Strategy Briefing
Michael Ullmer
Institutional and Business Services
20 May 2003
Disclaimer
The material that follows is a presentation of general
background information about the Bank’s activities
current at the date of the presentation, 20 May 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.
1
Speaker’s Notes

Speaker’s notes for this presentation are attached
below each slide.
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2
Agenda
 Profile
 Strategy
 Performance
 Future
3
Profile
Clients and Access
Clients
193,500
Business Banking centres
50
Corporate Banking sites
18
Access to Branches
1,000
Locations
Australia, New Zealand, UK,
USA, Hong Kong, Singapore, Tokyo
Financials
Average assets
$90 billion
Net profit after tax
~ 30% of the Group
People
5,500
4
Agenda
 Profile
 Strategy
 Performance
 Future
5
CBA Vision and IBS Goals
The Vision
To be
chosen
and
respected
as an
excellent
provider of
financial
services
Business Goals:
Divisional Goals:
Recognising the unique
lifetime financial needs of
clients
1. Serve institutions, corporates and
businesses through relationship
management, to provide financial solutions
that anticipate their needs
Providing services that are
best in segment with choice
of access
2. Provide world class finance, capital and
risk management products bundled in a
distinctive way, delivered economically
through the client’s choice of distribution
channel
Being skilled, authorised,
equipped and engaged to
differentiate our service
3. Build an empowering organisation with
the structure, career development, training
and rewards to ensure the Vision is
achieved
Using flexible technology,
scale and risk management
to ensure our services are
of superior value
4a. Maintain robust end-to-end specialist
delivery platforms capable of leveraging
scale and achieving improved client service
through flawless execution
4b. Risk framework aligned with the Vision
and active portfolio management designed
to optimise risk, return and capital
consumption
6
Our strategy is focused on growth & productivity…
Aspirations:
IBS is aiming for market leadership...
 Strong client franchise
 #1 or #2 in each of our established businesses in Australia
 Niche product driven growth in our offshore business
 Innovative, differentiated services
 One team, desirable place to work
… which is to be achieved in 2 ways.
Strategy:
1
Profitable growth
2
Competitive productivity
 Increase cross-sell activity
 Process and productivity
improvements
 Lift international growth
 Achieve benefits of IBS Redesign
 Product and services innovation
 Rationalise systems platforms
 Credit portfolio management
 Streamline credit processes
 High performance culture
 Increase staff training
 Client service excellence
7
… underpinned by a strong emphasis on people

Instill a culture of ownership, collaboration and innovation

Ensure continuous development opportunities

Right level of delegations

Balance of personal motivators and performance disciplines

Measure, recognise and act on results
8
To date we have made significant progress
Competitive
Productivity




Profitable
Growth



Amalgamation of activity
Streamlined structure
IBS Redesign programme
Clear client segmentation with differentiated
service models
Focussed international strategy
Active Portfolio Management operating model
implemented
Product innovation
9
The Redesign is a critical change initiative…
Segment
Institutional
Corporate
Client Total
Footings
($m)
>150
Top Tier
Corporate
Corporate
Business
Client
Turnover
($m)
10-150
1-10
>5
Number
of
Clients
Cost-toIncome
2002
(%)
800
26
2,200
38
Market
Share
2002
(%)
Relationship
Model
Focus of
Change
Initiatives
• Deepen relationship
• More clients
• Deepen relationship
11
Dedicated
Relationship
Executive
• More clients
• Deepen relationship
0.85-5
9,200
38
19
Regional
0.85-5
4,300
41
19
• More clients
• Deepen relationship
SME
0.15-0.85
59,000
42
22
• Deepen relationship
• Efficiency gains
Small
<0.15
118,000
74
22
Dedicated
team of
Business
Bankers
• Efficiency gains
10
…and much work has been completed
2002
Oct
2003
Nov Dec Jan Feb
Mar Apr May June July Dec
Migrate and consolidate BB & CB Centres
SA/WA
ACT
QLD
VIC
NSW
Design streamlined credit processes
Test streamlined credit processes
Implement streamlined credit processes
Establish Client Service Centre (CSC)
Transfer Corporate Banking support to CSC
Identify redundant positions
11
Agenda
 Profile
 Strategy
 Performance
 Future
12
Over the year, we have completed some notable deals
August 2002
Global
Leasing
Airservices
Australia
Lessee Adviser
Air Traffic
Management
US$ 552,000,000
Australia
October 2002
Lessee Adviser
Cargo Handling &
Catering Systems
March 2003
Transaction
Banking
Full Transaction
Banking Services
US$ 237,000,000
Singapore
Debt
Capital
Markets
13
Our standing in client satisfaction amongst
institutions is good…
Transaction
Banking
Banking
Relationship
Bankers
Primary
Relationship Cash
Management,
Debt, Bonds
Primary
Relationship Treasury &
Financial
Markets
Relationship
Management
1. BNP
1. CBA
1. Deutsche
1. SGB
2. CBA
2. MBL
2. CBA
2. JPM
3. SGB
3. ABN
3. ABN
3. CBA
Source: East & Partners 2003 corporates with turnover greater than $240m
14
…and is equally encouraging amongst midcorporates…
Treasury
Relationship
Management
Loyalty to the
Relationship
Transaction Banking
Quality of
People
Account
Management
Loyalty to the
Relationship
Quality of
People
1.
SGB
1. CBA
1.
JPM
1. CBA
1. CBA
1. CBA
2.
JPM
2. BNP
2.
ABN
2. SGB
2. SGB
2. JPM
3.
CBA
3. SGB
3.
CBA
3. JPM
3. ANZ
3. SGB
Source: East & Partners 2003 mid-corporates with turnover $20m-$100m
15
…and business clients
Banking
Satisfaction with Main Financial Institution Relationship
Main Bank clients
CBA
ANZ
NAB
WBC
Very Dissatisfied
7%
5%
6%
5%
Fairly Dissatisfied
9%
8%
10%
9%
Neither Satisfied nor Dissatisfied
32%
24%
26%
28%
Fairly Satisfied
32%
34%
32%
33%
Very Satisfied
21%
29%
25%
25%
Source: Business Finance Monitor October 2002 to March 2003 - businesses with turnover up to $40 million
16
Our product market shares in the institutional
segment are competitive…
15%
Corporate Bonds
12.9%
11.5%
11.1%
10.5%
10.4%
Deutsche
UBSW
NAB
ABN
8.2%
7.4%
WBC
ANZ
8.8%
8.3%
8.1%
ANZ
Deutsche
NAB
10%
Transaction Banking Primary Relationship Market Share
5%
0%
100%
12.0%
11.2%
11.2%
10.8%
CBA
13.7%
Global Loans
80%
26.0%
20%
32.7%
35.3%
32.0%
29.4%
15.7%
13.0%
15%
12.1%
10%
60%
18.8%
16.2%
16.6%
16.1%
14.6%
5%
0%
40%
Barclays
26.8%
24.7%
23.2%
25.4%
25.4%
15%
20%
16.4%
15.2%
13.7%
15.7%
16.9%
0%
CBA
Deutsche
FX Overall
13.4%
12.4%
10%
5%
Nov 00
May 01
Nov 01
May 02
Nov 02
0%
CBA
CBA
ANZ
Interest Rate Derivatives
NAB
20%
WBC
Rest
WBC
16.4%
15%
12.0%
10.9%
10.7%
WBC
CBA
ANZ
10%
8.9%
5%
Source: INSTO 2002, Bloomberg 2003, Greenwich & Associates 2002/2003, East &
Partners 2003 turnover > $240m
0%
Deutsche
ABN 17
…and are similarly competitive in the corporate
segment…
Commercial Bills
30%
20%
Transaction Banking Primary Relationship Market Share
19%
19%
13%
10%
WBC
13% 12%
10%
12% 9%
NAB
CBA
ANZ
0%
100%
Jul 02
15.9%
80%
16.6%
17.0%
Term Loans
30%
18.3%
17.6%
17.2%
Jan 03
25%
27%
26% 25%
18%
20%
17%
16%
16%
CBA
NAB
60%
23.9%
24.9%
23.2%
10%
WBC
ANZ
0%
40%
Jul 02
19.6%
19.1%
19.9%
Jan 03
Interest Rate Swaps
30%
20%
22.3%
21.8%
22.7%
0%
21%
20%
20%
16%
15% 15% 13%
NAB
13% 11%
10%
Feb 02
Aug 02
Feb 03
CBA
ANZ
WBC
0%
Jul 02
Jan 03
FX Options
CBA
WBC
ANZ
other
NAB
20%
18%
16%
12% 12% 11%
13%
12%
11%
10%
NAB
CBA
ANZ
Source: East & Partners- mid-corporates with turnover $20m-$100m
WBC
0%
Jul 02
Jan 03
18
…and in the business segment
Borrowings
30%
25%
20%
15%
10%
24%
24%
19%
NAB
CBA
19%
13%
15%
16%
ANZ
14%
WBC
5%
0%
March 02
March 03
Source: Business Finance Monitor - Businesses with turnover up to $40m
19
Market share of aggregate lending balances
maintained
Business Lending Market Share
Market Share (%)
15.5%
15.0%
14.5%
14.0%
Mar-03
Jan-03
Nov-02
Sep-02
Jul-02
May-02
Mar-02
Jan-02
Nov-01
Sep-01
Jul-01
May-01
Mar-01
Jan-01
13.5%
CBA Rolling 12 Mth Mkt Share (%)
Source: RBA All Business Lending
20
Agenda
 Profile
 Strategy
 Performance
 Future
21
Issues going forward
Industry and regulatory issues

Uncertain outlook for business credit growth

Growth in pool of investable funds outstripping asset creation

Financial Services Reform Act

Implications of International Accounting Standards eg IAS39

Reform of credit card and debit card schemes
IBS Transformation

Product and process simplification

Sales Model framework
22
Strategy Briefing
Michael Ullmer
Institutional and Business Services
20 May 2003
Supplementary Slides
IBS is structured into client and product groups…
Manage Client relationships
Institutional
Banking
Corporate
Banking
Business
Banking
Capital and
risk
management
solutions for
Institutions
and
governments
in the
domestic and
international
market
Local
relationship
management
for corporate
clients in
Australia and
the top
institutional /
corporate
clients in New
Zealand
Integrated
financial
services for
small, medium
and rural
businesses
throughout
Australia
People
Risk Management
Design and manufacture product
Working
Capital
Services
Global
Markets
Financial
markets facing
activities
including debt
capital
markets,
foreign
exchange,
derivatives
money market,
and
commodities.
Products to
support
financial and
operational
working capital
needs, such
as transaction
banking,
merchant
acquiring and
asset
financing
Technology
Institutional
Banking
Product range
embracing the
full capital
structure from
senior debt to
mezzanine to
equity using
project
finance,
structured
finance, and
corporate
lending
Brand
25
…led by an experienced leadership team
Institutional Banking
Doug Dovey
Global Markets
Paul Riordan
Risk Management
Michael Hamar
• 5 years with CBA
• previously UBS Warburg
and Bankers Trust
• 8 years with CBA
• previously Bank of
America and UBS
• 1 year with CBA
• previously JP Morgan
Chase
Corporate Banking
Karen McGregor
Institutional & Business
Services
Michael Ullmer
Finance & Strategy
George Frazis
• 6 years with CBA
• previously Leighton
Holdings and HSBC
Business Banking
Eric Kinsella
• 33 years with CBA
• 6 years with CBA
• previously Coopers &
Lybrand and KPMG
Working Capital Services
Bruce Munro
• 32 years with CBA
• 1 year with CBA
• previously Boston
Consulting Group
Human Resources
Shelley Jones
• 5 years with CBA
• previously Sportsgirl
Sportscraft and SECV
26
Overall, our risk profile continues to remain sound
Top 20 exposures as a % of Total
Committed Exposure
Commercial Portfolio
100%
80%
60%
40%
36
39
40
4.0%
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
Dec
2000
15
20
15
14
19
17
Dec
2001
Dec
2002
Bad Debt Exposure/Risk Weighted
Assets (annualised)
PEER GROUP
CBA
0.60%
29
29
27
0%
% of RWA
0.50%
0.40%
0.30%
0.20%
0.10%
0.00%
Dec 01
Jun 02
Dec 02
Ju
nDe 9 4
c9
Ju 4
nDe 9 5
c9
Ju 5
nDe 9 6
c9
Ju 6
nDe 9 7
c9
Ju 7
nDe 9 8
c9
Ju 8
nDe 9 9
c9
Ju 9
nDe 0 0
c0
Ju 0
nDe 0 1
c0
Ju 1
nDe 0 2
c02
20%
Half Year
AAA/AA*
A
BBB
Other
27
Uncertain business credit growth and tightening
spreads
CREDIT
%
(3 month-ended annual rates)
Other
personal
30
%
CREDIT
%
%
(annual % change)
Housing
30
30
30
20
20
20
20
10
10
10
10
0
0
0
-10
-10
0


Business
-10
Jul-97 Jul-98 Jul-99 Jul-00
%
CBA INVESTMENT INDICATOR
(deviation from average)
BFI
(lhs)
20
Index
Index
(1997/98=100)
240
240
Average
approval
size
0.1
0
180
180
120
120
0.0
CBA
indicator
(adv 3mnths, rhs)
-10
-20
Jan-96
Sep-90 Sep-94 Sep-98 Sep-02
CBA BUSINESS APPROVALS
%
0.2
10
-10
Sep-82 Sep-86
Jul-01 Jul-02
-0.1
-0.2
Jan-98
Jan-00
Jan-02

Business credit remains
quite volatile on a month to
month basis.
Expectations of substantial
business investment and
resultant credit growth
have not materialised.
However, growth remains
in marginally positive
territory.
Lending rates are
flattening with the cash
rate, slightly up from recent
lows, putting further
pressure on margins.
60
Jan-97
60
Jan-99
Jan-01
Jan-03
28