Deutsche Bank AsiaPacific Financial Institutions Conference

1
Deutsche Bank - Asia-Pacific Financial
Institutions Conference

• Stuart Grimshaw
• Group Executive Financial and Risk Management

8 July 2002
www.commbank.com.au
2
Disclaimer

• The material that follows is a presentation of
  general background information about the Banks
  activities current at the date of the
  presentation, 8 July 2002. 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.

3
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.

4
Agenda

• Introduction
• Australian Economy Commonwealth Bank Group
• Strategy
• Strategic issues
• Competitive advantage
• Strategic imperatives
• Looking Forward
• Strategic plan

5
Introduction
6
Australian Economy Commonwealth Bank Group

• Credit Growth
• ? Current position
• ? Housing market
• Commonwealth Bank Group
• ? Asset quality

7
Australian EconomyCredit Growth
Source Commonwealth Research
8
Housing Market
DEBT REPAYMENT LEVELS


( of h/hold income, Mar'02)
20
20
15
15
10
10
Source Melbourne Institute
5
5
lt30
31-50
51-70
71-100
gt100
Income ('000pa)
Source Commonwealth Research
9
Commonwealth Bank Group Low Credit Risk Profile

• Housing Loans
• 48 of total loan book
• Loan loss rate of lt 3bps in 17 of last 20 years
• 55 average loan to valuation ratio
• Conditional acceptance of First Home Owners Grant
  as deposit
• Asset Quality
• Impaired assets to risk weighted assets of less
  than 1
• in line with domestic peers
• Relatively low bad debt expense
• Well provisioned

Excluding securitisation (or 52 including
securitisation)
10
Credit Risk Historical PL Charge
Bad Debt Expense / RWA
Charge Per Half
Excludes Colonial
11
Aggregate Provisions
millions
Includes Colonial
12
Strategy

• Strategic Issues
• Competitive Advantage
• Strategic Imperatives

13
Strategic Issues

• Domestic Growth
• Wealth Management
• Distribution
• Technology Productivity

14
Competitive Advantage

• Brand
• Scale
• Innovation

15
Brand Commonwealth Bank Share of Mind
75
71
70
69
68
68
68
66
66
65
65
65
64
63
63
63
CBA
50
Westpac
()
ANZ
25
NAB
0
Sept
Nov
Jan
Mar
May
Jul
Sep
Nov
'01

• CBAs share of mind remains at a consistent
  level, leading the Big Four.
• Share of mind for Westpac, ANZ and NAB continue
  to measure at similar levels.

Research International November 2001
16
Brand Colonial First State
Adviser brand awareness - overall opinion of
organisation
Source ASSIRT Service Level Survey - 2001
17
Australias Most Accessible Bank
Personal Lenders over 700 staff
Direct Banking over 62 million calls
Mobile Bankers over 180
Branches 1,045 branches
Financial Planners over 600
ATMs nearly 4,000
10 million customers
Business Banking 80 centres
EFTPOS over 120,000 merchant terminals
NetBank 1.5 million registered customers
Agencies(Postal Private) over 3,900
Third Party Distribution over 15,000 individual
advisers, brokers and agents
Premium Banking 13 Centres
Ezy Banking over 700 Stores
for 6 months to Dec 01
Also includes financial consultants and
personal client advisers
18
Scale Strong Market Share Positioning
Australian Market Share
Rank


Dec 2001 Data
Colonial data captured as part of market share
calculation from June 2001
19
(No Transcript)
20
Strategic Imperatives

• Strategic Issues
• Domestic Growth
• Wealth Management
• Distribution
• Technology Productivity

• Segmentation
• Productivity

21
Segmentation Aligned Domestic Structure with
Customer Needs
22
Youth Age of Acquisition
Lower relative CBA acquisition after age 24
Key acquisition period for other banks -
Retention by CBA vital
Under 18 acquisition important to CBA
Source Customer Tenure Analysis - Customer
Strategy and Market Research
23
Banking Needs
Banking needs change and grow as customers age
and pass through different lifestages
Complex needs
CompetitorActivity
Secured Credit needs
Investing needs
Lower involvement products
Unsecured Credit needs
Higher value products
Credit Card needs
Transacting needs
Savings needs
0 5 12 18
24 30

Age of Customer
24
Premium and Business Opportunity
Premium Customers
Current number of premium customers
Potential number of premium customers
Business (Middle Market)
Current market share
Natural market share
Source Commonwealth Bank illustration
25
Business Increasing Cross-sell
Corporate Segment Example
Example Bundled Products
Working Capital Services
Financial Markets
Business Banking
17
26
8
26
Interest rate risk management FX
products Investments
Financial Markets
6
8
8
Bill financing Cash funded loans Overdrafts Transa
ction services
Working Capital Services
Corporate Finance
26 of this segment use products from all three
areas
26
Funds Management Opportunity
Source Plan for Life, CBA
27
Growth through Retail Masterfunds
28
What is different about FirstChoice?

• Underlying Investment structure
• Superior service standards
• Value for money
• Simplicity

29
Productivity

• Segmentation premium banking
• Simplified transaction accounts
• Browser based workflow enabled systems
• Credit risk architecture
• 7 level organisation structure
• Shared services HR and finance

30
Looking Forward
31
Strategic Plan to June 2006 is Underpinned by
Growth Assumptions
32
Deutsche Bank - Asia-Pacific Financial
Institutions Conference

• Stuart Grimshaw
• Group Executive Financial and Risk Management

8 July 2002
www.commbank.com.au