November 2002 Investor Roadshow David Murray Chief Executive - PowerPoint PPT Presentation

November 2002 Investor Roadshow David Murray Chief Executive Officer Stuart Grimshaw Chief Financial Officer www.commbank.com.au

Disclaimer The material that follows is a presentation of general background information about the Bank‟s activities current at the date of the presentation, 4 November 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. A full colour version of this presentation is available on the News & Information page of the Commonwealth Bank‟s Shareholder Centre website http://shareholders.commbank.com.au/display 2

Speaker’s Notes  Speaker‟s 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  The Australian Economy and recent Equity Market Performance  Commonwealth Bank: Track Record, Differentiators and Growth Drivers  How is Commonwealth Bank Positioned Against the Current Outlook? 4

The Australian Economy and recent Equity Market Performance

Australia’s Economy has been Resilient G D P R E L A T IV E G D P G R O W T H % (a n n u a l % ch a n g e ) (a n n u a l % c h a n g e ) % 9 6 A u s tra lia 6 4 % % 3 2 % L o n g -ru n % a ve ra g e 0 0 U S -2 -3 S e p - 8 7 S e p - 9 0 S e p - 9 3 S e p - 9 6 S e p - 9 9 S e p - 0 2 S e p -8 8 S e p -9 1 S e p -9 4 S e p -9 7 S e p -0 0 V A L U E O F R E T A I L P R O F I T S % p a % p a 2 0 T R A D E ( % o f G D P ) 1 5 1 5 1 6 1 0 1 0 C o rp o ra te p ro fits * (p riv n o n -fa rm ) 1 2 5 5 S m a ll b u s in e s s in c o m e * * % G D P (fc ) 8 0 0 S e p -9 0 S e p -9 3 S e p -9 6 S e p -9 9 S e p -0 2 J u l -9 5 J u l -9 7 J u l -9 9 J u l -0 1 6 Source: Commonwealth Research

Interest Rates & Credit Growth CREDIT THE CASH RATE 30 7 (3 month-ended annual rates) % CBA (f) 20 6 Market (f) (Jun „02) 10 5 0 Market (f) (Oct „02) 4 -10 Jul-98 Jul-99 Jul-00 Jul-01 Jul-02 Jul-97 Jul-98 Jul-99 Jul-00 Jul-01 Jul-02 Business Housing Other personal 7 Source: Commonwealth Research

Housing Market EQUITIES AND HOUSE PRICES HOUSING LOAN (RELATIVE PERFORMANCE) APPROVALS '000 $bn % Index 18 6 45 250 H ouse Prices* (lhs) 16 14 All Ords (lhs) 200 4 30 12 Owner-occupied 150 10 (ex refinance) 2 (rhs) 15 8 100 Investor 6 M ortgage rate (rhs) (lhs) *CBA Est. House Price Index 50 4 0 0 Sep-86 Sep-90 Sep-94 Sep-98 Sep-02 Jul-86 Jul-89 Jul-92 Jul-95 Jul-98 Jul-01 Compound Annual Growth Rate: 1986-2002 2000-2002 All Ordinaries Index: 6.2% -3.5% House Prices: 10.1% 20.5% 8 Source: Commonwealth Research

Housing Market House Price as Multiple of Gross Yearly AWE* Darwin Sep-02 Sep-99 C hange Sydney 10.6 8.5 25% Melbourne 6.7 5.3 26% Brisbane 6.0 4.8 25% Perth 5.0 4.6 9% Adelaide 5.0 3.8 32% Brisbane H obart 3.7 3.5 6% C anberra 5.6 4.5 24% Sydney D arw in 5.6 5.1 10% Perth Canberra T otal Australia 7.6 6.2 23% Adelaide Melbourne Hobart AWE: average weekly earnings Source: CBA Research 9

Housing Market S Y D N E Y H O U S E P R I C E S H O U S E P R I C E S 4 0 0 6 0 6 0 ( d e f la t e d b y t h e C P I) 9 0 th 4 0 3 0 0 4 0 p e r c e n tile R e a l g r o w th $‟000 2 0 %pa ( r h s ) %pa 2 0 0 2 0 0 1 0 0 0 - 2 0 L e v e l Q I- Q III 2 0 0 2 ( lh s ) Source: Residex a t a n n u a l r a te - 4 0 0 - 2 0 1 9 0 0 1 9 1 2 1 9 2 4 1 9 3 6 1 9 4 8 1 9 6 0 1 9 7 2 1 9 8 4 1 9 9 6 M a r - 6 0 M a r - 6 8 M a r - 7 6 M a r - 8 4 M a r - 9 2 M a r - 0 0 P R IN C IP A L R E P A Y M E N T S % % DEBT REPAYMENT LEVELS 1 2 3 0 20 20 Pr in c ip a l (% of h/hold income, Mar'02) ( % o f m o tg a g e p a y m e n t) ( lh s ) 8 2 0 15 15 4 10 10 10 Cu m u la tiv e o v e r p a y m e n t o f p r in c ip a l* Source: Melbourne Institute ( r h s ) 0 5 5 0 <30 31-50 51-70 71-100 >100 S e p - 9 7 S e p - 9 9 S e p - 0 1 Income ($'000pa) *assumes principal repayment ratio fixed at 1997/98 level 10 Source: Commonwealth Research, unless otherwise marked

Australian Equity Market Performance World Equity Market Performance (US$ Currency adjusted YTD%) 0% -10% -6% -11% YTD Performance -14% -20% -15% -17% -18% -30% -26% -34% -34% -40% -50% -60% -62% -70% NIKKEI/JAPAN FTSE/LONDON HANG SENG/HK BOLSA/MEXICO CAC/FRANCE DAX/GERMANY BOVESPA/BRAZIL DJIA/US NASDAQ/US ASX/AUSTRALIA Indices As at close of business 15 October, 2002 Source: Deutsche Bank 11

Australian Banks - Credit Quality Global Asset Quality Map - Selected Regions/Segments (2002E) DENMARK 200 2002E Median Loan Loss Reserves/Non Performing Loans (%) US MID CAP REG SPAIN 180 Developed Markets Median NPL/Loans 1.7% US MONEY CENTERS 160 AUSTRALIA US LARGE CAP REG 140 PORTUGAL 120 Developed Markets Median LLR/NPLs 100% 100 US FIDUCIARY/TRUST CANADA NORWAY GERMANY 80 EURO INTL FRANCE SWISS UK EURO RETAIL EURO WHOLESALE 60 SWEDEN BELGIUM SINGAPORE ITALY HK 40 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 2002E Median Nonperforming Loans/Loans (%) Source: Merrill Lynch Global Banks Team 12

Australian Banks - Shareholder Value Performance Global Five Year 300 Shareholder Performance Index 1 250 3 12 200 25 Index 150 100 50 0 CBA WBC ANZ NAB Source: Oliver Wyman & Co Shareholder Performance Index, 2002. 13 Period covered by index 1 Jan 1997 - 31 Dec 2001

Commonwealth Bank:  Our Track Record  Our Differentiators and Growth Drivers

Recent Result Highlights  Solid Earnings Growth  Reported Profit up 10.7% to $2,655m  Cash Profit up 10.6% to $2,501m  Cash EPS up 10.1% to $1.97  Costs steady year on year  Improved productivity and cost to income ratio  High dividend payout ratio relative to peers  Capital position remains strong  Credit Quality and Provisioning remains strong 15

Net Profit* Full Year = 2,262 Full Year = 2,501 1,400 1,309 1,192 1,153 120 1,109 1,200 96 71 97 78 121 1,000 164 156 800 600 1092 975 918 875 400 200 0 Dec 2000 Jun 2001 Dec 2001 Jun-02 Banking Life & Super Funds M anagement * Net Profit after tax and outside equity interest - cash basis. Excludes appraisal value uplift and goodwill amortisation. 16

ROE and EPS 110 25% 103 100 94 91 88 90 20% 80 70 15% 60 EPS ROE 14.61% 50 13.10% 13.14% 10% 12.46% 40 30 5% 20 10 0 0% Dec 00 Jun 01 Dec 01 Jun 02 Earnings per share - cash basis ROE - cash basis 17

Dividend Growth 150 100 82 90 75 125 72 80 66 70 100 58 57 60 52 Cents 75 46 50 % 68 40 61 36 58 50 30 49 46 45 22 20 38 20 36 25 24 10 20 20 0 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 First Half Second Half Payout Ratio 18

Asset Quality Overview First Half Second Half Charge for Bad & Doubtful Debts (6 months) $290m $159m Charge for Bad & Doubtful Debts to RWA 0.42% 0.23% (annualised) Impaired Assets (net of interest reserved) $983m $884m Specific Provisions $309m $270m General Provision $1,334m $1,356m General Provision to RWA 0.96% 0.96% 19

Current Operating Outlook 2002-2003  Core business remains sound  Equity market volatility has continued in the first quarter of 2003  Additional costs of governance to be included in first half result:  expensing of employee option plans  restructuring provisions taken above the line 20

Commonwealth Bank: Differentiators

Segmentation: Aligned Domestic Structure with Customer Needs Retail Banking Premium Investment & Institutional & Services Financial Insurance Business Services Services Services Personal Premium clients Agents, Brokers, Institutional, Customer Group banking including Financial Advisers Corporate, customers, professionals Commercial Small business and business business banking customers customers Branch, Ezy- Relationship Agents, Branches, Relationship Channels Banking, ATM, managers, Brokers, Financial managers, EFTPOS, Premium Advisers, Premium Business centres Phone, On-line, investment investment centres, Mortgage centres, phone, DirectDealerships, brokers on-line. Institutional Clients Support Finance, Risk Management, Human Resources, Strategy, Technology, Legal, Secretariat 22

Scale : Strong Market Share Positioning Australian Market Share Jun 2001 Dec 2001 Jun 2002 Rank * 1 Home Loans^ 20.4% 20.1% 20.1% (Residentially Secured) 1 Credit Cards 21.4% 21.4% 21.6% * 1 Retail Deposits^ 24.0% 24.1% 24.2% 1 Retail FUM (Plan for Life) 16.1% 16.1% 15.7% * 2 Superannuation/Annuities 16.3% 16.4% 16.4% 1 Retail Broking 9.0% 8.5% 9.2% * 2 Inforce Premiums 14.4% 14.5% 14.4% * March 2002 data ^ Due to delays in implementing new APRA reporting methodology, no market share data has been available since March 2002. 23