Presentation

Michael Cameron

Chief Financial Officer

11-12 June 2003

www.commbank.com.au

UBS Australian Financial Services Conference

2

The material that follows is a presentation of general background information about the Bank’s activities current at the date of the presentation, 12 June 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.

Disclaimer

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.”

4

Agenda

Long Term Growth Outlook

Commonwealth Bank’s Position

Divisional Focus

Long Term Growth Outlook

6

0

20

40

60

80

100

120

Sep-82Sep-84Sep-86Sep-88Sep-90Sep-92Sep-94Sep-96Sep-98Sep-00Sep-02

Per c

ent o

f nom

inal G

DP

Bank Loans & AdvancesAFI Loans & AdvancesAFI Credit

1860-20001982-2002

1982 1992 2002

Strong credit growth over the last 20 years...

Sources: Cyclical Prudence - Credit Cycles in Australia, Kent & D’Arcy; Commonwealth Research

Per

cen

t of n

omin

al G

DP

In Australia, average total credit growth over the last 20 years has been 12%p.a.

7

...but banking margins have been squeezed

Source: Company Financial Statements

Average Operating Margins*4 Major Banks (1997 - 2002)

*Margin calculated as Total Income / Total Controllable Assets

1997 1998 200120001999 2002

3.9

2.9

3.1

3.3

3.7

3.5

Importance of:

Scale

Brand

Large customer base

Extensive proprietary and third party distribution

8

Expectation premium > 0

Investor returns - natural cycle or structural shift?

Source: Moody's Manual of Investments; Value Management Research Engine; Top Performer Study 2002

1927 1937 1947 1952 1967 1972 1977 1982 1992 1997198719421932 1957 19620

20

40

60

80

100

120

140

160

180

200

%Ratio of Market Value of Companies Over Fundamental Value

(1926 - 2002)

2002

9

$m

Total Net Retail Fund Flows(for quarter ended)

Source: Plan for Life (ex Cash)

Equity Markets

Source: Bloomberg

Weak equity markets and declining fund flows

Index(Base 100)

-33%

-11%

MSCI World All Ordinaries

Dec-01 Mar-02 Jun-02 Sep-02 Dec-02 Mar-03

55

70

85

100

0

1000

2000

3000

4000

5000

6000

7000

Dec-01 Mar-02 Jun-02 Sep-02 Dec-02 Mar-03

10

Projected Size of Various Product Segments

$ B

illio

nRecent trends shaping the future of funds management...

Strong inherent growth expected, particularly retail

Growth of mastertrusts

Industry consolidation

Institutionalisation of distribution

Industry commoditisation

Source: DEXX&R projections February 2003, assumes 5% pa post-fee returns

0

50

100

150

200

250

300Value at June 2002

Projected Value to June 2012

11

Projected Size of Various Product Segments

$ B

illio

n

...and the life insurance industry

Strong industry growth

to continue

Repricing of products

Product rationalisation &

customer migration

Increasing regulation

Source: DEXX&R projections February 2003

0

1

2

3

4

5

6

7

Term & Trauma Disability Group Risk

Value at June 2002

Projected Value to June 2012

12

Summary

Long Term Growth Outlook

Credit growth will slow

Margins will decline

Funds Management and Insurance to grow

Commonwealth Bank’s Position

14

Organising to meet current and longer term challenges

Immediate Environment: Productivity Implementation of strategic initiatives

Longer Term Environment: Leverage key competitive strengths Scale Brand Risk Profile Products and Businesses Distribution Innovation People

15

Our starting position

Source: CBA portfolio analysis 2003

Commonwealth Bank Market Shares*

Merchant Acquiring

Sovereign

Deposits

Transaction Services

Credit Cards

Home Loans

Global Markets

Asset Finance

Managed Investments

Life Insurance

Corporate and Business Lending

Institutional Banking Products

New Zealand Deposits

New Zealand Lending

Property Managed Funds

General Insurance

Hong Kong

*Sorted by market share rank

3%

5%

9%

13%

15%

17%

18%

15%

15%

15%

16%

20%

22%

22%

25%

31%

36%

0% 10% 20% 30% 40%

1

1

121

12

21

1

Rank

16

Premium Financial Services

Investment & Insurance Services

Institutional & Business

Services

Personal banking

customers, Small business banking

customers

Branches, Ezy-Banking, ATM,

EFTPOS, Phone, On-line,

Mortgage brokers

Retail Banking Services

Premium client including

professionals and business

Agents, Brokers, Financial Advisers

Institutional, Corporate,

Commercial business

customers

Relationship managers, Premium

investment centres, phone,

on-line

Agents, Branches,

Brokers, Financial advisers, Premium

investment centres,

DirectDealer-ships, Institutional

clients

Relationship managers, Business centres

Finance, Risk Management, Human Resources, Strategy, Technology, Legal, Secretariat

A re-aligned organisational structure

Customer Group

Channels

Support

InternationalFinancialServices

Personal, Business, Rural, Corporate and Commercial customers,

Agents, Brokers and Financial

Advisers

Agents, Brokers, Financial advisers, Branches,

Internet, Call centres, ATM,

EFTPOS, Strategic alliances

17

Deepening our customer relationships

From... To...

Pure cross sell Needs based bundling

Fragmented definition Concise definition

Varied measures Consistent measure

No published targets Transparent targets

Inconsistent group-wide sales and service system

One Group approach

18

Summary

Commonwealth Bank’s Position

Productivity Improvement

The Customer

Divisional Focus

• v

Retail Banking Services

Premium Financial Services

Institutional & Business Services

Investment & Insurance Services

International Financial Services

20

Branch/Agencies

Total Branches 1,016 Total Agencies 3,890

Electronic

Total ATMs 3,116

EFTPOS Terminals 122,767

Online

Netbank customers 2.6m

CBA Market Share 27%

Mobile

Mobile Bankers 216

Direct Banking

Total Calls (02/3 YTD) 110m

Advice/3rd PartyActive Mortgage 252origination head agreements Financial Planners 335Financial Consultants 161

* Ezy Banking - over 758 Woolworths stores

Retail: a leading profile

Our network -

Our staff - 18,000 people (including operations)

Our footprint -

Leading market share in core Retail products ~ total footings of $169.6bn at 31 March 2003

All data as at 30/04/03 unless specified

21

Retail: product positioning

Transaction accounts - simplified and rationalised

Home loans - re-engineered by 2004

Credit cards - growing

Deposits - 65% of Bank funding

Sustainable cost to income ratios

Improved service at lower cost

Increased cross-sell and innovation

Low cost funding platform

22

Premium: a differentiated business model

BankingPlatform

Borrowing Services

Lending Services

Transactional Banking

BrokingPlatform

Advisory Services

Direct Investment

Indirect Investment

Debt Products

Equity Products

Commercial Adviser

Personal Adviser

InvestmentAdviser

FinancialAdviser

Risk/InsuranceAdviser

Client

Primary Relationship ManagerSecondary Relationship Manager & specialised advice

23

Premium: building a long term business

Over 170,000 client relationships migrated by end June 2003

Physical capacity substantially completed

We have recently acquired TD Waterhouse.

Apr 02 Dec 02 Jun 03Relationships 40,000 >75,000 >170,000Staff 830 1,130 1,546Locations 24 25 27CommSec Accounts 685,000 720,000 >1.1MCost to Income: Banking* 48% Equities* 75%

Key Performance Indicators:

24

Institutional & Business: redesign for business customers

Relationship Model

• Deepen relationship

• More clients• Deepen relationship

• More clients• Deepen relationship

• More clients• Deepen relationship

• Deepen relationship• Efficiency gains

• Efficiency gains

Focus of Change

Initiatives

Client Turnover

($m)

>150

10-150

1-10

Client Total Footings

($m)

>5

0.85-5

0.85-5

0.15-0.85

<0.15

Number of

Clients

800

2,200

9,200

4,300

59,000

118,000

MarketShare2002(%)

Cost-to-Income

2002(%)

38

38

41

42

74

26

19

11

19

22

22

DedicatedRelationshipExecutive

Dedicatedteam of BusinessBankers

Segment

Small

Top Tier

Corporate

Corporate

Regional

SMEBusiness

Corporate

Institutional

25

Institutional & Business: improve overall satisfaction levels

Source: Business Finance Monitor October 2002 to March 2003 - businesses with turnover up to $40 million

Satisfaction with Main Financial Institution RelationshipMain Bank clients

7%

9%

32%

32%

21%

5%

8%

24%

34%

29%

6%

10%

26%

32%

25%

5%

9%

28%

33%

25%

Banking (Business Customers)

Very Dissatisfied

Fairly Dissatisfied

Neither Satisfied nor Dissatisfied

Fairly Satisfied

Very Satisfied

CBA ANZ NAB WBC

26

Funds management: building opportunities

$m

• Realise integration benefits, including further rationalisation of legacy systems

• Offer increased style diversification

• Leverage internal distribution opportunities

• Leverage scale to reduce costs

• Grow alternate asset classes

• Increase reputation as manager of international shares

FirstChoice Other Strategic Initiatives

0

300

600

900

1200

1500

1800

2100

2400

2700

3000

3300

May

-02

Jun-

02

Jul-0

2

Aug-0

2

Sep-0

2

Oct-02

Nov-0

2

Dec-0

2

Jan-

03

Feb-0

3

Mar

-03

Apr-0

3

May

-03

FirstChoice - Funds Under Administration

27

Insurance: distribution, service and risk pricing

Increase internal distribution through:

Personal Insurance Consultants

Business Investment Managers

Repricing of premiums

Upskilling of call centre staff

Product rationalisation

Systems migration

Trend in Share of Inforce Premiums (Top 5 Players)

Strategic Focus

Source: Plan for Life

0%

5%

10%

15%

20%

25%

30%

35%

40%

Dec-90 Dec-92 Dec-94 Dec-96 Dec-98 Dec-00 Dec-02

CommInsure AXA NAB AMP ING

28

International: our geographical presence

* includes Japan, Indonesia, Vietnam, China, Fiji

Life Insurance

Banking Funds Management

New Zealand

UK

Hong Kong

USA

Singapore

Other Asia & Pacific*

29

ASB

11%

CBA Banking

89%

International: ASB Bank a strong performer

CBA

Banking90%

ASB Bank

10%

Net Profit - Banking

ASB Bank represented 10% of the total banking net profit after tax (as at December 2002)

Lending Assets - Banking

ASB Bank represented 11% of the total banking lending assets (as at December 2002)

30

Summary

Divisional Focus

Further improve the service experience

Building on our leading funds management position

Insurance business well positioned

Continue to develop international businesses

31

Key Points

A number of trends are shaping the outlook for financial services: Banking: Slowing growth in a lower margin environment Funds Management: industry dynamics are changing Insurance: positioning to drive growth and efficiency gains

Focus on improved productivity and customer commitment Customer relationship initiatives being implemented in the retail bank Customer migration, service model and product development

well progressed in the premium business New segmentation and service models implemented in the

institutional and business bank Leadership in funds management to continue Insurance business well positioned A sound international strategy Strong growth position

Michael Cameron

Chief Financial Officer

11-12 June 2003

www.commbank.com.au

UBS Australian Financial Services Conference