Transaction ansaction Banking Banking 1 Grou Gr oup T p Tran ansaction saction Balan alance ces Stron Str ong g g growth th ac across oss divi divisi sion ons $m FY16 v FY15 40% + 22% 34% Group 20% 126,780 +22% 14% 103,528 14% 88,351 15% Ex 17% 14% offset 9% accounts 2 RBS BPB IB&M BWA NZ FY14 FY15 FY16 Inno In nova vation & tion & Simpli Simplicity city RBS S Ne New Tran ansaction saction A Acc ccou ounts nts 3 # Real time + 29% Instant Banking 1,070k 959k 831k Fast, simple processes FY14 FY15 FY16 1. Includes non-interest bearing deposits. 2. Excludes Cash Management Pooling Facilities (CMPF). 3. Number of new RBS 17 personal transaction accounts, including offset accounts.
Innova Inno vation tion an and d Simplicity Simplicity Simpli Simplified fied Ho Home me Lo Loan ans Simplified Simpli fied Per ersona sonal l Lo Loan ans Easy Easy conversion application of and approval conditional with focus on to full financial approval wellbeing Enh Enhan ance ced d Pr Prop oper erty Se ty Sear arch In Instant B stant Ban anking king Open, fund Now across and access key platforms transaction – property accounts listings, in under 5 prices etc minutes 18
Inno Innova vation and Simp tion and Simplicity licity Paper perless less Sta Statement tements s Instant Instant Banking Banking Photo a bill Photo a bill October 2015 May 2016 June 2016 BPAY details Move to paperless New transaction automatically statements with a single accounts opened < 5 populated from photo click - over 800,000 minutes + instant additional accounts now access via Cardless – simple click for paperless 1 Cash, Tap & Pay payment 1. Since launch in October 2015 19
Innova Inno vation tion an and d Simplicity Simplicity OnDec OnDeck Kounta on A ounta on Alber lbert Innova Inn vation La tion Labs bs Awarded Best Fintech/Bank 1 Collaboration Melbourne “pop - up” February 2016 March 2016 May 2016 Sydney, Hong Kong, 40k+ Albert terminals, London - 24 apps incl. Kounta - Exclusive banking Supporting an referral arrangement cloud based system for innovation ecosystem with leading online orders, payments, with clients, small business lender inventory update - government and same time, one device communities 1. Australian FinTech Awards. 20
Innova Inno vation and Simp tion and Simplicity licity Easy Easy Aler Alerts ts Albert Alber TYME TYME Canstar Innovation Award Roll-out May 2016 October 2015 Customisable push Customer on-boarding Now with 40,000+ notifications for in ~5 minutes with devices in market deposits, high/low biometric 60% new merchants balance & payment identification to CBA reminders (500 kiosks 1 ) 1. In Pick ‘n’ Pay stores within South Africa 21
Add dditi ition onal al Pr Prod oduc uctivi tivity ty info information rmation Prod Pr oduc uctiv tivity ity Metrics etrics Perso sonal l Loans s – Sa Same me da day y fu fund nding ing % of new loans funded same day 1 Measure Metric Timeframe Asset Finance Settlement Received to Funded FY16 vs Approval 42% (for the new Fast Lane abridged FY15 – turnaround settlement process) times 37% 32% SME Loan Median turnaround time in days Approval (IFS) from SME customers wanting to 29% May 16 vs – turnaround have an unsecured or secured May 15 times loan with CBA China county 26% banks to credit approval Colonial First Median time in hours from State Customer customer request receipt time Mar 16 vs Request until request is fully processed by Dec 14 – turnaround CFS Investor Services times 10% Bankwest Small TAT in calendar days from when Business the customer requests the Personal Liability application (sales enquiry) to the FY16 vs Credit Card time the customer has their credit FY15 – turnaround card ordered using the 75th times (TAT) percentile as a measure FY11 FY12 FY13 FY14 FY15 FY16 1. Percentage of personal loans funded on day of application, excluding applications referred for 22 manual decisioning and fraud verification
Pr Productivity oductivity + + Ef Efficienc ficiency + + In Investment estment Pr Prod oduc uctiv tivity ity Cost-to Cost to-In Inco come me Rein einvestmen estment (%) ($m) As Asset et Finance Finance Appr pproval al 73% +10% (Turnaround time) 44.6 SME Loan Loan 1,373 Appr pproval al - IFS FS 72% Branches (Turnaround time) 12% & Other 1,246 42.8 42.4 Risk & 37% Colonial Colonial Compliance Customer Cus tomer 85% Reques equests ts (Turnaround time) Productivity 51% & Growth Bankw Bankwes est t Small mall Bus Busines iness 97% Cr Credit edit Car Card (Turnaround time) FY12 FY15 FY16 FY15 FY16 23
Note No tes 24
Strength Str ength Dep Deposit osit Who holesale lesale Capita Ca pital Liquidity Liqu idity 3 Fund Fu nding ing Fund Fu nding ing $bn Portfolio Tenor 2 Basel III % of Total Funding (years) Common Equity Tier 1 LCR 14.4% 120% 120% 12.7% Internationally comparable 1 134 132 4.1 10.6% 66% 3.8 59 65% CLF 1 9.1% 66 HQLA 1 75 assets 66 Jun 15 Jun 16 Jun 15 Jun 16 Jun 15 Jun 16 Jun 15 Jun 16 1. Refer glossary for definitions 2. Weighted Average Maturity of long term wholesale debt. Includes all deals with first call or 25 residual maturity of 12 months or greater. 3. Liquids are reported net of applicable regulatory haircuts.
Note No tes 26
RESULTS PRESENTATION FOR THE FULL YEAR ENDED 30 JUNE 2016 Results Presentation DAVID CRAIG CHIEF FINANCIAL OFFICER For the half year ended 31 December 2009 COMMONWEALTH BANK OF AUSTRALIA | ACN 123 123 124 | 10 AUGUST 2016 10 February Commonwealth Bank of Australia ACN 123 123 124 2010
Add dditi ition onal al Non-ca Non cash sh items items & T & Tax ax information info rmation Non Non-ca cash i sh items tems Tax ax Effective Tax Rate “cash basis” (%) $m Jun 16 Jun 15 Cash NPAT 9,450 9,137 27.5% 27.3% 27.2% Non-cash items Hedging and IFRS volatility Unrealised accounting gains and losses arising from the application of “AASB 139 Financial (200) 6 FY14 FY15 FY16 Instruments: Recognition and Measurement” • Australia’s largest tax payer 1 Other • Effective tax rate reflects global business mix Bankwest non-cash (27) (52) items • Signatory of Voluntary Tax Transparency Code Treasury shares 4 (28) valuation adjustment Total non-cash items (223) (74) Statutory NPAT 9,227 9,063 1. Bloomberg, July 2016 28
Good ope Good operating r ting result esult Jun 16 vs Jun 16 $m Jun 15 5% Operating income 24,606 4% Operating expenses (10,429) 6% Operating performance 14,177 (33%) Investment experience 141 27% Loan impairment expense (1,256) Tax and non-controlling interests (3,612) 4% 3% Cash NPAT 9,450 2% Statutory NPAT 9,227 29
Add dditi ition onal al Othe ther Ban r Banking king I Inc ncome ome information info rmation Other Oth er Ban anking king In Inco come me Trad ading In ing Inco come me $m $m 1,087 1,039 4,860 4,811 946 548 4,283 558 Trading 378 Other 2 188 424 1,087 1,039 Trading 946 371 Lending 1,005 1,010 1,037 fees Sales 783 654 573 2,209 2,215 Commissions 2,112 (39) (74) CVA / FVA FY14 FY15 FY16 FY14 FY15 FY16 30
Operating Income up Oper ting Income up 5% 5% $m +5.3% 5.3% Fu Fund nds s & & In Insur suran ance ce +3 +3% +4.7% before FX Average FUA 4% Insurance income flat 2,811 2,730 Other Ba Oth r Banking ing Income me +1 +1% 4,860 4,811 FVA / CVA ($35m) Trading (ex FVA/CVA) 8% OBI (ex Trading) flat 16,935 15,827 Net Inte Net In terest In est Inco come me +7 +7% Volume 8% Margin (2) bpts FY15 FY16 31
Add Additi ition onal al Group NI oup NIM inf informa rmation tion 12 12 Mo Month nth Mo Moveme ement nt 214 209 bpts 207 210 206 206 FY14 FY15 FY16 2 - - 209 207 (2) (2) 206 206 ex Treasury & Markets Group NIM 3bps ex Treasury & Markets FY15 Asset Funding Portfolio Capital & Treasury & FY16 pricing costs & mix Other Markets Basis risk 32
Underlying Group NIM down 1bpt 1 6 Month Mo 6 Month Movement ement bpts 212 207 208 206 209 206 205 204 Dec 14 Jun 15 Dec 15 Jun 16 1 208 2 206 (1) (3) (1) 206 205 ex Treasury & Markets 1H16 Asset Funding Portfolio Capital & Treasury 2H16 pricing costs & mix Other & Markets Basis risk 1. Excluding Treasury and Markets 33
Add dditi ition onal al Continuing to Continu ing to In Invest est info information rmation Gr Gross oss In Investmen estment Spen t Spend In Investmen estment t Spe Spend nd $m % of total 1,373 1,286 1,246 Branches 1,237 11% 12% 12% 1,182 & Other 1,179 24% 692 Risk & 30% 37% 639 Compliance 2 nd Half 651 655 638 593 65% Productivity 58% 51% 681 & Growth 647 1 st Half 589 595 582 541 FY14 FY15 FY16 FY11 FY12 FY13 FY14 FY15 FY16 34
Underlying expenses up 3% Total Oper otal Operating ting Expen Expenses ses $m + 4.4% Underlying Under ying + 3.0% 71 65 71 250 10,429 (21) 10,293 9,993 FY15 Staff Amortisation Other FY16 Investment FX FY16 underlying Spend increase 35
Add dditi ition onal al Cr Cred edit it qu qualit ality info information rmation Ho Home me Lo Loan an Arrea ears LIE to LI E to Gr Gross oss Lo Loan ans 1.5% Consumer (bpts) 90+ days Bankwest RBS ASB 1.0% 19 18 18 18 17 17 0.5% 0.0% Jun 13 Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 FY11 FY12 FY13 FY14 FY15 FY16 LI LIE to E to Gr Gross oss Lo Loan ans Grou Gr oup Ho p Home me Lo Loan an Arrea ears Corporate (bpts) 90+ days 2012 2013 30 1.5% 24 2014 2015 13 13 43 2016 1Q16 2Q16 3Q16 4Q16 1.0% Uptick largely in commodity and related sectors 24 23 0.5% 20 13 11 0.0% FY11 FY12 FY13 FY14 FY15 FY16 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun LIE percentage of average GLA. Consumer represents Retail Banking Services, ASB Retail, Bankwest Retail and IFS Retail. Corporate represents Institutional Banking and Markets, Business and Private Banking, ASB Business, Bankwest Business, IFS 36 Business and other corporate related expense. Statutory Corporate LIE for FY13 26 bpts and FY14 11 bpts.
Sound credit quality Lo Loan an Imp Impair airmen ment t Exp Expen ense se Consumer onsumer Arrear ears 90+ Days CBA Group (bpts) Personal Loans Credit Cards 1.46% Home Loans 1.34% 1.23% 1.20% 73 1.02% 1.01% 0.99% 1.05% 0.62% 0.54% 0.52% 0.50% Jun 13 Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 Trou oublesome blesome and and Imp Impair aired ed Ass ssets ets 41 $bn Group Impaired 9.5 Commercial Troublesome 8.2 7.0 25 6.5 6.6 4.3 6.0 5.9 21 3.9 20 19 3.4 3.1 3.4 16 16 2.9 2.8 5.2 4.3 3.6 3.5 3.1 3.1 3.1 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Jun 13 Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 Pro Forma Cash LIE basis points (bpts) calculated as a percentage of average GLA. FY09 includes Bankwest on a pro-forma basis and is based 37 on LIE for the year. Statutory LIE for FY10 48 bpts, FY13 21 bpts and FY14 16 bpts. Consumer Home Loan Arrears exclude Reverse Mortgage, Commonwealth Portfolio Loan (RBS only) and Residential Mortgage Group (RBS only) loans.
Add dditi ition onal al Cred Cr edit it Qualit Quality info information rmation Comme ommercial cial Por ortf tfolio olio Qu Quality ality % of book rated investment grade 67.5 68.8 68.3 69.8 69.9 69.8 68.7 500 TCE ($bn) 400 Other 300 BBB 200 A 100 AAA/AA 0 Jun 13 Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 Imp Impair aired ed Ass ssets ets to to GL GLAs CBA Peer 1 Peer 2 Peer 3 2.0% 1.0% 0.0% FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 CBA grades in S&P equivalents. Impaired Assets based on financial year data (CBA: 30 June, Peers: 30 September). 38
Strong provisioning In Individu ividual Pr l Provision visions Collective Collectiv e Pr Provisi vision ons $m $m 2,818 2,779 2,762 695 Economic 762 755 Overlay Overlay unchanged 1,127 187 264 347 Bankwest 944 389 887 209 1,077 267 981 941 128 Consumer 169 128 610 566 492 Commercial 859 762 729 Jun 14 Jun 15 Jun 16 Jun 14 Jun 15 Jun 16 39
Add dditi ition onal al RBS RBS info information rmation Reta etail il Ban anking king Ser Servi vice ces Home me Loan Market t Sh Share CBA Peer 1 FY16 vs Peer 2 Peer 3 FY16 $m FY15 27% 25.3% Home loans 4,100 9% 25% Consumer finance 2,520 4% 23.2% 23% Retail deposits 3,149 11% 21% Distribution 427 8% 19% Other 165 0% Total banking income 10,361 8% 17% Operating expenses (3,373) 3% 14.8% 15% Operating performance 6,988 10% 14.6% 13% Loan impairment expense (660) 5% Tax (1,892) 11% 11% Jun 16 Jun 07 Cash net profit after tax 4,436 11% Source: RBA/APRA. CBA includes Bankwest 40
Retail etail Banking Banking Ser Services vices Cost ost-to to-In Inco come me Ratio tio FY16 vs FY16 vs FY15 FY15 % Income Operating Performance 11% 10% 35.2 9% 8% 34.1 4% 3% 32.6 Home Consumer Retail Income Costs Operating Jun 14 Jun 15 Jun 16 loans finance deposits performance RBS S Mar argin gin Reta etail il Dep eposit osit Mix ix bpts $bn + 7% 273 235 269 219 266 266 261 + 34% 43 Transactions 1 32 64 60 Online 2 Savings & 128 127 Investments 2H14 1H15 2H15 1H16 2H16 Jun 15 Jun 16 1. Transactions includes non-interest bearing deposits. 41 2. Online includes NetBank Saver, Goal Saver and Business Online Saver.
Add dditi ition onal al Corpo Cor porate te information info rmation Business usiness & & Priv Private te Ban anking king In Insti stitution tutional al Ban anking king & & Mar arkets ets FY16 vs FY16 vs FY16 FY16 $m $m FY15 FY15 Corporate Financial Services 1,395 6% Institutional Banking 2,164 0% Markets Regional and Agribusiness 646 1% 689 9% Local Business Banking 1,137 5% Private Bank 366 11% CommSec 364 7% Total banking income Total banking income 3,908 5% 2,853 2% Operating expenses (1,081) 11% Operating expenses (1,489) 4% Operating performance 1,772 (3%) Operating performance 2,419 6% Loan impairment expense (252) 51% Loan impairment expense (179) 18% Tax (356) (6%) Tax (673) 5% Cash net profit after tax 1,164 Cash net profit after tax 1,567 5% (9%) 42
Cor Corpor porate te IB&M – FY16 IB& FY16 vs vs FY15 FY15 BPB PB – FY16 FY16 vs vs FY15 FY15 Income Operating Performance Operating Performance Income 14% 11% 9% 7% 6% 6% 5% 5% 11% 4% 3% 1% (3%) 0% 2% Income Costs Operating CFS RAB LBB Private Comm performance Bank Sec Income Costs Operating Institutional Markets Markets (ex CVA / performance Banking (ex CVA / FVA) FVA) NIM 4 NIM Australi lian Bu Busine iness Le Lending ing Gr Growt wth 1, 3 2, 3 12 months to Jun 16 6 months to Jun 16 bpts 204 4.4% 7.7% 197 6.6% 6.1% 2.5% 192 (1.4%) Jun 15 Dec 15 Jun 16 System BPB IB&M System BPB IB&M 1. Spot balance growth twelve months to June 2016. 2. Spot balance growth six months to June 2016. 3. Source RBA. IB&M 43 represents Core Domestic Lending balance growth and excludes Cash Management Pooling Facilities (CMPF). 4. Combined Institutional Banking and Markets and Business and Private Banking.
Add dditi ition onal al Wea ealth lth Man Manage gemen ment information info rmation Wealth Mana ealth Managemen gement Ge Gene neral al In Insur suran ance ce Claims laims Net Event Claims $ FY16 vs FY16 $m FY15 Colonial First State (CFS) 1 929 7% CFSGAM 842 (1%) CommInsure (CI) 622 (2%) Total operating income 2,393 2% 2H13 1H14 2H14 1H15 2H15 1H16 2H16 Ass Assets ts Under Ma r Manageme ment 2 Operating expenses (1,676) (3%) $bn Operating performance 717 15% (1%) Tax (185) 25% ( 6.0 ) 3.5 202.2 199.7 Underlying profit after tax 532 12% Investment experience 85 (52%) Jun 15 Net Markets Jun 16 Cash net profit after tax 617 (6%) flows & Other Spot 1. Colonial First State incorporates the results of all Wealth Management Financial Planning businesses 44 2. AUM includes Realindex Investments and excludes the Group’s interest in the First State Cinda Fund Management Company Ltd
Wealth Man ealth Management gement FY16 FY16 vs vs FY15 FY15 Fund Fu nds s Un Unde der A r Administr dministration tion Income 1 Operating Performance $bn + 2% 15% 7% 1.1 1.3 Investment experience 2 134.3 131.9 52% 2% Jun-15 Net Flows Net Markets and Other Markets Jun-16 (1%) Jun 15 Jun 16 (3%) Flows & Other (2%) (6%) Op. Spot CFS CFSGAM CI Income 1 Costs perf. NPAT Insur In suran ance ce In Infor orce ce CFSG FSGAM Fu Fund nds s Perf erfor orman mance ce 3 year rolling average of percentage of assets outperforming $m benchmark returns + 2% 100% 100% 100% 100% 99% 100% 42 80% (1) 78% 76% 2,508 69% 2,467 25% 6% Global Fixed Stewart First Global Property Infra Weighted Jun-15 Life Insurance General Insurance Jun-16 Cash Realindex Core Growth Jun 16 Jun 15 Life General infra- State resources securities interest Investors structure Average Stewart structure funds Insurance Insurance Spot securities Asia 1. Total operating income 45 2. Driven by non-recurrence of divestments and investment revaluation gains in the prior year
Add dditi ition onal al Di Divide vidend nd p per Sh er Shar are info information rmation Payout ratio io (c (cash) sh) 75.0% 75.0% 78.2% 78 .2% 73 73.9% .9% 73.2% .2% 75 75.8% .8% 75 75.9% .9% 75 75.1% .1% 75 75.1% .1% 76.5% 76 .5% 82% 81% 81% 81% 71% 90% 70% 84% 70% 84% 71% 87% 62% 62% 84%74% 63% 63% 198 113 153 113 115 120 170 132 188 137 197 164 200 183 218 198 222 222 cents FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Interim Final 46
Dividend maintained Dividend maintained cent ce nts s pe per sha r share 420 420 401 364 334 320 290 266 228 78.2% 78.2% 75.8% 75 .8% 75.9% 75.9% 76 76.5% .5% 75.1% 75.1% 75.1% 75 .1% 75 75.0% .0% 73.9% 73 .9% 73 73.2% .2% FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Cash NPAT Payout Ratio 47
Add dditi ition onal al Pro-for Pr orma Ca ma Capital pital info information rmation Estimated increase Mortgage risk weight change has Entitlement offer in average risk no impact on the Group’s (Aug-15) raised weight for the internationally comparable ratio. $5.1bn or 131 Group’s mortgage 14.4% Capital raising strengthened the bpts portfolio 1 Group’s position within the Global top quartile 10.6% (100) 9.6% 8.0% 2 CET1 (APRA) Higher mortgage CET1 (APRA) APRA CET1 (Int'l) Reported risk weight Pro-forma Min Reported Jun 16 Jun 16 Jun 16 Note: Colonial Group debt – first tranche matured in April 2015 ($350m). Remaining debt to mature in FY17 ($1,200m or 30bpts of CET1) and FY18 ($665m or 15bpts of CET1). 1. On 5 August 2016, APRA reaffirmed its aim to increase the average risk weight on Australian mortgages measured across all IRB 48 ADIs to an average of at least 25 per cent. APRA has advised both recalibration and modelling changes which are likely to lead to some volatility in mortgage risk weights over coming quarters as these changes are finalised. 2. Refer glossary for definition
Strong Ca St ong Capital pital Positi osition on CET1 CET1 14.4% bpts 118 (6) 10.6% 10.2% (72) 9.1% 8.0% Jun 15 Dec 15 Dec 15 Cash RWA Jun 16 APRA Jun 16 Int'l 1 APRA APRA Interim NPAT & Other APRA Min Dividend (Net of DRP) 1. Internationally comparable capital - refer glossary for definition 49
Notes Note 50
Inter Interna national tional Peer Basel eer Basel II III I CET CET1 G-SIBs in dark grey 17.7 APRA top quartile 1 14.9 14.7 14.5 14.4 14.0 13.9 13.5 13.5 13.5 13.2 13.0 12.9 12.5 12.4 12.1 12.1 11.9 11.8 11.6 11.6 11.4 11.4 11.4 11.3 11.3 11.1 10.8 10.8 10.7 10.6 10.6 10.5 10.3 10.3 10.2 10.1 10.1 3 3 3 2 3 2 3 3 3 3 3 3 3 3 2 3 3 3 Nordea UBS WBC RBS CBA ANZ ING Lloyds Intesa Sanpaolo China Construct. Bank Standard Chartered NAB ICBC Citi HSBC Sumitomo Mitsui China Merchants Bank JP Morgan Credit Suisse Barclays Commerzbank Credit Agricole SA Mitsubishi UFJ BNP Paribas SocGen Bank of China Bank of Comm BBVA Deutsche Mizuho Wells Fargo Santander Bank of America UniCredit RBC Agri. Bank of China Scotiabank Toronto Dominion Source: Morgan Stanley and CBA. Based on last reported CET1 ratios up to 5 August 2016 assuming Basel III capital reforms fully implemented. Peer group comprises listed commercial banks with total assets in excess of A$750 billion and which have disclosed fully implemented Basel III ratios or provided sufficient disclosure for a Morgan Stanley estimate. 1. APRA Insight Issue Two “International capital comparison update” (4 July 2016) 51 2. Domestic peer figures as at 31 March 2016. NAB included in peer bank top quartile in accordance with APRA update (see 1 above). 3. Deduction for accrued expected future dividends added back for comparability
Add dditi ition onal al Fund Fu nding ing info information rmation Funding Fun ding Composi ompositi tion on Aver erage ge Lon Long g Ter erm m Fu Fund nding ing Costs osts Margin to BBSW (bpts) 200 Customer Deposits 66% 175 1 ST Wholesale Funding 14% 150 LT Wholesale Funding > 12 months 10% 125 LT Wholesale Funding ≤ 12 months 3% 100 Predicted LT Covered Bonds 3% 75 funding costs if current Hybrids 2% 50 market rates Portfolio Average Cost remain 25 Indicative Spot Market Cost Short Term Collateral Deposits 1% unchanged 0 RMBS 1% Jun 06 Jun 08 Jun 10 Jun 12 Jun 14 Jun 16 Issuance Issuan ce In Indica dicativ tive Fu e Fund nding ing Cost ost Cur urves es $bn 38 2 38 129 140 Margin to BBSW (bpts) 25 31 114 120 98 20 100 100 74 15 80 87 72 60 47 10 49 40 5 26 17 14 13 20 8 3 0 - 1 year 2 year 3 year 4 year 5 year Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Jun-16 Jun 16 Securitisation Long Term Wholesale Covered Bond Jun 07 Jun 15 Jun 16 1. Includes the categories ‘central bank deposits’ and ‘due to other financial institutions’ (including collateral received) 2. Includes 52 restructure of swaps and reclassification of deals between short and long term funding
Fund Funding an ing and Liqu d Liquidity idity Fu Fund nding ing Long T Long Ter erm Funding m Funding Portfolio Tenor (years) 4 $bn Sour ource of ce of f funds unds Use e of of f funds unds 4.1 3.9 3.8 66% (27) Deposit 38 Jun 15 Dec 15 Jun 16 Funded Liquidity Liquidity 5 1 $bn 120% 123% 120% LCR (56) 140 132 134 NSFR 40 >100% 66 59 CLF 6 66 (1) (3) 8 HQLA 6 74 75 66 1 3 Equity FX Customer Short term New long 2, 3 Long term Lending Other Assets deposits funding term funding maturities Jun 15 Dec 15 Jun 16 12 Months to Jun 16 1. Includes net short term collateral deposits. 2. Includes restructure of swaps. 3. Reported at historical FX rates. 4. Weighted 53 Average Maturity of long term wholesale debt. Includes all deals with first call or residual maturity of 12 months or greater. 5. Liquids are reported net of applicable regulatory haircuts. 6. Refer glossary for definition.
Notes Note 54
Summary Summar A volume olume driv driven en inco income r me result esult Go Good od ope operating ting pe perf rfor orman mance ce +5% (Income less operating expenses, $m) FY16 vs FY15 +10% FUA FY16 vs FY15 F&I +3% +4% 6,988 +1% OBI +6% Volume -1% +7% NII +4% +8% 2,419 +15% Flat 1,843 1,444 717 1,082 1 2 RBS BPB IB&M WM NZ BW Total Operating Income Con ontinuing tinuing to to in invest est Str Stren ength gth Deposit Wholesale LCR $m CET1 Funding Funding (years) 10.6% 1,373 66% 120% 4.1 1,237 1,246 1,182 120% 65% 3.8 9.1% Jun 15 Jun 16 Jun 15 Jun 16 Jun 15 Jun 16 Jun 15 Jun 16 FY13 FY14 FY15 FY16 1. IB&M ex CVA/FVA 55 2. In NZD
Notes Note 56
RESULTS PRESENTATION FOR THE FULL YEAR ENDED 30 JUNE 2016 Results Presentation IAN NAREV CHIEF EXECUTIVE OFFICER For the half year ended 31 December 2009 COMMONWEALTH BANK OF AUSTRALIA | ACN 123 123 124 | 10 AUGUST 2016 10 February Commonwealth Bank of Australia ACN 123 123 124 2010
Add dditi ition onal al Capital Cap ital information info rmation CET1 ET1 2 + 367% 10.6% 42 9.3% 9.1% 8.2% 33 7.5% 7.3% 31 6.6% 27 5.6% 24 5.0% 22 4.5% 20 17 11 9 1 1 1 1 1 1 Jun 07 Jun 08 Jun 09 Jun 10 Jun 11 Jun 12 Jun 13 Jun 14 Jun 15 Jun 16 CET1 amount ($bn) CET1 ratio (%) 1. Calculated Basel III equivalent 58 2. Growth relates to change in dollar value of CET1
Depos Dep ositor itors s and and sha shareho eholder lders s fund our fund our lending to lending to bor borrower ers Deposi Depositor tors Sha Shareh eholde olders Borrower Bor ers 11.3 million Over 800,000 1.9 million Australian households are deposit customers home loan customers direct shareholders and millions more individuals through their superannuation funds 76% A customer who invests in a 3 $403 year term deposit offer will earn of profits are paid to shareholders as dividends. per year saved on the average $575 variable home loan** The average retail shareholder more per year* will receive $3,738 this year * based on the average customer term deposit balance and CBA 3 year TD offer announced on 2 August, 2016 59 ** based on rate reduction announced on 2 August, 2016
Add dditi ition onal al Ec Econ onom omic ic Ind Indica icators tors (J (Jun une e FY) FY) info information rmation GDP % CPI% Unemployment Rate % GDP Nominal GDP 6.2 5.7 3.6 5.9 2.7 5.8 5.8 2.9 2.9 4.0 2.3 2.3 2.4 2.5 2.3 5.4 1.7 1.4 2.3 2.3 5.2 1.3 1.6 201220132014201520162017 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 Cash Rate % Total Credit Growth % Housing Credit Growth % 7.30 7.00 3.50 6.70 6.75 6.40 6.20 5.90 2.75 2.50 5.00 5.00 4.60 4.40 2.00 5.00 4.75 1.75 3.10 1.25 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 Credit Growth = 12 months to June qtr = forecast 60 GDP, Unemployment & CPI = Financial year average Cash Rate = As at end June qtr
Outlook Outloo Solid underlying GDP growth and stable employment, but nominal growth remains weak Globally, monetary stimulus unable to offset low confidence from weak incomes and instability “More of the same” the most likely scenario, but with some downside risk For CBA – conservatism, focus on the long-term, wary of structural responses to cyclical trends 61
Add dditi ition onal al Resu esult qu lt qualit ality info information rmation Gr Grou oup NI p NIM ROE OE 1 Cash basis % CBA ROE for 2H16 2.4 CBA 15.6% 2.3 Peers 14.2% 2.2 14.1% 2.1 2.0 9.7% 1.9 1.8 1.7 Mar 16 Jun 16 Mar 13 Sep 13 Mar 14 Sep 14 Mar 15 Sep 15 CBA Peer 3 Peer 2 Peer 1 Ca Capitali italise sed So Softwar ftware 2 Capital pital 3 $m APRA CET1 10.6% 10.5% 2,249 2,228 9.8% 9.7% 2,127 1,651 CBA Peer 3 Peer 1 Peer 2 Peer 3 Peer 2 CBA Peer 1 1. CBA is half to June 2016. Peers are half to March 2016. 2. Reported CBA is at June 2016. Peers as at March 2016. 62 3. CBA as at June 2016. Peers as at March 2016.
Summar Summary Result again built on the consistent execution of a 10 year strategy: - Customer satisfaction, innovation, strength Changing operating context, impacting returns: - Economic sentiment - Interest rates - Competitive intensity - Regulatory compliance/costs Long-term focus, continuing to reinvest 63
RESULTS PRESENTATION FOR THE FULL YEAR ENDED 30 JUNE 2016 SUPPLEMENTARY SLIDES Overview, Customers & People 65 Technology & Innovation 83 Risk & Credit Quality 95 Capital & Funding 111 Economic Indicators 125 Results Presentation For the half year ended 31 December 2009 COMMONWEALTH BANK OF AUSTRALIA | ACN 123 123 124 | 10 AUGUST 2016 10 February Commonwealth Bank of Australia ACN 123 123 124 2010
CB CBA A Ov Over erview view Total otal Australia NZ Other Peo eople, ple, Customers 13.1m 2.3m 0.5m 15.9m Custo Customer mers & s & Staff 41,400 5,800 4,500 51,700 Deli De livery Branches 1,131 133 145 1,409 ATMs 4,381 445 172 4,998 #1 Retail Custo Customer mer #1 Business = Satisf Sa tisfaction tion Internet Banking #1 #1 Main Financial Institution (MFI) Mar Market Home Lending 1 #1 Shar Shares es Household Deposits 2 #1 FirstChoice Platform 3 #1 Market Capitalisation 4 #1 Capital (CET1) 10.6% Str Stren engt gth $933bn Total Assets Credit Ratings 5 AA-*/Aa2/AA- Refer notes slide at back of this presentation for source information 1. Source: RBA 2. Source: APRA 3. Source: Plan for Life Mar- 16 4. Source: Bloomberg, 27 Jul 2016 5. S&P, Moody’s, Fitch 65 * S&P put major Australian Banks on “Outlook Negative” 7 Jul 2016
Sector Sector leading leading retur eturns ns Cash ash ROE OE CBA Ranking 1 Market Return Return Dividend Taxes Cap on on declared Paid (ASX) Equity Assets 1 st 81 st 1 st 1 st 31 st 19.5% Return 18.7% 18.4% on 1.0% 18.2% 18.2% 1.0% Assets 16.5% FY11 FY12 FY13 FY14 FY15 FY16 1. Most recent annual results data amongst ASX 100 companies. Sourced from Bloomberg 27 July 2016. 66
Br Broa oad d co cont ntribu ributo tor r to to A Aus ustr tralian alian wellbeing ellbeing Operating Income Loan impairment FY16 Expenses Cost of lending across the economy Including ~5,000 SME $24.6bn partners and suppliers (>90% Australian) $1.3bn Tax expense $4.2bn Australia’s largest tax payer 1 and signatory of $3.6bn the Voluntary Tax Transparency Code Salaries $2.3bn $6.2bn Employing ~41,400 people in Australia, ~51,700 globally $7bn Retained for capital and growth Over $192 billion in new Dividends lending in FY16 Returned to over 800,000 shareholders & super funds All figures are annual figures as at 30 June 2016 67 1. Bloomberg data as at July 2016
Our Stak Our Stakeholder eholders Custome Custo mer r Pr Product Ho t Holdin ldings 1 15.2m Super fund unit holders ? 5.1m 11.3m 4.5m 2.3m 1.7m 4.1m 3.2m 905k 650k 1.9m >300k 51,700 1.1m ~800k Home Loans Credit Cards Retail Savings Insurance Personal Loans Business Funds CommSec Shareholders Employees and Transactions Relationships Management Australia Offshore 1. Customers who hold at least one product in each of the major product categories shown. Totals not mutually exclusive – 68 includes cross product holdings. Figures are approximates only and may include some level of duplication across customer segments. CommSec total includes active accounts only. Figures may reflect restatements consistent with current period reporting.
Customer Customer need needs s met met By y Age ge By y Cha hann nnel el 3.43 3.35 3.35 4.16 3.15 2.70 3.29 2.59 3.15 2.21 1.54 Overall Non-Internet Mobile App Website and 14 - 17 18 - 24 25 - 34 35 - 49 50 - 64 65+ Total Users Only Users Mobile App 18+ Users Share of Sha e of Pr Prod oduc uct Wealth lth – Sha Share of e of Pr Prod oduc uct Wealth Share of 8.30 12.8% product Lending and Cards 10.9% Deposits 4.07 12.8% 8.4% 8.0% 3.15 1.89 58.7% 0.52 1.11 2.34 65.4% 1.53 Products held Products CBA Peer 3 Peer 1 Peer 2 at CBA held anywhere Refer notes slide at back of this presentation for source information 69 Individual products may not add up to the overall totals due to rounding
Cor Corpor porate R te Responsibility esponsibility Str Strate tegy y Our Vision To excel at securing and enhancing the financial wellbeing of people, businesses and communities Our Values Cor Corpo porate te Resp espon onsibil sibility ity Str Strate tegy Our role in society Our people The way we do business Build Innovate Fairness and Community Influence Transparently Sustainably capability purposefully respect minded for good 70
Cor Corpor porate R te Responsibi esponsibility lity Our vision is to excel at securing and enhancing the financial wellbeing of people, businesses and communities. Our corporate responsibility efforts help us deliver on our vision with a focus on our role in society, our people and the way we do business. Strong environmental, Leader in climate The most sustainable bank A leading sustainability-driven disclosure social and in the world company governance practices The Group has been The Group has been recognised as In 2015/16, the Group was once again included in the CDP ASX the most sustainable company in The Group continues to be included in the Dow Jones Sustainability 200 Climate Disclosure Australia and the most sustainable listed on the FTSE4Good World Index (DJSI )2. Leadership Index for the bank in the world 1 Index - comprising seventh consecutive year. companies demonstrating strong Environmental, Social and Governance (ESG) practices. A great place to work WGEA 3 citation retained • Named 2 nd most inclusive employer in • the 2016 Australian Workplace Equality Index (AWEI) Awards, which recognises workplace support for LGBTI people. • Employee network Unity named the 2016 LGBTI Employee Network of the Year. 1. World Economic Forum, G100 - the global index of the world's most sustainable corporations. 2. The DJSI World is the first 71 global index to track the financial performance of the leading sustainability-driven companies worldwide. 3.Workplace Gender Equality Agency
Cor Corpor Cor Corpor porate R porate R te Responsibility te Responsibi esponsibility esponsibility lity Our role in society Delivering on 2015 $50 million investment Australia’s leading technology bank commitment to education over 3 years $10 million provided (of $15 million commitment) Doubled investment in Start Smart financial literacy in FY16 to support Australian researchers in program leading to 550,000+ students registered building the world’s first silicon -based quantum Learning Impact Fund launched to evaluate computer in Sydney education programs in Australia to raise the Innovation labs bringing clients, government and academic achievement of children and young communities together to explore the latest adults FinTech developments $1.6 million investment to develop a centre of expertise for cyber security education with UNSW Start Smar St Smart st students s (regis istered) 1 Program expansion to meet new target of >500k 557k 299k 289k 285k 236k 200k 120k FY10 FY11 FY12 FY13 FY14 FY15 FY16 1. Start Smart students’ refers to the number of students booked to attend Commonwealth Bank’s Start Smart Programs during a 72 12 month period
Cor Corpor Cor Corpor porate R porate R te Responsibility te Responsibi esponsibility esponsibility lity Our people Employer of Choice for Gender Equality Committed to national Financial Inclusion Action Plan (FIAP) program alongside 10 other community Named second most inclusive employer in the 2016 and industry organisations Australian Workplace Equality Index (AWEI) Awards More than $262m in total community investment and employee network Unity was named the 2016 LGBTI Employee Network of the Year Granted $2m to 229 grassroots programs through Announced new 40 per cent target for women in the Staff Community Fund, Australia’s longest - Executive Manager and above positions by 2020 running workplace-giving program Wome men i in E Executiv ive Manager and and above roles les 1 Total l Co Commu mmunit ity y In Invest stme ment 2 $m 35% 34% 32% 31% 30% 262 28% 26% 243 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY15 FY16 1. Percentage of roles at the level of Executive Manager and above filled by women, in relation to the total headcount at this level. 73 Comparatives have been restated to include IFS. 2. Total community investment includes investment in the form of cash, time, foregone revenue and program implementation costs. This figure was measured in this way for the first time in FY15.
Cor Corpor Corpor Cor porate R porate R te Responsibility te Responsibi esponsibility esponsibility lity The way we do business The Group was closely Updated Group Environment Committed to addressing involved through the full Policy acknowledging community concerns about process of government international efforts to limit industry conduct consultation and engagement global warming to two degrees Released Wealth Management to the Financial System Inquiry First Australian Bank to be Responsible Investing framework (FSI) awarded a 5 Star Green Star - integrating ESG considerations Released Human Rights rating for our current branch across our investment processes Position Statement formalising design 1,786 professionals trained on our commitment to respect Commonwealth Bank Place is ESG matters human rights across all the first Australian office Released financed carbon operations, including our awarded a 6 Star Green Star emissions report assessing the supply chain practices rating across all four aspects: carbon emissions intensity of our Launched Elevate design, construction, interior business lending portfolio Reconciliation Action Plan in fit-out and operation June 2016 performance 74
Corpor Cor porate te Respo esponsibility nsibility Scor Scorecar ecard FY16 FY15 FY14 FY13 FY12 FY11 Roy Morgan MFI Retail Customer Satisfaction % 82.8 84.2 83.2 83.0 79.0 75.2 - Rank (CBA) 1 1 st 1 st 1 st 1 st 2 nd 4 th Customer DBM Business Financial Services Monitor (avg) 7.2 7.5 7.4 7.4 7.3 7.1 satisfaction - Rank (CBA) 2 =1 st =1 st =1 st =1 st =1 st =2 nd Wealth Insights Platform Service Level Survey (avg) 8.07 7.75 7.94 8.32 7.86 7.74 - Rank (CBA) 3 2 nd 1 st 1 st 1 st 1 st 1st Employee Engagement Index Score (CBA) % 4 77 81 81 80 80 n/a 11.3 Employee Turnover Voluntary % 5 10.2 10.2 10.2 12.9 12.7 Women in Manager and above roles % 6 43.6 43.2 42.9 42.0 42.0 43.6 People 35.2 Women in Executive Manager and above roles % 6 33.9 31.8 30.3 30.9 28.2 Lost Time Injury Frequency Rate (LTIFR) 7 1.2 1.9 1.5 1.9 2.8 2.4 Absenteeism Rate 8 6.0 6.0 6.1 6.2 6.2 6.0 Scope 1 emissions tCO 2 -e (CBA) 9 6,847 7,249 7,936 8,064 8,192 8,183 Greenhouse Gas Scope 2 emissions tCO 2 -e (CBA) 9 81,307 86,264 91,275 100,997 118,047 137,948 Emissions Scope 3 emissions tCO 2 -e (CBA) 9 39,361 44,826 47,438 47,667 63,719 33,854 School Banking students (active) 10 330,874 310,474 273,034 233,217 191,416 140,280 Financial Literacy Programs Start Smart students (booked) 11 298,505 288,728 284,834 235,735 200,081 557,475 All metrics capture data of the wholly owned and operated entities of the Commonwealth Bank Group (the Group) unless otherwise 75 stated. For definitions and notes, please refer source slide at the end of this presentation.
Investing In esting in our soc in our society iety $262m 262m 55 550,0 0,000 00+ #1 #1 Tota tal Stu Stude dent nts s Largest tax st tax payer r register gistered ed f for or Star Start t Commu Community nity in A in Austr ustralia alia Investmen In estment Smart Smar t finan financial cial ed educ ucation tion 170,3 17 0,357 57 2,40 2,400+ 0+ $2m $2m Calls Calls to ou to our r Busi Busine ness sses es In gran In ants ts to to 229 229 In Indige digeno nous us engaged with with ou our r you outh th foc ocused used cu customer stomer innova inno vation tion la labs bs orga or ganisa nisation tions ass assis ista tanc nce e li line ne $1 $1.6m .6m 52% 52% 21 21 Towar ard d cyber yber Stu Stude dent nt cu customer stomers s Car Caree eerT rTrac acker ers s security secu rity edu educa cation tion savi sa ving ng regu gular larly y Indige In digeno nous us inte interns ns via Sc vi School l Ba Banking ing 76
Supporting the transition to a low carbon economy Detailed assessment undertaken of the carbon emissions arising from the Group’s business lending, providing the analysis and insights to identify and act on key opportunities to reduce these carbon emissions. The Group’s lending exposure to renewable electricity generation reached $ 2.2 billion as at 30 June 2016, more than 5 times our exposure to direct coal related electricity generation. The next iteration of the Group’s assessed carbon emissions reporting will be available in the coming months. CBA Gr Grou oup B p Business usiness Le Lend nding ing CBA Gr Grou oup B p Business usiness Le Lend nding ing Emissi Emis sion ons s Pr Prof ofil ile Emi Emiss ssions ions Inten Intensi sity ty (EI) (EI) of of E Expe xpenditur nditure % of actual emissions in each sector EI of Expenditure (kgCO 2e /AUD) Property & 1.9 2 1.8 Business 3% Construction Other 1% 13% Agriculture 1 (incl. Forestry Portfolio average 0.3 &Fishing) 0.5 Transport 0.5 29% & Storage 0.3 0.2 11% <0.1 <0.1 <0.1 <0.1 <0.1 <0.05 <0.05 <0.05 <0.05 0 Mining Electricity, 9% Gas & Manufacturing Water 17% 17% Weighted portfolio average EI of expenditure includes a double count of electricity scope 1 emissions across all sectors. Sector classification defined by ANZSIC main business activity. For methodology and further details, please refer to: https://www.commbank.com.au/content/dam/commbank/about- 77 us/docs/sustainability-20151103-assessed-emissions-lending-port.pdf.
Open Op en Ad Advice vice Review view Prog Pr ogram am Pr Prog ogress ess ♦ Offer to review advice provided to all Financial Independent Reports program Promontory Financial Group Wisdom and Commonwealth Financial Planning Expert outcomes publicly customers between September 2003 and July 2012 ♦ Opened 3 July 2014. Expressions of interest closed 3 Independent Maurice Shine Slater & Provide support July 2015, registrations closed 3 July 2016 Customer Blackburn Lawyers Gordon for customers Advocates ♦ 350,000 letters sent to current CFP customers ♦ Over 500 people working on the program Hon Ian Callinan AC ♦ As at 10 August 2016: Chairman Independent Reviews Review individual cases ♦ Approx. 8,600 customers have requested a review Panel if required Hon Geoffrey Hon Julie Davies AO Dodds-Streeton QC of their advice Deputy Chairman Panellist ♦ 5,000 assessments issued ♦ Compensation offered in 666 cases ($8.7m) Investigates Independent fraud, forgery and McGrathNichol ♦ On track to deliver all assessments by the end of the Forensic dishonest Expert conduct 2016 calendar year ♦ Promontory Financial Group’s sixth progress report to Consultant Provides Fiona Guthrie Expert expert advice Advisor be delivered in September 2016 78
CFSGAM CFSGAM – Glob Global al Reac each Australia and New Zealand AUM $111.6 billion 1 UK, Europe and Middle East AUM $71.6 billion Asia (incl. Japan) AUM $9.7 billion Joint venture North America AUM $6.8 billion 2 Spot 1. Assets under management indicated above includes Realindex Investments which is a wholly owned investment management subsidiary of the Colonial First State group of companies 2. USA assets managed through CFSAMAL (Australia based non-domiciled), 79 FSII (UK based non-domiciled), FSI Singapore (Singaporean based non-domiciled), USA SEC Registered Investment Advisers
CB CBA A in in Asia Asia and Sou and South th Africa Africa China ♦ Bank of Hangzhou (20%): 189 branches ♦ Qilu Bank (20%): 120 branches ♦ County Banking (Henen & Hebei): - 15 branches (10 @ 100% holding, 5 @ 80% holding) - 8 sub-branches (2 @ 100% holding, 6 @ 80% holding) ♦ CBA Beijing, Shanghai and Hong Kong branches ♦ BoCommLife (37.5%): operating in 11 provinces ♦ First State Investments Hong Kong and First State Cinda JV (46%) ♦ Colonial Mutual Group Beijing Rep Office Indonesia ♦ PT Bank Commonwealth (98%): 90 branches and 144 ATMs ♦ PT Commonwealth Life (80%): 29 life offices Asia ♦ First State Investments Vietnam ♦ Vietnam International Bank (20%): 155 branches ♦ Hanoi Representative Office ♦ Ho Chi Minh City CBA branch; 28 ATMs Singapore Japan ♦ ♦ CBA branch Tokyo CBA branch ♦ ♦ First State Investments First State Investments India Ind ia South Africa South ♦ ♦ Mumbai CBA branch CBA SA (TYME entities) Africa Map not to scale 80
IFS IFS – Continued g Continued growth wth 1 Revenue Dir irec ect t Pr Prop oprietar rietary y Custome ustomers ‘000 A$m 600 300 500 250 200 400 150 300 100 200 50 100 - - Jun 11 Jun 12 Jun 13 Jun 14 Jun 15 Jun 16 Jun 11 Jun 12 Jun 13 Jun 14 Jun 15 Jun 16 Pr Prop oprietar rietary y In Inco come me Propriet Pr ietary Loans Loans & & Inf Inforce Pr Premi mium Spot (A$m) A$m 140 2,500 300 Proprietary Income CAGR 9% Lending Balances CAGR 12% 120 Inforce Premium CAGR 14% 250 2,000 100 200 80 1,500 150 60 1,000 100 40 500 50 20 - - 0 Jun 11 Jun 12 Jun 13 Jun 14 Jun 15 Jun 16 Jun 11 Jun 12 Jun 13 Jun 14 Jun 15 Jun 16 Consumer Lending (LHS) Commercial Lending (LHS) Insurance OBI NII Total Inforce (RHS) 1. International Financial Services incorporates the Asian retail and business banking operations (Indonesia, China, Vietnam and 81 India), associate investments in two Chinese and one Vietnamese bank and a Chinese life insurance business, the life insurance operations in Indonesia and a financial services technology business in South Africa.
Busines Business s Customer Customer Sa Satisf tisfaction action Micr icro Small Small CBA all segments: 7.2 ( = #1) 7.8 7.8 7.6 7.6 7.4 7.4 7.2 7.2 7.0 7.0 6.8 6.8 6.6 6.6 6.4 6.4 Jun 13 Jun 14 Jun 15 Jun 16 Jun 13 Jun 14 Jun 15 Jun 16 IB&M first/equal first – Med edium ium Large La ge 57 consecutive months 8.2 8.0 8.0 7.8 7.8 7.6 7.6 7.4 7.4 7.2 7.2 7.0 7.0 6.8 6.8 6.6 6.6 6.4 6.4 Jun 13 Jun 14 Jun 15 Jun 16 Jun 13 Jun 14 Jun 15 Jun 16 82 CBA Peers Refer notes slide at back of this presentation for source information
Wor orld ld class lass te techn hnolog ology y & & op oper eration tions Wor orld ld class lass tec techno hnolog logy & oper y & operation tions State-of-the- The Digital Revitalised Innovation art Core Future front-line Culture Simple, personalised Single view of Legacy system Innovation Lab digital experiences customer across replacement Leading apps for Building an innovation channels Real-time banking phones, tablets and CommSee ecosystem Straight-through smart watches Anywhere, anytime, Revitalised Pi, Albert, Leo, processing any device Processes Simplified Emmy Customer insights architecture through analytics Resilient systems Standardised, scalable, reliable & secure systems 83
Australia’s leading technology bank #1 #1 #1 Free Online Banking Customer Satisfaction Internet Banking Services 7 years in a row financial (Roy Morgan) (CANSTAR) app #1 #1 #1 Following Innovative Business Client on Product – Daily IQ Feedback social media (AB+F) (Peter Lee Associates) #1 #1 #1 Innovative Card & Mobile Internet Business Payment product – Banking Bank – CommBiz Mobile Wallet (CANSTAR) (AB+F) (AB&F) Refer notes slide at back of this presentation for source information 84
Customer Sa Customer Satisf tisfaction action - Onlin Online Inter Internet B net Bank anking ing Website bsite 97% Satisfaction with Internet Banking Services Satisfaction with Internet Banking Services via "Website" or "App“ 93. 93.6% 6% via "Website" 95% 97% 93% 91% 95% 89% 93.3% 93.3% 87% 93% 85% Dec 14 Jun 15 Dec 15 Jun 16 App pp 91% 97% Satisfaction with Internet Banking Services via " App“ 92.9% 92.9% 95% 89% 93% 5.6m active 91% online 87% users 1 89% 87% 85% 85% Dec 14 Jun 15 Dec 15 Jun 16 Dec 14 Jun 15 Dec 15 Jun 16 Refer notes slide at back of this presentation for source information 1. Unique number of customers who have logged into NetBank or 85 CBA Peer 1 Peer 2 Peer 3 CommBank App in June 2016.
Inno Innova vation and Simp tion and Simplicity licity Wea ealth Soluti lth Solution ons Financial Financ ial T Toolkit oolkit NZ NZ October 2015 – June 2016 March 2016 June 2016 Online features include: Toolkit gives customers Clever Kash - cashless Interactive & personalised assistance with planning, interactive moneybox general insurance quotes saving and budgeting Business Essential Super – 240,000 customers have 1st in Mobile app 600+ accounts opened used the Financial Toolkit satisfaction at 87% 1 since launch Book appointments online 1 Customer Retail Market Monitor, Camorra Research, June 2016 86
Exploring Exploring new o new oppor pportunities tunities Qua Quant ntum um Bloc Blockc kcha hain in Cyber Cybe r sec secur urity ity Partnering with Our $15m investment Investigating and UNSW to deliver is supporting experimenting widely training to more than with the technology – Australian 16,000 people – researchers to working on 25+ use boosting Australia’s develop the world’s cases for blockchain reserve of security first silicon-based technology with our engineering quantum computer partners professionals 87
Small Small Business Business Australian first real-time Over 170k conversations Access to specialists transaction account alerts 1 (58k in branch) with small available within every business customers to better Recently launched data branch, with increased understand their business and feed integration between small business capabilities their needs NetBank and Xero Simple Business Overdraft Bank of the Year – Small limits up 47% Business (Canstar) Small business customers 40k+ customers using new Ranked #1 in small using market leading Albert asset finance online business customer technology (25k devices) quoting with real time satisfaction for 19 decisioning and same day consecutive months to funding Jun 16 88
Distribut Dist ribution ion Transf ansfor orma mation tion Small Smal l Bus Busines iness Video ideo Conf Confer eren encing cing 165 dedicated specialists 58k conversations in FY16 Access to CBA specialists, almost 60k calls in FY16 Exp Express ess Br Bran anche hes 82 sites and growing Concier Con cierge ge Self Self Ser Servi vice ce Supported by tablets and software to enhance 700+ Intelligent Deposit customer flow Machines (IDMs) - 55% of total deposits in IDM branches 89
Self Ser Self Service vice and and Digit Digital al Simple ac Simple activ tiviti ities es mo move to e to digital digital Acc ccou ounts with nts with e-sta stateme tements nts Migration of selected services Transactions and Savings (% of total) # low-value add interactions in branch per month (m) 63% Jun 16 35% Jun 15 30% 86% 44% 49% Updated contact Pin change Credit card Statement Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 details repayment enquiry In Intelli tellige gent nt Dep eposit osit Mac achine hines s (I (IDMs) s) Digital igital Tran ansaction sactions % of deposits completed via IDM in branches Total BPay and Transfers via Digital (Six Monthly, #) that have had a machine for > 1 month 1 55% 309m Deposits now 39% of total IDM transactions 11% 225m Jun 12 Jun 13 Jun 14 Jun 15 Jun 16 Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 90 1. The Intelligent Deposit Machine rate has been aligned with other migration measures
Self Ser Self Service vice and and Digit Digital al Digital igital ad adop option tion incr increa easi sing ng Sales Sales rapidl pidly y growing ing Total # logons (Six Monthly) Digital contribution to total sales 2 on NetBank and CommBank App (m) 1 21% + 41% 10% 840 808 709 672 597 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 Mob obil ile e % % of of Online Online logins logins Mob obil ile e % % of of Online Online Sales Sales Volume of logins on a mobile device 3 Volume of submitted applications on a mobile device 3,4 75% 50% 43% 30% Jun 12 Jun 13 Jun 14 Jun 15 Jun 16 Dec 14 Jun 15 Dec 15 Jun 16 1. Includes logons to previous app. 2. 6 month rolling average of key retail products originated end-to-end in digital 3. Incl. App and 91 NetBank via web browser on a mobile device 4. Including Savings & Transaction accounts, Credit Cards, Car & Home Insurance, Essential Super, Personal Loans, Mortgage Lending, Consumer Credit Insurance, Personal Savings and Personal Overdrafts.
Transaction ansaction volumes olumes Bran anch ATM TM 1 m m (deposits & withdrawals) (all transactions) 130 325 261 59 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Point of oint of Sale Sale 2 In Inter terne net 3 m m (all transactions, including credit cards) (transactions of value) 1,676 606 ~75% of online logins via mobile device 700 40 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 All figures are approximates. 1. All cardholder transactions at Australian CBA ATMs. ATM includes IDMs and an increase in the dollar 92 value of deposits. ATM only transactions reduced for FY16. 2. Calendar years to 2006; financial years thereafter. Includes EFTPOS Payments Australia Ltd (EPAL), MasterCard and Visa volumes only. 3. Calendar years to ‘07; financial years thereafter. Incl udes BPAY.
Transaction ansaction volumes olumes By y Nu Numbe mber By y $ $ Value alue FY16 FY16 % of total % of total 65% 52% 34% 23% 9% 10% 5% 2% Branch ATM PoS Internet Branch ATM PoS Internet 93
Self Ser Self Service vice and and Digit Digital al Add dditi ition onal al Growing Gr wing Mobile Mobile info information rmation Pay T ay Tag Car ardless dless Cash ash Tap & p & Pay ay Cumulative volume of unique transactions (m) 1 Volume of transactions per quarter (m) 2 Number of Pay Tags in market (k) 2.7 412 8.5 361 2.0 313 1.8 256 5.3 1.4 1.2 176 2.7 1.2 0.1 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 Jun 15 Sep 15 Dec 15 Mar 16 Jun 16 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 CommBank ommBank App pp CommBank ommBank App pp Lo Lock, k, Bloc lock k & & Limit Limit Logons per week (m) Transactions per week ($bn) 3 Number of accounts enrolled (k) 4 541 4.6 465 24 3.8 21 363 3.0 18 15 2.5 215 10 1.5 26 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 1. Launched April 2014 2. Volume of transactions using Tap & Pay (inc. HCE/Pay Tag) 3. Includes BPAY 4. Number of unique 94 accounts that have enrolled for Lock, Block and Limit (excl. temp. lock)
RBS RBS Home Home Loan P Loan Por ortf tfolio olio Jun Dec Jun Jun Dec Jun Portfolio 1 New Business 1 15 15 16 15 15 16 Total Funding ($bn) Total Balances - Spot ($bn) 321 331 345 80 44 87 Average Funding Size ($’000) Total Balances - Average ($bn) 311 326 332 274 304 302 Serviceability Buffer (%) 6 Total Accounts (m) 1.5 1.5 1.5 2.25 2.25 2.25 Variable Rate (%) Variable Rate (%) 87 90 88 84 84 84 Owner Occupied (%) 58 59 60 Owner Occupied (%) 59 65 65 Investment (%) Investment (%) 36 35 35 37 32 33 Line of Credit (%) 6 6 5 Line of Credit (%) 4 3 2 Proprietary (%) 61 60 59 Proprietary (%) 59 55 55 Broker (%) Broker (%) 39 40 41 41 45 45 Interest Only (%) 2 Interest Only (%) 2 38 38 39 39 38 38 Lenders’ Mortgage Insurance (%) 2 Lenders’ Mortgage Insurance (%) 2 24 23 22 19 15 14 Low Deposit Premium (%) 2 Low Deposit Premium (%) 2 7 7 7 7 6 5 Mortgagee In Possession (bpts) 4 4 5 1. All portfolio and new business metrics are based on balances and fundings respectively, unless stated otherwise. All new business metrics are based on 12 Annualised Loss Rate (bpts) 2 2 2 months to June and 6 months to December. 2. Excludes Line of Credit (Viridian LOC). Portfolio Dynamic LVR (%) 3 48 48 49 3. LVR defined as current balance/current valuation. 4. Any payment ahead of monthly minimum repayment; includes offset facilities. Customers in Advance (%) 4 76 76 75 5. Average number of payments ahead of scheduled repayments. 6. Serviceability test based on the higher of the customer rate plus a 2.25% interest Payments in Advance incl. offset 5 28 31 33 rate buffer or a minimum floor rate. 95
Austr ustralian alian Home Loan Home Loan Por ortf tfolio olio 1 Stron Str ong P g Por ortf tfolio olio Qu Quality ality Portfolio losses continue to be low (FY16: 2bpts) 77% of customers paying in advance 2 by 31 months on average, including offset facilities Regular stress testing undertaken to identify areas of sensitivity Portfolio dynamic LVR 3 of 50% (RBS: 49%, Bankwest: 56%) Limited “low doc” 4 lending (0.05% of approvals and <1% of the portfolio) Modest growth in Investment Home Loans; Investment loan arrears below portfolio average Low proportion of loans reliant on foreign income (<1% of originations) as a result of strict lending criteria Ser Servi vicing cing Criteri riteria Higher of customer rate plus 2.25% or minimum floor rate (RBS: 7.25% pa, Bankwest: 7.35% pa) 80% cap on less certain income sources (e.g. rent, bonuses etc.) Maximum LVR of 95% 5 for all loans Lenders’ Mortgage Insurance (LMI) required for higher risk loans, including high LVR loans Limits on investor income allowances e.g. RBS restrict the use of negative gearing where LVR>90% Buffer applied to existing mortgage repayments Interest only loans assessed on principal and interest basis 1. RBS and Bankwest, except where noted. 2. Defined as any payment ahead of monthly minimum repayment; includes offset 96 facilities. 3. LVR defined as current balance/current valuation. 4. RBS Only. Documentation is required, including Business Activity Statements. 5. For Bankwest, maximum LVR excludes any capitalised mortgage insurance.
Austr ustralian alian Hom Home Loa e Loan P n Por ortf tfolio olio 1 Jun Dec Jun Jun Dec Jun Portfolio 1 New Business 1 15 15 16 15 15 16 Total Balances - Spot ($bn) 383 393 409 Total Funding ($bn) 94 50 101 Average Funding Size ($’000) Total Balances - Average ($bn) 371 388 395 274 302 300 Serviceability Buffer (%) 6 Total Accounts (m) 1.7 1.7 1.8 2.25 2.25 2.25 Variable Rate (%) 85 85 85 Variable Rate (%) 87 90 88 Owner Occupied (%) 60 62 62 Owner Occupied (%) 60 66 66 Investment (%) 35 33 33 Investment (%) 37 31 32 Line of Credit (%) 5 5 5 Line of Credit (%) 3 3 2 Proprietary (%) 57 56 55 Proprietary (%) 55 52 51 Broker (%) 43 44 45 Broker (%) 45 48 49 Interest Only (%) 2 Interest Only (%) 2 37 38 39 41 39 40 Lenders’ Mortgage Insurance (%) 2 Lenders’ Mortgage Insurance (%) 2 26 25 24 21 16 15 Mortgagee In Possession (bpts) 4 4 5 1. All portfolio and new business metrics are based on balances and fundings respectively, unless stated otherwise. All new business metrics are based on 12 Annualised Loss Rate (bpts) 2 2 2 months to June and 6 months to December. 2. Excludes Line of Credit (Viridian LOC/Equity Line). Portfolio Dynamic LVR (%) 3 49 49 50 3. LVR defined as current balance/current valuation. Comparative information has been reclassified to conform to presentation in the current period. Customers in Advance (%) 4 77 78 77 4. Any payment ahead of monthly minimum repayment; includes offset facilities. 5. Average number of payments ahead of scheduled repayments. Payments in Advance incl. offset 5 27 29 31 6. Serviceability test based on the higher of the customer rate plus a 2.25% interest rate buffer or a minimum floor rate. Jun 15 RBS only. 97
Austr ustralian alian Home Home Loan Loans Balan alance ce Gr Growth th State Pr Sta te Prof ofil ile % of Portfolio FY16 Balance Growth (90) 31 $bn 10.5% 101 17% (16) 33% 26% 7.9% 409 6% 18% 383 5.4% 4.7% 4.2% Jun 15 New Redraw & Repayments External Jun 16 NSW/ACT VIC/TAS QLD WA SA/NT Fundings Interest / Other Refinance Determined by location of the underlying security Arrea ears Arrea ears s by by Sta State te WA NSW/ACT 90+ days 1.50% 90+ days 2012 2013 1.50% SA/NT QLD 2014 2015 VIC/TAS 2016 National 1.00% 1.00% 0.50% 0.50% 0.00% 0.00% Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jun 13 Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 Includes RBS and Bankwest. State Profile and Arrears exclude Line of Credit, Reverse Mortgage, Commonwealth Portfolio Loans 98 (RBS only) and Residential Mortgage Group (RBS only) loans.
RBS Hom RBS Home e Loan Loan Gr Growth Pr wth Profile ofile Ho Home me Lo Loan an Balan alance ces Brok oker er Sha Share of e of Fun Funding dings 1 $bn 54% (79) 28 52% 52% 51% 87 50% (12) 47% 46% 45% 345 321 42% 40% 38% 39% Jun 15 New Redraw & Repayments External Jun 16 Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 fundings interest / Other refinance Market CBA Ho Home me Lo Loan an Arrea ears s by by Vinta intage ge 3 Home Ho me Lo Loan an Dynamic ynamic LVR 2 90+ days Average 70% 2.0% Dynamic Proportion of Total Portfolio 60% LVR 1.5% Jun 15 48% 50% FY07-09 Dec 15 48% 40% 1.0% Jun 16 49% FY11 FY12 FY13 30% 20% FY10 0.5% FY14 10% FY15 FY16 0.0% 0% 0 6 12 18 24 30 36 42 48 54 60 66 72 78 0-60% 61-80% 81-90% 91-95% 96+% Dynamic LVR Band Months on Book 1. % of home loan fundings ($’s). Market represents quarterly MFAA data up to Mar 16. CBA includes Residential Mortgage Group. 99 2. Dynamic LVR is current balance / current valuation. 3. Vintage Arrears includes: Line of Credit, Reverse Mortgage, Commonwealth Portfolio Loan and Residential Mortgage Group loans.
RBS RBS Consu Consumer mer Ar Arrear ears Home Home Loa Loans ns Cred edit it Car ards ds 30+ days 30+ days FY13 FY12 FY12 FY13 3.5% 3.0% FY15 FY14 FY14 FY15 FY16 FY16 2.5% 3.0% 2.0% 1.5% 2.5% 1.0% 0.5% 2.0% Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Per ersonal sonal Loa Loans ns Con onsumer sumer Arrea ears 30+ days 4.5% FY12 FY13 Home Loan arrears stable year on year. WA and QLD portfolios continue to experience stress, mainly due to FY14 FY15 4.0% mining towns, while NSW improved. FY16 3.5% Personal Loan arrears remain elevated mainly due to economic worsening in WA and QLD. 3.0% 2.5% Lower Credit Card arrears benefiting from improved collections strategies. 2.0% Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Home Loans exclude Line of Credit, Reverse Mortgage, Commonwealth Portfolio Loan and Residential Mortgage Group loans. 100
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