Presentation of Full Year Results

Presentation of Full Year Results

UBS Australian Financial Services Conference Michael Cameron Chief Financial Officer 11-12 June 2003 www.commbank.com.au Disclaimer The material that follows is a presentation of general background information about the Banks activities current at the date of the presentation, 12 June 2003. 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 or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. These should be considered, with or without professional advice when deciding if an investment is appropriate. 2 Speakers Notes Speakers notes for this presentation are attached below each slide. To access them, you may need to save the slides in PowerPoint and view/print in notes view. 3 Agenda

Long Term Growth Outlook Commonwealth Banks Position Divisional Focus 4 Long Term Growth Outlook Strong credit growth over the last 20 years... In Australia, average total credit growth over the last 20 years has been 12%p.a. 1982-2002 1860-2000 120 Per cent of nominal GDP Per cent of nominal GDP 100 80 60 40 BankLoans&Advances AFILoans&Advances AFICredit 20 0

Sep-82Sep-84Sep-86Sep-88Sep-90Sep-92Sep-94Sep-96Sep-98Sep-00Sep-02 1982 1992 2002 Sources: Cyclical Prudence - Credit Cycles in Australia, Kent & DArcy; Commonwealth Research 6 ...but banking margins have been squeezed Average Operating Margins* 4 Major Banks (1997 - 2002) 3.9 Importance of: Scale 3.7 Brand 3.5 Large customer base Extensive proprietary and third party distribution

3.3 3.1 2.9 1997 1998 1999 2000 2001 2002 *Margin calculated as Total Income / Total Controllable Assets Source: Company Financial Statements 7 Investor returns natural cycle or structural shift? Ratio of Market Value of Companies Over Fundamental Value (1926 - 2002) % 200 180 160 140 Expectation premium > 0 120 100 80 60 40 20 0 1927 1932 1937 1942 1947 1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 Source: Moody's Manual of Investments; Value Management Research Engine; Top Performer Study 2002 8 Weak equity markets and declining fund flows Equity Markets

Index (Base 100) Total Net Retail Fund Flows (for quarter ended) $m -11% 7000 100 6000 5000 85 4000 3000 70 2000 -33% 55 Dec-01 Mar-02 Jun-02 MSCI World Source: Bloomberg Sep-02 1000

Dec-02 Mar-03 0 Dec-01 Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 All Ordinaries Source: Plan for Life (ex Cash) 9 Recent trends shaping the future of funds management... Projected Size of Various Product Segments 300 250 Value at June 2002 Strong inherent growth expected, particularly retail Growth of mastertrusts

Industry consolidation Institutionalisation of distribution Industry commoditisation Projected Value to June 2012 $ Billion 200 150 100 50 0 Source: DEXX&R projections February 2003, assumes 5% pa post-fee returns 10 ...and the life insurance industry Projected Size of Various Product Segments 7 Value at June 2002 6 Projected Value to June 2012

to continue 5 $ Billion Strong industry growth 4 Repricing of products Product rationalisation & 3 2 customer migration 1 0 Term & Trauma Disability Group Risk Source: DEXX&R projections February 2003 Increasing regulation 11 Summary

Long Term Growth Outlook Credit growth will slow Margins will decline Funds Management and Insurance to grow 12 Commonwealth Banks Position Organising to meet current and longer term challenges Immediate Environment: Productivity Implementation of strategic initiatives Longer Term Environment: Leverage key competitive strengths Scale Brand Risk Profile

Products and Businesses Distribution Innovation People 14 Our starting position Commonwealth Bank Market Shares* Merchant Acquiring Sovereign Deposits Transaction Services Credit Cards Home Loans Global Markets Asset Finance Managed Investments Life Insurance Corporate and Business Lending Institutional Banking Products New Zealand Deposits New Zealand Lending Property Managed Funds General Insurance Hong Kong Rank

36% 31% 1 1 25% 22% 22% 20% 1 2 1 1 2 16% 15% 15% 15% 18% 17% 15% 13% 2 1 1 9% 5% 3% 0% Source: CBA portfolio analysis 2003 10% 20%

30% *Sorted by market share rank 40% 15 A re-aligned organisational structure Customer Group Channels Support Retail Banking Services Premium Financial Services Investment & Insurance Services Institutional & Business Services International Financial Services Personal banking customers, Small business

banking customers Premium client including professionals and business Agents, Brokers, Financial Advisers Institutional, Corporate, Commercial business customers Personal, Business, Rural, Corporate and Commercial customers, Agents, Brokers and Financial Advisers Branches, EzyBanking, ATM, EFTPOS, Phone, On-line, Mortgage brokers Relationship managers, Premium investment centres, phone, on-line Agents,

Branches, Brokers, Financial advisers, Premium investment centres, DirectDealerships, Institutional clients Relationship managers, Business centres Agents, Brokers, Financial advisers, Branches, Internet, Call centres, ATM, EFTPOS, Strategic alliances Finance, Risk Management, Human Resources, Strategy, Technology, Legal, Secretariat 16 Deepening our customer relationships From... To... Pure cross sell Needs based bundling Fragmented definition Concise definition

Varied measures Consistent measure Inconsistent group-wide sales and service system One Group approach No published targets Transparent targets 17 Summary Commonwealth Banks Position Productivity Improvement The Customer 18 Divisional Focus Retail Banking Services Premium Financial Services Institutional & Business Services Investment & Insurance Services International Financial Services v Retail: a leading profile Our staff -

Our footprint - 18,000 people Leading market share in core Retail products ~ total footings of $169.6bn at 31 March 2003 (including operations) Our network - Online Branch/Agencies Electronic Total Branches 1,016 Netbank customers 2.6m Total ATMs Total Agencies 3,890 CBA Market Share 27% EFTPOS Terminals 122,767 Advice/3rd Party

Mobile Mobile Bankers 3,116 Direct Banking 216 Total Calls (02/3 YTD) 110m Active Mortgage origination head agreements 252 Financial Planners 335 Financial Consultants 161 * Ezy Banking - over 758 Woolworths stores All data as at 30/04/03 unless specified 20 Retail: product positioning Transaction accounts - simplified and rationalised Sustainable cost to income ratios Home loans - re-engineered by 2004 Improved service at lower cost

Credit cards - growing Increased cross-sell and innovation Deposits - 65% of Bank funding Low cost funding platform 21 Premium: a differentiated business model Advisory Services Broking Platform Direct Investment Indirect Investment Debt Products Banking Platform Commercial Adviser Risk/Insurance Adviser Equity Products Personal Adviser Borrowing Services

Investment Adviser Lending Services Transactional Banking Client Financial Adviser Primary Relationship Manager Secondary Relationship Manager & specialised advice 22 Premium: building a long term business Over 170,000 client relationships migrated by end June 2003 Physical capacity substantially completed We have recently acquired TD Waterhouse. Key Performance Indicators: Relationships Staff Locations CommSec Accounts Cost to Income: Banking* Equities* Apr 02 40,000 830

24 685,000 Dec 02 >75,000 1,130 25 720,000 Jun 03 >170,000 1,546 27 >1.1M 48% 75% 23 Institutional & Business: redesign for business customers Segment Institutional Corporate Client Total Footings ($m) >150 Number of Clients Cost-toIncome 2002 (%)

Market Share 2002 (%) Relationship Model Focus of Change Initiatives Deepen relationship 800 26 >5 2,200 38 0.85-5 9,200 38 19 0.85-5 4,300 41 19

More clients Deepen relationship SME 0.15-0.85 59,000 42 22 Deepen relationship Efficiency gains Small <0.15 118,000 74 22 Top Tier Corporate Corporate Regional Business Client Turnover ($m) 10-150 1-10

More clients Deepen relationship 11 Dedicated Relationship Executive Dedicated team of Business Bankers More clients Deepen relationship Efficiency gains 24 Institutional & Business: improve overall satisfaction levels Banking (Business Customers) Satisfaction with Main Financial Institution Relationship Main Bank clients CBA ANZ NAB WBC Very Dissatisfied 7% 5%

6% 5% Fairly Dissatisfied 9% 8% 10% 9% Neither Satisfied nor Dissatisfied 32% 24% 26% 28% Fairly Satisfied 32% 34% 32% 33% Very Satisfied 21% 29%

25% 25% Source: Business Finance Monitor October 2002 to March 2003 - businesses with turnover up to $40 million 25 Funds management: building opportunities FirstChoice Other Strategic Initiatives $m Realise integration benefits, including further rationalisation of legacy systems 3300 3000 2700 2400 Offer increased style diversification 2100 1800 1500 Leverage internal distribution opportunities 1200 900 Leverage scale to reduce costs

600 300 Grow alternate asset classes M ay -0 Ju 2 n02 Ju l-0 Au 2 g0 Se 2 p0 O 2 ct -0 N 2 ov D 02 ec -0 Ja 2 n0 Fe 3 b0 M 3 ar -0 Ap 3 rM 03 ay -0 3 0

FirstChoice - Funds Under Administration Increase reputation as manager of international shares 26 Insurance: distribution, service and risk pricing Trend in Share of Inforce Premiums (Top 5 Players) Strategic Focus 35% Increase internal distribution through: 30% Personal Insurance Consultants 25% Business Investment Managers 40% 20% Repricing of premiums Upskilling of call centre staff

5% Product rationalisation 0% Dec-90 Systems migration 15% 10% Dec-92 Dec-94 CommInsure Dec-96 AXA Dec-98 NAB Dec-00 AMP Dec-02 ING Source: Plan for Life 27 International: our geographical presence

Banking New Zealand UK USA Hong Kong Singapore Other Asia & Pacific* Life Insurance Funds Management

* includes Japan, Indonesia, Vietnam, China, Fiji 28 International: ASB Bank a strong performer ASB Bank 10% Net Profit - Banking CBA Banking 90% ASB Bank represented 10% of the total banking net profit after tax (as at December 2002) ASB 11% Lending Assets - Banking CBA Banking 89% ASB Bank represented 11% of the total banking lending assets (as at December 2002) 29 Summary Divisional Focus Further improve the service experience

Building on our leading funds management position Insurance business well positioned Continue to develop international businesses 30 Key Points A number of trends are shaping the outlook for financial services: Banking: Slowing growth in a lower margin environment Funds Management: industry dynamics are changing Insurance: positioning to drive growth and efficiency gains Focus on improved productivity and customer commitment Customer relationship initiatives being implemented in the retail bank Customer migration, service model and product development well progressed in the premium business

New segmentation and service models implemented in the institutional and business bank Leadership in funds management to continue Insurance business well positioned A sound international strategy Strong growth position 31 UBS Australian Financial Services Conference Michael Cameron Chief Financial Officer 11-12 June 2003 www.commbank.com.au

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