John Mulcahy UBS Warburg Conference 6 June 2001 www.commbank.com.au

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John MulcahyUBS Warburg Conference 6 June
2001www.commbank.com.au
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Disclaimer

• The material that follows is a presentation of
  general background information about the Banks
  activities current at the date of the
  presentation, 6 June 2001. 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.

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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.

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Agenda

• Group Performance
• Progress Report on Integration and Group Strategy
• Drivers of growth in Financial Services

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Group Performance
Net Profit after tax and outside equity
interest - cash basis. Excludes abnormal items,
appraisal value uplift and goodwill
amortisation Proforma
Proforma
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Group Performance
Mar 2001
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Index of Top Consistent Performers
SPI through December 2000.
Source Oliver, Wyman Company Report Number 3
Volume 11 March 2001
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Australian Market Share
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Progress Report on Integration
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Integration Targets

• Expect majority of cost synergies to be achieved
  by end of year two whilst revenue synergies will
  progressively be realised over the next few years
• Funding benefits from anticipated improved
  ratings and capital management
• Maintain improve service levels
• Maintain the momentum of Colonial First State
  Investments
• Continue strong relationships with independent
  distributors

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Customer Retention

• Customer Retention has been a critical target
• Retention based upon Customer Revenues rather
  than specific Customer Numbers
• Retention is on target
• Early Card Product changes resulted in 97
  retention
• Customer experience has been well managed

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Outcomes to Date

• Retail banking operations
• Systems build complete
• Transaction bridge operational
• End to End Testing commenced
• Launceston call centre site build (stage 1)
  complete
• Conversion Management System operational
• Launceston call centre operational
• Colonial customer retention on track
• Product Conversion Mailing Lodged
• Branch amalgamation program complete

Forecast Completion Dec Qtr Dec
00 Mar Qtr Jan 01 Jun Qtr Mar 01 Mar
Qtr Jan 01 Jun Qtr Mar 01 Jun
Qtr Mar 01 Ongoing Jun Qtr May 01 Dec
Qtr May 01
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Other Outcomes

• Area manager incentive scheme now incorporates
  integration metrics
• 1 million Product conversion mailings sent to
  customers
• 700,000 Keycards issued to customers
• Extensive Verification Programme
• Campaign Management initiated to review all
  customer impacts
• No unplanned impact on agent network

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Integration Phase 2

• Rationalisation of the Financial Services product
  set to ensure a streamlined set of products with
  a consistent brand
• Life products
• Managed Funds products
• Systems Infrastructure to support the
  rationalised product set
• Distribution Strategy
• comprehensive strategy leveraging proprietary and
  third party distribution channels

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Group Strategy and Drivers of Growth in Financial
Services
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Group Strategy
WHY?
Business Goals
Strategic Vision
Financial Goal
Top Quartile TSR
Growth with low inflation
To be the best brands in helping customers
manage and build wealth
Major technology shift
Pace of change
Limited longer term domestic scope
Margin squeeze
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Progress against the Strategy

• Attract More Customers More Revenue per
  Customer
• Approximately 10 million personal customers
• Growth in customer numbers and/or revenue across
  all segments
• Innovation and On-line leadership
• 1.1m on-line customers as at 31/3/01
• Best Team
• Key skills and people from Colonial retained
• All staff participate in a form of performance
  based remuneration

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Progress against the Strategy

• Develop Offshore Opportunities
• ASB wholly owned
• Entry into UK mortgage market
• Integration of Stewart Ivory and CFS
• China - commenced Life Insurance business
• Global Best Practice Costs
• Focus on technology driven productivity
• Leverage the increased scale from Integration

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Sector Growth
Source Salomon Smith Barney Estimates, APRA,
Commonwealth Bank
Source ABS, Commonwealth Bank
Source Salomon Smith Barney Estimates, ASSIRT,
Commonwealth Bank
Source Plan for Life, Commonwealth Bank
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Financial Services Drivers

• Consumers
• Sophisticated
• Choice
• Convenience
• Reduced loyalty

• Demographics
• Aging population
• Increased life expectancy

Increased Complexity

• Regulation
• Superannuation
• Tax
• Clerp 6

• Competition
• Global
• Consolidation
• Blurred boundaries

• Technology
• Channel proliferation
• Rapid change

• Economic
• Poor savings history
• Weak AUD

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Financial Services Vision
By offering customers a comprehensive product
set, superior value and the convenience of a
multi channel distribution environment, we will
meet customer needs in wealth creation,
protection and financial management and build
upon our positioning as the leading financial
services brand.
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Financial Services Business Model

• Product Strategy
• Manufacture
• Wholesale
• Multi-channel sales delivery
• leverage the CBA retail network
• leverage and grow 3rd party distribution channels
• develop online and self fulfillment
  opportunities.
• Cross sell / life cycle strategy
• Customer segmentation and life stage needs as the
  basis for targeted marketing and product bundling

Superior Customer Service
Wealth Management capability
Advice Wrap
Develop channel specific offerings in line with
customer needs to build balances and market share
Deliver maximum sell / retention across the
complete product range
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Funds under Management
Retail Funds Under Management Market
Share as at 31/12/2000 Market Share as at
31/3/2001 bn share bn share 1.
CBA 41.4 19.6 42.6 20.0 2.
NAB 29.7 14.1 30.4 14.3 3.
AMP 25.3 12.0 24.8 11.7 4. BT 18.1
8.6 17.2 8.1 5. Westpac 13.7 6.5 13.8
6.5 6. ANZ 11.0 5.2 11.5 5.4

Source Assirt
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Funds under Management

• Total Assets Under Management
• Market Share as at 31/12/2000 Market Share
  as at 31/3/2001
• bn share bn share
• 1. CBA 90.4 14.8 94.5 15.1
• 2. AMP 72.2 11.8 72.4 11.6
• 3. NAB 43.4 7.3 47.1 7.5
• 4. BT 37.1 6.2 35.9 5.7
• 5. Deutsche 33.3 5.6 33.3 5.3
• 6. State Street 30.3 5.1 30.3 4.8

Source Assirt
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Areas of Strategic Focus

• Rationalisation of the Financial Services product
  set
• Improvement in customer service
• Continued focus on productivity improvement

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UBS Warburg Conference 6 June
2001www.commbank.com.au