Results Presentation For the Half Year Ended 31 December 2016 - PowerPoint PPT Presentation

Results Presentation For the Half Year Ended 31 December 2016 COMMONWEALTH BANK OF AUSTRALIA | ACN 123 123 124 | 15 FEBRUARY 2017

Today  Strategic Update  Financials  Outlook

Delivering on our Vision In the last six months: $109 billion new lending to personal and business customers 140,000 new home loans, including 15,000 first home buyers $3.5 billion new loans to 12,700 small businesses $1.2 billion new lending to farmers and other rural customers 1.5 million new deposit accounts

This Result Dec 16 vs Dec 15  Statutory Profit 6%  Cash NPAT 2% Cash Earnings per Share ($) 2.86 Flat Dividend per Share ($) 1.99 +1 cent ROE – Cash 16.0% (130) bpts

Long term grow th focus Income Growth (%) CBA +3% 6% (reported) +1% +2% Peer Average 3% (underlying) Jun 16 Dec 16 Jun 13 Jun 14 Jun 15 Total Operating Income growth on prior comparative period - CBA June Financial Years, Peers September

Productivity enabling ongoing investment Cost to Income (%) Investment 43.8% $600m 42.9% 11% Branches & Other 42.2% 42.1% 36% Risk & Compliance 41.5% 53% Productivity & Growth 1H13 1H14 1H15 1H16 1H17 1H17 1H13 1H14 1H15 1H16 1H17 1H17 underlying

Contributing to our economy and community $ billion 13.1 3.1 2.6 ~800,000 retail Salaries shareholders 0.6 50,000+ 1.9 staff Expenses LIE 1.5 ~5,000 SME cost Tax 3.4 partners of lending Australia’s Reinvested largest payer for growth Dividends Total Income

Managing for today’s environment Capital Management Return on Equity 378% 4 CET1 16.0% 3.5 3 2.5 2 121% 1.5 Assets 1 0.5 0 1H17 2008 2010 2012 2014 2016 2007 2009 2011 2013 2015 1H17

Strategic Update Consumer 1 Business 2 3 International

Delivering for customers Retail Customer Satisfaction 83.2% #1 19 consecutive months CBA Peers 66.5% Dec 06 Dec 16

MFI share – a strength and opportunity Overall Customer lifecycle by age 33.8% 45.9% 43.0% 42.4% MFI Share 19.1% 30.2% 13.7% Dec 12 11.9% 28.5% Dec 16 26.6% 14-17 50-64 65+ CBA Peer 3 Peer 1 Peer 2 18-24 25-34 35-49

The digital revolution 5.8m customers now using digital 53% of total transactions (by $) 25% of new account openings 3 mins to open new accounts 80% of logins via mobile

Real time banking Group Transaction Balances +41%  Used by 15 million customers since 2012 +18%  Originate and transact in real time: anywhere, anytime, any device  Instant banking: fast and simple  Driving customer satisfaction 1H15 1H16 1H17

On-going real time innovation UBIMET Warning RED: Thunderstorm from W, lightning, heavy rain, hail, damaging wind gusts 07/12 5:27pm – 07/12 6:57pm Instant Storm Receipt Alerts

Branches remain key Customer Relationships Efficiency  68k Customer insights each week  New format – 88 locations  32k Financial Health Checks each week  50% reduction in branch space  24k Video-conferencing referrals 1H17  IDMs across network by end 2017

Branches remain key – home lending Proprietary % of Total Flows RBS 57%  Branch applications up 13% 55% 54%  Smarter analytics: o 10x increase in branch leads 48% 48% Market o higher contact rate (now 95%) 46% o higher conversion rates (3x)  Extra branch lenders Dec 15 Jun 16 Dec 16

Broad customer relationships  FirstChoice Australia’s most popular platform (7 years)  CFS Trusted with >$100bn of Australia’s investments/savings  CommSec One in every two retail trades (non-advised)  CommInsure One in every four CBA home loan customers

Focus on Better Banking Improving Listening Putting things right  Agribusiness  Customer Advocate  Open Advice Review customer assistance appointed assessments completed measures introduced  First phase of pre 2012 review of  New Industry  Financial inclusion advice under licence conditions Whistleblower for CFP and FWL completed and action plan launched principles developed phase 2 progressing (with ABA)  Making it easier to  Ongoing service fee reviews avoid credit card late on track for June completion payment fees  CommInsure review completed

Strategic Update 1 Consumer 2 Business 3 International

More satisfied customers - business Customer Satisfaction Customer Satisfaction 4 years* (DBM) (DBM, Large) #1 #1 Micro = #1 Small = #1 Medium = CBA Peers #1 Large Dec 16 Dec 15 *Outright or equal 1 st

Corporate – targeted grow th Australian Lending Growth 6 months  Supporting growth in the economy 4.0%  BPB – diversified growth 3.1%  IB&M (3 years): 2.0% o 129 mandate wins o Transaction balances up 59%  Relationship focus + real time technology System BPB IB&M

Transformative technology a differentiator Payments Blockchain Digital & Analytics First interbank open Landmark account transaction Empowering clients partnerships with with insights based on Alipay and Barclays First global real-time customer Albert and Pi behaviours government bond trial

Transformative technology - Albert 70,000 64% devices new merchants to CBA 13 39 new apps last six apps in total months POS Vista POS

Strategic Update 1 Consumer 2 Business 3 International

TYME kiosk Self service on-boarding  Account creation on the spot  Debit card issuance Identity and authentication  Biometric capture  External verification of identity

Innovation via partnerships African Rainbow Capital Strategic retail partner Strategic BEE partner 10 year partnership Broad based local ownership 1,000 locations 10 million rewards customers 10% future shareholder in CBA South Africa 10,000 till points

685 across South Africa, since launch May 2016 kiosks 9 from concept to rollout months 100,000 through Pick ’n Pay and Boxer stores enrolments 4 to on-board new customers minutes on-boarding cost per $4 customer

SmartPOS prototype 2x Cameras Security Voucher, coupon, QR, Strictest global bar code scanning security standards Connectivity 4G, Antenna & Wi-Fi, Bluetooth and GPS Payments Contactless, NFC, Wallet Touch 7” high resolution Open Apps & VAS multi-touch screen Open platform app development, CommBank access

Summary Driving At the strong forefront of consumer innovation franchise Focus on Investing long term for the growth long term

Results Presentation For the Half Year Ended 31 December 2016 DAVID CRAIG CHIEF FINANCIAL OFFICER COMMONWEALTH BANK OF AUSTRALIA | ACN 123 123 124 | 15 FEBRUARY 2017

This Result Dec 16 vs Dec 15  Statutory Profit ($m) 6% 4,895  Cash NPAT ($m) 4,907 2% ROE – Cash 16.0% (130) bpts

Components of grow th 1H17 vs 1H16 $m (393) 397 28.4% 1% 3% tax rate 4% 367 (74) 3% 297 (75) 222 (123) 2% 99 Underlying Visa Accel. Expenses Oper. LIE & Other NPBT Tax NPAT Income Amort. Perf.

Income – balancing volume & margins $m FMI: ↓ 3% Trading: Insurance: ↓ 19% Volume: ↑ 5% +$104m +6% Margin: ↓ 4bpts 13,126 (8%) +7% 397 +3% +4% (122) 173 12,729 316 12,362 Underlying Banking +5% 1H16 Net Other Funds 1H17 Visa 1H17 Interest Banking & Underlying Income Income Insurance

Margin – dow n 3 bpts on higher funding costs bpts 215 214 213 211 3 (3) deposits (2) wholesale Jun 15 Dec 15 Jun 16 Dec 16 214 211 2 (5) (1) 209 (2) 2H16 Asset Funding Portfolio Capital & Sub Treasury 1H17 Pricing Costs Mix Other Total & Markets

Expenses – tightly controlled $m +9% +1% 5,677 5,284 5,210 393 43 2 29 1H16 Staff Amortisation Other 1H17 Accelerated 1H17 Underlying Amortisation

Cost discipline sustains positive jaw s 10% Underlying 8% 7% Operating 6% 6% Performance 5% 6% Revenue 5% Growth 4% 3% Expense 3% 3% Growth 1% 1H13 1H14 1H15 1H16 1H17

Divisional contributions $m Operating Performance +9% 1H17 vs 1H16 +2% +2% +7% (1%) (35%) 3,868 1,196 940 752 552 306 BWA WM RBS BPB IB&M ASB (NZD)

RBS – strong grow th, further efficiency gains Balance Growth Margin Cost-to-Income 12 months 32.3% 9% 8.2% 292 8.0% 290 287 7% 30.8% System 7.5% 6.5% 2% Home Household 1H16 2H16 1H17 Rev. Exp. NPAT 1H16 1H17 Loans Deposits

Corporate – targeted grow th Lending Margin IB&M BPB 6 months 10% Investment in frontline bankers and technology 1H16 202 9% 198 1H16 190 12% 4% 4.0% 3% System 3.1% 2% 2% 2% 2.0% BPB IB&M Rev. Exp. Rev. Exp. 1H16 2H16 1H17 NPAT NPAT

Wealth – responding to challenges Funds Income Costs Insurance Income   Remediation costs  Avg FUA +3%  Loss recognition $90m  Productivity gains  Margins  (mix)  GI premiums  9% (3%) (33%) +3% 964 330 855 847 933 927 826 220 172 $m 1H16 2H16 1H17 1H16 2H16 1H17 1H16 2H16 1H17

Impairment expense remains low CBA Group (bpts) Consumer Corporate 20 18 18 14 FY16 1H17 FY16 1H17 73 41 25 21 20 19 17 16 16 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 1H17 Pro Forma