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Presentation of Full Year Results

Presentation of Full Year Results. Michael Cameron Chief Financial Officer 20 August 2003. www.commbank.com.au. Disclaimer.

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Presentation of Full Year Results

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  1. Presentation of Full Year Results Michael Cameron Chief Financial Officer 20 August 2003 www.commbank.com.au

  2. Disclaimer The material that follows is a presentation of general background information about the Bank’s activities current at the date of the presentation, 20 August 2003. 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. Full Year Results 20 August 2003

  3. 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.” Full Year Results 20 August 2003

  4. Overview

  5. June 2003 $2,012m $2,579m June 2002 $2,655m $2,501m Change (24%) 3% 3% increase in cash profit is in line with expectations at the last AGM Statutory Net Profit After Tax Net Profit After Tax (cash basis)* * ie excluding appraisal value uplift/reduction and goodwill amortisation. Unless otherwise stated the numbers in this presentation refer to the net profit after tax (cash basis) and all comparisons are to the prior comparative period. Full Year Results 20 August 2003

  6. Banking performance drives a 9% underlying growth Full Year Results 20 August 2003

  7. Key shareholder ratios improving June 2003 $2,579m 203 cents 154 cents 75.9% 13.27% June 2002 $2,501m 197 cents 150 cents 76.2% 13.12% Change 3% 3% 3% - 2% Earnings per Share Dividend per Share Net Profit After Tax Dividend Payout Ratio Return on Equity Full Year Results 20 August 2003

  8. Another record dividend Full Year Results 20 August 2003

  9. Strategic initiative targets achieved Full Year to 30 June 2003 Costs Benefits Net Cost Annual Benefit $m $m $m $m Target 227 84 143 159 Outcome 214 69 145 165 Revenue: $40m Costs: $125m Full Year Results 20 August 2003

  10. Segment Results: Banking

  11. Banking • A strong result driven by solid home loan growth and continuing sound asset quality • In summary • 16% underlying profit growth • 4% productivity improvement • 9% growth in assets Full Year Results 20 August 2003

  12. Banking result reflects the strong home loan market Full Year Results 20 August 2003

  13. Banking income has grown strongly Full Year Results 20 August 2003

  14. Underlying Banking Cost to Income is improving... Full Year Results 20 August 2003

  15. 9% growth in lending assets Full Year Results 20 August 2003

  16. June 2003 2002 Merchant Acquiring1 Deposits2 Credit Cards Transaction Services3 Home Loans Business Lending New Zealand Lending New Zealand Deposits Asset Finance4 34.5% 33.9%5 24.7% 24.8%6 22.8% 22.9%6 22.7%7 21.8%7 19.5%8 19.9%8 15.2% 14.3%9 20.4%5 19.6% 16.3%5 15.5% 15.1% 16.5% 0% 10% 20% 30% 40% Strong banking product market shares Banking Market Shares Notes: (1) - Includes both Credit and Debit Turnover (2) - Retail Only (3) - Mid-Corporates (turnover $20m-100m) (4) - Excludes consumer and commercial finance (5) - April Data (6) - May Data (7) - February Data (8) - March Data (9) - Eliminated effect of changes in data series Source: RBA, APRA, East and Partners, AELA, Reserve Bank of NZ Full Year Results 20 August 2003

  17. Home lending growth profile* Owner occupied Investment Home Loan Viridian/ Access Advantage Full Year Results 20 August 2003

  18. Top 20 Exposures to Corporates (Committed) (Top 20 exposures are 3.3% of total committed exposures of $229 billion) A- A- A- BBB BBB- A- A- A+ A+ S&P Rating or Equivalent A- AA- AAA A+ BBB- BBB+ BB A+ BBB BBB+ BBB 0 200 400 600 Committed Exposure ($m) 30 June 2003 Further improvement in the portfolio Well Diversified Portfolio by Industry Energy Telcos Technology Leasing Aviation Construction Finance Other Commercial Agriculture Government A High Quality Portfolio 63% investment grade Jun 03 Dec 02 Jun 02 Dec 01 *CBA Equivalent Ratings ^Predominantly secured lending Full Year Results 20 August 2003

  19. Continuing sound asset quality *Risk Weighted Assets Full Year Results 20 August 2003

  20. The Bank remains well provisioned $millions * Includes Colonial Full Year Results 20 August 2003

  21. Segment Results: Funds Management

  22. Funds Management • Lower result consistent with tough market conditions • Income to FUM stable at 116 basis points • Cost growth of 6% • FirstChoice growing rapidly to $3.2bn Full Year Results 20 August 2003

  23. Lower Funds Management profit Full Year Results 20 August 2003

  24. Underlying expenses increased by $46m % $bn Underlying Expenses/Average FUM (%) Average FUM ($bn) Full Year Results 20 August 2003

  25. Movement in funds under management Full Year Results 20 August 2003

  26. Net flows by product category $bn Net Funds Flow *Cash Management Trusts ^ Non-UK includes New Zealand and Asia Full Year Results 20 August 2003

  27. June 2003 2002 Managed Investments1 14.8% 15.5% New Zealand Managed Investments 14.0%3 13.0% Property Managed Funds2 6.3% 5.2% 0% 10% 20% Strong market share position Funds Management Market Shares (1) Retail Only (2) Internally Calculated (3) March Data Source: Plan for Life, Fund Source Research Full Year Results 20 August 2003

  28. FirstChoice has made a strong contribution Full Year Results 20 August 2003

  29. Segment Results: Life Insurance

  30. Life Insurance • 85% growth in net profit after tax • Improved shareholder investment returns • Lower operating costs • #1 market share in Australia and New Zealand Full Year Results 20 August 2003

  31. Steady operating margins and improving investment returns Full Year Results 20 August 2003

  32. Operating expense to average inforce premiums is improving $m % Operating Expenses/ Average Inforce Premiums (%) Average Inforce Premiums ($m) Full Year Results 20 August 2003

  33. 9% growth in annual premiums Full Year Results 20 August 2003

  34. June 2003 2002 New Zealand1 28.3%2 26.2% Australia 15.0%2 14.9% Hong Kong 2.5%3 2.1%4 0% 10% 20% 30% 40% Market shares growing Life Insurance Market Shares (1) In-force Business (2) March Data (3) Single premium new business (Jan - Mar 2003) (4) Single premium new business (Jan - Jul 2002) Source: ISI Statistics, Plan for Life, HK Insurance Association Full Year Results 20 August 2003

  35. Lump Sum Disability Income Group Risk & MasterFund Australian Life Insurance business Full Year Results 20 August 2003

  36. Investment Earnings

  37. Investment earnings Full Year Results 20 August 2003

  38. Investment Mandate Structure The Bank has $3bn of shareholders funds across its insurance and funds management business, which is invested in: Full Year Results 20 August 2003

  39. Wealth Management Valuations

  40. Wealth management valuations Full Year Results 20 August 2003

  41. Wealth management valuations - movement analysis Full Year Results 20 August 2003

  42. Capital

  43. Short TermLong Term F1+ AA (Stable) P1 Aa3 (Stable) A1+ AA- (Stable) Fitch Moody’s S&P Capital ratios remain strong Credit Ratings unchanged or improved since 1996... Full Year Results 20 August 2003

  44. Generation and use of capital Full Year Results 20 August 2003

  45. Summary

  46. Summary • Cash profit up 3% with underlying Group profit growth of 9% • 2003 strategic initiatives delivered • Underlying bank cost/income improvement of 4% • Further improvement in credit quality • Continued strengthening of our Tier 1 capital position Full Year Results 20 August 2003

  47. Presentation of Full Year Results Michael Cameron Chief Financial Officer 20 August 2003 www.commbank.com.au

  48. Supplementary Slides

  49. Underlying EPS growth of 16 cents per share Full Year Results 20 August 2003

  50. June 2003 2002 Institutional 9.4%1 12.9%2 12.2% 10.2% 10.9% 13.4%2 8.4% 10.9%2 Corporate 12.1%3 11.5%4 25.6%3 24.9%4 16.0%3 14.9%4 11.6%4 13.2%3 10% 20% 30% 0% Strong market share position Global Markets Shares Corporate Bonds Global Loans FX Overall Interest Rate Derivatives Commercial Bills (Investment) Term Loans (Debt) Interest Rate Swaps FX Options Notes: (1) - 6 mths ended 30 June 2003 (2) - December 2002 Data (3) - January 2003 Data (4) - July 2002 Data Source: Insto Public Domestic Non Govt. Bond League Table, Bloomberg Global Loans League Table, Greenwich and Associates, East and Partners Full Year Results 20 August 2003

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