Presentation of Full Year Results22 August 2001

www.commbank.com.au

1

The material that follows is a presentation of

general background information about the Bank’s

activities current at the date of the presentation,

22 August 2001. 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.

Disclaimer

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

Overview

• Retail Integration completed ahead of time & to business case

• Additional $70 million of integration synergies identified

• $800 million added to value of wealth management businesses

• Strong net interest income with stable net interest margin

• Positive contribution from other banking income

• Home lending market share beginning to stabilise

• Weaker life insurance operating margins & investment earnings

below long term expectations

• Operating expenses increased above plan

4

• Performance Highlights

• Income and Expenditure

• Balance Sheet

• Colonial Merger

• Funding and Capital

Agenda

Performance Highlights

Commonwealth Bank GroupSet out in this presentation are unaudited proforma graphs and tables

which comprise the profit and loss, balance sheet and life insurance and

funds management statistics for the Commonwealth Bank Group and

Colonial Limited for the half years ending December 1999 and June

2000. These have been prepared to illustrate the proforma consolidated

position of Commonwealth Bank and Colonial as if Colonial had been

merged with Commonwealth Bank as at 31 December 1999 for balance

sheet purposes and from 1 July 1999 to 30 June 2000 for profit and loss

purposes.

The proformas do not include goodwill amortisation or life insurance

appraisal value uplift. The results included within the profit and loss

have been adjusted for abnormal items and other items not considered

part of the ongoing operations, such as the effect of Colonial’s UK life

insurance business which was sold during the year and specific

payments made by Colonial in relation to the merger with

Commonwealth Bank. [No adjustments have been made for

inconsistencies in accounting policies between Colonial and

Commonwealth].

6

Managing Integration: Scale & Complexity

RETAIL

INTEGRATION

• Transaction bridge designed and

built for testing in 90 days

• 1.3 million accounts converted

• Internet Protocol Network roll out to 500

branches aligned with integration programme

• 3.5 million Colonial ATM transactions / month

redirected to CBA ATM network

• 279 branch

amalgamations and 89

Colonial branch sites

rebadged over 8

weekends

• 500 ATM movements

• 5,100 pieces of

equipment deployed in

network

• 6000+ staff involved

• 200+ dedicated full time

staff

• 1,950 staff completed

Orientation workshops

• 39,600 hours of call centre

staff training

• 1083 branches completed

Product & System

Conversion training

• Customer

mailout

programme

• Customer Care

programme

• Queue Walkers

• Additional

service

consultantsPEOPLE

CUSTOMER

TIME

PLANNING &

LOGISTICSTECHNOLOGY

7

792 802 875 918

193 170156

16448 6378

71

0

200

400

600

800

1,000

1,200

Dec 1999** Jun 2000** Dec 2000 Jun 2001

Banking Life & Super Funds Management

Net Operating Profit*

* * Proforma

* Net Profit after tax and outside equity interest - cash basis.

Excludes abnormal items, appraisal value uplift and goodwill amortisation.

1,033 1,035

1,109 1,153

Full Year = 2,262

8

67 71 72 73

3441 42 43

8 9 8 8

40373635

29313029

34292518

24242324

0

50

100

150

200

250

300

Dec 1999* Jun 2000 Dec 2000 Jun 2001

Lending Assets**:

* Proforma

** Excludes securitised housing loan balances $6.8b (Jun 01), $4.7b (Dec 00), $3b (Jun 00), $1.7b (Dec 99).

215235 243

251

Housing Personal Business Corporate

Life & SuperFunds Management: Retail Wholesale

Total Lending Assets & Funds Under

Management

$77 billion

$150 billion

9

Australian Market Share

Jun 2000^ Dec 2000 Jun 2001

Home Loans(Residentially Secured)

21.4% 20.8% 20.3%

Credit Cards 27.8% 26.5% 26.3%*

Retail Deposits 25.3% 24.6% 24.0%

Retail FUM 19.2% 19.6% 20.4%

Superannuation/Annuities 22.0% 22.0% 22.3%**

Retail Broking 9.0% 8.5% 8.7%

* Market share as at 31 May 2001

** Market share as at 31 March 2001 ^ Commonwealth and Colonial combined

10

Home Loan Market Share

• Maintained 30%+ market share in proprietary channels

• Doubled market share in mortgage broker channel

• Increased mobile lenders and field staff

• Market share beginning to stabilise

• Broker channels less profitable than proprietary

channels

• Owner occupied mortgage balances grew by $750

million in June 2001

11

Jun 2000 Dec 2000 Jun 2001

Retail Lending 15.0% 14.0% 14.0%*

Retail Deposits 14.2% 14.5% 14.5%

Credit Cards 14.4% 13.8% 14.1%*

Retail Funds Management 3.8% 4.7% 5.9%*

Main Bank Share 16.8% 17.7% 16.4%*

New Zealand

New Zealand Market Share ASB Group

* As at 31 March 2001

12

2.75

3.00

3.25

3.50

Mar

-99

Jun-9

9

Sep

-99

Dec

-99

Mar

-00

Jun-0

0

Sep

-00

Dec

-00

Mar

-01

Jun-0

1

NAB WBC ANZ Commonwealth Bank Group*

Domestic Net Interest Margins

%

* Proforma

Net interest margin for Commonwealth Bank Group refers to half-yearly reporting periods ending

June and December. The ANZ, NAB and WBC net interest margin refers to the half-yearly

reporting periods ending March and September.

3.09

2.972.98

2.82

Income and Expenditure

14

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Dec 1999* Jun 2000* Dec 2000 Jun 2001

$m

illi

on

s

Net Interest Income Other Banking Operating Income

Funds Management Income Life & Super Income

Operating Income

49%

26%

* Proforma

19%

49%

26%

18%

51%

27%

15%

7%7%6%

14%

8%

27%

51%

Full Year = 8,824

4,201 4,231 4,401 4,423

15

Banking

• 8% growth in Banking total operating income

• 8% growth in Banking net interest income

• Other Banking operating income up 9%

– Commission and other fees, up 10%

– Trading Income, up 30%

– Lending Fees, down 3%

16

Funds Management

Half Year Full Year

31/12/99*$M

30/06/00*$M

31/12/00$M

30/06/01$M

30/06/01$M

Operating income 255 318 340 399 739

Operatingexpenses

186 224 224 272 496

Operating profitbefore tax

69 94 116 127 243

Income taxexpense

21 31 38 56 94

Operating profitafter tax

48 63 78 71 149

* Proforma

17

Funds Management

23 27

20 24 2731

1924

2324

24

18 20

1422

21

0

20

40

60

80

100

120

Dec 1999* Jun 2000* Dec 2000 Jun 2001

$b

illi

on

s

Australian Retail Funds** Australian Wholesale Funds

International Funds Australian Life Assets

** Includes listed property trusts* Proforma

7689

95101

18

Funds Management: ASSIRT Reconciliation

Group

Total

$m

Funds Under Management (external funds) 76,953

add life & super assets held in FUM (internal funds) 24,527

Total Funds Under Management per June 2001 Profit Announcement 101,480

less ASB Group funds under management (2,340)

Other (272)

Funds Under Management per ASSIRT June 2001 Report 98,868

19

Life & Super

Half Year Full Year31/12/99*

$M30/6/00*

$M31/12/00

$M30/06/01

$M30/06/01

$MThe Margin on Services operatingprofit after tax is represented by :

Planned profit margins 103 122 128 129 257Experience variation (12) (8) (33) (30) (63)New business / losses reversal ofcapitalised losses

11 2 (3) 1 (2)

Operating margins 102 116 92 100 192Investment earnings on assets inexcess of policy liabilities

91 52 68 58 126

Other - 2 (4) 6 2Operating profit after income tax 193 170 156 164 320

* Proforma

Sources of life & super operating profit (excluding abnormals)

20

Life & Super

Investment Earnings

Net Earnings on Shareholders Assets

($m):

Year ending - 30/6/00 30/6/01

Australia 112 83

New Zealand 15 (5)

Asia 16 2

Total 143 80

Market Returns & Group Exposure

(%):

Market Movement Exposure*

Index for Year at 30/6/01

All Ords 5% 50%

Dow Jones 0% 20%

Euro Top 300 (11%) 10%

MSCI (21%) 10%

* % of total Group equity exposure

21

Business Value: Movement Analysis

$m

Business Value as at 30 June 2000 6,736

Analysis of Movement since 30 June 2000

MoS / Cash Profits 423

Synergies Credited Against Goodwill 332

Net Appraisal Value Uplift 474

Other 38

Increase to 30 June 2001 1,267

Business Value as at 30 June 2001 8,003

22

Appraisal Value Uplift (full year to 30 June 2001)

Funds Management 596

Life & Super

Australia (33)

New Zealand (26)

Asia (63)

(122)

Appraisal Value Uplift through Profit and Loss Account 474

Goodwill Amortisation (full year to 30 June 2001)

Colonial Acquisition 285

ASB Group - Acquisition of Minority 10

State Bank Victoria 39

Other Group Entities 4

Goodwill Amortisation through Profit and Loss Account338

Accelerated Goodwill realised as Appraisal Value 332

Goodwill & Appraisal Value Uplift

$m

23

0

500

1,000

1,500

2,000

2,500

Dec 1999** Jun 2000** Dec 2000 Jun 2001

$mil

lio

ns

Existing Operations

Operating Expense Analysis

** Proforma

2,349 2,473 2,470 2,619

Full Year = 5,089*

*Total operating expenses excluding $81 million attributable to Business Acquisitions

and GST (net of synergies).

24

Cost Ratios

55.9

58.8 58.1 57.4

2.12 2.11 2.11 2.10

1.85 1.83 1.78 1.73

35

40

45

50

55

60

65

Dec 1999* Jun 2000* Dec 2000 Jun 2001

1

1.5

2

2.5

3

3.5

Banking Cost to Income

Banking Cost to Avg. Balance Sheet Assets

Total Cost to Total Controllable Assets**

* Proforma ** Costs to assets held and funds under management

Asset Quality

26

Total Risk Rated Exposures

Credit Risk

0%

20%

40%

60%

80%

100%

Dec 1999 June 2000 Dec 2000 June 2001

Other BBB A AAA/AA

27

0

100

200

300

400

500

600

Dec 1999* Jun 2000 Dec 2000 Jun 2001

0

2

4

6

8

%

Commowealth Bank Group (Other Countries)

Commonwealth Bank Group (Australia)

Net Impaired assets as % of Total Shareholder Equity (axis on right)

Net Impaired Assets

* Commonwealth Bank Group excluding Colonial

28

Arrears

Loans Accruing past 90 days or more

30/06/00 31/12/00 30/06/01

$m $m $m

Housing Loans 211 247 218

Other Loans 64 66 90

Total 275 313 308

Housing loans arrears rate

30/6/98 30/6/99 30/6/00* 31/12/00* 30/06/01

Housing Loans accruing

but past 90 days or more $m 249 182 211 247 218

Housing loan balances $m 47,471 52,646 70,738 71,505 73,511

Arrears rate % 0.53% 0.35% 0.30% 0.35% 0.30%

*Housing loan balances net of securitisation and includes Colonial and home equity and similar

facilities. See Profit Announcement for the full year ended 30 June 2001 (p.13)

29

Credit Risk: Historical P&L Charge

0.00%

0.05%

0.10%

0.15%

0.20%

Dec-98* Jun-99* Dec-99 Jun-00 Dec-00 Jun-01

Bad Debt Expense / RWA

* Excludes Colonial

Basis

Poin

t C

harg

e P

er

Half

30

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Jun

94

Dec

94

Jun

95

Dec

95

Jun

96

Dec

96

Jun

97

Dec

97

Jun

98

Dec

98

Jun

99

Dec

99

Jun

00*

Dec

00*

Jun

01*

0

50

100

150

200

250

300

%

General Provision

Specific Provision

Total Provisions/Gross Impaired Assets (axis on right)

Aggregate Provisions

* Includes Colonial

$m

illio

ns

Colonial Merger

32

$m

Base case synergy target 380

Additional synergies:

- Staff costs

- Property savings 70

- Other (net)

Total anticipated integration synergies

by end of year 3 (June 2003) 450

Overall Synergies

Additional integration synergies:

33

Integration Expenditure

Restructuring Provision

Provision30/06/00

$m

ExpenditureFull Year

Ended30/06/01

$m

Adjustmentsto Opening

Balance$m

ClosingBalance30/06/01

$mRestructuring Costs

- Colonial 294 244 145 195

- Commonwealth 106 100 - 6

Total RestructuringCosts (pre tax)

400 344 145 201

Net of Tax 330 275 87 142

Fair Value Adjustments(pre tax)

475 n/a 162 637

Net of Tax 327 n/a 151 478

34

Integration Related Staff Movements

BusinessCase

Merger

Jan-00 Jun-00

Total Staff 40,018 37,205

EDS Migration &

Technology Net Exits

(113)Other Net Reduction

Retrenchments (110)

(269)

Movement

Jan to JunJun-01

34,960 (5,058)

(459)

(1,196)

(1,469)

(3,124)Total Integration Mvt

(1,083)

(1,359)

(2,855)

(413)

(3,124)

(46)

Funding and Capital

36

0

20

40

60

80

100

Dec-99 Jun-00 Dec-00 Jun-01

0

25

50

75

100

Total Retail Deposits (LHS)

Market Share of Retail Deposits (RHS)

Retail Funding % (RHS)

A$bRetail

%

Funding Sources

37

Capital Adequacy

31 Dec 99 30 Jun 00 31 Dec 00 30 June 01

Total Tier One Capital 7,336 9,618 8,914 9,015

Total Tier Two Capital 3,945 6,097 5,802 5,784

Tier One and Tier Two Capital 11,281 15,715 14,716 14,799

Deductions (1,389) (3,197) (2,278) (2,119)

Total Regulatory Capital 9,892 12,518 12,438 12,680

Risk Weighted Capital Ratios (%)

Tier one 6.76 7.49 6.71 6.51

Tier two 3.63 4.75 4.37 4.18

Less Deductions (1.28) (2.49) (1.71) (1.53)

Total 9.11 9.75 9.37 9.16

38

ROE and EPS

* As reported in prior profit announcements (i.e. not proforma)

8890 91 91

22.58%

20.78%

12.46%13.10%

23.07%

12.74% 14.26%

21.19%

0

25

50

75

100

Dec-99 Jun-00 Dec-00 Jun-01

EPS

0%

5%

10%

15%

20%

25%

ROE

Earnings per share - cash basis ROE - cash basis ROE - before abnormals

39

Annual Dividends

20 2024

36 3845 46 49

58 61

20 22

36

4652

57 58

66

7572

0

25

50

75

100

125

150

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Ce

nts

0

10

20

30

40

50

60

70

80

90

100

%

First Half Second Half Payout Ratio

40

Overview

• Retail Integration completed ahead of time & to business case

• Additional $70 million of integration synergies identified

• $800 million added to value of wealth management businesses

• Strong net interest income with stable net interest margin

• Positive contribution from other banking income

• Home lending market share beginning to stabilise

• Weaker life insurance operating margins & investment earnings

below long term expectations

• Operating expenses increased above plan

Presentation of Full Year Results22 August 2001

www.commbank.com.au