JP Morgan Investment Conference

Peter Polson

Group Executive, Investment & Insurance Services

Commonwealth Bank of Australia

1 October 2002

The material that follows is a presentation of general

background information about the Bank’s activities

current at the date of the presentations, 1 October

2002. 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

Agenda

Overview of Commonwealth Bank

Commonwealth Bank’s Wealth Management Model

Wealth Management Industry Trends

Commonwealth Bank’s Strategic Response

Overview of Commonwealth Bank

Commonwealth Bank: An Overview

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December 2001 - the Bank’s

restructure programme

“Organising for the Future”

announced.

December 1990 - the Bank

was converted into a public

company with share capital.

70% shareholding retained

by the Commonwealth

Government.

1991 - The Bank acquired

State Bank Victoria $1.6

billion. October 1993 - the

Commonwealth Government

shareholding was reduced to

50.4% and in 1996 the Bank

was fully privatised.

June 2000 - the Bank

acquired Colonial Group

Limited $9.1 billion.

Share price performance last 10 years

February/March 1997 - Introduction of

- “NetBank” internet banking and

- “CommSec” discount broking

May 2002 - “FirstChoice”

masterfund launched

Recent Result Highlights

Solid Earnings Growth

Reported Profit up 10.7% to $2,655m

Cash Profit up 10.6% to $2,501m

Cash EPS up 10.1% to $1.97

Costs steady year on year

Improved productivity and cost to income ratio

High dividend payout ratio relative to peers

Capital position remains strong

Credit Quality and Provisioning remains strong

Net Profit by Segment*

875 918 9751092

156164

121

97

7871 96

120

0

200

400

600

800

1,000

1,200

1,400

Dec 2000 Jun 2001 Dec 2001 Jun-02

Banking Life & Super Funds M anagement

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

Excludes appraisal value uplift and goodwill amortisation.

1,109 1,153

$m

illi

on

1,1921,309

Full Year = 2,262 Full Year = 2,501

17%

Segmentation: Aligned Domestic

Structure with Customer Needs

Retail BankingServices

PremiumFinancialServices

Investment &InsuranceServices

Institutional &BusinessServices

CustomerGroup

Personalbankingcustomers,Small businessbankingcustomers

Premium clientsincludingprofessionalsand business

Agents, Brokers,Financial Advisers

Institutional,Corporate,Commercialbusinesscustomers

Channels Branch, Ezy-Banking, ATM,EFTPOS,Phone, On-line,Mortgagebrokers

Relationshipmanagers,Premiuminvestmentcentres, phone,on-line.

Agents, Branches,Brokers, FinancialAdvisers, Premiuminvestment centres,DirectDealerships,Institutional Clients

Relationshipmanagers,Business centres

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

Commonwealth Bank’s Wealth

Management Model

Investments and Insurance within

Commonwealth Bank

Business

Investment Products

• Colonial First State Australia

• Colonial First State Property

• First State Asia

• First State UK

Insurance

• CommInsure

Financial Planning & Advice

• Financial Wisdom

• Commonwealth Financial

Solutions

• Bank Branch Network

Country

Australia/NZ

Australia/NZ

Asia

UK, Europe, USA

Australia

Australia

Australia

Australia

Activity

• Asset management & Masterfunds

• Direct property asset management

• Asset management

• Asset management

• General & life insurance

• Third party distribution

• Third party distribution

• Distribution of investment/insurance

products

Scale: Funds Under Management

$103bn

29 28

2731 33 33

1723

24 26 25

2722

181921

0

20

40

60

80

100

120

Dec 2000 Jun 2001 Dec 2001 Jun 2002

$b

illio

ns

Australian Retail Funds Australian Wholesale Funds

International Funds Internal Life Assets

Average FUM

Retail Australian Market Share -

Investment Products

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

Market Share and Rank

by Product Category

Market Share and Rank

by Asset Class

2 22

2 1 2

2

4

1 1

2

1

Superannuation Allocated Pension

CMT* Unit Trusts (ex Cash)

Total Retail Total Wholesale

Cash Australian Shares

Overseas Shares Diversified

Income Property

*CMT = Cash Management Trust

Source: Plan for Life June 2002

Brand - Colonial First State

0%

5%

10%

15%

20%

25%

7.60

7.70

7.80

7.90

8.00

8.10

8.20

8.30

0%

20%

40%

60%

80%

100%

32%

34%

36%

38%

40%

42%

44%

AMP

AMP

AMP

BTColonial

or

ColonialFirstState

ColonialFirst

State

AXA

Colonial

FirstState ING

Consumer Brand Awareness - Unaided

3

Consumer Brand Awareness - Total

Consumer Purchase Intention

2

2

Adviser Brand Awareness - OverallOpinion of Organisation

ColonialFirst

StatePerpetual

1

Navigator

Source: Consumer Charts - Newspoll June 2002; Adviser Chart - ASSIRT Service Level Survey 2001

CommInsure - Overview

Life Insurance:

•Market Inforce $3.4bn

•CommInsure rank: 2

Annuities:

•Market FUM $10.7bn

•CommInsure Rank: 3

House & Contents Insurance:

•Market GWP* $2.5bn

•CommInsure Rank: 6

*GWP: gross written premium

Source: Plan for Life, APRA adjusted

14.40%

5.13

%

12.97%

Financial

Planning &

Advice Services

Investment

Products

Insurance

Products

Branch

Network

Owned Practice

Based Planning

Financial Planning & Advice Services -

Overview

Key Metrics

• Practice Based Planners- Financial Wisdom (263)- C’wlth Financial Solutions (142)

• Bank Branch Planners (625)

Wealth Management

Industry Trends

Australian Market Prospects -

Product Segment Growth

0

50

100

150

200

250

300

350

Self M

anage

d Fun

ds

Per

sona

l Sup

er

Unit

Trusts

Pub

lic S

ector F

unds

Whol

esale

Sav

ings

Mar

ket

Corp

orat

e Sup

er M

aste

r Tru

sts

Indu

stry F

unds

Corp

orat

e Sta

ndalon

e Fun

ds

Allo

cate

d Pen

sion

s

Ann

uitie

s

Insu

ranc

e Bon

ds

$ B

illi

on

Value at 30 June 2001

Projected Value at 30 June 2011

Projected Size of Various Product Segments

Source: Rice Kachor projections March 2002, include 5% post fee returns, except for DIY (7%)

Growth in Master Trusts

Master Trust Market as a Percentage of Total Retail

(ex cash)

0%

10%

20%

30%

40%

50%

60%

70%

80%

Se

p-9

4

Ma

r-9

5

Se

p-9

5

Ma

r-9

6

Se

p-9

6

Ma

r-9

7

Se

p-9

7

Ma

r-9

8

Se

p-9

8

Ma

r-9

9

Se

p-9

9

Ma

r-0

0

Se

p-0

0

Ma

r-0

1

Se

p-0

1

Ma

r-0

2

FUM gross salesSource: Plan for Life June 2002

Australian Market Prospects:

Other Trends

Top 5: Trends in Share of Retail FUM

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Jun-9

1

Jun-9

2

Jun-9

3

Jun-9

4

Jun-9

5

Jun-9

6

Jun-9

7

Jun-9

8

Jun-9

9

Jun-0

0

Jun-0

1

Jun-0

2

CBA

NABWBCAMPANZ

Source: Plan for Life June 2002

Commonwealth Bank Wealth Management:

Our Competitive Advantage

Distribution - internal and external

Brand

Innovation

Flexibility to vary margins across value chain

Efficient administrator with strong service culture

Broad manufacturer across broad product base

Scale

Commonwealth Bank’s

Strategic Response

Investment Products - Key Strategies

Realise benefits of integration

Establish Colonial First State as key player in:

mastertrusts

corporate superannuation

Leverage internal distribution opportunities

Increase reputation as manager of international shares

Strengthen retail brand

Grow alternate asset classes

Investment Products - Key Strategies

Global Business

Expand global investment manufacturing capabilities

Gather assets in the UK and Europe

UK retail: IFAs, fund supermarkets, life companies

Europe: sell product via European financial services companies

Wholesale/Institutional

Explore distribution opportunities in Asia

Growth through Retail Masterfunds

FirstChoice Corporate Superannuation

0

50

100

150

200

250

300

350

400

450

500

550

600

31-May 30-Jun 31-Jul 31-Aug

Cummulative totals for week ending

Millio

ns

CBA Branch + CommSec CBA Third Party Other

FirstChoice: Retail Net Contribution

by Channel

Period covered: 13 May 2002 - 31 August 2002

Insurance - Key Strategies

Insurance environment has been restructured to increase

focus. Key actions going forward are:

- product rationalisation

- migrate to modern systems architecture

- actively promote the CommInsure brand

- customer service and pricing improvements

- improve sales through both internal distribution channels

and IFAs

- strong focus on capital management

Financial Planning & Advice Services -

Key Strategies

Review positioning of non-proprietary dealerships

Confirm business model for proprietary dealerships

- extent of Group manufactured product sold

- role of technology (Avanteos)

- appropriate performance metrics

Assess operating model interfacing with bank distribution

Summary

Revenue Generation Strategies

• Develop innovative new products

• Grow the FirstChoice Masterfund

offering

• Expand international asset

management capability

• Build strong links between

manufacturing and distribution

businesses

• Improve service and pricing for

insurance business

Efficiency-Based Strategies

• Remove investment product overlap to

offer an integrated product suite

• Migrate to a single back office platform

• Eliminate duplicated functions

The structure of the IIS Group reflects a strategy

of growing value by being the manufacturer and distributor

of high quality wealth management products

Conclusion

Commonwealth Bank’s wealth management strategies

are an integral part of the Group’s vision:

To be chosen and respected

as an excellent provider

of financial services

Questions

JP Morgan Investment Conference

Peter Polson

Group Executive, Investment & Insurance Services

Commonwealth Bank of Australia

1 October 2002