Commonwealth Bank
International Financial Services
Group Executive, Garry Mackrell
29 July 2003
www.commbank.com.au
1
Disclaimer
The material that follows is a presentation of general
background information about the Bank’s activities current
at the date of the presentation, 29 July 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.
2
Speaker’s Notes

Speaker’s notes for this presentation are
attached below each slide.
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3
International Financial Services (IFS) Overview

Operations and Goals

Key Achievements

IFS Strategy

IFS Business Model

Repositioning in Hong Kong

Strategic Initiatives
4
Operations and Goals
Profit
Other
2%
IFS
10%
Develop integrated financial
services model in chosen
markets (replicate ASB)
New
Zealand
Zealand
& Hong Kong
CBA
Group
90%
Develop distribution
channels, alliances and
partnerships
98%
Assets
Divisional Goals
Other
3%
IFS
11%
One Team, excelling in
customer service
CBA
Group
89%
New
Zealand
& Hong Kong
97%
Re-engineer, simplify and
leverage business processes,
IT platforms and information
management
Data as at December 2002
5
Key Achievements

Strong performance by ASB Bank

Underlying improvement in business fundamentals within New Zealand
and Asian life operations

Grew or maintained market share in all locations

Developed and launched alternative distribution channels within Hong
Kong
- Distribution joint venture with Cheung Kong Group
- Financial Solutions

Divestment of Philippines life operations
6
IFS Strategy
Extend ASB Model
Distinctive components
People & Teamwork
• High performance
• One team
• Cross - sell
Service Experience
Technology &
Processing
Distribution
• Customer centric
• Single end to end processes • Proprietary/aligned
• Single view of
• Reduce cycle time
• Effective service
customer (Onyx)
• Continuous measurement
execution
• Risk and value-based
pricing
Positioning Strategy
Market Leader
Service
Processes
Meet Market
Price
Products
7
IFS Business Model - integrated services features
Banking
Distribution Services
OCEO, HR, IT, Finance, Risk etc
Investments
Distribution
Proprietary
Distribution
Third Party
Insurance
Centre
Functions
Operations
Products
Integration /
Bundling
Distribution
8
Repositioning in Hong Kong
Administration
Business
Manufacturing
Business
Distribution
Services
Business
Distribution
Business
CMG - agency
CMG
life admin
CMG
life
CMG - wealth
management
CommServe
distribution
services
CommServe
pensions
admin
Other
product
providers
CMG - direct sales
staff (CSA)
Financial Solutions
Financial
Services
Consumers/
Customers
AMTD
Non- affiliated
(IFA’s, Brokers, etc.)
Key :
CMG Asia
CBA / IFS
External
9
Strategic Initiatives

Grow New Zealand

Reposition Hong Kong

Develop Asian options

Leverage (ASB) integrated approach
10
Commonwealth Bank
International Financial Services
Group Executive, Garry Mackrell
29 July 2003
www.commbank.com.au
11
Appendix 1
Overview of IFS Businesses
Country
Company Name
Business
Ownership
New
Zealand
ASB Bank
Banking
ASB Group
Investments
Sovereign
Fiji
Hong Kong,
China
100%
Staff /
Agents
3120
Market
Share
16%
Investments
100%
160
14%
Insurance
100%
790 / 480
28%
Colonial Nat Bank
Banking
51%
305
15%
Colonial Fiji Life
Insurance
100%
205
72%
CMG Asia
Insurance
100%
290 / 1200
3%
CommServe /
AMTD
Pensions
Admin
Fin
Solutions
Fin
Planning
100%
100%
30%
Recent
Trend
10%
160
Start up
Start up
Data as at December 2002
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Appendix 1 (Cont’d)
Overview of IFS Businesses
Country
Company
Name
Indonesia
PT Bank
Commonwealth
PT Astra CMG
Shanghai,
China
Vietnam
CMG China
Life*
CMG Bao
Minh*
* commenced 2000
Business
Ownership
Banking /
Investments
Insurance
99%
Staff /
Agents
149 / 47
50%
361 / 1681
Market
Share
1%
4%
4%
Insurance
49%
57 / 228
0.1%
Insurance
50%
259 / 4652
3%
Recent
Trend
Data as at December 2002
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Appendix 2
Business Profile - ASB Bank
“Grow”
Market Positioning

Highly favourable market conditions moderating

ASB growing faster than market
Market Share
ASB market share of major banks by gross loans (%)
Retail
Rural
Business/Corp
02/03 Initiatives

Expand and extend existing retail bank excellence
into broader financial services / business

Continue strong retail banking growth

Drive business / rural growth by enhancing sales
capabilities and service excellence

Continuous improvement focused on customer
services and on business process re-engineering
15.7
16.6
18.7
10.6
11.2
12.9
8.0
7.3
7.9
2000
2001
2002
2000
2001
2002
2000
2001
2002
Source: General Disclosure Statements
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Appendix 2 (Cont’d)
Business Profile - Sovereign Insurance
“Consolidate and grow”
Market Share
Market Positioning
NZ insurance and investments market - low
growth / uneven competition
 Sovereign - double market share of nearest
competitor
 Sovereign differentiated by relative scale,
adviser support and distribution reach

02/03 Initiatives
Extend distribution and cross-sell synergies
leverage ASB network
 Improve profitability through pricing for risk,
enhancing persistency and aligning compensation
/ commissions structures
 Consolidate products / legacy systems (Phase 1)
(%)
Inforce
Investments*
14
26.5
27.7
28.3
12/00
12/01
12/02
13
13
14
14
12/01
6/02
12/02
3/03

* ASB Investments
15
Appendix 2 (Cont’d)
Business Profile - Hong Kong
“Get fundamentals right / reposition”
Market Positioning



Market Share
Mid-ranked life insurance player facing strong
competition and low growth environment
(%)
New Business
Pension Admin
Migrating from traditional life agency distribution
model to broader financial services provider
Support / extend into Mainland China
(CommServe and distribution services businesses)
3.4
2.1
12/01
06/02
2.3
2.5
5
5
5
8
02/03 Initiatives
Reposition traditional life business
 Expand CommServe
 Support China and Vietnam entry

12/02 03/03
12/01 06/02 12/02
03/03
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Appendix 3
PEOPLE & TEAMWORK
ASB Bank - Cross Sell
One Team Closed Referrals
1800
45%
1600
Closing Ratio
1400
34%
1200
43%
29%
34%
1000
51%
800
32%
600
400
22%
200
0
1
Sep 01
2
Dec 01
3
Mar 02
4
Jun 02
5
Sep 02
6
Dec 02
7
Mar 03
8
Jun 03
17
Appendix 3 (Cont’d)
SERVICE EXPERIENCE
New Zealand Banking - Customer Satisfaction
Auckland University Colgate Main Bank Survey - September 2002
(Major Banks)
% satisfied and very satisfied customers
(1998-2002)
90
Customer Switching Intentions
25
% WANT TO LEAVE
% WANT TO JOIN
85
80
20
75
70
15
65
60
10
55
50
5
45
40
0
1998
1999
ASB
ANZ
2000
BNZ
2001
NBNZ
2002
ANZ
ASB
BNZ
NATIONAL
WESTPAC
Westpac
ASB attracts highest % of customers
considering switching
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Appendix 4
IFS Management Team
ASB Bank/Region
Hugh Burrett
Indonesia Life
Geoff Coates
LoS 43 years
LoS 27 years
Sovereign Insurance
Simon Swanson
International Financial
Services
Garry Mackrell
LoS 23 years
Fiji
Mike Walsh
LoS 12 years
> Reserve Bank NZ
LoS 30 years
PTBC, Indonesia
Symon Brewis-Weston
LoS - CBA 2 years
> Rabobank 3 years
> CBA 5 years
Hong Kong/Region
Peter Fancke
LoS 31 years
Vietnam Life
Rod Carkeet
LoS 40 Years
China Life
Chong Lee
LoS 15 years
LoS = Length of service
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