Half Year Results Presentation to Media

David Murray

12 February 2003

www.commbank.com.au

Half Year Results 12 February 2003 2

Economic environment

Challenging operational environment

Global:

Political and economic uncertainty

Continued declines in equity markets

Domestic:

Drought consequences affect economy

Housing cool-down likely to halt wealth effect

Subdued business credit demand continues

Half Year Results 12 February 2003 3

The Bank’s key objectives in this environment

Respond to customer and shareholder demands and preserve combination of quality, security and stability

Customers:

Access: reliability

Service: improving quality standards

Shareholders:

Security: prudent capital and credit quality management

Income: cash results enable continued high dividend pay-out ratio

Half Year Results 12 February 2003 4

Providing shareholder income: Slight increase in cash profit…

Statutory Net Profit After Tax

Net Profit After Tax (cash basis)*

Earnings per Share

Dec 2002

$622m

$1,208m

95cps

Dec 2001

$1,204m

$1,192m

94cps

% Change

(48%)

1%

1%

* ie excluding appraisal value uplift/reduction and goodwill amortisation. Unless otherwise stated the numbers in this presentation refer to the net profit after tax (cash basis) and all comparisons are to the prior comparative period.

Half Year Results 12 February 2003 5

Resulting in the highest dividend payout ratio among major banks

Dividends per Share

Dividend Payout Ratio

Dec 2002

69cps

72.7%

Dec 2001

68cps

72.6%

Change

1%

-

20 24

36 3845 46 49

58 6168 69

22

36

4652

57 58

66

72

82

75

0

25

50

75

100

125

150

1993 1995 1997 1999 2001 2003

Ce

nts

First Half Second Half

Half Year Results 12 February 2003 6

Banking

Funds Management

Life Insurance

31 Dec 02

$1,079m

$135m

($6m)

31 Dec 01

$975m

$182m

$35m

Change YoY%

11%

(26%)

(117%)

Divisional breakdown: Sound growth in Banking offset by weaker Wealth Management

Net Profit After Tax

30 Jun 02

$1,092m

$186m

$31m

Retail banking strong, business and corporate subdued

Difficult global investment markets affecting wealth management businesses

Net retail funds flow positive

Half Year Results 12 February 2003 7

Providing shareholder security: Capital Adequacy

Regulatory Target Capital:

Tier 1: 6.5% - 7%

Total Capital: 9% - 11%

Actual Capital:

Tier 1

Tier 2

Less Deductions

Total Capital

Capital position remains strong

Hybrid note issue and share buyback on hold

31/12/02 30/6/02 31/12/01

7.06% 6.78% 6.75%

4.08% 4.28% 4.27%

1.33% 1.26% 1.71%

9.81% 9.80% 9.31%

Half Year Results 12 February 2003 8

Colonial merger – a situation update

Growth in asset value:

Maintained value of life insurance

Added value to funds management

Banking:

Integration synergies achieved ahead of schedule

Higher risk / lower quality assets divested:

United Kingdom - life insurance and private client business

Thailand, Malaysia, Philippines - life insurance

Underlying strategy sound:

Business mix enhanced

Customers benefit from wider range of services

Half Year Results 12 February 2003 9

Conservative approach, based on external market conditions: Market volatility and uncertainty Lower industry funds flows

Result: Reduction in underlying appraisal value of $426 million Lower by $780 million than independent valuation Consistent with valuation in June 2002

But: No impact on capital adequacy or dividends Credit ratings confirm adequate capitalisation Capital position strengthened

Appraisal value

Half Year Results 12 February 2003 10

Results flow from Bank strengths

Higher profits despite continued weakness of environment made possible by:

Disciplined adherence to service improvement

Experience in managing difficult conditions

Active implementation of sound strategy

Half Year Results 12 February 2003 11

Outlook - General

Global situation remains uncertain:

Political tension

Economic weakness

Fragile equity markets

Domestic situation less supportive:

Economy holding up well, but likely to slow

Competitive industry pressures

Half Year Results 12 February 2003 12

Outlook - Bank

Continued focus on service, income and security

Commitment to sustainable business growth, strong credit quality standards and high dividend pay-out ratio through growth in cash earnings

Strategic positioning to benefit from any improvement in external conditions

Continued efficiency gains to underpin value of customer service