Commonwealth Bank Of Australia · ASX:CBA
Commonwealth Bank Of Australia — Debt Investor Presentation (February 2018)
72 slides from Commonwealth Bank Of Australia's debt investor presentation, Feb 7, 2018
Slide 1: Debt Investor Update
Debt Investor Update For the half year ended 31 December 2017 Commonwealth Bank of Australia | ACN 123 123 124 | 7 February 2018
Slide 2: CBA overview
CBA overview People and Technology and Strength and customers innovation returns 48,9001 people delivering Australia’s leading technology Australia’s 2nd largest company quality service to bank and the first to offer real- by market capitalisation, with 15.9m1 customers time banking, 24x7 strong cap
Slide 3: Result overview – Half year ended 31 Dec 2017
Result overview – Half year ended 31 Dec 2018 Cash NPAT1 ($m) NIM1 Underlying C:I1,2 Cash ROE1 +5.8% +6 bpts (10) bpts flat 4,828 5,1103 ex AUSTRAC 216 15.7% 15.7%3 ex AUSTRAC penalty 40.9% 210 40.8% penalty provision3 provision3 4,735 14.5% 1H17 1H18 1H17 1H18 1H17 1H18 1H17 1H18 CET1 (APRA) CET1 (
Slide 4: Divisional contributions
Divisional contributions1 Cash NPAT ($m) Cost-to- income 1H18 Retail Banking Services 2 2,653 +7.7% 30.1% Business & PB 960 +9.3% 35.7% Inst. Bank & Markets 591 (13.2%) 38.3% Wealth Mgt 281 +33.2% 66.1% ASB (NZD) 575 +14.5% 34.1% Bankwest 339 +16.9% 41.6% Int'l Fin Services 54 +74.2% 64.0% 1. Presen
Slide 5: Volume growth
Volume growth1 Household Deposits Home Lending Business Lending Market share1 Market share1 40% 26% CBA Peers 24.6% 28.5% 23.1% 30% 21% CBA 23.4% Peers 20% 16% 14.9% 14.3% 14.6% 13.5% 10% 11% Jun 07 Dec 17 Jun 07 Dec 17 6.3% 5.6% 5.2% 4.2% 3.7% 2.9% 2.8% 3.2% 2.0% 1.9% 0.9% 0.1% 12 Months2 6 Months2
Slide 6: Underlying operating income up 4.9%
Underlying operating income up 4.9% $m +4.9%2 +6.2% 0.2% +6.3% 13,028 4 70 Volumes +3.5% Margins +6 bpts Funds 96 FUA +9.4% Insurance (26) weather events 540 12,414 Lending/other 85 higher SAF income, lending fees Trading (44) reduced market volatility Commissions (37) lower interchange rates, ATM f
Slide 7: BAU costs +2.0%, continuing to invest
BAU costs +2.0%, continuing to invest $m Total Operating Expenses1 Frontline and compliance Investment spend3 1H18 benefit from staff, partly offset by +19% 1H17 accelerated productivity amortisation +4.7% +2.0% 5,318 200 53 5,182 (64) 48 5,081 1H17 Staff Other 1H18 Benefit from Provision for 1H18 U
Slide 8: Margin up 6 bpts this half
Margin1 up 6 bpts this half bpts 214 216 210 Home loan repricing partly offset by business 1H16 1H17 1H18 lending competition Favourable 216 deposit mix 3 (3) 5 1 210 Lower basis risk +1 Bank levy2 and wholesale New Zealand +1 funding impact Decreased liquids +1 2H17 Asset Funding Portfolio Capital
Slide 9: Loan Impairment Expense / Consumer arrears
Loan Impairment Expense / Consumer arrears LIE (bpts)1 Consumer arrears (90+ days) Personal Loans 1.41% Consumer Consumer Corporate 18 18 17 1.21% Group 1.21% 1.28% 73 1H17 2H17 1H18 Credit Cards 1.03% Corporate 14 13 0.88% 3 0.89% 0.88% 41 1H17 2H17 1H18 Home Loans2 0.60% 0.59% 25 21 0.53% 20 19 0.
Slide 10: Provisioning
Provisioning $m Individual Collective1 • Increased management 2,807 2,747 2,772 overlays • Economic overlay Overlay 756 711 811 unchanged 1,017 980 978 Bankwest 140 145 212 139 Approximate pro-forma impact on 198 184 collective provision (Jun 17) +$850m 195 211 216 Consumer 1,059 1,112 1,078 $3.60bn
Slide 11: Regulatory update
Regulatory update AUSTRAC Committed to investment in strengthening compliance ► Progress over recent years, including Program of Action ► Strengthened policies, systems and processes ($m) ► No evidence of misconduct or unethical behaviour 3,978 CAGR1 33% 3,370 APRA Inquiry ► Progress report released
Slide 12: Capital, Funding & Liquidity
Capital, Funding & Liquidity Commonwealth Bank of Australia | ACN 123 123 124 | 7 February 2018
Slide 13: Capital, Funding and Liquidity
Capital, Funding and Liquidity LCR Deposit Funding NSFR CET1 Transaction Supported by strong “unquestionably Liquid assets $139bn accounts +14.7% deposits growth strong” 10.5% 135% 16.3% 129% 131% 110% 15.4% 15.6% 68% 107% 67% 106% International 66% CLF reduced 10.4 by 9.9 10.1 $10.2bn Jan 17 APRA D
Slide 14: Funding overview
Funding overview 6 months to December 2017 $bn Source of funds Use of funds New 8.9 yrs Portfolio 4.6 yrs 68% Deposit Funded 131% (12) LCR 16 Core Funding Surplus $3bn 3 (11) (4) 3 (3) 7 1 Equity Long Term Long Term Short Term Collateral Customer Lending HQLA assets Other Assets Issuances Maturities
Slide 15: Deposit funding
Deposit funding Deposits vs Peers1 160 Deposits in LCR calculation2 December 2017 ($bn) As at 30 Sep 2017 ($bn) 140 CBA overweight more stable deposits CBA 120 Peer 1 Peer 2 489 100 Peer 3 415 Other 80 deposits 239 326 209 268 60 201 149 40 Household 250 deposits 206 20 125 119 0 Retail / SME Retail
Slide 16: Wholesale funding – portfolio
Wholesale funding – portfolio Term Wholesale Funding profile – issuance & maturity Current Period Issuance $bn Date Type Tenor (yr) Volume Spread at Issue Issuance Maturity Jul 17 USD Senior 30.0 1,500 T+103 Jul 17 AUD Senior 5.0 125 3m BBSW +0.88% 50 Weighted average maturity 4.6 years Jul 17 AUD S
Slide 17: Wholesale funding
Wholesale funding • Favourable funding conditions – spreads have tightened in all maturities • Opportunity taken to lengthen tenor at broadly flat wholesale funding costs Indicative Funding Costs1 Weighted Average Maturity3 Avg Annual Maturity 3.00% 33.8 Avg Annual Issuance 2 28.2 24 Portfolio (yrs)
Slide 18: Regulatory requirements
Regulatory requirements Liquidity Coverage Ratio (LCR) Net Stable Funding Ratio (NSFR) 135% 129% 131% 110% 616.6 154.7 558.8 Liquids and Wholesale 141.7 138.5 Other Assets Funding & Other 114.8 110.1 105.4 Other Loans Retail/SME Residential CLF Mortgages 58.5 CLF CLF <35% 48.3 48.3 Capital $bn $bn N
Slide 19: Capital drivers
Capital drivers bpts Capital – CET1 (APRA) 16.3% 110 24 (15) (17) (8) (9) 10.4% 10.1% (55) Jun 17 Dividends Cash Credit IRRBB Operational Colonial Other Dec 17 Dec 17 1 APRA (Net of DRP) NPAT RWA RWA RWA Debt APRA INT'L Total Risk Weighted Assets Credit Risk Weighted Assets $bn $bn 6.5 0.2 441 377 (
Slide 20: International CET1 ratios
International CET1 ratios 21.7 G-SIBs in dark grey 16.3 16.2 15.8 15.5 15.0 14.9 14.8 14.6 14.5 14.3 14.2 13.9 13.9 13.4 13.3 13.1 12.9 12.8 12.7 12.3 12.3 12.2 12.1 12.1 11.9 11.9 11.5 11.5 11.5 11.3 11.2 11.2 10.9 10.8 10.7 10.6 China Construct. Bank China Merchants Bank Standard Chartered2 Agri.
Slide 21: APRA and International comparison
APRA and International comparison The following table provides details on the differences, as at 31 December 2017, between the APRA Basel III capital requirements and internationally comparable capital ratio1. CET1 APRA 10.4% Equity investments Balances below prescribed threshold are risk weighted,
Slide 22: Leverage ratio – above Basel minimum
Leverage ratio – above Basel minimum CBA Leverage Ratio well above prescribed Basel Committee minimum Leverage ratio introduced to constrain the build-up of leverage in $m Dec 17 the banking system. Tier 1 Capital 54,465 The Basel Committee has introduced a minimum requirement of 3% from 1 January 2
Slide 23: Regulatory change timetable
Regulatory change timetable 2018 2019 2020 2021 2022 ADIs to target unquestionably strong capital ratios, Capital to exceed APRA’s unquestionably which will also cover “Basel III” proposals unquestionably strong Implementation strong Consultations expected from early 2018 benchmark by 1 Jan 2020 Bas
Slide 24: Credit quality and risk management
Credit quality and risk management Commonwealth Bank of Australia | ACN 123 123 124 | 7 February 2018
Slide 25: Regulatory exposure mix
Regulatory exposure mix Regulatory Credit Exposure Mix Portfolio CBA Peer 1 Peer 2 Peer 3 Residential Mortgages 56% 41% 47% 57% Corporate, SME, Specialised Lending 27% 31% 38% 29% Bank 4% 5% 5% 2% Sovereign 9% 15% 8% 8% Qualifying Revolving 3% 3% 1% 2% Other Retail 1% 5% 1% 2% Total 100% 100% 100% 1
Slide 26: Sector exposures
Sector exposures Exposures by Industry Top 20 Commercial Exposures AAA A+ BBB+ TCE $bn Other Dec 17 A- to AA- to A- to BBB- BBB A- Sovereign 96.8 7.5 0.5 0.1 104.9 AAA Property 2.1 6.4 13.6 45.7 67.8 BBB+ BBB- Banks 26.5 22.2 4.5 2.4 55.6 BBB- BBB Finance - Other 21.9 21.8 8.2 2.6 54.5 A+ Retail & W
Slide 27: Credit exposures by industry
Credit exposures by industry Corporate Portfolio Quality Group TCE1 TIA $m TIA % of TCE1 % of book rated investment grade Jun 17 Dec 17 Jun 17 Dec 17 Jun 17 Dec 17 TCE ($bn) 68.7 69.2 68.0 Consumer 55.4% 56.6% 1,578 1,581 0.26% 0.26% 500 Sovereign 9.7% 9.7% - - - - 400 Other Property 6.4% 6.3% 693 5
Slide 28: Commercial property – lower exposure
Commercial property – lower exposure Overview Group Exposure Dec 16 71.870.2 67.8 Exposure has reduced in the half year. Remains diversified across Jun 17 sectors and by counterparty. Dec 17 Composition remains steady in last 6 months with 86.2% of Commercial Property exposure to investors and R
Slide 29: Residential apartments – weighted to Sydney
Residential apartments – weighted to Sydney Overview1 Profile (Dec 17) Total Residential Apartment Development1 Apartment Development exposure reduced $10.9bn (16% of CP) $4.1bn (0.4% of TCE) $0.4bn for the half. Other Perth $0.2bn Facilities being repaid on time from pre-sale $0.2bn Investment
Slide 30: Mining, oil & gas – lower exposure
Mining, oil & gas – lower exposure Overview Group Exposure Exposure of $13.8bn (1.3% of Group TCE), $0.9bn 73 70 71 Dec 16 reduction on prior half due to repayments and lower Jun 17 uncommitted facility utilisations. Dec 17 Relatively stable performance over the past 12 months: 14.9 14.7 13.8
Slide 31: Agriculture – NZ Dairy portfolio quality generally improving
Agriculture – NZ Dairy portfolio quality generally improving Overview Group Exposure Dec 16 Exposure of $21.5bn (2.0% of Group TCE) is well diversified 21.221.7 21.5 Jun 17 by geography, sector and client base. Dec 17 Australian agriculture portfolio performing well. 14 14 12 NZ dairy portfoli
Slide 32: Retail trade
Retail trade Overview Group Exposure Dec 16 12.6 12.2 Exposure of $12.2bn (1.1% of Group TCE), stable on prior half 12.2 Jun 17 Personal and household good retailing accounts for $6.1bn 35 Dec 17 31 31 (0.6% of Group TCE) Volume and margin competition continues to effect the Discretionary Reta
Slide 33: Home loan portfolio – Australia
Home loan portfolio – Australia Portfolio1 Dec 16 Jun 17 Dec 17 New Business1 Dec 16 Jun 17 Dec 17 Total Balances - Spot ($bn) 423 436 444 Total Funding ($bn) 53 49 49 Total Balances - Average ($bn) 416 423 440 Average Funding Size ($’000)6 311 309 320 Total Accounts (m) 1.8 1.8 1.8 Serviceability B
Slide 34: Australian home loans - policy tightening
Australian home loans - policy tightening • Increased serviceability buffers • LVR restrictions on interest only and • Reduced reliance on less investment lending stable income sources • Limits on lending to high risk apartment areas • LVR restrictions and reduced reliance on rental income for lendi
Slide 35: Australian home loans – portfolio growth profile
Australian home loans – portfolio growth profile $bn Balance Growth State Profile 1H18 1H18 Balance Growth NSW/ACT VIC/TAS QLD WA SA/NT 16 (48) % of Portfolio 49 (9) 6% 436 444 16% 34% 18% 2.8% 26% 2.2% 1.3% Jun 17 New Redraw & Repayments / External Dec 17 Fundings Interest Other Refinance (0.3%) (0
Slide 36: Payments in advance
Payments in advance1 Payments in advance (% of accounts) Residual: have less than 1 month 6% repayment buffer Structural: loans that structurally 9% restrict payments in advance e.g. fixed rate loans etc 4% New Accounts: loans that are less than one year on book 30% 16% Investment loans: incentivise
Slide 37: Home loan serviceability
Home loan serviceability Key Origination Requirements1 Interest rate buffers built into serviceability tests2 Serviceability CBA 80% or lower cap on less certain income sources 10% (e.g. rent, bonuses etc.) Income Limits on investor income allowances e.g. RBS 9% restrict the use of negative gear
Slide 38: Interest only - Australia
Interest only - Australia Arrears Balances1 Arrears1 Income Profile1 90+ days 90+ days Applicant Gross Income Band Fundings (6 Months to Dec 17) 300 1.20% 50% Billions Interest Only Interest only 90+ day arrears balances 45% Interest Only Principal & Interest Interest only – total portfolio balances
Slide 39: Interest only (CBA) – switching
Interest only (CBA) – switching Balance Movement ($m)1 Scheduled IO term expiry1 Interest Only (IO) to Principal and Interest (P&I) (% of total IO Loans) Quarterly 26% Payments in advance > 6 21% 29% 20% months2: accounts with a financial 5,540 buffer to absorb any increased 19% repayments 31% 2,649
Slide 40: Investor lending
Investor lending Growth1 Income Profile2 Arrears2 Year on year (%) Applicant Gross Income Band 16% 90+ days 40% Fundings (6 Months to Dec 17) 1.00% 35% 12% Owner Occupied 0.80% 30% 8.3% Investment Loans 8% 25% 7.5% 0.60% 4.1% 20% 4% 0.40% 15% 0.5% Owner Occupied 0% Portfolio 10% 0.20% Investment Loa
Slide 41: Home loan portfolio arrears
Home loan portfolio arrears Arrears by BU Arrears by Year Arrears by Vintage Group 90+ days1 Group 90+ days1 Australia2 90+ days 1.8% 1.8% 2.0% Group Bankwest CBA ASB 2013 2014 2015 2016 2017 1.5% 1.2% 1.2% FY07-FY10 FY13 FY12 1.0% FY14 0.6% 0.6% FY11 0.5% FY15 Excluding WA FY16 FY17 0.0% 0.0% 0.0%
Slide 42: Australian home loans arrears by State
Australian home loans arrears by State Home loan arrears Western Australia 90+ days 1.50% % of Portfolio Rigorous stress testing 16% 34% WA 18% Credit policy tightening e.g. LVR caps, insurance 6% 26% QLD requirements 1.00% SA/NT Tailored treatments by segment National 0.50% National (ex WA)
Slide 43: Loan to Value Ratio (LVR) and portfolio insurance
Loan to Value Ratio (LVR) and portfolio insurance Home Loan Dynamic LVR1 Portfolio Insurance Profile2 % of Australian Home Loan portfolio 70% Insurance with Genworth or QBE for higher risk loans above 80% Average Excess of Loss LVR 60% Dynamic Re-insurance LVR 22% % of Total Portfolio Accounts Dec 1
Slide 44: Consumer arrears
Consumer arrears Credit Cards Personal Loans 1.8% Group 90+ days 1.8% Group 90+ days 1.2% Group 1.2% Bankwest CBA 0.6% 0.6% ASB 0.0% 0.0% Dec 15 Jun 16 Dec 16 Jun 17 Dec 17 Dec 15 Jun 16 Dec 16 Jun 17 Dec 17 Credit Cards Personal Loans 3.0% 4.0% Group 30+ days Group 30+ days 2.8% 2013 3.5% 2.6% 2014
Slide 45: CBA home loans
CBA home loans Relatively low historical losses on the Losses manageable under a highly Group’s home loan portfolio stressed scenario Losses to average gross loans1 Stress scenario 2.5% CBA Home Loans 3 year scenario of cumulative 31% house price decline, peak Group Total Loan Losses 11% unemploymen
Slide 46: Strategy
Strategy Commonwealth Bank of Australia | ACN 123 123 124 | 7 February 2018
Slide 47: Customer focus
Customer focus Our Vision Our Values Our Capabilities To excel at securing and Integrity People Technology enhancing the financial Accountability wellbeing of Collaboration Productivity Strength people, businesses and Excellence communities Service Our “One CommBank” Growth Continued growth in busin
Slide 48: Customers
Customers Customer Satisfaction1 Net Promoter Score2 10 Retail 5 +4.4 +1.8 Rank 0.0 0 -0.7 Retail #1 -5 -10 Business = #1 -15 31.5% 27.1% -20 Wealth #1 -25 Internet #1 -30 CBA Peers +4.4 -35 Promoters Detractors2 NPS Dec 08 Dec 17 1. Refer notes slide at the back of this presentation for definitions
Slide 49: Customers
Customers Customer lifecycle by age Serving 15.91 million customers MFI for 1 in 3 Australians 46.2% 45.6% Leading market shares in home lending2 24.6% and household deposits3 28.5% Dec 17 Highest share-of-wallet amongst peer group Dec 12 (3.09 products per customer) 40.4% MFI Share Overall MFI mark
Slide 50: Technology
Technology Net Promoter Score1 #1 Free Financial app Customer’s likelihood to recommend main financial institution based on use of Internet Banking services (via Mobile App) (Apple App Store & Google Play Store)2 50.7% Promoters +36.6 #1 Online Banking – 8 years in a row (CANSTAR) 3 +27.3 +25.7 +23.
Slide 51: Technology
Technology Budgeting Made Easy Putting customers in control Transaction Notifications1 Insufficient funds alerts Spend tracker Credit card alerts Your account is overdrawn Savings Challenge2 High cost transaction alerts by $537.00. To avoid a fee, repay the overdrawn amount by midnight Credit Card S
Slide 52: Real time, digital banking
Real time, digital banking Digital - transactions Digital - sales Repositioning branches 56% of all transactions by 29% of retail product ~50% smaller footprint value now digital sales now digital ~250 locations 56% Digital transactions by value Digital contribution to total sales1 29% Branch deposi
Slide 53: Corporate responsibility – performance data
Corporate responsibility – performance data 1H18 FY17 FY16 FY15 Environment Renewable energy lending exposure ($bn) 3.3 2.8 2.2 1.4 Total greenhouse gas emissions (Group) (tCO2-e) 98,214 204,3171 164,111 179,276 Emissions per FTE (Australia) Scope 1 + 2 (tCO2-e) 2.3 2.3 2.6 2.7 Employee Engagement I
Slide 54: CBA in Asia and South Africa
CBA in Asia and South Africa South Africa TymeDigital by Commonwealth Bank SA: 715 kiosks Indonesia PT Bank Commonwealth (99%): 50 branches and 50 kiosks PT Commonwealth Life (80%): 25 life offices PT First State Investments China Bank of Hangzhou (18%): 201 branches Qilu Bank (18%): 131
Slide 55: Economic Overview
Economic Overview Commonwealth Bank of Australia | ACN 123 123 124 | 7 February 2018
Slide 56: Key economic indicators (June FY)
Key economic indicators (June FY) GDP % CPI% Unemployment Rate % GDP Nominal GDP 6.2 3.1 5.8 5.9 2.8 2.7 2.7 5.8 2.6 2.4 5.7 2.4 2.1 4.1 4.2 2.0 3.7 1.7 1.7 5.4 1.4 5.2 2.4 1.5 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 Cas
Slide 57: A sustainable global upturn is underway
A sustainable global upturn is underway Global growth momentum1 OECD gross fixed CAPEX2 (number of countries) (annual % change) % of total % 100 7 forecasts 75 Accelerating 0 Mar 06 Mar 09 Mar 12 Mar 15 Mar 18 50 Slowing -7 25 Contracting 0 2004 2007 2010 2013 2016 2019 -14 IMF forecasts have well o
Slide 58: A sustainable global upturn is underway
A sustainable global upturn is underway Global industrial production1 Policy indicators2 (annual % change) % % 8.00 2.00 14.0 OECD fiscal pulse ((-) stimulatory / (+) 7.00 restrictive) 1.00 (RHS) 7.0 6.00 0.00 5.00 % 0.0 4.00 -1.00 3.00 -2.00 -7.0 2.00 G-7 policy rate -3.00 1.00 (LHS) -14.0 0.00 -4.
Slide 59: Global risks remain
Global risks remain Global debt1 Global debt1 (% of GDP) (% of GDP) % % % 30 360 Outstandings (RHS) 20 315 100 Mature market government debt 10 270 Emerging market 75 non-financial corporates 0 225 Annual change (LHS) -10 180 50 Mar 99 Mar 03 Mar 07 Mar 11 Mar 15 Mar 99 Mar 03 Mar 07 Mar 11 Mar 15 G
Slide 60: Australia ended 2017 with a respectable growth momentum
Australia ended 2017 with a respectable growth momentum CBA Purchasing Managers Indexes1 CBA Composite PMI1 Index (leading indicators) Index 60 Future Output Manufacturing Index 80 55 70 Services Leading Index (based on orders/jobs Expansion 60 sub indexes) Expansion 50 Contraction 50 Contraction 45
Slide 61: Getting easier to grow
Getting easier to grow The commodity boom-bust Fundamental drivers1 (start = 100) (index) index index index 600 140 Mining capex 160 Real TWI (LHS) 400 100 120 Unit labour costs (RHS) 200 Commodity prices (RBA USD index) 80 60 0 Sep 01 Sep 04 Sep 07 Sep 10 Sep 13 Sep 16 2002/03 2006/07 2010/11 2014/
Slide 62: Growth positives
Growth positives Mining output by sector Public investment (Q3’12 = 100) (Work yet to be done, % of annual GDP) index % 1.5 175.0 Iron ore Engineering 150.0 1.0 Oil & gas Coal 125.0 0.5 Building 100.0 Other 0.0 75.0 Sep 01 Sep 04 Sep 07 Sep 10 Sep 13 Sep 16 Sep 12 Sep 14 Sep 16 New capacity means a
Slide 63: Growth positives
Growth positives Asian income growth by proxy Population (Australian GDP exposed to Asian income growth) (annual % change) % pa % 9.0 2.4 Long run average 6.0 1.6 3.0 0.8 0.0 Sep 00 Sep 03 Sep 06 Sep 09 Sep 12 Sep 15 0.0 1973/74 1981/82 1989/90 1997/98 2005/06 2013/14 -3.0 Strong growth in Asian inc
Slide 64: Growth risks
Growth risks Transition drivers1 CBA Manufacturing PMI2 (end 2012 = 100) (price pressure indicators) Index Index 140 60 Residential Input construction prices 120 55 Backlog of work Non-mining 100 capex 50 Suppliers delivery times 80 45 Government capex 60 40 Jun 12 Jun 13 Jun 14 Jun 15 Jun 16 Jun 17
Slide 65: Growth risks
Growth risks Wages & debt1 Household wealth and Liabilities2 (% of annual household disposable income) % % pa % 150 6 750 Net Wealth Household debt 600 (% of GDP) (LHS) Dwellings 100 4 450 300 50 Wage price 2 Financial assets index (RHS) 150 Liabilities 0 0 0 Mar 00 Mar 04 Mar 08 Mar 12 Mar 16 Mar 9
Slide 66: Growth risks
Growth risks Wisest place for new savings?1 Saving ratio % % 20 48 15 36 Cash savings 10 (deposits) 24 5 12 Paying off debt 0 0 -5 Sep 97 Sep 02 Sep 07 Sep 12 Sep 17 Sep 72 Sep 81 Sep 90 Sep 99 Sep 08 Sep 17 Household behaviour has changed in a way that favours The ability to “fund” consumer spendin
Slide 67: The housing market is cooling
The housing market is cooling Home loan deposit1* Dwelling price momentum2 (% of household disposable income) (8 capital cities) % % 100 * Based on 20% 24 of national price Price 85 growth 12 70 0 2006-2013 average Price 55 -12 momentum 40 -24 Mar 93 Mar 98 Mar 03 Mar 08 Mar 13 Mar 18 Jan 98 Jan 02
Slide 68: New Zealand
New Zealand Global dairy trade auction results1 NZ short term arrivals2 (USD/tonne) (monthly, seasonally adjusted) 6,000 '000 340 Whole Milk Powder Lions tour 320 5,000 300 280 4,000 CWC 260 RWC 240 3,000 Lions tour 220 2,000 GDT overall price 200 180 1,000 160 2008 2009 2010 2011 2012 2013 2014 201
Slide 69: New Zealand
New Zealand NZ CPI inflation1 OCR forecasts2 (%) (ASB forecast and implied market pricing, %) % % 6 4.0 5 Annual % (f) 3.5 4 3 3.0 2 2.5 OCR implied by current 1 market pricing 2.0 0 ASB Economics Forecast quarterly change (peak of 3.5% in 2020) -1 1.5 Jun 00 Jun 03 Jun 06 Jun 09 Jun 12 Jun 15 Jun 1
Slide 70: New Zealand
New Zealand NZ household lending growth1 NZ median house price2 % (annual % change) (3 month moving average, $’000) 20 $ 000's 1000 15 Mortgage lending 900 Auckland 10 800 700 5 600 NZ 0 500 Wellington 400 -5 Consumer Credit 300 Canterbury/Westland -10 200 Mar 04 Mar 08 Mar 12 Mar 16 Jan 05 Jan 07 J
Slide 71: Glossary
Glossary Capital & Other Funding & Risk Risk Weighted Assets or The value of the Group’s On and Off Balance Sheet assets are Liquidity coverage ratio The LCR is the first quantitative liquidity measure that is part of the Basel III RWA adjusted by risk weights calculated according to various APRA (L
Slide 72: Notes
Notes Disclaimer The material in this presentation is general background information about the Group and its activities current as at the date of the presentation, 7 February 2018. It is information given in summary form and does not purport to be complete. Information in this presentation is not in
Commonwealth Bank of Australia — Debt Investor Presentation (February 2018) on 6ix