DEBT INVESTOR UPDATE - RESULTS PRESENTATION FOR THE FULL YEAR ENDED 30 JUNE 2015 Results Presentation For the half year ended 31 December 2009 10 February Commonwealth Bank of Australia ACN 123 123 124 2010 COMMONWEALTH BANK OF AUSTRALIA | ACN 123 123 124 | 12 AUGUST 2015
Note 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, 12 August 2015. 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. Cash Profit The Management Discussion and Analysis discloses the net profit after tax on both a statutory and cash basis. The statutory basis is prepared and reviewed 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 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 with the prior comparative period and prior half disclosures 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
Results & strategy
CB CBA A Ov Over erview view Addit Additional ional Sna Snaps psho hot t FY1 FY15 1 information inf ormation Our Vision Leading national franchise First in customer satisfaction – # 1 “main financial institution” 1 To excel at securing and # 1 in home lending 2 enhancing the financial # 1 in household deposits 3 wellbeing of people, businesses Highly rated wealth platform 4 and communities Earnings up 5% in FY15 Our Values Peer leading ROE of18.2% Strong levels of capital Integrity Collaboration CET1 (APRA) 9.1% Excellence CET1 (Int’l) 12.7% 5 Accountability Highly rated AA- / Aa2 / AA- 6 Service 1. Roy Morgan Research – “Main Financial Institution” refer Full Year Results Presentation 30 Jun 2015 for full source information available at www.commbank.com.au/about-us/investors/shareholders.html 2. Source: RBA 3. Source: APRA 4. Source: Plan 4 for Life-Mar 15 5. Analysis aligns with the APRA study entitled “International capital comparison study” (13 July 2015 ). 6. S&P, Moodys, Fitch
Cash Cash Pr Profit ofit up up 5% Jun 15 vs Jun 15 Jun 14 $m Jun 14 Operating income 23,368 22,166 5% Operating expenses (9,993) (9,499) 5% Operating performance 13,375 12,667 6% Investment experience 210 235 (11%) Loan impairment expense (988) (953) 4% Tax and non-controlling interests (3,460) (3,269) 6% Cash NPAT 9,137 8,680 5% Statutory NPAT 9,063 8,631 5% 5
Operating Income and Expenses Operating income Operating expenses $m +5% (underlying 1 +6%) Compliance Underlying • Additional risk investment 2H15: (0.6%) Programs +5.2% • Advice Reviews 2,730 • Cyber security (1%) 2,752 Underlying Regulation 9,993 (151) • AML +2.9% 4,839 347 (63) 4,323 +12% 9,779 185 9,499 (260) 222 15,799 15,091 +5% FY14 Productivity Staff Other Compliance, FY15 Non-recurring FX FY15 Jun 14 Jun 15 Jun 14 Jun 15 Jun 15 costs Programs & Compliance, underlying Net Interest Income Regulation Programs & Regulation Other Banking Income Funds & Insurance 1. Excluding Property 6
Business Unit Business Unit Cash Cash NP NPAT T ($m) ($m) - FY FY Retail Banking Services Business & Private Banking Institutional Banking & Markets Growth +5% Growth +10% Growth +1% 35% 38% 36% 3,867 3,678 3,337 1,459 1,321 1,268 1,252 1,224 1,188 Jun 13 Jun 14 Jun 15 Jun 13 Jun 14 Jun 15 Jun 13 Jun 14 Jun 15 New Zealand 2 Wealth Management 1 Bankwest Growth (6%) Growth +17% Growth +11% 74% 41% 43% 865 752 742 688 675 650 621 589 561 Jun 13 Jun 14 Jun 15 Jun 13 Jun 14 Jun 15 Jun 13 Jun 14 Jun 15 1. Excluding Property % Cost-to-income 2. NZ result in AUD 7
Volume olume growth wth Household Deposits Home Lending Credit Cards 1 1 1 Balance Growth Balance Growth Balance Growth Underweight in higher growth Not participating in zero segments – broker and balance transfer market investment lending 8.1% 11.6% 9.5% 7.4% 6.6% 2.0% 1.2% System CBA System CBA System RBS New Transaction Accts 2 Business Lending ASB 1, 3 Balance Growth Business & Rural Balance Growth 1 RBS +26% 13.0% 959k 831k 759k 4.8% 4.8% 6.7% 4.3% FY13 FY14 FY15 System BPB IB&M System ASB 1 Spot balance growth twelve months to June 15. Source RBA/APRA/RBNZ. CBA includes BWA except Business Lending. Business Lending is RBA. 2 Includes offset accounts 8 3 IB&M represents Core Domestic Lending balance growth and excludes Cash Management Pooling Facilities (CMPF)
Additional Addit ional Group NIM information inf ormation bpts Group NIM (Six Months) bpts 12 Month Movement 214 209 204 204 204 201 Dec 13 Jun 14 Dec 14 Jun 15 12 month NIM 214 (2) (8) 4 (1) 209 (4) 6 ex Treasury 204 203 & Markets Group NIM 1bpt ex Treasury & Markets FY14 FY15 FY14 Asset Funding Basis Portfolio Other Treasury FY15 pricing costs risk mix and Markets 9
Credit quality Loan Impairment Expense (Cash) Group Consumer Arrears 90+ days CBA Group 1.34% (basis points) 1 1.23% 1.20% 2 73 1.05% 1.02% 1.01% 0.52% 0.62% 0.50% Personal Loans Credit Cards Home Loans 4 Jun 13 Dec 13 Jun 14 Dec 14 Jun 15 3 41 Troublesome and Impaired Assets $bn 9.5 8.2 25 7.0 4.3 6.5 21 6.0 3 20 3.9 3.4 3 16 16 3.4 2.9 5.2 4.3 3.6 3.1 3.1 FY09 FY10 FY11 FY12 FY13 FY14 FY15 Jun 13 Dec 13 Jun 14 Dec 14 Jun 15 Pro Forma Commercial Troublesome Group Impaired 1 Basis points as a percentage of average Gross Loans and Acceptances (GLA) 2 FY09 includes Bankwest on a pro-forma basis and is based on impairment expense for the year 10 3 Statutory Loan Impairment Expense (LIE) for FY10 48 bpts, FY13 21 bpts and FY14 16 bpts 4 Excludes Reverse Mortgage, Commonwealth Portfolio Loan (RBS only) and Residential Mortgage Group (RBS only) loans
Provisions Individual Provisions Collective Provisions $m $m 2,858 2,779 2,762 1,628 Overlay Economic 823 762 755 overlay portion 659 increased 1,127 264 347 419 Bankwest 887 389 157 981 267 941 909 128 Consumer 128 812 610 492 Commercial 762 729 707 Jun 13 Jun 14 Jun 15 Jun 13 Jun 14 Jun 15 11
Investment spend Investment Spend Investment Spend % of total $m 1,286 1,246 1,237 1,182 1,179 Branches Core 11% 12% 16% & Other 1,036 Banking 639 12% 24% Risk & 651 655 593 30% Compliance 638 19% 563 65% Productivity 58% 647 53% & Growth 595 589 582 541 473 FY10 FY11 FY12 FY13 FY14 FY15 FY13 FY14 FY15 1 st Half 2 nd Half 12
Funding, liquidity and capital
Liquidity Liquid ity ♦ Full Liquidity Coverage Ratio (LCR) 1 Liquidity Coverage Ratio compliance from 1 Jan 2015 $bn ♦ RBA Committed Liquidity Facility 116% 120% LCR (CLF) 139 136 – Available to meet AUD cash 132 outflows – 15bp commitment fee on approved 52 amount with additional cost if used 70 66 CLF 2 – Collateralised by RBA repo-eligible securities (including Internal RMBS) 31 – CBA has additional internal RMBS above amount used for CLF ♦ HQLA APRA determined the CBA CLF in 66 66 Assets 2,3 context of AUD cash outflows and 56 acceptable HQLA1 holdings - $66bn for calendar year 2015 2 Jun 14 Dec 14 Jun 15 Internal RMBS Bank, NCD, Bills, RMBS, Supra, Covered Bonds Cash, Govt, Semi-govt 1 Liquids are reported net of applicable regulatory haircuts. Dec 14 adjusted from Pro-forma to align with final reporting with APRA 2 CBA provided with a CLF of $70bn for period 1 Jan 2015 to 31 Mar 2015 inclusive, after which the CLF is $66bn. The Exchange Settlement Account 14 (ESA) balance is netted down by the Reserve Bank of Australia open-repo of internal RMBS 3 Qualifying HQLA includes cash, Govt and Semi Govt securities. Also includes $5.6bn of RBNZ eligible securities
Fund Funding ing Funding Funding sources $bn $bn Jun 15 Jun 14 Source of funds Use of funds Transactions 91 77 63% Deposit Savings 176 155 31 (32) Funded Investments 195 193 Other 16 14 39 (38) Total customer deposits 478 439 Wholesale funding 280 250 16 Total funding 758 689 (35) Equity 53 49 15 2 4 Total funded assets 811 738 Equity IFRS & FX Net short Customer New long Long term Lending Other Assets 1 on ST & LT term funding deposits term funding maturities Debt Customer % of 63% 64% 12 Months to Jun 15 total funding 1 Includes additional collateral received of $9bn due to weaker AUD 15
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