907 876 (3%) - Operating expenses (398) (401) (409) (1%) (3%) Loan impairment expense (6) (
Slide 135: Bankwest
Bankwest FY14 vs FY13 2H14 vs 1H14 For personal use only FY14 vs 2H14 vs $m FY14 FY13 2H14 1H14 Modest growth in average interest earning Decrease in average interest Banking income 1,783 2% assets 876 (3%) earning assets Improved net interest Lower net interest margin margin Efficiency sa
Slide 136: CBA in Asia
CBA in Asia Cash NPAT1 For personal use only Growth driven by a strong performance from $m Growth driven by strong the Lending, Leasing and Trade Finance investment performance businesses, combined with the benefit of a Strong contribution from China and the benefit of a weaker Australian dollar. in
Slide 137: CBA in Asia – Strong proprietary growth
CBA in Asia – Strong proprietary growth 1 2 NPAT and Revenue (A$m) Proprietary Customers For personal use only ‘000 200 IFS Asia 80 450 70 400 Cash NPAT CAGR - 34% 150 Revenue CAGR - 15% 60 350 50 300 100 40 250 30 200 50 20 150 10 100 - - 50 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 J
Slide 138: CBA in Asia
CBA in Asia Japan For personal use only ♦ Tokyo CBA branch, First State Investments China ♦ Bank of Hangzhou (20%): 149 branches ♦ Qilu Bank (20%): 93 branches ♦ County Banking - Henan: 7 Banks and 2 branches (5 Banks and 2 branches @ 80% and 2 Banks @ 100% shareholding) - Hebei: 8 Banks (5 Banks @
Slide 139: Australia in perspective
Australia in perspective The economy is set to complete 23 years of …but the unemployment rate is yet to peak For personal use only continuous economic growth… AUSTRALIA: ECONOMIC GROWTH UNEMPLOYMENT RATE (annual % change) % (trend estimates) % % % 6 22 years 6 6.0 6.0 5.5 5.5 3 3 5.0 5.0 0 0 4.5 4.
Slide 140: Australia in perspective
Australia in perspective Household and corporate balance sheets are The current account and Budget balance have For personal use only in good shape narrowed in recent years CREDIT % (% of GDP) % % AUSTRALIA: KEY BALANCES % 100 100 (rolling annual total, % of GDP) 3 3 Household Budget balance 75 75 0
Slide 141: The global backdrop
The global backdrop Global recovery - more advanced economies Asian export market s critical to Australia. For personal use only than emerging economies Exports to China continue to reach new highs MANUFACTURING PMI'S AUSTRALIA: EXPORTS TO CHINA Index Index 60 60 (rolling annual total) $bn $bn Matur
Slide 142: Progress on the growth transition
Progress on the growth transition The non-mining economy will need to make a For personal use only The targeted areas are lifting larger contribution to growth GROWTH DRIVERS FROM MINING PEAK TRANSITION INDICATORS (cumulative contribution to GDP since end 2012) % (annual % change) 60 300 % Other % R
Slide 143: Progress on the growth transition – the export boom
Progress on the growth transition – the export boom Resource exports will grow at 8-10%pa over Australia will become the largest LNG For personal use only the next two years exporter before 2020 KEY RESOURCE EXPORTS LIQUEFACTION CAPACITY Mt Mt (million tonnes pa) 1000 100 Australia Qatar 750 75 Afri
Slide 144: Progress on the growth transition – residential construction & non-mining capex
Progress on the growth transition – residential construction & non-mining capex A strong residential construction upturn is For personal use only Non-mining capex is beginning to turn up underway DWELLING COMMENCEMENTS LENDING & NON-MINING CAPEX '000 '000 % (annual % change) % 40 70 Thousands Thousa
Slide 145: Threats to the growth transition
Threats to the growth transition Potential for significant job losses in areas The Australian Dollar remains high by For personal use only related to resource investment historical standards MINING CAPEX & JOBS THE AUD % % USD USD 3 9 1.20 1.20 Jobs related to resource investment (% of total employm
Slide 146: Progress on the inflation transition
Progress on the inflation transition Key inflation measures are near the top of the The convergence between domestic & For personal use only RBA’s inflation target imported inflation has been to the high side CONSUMER PRICES INFLATION % (annual % change) % % (annual % change) % 9 9 Non- tradables Un
Slide 147: Housing market - summary
Housing market - summary Australian house prices underwent a modest correction during the Global Financial Crisis but are rising For personal use only again and have now exceeded previous peaks. Recent increases in house prices have been concentrated in Sydney (where real prices were little chan
Slide 148: Rising Australian dwelling prices
Rising Australian dwelling prices Dwelling prices Dwelling price growth For personal use only DWELLING PRICES 3 Years 12 mths 6 mths Index (houses and other dwellings) Index to to to change (%) Sydney Jun 14 Jun 14 Jun 14 700 700 Sydney 19.5 15.4 5.5 Melbourne Melbourne 5.7 9.4 2.9 550 Perth 550 Bri
Slide 149: Stronger household balance sheets
Stronger household balance sheets The household savings rate is below peaks Cautious approach to debt has kept For personal use only but still remains high household balance sheets in good shape HOUSEHOLD CREDIT & SAVINGS HOUSEHOLD FINANCES % % % %pa 24 180 -6 24 Household Debt to credit disposable
Slide 150: Natural correction mechanism at work
Natural correction mechanism at work Rising house prices dampen housing Rising vacancy rates and slower rental growth For personal use only affordability reduces rental yields HOUSING AFFORDABILITY* VACANCY RATES & RENTS Index Index % % 80 80 9 9 * The CBA-HIA affordability measure compares househol
Slide 151: Urbanisation rates important in assessing house prices
Urbanisation rates important in assessing house prices Urban population Density & house prices Dwelling prices For personal use only URBAN POPULATION DENSITY & HOUSE PRICES (% of total) %80urban pop DWELLING PRICES Australia in 2 largest *Source: OECD/RBA (ratio to household income) New Zealand citi
Slide 152: Factors that characterise a house price bubble not evident in Australia
Factors that typically characterise a house price bubble are not evident in Australia Housing “Bubble” – For personal use only Current position in Australia typical characteristics Unsustainable asset prices Prices supported by the excess of demand over supply Australia’s population continues to
Slide 153: Differences between Australian and US housing markets
Significant differences between Australian and US housing markets minimise risk of a US style house price collapse CBA / Aust US Australian mortgage product For personal use only Principal and interest amortising 25/30 Unemployment 6.4%1 6.2%2 year loan Variable interest rate set at bank’s No-Re
Slide 154: New Zealand Economic Summary
New Zealand Economic Summary – New Zealand For personal use only 2014 2015 2016 2010 2011 2012 2013 (f) (f) (f) Credit growth (annual – June 0.7 1.5 3.2 3.9 4.2 4-6 3½-5½ vs June) Household credit 2.5 1.2 1.8 5.1 5.2 3½-5½ 3-5 Business credit -7.6 1.2 3.9 1.8 3.2 3½-5½ 5-7 Agriculture credit 2.6 -0.
Slide 155: Customer Satisfaction - Sources
Customer Satisfaction - Sources For personal use only 1 Roy Morgan Research Retail Main Financial Institution (MFI) Customer Satisfaction. Australian population 14+, % “Very Satisfied” or “Fairly Satisfied” with relationship with that MFI. 6 month rolling average to June 2014. Rank based on comparis
Slide 156: Technology - Sources
Technology - Sources 1 CommBank app on iOS and Android. Sources are the Apple App Store and the Google Play Store. For personal use only 2 CBA’s combined following across Facebook, Twitter, LinkedIn and Google+ is the largest of the main Australian banks. In addition, global independent website The
Slide 157: Productivity Metrics - Definitions
Productivity Metrics - Definitions For personal use only Measure Metric Timeframe Credit approval time - asset finance Average time taken to issue a credit approval FY14 v FY12 Time to verify HomeSeeker conditional pre- Conditional approval time - HomeSeeker loans FY14 v FY13 approvals The median nu
Slide 158: Sustainability scorecard – sources and definitions
Sustainability scorecard – sources and definitions Complete definitions for scorecard metrics are available at www.commbank.com.au/sustainability2014 For personal use only All metrics capture data from Australian domestic operations only (excluding Bankwest), unless otherwise stated. 1 Proportion of
Slide 159: Ian Narev and David Craig
FOR THE FULL YEAR ENDED 30 JUNE 2014 For personal use only IAN NAREV DAVID CRAIG CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER COMMONWEALTH BANK OF AUSTRALIA | ACN 123 123 124 | 13 AUGUST 2014
Commonwealth Bank of Australia — FY2014 Earnings Presentation on 6ix