Debt Investor Update For the full year ended 30 June 2013 0 14 AUGUST 2013 | COMMONWEALTH BANK OF AUSTRALIA | ACN 123 123 124 FIND OUT MORE VIA OUR APP
Notes Disclaimer The material that follows is a presentation of general background information about the Group’s activities current at the date of the presentation, 14 August 2013. 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. Cash Profit The Management Discussion and Analysis discloses the net profit after tax on both a ‘statutory basis’ and a ‘cash basis’. The statutory basis is prepared in accordance with the Corporations Act 2001 and the Australian Accounting Standards, which comply with International Financial Reporting Standards (IFRS). The cash basis is used by management to present a clear view of the Group’s underlying operating results, excluding a number of items that introduce volatility and/or one off distortions of the Group’s current period performance. These items, such as hedging and IFRS volatility, are calculated consistently year on year and do not discriminate between positive and negative adjustments. A list of items excluded from statutory profit is provided in the reconciliation of the net profit after tax (“cash basis”) on page 3 of the Profit Announcement (PA) and described in greater detail on page 15 of the PA and can be accessed at our website http://www.commbank.com.au/about-us/shareholders/financial- information/results/ 2
Index Results and Strategy 4 Capital, Funding and Liquidity 19 Sector Exposure and Home Loans 31 Economic Indicators 39 Housing Market 51 Covered Bonds 57
CBA overview � Largest Australian Bank by market capitalisation Result – 12 months to 30 Jun 2013 1 � AA- / Aa2 / AA- Credit Ratings (S&P, Moodys, Fitch) Cash earnings ($m) 7,819 10% � ~14.6 million customers 18.4% ROE (Cash) (20) bpts � ~52,000 staff 4.86 Cash EPS ($) 8% � Over 1,100 branches, leading online platforms 3.64 DPS ($) 9% � #1 in household deposits 45.0% Cost-to-Income (Cash) (100) bpts � #1 in home lending 213 NIM (bpts) 4 bpts � #1 wealth platform - FirstChoice Balance Sheet Capital & Funding Total assets ($bn) 754 11.0% 5% Capital – Basel III CET1 (Int’l) 120 bpts Total liabilities ($bn) 708 Capital – Basel III CET1 (APRA) 8.2% 5% 70 bpts 250 FUA ($bn, spot) LT wholesale funding WAM (yrs) 3.8 22% 0.1 RWA 2 ($bn) 329 na Deposit funding 63% 1% Provisions to Credit RWAs 2 (bpts) 160 na Liquids ($bn) 137 2% 1 All movements on prior comparative period. 4 2 Basel III.
Cash NPAT drivers 12 months to 30 Jun 2013 � Income � Income � 8% � 8% � Operating performance � 12% � Operating performance � 12% � Lending balances � 9% � Lending balances � 9% � Expenses � Expenses � 3% � 3% � CVA turnaround +$215m � CVA turnaround +$215m � C:I ratio � C:I ratio � 180 bpts � 180 bpts � � Deposit income � 11% Deposit income � 11% � � � 10% � 10% � � � $9m (19%) � $9m (19%) NII NII LIE LIE +13% 1 � Business loans � 4% � Business loans � 4% � Avg FUA � Avg FUA � 13% � 13% � Income � Income � 5% � 5% � Expenses � Expenses � Net op. income � Net op. income � 12% � 12% � Expenses � Expenses � 3% � 3% flat flat 4 2 � NIM lower (deposits) � NIM lower (deposits) � � � 9% � 9% � Business loans � 4% � Business loans � 4% Expenses Expenses (2%) 3,054 $m +10% +14% +9% 1,488 +6% 1,210 800 687 561 3 Retail Banking Business & Inst. Bank & Wealth NZ Bankwest Service Private Bank Markets Management All movements on prior comparative period unless stated otherwise. 1 Source RBA. Six months to Jun 13 annualised. 5 2 Excludes volume related expenses. 3 NZD. 4 Source RBA. Six months to Jun 13 annualised. Bankwest core market balances.
Expense grow th Group Cost-to-Income ratio (6 mth) Operating Expenses Jun 12 Dec 12 Jun 13 46.2 45.1 44.9 $m Underlying 36 9,605 +1.8% 64 62 80 9,363 86 47 254 9,196 (220) FY12 Productivity Inflation IT Other FY13 Growth and Software Investment Defined FY13 (ex amortisation underlying Volume Amortisation Spend Benefit and investment) Fund 6
Group NIM 12 Month Movement bpts Wholesale (10) Wholesale (10) Deposits Deposits (11) (11) 15 (21) 1 3 3 3 bpts 6 month NIM 213 209 213 209 217 217 212 210 206 Jun 11 Dec 11 Jun 12 Dec 12 Jun 13 12 month NIM Asset Funding Basis Portfolio Replicating Other 1 FY12 FY13 costs risk mix portfolio pricing 1 Includes Treasury, New Zealand, impact from change in Non lending IEA’s and other unallocated items. 7
Retail bank funding costs 35% x 1.37% Basis Risk Wholesale funding 3 Deposit 65% x 2.01% funding Jun 07 Dec 07 Jun 08 Dec 08 Jun 09 Dec 09 Jun 10 Dec 10 Jun 11 Dec 11 Jun 12 Dec 12 Jun 13 Dec 12 Jun 13 Increase in wholesale funding 1 1.43% 1.37% Increase in deposit funding 1.96% 2.01% Increase in weighted average cost 1.77% 1.79% Increase in home loan (SVR) rate 2 1.58% 1.58% 1 Includes basis risk. 8 2 Outside of movements in the RBA cash rate. 3 Retail deposits as a proportion of retail lending.
Credit quality Loan Impairment Expense (Cash) to Gross Loans 1 Group Consumer Arrears 90+ days CBA Group 1 1.4% (basis points) 2 73 0.9% 41 3 25 3 21 20 0.4% Jun 11 Dec 11 Jun 12 Dec 12 Jun 13 Home Loans Personal Loans Credit Cards FY09 FY10 FY11 FY12 FY13 Pro Forma 4 PD Ratings Migration Risk-Rated Portfolio Troublesome and Impaired Assets $bn 10 13.9 13.1 12.3 5 11.1 10.5 10.1 TCE ($bn) 9.5 5.4 0 5.4 5.5 4.9 4.7 4.5 5 4.3 10 8.5 7.7 6.8 6.2 5.8 5.6 5.2 Total Upgrades Downgrades - excluding defaults 15 Total Defaults Net 20 Jun 10 Dec 10 Jun 11 Dec 11 Jun 12 Dec 12 Jun 13 Dec 09 Mar 10 Jun 10 Sep 10 Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13 5 Commercial Troublesome Group Impaired 1 Basis points as a percentage of average Gross Loans and Acceptances. 2 FY09 includes Bankwest on a pro forma basis and is based on impairment expense for the year. 9 3 Statutory LIE for FY10 48 bpts and for FY13 21 bpts. 4 Excludes banks and sovereigns 5 Comparative information restated to conform to presentation in current period.
Provisioning Individual Provisions Collective Provisions $m $m 3,461 Economic Economic overlay overlay unchanged unchanged 3,043 2,858 2,837 Overlay 1,192 1,049 823 847 2,125 2,008 1,992 758 419 Bankwest 473 1,628 598 979 934 956 659 909 830 898 177 808 116 227 Consumer 157 969 920 847 812 707 Commercial 681 619 588 Jun 10 Jun 11 Jun 12 Jun 13 Jun 10 Jun 11 Jun 12 Jun 13 10
Provisioning ratios Collective Provisions 1 to Credit RWA 2 Provisions for Impaired Assets 3 to Impaired Assets 4 50.00% 1.45% 1.25% 40.00% 1.05% 30.00% 0.85% 0.65% 20.00% FY08 FY09 FY10 FY11 FY12 FY13 FY08 FY09 FY10 FY11 FY12 FY13 CBA Peer 1 Peer 2 Peer 3 CBA Peer 1 Peer 2 Peer 3 Total Provisions 1 to Credit RWA 2 Impaired Assets 4 to Gross Loans and Acceptances 2.50% 2.00% 2.00% 1.50% 1.50% 1.00% 1.00% 0.50% 0.00% 0.50% FY08 FY09 FY10 FY11 FY12 FY13 FY08 FY09 FY10 FY11 FY12 FY13 CBA Peer 1 Peer 2 Peer 3 CBA Peer 1 Peer 2 Peer 3 1 Provisions do not include General Reserve for Credit Losses, equity reserves or other similar adjustments. 2 All ratios subsequent to 1 January 2013 are based on Basel III credit RWA, all ratios prior to this date are based on Basel II/Basel 2.5 credit RWA 11 3 CBA ratios prior to June 2010 and Peers 1 & 2 ratios based on Individually Assessed Provisions to Impaired Assets. 4 CBA data from June 2010 has been updated for changes in the definition of impaired assets to include unsecured retail exposures which are 90 days past due.
Our strategy Customer Focus Capabilities People Technology Strength Productivity opportunities “One CommBank” Growth Continued growth in business and institutional banking Disciplined capability-led growth outside Australia TSR Outperformance 12
Our strategy – customer focus Products per Customer Retail Customer Satisfaction 84.0% CBA CBA Peers Peers 3.00 82.0% 80.0% 2.80 78.0% 2.60 76.0% 74.0% 2.40 72.0% 2.20 70.0% 68.0% 2.00 Jun 07 Jun 13 Jun 07 Jun 13 Average Number of Banking and Finance Products held by % Satisfied ('Very Satisfied' or 'Fairly Satisfied') 1 Customers 18+ (at the Financial Institution) 2 1. Roy Morgan Research Main Financial Institution (MFI) Retail Customer Satisfaction (June 2013). Australian population 14+, % “Very Satisfied” or “Fairly Satisfied” with relationship with that MFI. 6-month rolling average. The ranking refers to CBA’s position relative to the other three main Australian banks (Westpac, NAB and ANZ). CBA excludes Bankwest. 2. Products per Customer – Roy Morgan Research. Australian Population 18+ , Banking and Finance products per Banking 13 and Finance customer at financial institution. 6 month rolling average. CBA excludes Bankwest
Our strategy – technology 14 Commonwealth Bank of Australia / Presentation Title / Con fi dential
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