Chairman’s Statement | 2 | |||
Chief Executive Officer’s Statement | 4 | |||
Highlights | 6 | |||
Banking Analysis | 10 | |||
Funds Management Analysis | 20 | |||
Insurance Analysis | 24 | |||
Shareholder Investment Returns | 27 | |||
Presentation of Financial Information | 28 | |||
Integrated Risk Management | 29 | |||
Description of Business Environment | 33 | |||
Corporate Governance | 36 | |||
Directors’ Report | 43 | |||
Five Year Financial Summary | 71 | |||
Financial Statements | 73 | |||
Income Statements | 74 | |||
Balance Sheets | 75 | |||
Statements of Recognised Income and Expense | 76 | |||
Statements of Cash Flows | 77 | |||
Notes to the Financial Statements | 79 | |||
Directors’ Declaration | 233 | |||
Independent Audit Report | 234 | |||
Shareholding Information | 236 | |||
International Representation | 239 | |||
Contact Us | 240 | |||
Corporate Directory | 241 |
• | Strong growth in banking income, underpinned by profitable growth across all major product lines; |
• | A substantial increase in Funds under Administration, to $152 billion, reflecting robust inflows and continued strength in investment markets; |
• | Increases in insurance premiums, operating margins and a favourable claims experience; |
• | Strong growth in earnings from ASB in the competitive New Zealand market; |
• | Sound expense management and continued productivity improvement; and |
• | Continued strength in credit quality across the portfolio. |
2 Commonwealth Bank of Australia Annual Report 2006
John Schubert
Chairman
23 August 2006
Commonwealth Bank of Australia Annual Report 2006 3
• | We have begun to embed our Sales and Service culture, which has been at the core of our subsidiary ASB’s success, and have appointed a senior ASB executive to lead the program which we have called “SUCCESS”; |
• | We are continuing to invest in our branches: |
— | We refurbished another 133 branches; | ||
— | We increased customer facing staff in the retail bank by 450 and have plans to replicate this in 2007; | ||
— | We are building new branches and are now opening 65 branches for business on Saturdays; and | ||
— | We have introduced new and improved products which we believe will make us more competitive. These include the new “Yellow” credit card, NetBank Saver and new pricing options for the streamline accounts. We also removed NetBank fees during the year. |
• | We have restructured the business to better align it with the needs of our business customers; |
• | We are increasing our business banking “footprint” increasing the number of business bankers, adding new business banking centres and putting business bankers back into selected branches; |
• | We have rolled out our CommSee for Business across the network which provides us with the information platform to support the selective growth of the “footprint”; |
• | We have built CommBiz, our new internet business banking offering, which we will begin rolling out to our customers shortly; and |
• | We have developed a new and improved portfolio of business banking products and simplified our business banking processes and approval procedures. |
• | In Technology we have a new team in place and we have reorganised our Enterprise IT function into a co-ordinated structure; |
• | We have taken the first steps to restructure our relationship with our IT providers with the execution of new Enterprise Processing Systems and telecommunications agreements which will deliver savings and improved service levels to the Bank; and |
• | We have introduced a more focussed approach to group wide procurement – building on the progress we have made over the last three years. |
4 Commonwealth Bank of Australia Annual Report 2006
• | Recent management changes have strengthened the Bank’s leadership team while building greater collaboration across the organisation and better aligning the organisation with the needs of our customers; |
• | We have increased our focus on our people with the introduction of a number of initiatives designed to enhance their wellbeing; and |
• | We have continued to support our community making significant commitments to a range of initiatives including financial literacy, environmental partnerships and one-off assistance for communities in need of help. |
Chief Executive Officer
23 August 2006
Commonwealth Bank of Australia Annual Report 2006 5
Full year | Half year | |||||||||||||||
Net Profit after | 30/06/06 | 30/06/05 | 30/06/06 | 31/12/05 | ||||||||||||
Income Tax | $M | $M | $M | $M | ||||||||||||
Statutory basis | 3,928 | 3,400 | 1,929 | 1,999 | ||||||||||||
Cash basis | 4,053 | 3,492 | 1,992 | 2,061 | ||||||||||||
Cash basis ex HK sale | 3,908 | 3,492 | 1,992 | 1,916 | ||||||||||||
• | Strong growth in banking income, following average interest earning asset growth of 12% to $275 billion and net interest margin contraction of seven basis points (after adjusting for the impact of AIFRS); |
• | Growth in Funds under Administration of 23% to $152 billion supported by both strong inflows and continued strength in investment markets; |
• | Solid growth in insurance premiums, operating margins and favourable claims experience; |
• | Continued strength in credit quality across the portfolio; and |
• | Underlying expense growth of 5% with continued productivity improvements. |
6 Commonwealth Bank of Australia Annual Report 2006
Full Year Ended | Half Year Ended | |||||||||||||||||||||||
30/06/06 | 30/06/05 | Jun 06 vs | 30/06/06 | 31/12/05 | Jun 06 vs | |||||||||||||||||||
Group Performance Summary | $M | $M | Jun 05 % | $M | $M | Dec 05 % | ||||||||||||||||||
Net interest income(1) | 6,514 | 6,026 | 8 | 3,259 | 3,255 | — | ||||||||||||||||||
Other banking income(1) | 3,036 | 2,845 | 7 | 1,591 | 1,445 | 10 | ||||||||||||||||||
Total Banking Income | 9,550 | 8,871 | 8 | 4,850 | 4,700 | 3 | ||||||||||||||||||
Funds management income | 1,543 | 1,247 | 24 | 828 | 715 | 16 | ||||||||||||||||||
Insurance income | 742 | 747 | (1 | ) | 356 | 386 | (8 | ) | ||||||||||||||||
Total Operating Income | 11,835 | 10,865 | 9 | 6,034 | 5,801 | 4 | ||||||||||||||||||
Shareholder investment returns | 101 | 237 | (57 | ) | 37 | 64 | (42 | ) | ||||||||||||||||
Profit on sale of the Hong Kong insurance business | 145 | — | — | — | 145 | — | ||||||||||||||||||
Total Income | 12,081 | 11,102 | 9 | 6,071 | 6,010 | 1 | ||||||||||||||||||
Operating expenses | 5,994 | 5,719 | (5 | ) | 3,027 | 2,967 | (2 | ) | ||||||||||||||||
Which new Bank | — | 150 | — | — | — | — | ||||||||||||||||||
Total Operating Expenses | 5,994 | 5,869 | (2 | ) | 3,027 | 2,967 | (2 | ) | ||||||||||||||||
Bad debts expense | 398 | 322 | (24 | ) | 210 | 188 | (12 | ) | ||||||||||||||||
Net profit before income tax | 5,689 | 4,911 | 16 | 2,834 | 2,855 | (1 | ) | |||||||||||||||||
Corporate tax expense(2) | 1,605 | 1,409 | (14 | ) | 829 | 776 | (7 | ) | ||||||||||||||||
Minority interests(3) | 31 | 10 | large | 13 | 18 | 28 | ||||||||||||||||||
NPAT (“cash basis”) | 4,053 | 3,492 | 16 | 1,992 | 2,061 | (3 | ) | |||||||||||||||||
Defined benefit superannuation plan expense | (25 | ) | (53 | ) | 53 | (6 | ) | (19 | ) | 68 | ||||||||||||||
Treasury shares | (100 | ) | (39 | ) | large | (57 | ) | (43 | ) | (33 | ) | |||||||||||||
NPAT (“statutory basis”) | 3,928 | 3,400 | 16 | 1,929 | 1,999 | (4 | ) | |||||||||||||||||
Represented by: | ||||||||||||||||||||||||
Banking | 3,277 | 2,913 | 11 | 1,638 | 1,589 | 3 | ||||||||||||||||||
Funds management | 400 | 351 | 14 | 217 | 183 | 19 | ||||||||||||||||||
Insurance | 215 | 156 | 38 | 112 | 103 | 9 | ||||||||||||||||||
NPAT (“underlying basis”) | 3,842 | 3,420 | 12 | 1,967 | 1,875 | 5 | ||||||||||||||||||
Shareholder investment returns | 66 | 177 | (63 | ) | 25 | 41 | (39 | ) | ||||||||||||||||
Which new Bank | — | (105 | ) | — | — | — | — | |||||||||||||||||
Cash NPAT ex Hong Kong Sale | 3,908 | 3,492 | 12 | 1,992 | 1,916 | 4 | ||||||||||||||||||
Profit on sale of Hong Kong insurance business | 145 | — | — | — | 145 | — | ||||||||||||||||||
NPAT (“cash basis”) | 4,053 | 3,492 | 16 | 1,992 | 2,061 | (3 | ) | |||||||||||||||||
(1) | Due to a change in accounting policy regarding classification of interest expense on certain non traded derivatives, a reclassification of $29 million between Net Interest Income and Other Banking Income has occurred in the half year ended 31 December 2005. There was no impact on total banking income or on profit. | |
(2) | For purposes of presentation, Policyholder tax benefit and Policyholder tax expense are shown on a net basis. | |
(3) | Minority interests includes preference dividends paid to holders of preference shares in ASB Capital. |
Full Year Ended | Half Year Ended | |||||||||||||||||||||||
30/06/06 | 30/06/05 | Jun 06 vs | 30/06/06 | 31/12/05 | Jun 06 vs | |||||||||||||||||||
Shareholder Summary | Jun 05 % | Dec 05% | ||||||||||||||||||||||
Dividend per share – fully franked (cents) | 224 | 197 | 14 | 130 | 94 | 38 | ||||||||||||||||||
Dividend cover – cash (times) | 1.4 | 1.3 | n/a | 1.2 | 1.7 | n/a | ||||||||||||||||||
Earnings per share (cents) (1) | ||||||||||||||||||||||||
Statutory – basic | 308.2 | 259.6 | 19 | 151.1 | 157.1 | (4 | ) | |||||||||||||||||
Cash basis – basic | 315.9 | 264.8 | 19 | 154.9 | 160.9 | (4 | ) | |||||||||||||||||
Cash basis – basic excluding the sale of Hong Kong | 304.6 | 264.8 | 15 | 154.9 | 149.5 | 4 | ||||||||||||||||||
Dividend payout ratiDec 05 %o (%) | ||||||||||||||||||||||||
Statutory | 73.3 | 77.0 | (370)bpts | 86.5 | 60.6 | large | ||||||||||||||||||
Cash basis | 71.0 | 74.9 | (390)bpts | 83.7 | 58.8 | large | ||||||||||||||||||
Weighted avg no. of shares – statutory basic (M) | 1,275 | 1,260 | 1 | 1,277 | 1,273 | — | ||||||||||||||||||
Weighted avg no. of shares – cash basic (M)(1) | 1,283 | 1,269 | 1 | 1,285 | 1,281 | — | ||||||||||||||||||
Return on equity – cash (%) | 21.3 | 18.8 | 250bpts | 20.8 | 21.7 | (90)bpts | ||||||||||||||||||
(1) | Fully diluted EPS and weighted average number of shares (fully diluted) are disclosed in Note 7 to Financial Statements. |
Credit Ratings | Long–term | Short–term | Affirmed | |||||||||
Fitch Ratings | AA | F1+ | Jun 06 | |||||||||
Moody’s Investor Services | Aa3 | P-1 | Jun 06 | |||||||||
Standards & Poor’s | AA- | A-1+ | Jun 06 | |||||||||
Commonwealth Bank of Australia Annual Report 2006 7
As at | ||||||||||||||||||||
30/06/06 | 31/12/05 | 30/06/05 | Jun 06 vs | Jun 06 vs | ||||||||||||||||
Balance Sheet Summary | $M | $M | $M | Dec 05 % | Jun 05 % | |||||||||||||||
Lending assets(1) | 266,096 | 254,947 | 235,862 | 4 | 13 | |||||||||||||||
Total assets | 369,103 | 351,193 | 337,404 | 5 | 9 | |||||||||||||||
Total liabilities | 347,760 | 331,343 | 314,761 | 5 | 10 | |||||||||||||||
Shareholders’ equity | 21,343 | 19,850 | 22,643 | 8 | (6 | ) | ||||||||||||||
Assets held and FUA | ||||||||||||||||||||
On balance sheet: | ||||||||||||||||||||
Banking assets | 340,254 | 321,477 | 304,620 | 6 | 12 | |||||||||||||||
Insurance funds under administration | 20,792 | 21,217 | 22,959 | (2 | ) | (9 | ) | |||||||||||||
Other insurance and internal funds management assets | 8,057 | 8,499 | 9,825 | (5 | ) | (18 | ) | |||||||||||||
369,103 | 351,193 | 337,404 | 5 | 9 | ||||||||||||||||
Off balance sheet: | ||||||||||||||||||||
Funds under administration | 130,721 | 115,757 | 100,105 | 13 | 31 | |||||||||||||||
499,824 | 466,950 | 437,509 | 7 | 14 | ||||||||||||||||
(1) | Lending assets comprise Loans, Advances, and Other Receivables (gross of provisions for impairment and excluding securitisation) and bank acceptances of customers. |
Full Year Ended | Half Year Ended | |||||||||||||||||||||||
30/06/06 | 30/06/05 | Jun 06 vs | 30/06/06 | 31/12/05 | Jun 06 vs | |||||||||||||||||||
Key Performance Indicators | Jun 05 % | Dec 05% | ||||||||||||||||||||||
Banking | ||||||||||||||||||||||||
Underlying NPAT ($M)(1) | 3,227 | 2,913 | 11 | 1,638 | 1,589 | 3 | ||||||||||||||||||
Net interest margin (%)(2) (3) | 2.34 | 2.43 | (9)bpts | 2.29 | 2.39 | (10)bpts | ||||||||||||||||||
Average interest earning assets ($M)(4) | 274,798 | 244,708 | 12 | 282,553 | 267,169 | 6 | ||||||||||||||||||
Average interest bearing liabilities ($M)(4) | 255,100 | 255,597 | 14 | 263,203 | 247,129 | 7 | ||||||||||||||||||
Expense to income (%) | 47.7 | 50.6 | 6 | 47.4 | 48.1 | 1 | ||||||||||||||||||
Funds Management | ||||||||||||||||||||||||
Underlying NPAT ($M)(1) | 400 | 351 | 14 | 217 | 183 | 19 | ||||||||||||||||||
Operating income to average funds under administration (%) | 1.12 | 1.08 | 4bpts | 1.14 | 1.10 | 4bpts | ||||||||||||||||||
Funds under administration – spot ($M) | 151,513 | 123,064 | 23 | 151,513 | 136,974 | 11 | ||||||||||||||||||
Expense to average FUA (%) | 0.71 | 0.72 | 1 | 0.72 | 0.70 | (3 | ) | |||||||||||||||||
Insurance | ||||||||||||||||||||||||
Underlying NPAT ($M)(1) | 215 | 156 | 38 | 112 | 103 | 9 | ||||||||||||||||||
Inforce premiums ($M) | 1,223 | 1,265 | (3 | ) | 1,223 | 1,216 | 1 | |||||||||||||||||
Expense to average inforce premium (%) | 36.7 | 45.5 | 19 | 33.6 | 40.5 | 17 | ||||||||||||||||||
Capital Adequacy | ||||||||||||||||||||||||
Tier 1 (%) | 7.56 | 7.46 | 10bpts | 7.56 | 7.54 | 2bpts | ||||||||||||||||||
Total (%) | 9.66 | 9.75 | (9)bpts | 9.66 | 9.81 | (15)bpts | ||||||||||||||||||
Adjusted Common Equity (%) | 4.50 | 4.91 | (41)bpts | 4.50 | 5.00 | (50)bpts | ||||||||||||||||||
(1) | Underlying NPAT excludes Which new Bank expenses and shareholder investment returns. | |
(2) | Net Interest Margin for the half year ended 31 December 2005 has been restated due to a change in accounting policy regarding classification of interest expense on certain non traded derivatives. | |
(3) | After adjusting for AIFRS the underlying variance is seven basis points (full year) and nine basis points (half year). Refer to Note 4 to the Financial Statement for the reconciliation of Net Interest Margin. | |
(4) | Average interest earning assets and average interest bearing liabilities have been adjusted to remove the impact of securitisation. Refer to Note 4 to the Financial Statements, Average Balance Sheet. |
Ex-Dividend Date | 14 August 2006 | |||
Record Date | 18 August 2006 | |||
Final Dividend Payment | 5 October 2006 | |||
Annual General Meeting | 3 November 2006 | |||
2007 Interim Results Announced | 14 February 2007 | |||
8 Commonwealth Bank of Australia Annual Report 2006
Cash EPS Performance 2003-2006 (cents)(1) | Underlying NPAT By Segment ($M)(1) | |
Banking Underlying Expense to Income | Lending Assets ($B) | |
Funds Under Administration ($B) | Annual Inforce Premiums – Australia & New Zealand ($M) | |
(1) | 2006 and 2005 presented on an AIFRS basis excluding the profit from sale of the Hong Kong insurance business. |
Commonwealth Bank of Australia Annual Report 2006 9
• | Continued strong volume growth in home loans, up 10% since June 2005 to $155 billion; |
• | Domestic deposit volume growth of 7% since June 2005 to $151 billion including 11% growth in savings accounts; |
• | Significant improvement in business lending volumes, up 20% since June 2005 to $76 billion; |
• | Net interest margin (after adjusting for AIFRS) decreased seven basis points over the year in a competitive market; |
• | Good expense control, with operating expenses increasing 4% compared with the prior year; and |
• | Credit quality of the overall portfolio remaining sound. |
• | Business Lending price pressure of four basis points due to competitive pricing and the full impact of large, lower margin institutional loans written in the first half of the year; |
• | Home Loan margin pressure of three basis points due to timing of the cash rate increase and strong price competition; and |
• | Funding mix, asset mix, deposit pricing and non lending interest earning assets contributed two basis points to the decline. |
10 Commonwealth Bank of Australia Annual Report 2006
Full Year Ended | Half Year Ended | |||||||||||||||||||||||
30/06/06 | 30/06/05 | Jun 06 vs | 30/06/06 | 31/12/05 | Jun 06 vs | |||||||||||||||||||
Key Performance Indicators | $M | $M | Jun 05 % | $M | $M | Dec 05 % | ||||||||||||||||||
Net interest income | 6,514 | 6,026 | 8 | 3,259 | 3,255 | — | ||||||||||||||||||
Other banking income | 3,036 | 2,845 | 7 | 1,591 | 1,445 | 10 | ||||||||||||||||||
Total banking income | 9,550 | 8,871 | 8 | 4,850 | 4,700 | 3 | ||||||||||||||||||
Operating expenses | 4,558 | 4,380 | (4 | ) | 2,298 | 2,260 | (2 | ) | ||||||||||||||||
Which new Bank | — | 112 | — | — | — | — | ||||||||||||||||||
Total operating expenses | 4,558 | 4,492 | (1 | ) | 2,298 | 2,260 | (2 | ) | ||||||||||||||||
Bad debts expense | 398 | 322 | (24 | ) | 210 | 188 | (12 | ) | ||||||||||||||||
Net profit before income tax | 4,594 | 4,057 | 13 | 2,342 | 2,252 | 4 | ||||||||||||||||||
Income tax expense | 1,339 | 1,220 | (10 | ) | 691 | 648 | (7 | ) | ||||||||||||||||
Minority interests | 28 | 3 | large | 13 | 15 | 13 | ||||||||||||||||||
NPAT (“cash basis”) | 3,227 | 2,834 | 14 | 1,638 | 1,589 | 3 | ||||||||||||||||||
NPAT(“underlying basis”)(1) | 3,227 | 2,913 | 11 | 1,638 | 1,589 | 3 | ||||||||||||||||||
(1) | Underlying basis excludes Which new Bank expenses. |
Productivity and other measures | ||||||||||||||||||||||||
Net interest margin (%)(1) | 2. 34 | 2.43 | (9)bpts | 2.29 | 2.39 | (10)bpts | ||||||||||||||||||
Expense to income (%) | 47. 7 | 50.6 | 6 | 47.4 | 48.1 | 1 | ||||||||||||||||||
Expense to income – underlying (%) | 47. 7 | 49.4 | 3 | 47.4 | 48.1 | 1 | ||||||||||||||||||
Effective corporate tax rate (%) | 29. 1 | 30.1 | (100)bpts | 29.5 | 28.8 | 70bpts | ||||||||||||||||||
(1) | After adjusting for AIFRS the underlying variance is seven basis points (full year) and nine basis points (half year). Refer to Note 4 to the Financial Statements for the reconciliation of Net Interest Margin. |
Total Banking NPAT (“Underlying Basis”) | ||||||||||||||||||||||||
Australian Retail Products | 1,794 | 1,589 | 13 | 900 | 894 | 1 | ||||||||||||||||||
Premium, Business & Corporate and Institutional Products | 1,038 | 1,009 | 3 | 537 | 501 | 7 | ||||||||||||||||||
Asia Pacific | 364 | 291 | 25 | 182 | 182 | — | ||||||||||||||||||
Other | 31 | 24 | 29 | 19 | 12 | 58 | ||||||||||||||||||
Total Banking NPAT (“Underlying Basis”) | 3,227 | 2,913 | 11 | 1,638 | 1,589 | 3 | ||||||||||||||||||
Full year | Half year | |||||||||||||||
30/06/06 | 30/06/05 | 30/06/06 | 31/12/05 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Commissions | 1,635 | 1,545 | 820 | 815 | ||||||||||||
Lending fees | 800 | 733 | 411 | 389 | ||||||||||||
Trading income | 505 | 440 | 261 | 244 | ||||||||||||
Other income | 175 | 127 | 138 | 37 | ||||||||||||
3,115 | 2,845 | 1,630 | 1,485 | |||||||||||||
Non trading derivatives | (79 | ) | — | (39 | ) | (40 | ) | |||||||||
Other banking income | 3,036 | 2,845 | 1,591 | 1,445 | ||||||||||||
• | Commissions: increased by 6% on the prior year to $1,635 million. The increase was mainly driven by volume increases including a 30% increase in CommSec trading volume; |
• | Lending fees: increased by 9% compared with the prior year to $800 million. After adjusting for AIFRS which required $25 million of net fee income to be deferred, lending fee growth was up 13% compared with the prior year. The result was driven by an increase in lending volumes in the business and corporate lending portfolios together with higher volumes in overdraft facilities; |
• | Trading income increased 15% on the prior year to $505 million reflecting favourable market conditions; and |
• | Other income increased $48 million on the prior year. The current year includes $32 million in relation to the Mastercard initial public offering. The prior year includes $52 million relating to tax consolidation legislation impacting the leasing business. Excluding these items, the increase was mainly due to structured transactions and leasing income. |
Other income in the second half increased by $101 million to $138 million. After adjusting for the impact of AIFRS and timing of asset sales, other income was flat. |
Commonwealth Bank of Australia Annual Report 2006 11
• | Average salary increases of 4% reflecting labour market movements and other inflation-related expense increases; |
• | Commencement of a number of projects supporting the strategic priorities of the Bank (including customer service and business banking initiatives) totalling $40 million; partly offset by |
• | Ongoing realisation of expense savings as a result of Which new Bank efficiency initiatives. |
• | A major portion of the credit portfolio is in home loans which have a lower risk weighting compared with other portfolios; |
• | The continuing strong asset quality in the business lending book; and |
• | A level of impaired assets which is at the lower end of levels achieved over the past decade. |
12 Commonwealth Bank of Australia Annual Report 2006
As at | ||||||||||||||||||||
30/06/06 | 31/12/05 | 30/06/05 | Jun 06 vs | Jun 06 vs | ||||||||||||||||
Total Banking Assets & Liabilities | $M | $M | $M | Dec 05 % | Jun 05 % | |||||||||||||||
Interest earning assets | ||||||||||||||||||||
Home loans including securitisation | 167,121 | 159,339 | 150,678 | 5 | 11 | |||||||||||||||
Less: securitisation | (12,607 | ) | (9,124 | ) | (10,818 | ) | 38 | 17 | ||||||||||||
Home loans | 154,514 | 150,215 | 139,859 | 3 | 10 | |||||||||||||||
Personal | 17,228 | 15,967 | 15,668 | 8 | 10 | |||||||||||||||
Business and corporate | 76,044 | 71,502 | 63,549 | 6 | 20 | |||||||||||||||
Loans, advances and other receivables(1) | 247,768 | 237,684 | 219,076 | 4 | 13 | |||||||||||||||
Non lending interest earning assets | 40,283 | 39,431 | 36,273 | 2 | 11 | |||||||||||||||
Total interest earning assets | 288,069 | 277,115 | 255,349 | 4 | 13 | |||||||||||||||
Other assets(2) | 52,185 | 44,362 | 49,271 | 18 | 6 | |||||||||||||||
Total assets | 340,254 | 321,477 | 304,620 | 6 | 12 | |||||||||||||||
Interest bearing liabilities | ||||||||||||||||||||
Transaction deposits | 37,079 | 34,287 | 34,694 | 8 | 7 | |||||||||||||||
Savings deposits | 41,421 | 40,030 | 38,461 | 3 | 8 | |||||||||||||||
Investment deposits | 67,364 | 67,462 | 66,087 | — | 2 | |||||||||||||||
Other demand deposits | 20,325 | 19,573 | 21,806 | 4 | (7 | ) | ||||||||||||||
Total interest bearing deposits | 166,189 | 161,352 | 161,048 | 3 | 3 | |||||||||||||||
Deposits not bearing interest | 7,037 | 7,371 | 6,978 | (5 | ) | 1 | ||||||||||||||
Deposits and other public borrowings | 173,226 | 168,723 | 168,026 | 3 | 3 | |||||||||||||||
Other interest bearing liabilities | 99,976 | 95,538 | 72,935 | 5 | 37 | |||||||||||||||
Total interest bearing liabilities | 266,165 | 256,890 | 233,983 | 4 | 14 | |||||||||||||||
Securitisation debt issues | 13,505 | 9,849 | 12,144 | 37 | 11 | |||||||||||||||
Non interest bearing liabilities | 44,515 | 40,316 | 41,422 | 10 | 7 | |||||||||||||||
Total liabilities | 324,185 | 307,055 | 287,549 | 6 | 13 | |||||||||||||||
Provisions for Impairment | ||||||||||||||||||||
Collective Provisions | 1,046 | 1,041 | 1,390 | — | (25 | ) | ||||||||||||||
Individually assessed provisions | 171 | 179 | 157 | (4 | ) | 9 | ||||||||||||||
Total provisions | 1,217 | 1,220 | 1,547 | — | (21 | ) | ||||||||||||||
General reserve for credit losses (pre-tax equivalent) | 500 | 404 | — | 24 | — | |||||||||||||||
Total provisions including general reserve for credit losses | 1,717 | 1,624 | 1,547 | 6 | 11 | |||||||||||||||
Full Year Ended | Half Year Ended | |||||||||||||||||||||||
30/06/06 | 30/06/05 | Jun 06 vs | 30/06/06 | 30/06/06 | Jun 06 vs | |||||||||||||||||||
Asset Quality(3) | $M | $M | Jun 05 % | $M | $M | Dec 05 % | ||||||||||||||||||
Risk weighted assets ($M)(4) | 216,438 | 189,559 | 14 | 216,438 | 202,667 | 7 | ||||||||||||||||||
Net impaired assets ($M) | 155 | 219 | (29 | ) | 155 | 217 | (29 | ) | ||||||||||||||||
General provisions as a % of risk weighted assets | — | 0. 73 | — | — | — | — | ||||||||||||||||||
Collective provisions plus general reserve for credit losses (pre-tax equivalent)/risk weighted assets (%) | 0.71 | — | — | 0. 71 | 0. 71 | — | ||||||||||||||||||
Specific provisions for impairment as a % of gross impairment assets net of interest reserved (%) | — | 41. 8 | — | — | — | — | ||||||||||||||||||
Individually assessed provisions for impairment as a % of gross impaired assets net of interest reserved | 52.5 | — | — | 52. 5 | 45. 2 | 16 | ||||||||||||||||||
Bad debt expense as a % of risk weighted assets annualised (%) | 0.18 | 0. 17 | 1bpt | 0. 19 | 0. 19 | — | ||||||||||||||||||
(1) | Gross of provisions for impairment which are included in Other Assets. | |
(2) | Other assets include Bank acceptances of customers, provision for impairment and securitisation assets. | |
(3) | Asset quality coverage ratios are not comparable to prior periods due to AIFRS. | |
(4) | No AIFRS adjustment is made to Risk Weighted Assets in the prior periods as the APRA prudential requirement is to apply previous Australian GAAP (‘AGAAP’). |
Commonwealth Bank of Australia Annual Report 2006 13
• | The rollout of CommSee, the Bank’s state-of-the-art customer management system, across our 1,000 strong branch network and seven call centres; |
• | The implementation of CommServe, a training program designed to ensure our people are able to obtain maximum value from CommSee in improving Sales and Service outcomes. Over 14,000 staff undertook CommServe training during the 2006 financial year; |
• | The refurbishment of a further 133 branches, taking to 384 the number of branches refurbished over the past three years into a design/layout more conducive to effective sales and service; |
• | An additional 450 frontline customer service staff; |
• | Improved access to Australia’s largest electronic banking and branch network through two new Streamline products with flat monthly fees, and the removal of transaction fees from NetBank; |
• | The introduction of a low interest rate credit card (“Yellow”) to meet growing customer demand in this segment of the market; and |
• | The pilot of a new customer service model which enables our frontline staff to spend more time on customer service and empowers our branch managers to make decisions about their business best suited to local conditions. |
Market Share Percentage | 30/06/06 | 31/12/05 | 30/06/05 | |||||||||
Home Loans(1) | 18.8 | 18.8 | 19.0 | |||||||||
Credit Cards(1) (2) | 20.5 | 21.4 | 22.8 | |||||||||
Personal lending (APRA and other households)(3) | 16.1 | 16.0 | 16.7 | |||||||||
Household Deposits | 29.3 | 29.6 | 29.8 | |||||||||
Retail deposits | 22.2 | 22.9 | 23.0 | |||||||||
(1) | Comparatives have been restated due to a reclassification between home loans and personal loans by another ADI. | |
(2) | As at 31 May 2006. | |
(3) | Personal lending market share includes personal loans and margin loans. |
14 Commonwealth Bank of Australia Annual Report 2006
Australian Retail | Full Year to June 2006 | |||||||||||||||||||||||
Net | Other | Total | Underlying | |||||||||||||||||||||
Interest | Banking | Banking | Expenses | Bad Debts | Profit after | |||||||||||||||||||
Income $M | Income $M | Income $M | $M | $M | Tax $M | |||||||||||||||||||
Home loans | 1,239 | 151 | 1,390 | |||||||||||||||||||||
Consumer finance | 727 | 368 | 1,095 | |||||||||||||||||||||
Retail deposits | 1,953 | 700 | 2,653 | |||||||||||||||||||||
Australian Retail products | 3,919 | 1,219 | 5,138 | 2,240 | 354 | 1,794 | ||||||||||||||||||
Full Year to June 2005 | ||||||||||||||||
Total | Underlying | |||||||||||||||
Banking | Expenses | Bad Debts | Profit after | |||||||||||||
Income $M | $M | $M | Tax $M | |||||||||||||
Home loans | 1,194 | |||||||||||||||
Consumer finance | 985 | |||||||||||||||
Retail deposits | 2,514 | |||||||||||||||
Australian Retail products | 4,693 | 2,168 | 266 | 1,589 | ||||||||||||
Half Year to June 2006 | ||||||||||||||||||||||||
Net | Other | Total | Underlying | |||||||||||||||||||||
Interest | Banking | Banking | Expenses | Bad Debts | Profit after | |||||||||||||||||||
Income $M | Income $M | Income $M | $M | $M | Tax $M | |||||||||||||||||||
Home loans | 615 | 74 | 689 | |||||||||||||||||||||
Consumer finance | 363 | 195 | 558 | |||||||||||||||||||||
Retail deposits | 978 | 351 | 1,329 | |||||||||||||||||||||
Australian Retail products | 1,956 | 620 | 2,576 | 1,108 | 198 | 900 | ||||||||||||||||||
As At | ||||||||||||||||||||
30/06/06 | 31/12/05 | 30/06/05 | Jun 06 vs | Jun 06 vs | ||||||||||||||||
Major Balance Sheet Items (gross of impairment) | $M | $M | $M | Dec 05 % | Jun 05 % | |||||||||||||||
Home loans (incl securitisation) | 144,834 | 135,990 | 129,913 | 7 | 11 | |||||||||||||||
Consumer finance(1) | 10,640 | 10,507 | 10,720 | 1 | (1 | ) | ||||||||||||||
Total assets – Australian Retail products | 155,474 | 146,497 | 140,633 | 6 | 11 | |||||||||||||||
Home loans (net of securitisation) | 132,227 | 126,866 | 119,094 | 4 | 11 | |||||||||||||||
Transaction deposits | 16,993 | 17,077 | 16,382 | — | 4 | |||||||||||||||
Savings deposits | 38,071 | 36,306 | 34,061 | 5 | 12 | |||||||||||||||
Other demand deposits | 19,818 | 19,977 | 19,197 | (1 | ) | 3 | ||||||||||||||
Deposits not bearing interest | 2,362 | 2,478 | 2,172 | (5 | ) | 9 | ||||||||||||||
Total liabilities – Australia Retail products | 77,244 | 75,838 | 71,812 | 2 | 8 | |||||||||||||||
(1) | Retail Consumer Finance includes personal loans and credit cards. |
Australian Home Loan Approvals by State(1) (2) | Australian Home Loan Balances by State(2) | |
(1) | As at 31 May 2006. | |
(2) | Half year averages. |
Commonwealth Bank of Australia Annual Report 2006 15
• | Institutional Banking customers gave the Bank a strong rating in the latest East & Partners customer satisfaction survey. Of the major banks, CBA retained number one status as principal and secondary transaction bank of the Top 500 corporates and the highest average rating in all key relationship management categories; |
• | Development of dedicated mobile lenders, strong servicing for third party brokers, the introduction of a dedicated acquisition sales force for corporate clients and foreign exchange sales force; |
• | Recent establishment of five distribution teams being Institutional Banking, Corporate Financial Services, Agribusiness, Local Business Banking and Private Client Services which all provide greater focus on each of these segments as the Bank expands its business banking footprint; |
• | The introduction of the Business Online Saver high yield investment account, the Commonwealth Portfolio Loan product and the Business Line of Credit, all of which have reached $1 billion in balances; |
• | CommSec has achieved record trading volumes and substantial margin lending balance growth during the year. On 30 June 2006, CommSec executed 47,406 trades to the value of $683 million in turnover. This set an Australian broking industry record for the highest number of trades and turnover by a broker in a single day; |
• | Successful implementation of the CommSee customer management system across the business providing Bank employees with a common IT platform and access to common client information; and |
• | Further extended specialised client service teams that are now capable of supporting all business clients centrally for most servicing activities. |
Market Share Percentage | 30/06/06 | 31/12/05 | 30/06/05 | |||||||||
Business Lending | 13.1 | 13.5 | 13.2 | |||||||||
Asset finance | 14.5 | 15.1 | 15.4 | |||||||||
Equities trading (CommSec) | 4.3 | 4.3 | 3.6 | |||||||||
16 Commonwealth Bank of Australia Annual Report 2006
Premium, Business & Corporate and | ||||||||||||||||||||||||
Institutional | Full Year to June 2006 | |||||||||||||||||||||||
Net | Other | Total | Underlying | |||||||||||||||||||||
Interest | Banking | Banking | Expenses | Bad Debts | Profit after | |||||||||||||||||||
Income $M | Income $M | Income $M | $M | $M | Tax $M | |||||||||||||||||||
Corporate Banking | 558 | 394 | 952 | |||||||||||||||||||||
Financial Markets | 287 | 642 | 929 | |||||||||||||||||||||
Lending and Finance | 751 | 441 | 1,192 | |||||||||||||||||||||
Premium, Business & Corporate and Institutional products | 1,596 | 1,477 | 3,073 | 1,570 | 68 | 1,038 | ||||||||||||||||||
Full Year to June 2005 | ||||||||||||||||
Total | Underlying | |||||||||||||||
Banking | Expenses | Bad Debts | Profit after | |||||||||||||
Income $M | $M | $M | Tax $M | |||||||||||||
Corporate Banking | 945 | |||||||||||||||
Financial Markets | 814 | |||||||||||||||
Lending and Finance | 1,204 | |||||||||||||||
Premium, Business & Corporate and Institutional products | 2,963 | 1,536 | 39 | 1,009 | ||||||||||||
Half Year to June 2006 | ||||||||||||||||||||||||
Net | Other | Total | Underlying | |||||||||||||||||||||
Interest | Banking | Banking | Expenses | Bad Debts | Profit after | |||||||||||||||||||
Income $M | Income $M | Income $M | $M | $M | Tax $M | |||||||||||||||||||
Corporate Banking | 282 | 184 | 466 | |||||||||||||||||||||
Financial Markets | 144 | 331 | 475 | |||||||||||||||||||||
Lending and Finance | 382 | 249 | 631 | |||||||||||||||||||||
Premium, Business & Corporate and Institutional products | 808 | 764 | 1,572 | 791 | 31 | 537 | ||||||||||||||||||
As At | ||||||||||||||||||||
30/06/06 | 31/12/05 | 30/06/05 | Jun 06 vs | Jun 06 vs | ||||||||||||||||
Major Balance Sheet Items (gross of impairment) | $M | $M | $M | Dec 05 % | Jun 05 % | |||||||||||||||
Interest earning lending assets | 66,343 | 60,949 | 51,584 | 9 | 29 | |||||||||||||||
Bank acceptances of customers | 18,310 | 17,263 | 16,786 | 6 | 9 | |||||||||||||||
Non lending interest earning assets | 35,471 | 35,320 | 33,993 | — | 4 | |||||||||||||||
Margin loans | 5,758 | 4,664 | 4,311 | 23 | 34 | |||||||||||||||
Other assets(1) | 19,947 | 15,711 | 19,773 | 27 | 1 | |||||||||||||||
Total assets – Premium, Business & Corporate and Institutional products(2) | 145,829 | 133,907 | 126,447 | 9 | 15 | |||||||||||||||
Transaction deposits | 16,426 | 14,155 | 14,457 | 16 | 14 | |||||||||||||||
Other demand deposits | 37,821 | 37,074 | 34,601 | 2 | 9 | |||||||||||||||
Deposits not bearing interest | 3,520 | 3,675 | 3,651 | (4 | ) | (4 | ) | |||||||||||||
Certificates of deposits and other | 20,178 | 19,243 | 16,367 | 5 | 23 | |||||||||||||||
Dues to other financial institutions | 11,333 | 9,852 | 7,964 | 15 | 42 | |||||||||||||||
Liabilities at fair value through the Income Statement | 2,085 | 2,630 | 1,580 | (21 | ) | 32 | ||||||||||||||
Debt issues | 77,848 | 69,854 | 65,463 | 11 | 19 | |||||||||||||||
Loan capital | 9,744 | 9,129 | 8,356 | 7 | 17 | |||||||||||||||
Other non interest bearing Liabilities | 36,703 | 31,628 | 32,927 | 16 | 11 | |||||||||||||||
Total liabilities – Business, Corporate and Institutional products Australia(2) | 215,658 | 197,240 | 185,366 | 9 | 16 | |||||||||||||||
Banking Sheet by Product Segment | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Corporate Banking | 3,546 | 2,982 | 3,299 | 19 | 7 | |||||||||||||||
Financial Markets | 36,228 | 29,680 | 34,104 | 22 | 6 | |||||||||||||||
Lending and Finance | 101,601 | 94,671 | 85,935 | 7 | 18 | |||||||||||||||
Other(2) | 4,454 | 6,574 | 3,109 | (32 | ) | 43 | ||||||||||||||
Total assets – Premium, Business & Corporate and Institutional products | 145,829 | 133,907 | 126,447 | 9 | 15 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Corporate Banking | 20,799 | 18,592 | 18,659 | 12 | 11 | |||||||||||||||
Financial Markets | 71,594 | 70,098 | 67,398 | 2 | 6 | |||||||||||||||
Lending and Finance | 27,303 | 25,145 | 21,658 | 9 | 26 | |||||||||||||||
Other(2) | 95,962 | 83,405 | 77,651 | 15 | 24 | |||||||||||||||
Total liabilities – Business, Corporate and Institutional products Australia | 215,658 | 197,240 | 185,366 | 9 | 16 | |||||||||||||||
(1) | Other assets include intangible assets and derivative assets. (2) Includes Group Funding, Balance Sheet Management and other capital not directly attributed to the product based segments above. |
Commonwealth Bank of Australia Annual Report 2006 17
• | Continued growth in home lending volumes above market growth rates. This is the 15th year of market share growth in this segment; |
• | Strong growth in commercial/business and rural lending; |
• | Success of the Fastsaver deposit product introduced in November 2004 with balances growing by more than 75% by the end of the year; |
• | Net interest margin pressure over the year in a very competitive environment. Most of this pressure was evidenced in the first half with net interest margin flat in the second half; |
• | Continued productivity improvements with expense to income ratio of 43.1% for the year; and |
• | Sound credit quality. |
• | For the fourth consecutive year, ASB Bank was recognised as New Zealand’s “Bank of the Year” by the UK based Banker Magazine; and |
• | ASB Bank continued its leading position in Personal and Business Banking customer satisfaction among the major banks. |
• | Purchase of the remaining 49% of the Colonial National Bank in Fiji from the Fiji Government in January 2006. Fiji loans and advances increased by 34% during 2006 to $484 million although liquidity and interest rate volatility issues in the Fiji economy resulted in a more subdued performance in the second half of the year; |
• | Acquisition of a 19.9% interest in Hangzhou City Commercial Bank (HZB) for $102 million. HZB is one of the top five City Commercial Banks by assets in mainland China. When combined with our investment in Jinan City Commercial Bank, the Bank now holds interests in two of the top 10 City Commercial Banks in China; |
• | Finalisation of the first stage of the Capability Transfer Program with Jinan City Commercial Bank; |
• | Development of a mortgage broking business in Shanghai; and |
• | Continuation of the branch expansion program in PT Bank Commonwealth in Indonesia with six new branches added during the year. |
Market Share Percentage | 30/06/06 | 31/12/05 | 30/06/05 | |||||||||
NZ lending for housing | 23.1 | 23.2 | 23.0 | |||||||||
NZ retail deposits | 20.3 | 19.9 | 19.5 | |||||||||
18 Commonwealth Bank of Australia Annual Report 2006
Full Year to June 2006 | ||||||||||||||||||||||||
Net | Other | Total | Underlying | |||||||||||||||||||||
Interest | Banking | Banking | Expenses | Bad Debts | Profit after | |||||||||||||||||||
Income $M | Income $M | Income $M | $M | $M | Tax $M | |||||||||||||||||||
ASB | 680 | 291 | 971 | |||||||||||||||||||||
Other | 43 | 52 | 95 | |||||||||||||||||||||
Asia Pacific | 723 | 343 | 1,066 | 521 | 20 | 364 | ||||||||||||||||||
Full Year to June 2005 | ||||||||||||||||
Total | Underlying | |||||||||||||||
Banking | Expenses | Bad Debts | Profit after | |||||||||||||
Income $M | $M | $M | Tax $M | |||||||||||||
ASB | 878 | |||||||||||||||
Other | 39 | |||||||||||||||
Asia Pacific | 917 | 490 | 18 | 291 | ||||||||||||
Half Year to June 2006 | ||||||||||||||||||||||||
Net | Other | Total | Underlying | |||||||||||||||||||||
Interest | Banking | Banking | Expenses | Bad Debts | Profit after | |||||||||||||||||||
Income $M | Income $M | Income $M | $M | $M | Tax $M | |||||||||||||||||||
ASB | 338 | 138 | 476 | |||||||||||||||||||||
Other | 23 | 38 | 61 | |||||||||||||||||||||
Total Banking Income – Asia Pacific | 361 | 176 | 537 | 261 | 8 | 182 | ||||||||||||||||||
As At | ||||||||||||||||||||
Major Balance Sheet Items | 30/06/06 | 31/12/05 | 30/06/05 | Jun 06 vs | Jun 06 vs | |||||||||||||||
(gross of impairment)(1) | $M | $M | $M | Dec 05 % | Jun 05 % | |||||||||||||||
Home lending | 22,287 | 23,349 | 20,765 | (5 | ) | 7 | ||||||||||||||
Other lending assets | 10,531 | 11,157 | 12,132 | (6 | ) | (13 | ) | |||||||||||||
Non lending interest earning assets | 4,812 | 5,523 | 3,664 | (13 | ) | 31 | ||||||||||||||
Other assets | 1,321 | 1,044 | 979 | 27 | 35 | |||||||||||||||
Total Assets – Asia Pacific | 38,951 | 41,073 | 37,540 | (5 | ) | 4 | ||||||||||||||
Debt Issues | 744 | 182 | 6,939 | large | (89 | ) | ||||||||||||||
Deposits(2) | 18,040 | 19,256 | 23,006 | (6 | ) | (22 | ) | |||||||||||||
Liabilities at fair value through the Income Statement | 11,727 | 13,691 | — | (14 | ) | — | ||||||||||||||
Other Liabilities | 772 | 848 | 426 | (9 | ) | 81 | ||||||||||||||
Total Liabilities – Asia Pacific | 31,283 | 33,977 | 30,371 | (8 | ) | 3 | ||||||||||||||
Balance Sheet by Segment | ||||||||||||||||||||
Assets | ||||||||||||||||||||
ASB | 36,724 | 38,981 | 35,593 | (6 | ) | 3 | ||||||||||||||
Other | 2,227 | 2,092 | 1,947 | 6 | 14 | |||||||||||||||
Total Assets – Asia Pacific | 38,951 | 41,073 | 37,540 | (5 | ) | 4 | ||||||||||||||
Liabilities | ||||||||||||||||||||
ASB | 29,306 | 31,933 | 29,658 | (8 | ) | (1 | ) | |||||||||||||
Other | 1,977 | 2,044 | 713 | (3 | ) | large | ||||||||||||||
Total Liabilities – Asia Pacific | 31,283 | 33,977 | 30,371 | (8 | ) | 3 | ||||||||||||||
(1) | 30 June 2006 balance sheet impacted by deterioration of the NZD (11% over the full year). | |
(2) | Asia Pacific Deposits exclude deposits held in other overseas countries (30 June 2006: A$4 billion and 31 December 2005: A$4 billion and 30 June 2005: A$4 billion). |
Commonwealth Bank of Australia Annual Report 2006 19
• | Continued platform enhancements and new product offerings including the development of a self managed super offering “YourChoice”, to capitalise on this rapidly growing sector of the market; |
• | Strategic alliance formed between Avanteos and Goldman Sachs JB Were, which has contributed $5 billion of additional net funds flow; |
• | A funds management joint venture has been established to operate within China, with approval being received from the China Securities Regulatory Commission; |
• | Further improvement in Bank planner performance, with a 16% increase in productivity for the year; |
• | Acquisition of the Gandel Group’s interests in the Colonial First State Property Retail Trust Limited and Gandel Retail Management Trust Ltd, which provides funds management and property management services to a number of Colonial First State Retail Property trusts; |
• | The continued rationalisation of legacy systems and products; and |
• | Strengthening of the control and operating environment, particularly around unit pricing of investment style products within the life insurance entities. |
• | The acquisition of Gandel’s Joint Venture interest which increased expenses $28 million in the current year; and |
• | Expenses in relation to the Unit Pricing control and process improvement program, totalling $55 million. This is expected to incur additional expenses of $20-30 million in the next 12 months. |
20 Commonwealth Bank of Australia Annual Report 2006
Full Year Ended | Half Year Ended | |||||||||||||||||||||||
30/06/06 | 30/06/05 | Jun 06 vs | 30/06/06 | 31/12/05 | Jun 06 vs | |||||||||||||||||||
Key Performance Indicators | $M | $M | Jun 05 % | $M | $M | Dec 05 % | ||||||||||||||||||
Operating income – external | 1,543 | 1,247 | 24 | 828 | 715 | 16 | ||||||||||||||||||
Operating income – internal | 9 | 10 | (10 | ) | 4 | 5 | (20 | ) | ||||||||||||||||
Total operating income | 1,552 | 1,257 | 23 | 832 | 720 | 16 | ||||||||||||||||||
Shareholder investment returns | 14 | 33 | (58 | ) | 7 | 7 | — | |||||||||||||||||
Funds management income | 1,566 | 1,290 | 21 | 839 | 727 | 15 | ||||||||||||||||||
Volume expense | 224 | 156 | (44 | ) | 125 | 99 | (26 | ) | ||||||||||||||||
Operating expenses | 765 | 642 | (19 | ) | 405 | 360 | (13 | ) | ||||||||||||||||
Which new Bank | — | 36 | — | — | — | — | ||||||||||||||||||
Total operating expenses | 989 | 834 | (19 | ) | 530 | 459 | (15 | ) | ||||||||||||||||
Net profit before income tax (“cash basis”) | 577 | 456 | 27 | 309 | 268 | 15 | ||||||||||||||||||
Net profit before income tax (“underlying basis”)(1) | 563 | 459 | 23 | 302 | 261 | 16 | ||||||||||||||||||
Corporate tax expense(2) | 164 | 100 | (64 | ) | 87 | 77 | (13 | ) | ||||||||||||||||
Minority interests | 3 | 7 | (57 | ) | — | 3 | — | |||||||||||||||||
Net profit after income tax (“cash basis”) | 410 | 349 | 17 | 222 | 188 | 18 | ||||||||||||||||||
Net profit after income tax (underlying basis)(1) | 400 | 351 | 14 | 217 | 183 | 19 | ||||||||||||||||||
(1) | Underlying basis excludes shareholder investment returns and Which new Bank expenses. | |
(2) | For purpose of presentation, Policyholder tax benefit and Policyholder tax expense are shown on a net basis (2006: $193 million). |
Funds under administration – average | 139,082 | 116,262 | 20 | 147,684 | 130,179 | 13 | ||||||||||||||||||
Funds under administration – spot | 151,513 | 123,064 | 23 | 151,513 | 136,974 | 11 | ||||||||||||||||||
Net flows | 10,830 | 456 | large | 8,135 | 2,695 | large | ||||||||||||||||||
Total retail net flows | 8,235 | 2,190 | large | 6,870 | 1,365 | large | ||||||||||||||||||
Operating income to average funds under administration (%) | 1.12 | 1.08 | 4bpts | 1.14 | 1.10 | 4bpts | ||||||||||||||||||
Operating expenses to average funds under administration (%) | 0.71 | 0.72 | 1 | 0.72 | 0.70 | (3 | ) | |||||||||||||||||
Effective corporate tax rate (%) | 28.4 | 21.9 | large | 28.2 | 28.7 | (50)bpts | ||||||||||||||||||
• | Continuation of market leading flows into FirstChoice capturing in excess of 25%(1) of the market net flows. FirstChoice has now exceeded $25 billion in funds under administration in less than four years; |
• | Significant inflows associated with the Goldman Sachs JB Were strategic alliance of $5 billion; |
• | Reduced net outflows on Australian equity funds due partly to improved investment performance; |
• | A turnaround in net flows into wholesale products, which achieved positive net flows of $1.3 billion for the year; |
• | Good flows into higher margin equity products and mandates in the International business; |
• | Net outflows from the cash management product due to competition from attractively priced retail deposit products; |
• | Property net outflows following the planned sell-down of assets within a closed end fund; and |
• | Net outflows in other retail products which include closed legacy products, which is consistent with prior periods. |
(1) | Nine months to March 2006 (source: Plan for Life). |
Market Share Percentage(2) | 30/06/06 | 31/12/05 | 30/06/05 | |||||||||
Australian retail – administrator view | 15.7 | 14.6 | 14.5 | |||||||||
New Zealand retail | 15.0 | 15.0 | 15.2 | |||||||||
Platforms (Masterfunds) | 12.5 | 10.8 | 10.2 | |||||||||
(2) | 2006 figures are as at 31 March.. |
2006 FirstChoice — Fund Manager Destination | 2006 FirstChoice — Sources of Funds | |
Full Year Ended 30 June 2006 | ||||||||||||||||||||||||
Opening | FX(3)& | Closing | ||||||||||||||||||||||
Balance | Investment | Other | Balance | |||||||||||||||||||||
30/06/05 | Inflows | Outflows | Income | Movements(4) | 30/06/06 | |||||||||||||||||||
Funds under Administration | $M | $M | $M | $M | $M | $M | ||||||||||||||||||
FirstChoice & Avanteos | 19,069 | 19,219 | (5,886 | ) | 3,190 | (217 | ) | 35,375 | ||||||||||||||||
Cash management | 4,182 | 2,417 | (3,061 | ) | 152 | — | 3,690 | |||||||||||||||||
Other retail(1) | 36,069 | 3,450 | (7,904 | ) | 4,353 | (413 | ) | 35,555 | ||||||||||||||||
Australian retail | 59,320 | 25,086 | (16,851 | ) | 7,695 | (630 | ) | 74,620 | ||||||||||||||||
Wholesale | 24,894 | 13,099 | (11,810 | ) | 3,682 | (50 | ) | 29,185 | ||||||||||||||||
Property | 13,456 | 1,074 | (2,144 | ) | 1,520 | 3 | 13,909 | |||||||||||||||||
Other(2) | 2,886 | 192 | (481 | ) | 454 | 657 | 3,708 | |||||||||||||||||
Domestically sourced | 100,556 | 39,451 | (31,286 | ) | 13,351 | (20 | ) | 122,052 | ||||||||||||||||
Internationally sourced | 22,508 | 12,097 | (9,432 | ) | 3,835 | 453 | 29,461 | |||||||||||||||||
Total – Funds under Administration | 123,064 | 51,548 | (40,718 | ) | 17,186 | 433 | 151,513 | |||||||||||||||||
Full Year Ended 30 June 2005 | ||||||||||||||||||||||||
Opening | FX(3)& | Closing | ||||||||||||||||||||||
Balance | Investment | Other | Balance | |||||||||||||||||||||
30/06/04 | Inflows | Outflows | Income | Movements(4) | 30/06/05 | |||||||||||||||||||
Funds under Administration | $M | $M | $M | $M | $M | $M | ||||||||||||||||||
FirstChoice & Avanteos | 12,075 | 10,377 | (4,265 | ) | 1,153 | (271 | ) | 19,069 | ||||||||||||||||
Cash management | 4,414 | 2,961 | (3,425 | ) | 232 | — | 4,182 | |||||||||||||||||
Other retail | 34,705 | 4,417 | (7,875 | ) | 3,951 | 871 | 36,069 | |||||||||||||||||
Australian retail | 51,194 | 17,755 | (15,565 | ) | 5,336 | 600 | 59,320 | |||||||||||||||||
Wholesale | 23,955 | 10,841 | (13,350 | ) | 3,177 | 271 | 24,894 | |||||||||||||||||
Property | 12,624 | 1,207 | (1,172 | ) | 1,668 | (871 | ) | 13,456 | ||||||||||||||||
Other | 3,033 | 248 | (786 | ) | 391 | — | 2,886 | |||||||||||||||||
Domestically sourced | 90,806 | 30,051 | (30,873 | ) | 10,572 | — | 100,556 | |||||||||||||||||
Internationally sourced | 19,077 | 9,209 | (7,931 | ) | 2,453 | (300 | ) | 22,508 | ||||||||||||||||
Total – Funds under Administration | 109,883 | 39,260 | (38,804 | ) | 13,025 | (300 | ) | 123,064 | ||||||||||||||||
Half Year Ended 30 June 2006 | ||||||||||||||||||||||||
Opening | FX(3)& | Closing | ||||||||||||||||||||||
Balance | Investment | Other | Balance | |||||||||||||||||||||
31/12/05 | Inflows | Outflows | Income | Movements(4) | 30/06/06 | |||||||||||||||||||
Funds under Administration | $M | $M | $M | $M | $M | $M | ||||||||||||||||||
FirstChoice & Avanteos | 24,770 | 12,655 | (3,258 | ) | 1,425 | (217 | ) | 35,375 | ||||||||||||||||
Cash management | 3,966 | 1,159 | (1,548 | ) | 113 | — | 3,690 | |||||||||||||||||
Other retail | 36,647 | 1,799 | (3,937 | ) | 1,459 | (413 | ) | 35,555 | ||||||||||||||||
Australian retail | 65,383 | 15,613 | (8,743 | ) | 2,997 | (630 | ) | 74,620 | ||||||||||||||||
Wholesale | 28,012 | 6,001 | (5,901 | ) | 1,753 | (50 | ) | 29,815 | ||||||||||||||||
Property | 13,750 | 304 | (1,008 | ) | 859 | 4 | 13,909 | |||||||||||||||||
Other | 3,349 | 95 | (308 | ) | (85 | ) | 657 | 3,708 | ||||||||||||||||
Domestically sourced | 110,494 | 22,013 | (15,960 | ) | 5,524 | (19 | ) | 122,052 | ||||||||||||||||
Internationally sourced | 26,480 | 6,633 | (4,551 | ) | 805 | 94 | 29,461 | |||||||||||||||||
Total – Funds under Administration | 136,974 | 28,646 | (20,511 | ) | 6,329 | 75 | 151,513 | |||||||||||||||||
(1) | Includes stand alone retail and legacy retail products. | |
(2) | Includes life company assets sourced from retail investors but not attributable to a funds management product (e.g. premiums from risk products). These amounts do not appear in retail market share data. | |
(3) | Includes foreign exchange gains and losses from translation of internationally sourced business. | |
(4) | Other movements represent the re-alignment of funds to correctly classify source of funds. |
• | Solid inforce premium and operating margin growth in Australia and New Zealand; |
• | Positive experience variations; and |
• | Good expense control. |
• | Maintaining number one market share position for Australian risk premiums with 13.5% of the life insurance risk market; |
• | Launch of a Guaranteed Index Tracked Annuity Product and a Travel Insurance product; and |
• | Productivity improvements through continued simplification and rationalisation of systems and processes. |
• | Life and General Insurance premium growth, with inforce premiums increasing by 8% for the year; |
• | Sales volume growth, particularly within General Insurance (up 13%) and Group Risk products (up 8%); and |
• | Positive claims experience in both Life and General Insurance products, despite the impact of claims associated with Cyclone Larry in the second half of the year. |
• | Strong growth in new business sales of risk products resulting in market share growth and improved margins; |
• | Positive persistency experience; and |
• | Good investment returns. |
(1) | Adjusted to remove the contribution to income, expenses, and operating result, of the Hong Kong insurance business for 2005 and 2006 |
Full Year Ended | Half Year Ended | |||||||||||||||||||||||
30/06/06 | 30/06/05 | Jun 06 vs | 30/06/06 | 31/12/05 | Jun 06 vs | |||||||||||||||||||
Key Performance Indicators | $M | $M | Jun 05 % | $M | $M | Dec 05 % | ||||||||||||||||||
Insurance | ||||||||||||||||||||||||
Life insurance operating income | 669 | 693 | (3 | ) | 332 | 347 | (7 | ) | ||||||||||||||||
General insurance operating income | 73 | 54 | 35 | 34 | 39 | (13 | ) | |||||||||||||||||
Total operating income | 742 | 747 | (1 | ) | 356 | 386 | (8 | ) | ||||||||||||||||
Shareholder investment returns | 87 | 204 | (57 | ) | 30 | 57 | (47 | ) | ||||||||||||||||
Profit on sale of the Hong Kong insurance business | 145 | — | — | — | 145 | — | ||||||||||||||||||
Total insurance income | 974 | 951 | 2 | 386 | 588 | (34 | ) | |||||||||||||||||
Volume expense | 181 | 218 | 17 | 86 | 95 | 9 | ||||||||||||||||||
Other operating expenses(1) | 275 | 333 | 17 | 117 | 158 | 26 | ||||||||||||||||||
Which new Bank | — | 2 | — | — | — | — | ||||||||||||||||||
Total operating expenses | 456 | 553 | 18 | 203 | 253 | 20 | ||||||||||||||||||
Net profit before income tax | 518 | 398 | 30 | 183 | 335 | (45 | ) | |||||||||||||||||
Corporate tax expense(2) | 102 | 89 | (15 | ) | 51 | 51 | — | |||||||||||||||||
Net profit after income tax (“cash basis”) | 416 | 309 | 35 | 132 | 284 | (54 | ) | |||||||||||||||||
Net profit after income tax (“underlying basis”)(3) | 215 | 156 | 38 | 112 | 103 | 9 | ||||||||||||||||||
Productivity and Other Measures | ||||||||||||||||||||||||
Expenses to average inforce premiums (%) | 36. 7 | 45. 5 | 19 | % | 33. 6 | 40. 5 | 17 | % | ||||||||||||||||
Expenses to average inforce premiums (underlying %)(3) | 36. 7 | 45. 3 | 19 | % | 33. 6 | 40. 5 | 17 | % | ||||||||||||||||
Effective corporate tax rate including impact of profit on sale of Hong Kong insurance business (%) | 27. 3 | 22. 4 | large | 27. 9 | 26. 8 | large | ||||||||||||||||||
(1) | Operating expenses include $9 million internal expenses relating to the asset management of shareholder funds (June 2005: $10 million). | |
(2) | For purpose of presentation, Policyholder tax benefit and Policyholder tax expense are shown on a net basis (2006: $138 million). | |
(3) | Underlying basis excludes shareholder investment returns, the profit on the sale of the Hong Kong insurance business and Which new Bank expenses. |
Full Year Ended | Half Year Ended | |||||||||||||||||||||||
30/06/06 | 30/06/05 | Jun 06 vs | 30/06/06 | 31/12/05 | Jun 06 vs | |||||||||||||||||||
Sources of Profit from Insurance Activities | $M | $M | Jun 05 % | $M | $M | Dec 05 % | ||||||||||||||||||
The Margin on Services profit from ordinary activities after income tax is represented by: | ||||||||||||||||||||||||
Planned profit margins | 146 | 122 | 20 | 77 | 69 | 12 | ||||||||||||||||||
Experience variations | 48 | 27 | 78 | 29 | 19 | 53 | ||||||||||||||||||
Other | — | (8 | ) | — | (2 | ) | 2 | large | ||||||||||||||||
General insurance operating margins | 21 | 13 | 62 | 8 | 13 | (38 | ) | |||||||||||||||||
Operating margins | 215 | 154 | 40 | 112 | 103 | 9 | ||||||||||||||||||
After tax shareholder investment returns | 56 | 155 | (64 | ) | 20 | 36 | (44 | ) | ||||||||||||||||
Profit on sale of the Hong Kong insurance business | 145 | — | — | — | 145 | — | ||||||||||||||||||
Net profit after income tax (“cash basis”) | 416 | 309 | 35 | 132 | 284 | (54 | ) | |||||||||||||||||
Full Year Ended | ||||||||||||||||||||||||||||||||
Australia | New Zealand | Asia | Total | |||||||||||||||||||||||||||||
Net Profit after Income Tax | 30/06/06 | 30/06/05 | 30/06/06 | 30/06/05 | 30/06/06 | 30/06/05 | 30/06/06 | 30/06/05 | ||||||||||||||||||||||||
(“cash basis”) | $M | $M | $M | $M | $M | $M | $M | $M | ||||||||||||||||||||||||
Operating margins | 125 | 94 | 77 | 52 | 13 | 8 | 215 | 154 | ||||||||||||||||||||||||
After tax shareholder investment returns | 56 | 92 | 17 | 22 | (17 | ) | 41 | 56 | 155 | |||||||||||||||||||||||
Profit on sale of Hong Kong business | — | — | — | — | 145 | — | 145 | — | ||||||||||||||||||||||||
Net profit after income tax | 181 | 186 | 94 | 74 | 141 | 49 | 416 | 309 | ||||||||||||||||||||||||
Half Year Ended | ||||||||||||||||||||||||||||||||
Australia | New Zealand | Asia | Total | |||||||||||||||||||||||||||||
Net Profit after Income Tax | 30/06/06 | 31/12/05 | 30/06/06 | 31/12/05 | 30/06/06 | 31/12/05 | 30/06/06 | 31/12/05 | ||||||||||||||||||||||||
(“cash basis”) | $M | $M | $M | $M | $M | $M | $M | $M | ||||||||||||||||||||||||
Operating margins | 70 | 55 | 39 | 38 | 3 | 10 | 112 | 103 | ||||||||||||||||||||||||
After tax shareholder investment returns | 21 | 35 | 7 | 10 | (8 | ) | (9 | ) | 20 | 36 | ||||||||||||||||||||||
Profit on sale of Hong Kong business | — | — | — | — | — | 145 | — | 145 | ||||||||||||||||||||||||
Net profit after income tax | 91 | 90 | 46 | 48 | (5 | ) | 146 | 132 | 284 | |||||||||||||||||||||||
Full Year Ended 30 June 2006 | ||||||||||||||||||||
Opening | Closing | |||||||||||||||||||
Balance | Sales/New | Other | Balance | |||||||||||||||||
30/06/05 | Balances | Lapses | Movements(2) | 30/06/06 | ||||||||||||||||
Annual Inforce Premiums(1) | $M | $M | $M | $M | $M | |||||||||||||||
General insurance(3) | 215 | 70 | (49 | ) | — | 236 | ||||||||||||||
Personal life | 785 | 137 | (81 | ) | (109 | ) | 732 | |||||||||||||
Group life | 265 | 71 | (48 | ) | (33 | ) | 255 | |||||||||||||
Total | 1,265 | 278 | (178 | ) | (142 | ) | 1,233 | |||||||||||||
Australia | 856 | 231 | (166 | ) | — | 921 | ||||||||||||||
New Zealand | 296 | 47 | (12 | ) | (29 | ) | 302 | |||||||||||||
Asia(4) | 113 | — | — | (113 | ) | — | ||||||||||||||
Total | 1,265 | 278 | (178 | ) | (178 | ) | 1,223 | |||||||||||||
Full Year Ended 30 June 2005 | ||||||||||||||||||||
Opening | Closing | |||||||||||||||||||
Balance | Sales/New | Other | Balance | |||||||||||||||||
30/06/04 | Balances | Lapses | Movements(2) | 30/06/05 | ||||||||||||||||
Annual Inforce Premiums(1) | $M | $M | $M | $M | $M | |||||||||||||||
General insurance(3) | 192 | 62 | (39 | ) | — | 215 | ||||||||||||||
Personal life | 703 | 164 | (89 | ) | 7 | 785 | ||||||||||||||
Group life | 272 | 74 | (87 | ) | 6 | 265 | ||||||||||||||
Total | 1,167 | 300 | (215 | ) | 13 | 1,265 | ||||||||||||||
Australia | 815 | 228 | (187 | ) | — | 856 | ||||||||||||||
New Zealand | 258 | 48 | (15 | ) | 5 | 296 | ||||||||||||||
Asia(4) | 94 | 24 | (13 | ) | 8 | 113 | ||||||||||||||
Total | 1,167 | 300 | (215 | ) | 13 | 1,265 | ||||||||||||||
Half Year Ended 30 June 2006 | ||||||||||||||||||||
Opening | Closing | |||||||||||||||||||
Balance | Sales/New | Other | Balance | |||||||||||||||||
31/12/06 | Balances | Lapses | Movements(2) | 30/06/06 | ||||||||||||||||
Annual Inforce Premiums(1) | $M | $M | $M | $M | $M | |||||||||||||||
General insurance | 225 | 35 | (24 | ) | — | 236 | ||||||||||||||
Personal life | 740 | 65 | (39 | ) | (34 | ) | 732 | |||||||||||||
Group life | 251 | 31 | (24 | ) | (3 | ) | 255 | |||||||||||||
Total | 1,216 | 131 | (87 | ) | (37 | ) | 1,223 | |||||||||||||
Australia | 895 | 110 | (83 | ) | (1 | ) | 921 | |||||||||||||
New Zealand | 321 | 21 | (4 | ) | (36 | ) | 302 | |||||||||||||
Asia | — | — | — | — | — | |||||||||||||||
Total | 1,216 | 131 | (87 | ) | (37 | ) | 1,223 | |||||||||||||
(1) | Inforce premium relates to risk business. Savings products are disclosed within Funds Management. | |
(2) | Includes foreign exchange movements. | |
(3) | General insurance inforce premiums includes approximately $46 million of badged premium (June 2005: $40 million). | |
(4) | Other movements represent the sale of the Hong Kong insurance business. |
Market Share Percentage – Annual Inforce Premiums | 30/06/06 | 31/12/05 | 30/06/05 | |||||||||
Australia (total risk)(1) | 13.5 | 13.5 | 13.8 | |||||||||
Australia (individual risk)(1) | 12.4 | 12.6 | 13.0 | |||||||||
New Zealand(1) | 31.1 | 30.9 | 30.7 | |||||||||
(1) | As at 31 March 2006. |
Full Year Ended | Half Year Ended | |||||||||||||||||||||||
30/06/06 | 30/06/05 | Jun 06 vs | 30/06/06 | 31/12/05 | Jun 06 vs | |||||||||||||||||||
Shareholder Investment Returns | $M | $M | Jun 05 % | $M | $M | Dec 05 % | ||||||||||||||||||
Funds management business | 14 | 33 | (58 | ) | 7 | 7 | — | |||||||||||||||||
Insurance business(1) | 87 | 204 | (57 | ) | 30 | 57 | (47 | ) | ||||||||||||||||
Profit on sale of Hong Kong insurance business | 145 | — | — | — | 145 | — | ||||||||||||||||||
Shareholder investment returns before income tax | 246 | 237 | 4 | 37 | 209 | (82 | ) | |||||||||||||||||
Income tax expense | 35 | 60 | 42 | 12 | 23 | 48 | ||||||||||||||||||
Shareholder investment returns after tax | 211 | 177 | 19 | 25 | 186 | (87 | ) | |||||||||||||||||
(1) | Excluding profit on sale of the Hong Kong insurance business. |
As at 30 June 2006 | ||||||||||||||||
Australia | New Zealand | Asia | Total | |||||||||||||
Shareholder Investment Asset Mix ($M) | $M | $M | $M | $M | ||||||||||||
Local equities | 41 | 1 | — | 42 | ||||||||||||
International equities | — | 25 | — | 25 | ||||||||||||
Property | 307 | 8 | — | 315 | ||||||||||||
Sub-total | 348 | 34 | — | 382 | ||||||||||||
Fixed interest | 342 | 191 | 23 | 556 | ||||||||||||
Cash | 823 | 132 | 9 | 964 | ||||||||||||
Income | 1,165 | 323 | 32 | 1,520 | ||||||||||||
Total | 1,513 | 357 | 32 | 1,902 | ||||||||||||
As at 30 June 2006 | ||||||||||||||||
Australia | New Zealand | Asia | Total | |||||||||||||
Shareholder Investment Asset Mix (%) | % | % | % | % | ||||||||||||
Local equities | 3 | — | — | 2 | ||||||||||||
International equities | — | 7 | — | 1 | ||||||||||||
Property | 20 | 2 | — | 17 | ||||||||||||
Sub-total | 23 | 9 | — | 20 | ||||||||||||
Fixed interest | 23 | 54 | 72 | 29 | ||||||||||||
Cash | 54 | 37 | 28 | 51 | ||||||||||||
Income | 77 | 91 | 100 | 80 | ||||||||||||
Total | 100 | 100 | 100 | 100 | ||||||||||||
• | Exclude expenses of “Which new Bank”; |
• | Exclude shareholder investment returns from funds management and life insurance income; |
• | Exclude policyholder tax from the funds management income and life insurance income lines; and |
• | Exclude the effect of profit on sale of the Hong Kong insurance business. |
• | A system of industry limits and targets for exposures by industry; |
• | A process for considering the risk associated with correlations between large exposures; |
• | A large credit exposure policy for aggregate exposures to individual, commercial and industrial client groups tiered by credit risk rating and loan duration; and |
• | A system of country limits for geographic exposures. |
Average VaR During | Average VaR During | Average VaR During | Average VaR During | |||||||||||||
VaR Expressed based on 97.5% | June 2006 | December 2005 | June 2005 | December 2004 | ||||||||||||
confidence | Half Year $M | Half Year $M | Half Year $M | Half Year $M | ||||||||||||
Group | ||||||||||||||||
Interest rate risk | 3.16 | 2.65 | 3.44 | 3.68 | ||||||||||||
Exchange rate risk | 0.65 | 0.53 | 0.26 | 0.58 | ||||||||||||
Implied volatility risk | 0.61 | 0.61 | 0.49 | 0.53 | ||||||||||||
Equities risk | 0.10 | 0.08 | 0.04 | 0.22 | ||||||||||||
Commodities risk | 1.20 | 0.36 | 0.18 | 0.34 | ||||||||||||
Prepayment risk | 0.33 | 0.28 | 0.38 | 0.54 | ||||||||||||
ASB Bank | 0.30 | 0.36 | 0.22 | 0.26 | ||||||||||||
Diversification benefit | (2.26 | ) | (1.40 | ) | (0.98 | ) | (1.64 | ) | ||||||||
4.09 | 3.47 | 4.03 | 4.51 | |||||||||||||
Credit speed | 5.97 | 5.74 | 4.85 | 4.67 | ||||||||||||
Total | 10.06 | 9.21 | 8.88 | 9.18 | ||||||||||||
Average VaR During | Average VaR During | Average VaR During | Average VaR During | |||||||||||||
VaR Expressed based on 99.0% | June 2006 | December 2005 | June 2005 | December 2004 | ||||||||||||
confidence | Half Year $M | Half Year $M | Half Year $M | Half Year $M | ||||||||||||
Group | ||||||||||||||||
Interest rate risk | 4.01 | 3.36 | 4.78 | 4.72 | ||||||||||||
Exchange rate risk | 0.77 | 0.62 | 0.31 | 0.70 | ||||||||||||
Implied volatility risk | 0.80 | 0.95 | 0.73 | 0.70 | ||||||||||||
Equities risk | 0.13 | 0.09 | 0.05 | 0.30 | ||||||||||||
Commodities risk | 1.61 | 0.45 | 0.21 | 0.41 | ||||||||||||
Prepayment risk | 0.33 | 0.28 | 0.38 | 0.54 | ||||||||||||
ASB Bank | 0.40 | 0.48 | 0.32 | 0.34 | ||||||||||||
Diversification benefit | (3.04 | ) | (1.93 | ) | (1.28 | ) | (2.01 | ) | ||||||||
5.01 | 4.30 | 5.50 | 5.70 | |||||||||||||
Credit speed | 7.09 | 6.81 | 5.75 | 5.54 | ||||||||||||
Total | 12.10 | 11.11 | 11.25 | 11.24 | ||||||||||||
• | Inadequate or failed internal processes and methodologies; |
• | People; |
• | Systems; or |
• | External events. |
• | Economic; |
• | Competitive; |
• | Social trends; or |
• | Regulatory. |
• | Line Management in each Business Unit are responsible for ensuring their business is and remains compliant with legislative, regulatory, industry code and organisational requirements by implementing and monitoring controls; and |
• | Business Unit Compliance and Group Compliance work together to independently monitor, overview and report on compliance to management, compliance committees and the Board. |
• | Business assumptions including: |
- Amount, timing and duration of claims/policy payments | ||
- Policy lapse rates | ||
- Long term maintenance expense levels |
• | Long term economic assumptions for discount and interest rates, inflation rates and market earnings rates; and |
• | Selection of methodology, either projection or accumulation method. The selection of the method is generally governed by the product type. |
• | Recent results may be a statistical aberration; or |
• | There may be a commencement of a new paradigm requiring a change in long term assumptions. |
• | The corporate governance of the Bank, including the establishment of Committees; | |
• | Oversight of the business and affairs of the Bank by: |
– | Establishing, with management, and approving the strategies and financial objectives; | ||
– | Approving major corporate and capital initiatives and approving capital expenditure in excess of limits delegated to management; | ||
– | Establishing appropriate systems of risk management; and | ||
– | Monitoring the performance of management; |
• | Approving documents (including reports and statements to shareholders) required by the Bank’s Constitution and relevant regulation; | |
• | Appointment of the Chief Executive Officer; and | |
• | Approval of the Bank’s major HR policies and overseeing the development strategies for senior and high performing executives. |
Board Membership | Committee Membership | |||||||||||
Board Performance | People | |||||||||||
Director(1) | & Renewal | & Remuneration | Audit | Risk | ||||||||
J M Schubert | Non-Executive, independent | Chairman | Chairman | Member | Member | |||||||
R J Norris | Executive | Chief Executive Officer | Member | |||||||||
R J Clairs | Non-Executive, independent | Chairman | Member | |||||||||
A B Daniels(2) | Non-Executive, independent | Member | Member | |||||||||
C R Galbraith | Non-Executive, independent | Member | Member | Member | ||||||||
S C H Kay | Non-Executive, independent | Member | Member | |||||||||
W G Kent | Non-Executive, independent | Member | Member | |||||||||
F D Ryan | Non-Executive, independent | Chairman | Member | |||||||||
F J Swan | Non-Executive, independent | Member | Chairman | |||||||||
B K Ward(2) | Non-Executive, independent | Member | Member | |||||||||
D Turner(3) | Non-Executive, independent | Member | ||||||||||
J Hemstritch(4) | Non-Executive, independent | |||||||||||
(1) | Mr. D V Murray retired as Chief Executive Officer and Director on 22 September 2005 | |
(2) | Mr. A B Daniels and Ms. B K Ward will retire at the Bank’s Annual General Meeting on 3 November 2006. | |
(3) | Mr. D Turner was appointed to the Board with effect from 1 August 2006. In accordance with the Bank’s Constitution and the ASX Listing Rules, he will stand for election at the Annual General Meeting to be held on 3 November 2006. | |
(4) | Mrs. J Hemstritch was appointed to the Board with effect from 9 October 2006. In accordance with the Bank’s constitution and the ASX Listing Rules, she will stand for election at the Annual General Meeting to be held on 3 November 2006. |
• | The Chief Executive Officer and any other executive director shall not be eligible to stand for election as Chairman of the Bank; |
• | The number of Directors shall not be less than 9 nor more than 13 (or such lower number as the Board may from time to time determine). The Board has determined that the number of directors shall be 12; and | |
• | At each Annual General Meeting one-third of Directors (other than the Chief Executive Officer) shall retire from office and may stand for re-election. |
• | The specific disclosures made by each Director as referred to above; |
• | Where applicable, the related party dealings referrable to each Director, noting that those dealings are not material under accounting standards; |
• | That no Director is, or has been associated directly with, a substantial shareholder of the Bank; |
• | That no non-executive Director has ever been employed by the Bank or any of its subsidiaries; |
• | That no Director is, or has been associated with a supplier, professional adviser, consultant to or customer of the Bank which is material under accounting standards; and |
• | That no non-executive Director personally carries on any role for the Bank other than as a Director of the Bank. |
• | Be capable of operating as part of an exceptional team; |
• | Contribute outstanding performance and exhibit impeccable values; |
• | Be capable of inputting strongly to risk management, strategy and policy; |
• | Provide skills and experience required currently and for the future strategy of the Bank; |
• | Be excellently prepared and receive all necessary education, |
• | Provide important and significant insights, input and questions to management from their experience and skill; and |
• | Vigorously debate and challenge management. |
• | The Board will consist of a majority of independent non-executive Directors and the membership of the Board Performance and Renewal, People & Remuneration and Audit Committees should consist solely of independent non-executive Directors. The Risk Committee should consist of a majority of independent non-executive Directors; |
• | The Chairman will be an independent non-executive Director. The Audit Committee will be chaired by an independent non-executive Director other than the Board Chairman; |
• | The Board will generally meet regularly with an agenda designed to provide adequate information about the affairs of the Bank, allow the Board to guide and monitor management and assist in involvement in discussions and decisions on strategy. Matters having strategic implications are given priority on the agenda for regular Board meetings. In addition, ongoing strategy is the major focus of at least two of the Board meetings annually; |
• | The Board has an agreed policy on the basis on which Directors are entitled to obtain access to company documents and information and to meet with management; and |
• | The Bank has in place a procedure whereby, after appropriate consultation, Directors are entitled to seek independent professional advice, at the expense of the Bank, to assist them to carry out their duties as Directors. The policy of the Bank provides that any such advice is generally made available to all Directors. |
• | For Directors and executives who report to the Chief Executive Officer, any hedging of publicly disclosed shareholding positions; and |
• | For executives, any trading (including hedging) in positions prior to vesting of shares or options. |
• | The Audit Committee consists entirely of independent non-executive Directors, all of whom have familiarity with financial management and at least one has expertise in financial accounting and reporting. The Chairman of the Bank is not permitted to be the Chairman of the Audit Committee; |
• | At least twice a year the Audit Committee meets the external auditors and the chief internal audit executive and also separately with the external Auditors independently of management; |
• | The Audit Committee is responsible for nominating the external auditor to the Board for appointment by shareholders. The Audit Committee approves the terms of the contract with the external auditor, agrees the annual audit plan and approves payments to the Auditor; |
• | The Audit Committee discusses and receives assurances from the external auditors on the quality of the Bank’s systems, its accounting processes and its financial results. It also receives a report from the Auditors on any significant matters raised by the Auditors with management; |
• | All material accounting matters requiring exercise of judgement by management are specifically reviewed by the Audit Committee and reported on by the Committee to the Board; and |
• | Certified assurances are received by the Audit Committee and the Board that the Auditors meet the independence requirements as recommended by the Corporations Act and the Securities and Exchange Commission (“SEC”) of the USA. |
• | Reviews the financial statements and reports of the Group; |
• | Reviews accounting policies to ensure compliance with current laws, relevant regulations and accounting standards; |
• | Conducts any investigations relating to financial matters, records, accounts and reports which it considers appropriate; and |
• | Reviews all material matters requiring exercise of judgment by management and reports those matters to the Board. |
• | The financial statements and their conformity with accounting standards, other mandatory reporting and statutory requirements; and |
• | The quality of the accounting policies applied and any other significant judgments made. |
• | Assume the role of management or act as an employee; |
• | Become an advocate for the Bank; |
• | Audit their own work; |
• | Create a mutual or conflicting interest between the Auditor and the Bank; |
• | Require an indemnification from the Bank to the Auditor; |
• | Seek contingency fees; nor |
• | Have a direct financial or business interest or a material indirect financial or business interest in the Bank or any of its affiliates, or an employment relationship with the Bank or any of its affiliates. |
• | Bookkeeping or services relating to accounting records or financial statements of the Bank; |
• | Financial information systems design and implementation; |
• | Appraisal or valuation services and fairness opinions; |
• | Actuarial services; |
• | Internal audit outsourcing services; |
• | Management functions, including acting as an employee; |
• | Human resources; |
• | Broker-dealer, investment adviser or investment banking services; |
• | Legal services; or |
• | Expert services unrelated to the audit. |
• | Audit services to the Bank or an affiliate; |
• | Related services connected with the lodgement of statements or documents with the ASX, ASIC, APRA, SEC or other regulatory or supervisory bodies; |
• | Services reasonably related to the performance of the audit services; |
• | Agreed upon procedures or comfort letters provided by the Auditor to third parties in connection with the Bank’s financing or related activities; and |
• | Other services pre-approved by the Audit Committee. |
• | To act properly and efficiently in pursuing the objectives of the Bank; | |
• | To avoid situations which may give rise to a conflict of interest; | |
• | To know and adhere to the Bank’s Equal Employment Opportunity policy and programs; | |
• | To maintain confidentiality in the affairs of the Bank and its customers; and | |
• | To be absolutely honest in all professional activities. |
• | Fair Treatment Review; | |
• | Equal Employment Opportunity; | |
• | Occupational Health and Safety; | |
• | Recruitment and selection; | |
• | Performance management; | |
• | Talent management and succession planning; | |
• | Remuneration and recognition; | |
• | Employee share plans; and | |
• | Supporting Professional Development. |
• | That they have reviewed the report; | |
• | That based on their knowledge, the report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the periods covered by the report; | |
• | That based on their knowledge, the Financial Statements, and other financial information included in the report, fairly present in all material respects the financial condition, results of operations and cash flows of the Group as of, and for, the periods presented in the report; | |
• | That they are responsible for establishing and maintaining disclosure controls and procedures (as defined in the US Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Group and have: |
– | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under their supervision, to ensure that material information relating to the Group, including its consolidated subsidiaries, is made known to them by others within those entities, particularly during the period in which the report is being prepared; | ||
– | Evaluated the effectiveness of those disclosure controls and procedures, with the assistance of other members of the Group’s management, and presented in this report their conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
• | Disclosed in this report any change in the Group’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Group’s internal control over financial reporting; and | |
• | That they have disclosed, based on their most recent evaluation of internal control over financial reporting, to the Group’s auditors and the Audit Committee of the Group’s Board of Directors: |
– | All significant deficiencies (if any) in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the Group’s ability to record, process, summarise and report financial data; and | ||
– | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Group’s internal control over financial reporting. |
• | From 1 July 2005 a number of new processes and controls were implemented and existing processes and controls enhanced to address the transition to International Financial Reporting Standards, refer to Note 1 (nn) to the Financial Statements. |
• | That they designed internal control over financial reporting, or caused such internal control over financial reporting to be designed under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. |
Date of Ceasing | ||||||
Director | Company | Date Appointed | (if applicable) | |||
J M Schubert | BHP Biliton Limited BHP Biliton Plc Qantas Limited Worley Group Limited | 01/06/2000 29/06/2001 23/10/2000 28/11/2002 | 28/02/2005 | |||
R J Norris | Air New Zealand Limited Fletcher Building Limited | 18/02/2002 17/04/2001 | 30/08/2005 09/08/2005 | |||
R J Clairs | David Jones Limited Cellnet Group Limited | 22/02/1999 01/07/2004 | ||||
A B Daniels | The Australian Gas Light Company Orica Limited | 04/08/1999 01/03/1995 | 18/10/2005 17/12/2003 | |||
C R Galbraith | OneSteel Limited GasNet Australia Group | 25/10/2000 17/12/2001 | ||||
S C H Kay | Symbion Health Limited Brambles Industries Limited Brambles Industries Plc | 28/09/2001 01/06/2006 01/06/2006 | ||||
W G Kent | West Australian Newspaper Holdings Limited Coventry Group Limited Perpetual Trustees Australia Limited (Group) | 02/02/1998 01/07/2001 01/05/1998 | 31/07/2005 | |||
F D Ryan | Australian Foundation Investment Company Limited | 08/08/2001 | ||||
F J Swan | Foster’s Group Limited National Foods Limited Southcorp Limited | 25/10/1999 11/03/1997 26/05/2005 | 30/06/2005 29/07/2005 | |||
B K Ward | Lion Nathan Limited Multiplex Group Allco Finance Group Limited | 20/02/2003 26/10/2003 29/04/2005 | ||||
No. of Meetings | No. of Meetings | |||||||
Director | Held(1) | Attended | ||||||
J M Schubert | 9 | 9 | ||||||
R J Norris | 7 | 7 | ||||||
R J Clairs | 9 | 9 | ||||||
A B Daniels | 9 | 9 | ||||||
C R Galbraith | 9 | 9 | ||||||
S C H Kay | 9 | 9 | ||||||
W G Kent | 9 | 9 | ||||||
F D Ryan | 9 | 9 | ||||||
F J Swan | 9 | 9 | ||||||
B K Ward | 9 | 9 | ||||||
D V Murray | 2 | 2 | ||||||
(1) | The number of meetings held during the time the Director was a member of the Board. |
People & Remuneration | ||||||||||||||||||||||||
Risk Committee | Audit Committee | Committee | ||||||||||||||||||||||
No. of Meetings | No. of Meetings | No. of Meetings | No. of Meetings | No. of Meetings | No. of Meetings | |||||||||||||||||||
Director | Held(1) | Attended | Held(1) | Attended | Held(1) | Attended | ||||||||||||||||||
J M Schubert | 6 | 6 | 6 | 5 | 8 | 8 | ||||||||||||||||||
R J Norris | 5 | 5 | ||||||||||||||||||||||
R J Clairs | 6 | 6 | 8 | 8 | ||||||||||||||||||||
A B Daniels | 6 | 5 | 8 | 8 | ||||||||||||||||||||
C R Galbraith | 6 | 6 | 6 | 6 | ||||||||||||||||||||
S C H Kay | 6 | 6 | 8 | 8 | ||||||||||||||||||||
W G Kent | 6 | 6 | 6 | 6 | ||||||||||||||||||||
F D Ryan | 6 | 6 | 6 | 6 | ||||||||||||||||||||
F J Swan | 6 | 5 | ||||||||||||||||||||||
B K Ward | 6 | 6 | 6 | 5 | ||||||||||||||||||||
D V Murray | 1 | 1 | ||||||||||||||||||||||
Board Performance & Renewal | ||||||||
Committee | ||||||||
No. of Meetings | No. of Meetings | |||||||
Director | Held(1) | Attended | ||||||
J M Schubert | 4 | 4 | ||||||
C R Galbraith | 4 | 4 | ||||||
F J Swan | 4 | 4 | ||||||
(1) | The number of meetings held during the time the Director was a member of the relevant committee |
• | As declared in the 30 June 2005 Annual Report, a fully franked final dividend of 112 cents per share amounting to $1,435 million was paid on 23 September 2005. The payment comprised cash disbursements of $1,172 million with $262 million being reinvested by participants through the Dividend Reinvestment Plan; and |
• | In respect of the year to 30 June 2006, a fully franked interim dividend of 94 cents per share amounting to $1,211 million was paid on 5 April 2006. The payment comprised cash disbursements of $992 million with $219 million being reinvested by participants through the Dividend Reinvestment Plan. |
• | The implementation of CommServe, a training program designed to ensure our people are able to obtain maximum value from CommSee (the Bank’s state-of-the-art customer management system) in improving Sales and Service outcomes. Over 14,000 staff undertook CommServe training during 2006; |
• | The refurbishment of a further 133 branches, taking to 384 the number of branches refurbished over the past 3 years into a design/layout more conducive to effective sales and service; |
• | Improved access to Australia’s largest electronic banking and branch network through two new Streamline products with flat monthly fees, and the removal of transaction fees from NetBank; |
• | The introduction of the Business Online Saver high yield investment account, the Commonwealth Portfolio Loan product and the Business Line of Credit, all of which have reached $1 billion in balances; |
• | Continued platform enhancements and new product offerings including the development of a self managed super offering “YourChoice”, to capitalise on this rapidly growing sector of the market; |
• | Strategic alliance formed between Avanteos and Goldman Sachs JB Were, which has contributed $5.0 billion of additional net funds flow; |
• | Acquisition of the Gandel Group’s interests in the Colonial First State Property Retail Trust and Gandel Retail Management Trust, which provides funds management and property management services to a number of Colonial First State Retail Property trusts; |
Remuneration Report | ||||
Introduction | 51 | |||
Changes since 2005 | 51 | |||
People & Remuneration Committee | 51 | |||
Compensation Policy | 51 | |||
Compensation Structure | 52 | |||
Current Target Potential Compensation Mix for Executives | 53 | |||
Short Term Incentive (STI) Arrangements | 53 | |||
Long Term Incentive (LTI) Arrangements | 53 | |||
Summary of performance hurdles for Employee Reward Plan (ERP) grants | 54 | |||
Bank Performance | 55 | |||
Short Term Performance — 2005/2006 | 55 | |||
Cash NPAT performance 2002 — 2006 | 55 | |||
Cash EPS performance 2002 — 2006 | 55 | |||
Long Term Performance | 56 | |||
LTI Grant Performance | 56 | |||
Share Price | 56 | |||
Dividends per Share | 56 | |||
Directors’ Compensation | 57 | |||
Managing Director and CEO | 57 | |||
Non-Executive Directors | 57 | |||
Details of Components of Non-Executive Directors’ fees | 58 | |||
Directors’ Retirement Allowance Scheme | 58 | |||
Compensation of Directors | 59 | |||
Compensation of Executives | 60 | |||
Termination Arrangements | 61 | |||
STI Allocations to Executives for the Year Ended 30 June 2006 | 62 | |||
LTI Allocations to Executives (under 2005 ERP Grant) in the Year Ended 30 June 2006 | 62 | |||
Equity Holdings of Key Management Personnel and Other Executives | 63 | |||
Shares held by Directors | 63 | |||
Shares held by Executives | 64 | |||
Option Holdings of Key Management Personnel and Other Executives | 65 | |||
Shares Vested and Options Exercised During the Year | 66 | |||
Loans to Key Management Personnel and Other Executives | 67 | |||
Terms and Conditions of Loans | 68 | |||
Other Transactions of Key Management Personnel, Other Executives and Other Related Parties | 68 | |||
Audit | 68 | |||
Term | Definition | |
Australian Equivalent to International Financial Reporting Standards (AIFRS) | The Australian equivalent to International Financial Reporting Standards (AIFRS) adopted by the Bank from 1 July 2005. | |
Australian Generally Accepted Accounting Principles (AGAAP) | The financial reporting standards adopted by the Bank up to the year ended 30 June 2005. The 2005 comparatives have been restated for AIFRS. | |
Base Compensation | Calculated on a total cost basis and includes any Fringe Benefits Tax charges related to employee benefits including motor vehicles. | |
Board | The Board of Directors of the Bank. | |
Committee | The People and Remuneration Committee of the Board of Bank. | |
Compensation | All forms of consideration paid, payable or provided by the Bank, or on behalf of the Bank, in exchange for services rendered to the Bank. | |
Earnings Per Share (EPS) | The portion of a company’s net profit after tax allocated to each outstanding share of common stock. | |
Equity Reward Plan (ERP) | The Bank’s long term incentive scheme. | |
Fixed Compensation | Consists of Base Compensation, as well as employer contributions to superannuation. For further details please refer to page 53. | |
Group | Commonwealth Bank of Australia and its subsidiaries. | |
International Financial Reporting Standards (IFRS) | Reporting standards which have been adopted by the International Accounting Standards Board (IASB), an independent, international organisation supported by the professional accountancy bodies. The objective is to achieve uniformity and transparency in the accounting principles used by businesses and other organisations for financial reporting globally. | |
Key Management Personnel | Persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity. In addition to Key Management Personnel, there are separate disclosure requirements for Directors and Executives of the Bank. | |
Long Term Incentive (LTI) | LTI grants to Executives are delivered in the form of ordinary shares in the Bank that vest if, and to the extent that, a performance hurdle is met. For further details please refer to page 53. | |
Options | A right to acquire a Bank share on payment of an exercise price if relevant performance hurdles are met. | |
Other Executives | Other Executives are those who are not Key Management Personnel but are amongst the Executives for whom disclosure is required in accordance with section 300A(1)(c) of the Corporations Act 2001. | |
Peer Group | The group of competitors that the Bank’s long term incentive plan is compared to in order to determine if the performance hurdle is met. | |
Performance Hurdle | The criteria relating to the Bank’s long term incentive plan that must be met in order for shares to partially or fully vest within the plan. | |
Reward Shares | Shares in the Bank granted under the Equity Reward Plan and subject to a performance hurdle. | |
Short Term Incentive (STI) | Compensation paid with direct reference to the individual’s performance over the preceding financial year. For further details please refer to page 53. | |
Salary Packaging | An arrangement where an employee agrees to forego part of his or her base compensation in return for non-cash benefits of a similar value. | |
STI Deferral | Withholding a portion of short term incentives in cash for one year for the CEO and Executives who, in a reporting sense, are no more than two levels removed from the CEO. For further details please refer to page 53. | |
Total Shareholder Return (TSR) | TSR is calculated by combining the reinvestment of dividends and the movement in the Bank’s share price. TSR is utilised as a performance hurdle for the Bank’s long term incentive plan. |
• | Disclosure of compensation for ‘Key Management Personnel’ as opposed to ‘Specified Executives’ previously. AASB1046 defined a ‘Specified Executive’ as someone who is directly accountable and responsible for the strategic and operational management of an organisation. In 2005, the Bank was required to disclose details of compensation for the five employees, excluding Directors, with the greatest authority in this area. The Bank took the view that all members of its Executive Committee have significant influence over the strategic direction of the Bank, and accordingly defined all nine of its Group Executives as Specified Executives for disclosure purposes. This approach is consistent with the definition of Key Management Personnel required under AASB124, used in compiling the 2006 report; |
• | Changes in the sub-categories of compensation that are reported. AASB124 requires the breakdown to be in five categories — short term benefits, post-employment benefits, other long term benefits, termination benefits and share-based payments. This differs from AASB1046 which required four categories — primary benefits, post employment benefits, equity benefits and other benefits; and |
• | AASB124 requires the Bank to use a fair value calculation to determine the value of reward shares to be disclosed for each Executive. The fair value approximates the number of shares that are expected to vest in the participants over the expected vesting period. This has resulted in changes in the calculation of long term incentives (LTI) values being disclosed since 2004/05, including some negative values for Executives who forfeited their entitlements to reward shares upon exiting the Bank. |
• | Restriction of re-testing from four occasions to one occasion, 12 months after initial testing, at which time a maximum of 50% only of the original grant may vest; and |
• | The use of a straight line vesting scale with 50% vesting at the 51st percentile, through to 100% vesting at the 75th percentile. Previous vesting commenced when Bank performance met the 50th percentile, with 100% vesting at the 75th percentile, but the scale was tiered with accelerated straight line vesting where performance exceeded the 67th percentile. |
• | Attract and retain high calibre employees; |
• | Align individual and Bank goals; and |
• | Ensure total compensation is competitive by market standards. Fixed compensation is generally set at the market median and total compensation up to the 75th percentile for performance. In this regard the Bank is careful not to generate upward pressure on the market. |
• | Reward Executives for Bankwide, business unit and individual performance against targets set by reference to appropriate benchmarks and against behavioural standards; |
• | Align the interests of Executives with those of shareholders; and |
• | Link Executive reward with the strategic goals and sustainable performance of the Bank. |
• | Fixed compensation; |
• | Short Term Incentive (STI); and |
• | Long Term Incentive (LTI). |
(1) | STI refers to Short Term Incentive | |
(2) | STI deferral applies generally to the CEO and to executives who, in a reporting sense, are no more than three levels removed from the CEO. Payment is subject to forfeiture on resignation or misconduct, including misrepresentation of performance outcomes. | |
(3) | LTI refers to Long Term Incentive. LTI grant allocations are made by September each year. After three years the grant is measured against the performance hurdle to assess what portion of the grant, if any, will vest at that time. Some re-testing can occur after that time. Refer to page 53 for further detail. | |
(4) | Maximum vesting period of four years applies to all future LTI grants. Refer page 53 for further details. |
Fixed | Short Term | Long Term | ||||||||||||||||||
Compensation | Incentive (STI) | Incentive (LTI) | STI Deferral(1) | Salary Packaging(2) | ||||||||||||||||
CEO | ü | ü | ü | ü | ü | |||||||||||||||
Group Executive | ü | ü | ü | ü | ü | |||||||||||||||
Executive General Manager | ü | ü | ü | ü | ü | |||||||||||||||
General Manager | ü | ü | ü | û | ü | |||||||||||||||
Executive Manager | ü | ü | û | û | ü | |||||||||||||||
Australian Workplace Agreement | ü | ü | û | û | ü | |||||||||||||||
Other Staff | ü | ü | û | û | û | |||||||||||||||
(ü) | Eligible | |
(û) | Ineligible | |
(1) | STI Deferral also applies to certain General Managers and Executive Managers with relatively high levels of STI payments. | |
(2) | Salary packaging refers to the option for employees to sacrifice base compensation for other benefits. |
Fixed Component | STI | LTI | ||||||||||
(base compensation and | Component | Component | ||||||||||
Superannuation) % | % | % | ||||||||||
CEO | 25 | 25 | 50 | |||||||||
Group Executives | 30 | 30 | 40 | |||||||||
Executive General Managers | 40 | 30 | 30 | |||||||||
General Managers | 50 | 35 | 15 | |||||||||
• | 50% paid as immediate cash payment; and | |
• | 50% in cash deferred for one year. Generally, the Executive will need to be an employee of the Bank at the end of the deferral period to receive this portion. |
2002 Grant(1) | 2003 Grant | 2004 Grant | 2005 Grant | |||||
Performance measurement From To | 2 Aug 2002 3 Oct 2005 | 1 Aug 2003 2 Oct 2006 | 23 Sept 2004 24 Sept 2007 | 15 Jul 2005 16 Jul 2008 | ||||
Additional measurement opportunities | Every Six months from 3 Aug 2005 until 2 Oct 2007 | Every Six months from 2 Aug 2006 until 1 Oct 2008 | Every Six months from 24 Sept 2007 until 23 Sept 2009 | Every Six months from 16 July 2008 until 15 July 2010 | ||||
Expiry Date if Exercisable | 2 Oct 2007 | 1 Oct 2008 | 23 Sept 2009 | 14 July 2010 | ||||
Status as at 30 June 2006 | 30th percentile | 50th percentile | 51st percentile | 40th percentile | ||||
Vesting Scale | <50th percentile = Nil shares 50th - 67th percentile = 50% - 75% of shares 68th -75th percentile = 76% - 100% of shares | |||||||
Performance Hurdle(2) | TSR vs Peer Group. Where the rating is at least at the 50th percentile on the third anniversary of the grant, the shares will vest at a time nominated by the Executive, within the half yearly windows, over the next two years. The vesting percentage will be the higher of the rating determined at the third anniversary of the grant and the rating determined at the half yearly measurement point at which the Executive nominates that the shares will vest. Where the rating is below the 50th percentile on the third anniversary of the grant, the shares can still vest if the rating reaches the 50th percentile at one of the half yearly measurement points prior to the fifth anniversary, but the maximum vesting will be 50%. | |||||||
(1) | The 2002 Grant did not meet the performance hurdle at the first or second measurement points. | |
(2) | Amendments have been made for the 2006 grant to adopt a straight line vesting scale with 50% vesting at the 51st percentile, through to 100% vesting at the 75th percentile. Previous vesting commenced when Bank performance met the 50th percentile, with 100% vesting at the 75th percentile but the scale was tiered with accelerated straight line vesting where performance exceeded the 67th percentile. A restriction of re-testing from four occasions to one occasion, 12 months after initial testing, at which time a maximum of 50% only of the original grant may vest has also been implemented for 2006 and future grants. |
Adelaide Bank | Macquarie Bank | |
AMP | National Australia Bank | |
Australian & New Zealand Banking | QBE insurance | |
Group | ||
AXA | St George | |
Bank of Queensland | Suncorp-Metway | |
Bendigo Bank | Westpac Banking Group | |
IAG |
Key Result Area | Commentary | |
Customer Service | The Bank’s vision is ‘to be Australia’s finest financial services organisation through excelling in customer service’. The Bank has made progress as a result of the Which new Bank program, through enhanced customer turnaround times, the implementation of CommSee and CommServe, further branch refurbishments and, more recently, the introduction of new products, removal of transaction fees from NetBank and the opening of some branches on Saturdays for convenient banking. | |
In March 2006 the Bank announced an evolutionary strategic direction for the next phase of the Bank’s development. The strategy draws on the Bank’s strengths and attributes and identifies areas of opportunity and brings together these two elements to ensure customers benefit in a way that is important to them. | ||
It is expected that the impact during 2006/2007 of service initiatives already completed and being implemented will add further to the Bank’s competitiveness, customer satisfaction levels and ultimately the Bank’s market share in profitable areas. | ||
People Engagement | There have been solid people engagement improvements driven from the Which new Bank program. This result is supported by enhanced employee satisfaction readings, key culture change measures, a continuing safety improvement focus and the implementation of enhanced leadership, performance management and talent management frameworks. | |
This progress is reflective of the Bank’s commitment to its people. The evolutionary strategy builds on the success of the Which new Bank program and includes a strategic priority relating to Trust and Team spirit. Through strengthening leadership, developing and valuing our people and working collaboratively business performance will be lifted and growth will continue. | ||
Business Outcomes | The Bank exceeded its net profit after tax (NPAT) targets for the year ended 30 June 2006. Cash NPAT increased by 16% compared to the prior year. This result includes the profit from the sale of the Hong Kong insurance business of $145 million. Excluding this item, cash NPAT increased 12%. Underlying NPAT also increased by 12%. | |
All Which new Bank market commitments were either met or exceeded. | ||
The result was delivered through strong performances across the business driven by strong growth in Banking Income. Fund flows and investment returns have also been strong, insurance growth has been good and productivity continues to improve. | ||
Cash NPAT performance 2002 to 2006 | Cash EPS performance 2002 to 2006 | |
• | Progress in relation to the Bank’s four strategic priorities of Customer Service, Business Banking, Technology and Operational Excellence and Trust and Team Spirit; | |
• | Business and financial results; | |
• | Recruitment and development of top management; | |
• | Employee engagement initiatives; | |
• | The Bank’s sales and service culture; and | |
• | Relationships with external stakeholders including the general community, investors, regulators, Government and the media. |
Committee Compensation | ||||||||||||||||||||
Board | People and | |||||||||||||||||||
Compensation(1) | Remuneration | Audit | Risk | Total | ||||||||||||||||
Director | $ | $ | $ | $ | $ | |||||||||||||||
J M Schubert | 560,000 | 20,000 | — | 20,000 | 600,000 | |||||||||||||||
R J Clairs | 160,000 | 35,000 | — | 20,000 | 215,000 | |||||||||||||||
A B Daniels | 160,000 | 20,000 | — | 20,000 | 200,000 | |||||||||||||||
C R Galbraith | 160,000 | — | 25,000 | 20,000 | 205,000 | |||||||||||||||
S C H Kay | 160,000 | 20,000 | — | 20,000 | 200,000 | |||||||||||||||
W G Kent | 160,000 | — | 25,000 | 20,000 | 205,000 | |||||||||||||||
F D Ryan | 160,000 | — | 45,000 | 20,000 | 225,000 | |||||||||||||||
F J Swan | 160,000 | — | — | 35,000 | 195,000 | |||||||||||||||
B K Ward | 160,000 | — | 25,000 | 20,000 | 205,000 | |||||||||||||||
Total | 1,840,000 | 95,000 | 120,000 | 195,000 | 2,250,000 | |||||||||||||||
(1) | Non-Executive Directors sacrifice 20% of these fees on a mandatory basis under the Non-Executive Directors Share Plan (NEDSP). |
Increase in Accrued Benefit in Year | Entitlement as at 30 June 2005 | |||||||
Director | $ | $ | ||||||
J M Schubert | — | 636,398 | ||||||
R J Clairs | — | 202,989 | ||||||
A B Daniels | — | 160,618 | ||||||
C R Galbraith | — | 159,092 | ||||||
S C H Kay(1) | — | — | ||||||
W G Kent | — | 159,092 | ||||||
F D Ryan | — | 168,263 | ||||||
F J Swan | — | 266,173 | ||||||
B K Ward | — | 370,180 | ||||||
Total | 2,122,805 | |||||||
(1) | Ms Kay was appointed a Director after the closure of the scheme. |
Short Term Benefits | Post Employment Benefits | Equity Benefits | Other Benefits | |||||||||||||||||||||||||||||||||||||||||
STI | STI | LTI | ||||||||||||||||||||||||||||||||||||||||||
Cash | Cash STI payment | Deferred in Cash | Super- annuation | Retirement Allowance | Deferred in Shares | Reward Shares | NEDSP | Termi- nation | Other | Total | ||||||||||||||||||||||||||||||||||
Fixed(1) | At Risk | At Risk | Fixed(2) | Fixed(3) | At Risk | At Risk | Fixed(1) | Benefits | Benefits | Compensation | ||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
J M Schubert | Chairman (commenced as Chairman on 26 November 2004) | |||||||||||||||||||||||||||||||||||||||||||
2006 | 478,665 | — | — | 43,082 | — | — | — | 119,666 | — | — | 641,413 | |||||||||||||||||||||||||||||||||
2005 | 342,987 | — | — | 30,869 | 12,157 | — | — | 85,747 | — | — | 471,760 | |||||||||||||||||||||||||||||||||
R J Norris(4) | Managing Director and CEO (commenced in role on 22 September 2005. See notes to the “Compensation of Executives” table for details of individual items) | |||||||||||||||||||||||||||||||||||||||||||
2006 | 921,642 | — | 650,000 | 1,248,358 | — | — | 483,045 | — | — | 846,963 | 4,150,008 | |||||||||||||||||||||||||||||||||
2005 | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
R J Clairs | ||||||||||||||||||||||||||||||||||||||||||||
2006 | 171,529 | — | — | 15,438 | — | — | — | 42,882 | — | — | 229,849 | |||||||||||||||||||||||||||||||||
2005 | 139,075 | — | — | 12,517 | 18,201 | — | — | 34,769 | — | — | 204,562 | |||||||||||||||||||||||||||||||||
A B Daniels(5) | ||||||||||||||||||||||||||||||||||||||||||||
2006 | 159,562 | — | — | — | — | — | — | 39,891 | — | — | 199,453 | |||||||||||||||||||||||||||||||||
2005 | 131,831 | — | — | 11,865 | 15,159 | — | — | 32,958 | — | — | 191,813 | |||||||||||||||||||||||||||||||||
C R Galbraith | ||||||||||||||||||||||||||||||||||||||||||||
2006 | 163,551 | — | — | 14,720 | — | — | — | 40,888 | — | — | 219,159 | |||||||||||||||||||||||||||||||||
2005 | 130,220 | — | — | 11,720 | 8,542 | — | — | 32,555 | — | — | 183,037 | |||||||||||||||||||||||||||||||||
S C Kay | ||||||||||||||||||||||||||||||||||||||||||||
2006 | 159,562 | — | — | 14,361 | — | — | — | 39,891 | — | — | 213,814 | |||||||||||||||||||||||||||||||||
2005 | 165,976 | — | — | 14,938 | — | — | — | 41,494 | — | — | 222,408 | |||||||||||||||||||||||||||||||||
W G Kent | ||||||||||||||||||||||||||||||||||||||||||||
2006 | 163,551 | — | — | 14,720 | — | — | — | 40,888 | — | — | 219,159 | |||||||||||||||||||||||||||||||||
2005 | 130,220 | — | — | 11,720 | 8,542 | — | — | 32,555 | — | — | 183,037 | |||||||||||||||||||||||||||||||||
F D Ryan | ||||||||||||||||||||||||||||||||||||||||||||
2006 | 179,507 | — | — | 16,156 | — | — | — | 44,877 | — | — | 240,540 | |||||||||||||||||||||||||||||||||
2005 | 145,398 | — | — | 13,086 | 12,723 | — | — | 36,350 | — | — | 207,557 | |||||||||||||||||||||||||||||||||
F J Swan | ||||||||||||||||||||||||||||||||||||||||||||
2006 | 155,573 | — | — | 14,002 | — | — | — | 38,893 | — | — | 208,468 | |||||||||||||||||||||||||||||||||
2005 | 124,478 | — | — | 11,203 | 8,087 | — | — | 31,120 | — | — | 174,888 | |||||||||||||||||||||||||||||||||
B K Ward | ||||||||||||||||||||||||||||||||||||||||||||
2006 | 163,551 | — | — | 14,720 | — | — | — | 40,888 | — | — | 219,159 | |||||||||||||||||||||||||||||||||
2005 | 135,831 | — | — | 12,225 | 17,225 | — | — | 33,958 | — | — | 199,239 | |||||||||||||||||||||||||||||||||
D V Murray(4) (6) | (retired 22 September 2005. See notes to the “Compensation of Executives” table for details of individual items) | |||||||||||||||||||||||||||||||||||||||||||
2006 | 351,500 | — | — | 1,395,557 | — | 112,500 | (2,891,623 | ) | — | 8,772,464 | — | 7,740,398 | ||||||||||||||||||||||||||||||||
2005 | 1,757,500 | 760,000 | 760,000 | 142,500 | — | 431,250 | 1,124,865 | — | — | — | 4,976,115 | |||||||||||||||||||||||||||||||||
Total Compensation for Directors | ||||||||||||||||||||||||||||||||||||||||||||
2006 | 3,068,193 | — | 650,000 | 2,791,114 | — | 112,500 | (2,408,578 | ) | 448,764 | 8,772,464 | 846,963 | 14,281,420 | ||||||||||||||||||||||||||||||||
2005 | 3,328,730 | 760,000 | 760,000 | 274,839 | 100,636 | 431,250 | 1,124,865 | 392,808 | — | — | 7,173,128 | |||||||||||||||||||||||||||||||||
(1) | For Non-Executive Directors, this includes that portion of base fees and committee fees paid as cash. Non-Executive Directors also sacrifice 20% of their fees on a mandatory basis under the Non-Executive Directors Share Plan (NEDSP). Further detail on the NEDSP is contained in Note 33 to the Financial Statements. | |
(2) | Represents company contribution to superannuation and includes any allocations made by way of salary sacrifice by Executives. | |
(3) | For Non-Executive Directors this represents the increase in their accrued benefit in the year under the Director’s Retirement Allowance Scheme which was approved by shareholders at the 1997 Annual General Meeting. See page 58 regarding discontinuance of the Scheme. | |
(4) | Refer to page 57 for explanatory information for each compensation component. | |
(5) | Mr Daniels turned 70 during the year ended 30 June 2005. The Bank’s compulsory superannuation obligations cease after a person reaches age 70. | |
(6) | Mr Murray’s termination benefit represents a pro rata entitlement to Performance Units granted in place of the Reward Shares originally granted under the 2002, 2003 and 2004 ERP arrangements that were automatically forfeited when he retired from the Bank. The Performance Units may vest in him at a future date, depending on the performance of the relevant grant. He may receive all, some or none of these Performance Units, depending on the performance of the grant over the relevant periods. This arrangement is consistent with termination arrangements for Executives who have unvested ERP Reward Shares when they retire from the Bank. |
Post | ||||||||||||||||||||||||||||||||||||||||
Employment | ||||||||||||||||||||||||||||||||||||||||
Short Term Benefits | Benefits | Equity Benefits | Other Benefits | |||||||||||||||||||||||||||||||||||||
STI | STI | LTI | ||||||||||||||||||||||||||||||||||||||
Cash | Non Monetary | Cash STI payment | Deferred in Cash | Super- annuation | Deferred in Shares | Reward Shares | Termi- nation | Other | Total | |||||||||||||||||||||||||||||||
Fixed(1) | Fixed(2) | At Risk(3) | At Risk(4) | Fixed(5) | At Risk(6) | At Risk(7) | Benefits(8) | Benefits(9) | Compensation | |||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
M A Cameron | Group Executive, Retail Banking Services | |||||||||||||||||||||||||||||||||||||||
2006 | 833,465 | 10,260 | 382,485 | 382,485 | 59,995 | 42,500 | 346,920 | — | — | 2,058,110 | ||||||||||||||||||||||||||||||
2005(10) | 718,300 | 10,260 | 327,250 | 327,250 | 51,700 | 160,625 | 190,436 | — | — | 1,785,821 | ||||||||||||||||||||||||||||||
L G Cupper | Group Executive, People Services | |||||||||||||||||||||||||||||||||||||||
2006(11) | 634,500 | 10,260 | — | — | 643,900 | 48,750 | 396,886 | — | — | 1,734,296 | ||||||||||||||||||||||||||||||
2005(10) | 605,000 | 10,260 | 292,500 | 292,500 | 45,000 | 185,625 | 274,675 | — | — | 1,705,560 | ||||||||||||||||||||||||||||||
S I Grimshaw | Group Executive, Premium Business Services | |||||||||||||||||||||||||||||||||||||||
2006 | 1,026,000 | 10,260 | 506,000 | 506,000 | 74,000 | 70,000 | 560,429 | — | — | 2,752,689 | ||||||||||||||||||||||||||||||
2005(10) | 932,500 | 10,260 | 425,000 | 425,000 | 67,500 | 275,625 | 369,986 | — | — | 2,505,871 | ||||||||||||||||||||||||||||||
H D Harley | Group Executive, Group Strategic Development | |||||||||||||||||||||||||||||||||||||||
2006 | 839,500 | 9,837 | 324,000 | 324,000 | 60,500 | 57,500 | 449,894 | — | — | 2,065,231 | ||||||||||||||||||||||||||||||
2005(10) | 783,500 | 10,260 | 357,500 | 357,500 | 56,500 | 207,500 | 273,868 | — | — | 2,046,628 | ||||||||||||||||||||||||||||||
M R Harte | Group Executive, Enterprise IT (commenced in the role on 10 April 2006) | |||||||||||||||||||||||||||||||||||||||
2006 | 117,500 | — | 64,575 | 64,575 | 708,500 | — | — | — | 115,825 | 1,070,975 | ||||||||||||||||||||||||||||||
2005(10) | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
M A Katz | Group Executive, Premium Business Services (resigned on 24 March 2006) | |||||||||||||||||||||||||||||||||||||||
2006(12) | 775,227 | 7,490 | — | — | 50,330 | 72,500 | (1,293,780 | ) | 3,564,028 | — | 3,175,795 | |||||||||||||||||||||||||||||
2005(10) | 950,000 | 10,260 | 382,500 | 382,500 | 68,400 | 277,500 | 453,878 | — | — | 2,525,038 | ||||||||||||||||||||||||||||||
R V McKinnon | Group Executive, Technology Services (resigned on 31 December 2005) | |||||||||||||||||||||||||||||||||||||||
2006(12) | 293,750 | 5,130 | — | (240,000 | ) | 21,250 | (35,625 | ) | (542,201 | ) | 31,280 | — | (466,416 | ) | ||||||||||||||||||||||||||
2005(10) | 560,000 | 10,260 | 240,000 | 240,000 | 40,000 | 138,750 | 191,324 | — | — | 1,420,334 | ||||||||||||||||||||||||||||||
G L Mackrell | Group Executive, International Financial Services | |||||||||||||||||||||||||||||||||||||||
2006 | 710,000 | 10,260 | 363,400 | 363,400 | 80,907 | 50,625 | 419,034 | — | — | 1,997,626 | ||||||||||||||||||||||||||||||
2005(10) | 628,000 | 10,260 | 315,000 | 315,000 | 84,985 | 198,125 | 270,349 | — | — | 1,821,719 | ||||||||||||||||||||||||||||||
J K O’Sullivan | General Counsel | |||||||||||||||||||||||||||||||||||||||
2006 | 755,600 | 10,260 | 291,200 | 331,200 | 94,400 | 50,000 | 313,517 | — | — | 1,846,177 | ||||||||||||||||||||||||||||||
2005(10) | 728,000 | 10,260 | 295,000 | 295,000 | 52,000 | 150,000 | 186,873 | — | — | 1,717,133 | ||||||||||||||||||||||||||||||
G A Petersen | Group Executive, Wealth Management | |||||||||||||||||||||||||||||||||||||||
2006 | 542,233 | 10,260 | 282,449 | 282,449 | 102,543 | 27,612 | 219,233 | — | — | 1,466,779 | ||||||||||||||||||||||||||||||
2005(10) | 437,000 | 10,260 | 217,500 | 217,500 | 72,200 | 103,227 | 110,538 | — | — | 1,168,225 | ||||||||||||||||||||||||||||||
Total Compensation(13) | ||||||||||||||||||||||||||||||||||||||||
2006 | 6,527,775 | 84,017 | 2,214,109 | 2,014,109 | 1,896,325 | 383,862 | 869,932 | 3,595,308 | 115,825 | 17,701,262 | ||||||||||||||||||||||||||||||
2005(10) (13) | 6,342,300 | 92,340 | 2,852,250 | 2,852,250 | 538,285 | 1,696,977 | 2,321,927 | — | — | 16,696,329 | ||||||||||||||||||||||||||||||
Other Executives(14) | ||||||||||||||||||||||||||||||||||||||||
J Beggs | Executive General Manager, Enterprise IT | |||||||||||||||||||||||||||||||||||||||
2006 | 412,000 | — | 721,000 | 721,000 | 12,139 | 162,504 | 147,989 | — | — | 2,176,632 | ||||||||||||||||||||||||||||||
2005 | 400,000 | — | 1,125,000 | 1,125,000 | 11,585 | 625,012 | 94,741 | — | — | 3,381,338 | ||||||||||||||||||||||||||||||
W Negus | Chief Executive Officer, Colonial First State Global Asset Management (commenced in role 1 June 2005) | |||||||||||||||||||||||||||||||||||||||
2006 | 932,836 | 10,260 | 886,000 | 886,000 | 67,164 | — | 194,994 | — | — | 2,977,254 | ||||||||||||||||||||||||||||||
2005 | 77,333 | 855 | — | — | 5,568 | — | — | — | — | 83,756 | ||||||||||||||||||||||||||||||
M Touw(15) | Executive General Manager, Global Markets and Group Treasury | |||||||||||||||||||||||||||||||||||||||
2006 | 535,600 | 10,260 | 2,420,000 | 3,630,000 | 38,563 | 317,243 | 168,236 | — | — | 7,119,902 | ||||||||||||||||||||||||||||||
2005 | 515,000 | 10,260 | 831,110 | 1,246,665 | 37,080 | 678,946 | 106,986 | — | — | 3,426,047 | ||||||||||||||||||||||||||||||
Total Compensation for Executives | ||||||||||||||||||||||||||||||||||||||||
2006 | 8,408,211 | 104,537 | 6,241,109 | 7,251,109 | 2,014,191 | 863,609 | 1,381,151 | 3,595,308 | 115,825 | 29,975,050 | ||||||||||||||||||||||||||||||
2005 | 7,334,633 | 103,455 | 4,808,360 | 5,223,915 | 592,518 | 3,000,935 | 2,523,654 | — | — | 23,587,470 | ||||||||||||||||||||||||||||||
(1) | Reflects amounts paid in the year ended 30 June and is calculated on a total cost basis. Included may be salary sacrifice amounts (e.g. motor vehicles plus FBT) with the exception of salary sacrifice superannuation which is included under ‘Superannuation’. | |
(2) | Represents the cost of car parking (including FBT). | |
(3) | Cash STI payment represents the amount of cash immediately payable to an Executive in recognition of performance for the year ended 30 June, with the exception of STI sacrificed to superannuation which is included under ‘Superannuation’. | |
(4) | STI Deferred in Cash represents the mandatory deferral of 50% of STI payments for Executives in recognition of performance to the year ended 30 June 2006. These amounts are deferred until 1 July 2007. Generally, the Executive will need to be an employee of the Bank at the end of the deferral period to receive this portion. Deferrals of STI payments prior to 2005 were made in shares. | |
(5) | Represents company contribution to superannuation and includes any allocations made by way of salary sacrifice by Executives. |
(6) | STI Deferred in Shares represents the cost of shares acquired under the mandatory component of the Equity Participation Plan (EPP). Shares vest in two equal tranches after one and two years respectively. For example, for STI payments for the year ended 30 June 2004, half the shares vested on 1 July 2005 and half vested on 1 July 2006. The amount included in compensation each year has been amortised on a straight-line basis over the vesting period for each tranche of shares. See Note 33 to the Financial Statements for further details on the operation of the EPP. The last share grant made under the mandatory component of the EPP was in 2005. Mr McKinnon forfeited shares deferred under the mandatory component of the EPP (MEP) when he exited the Bank, resulting in a reversal of disclosed amounts for STI Deferred in Shares, as required under AASB124. | |
(7) | The ‘fair value’ of LTI reward shares has been calculated using a Monte-Carlo simulation method, incorporating the assumptions below : The assessment has been made as at purchase date for each ERP grant based on the expected future TSR performance of the Bank and each member of its peer group. The annualised equivalent of the ‘fair value’ in respect of the number of shares for each grant has been amortised on a straight line basis over the term of the grant. Messrs Katz, McKinnon and Murray forfeited reward shares when they exited the Bank, resulting in a reversal of disclosed amounts for LTI Reward Shares, as required under AASB124. |
Purchase Date | Fair Value | Exercise Price | Risk Free Rate | Assumption Term | Dividend Yield | Volatility | ||||||||||||||||||
30 November 2002 | $ | 16.75 | $ | 0.00 | 5.35 | % | 57 mths | Nil | 20.0 | % | ||||||||||||||
29 October 2003 | $ | 16.36 | $ | 0.00 | 5.70 | % | 58 mths | Nil | 20.0 | % | ||||||||||||||
22 September 2004 | $ | 16.72 | $ | 0.00 | 5.48 | % | 59 mths | Nil | 15.0 | % | ||||||||||||||
5 November 2004 | $ | 19.72 | $ | 0.00 | 5.61 | % | 57 mths | Nil | 15.0 | % | ||||||||||||||
23 November 2005 | $ | 24.51 | $ | 0.00 | 5.65 | % | 56 mths | Nil | 15.0 | % | ||||||||||||||
(8) | Represents any severance payments made on termination of employment (excluding any payment in lieu of notice). For Messrs Katz and McKinnon, termination benefit includes a pro rata entitlement to Performance Units granted in place of the Reward Shares originally granted under the ERP arrangements that were automatically forfeited when they resigned from the Bank. The Performance Units may vest at a future date, depending on the performance of the relevant grant. They may receive all, some or none of these Performance Units, depending on the performance of the grant over the relevant periods. This arrangement is consistent with termination arrangements for Executives who have unvested ERP Reward Shares when they exit the Bank. | |
(9) | All Other Benefits payable that are not covered above, including any payment made in lieu of notice on termination of employment and other contractual payments. | |
(10) | Differences in disclosure requirements of AASB1046 which applied for the 2005 Remuneration Report and requirements under AASB124 and AASB2 which apply for 2006 disclosure have resulted in differences in compensation disclosures. In particular, options are no longer disclosed in the 2005 comparative figures as all options were issued by the Bank prior to 7 November 2002, and AASB2 does not require these to be disclosed, and the calculation for determining LTI amounts to be disclosed has also changed. | |
(11) | As announced on 4 August 2006, Mr Cupper will retire from the Bank at the end of October 2006. As a result, 100% of his STI payment was immediately payable and has been included under ‘Superannuation’. | |
(12) | Negative values are shown where at risk compensation that was disclosed in previous Remuneration Reports has been forfeited. Messrs Katz and McKinnon both forfeited LTI Reward Shares upon exiting the Bank that were included in their disclosed compensation details for the year ended 30 June 2005. | |
(13) | Group totals in respect of the financial year ended 30 June 2005 do not necessarily equal the sum of amounts disclosed for individuals specified in 2006 as there are differences to the individuals specified in 2005. | |
(14) | These Executives, who are not Key Management Personnel, and Messrs Grimshaw and Katz are the five Executives who received the highest compensation for the year ended 30 June 2006 as defined in the Section 300A of the Corporations Act 2001. | |
(15) | 60% of Mr Touw’s STI payment is deferred as cash, with a 20% tranche vesting on 1 July each year until the final 20% vests at the end of three years. Each tranche is indexed to mirror the Bank’s TSR performance over the relevant vesting period. Generally Mr Touw will need to be employed with the Bank at the vesting date to receive the relevant tranche. |
Percentage | Percentage | Percentage | Minimum Total | Maximum Total | ||||||||||||||||
Paid | Forfeited | Deferred(1) | Value | Value | ||||||||||||||||
% | % | % | $ | $ | ||||||||||||||||
M A Cameron | 50 | — | 50 | 382,485 | 764,970 | |||||||||||||||
L G Cupper(2) | 100 | — | — | 598,400 | 598,400 | |||||||||||||||
S I Grimshaw | 50 | — | 50 | 506,000 | 1,012,000 | |||||||||||||||
H D Harley | 50 | — | 50 | 324,000 | 648,000 | |||||||||||||||
M R Harte(3) | 50 | — | 50 | 64,575 | 129,150 | |||||||||||||||
M A Katz(4) | — | — | — | — | — | |||||||||||||||
R V McKinnon(5) | — | — | — | — | — | |||||||||||||||
G L Mackrell | 50 | — | 50 | 363,400 | 726,800 | |||||||||||||||
R J Norris(6) | 50 | — | 50 | 650,000 | 1,300,000 | |||||||||||||||
J K O’Sullivan | 50 | — | 50 | 331,200 | 662,400 | |||||||||||||||
G A Petersen | 50 | — | 50 | 282,449 | 564,898 | |||||||||||||||
J Beggs | 50 | — | 50 | 721,000 | 1,442,000 | |||||||||||||||
W Negus | 50 | — | 50 | 886,000 | 1,772,000 | |||||||||||||||
M Touw(7) | 40 | — | 60 | 2,420,000 | 6,050,000 | |||||||||||||||
(1) | Will generally vest on 1 July 2007 and be paid in July 2007, subject to not being forfeited due to resignation or misconduct including misrepresentation of performance outcomes. Will generally vest and be immediately payable in circumstances of retrenchment, retirement or death. Mr Touw has slightly different arrangements. Refer Footnote 7 below for details. | |
(2) | Mr Cupper will retire from the Bank at the end of October 2006. As a result, 100% of his STI payment was immediately payable as cash. | |
(3) | Mr Harte commenced on 10 April 2006. | |
(4) | Mr Katz ceased employment on 24 March 2006 | |
(5) | Mr McKinnon ceased employment on 31 December 2005. | |
(6) | Mr Norris commenced in the role on 22 September 2005. | |
(7) | 60% of Mr Touw’s STI payment is deferred as cash, with a 20% tranche vesting on 1 July each year until the final 20% vests at the end of three years. Each tranche is indexed to mirror the Bank’s TSR performance over the relevant vesting period. Generally Mr Touw will need to be employed with the Bank at the vesting date to receive the relevant tranche. |
Percentage | Percentage | Percentage | Current | Minimum Total | Maximum Total | |||||||||||||||||||
Paid(1) | Forfeited | Deferred(1) | Allocation | Value | Value(2) | |||||||||||||||||||
% | % | % | (No. of Shares) | $ | $ | |||||||||||||||||||
M A Cameron | — | — | 100 | 29,190 | — | 1,132,572 | ||||||||||||||||||
L G Cupper | — | — | 100 | 22,440 | — | 870,672 | ||||||||||||||||||
S I Grimshaw | — | — | 100 | 35,140 | — | 1,363,432 | ||||||||||||||||||
H D Harley | — | — | 100 | 32,440 | — | 1,258,672 | ||||||||||||||||||
M R Harte(3) | — | — | 100 | — | — | — | ||||||||||||||||||
M A Katz(4) | — | 74 | 26 | 9,900 | — | 384,120 | ||||||||||||||||||
R V McKinnon(5) | — | 100 | — | — | — | — | ||||||||||||||||||
G L Mackrell | — | — | 100 | 27,570 | — | 1,069,716 | ||||||||||||||||||
R J Norris(6) | — | — | 100 | 100,328 | — | 3,892,726 | ||||||||||||||||||
J K O’Sullivan | — | — | 100 | 23,250 | — | 902,100 | ||||||||||||||||||
G A Petersen | — | — | 100 | 20,280 | — | 786,864 | ||||||||||||||||||
J Beggs | — | — | 100 | 10,000 | — | 388,000 | ||||||||||||||||||
W Negus | — | — | 100 | 40,500 | — | 1,571,400 | ||||||||||||||||||
M Touw | — | — | 100 | 11,250 | — | 436,500 | ||||||||||||||||||
(1) | Will vest in 2008/2009, 2009/2010 or 2010/2011 subject to the service conditions and performance hurdle being met (see page 54). In circumstances of retrenchment, retirement or death, the Executive or their Estate may, at Board discretion, retain a pro-rated grant of long term incentives. | |
(2) | This equals the “Number of Reward Shares Allocated” multiplied by the Bank’s closing share price at the Commencement Date of the grant (15 July 2005), which was $38.80. | |
(3) | Mr Harte commenced on 10 April 2006. | |
(4) | Mr Katz ceased employment on 24 March 2006 and retained a pro rata LTI allocation. | |
(5) | Mr McKinnon ceased employment on 31 December 2005. | |
(6) | Mr Norris commenced in the role on 22 September 2005. |
Acquired/Granted | ||||||||||||||||||||||
Balance | as | On Exercise of | Net Change | Balance | ||||||||||||||||||
Name | Class | 1 July 2005 | Compensation(1) | Options | Other(2) | 30 June 2006 | ||||||||||||||||
Directors | ||||||||||||||||||||||
R J Clairs | Ordinary | 13,357 | 776 | — | — | 14,133 | ||||||||||||||||
A B Daniels(3) | Ordinary | 17,669 | 721 | — | 301 | 18,691 | ||||||||||||||||
C R Galbraith | Ordinary | 8,824 | 740 | — | 466 | 10,030 | ||||||||||||||||
S C H Kay | Ordinary | 3,669 | 721 | — | — | 4,390 | ||||||||||||||||
W G Kent | Ordinary | 15,286 | 740 | — | 87 | 16,113 | ||||||||||||||||
D V Murray(4) | Ordinary | 323,638 | — | 250,000 | (78,093 | ) | 495,545 | |||||||||||||||
Deferred STI | 21,866 | — | — | (21,866 | ) | — | ||||||||||||||||
Reward Shares | 325,000 | — | — | (325,000 | ) | — | ||||||||||||||||
R J Norris(5) | Ordinary | 10,000 | — | — | — | 10,000 | ||||||||||||||||
Reward Shares | — | 100,328 | — | — | 100,328 | |||||||||||||||||
F D Ryan | Ordinary | 7,430 | 812 | — | — | 8,242 | ||||||||||||||||
J M Schubert | Ordinary | 18,508 | 2,165 | — | 515 | 21,188 | ||||||||||||||||
F J Swan | Ordinary | 5,954 | 704 | — | 316 | 6,974 | ||||||||||||||||
B K Ward(6) | Ordinary | 5,766 | 739 | — | 124 | 6,629 | ||||||||||||||||
Ordinary | 430,101 | 8,118 | 250,000 | (76,284 | ) | 611,935 | ||||||||||||||||
Total For Directors | Deferred STI | 21,866 | — | — | (21,866 | ) | — | |||||||||||||||
Reward Shares | 325,000 | 100,328 | — | (325,000 | ) | 100,328 | ||||||||||||||||
(1) | For Non-Executive Directors, represents shares acquired under NEDSP on 2 September 2005 and 15 March 2006 by mandatory sacrifice of fees. All shares acquired through NEDSP are subject to a 10 year trading restriction (shares will be tradeable earlier if the Director leaves the Board). See Note 33 to the Financial Statements for further details on the NEDSP. For Mr Norris, this represents Reward Shares granted under the Equity Reward Plan (ERP) and subject to a performance hurdle. The first possible date for meeting the performance hurdle is 15 July 2008 with the last possible date for vesting being 15 July 2010. See Note 33 to the Financial Statements for further details on the ERP. | |
(2) | ‘Net change other’ incorporates changes resulting from purchases and sales during the year by Directors and, for Mr Murray, vesting of deferred STI shares on retirement (which became Ordinary shares). | |
(3) | A related party of Mr Daniels beneficially holds an investment of $62,838 in Colonial First State Global Health and Biotech Fund, $403,860 in Colonial First State Future Leaders Fund and $361,464 in Colonial First State Imputation Fund. | |
(4) | Mr Murray retired on 22 September 2005. Mr Murray acquired 10,000 PERLS III securities during the year and continued to hold them at 30 June 2006. | |
(5) | Mr Norris commenced on 22 September 2005. | |
(6) | Ms Ward continued to hold 250 PERLS II securities at 30 June 2006. |
Acquired/Granted | ||||||||||||||||||||||
Balance | as | On Exercise | Net Change | Balance | ||||||||||||||||||
Name | Class | 30 June 2005 | Compensation(1) | of Options | Other(2) | 30 June 2006 | ||||||||||||||||
Executives | ||||||||||||||||||||||
M A Cameron | Ordinary | — | — | — | — | — | ||||||||||||||||
Deferred STI | 8,094 | — | — | (5,246 | ) | 2,848 | ||||||||||||||||
Reward Shares | 60,430 | 29,190 | — | — | 89,620 | |||||||||||||||||
L G Cupper(3) | Ordinary | 44,540 | — | — | 6,815 | 51,355 | ||||||||||||||||
Deferred STI | 9,385 | — | — | (6,118 | ) | 3,267 | ||||||||||||||||
Reward Shares | 84,000 | 22,440 | — | — | 106,440 | |||||||||||||||||
S I Grimshaw | Ordinary | 16,365 | — | 100,000 | (91,057 | ) | 25,308 | |||||||||||||||
Deferred STI | 14,133 | — | — | (9,442 | ) | 4,691 | ||||||||||||||||
Reward Shares | 113,800 | 35,140 | — | — | 148,940 | |||||||||||||||||
H D Harley | Ordinary | 25,852 | — | 87,500 | (87,071 | ) | 26,281 | |||||||||||||||
Deferred STI | 10,241 | — | — | (6,388 | ) | 3,853 | ||||||||||||||||
Reward Shares | 85,700 | 32,440 | — | — | 118,140 | |||||||||||||||||
M R Harte(4) | Ordinary | — | — | — | — | — | ||||||||||||||||
Deferred STI | — | — | — | — | — | |||||||||||||||||
Reward Shares | — | — | — | — | — | |||||||||||||||||
M A Katz(5) | Ordinary | 303,748 | — | 250,000 | (378,748 | ) | 175,000 | |||||||||||||||
Deferred STI | 14,061 | — | — | (14,061 | ) | — | ||||||||||||||||
Reward Shares | 139,130 | 38,380 | — | (177,510 | ) | — | ||||||||||||||||
R V McKinnon(6) | Ordinary | 43,991 | — | 37,500 | (81,491 | ) | — | |||||||||||||||
Deferred STI | 7,083 | — | — | (7,083 | ) | — | ||||||||||||||||
Reward Shares | 58,750 | 17,030 | — | (75,780 | ) | — | ||||||||||||||||
G L Mackrell | Ordinary | 27,319 | — | — | 7,611 | 34,930 | ||||||||||||||||
Deferred STI | 10,134 | — | — | (6,742 | ) | 3,392 | ||||||||||||||||
Reward Shares | 83,230 | 27,570 | — | — | 110,800 | |||||||||||||||||
J K O’Sullivan | Ordinary | 5,565 | — | — | 3,351 | 8,916 | ||||||||||||||||
Deferred STI | 6,702 | — | — | (3,351 | ) | 3,351 | ||||||||||||||||
Reward Shares | 59,440 | 23,250 | — | — | 82,690 | |||||||||||||||||
G A Petersen | Ordinary | 8,572 | — | — | 1,335 | 9,907 | ||||||||||||||||
Deferred STI | 5,177 | — | — | (3,327 | ) | 1,850 | ||||||||||||||||
Reward Shares | 35,500 | 20,280 | — | — | 55,780 | |||||||||||||||||
Other Executives | ||||||||||||||||||||||
J Beggs | Ordinary | 105,891 | — | — | 20,845 | 126,736 | ||||||||||||||||
Deferred STI | 31,734 | — | — | (20,845 | ) | 10,889 | ||||||||||||||||
Reward Shares | 29,000 | 10,000 | — | — | 39,000 | |||||||||||||||||
W Negus | Ordinary | 3,680 | — | — | — | 3,680 | ||||||||||||||||
Deferred STI | — | — | — | — | — | |||||||||||||||||
Reward Shares | — | 40,500 | — | — | 40,500 | |||||||||||||||||
M Touw | Ordinary | — | — | — | — | — | ||||||||||||||||
Deferred STI | 49,703 | — | — | (16,574 | ) | 33,129 | ||||||||||||||||
Reward Shares | 33,200 | 11,250 | — | — | 44,450 | |||||||||||||||||
Total for Executives | Ordinary | 585,523 | — | 475,000 | (598,410 | ) | 462,113 | |||||||||||||||
Deferred STI | 166,447 | — | — | (99,177 | ) | 67,270 | ||||||||||||||||
Reward Shares | 782,180 | 307,470 | — | (253,290 | ) | 836,360 | ||||||||||||||||
(1) | Represents: | |
• | Deferred STI — acquired under the mandatory component of the Bank’s Equity Participation Plan (EPP). Shares were purchased on 31 October 2004 in two equal tranches, vesting on 1 July 2005 and 1 July 2006 respectively. See Note 33 to the Financial Statements for further details on the EPP. | |
• | Reward Shares — granted under the Equity Reward Plan (ERP) and are subject to a performance hurdle. The first possible date for meeting the performance hurdle is 16 July 2008 with the last possible date for vesting being 15 July 2010. See Note 33 to the Financial Statements for further details on the ERP. | |
(2) | ‘Net change other’ incorporates changes resulting from purchases and sales during the year by Executives and vesting of Deferred STI and Reward Shares (which became Ordinary shares). | |
(3) | Mr Cupper acquired 6,000 PERLS III securities during the year, and continued to hold them at 30 June 2006. | |
(4) | Mr Harte commenced on 10 April 2006. | |
(5) | Mr Katz ceased employment on 24 March 2006. Mr Katz acquired 2,250 PERLS III securities during the year, and continued to hold these and 250 PERLS II securities as at 30 June 2006. | |
(6) | Mr McKinnon ceased employment on 31 December 2005. |
Vested and Exercisable at | ||||||||||||||||||||
30 June 2006(1) | ||||||||||||||||||||
Balance | Options | Balance | Exercise Price | |||||||||||||||||
Name | 1 July 2005 | Exercised | 30 June 2006 | Number | $ | |||||||||||||||
Directors | ||||||||||||||||||||
D V Murray (retired on 22 September 2005) | 250,000 | (250,000 | ) | — | — | — | ||||||||||||||
R J Norris (commenced on 22 September 2005) | — | — | — | — | — | |||||||||||||||
Executives | ||||||||||||||||||||
M A Cameron | — | — | — | — | — | |||||||||||||||
L G Cupper | 75,000 | — | 75,000 | 75,000 | 30.12 | |||||||||||||||
S I Grimshaw | 100,000 | (100,000 | ) | — | — | — | ||||||||||||||
H D Harley | 87,500 | (87,500 | ) | — | — | — | ||||||||||||||
M R Harte | — | — | — | — | — | |||||||||||||||
M A Katz (ceased employment on 24 March 2006) | 250,000 | (250,000 | ) | — | — | — | ||||||||||||||
R V McKinnon (ceased employment on 31 December 2005) | 37,500 | (37,500 | ) | — | — | — | ||||||||||||||
G L Mackrell | — | — | — | — | — | |||||||||||||||
J K O’Sullivan | — | — | — | — | — | |||||||||||||||
G A Petersen | — | — | — | — | — | |||||||||||||||
Total for Key Management Personnel | 800,000 | (725,000 | ) | 75,000 | 75,000 | n/a | ||||||||||||||
Other Executives | ||||||||||||||||||||
J Beggs | 150,000 | — | 150,000 | 75,000 | 23.84 | |||||||||||||||
37,500 | 26.97 | |||||||||||||||||||
37,500 | 30.12 | |||||||||||||||||||
W Negus | — | — | — | — | — | |||||||||||||||
M Touw(2) | — | — | — | — | — | |||||||||||||||
Total | 950,000 | (725,000 | ) | 225,000 | 225,000 | n/a | ||||||||||||||
(1) | ‘Vested and Exercisable’ options represents those granted on 3 September 2001 with an exercise price of $30.12. Mr Beggs also held vested but unexercised options granted on 24 September 1999 with an exercise price of $23.84 and 13 September 2001 with an exercise price of $26.97 at 30 June 2006. | |
(2) | As at 30 June 2005, Mr Touw privately held a short selling (negative) position in Commonwealth Bank Call Options of 40,000. During the year he reversed out of this position and had a nil balance as at 30 June 2006. As at 30 June 2005 Mr Touw had a nil position in Commonwealth Bank Low Exercise Price Options (LEPOs). During the year he short sold 10,000 LEPOs and that position remained as at 30 June 2006. |
Shares Granted on Exercise of Options | ||||||||||||||||||||||||
Value in Excess | Total Value | |||||||||||||||||||||||
of Exercise | of Options | |||||||||||||||||||||||
Deferred STI | Reward Shares | Exercise Price | Price(1) | Exercised(2) | ||||||||||||||||||||
Name | Vested | Vested | Number | $ | $ | $ | ||||||||||||||||||
Directors | ||||||||||||||||||||||||
D V Murray(3) | 21,866 | — | 250,000 | 30.12 | 10.88 | 2,720,000 | ||||||||||||||||||
R J Norris(4) | — | — | — | |||||||||||||||||||||
Executives | ||||||||||||||||||||||||
M A Cameron | 5,246 | — | — | — | — | — | ||||||||||||||||||
L G Cupper | 6,118 | — | — | — | — | — | ||||||||||||||||||
S I Grimshaw | 9,442 | — | 100,000 | 30.12 | 7.15 | 715,000 | ||||||||||||||||||
H D Harley | 6,388 | — | 37,500 | 26.97 | 16.85 | 631,875 | ||||||||||||||||||
50,000 | 30.12 | 13.70 | 685,000 | |||||||||||||||||||||
M R Harte(5) | — | — | — | — | — | — | ||||||||||||||||||
M A Katz(6) | 14,061 | — | 125,000 | 26.97 | 18.48 | 2,310,000 | ||||||||||||||||||
125,000 | 30.12 | 15.33 | 1,916,250 | |||||||||||||||||||||
R V McKinnon(7) | 4,696 | — | 37,500 | 30.12 | 13.53 | 507,375 | ||||||||||||||||||
G L Mackrell | 6,742 | — | — | — | — | — | ||||||||||||||||||
J K O’Sullivan | 3,351 | — | — | — | — | — | ||||||||||||||||||
G A Petersen | 3,327 | — | — | — | — | — | ||||||||||||||||||
Total for Key Management Personnel | 81,237 | — | 725,000 | n/a | n/a | 9,485,500 | ||||||||||||||||||
Other Executives | ||||||||||||||||||||||||
J Beggs | 20,845 | — | — | — | — | — | ||||||||||||||||||
W Negus | — | — | — | — | — | — | ||||||||||||||||||
M Touw | 16,574 | — | — | — | — | — | ||||||||||||||||||
Total | 118,656 | — | 725,000 | n/a | n/a | 9,485,500 | ||||||||||||||||||
(1) | “Value in Excess of Exercise Price” represents the difference between the exercise price and closing market value of CBA shares on date of exercise. | |
(2) | “Total Value of Options Exercised” represents the number of options exercised multiplied by the “Value in Excess of Exercise Price”. No options were granted or lapsed during the year. Accordingly, this value represents the total value of options that were granted, lapsed and exercised during the year. | |
(3) | Mr Murray retired on 22 September 2005 and deferred STI vested at this time. | |
(4) | Mr Norris commenced on 22 September 2005. | |
(5) | Mr Harte commenced in the role on 10 April 2006 | |
(6) | Mr Katz ceased employment on 24 March 2006. | |
(7) | Mr McKinnon ceased employment on 31 December 2005. |
Balance | Interest Not | Balance | Number in | |||||||||||||||||||||||
Year Ended | 1 July | Interest Charged | Charged | Write-off | 30 June | Group at | ||||||||||||||||||||
30 June | $000s | $000s | $000s | $000s | $000s | 30 June | ||||||||||||||||||||
Directors | ||||||||||||||||||||||||||
2006 | — | 379 | — | — | 5,729 | 1 | ||||||||||||||||||||
2005 | 2 | — | — | — | 3 | 1 | ||||||||||||||||||||
Executives | ||||||||||||||||||||||||||
2006 | 9,894 | 550 | — | — | 9,284 | 7 | ||||||||||||||||||||
2005 | 8,706 | 523 | — | — | 8,803 | 6 | ||||||||||||||||||||
Total for Key Management Personnel | ||||||||||||||||||||||||||
2006 | 9,894 | 929 | — | — | 15,013 | 8 | ||||||||||||||||||||
2005 | 8,708 | 523 | — | — | 8,806 | 7 | ||||||||||||||||||||
Other Executives | ||||||||||||||||||||||||||
2006 | 554 | 31 | — | — | 442 | 1 | ||||||||||||||||||||
2005 | 554 | 32 | — | — | 554 | 1 | ||||||||||||||||||||
Highest | ||||||||||||||||||||||||
Balance | Interest | Interest Not | Balance | Balance | ||||||||||||||||||||
1 July 2005 | Charged | Charged | Write-off | 30 June 2006 | in Period | |||||||||||||||||||
$000s | $000s | $000s | $000s | $000s | $000s | |||||||||||||||||||
Directors | ||||||||||||||||||||||||
D V Murray | — | 379 | — | — | 5,729 | 5,729 | ||||||||||||||||||
Executives | ||||||||||||||||||||||||
M A Cameron | — | 5 | — | — | 358 | 546 | ||||||||||||||||||
— | 3 | — | — | 300 | 302 | |||||||||||||||||||
S I Grimshaw | 1,485 | 73 | — | — | 857 | 1,485 | ||||||||||||||||||
— | 16 | — | — | 391 | 394 | |||||||||||||||||||
H D Harley | 332 | 19 | — | — | 304 | 334 | ||||||||||||||||||
243 | 11 | — | — | — | 243 | |||||||||||||||||||
347 | 7 | — | — | — | 427 | |||||||||||||||||||
M A Katz | 175 | 11 | — | — | 175 | 175 | ||||||||||||||||||
175 | 11 | — | — | 175 | 175 | |||||||||||||||||||
500 | 31 | — | — | 500 | 500 | |||||||||||||||||||
100 | — | — | — | 100 | 100 | |||||||||||||||||||
G L Mackrell | 1,080 | 43 | — | — | 1,017 | 1,080 | ||||||||||||||||||
J K O’Sullivan | 1,500 | 97 | — | — | 1,500 | 1,500 | ||||||||||||||||||
392 | 26 | — | — | 582 | 587 | |||||||||||||||||||
696 | 42 | — | — | 614 | 696 | |||||||||||||||||||
258 | 17 | — | — | 274 | 277 | |||||||||||||||||||
647 | 42 | — | — | 647 | 647 | |||||||||||||||||||
200 | 12 | — | — | 200 | 200 | |||||||||||||||||||
201 | 7 | — | — | — | 203 | |||||||||||||||||||
G A Petersen | 400 | 11 | — | — | 155 | 400 | ||||||||||||||||||
800 | 52 | — | — | 800 | 800 | |||||||||||||||||||
Total for Key Management Personnel | 9,531 | 915 | — | — | 14,678 | 16,800 | ||||||||||||||||||
Other Executives | ||||||||||||||||||||||||
W Negus | 442 | 30 | — | — | 442 | 442 | ||||||||||||||||||
112 | 1 | — | — | — | 112 | |||||||||||||||||||
Total | 10,085 | 946 | — | — | 15,120 | 17,354 | ||||||||||||||||||
$’000 | ||||
Regulatory audits, reviews, attestations and assurances for Group entities — Australia | 1,495 | |||
Regulatory audits, reviews, attestations and assurances for Group entities — Off-shore | 631 | |||
APRA reporting (including the tripartite review) | 996 | |||
Financial and other audits, reviews, attestations and assurances for Group entities — Australia | 52 | |||
Financial and other audits, reviews, attestations and assurances for Group entities — Off-shore | 132 | |||
Assurance services relating to Sarbanes-Oxley legislation compliance | 2,782 | |||
Agreed upon procedures and comfort letters in respect of financing, debt raising and related activities | 457 | |||
Total | 6,545 | (1) | ||
(1) | An additional amount of $4,056,000 was paid to Ernst & Young by way of fees paid for Non-Audit Services provided to entities not consolidated into the Financial Statements, being management investment schemes and superannuation funds. $3,923,000 of this amount related to statutory audits, with the residual relating to reviews, attestations and assurances. |
• | The operation of the Independent Auditor Services Policy during the year to restrict the nature of non-audit services engagements, to prohibit certain services and to require Audit Committee pre-approval for all such engagements; and | |
• | The relative quantum of fees paid for non-audit services compared to the quantum of audit fees. |
J M Schubert | R J Norris | |
Chairman | Managing Director and Chief Executive Officer | |
23 August 2006 |
Partner
23 August 2006
under the Professional Standards Act 1994 (NSW).
AIFRS(1) | AGAAP(1) | ||||||||||||||||||||
2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||
$M | $M | $M | $M | $M | |||||||||||||||||
Income Statement | |||||||||||||||||||||
Net interest income | 6,514 | 6,026 | 5,410 | 5,026 | 4,710 | ||||||||||||||||
Other operating income | 5,567 | 5,076 | 5,081 | 4,373 | 4,358 | ||||||||||||||||
Total operating income | 12,081 | 11,102 | 10,491 | 9,399 | 9,068 | ||||||||||||||||
Bad debts expense | 398 | 322 | 276 | 305 | 449 | ||||||||||||||||
Operating expenses: | |||||||||||||||||||||
Comparable business | 5,994 | 5,719 | 5,500 | 5,312 | 5,201 | ||||||||||||||||
Initiatives including Which new Bank | — | 150 | 749 | 239 | — | ||||||||||||||||
Total operating expenses | 5,994 | 5,869 | 6,249 | 5,551 | 5,201 | ||||||||||||||||
Net profit before income tax | 5,689 | 4,911 | 3,966 | 3,543 | 3,418 | ||||||||||||||||
Corporate tax expense | (1,605 | ) | (1,409 | ) | (1,262 | ) | (958 | ) | (916 | ) | |||||||||||
Outside equity interests | (31 | ) | (10 | ) | (9 | ) | (6 | ) | (1 | ) | |||||||||||
Net profit after tax (“cash basis”) | 4,053 | 3,492 | 2,695 | 2,579 | 2,501 | ||||||||||||||||
Defined benefit superannuation plan expense | (25 | ) | (53 | ) | — | — | — | ||||||||||||||
Treasury share valuation adjustment | (100 | ) | (39 | ) | — | — | — | ||||||||||||||
Appraisal value uplift/(reduction) | — | — | 201 | (245 | ) | 477 | |||||||||||||||
Goodwill amortisation | — | — | (324 | ) | (322 | ) | (323 | ) | |||||||||||||
Operating profit after income tax attributable to members of the Bank | 3,928 | 3,400 | 2,572 | 2,012 | 2,655 | ||||||||||||||||
Contributions to profit (after tax) | |||||||||||||||||||||
Banking | 3,227 | 2,913 | 2,675 | 2,376 | 2,067 | ||||||||||||||||
Funds management | 400 | 351 | 274 | 233 | 368 | ||||||||||||||||
Insurance | 215 | 156 | 129 | 65 | 33 | ||||||||||||||||
Net profit after income tax (“underlying basis”) | 3,842 | 3,420 | 3,078 | 2,674 | 2,468 | ||||||||||||||||
Shareholder investment returns | 66 | 177 | 152 | 73 | 33 | ||||||||||||||||
Which new Bank | — | (105 | ) | (535 | ) | (168 | ) | — | |||||||||||||
Profit on sale of the Hong Kong insurance business | 145 | — | — | — | — | ||||||||||||||||
Net profit after income tax (“cash basis”) | 4,053 | 3,492 | 2,695 | 2,579 | 2,501 | ||||||||||||||||
Defined benefit superannuation plan expense | (25 | ) | (53 | ) | — | — | — | ||||||||||||||
Treasury share valuation adjustment | (100 | ) | (39 | ) | — | — | — | ||||||||||||||
Goodwill amortisation | — | — | (324 | ) | (322 | ) | (323 | ) | |||||||||||||
Appraisal value uplift/(reduction) | — | — | 201 | (245 | ) | 477 | |||||||||||||||
Net profit after income tax | 3,928 | 3,400 | 2,572 | 2,012 | 2,655 | ||||||||||||||||
Balance Sheet | |||||||||||||||||||||
Loans, advances and other receivables | 259,176 | 228,346 | 189,391 | 160,347 | 147,074 | ||||||||||||||||
Total assets | 369,103 | 337,404 | 305,995 | 265,110 | 249,648 | ||||||||||||||||
Deposits and other public borrowings | 173,227 | 168,026 | 163,177 | 140,974 | 132,800 | ||||||||||||||||
Total liabilities | 347,760 | 314,761 | 281,110 | 242,958 | 228,592 | ||||||||||||||||
Shareholders’ equity | 21,343 | 22,643 | 22,405 | 20,024 | 19,030 | ||||||||||||||||
Net tangible assets | 12,087 | 10,938 | 17,700 | 14,995 | 13,639 | ||||||||||||||||
Risk weighted assets | 216,438 | 189,559 | 169,321 | 146,808 | 141,049 | ||||||||||||||||
Average interest earning assets | 274,798 | 244,708 | 214,187 | 188,270 | 170,634 | ||||||||||||||||
Average interest bearing liabilities | 255,100 | 225,597 | 197,532 | 174,737 | 157,105 | ||||||||||||||||
Assets (on balance sheet) | |||||||||||||||||||||
Australia | 304,831 | 280,255 | 252,652 | 221,248 | 208,673 | ||||||||||||||||
New Zealand | 43,318 | 41,383 | 35,059 | 27,567 | 24,579 | ||||||||||||||||
Other | 20,954 | 15,766 | 18,284 | 16,295 | 16,396 | ||||||||||||||||
Total Assets | 369,103 | 337,404 | 305,995 | 265,110 | 249,648 | ||||||||||||||||
(1) | The Group adopted AIFRS accounting standards for the reporting period beginning 1 July 2004. As a result the 2006 and 2005 results are presented on an AIFRS basis, while the 2004, 2003 and 2002 results are presented on the previous AGAAP basis. |
AIFRS(1) | AGAAP(1) | ||||||||||||||||||||
2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||
Shareholder Summary | |||||||||||||||||||||
Dividends per share (cents) — fully franked | 224 | 197 | 183 | 154 | 150 | ||||||||||||||||
Dividends cover (times) — statutory | 1. 4 | 1. 3 | 1. 1 | 0. 9 | 1. 4 | ||||||||||||||||
Dividends cover (times) — cash | 1. 4 | 1. 3 | 1. 1 | 1. 3 | 1. 3 | ||||||||||||||||
Dividends cover (times) — underlying | 1. 3 | 1. 3 | 1. 3 | 1. 4 | 1. 3 | ||||||||||||||||
Earnings per share (cents) | |||||||||||||||||||||
Basic | |||||||||||||||||||||
Statutory | 308. 2 | 259. 6 | 196. 9 | 157. 4 | 209. 6 | ||||||||||||||||
Cash basis | 315. 9 | 264. 8 | 206. 6 | 202. 6 | 197. 3 | ||||||||||||||||
Underlying basis | 299. 4 | 259. 2 | 237. 1 | 210. 2 | 194. 6 | ||||||||||||||||
Fully diluted | |||||||||||||||||||||
Statutory | 303. 1 | 255. 3 | 196. 8 | 157. 3 | 209 .3 | ||||||||||||||||
Cash basis | 310. 5 | 260. 5 | 206. 5 | 202. 5 | 197. 0 | ||||||||||||||||
Underlying basis | 294. 7 | 255. 0 | 237. 0 | 210. 0 | 194. 3 | ||||||||||||||||
Dividend payout ratio (%) | |||||||||||||||||||||
Statutory | 73. 3 | 77. 0 | 93. 5 | 97. 7 | 71. 7 | ||||||||||||||||
Cash basis | 71. 0 | 74. 9 | 89. 1 | 75. 9 | 76. 2 | ||||||||||||||||
Underlying basis | 74. 9 | 76. 5 | 77. 6 | 73. 3 | 77. 2 | ||||||||||||||||
Net tangible assets per share ($) | 9. 4 | 8. 5 | 12. 2 | 11. 4 | 10. 3 | ||||||||||||||||
Weighted average number of shares (statutory basic) | 1,275 | 1,260 | 1,256 | 1,253 | 1,250 | ||||||||||||||||
Weighted average number of shares (fully diluted) | 1,329 | 1,316 | 1,257 | 1,254 | 1,252 | ||||||||||||||||
Weighted average number of shares (cash basic) | 1,283 | 1,269 | 1,256 | 1,253 | 1,250 | ||||||||||||||||
Weighted average number of shares (cash fully diluted) | 1,338 | 1,325 | 1,257 | 1,254 | 1,252 | ||||||||||||||||
Number of shareholders | 698,552 | 704,906 | 714,901 | 746,073 | 722,612 | ||||||||||||||||
Share prices for the year ($) | |||||||||||||||||||||
Trading high | 47. 41 | 38. 52 | 33. 54 | 32. 75 | 34. 94 | ||||||||||||||||
Trading low | 36. 62 | 28. 79 | 27. 0 | 23. 05 | 24. 75 | ||||||||||||||||
End (closing price) | 44. 41 | 37. 95 | 32. 58 | 29. 55 | 32. 93 | ||||||||||||||||
Performance Ratios (%) | |||||||||||||||||||||
Return on average Shareholders’ equity | |||||||||||||||||||||
Statutory | 20. 4 | 18. 2 | 12. 5 | 10. 5 | 14. 7 | ||||||||||||||||
Cash basis | 21. 3 | 18. 8 | 12. 7 | 13. 1 | 12. 9 | ||||||||||||||||
Underlying basis | 20. 2 | 18. 4 | 14. 6 | 13. 6 | 12. 8 | ||||||||||||||||
Return on average total assets | |||||||||||||||||||||
Statutory | 1. 1 | 1. 1 | 0. 9 | 0. 8 | 1. 1 | ||||||||||||||||
Cash basis | 1. 1 | 1. 1 | 0. 9 | 1. 0 | 1. 0 | ||||||||||||||||
Underlying basis | 1. 1 | 1. 1 | 1. 1 | 1. 0 | 1. 0 | ||||||||||||||||
Capital adequacy — Tier 1 | 7. 56 | 7. 46 | 7. 43 | 6. 96 | 6. 78 | ||||||||||||||||
Capital adequacy — Tier 2 | 3. 10 | 3. 21 | 3. 93 | 4. 21 | 4. 28 | ||||||||||||||||
Deductions | (1. 00 | ) | (0. 92 | ) | (1. 11 | ) | (1. 44 | ) | (1. 26 | ) | |||||||||||
Capital adequacy — Total | 9. 66 | 9. 75 | 10. 25 | 9. 73 | 9. 80 | ||||||||||||||||
Net interest margin | 2. 34 | 2. 43 | 2. 53 | 2. 67 | 2. 76 | ||||||||||||||||
Other Information (numbers) | |||||||||||||||||||||
Full time staff equivalent | 36,664 | 35,313 | 36,296 | 35,845 | 37,245 | ||||||||||||||||
Branches/services centres (Australia) | 1,005 | 1,006 | 1,012 | 1,014 | 1,020 | ||||||||||||||||
Agencies (Australia) | 3,836 | 3,864 | 3,866 | 3,893 | 3,936 | ||||||||||||||||
ATMs (proprietary) | 3,191 | 3,154 | 3,109 | 3,116 | 3,049 | ||||||||||||||||
EFTPOS terminals | 148,220 | 137,240 | 126,049 | 129,259 | 126,613 | ||||||||||||||||
EzyBanking locations | 862 | 841 | 815 | 760 | 730 | ||||||||||||||||
Productivity | |||||||||||||||||||||
Total net operating income per full-time (equivalent) employee ($) | 329,506 | 314,388 | 289,040 | 262,212 | 243,469 | ||||||||||||||||
Staff expense/Total operating income (%) | 23. 4 | 24. 1 | 24. 3 | 26. 4 | 26. 4 | ||||||||||||||||
Total operating expenses/Total operating income (%) | 49. 6 | 52. 9 | 59. 6 | 59. 1 | 57. 4 | ||||||||||||||||
(1) | The Group adopted AIFRS accounting standards for the reporting period beginning 1 July 2004. As a result the 2006 and 2005 results are presented on an AIFRS basis, while the 2004, 2003 and 2002 results are presented on the previous AGAAP basis. |
Income Statements | 74 | |||||
Balance Sheets | 75 | |||||
Statements of Recognised Income and Expense | 76 | |||||
Statements of Cash Flows | 77 | |||||
Note 1 | Accounting Policies | 79 | ||||
Note 2 | Profit | 115 | ||||
Note 3 | Income | 117 | ||||
Note 4 | Average Balances and Related Interest | 118 | ||||
Note 5 | Income Tax Expense | 123 | ||||
Note 6 | Dividends | 126 | ||||
Note 7 | Earnings Per Share | 127 | ||||
Note 8 | Cash and Liquid Assets | 128 | ||||
Note 9 | Receivables from Other Financial Institutions | 128 | ||||
Note 10 | Assets at Fair Value through Income Statement | 129 | ||||
Note 11 | Derivative Assets and Liabilities | 131 | ||||
Note 12 | Available-for-Sale Investments | 138 | ||||
Note 13 | Investment Securities | 140 | ||||
Note 14 | Loans, Advances and Other Receivables | 142 | ||||
Note 15 | Provisions for Impairment | 144 | ||||
Note 16 | Credit Risk Management | 148 | ||||
Note 17 | Asset Quality | 155 | ||||
Note 18 | Shares in and Loans to Controlled Entities | 159 | ||||
Note 19 | Investment Property | 159 | ||||
Note 20 | Property, Plant and Equipment | 160 | ||||
Note 21 | Intangible Assets | 162 | ||||
Note 22 | Other Assets | 163 | ||||
Note 23 | Deposits and Other Public Borrowings | 164 | ||||
Note 24 | Payables to Other Financial Institutions | 165 | ||||
Note 25 | Liabilities at Fair Value through Income Statement | 165 | ||||
Note 26 | Income Tax Liabilities | 165 | ||||
Note 27 | Other Provisions | 166 | ||||
Note 28 | Debt Issues | 167 | ||||
Note 29 | Managed Fund Units on Issue | 169 | ||||
Note 30 | Bills Payable and Other Liabilities | 170 | ||||
Note 31 | Loan Capital | 170 | ||||
Note 32 | Detailed Statements of Changes in Equity | 173 | ||||
Note 33 | Share Capital | 176 | ||||
Note 34 | Minority Interests | 182 | ||||
Note 35 | Capital Adequacy | 183 | ||||
Note 36 | Maturity Analysis of Monetary Assets and Liabilities | 188 | ||||
Note 37 | Financial Reporting by Segments | 190 | ||||
Note 38 | Life Insurance Business | 193 | ||||
Note 39 | Remuneration of Auditors | 199 | ||||
Note 40 | Commitments for Capital Expenditures Not Provided for in the Accounts | 199 | ||||
Note 41 | Lease Commitments — Property, Plant and Equipment | 200 | ||||
Note 42 | Contingent Liabilities, Assets and Commitments | 201 | ||||
Note 43 | Market Risk | 204 | ||||
Note 44 | Retirement Benefit Obligations | 215 | ||||
Note 45 | Controlled Entities | 218 | ||||
Note 46 | Investments in Associated Entities and Joint Ventures | 220 | ||||
Note 47 | Director and Executive Disclosures | 221 | ||||
Note 48 | Related Party Disclosures | 221 | ||||
Note 49 | Notes to the Statements of Cash Flows | 228 | ||||
Note 50 | Disclosures about Fair Value of Financial Instruments | 230 |
For the year ended 30 June 2006
Group | Bank | |||||||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||||||
Note | $M | $M | $M | $M | ||||||||||||||||
Interest income | 2 | 19,758 | 16,781 | 16,027 | 13,681 | |||||||||||||||
Interest expense | 2 | 13,244 | 10,755 | 11,305 | 8,858 | |||||||||||||||
Net interest income | 6,514 | 6,026 | 4,722 | 4,823 | ||||||||||||||||
Other operating income | 3,036 | 2,845 | 5,540 | 3,991 | ||||||||||||||||
Net banking operating income | 9,550 | 8,871 | 10,262 | 8,814 | ||||||||||||||||
Funds management income | 1,589 | 1,247 | — | — | ||||||||||||||||
Investment revenue | 2,098 | 1,956 | — | — | ||||||||||||||||
Claims and policyholder liability expense | (2,064 | ) | (1,871 | ) | — | — | ||||||||||||||
Net funds management operating income | 2 | 1,623 | 1,332 | — | — | |||||||||||||||
Premiums from insurance contracts | 1,052 | 1,132 | — | — | ||||||||||||||||
Investment revenue | 1,031 | 1,186 | — | — | ||||||||||||||||
Claims and policyholder liability expense from insurance contracts | (970 | ) | (1,243 | ) | — | — | ||||||||||||||
Insurance margin on services operating income | 2 | 1,113 | 1,075 | — | — | |||||||||||||||
Total net operating income | 2 | 12,286 | 11,278 | 10,262 | 8,814 | |||||||||||||||
Bad debts expense | 2,15 | 398 | 322 | 380 | 292 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||
Comparable business | 2 | 5,994 | 5,719 | 4,604 | 4,388 | |||||||||||||||
Which new Bank | — | 150 | — | 150 | ||||||||||||||||
Total operating expenses | 2 | 5,994 | 5,869 | 4,604 | 4,538 | |||||||||||||||
Defined benefit superannuation plan expense | 2,44 | (35 | ) | (75 | ) | (35 | ) | (75 | ) | |||||||||||
Profit before income tax | 2 | 5,859 | 5,012 | 5,243 | 3,909 | |||||||||||||||
Corporate tax expense | 5 | 1,569 | 1,374 | 976 | 897 | |||||||||||||||
Policyholder tax expense | 5 | 331 | 228 | — | — | |||||||||||||||
Profit after income tax(1) | 3,959 | 3,410 | 4,267 | 3,012 | ||||||||||||||||
Minority interests | (31 | ) | (10 | ) | — | — | ||||||||||||||
Net profit attributable to members of the Bank | 3,928 | 3,400 | 4,267 | 3,012 | ||||||||||||||||
(1) | Net banking operating income, and profit after income tax of the Bank, is greater than the Group, due to the receipt of tax exempt intragroup dividends. |
Cents per share | ||||||||||||
Earnings per share: | ||||||||||||
Basic | 7 | 308. 2 | 259. 6 | |||||||||
Fully diluted | 7 | 303. 1 | 255. 3 | |||||||||
Dividends per share attributable to shareholders of the Bank: | ||||||||||||
Ordinary shares | 6 | 224 | 197 | |||||||||
PERLS(1) | — | 1,115 | ||||||||||
Trust preferred securities (TPS) — issued 6 August 2003(1) | — | 7,795 | ||||||||||
PERLS II — issued 6 January 2004(1) | — | 908 | ||||||||||
(1) | Instruments reclassified to loan capital on adoption of AIFRS from 1 July 2005. |
$M | $M | |||||||
Net profit after income tax comprises: | ||||||||
Net profit after income tax (“underlying basis”) | 3,842 | 3,420 | ||||||
Shareholder investment returns (after tax) | 66 | 177 | ||||||
Which new Bank (after tax) | — | (105 | ) | |||||
Profit on sale of the Hong Kong insurance business | 145 | — | ||||||
Net profit after income tax (“cash basis”) | 4,053 | 3,492 | ||||||
Defined benefit superannuation plan expense | (25 | ) | (53 | ) | ||||
Treasury share valuation adjustment | (100 | ) | (39 | ) | ||||
Net profit after income tax (“statutory basis”) | 3,928 | 3,400 | ||||||
As at 30 June 2006
Group | Bank | |||||||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||||||
Note | $M | $M | $M | $M | ||||||||||||||||
Assets | ||||||||||||||||||||
Cash and liquid assets | 8 | 5,131 | 6,055 | 4,819 | 5,736 | |||||||||||||||
Receivables due from other financial institutions | 9 | 7,107 | 6,087 | 7,464 | 5,972 | |||||||||||||||
Assets at fair value through Income Statement: | 10 | |||||||||||||||||||
Trading | 15,758 | 14,631 | 13,926 | 12,432 | ||||||||||||||||
Insurance | 24,437 | 27,484 | — | — | ||||||||||||||||
Other | 2,944 | — | 396 | — | ||||||||||||||||
Derivative assets | 11 | 9,675 | — | 9,938 | — | |||||||||||||||
Available-for-sale investments | 12 | 11,203 | — | 9,914 | — | |||||||||||||||
Investment securities | 13 | — | 10,838 | — | 6,922 | |||||||||||||||
Loans, advances and other receivables | 14 | 259,176 | 228,346 | 212,699 | 183,925 | |||||||||||||||
Bank acceptances of customers | 18,310 | 16,786 | 18,439 | 16,917 | ||||||||||||||||
Shares in and loans to controlled entities | 18 | — | — | 36,150 | 29,161 | |||||||||||||||
Investment property | 19 | 258 | 252 | — | — | |||||||||||||||
Property, plant and equipment | 20 | 1,314 | 1,132 | 1,027 | 821 | |||||||||||||||
Investment in associates | 46 | 190 | 52 | 114 | 12 | |||||||||||||||
Intangible assets | 21 | 7,809 | 7,656 | 2,738 | 2,675 | |||||||||||||||
Deferred tax assets | 5 | 650 | 651 | 392 | 599 | |||||||||||||||
Other assets | 22 | 5,141 | 17,434 | 4,624 | 17,154 | |||||||||||||||
Total Assets | 369,103 | 337,404 | 322,640 | 282,326 | ||||||||||||||||
Liabilities | ||||||||||||||||||||
Deposits and other public borrowings | 23 | 173,227 | 168,026 | 155,956 | 143,858 | |||||||||||||||
Payables due to other financial institutions | 24 | 11,184 | 8,023 | 11,131 | 7,969 | |||||||||||||||
Liabilities at fair value through Income Statement | 25 | 13,811 | — | 2,085 | — | |||||||||||||||
Derivative liabilities | 11 | 10,820 | — | 10,955 | — | |||||||||||||||
Bank acceptances | 18,310 | 16,786 | 18,439 | 16,917 | ||||||||||||||||
Due to controlled entities | — | — | 32,435 | 26,428 | ||||||||||||||||
Current tax liabilities | 26 | 378 | 833 | 334 | 764 | |||||||||||||||
Deferred tax liabilities | 26 | 1,336 | 921 | 640 | 872 | |||||||||||||||
Other provisions | 27 | 821 | 871 | 690 | 703 | |||||||||||||||
Insurance policy liabilities | 38 | 22,225 | 24,694 | — | — | |||||||||||||||
Debt issues | 28 | 78,591 | 70,765 | 52,198 | 40,687 | |||||||||||||||
Managed funds units on issue | 29 | 1,109 | — | — | — | |||||||||||||||
Bills payable and other liabilities | 30 | 6,053 | 17,551 | 4,299 | 16,737 | |||||||||||||||
337,865 | 308,470 | 289,162 | 254,935 | |||||||||||||||||
Loan capital | 31 | 9,895 | 6,291 | 10,688 | 7,010 | |||||||||||||||
Total Liabilities | 347,760 | 314,761 | 299,850 | 261,945 | ||||||||||||||||
Net Assets | 21,343 | 22,643 | 22,790 | 20,381 | ||||||||||||||||
Shareholders’ Equity | ||||||||||||||||||||
Share capital: | ||||||||||||||||||||
Ordinary share capital | 33 | 13,505 | 13,486 | 13,766 | 13,739 | |||||||||||||||
Preference share capital | 33 | — | 687 | — | 687 | |||||||||||||||
Other equity instruments | 33 | 939 | 1,573 | 1,895 | 737 | |||||||||||||||
Reserves | 32 | 1,904 | 1,265 | 2,657 | 2,226 | |||||||||||||||
Retained profits | 32 | 4,487 | 3,843 | 4,472 | 2,992 | |||||||||||||||
Shareholders’ Equity attributable to members of the Bank | 20,835 | 20,854 | 22,790 | 20,381 | ||||||||||||||||
Minority interests: | ||||||||||||||||||||
Controlled entities | 34 | 508 | 631 | — | — | |||||||||||||||
Insurance statutory funds and other funds | — | 1,158 | — | — | ||||||||||||||||
Total Minority Interests | 508 | 1,789 | — | — | ||||||||||||||||
Total Shareholders’ Equity | 21,343 | 22,643 | 22,790 | 20,381 | ||||||||||||||||
For the year ended 30 June 2006
Group | Bank | |||||||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||||||
Note | $M | $M | $M | $M | ||||||||||||||||
Actuarial gains/(losses) from defined benefit superannuation plan | 32,44 | 387 | 110 | 387 | 110 | |||||||||||||||
Gains/(losses) on cash flow hedging instruments: | ||||||||||||||||||||
Recognised in equity | 32 | 89 | — | 58 | — | |||||||||||||||
Transferred to Income Statement | 32 | (58 | ) | — | (51 | ) | — | |||||||||||||
Gains/(losses) on available-for-sale investments: | — | — | ||||||||||||||||||
Recognised in equity | 32 | 51 | — | 52 | — | |||||||||||||||
Transferred to Income Statement on sale | 32 | (33 | ) | — | (31 | ) | — | |||||||||||||
Transferred to Income Statement on impairment | 32 | (3 | ) | — | (3 | ) | — | |||||||||||||
Revaluation of properties | 32 | 19 | 29 | 14 | 29 | |||||||||||||||
Transfer from FCTR to Income Statement on sale of entities | 32 | 41 | — | — | — | |||||||||||||||
Exchange differences on translation of foreign operations | 32 | (232 | ) | (141 | ) | (8 | ) | — | ||||||||||||
Income tax on items taken directly to or transferred directly from equity: | ||||||||||||||||||||
FCTR | 32 | 13 | — | — | — | |||||||||||||||
AFS investments revaluation reserve | 32 | (6 | ) | — | 7 | — | ||||||||||||||
Revaluation of properties | 32 | (4 | ) | — | (3 | ) | — | |||||||||||||
Cash flow hedge reserve | 32 | (11 | ) | — | (2 | ) | — | |||||||||||||
Net income recognised directly in equity | 253 | (2 | ) | 420 | 139 | |||||||||||||||
Profit for the period | 3,959 | 3,410 | 4,267 | 3,012 | ||||||||||||||||
Total net income recognised for the period | 4,212 | 3,408 | 4,687 | 3,151 | ||||||||||||||||
Attributable to: | ||||||||||||||||||||
Members of the parent | 4,181 | 3,398 | 4,687 | 3,151 | ||||||||||||||||
Minority interests | 31 | 10 | — | — | ||||||||||||||||
Total net income recognised for the period | 4,212 | 3,408 | 4,687 | 3,151 | ||||||||||||||||
For the year ended 30 June 2006
Group | Bank | |||||||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||||||
Note | $M | $M | $M | $M | ||||||||||||||||
Cash Flows From Operating Activities | ||||||||||||||||||||
Interest received | 19,712 | 16,781 | 16,268 | 13,571 | ||||||||||||||||
Interest paid | (12,555 | ) | (10,720 | ) | (11,348 | ) | (8,960 | ) | ||||||||||||
Other operating income received | 4,319 | 4,559 | 2,715 | 3,621 | ||||||||||||||||
Expenses paid | (5,809 | ) | (5,678 | ) | (4,318 | ) | (4,459 | ) | ||||||||||||
Income taxes paid | (1,980 | ) | (985 | ) | (1,117 | ) | (619 | ) | ||||||||||||
Net decrease/(increase) in trading securities | — | 318 | — | 505 | ||||||||||||||||
Net increase in assets at fair value through Income Statement (excluding life insurance) | (307 | ) | — | (1,926 | ) | — | ||||||||||||||
Life insurance: | ||||||||||||||||||||
Investment income | 2,399 | 1,572 | — | — | ||||||||||||||||
Premiums received(3) | 2,338 | 3,183 | — | — | ||||||||||||||||
Policy payments(3) | (4,938 | ) | (4,664 | ) | — | — | ||||||||||||||
Net increase in liabilities at fair value through Income Statement (excluding life insurance) | 1,445 | — | 504 | — | ||||||||||||||||
Cash flows from operating activities before changes in operating assets and liabilities | 4,624 | 4,366 | 778 | 3,659 | ||||||||||||||||
Changes in operating assets and liabilities arising from cash flow movements | ||||||||||||||||||||
Movement in investment securities: | ||||||||||||||||||||
Purchases | — | (22,608 | ) | — | (20,254 | ) | ||||||||||||||
Proceeds from sale | — | 396 | — | 275 | ||||||||||||||||
Proceeds at or close to maturity | — | 22,799 | — | 19,344 | ||||||||||||||||
Movement in available-for-sale investments: | ||||||||||||||||||||
Purchases | (28,189 | ) | — | (25,310 | ) | — | ||||||||||||||
Proceeds from sale | 646 | — | 558 | — | ||||||||||||||||
Proceeds at or close to maturity | 24,831 | — | 21,828 | — | ||||||||||||||||
Lodgement of deposits with regulatory authorities | (29 | ) | (7 | ) | (1 | ) | 3 | |||||||||||||
Net (increase) in loans, advances and other receivables | (31,996 | ) | (31,721 | ) | (28,936 | ) | (24,777 | ) | ||||||||||||
Net (increase)/decrease in receivables due from other financial institutions not at call | (881 | ) | 1,097 | (793 | ) | 464 | ||||||||||||||
Net decrease in securities purchased under agreement to resell | 537 | 991 | 740 | 988 | ||||||||||||||||
Life insurance business: | ||||||||||||||||||||
Purchase of insurance assets at fair value through Income Statement | (8,078 | ) | (14,165 | ) | — | — | ||||||||||||||
Proceeds from sale/maturity of insurance assets at fair value through Income Statement | 9,398 | 15,281 | — | — | ||||||||||||||||
Net increase in deposits and other borrowings | 12,799 | 6,332 | 13,284 | 7,291 | ||||||||||||||||
Net proceeds from issuance of debt securities | 14,605 | 17,934 | 13,331 | 16,238 | ||||||||||||||||
Net increase in payables due to other financial institutions not at call | 2,571 | 449 | 2,566 | 426 | ||||||||||||||||
Net increase/(decrease) in securities sold under agreements to repurchase | 328 | (1,480 | ) | 328 | (1,418 | ) | ||||||||||||||
Changes in operating assets and liabilities arising from cash flow movements | (3,458 | ) | (4,702 | ) | (2,405 | ) | (1,420 | ) | ||||||||||||
Net cash provided by/(used in) Operating Activities | 49 | (a) | 1,166 | (336 | ) | (1,627 | ) | 2,239 | ||||||||||||
Cash flows from Investing Activities | ||||||||||||||||||||
Payment for acquisition of entities and management rights | 49 | (e) | (418 | ) | (40 | ) | (26 | ) | (24 | ) | ||||||||||
Proceeds from disposal of controlled entities | 49 | (c) | 553 | — | — | 178 | ||||||||||||||
Proceeds from disposal of entities and businesses (net of cash disposed) | 35 | 173 | — | 306 | ||||||||||||||||
Dividends received | 4 | 3 | 2,080 | 988 | ||||||||||||||||
Net amounts paid to controlled entities | — | — | 1,531 | (3,325 | ) | |||||||||||||||
Proceeds from sale of property, plant and equipment | 32 | 30 | 17 | 30 | ||||||||||||||||
Purchases of property, plant and equipment | (385 | ) | (286 | ) | (329 | ) | (164 | ) | ||||||||||||
Payment for acquisitions of investments in associates | (152 | ) | (42 | ) | (102 | ) | — | |||||||||||||
Purchases of intangible assets | (90 | ) | (92 | ) | (95 | ) | — | |||||||||||||
Net decrease in other assets | 31 | 1,055 | 371 | 758 | ||||||||||||||||
Net cash (used in)/provided by Investing Activities | (390 | ) | 801 | 3,447 | (1,253 | ) | ||||||||||||||
(1) | It should be noted that the Bank does not use this accounting Statement of Cash Flows in the internal management of its liquidity positions. | |
(2) | Adjusted for AIFRS gross-up. Refer Note 1 (nn) (ii). | |
(3) | Represents gross premiums and policy payments before splitting between policyholders and shareholders. |
For the year ended 30 June 2006
Group | Bank | |||||||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||||||
Note | $M | $M | $M | $M | ||||||||||||||||
Cash Flows from Financing Activities | ||||||||||||||||||||
Buyback of shares | (500 | ) | — | (500 | ) | — | ||||||||||||||
Proceeds from issue of shares (net of costs) | 49 | 66 | 49 | 66 | ||||||||||||||||
Proceeds from issue of preference shares to minority interests | — | 323 | — | — | ||||||||||||||||
Proceeds from issue of other equity instruments (net of costs) | 939 | — | 1,895 | — | ||||||||||||||||
Dividends paid (excluding DRP buyback of shares) | (2,163 | ) | (2,083 | ) | (2,163 | ) | (2,024 | ) | ||||||||||||
Net movement in other liabilities | 139 | (330 | ) | (3,313 | ) | (292 | ) | |||||||||||||
Net (purchase) of treasury shares | (10 | ) | (60 | ) | (2 | ) | — | |||||||||||||
Issue of loan capital | 2,446 | 1,233 | 3,152 | 1,554 | ||||||||||||||||
Redemption of loan capital | (915 | ) | (1,392 | ) | (918 | ) | (1,621 | ) | ||||||||||||
Other | 1 | 55 | (93 | ) | 6 | |||||||||||||||
Net cash (used in) Financing Activities | (14 | ) | (2,188 | ) | (1,893 | ) | (2,311 | ) | ||||||||||||
Net increase/(decrease) in cash and cash equivalents | 762 | (1,723 | ) | (73 | ) | (1,325 | ) | |||||||||||||
Cash and cash equivalents at beginning of period | 1,276 | 2,999 | 314 | 1,639 | ||||||||||||||||
Cash and cash equivalents at end of period | 49 | (b) | 2,038 | 1,276 | 241 | 314 | ||||||||||||||
(1) | It should be noted that the Bank does not use this accounting Statement of Cash Flows in the internal management of its liquidity positions. | |
(2) | Adjusted for AIFRS gross-up. Refer Note 1 (nn) (ii). |
• | AASB 119 Employee Benefits (July 2005). |
• | AASB 2004-3 Amendments to Australian Accounting Standards (December 2004) amending AASB 1 First-time Adoption of Australian Equivalents to International Financial Reporting Standards (July 2004), AASB 101 Presentation of Financial Statements and AASB 124 Related Party Disclosures. |
• | AASB 2005-1 Amendments to Australian Accounting Standards (May 2005) amending AASB 139 Financial Instruments: Recognition and Measurement. |
• | AASB 2005-3 Amendments to Australian Accounting Standards (June 2005) amending AASB 119 Employee Benefits (either July or December 2004). |
• | AASB 2005-4 Amendments to Australian Accounting Standards (June 2005) amending AASB 139 Financial Instruments: Recognition and Measurement, AASB 1 First-time Adoption of Australian Equivalents to International Financial Reporting Standards (July 2004), AASB 1023 General Insurance Contracts and AASB 1038 Life Insurance Contracts. |
• | AASB 2005-5 Amendments to Australian Accounting Standards (June 2005) amending AASB 1 First-time Adoption of Australian Equivalents to International Financial Reporting Standards (July 2004), and AASB 139 Financial Instruments: Recognition and Measurement. |
• | AASB 2005-6 Amendments to Australian Accounting Standards (June 2005) amending AASB 3 Business Combinations. |
• | AASB 2005-9 Amendments to Australian Accounting Standards (September 2005) requires that liabilities arising from the issue of financial guarantee contracts are recognised in the Balance Sheet. |
• | AASB 2006-1 Amendments to Australian Accounting Standards (January 2006) amending AASB 121 The Effects of Change in Foreign Exchange Rates (July 2004). |
• | UIG 8 Scope of AASB 2. |
• | AASB 7 Financial Instruments: Disclosure (August 2005) replacing the presentation requirements of financial instruments in AASB 132. AASB 7 is applicable for annual reporting periods beginning on or after 1 January 2007. |
• | AASB 2005-10 Amendments to Australian Accounting Standards (September 2005) makes consequential amendments to AASB 132 Financial Instruments: Disclosures and Presentation, AASB 101 Presentation of Financial Statements, AASB 114 Segment Reporting, AASB 117 Leases, AASB 133 Earnings per Share, AASB 139 Financial Instruments: Recognition and Measurement, AASB 1 First-time Adoption of Australian Equivalents to International Financial Reporting Standards, AASB 4 Insurance Contracts, AASB 1023 General Insurance Contracts and AASB 1038 Life Insurance Contracts, arising from the release of AASB 7. AASB 2005-10 is applicable for annual reporting periods beginning on or after 1 January 2007. |
• | Assets at fair value through Income Statement (Note 1 (i)) |
• | Available-for-sale investments (Note 1 (j)) |
• | Loans, advances and other receivables (Note 1 (l)) |
• | Liabilities at fair value through Income Statement (Note 1 (x)) |
• | Liabilities at amortised cost |
• | Equity (Note 1 (ee)) |
Buildings | ||||
Shell | Maximum 30 years | |||
Integral plant and equipment: | ||||
Carpets | 10 years | |||
All other (air-conditioning, lifts) | 20 years | |||
Non integral plant and equipment: | ||||
Fixtures and fittings | 10 years | |||
Leasehold improvements | ||||
Leasehold improvements | Lesser of unexpired lease term or lives as above | |||
Equipment | ||||
Security surveillance systems | 7 years | |||
Furniture | 8 years | |||
Office machinery | 5 years | |||
EFTPOS machines | 3 years | |||
• | Business assumptions including: |
• | Amount, timing and duration of claims/policy payments; |
• | Policy lapse rates; and |
• | Acquisition and long term maintenance expense levels; |
• | Long term economic assumptions for discount and interest rates, inflation rates and market earnings rates; and |
• | Selection of methodology, either projection or accumulation method. The selection of the method is generally governed by the product type. |
• | Recent results may be a statistical aberration; or |
• | There may be a commencement of a new paradigm requiring a change in long term assumptions. |
• | Investment properties reclassified from Property, Plant and Equipment to a separate line on the face of the Balance Sheet (refer note 1 (q)); |
• | Capitalised computer software reclassified from Other assets to Intangible assets – computer software costs (refer note 1 (t)); |
• | The acquired portion of excess market value over net assets is reclassified from Other assets to Intangible assets – goodwill (refer note 1 (t)); and |
• | Separation and reclassification of deferred tax assets and tax liabilities (refer note 1 (y)). |
• | Derivative assets and liabilities reclassified from Other assets and Other liabilities to separate lines on the face of the Balance Sheet (refer note 1 (ff)); |
• | Insurance and trading assets reclassified to Assets at fair value through Income Statement (refer note 1 (i)); |
• | Investment securities predominately reclassified to Available-for-sale investments (refer note 1 (j)); |
• | Some Deposits from customers and Debt issues reclassified to Liabilities at fair value through Income Statement (refer note 1 (x)); |
• | Reclassification of minority interests in Insurance Statutory funds and other funds to liabilities (refer note 1 (hh)); and |
• | Reclassification of preference share capital and other equity instruments from shareholders’ equity to loan capital (refer note 1 (dd)). |
Group | ||||||||||||||||||||||||||||
1 July 2004 | ||||||||||||||||||||||||||||
Transition Adjustments | ||||||||||||||||||||||||||||
Policy | AGAAP | Reclass | Gross-up | Re-Measure | Total | AIFRS | ||||||||||||||||||||||
Note(1) | Group $M | $M | $M | $M(2) | $M | Group $M | ||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Cash and liquid assets | (f | ) | 6,453 | 168 | 153 | — | 321 | 6,774 | ||||||||||||||||||||
Receivables from other financial institutions | (g | ) | 8,369 | (130 | ) | — | — | (130 | ) | 8,239 | ||||||||||||||||||
Assets at fair value through Income Statement: | ||||||||||||||||||||||||||||
Trading | (i | ) | 14,896 | — | 3 | — | 3 | 14,899 | ||||||||||||||||||||
Insurance | (i),(hh | ) | 28,942 | (16 | ) | — | (301 | ) A | (317 | ) | 28,625 | |||||||||||||||||
Investment securities | 11,447 | — | 531 | — | 531 | 11,978 | ||||||||||||||||||||||
Loans, advances and other receivables | (l),(m),(n | ) | 189,391 | — | 7,605 | 24 | 7,629 | 197,020 | ||||||||||||||||||||
Bank acceptances of customers | (o | ) | 15,019 | — | — | — | — | 15,019 | ||||||||||||||||||||
Deposits with regulatory authorities | (g | ) | 38 | (38 | ) | — | — | (38 | ) | — | ||||||||||||||||||
Investment property | (q | ) | — | 252 | — | — | 252 | 252 | ||||||||||||||||||||
Property, plant and equipment | (s | ) | 1,204 | (228 | ) | — | 31 | (197 | ) | 1,007 | ||||||||||||||||||
Investment in associates | (c | ) | 239 | — | — | — | — | 239 | ||||||||||||||||||||
Intangible assets | (t | ) | 4,705 | 2,836 | — | — | 2,836 | 7,541 | ||||||||||||||||||||
Deferred tax assets | (y | ) | — | 564 | — | 23 | H | 587 | 587 | |||||||||||||||||||
Other assets | (u | ) | 25,292 | (3,408 | ) | (17 | ) | (2,512 | ) I | (5,937 | ) | 19,355 | ||||||||||||||||
Total Assets | 305,995 | — | 8,275 | (2,735 | ) | 5,540 | 311,535 | |||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||
Deposits and other public borrowings | (v | ) | 163,177 | — | 24 | — | 24 | 163,201 | ||||||||||||||||||||
Payables due to other financial institutions | (w | ) | 6,641 | — | — | — | — | 6,641 | ||||||||||||||||||||
Bank acceptances | (o | ) | 15,019 | — | — | — | — | 15,019 | ||||||||||||||||||||
Income tax liability | (y | ) | 811 | (811 | ) | — | — | (811 | ) | — | ||||||||||||||||||
Current tax liabilities | (y | ) | — | 426 | — | — | 426 | 426 | ||||||||||||||||||||
Deferred tax liabilities | (y | ) | — | 385 | — | 188 | L | 573 | 573 | |||||||||||||||||||
Other provisions | (z),(aa | ) | 1,011 | — | — | (85 | ) M | (85 | ) | 926 | ||||||||||||||||||
Insurance policy liabilities | (hh | ) | 24,638 | — | — | — | — | 24,638 | ||||||||||||||||||||
Debt issues | (bb | ) | 44,042 | — | 8,732 | — | 8,732 | 52,774 | ||||||||||||||||||||
Bills payable and other liabilities | (cc | ) | 19,140 | — | (481 | ) | 77 | P | (404 | ) | 18,736 | |||||||||||||||||
Loan capital | (dd | ) | 6,631 | — | — | — | — | 6,631 | ||||||||||||||||||||
Total Liabilities | 281,110 | — | 8,275 | 180 | 8,455 | 289,565 | ||||||||||||||||||||||
Net Assets | 24,885 | — | — | (2,915 | ) | (2,915 | ) | 21,970 | ||||||||||||||||||||
Shareholders’ Equity | ||||||||||||||||||||||||||||
Share capital: | ||||||||||||||||||||||||||||
Ordinary share capital | (ee | ) | 13,359 | — | — | (371 | ) R | (371 | ) | 12,988 | ||||||||||||||||||
Preference share capital | 687 | — | — | — | — | 687 | ||||||||||||||||||||||
Other equity instruments | 1,573 | — | — | — | — | 1,573 | ||||||||||||||||||||||
Reserves | (ee | ) | 3,946 | 492 | — | (3,045 | ) S | (2,553 | ) | 1,393 | ||||||||||||||||||
Retained profits | 2,840 | (492 | ) | — | 501 | T | 9 | 2,849 | ||||||||||||||||||||
Shareholders’ equity attributable to members of the Bank | 22,405 | — | — | (2,915 | ) | (2,915 | ) | 19,490 | ||||||||||||||||||||
Minority interests: | ||||||||||||||||||||||||||||
Controlled entities | 304 | — | — | — | — | 304 | ||||||||||||||||||||||
Insurance statutory funds and other funds | (hh | ) | 2,176 | — | — | — | — | 2,176 | ||||||||||||||||||||
Total Shareholders’ Equity | 24,885 | — | — | (2,915 | ) | (2,915 | ) | 21,970 | ||||||||||||||||||||
(1) | References relate to key Accounting Policies as set out on pages 79 to 98. | |
(2) | References relate to explanations of the key AIFRS re-measure adjustments set out on pages 103 to 106. |
(nn) Effect of Transition to Australian Equivalents of IFRS
Balance Sheet Reconciliation
Group | ||||||||||||||||||||||||||||||||
30 June 2005 | ||||||||||||||||||||||||||||||||
Transition Adjustments | ||||||||||||||||||||||||||||||||
Policy | AGAAP | Reclass | Gross-up | Re-Measure | Total | AIFRS | ||||||||||||||||||||||||||
Note(1) | Group $M | $M | $M | $M(2) | $M | Group $M | ||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||
Cash and liquid assets | (f | ) | 5,715 | 163 | 177 | — | 340 | 6,055 | ||||||||||||||||||||||||
Receivables from other financial institutions | (g | ) | 6,205 | (118 | ) | — | — | (118 | ) | 6,087 | ||||||||||||||||||||||
Assets at fair value through Income Statement: | ||||||||||||||||||||||||||||||||
Trading | (i | ) | 14,628 | — | 3 | — | 3 | 14,631 | ||||||||||||||||||||||||
Insurance | (i),(hh | ) | 27,837 | (16 | ) | — | (337 | ) | A | (353 | ) | 27,484 | ||||||||||||||||||||
Investment securities | 10,272 | — | 566 | — | 566 | 10,838 | ||||||||||||||||||||||||||
Loans, advances and other receivables | (l),(m),(n | ) | 217,516 | — | 10,818 | 12 | 10,830 | 228,346 | ||||||||||||||||||||||||
Bank acceptances of customers | (o | ) | 16,786 | — | — | — | — | 16,786 | ||||||||||||||||||||||||
Deposits with regulatory authorities | (g | ) | 45 | (45 | ) | — | — | (45 | ) | — | ||||||||||||||||||||||
Investment property | (q | ) | — | 252 | — | — | 252 | 252 | ||||||||||||||||||||||||
Property, plant and equipment | (s | ) | 1,344 | (237 | ) | — | 25 | (212 | ) | 1,132 | ||||||||||||||||||||||
Investment in associates | (c | ) | 52 | — | — | — | — | 52 | ||||||||||||||||||||||||
Intangible assets | (t | ) | 4,394 | 2,941 | — | 321 | G | 3,262 | 7,656 | |||||||||||||||||||||||
Deferred tax assets | (y | ) | — | 627 | — | 24 | H | 651 | 651 | |||||||||||||||||||||||
Other assets | (u | ) | 24,241 | (3,567 | ) | (37 | ) | (3,203 | ) | I | (6,807 | ) | 17,434 | |||||||||||||||||||
Total Assets | 329,035 | — | 11,527 | (3,158 | ) | 8,369 | 337,404 | |||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Deposits and other public borrowings | (v | ) | 168,029 | — | (3 | ) | — | (3 | ) | 168,026 | ||||||||||||||||||||||
Payables due to other financial institutions | (w | ) | 8,023 | — | — | — | — | 8,023 | ||||||||||||||||||||||||
Bank acceptances | (o | ) | 16,786 | — | — | — | — | 16,786 | ||||||||||||||||||||||||
Income tax liability | (y | ) | 1,550 | (1,550 | ) | — | — | (1,550 | ) | — | ||||||||||||||||||||||
Current tax liabilities | (y | ) | — | 833 | — | — | 833 | 833 | ||||||||||||||||||||||||
Deferred tax liabilities | (y | ) | — | 717 | — | 204 | L | 921 | 921 | |||||||||||||||||||||||
Other provisions | (z),(aa | ) | 895 | — | — | (24 | ) | M | (24 | ) | 871 | |||||||||||||||||||||
Insurance policy liabilities | (hh | ) | 24,694 | — | — | — | — | 24,694 | ||||||||||||||||||||||||
Debt issues | (bb | ) | 58,621 | — | 12,144 | — | 12,144 | 70,765 | ||||||||||||||||||||||||
Bills payable and other liabilities | (cc | ) | 18,086 | — | (614 | ) | 79 | P | (535 | ) | 17,551 | |||||||||||||||||||||
Loan capital | (dd | ) | 6,291 | — | — | — | — | 6,291 | ||||||||||||||||||||||||
Total Liabilities | 302,975 | — | 11,527 | 259 | 11,786 | 314,761 | ||||||||||||||||||||||||||
Net Assets | 26,060 | — | — | (3,417 | ) | (3,417 | ) | 22,643 | ||||||||||||||||||||||||
Shareholders’ Equity | ||||||||||||||||||||||||||||||||
Share capital: | ||||||||||||||||||||||||||||||||
Ordinary share capital | (ee | ) | 13,871 | — | — | (385 | ) | R | (385 | ) | 13,486 | |||||||||||||||||||||
Preference share capital | 687 | — | — | — | — | 687 | ||||||||||||||||||||||||||
Other equity instruments | 1,573 | — | — | — | — | 1,573 | ||||||||||||||||||||||||||
Reserves | (ee | ) | 4,624 | 492 | — | (3,851 | ) | S | (3,359 | ) | 1,265 | |||||||||||||||||||||
Retained profits | 3,516 | (492 | ) | — | 819 | T | 327 | 3,843 | ||||||||||||||||||||||||
Shareholders’ equity attributable to members of the Bank | 24,271 | — | — | (3,417 | ) | (3,417 | ) | 20,854 | ||||||||||||||||||||||||
Minority interests: | ||||||||||||||||||||||||||||||||
Controlled entities | 631 | — | — | — | — | 631 | ||||||||||||||||||||||||||
Insurance statutory funds and other funds | (hh | ) | 1,158 | — | — | — | — | 1,158 | ||||||||||||||||||||||||
Total Shareholders’ Equity | 26,060 | — | — | (3,417 | ) | (3,417 | ) | 22,643 | ||||||||||||||||||||||||
(1) | References relate to key Accounting Policies as set out on pages 79 to 98. | |
(2) | References relate to explanations of the key AIFRS re-measure adjustments set out on pages 103 to 106. |
(nn) Effect of Transition to Australian Equivalents of IFRS
Balance Sheet Reconciliation
Group | ||||||||||||||||||||||||||||||||
1 July 2005 | ||||||||||||||||||||||||||||||||
Transition Adjustments | ||||||||||||||||||||||||||||||||
Policy | AGAAP | Reclass | Gross-up | Re-Measure | Total | AIFRS | ||||||||||||||||||||||||||
Note(1) | Group $M | $M | $M | $M(2) | $M | Group $M | ||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||
Cash and liquid assets | (f | ) | 5,715 | 163 | 177 | — | 340 | 6,055 | ||||||||||||||||||||||||
Receivables from other financial institutions | (g | ) | 6,205 | (627 | ) | — | — | (627 | ) | 5,578 | ||||||||||||||||||||||
Assets at fair value through Income Statement: | ||||||||||||||||||||||||||||||||
Trading | (i | ) | 14,628 | (436 | ) | 3 | — | (433 | ) | 14,195 | ||||||||||||||||||||||
Insurance | (i),(hh | ) | 27,837 | (16 | ) | — | (352 | ) | A | (368 | ) | 27,469 | ||||||||||||||||||||
Other | (i | ) | — | 3,402 | — | — | 3,402 | 3,402 | ||||||||||||||||||||||||
Derivative assets | (ff | ) | — | 12,096 | — | (2,292 | ) | B | 9,804 | 9,804 | ||||||||||||||||||||||
Investment securities | 10,272 | (10,838 | ) | 566 | — | (10,272 | ) | — | ||||||||||||||||||||||||
Available-for-sale investments | (j | ) | — | 9,706 | — | 85 | C | 9,791 | 9,791 | |||||||||||||||||||||||
Loans, advances and other receivables | (l),(m),(n | ) | 217,516 | (1,146 | ) | 10,818 | 574 | D-F | 10,246 | 227,762 | ||||||||||||||||||||||
Bank acceptances of customers | (o | ) | 16,786 | — | — | — | — | 16,786 | ||||||||||||||||||||||||
Deposits with regulatory authorities | (g | ) | 45 | (45 | ) | — | — | (45 | ) | — | ||||||||||||||||||||||
Investment property | (q | ) | — | 252 | — | — | 252 | 252 | ||||||||||||||||||||||||
Property, plant and equipment | (s | ) | 1,344 | (238 | ) | — | 25 | (213 | ) | 1,131 | ||||||||||||||||||||||
Investment in associates | (c | ) | 52 | — | — | — | — | 52 | ||||||||||||||||||||||||
Intangible assets | (t | ) | 4,394 | 2,941 | — | 321 | G | 3,262 | 7,656 | |||||||||||||||||||||||
Deferred tax assets | (y | ) | — | 627 | — | 241 | H | 868 | 868 | |||||||||||||||||||||||
Other assets | (u | ) | 24,241 | (16,165 | ) | (37 | ) | (3,670 | ) | I | (19,872 | ) | 4,369 | |||||||||||||||||||
Total Assets | 329,035 | (324 | ) | 11,527 | (5,068 | ) | 6,135 | 335,170 | ||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Deposits and other public borrowings | (v | ) | 168,029 | (8,272 | ) | (3 | ) | 66 | J | (8,209 | ) | 159,820 | ||||||||||||||||||||
Payables due to other financial institutions | (w | ) | 8,023 | (16 | ) | — | — | (16 | ) | 8,007 | ||||||||||||||||||||||
Liabilities at fair value through Income Statement | (x | ) | — | 12,437 | — | — | 12,437 | 12,437 | ||||||||||||||||||||||||
Derivative liabilities | (ff | ) | — | 11,913 | — | (609 | ) | K | 11,304 | 11,304 | ||||||||||||||||||||||
Bank acceptances | (o | ) | 16,786 | — | — | — | — | 16,786 | ||||||||||||||||||||||||
Income tax liability | (y | ) | 1,550 | (1,550 | ) | — | — | (1,550 | ) | — | ||||||||||||||||||||||
Current tax liabilities | (y | ) | — | 833 | — | — | 833 | 833 | ||||||||||||||||||||||||
Deferred tax liabilities | (y | ) | — | 717 | — | 444 | L | 1,161 | 1,161 | |||||||||||||||||||||||
Other provisions | (z),(aa | ) | 895 | 16 | — | (24 | ) | M | (8 | ) | 887 | |||||||||||||||||||||
Insurance policy liabilities | (hh | ) | 24,694 | — | — | 342 | N | 342 | 25,036 | |||||||||||||||||||||||
Debt issues | (bb | ) | 58,621 | (4,240 | ) | 12,144 | (1,046 | ) | O | 6,858 | 65,479 | |||||||||||||||||||||
Managed fund units on issue | (hh | ) | — | 1,158 | — | — | 1,158 | 1,158 | ||||||||||||||||||||||||
Bills payable and other liabilities | (cc | ) | 18,086 | (12,162 | ) | (614 | ) | (282 | ) | P | (13,058 | ) | 5,028 | |||||||||||||||||||
Loan capital | (dd | ) | 6,291 | 2,260 | — | (194 | ) | Q | 2,066 | 8,357 | ||||||||||||||||||||||
Total Liabilities | 302,975 | 3,094 | 11,527 | (1,303 | ) | 13,318 | 316,293 | |||||||||||||||||||||||||
Net Assets | 26,060 | (3,418 | ) | — | (3,765 | ) | (7,183 | ) | 18,877 | |||||||||||||||||||||||
Shareholders’ Equity | ||||||||||||||||||||||||||||||||
Share capital: | ||||||||||||||||||||||||||||||||
Ordinary share capital | (ee | ) | 13,871 | — | — | (385 | ) | R | (385 | ) | 13,486 | |||||||||||||||||||||
Preference share capital | 687 | (687 | ) | — | — | (687 | ) | — | ||||||||||||||||||||||||
Other equity instruments | 1,573 | (1,573 | ) | — | — | (1,573 | ) | — | ||||||||||||||||||||||||
Reserves | (ee | ) | 4,624 | 802 | (3) | — | (3,729 | ) | S | (2,927 | ) | 1,697 | ||||||||||||||||||||
Retained profits | 3,516 | (802 | )(3) | — | 349 | T | (453 | ) | 3,063 | |||||||||||||||||||||||
Shareholders’ equity attributable to members of the Bank | 24,271 | (2,260 | ) | �� | — | (3,765 | ) | (6,025 | ) | 18,246 | ||||||||||||||||||||||
Minority interests: | ||||||||||||||||||||||||||||||||
Controlled entities | 631 | — | — | — | — | 631 | ||||||||||||||||||||||||||
Insurance statutory funds and other funds | (hh | ) | 1,158 | (1,158 | ) | — | — | (1,158 | ) | — | ||||||||||||||||||||||
Total Shareholders’ Equity | 26,060 | (3,418 | ) | — | (3,765 | ) | (7,183 | ) | 18,877 | |||||||||||||||||||||||
(1) | References relate to key Accounting Policies as set out on pages 79 to 98. | |
(2) | References relate to explanations of the key AIFRS re-measure adjustments set out on pages 103 to 106. | |
(3) | These estimates of AIFRS transition adjustments have been revised due to a change in functional currency. The details are discussed further in Note 32. |
(nn) Effect of Transition to Australian Equivalents of IFRS
Income Statement Reconciliation
Group | ||||||||||||||||||||||||||||
Year Ended 30 June 2005 | ||||||||||||||||||||||||||||
Transition Adjustments | ||||||||||||||||||||||||||||
AIFRS | ||||||||||||||||||||||||||||
Policy | AGAAP | Gross-up | Re-Measure | Transition | AIFRS | |||||||||||||||||||||||
Note(1) | Group $M | $M | $M(2) | $M | Group $M | |||||||||||||||||||||||
Interest income | (m | ) | 16,194 | 598 | (11 | ) | 587 | 16,781 | ||||||||||||||||||||
Interest expense | 10,228 | 527 | — | 527 | 10,755 | |||||||||||||||||||||||
Net interest income | 5,966 | 71 | (11 | ) | 60 | 6,026 | ||||||||||||||||||||||
Other operating income | 2,915 | (70 | ) | — | (70 | ) | 2,845 | |||||||||||||||||||||
Net banking operating income | 8,881 | 1 | (11 | ) | (10 | ) | 8,871 | |||||||||||||||||||||
Funds management income | 1,261 | — | (14 | ) | (14 | ) | 1,247 | |||||||||||||||||||||
Investment revenue | (hh | ) | 2,008 | — | (52 | ) | U | (52 | ) | 1,956 | ||||||||||||||||||
Claims and policyholder liability expense from insurance contracts | (1,871 | ) | — | — | — | (1,871 | ) | |||||||||||||||||||||
Net funds management and investment contract operating income | 1,398 | — | (66 | ) | (66 | ) | 1,332 | |||||||||||||||||||||
Premiums from insurance contracts | 1,132 | — | — | — | 1,132 | |||||||||||||||||||||||
Investment revenue | 1,186 | — | — | — | 1,186 | |||||||||||||||||||||||
Claims and policyholder liability expense from insurance contracts | (1,243 | ) | — | — | — | (1,243 | ) | |||||||||||||||||||||
Insurance margin on services operating income | 1,075 | — | — | — | 1,075 | |||||||||||||||||||||||
Total net operating income | 11,354 | 1 | (77 | ) | (76 | ) | 11,278 | |||||||||||||||||||||
Bad debts expense | 322 | — | — | — | 322 | |||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||
Comparable business | 5,697 | 1 | 21 | 22 | 5,719 | |||||||||||||||||||||||
Which new Bank | 150 | — | — | — | 150 | |||||||||||||||||||||||
Total operating expenses | 5,847 | 1 | 21 | 22 | 5,869 | |||||||||||||||||||||||
Defined benefit superannuation plan expense | (z | ) | — | — | (75 | ) | V | (75 | ) | (75 | ) | |||||||||||||||||
Appraisal value uplift | (hh | ) | 778 | — | (778 | ) | W | (778 | ) | — | ||||||||||||||||||
Goodwill amortisation | (t | ) | (325 | ) | — | 325 | X | 325 | — | |||||||||||||||||||
Profit before income tax | 5,638 | — | (626 | ) | (626 | ) | 5,012 | |||||||||||||||||||||
Income tax expense | (y | ) | 1,637 | — | (35 | ) | (35 | ) | 1,602 | |||||||||||||||||||
Profit after income tax | 4,001 | — | (591 | ) | (591 | ) | 3,410 | |||||||||||||||||||||
Minority interests | (10 | ) | — | — | — | (10 | ) | |||||||||||||||||||||
Net profit attributable to members of the Bank | 3,991 | — | (591 | ) | (591 | ) | 3,400 | |||||||||||||||||||||
Net profit after income tax comprises: | ||||||||||||||||||||||||||||
Net profit after income tax (“underlying basis”) | 3,466 | — | (46 | ) | (46 | ) | 3,420 | |||||||||||||||||||||
Shareholder investment returns | 177 | — | — | — | 177 | |||||||||||||||||||||||
Which new Bank | (105 | ) | — | — | — | (105 | ) | |||||||||||||||||||||
Net profit after income tax (“cash basis”) | 3,538 | — | (46 | ) | (46 | ) | 3,492 | |||||||||||||||||||||
Defined benefit superannuation plan expense | (z | ) | — | — | (53 | ) | (53 | ) | (53 | ) | ||||||||||||||||||
Treasury share valuation adjustment | (hh | ) | — | — | (39 | ) | (39 | ) | (39 | ) | ||||||||||||||||||
Net profit after income tax (“statutory basis”)(1) | 3,538 | — | (138 | ) | (138 | ) | 3,400 | |||||||||||||||||||||
(1) | References relate to key Accounting Policies as set out on pages 79 to 98. | |
(2) | References relate to explanations of the key AIFRS re-measure adjustments set out on pages 103 to 106. |
(nn) Effect of Transition to Australian Equivalents to IFRS
Explanation of AIFRS Re-measure Transition Adjustments
AIFRS Balance Sheet Impacts
Re-measure | ||||||||
Adjustment | ||||||||
Reference | Transition Date | Adjustment $M | Explanation of material AIFRS re-measurements | |||||
A | Insurance assets at fair value through Income Statement (refer note 1 (i) and (hh)) | |||||||
1 July 2004 | (301 | ) | The recognition of direct investments in Commonwealth Bank shares by the Bank’s life insurance statutory funds as ‘Treasury Shares’ results in the reversal of the fair value of these shares from consolidated insurance assets while the cost of these shares is reversed from ordinary share capital (refer adjustment R). The associated insurance policyholder liability is not reversed, resulting in an accounting mismatch (see adjustment U). | |||||
30 June 2005 | (337 | ) | As above. | |||||
1 July 2005 | (352 | ) | As above, also includes impact of valuing assets held by life insurance using bid prices rather than mid prices (-$15m). | |||||
B | Derivative assets (refer note 1 (ff)) | |||||||
1 July 2004 | — | |||||||
30 June 2005 | — | |||||||
1 July 2005 | (2,292 | ) | Principally relates to the elimination of internal swaps; and an adjustment to re-measure derivatives that were previously accrual accounted. | |||||
C | Available-for-sale investments (refer note 1 (j)) | |||||||
1 July 2004 | — | |||||||
30 June 2005 | — | |||||||
1 July 2005 | 85 | Revaluation of available-for-sale (‘AFS’) investments from cost to fair value. AFS assets are principally comprised of those assets classified as investment securities under previous Australian GAAP, which were measured on a cost basis. | ||||||
D | Loans, advances and other receivables — gross (refer note 1 (l)) | |||||||
1 July 2004 | — | |||||||
30 June 2005 | — | |||||||
1 July 2005 | 295 | Principally relates to two adjustments: (1) re-measurement to fair value of loan assets designated within fair value hedging relationships. Such loan assets are initially measured on an amortised cost basis, and then adjusted to fair value to offset the mark-to-market movement on the associated fair value hedge derivative (+$399m); and (2) capitalisation of the net fee income integral to the yield of an originated loan results in the recognition of an unamortised deferred income balance (-$122m). | ||||||
E | Loans, advances and other receivables — collective provision for impairment (refer note 1 (n)) | |||||||
1 July 2004 | — | |||||||
30 June 2005 | — | |||||||
1 July 2005 | 294 | Reflects the difference between the previous Australian GAAP general provision for impairment and the AIFRS collective provision for impairment, net of reclassifications. Under AIFRS, collective provisions are recognised where there is objective evidence of impairment, and includes an estimate of losses which have been incurred but not reported as at balance sheet date. | ||||||
F | Loans, advances and other receivables — individually assessed provisions for impairment (refer note 1 (n)) | |||||||
1 July 2004 | — | |||||||
30 June 2005 | — | |||||||
1 July 2005 | (15 | ) | Reflects the difference between the previous Australian GAAP specific provision for impairment and the AIFRS individually assessed provisions. This difference relates to the impact of discounting of expected cash flows on recovery. | |||||
G | Intangible assets (refer note 1 (t)) | |||||||
1 July 2004 | — | |||||||
30 June 2005 | 321 | Goodwill no longer amortised under AIFRS. Reflects the reversal of amortisation of goodwill for the year ended 30 June 2005. | ||||||
1 July 2005 | 321 | As above. |
(nn) Effect of Transition to Australian Equivalents to IFRS
Explanation of AIFRS Re-measure Transition Adjustments
AIFRS Balance Sheet Impacts
Re-measure | ||||||||
Adjustment | ||||||||
Reference | Transition Date | Adjustment $M | Explanation of material AIFRS re-measurements | |||||
H | Deferred tax assets (refer note 1 (y)) | |||||||
1 July 2004 | 23 | Principally relates to the deferred tax asset recognised on the defined benefit superannuation plan deficit liability, under the AIFRS “balance sheet” approach to tax-effect accounting. | ||||||
30 June 2005 | 24 | As above. | ||||||
1 July 2005 | 241 | As above, and also includes deferred tax assets related to various AIFRS adjustments such as hedge accounting, loan impairment provisioning and revenue and expense recognition. | ||||||
I | Other assets (refer note 1 (u)) | |||||||
1 July 2004 | (2,512 | ) | Principally relates to two adjustments: (1) the reversal of internally generated appraisal value excess (-$3,123m); and (2) the recognition of the defined benefit superannuation plan surplus asset (+$633m). Refer to adjustments R and S. | |||||
30 June 2005 | (3,203 | ) | As above, though adjustments become (1) (-$3,901m); and (2) (+$717m). | |||||
1 July 2005 | (3,670 | ) | As above, also includes hedging impact of (-$473 m), which relates to the elimination of interest receivable on hedged derivatives. | |||||
J | Deposits from customers (refer note 1 (v)) | |||||||
1 July 2004 | — | |||||||
30 June 2005 | — | |||||||
1 July 2005 | 66 | Represents the revaluation of deposits designated within fair value hedge relationships. | ||||||
K | Derivative liabilities (refer note 1 (ff)) | |||||||
1 July 2004 | — | |||||||
30 June 2005 | — | |||||||
1 July 2005 | (609 | ) | Principally relates to the elimination of internal swaps; initial recognition of embedded derivatives at fair value; and an adjustment to re-measure derivatives that were previously accrual accounted. | |||||
L | Deferred tax liabilities (refer note 1 (y)) | |||||||
1 July 2004 | 188 | Principally relates to the deferred tax liability recognised on the defined benefit superannuation plan surplus asset, under the AIFRS “balance sheet” approach to tax-effect accounting. Refer adjustment I above. | ||||||
30 June 2005 | 204 | As above. | ||||||
1 July 2005 | 444 | As above, and also includes deferred tax liabilities related to various AIFRS adjustments such as hedge accounting, re-measurement of available-for-sale assets, and revenue and expense recognition. | ||||||
M | Other provisions (refer note 1 (z) and (aa)) | |||||||
1 July 2004 | (85 | ) | Principally relates to the reversal of accrued liabilities in respect of employee share-based compensation. This is a one-off adjustment in the comparative period due to the discontinuance of the mandatory component of the Equity Participation Plan. | |||||
30 June 2005 | (24 | ) | As above. | |||||
1 July 2005 | (24 | ) | As above. | |||||
N | Insurance policyholder liabilities (refer note 1 (hh)) | |||||||
1 July 2004 | — | |||||||
30 June 2005 | — | |||||||
1 July 2005 | 342 | Relates to measurement differences in the actuarial calculation of policyholder liabilities under AIFRS. Impact primarily driven by a change in the discount rates applied to some contracts, and the write off of deferred acquisition costs related to investment-style products of the Wealth Management business. |
(nn) Effect of Transition to Australian Equivalents to IFRS
Explanation of AIFRS Re-measure Transition Adjustments
AIFRS Balance Sheet Impacts
Re-measure | ||||||||
Adjustment | ||||||||
Reference | Transition Date | Adjustment $M | Explanation of material AIFRS re-measurements | |||||
O | Debt issues (refer note 1 (bb)) | |||||||
1 July 2004 | — | |||||||
30 June 2005 | — | |||||||
1 July 2005 | (1,046 | ) | Represents the revaluation of debt issues designated within fair value hedge relationships. | |||||
P | Bills payable and other liabilities (refer note 1 (cc)) | |||||||
1 July 2004 | 77 | Relates to the recognition of the defined benefit superannuation plan deficit liability. | ||||||
30 June 2005 | 79 | As above. | ||||||
1 July 2005 | (282 | ) | As above, also includes impact of the elimination of interest payable on hedge derivatives. | |||||
Q | Loan capital (refer note 1 (dd)) | |||||||
1 July 2004 | — | |||||||
30 June 2005 | — | |||||||
1 July 2005 | (194 | ) | Relates to the impact of fair value hedging and foreign currency re-translation of hybrid instrument reclassified from equity. | |||||
R | Ordinary share capital (refer note 1 (ee)) | |||||||
1 July 2004 | (371 | ) | Relates to two adjustments: (1) recognition of direct investments in Commonwealth Bank shares by the Bank’s life insurance statutory funds as ‘Treasury Shares’ results in the reversal of the cost of these shares from ordinary share capital (-$245m), being fair value of $301m less market value appreciation $46m (less $10m tax effect)); and (2) the consolidation of the Employee Share Scheme Trust, which holds shares in the Bank on behalf of employees, results in the reversal of the cost of these shares from ordinary share capital (-$126m). | |||||
30 June 2005 | (385 | ) | As above, though adjustments become (1) (-$253m); and (2) (-$132m). | |||||
1 July 2005 | (385 | ) | As above. | |||||
S | Reserves (refer note 1 (ee)) | |||||||
1 July 2004 | (3,045 | ) | Principally relates to the reversal from general reserve of the internally generated appraisal value excess (-$3,123m). | |||||
30 June 2005 | (3,851 | ) | As above (-$3,901m). | |||||
1 July 2005 | (3,729 | ) | As above, also includes the impact of the recognition of available-for-sale revaluation reserve; cash flow hedge reserve; and the retranslation of certain hybrid financial instruments on reclassification from equity to loan capital. | |||||
T | Retained profits | |||||||
1 July 2004 | 501 | Principally relates to three adjustments: (1) Recognition of the net after tax surplus on the Bank’s defined benefit superannuation plans (+$389m) comprising an opening surplus of (+$443m) less an opening deficit of (-$54m); (2) adjustment related to employee share-based compensation accounting under AIFRS (+$141m); and (3) the reversal of the cumulative market value appreciation on life insurance treasury shares (-$46m). | ||||||
30 June 2005 | 819 | As above, though adjustments become (1) (+$447m); (2) (+$112m); and (3) (-$66m), together with (4) the reversal of goodwill amortisation for the full year (+$321m) | ||||||
1 July 2005 | 349 | As above, also includes the impact of (1) the initial recognition of derivative financial instruments on initial application of hedge accounting and recognition of embedded derivatives (-$282m); (2) change in calculation of life insurance policy holder liabilities and DAC (-$260m); (3) revenue and expense recognition adjustments (-$167m); and (4) recalculation of loan impairment provisions (+$195m). |
(nn) Effect of Transition to Australian Equivalents to IFRS
Explanation of AIFRS Re-measure Transition Adjustments
AIFRS Income Statement Impacts
Re-measure | ||||||||
Adjustment | ||||||||
Reference | Transition Date | Adjustment $M | Explanation of material AIFRS re-measurements | |||||
U | Funds management investment revenue (refer note 1 (hh)) | |||||||
30 June 2005 | (52 | ) | Relates to reversal of net gains on treasury shares held in the life insurance statutory funds. | |||||
V | Defined benefit superannuation plan expense (refer note 1 (hh)) | |||||||
30 June 2005 | (75 | ) | Relates to the additional, non-cash expense item reflecting the accrual accounting charge to profit and loss associated with accounting for defined benefit superannuation plans. | |||||
W | Appraisal value uplift (refer note 1 (t)) | |||||||
30 June 2005 | (778 | ) | Relates to the reversal of the appraisal value uplift on cessation of appraisal value accounting under AIFRS. | |||||
X | Goodwill amortisation (refer note 1 (t)) | |||||||
30 June 2005 | 325 | Relates to the reversal of goodwill amortisation under AIFRS. |
(nn) Effect of Transition to Australian Equivalents of IFRS
Balance Sheet Reconciliation
Bank | ||||||||||||||||||||||||||||||||
1 July 2004 | ||||||||||||||||||||||||||||||||
Transition Adjustments | ||||||||||||||||||||||||||||||||
Policy | AGAAP | Reclass | Gross-up | Re-Measure | Total | AIFRS | ||||||||||||||||||||||||||
Note(1) | Bank $M | $M | $M | $M(2) | $M | Bank $M | ||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||
Cash and liquid assets | 6,485 | 168 | — | 168 | 6,653 | |||||||||||||||||||||||||||
Receivables from other financial institutions | 7,068 | (164 | ) | — | — | (164 | ) | 6,904 | ||||||||||||||||||||||||
Assets at fair value through Income Statement: | ||||||||||||||||||||||||||||||||
Trading | 12,877 | — | — | — | — | 12,877 | ||||||||||||||||||||||||||
Investment securities | 6,626 | — | — | — | — | 6,626 | ||||||||||||||||||||||||||
Loans, advances, and other receivables | 154,139 | — | 5,473 | 13 | 5,486 | 159,625 | ||||||||||||||||||||||||||
Bank acceptances of customers | 15,160 | — | — | — | — | 15,160 | ||||||||||||||||||||||||||
Deposits with regulatory authorities | 4 | (4 | ) | — | — | (4 | ) | — | ||||||||||||||||||||||||
Shares in and loans to controlled entities | 23,677 | — | — | — | — | 23,677 | ||||||||||||||||||||||||||
Investment property | — | — | — | — | — | — | ||||||||||||||||||||||||||
Property, plant and equipment | 722 | — | — | 30 | 30 | 752 | ||||||||||||||||||||||||||
Investment in associates | 220 | — | — | — | — | 220 | ||||||||||||||||||||||||||
Intangible assets | 2,522 | 78 | — | — | 78 | 2,600 | ||||||||||||||||||||||||||
Deferred tax assets | — | 423 | — | 23 | G | 446 | 446 | |||||||||||||||||||||||||
Other assets | 18,849 | (501 | ) | 96 | 611 | H | 206 | 19,055 | ||||||||||||||||||||||||
Total Assets | 248,349 | — | 5,569 | 677 | 6,246 | 254,595 | ||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Deposits and other public borrowings | 142,469 | — | — | — | — | 142,469 | ||||||||||||||||||||||||||
Payables due to other financial institutions | 6,611 | — | — | — | — | 6,611 | ||||||||||||||||||||||||||
Bank acceptances | 15,160 | — | — | — | — | 15,160 | ||||||||||||||||||||||||||
Income tax liability | 690 | (690 | ) | — | — | (690 | ) | — | ||||||||||||||||||||||||
Due to controlled entities | 14,176 | — | 5,468 | — | 5,468 | 19,644 | ||||||||||||||||||||||||||
Current tax liabilities | — | 358 | — | — | 358 | 358 | ||||||||||||||||||||||||||
Deferred tax liabilities | — | 332 | — | 197 | K | 529 | 529 | |||||||||||||||||||||||||
Other provisions | 832 | — | — | (83 | ) | L | (83 | ) | 749 | |||||||||||||||||||||||
Debt issues | 24,449 | — | — | — | — | 24,449 | ||||||||||||||||||||||||||
Bills payable and other liabilities | 17,888 | — | 101 | 80 | N | 181 | 18,069 | |||||||||||||||||||||||||
Loan capital | 7,338 | — | — | — | — | 7,338 | ||||||||||||||||||||||||||
Total Liabilities | 229,613 | — | 5,569 | 194 | 5,763 | 235,376 | ||||||||||||||||||||||||||
Net Assets | 18,736 | — | — | 483 | 483 | 19,219 | ||||||||||||||||||||||||||
Shareholders’ Equity | ||||||||||||||||||||||||||||||||
Share capital: | ||||||||||||||||||||||||||||||||
Ordinary share capital | 13,359 | — | — | (126 | ) | P | (126 | ) | 13,233 | |||||||||||||||||||||||
Preference share capital | 687 | — | — | — | — | 687 | ||||||||||||||||||||||||||
Other equity instruments | 737 | — | — | — | — | 737 | ||||||||||||||||||||||||||
Reserves | 2,148 | (5 | ) | — | 80 | Q | 75 | 2,223 | ||||||||||||||||||||||||
Retained profits | 1,805 | 5 | — | 529 | R | 534 | 2,339 | |||||||||||||||||||||||||
Shareholders’ equity attributable to members of the Bank | 18,736 | — | — | 483 | 483 | 19,219 | ||||||||||||||||||||||||||
Minority interests: | ||||||||||||||||||||||||||||||||
Controlled entities | — | — | — | — | — | — | ||||||||||||||||||||||||||
Insurance statutory funds and other funds | — | — | — | — | — | — | ||||||||||||||||||||||||||
Total Shareholders’ Equity | 18,736 | — | — | 483 | 483 | 19,219 | ||||||||||||||||||||||||||
(1) | References relate to key Accounting Policies as set out on pages 79 to 98. | |
(2) | References relate to explanations of the key AIFRS re-measure adjustments set out on pages 111 to 114. |
(nn) Effect of Transition to Australian Equivalents of IFRS
Balance Sheet Reconciliation
Bank | ||||||||||||||||||||||||||||
30 June 2005 | ||||||||||||||||||||||||||||
Transition Adjustments | ||||||||||||||||||||||||||||
Policy | AGAAP | Reclass | Gross-up | Re-Measure | Total | AIFRS | ||||||||||||||||||||||
Note(1) | Bank $M | $M | $M | $M(2) | $M | Bank $M | ||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Cash and liquid assets | 5,574 | 162 | — | — | 162 | 5,736 | ||||||||||||||||||||||
Receivables from other financial institutions | 6,133 | (161 | ) | — | — | (161 | ) | 5,972 | ||||||||||||||||||||
Assets at fair value through Income Statement: | ||||||||||||||||||||||||||||
Trading | 12,432 | — | — | — | — | 12,432 | ||||||||||||||||||||||
Investment securities | 6,922 | — | — | — | — | 6,922 | ||||||||||||||||||||||
Loans, advances, and other receivables | 174,140 | — | 9,783 | 2 | 9,785 | 183,925 | ||||||||||||||||||||||
Bank acceptances of customers | 16,917 | — | — | — | — | 16,917 | ||||||||||||||||||||||
Deposits with regulatory authorities | 1 | (1 | ) | — | — | (1 | ) | — | ||||||||||||||||||||
Shares in and loans to controlled entities | 29,161 | — | — | — | — | 29,161 | ||||||||||||||||||||||
Investment property | — | — | — | — | — | — | ||||||||||||||||||||||
Property, plant and equipment | 796 | — | — | 25 | 25 | 821 | ||||||||||||||||||||||
Investment in associates | 12 | — | — | — | — | 12 | ||||||||||||||||||||||
Intangible assets | 2,336 | 153 | — | 186 | F | 339 | 2,675 | |||||||||||||||||||||
Deferred tax assets | — | 577 | — | 22 | G | 599 | 599 | |||||||||||||||||||||
Other assets | 17,200 | (727 | ) | (7 | ) | 688 | H | (46 | ) | 17,154 | ||||||||||||||||||
Total Assets | 271,624 | 3 | 9,776 | 923 | 10,702 | 282,326 | ||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||
Deposits and other public borrowings | 143,858 | — | — | — | — | 143,858 | ||||||||||||||||||||||
Payables due to other financial institutions | 7,969 | — | — | — | — | 7,969 | ||||||||||||||||||||||
Bank acceptances | 16,917 | — | — | — | — | 16,917 | ||||||||||||||||||||||
Income tax liability | 1,421 | (1,421 | ) | — | — | (1,421 | ) | — | ||||||||||||||||||||
Due to controlled entities | 16,652 | — | 9,776 | — | 9,776 | 26,428 | ||||||||||||||||||||||
Current tax liabilities | — | 764 | — | — | 764 | 764 | ||||||||||||||||||||||
Deferred tax liabilities | — | 657 | — | 215 | K | 872 | 872 | |||||||||||||||||||||
Other provisions | 723 | — | — | (20 | ) L | (20 | ) | 703 | ||||||||||||||||||||
Debt issues | 40,687 | — | — | — | — | 40,687 | ||||||||||||||||||||||
Bills payable and other liabilities | 16,658 | — | — | 79 | N | 79 | 16,737 | |||||||||||||||||||||
Loan capital | 7,010 | — | — | — | — | 7,010 | ||||||||||||||||||||||
Total Liabilities | 251,895 | — | 9,776 | 274 | 10,050 | 261,945 | ||||||||||||||||||||||
Net Assets | 19,729 | 3 | — | 649 | 652 | 20,381 | ||||||||||||||||||||||
Shareholders’ Equity | ||||||||||||||||||||||||||||
Share capital: | ||||||||||||||||||||||||||||
Ordinary share capital | 13,871 | — | — | (132 | ) P | (132 | ) | 13,739 | ||||||||||||||||||||
Preference share capital | 687 | — | — | — | — | 687 | ||||||||||||||||||||||
Other equity instruments | 737 | — | — | — | — | 737 | ||||||||||||||||||||||
Reserves | 2,179 | (2 | ) | — | 49 | Q | 47 | 2,226 | ||||||||||||||||||||
Retained profits | 2,255 | 5 | — | 732 | R | 737 | 2,992 | |||||||||||||||||||||
Shareholders’ equity attributable to members of the Bank | 19,729 | 3 | — | 649 | 652 | 20,381 | ||||||||||||||||||||||
Minority interests: | ||||||||||||||||||||||||||||
Controlled entities | — | — | — | — | — | — | ||||||||||||||||||||||
Insurance statutory funds and other funds | — | — | — | — | — | — | ||||||||||||||||||||||
Total Shareholders’ Equity | 19,729 | 3 | — | 649 | 652 | 20,381 | ||||||||||||||||||||||
(1) | References relate to key Accounting Policies as set out on pages 79 to 98. (2) References relate to explanations of the key AIFRS re-measure adjustments set out on pages 111 to 114. | |
(2) | References relate to explanations of the key AIFRS re-measure adjustments set out on pages 111 to 114. |
(nn) Effect of Transition to Australian Equivalents of IFRS
Balance Sheet Reconciliation
Bank | ||||||||||||||||||||||||||||
1 July 2005 | ||||||||||||||||||||||||||||
Transition Adjustments | ||||||||||||||||||||||||||||
Policy | AGAAP | Reclass | Gross-up | Re-Measure | Total | AIFRS | ||||||||||||||||||||||
Note(1) | Bank $M | $M | $M | $M(2) | $M | Bank $M | ||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Cash and liquid assets | 5,574 | 162 | — | — | 162 | 5,736 | ||||||||||||||||||||||
Receivables from other financial institutions | 6,133 | (161 | ) | — | — | (161 | ) | 5,972 | ||||||||||||||||||||
Assets at fair value through Income Statement: | ||||||||||||||||||||||||||||
Trading | 12,432 | (101 | ) | — | — | (101 | ) | 12,331 | ||||||||||||||||||||
Other | — | 324 | — | — | 324 | 324 | ||||||||||||||||||||||
Derivative assets | — | 12,249 | — | (2,691 | ) A | 9,558 | 9,558 | |||||||||||||||||||||
Investment securities | 6,922 | (6,922 | ) | — | — | (6,922 | ) | — | ||||||||||||||||||||
Available-for-sale investments | — | 6,860 | — | 93 | B | 6,953 | 6,953 | |||||||||||||||||||||
Loans, advances, and other receivables | 174,140 | 50 | 9,783 | 169 | C-E | 10,002 | 184,142 | |||||||||||||||||||||
Bank acceptances of customers | 16,917 | — | — | — | — | 16,917 | ||||||||||||||||||||||
Deposits with regulatory authorities | 1 | (1 | ) | — | — | (1 | ) | — | ||||||||||||||||||||
Shares in and loans to controlled entities | 29,161 | — | — | 68 | 68 | 29,229 | ||||||||||||||||||||||
Investment property | — | — | — | — | — | — | ||||||||||||||||||||||
Property, plant and equipment | 796 | — | — | 25 | 25 | 821 | ||||||||||||||||||||||
Investment in associates | 12 | — | — | — | — | 12 | ||||||||||||||||||||||
Intangible assets | 2,336 | 153 | — | 186 | F | 339 | 2,675 | |||||||||||||||||||||
Deferred tax assets | — | 577 | — | 154 | G | 731 | 731 | |||||||||||||||||||||
Other assets | 17,200 | (13,025 | ) | (7 | ) | 956 | H | (12,076 | ) | 5,124 | ||||||||||||||||||
Total Assets | 271,624 | 165 | 9,776 | (1,040 | ) | 8,901 | 280,525 | |||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||
Deposits and other public borrowings | 143,858 | (1,580 | ) | — | 67 | I | (1,513 | ) | 142,345 | |||||||||||||||||||
Payables due to other financial institutions | 7,969 | — | — | — | — | 7,969 | ||||||||||||||||||||||
Liabilities at fair value through Income | ||||||||||||||||||||||||||||
Statement | — | 1,580 | — | — | 1,580 | 1,580 | ||||||||||||||||||||||
Derivative liabilities | — | 11,854 | — | (937 | ) J | 10,917 | 10,917 | |||||||||||||||||||||
Bank acceptances | 16,917 | — | — | — | — | 16,917 | ||||||||||||||||||||||
Income tax liability | 1,421 | (1,421 | ) | — | — | (1,421 | ) | — | ||||||||||||||||||||
Due to controlled entities | 16,652 | — | 9,776 | — | 9,776 | 26,428 | ||||||||||||||||||||||
Current tax liabilities | — | 764 | — | — | 764 | 764 | ||||||||||||||||||||||
Deferred tax liabilities | — | 657 | — | 366 | K | 1,023 | 1,023 | |||||||||||||||||||||
Other provisions | 723 | — | — | 16 | L | 16 | 739 | |||||||||||||||||||||
Debt issues | 40,687 | — | — | (996 | ) M | (996 | ) | 39,691 | ||||||||||||||||||||
Managed funds units on issue | — | — | — | — | — | — | ||||||||||||||||||||||
Bills payable and other liabilities | 16,658 | (11,842 | ) | — | 269 | N | (11,573 | ) | 5,085 | |||||||||||||||||||
Loan capital | 7,010 | 1,435 | — | (186 | ) O | 1,249 | 8,259 | |||||||||||||||||||||
Total Liabilities | 251,895 | 1,447 | 9,776 | 1,401 | 9,822 | 261,717 | ||||||||||||||||||||||
Net Assets | 19,729 | (1,282 | ) | — | 361 | (921 | ) | 18,808 | ||||||||||||||||||||
Shareholders’ Equity | ||||||||||||||||||||||||||||
Share capital: | ||||||||||||||||||||||||||||
Ordinary share capital | 13,871 | — | — | (132 | ) P | (132 | ) | 13,739 | ||||||||||||||||||||
Preference share capital | 687 | (687 | ) | — | — | (687 | ) | — | ||||||||||||||||||||
Other equity instruments | 737 | (737 | ) | — | — | (737 | ) | — | ||||||||||||||||||||
Reserves | 2,179 | 252 | — | 88 | Q | 340 | 2,519 | |||||||||||||||||||||
Retained profits | 2,255 | (110 | ) | — | 405 | R | 295 | 2,550 | ||||||||||||||||||||
Shareholders’ equity attributable to members of the Bank | 19,729 | (1,282 | ) | — | 361 | (921 | ) | 18,808 | ||||||||||||||||||||
Minority interests: | ||||||||||||||||||||||||||||
Controlled entities | — | — | — | — | — | — | ||||||||||||||||||||||
Insurance statutory funds and other funds | — | — | — | — | — | — | ||||||||||||||||||||||
Total Shareholders’ Equity | 19,729 | (1,282 | ) | — | 361 | (921 | ) | 18,808 | ||||||||||||||||||||
(1) | References relate to key Accounting Policies as set out on pages 79 to 98. | |
(2) | References relate to explanations of the key AIFRS re-measure adjustments set out on pages 111 to 114. |
(nn) Effect of Transition to Australian Equivalents of IFRS
Income Statement Reconciliation
Bank | ||||||||||||||||||||||||
Year Ended 30 June 2005 | ||||||||||||||||||||||||
Transition Adjustments | ||||||||||||||||||||||||
Policy | AGAAP | Gross-up | Re-Measure | AIFRS | AIFRS | |||||||||||||||||||
Note(1) | Group $M | $M | $M | Transition $M | Bank $M | |||||||||||||||||||
Interest income | 13,404 | 289 | (12 | ) | 277 | 13,681 | ||||||||||||||||||
Interest expense | (8,601 | ) | (257 | ) | — | (257 | ) | (8,858 | ) | |||||||||||||||
Net interest income | 4,803 | 32 | (12 | ) | 20 | 4,823 | ||||||||||||||||||
Other operating income | 4,023 | (32 | ) | — | (32 | ) | 3,991 | |||||||||||||||||
Net banking operating income | 8,826 | — | (12 | ) | (12 | ) | 8,814 | |||||||||||||||||
Funds management income | — | — | — | — | — | |||||||||||||||||||
Investment revenue | — | — | — | — | — | |||||||||||||||||||
Claims and policyholder liability expense | — | — | — | — | — | |||||||||||||||||||
Net funds management and investment contract operating income | — | — | — | — | — | |||||||||||||||||||
Premiums from insurance contracts | — | — | — | — | — | |||||||||||||||||||
Investment revenue | — | — | — | — | — | |||||||||||||||||||
Claims and policyholder liability expense from insurance contracts | — | — | — | — | — | |||||||||||||||||||
Insurance margin on services operating income | — | — | — | — | — | |||||||||||||||||||
Total net operating income | 8,826 | — | (12 | ) | (12 | ) | 8,814 | |||||||||||||||||
Bad debts expense | (292 | ) | — | — | — | (292 | ) | |||||||||||||||||
Operating expenses: | — | — | — | — | — | |||||||||||||||||||
Comparable business | (4,357 | ) | — | (31 | ) | (31 | ) | (4,388 | ) | |||||||||||||||
Which new Bank | (150 | ) | — | — | — | (150 | ) | |||||||||||||||||
Total operating expenses | (4,507 | ) | — | (31 | ) | (31 | ) | (4,538 | ) | |||||||||||||||
Defined benefit superannuation plan expense | — | — | (75 | ) S | (75 | ) | (75 | ) | ||||||||||||||||
Appraisal value uplift | — | — | — | — | — | |||||||||||||||||||
Goodwill amortisation | (186 | ) | — | 186 | T | 186 | — | |||||||||||||||||
Profit before income tax | 3,841 | — | 68 | 68 | 3,909 | |||||||||||||||||||
Corporate tax expense | (920 | ) | — | 23 | 23 | (897 | ) | |||||||||||||||||
Profit after income tax | 2,921 | — | 91 | 91 | 3,012 | |||||||||||||||||||
Minority interests | — | — | — | — | — | |||||||||||||||||||
Net profit attributable to members of the Bank | 2,921 | — | 91 | 91 | 3,012 | |||||||||||||||||||
(1) | References relate to key Accounting Policies as set out on pages 79 to 98. | |
(2) | References relate to explanations of the key AIFRS re-measure adjustments set out on pages 111 to 114. |
(nn) Effect of Transition to Australian Equivalents to IFRS
Explanation of AIFRS Re-measure Transition Adjustments
AIFRS Balance Sheet Impacts
Re-measure | ||||||||
Adjustment | ||||||||
Reference | Transition Date | Adjustment $M | Explanation of material AIFRS re-measurements | |||||
A | Derivative assets (refer note 1 (ff)) | |||||||
1 July 2004 | — | |||||||
30 June 2005 | — | |||||||
1 July 2005 | (2,691 | ) | Principally relates to the recognition of internal swaps; and an adjustment to re-measure derivatives that were previously accrual accounted. | |||||
B | Available-for-sale investments (refer note 1 (j)) | |||||||
1 July 2004 | — | |||||||
30 June 2005 | — | |||||||
1 July 2005 | 93 | Principally relates to the revaluation of available-for-sale (‘AFS’) investments from cost to fair value. AFS assets are principally comprised of those assets classified as investment securities under previous Australian GAAP, which were measured on a cost basis. | ||||||
C | Loans, advances and other receivables — gross (refer note 1 (l)) | |||||||
1 July 2004 | — | |||||||
30 June 2005 | — | |||||||
1 July 2005 | (112 | ) | Principally relates to two adjustments: (1) capitalisation of the net fee income integral to the yield of an originated loan results in the recognition of an unamortised deferred income balance (-$155m); and (2) re-measurement to fair value of loan assets designated within fair value hedging relationships. Such loan assets are initially measured on an amortised cost basis, and then adjusted to fair value to offset the mark-to-market movement on the associated fair value hedge derivative (+$37m). | |||||
D | Loans, advances and other receivables — collective provision for impairment (refer note 1 (n)) | |||||||
1 July 2004 | — | |||||||
30 June 2005 | — | |||||||
1 July 2005 | 302 | Reflects the difference between the previous Australian GAAP general provision for impairment and the AIFRS collective provision for impairment, net of reclassifications. Under AIFRS, collective provisions are recognised where there is objective evidence of impairment, and includes an estimate of losses which have been incurred but not reported as at balance date. | ||||||
E | Loans, advances and other receivables — individually assessed provisions for impairment (refer note 1 (n)) | |||||||
1 July 2004 | — | |||||||
30 June 2005 | — | |||||||
1 July 2005 | (21 | ) | Reflects the difference between the previous Australian GAAP specific provision for impairment and the AIFRS individually assessed provisions. This difference relates to the impact of discounting of expected cash flows on recovery. | |||||
F | Intangible assets (refer note 1 (t)) | |||||||
1 July 2004 | — | |||||||
30 June 2005 | 186 | Goodwill no longer amortised under AIFRS. Reflects the reversal of amortisation of goodwill for the full year ended 30 June 2005. | ||||||
1 July 2005 | 186 | As above. |
(nn) Effect of Transition to Australian Equivalents to IFRS
Explanation of AIFRS Re-measure Transition Adjustments
AIFRS Balance Sheet Impacts
Re-measure | ||||||||
Adjustment | ||||||||
Reference | Transition Date | Adjustment $M | Explanation of material AIFRS re-measurements | |||||
G | Deferred tax assets (refer note 1 (y)) | |||||||
1 July 2004 | 23 | Principally relates to the deferred tax asset recognised on the defined benefit superannuation plan deficit liability, under the AIFRS “balance sheet” approach to tax-effect accounting. | ||||||
30 June 2005 | 22 | As above. | ||||||
1 July 2005 | 154 | As above, and also includes deferred tax assets related to various AIFRS adjustments such as hedge accounting, loan impairment provisioning and revenue and expense recognition. | ||||||
H | Other assets (refer note 1 (u)) | |||||||
1 July 2004 | 611 | Principally relates to the recognition of the defined benefit superannuation plan surplus asset (+$633m). Refer to adjustment S. | ||||||
30 June 2005 | 688 | As above, though adjustment becomes +$717m. | ||||||
1 July 2005 | 956 | As above, also includes hedging impact of +$261m, which relates to the elimination of interest receivable on hedged derivatives. | ||||||
I | Deposits from customers (refer note 1 (v)) | |||||||
1 July 2004 | — | |||||||
30 June 2005 | — | |||||||
1 July 2005 | 67 | Represents the revaluation of deposits designated within fair value hedge relationships. | ||||||
J | Derivative liabilities (refer note 1 (ff)) | |||||||
1 July 2004 | — | |||||||
30 June 2005 | — | |||||||
1 July 2005 | (937 | ) | Principally relates to the elimination of internal swaps; initial recognition of embedded derivatives at fair value; and an adjustment to re-measure derivatives that were previously accrual accounted. | |||||
K | Deferred tax liabilities (refer note 1 (y)) | |||||||
1 July 2004 | 197 | Principally relates to the deferred tax liability recognised on the defined benefit superannuation plan surplus asset, under the AIFRS “balance sheet” approach to tax-effect accounting. Refer adjustment H above. | ||||||
30 June 2005 | 215 | As above. | ||||||
1 July 2005 | 366 | As above, and also includes deferred tax liabilities related to various AIFRS adjustments such as hedge accounting, re-measurement of available-for-sale investments, and revenue and expense recognition. | ||||||
L | Other provisions (refer note 1 (z) and (aa)) | |||||||
1 July 2004 | (83 | ) | Principally relates to the reversal of accrued liabilities in respect of employee share-based compensation. This is a one-off adjustment in the comparative period due to the discontinuance of the mandatory component of the Equity Participation Plan. | |||||
30 June 2005 | (20 | ) | As above. | |||||
1 July 2005 | 16 | As above. |
(nn) Effect of Transition to Australian Equivalents to IFRS
Explanation of AIFRS Re-measure Transition Adjustments
AIFRS Bank Balance Sheet Impacts
Re-measure | ||||||||
Adjustment | ||||||||
Reference | Transition Date | Adjustment $M | Explanation of material AIFRS re-measurements | |||||
M | Debt issues (refer note 1 (bb)) | |||||||
1 July 2004 | — | |||||||
30 June 2005 | — | |||||||
1 July 2005 | (996 | ) | Represents the revaluation of debt issues designated within fair value hedge relationships. | |||||
N | Bills payable and other liabilities (refer note 1 (cc)) | |||||||
1 July 2004 | 80 | Principally relates to the recognition of the defined benefit superannuation plan deficit liability. | ||||||
30 June 2005 | 79 | As above. | ||||||
1 July 2005 | 269 | As above, also includes impact of the elimination of interest payable on hedge derivatives. | ||||||
O | Loan capital (refer note 1 (dd)) | |||||||
1 July 2004 | — | |||||||
30 June 2005 | — | |||||||
1 July 2005 | (186 | ) | Relates to the impact of fair value hedging and foreign currency re-translation of hybrid instruments reclassified from equity. | |||||
P | Ordinary share capital (refer note 1 (ee)) | |||||||
1 July 2004 | (126 | ) | Relates to the consolidation of the Employee Share Scheme Trust, which holds shares in the Bank on behalf of employees, results in the reversal of the cost of these shares from ordinary share capital (-$126m). | |||||
30 June 2005 | (132 | ) | As above, though adjustment becomes (-$132m). | |||||
1 July 2005 | (132 | ) | As above. | |||||
Q | Reserves (refer note 1 (ee)) | |||||||
1 July 2004 | 80 | Principally relates to two adjustments: (1) recognition of a new employee compensation reserve for the accrual of employee expenses incurred by the Bank to be compensated through share based payments (+$47m); and (2) the recognition of the directors discount on property in the asset revaluation reserve (+$30m). | ||||||
30 June 2005 | 49 | As above, though adjustment becomes (1) (+$23m); and (2) (+$25m). | ||||||
1 July 2005 | 88 | As above, also includes the impact of the recognition of available-for-sale revaluation reserve; cash flow hedge reserve; and the retranslation of certain hybrid financial instruments on reclassification from equity to loan capital. | ||||||
R | Retained profits | |||||||
1 July 2004 | 529 | Principally relates to two adjustments: (1) Recognition of the net after tax surplus on the Bank’s defined benefit superannuation plans (+$389m) comprising an opening surplus of (+$443m) less an opening deficit of (-$54m); and (2) adjustment related to employee share-based compensation accounting under AIFRS (+$141m). | ||||||
30 June 2005 | 732 | As above, though adjustments become (1) (+$447m); and (2) (+$112m), together with (3) the reversal of goodwill amortisation for the full year (+$186m) | ||||||
1 July 2005 | 405 | As above, also includes the impact of (1) the initial recognition of derivative financial instruments on initial application of hedge accounting (-$105m); (2) revenue and expense recognition adjustments (-$108m); and (3) recalculation of loan impairment provisions (+$114m). |
(nn) Effect of Transition to Australian Equivalents to IFRS
Explanation of AIFRS Re-measure Transition Adjustments
AIFRS Bank Income Statement Impacts
Re-measure | ||||||||
Adjustment | ||||||||
Reference | Transition Date | Adjustment $M | Explanation of material AIFRS re-measurements | |||||
S | Defined benefit superannuation plan expense (refer note 1 (hh)) | |||||||
30 June 2005 | (75 | ) | Relates to the additional, non-cash expense item reflecting the accrual accounting charge to profit and loss associated with accounting for the defined benefit superannuation plans. | |||||
T | Goodwill amortisation (refer note 1 (t)) | |||||||
30 June 2005 | 186 | Relates to the reversal of goodwill amortisation under AIFRS. |
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Interest Income | ||||||||||||||||
Loans | 17,304 | 14,846 | 13,739 | 11,708 | ||||||||||||
Other financial institutions | 333 | 229 | 319 | 136 | ||||||||||||
Cash and liquid assets | 250 | 198 | 271 | 221 | ||||||||||||
Assets at fair value through Income Statement | 1,186 | 785 | 796 | 647 | ||||||||||||
Available-for-sale investments | 685 | — | 241 | — | ||||||||||||
Investment securities | — | 723 | — | 242 | ||||||||||||
Controlled entities | — | — | 661 | 727 | ||||||||||||
Total Interest Income | 19,758 | 16,781 | 16,027 | 13,681 | ||||||||||||
Interest Expense | ||||||||||||||||
Deposits | 7,388 | 7,063 | 6,663 | 5,543 | ||||||||||||
Other financial institutions | 475 | 257 | 433 | 255 | ||||||||||||
Liabilities at fair value through Income Statement | 971 | — | 371 | — | ||||||||||||
Debt issues | 3,795 | 3,084 | 2,398 | 2,201 | ||||||||||||
Controlled entities | — | — | 854 | 496 | ||||||||||||
Loan capital | 615 | 351 | 586 | 363 | ||||||||||||
Total Interest Expense | 13,244 | 10,755 | 11,305 | 8,858 | ||||||||||||
Net Interest Income | 6,514 | 6,026 | 4,722 | 4,823 | ||||||||||||
Other Operating Income | ||||||||||||||||
Lending fees | 800 | 733 | 714 | 722 | ||||||||||||
Commission and other fees | 1,635 | 1,545 | 1,330 | 1,286 | ||||||||||||
Trading income | 505 | 440 | 498 | 381 | ||||||||||||
Net gain/(loss) on disposal of non-trading instruments | 45 | (13 | ) | 31 | (39 | ) | ||||||||||
Net hedging ineffectiveness | (79 | ) | — | 333 | — | |||||||||||
Dividends — Controlled entities | — | — | 2,078 | 988 | ||||||||||||
Dividends — Other | 4 | 3 | 2 | — | ||||||||||||
Net profit on sale of property, plant and equipment | 4 | 4 | (1 | ) | 4 | |||||||||||
Funds management and investment contract income | 1,623 | 1,332 | — | — | ||||||||||||
Insurance contracts income | 1,113 | 1,075 | — | — | ||||||||||||
Other | 122 | 133 | 555 | 649 | ||||||||||||
Total Other Operating Income | 5,772 | 5,252 | 5,540 | 3,991 | ||||||||||||
Total Net Operating Income | 12,286 | 11,278 | 10,262 | 8,814 | ||||||||||||
Bad Debts Expense | ||||||||||||||||
Collectively assessed impairment loss/(recovery) | 398 | 322 | 380 | 292 | ||||||||||||
Bad Debts Expense (Note 15) | 398 | 322 | 380 | 292 | ||||||||||||
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Staff Expenses | ||||||||||||||||
Salaries and wages | 2,419 | 2,274 | 1,872 | 1,758 | ||||||||||||
Share based compensation | 39 | 74 | 39 | 74 | ||||||||||||
Superannuation contributions | 8 | 7 | (14 | ) | (18 | ) | ||||||||||
Provisions for employee entitlements | 66 | 67 | 59 | 59 | ||||||||||||
Payroll tax | 123 | 115 | 111 | 101 | ||||||||||||
Fringe benefits tax | 34 | 32 | 30 | 28 | ||||||||||||
Other staff expenses | 134 | 104 | 31 | 29 | ||||||||||||
Comparable business | 2,823 | 2,673 | 2,128 | 2,031 | ||||||||||||
Which new Bank | — | 50 | — | 50 | ||||||||||||
Total Staff Expenses | 2,823 | 2,723 | 2,128 | 2,081 | ||||||||||||
Occupancy and Equipment Expenses | ||||||||||||||||
Operating lease rentals | 338 | 331 | 284 | 266 | ||||||||||||
Depreciation: | ||||||||||||||||
Buildings | 22 | 21 | 21 | 20 | ||||||||||||
Leasehold improvements | 56 | 58 | 46 | 46 | ||||||||||||
Equipment | 64 | 63 | 38 | 29 | ||||||||||||
Operating lease assets | 9 | 8 | — | — | ||||||||||||
Repairs and maintenance | 73 | 71 | 67 | 64 | ||||||||||||
Other | 59 | 61 | 32 | 40 | ||||||||||||
Comparable business | 621 | 613 | 488 | 465 | ||||||||||||
Which new Bank | — | 13 | — | 13 | ||||||||||||
Total Occupancy and Equipment Expenses | 621 | 626 | 488 | 478 | ||||||||||||
Information Technology Services | ||||||||||||||||
Projects and development | 364 | 331 | 332 | 298 | ||||||||||||
Data processing | 227 | 248 | 200 | 221 | ||||||||||||
Desktop | 137 | 150 | 134 | 148 | ||||||||||||
Communications | 201 | 204 | 173 | 174 | ||||||||||||
Amortisation of software assets | 43 | 17 | 36 | 18 | ||||||||||||
IT equipment depreciation | 13 | 6 | 13 | 6 | ||||||||||||
Comparable business | 985 | 956 | 888 | 865 | ||||||||||||
Which new Bank | — | 52 | — | 52 | ||||||||||||
Total Information Technology Services | 985 | 1,008 | 888 | 917 | ||||||||||||
Other Expenses | ||||||||||||||||
Postage | 118 | 112 | 104 | 98 | ||||||||||||
Stationery | 98 | 108 | 74 | 79 | ||||||||||||
Fees and commissions | 636 | 614 | 406 | 402 | ||||||||||||
Advertising, marketing and loyalty | 307 | 288 | 249 | 234 | ||||||||||||
Amortisation of other intangible assets (excluding software) | 6 | 3 | — | — | ||||||||||||
Non lending losses | 116 | 103 | 110 | 103 | ||||||||||||
Other | 284 | 249 | 157 | 111 | ||||||||||||
Comparable business | 1,565 | 1,477 | 1,100 | 1,027 | ||||||||||||
Which new Bank | — | 35 | — | 35 | ||||||||||||
Total Other Expenses | 1,565 | 1,512 | 1,100 | 1,062 | ||||||||||||
Comparable business | 5,994 | 5,719 | 4,604 | 4,388 | ||||||||||||
Which new Bank | — | 150 | — | 150 | ||||||||||||
Total Operating Expenses | 5,994 | 5,869 | 4,604 | 4,538 | ||||||||||||
Defined benefit superannuation plan expense | (35 | ) | (75 | ) | (35 | ) | (75 | ) | ||||||||
Profit before income tax | 5,859 | 5,012 | 5,243 | 3,909 | ||||||||||||
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Banking | ||||||||||||||||
Interest income | 19,758 | 16,781 | 16,027 | 13,681 | ||||||||||||
Fees and commissions | 2,435 | 2,278 | 2,044 | 2,008 | ||||||||||||
Trading income | 505 | 440 | 498 | 380 | ||||||||||||
Gain/(loss) on disposal of non-trading instruments | 45 | (13 | ) | 31 | — | |||||||||||
Net hedging ineffectiveness | (79 | ) | — | 333 | — | |||||||||||
Dividends | 4 | 3 | 2,080 | 988 | ||||||||||||
Net gain/(loss) on sale of property, plant and equipment | 4 | 4 | (1 | ) | 4 | |||||||||||
Other income | 122 | 132 | 555 | 615 | ||||||||||||
22,794 | 19,625 | 21,567 | 17,676 | |||||||||||||
Funds Management, Investment and Insurance contracts | ||||||||||||||||
Funds management and investment contract income including premiums | 1,589 | 1,247 | — | — | ||||||||||||
Insurance contract premiums and related income | 1,052 | 1,132 | — | — | ||||||||||||
Investment income(1) | 3,129 | 3,142 | — | — | ||||||||||||
5,770 | 5,521 | — | — | |||||||||||||
Total income | 28,564 | 25,146 | 21,567 | 17,676 | ||||||||||||
(1) | Includes profit on sale of the Hong Kong insurance business of $145 million and goodwill impairment on Symetry investment of $21 million. |
2006 | 2005 | |||||||||||||||||||||||
Average | Average | Average | Average | |||||||||||||||||||||
Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||||||||
Average Interest Earning Assets and Income | $M | $M | % | $M | $M | % | ||||||||||||||||||
Cash and liquid assets | ||||||||||||||||||||||||
Australia | 3,581 | 221 | 6.2 | 3,716 | 178 | 4.8 | ||||||||||||||||||
Overseas | 908 | 29 | 3.2 | 1,077 | 20 | 1.9 | ||||||||||||||||||
Receivables due from other financial institutions | ||||||||||||||||||||||||
Australia | 3,016 | 145 | 4.8 | 2,394 | 61 | 2.5 | ||||||||||||||||||
Overseas | 4,007 | 188 | 4.7 | 3,791 | 168 | 4.4 | ||||||||||||||||||
Assets at fair value through Income Statement — Trading | ||||||||||||||||||||||||
Australia | 12,161 | 725 | 6.0 | 11,535 | 603 | 5.2 | ||||||||||||||||||
Overseas | 3,388 | 185 | 5.5 | 3,850 | 182 | 4.7 | ||||||||||||||||||
Assets at fair value through Income Statement — Other | ||||||||||||||||||||||||
Australia | 355 | 22 | 6.2 | — | — | — | ||||||||||||||||||
Overseas | 3,241 | 254 | 7.8 | — | — | — | ||||||||||||||||||
Investment securities | ||||||||||||||||||||||||
Australia | — | — | — | 4,375 | 296 | 6.8 | ||||||||||||||||||
Overseas | — | — | — | 8,538 | 427 | 5.0 | ||||||||||||||||||
Available-for-sale investments | ||||||||||||||||||||||||
Australia | 5,010 | 349 | 7.0 | — | — | — | ||||||||||||||||||
Overseas | 6,508 | 336 | 5.2 | — | — | — | ||||||||||||||||||
Loans, advances and other receivables | ||||||||||||||||||||||||
Australia | 192,086 | 13,527 | 7.0 | 171,249 | 11,822 | 6.9 | ||||||||||||||||||
Overseas | 40,537 | 3,012 | 7.4 | 34,183 | 2,427 | 7.1 | ||||||||||||||||||
Intragroup loans | ||||||||||||||||||||||||
Australia | — | — | — | — | — | — | ||||||||||||||||||
Overseas | 9,623 | 338 | 3.5 | 5,793 | 92 | 1.6 | ||||||||||||||||||
Average interest earning assets and interest income including intragroup | 284,421 | 19,331 | 6.8 | 250,501 | 16,276 | 6.5 | ||||||||||||||||||
Intragroup eliminations | (9,623 | ) | (338 | ) | 3.5 | (5,793 | ) | (92 | ) | 1.6 | ||||||||||||||
Total average interest earning assets and interest income | 274,798 | 18,993 | 6.9 | 244,708 | 16,184 | 6.6 | ||||||||||||||||||
Securitisation Home Loan Assets | 10,887 | 765 | 7.0 | 8,568 | 597 | 7.0 | ||||||||||||||||||
Average Non-Interest Earning Assets | ||||||||||||||||||||||||
Bank acceptances | ||||||||||||||||||||||||
Australia | 18,014 | 16,263 | ||||||||||||||||||||||
Overseas | — | — | ||||||||||||||||||||||
Assets at fair value through Income Statement — Insurance | ||||||||||||||||||||||||
Australia | 20,529 | 22,929 | ||||||||||||||||||||||
Overseas | 3,468 | 4,542 | ||||||||||||||||||||||
Property, plant and equipment | ||||||||||||||||||||||||
Australia | 978 | 893 | ||||||||||||||||||||||
Overseas | 158 | 144 | ||||||||||||||||||||||
Other assets | ||||||||||||||||||||||||
Australia | 20,699 | 23,822 | ||||||||||||||||||||||
Overseas | 5,113 | 3,303 | ||||||||||||||||||||||
Provisions for impairment | ||||||||||||||||||||||||
Australia | (1,144 | ) | (1,430 | ) | ||||||||||||||||||||
Overseas | (86 | ) | (142 | ) | ||||||||||||||||||||
Total average non-interest earning assets | 67,729 | 70,324 | ||||||||||||||||||||||
Total average assets | 353,414 | 323,600 | ||||||||||||||||||||||
Percentage of total average assets applicable to overseas operations (%) | 19. 0 | 18.3 | ||||||||||||||||||||||
2006 | 2005 | |||||||||||||||||||||||
Average | Average | Average | Average | |||||||||||||||||||||
Average Interest Bearing Liabilities and Loan | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||||
Capital and Interest Expense | $M | $M | % | $M | $M | % | ||||||||||||||||||
Time deposits | ||||||||||||||||||||||||
Australia | 60,725 | 3,533 | 5.8 | 61,826 | 3,183 | 5.1 | ||||||||||||||||||
Overseas | 15,732 | 935 | 5.9 | 17,716 | 1,356 | 7.7 | ||||||||||||||||||
Savings deposits | ||||||||||||||||||||||||
Australia | 31,832 | 603 | 1.9 | 31,304 | 586 | 1.9 | ||||||||||||||||||
Overseas | 2,597 | 119 | 4.6 | 2,927 | 119 | 4.1 | ||||||||||||||||||
Other demand deposits(1) | ||||||||||||||||||||||||
Australia | 44,544 | 1,905 | 4.3 | 41,235 | 1,653 | 4.0 | ||||||||||||||||||
Overseas | 4,637 | 293 | 6.3 | 4,859 | 166 | 3.4 | ||||||||||||||||||
Payables due to other financial institutions | ||||||||||||||||||||||||
Australia | 1,982 | 119 | 6.0 | 1,707 | 50 | 2.9 | ||||||||||||||||||
Overseas | 7,649 | 356 | 4.7 | 6,292 | 207 | 3.3 | ||||||||||||||||||
Liabilities at fair value through Income Statement | ||||||||||||||||||||||||
Australia | 2,038 | 192 | 9.4 | — | — | — | ||||||||||||||||||
Overseas | 13,266 | 779 | 5.9 | — | — | — | ||||||||||||||||||
Debt issues(1) | ||||||||||||||||||||||||
Australia | 46,315 | 2,547 | 5.5 | 34,853 | 2,095 | 6.0 | ||||||||||||||||||
Overseas | 14,603 | 577 | 4.0 | 16,540 | 462 | 2.8 | ||||||||||||||||||
Loan capital(1) | ||||||||||||||||||||||||
Australia | 7,936 | 450 | 5.7 | 5,566 | 321 | 5.8 | ||||||||||||||||||
Overseas | 1,244 | 165 | 13.3 | 772 | 30 | 3.9 | ||||||||||||||||||
Intragroup borrowings | ||||||||||||||||||||||||
Australia | 9,623 | 338 | 3.5 | 5,793 | 92 | 1.6 | ||||||||||||||||||
Overseas | — | — | — | — | — | — | ||||||||||||||||||
Average interest bearing liabilities and loan capital and interest expense including intragroup | 264,723 | 12,911 | 4.9 | 231,390 | 10,320 | 4.5 | ||||||||||||||||||
Intragroup eliminations | (9,623 | ) | (338 | ) | 3.5 | (5,793 | ) | (92 | ) | 1.6 | ||||||||||||||
Total average interest bearing liabilities and loan capital and interest expense | 255,100 | 12,573 | 4.9 | 225,597 | 10,228 | 4.5 | ||||||||||||||||||
Securitisation Debt Issues | 11,541 | 671 | 5.8 | 9,911 | 527 | 5.3 | ||||||||||||||||||
Non-Interest Bearing Liabilities | ||||||||||||||||||||||||
Deposits not bearing interest | ||||||||||||||||||||||||
Australia | 5,797 | 5,512 | ||||||||||||||||||||||
Overseas | 1,170 | 1,121 | ||||||||||||||||||||||
Liabilities on bank acceptances | ||||||||||||||||||||||||
Australia | 18,014 | 16,263 | ||||||||||||||||||||||
Overseas | — | — | ||||||||||||||||||||||
Insurance policy liabilities | ||||||||||||||||||||||||
Australia | 20,731 | 20,732 | ||||||||||||||||||||||
Overseas | 3,040 | 3,900 | ||||||||||||||||||||||
Other liabilities | ||||||||||||||||||||||||
Australia | 11,476 | 14,607 | ||||||||||||||||||||||
Overseas | 4,552 | 3,927 | ||||||||||||||||||||||
Total average non-interest bearing liabilities | 64,780 | 66,062 | ||||||||||||||||||||||
Total average liabilities and loan capital | 331,421 | 301,570 | ||||||||||||||||||||||
Shareholders’ equity | 21,993 | 22,030 | ||||||||||||||||||||||
Total average liabilities, loan capital and Shareholders’ equity | 353,414 | 323,600 | ||||||||||||||||||||||
Percentage of total average liabilities and Loan Capital applicable to overseas operations (%) | 20.7 | 19.3 | ||||||||||||||||||||||
(1) | Comparison between reporting periods are impacted by hedge accounting. |
2006 | 2005 | |||||||||||||||||||||||
Avg Bal | Income | Yield | Avg Bal | Income | Yield | |||||||||||||||||||
Net Interest Margin | $M | $M | % | $M | $M | % | ||||||||||||||||||
Total interest earning assets excluding securitisation | 274,798 | 18,993 | 6.91 | 244,708 | 16,184 | 6.61 | ||||||||||||||||||
Total interest bearing liabilities excluding securitisation | 255,100 | 12,573 | 4.93 | 225,597 | 10,228 | 4.53 | ||||||||||||||||||
Net interest income & interest spread (excluding securitisation) | 6,420 | 1.98 | 5,956 | 2.08 | ||||||||||||||||||||
Benefit of free funds | 0.36 | 0.35 | ||||||||||||||||||||||
Net interest margin | 2.34 | 2.43 | ||||||||||||||||||||||
2006 | 2005 | Jun 06 vs | ||||||||||
Reconciliation of Net Interest Margin | % | % | Jun 05 % | |||||||||
Net margin as reported(1) | 2.34 | 2.43 | (9)bpts | |||||||||
AIFRS volatility(2) | 0.02 | — | 2bpts | |||||||||
Underlying net interest margin pro-forma basis | 2.36 | 2.43 | (7)bpts | |||||||||
(1) | Refer page 102 for a reconciliation of Net Interest Income (AIFRS to AGAAP equivalent). | |
(2) | Represents AIFRS impact (mainly hybrid distributions and hedge accounting). |
2006 | 2005 | |||||||||||||||||||||||
Avg Bal | Income | Yield | Avg Bal | Income | Yield | |||||||||||||||||||
$M | $M | % | $M | $M | % | |||||||||||||||||||
Loans, Advances and Other Receivables | ||||||||||||||||||||||||
Australia | 192,086 | 13,527 | 7.04 | 171,249 | 11,822 | 6.90 | ||||||||||||||||||
Overseas | 40,537 | 3,012 | 7.43 | 34,183 | 2,427 | 7.10 | ||||||||||||||||||
Total | 232,623 | 16,539 | 7.11 | 205,432 | 14,249 | 6.94 | ||||||||||||||||||
Non Lending Interest Earning Assets | ||||||||||||||||||||||||
Australia | 24,123 | 1,462 | 6.06 | 22,020 | 1,138 | 5.17 | ||||||||||||||||||
Overseas | 18,052 | 992 | 5.50 | 17,256 | 797 | 4.62 | ||||||||||||||||||
Total | 42,175 | 2,454 | 5.82 | 39,276 | 1,935 | 4.93 | ||||||||||||||||||
Interest Bearing Deposits | ||||||||||||||||||||||||
Australia | 137,101 | 6,041 | 4.41 | 134,365 | 5,422 | 4.04 | ||||||||||||||||||
Overseas | 22,966 | 1,347 | 5.87 | 25,502 | 1,641 | 6.43 | ||||||||||||||||||
Total | 160,067 | 7,388 | 4.62 | 159,867 | 7,063 | 4.42 | ||||||||||||||||||
Other Interest Bearing Liabilities | ||||||||||||||||||||||||
Australia | 58,271 | 3,308 | 5.68 | 42,126 | 2,466 | 5.85 | ||||||||||||||||||
Overseas | 36,762 | 1,877 | 5.11 | 23,604 | 699 | 2.96 | ||||||||||||||||||
Total | 95,033 | 5,185 | 5.46 | 65,730 | 3,165 | 4.82 | ||||||||||||||||||
Year Ended | ||||
2006 vs 2005 | ||||
Increase/(Decrease) | ||||
Change in Net Interest | $M | |||
Due to changes in average volume of interest earning assets and interest bearing liabilities | 718 | |||
Due to changes in interest margin | (254 | ) | ||
Change in net interest income | 464 | |||
June 2006 vs June 2005 | ||||||||||||
Changes in Net Interest Income: | Volume | Rate | Total | |||||||||
Volume and Rate Analysis | $M | $M | $M | |||||||||
Interest Earning Assets | ||||||||||||
Cash and liquid assets | ||||||||||||
Australia | (7 | ) | 50 | 43 | ||||||||
Overseas | (4 | ) | 13 | 9 | ||||||||
Receivables due from other financial institutions | ||||||||||||
Australia | 23 | 61 | 84 | |||||||||
Overseas | 10 | 10 | 20 | |||||||||
Assets at fair value through Income Statement — Trading | ||||||||||||
Australia | 35 | 87 | 122 | |||||||||
Overseas | (24 | ) | 27 | 3 | ||||||||
Assets at fair value through Income Statement — Other | ||||||||||||
Australia | 11 | 11 | 22 | |||||||||
Overseas | 127 | 127 | 254 | |||||||||
Investment securities | ||||||||||||
Australia | (148 | ) | (148 | ) | (296 | ) | ||||||
Overseas | (214 | ) | (213 | ) | (427 | ) | ||||||
Available-for-sale investments | ||||||||||||
Australia | 174 | 175 | 349 | |||||||||
Overseas | 168 | 168 | 336 | |||||||||
Loans, advances and other receivables | ||||||||||||
Australia | 1,453 | 252 | 1,705 | |||||||||
Overseas | 462 | 123 | 585 | |||||||||
Intragroup loans | ||||||||||||
Australia | — | — | — | |||||||||
Overseas | 98 | 148 | 246 | |||||||||
Changes in interest income including intragroup | 2,255 | 800 | 3,055 | |||||||||
Intragroup eliminations | (98 | ) | (148 | ) | (246 | ) | ||||||
Changes in interest income | 2,035 | 774 | 2,809 | |||||||||
Securitisation home loan assets | 162 | 6 | 168 | |||||||||
Interest Bearing Liabilities and Loan Capital | ||||||||||||
Time deposits | ||||||||||||
Australia | (60 | ) | 410 | 350 | ||||||||
Overseas | (135 | ) | (286 | ) | (421 | ) | ||||||
Savings deposits | ||||||||||||
Australia | 10 | 7 | 17 | |||||||||
Overseas | (14 | ) | 14 | — | ||||||||
Other demand deposits | ||||||||||||
Australia | 137 | 115 | 252 | |||||||||
Overseas | (11 | ) | 138 | 127 | ||||||||
Payables due to other financial institutions | ||||||||||||
Australia | 12 | 57 | 69 | |||||||||
Overseas | 54 | 95 | 149 | |||||||||
Liabilities at fair value through income Statement | ||||||||||||
Australia | 96 | 96 | 192 | |||||||||
Overseas | 390 | 389 | 779 | |||||||||
Debt issues | ||||||||||||
Australia | 660 | (208 | ) | 452 | ||||||||
Overseas | (65 | ) | 180 | 115 | ||||||||
Loan capital | ||||||||||||
Australia | 136 | (7 | ) | 129 | ||||||||
Overseas | 40 | 95 | 135 | |||||||||
Intragroup borrowings | ||||||||||||
Australia | 98 | 148 | 246 | |||||||||
Overseas | — | — | — | |||||||||
Changes in interest expense including intragroup | 1,556 | 1,035 | 2,591 | |||||||||
Intragroup eliminations | (98 | ) | (148 | ) | (246 | ) | ||||||
Changes in interest expense | 1,396 | 949 | 2,345 | |||||||||
Changes in net interest income | 718 | (254 | ) | 464 | ||||||||
Securitisation debt issues | 91 | 53 | 144 | |||||||||
2006 | 2005 | |||||||
Geographical analysis of key categories | % | % | ||||||
Australia | ||||||||
Interest spread(1) | 2.21 | 2.33 | ||||||
Benefit of net free liabilities, provisions and equity(2) | 0.24 | 0.25 | ||||||
Australia interest margin(3) | 2.45 | 2.58 | ||||||
Overseas | ||||||||
Interest spread(1) | 0.97 | 1.03 | ||||||
Benefit of net free liabilities, provisions and equity(2) | 0.67 | 0.68 | ||||||
Overseas interest margin(3) | 1.64 | 1.71 | ||||||
Group | ||||||||
Interest spread(1) | 1.98 | 2.08 | ||||||
Benefit of net free liabilities, provisions and equity(2) | 0.36 | 0.35 | ||||||
Group interest margin(3) | 2.34 | 2.43 | ||||||
(1) | Difference between the average interest rate earned and the average interest rate paid on funds. | |
(2) | A portion of the Group’s interest earning assets is funded by net interest free liabilities and shareholders’ equity. The benefit to the Group of these interest free funds is the amount it would cost to replace them at the average cost of funds. | |
(3) | Net interest income divided by average interest earning assets for the year. |
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Profit from ordinary activities before Income Tax | ||||||||||||||||
Banking | 4,594 | 4,057 | 5,278 | 3,984 | ||||||||||||
Funds management | 643 | 508 | — | — | ||||||||||||
Insurance | 657 | 522 | — | — | ||||||||||||
Defined benefit superannuation plan expense | (35 | ) | (75 | ) | (35 | ) | (75 | ) | ||||||||
5,859 | 5,012 | 5,243 | 3,909 | |||||||||||||
Prima Facie Income Tax at 30% | ||||||||||||||||
Banking | 1,378 | 1,217 | 1,584 | 1,195 | ||||||||||||
Funds management | 193 | 153 | — | — | ||||||||||||
Insurance | 197 | 157 | — | — | ||||||||||||
Defined benefit superannuation plan expense | (11 | ) | (23 | ) | (11 | ) | (23 | ) | ||||||||
1,757 | 1,504 | 1,573 | 1,172 | |||||||||||||
Tax effect of expenses that are non-deductible/income non-assessable in determining taxable profit: | ||||||||||||||||
Current period | ||||||||||||||||
Taxation offsets and other dividend adjustments | (29 | ) | (48 | ) | (615 | ) | (309 | ) | ||||||||
Tax adjustment referable to policyholder income | 232 | 160 | — | — | ||||||||||||
Non assessable income — life insurance transitional fee relief | — | (30 | ) | — | — | |||||||||||
Non—assessable gains | (43 | ) | — | — | — | |||||||||||
Tax losses recognised | (35 | ) | (9 | ) | (14 | ) | (2 | ) | ||||||||
Other | 3 | 25 | 32 | 36 | ||||||||||||
128 | 98 | (597 | ) | (275 | ) | |||||||||||
Prior periods | ||||||||||||||||
Other | 15 | — | — | — | ||||||||||||
Total income tax expense | 1,900 | 1,602 | 976 | 897 | ||||||||||||
Income Tax Attributable to Profit from ordinary activites | ||||||||||||||||
Banking | 1,328 | 1,197 | 976 | 897 | ||||||||||||
Funds management | 139 | 88 | — | — | ||||||||||||
Insurance | 102 | 89 | — | — | ||||||||||||
Corporate tax expense | 1,569 | 1,374 | 976 | 897 | ||||||||||||
Policyholder tax expense | 331 | 228 | — | — | ||||||||||||
Total income tax expense | 1,900 | 1,602 | 976 | 897 | ||||||||||||
% | % | % | % | |||||||||||||
Effective Tax Rate | ||||||||||||||||
Total — corporate | 28.4 | 28.7 | 18.6 | 22.9 | ||||||||||||
Banking — corporate | 29.1 | 30.1 | 18.6 | 22.9 | ||||||||||||
Funds management — corporate | 30.8 | 21.8 | — | — | ||||||||||||
Insurance — corporate | 19.7 | 22.4 | — | — | ||||||||||||
$M | $M | $M | $M | |||||||||||||
Recognised in the Income Statement | ||||||||||||||||
Australia | ||||||||||||||||
Current tax expense | 1,366 | 1,403 | 655 | 1,036 | ||||||||||||
Deferred tax expense | 382 | (5 | ) | 318 | (148 | ) | ||||||||||
Total Australia | 1,748 | 1,398 | 973 | 888 | ||||||||||||
Overseas | ||||||||||||||||
Current tax expenses | 114 | 175 | 3 | 9 | ||||||||||||
Deferred tax expense | 38 | 29 | — | — | ||||||||||||
Total Overseas | 152 | 204 | 3 | 9 | ||||||||||||
Total income tax expense | 1,900 | 1,602 | 976 | 897 | ||||||||||||
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
The significant temporary differences are as follows(1) : | ||||||||||||||||
Deferred tax assets arising from: | ||||||||||||||||
Provision for employee benefits | 261 | 261 | 245 | 240 | ||||||||||||
Provisions for Which new Bank | 11 | 41 | 11 | 41 | ||||||||||||
Provisions for impairment on loans, advances and other receivables | 350 | 431 | 341 | 425 | ||||||||||||
Other provisions not tax deductible until expense incurred | 135 | 71 | 74 | 59 | ||||||||||||
Recognised value of tax losses carried forward | 9 | — | 9 | — | ||||||||||||
Financial instruments | 195 | 153 | 62 | 73 | ||||||||||||
Other | 297 | 133 | 209 | 182 | ||||||||||||
Set off of tax | (608 | ) | (439 | ) | (559 | ) | (421 | ) | ||||||||
Total deferred tax assets | 650 | 651 | 392 | 599 | ||||||||||||
Intergroup deferred tax receivable (Note 22) | — | — | — | 549 | ||||||||||||
Deferred tax liabilities arising from: | ||||||||||||||||
Property asset revaluations | 29 | 29 | 29 | 29 | ||||||||||||
Lease financing | 312 | 296 | 144 | 292 | ||||||||||||
Defined benefit superannuation plan surplus | 368 | 215 | 368 | 215 | ||||||||||||
Intangible assets | 10 | 11 | — | — | ||||||||||||
Financial instruments | 626 | 409 | 586 | 311 | ||||||||||||
Other | 599 | 400 | 72 | 446 | ||||||||||||
Set off of tax | (608 | ) | (439 | ) | (559 | ) | (421 | ) | ||||||||
Total deferred tax liabilities (Note 26) | 1,336 | 921 | 640 | 872 | ||||||||||||
Intergroup deferred tax payable (Note 30) | — | — | — | 60 | ||||||||||||
Deferred tax assets opening balance: | 651 | 564 | 599 | 423 | ||||||||||||
1 July 2004 AIFRS Transitional Adjustment | — | 23 | — | 23 | ||||||||||||
Restated opening balance | 651 | 587 | 599 | 446 | ||||||||||||
Movement in temporary differences during the year: | ||||||||||||||||
Provisions for employee benefits | — | 29 | 5 | 28 | ||||||||||||
Provisions for Which new Bank | (30 | ) | (11 | ) | (30 | ) | (11 | ) | ||||||||
Provisions for impairment on loans, advances and other receivables | (81 | ) | 8 | (84 | ) | 12 | ||||||||||
Other provisions not tax deductible until expense incurred | 64 | 42 | 15 | 95 | ||||||||||||
Tax value of loss carry-forwards utilised | 9 | — | 9 | — | ||||||||||||
Financial instruments | 42 | (50 | ) | (11 | ) | (58 | ) | |||||||||
Other | 164 | (180 | ) | 27 | (52 | ) | ||||||||||
Set off of tax | (169 | ) | 226 | (138 | ) | 139 | ||||||||||
Deferred tax assets closing balance(1) | 650 | 651 | 392 | 599 | ||||||||||||
Deferred tax liabilities opening balance: | 921 | 384 | 872 | 332 | ||||||||||||
1 July 2004 AIFRS Transitional Adjustment | — | 188 | — | 197 | ||||||||||||
Restated opening balance | 921 | 572 | 872 | 529 | ||||||||||||
Movements in temporary differences during the year: | ||||||||||||||||
Property asset revaluations | — | 29 | — | 29 | ||||||||||||
Lease financing | 16 | (43 | ) | (148 | ) | (47 | ) | |||||||||
Defined benefit superannuation plan surplus | 153 | 25 | 153 | 25 | ||||||||||||
Intangible assets | (1 | ) | 11 | — | — | |||||||||||
Financial instruments | 217 | (234 | ) | 275 | (156 | ) | ||||||||||
Other | 199 | 335 | (374 | ) | 353 | |||||||||||
Set off of tax | (169 | ) | 226 | (138 | ) | 139 | ||||||||||
Deferred tax liabilities closing balance(1)(Note 26) | 1,336 | 921 | 640 | 872 | ||||||||||||
(1) | Exchange differences on deferred foreign tax balances are taken to income to match the treatment of exchange differences on the underlying assets and liabilities. |
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Deferred tax assets not taken to account(1) | ||||||||||||||||
Valuation allowance | ||||||||||||||||
Opening balance | 159 | 170 | 79 | 94 | ||||||||||||
Prior year adjustments | (40 | ) | (33 | ) | 7 | (33 | ) | |||||||||
Benefits now taken to account | (35 | ) | (9 | ) | (14 | ) | (2 | ) | ||||||||
Benefits arising duning the year not recognised | 47 | 31 | — | 20 | ||||||||||||
Closing balance | 131 | 159 | 72 | 79 | ||||||||||||
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Expiration of carry-forward losses | $M | $M | $M | $M | ||||||||||||
At 30 June 2006 carry-forward losses expire as follows: | ||||||||||||||||
From one to two years | 2 | 3 | — | 1 | ||||||||||||
From two to four years | 14 | 3 | 10 | — | ||||||||||||
After four years | 30 | 36 | 29 | 34 | ||||||||||||
Losses that do not expire under current tax law | 85 | 117 | 33 | 44 | ||||||||||||
Total | 131 | 159 | 72 | 79 | ||||||||||||
• | Capital losses arising under the tax consolidations systems; and | |
• | Tax losses and timing differences in offshore centres have not been recognised as assets because recovery is not probable. |
• | $72 million (2005: $44 million) in capital losses; and | |
• | $59 million (2005: $115 million) in offshore centres. |
• | The company derives future capital gains and assessable income of a nature and of an amount sufficient to enable the benefit from the losses to be realised; | |
• | The company continues to comply with the conditions for claiming capital losses and deductions imposed by tax legislation; and | |
• | No changes in tax legislation adversely affect the Company in realising the benefit from deductions for the losses. |
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Ordinary Shares | ||||||||||||||||
Interim ordinary dividend (fully franked) (2006: 94 cents, 2005: 85 cents) Interim ordinary dividend paid — cash component only | 992 | 883 | 992 | 883 | ||||||||||||
Interim ordinary dividend paid — dividend reinvestment plan | 219 | 200 | 219 | 200 | ||||||||||||
Total dividends paid | 1,211 | 1,083 | 1,211 | 1,083 | ||||||||||||
Preference Shares(1) | ||||||||||||||||
Preference dividends paid (fully franked) (2005: 1,115 cents) | — | 29 | — | 29 | ||||||||||||
Provision for preference dividend | — | 10 | — | 10 | ||||||||||||
Other Equity Instruments(1) | ||||||||||||||||
Dividends paid | — | 92 | — | 34 | ||||||||||||
Total dividends provided for, reserved or paid | 1,211 | 1,214 | 1,211 | 1,156 | ||||||||||||
Other provision carried | 6 | 4 | 6 | 4 | ||||||||||||
Dividends proposed and not recognised as a liability (fully franked) (2006: 130 cents, 2005: 112 cents)(2) | 1,668 | 1,434 | 1,668 | 1,434 | ||||||||||||
Provision for dividends | ||||||||||||||||
Balance as at 1 July 2005 | 14 | 14 | 14 | 14 | ||||||||||||
Provisions made during the year | 2,646 | 2,437 | 2,646 | 2,437 | ||||||||||||
Provisions used during the year | (2,645 | ) | (2,437 | ) | (2,645 | ) | (2,437 | ) | ||||||||
Provisions reversed during the year | (9 | ) | — | (9 | ) | — | ||||||||||
Balance at 30 June 2006 (Note 27) | 6 | 14 | 6 | 14 | ||||||||||||
(1) | Reclassified to loan capital on adoption of AIFRS from 1 July 2005. | |
(2) | The 2005 final dividend was satisfied by cash disbursements of $1,173 million and the issue of $261 million of ordinary shares through the dividend reinvestment plan. The 2006 final dividend is expected to be satisfied by cash disbursements of $1,365 million and the estimated issue of $303 million of ordinary shares through the dividend reinvestment plan. |
Full Year | DRP | |||||||||||||||||||||||||||
Half-year | Full Year | Payout Ratio | Participation | |||||||||||||||||||||||||
Cents Per | Payout Ratio(1) | Payout Ratio(1) | Cash Basis(2) | DRP | Rate(3) | |||||||||||||||||||||||
Half Year Ended | Share | Date Paid | % | % | % | Price | % | |||||||||||||||||||||
31 December 2003 | 79 | 30/03/04 | 82. 7 | — | — | 31.61 | 18. 8 | |||||||||||||||||||||
30 June 2004 | 104 | 24/09/04 | 103. 8 | 93.5 | 73. 9 | 30.14 | 18. 7 | |||||||||||||||||||||
31 December 2004 | 85 | 31/03/05 | 65. 6 | — | — | 35.90 | 18. 6 | |||||||||||||||||||||
30 June 2005 | 112 | 23/09/05 | 88. 6 | 77.0 | 74. 9 | 37.19 | 18. 2 | |||||||||||||||||||||
31 December 2005 | 94 | 05/04/06 | 60. 6 | — | — | 43.89 | 18. 1 | |||||||||||||||||||||
30 June 2006 | 130 | (4) | 86. 5 | 73. 3 | 71. 0 | — | — | |||||||||||||||||||||
(1) | Dividend Payout Ratio: dividends divided by statutory earnings. | |
(2) | Payout ratio based on net profit after tax before defined benefit superannuation plan expense and treasury shares mismatch. Includes Which new Bank expenses for the year ended 30 June 2005 and the profit on sale of CMG Asia for the year ended 30 June 2006. | |
(3) | DRP Participation Rate: the percentage of total issued share capital participating in the Dividend Reinvestment Plan. | |
(4) | Dividend expected to be paid on 5 October 2006. |
Group | ||||||||
2006 | 2005 | |||||||
C | C | |||||||
Earnings per Ordinary Share | ||||||||
Basic | 308. 2 | 259. 6 | ||||||
Fully diluted | 303. 1 | 255. 3 | ||||||
$M | $M | |||||||
Reconciliation of earnings used in the calculation of earnings per share | ||||||||
Profit after income tax | 3,959 | 3,410 | ||||||
Less: Preference share dividends | — | (39 | ) | |||||
Less: Other equity instrument dividends | — | (76 | ) | |||||
Less: Other dividends — ASB preference shares | — | (16 | ) | |||||
Less: Minority interests | (31 | ) | (10 | ) | ||||
Earnings used in calculation of basic earnings per share | 3,928 | 3,269 | ||||||
Add: Profit impact of assumed conversions | ||||||||
Preference shares | — | 23 | ||||||
Other equity instruments | — | 67 | ||||||
Loan capital | 100 | — | ||||||
Earnings used in calculation of fully diluted earnings per share | 4,028 | 3,359 | ||||||
Number of Shares | ||||||||
2006 | 2005 | |||||||
M | M | |||||||
Weighted average number of ordinary shares (net of treasury shares) used in the calculation of basic earnings per share | 1,275 | 1,260 | ||||||
Effect of dilutive securities — share options and convertible loan capital instruments | 54 | 56 | ||||||
Weighted average number of ordinary shares (net of treasury shares) used in the calculation of fully diluted earnings per share | 1,329 | 1,316 | ||||||
C | C | |||||||
Cash Basis Earnings Per Ordinary Share | ||||||||
Basic | 315. 9 | 264. 8 | ||||||
Fully diluted | 310. 5 | 260. 5 | ||||||
$M | $M | |||||||
Reconciliation of earnings used in the calculation of basic cash basis earnings per share | ||||||||
Earnings used in calculation of earnings per share (as above) | 3,928 | 3,269 | ||||||
Add: Defined benefit superannuation plan expense after income tax | 25 | 53 | ||||||
Add: Treasury shares mismatch after income tax | 100 | 39 | ||||||
Earnings used in calculation of basic cash basis earnings per share | 4,053 | 3,361 | ||||||
Add: Profit impact of assumed conversions | ||||||||
Preference shares | — | 23 | ||||||
Other equity instruments | — | 67 | ||||||
Loan capital | 100 | — | ||||||
Earnings used in calculation of fully diluted cash basis earnings per share | 4,153 | 3,451 | ||||||
Number of Shares | ||||||||
2006 | 2006 | |||||||
M | M | |||||||
Weighted average number of ordinary shares (net of treasury shares) used in calculation of basic cash basis earnings per share | 1,283 | 1,269 | ||||||
Effect of dilutive securities — share options and convertible loan capital instruments | 55 | 56 | ||||||
Weighted average number of ordinary shares (net of treasury shares) used in calculation of fully diluted cash basis earnings per share | 1,338 | 1,325 | ||||||
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Australia | ||||||||||||||||
Notes, coins and cash at bankers | 1,629 | 1,831 | 1,210 | 1,474 | ||||||||||||
Money at short call | 4 | 3 | — | — | ||||||||||||
Securities purchased under agreements to resell | 2,629 | 2,598 | 2,629 | 2,598 | ||||||||||||
Bills received and remittances in transit | 131 | 372 | 133 | 371 | ||||||||||||
Total Australia | 4,393 | 4,804 | 3,972 | 4,443 | ||||||||||||
Overseas | ||||||||||||||||
Notes, coins and cash at bankers | 74 | 68 | 4 | 5 | ||||||||||||
Money at short call | 356 | 307 | 210 | 45 | ||||||||||||
Securities purchased under agreements to resell | 308 | 876 | 633 | 1,243 | ||||||||||||
Total Overseas | 738 | 1,251 | 847 | 1,293 | ||||||||||||
Total Cash and Liquid Assets | 5,131 | 6,055 | 4,819 | 5,736 | ||||||||||||
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Australia | ||||||||||||||||
Placements with and loans to other banks and financial institutions | 3,191 | 3,573 | 3,700 | 4,000 | ||||||||||||
Total Australia | 3,191 | 3,573 | 3,700 | 4,000 | ||||||||||||
Overseas | ||||||||||||||||
Deposits with regulatory authorities(1) | 74 | 45 | 3 | 1 | ||||||||||||
Other placements with and loans to other banks and financial institutions | 3,842 | 2,469 | 3,761 | 1,971 | ||||||||||||
Total Overseas | 3,916 | 2,514 | 3,764 | 1,972 | ||||||||||||
Total Receivables from Other Financial Institutions | 7,107 | 6,087 | 7,464 | 5,972 | ||||||||||||
(1) | These at call deposits are required by law for the Bank to operate in these regions. |
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Trading | 15,758 | 14,631 | 13,926 | 12,432 | ||||||||||||
Insurance | 24,437 | 27,484 | — | — | ||||||||||||
Other | 2,944 | — | 396 | — | ||||||||||||
Total Assets at Fair Value through Income Statement | 43,139 | 42,115 | 14,322 | 12,432 | ||||||||||||
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Trading | $M | $M | $M | $M | ||||||||||||
Australia | ||||||||||||||||
Market Quoted: | ||||||||||||||||
Australian Public Securities | ||||||||||||||||
Commonwealth and States | 422 | 283 | 422 | 283 | ||||||||||||
Local and semi-government | 860 | 505 | 860 | 505 | ||||||||||||
Bills of exchange | 2,982 | 1,346 | 2,982 | 1,346 | ||||||||||||
Certificates of deposit | 5,031 | 5,980 | 5,031 | 5,977 | ||||||||||||
Medium term notes | 2,846 | 1,949 | 2,846 | 1,949 | ||||||||||||
Other securities | 43 | 196 | 24 | 181 | ||||||||||||
Non-Market Quoted: | ||||||||||||||||
Commercial paper | 648 | 767 | 800 | 878 | ||||||||||||
Total Australia | 12,832 | 11,026 | 12,965 | 11,119 | ||||||||||||
Overseas | ||||||||||||||||
Market Quoted: | ||||||||||||||||
Government securities | 361 | 358 | 220 | 248 | ||||||||||||
Eurobonds | 349 | 502 | 349 | 502 | ||||||||||||
Certificates of deposit | 1,408 | 1,559 | — | — | ||||||||||||
Medium term notes | 60 | — | — | — | ||||||||||||
Floating rate notes | 392 | 563 | 392 | 563 | ||||||||||||
Commercial paper | 82 | 367 | — | — | ||||||||||||
Non-Market Quoted: | ||||||||||||||||
Commercial paper | 138 | 6 | — | — | ||||||||||||
Bills of exchange | 135 | 240 | — | — | ||||||||||||
Other securities | 1 | 10 | — | — | ||||||||||||
Total Overseas | 2,926 | 3,605 | 961 | 1,313 | ||||||||||||
Total Trading Assets | 15,758 | 14,631 | 13,926 | 12,432 | ||||||||||||
Thereof can be repledged or resold by counter party | 1,192 | n/a | (1) | 1,192 | n/a | (1) | ||||||||||
(1) | No comparative balances are provided due to the exemption elected when adopting Financial Instruments AIFRS accounting from 1 July 2005. |
Investments | Investments | |||||||||||||||
Backing Life | Backing Life | |||||||||||||||
Risk | Investment | |||||||||||||||
Contracts | Contracts | Group | ||||||||||||||
2006 | 2006 | 2006 | 2005 | |||||||||||||
Insurance | $M | $M | $M | $M | ||||||||||||
Equity Security Investments: | ||||||||||||||||
Direct | 685 | 2,013 | 2,698 | 2,791 | ||||||||||||
Indirect | 1,156 | 5,725 | 6,881 | 6,467 | ||||||||||||
Total Equity Security Investments | 1,841 | 7,738 | 9,579 | 9,258 | ||||||||||||
Debt Security Investments: | ||||||||||||||||
Direct | 579 | 1,924 | 2,503 | 3,918 | ||||||||||||
Indirect | 2,598 | 5,497 | 8,095 | 8,116 | ||||||||||||
Total Debt Security Investments | 3,177 | 7,421 | 10,598 | 12,034 | ||||||||||||
Property Investments: | ||||||||||||||||
Direct | 182 | 313 | 495 | 3 | ||||||||||||
Indirect | 463 | 854 | 1,317 | 2,442 | ||||||||||||
Total Property Investments | 645 | 1,167 | 1,812 | 2,445 | ||||||||||||
Other Assets | 87 | 2,361 | 2,448 | 3,747 | ||||||||||||
Total Life Insurance Investment Assets | 5,750 | 18,687 | 24,437 | 27,484 | ||||||||||||
Group | Bank | |||||||
2006 | 2006 | |||||||
Other(1) | $M | $M | ||||||
Fair value structured transactions | 1,005 | 369 | ||||||
Receivables due from financial institutions | 1,144 | — | ||||||
Term loans | 616 | — | ||||||
Other lending | 179 | 27 | ||||||
Total Other Financial Instruments | 2,944 | 396 | ||||||
(1) | Under AIFRS, certain assets have been designated at fair value through Income Statement from 1 July 2005 as they are managed by the Group on a fair value basis. |
Group | ||||||||||||||||||||||||
2006 | 2005 | |||||||||||||||||||||||
Face Value | Fair Value | Fair Value | Face Value | Fair Value | Fair Value | |||||||||||||||||||
Asset | Liability | Asset | Liability | |||||||||||||||||||||
$M | $M | $M | $M | $M | $M | |||||||||||||||||||
Derivative Assets and Liabilities | ||||||||||||||||||||||||
Held for trading | 972,789 | 8,257 | (7,779 | ) | 645,203 | 12,145 | (1) | (11,916 | )(1) | |||||||||||||||
Held for hedging | 114,612 | 1,131 | (2,934 | ) | n/a | n/a | n/a | |||||||||||||||||
Other derivatives | 31,646 | 287 | (107 | ) | n/a | n/a | n/a | |||||||||||||||||
Total recognised derivative assets and liabilities | 1,119,047 | 9,675 | (10,820 | ) | n/a | n/a | n/a | |||||||||||||||||
Derivatives held for trading | ||||||||||||||||||||||||
Exchange rate related contracts: | ||||||||||||||||||||||||
Forward contracts | 245,943 | 2,179 | (2,067 | ) | 164,491 | 1,532 | (1,686 | ) | ||||||||||||||||
Swaps | 104,942 | 2,735 | (2,095 | ) | 85,978 | 6,602 | (6,177 | ) | ||||||||||||||||
Futures | 8,063 | 15 | — | 25 | 1 | — | ||||||||||||||||||
Options purchased and sold | 17,051 | 190 | (193 | ) | 21,523 | 146 | (191 | ) | ||||||||||||||||
Total exchange rate related contracts | 375,999 | 5,119 | (4,355 | ) | 272,017 | 8,281 | (8,054 | ) | ||||||||||||||||
Interest rate related contracts: | ||||||||||||||||||||||||
Forward contracts | 64,865 | 1 | (2 | ) | 25,312 | 2 | (2 | ) | ||||||||||||||||
Swaps | 404,493 | 2,443 | (2,824 | ) | 273,456 | 3,727 | (3,761 | ) | ||||||||||||||||
Futures | 83,075 | 3 | (29 | ) | 44,362 | 10 | (28 | ) | ||||||||||||||||
Options purchased and sold | 34,899 | 94 | (119 | ) | 26,659 | 108 | (50 | ) | ||||||||||||||||
Total interest rate related contracts | 587,332 | 2,541 | (2,974 | ) | 369,789 | 3,847 | (3,841 | ) | ||||||||||||||||
Credit related contracts: | ||||||||||||||||||||||||
Swaps | 3,073 | 6 | (8 | ) | 3,002 | 4 | (8 | ) | ||||||||||||||||
Total credit related contracts | 3,073 | 6 | (8 | ) | 3,002 | 4 | (8 | ) | ||||||||||||||||
Equity related contracts: | ||||||||||||||||||||||||
Options purchased and sold | — | — | — | 395 | 13 | (13 | ) | |||||||||||||||||
Total equity related contracts | — | — | — | 395 | 13 | (13 | ) | |||||||||||||||||
Commodity related contracts: | ||||||||||||||||||||||||
Forward contracts | 1,919 | 244 | (190 | ) | — | — | — | |||||||||||||||||
Swaps | 2,944 | 299 | (200 | ) | — | — | — | |||||||||||||||||
Options purchased and sold | 1,522 | 48 | (52 | ) | — | — | — | |||||||||||||||||
Total commodity related contracts | 6,385 | 591 | (442 | ) | — | — | — | |||||||||||||||||
Total derivative assets/liabilities held for trading | 972,789 | 8,257 | (7,779 | ) | 645,203 | 12,145 | (1) | (11,916 | )(1) | |||||||||||||||
(1) | The fair value of derivative assets and liabilities for 2005 has been included in Note 11 for comparative purposes only. For the 2005 financial year these fair values are disclosed as other assets and other liabilities respectively. |
Group | ||||||||||||||||||||||||
2006 | 2005 | |||||||||||||||||||||||
Face Value | Fair Value | Fair Value | Face Value | Fair Value | Fair Value | |||||||||||||||||||
Asset | Liability | Asset | Liability | |||||||||||||||||||||
$M | $M | $M | $M | $M | $M | |||||||||||||||||||
Derivatives designated as fair value hedges | ||||||||||||||||||||||||
Exchange rate related contracts: | ||||||||||||||||||||||||
Forward contracts | 16 | — | — | |||||||||||||||||||||
Swaps | 15,251 | 375 | (543 | ) | ||||||||||||||||||||
Futures | — | — | — | |||||||||||||||||||||
Options purchased and sold | 101 | — | — | |||||||||||||||||||||
Total exchange rate related contracts | 15,368 | 375 | (543 | ) | �� | n/a | (1) | n/a | (1) | n/a | (1) | |||||||||||||
Interest rate related contracts: | ||||||||||||||||||||||||
Swaps | 44,171 | 215 | (2,187 | ) | ||||||||||||||||||||
Futures | 1,500 | 3 | — | |||||||||||||||||||||
Total interest rate related contracts | 45,671 | 218 | (2,187 | ) | n/a | (1) | n/a | (1) | n/a | (1) | ||||||||||||||
Equity related contracts: | ||||||||||||||||||||||||
Swaps | 159 | — | (10 | ) | ||||||||||||||||||||
Total equity related contracts | 159 | — | (10 | ) | n/a | (1) | n/a | (1) | n/a | (1) | ||||||||||||||
Commodity related contracts: | ||||||||||||||||||||||||
Swaps | 47 | 1 | (1 | ) | ||||||||||||||||||||
Total commodity related contracts | 47 | 1 | (1 | ) | n/a | (1) | n/a | (1) | n/a | (1) | ||||||||||||||
Total fair value hedges | 61,245 | 594 | (2,741 | ) | n/a | (1) | n/a | (1) | n/a | (1) | ||||||||||||||
Derivatives designated as cash flow hedges | ||||||||||||||||||||||||
Exchange rate related contracts: | ||||||||||||||||||||||||
Forward contracts | 1,237 | 3 | — | |||||||||||||||||||||
Swaps | 980 | 281 | — | |||||||||||||||||||||
Total exchange rate related contracts | 2,217 | 284 | — | n/a | (1) | n/a | (1) | n/a | (1) | |||||||||||||||
Interest rate related contracts: | ||||||||||||||||||||||||
Swaps | 51,150 | 253 | (193 | ) | ||||||||||||||||||||
Total interest rate related contracts | 51,150 | 253 | (193 | ) | ||||||||||||||||||||
Total cash flow hedges | 53,367 | 537 | (193 | ) | n/a | (1) | n/a | (1) | n/a | (1) | ||||||||||||||
Total derivative assets/liabilities held for hedging | 114,612 | 1,131 | (2,934 | ) | n/a | (1) | n/a | (1) | n/a | (1) | ||||||||||||||
(1) | No comparative balances provided as exemption elected when adopting Financial Instruments AIFRS accounting from 1 July 2005. |
Group | ||||||||||||||||||||||||
2006 | 2005 | |||||||||||||||||||||||
Face Value | Fair Value | Fair Value | Face Value | Fair Value | Fair Value | |||||||||||||||||||
Asset | Liability | Asset | Liability | |||||||||||||||||||||
$M | $M | $M | $M | $M | $M | |||||||||||||||||||
Other Derivatives | ||||||||||||||||||||||||
Exchange rate related contracts: | ||||||||||||||||||||||||
Forward contracts | 6,802 | 171 | (28 | ) | ||||||||||||||||||||
Swaps | 5,838 | 88 | (20 | ) | ||||||||||||||||||||
Options purchased and sold | 252 | 1 | (6 | ) | ||||||||||||||||||||
Total exchange rate related contracts | 12,892 | 260 | (54 | ) | n/a | (1) | n/a | (1) | n/a | (1) | ||||||||||||||
Interest rate related contracts: | ||||||||||||||||||||||||
Forward contracts | 7,691 | 1 | (2 | ) | ||||||||||||||||||||
Swaps | 8,069 | 17 | (27 | ) | ||||||||||||||||||||
Futures | 1,916 | — | — | |||||||||||||||||||||
Options purchased and sold | 627 | — | (1 | ) | ||||||||||||||||||||
Total interest rate related contracts | 18,303 | 18 | (30 | ) | n/a | (1) | n/a | (1) | n/a | (1) | ||||||||||||||
Credit related contracts: | ||||||||||||||||||||||||
Swaps | 275 | — | — | |||||||||||||||||||||
Total credit related contracts | 275 | — | — | n/a | (1) | n/a | (1) | n/a | (1) | |||||||||||||||
Equity related contracts: | ||||||||||||||||||||||||
Options purchased and sold | 171 | 8 | (1 | ) | ||||||||||||||||||||
Total equity related contracts | 171 | 8 | (1 | ) | n/a | (1) | n/a | (1) | n/a | (1) | ||||||||||||||
Commodity related contracts: | ||||||||||||||||||||||||
Forward contracts | 5 | 1 | (1 | ) | ||||||||||||||||||||
Total commodity related contracts | 5 | 1 | (1 | ) | n/a | (1) | n/a | (1) | n/a | (1) | ||||||||||||||
Identified embedded derivatives | — | — | (21 | ) | ||||||||||||||||||||
Total other derivatives | 31,646 | 287 | (107 | ) | n/a | (1) | n/a | (1) | n/a | (1) | ||||||||||||||
Total recognised derivative assets/liabilities | 1,119,047 | 9,675 | (10,820 | ) | n/a | (1) | n/a | (1) | n/a | (1) | ||||||||||||||
(1) | No comparative balances provided as exemption elected when adopting Financial Instruments AIFRS accounting from 1 July 2005. |
Bank | ||||||||||||||||||||||||
2006 | 2005 | |||||||||||||||||||||||
Face Value | Fair Value | Fair Value | Face Value | Fair Value | Fair Value | |||||||||||||||||||
Asset | Liability | Asset | Liability | |||||||||||||||||||||
$M | $M | $M | $M | $M | $M | |||||||||||||||||||
Derivative Assets and Liabilities | ||||||||||||||||||||||||
Held for trading | 1,004,062 | 8,944 | (8,179 | ) | ||||||||||||||||||||
Held for hedging | 94,052 | 991 | (2,755 | ) | ||||||||||||||||||||
Other derivatives | 2,788 | 3 | (21 | ) | ||||||||||||||||||||
Total derivative assets and liabilities | 1,100,902 | 9,938 | (10,955 | ) | n/a | (1) | n/a | (1) | n/a | (1) | ||||||||||||||
Derivatives held for trading | ||||||||||||||||||||||||
Exchange rate related contracts: | ||||||||||||||||||||||||
Forward contracts | 245,943 | 2,179 | (2,067 | ) | ||||||||||||||||||||
Swaps | 104,435 | 2,733 | (1,962 | ) | ||||||||||||||||||||
Futures | 8,063 | 15 | — | |||||||||||||||||||||
Options purchased and sold | 17,051 | 190 | (193 | ) | ||||||||||||||||||||
Derivatives held with controlled entities | 18,877 | 327 | (406 | ) | ||||||||||||||||||||
Total exchange rate related contracts | 394,369 | 5,444 | (4,628 | ) | n/a | (1) | n/a | (1) | n/a | (1) | ||||||||||||||
Interest rate related contracts: | ||||||||||||||||||||||||
Forward contracts | 64,865 | 1 | (2 | ) | ||||||||||||||||||||
Swaps | 404,470 | 2,443 | (2,824 | ) | ||||||||||||||||||||
Futures | 83,075 | 3 | (29 | ) | ||||||||||||||||||||
Options purchased and sold | 34,899 | 94 | (119 | ) | ||||||||||||||||||||
Derivatives held with controlled entities | 12,926 | 362 | (127 | ) | ||||||||||||||||||||
Total interest rate related contracts | 600,235 | 2,903 | (3,101 | ) | n/a | (1) | n/a | (1) | n/a | (1) | ||||||||||||||
Credit related contracts: | ||||||||||||||||||||||||
Swaps | 3,073 | 6 | (8 | ) | ||||||||||||||||||||
Total credit related contracts | 3,073 | 6 | (8 | ) | n/a | (1) | n/a | (1) | n/a | (1) | ||||||||||||||
Commodity related contracts: | ||||||||||||||||||||||||
Forward contracts | 1,919 | 244 | (190 | ) | ||||||||||||||||||||
Swaps | 2,944 | 299 | (200 | ) | ||||||||||||||||||||
Options purchased and sold | 1,522 | 48 | (52 | ) | ||||||||||||||||||||
Total commodity related contracts | 6,385 | 591 | (442 | ) | n/a | (1) | n/a | (1) | n/a | (1) | ||||||||||||||
Total derivative assets/liabilities held for trading | 1,004,062 | 8,944 | (8,179 | ) | n/a | (1) | n/a | (1) | n/a | (1) | ||||||||||||||
(1) | No comparative balances provided as exemption elected when adopting Financial Instruments AIFRS accounting from 1 July 2005. |
Bank | ||||||||||||||||||||||||
2006 | 2005 | |||||||||||||||||||||||
Face Value | Fair Value | Fair Value | Face Value | Fair Value | Fair Value | |||||||||||||||||||
Asset | Liability | Asset | Liability | |||||||||||||||||||||
$M | $M | $M | $M | $M | $M | |||||||||||||||||||
Derivatives designated as fair value hedges | ||||||||||||||||||||||||
Exchange rate related contracts: | ||||||||||||||||||||||||
Swaps | 13,544 | 341 | (534 | ) | ||||||||||||||||||||
Derivatives held with controlled entities | 229 | — | (4 | ) | ||||||||||||||||||||
Total exchange rate related contracts | 13,773 | 341 | (538 | ) | n/a | (1) | n/a | (1) | n/a | (1) | ||||||||||||||
Interest rate related contracts: | ||||||||||||||||||||||||
Swaps | 24,896 | 110 | (1,962 | ) | ||||||||||||||||||||
Futures | 1,500 | 3 | — | |||||||||||||||||||||
Derivatives held with controlled entities | 803 | 2 | (45 | ) | ||||||||||||||||||||
Total interest rate related contracts | 27,199 | 115 | (2,007 | ) | n/a | (1) | n/a | (1) | n/a | (1) | ||||||||||||||
Equity related contracts: | ||||||||||||||||||||||||
Swaps | 159 | — | (10 | ) | ||||||||||||||||||||
Total equity related contracts | 159 | — | (10 | ) | n/a | (1) | n/a | (1) | n/a | (1) | ||||||||||||||
Commodity related contracts: | ||||||||||||||||||||||||
Swaps | 47 | 1 | (1 | ) | ||||||||||||||||||||
Total commodity related contracts | 47 | 1 | (1 | ) | n/a | (1) | n/a | (1) | n/a | (1) | ||||||||||||||
Total fair value hedges | 41,178 | 457 | (2,556 | ) | n/a | (1) | n/a | (1) | n/a | (1) | ||||||||||||||
Derivatives designated as cash flow hedges | ||||||||||||||||||||||||
Exchange rate related contracts: | ||||||||||||||||||||||||
Swaps | 980 | 281 | — | |||||||||||||||||||||
Derivatives held with controlled entities | 744 | — | (6 | ) | ||||||||||||||||||||
Total exchange rate related contracts | 1,724 | 281 | (6 | ) | n/a | (1) | n/a | (1) | n/a | (1) | ||||||||||||||
Interest rate related contracts: | ||||||||||||||||||||||||
Swaps | 51,150 | 253 | (193 | ) | ||||||||||||||||||||
Total interest rate related contracts | 51,150 | 253 | (193 | ) | n/a | (1) | n/a | (1) | n/a | (1) | ||||||||||||||
Total cash flow hedges | 52,874 | 534 | (199 | ) | n/a | (1) | n/a | (1) | n/a | (1) | ||||||||||||||
Total derivative assets/liabilities held for hedging | 94,052 | 991 | (2,755 | ) | n/a | (1) | n/a | (1) | n/a | (1) | ||||||||||||||
(1) | No comparative balances provided as exemption elected when adopting Financial Instruments AIFRS accounting from 1 July 2005. |
Bank | ||||||||||||||||||||||||
2006 | 2005 | |||||||||||||||||||||||
Face Value | Fair Value | Fair Value | Face Value | Fair Value | Fair Value | |||||||||||||||||||
Asset | Liability | Asset | Liability | |||||||||||||||||||||
$M | $M | $M | $M | $M | $M | |||||||||||||||||||
Other Derivatives | ||||||||||||||||||||||||
Interest rate related contracts: | ||||||||||||||||||||||||
Swaps | 2,383 | — | — | |||||||||||||||||||||
Total interest rate related contracts | 2,383 | — | — | n/a | (1) | n/a | (1) | n/a | (1) | |||||||||||||||
Credit related contracts: | ||||||||||||||||||||||||
Swaps | 275 | — | — | |||||||||||||||||||||
Total credit related contracts | 275 | — | — | n/a | (1) | n/a | (1) | n/a | (1) | |||||||||||||||
Equity related contracts: | ||||||||||||||||||||||||
Options purchased and sold | 130 | 3 | — | |||||||||||||||||||||
Total equity related contracts | 130 | 3 | — | n/a | (1) | n/a | (1) | n/a | (1) | |||||||||||||||
Identified embedded derivatives | — | — | (21 | ) | ||||||||||||||||||||
Total other derivatives | 2,788 | 3 | (21 | ) | n/a | (1) | n/a | (1) | n/a | (1) | ||||||||||||||
Total recognised derivative assets/liabilities | 1,100,902 | 9,938 | (10,955 | ) | n/a | (1) | n/a | (1) | n/a | (1) | ||||||||||||||
(1) | No comparative balances provided as exemption elected when adopting Financial Instruments AIFRS accounting from 1 July 2005. |
Group | Bank | |||||||
2006 | 2006 | |||||||
$M | $M | |||||||
Australia | ||||||||
Market Quoted: | ||||||||
Australian Public Securities: | ||||||||
Local and semi-government | 1,892 | 1,894 | ||||||
Shares and equity investments | 511 | 502 | ||||||
Medium term notes | 415 | 407 | ||||||
Floating rate notes | 465 | — | ||||||
Mortgage backed securities | 1,576 | 1,576 | ||||||
Other securities | 800 | 510 | ||||||
Non-Market Quoted: | ||||||||
Australian Public Securities: | ||||||||
Local and semi-government | 84 | — | ||||||
Medium term notes | 70 | 61 | ||||||
Shares and equity investments | 217 | 158 | ||||||
Other securities | 2 | 941 | ||||||
Total Australia | 6,032 | 6,049 | ||||||
Overseas | ||||||||
Market Quoted: | ||||||||
Government securities | 265 | 63 | ||||||
Bills of exchange | 244 | 244 | ||||||
Certificates of deposit | 2,390 | 2,366 | ||||||
Eurobonds | 391 | 354 | ||||||
Medium term notes | 456 | 243 | ||||||
Floating rate notes | 571 | 430 | ||||||
Other securities | 509 | 84 | ||||||
Non-Market Quoted: | ||||||||
Government securities | 9 | — | ||||||
Certificates of deposit | 17 | 17 | ||||||
Eurobonds | 31 | 31 | ||||||
Floating rate notes | 118 | 45 | ||||||
Other securities | 192 | — | ||||||
Total Overseas | 5,193 | 3,877 | ||||||
Less specific allowances for impairment | (22 | ) | (12 | ) | ||||
Total Available-for-Sale investments | 11,203 | 9,914 | ||||||
Group | ||||||||||||||||
At 30 June 2006 | ||||||||||||||||
Amortised | Gross Unrealised | Gross Unrealised | Fair | |||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Australia | ||||||||||||||||
Australian Public Securities: | ||||||||||||||||
Local and semi-government | 1,892 | 84 | — | 1,976 | ||||||||||||
Medium term notes | 486 | — | (1 | ) | 485 | |||||||||||
Floating rate notes | 465 | — | — | 465 | ||||||||||||
Mortgage backed securities | 1,576 | — | — | 1,576 | ||||||||||||
Other securities and equity investments | 1,481 | 77 | (28 | ) | 1,530 | |||||||||||
Provisions | (22 | ) | 16 | (15 | ) | (21 | ) | |||||||||
Total Australia | 5,878 | 177 | (44 | ) | 6,011 | |||||||||||
Overseas | ||||||||||||||||
Government securities | 275 | — | (1 | ) | 274 | |||||||||||
Bills of exchange | 244 | 1 | (1 | ) | 244 | |||||||||||
Certificates of deposit | 2,408 | — | (1 | ) | 2,407 | |||||||||||
Eurobonds | 421 | 2 | (1 | ) | 422 | |||||||||||
Medium term notes | 457 | — | (1 | ) | 456 | |||||||||||
Floating rate notes | 688 | 1 | — | 689 | ||||||||||||
Other securities and equity investments | 703 | 1 | (3 | ) | 701 | |||||||||||
Provisions | — | — | (1 | ) | (1 | ) | ||||||||||
Total Overseas | 5,196 | 5 | (9 | ) | 5,192 | |||||||||||
Total Available-for-sale Investments | 11,074 | 182 | (53 | ) | 11,203 | |||||||||||
Group | ||||||||||||||||||||||||||||||||||||||||||||||||
Maturity Period at 30 June 2006 | ||||||||||||||||||||||||||||||||||||||||||||||||
Non- | ||||||||||||||||||||||||||||||||||||||||||||||||
0 to 3 months | 3 to 12 months | 1 to 5 years | 5 to 10 years | 10 years or more | Maturing | Total | ||||||||||||||||||||||||||||||||||||||||||
$M | % | $M | % | $M | % | $M | % | $M | % | $M | $M | |||||||||||||||||||||||||||||||||||||
Australia | ||||||||||||||||||||||||||||||||||||||||||||||||
Australian Public Securities: | ||||||||||||||||||||||||||||||||||||||||||||||||
Local and semi-government | — | — | 100 | 5. 60 | 1,702 | 6. 22 | 108 | 7. 17 | 66 | 6. 14 | — | 1,976 | ||||||||||||||||||||||||||||||||||||
Medium term notes | 17 | 5. 69 | — | — | 309 | 6. 09 | 110 | 5. 93 | 49 | 6. 05 | — | 485 | ||||||||||||||||||||||||||||||||||||
Floating rate notes | 75 | 6. 08 | 88 | 6. 08 | 242 | 6. 08 | — | — | 60 | 6. 08 | — | 465 | ||||||||||||||||||||||||||||||||||||
Mortgage backed securities | — | — | — | — | — | — | — | — | 1,576 | 6. 04 | — | 1,576 | ||||||||||||||||||||||||||||||||||||
Other securities, commercial paper and equity investments | 64 | 4. 59 | — | — | 331 | 6. 68 | 19 | 7. 11 | — | — | 1,116 | 1,530 | ||||||||||||||||||||||||||||||||||||
Provisions | (2 | ) | — | (11 | ) | — | (6 | ) | — | (2 | ) | — | — | — | — | (21 | ) | |||||||||||||||||||||||||||||||
Total Australia | 154 | — | 177 | — | 2,578 | — | 235 | — | 1,751 | — | 1,116 | 6,011 | ||||||||||||||||||||||||||||||||||||
Overseas | ||||||||||||||||||||||||||||||||||||||||||||||||
Government securities | 125 | 8. 95 | 61 | 11. 29 | 80 | 2. 55 | 8 | 3. 04 | — | — | — | 274 | ||||||||||||||||||||||||||||||||||||
Bills of exchange | 160 | 2. 94 | 84 | 3. 24 | — | — | — | — | — | — | — | 244 | ||||||||||||||||||||||||||||||||||||
Certificates of deposit | 1,660 | 4. 62 | 706 | 3. 90 | 41 | 4. 48 | — | — | — | — | — | 2,407 | ||||||||||||||||||||||||||||||||||||
Eurobonds | 123 | 6. 75 | 81 | 5. 09 | 218 | 5. 20 | — | — | — | — | — | 422 | ||||||||||||||||||||||||||||||||||||
Medium term notes | 20 | 6. 88 | 24 | 5. 75 | 412 | 5. 66 | — | — | — | — | — | 456 | ||||||||||||||||||||||||||||||||||||
Floating rate notes | 36 | 4. 20 | 102 | 3. 86 | 522 | 4. 06 | 28 | 5. 12 | 1 | 7. 12 | — | 689 | ||||||||||||||||||||||||||||||||||||
Other securities and equity investments | — | — | 20 | 5. 50 | 681 | 5. 79 | — | — | — | — | — | 701 | ||||||||||||||||||||||||||||||||||||
Provisions | — | — | — | — | — | — | (1 | ) | — | — | — | — | (1 | ) | ||||||||||||||||||||||||||||||||||
Total Overseas | 2,124 | — | 1,078 | — | 1,954 | — | 35 | — | 1 | — | — | 5,192 | ||||||||||||||||||||||||||||||||||||
Total Available-for-Sale Investments | 2,278 | — | 1,255 | — | 4,532 | — | 270 | — | 1,752 | — | 1,116 | 11,203 | ||||||||||||||||||||||||||||||||||||
Group | Bank | |||||||
2005 | 2005 | |||||||
Investment Securities (comparatives only) | $M | $M | ||||||
Australia | ||||||||
Listed: | ||||||||
Australian Public Securities: | ||||||||
Commonwealth and States | 2,201 | 2,201 | ||||||
Other Securities and equity investments | 343 | 336 | ||||||
Unlisted: | ||||||||
Australian Public Securities: | ||||||||
Local and semi-government | 80 | — | ||||||
Medium term notes | 783 | 220 | ||||||
Mortgage backed securities | 1,055 | 1055 | ||||||
Other securities and equity investments | 675 | 71 | ||||||
Total Australia | 5,137 | 3,883 | ||||||
Overseas | ||||||||
Listed: | ||||||||
Government securities | 79 | 63 | ||||||
Certificates of deposit | 1,376 | 1,341 | ||||||
Eurobonds | 636 | 600 | ||||||
Medium term notes | 378 | 122 | ||||||
Floating rate notes | 619 | 177 | ||||||
Other securities | 165 | 76 | ||||||
Unlisted: | ||||||||
Government securities | 224 | — | ||||||
Eurobonds | 477 | 76 | ||||||
Medium term notes | 254 | 221 | ||||||
Floating rate notes | 452 | 286 | ||||||
Preference shares | 744 | — | ||||||
Other securities and equity investments | 297 | 77 | ||||||
Total Overseas | 5,701 | 3,039 | ||||||
Total Investment Securities | 10,838 | 6,922 | ||||||
140 Commonwealth Bank of Australia Annual Report 2006
Group | ||||||||||||||||
At 30 June 2005 | ||||||||||||||||
Gross | Gross | |||||||||||||||
Amortised | Unrealised | Unrealised | Fair | |||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
Gross Unrealised Gains and Losses of Group (comparatives only) | $M | $M | $M | $M | ||||||||||||
Australia | ||||||||||||||||
Australian Public Securities: | ||||||||||||||||
Commonwealth and States | 2,281 | 54 | 1 | 2,334 | ||||||||||||
Medium term notes | 783 | 4 | — | 787 | ||||||||||||
Mortgage backed securities | 1,055 | — | — | 1,055 | ||||||||||||
Other securities and equity investments(1) | 1,018 | 64 | — | 1,082 | ||||||||||||
Total Australia | 5,137 | 122 | 1 | 5,258 | ||||||||||||
Overseas | ||||||||||||||||
Government securities | 303 | 3 | — | 306 | ||||||||||||
Certificates of deposit | 1,376 | — | — | 1,376 | ||||||||||||
Eurobonds | 1,113 | 21 | 1 | 1,133 | ||||||||||||
Medium term notes | 632 | 6 | 1 | 637 | ||||||||||||
Floating rate notes | 1,071 | 4 | — | 1,075 | ||||||||||||
Preference shares | 744 | — | — | 744 | ||||||||||||
Other securities and equity investments | 462 | 8 | — | 470 | ||||||||||||
Total Overseas | 5,701 | 42 | 2 | 5,741 | ||||||||||||
Total Investment Securities | 10,838 | 164 | 3 | 10,999 | ||||||||||||
(1) | Equity derivatives were in place to hedge equity market risk in respect of structured equity products for customers. There were $42 million of net deferred losses on these contracts which offset the above unrealised gains and these are disclosed within Note 43. At the end of the financial year there were no net deferred gains or losses included in the amortised cost value. |
Commonwealth Bank of Australia Annual Report 2006 141
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Australia | ||||||||||||||||
Overdrafts | 2,672 | 2,564 | 2,672 | 2,564 | ||||||||||||
Housing loans(1) | 144,834 | 129,913 | 141,121 | 125,452 | ||||||||||||
Credit card outstandings | 6,997 | 6,682 | 6,997 | 6,682 | ||||||||||||
Lease financing | 4,924 | 5,055 | 1,352 | 1,724 | ||||||||||||
Bills discounted | 2,779 | 3,399 | 2,779 | 3,399 | ||||||||||||
Term loans | 56,950 | 46,451 | 52,579 | 41,447 | ||||||||||||
Redeemable preference share financing | 1 | 9 | 1 | 9 | ||||||||||||
Other lending | 597 | 389 | 949 | 750 | ||||||||||||
Total Australia | 219,754 | 194,462 | 208,450 | 182,027 | ||||||||||||
Overseas | ||||||||||||||||
Overdrafts | 2,435 | 2,660 | — | — | ||||||||||||
Housing loans | 22,287 | 20,765 | 87 | 54 | ||||||||||||
Credit card outstandings | 428 | 406 | — | — | ||||||||||||
Lease financing | 139 | 195 | 137 | 127 | ||||||||||||
Bills discounted | 7 | — | 7 | — | ||||||||||||
Term loans | 15,282 | 12,804 | 5,730 | 3,686 | ||||||||||||
Redeemable preference share financing | 1,194 | — | — | — | ||||||||||||
Other lending | 8 | 192 | — | — | ||||||||||||
Other securities | 438 | — | 24 | — | ||||||||||||
Total overseas | 42,218 | 37,022 | 5,985 | 3,867 | ||||||||||||
Gross loans, advances and other receivables | 261,972 | 231,484 | 214,435 | 185,894 | ||||||||||||
Less | ||||||||||||||||
Provisions for impairment (Note 15): | ||||||||||||||||
Collective provisions(2) | (1,046 | ) | (1,390 | ) | (938 | ) | (1,218 | ) | ||||||||
Individually assessed provisions against loans and advances(2) | (171 | ) | (157 | ) | (157 | ) | (134 | ) | ||||||||
Unearned income: | ||||||||||||||||
Term loans | (934 | ) | (889 | ) | (510 | ) | (426 | ) | ||||||||
Lease financing | (645 | ) | (683 | ) | (131 | ) | (172 | ) | ||||||||
Interest reserved(3) | — | (19 | ) | — | (19 | ) | ||||||||||
(2,796 | ) | (3,138 | ) | (1,736 | ) | (1,969 | ) | |||||||||
Net loans, advances and other receivables | 259,176 | 228,346 | 212,699 | 183,925 | ||||||||||||
(1) | Includes securitised loan balances for 2006 of $12,007 million (2005: $10,818 million) in the Group and $9,977 million (2005: $7,290 million) in the Bank. Liabilities of similar values are included in debt issues (Group) and due to controlled entities (Bank). | |
(2) | Collective provisions and individually assessed provisions recalculated under AIFRS for 2006. | |
(3) | Interest reserved is not recognised under AIFRS from 1 July 2005 |
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Finance Leases | ||||||||||||||||
Minimum lease payments receivable: | ||||||||||||||||
No later than one year | 1,271 | 1,602 | 501 | 822 | ||||||||||||
Later than one year but not later than five years | 2,792 | 2,884 | 838 | 969 | ||||||||||||
Later than five years | 1,000 | 764 | 150 | 60 | ||||||||||||
Lease financing | 5,063 | 5,250 | 1,489 | 1,851 | ||||||||||||
142 Commonwealth Bank of Australia Annual Report 2006
Group | ||||||||||||||||
Maturity Period at 30 June 2006 | ||||||||||||||||
Maturing | ||||||||||||||||
Maturing | Between | Maturing | ||||||||||||||
One Year | One & Five | After Five | ||||||||||||||
or Less | Years | Years | Total | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Australia | ||||||||||||||||
Government and other public authorities | 234 | 1,287 | 7 | 1,528 | ||||||||||||
Agricultural, forestry and fishing | 1,053 | 1,495 | 759 | 3,307 | ||||||||||||
Financial, investments and insurance | 3,758 | 4,617 | 1,308 | 9,683 | ||||||||||||
Real estate: | ||||||||||||||||
Mortgage(1) | 14,570 | 12,724 | 117,540 | 144,834 | ||||||||||||
Construction(2) | 1,107 | 768 | 210 | 2,085 | ||||||||||||
Personal | 6,522 | 8,932 | 547 | 16,001 | ||||||||||||
Lease financing | 1,222 | 2,707 | 995 | 4,924 | ||||||||||||
Other commercial and industrial | 16,351 | 16,855 | 4,186 | 37,392 | ||||||||||||
Total Australia | 44,817 | 49,385 | 125,552 | 219,754 | ||||||||||||
Overseas | ||||||||||||||||
Government and other public authorities | 291 | 67 | 22 | 380 | ||||||||||||
Agricultural, forestry and fishing | 517 | 780 | 1,797 | 3,094 | ||||||||||||
Financial, investments and insurance | 1,808 | 3,175 | 3,020 | 8,003 | ||||||||||||
Real estate: | ||||||||||||||||
Mortgage(1) | 3,142 | 2,769 | 16,376 | 22,287 | ||||||||||||
Construction(2) | 125 | 87 | 56 | 268 | ||||||||||||
Personal | 386 | 127 | 8 | 521 | ||||||||||||
Lease financing | 50 | 84 | 5 | 139 | ||||||||||||
Other commercial and industrial | 4,399 | 2,547 | 580 | 7,526 | ||||||||||||
Total Overseas | 10,718 | 9,636 | 21,864 | 42,218 | ||||||||||||
Gross Loans, Advances and Other Receivables | 55,535 | 59,021 | 147,416 | 261,972 | ||||||||||||
Interest Rate Sensitivity of Lending | ||||||||||||||||
Australia | 14,724 | 26,215 | 46,999 | 87,938 | ||||||||||||
Overseas | 4,252 | 4,492 | 4,526 | 13,270 | ||||||||||||
Total Variable Interest Rates | 18,976 | 30,707 | 51,525 | 101,208 | ||||||||||||
Australia | 30,092 | 23,170 | 78,553 | 131,815 | ||||||||||||
Overseas | 6,467 | 5,144 | 17,338 | 28,949 | ||||||||||||
Total Fixed Interest Rates | 36,559 | 28,314 | 95,891 | 160,764 | ||||||||||||
Gross Loans, Advances and Other Receivables | 55,535 | 59,021 | 147,416 | 261,972 | ||||||||||||
(1) | Principally Owner occupied housing. While most of these loans would have a contractual term of 20 years or more, the actual average term of the portfolio is less than five years. | |
(2) | Financing real estate and land development projects. |
Commonwealth Bank of Australia Annual Report 2006 143
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Provisions for impairment | ||||||||||||||||
Collective provisions | ||||||||||||||||
Opening balance(1) | 1,021 | 1,393 | 915 | 1,242 | ||||||||||||
Charge against profit and loss | 398 | 322 | 380 | 292 | ||||||||||||
Transfer to individually assessed provisions | (440 | ) | (352 | ) | (404 | ) | (326 | ) | ||||||||
Impairment losses recovered | 127 | 81 | 90 | 60 | ||||||||||||
Adjustments for exchange rate fluctuations and other items | (7 | ) | 2 | (1 | ) | (1 | ) | |||||||||
1,099 | 1,446 | 980 | 1,267 | |||||||||||||
Impairment losses written off | (53 | ) | (56 | ) | (42 | ) | (49 | ) | ||||||||
Closing balance | 1,046 | 1,390 | 938 | 1,218 | ||||||||||||
Individually assessed provisions | ||||||||||||||||
Opening balance(1) | 191 | 143 | 174 | 121 | ||||||||||||
Transfer from collective provisions for: | ||||||||||||||||
New and increased provisioning | 468 | 408 | 427 | 378 | ||||||||||||
Less write-back of provisions no longer required | (28 | ) | (56 | ) | (23 | ) | (52 | ) | ||||||||
Net transfer | 440 | 352 | 404 | 326 | ||||||||||||
Adjustment for exchange rate fluctuations and other items | (16 | ) | (3 | ) | (15 | ) | — | |||||||||
Impairment losses | (444 | ) | (335 | ) | (406 | ) | (313 | ) | ||||||||
Closing balance | 171 | 157 | 157 | 134 | ||||||||||||
Total provisions for impairment | 1,217 | 1,547 | 1,095 | 1,352 | ||||||||||||
General Reserve for Credit Losses (pre-tax equivalent)(2) | 500 | — | 500 | — | ||||||||||||
Total provisions including General Reserve for Credit Losses | 1,717 | 1,547 | 1,595 | 1,352 | ||||||||||||
(1) | The opening balance at 1 July 2005 includes the impact of adopting AIFRS 132, AIFRS 137 and AIFRS 139 which have not been applied to the 2005 comparatives in accordance with AASB 1. | |
(2) | The General Reserve for Credit Loss has been established to satisfy the current APRA prudential requirement for banks to maintain a general reserve for credit loss, and allowable collective provisions, at a minimum level of 0.5% of risk weighted assets. |
Coverage Ratios | % | % | % | % | ||||||||||||
Collective provisions as a % of risk weighted assets | 0.48 | — | 0.44 | — | ||||||||||||
General provisions as a % of risk weighted assets | — | 0.73 | — | 0.68 | ||||||||||||
Collective provisions plus general reserve for credit losses (pre-tax equivalent) as a % of risk weighted assets | 0.71 | — | 0.68 | — | ||||||||||||
Individually assessed provisions for impairment as a % of gross impaired assets | 52.5 | — | 51.3 | — | ||||||||||||
Specific provisions for impairment as a % of gross impaired assets net of interest reserved(1) | — | 41.76 | — | 37.81 | ||||||||||||
Total provisions for impairment as % of gross impaired assets net of interest reserved(1) | 373.3 | 411.44 | 357.5 | 381.49 | ||||||||||||
Total provisions for impairment plus general reserve for credit losses (pre-tax equivalent) as a % of gross impaired assets | 526.7 | — | 520.9 | — | ||||||||||||
(1) | Interest reserved not recognised under AIFRS. |
144 Commonwealth Bank of Australia Annual Report 2006
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Total bad debts expense | 398 | 322 | 380 | 292 | ||||||||||||
The charge is required for: | ||||||||||||||||
Individually assessed provisioning | ||||||||||||||||
New and increased provisioning | 468 | 408 | 427 | 378 | ||||||||||||
Less provisions no longer required | (28 | ) | (56 | ) | (23 | ) | (52 | ) | ||||||||
Net individually assessed provisions | 440 | 352 | 404 | 326 | ||||||||||||
Provided from collective provisioning | (440 | ) | (352 | ) | (404 | ) | (326 | ) | ||||||||
Charge to profit and loss | — | — | — | — | ||||||||||||
Collective Provisioning | ||||||||||||||||
Direct write-offs | 53 | 56 | 42 | 49 | ||||||||||||
Recoveries of amounts previously written off | (127 | ) | (81 | ) | (90 | ) | (60 | ) | ||||||||
Movement in collective provision | 32 | (5 | ) | 24 | (23 | ) | ||||||||||
Funding of individually assessed provisions | 440 | 352 | 404 | 326 | ||||||||||||
Charge to profit and loss | 398 | 322 | 380 | 292 | ||||||||||||
Total charge to profit and loss for bad debts expense | 398 | 322 | 380 | 292 | ||||||||||||
Group | ||||||||
2006 | 2005 | |||||||
$M | $M | |||||||
Australia | ||||||||
Government and public authorities | — | — | ||||||
Agriculture, forestry and fishing | 4 | 16 | ||||||
Financial, investment and insurance | 1 | 1 | ||||||
Real estate | ||||||||
Mortgage(1) | 19 | 3 | ||||||
Construction(2) | 2 | 7 | ||||||
Personal | 97 | 63 | ||||||
Lease financing | 1 | 5 | ||||||
Other commercial and industrial | 42 | 49 | ||||||
Total Australia | 166 | 144 | ||||||
Overseas | ||||||||
Government and public authorities | — | — | ||||||
Agriculture, forestry and fishing | — | — | ||||||
Financial, investment and insurance | 1 | 1 | ||||||
Real estate | ||||||||
Mortgage(1) | 2 | 11 | ||||||
Construction(2) | — | — | ||||||
Personal | 2 | 1 | ||||||
Lease financing | — | — | ||||||
Other commercial and industrial | — | — | ||||||
Total Overseas | 5 | 13 | ||||||
Total individually assessed provisions | 171 | 157 | ||||||
(1) | Principally owner occupied housing. | |
(2) | Primarily financing real estate and land development projects. |
Commonwealth Bank of Australia Annual Report 2006 145
Group | ||||||||
2006 | 2005 | |||||||
$M | $M | |||||||
Bad Debts Written Off | ||||||||
Australia | ||||||||
Government and public authorities | 1 | — | ||||||
Agriculture, forestry and fishing | 8 | 1 | ||||||
Financial, investment and insurance | 1 | 4 | ||||||
Real estate: | ||||||||
Mortgage(1) | 9 | 8 | ||||||
Construction(2) | 5 | 4 | ||||||
Personal | 388 | 280 | ||||||
Lease financing | 6 | 4 | ||||||
Other commercial and industrial | 68 | 83 | ||||||
Total Australia | 486 | 384 | ||||||
Overseas | ||||||||
Government and public authorities | — | — | ||||||
Agriculture, forestry and fishing | — | — | ||||||
Financial, investment and insurance | — | — | ||||||
Real estate: | ||||||||
Mortgage(1) | — | 6 | ||||||
Construction(2) | — | — | ||||||
Personal | 7 | — | ||||||
Lease financing | — | — | ||||||
Other commercial and industrial | 4 | 1 | ||||||
Total Overseas | 11 | 7 | ||||||
Gross Bad Debts written off | 497 | 391 | ||||||
Bad Debts Recovered | ||||||||
Australia | 122 | 76 | ||||||
Overseas | 5 | 5 | ||||||
Total Bad Debts Recovered | 127 | 81 | ||||||
Net Bad Debts written off | 370 | 310 | ||||||
(1) | Principally owner occupied housing. | |
(2) | Primarily financing real estate and land development projects. |
146 Commonwealth Bank of Australia Annual Report 2006
Group | ||||||||
2006 | 2005 | |||||||
$M | $M | |||||||
Bad Debts Recovered | ||||||||
Australia | ||||||||
Government and public authorities | — | — | ||||||
Agriculture, forestry and fishing | 1 | 2 | ||||||
Financial, investment and insurance | 2 | 3 | ||||||
Real estate: | ||||||||
Mortgage(1) | 1 | 1 | ||||||
Construction(2) | — | 1 | ||||||
Personal | 100 | 60 | ||||||
Lease financing | 1 | 1 | ||||||
Other commercial and industrial | 17 | 8 | ||||||
Total Australia | 122 | 76 | ||||||
Overseas | ||||||||
Government and public authorities | — | — | ||||||
Agriculture, forestry and fishing | — | — | ||||||
Financial, investment and insurance | — | — | ||||||
Real estate: | ||||||||
Mortgage(1) | — | — | ||||||
Construction(2) | — | — | ||||||
Personal | 5 | 4 | ||||||
Lease financing | — | — | ||||||
Other commercial and industrial | — | 1 | ||||||
Total Overseas | 5 | 5 | ||||||
Total Bad Debts Recovered | 127 | 81 | ||||||
(1) | Principally owner occupied housing. | |
(2) | Primarily financing real estate and land development projects. |
Commonwealth Bank of Australia Annual Report 2006 147
148 Commonwealth Bank of Australia Annual Report 2006
Group | ||||||||
2006 | 2005 | |||||||
Industry | $M | $M | ||||||
Australia | ||||||||
Government and public authorities | 6,765 | 7,125 | ||||||
Agriculture, forestry and fishing | 5,227 | 5,029 | ||||||
Financial, investment and insurance | 30,114 | 38,588 | ||||||
Real estate: | ||||||||
Mortgage(1) | 149,958 | 134,913 | ||||||
Construction(2) | 3,501 | 2,211 | ||||||
Personal | 16,566 | 14,970 | ||||||
Lease financing | 4,924 | 5,055 | ||||||
Other commercial and industrial | 68,253 | 54,837 | ||||||
Total Australia | 285,308 | 262,728 | ||||||
Overseas | ||||||||
Government and public authorities | 904 | 1,385 | ||||||
Agriculture, forestry and fishing | 3,097 | 3,392 | ||||||
Financial, investment and insurance | 21,469 | 18,250 | ||||||
Real estate: | ||||||||
Mortgage(1) | 23,267 | 21,747 | ||||||
Construction(2) | 294 | 346 | ||||||
Personal | 524 | 581 | ||||||
Lease financing | 139 | 195 | ||||||
Other commercial and industrial | 14,686 | 10,667 | ||||||
Total Overseas | 64,380 | 56,563 | ||||||
Total Gross Credit Risk | 349,688 | 319,291 | ||||||
Less unearned income | (1,579 | ) | (1,572 | ) | ||||
Total Credit Risk | 348,109 | 317,719 | ||||||
Charge for Bad debts | 398 | 322 | ||||||
Loss Rate (%)(3) | 0.11 | 0.10 | ||||||
(1) | Principally owner occupied housing. | |
(2) | Primarily financing real estate and land development projects. | |
(3) | The loss rate is the charge as a percentage of the credit risk. |
Commonwealth Bank of Australia Annual Report 2006 149
Assets at | ||||||||||||||||||||||||||||
Fair Value | Loans | Bank | ||||||||||||||||||||||||||
through | Available | Advances | Acceptances | |||||||||||||||||||||||||
Income | For Sale | and Other | of | Contingent | ||||||||||||||||||||||||
Statement | Investments | Receivables | customers | Derivatives | Liabilities | Total | ||||||||||||||||||||||
$M | $M | $M | $M | $M | $M | $M | ||||||||||||||||||||||
Australia | ||||||||||||||||||||||||||||
Government and public authorities | 1,282 | 3,551 | 1,528 | 8 | 52 | 344 | 6,765 | |||||||||||||||||||||
Agriculture, forestry and fishing | — | — | 3,307 | 1,814 | 38 | 68 | 5,227 | |||||||||||||||||||||
Financial, investment and insurance | 8,013 | 122 | 9,683 | 1,103 | 6,518 | 1,484 | 26,923 | |||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||
Mortgage(1) | — | — | 144,834 | — | — | 5,124 | 149,958 | |||||||||||||||||||||
Construction(2) | — | — | 2,085 | 411 | 143 | 862 | 3,501 | |||||||||||||||||||||
Personal | — | — | 16,001 | 429 | 3 | 133 | 16,566 | |||||||||||||||||||||
Lease financing | — | — | 4,924 | — | — | — | 4,924 | |||||||||||||||||||||
Other commercial and industrial | 3,537 | 2,338 | 37,392 | 14,545 | 2,486 | 7,955 | 68,253 | |||||||||||||||||||||
Total Australia | 12,832 | 6,011 | 219,754 | 18,310 | 9,240 | 15,970 | 282,117 | |||||||||||||||||||||
Overseas | ||||||||||||||||||||||||||||
Government and public authorities | 361 | — | 380 | — | 69 | 94 | 904 | |||||||||||||||||||||
Agriculture, forestry and fishing | — | — | 3,094 | — | 2 | 1 | 3,097 | |||||||||||||||||||||
Financial, investment and insurance | 1,543 | 518 | 8,003 | — | 4,352 | 3,137 | 17,553 | |||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||
Mortgage(1) | — | — | 22,287 | — | — | 980 | 23,267 | |||||||||||||||||||||
Construction(2) | — | — | 268 | — | 3 | 23 | 294 | |||||||||||||||||||||
Personal | — | — | 521 | — | — | 3 | 524 | |||||||||||||||||||||
Lease financing | — | — | 139 | — | — | — | 139 | |||||||||||||||||||||
Other commercial and industrial | 1,022 | 4,674 | 7,526 | — | 195 | 1,269 | 14,686 | |||||||||||||||||||||
Total Overseas | 2,926 | 5,192 | 42,218 | — | 4,621 | 5,507 | 60,464 | |||||||||||||||||||||
Gross Balances | 15,758 | 11,203 | 261,972 | 18,310 | 13,861 | 21,477 | 342,581 | |||||||||||||||||||||
Other Risk Concentrations | ||||||||||||||||||||||||||||
Receivables due from other financial in stitutions | 7,033 | |||||||||||||||||||||||||||
Deposits with regulatory authorities | 74 | |||||||||||||||||||||||||||
Total Gross Credit Risk | 349,688 | |||||||||||||||||||||||||||
(1) | Principally owner occupied housing. | |
(2) | Primarily financing real estate and land development projects. |
150 Commonwealth Bank of Australia Annual Report 2006
Assets at | ||||||||||||||||||||||||||||
Fair Value | Loans | |||||||||||||||||||||||||||
through | Advances | Bank | ||||||||||||||||||||||||||
Income | Investment | and Other | Acceptances | Contingent | ||||||||||||||||||||||||
Statement | Securities | Receivables | of customers | Derivatives | Liabilities | Total | ||||||||||||||||||||||
$M | $M | $M | $M | $M | $M | $M | ||||||||||||||||||||||
Australia | ||||||||||||||||||||||||||||
Government and public authorities | 788 | 2,281 | 3,000 | 10 | 227 | 819 | 7,125 | |||||||||||||||||||||
Agriculture, forestry and fishing | — | — | 3,213 | 1,741 | 35 | 40 | 5,029 | |||||||||||||||||||||
Financial, investment and insurance | 7,326 | 837 | 5,882 | 1,167 | 15,240 | 4,563 | 35,015 | |||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||
Mortgage(1) | — | — | 129,913 | — | — | 5,000 | 134,913 | |||||||||||||||||||||
Construction(2) | — | — | 1,694 | 274 | 27 | 216 | 2,211 | |||||||||||||||||||||
Personal | — | — | 14,504 | 380 | 2 | 84 | 14,970 | |||||||||||||||||||||
Lease financing | — | — | 5,055 | — | — | — | 5,055 | |||||||||||||||||||||
Other commercial and industrial | 2,912 | 2,019 | 31,201 | 13,214 | 2,150 | 3,341 | 54,837 | |||||||||||||||||||||
Total Australia | 11,026 | 5,137 | 194,462 | 16,786 | 17,681 | 14,063 | 259,155 | |||||||||||||||||||||
Overseas | ||||||||||||||||||||||||||||
Government and public authorities | 558 | 303 | 216 | — | 49 | 259 | 1,385 | |||||||||||||||||||||
Agriculture, forestry and fishing | — | — | 3,372 | — | 7 | 13 | 3,392 | |||||||||||||||||||||
Financial, investment and insurance | 1,798 | 2,122 | 7,027 | — | 3,277 | 1,512 | 15,736 | |||||||||||||||||||||
Real estate: | — | |||||||||||||||||||||||||||
Mortgage(1) | — | — | 20,765 | — | — | 982 | 21,747 | |||||||||||||||||||||
Construction(2) | — | — | 271 | — | 6 | 69 | 346 | |||||||||||||||||||||
Personal | — | — | 552 | — | 2 | 27 | 581 | |||||||||||||||||||||
Lease financing | — | — | 195 | — | — | — | 195 | |||||||||||||||||||||
Other commercial and industrial | 1,249 | 3,276 | 4,624 | — | 461 | 1,057 | 10,667 | |||||||||||||||||||||
Total Overseas | 3,605 | 5,701 | 37,022 | — | 3,802 | 3,919 | 54,049 | |||||||||||||||||||||
Gross Balances | 14,631 | 10,838 | 231,484 | 16,786 | 21,483 | 17,982 | 313,204 | |||||||||||||||||||||
Other Risk Concentrations | ||||||||||||||||||||||||||||
Receivables due from other financial institutions | 6,042 | |||||||||||||||||||||||||||
Deposits with regulatory authorities | 45 | |||||||||||||||||||||||||||
Total Gross Credit Risk | 319,291 | |||||||||||||||||||||||||||
(1) | Principally owner occupied housing. | |
(2) | Primarily financing real estate and land development projects. |
Commonwealth Bank of Australia Annual Report 2006 151
Provisions | ||||||||||||||||||||||||
Impaired | for | Net | ||||||||||||||||||||||
Total Risk | Assets | Impairment | Write-offs | Recoveries | Write-offs | |||||||||||||||||||
Industry | $M | $M | $M | $M | $M | $M | ||||||||||||||||||
Australia | ||||||||||||||||||||||||
Government and public authorities | 6,765 | — | — | 1 | — | 1 | ||||||||||||||||||
Agriculture, forestry and fishing | 5,227 | 12 | 4 | 8 | (1 | ) | 7 | |||||||||||||||||
Financial, investment and insurance | 26,923 | 2 | 1 | 1 | (2 | ) | (1 | ) | ||||||||||||||||
Real estate: | ||||||||||||||||||||||||
Mortgage(1) | 149,958 | 40 | 19 | 9 | (1 | ) | 8 | |||||||||||||||||
Construction(2) | 3,501 | 7 | 2 | 5 | — | 5 | ||||||||||||||||||
Personal | 16,566 | 56 | 97 | 388 | (100 | ) | 288 | |||||||||||||||||
Lease financing | 4,924 | 12 | 1 | 6 | (1 | ) | 5 | |||||||||||||||||
Other commercial and industrial | 68,253 | 183 | 42 | 68 | (17 | ) | 50 | |||||||||||||||||
Total Australia | 282,117 | 312 | 166 | 486 | (122 | ) | 364 | |||||||||||||||||
Overseas | ||||||||||||||||||||||||
Government and public authorities | 904 | — | — | — | — | — | ||||||||||||||||||
Agriculture, forestry and fishing | 3,097 | 1 | — | — | — | — | ||||||||||||||||||
Financial, investment and insurance | 17,553 | — | 1 | — | — | — | ||||||||||||||||||
Real estate: | ||||||||||||||||||||||||
Mortgage(1) | 23,267 | 6 | 2 | — | — | — | ||||||||||||||||||
Construction(2) | 294 | 4 | — | — | — | — | ||||||||||||||||||
Personal | 524 | 2 | 2 | 7 | (5 | ) | 2 | |||||||||||||||||
Lease financing | 139 | — | — | — | — | — | ||||||||||||||||||
Other commercial and industrial | 14,686 | 1 | — | 4 | — | 4 | ||||||||||||||||||
Total Overseas | 60,464 | 14 | 5 | 11 | (5 | ) | 6 | |||||||||||||||||
Gross Balances | 342,581 | 326 | 171 | 497 | (127 | ) | 370 | |||||||||||||||||
Other Risk Concentrations | ||||||||||||||||||||||||
Receivables due from other financial institutions | 7,033 | |||||||||||||||||||||||
Deposits with regulatory authorities | 74 | |||||||||||||||||||||||
Total Gross Credit Risk | 349,688 | |||||||||||||||||||||||
(1) | Principally owner occupied housing . | |
(2) | Primarily financing real estate and land development projects. |
152 Commonwealth Bank of Australia Annual Report 2006
Provisions | ||||||||||||||||||||||||
Impaired | for | Net | ||||||||||||||||||||||
Total Risk | Assets | Impairment | Write-offs | Recoveries | Write-offs | |||||||||||||||||||
Industry | $M | $M | $M | $M | $M | $M | ||||||||||||||||||
Australia | ||||||||||||||||||||||||
Government and public authorities | 7,125 | — | — | — | — | — | ||||||||||||||||||
Agriculture, forestry and fishing | 5,029 | 76 | 16 | 1 | (2 | ) | (1 | ) | ||||||||||||||||
Financial, investment and insurance | 35,015 | 6 | 1 | 4 | (3 | ) | 1 | |||||||||||||||||
Real estate: | ||||||||||||||||||||||||
Mortgage(1) (3) | 134,913 | 32 | 3 | 8 | (1 | ) | 7 | |||||||||||||||||
Construction(2) | 2,211 | 2 | 7 | 4 | (1 | ) | 3 | |||||||||||||||||
Personal | 14,970 | 46 | 63 | 280 | (60 | ) | 220 | |||||||||||||||||
Lease financing | 5,055 | 8 | 5 | 4 | (1 | ) | 3 | |||||||||||||||||
Other commercial and industrial(3) | 54,837 | 211 | 49 | 83 | (8 | ) | 75 | |||||||||||||||||
Total Australia | 259,155 | 381 | 144 | 384 | (76 | ) | 308 | |||||||||||||||||
Overseas | ||||||||||||||||||||||||
Government and public authorities | 1,385 | — | — | — | — | — | ||||||||||||||||||
Agriculture, forestry and fishing | 3,392 | 1 | — | — | — | — | ||||||||||||||||||
Financial, investment and insurance | 15,736 | — | 1 | — | — | — | ||||||||||||||||||
Real estate: | ||||||||||||||||||||||||
Mortgage(1) | 21,747 | 7 | 11 | 6 | — | 6 | ||||||||||||||||||
Construction(2) | 346 | — | — | — | — | — | ||||||||||||||||||
Personal | 581 | 4 | 1 | — | (4 | ) | (4 | ) | ||||||||||||||||
Lease financing | 195 | — | — | — | — | — | ||||||||||||||||||
Other commercial and industrial | 10,667 | 2 | — | 1 | (1 | ) | — | |||||||||||||||||
Total Overseas | 54,049 | 14 | 13 | 7 | (5 | ) | 2 | |||||||||||||||||
Gross Balances | 313,204 | 395 | 157 | 391 | (81 | ) | 310 | |||||||||||||||||
Other Risk Concentrations | ||||||||||||||||||||||||
Receivables due from other financial institutions | 6,042 | |||||||||||||||||||||||
Deposits with regulatory authorities | 45 | |||||||||||||||||||||||
Total Gross Credit Risk | 319,291 | |||||||||||||||||||||||
(1) | Principally owner occupied housing. | |
(2) | Primarily financing real estate and land development projects. | |
(3) | Certain of these loans have been reclassified for consistency. |
2006 | 2005 | |||||||
Number | Number | |||||||
5% to less than 10% of Group’s capital resources | — | 1 | ||||||
10% to less than 15% of Group’s capital resources | — | — | ||||||
Commonwealth Bank of Australia Annual Report 2006 153
2006 | 2005 | |||||||
Industry | $M | $M | ||||||
Australia | ||||||||
Government and public authorities | 1,528 | 3,000 | ||||||
Agriculture, forestry and fishing | 3,307 | 3,213 | ||||||
Financial, investment and insurance | 9,683 | 5,882 | ||||||
Real estate: | ||||||||
Mortgage(1) | 144,834 | 129,913 | ||||||
Construction(2) | 2,085 | 1,694 | ||||||
Personal | 16,001 | 14,504 | ||||||
Lease financing | 4,924 | 5,055 | ||||||
Other commercial and industrial | 37,392 | 31,201 | ||||||
Total Australia | 219,754 | 194,462 | ||||||
Overseas | ||||||||
Government and public authorities | 380 | 216 | ||||||
Agriculture, forestry and fishing | 3,094 | 3,372 | ||||||
Financial, investment and insurance | 8,003 | 7,027 | ||||||
Real estate: | ||||||||
Mortgage(1) | 22,287 | 20,765 | ||||||
Construction(2) | 268 | 271 | ||||||
Personal | 521 | 552 | ||||||
Lease financing | 139 | 195 | ||||||
Other commercial and industrial | 7,526 | 4,624 | ||||||
Total Overseas | 42,218 | 37,022 | ||||||
Gross loans, Advances and Other Receivables | 261,972 | 231,484 | ||||||
Provisions for bad debts, unearned income, interest reserved and unearned tax remissions on leveraged leases(3) | (2,796 | ) | (3,138 | ) | ||||
Net Loans, Advances and Other Receivables | 259,176 | 228,346 | ||||||
(1) | Principally owner occupied housing. | |
(2) | Primarily financing real estate and land development projects. | |
(3) | Interest reserved not recognised under AIFRS from 1 July 2005. |
154 Commonwealth Bank of Australia Annual Report 2006
• | Any credit risk facility against which an individually assessed provision for impairment has been raised; |
• | Any credit risk facility maintained on a cash basis because of significant deterioration in the financial position of the borrower; and |
• | Any credit risk facility where loss of principal or interest is anticipated. |
• | Credit risk facilities on which the original contractual terms have been modified due to financial difficulties of the borrower. Interest on these facilities is taken to profit and loss. Failure to comply fully with the modified terms will result in immediate reclassification to non-performing. |
• | Other Real Estate Owned (OREO), comprising real estate where the Group assumed ownership or foreclosed in settlement of a debt; and |
• | Other Assets Acquired through Securities Enforcement (OAATSE), comprising assets other than real estate where the Group has assumed ownership or foreclosed in settlement of a debt. |
2006 | 2005 | |||||||
% | % | |||||||
Impaired Asset Ratios | ||||||||
Gross impaired asset ratios net of interest reserved as a % of risk weighted assets | 0.15 | 0.20 | ||||||
Net impaired assets as % of: | ||||||||
Risk weighted assets | 0.07 | 0.12 | ||||||
Total shareholders’ equity | 0.73 | 0.97 | ||||||
Commonwealth Bank of Australia Annual Report 2006 155
Group | ||||||||
2006 | 2005 | |||||||
$M | $M | |||||||
Australia | ||||||||
Non-Performing loans: | ||||||||
Gross balances | 312 | 381 | ||||||
Less interest reserved(1) | — | (19 | ) | |||||
Gross balances (net of interest reserved) | 312 | 362 | ||||||
Less provisions for impairment | (166 | ) | (144 | ) | ||||
Net Non-Performing Loans | 146 | 218 | ||||||
Restructured loans: | ||||||||
Gross balances | — | — | ||||||
Less interest reserved(1) | — | — | ||||||
Gross balances (net of interest reserved) | — | — | ||||||
Less specific provisions | — | — | ||||||
Net Restructured Loans | — | — | ||||||
Assets Acquired Through Security Enforcement (AATSE): | ||||||||
Gross balances | — | — | ||||||
Less provisions for impairment | — | — | ||||||
Net AATSE | — | — | ||||||
Net Australian Impaired assets | 146 | 218 | ||||||
Overseas | ||||||||
Non-Performing loans | ||||||||
Gross balances | 14 | 14 | ||||||
Less interest reserved(1) | — | — | ||||||
Gross balances (net of interest reserved) | 14 | 14 | ||||||
Less provisions for impairment | (5 | ) | (13 | ) | ||||
Net Non-Performing Loans | 9 | 1 | ||||||
Restructured loans: | ||||||||
Gross balances | — | — | ||||||
Less interest reserved(1) | — | — | ||||||
Gross balances (net of interest reserved) | — | — | ||||||
Less specific provisions | — | — | ||||||
Net Restructured Loans | — | — | ||||||
Asset Acquired Through Security Enforcement (AATSE) | ||||||||
Gross Balance | — | — | ||||||
Less provisions for impairment | — | — | ||||||
Net AATSE | — | — | ||||||
Net overseas impaired assets | 9 | 1 | ||||||
Total Net Impaired Assets | 155 | 219 | ||||||
(1) | Interest reserved not recognised under AIFRS from 1 July 2005. |
156 Commonwealth Bank of Australia Annual Report 2006
Movement in Impaired Asset Balances
The following table provides an analysis of the movement in the gross impaired asset balances for financial years 2005 and 2006.
Group | ||||||||
2006 | 2005 | |||||||
Gross Impaired Assets | $M | $M | ||||||
Gross impaired assets at beginning of period | 395 | 363 | ||||||
New and increased | 745 | 769 | ||||||
Balances written off | (450 | ) | (350 | ) | ||||
Returned to performing or repaid | (364 | ) | (387 | ) | ||||
Gross Impaired Assets at Period End | 326 | 395 | ||||||
Group | ||||||||
2006 | 2005 | |||||||
Loans Performing Past Due 90 Days or More | $M | $M | ||||||
Housing loans | 155 | 183 | ||||||
Other loans | 137 | 119 | ||||||
Total Loans Performing Past Due | 292 | 302 | ||||||
Group | ||||||||
2006 | 2005 | |||||||
Net Interest Forgone on Impaired Assets | $M | $M | ||||||
Australia non-performing facilities | 11 | 13 | ||||||
Overseas non-performing facilities | — | — | ||||||
Total Interest Forgone | 11 | 13 | ||||||
Group | ||||||||
2006 | 2005 | |||||||
Interest Taken to Profit on Impaired Assets | $M | $M | ||||||
Australia | ||||||||
Non-performing facilities | 11 | 9 | ||||||
Restructured facilities | — | — | ||||||
Overseas | ||||||||
Non-performing facilities | — | — | ||||||
Other real estate owned | — | — | ||||||
Total Interest Taken to Profit | 11 | 9 | ||||||
Impaired Assets
Group | ||||||||||||||||||||||||
Australia | Overseas | Total | Australia | Overseas | Total | |||||||||||||||||||
2006 | 2006 | 2006 | 2005 | 2005 | 2005 | |||||||||||||||||||
$M | $M | $M | $M | $M | $M | |||||||||||||||||||
Non-Performing Loans | ||||||||||||||||||||||||
With provisions | 172 | 10 | 182 | 235 | 14 | 249 | ||||||||||||||||||
Without provisions | 140 | 4 | 144 | 146 | — | 146 | ||||||||||||||||||
Gross balances | 312 | 14 | 326 | 381 | 14 | 395 | ||||||||||||||||||
Less interest reserved(1) | — | — | — | (19 | ) | — | (19 | ) | ||||||||||||||||
Net balances | 312 | 14 | 326 | 362 | 14 | 376 | ||||||||||||||||||
Less provisions for impairment | (166 | ) | (5 | ) | (171 | ) | (144 | ) | (13 | ) | (157 | ) | ||||||||||||
Net Non-Performing Loans | 146 | 9 | 155 | 218 | 1 | 219 | ||||||||||||||||||
Restructured Loans | ||||||||||||||||||||||||
Gross balances | — | — | — | — | — | — | ||||||||||||||||||
Less interest reserved(1) | — | — | — | — | — | — | ||||||||||||||||||
Net balances | — | — | — | — | — | — | ||||||||||||||||||
Less provisions for impairment | — | — | — | — | — | — | ||||||||||||||||||
Net Restructured Loans | — | — | — | — | — | — | ||||||||||||||||||
Other Real Estate Owned (OREO)(2) | ||||||||||||||||||||||||
Gross balances | — | — | — | — | — | — | ||||||||||||||||||
Less provisions for impairment | — | — | — | — | — | — | ||||||||||||||||||
Net OREO | — | — | — | — | — | — | ||||||||||||||||||
Other Assets Acquired Through Security Enforcement (OAATSE)(2) | ||||||||||||||||||||||||
Gross balances | — | — | — | — | — | — | ||||||||||||||||||
Less provisions for impairment | — | — | — | — | — | — | ||||||||||||||||||
Net OAATSE | — | — | — | — | — | — | ||||||||||||||||||
Total Impaired Assets | ||||||||||||||||||||||||
Gross balances | 312 | 14 | 326 | 381 | 14 | 395 | ||||||||||||||||||
Less interest reserved | — | — | — | (19 | ) | — | (19 | ) | ||||||||||||||||
Net balances | 312 | 14 | 326 | 362 | 14 | 376 | ||||||||||||||||||
Less provisions for impairment | (166 | ) | (5 | ) | (171 | ) | (144 | ) | (13 | ) | (157 | ) | ||||||||||||
Net Impaired Assets | 146 | 9 | 155 | 218 | 1 | 219 | ||||||||||||||||||
Non-Performing Loans by Size of Loan | ||||||||||||||||||||||||
Less than $1 million | 140 | 11 | 151 | 119 | 13 | 132 | ||||||||||||||||||
$1 million to $10 million | 125 | 3 | 128 | 116 | 1 | 117 | ||||||||||||||||||
Greater than $10 million | 47 | — | 47 | 146 | — | 146 | ||||||||||||||||||
Total | 312 | 14 | 326 | 381 | 14 | 395 | ||||||||||||||||||
Performing Loans 90 days past due or more(3) | 250 | 42 | 292 | 267 | 35 | 302 | ||||||||||||||||||
(1) | Interest reserved not recognised under AIFRS from 1 July 2005. | |
(2) | Other real estate owned and other assets acquired through security enforcement are sold through the Bank’s existing disposal processes. These processes are expected to take no longer than 6 months. | |
(3) | Comprising loans less than $250,000 in accordance with regulatory returns to APRA. They are not classified as Impaired Assets and therefore are not included within Impaired Assets. |
Bank | ||||||||
2006 | 2005 | |||||||
$M | $M | |||||||
Shares in controlled entities | 21,619 | 17,634 | ||||||
Loans to controlled entities | 14,531 | 11,527 | ||||||
Total Shares in and Loans to Controlled Entities | 36,150 | 29,161 | ||||||
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Investment Property | 258 | 252 | — | — | ||||||||||||
Group | ||||||||
2006 | 2005 | |||||||
$M | $M | |||||||
Rental income(1) | 17 | 15 | ||||||
Net gains or losses from fair value adjustments(1) | 6 | — | ||||||
Direct operating expenses(2) | (2 | ) | (2 | ) | ||||
Total | 21 | 13 | ||||||
(1) | This income is disclosed as part of Other Operating Income – Other in Note 2 | |
(2) | This expense is disclosed as part of Other Operating Income – Other in Note 2 |
Group | ||||||||
2006 | 2005 | |||||||
Investment Property (reconciliation) | $M | $M | ||||||
Opening balance | 252 | 252 | ||||||
Net gains or losses from fair value adjustments | 6 | — | ||||||
Closing balance | 258 | 252 | ||||||
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Land and Buildings | ||||||||||||||||
Land | ||||||||||||||||
At 30 June 2006 valuation | 199 | — | 182 | — | ||||||||||||
At 30 June 2005 valuation | — | 174 | — | 159 | ||||||||||||
Closing balance | 199 | 174 | 182 | 159 | ||||||||||||
Buildings | ||||||||||||||||
At 30 June 2006 valuation | 288 | — | 263 | — | ||||||||||||
At 30 June 2005 valuation | — | 293 | — | 257 | ||||||||||||
Closing balance | 288 | 293 | 263 | 257 | ||||||||||||
Total Land and Buildings | 487 | 467 | 445 | 416 | ||||||||||||
Leasehold Improvements | ||||||||||||||||
At cost | 732 | 702 | 633 | 582 | ||||||||||||
Provision for depreciation | (416 | ) | (409 | ) | (362 | ) | (337 | ) | ||||||||
Closing balance | 316 | 293 | 271 | 245 | ||||||||||||
Equipment | ||||||||||||||||
At cost | 794 | 735 | 511 | 406 | ||||||||||||
Provision for depreciation | (505 | ) | (486 | ) | (301 | ) | (253 | ) | ||||||||
Closing balance | 289 | 249 | 210 | 153 | ||||||||||||
Assets under Lease | ||||||||||||||||
At cost | 238 | 124 | 100 | — | ||||||||||||
Provision for depreciation | (17 | ) | (8 | ) | — | — | ||||||||||
Closing balance | 221 | 116 | 100 | — | ||||||||||||
Assets held for sale | ||||||||||||||||
At 30 June 2006 valuation | 1 | — | 1 | — | ||||||||||||
At 30 June 2005 valuation | — | 7 | — | 7 | ||||||||||||
Closing balance | 1 | 7 | 1 | 7 | ||||||||||||
Total Property, Plant and Equipment | 1,314 | 1,132 | 1,027 | 821 | ||||||||||||
Assets held for sale comprise: | ||||||||||||||||
Land | — | 5 | — | 5 | ||||||||||||
Buildings | 1 | 2 | 1 | 2 | ||||||||||||
Total Assets Held For Sale | 1 | 7 | 1 | 7 | ||||||||||||
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Carrying Amount of Land and Buildings under the Cost Model: | ||||||||||||||||
Land | 125 | 119 | 122 | 115 | ||||||||||||
Buildings | 225 | 229 | 210 | 201 | ||||||||||||
Total Land and Buildings | 350 | 348 | 332 | 316 | ||||||||||||
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Reconciliation | $M | $M | $M | $M | ||||||||||||
Land | ||||||||||||||||
Opening balance | 174 | 172 | 159 | 159 | ||||||||||||
Acquisitions | 9 | — | 8 | — | ||||||||||||
Disposals/transfers to “Assets held-for-sale” | 5 | (11 | ) | 5 | (11 | ) | ||||||||||
Disposals | (6 | ) | — | (6 | ) | — | ||||||||||
Net revaluations | 19 | 13 | 16 | 11 | ||||||||||||
FX translation adjustment | (2 | ) | — | — | — | |||||||||||
Closing balance | 199 | 174 | 182 | 159 | ||||||||||||
Buildings | ||||||||||||||||
Opening balance | 293 | 288 | 257 | 250 | ||||||||||||
Acquisitions | 38 | 22 | 35 | 22 | ||||||||||||
Acquisitions attributed to business combinations | 2 | — | — | — | ||||||||||||
Disposals/transfers to “Assets held-for-sale” | (13 | ) | (11 | ) | 1 | (12 | ) | |||||||||
Disposals | (7 | ) | — | (6 | ) | — | ||||||||||
Net revaluations | (1 | ) | 15 | (3 | ) | 17 | ||||||||||
Depreciation | (22 | ) | (21 | ) | (21 | ) | (20 | ) | ||||||||
FX translation adjustment | (2 | ) | — | — | — | |||||||||||
Closing balance | 288 | 293 | 263 | 257 | ||||||||||||
Leasehold Improvements | ||||||||||||||||
Opening balance | 293 | 281 | 245 | 235 | ||||||||||||
Acquisitions | 87 | 78 | 77 | 62 | ||||||||||||
Acquisitions attributed to business combinations | 9 | — | — | — | ||||||||||||
Disposals | (6 | ) | (8 | ) | (5 | ) | (6 | ) | ||||||||
Transfers | (7 | ) | — | — | — | |||||||||||
Depreciation | (56 | ) | (58 | ) | (46 | ) | (46 | ) | ||||||||
FX translation adjustment | (4 | ) | — | — | — | |||||||||||
Closing balance | 316 | 293 | 271 | 245 | ||||||||||||
Equipment | ||||||||||||||||
Opening balance | 249 | 191 | 153 | 108 | ||||||||||||
Adjustment to opening balance | (1 | ) | — | (1 | ) | — | ||||||||||
Acquisitions | 136 | 115 | 109 | 80 | ||||||||||||
Disposals/transfers | (13 | ) | 12 | — | — | |||||||||||
Depreciation | (80 | ) | (69 | ) | (51 | ) | (35 | ) | ||||||||
FX translation adjustment | (2 | ) | — | — | — | |||||||||||
Closing balance | 289 | 249 | 210 | 153 | ||||||||||||
Assets Under Lease | ||||||||||||||||
Opening balance | 116 | 75 | — | — | ||||||||||||
Acquisitions | 114 | 71 | 100 | — | ||||||||||||
Disposals/transfers | — | (22 | ) | — | — | |||||||||||
Depreciation | (9 | ) | (8 | ) | — | — | ||||||||||
Closing balance | 221 | 116 | 100 | — | ||||||||||||
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Intangible Assets | ||||||||||||||||
Goodwill | 7,200 | 7,214 | 2,522 | 2,522 | ||||||||||||
Computer software costs | 229 | 182 | 212 | 153 | ||||||||||||
Other | 380 | 260 | 4 | — | ||||||||||||
Total Intangible Assets | 7,809 | 7,656 | 2,738 | 2,675 | ||||||||||||
Goodwill | ||||||||||||||||
Purchased goodwill – Colonial | 6,705 | 6,705 | 2,229 | 2,229 | ||||||||||||
Purchased goodwill – other | 495 | 509 | 293 | 293 | ||||||||||||
Total goodwill | 7,200 | 7,214 | 2,522 | 2,522 | ||||||||||||
Computer Software Costs | ||||||||||||||||
Cost | 290 | 206 | 268 | 172 | ||||||||||||
Accumulated amortisation | (61 | ) | (24 | ) | (56 | ) | (19 | ) | ||||||||
Total computer software costs | 229 | 182 | 212 | 153 | ||||||||||||
Other(1) | ||||||||||||||||
Cost | 393 | 267 | 4 | — | ||||||||||||
Accumulated amortisation | (13 | ) | (7 | ) | — | — | ||||||||||
Total other | 380 | 260 | 4 | — | ||||||||||||
Goodwill (reconciliation) | ||||||||||||||||
Opening balance | 7,214 | 7,184 | 2,522 | 2,522 | ||||||||||||
Additions | 7 | 30 | — | — | ||||||||||||
Impairment | (21 | ) | — | — | — | |||||||||||
Closing balance | 7,200 | 7,214 | 2,522 | 2,522 | ||||||||||||
Computer Software Costs (reconciliation) | ||||||||||||||||
Opening balance | 182 | 107 | 153 | 78 | ||||||||||||
Additions: | ||||||||||||||||
From internal development | 90 | 92 | 95 | 87 | ||||||||||||
Amortisation | (43 | ) | (17 | ) | (36 | ) | (12 | ) | ||||||||
Closing balance | 229 | 182 | 212 | 153 | ||||||||||||
Other (reconciliation) | ||||||||||||||||
Opening balance | 260 | 250 | — | — | ||||||||||||
Additions: | ||||||||||||||||
From acquisitions | 126 | 13 | 4 | — | ||||||||||||
Amortisation | (6 | ) | (3 | ) | — | — | ||||||||||
Closing balance | 380 | 260 | 4 | — | ||||||||||||
(1) | Other principally comprises customer lists and $311 million of management fee rights. Management fee rights have an indefinite useful life under the contractual terms of the management agreements and are subject to an independent valuation for impairment testing purposes. No impairment was required as a result of this valuation. |
Segment Allocation of Goodwill
The Group’s carrying amount of goodwill for each segment of business is shown below.
Group | ||||||||
2006 | 2005 | |||||||
Segment | $M | $M | ||||||
Banking(1) | 4,360 | 4,353 | ||||||
Funds Management(2) | 2,267 | 2,288 | ||||||
Insurance(2) | 573 | 573 | ||||||
Total | 7,200 | 7,214 | ||||||
(1) | The allocation to banking includes goodwill related to the acquisitions of Colonial, State Bank of Victoria and 25% of ASB Bank. | |
(2) | The allocation to funds management and insurance principally related to the goodwill on acquisition of Colonial. |
Group | ||||||||||||||||||||||||
At 30 June 2006 | ||||||||||||||||||||||||
Funds | ||||||||||||||||||||||||
Management | Funds | Australian | ||||||||||||||||||||||
Australian | (Excluding | Management | Life | New Zealand | New Zealand | |||||||||||||||||||
Retail Banking | Property) | (Property) | Insurance | Banking | Life Insurance | |||||||||||||||||||
$M | $M | $M | $M | $M | $M | |||||||||||||||||||
Carrying amount of goodwill | 4,149 | 2,189 | 78 | 131 | 211 | 442 | ||||||||||||||||||
Group | Bank | |||||||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||||||
Note | $M | $M | $M | $M | ||||||||||||||||
Accrued interest receivable | 1,346 | 1,197 | 1,329 | 1,503 | ||||||||||||||||
Shares in other companies | n/a | 267 | n/a | 133 | ||||||||||||||||
Defined benefit superannuation plan surplus | 44 | 1,228 | 717 | 1,228 | 717 | |||||||||||||||
Accrued fees/reimbursements receivable | 669 | 641 | 385 | 507 | ||||||||||||||||
Securities sold not delivered | 1,088 | 907 | 659 | 625 | ||||||||||||||||
Unrealised gains on trading derivatives | 43 | n/a | (1) | 12,144 | n/a | (1) | 12,043 | |||||||||||||
Intergroup current tax receivable | — | — | 217 | 55 | ||||||||||||||||
Intergroup deferred tax receivable | — | — | — | (2) | 549 | |||||||||||||||
Other | 810 | 1,561 | 806 | 1,022 | ||||||||||||||||
Total Other Assets | 5,141 | 17,434 | 4,624 | 17,154 | ||||||||||||||||
(1) | Under AIFRS, a gain or loss on trading derivatives, including unrealised amounts, is recognised immediately in profit or loss. | |
(2) | For 2005, UIG Abstract 52 required current and deferred taxes under tax funding arrangements for tax consolidated subsidiaries to be recognised as inter-company balances. For 2006, UIG Interpretation 1052 requires subsidiaries in a tax consolidated group to recognise deferred taxes relating to temporary differences. |
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Australia | ||||||||||||||||
Certificates of deposit | 18,185 | 16,041 | 18,185 | 16,041 | ||||||||||||
Term deposits | 43,210 | 41,582 | 41,611 | 39,993 | ||||||||||||
On demand and short term deposit | 81,547 | 75,407 | 83,913 | 75,806 | ||||||||||||
Deposits not bearing interest | 5,872 | 5,823 | 5,876 | 5,853 | ||||||||||||
Securities sold under agreements to repurchase and short sales | 1,380 | 2,258 | 1,380 | 2,258 | ||||||||||||
Total Australia | 150,194 | 141,111 | 150,965 | 139,951 | ||||||||||||
Overseas | ||||||||||||||||
Certificates of deposit | 959 | 3,105 | 959 | 386 | ||||||||||||
Term deposits | 13,790 | 13,617 | 3,922 | 2,998 | ||||||||||||
On demand and short term deposits | 7,088 | 8,633 | 71 | 113 | ||||||||||||
Deposits not bearing interest | 1,166 | 1,155 | 9 | 5 | ||||||||||||
Securities sold under agreements to repurchase and short sales | 30 | 405 | 30 | 405 | ||||||||||||
Total Overseas | 23,033 | 26,915 | 4,991 | 3,907 | ||||||||||||
Total Deposits and Other Public Borrowings | 173,227 | 168,026 | 155,956 | 143,858 | ||||||||||||
Group | ||||||||||||||||||||
At 30 June 2006 | ||||||||||||||||||||
Maturing | Maturing | Maturing | Maturing | |||||||||||||||||
Three Months | Between Three | Between Six & | After | |||||||||||||||||
or Less | & Six Months | Twelve Months | Twelve Months | Total | ||||||||||||||||
$M | $M | $M | $M | $M | ||||||||||||||||
Australia | ||||||||||||||||||||
Certificates of deposit(1) | 12,605 | 1,769 | 2,388 | 1,423 | 18,185 | |||||||||||||||
Time deposits | 26,137 | 7,401 | 8,447 | 1,225 | 43,210 | |||||||||||||||
Total Australia | 38,742 | 9,170 | 10,835 | 2,648 | 61,395 | |||||||||||||||
Overseas | ||||||||||||||||||||
Certificates of deposit(1) | 551 | 17 | 390 | 1 | 959 | |||||||||||||||
Time deposits | 9,479 | 2,482 | 1,273 | 377 | 13,611 | |||||||||||||||
Total Overseas | 10,030 | 2,499 | 1,663 | 378 | 14,570 | |||||||||||||||
Total Certificates of Deposit and Time Deposits | 48,772 | 11,669 | 12,498 | 3,026 | 75,965 | |||||||||||||||
(1) | All certificates of deposit issued by the Bank are for amounts greater than $100,000. |
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Australia | 3,354 | 2,708 | 3,353 | 2,712 | ||||||||||||
Overseas | 7,830 | 5,315 | 7,778 | 5,257 | ||||||||||||
Total Payables to Other Financial Institutions | 11,184 | 8,023 | 11,131 | 7,969 | ||||||||||||
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Deposits and other borrowings | 8,238 | 2,085 | ||||||||||||||
Debt instruments | 5,573 | — | ||||||||||||||
Total Liabilities at Fair Value through Income Statement(1) | 13,811 | n/a | 2,085 | n/a | ||||||||||||
(1) | Liabilities at fair value through Income Statement have been designated to this category at inception as they are managed on a fair value basis by the Group. Designating these liabilities at fair value through Income Statement has also eliminated an accounting mismatch created by measuring assets and liabilities on a different basis. |
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Australia | ||||||||||||||||
Current tax liability | 368 | 808 | 329 | 757 | ||||||||||||
Deferred tax liability (Note 5) | 1,234 | 861 | 640 | 872 | ||||||||||||
Total Australia | 1,602 | 1,669 | 969 | 1,629 | ||||||||||||
Overseas | ||||||||||||||||
Current tax liability | 10 | 25 | 5 | 7 | ||||||||||||
Deferred tax liability (Note 5) | 102 | 60 | — | — | ||||||||||||
Total Overseas | 112 | 85 | 5 | 7 | ||||||||||||
Total Income Tax Liability | 1,714 | 1,754 | 974 | 1,636 | ||||||||||||
Group | Bank | |||||||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||||||
Note | $M | $M | $M | $M | ||||||||||||||||
Provision for: | ||||||||||||||||||||
Long service leave | 280 | 296 | 267 | 285 | ||||||||||||||||
Annual leave | 186 | 146 | 167 | 126 | ||||||||||||||||
Other employee entitlements | 66 | 58 | 66 | 62 | ||||||||||||||||
Which new Bank costs | — | 91 | — | 91 | ||||||||||||||||
Restructuring costs | 37 | 18 | 37 | 18 | ||||||||||||||||
General insurance contract outstanding claims | 85 | 100 | — | — | ||||||||||||||||
Self insurance/non-lending losses | 90 | 66 | 87 | 66 | ||||||||||||||||
Dividends | 6 | 6 | 14 | 6 | 14 | |||||||||||||||
Other | 71 | 82 | 60 | 41 | ||||||||||||||||
Total Other Provisions | 821 | 871 | 690 | 703 | ||||||||||||||||
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Reconciliation | $M | $M | $M | $M | ||||||||||||
Which new Bank costs: | ||||||||||||||||
Opening balance | 91 | 208 | 91 | 208 | ||||||||||||
Transfers | (46 | ) | (20 | ) | (46 | ) | (20 | ) | ||||||||
Amounts utilised during the year | (45 | ) | (97 | ) | (45 | ) | (97 | ) | ||||||||
Closing balance | — | 91 | — | 91 | ||||||||||||
Restructuring costs: | ||||||||||||||||
Opening balance | 18 | — | 18 | — | ||||||||||||
Additional provisions | 37 | 22 | 37 | 22 | ||||||||||||
Amounts utilised during the year | (18 | ) | (4 | ) | (18 | ) | (4 | ) | ||||||||
Closing balance | 37 | 18 | 37 | 18 | ||||||||||||
General insurance claims: | ||||||||||||||||
Opening balance | 100 | 79 | — | — | ||||||||||||
Additional provisions | 32 | 61 | — | — | ||||||||||||
Amounts utilised during the year | (47 | ) | (40 | ) | — | — | ||||||||||
Closing balance | 85 | 100 | — | — | ||||||||||||
Self insurance/non-lending losses: | ||||||||||||||||
Opening balance | 66 | 60 | 66 | 59 | ||||||||||||
Additional provisions | 26 | 34 | 23 | 34 | ||||||||||||
Amounts utilised during the year | (2 | ) | (28 | ) | (2 | ) | (27 | ) | ||||||||
Closing balance | 90 | 66 | 87 | 66 | ||||||||||||
Other: | ||||||||||||||||
Opening balance | 82 | 122 | 41 | 49 | ||||||||||||
Additional provisions | 59 | 29 | 54 | 24 | ||||||||||||
Amounts utilised during the year | (66 | ) | (69 | ) | (35 | ) | (32 | ) | ||||||||
FX translation adjustment | (4 | ) | — | — | — | |||||||||||
Closing balance | 71 | 82 | 60 | 41 | ||||||||||||
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Short Term Debt Issues | 22,838 | 26,864 | 11,034 | 9,500 | ||||||||||||
Long Term Debt Issues | 55,753 | 43,901 | 41,164 | 31,187 | ||||||||||||
Total Debt Issues | 78,591 | 70,765 | 52,198 | 40,687 | ||||||||||||
Short Term Debt Issues | ||||||||||||||||
AUD Promissory Notes | 1,081 | 1,214 | — | — | ||||||||||||
AUD Bank Bills | 505 | 624 | — | — | ||||||||||||
US Commercial Paper | 6,861 | 10,661 | — | — | ||||||||||||
Euro Commercial Paper | 4,248 | 4,976 | 4,248 | 3,065 | ||||||||||||
Other | 6 | — | 6 | — | ||||||||||||
Long Term Debt Issues with less than one year to maturity | 10,137 | 9,389 | 6,780 | 6,435 | ||||||||||||
Total Short Term Debt Issues | 22,838 | 26,864 | 11,034 | 9,500 | ||||||||||||
Long Term Debt Issues | ||||||||||||||||
USD Medium Term Notes | 29,475 | 22,967 | 27,172 | 15,680 | ||||||||||||
AUD Medium Term Notes | 12,479 | 7,122 | 4,232 | 6,272 | ||||||||||||
JPY Medium Term Notes | 1,785 | 868 | 1,785 | 692 | ||||||||||||
GBP Medium Term Notes | 4,088 | 4,401 | 2,084 | 2,736 | ||||||||||||
Other Currencies Medium Term Notes | 5,102 | 6,596 | 4,897 | 5,807 | ||||||||||||
Offshore Loans (all JPY) | 147 | — | 147 | — | ||||||||||||
Develop Australia bonds (all AUD) | 217 | — | — | — | ||||||||||||
Eurobonds | 2,460 | 1,947 | 847 | — | ||||||||||||
Total Long Term Debt Issues | 55,753 | 43,901 | 41,164 | 31,187 | ||||||||||||
Maturity Distribution of Debt Issues | ||||||||||||||||
Less than 3 months | 8,138 | 12,443 | 5,640 | 6,006 | ||||||||||||
Between 3 months to 12 months | 14,700 | 17,681 | 5,394 | 3,493 | ||||||||||||
Between 1 year and 5 years | 40,874 | 30,656 | 30,428 | 21,320 | ||||||||||||
Greater than 5 years | 14,879 | 9,985 | 10,736 | 9,868 | ||||||||||||
Total Debt Issues | 78,591 | 70,765 | 52,198 | 40,687 | ||||||||||||
• | USD medium term notes: between 1 and 5 years — USD 60 million (AUD 81 million); greater than 5 years — USD 258 million (AUD 347 million); | |
• | CHF medium term notes: between 1 and 5 years — CHF 200 million (AUD 218 million); | |
• | EUR medium term notes: greater than 5 years — EUR 5 million (AUD 8 million); | |
• | JPY medium term notes: between 1 and 5 years — JPY 25 billion (AUD 297 million); greater than 5 years — JPY 1.5 billion (AUD 18 million); | |
• | NZD medium term notes: between 1 and 5 years — NZD 10 million (AUD 8 million); | |
• | AUD medium term notes: between 1 and 5 years — AUD 6 million; | |
• | GBP medium term notes: greater than 5 years — GBP 3 million (AUD 7 million); and | |
• | HKD medium term notes: between 1 and 5 years — HKD 380 million (AUD 66 million). |
Group | ||||||||
2006 | 2005 | |||||||
(AUD Millions, except where | ||||||||
indicated) | ||||||||
US Commercial Paper | ||||||||
Outstanding at period end(1) | 6,861 | 10,661 | ||||||
Maximum amount outstanding at any month end(2) | 13,717 | 10,698 | ||||||
Approximate average amount outstanding | 9,754 | 10,341 | ||||||
Approximate weighted average rate on: | ||||||||
Average amount outstanding | 4.4 | % | 1.2 | % | ||||
Outstanding at period end | 5.2 | % | 1.5 | % | ||||
Euro Commercial Paper | ||||||||
Outstanding at period end(1) | 4,248 | 4,976 | ||||||
Maximum amount outstanding at any month end(2) | 4,441 | 6,146 | ||||||
Approximate average amount outstanding(2) | 3,177 | 3,800 | ||||||
Approximate weighted average rate on: | ||||||||
Average amount outstanding | 4.4 | % | 2.2 | % | ||||
Outstanding at period end | 5.2 | % | 2.8 | % | ||||
Other Commercial Paper | ||||||||
Outstanding period end(1) | 1,592 | 1,838 | ||||||
Maximum amount outstanding at any month end(2) | 2,665 | 2,110 | ||||||
Approximate average amount outstanding(2) | 1,880 | 1,790 | ||||||
Approximate weighted average rate on: | ||||||||
Average amount outstanding | 6.3 | % | 5.8 | % | ||||
Outstanding at period end | 6.4 | % | 5.7 | % | ||||
(1) | The amount outstanding at period end is reported on a book value basis (amortised cost). | |
(2) | The maximum and average amounts over the period are reported on a face value basis because the book values of these amounts are not available. Any differences between face value and book value would not be material given the short term nature of the borrowings. |
As at | As at | |||||||||
30 June | 30 June | |||||||||
Exchange Rates Utilised | Currency | 2006 | 2005 | |||||||
AUD 1.00 = | USD | 0.7428 | 0.7643 | |||||||
EUR | 0.5848 | 0.6313 | ||||||||
GBP | 0.4053 | 0.4223 | ||||||||
JPY | 85.276 | 84.165 | ||||||||
NZD | 1.214 | 1.090 | ||||||||
HKD | 5.770 | 5.940 | ||||||||
CAD | 0.8247 | 0.9399 | ||||||||
CHF | 0.917 | 0.978 | ||||||||
IDR | 6,880 | 7,425 | ||||||||
THB | 28.355 | 31.531 | ||||||||
FJD | 1.304 | 1.301 | ||||||||
• | All demand deposits and term deposits were guaranteed for a period of three years from 19 July 1996, with term deposits outstanding at the end of that three year period being guaranteed until maturity; and | |
• | All other amounts payable under a contract that was entered into, or under an instrument executed, issued, endorsed or accepted by the Bank at 19 July 1996 will be guaranteed until their maturity. |
• | All lending assets as at 30 June 1996 have been quarantined in CDBL, consistent with the charter terms on which they were written; | |
• | The CDBL’s liabilities continue to remain guaranteed by the Commonwealth of Australia; and | |
• | CDBL ceased to write new business or incur additional liabilities from 1 July 1996. From that date, new business that would have previously been written by CDBL is being written by the rural arm of the Bank. |
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Managed funds units on issue | 1,109 | — | (1) | — | — | |||||||||||
(1) | Reclassified from Minority Interests under AIFRS, refer Note 34. |
Group | Bank | |||||||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||||||
Note | $M | $M | $M | $M | ||||||||||||||||
Bills payable | 830 | 928 | 773 | 863 | ||||||||||||||||
Accrued interest payable | 1,587 | 1,435 | 1,408 | 1,226 | ||||||||||||||||
Accrued fees and other items payable | 1,408 | 1,256 | 1,057 | 860 | ||||||||||||||||
Defined benefit superannuation plan deficit | 44 | 65 | 79 | 65 | 79 | |||||||||||||||
Securities purchased not delivered | 1,097 | 1,065 | 655 | 796 | ||||||||||||||||
Unrealised losses on trading derivatives | 43 | n/a | 11,914 | n/a | 11,854 | |||||||||||||||
Intergroup deferred tax payable | — | — | — | 60 | ||||||||||||||||
Other liabilities | 1,066 | 874 | 341 | 999 | ||||||||||||||||
Total Bills Payable and Other Liabilities | 6,053 | 17,551 | 4,299 | 16,737 | ||||||||||||||||
Group | Bank | |||||||||||||||||||||||
Currency | 2006 | 2005 | 2006 | 2005 | ||||||||||||||||||||
Amount (M) | Footnotes | $M | $M | $M | $M | |||||||||||||||||||
Tier 1 Loan Capital | ||||||||||||||||||||||||
Exchangeable | FRN | USD38 | (1) | 50 | 49 | 50 | 49 | |||||||||||||||||
Exchangeable | FRN | USD71 | (2) | 96 | 124 | 96 | 124 | |||||||||||||||||
Undated | FRN | USD100 | (3) | 135 | 131 | 135 | 131 | |||||||||||||||||
Undated | TPS | USD550 | (4) | 740 | — | 740 | 719 | |||||||||||||||||
Undated | PERLS II | AUD750 | (5) | 750 | — | 750 | — | |||||||||||||||||
Undated | PERLS III | AUD1,166 | (6) | 1,166 | — | 1,166 | — | |||||||||||||||||
Undated | TPS | USD700 | (7) | — | — | 942 | — | |||||||||||||||||
Total Tier 1 Loan Capital | 2,937 | 304 | 3,879 | 1,023 | ||||||||||||||||||||
Tier 2 Loan Capital | ||||||||||||||||||||||||
Extendible | FRN | AUD275 | (8) | 275 | 275 | 275 | 275 | |||||||||||||||||
Subordinated | FRN | AUD25 | (9) | 25 | 25 | 25 | 25 | |||||||||||||||||
Subordinated | Notes | USD300 | (10) | 404 | 549 | 404 | 549 | |||||||||||||||||
Subordinated | EMTN | JPY20,000 | (11) | 235 | 216 | 235 | 216 | |||||||||||||||||
Subordinated | EMTN | USD400 | (12) | 539 | 501 | 539 | 501 | |||||||||||||||||
Subordinated | EMTN | GBP200 | (13) | 493 | 408 | 493 | 408 | |||||||||||||||||
Subordinated | EMTN | JPY30,000 | (14) | 352 | 387 | 352 | 387 | |||||||||||||||||
Subordinated | Notes | AUD130 | (15) | — | 130 | — | 130 | |||||||||||||||||
Subordinated | Notes | USD350 | (16) | 471 | 536 | 471 | 536 | |||||||||||||||||
Subordinated | EMTN | GBP150 | (17) | 370 | 373 | 370 | 373 | |||||||||||||||||
Subordinated | MTN | AUD300 | (18) | 300 | 300 | 300 | 300 | |||||||||||||||||
Subordinated | FRN | AUD200 | (18) | 200 | 200 | 200 | 200 | |||||||||||||||||
Subordinated | EMTN | JPY10,000 | (19) | 117 | 127 | 117 | 127 | |||||||||||||||||
Subordinated | EMTN | USD500 | (20) | 673 | 711 | 673 | 711 | |||||||||||||||||
Subordinated | FRN | AUD300 | (21) | 300 | 300 | 300 | 300 | |||||||||||||||||
Subordinated | EMTN | EUR300 | (22) | 513 | 501 | 513 | 501 | |||||||||||||||||
Subordinated | EMTN | USD61 | (23) | 81 | 126 | 81 | 126 | |||||||||||||||||
Subordinated | Notes | NZD350 | (24) | 288 | 322 | 288 | 322 | |||||||||||||||||
Subordinated | EMTN | JPY10,000 | (25) | 117 | — | 117 | — | |||||||||||||||||
Subordinated | FRN | AUD300 | (26) | 300 | — | 300 | — | |||||||||||||||||
Subordinated | EMTN | CAD300 | (27) | 364 | — | 364 | — | |||||||||||||||||
Subordinated | Loan | JPY5,000 | (28) | 59 | — | 59 | — | |||||||||||||||||
Subordinated | EMTN | USD200 | (29) | 269 | — | 269 | — | |||||||||||||||||
Subordinated | Notes | NZD183 | (30) | 151 | — | — | — | |||||||||||||||||
Total Tier 2 Loan Capital | 6,896 | 5,987 | 6,745 | 5,987 | ||||||||||||||||||||
Fair value hedge and effective yield adjustments | 62 | — | 64 | — | ||||||||||||||||||||
Total Loan Capital | 9,895 | 6,291 | 10,688 | 7,010 | ||||||||||||||||||||
Due July 2006 | : | USD32.5 million | ||||
Undated | : | USD5 million |
Due February 2008 | : | USD7 million | ||||
Due February 2011 | : | USD64 million |
• | A relevant event of default (discussed below) occurs in respect of a note issue and the Trustee of the relevant notes gives notice to the Bank that the notes are immediately due and payable; |
• | The most recent audited annual financial statements of the Group show a loss (as defined in the Agreements); |
• | The Bank does not declare a dividend in respect of its ordinary shares; |
• | The Bank, if required by the Commonwealth of Australia and subject to the agreement of the APRA, exercises its option to redeem a note issue; or |
• | In respect of Undated FRNs which have been exchanged to Dated FRNs, the Dated FRNs mature. |
• | A relevant event of default occurs in respect of the note issue and, where applicable, the Trustee of the notes gives notice of such to the Bank; |
• | The Bank, if required by the Commonwealth of Australia and subject to the agreement of the APRA, exercises its option to redeem such issue; or |
• | Any payment made by the Commonwealth of Australia pursuant to its guarantee in respect of the issue will trigger the issue of shares to the Commonwealth of Australia to the value of such payment. |
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Equity Reconciliations | ||||||||||||||||
Ordinary Share Capital | ||||||||||||||||
Opening balance | 13,486 | 13,359 | 13,739 | 13,359 | ||||||||||||
AIFRS transition adjustment(1) | — | (371 | ) | — | (126 | ) | ||||||||||
Restated opening balance | 13,486 | 12,988 | 13,739 | 13,233 | ||||||||||||
Buyback | (500 | ) | — | (500 | ) | — | ||||||||||
Dividend reinvestment plan | 481 | 446 | 481 | 446 | ||||||||||||
Employee share ownership schemes | 50 | 67 | 50 | 67 | ||||||||||||
(Purchase)/sale and vesting of treasury shares(2) | (10 | ) | (14 | ) | (2 | ) | (6 | ) | ||||||||
Issue costs | (2 | ) | (1 | ) | (2 | ) | (1 | ) | ||||||||
Closing balance | 13,505 | 13,486 | 13,766 | 13,739 | ||||||||||||
Preference Share Capital | ||||||||||||||||
Opening balance | 687 | 687 | 687 | 687 | ||||||||||||
AIFRS transition adjustment(3) | (687 | ) | — | (687 | ) | — | ||||||||||
Restated opening balance | — | 687 | — | 687 | ||||||||||||
Closing balance | — | 687 | — | 687 | ||||||||||||
Other Equity Instruments | ||||||||||||||||
Opening balance | 1,573 | 1,573 | 737 | 737 | ||||||||||||
AIFRS transition adjustment(3) | (1,573 | ) | — | (737 | ) | — | ||||||||||
Restated opening balance | — | 1,573 | — | 737 | ||||||||||||
Issue of instruments | 947 | — | 1,895 | — | ||||||||||||
Issue costs | (8 | ) | — | — | — | |||||||||||
Closing balance | 939 | 1,573 | 1,895 | 737 | ||||||||||||
Retained Profits | ||||||||||||||||
Opening balance | 3,843 | 2,840 | 2,992 | 1,805 | ||||||||||||
AIFRS transition adjustment(4) (5) | (780 | ) | 9 | (437 | ) | 534 | ||||||||||
Restated opening balance | 3,063 | 2,849 | 2,555 | 2,339 | ||||||||||||
Actuarial gains and losses from defined benefit superannuation plan | 387 | 110 | 387 | 112 | ||||||||||||
Realised gains and dividend income on treasury shares held within the Bank’s life insurance statutory funds recognised directly in retained profits | 85 | 21 | — | — | ||||||||||||
Operating profit attributable to members of the Bank | 3,928 | 3,400 | 4,267 | 3,012 | ||||||||||||
Total available for appropriation | 7,463 | 6,380 | 7,209 | 5,463 | ||||||||||||
Transfers to general reserve | (239 | ) | (8 | ) | — | — | ||||||||||
Transfers to general reserve for credit loss | (92 | ) | — | (92 | ) | — | ||||||||||
Interim dividend — cash component | (992 | ) | (883 | ) | (992 | ) | (883 | ) | ||||||||
Interim dividend — dividend reinvestment plan | (219 | ) | (200 | ) | (219 | ) | (200 | ) | ||||||||
Payment of final dividend prior year — cash component | (1,172 | ) | (1,069 | ) | (1,172 | ) | (1,069 | ) | ||||||||
Payment of final dividend prior year — dividend reinvestment plan | (262 | ) | (246 | ) | (262 | ) | (246 | ) | ||||||||
Other dividends | — | (131 | ) | — | (73 | ) | ||||||||||
Closing balance | 4,487 | 3,843 | 4,472 | 2,992 | ||||||||||||
(1) | Relates to the initial recognition of treasury shares held within the employee share scheme trust and the life insurance statutory funds. | |
(2) | Relates to movements in treasury shares held within the employee share scheme trust and the life insurance statutory funds. | |
(3) | Reclassification of hybrid financial instruments from equity to liabilities. | |
(4) | Comprises the following items detailed in Note 1 (nn): |
• | Actuarial and other movements within the defined benefit superannuation plan surplus; | ||
• | Net movement in the calculation of life insurance policyholder liabilities; | ||
• | Adjustment in respect of realised gains and dividend income on treasury shares; | ||
• | Deferral of initial entry fee income earned by life insurance entities; | ||
• | Adjustment to the fair value calculation for assets held by the life insurance business; | ||
• | Adjustment in respect of derivative financial instruments; | ||
• | Deferral of previously recognised net income and expenses within the banking business; | ||
• | Transfer of foreign currency translation reserve to retained profits on 1 July 2004; | ||
• | Foreign exchange adjustment on the reclassification of hybrid financial instruments; | ||
• | Transfer to establish the general reserve for credit loss; and | ||
• | Adjustment to fair value calculation for trading assets within the banking portfolios and for other financial instruments designated as fair value through profit and loss. |
(5) | Due to a change in functional currency the estimates of AIFRS transition adjustments were revised. The net impact of this was $51 million increase in FCTR, $51 million decrease in retained profits. |
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Reserves | ||||||||||||||||
General Reserve | ||||||||||||||||
Opening balance | 982 | 3,810 | 570 | 570 | ||||||||||||
AIFRS transition adjustment(1) | — | (2,836 | ) | — | — | |||||||||||
Restated opening balance | 982 | 974 | 570 | 570 | ||||||||||||
Appropriation from retained profits | 239 | 8 | — | — | ||||||||||||
Closing balance | 1,221 | 982 | 570 | 570 | ||||||||||||
Capital Reserve | ||||||||||||||||
Opening balance | 282 | 280 | 1,533 | 1,531 | ||||||||||||
Reversal of revaluation surplus on sale of property | 3 | 2 | 3 | 2 | ||||||||||||
Closing balance | 285 | 282 | 1,536 | 1,533 | ||||||||||||
Asset Revaluation Reserve | ||||||||||||||||
Opening balance | 119 | 61 | 99 | 43 | ||||||||||||
AIFRS transition adjustment(2) | — | 31 | — | 29 | ||||||||||||
Restated opening balance | 119 | 92 | 99 | 72 | ||||||||||||
Revaluation of properties | 19 | 29 | 14 | 29 | ||||||||||||
Transfers on sale of properties | (3 | ) | (2 | ) | (3 | ) | (2 | ) | ||||||||
Tax on revaluation of properties | (4 | ) | — | (3 | ) | — | ||||||||||
Closing balance | 131 | 119 | 107 | 99 | ||||||||||||
Foreign Currency Translation Reserve | ||||||||||||||||
Opening balance | (141 | ) | (205 | ) | 1 | 4 | ||||||||||
AIFRS transition adjustments(3) (4) | 78 | 205 | 1 | (1 | ) | |||||||||||
Restated opening balance | (63 | ) | — | 2 | 3 | |||||||||||
Currency translation adjustments | (232 | ) | (141 | ) | (8 | ) | (2 | ) | ||||||||
Transfer to the Income Statement | 41 | — | — | — | ||||||||||||
Tax on translation adjustments | 13 | — | — | — | ||||||||||||
Closing balance | (241 | ) | (141 | ) | (6 | ) | 1 | |||||||||
Cash Flow Hedge Reserve | ||||||||||||||||
Opening balance | — | — | — | — | ||||||||||||
AIFRS transition adjustment(5) | 39 | — | 1 | — | ||||||||||||
Restated opening balance | 39 | — | 1 | — | ||||||||||||
Gains/(losses) on cash flow hedging instruments: | ||||||||||||||||
Recognised in equity | 89 | — | 58 | — | ||||||||||||
Transferred to Income Statement | (58 | ) | — | (51 | ) | — | ||||||||||
Tax on cash flow hedging instruments | (11 | ) | — | (2 | ) | — | ||||||||||
Closing balance | 59 | — | 6 | — | ||||||||||||
Employee Compensation Reserve | ||||||||||||||||
Opening balance | 23 | — | 23 | — | ||||||||||||
AIFRS transition adjustments(6) | — | 47 | — | 47 | ||||||||||||
Restated opening balance | 23 | 47 | 23 | 47 | ||||||||||||
Current period movement | 11 | (24 | ) | 11 | (24 | ) | ||||||||||
Closing balance | 34 | 23 | 34 | 23 | ||||||||||||
General Reserve for Credit Loss(7) | ||||||||||||||||
Opening balance | — | — | — | — | ||||||||||||
AIFRS transition adjustment | 258 | — | 258 | — | ||||||||||||
Restated opening balance | 258 | — | 258 | — | ||||||||||||
Appropriation from retained profits | 92 | — | 92 | — | ||||||||||||
Closing balance | 350 | — | 350 | — | ||||||||||||
(1) | Net write down of the internally generated appraisal value of the life insurance and funds management business. | |
(2) | Change in valuation methodology for owner-occupied property. | |
(3) | Transfer to retained profits on 1 July 2004; and re-translation on 1 July 2005 due to change in recognition and measurement of financial instruments. | |
(4) | Due to change in functional currency, the estimates of the AIFRS transition adjustments were revised. The net impact of this was $51million increase in FCTR, $51million decrease in retained profits. | |
(5) | Initial recognition of the cash flow hedge reserve on 1 July 2005. | |
(6) | Initial recognition of employee equity compensation reserve on 1 July 2004. | |
(7) | The opening balance of the general reserve for credit loss has been appropriated from retained profits. The amount is the tax effected difference between the former general provision at 30 June 2005, $1,390 million, and the opening transition balance of the collective provision, $1,021 million. The general reserve for credit loss has been established to satisfy the current APRA prudential requirement for banks to maintain a general reserve for credit loss, and allowable collective provisions, at a minimum level of 0.5% of risk weighted assets. |
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Available-for-Sale Investments Reserve | ||||||||||||||||
Opening balance | — | — | — | — | ||||||||||||
AIFRS transition adjustment(1) | 56 | — | 35 | — | ||||||||||||
Restated opening balance | 56 | — | 35 | — | ||||||||||||
Net gains/(losses) on available-for-sale investments | 51 | — | 52 | — | ||||||||||||
Net (gains)/losses on available-for-sale investments transferred to Income Statement on sale | (33 | ) | — | (31 | ) | — | ||||||||||
Impairment of available-for-sale investments transferred to Income Statement | (3 | ) | — | (3 | ) | — | ||||||||||
Tax on available-for-sale investments | (6 | ) | — | 7 | — | |||||||||||
Closing balance | 65 | — | 60 | — | ||||||||||||
Total Reserves | 1,904 | 1,265 | 2,657 | 2,226 | ||||||||||||
Shareholders’ Equity attributable to members of the Bank | 20,835 | 20,854 | 22,790 | 20,381 | ||||||||||||
Shareholders’ Equity attributable to Minority Interests | 508 | 1,789 | — | — | ||||||||||||
Total Shareholders’ Equity | 21,343 | 22,643 | 22,790 | 20,381 | ||||||||||||
(1) | Initial recognition of the available-for-sale investment reserve on 1 July 2005. |
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Issued and Paid Up Ordinary Capital | $M | $M | $M | $M | ||||||||||||
Ordinary Share Capital | ||||||||||||||||
Opening balance (excluding Treasury Shares deduction) | 13,871 | 13,359 | 13,871 | 13,359 | ||||||||||||
Dividend Reinvestment Plan: Final Dividend prior year | 262 | 246 | 262 | 246 | ||||||||||||
Dividend Reinvestment Plan: Interim Dividend | 219 | 200 | 219 | 200 | ||||||||||||
Share Buyback | (500 | ) | — | (500 | ) | — | ||||||||||
Exercise of executive options | 50 | 67 | 50 | 67 | ||||||||||||
Issue costs | (2 | ) | (1 | ) | (2 | ) | (1 | ) | ||||||||
Closing balance (excluding Treasury Shares deduction) | 13,900 | 13,871 | 13,900 | 13,871 | ||||||||||||
Less Treasury Shares | (395 | ) | (385 | ) | (134 | ) | (132 | ) | ||||||||
Closing balance | 13,505 | 13,486 | 13,766 | 13,739 | ||||||||||||
Number | Number | Number | Number | |||||||||||||
Shares on Issue | ||||||||||||||||
Opening balance (excluding Treasury Shares deduction) | 1,280,276,172 | 1,264,006,062 | 1,280,276,172 | 1,264,006,062 | ||||||||||||
Dividend reinvestment plan issues: | ||||||||||||||||
2004/2005 Final Dividend fully paid ordinary shares at $37.19 | 7,032,857 | — | 7,032,857 | — | ||||||||||||
2005/2006 Interim Dividend fully paid ordinary shares at $43.89 | 4,979,668 | — | 4,979,668 | — | ||||||||||||
2003/2004 Final Dividend fully paid ordinary shares at $30.14 | — | 8,172,546 | — | 8,172,546 | ||||||||||||
2004/2005 Interim Dividend fully paid ordinary shares at $35.90 | — | 5,581,364 | — | 5,581,364 | ||||||||||||
Share buyback | (11,139,988 | ) | (11,139,988 | ) | ||||||||||||
Exercise under executive option plan | 1,756,200 | 2,516,200 | 1,756,200 | 2,516,200 | ||||||||||||
Closing balance (excluding Treasury Shares deduction) | 1,282,904,909 | 1,280,276,172 | 1,282,904,909 | 1,280,276,172 | ||||||||||||
Less Treasury Shares | (11,085,258 | ) | (13,511,769 | ) | (2,353,514 | ) | (4,613,116 | ) | ||||||||
Closing balance | 1,271,819,651 | 1,266,764,403 | 1,280,551,395 | 1,275,663,056 | ||||||||||||
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
PERLS | $M | $M | $M | $M | ||||||||||||
PERLS Capital issued and paid up | — | 687 | — | 687 | ||||||||||||
Number | Number | Number | Number | |||||||||||||
— | 3,500,000 | — | 3,500,000 |
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Other Equity Instruments | $M | $M | $M | $M | ||||||||||||
Other equity instruments issued and paid up | 939 | (2) | 1,573 | (1) | 1,895 | 737 | (1) | |||||||||
Number | Number | Number | Number | |||||||||||||
700,000 | 4,300,000 | 1,400,000 | 550,000 |
(1) | Reclassified to Loan Capital under AIFRS, refer Note 31. | |
(2) | Net of issue costs. |
• | As declared in the 30 June 2005 profit announcement, a fully franked final dividend of 112 cents per share amounting to $1,434 million was paid on 23 September 2005. The payment comprised cash disbursements of $1,172 million with $262 million being reinvested by participants through the Dividend Reinvestment Plan; and |
• | In respect of the year to 30 June 2006, a fully franked interim dividend of 94 cents per share amounting to $1,211 million was paid on 5 April 2006. The payment comprised cash disbursements of $992 million with $219 million being reinvested by participants through the Dividend Reinvestment Plan. |
• | Commonwealth Bank Employee Share Acquisition Plan (“ESAP”); |
• | Commonwealth Bank Equity Participation Plan (“EPP”); |
• | Commonwealth Bank Equity Reward Plan (“ERP”); and |
• | Commonwealth Bank Non-Executive Directors Share Plan (“NEDSP”). |
Bonus Ordinary | Shares issued | |||||||||||||||
Issue Date | Shares Issued(1) | No. of Participants | to Each Participant(2) | Issue Price(2) | ||||||||||||
13 October 2000 | 872,620 | 24,932 | 35 | $ | 27.78 | |||||||||||
20 December 2000 | 805 | 23 | 35 | $ | 27.78 | |||||||||||
31 October 2001 | 893,554 | 26,281 | 34 | $ | 28.95 | |||||||||||
3 December 2001 | 3,876 | 114 | 34 | $ | 28.95 | |||||||||||
31 January 2002 | 1,938 | 57 | 34 | $ | 28.95 | |||||||||||
From 1 July 2002, details of shares purchased under ESAP were: | ||||||||||||||||
Ordinary | Shares allocated | |||||||||||||||
Issue Date | Shares Purchased | No. of Participants | to Each Participant(3) | Allocation Price(3) | ||||||||||||
31 October 2002 | 830,874 | 25,178 | 33 | $ | 29.71 | |||||||||||
22 January 2003 | 1,584 | 48 | 33 | $ | 29.71 | |||||||||||
31 October 2003 | 683,617 | 23,573 | 29 | $ | 27.53 | |||||||||||
29 October 2004 | 699,918 | 22,578 | 31 | $ | 31.52 | |||||||||||
9 September 2005 | 646,412 | 24,862 | 26 | $ | 37.68 | |||||||||||
(1) | For Offers in 2000 and 2001 both new and existing shareholders were granted Bonus Ordinary Shares issued from the Share Capital Account. | |
(2) | The Issue Price x Shares issued to each Participant effectively represents about $1,000 of free shares. | |
(3) | The Allocation Price for the offer is equal to the market value which is determined by calculating the weighted average of the prices at which the shares were traded on the ASX during the 5 trading day period up to and including the grant date. The Allocation Price x Shares allocated to each participant effectively represents about $1,000 of free shares for the 2002, 2004 and 2005 Offers and $800 of free shares for the 2003 Offer. |
Allotment Date | Participants | Shares Purchased | Average Purchase Price | |||||||||
1 September 2005 | 131 | 93,437 | $ | 37.58 | ||||||||
9 November 2005 | 2 | 35,911 | $ | 40.46 | ||||||||
15 March 2006 | 56 | 8,469 | $ | 44.19 | ||||||||
Details of Movements | 2005 | 2006 | ||||||
Shares held under the Plan at the beginning of year | 2,790,353 | 2,616,771 | ||||||
Shares allocated during year | 2,067,281 | 56 | ||||||
Shares vested during year | (2,016,790 | ) | (1,736,939 | ) | ||||
Shares forfeited during year | (224,073 | ) | (56,804 | ) | ||||
Shares held under the Plan at end of year | 2,616,771 | 823,084 | ||||||
• | The Bank’s TSR (broadly, growth in share price plus dividends reinvested) over a minimum three year period, must equal or exceed the index of TSR achieved by the comparator group of companies. The comparator group (previously companies represented in the ASX’s “Banks and Finance Accumulation Index” excluding the Bank) was widened in 2001/02 to better reflect the Bank’s business mix; and | |
• | If the performance hurdle is not reached within that three years the options may nevertheless be exercisable or the shares vest, only where the hurdle is subsequently reached within five years from the grant date. |
Commencement | Options | |||||||||||||||||||||||||||
Year of Grant | Date | Issue Date | Options Issued | Outstanding(1) | Participants | Exercise Price | Exercise Period | |||||||||||||||||||||
2000 | 13 Sep 2000 | 7 Feb 01 | 577,500 | 187,500 | 16 | $ | 26.97 | (2) | 14 Sep 2003 to | |||||||||||||||||||
13 Sep 2010(3) | ||||||||||||||||||||||||||||
13 Sep 2000 | 31 Oct 01 | 12,500 | — | 1 | $ | 26.97 | (2) | 14 Sep 2003 to | ||||||||||||||||||||
13 Sep 2010(3) | ||||||||||||||||||||||||||||
2001 | 3 Sep 2001 | 31 Oct 01 | 2,882,000 | 741,000 | 61 | $ | 30.12 | (2) | 4 Sep 2004 to | |||||||||||||||||||
3 Sep 2011(4) | ||||||||||||||||||||||||||||
3 Sep 2001 | 31 Jan 02 | 12,500 | 12,500 | 1 | $ | 30.12 | (2) | 4 Sep 2004 to | ||||||||||||||||||||
3 Sep 2011(4) | ||||||||||||||||||||||||||||
3 Sep 2001 | 15 Apr 02 | 100,000 | — | 1 | $ | 30.12 | (2) | 4 Sep 2004 to | ||||||||||||||||||||
3 Sep 2011(4) | ||||||||||||||||||||||||||||
(1) | Options outstanding as at the date of the report. | |
(2) | The premium adjustment (based on the actual difference between the dividend and bond yields at the date of vesting) was nil. | |
(3) | Performance hurdle was satisfied on 31 March 2004 and options may be exercised up to 13 September 2010. | |
(4) | Performance hurdle was satisfied on 3 October 2004 and options may be exercised up to 3 September 2011. |
Options — Details of Movements | July 2004 – June 2005 | July 2005 – June 2006 | ||||||||||||||
Year of Grant | 2000 | 2001 | 2000 | 2001 | ||||||||||||
Held by participants at the start of year | 402,500 | 2,235,200 | 247,500 | 1,801,600 | ||||||||||||
Granted during year | — | — | — | — | ||||||||||||
Exercised during year | (155,000 | ) | (403,900 | ) | (60,000 | ) | (1,008,300 | ) | ||||||||
Lapsed during year | — | (29,700 | ) | — | (39,800 | ) | ||||||||||
Outstanding at the end of year | 247,500 | 1,801,600 | 187,500 | 753,500 | ||||||||||||
Granted from 30 June to the date of report | — | — | — | — | ||||||||||||
Exercised from 30 June to date of report | — | (50,000 | ) | — | — | |||||||||||
Lapsed from 30 June to the date of report | — | — | — | — | ||||||||||||
Outstanding as at the date of report | 247,500 | 1,751,600 | 187,500 | 753,500 | ||||||||||||
Average | ||||||||||||||||||||||||
Shares | Shares | Purchase | ||||||||||||||||||||||
Year of Grant | Purchase Date | Purchased | Allocated | Participants | Vesting Period | Price(9) | ||||||||||||||||||
2000 | 20 Feb 2001 | 361,100 | 361,100 | 61 | 14 Sep 2003 to Sep 2005 | (6) | $ | 29. 72 | ||||||||||||||||
31 Oct 2001 | 2,000 | 2,000 | 1 | 14 Sep 2003 to 3 Sep 2005 | (6) | $ | 29. 25 | |||||||||||||||||
2001 | 31 Oct 2001 | 652,100 | 661,500 | (1) | 241 | 4 Sep 2004 to 3 Sep 2006 | (7) | $ | 29. 25 | |||||||||||||||
2002 | 22 Nov 2002 | 357,500 | 545,500 | (2) | 195 | 3 Sep 2005 to 2 Sep 2007 | (8) | $ | 28. 26 | |||||||||||||||
2003 | 12 Nov 2003 | 285,531 | 595,600 | (3) | 255 | 2 Sep 2006 to 1 Sep 2008 | (8) | $ | 28. 33 | |||||||||||||||
2004 | 11 Nov 2004 | 225,934 | 522,290 | (4) | 259 | 23 Aug 2007 to 23 Aug 2009 | (8) | $ | 29. 87 | |||||||||||||||
2005 | 11 Nov 2005 | 18,306 | 557,253 | (5) | 260 | 15 Jul 2005 to 15 Jul 2010 | (8) | $ | 29. 30 | |||||||||||||||
(1) | In October 2001, 11,400 Reward Shares were re-allocated to participants receiving the 2001 grant as a result of Reward Shares forfeited from previous ERP grant. | |
(2) | In November 2002, 188,000 shares were re-allocated to participants receiving the 2002 grant as a result of shares forfeited from previous grants. The total number of Reward Shares allocated in 2002 represents 50% of the maximum entitlement that participants may receive. The 2002 grant did not meet the performance hurdle at the first measurement point and therefore did not vest. If it reaches the required performance hurdle at a subsequent measurement date, a maximum of 50% only of the original grant will vest. Further details of ERP arrangements are provided in the Bank’s Remuneration Report. | |
(3) | In November 2003, 310,069 shares were re-allocated to participants receiving the 2003 grant as a result of shares forfeited from previous grants. The total number of Reward Shares allocated in 2003 represents 50% of the maximum entitlement that participants may receive. It is intended that Reward Shares required to meet obligations under ERP will be acquired by the Trust on-market during the three years prior to the first measurement point of the performance hurdle. | |
(4) | In November 2004, 296,356 shares were re-allocated to participants receiving the 2004 Grant as a result of shares forfeited from previous grants. The total number of Reward Shares allocated in 2004 represents 50% of the maximum entitlement that participants may receive – refer to footnote 3 above for further information. | |
(5) | In November 2005, 538,947 shares were re-allocated to participants receiving the 2005 grant as a result of shares forfeited from previous grants. The total number of Reward Shares allocated in 2005 represents 50% of the maximum entitlement that participants may receive – refer to footnote 3 above for further information. | |
(6) | Performance hurdle was satisfied on 31 March 2004 and as a result 195,700 shares vested to participants of the 2000 grant. | |
(7) | Performance hurdle was satisfied on 3 October 2004 and as a result 423,500 shares vested to participants of the 2001 grant. | |
(8) | Performance hurdle must be satisfied within the vesting period, otherwise shares will be forfeited. | |
(9) | Average Purchase Price refers to the average price of all shares allocated for that grant, including the original purchase price of any reallocated shares. |
July 2004 – June 2005 | July 2005 – June 2006 | |||||||||||||||||||||||||||||||
Year of Grant | ||||||||||||||||||||||||||||||||
Total Reward Shares | 2001 | 2002 | 2003 | 2004 | 2002 | 2003 | 2004 | 2005 | ||||||||||||||||||||||||
Held by participants at the start of year | 437,000 | 445,825 | 557,500 | — | 376,850 | 462,850 | 544,900 | — | ||||||||||||||||||||||||
Granted during year(1) | — | — | — | 597,975 | — | — | — | 557,253 | ||||||||||||||||||||||||
Vested during year | (423,500 | ) | — | — | — | — | — | — | — | |||||||||||||||||||||||
Lapsed during year | (13,500 | ) | (68,975 | ) | (94,650 | ) | (53,075 | ) | (135,000 | ) | (114,200 | ) | (121,215 | ) | (34,505 | ) | ||||||||||||||||
Outstanding at the end of year | — | 376,850 | 462,850 | 544,900 | 241,850 | 348,650 | 423,685 | 522,748 | ||||||||||||||||||||||||
Granted from 30 June to date of report | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Vested from 30 June to date of report | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Lapsed from 30 June to date of report | — | (11,400 | ) | (8,950 | ) | (8,750 | ) | (7,750 | ) | (11,250 | ) | (15,125 | ) | (18,175 | ) | |||||||||||||||||
Outstanding as at the date of report | — | 365,450 | 453,900 | 536,150 | 234,100 | 337,400 | 408,560 | 504,573 | ||||||||||||||||||||||||
(1) | The total number of shares granted during the year represents 50% of the maximum entitlement that participants may receive. |
Details of issues made under EOP as well as movements for 2004/2005 and 2005/2006 are as follows:
Executive Option Plan (“EOP”)
Commencement | Options | |||||||||||||||||||||||
Date | Issue Date | Options Issued | Outstanding | Participants | Exercise Price(1) | Exercise Period | ||||||||||||||||||
3 Nov 1997 | 11 Dec 1997 | 2,875,000 | — | 27 | $ | 15.53 | (2) | 4 Nov 00 to 3 Nov 02 | ||||||||||||||||
25 Aug 1998 | 30 Sep 1998 | 3,275,000 | — | 32 | $ | 19.58 | (2) | 26 Aug 01 to 25 Aug 03 | ||||||||||||||||
24 Aug 1999 | 24 Sep 1999 | 3,855,000 | 190,600 | 38 | $ | 23.84 | (2) | 25 Aug 02 to 24 Aug 09 | (3) | |||||||||||||||
13 Sep 2000 | 13 Oct 2000 | 2,002,500 | 175,800 | 50 | $ | 26.97 | (2) | 14 Sep 03 to 13 Sep 10 | (4) | |||||||||||||||
(1) | The Exercise Price is the market value at the commencement date. Market value is defined as the weighted average of the prices at which shares were traded on the ASX during the one week period before the commencement date. | |
(2) | Premium adjustment (based on the actual difference between the dividend and bond yields at the date of vesting) was nil. | |
(3) | Performance hurdle for the 1999 grant was satisfied on 28 February 2004 and options may be exercised up to 24 August 2009. | |
(4) | Performance hurdle for the 2000 grant was satisfied on 31 March 2004 and options may be exercised up to 13 September 2010. |
July 2004 – June 2005 | July 2005 – June 2006 | |||||||||||||||
Year of Grant | 1999 | 2000 | 1999 | 2000 | ||||||||||||
Total options: | ||||||||||||||||
Held by participants at start of year | 1,875,000 | 1,144,600 | 450,000 | 637,300 | ||||||||||||
Exercised during year | (1,425,000 | ) | (507,300 | ) | (250,000 | ) | (437,900 | ) | ||||||||
Lapsed during year | — | — | (9,400 | ) | (23,600 | ) | ||||||||||
Outstanding at the end of year | 450,000 | 637,300 | 190,600 | 175,800 | ||||||||||||
Granted from 30 June to date of report | — | — | — | — | ||||||||||||
Exercised from 30 June to date of report | — | (75,400 | ) | — | — | |||||||||||
Lapsed from 30 June to date of report | — | — | — | — | ||||||||||||
Outstanding as at the date of report | 450,000 | 561,900 | 190,600 | 175,800 | ||||||||||||
Option Issue Date | Shares Issued | Price Paid per Share | Total Consideration Paid | |||||||||
24 September 1999 | 250,000 | $ | 23. 84 | $ | 5,960,000 | |||||||
13 October 2000 | 437,900 | $ | 26. 97 | $ | 11,810,163 | |||||||
7 February 2001 | 60,000 | $ | 26. 97 | $ | 1,618,200 | |||||||
30 October 2001 | 908,300 | $ | 30. 12 | $ | 27,357,996 | |||||||
15 April 2002 | 100,000 | $ | 30. 12 | $ | 3,012,000 | |||||||
Period | Total Fees Sacrificed | Participants | Shares Purchased | Average Purchase Price | ||||||||||||
1 April to 30 June 2005 | $ | 112,127 | 9 | 2,984 | $ | 37.58 | ||||||||||
1 July to 31 December 2005 | $ | 226,849 | 9 | 5,134 | $ | 44.19 | ||||||||||
Group | ||||||||
2006 | 2005 | |||||||
$M | $M | |||||||
Controlled entities: | ||||||||
Share capital(1) | 508 | 623 | ||||||
Retained profits and reserves | — | 8 | ||||||
Life insurance statutory funds(2) | — | 1,158 | ||||||
Total Minority Interests | 508 | 1,789 | ||||||
(1) | ASB Perpetual Preference Shares — $505 million. On 10 December 2002, ASB Capital Limited, a New Zealand subsidiary, issued NZD200 million (AUD182 million) of perpetual preference shares. Such shares are non-redeemable and carry limited voting rights. Dividends are payable quarterly and are non-cumulative. On 22 December 2004, ASB Capital No.2 Ltd, a New Zealand subsidiary, issued NZD350 million (AUD323 million) of perpetual preference shares. Such shares are non-redeemable and carry limited voting rights. Dividends are payable quarterly and are non-cumulative. | |
(2) | Reclassified to Managed Funds Units on Issue under AIFRS, refer Note 29. |
• | Excess of Market Value Over Net Assets (“EMVONA”) $1,339 million; |
• | Software capitalised expenses $229 million; and |
• | Defined benefit deficit $45 million. |
• | Issue of $262 million and $219 million shares in October 2005 and April 2006 respectively to satisfy the Dividend Reinvestment Plan (“DRP”) in respect of the final dividend for 2004/05 and interim dividend for 2005/06; |
• | In accordance with APRA guidelines, the estimated issue of $303 million shares to satisfy the DRP in respect of the final dividend for 2005/06; |
• | Issue of US$700 million Tier One hybrid in March 2006; |
• | Redemption of $700 million PERLS in April 2006; |
• | Issue of $1,166 million PERLS III in April 2006; and |
• | Completion of a $500 million on-market share buyback. |
• | Issue of the equivalent of $840 million Lower Tier Two Capital; |
• | In accordance with APRA guidelines, the reduction in Tier Two note and bond issues of $278 million due to amortisation; |
• | The call and maturity of the equivalent of $78 million of Tier Two note and bond issues; and |
• | Increase in the value of Tier Two note and bond issues of $66 million resulting from changes in foreign exchange movements (whilst these notes are hedged, the unhedged value is included in the calculation of regulatory capital in accordance with APRA regulations). |
• | An increase in deductions due to the Bank’s acquisition of a 19.9% interest in Hangzhou City Commercial Bank for $102 million; |
• | An increase in deductions due to a $291 million increase in net tangible assets arising from the retention of profits in the Colonial Group; and |
• | A decrease in deductions due to the $145 million profit realised on the sale of CMG Asia in October 2005 being repatriated to the Bank. The balance of the proceeds of sale of $463 million was used to repay part of the non-recourse debt funding in the Bank’s life and funds management business. |
Group | ||||||||
2006 | 2005 | |||||||
Actual | Actual | |||||||
Risk-Weighted Capital Ratios | % | % | ||||||
Tier One | 7.56 | 7.46 | ||||||
Tier Two | 3.10 | 3.21 | ||||||
Less deductions | (1.00 | ) | (0.92 | ) | ||||
Total | 9.66 | 9.75 | ||||||
Adjusted Common Equity(1) | 4.50 | 4.91 | ||||||
2006 | 2005 | |||||||
Regulatory Capital | $M | $M | ||||||
Tier One Capital | ||||||||
Shareholders’ equity | 21,343 | 26,060 | ||||||
Reverse effect to shareholders’ equity of AIFRS transition(2) | 7,183 | — | ||||||
Reverse effect of AIFRS during the period to 30 June 2006:(2) | ||||||||
Purchase/(sale) and vesting of treasury shares | 10 | — | ||||||
Actuarial (gains)/losses from defined benefit superannuation plan | (387 | ) | — | |||||
Realised gains and dividend income on treasury shares held within the Bank’s life insurance statutory funds | (85 | ) | — | |||||
Cash flow hedge reserve | (20 | ) | — | |||||
Employee compensation reserve | (11 | ) | — | |||||
General reserve for credit loss | (92 | ) | — | |||||
Available-for-sale investments | (9 | ) | — | |||||
Defined benefit superannuation plan expense | 25 | — | ||||||
Treasury share valuation adjustment | 100 | — | ||||||
Preference share capital | (687 | ) | ||||||
Issue of hybrid instruments | 1,147 | |||||||
Other | (6 | ) | — | |||||
Adjusted shareholders’ equity per APRA’s transitional arrangements | 28,511 | 26,060 | ||||||
Eligible loan capital | 281 | 304 | ||||||
Estimated reinvestment under Dividend Reinvestment Plan(3) | 303 | 272 | ||||||
Foreign currency translation reserve related to non-consolidated subsidiaries | 160 | 211 | ||||||
Deduct: | ||||||||
Asset revaluation reserve(4) | (131 | ) | (92 | ) | ||||
Expected dividend | (1,668 | ) | (1,434 | ) | ||||
Goodwill(5) | (4,416 | ) | (4,394 | ) | ||||
Intangible component of investment in non–consolidated subsidiaries(6) | (5,397 | ) | (5,397 | ) | ||||
Minority interests in entities controlled by non–consolidated subsidiaries | — | (111 | ) | |||||
Minority interests in insurance statutory funds and other funds | (1,158 | ) | (1,158 | ) | ||||
Capitalised expenses | (122 | ) | (107 | ) | ||||
Other | (9 | ) | (13 | ) | ||||
Total Tier One Capital | 16,354 | 14,141 | ||||||
Tier Two Capital | ||||||||
Collective provision for impairment losses(7) | 1,046 | — | ||||||
General reserve for credit loss (pre-tax equivalent)(7) | 500 | — | ||||||
General provision for bad debts | 1,546 | 1,389 | ||||||
FITB related to general provision for bad debts | (464 | ) | (414 | ) | ||||
Asset revaluation reserve(4) | 131 | 92 | ||||||
Upper Tier Two note and bond issues | 235 | 237 | ||||||
Lower Tier Two note and bond issues(8) (9) | 5,335 | 4,783 | ||||||
Other | (58 | ) | — | |||||
Total Tier Two Capital | 6,725 | 6,087 | ||||||
Total Capital | 23,079 | 20,228 | ||||||
(1) | Adjusted Common Equity (“ACE”) is one measure considered by Standard & Poor’s in evaluating the Bank’s credit rating. The ACE ratio has been calculated in accordance with Standard & Poor’s methodology at 30 June 2006. | |
(2) | APRA requires regulatory capital to continue to be calculated in accordance with AGAAP accounting principles until 1 July 2006. As such, all material changes to capital resulting from the Bank adopting AIFRS accounting standards on 1 July 2005 have been reversed from regulatory capital. | |
(3) | Based on reinvestment experience related to the Bank’s Dividend Reinvestment Plan. | |
(4) | The Bank agreed with APRA to adopt AIFRS on 1 July 2005 for the reporting of the Asset Revaluation Reserve. | |
(5) | Consistent with APRA requirements goodwill is reported on an AGAAP basis. | |
(6) | Per APRA’s transitional arrangements, it was agreed to deduct the value as at 30 June 2005 of the intangible component of the carrying value of the life insurance and funds management business from Tier One Capital until 1 July 2006. | |
(7) | In line with current APRA requirements the Bank has established a General Reserve for Credit Loss. | |
(8) | APRA requires these Lower Tier Two note and bond issues to be included as if they were un–hedged. | |
(9) | For regulatory capital purposes, Lower Tier Two note and bond issues are amortised by 20% of the original amount during each of the last five years to maturity. |
Group | ||||||||
2006 | 2005 | |||||||
Regulatory Capital | $M | $M | ||||||
Total Capital | 23,079 | 20,228 | ||||||
Deduct: | ||||||||
Investment in non–consolidated subsidiaries (net of intangible component deducted from Tier One Capital): | ||||||||
Shareholders’ net tangible assets in life and funds management businesses | (1,902 | ) | (2,513 | ) | ||||
Reverse effect of transition to AIFRS(1) | (592 | ) | — | |||||
Capital in other non-consolidated subsidiaries | (256 | ) | (348 | ) | ||||
Value of acquired inforce business(2) | (1,339 | ) | (1,152 | ) | ||||
Less: non-recourse debt | 2,077 | 2,292 | ||||||
(2,012 | ) | (1,721 | ) | |||||
Other deductions | (151 | ) | (28 | ) | ||||
Capital Base | 20,916 | 18,479 | ||||||
(1) | APRA requires regulatory capital to continue to be calculated in accordance with AGAAP accounting principles until 1 July 2006. As such, all material changes to capital resulting from the Bank adopting AIFRS accounting standards on 1 July 2005 have been reversed from regulatory capital. | |
(2) | Per APRA’s transitional arrangements, it was agreed to deduct the value as at 30 June 2005 of acquired inforce business from Total Capital, until 1 July 2006. However, values as at 30 June 2005 have been adjusted to reflect the acquisition of the Gandel Group interests in Colonial First State Property Retail Trust and Gandel Retail Management Trust. |
Group | ||||||||
2006 | 2005 | |||||||
Adjusted Common Equity(1) | $M | $M | ||||||
Tier One Capital | 16,354 | 14,141 | ||||||
Deduct: | ||||||||
Eligible loan capital | (281 | ) | (304 | ) | ||||
Preference share capital | — | (687 | ) | |||||
Other equity instruments | (3,659 | ) | (1,573 | ) | ||||
Minority interests (net of minority interests component deducted from Tier One Capital) | (508 | ) | (520 | ) | ||||
Investment in non–consolidated subsidiaries (net of intangible component deducted from Tier One Capital) | (2,012 | ) | (1,721 | ) | ||||
Other deductions | (151 | ) | (28 | ) | ||||
Total Adjusted Common Equity | 9,743 | 9,308 | ||||||
(1) | Adjusted Common Equity (“ACE”) is one measure considered by Standard & Poor’s in evaluating the Bank’s credit rating. The ACE ratio has been calculated in accordance with the pre AIFRS Standard & Poor’s methodology at 30 June 2006. |
Group | ||||||||||||||||||||
Risk–Weighted | ||||||||||||||||||||
Face Value | Risk Weights | Balance | ||||||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||||||
Risk-Weighted Assets | $M | $M | % | $M | $M | |||||||||||||||
On Balance Sheet Assets | ||||||||||||||||||||
Cash, claims on Reserve Bank, short term claims on Australian Commonwealth and State Government and Territories, and other zero–weighted assets | 23,301 | 27,447 | — | — | — | |||||||||||||||
Claims on OECD banks and local governments | 16,742 | 14,754 | 20 | 3,348 | 2,951 | |||||||||||||||
Advances secured by residential property(1) | 157,962 | 143,746 | 50 | 78,981 | 71,873 | |||||||||||||||
All other assets(1) | 110,971 | 92,510 | 100 | 110,971 | 92,510 | |||||||||||||||
Total On Balance Sheet Assets – Credit Risk(2) (3) | 308,976 | 278,457 | 193,300 | 167,334 | ||||||||||||||||
Group | ||||||||||||||||||||||||
Risk-Weighted | ||||||||||||||||||||||||
Face Value | Credit Equivalent | Balance | ||||||||||||||||||||||
2006 | 2005 | 2006 | 2005 | 2006 | 2005 | |||||||||||||||||||
$M | $M | $M | $M | $M | $M | |||||||||||||||||||
Off Balance Sheet Exposures | ||||||||||||||||||||||||
Direct credit substitutes | 3,598 | 3,308 | 3,598 | 3,308 | 2,786 | 2,622 | ||||||||||||||||||
Trade and performance related items | 2,365 | 1,280 | 999 | 584 | 964 | 540 | ||||||||||||||||||
Commitments | 82,634 | 76,581 | 16,604 | 13,839 | 12,049 | 10,328 | ||||||||||||||||||
Foreign exchange, interest rate and other market related transactions | 1,027,846 | 885,700 | 14,342 | 20,814 | 3,892 | 5,881 | ||||||||||||||||||
Total Off Balance Sheet Exposures – Credit Risk(4) | 1,116,443 | 966,869 | 35,543 | 38,545 | 19,691 | 19,371 | ||||||||||||||||||
Total Risk-Weighted Assets – Credit Risk | 212,991 | 186,705 | ||||||||||||||||||||||
Risk-Weighted Assets – Market Risk | 3,447 | 2,854 | ||||||||||||||||||||||
Total Risk-Weighted Assets | 216,438 | 189,559 | ||||||||||||||||||||||
(1) | For loans secured by residential property approved after 5 September 1994, a risk weight of 100% applied where the loan to valuation ratio is in excess of 80%. Effective from 28 August 1998, a risk weight of 50% applies to these loans if they are totally insured by an acceptable lender’s mortgage insurer. Loans that are risk-weighted at 100% are reported under “All other assets”. | |
(2) | The difference between total on balance sheet assets and the Group’s balance sheet reflects the alternative treatment of some assets and provisions as prescribed in APRA’s capital adequacy guidelines; principally goodwill, collective provision for impairment losses, General Reserve for Credit Loss, and investments in life insurance and funds management business. | |
(3) | Total on balance sheet assets exclude debt and equity securities in the trading book and all on balance sheet positions in commodities, as they are included in the calculation of notional market risk-weighted assets. | |
(4) | Off balance sheet exposures secured by the residential property account for $8.9 billion of off balance sheet credit equivalent assets ($4.2 billion of off balance sheet risk-weighted assets). |
Group | ||||||||||||||||||||||||||||||||
Maturity Period At 30 June 2006 | ||||||||||||||||||||||||||||||||
0 to 3 | 3 to 12 | 1 to 5 | Over 5 | Not | ||||||||||||||||||||||||||||
At Call | Overdrafts | months | months | years | years | Specified | Total | |||||||||||||||||||||||||
$M | $M | $M | $M | $M | $M | $M | $M | |||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||
Cash and liquid assets | 2,016 | — | 3,115 | — | — | — | — | 5,131 | ||||||||||||||||||||||||
Receivables due from other financial institutions | — | — | 5,923 | 1,156 | — | 28 | — | 7,107 | ||||||||||||||||||||||||
Assets at fair value through Income Statement: | ||||||||||||||||||||||||||||||||
Trading(1) | — | — | 15,758 | — | — | — | — | 15,758 | ||||||||||||||||||||||||
Insurance | 153 | — | 995 | 1,900 | 2,653 | 1,945 | 16,791 | 24,437 | ||||||||||||||||||||||||
Other | 182 | — | 2,124 | 62 | 576 | — | — | 2,944 | ||||||||||||||||||||||||
Derivative assets | — | — | 7,484 | 986 | 833 | 372 | — | 9,675 | ||||||||||||||||||||||||
Available-for-sale investments | — | — | 2,278 | 1,255 | 4,532 | 2,022 | 1,116 | 11,203 | ||||||||||||||||||||||||
Loans, advances and other receivables(2) | 15,182 | 5,107 | 16,643 | 18,115 | 58,373 | 146,802 | (1,046 | ) | 259,176 | |||||||||||||||||||||||
Bank acceptances of customers | — | — | 17,531 | 779 | — | — | — | 18,310 | ||||||||||||||||||||||||
Other monetary assets | 29 | — | 3,803 | 81 | 6 | 2 | 255 | 4,176 | ||||||||||||||||||||||||
Total monetary assets | 17,562 | 5,107 | 75,654 | 24,334 | 66,973 | 151,171 | 17,116 | 357,917 | ||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Deposits and other public borrowings(3) | 97,262 | — | 48,772 | 24,167 | 2,938 | 88 | — | 173,227 | ||||||||||||||||||||||||
Payables to other financial institutions | 1,380 | — | 8,999 | 805 | — | — | — | 11,184 | ||||||||||||||||||||||||
Liabilities at fair value through Income Statement | 1,987 | — | 5,426 | 2,677 | 2,880 | 841 | — | 13,811 | ||||||||||||||||||||||||
Derivative liabilities | — | — | 6,471 | 877 | 1,047 | 2,425 | — | 10,820 | ||||||||||||||||||||||||
Bank acceptances | — | — | 17,531 | 779 | — | — | — | 18,310 | ||||||||||||||||||||||||
Insurance policy liabilities | — | — | — | — | — | — | 22,225 | 22,225 | ||||||||||||||||||||||||
Debt issues and loan capital | — | — | 9,478 | 14,700 | 42,838 | 21,470 | — | 88,486 | ||||||||||||||||||||||||
Managed funds units on issue | — | — | — | — | — | — | 1,109 | 1,109 | ||||||||||||||||||||||||
Other monetary liabilities | 10 | — | 5,056 | 209 | 469 | 420 | 205 | 6,369 | ||||||||||||||||||||||||
Total monetary liabilities | 100,639 | — | 101,733 | 44,214 | 50,172 | 25,244 | 23,539 | 345,541 | ||||||||||||||||||||||||
(1) | Trading assets are purchased without the intention to hold until maturity and are categorised as maturing within 3 months. | |
(2) | $141 billion of this figure represents owner occupied housing loans. While most of these loans would have a contractual term of 20 years or more, and are analysed accordingly, the actual average term of the portfolio has historically been less than 5 years. | |
(3) | Includes substantial “core” deposits that are contractually at call customer savings and cheque accounts. History demonstrates such accounts provide a stable source of long term funding for the Bank. Also refer to Interest Rate Risk Sensitivity table in Note 43. |
Group | ||||||||||||||||||||||||||||||||
Maturity Period At 30 June 2005 | ||||||||||||||||||||||||||||||||
0 to 3 | 3 to 12 | 1 to 5 | Over 5 | Not | ||||||||||||||||||||||||||||
At Call | Overdrafts | months | months | years | years | Specified | Total | |||||||||||||||||||||||||
$M | $M | $M | $M | $M | $M | $M | $M | |||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||
Cash and liquid assets | 970 | — | 5,085 | — | — | — | — | 6,055 | ||||||||||||||||||||||||
Receivables due from other financial institutions | 371 | — | 4,943 | 408 | 50 | 315 | — | 6,087 | ||||||||||||||||||||||||
Trading securities(1) | — | — | 14,631 | — | — | — | — | 14,631 | ||||||||||||||||||||||||
Investment securities | — | — | 1,467 | 1,325 | 5,279 | 2,767 | — | 10,838 | ||||||||||||||||||||||||
Loans, advances and other receivables(2) | 4,837 | 5,225 | 21,766 | 30,518 | 57,143 | 110,247 | (1,390 | ) | 228,346 | |||||||||||||||||||||||
Bank acceptances of customers | — | — | 16,387 | 399 | — | — | — | 16,786 | ||||||||||||||||||||||||
Life assets | 179 | — | 4,128 | 477 | 3,471 | 3,130 | 16,099 | 27,484 | ||||||||||||||||||||||||
Other monetary assets | 1 | — | 15,479 | 20 | 1 | 17 | 115 | 15,633 | ||||||||||||||||||||||||
Total monetary assets | 6,358 | 5,225 | 83,886 | 33,147 | 65,944 | 116,476 | 14,824 | 325,860 | ||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Deposits and other public borrowings(3) | 93,682 | — | 39,974 | 29,957 | 4,274 | 139 | — | 168,026 | ||||||||||||||||||||||||
Payables to other financial institutions | 809 | — | 6,054 | 1,160 | — | — | — | 8,023 | ||||||||||||||||||||||||
Bank acceptances | — | — | 16,387 | 399 | — | — | — | 16,786 | ||||||||||||||||||||||||
Life liabilities | — | — | — | — | — | — | 24,694 | 24,694 | ||||||||||||||||||||||||
Debt issues and loan capital | — | — | 11,978 | 18,164 | 33,467 | 13,447 | — | 77,056 | ||||||||||||||||||||||||
Other monetary liabilities | 8 | — | 16,807 | 30 | 9 | 7 | 174 | 17,035 | ||||||||||||||||||||||||
Total monetary liabilities | 94,499 | — | 91,200 | 49,710 | 37,750 | 13,593 | 24,868 | 311,620 | ||||||||||||||||||||||||
(1) | Trading securities are purchased without the intention to hold until maturity and are categorised as maturing within 3 months. | |
(2) | $125 billion of this figure represents owner occupied housing loans. While most of these loans would have a contractual term of 20 years or more, and are analysed accordingly, the actual average term of the portfolio has historically been less than 5 years. | |
(3) | Includes substantial “core” deposits that are contractually at call customer savings and cheque accounts. History demonstrates such accounts provide a stable source of long term funding for the Bank. Also refer to Interest Rate Risk Sensitivity table in Note 43. |
Group | ||||||||||||||||
Year Ended 30 June 2006 | ||||||||||||||||
Primary Segment | Funds | |||||||||||||||
Business Segments | Banking | Management | Insurance | Total | ||||||||||||
Income Statement | $M | $M | $M | $M | ||||||||||||
Interest income | 19,758 | — | — | 19,758 | ||||||||||||
Premium and related revenue | — | — | 1,052 | 1,052 | ||||||||||||
Other income | 3,036 | 3,687 | 1,031 | 7,754 | ||||||||||||
Total revenue | 22,794 | 3,687 | 2,083 | 28,564 | ||||||||||||
Interest expense | 13,244 | — | — | 13,244 | ||||||||||||
Segment result before income tax | 4,559 | 643 | 657 | 5,859 | ||||||||||||
Income tax expense | (1,328 | ) | (331 | ) | (241 | ) | (1,900 | ) | ||||||||
Segment result after income tax | 3,231 | 312 | 416 | 3,959 | ||||||||||||
Minority interests | (28 | ) | (3 | ) | — | (31 | ) | |||||||||
Segment result after income tax and minority interests | 3,203 | 309 | 416 | 3,928 | ||||||||||||
Net profit attributable to shareholders of the Bank | 3,203 | 309 | 416 | 3,928 | ||||||||||||
Non–Cash Expenses | ||||||||||||||||
Intangible asset amortisation | 49 | — | — | 49 | ||||||||||||
Bad debts expense | 398 | — | — | 398 | ||||||||||||
Depreciation | 157 | 2 | 5 | 164 | ||||||||||||
Defined benefit superannuation plan expense | 35 | — | — | 35 | ||||||||||||
Other | 65 | 1 | — | 66 | ||||||||||||
Balance Sheet | ||||||||||||||||
Total assets | 340,254 | 19,201 | 9,648 | 369,103 | ||||||||||||
Acquisition of property, plant & equipment, intangibles and other non–current assets | 510 | 94 | 8 | 612 | ||||||||||||
Associate investments | 106 | 52 | 32 | 190 | ||||||||||||
Total liabilities | 324,185 | 16,423 | 7,152 | 347,760 | ||||||||||||
Group | ||||||||||||||||
Year Ended 30 June 2005 | ||||||||||||||||
Primary Segment | Funds | |||||||||||||||
Business Segments | Banking | Management | Insurance | Total | ||||||||||||
Income Statement | $M | $M | $M | $M | ||||||||||||
Interest income | 16,781 | — | — | 16,781 | ||||||||||||
Premium and related revenue | — | — | 1,132 | 1,132 | ||||||||||||
Other income | 2,845 | 3,203 | 1,186 | 7,234 | ||||||||||||
Total revenue | 19,626 | 3,203 | 2,318 | 25,147 | ||||||||||||
Interest expense | 10,755 | — | — | 10,755 | ||||||||||||
Segment result before income tax | 3,982 | 508 | 522 | 5,012 | ||||||||||||
Income tax expense | (1,197 | ) | (192 | ) | (213 | ) | (1,602 | ) | ||||||||
Segment result after income tax | 2,785 | 316 | 309 | 3,410 | ||||||||||||
Minority interests | (3 | ) | (7 | ) | — | (10 | ) | |||||||||
Segment result after income tax and minority interests | 2,782 | 309 | 309 | 3,400 | ||||||||||||
Net profit attributable to shareholders of the Bank | 2,782 | 309 | 309 | 3,400 | ||||||||||||
Non–Cash Expenses | ||||||||||||||||
Intangible asset amortisation | 20 | — | — | 20 | ||||||||||||
Bad debts expense | 322 | — | — | 322 | ||||||||||||
Depreciation | 135 | 8 | 13 | 156 | ||||||||||||
Defined benefit superannuation plan expense | 75 | — | — | 75 | ||||||||||||
Other | 84 | 27 | — | 111 | ||||||||||||
Balance Sheet | ||||||||||||||||
Total assets | 304,620 | 16,191 | 16,593 | 337,404 | ||||||||||||
Acquisition of property, plant & equipment, intangibles and other non–current assets | 303 | 8 | 39 | 350 | ||||||||||||
Associate investments | 19 | 1 | 32 | 52 | ||||||||||||
Total liabilities | 287,549 | 16,832 | 10,380 | 314,761 | ||||||||||||
Group | ||||||||||||||||
Secondary Segment | Year Ended 30 June | |||||||||||||||
Geographical Segments | 2006 | 2006 | 2005 | 2005 | ||||||||||||
Income Statement | $M | % | $M | % | ||||||||||||
Revenue | ||||||||||||||||
Australia | 22,802 | 79.8 | 20,003 | 79.5 | ||||||||||||
New Zealand | 4,021 | 14.1 | 3,361 | 13.4 | ||||||||||||
Other countries(1) | 1,741 | 6.1 | 1,783 | 7.1 | ||||||||||||
Total Revenue | 28,564 | 100.0 | 25,147 | 100.0 | ||||||||||||
Net Profit Attributable to Shareholders of the Bank | ||||||||||||||||
Australia | 3,200 | 81.5 | 2,778 | 81.7 | ||||||||||||
New Zealand | 387 | 9.8 | 363 | 10.7 | ||||||||||||
Other countries(1) | 341 | 8.7 | 259 | 7.6 | ||||||||||||
Total Net Profit Attributable to Shareholders of the Bank | 3,928 | 100.0 | 3,400 | 100.0 | ||||||||||||
Assets | ||||||||||||||||
Australia | 304,831 | 82.6 | 280,255 | 83.0 | ||||||||||||
New Zealand | 43,318 | 11.7 | 41,383 | 12.3 | ||||||||||||
Other countries(1) | 20,954 | 5.7 | 15,766 | 4.7 | ||||||||||||
Total Assets | 369,103 | 100.0 | 337,404 | 100.0 | ||||||||||||
Acquisition of Property, Plant & Equipment, Intangibles and Other Non–Current Assets | ||||||||||||||||
Australia | 564 | 92.2 | 303 | 86.6 | ||||||||||||
New Zealand | 34 | 5.5 | 37 | 10.6 | ||||||||||||
Other countries(1) | 14 | 2.3 | 10 | 2.8 | ||||||||||||
Total | 612 | 100.0 | 350 | 100.0 | ||||||||||||
(1) | Other countries were: United Kingdom, United States of America, Japan, Singapore, Malta, Hong Kong, Grand Cayman, Fiji, Indonesia, China and Vietnam. |
Life Insurance | Life Investment | |||||||||||||||||||||||||||||
Contracts | Contracts | Group | ||||||||||||||||||||||||||||
2006 | 2005 | 2006 | 2005 | 2006 | 2005 | |||||||||||||||||||||||||
Summarised Income Statement | $M | $M | $M | $M | $M | $M | ||||||||||||||||||||||||
Premium and related revenue | 949 | 414 | 1,363 | 1,500 | ||||||||||||||||||||||||||
Outward reinsurance premiums expense | (176 | ) | (3 | ) | (179 | ) | (231 | ) | ||||||||||||||||||||||
Claims expense | (526 | ) | (127 | ) | (653 | ) | (422 | ) | ||||||||||||||||||||||
Reinsurance recoveries | 128 | — | 128 | 122 | ||||||||||||||||||||||||||
Investment revenue (excluding investments in subsidiaries) | ||||||||||||||||||||||||||||||
Equity securities | 205 | 1,686 | 1,891 | 1,635 | ||||||||||||||||||||||||||
Debt securities | 230 | 372 | 602 | 795 | ||||||||||||||||||||||||||
Property | 174 | 169 | 343 | 353 | ||||||||||||||||||||||||||
Other | (48 | ) | 413 | 365 | 411 | |||||||||||||||||||||||||
Increase/(decrease) in insurance policy liabilities | (192 | ) | (2,165 | ) | (2,357 | ) | (2,686 | ) | ||||||||||||||||||||||
Operating income | 744 | 759 | 1,503 | 1,477 | ||||||||||||||||||||||||||
Acquisition expenses | 163 | 21 | 184 | 295 | ||||||||||||||||||||||||||
Maintenance expenses | 173 | 191 | 364 | 413 | ||||||||||||||||||||||||||
Management expenses | 18 | 7 | 25 | 43 | ||||||||||||||||||||||||||
Other expense | 14 | 29 | 43 | 36 | ||||||||||||||||||||||||||
Operating profit before income tax | 376 | 511 | 887 | 690 | ||||||||||||||||||||||||||
Income tax attributable to operating profit | 148 | 255 | 403 | 314 | ||||||||||||||||||||||||||
Operating profit after income tax | 228 | 256 | 484 | 376 | ||||||||||||||||||||||||||
Minority interests in operating profit after income tax | — | — | — | (5 | ) | |||||||||||||||||||||||||
Net profit after income tax | 228 | n/a | (1) | 256 | n/a | (1) | 484 | 371 | ||||||||||||||||||||||
Sources of life insurance operating profit | ||||||||||||||||||||||||||||||
The operating profit after income tax is represented by: | ||||||||||||||||||||||||||||||
Emergence of planned profit margins | 104 | 200 | 304 | 206 | ||||||||||||||||||||||||||
Difference between actual and planned experience | 20 | (41 | ) | (21 | ) | (2 | ) | |||||||||||||||||||||||
Effects of changes to underlying assumptions | 2 | — | 2 | — | ||||||||||||||||||||||||||
Reversal of previously recognised losses or loss recognition on groups of related products | 1 | — | 1 | — | ||||||||||||||||||||||||||
Investment earnings on assets in excess of policyholder liabilities | 70 | 7 | 77 | 167 | ||||||||||||||||||||||||||
Other movements(2) | 31 | 90 | 121 | — | ||||||||||||||||||||||||||
Operating profit after income tax | 228 | n/a | (1) | 256 | n/a | (1) | 484 | 371 | ||||||||||||||||||||||
Life insurance premiums received and receivable | 2,649 | 3,112 | ||||||||||||||||||||||||||||
Life insurance claims paid and payable | 4,803 | 4,632 | ||||||||||||||||||||||||||||
(1) | No comparative balances provided as exemption elected when adopting Insurance Contracts AIFRS accounting from 1 July 2005. | |
(2) | Includes profit on sale of the Hong Kong insurance business. |
Life Insurance | Life Investment | |||||||||||||||||||||||
Contracts | Contracts | Group | ||||||||||||||||||||||
Reconciliation of movements in | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | ||||||||||||||||||
policy liabilities | $M | $M | $M | $M | $M | $M | ||||||||||||||||||
Contract policy liabilities | ||||||||||||||||||||||||
Gross policy liabilities opening balance | 25,241 | — | 25,241 | |||||||||||||||||||||
AIFRS transition adjustment | (19,108 | ) | 19,108 | — | ||||||||||||||||||||
Net increase/(decrease) in contract liabilities reflected in the summarised Income Statement | 135 | 2,165 | 2,300 | |||||||||||||||||||||
Contract contributions recognised in policy liabilities | 60 | 1,329 | 1,389 | |||||||||||||||||||||
Contract withdrawals recognised in policy liabilities | (281 | ) | (4,133 | ) | (4,414 | ) | ||||||||||||||||||
Non cash movements | (1,361 | ) | (559 | ) | (1,920 | ) | ||||||||||||||||||
FX translation adjustment | (97 | ) | (126 | ) | (223 | ) | ||||||||||||||||||
Gross policy liabilities closing balance | 4,589 | n/a | (1) | 17,784 | n/a | (1) | 22,373 | n/a | (1) | |||||||||||||||
Liabilities ceded under reinsurance | ||||||||||||||||||||||||
Opening balance | (205 | ) | — | (205 | ) | |||||||||||||||||||
Decrease/(increase) in reinsurance assets reflected in the summarised Income Statement | 57 | — | 57 | |||||||||||||||||||||
Closing balance | (148 | ) | n/a | (1) | — | n/a | (1) | (148 | ) | n/a | (1) | |||||||||||||
Net policy liabilities at 30 June | ||||||||||||||||||||||||
Expected to be realised within 12 months | 545 | 3,625 | 4,170 | |||||||||||||||||||||
Expected to be realised in more than 12 months | 3,896 | 14,159 | 18,055 | |||||||||||||||||||||
Total Insurance Policy Liabilities | 4,441 | n/a | (1) | 17,784 | n/a | (1) | 22,225 | n/a | (1) | |||||||||||||||
(1) | No comparative balances provided as exemption elected when adopting Insurance Contracts AIFRS accounting from 1 July 2005. |
Variable | Impact of movement in underlying variable | |
Expense risk | An increase in the level or inflationary growth of expenses over assumed levels will decrease profit and shareholder equity. | |
Interest rate risk | Depending on the profile of the investment portfolio, the investment income of the Group will decrease as interest rates decrease. This may be offset to an extent by changes in the market value of fixed interest investments. The impact on profit and shareholder equity depends on the relative profiles of assets and liabilities, to the extent that these are not matched. | |
Mortality rates | For insurance contracts that pay a death benefit, higher rates of mortality increase the claim cost and therefore reduce both profit and shareholder equity. For lifetime annuity contracts, lower mortality rates increase the duration of annuity payments and therefore reduce both profit and shareholder equity. | |
Morbidity rates | The cost of health-related claims depends on both the incidence of policyholders becoming ill and the duration which they remain ill. Higher than expected incidence and duration would be likely to increase claim costs, reducing profit and shareholders’ equity. | |
Discontinuance | The impact of the discontinuance rate assumption depends on a range of factors including the type of contract, the surrender value basis (where applicable) and the duration in force. For example, an increase in discontinuance rates at earlier durations of life insurance contracts usually has a negative effect on performance and net assets. However, due to the interplay between the factors, there is not always an adverse outcome from an increase in discontinuance rates. | |
Market Risk | For contracts where benefit payments depend on the value of underlying assets, market risk is borne by policyholders. However, the Group derives fee income based on the value of the underlying funds; hence revenues are always sensitive to changes in market value. For assets which are not contractually linked to policy liabilities, the Group is exposed to market risk. |
Gross (before reinsurance) | Net (after reinsurance) | |||||||||||||||||||
Policy | Policy | Shareholder | ||||||||||||||||||
Profit/(loss) | Liabilities | Profit/(loss) | Liabilities | Equity | ||||||||||||||||
2006 | 2006 | 2006 | 2006 | 2006 | ||||||||||||||||
$M | $M | $M | $M | $M | ||||||||||||||||
Result of change in variables(1) | ||||||||||||||||||||
Interest rates – 1% increase | (17 | ) | (10 | ) | (18 | ) | (8 | ) | (18 | ) | ||||||||||
Mortality and morbidity on lump sum products – 10% increase in total costs | (2 | ) | 2 | (2 | ) | 2 | (2 | ) | ||||||||||||
Annuitant mortality – 20% increase in rate of future mortality improvement | (12 | ) | 16 | (12 | ) | 16 | (12 | ) | ||||||||||||
Morbidity on Income Protection – 10% increase in total cost | (7 | ) | 7 | (6 | ) | 6 | (6 | ) | ||||||||||||
Discontinuance – 10% increase in discontinuance rates | — | — | — | — | — | |||||||||||||||
Expenses – 10% increase in maintenance expenses assumption | (1 | ) | 1 | (1 | ) | 1 | (1 | ) | ||||||||||||
(1) | Represents Australia and New Zealand only. |
Life Insurance | ||||||||
Contracts | ||||||||
2006 | 2005 | |||||||
Components of life insurance contract liabilities | $M | $M | ||||||
Future policy benefits(1) | 6,205 | |||||||
Future bonuses | 1,128 | |||||||
Future expenses | 1,810 | |||||||
Future profit margins | 1,321 | |||||||
Future charges for acquisition expenses | (407 | ) | ||||||
Balance of future premiums | (5,705 | ) | ||||||
Provisions for bonuses not allocated to participating policyholders | 89 | |||||||
Total Contract Liabilities | 4,441 | n/a | (2) | |||||
(1) | Including bonuses credited to policyholders in prior years. | |
(2) | No comparative balances provided as exemption elected when adopting Insurance Contracts AIFRS accounting from 1 July 2005. |
Product Type | Method | Profit Carrier | ||
Individual | ||||
Conventional Investment account Lump sum risk Income stream risk Immediate annuities | Projection Projection Projection Projection Projection | Bonuses or expected claim payment Bonuses or funds under management Premiums/expected claim payment Expected claim payments Annuity payments | ||
Group | ||||
Investment account Lump sum risk Income stream risk | Projection Accumulation Projection | Bonuses or funds under management Not applicable Expected claim payments |
June 2006 | June 2005 | |||||||
Class of Business(1) | Rate Range % | Rate Range % | ||||||
Traditional – ordinary business (after tax) | 6.00–6. 75 | 5.52–6. 26 | ||||||
Traditional – superannuation business (after tax) | 7.33–8. 26 | 6.74–7. 67 | ||||||
Annuity based (after tax) | 5.79–6. 30 | 5.71–6. 49 | ||||||
Term insurance – ordinary business (before tax) | 5.58–5. 81 | 5.11–5. 50 | ||||||
Term insurance – superannuation business (before tax) | 5.58–5. 81 | 5.11–5. 50 | ||||||
Income protection business (before tax) | 5.58–5. 81 | 5.11 | ||||||
Investment account – ordinary business (after tax) | 4.21 | 3.74 | ||||||
Investment account – superannuation business (after tax) | 5.12 | 4.55 | ||||||
Investment account – exempt (after tax) | 5.98 | 5.31 | ||||||
(1) | For New Zealand, investment earning rates assumed were 3.9% to 5.6% net of tax. |
Key variables that affect the | ||||||
Nature of compensation for | timing and uncertainty of future | |||||
Type of Contract | Detail of contract workings | claims | cash flows | |||
Non-participating life insurance contracts with fixed and guaranteed terms (Term Life, Trauma and Disability) | Guaranteed benefits paid on death, ill health or maturity that are fixed and guaranteed and not at the discretion of the issuer. | Benefits, defined by the insurance contracts, are determined by the contract. They are not directly affected by the performance of underlying assets or the performance of the contracts as a whole. | Mortality Morbidity Discontinuance rates Expenses | |||
Life insurance contracts with discretionary participating benefits (endowment and whole of life) | These policies include a clearly defined initial guaranteed sum assured which is payable on death. The guaranteed amount is multiple of the amount that is increased throughout the duration of the policy by the addition of regular annual bonuses which, once added, are not removed. Bonuses are also added on maturity. | Benefits arising from the discretionary participation feature are based on the performance of a specified pool of contracts or a specified type of contract. | Market earnings rates Mortality Discontinuance rates Expenses | |||
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$’000 | $’000 | $’000 | $’000 | |||||||||||||
Amounts paid or due and payable for audit services to: | ||||||||||||||||
Ernst & Young | 9,481 | 7,921 | 7,559 | 4,084 | ||||||||||||
Other Auditors | 176 | 114 | — | — | ||||||||||||
9,657 | 8,035 | 7,559 | 4,084 | |||||||||||||
Amounts paid or due and payable for non-audit services to Ernst & Young: | ||||||||||||||||
Audit related services | 5,122 | 2,077 | 1,660 | 1,664 | ||||||||||||
Taxation services | — | 16 | — | 8 | ||||||||||||
All other services | ||||||||||||||||
Other services | 1,423 | 327 | 782 | 11 | ||||||||||||
6,545 | (1) | 2,420 | 2,442 | 1,683 | ||||||||||||
Total Remuneration of Auditors | 16,202 | 10,455 | 10,001 | 5,767 | ||||||||||||
(1) | An additional amount of $4,056,000 was paid to Ernst & Young by way of fees paid for Non-Audit Services provided to entities not consolidated into the Financial Statements, being managed investment schemes and superannuation funds. $3,923,000 of this amount relates to statutory audits, with the residual relating to reviews attestations and assurances. |
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Not later than one year | 36 | 13 | 14 | 13 | ||||||||||||
Total Commitments for Capital Expenditure Not Provided for in the Accounts | 36 | 13 | 14 | 13 | ||||||||||||
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Commitments in respect of non-cancellable operating lease agreements due: | ||||||||||||||||
Not later than one year | 298 | 297 | 258 | 263 | ||||||||||||
Later than one year but not later than five years | 732 | 635 | 610 | 540 | ||||||||||||
Later than five years | 255 | 214 | 214 | 165 | ||||||||||||
Total Lease Commitments – Property, Plant and Equipment | 1,285 | 1,146 | 1,082 | 968 | ||||||||||||
Group’s share of lease commitments of associated entities due: | ||||||||||||||||
Not later than one year | 3 | — | ||||||||||||||
Later than one year but not later than five years | 3 | — | ||||||||||||||
Later than five years | 2 | — | ||||||||||||||
Total Lease Commitments – Property, Plant and Equipment | 8 | — | ||||||||||||||
Group | ||||||||||||||||
Face Value | Credit Equivalent | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Credit risk related instruments | ||||||||||||||||
Guarantees | 2,592 | 2,438 | 2,592 | 2,438 | ||||||||||||
Standby letters of credit | 342 | 321 | 342 | 321 | ||||||||||||
Bill endorsements | 230 | 276 | 230 | 276 | ||||||||||||
Documentary letters of credit | 613 | 185 | 123 | 37 | ||||||||||||
Performance related contingents | 1,753 | 1,095 | 876 | 547 | ||||||||||||
Commitments to provide credit | 82,162 | 76,162 | 16,135 | 13,421 | ||||||||||||
Other commitments | 8,048 | 8,279 | 1,179 | 942 | ||||||||||||
Total Credit Risk Related Instruments | 95,740 | 88,756 | 21,477 | 17,982 | ||||||||||||
2006 | 2005 | |||||||
$M | $M | |||||||
Funds under administration | ||||||||
Australia | 99,000 | 77,208 | ||||||
United Kingdom | 15,526 | 11,914 | ||||||
New Zealand | 9,353 | 8,579 | ||||||
Asia | 6,842 | 2,404 | ||||||
Total | 130,721 | 100,105 | ||||||
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Assets pledged | $M | $M | $M | $M | ||||||||||||
Cash | 1,633 | (2) | 1,633 | |||||||||||||
Assets at fair value through Income Statement | 1,192 | 1,192 | ||||||||||||||
Available-for-sale investments | 58 | 58 | ||||||||||||||
Assets pledged | 2,883 | N/A | (1) | 2,883 | N/A | (1) | ||||||||||
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Collateral held | $M | $M | $M | $M | ||||||||||||
Cash | 312 | 312 | ||||||||||||||
Assets at fair value through Income Statement | 2,334 | 2,334 | ||||||||||||||
Collateral held | 2,646 | N/A | (1) | 2,646 | N/A | (1) | ||||||||||
(1) | No comparative balances provided as exemption elected when adopting Financial Instruments AIFRS accounting from 1 July 2005. | |
(2) | These balances include assets sold under repurchase agreements. The liabilities related to these repurchase agreements are disclosed in Note 23. |
• | Ensure all financial obligations are met when due; | |
• | Provide adequate protection, even under crisis scenarios, at lowest cost; and | |
• | Achieve sustainable, lowest-cost funding within the limitations of funding diversification requirements. |
Group | ||||||||
2006 | 2005 | |||||||
Market Risk | $M | $M | ||||||
Australia | ||||||||
Cheque accounts | 31,962 | 27,455 | ||||||
Savings accounts | 32,070 | 31,947 | ||||||
Term deposits | 43,210 | 41,582 | ||||||
Cash management accounts | 23,387 | 21,831 | ||||||
Debt issues | 65,426 | 52,384 | ||||||
Bank acceptances | 18,310 | 16,786 | ||||||
Certificates of deposits | 18,185 | 16,038 | ||||||
Life insurance policy liabilities | 20,001 | 20,636 | ||||||
Loan capital | 8,887 | 6,291 | ||||||
Securities sold under agreements to repurchase and short sales | 1,380 | 2,258 | ||||||
Liabilities at fair value through Income Statement | 1,948 | — | ||||||
Managed funds units on issue | 1,109 | — | ||||||
Other | 3,354 | 2,353 | ||||||
Total Australia | 269,229 | 239,561 | ||||||
Overseas | ||||||||
Deposits and interbank | 30,863 | 32,230 | ||||||
Commercial paper | 7,710 | 12,266 | ||||||
Life insurance policy liabilities | 2,224 | 4,058 | ||||||
Other debt issues | 5,455 | 6,115 | ||||||
Loan capital | 1,008 | — | ||||||
Liabilities at fair value through Income Statement | 11,863 | — | ||||||
Total Overseas | 59,123 | 54,669 | ||||||
Total Funding Sources | 328,352 | 294,230 | ||||||
Provisions and other liabilities | 19,408 | 20,531 | ||||||
Total Liabilities | 347,760 | 314,761 | ||||||
(expressed as a percentage of expected next | 2006 | 2005 | ||||||
12 months’ earnings) | % | % | ||||||
Average monthly exposure | 1.1 | 1.1 | ||||||
High month exposure | 2.1 | 1.5 | ||||||
Low month exposure | 0.2 | 0.5 |
2006 | 2005 | |||||||
$M | $M | |||||||
Exposure as at 30 June | 117 | 7 | ||||||
Average monthly exposure | 53 | 24 | ||||||
High month exposure | 127 | 78 | ||||||
Low month exposure | 7 | 5 |
Repricing Period at 30 June 2006 | ||||||||||||||||||||||||||||||||||||
Balance | Not | Weighted | ||||||||||||||||||||||||||||||||||
Sheet | 0 to 1 | 1 to 3 | 3 to 6 | 6 to 12 | 1 to 5 | Over 5 | Interest | Average | ||||||||||||||||||||||||||||
Total | month | months | months | months | years | years | Bearing | Rate | ||||||||||||||||||||||||||||
$M | $M | $M | $M | $M | $M | $M | $M | % | ||||||||||||||||||||||||||||
Australia | ||||||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||
Cash and liquid assets | 4,393 | 3,413 | — | — | — | — | — | 980 | 5.05 | |||||||||||||||||||||||||||
Receivables due from other financial institutions | 3,191 | 2,348 | 687 | 37 | — | — | — | 119 | 5.31 | |||||||||||||||||||||||||||
Assets at fair value through Income Statement: | ||||||||||||||||||||||||||||||||||||
Trading | 12,832 | 12,763 | 50 | — | — | — | — | 19 | 6.17 | |||||||||||||||||||||||||||
Insurance | 22,091 | 660 | 333 | 1,800 | 102 | 2,099 | 1,777 | 15,320 | 6.28 | |||||||||||||||||||||||||||
Other | 394 | 343 | 38 | — | 13 | — | — | — | 6.20 | |||||||||||||||||||||||||||
Derivative assets | 6,924 | — | — | — | — | — | — | 6,924 | — | |||||||||||||||||||||||||||
Available-for-sale investments | 6,011 | 1,657 | 385 | 369 | 193 | 2,453 | 340 | 614 | 7.41 | |||||||||||||||||||||||||||
Loans, advances and other receivables | 217,054 | 140,016 | 16,557 | 6,677 | 13,371 | 38,294 | 3,204 | (1,065 | ) | 7.54 | ||||||||||||||||||||||||||
Bank acceptances of customers | 18,310 | — | — | — | — | — | — | 18,310 | — | |||||||||||||||||||||||||||
Investment property | 258 | — | — | — | — | — | — | 258 | — | |||||||||||||||||||||||||||
Property, plant and equipment | 1,157 | — | — | — | — | — | — | 1,157 | — | |||||||||||||||||||||||||||
Investment in associates | 178 | — | — | — | — | — | — | 178 | — | |||||||||||||||||||||||||||
Intangible assets | 7,057 | — | — | — | — | — | — | 7,057 | — | |||||||||||||||||||||||||||
Deferred tax assets | 610 | — | — | — | — | — | — | 610 | — | |||||||||||||||||||||||||||
Other assets | 4,270 | — | — | — | — | — | — | 4,270 | — | |||||||||||||||||||||||||||
Total Assets | 304,730 | 161,200 | 18,050 | 8,883 | 13,679 | 42,846 | 5,321 | 54,751 | 6.37 | |||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||||
Deposits and other public borrowings | 150,194 | 102,755 | 19,413 | 11,508 | 8,611 | 1,924 | 111 | 5,872 | 4.53 | |||||||||||||||||||||||||||
Payables due to other financial institutions | 3,354 | 2,967 | 161 | 215 | 6 | 5 | — | — | 4.70 | |||||||||||||||||||||||||||
Liabilities at fair value through Income Statement | 1,948 | 1,948 | — | — | — | — | — | — | 5.52 | |||||||||||||||||||||||||||
Derivative liabilities | 8,557 | — | — | — | — | — | — | 8,557 | — | |||||||||||||||||||||||||||
Bank acceptances | 18,310 | — | — | — | — | — | — | 18,310 | — | |||||||||||||||||||||||||||
Current tax liabilities | 368 | — | — | — | — | — | — | 368 | — | |||||||||||||||||||||||||||
Deferred tax liabilities | 1,234 | — | — | — | — | — | — | 1,234 | — | |||||||||||||||||||||||||||
Other provisions | 794 | — | — | — | — | — | — | 794 | — | |||||||||||||||||||||||||||
Insurance policy liabilities | 20,001 | — | — | — | — | — | — | 20,001 | (1) | — | ||||||||||||||||||||||||||
Debt issues | 65,426 | 10,562 | 25,766 | 7,791 | 2,457 | 14,854 | 3,938 | 58 | 5.99 | |||||||||||||||||||||||||||
Managed funds units on issue | 1,109 | — | — | — | — | — | — | 1,109 | — | |||||||||||||||||||||||||||
Bills payable and other liabilities | 5,156 | — | — | — | — | — | — | 5,156 | — | |||||||||||||||||||||||||||
276,451 | 118,232 | 45,340 | 19,514 | 11,074 | 16,783 | 4,049 | 61,459 | |||||||||||||||||||||||||||||
Loan capital | 8,887 | 1,093 | 2,484 | 628 | — | 1,266 | 3,416 | — | 5.22 | |||||||||||||||||||||||||||
Total Liabilities | 285,338 | 119,325 | 47,824 | 20,142 | 11,074 | 18,049 | 7,465 | 61,459 | 4.01 | |||||||||||||||||||||||||||
Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||
Share capital and other equity | 19,782 | — | — | — | — | — | — | 19,782 | — | |||||||||||||||||||||||||||
Minority interests | 3 | — | — | — | — | — | — | 3 | — | |||||||||||||||||||||||||||
Total Shareholders’ Equity | 19,785 | — | — | — | — | — | — | 19,785 | — | |||||||||||||||||||||||||||
Derivatives | (2) | 2,827 | (25,735 | ) | 9,069 | 11,447 | 1,378 | 1,014 | — | (3) | ||||||||||||||||||||||||||
Net Mismatch | (2) | 44,702 | (55,509 | ) | (2,190 | ) | 14,052 | 26,175 | (1,130 | ) | (26,493 | ) | (3) | |||||||||||||||||||||||
Cumulative Mismatch | (2) | 44,702 | (10,807 | ) | (12,997 | ) | 1,055 | 27,230 | 26,100 | (393 | ) | (3) | ||||||||||||||||||||||||
(1) | Technically, the insurance policy liabilities are not interest bearing, but the amount of the liability may change in line with changes in interest rates. This is particularly so with investment linked policies. | |
(2) | No balance sheet amount applicable. | |
(3) | No rate applicable. |
Repricing Period at 30 June 2006 | ||||||||||||||||||||||||||||||||||||
Balance | Not | Weighted | ||||||||||||||||||||||||||||||||||
Sheet | 0 to 1 | 1 to 3 | 3 to 6 | 6 to 12 | 1 to 5 | Over 5 | Interest | Average | ||||||||||||||||||||||||||||
Total | month | months | months | months | years | years | Bearing | Rate | ||||||||||||||||||||||||||||
$M | $M | $M | $M | $M | $M | $M | $M | % | ||||||||||||||||||||||||||||
Overseas | ||||||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||
Cash and liquid assets | 738 | 630 | 67 | 9 | — | — | — | 32 | 1.64 | |||||||||||||||||||||||||||
Receivables due from other financial institutions | 3,916 | 3,112 | 445 | 157 | — | 7 | 28 | 167 | 3.64 | |||||||||||||||||||||||||||
Assets at fair value through Income Statement: | ||||||||||||||||||||||||||||||||||||
Trading | 2,926 | 467 | 1,470 | 513 | 10 | 299 | 166 | 1 | 6.20 | |||||||||||||||||||||||||||
Insurance | 2,346 | 832 | 1 | 3 | 1 | 17 | 23 | 1,469 | 2.09 | |||||||||||||||||||||||||||
Other | 2,550 | 1,551 | 911 | 26 | 8 | 9 | — | 45 | 7.42 | |||||||||||||||||||||||||||
Derivative assets | 2,751 | — | — | — | — | — | — | 2,751 | — | |||||||||||||||||||||||||||
Available-for-sale investments | 5,192 | 471 | 2,493 | 1,172 | 352 | 684 | 21 | (1 | ) | 4.73 | ||||||||||||||||||||||||||
Loans, advances and other receivables | 42,122 | 10,102 | 5,812 | 5,433 | 4,981 | 15,446 | 419 | (71 | ) | 7.37 | ||||||||||||||||||||||||||
Property, plant and equipment | 157 | — | — | — | — | — | — | 157 | — | |||||||||||||||||||||||||||
Investment in associates | 12 | — | — | — | — | — | — | 12 | — | |||||||||||||||||||||||||||
Intangible assets | 752 | — | — | — | — | — | — | 752 | — | |||||||||||||||||||||||||||
Deferred tax assets | 40 | — | — | — | — | — | — | 40 | — | |||||||||||||||||||||||||||
Other assets | 871 | — | — | — | — | — | — | 871 | — | |||||||||||||||||||||||||||
Total Assets | 64,373 | 17,165 | 11,199 | 7,313 | 5,352 | 16,462 | 657 | 6,225 | 6.25 | |||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||||
Deposits and other public borrowings | 23,033 | 10,694 | 6,937 | 2,567 | 1,015 | 651 | 3 | 1,166 | 5.69 | |||||||||||||||||||||||||||
Payables due to other financial institutions | 7,830 | 5,144 | 1,018 | 283 | 178 | 322 | — | 885 | 3.69 | |||||||||||||||||||||||||||
Liabilities at fair value through Income Statement | 11,863 | 5,541 | 3,993 | 1,271 | 406 | 641 | 11 | — | 4.83 | |||||||||||||||||||||||||||
Derivative liabilities | 2,263 | — | — | — | — | — | — | 2,263 | — | |||||||||||||||||||||||||||
Current tax liabilities | 10 | — | — | — | — | — | — | 10 | — | |||||||||||||||||||||||||||
Deferred tax liabilities | 102 | — | — | — | — | — | — | 102 | — | |||||||||||||||||||||||||||
Other provisions | 27 | — | — | — | — | — | — | 27 | — | |||||||||||||||||||||||||||
Insurance policy liabilities | 2,224 | — | — | — | — | — | — | 2,224 | (1) | — | ||||||||||||||||||||||||||
Debt issues | 13,165 | 4,767 | 4,093 | 69 | 136 | 4,100 | — | — | 5.22 | |||||||||||||||||||||||||||
Bills payable and other liabilities | 897 | — | — | — | — | — | — | 897 | — | |||||||||||||||||||||||||||
61,414 | 26,146 | 16,041 | 4,190 | 1,735 | 5,714 | 14 | 7,574 | |||||||||||||||||||||||||||||
Loan capital | 1,008 | — | — | — | — | 253 | 740 | 15 | 3.96 | |||||||||||||||||||||||||||
Total Liabilities | 62,422 | 26,146 | 16,041 | 4,190 | 1,735 | 5,967 | 754 | 7,589 | 4.65 | |||||||||||||||||||||||||||
Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||
Share capital and other equity | 1,053 | — | — | — | — | — | — | 1,053 | — | |||||||||||||||||||||||||||
Minority interests | 505 | — | — | — | — | — | — | 505 | — | |||||||||||||||||||||||||||
Total Shareholders’ Equity | 1,558 | — | — | — | — | — | — | 1,558 | — | |||||||||||||||||||||||||||
Derivatives | (2) | 5,632 | 12,782 | (2,464 | ) | (3,650 | ) | (11,806 | ) | (494 | ) | — | (3) | |||||||||||||||||||||||
Net Mismatch | (2) | (3,349 | ) | 7,940 | 659 | (33 | ) | (1,311 | ) | (591 | ) | (2,922 | ) | (3) | ||||||||||||||||||||||
Cumulative Mismatch | (2) | (3,349 | ) | 4,591 | 5,250 | 5,217 | 3,906 | 3,315 | 393 | (3) | ||||||||||||||||||||||||||
(1) | Technically, the insurance policy liabilities are not interest bearing, but the amount of the liability may change in line with changes in interest rates. This is particularly so with investment linked policies. | |
(2) | No balance sheet amount applicable. | |
(3) | No rate applicable. |
Repricing Period at 30 June 2005 | ||||||||||||||||||||||||||||||||||||
Balance | Not | Weighted | ||||||||||||||||||||||||||||||||||
Sheet | 0 to 1 | 1 to 3 | 3 to 6 | 6 to 12 | 1 to 5 | Over 5 | Interest | Average | ||||||||||||||||||||||||||||
Total | month | months | months | months | years | years | Bearing | Rate | ||||||||||||||||||||||||||||
$M | $M | $M | $M | $M | $M | $M | $M | % | ||||||||||||||||||||||||||||
Australia | ||||||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||
Cash and liquid assets | 4,804 | 3,423 | — | — | — | — | — | 1,381 | 4.95 | |||||||||||||||||||||||||||
Receivables from other financial institutions | 3,528 | 2,816 | 534 | 82 | — | — | — | 96 | 3.55 | |||||||||||||||||||||||||||
Trading securities | 11,026 | 11,015 | — | — | — | — | — | 11 | 4.77 | |||||||||||||||||||||||||||
Life insurance investment assets | 22,771 | 3,097 | 882 | 76 | 358 | 2,467 | 2,123 | 13,768 | 4.67 | |||||||||||||||||||||||||||
Investment securities | 5,137 | 1,295 | 136 | 325 | 165 | 2,517 | 697 | 2 | 5.98 | |||||||||||||||||||||||||||
Loans, advances and other receivables | 191,471 | 113,394 | 12,329 | 9,401 | 14,707 | 40,810 | 2,097 | (1,267 | ) | 7.18 | ||||||||||||||||||||||||||
Bank acceptances of customers | 16,786 | — | — | — | — | — | — | 16,786 | — | |||||||||||||||||||||||||||
Investment property | 252 | 252 | — | |||||||||||||||||||||||||||||||||
Property, plant and equipment | 978 | — | — | — | — | — | — | 978 | — | |||||||||||||||||||||||||||
Investment in associates | 52 | 52 | — | |||||||||||||||||||||||||||||||||
Intangible assets | 7,249 | — | — | — | — | — | — | 7,249 | — | |||||||||||||||||||||||||||
Deferred tax assets | 651 | 651 | — | |||||||||||||||||||||||||||||||||
Other assets | 15,562 | — | — | — | — | — | — | 15,562 | — | |||||||||||||||||||||||||||
Total Assets | 280,267 | 135,040 | 13,881 | 9,884 | 15,230 | 45,794 | 4,917 | 55,521 | 5.71 | |||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||||
Deposits and other public borrowings | 141,111 | 93,698 | 21,222 | 12,435 | 4,479 | 3,288 | 136 | 5,853 | 4.27 | |||||||||||||||||||||||||||
Payables due to other financial institutions | 2,708 | 2,086 | 544 | 56 | 9 | 13 | — | — | 3.45 | |||||||||||||||||||||||||||
Bank acceptances | 16,786 | — | — | — | — | — | — | 16,786 | — | |||||||||||||||||||||||||||
Current tax liabilities | 748 | — | — | — | — | — | — | 748 | — | |||||||||||||||||||||||||||
Deferred tax liabilities | 921 | — | — | — | — | — | — | 921 | — | |||||||||||||||||||||||||||
Other provisions | 830 | — | — | — | — | — | — | 830 | — | |||||||||||||||||||||||||||
Insurance policy liabilities | 20,636 | — | — | — | — | — | — | 20,636(1) | — | |||||||||||||||||||||||||||
Debt issues | 52,384 | 7,122 | 19,389 | 3,218 | 2,848 | 19,298 | 509 | — | 5.76 | |||||||||||||||||||||||||||
Bills payable and other liabilities | 16,777 | — | — | — | — | — | — | 16,777 | — | |||||||||||||||||||||||||||
252,901 | 102,906 | 41,155 | 15,709 | 7,336 | 22,599 | 645 | 62,551 | |||||||||||||||||||||||||||||
Loan capital | 6,291 | 608 | 2,202 | 146 | — | 1,939 | 1,396 | — | 7.13 | |||||||||||||||||||||||||||
Total Liabilities | 259,192 | 103,514 | 43,357 | 15,855 | 7,336 | 24,538 | 2,041 | 62,551 | 3.70 | |||||||||||||||||||||||||||
Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||
Share capital and other equity | 15,429 | — | — | — | — | — | — | 15,429 | — | |||||||||||||||||||||||||||
Minority interests | 1,270 | — | — | — | — | — | — | 1,270 | — | |||||||||||||||||||||||||||
Total Shareholders’ Equity | 16,699 | — | — | — | — | — | — | 16,699 | — | |||||||||||||||||||||||||||
Off Balance Sheet Items | ||||||||||||||||||||||||||||||||||||
Swaps | (2) | 3,296 | (17,956 | ) | 4,543 | 3,322 | 6,726 | 69 | — | (3) | ||||||||||||||||||||||||||
Options | (2) | — | 84 | (15 | ) | — | (69 | ) | — | — | (3) | |||||||||||||||||||||||||
Futures | (2) | — | 3,420 | 3,196 | (3,890 | ) | (2,208 | ) | (518 | ) | — | (3) | ||||||||||||||||||||||||
Net Mismatch | (2) | 34,696 | (43,351 | ) | 1,787 | 7,166 | 26,214 | 2,392 | (24,527 | ) | (3) | |||||||||||||||||||||||||
Cumulative Mismatch | (2) | 34,696 | (8,655 | ) | (6,868 | ) | 298 | 26,512 | 28,904 | 4,377 | (3) | |||||||||||||||||||||||||
(1) | Technically, the insurance policy liabilities are not interest bearing, but the amount of the liability may change in line with changes in interest rates. This is particularly so with investment linked policies. | |
(2) | No balance sheet amount applicable. | |
(3) | No rate applicable. |
Repricing Period at 30 June 2005 | ||||||||||||||||||||||||||||||||||||
Balance | Not | Weighted | ||||||||||||||||||||||||||||||||||
Sheet | 0 to 1 | 1 to 3 | 3 to 6 | 6 to 12 | 1 to 5 | Over 5 | Interest | Average | ||||||||||||||||||||||||||||
Total | month | months | months | months | years | years | Bearing | Rate | ||||||||||||||||||||||||||||
$M | $M | $M | $M | $M | $M | $M | $M | % | ||||||||||||||||||||||||||||
Overseas | ||||||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||
Cash and liquid assets | 1,251 | 1,094 | 82 | — | 1 | — | — | 74 | 2.77 | |||||||||||||||||||||||||||
Receivables from other financial institutions | 2,559 | 1,017 | 1,143 | 351 | — | — | — | 48 | 3.60 | |||||||||||||||||||||||||||
Trading securities | 3,605 | 291 | 2,335 | 152 | 97 | 492 | 233 | 5 | 5.81 | |||||||||||||||||||||||||||
Life insurance investment assets | 4,713 | 1,005 | 64 | 9 | 25 | 433 | 831 | 2,346 | 2.32 | |||||||||||||||||||||||||||
Investment securities | 5,701 | 500 | 3,406 | 573 | 151 | 713 | 357 | 1 | 4.37 | |||||||||||||||||||||||||||
Loans, advances and other receivables | 36,875 | 11,633 | 3,633 | 3,027 | 6,449 | 12,158 | 98 | (123 | ) | 7.49 | ||||||||||||||||||||||||||
Property, plant and equipment | 154 | — | — | — | — | — | — | 154 | — | |||||||||||||||||||||||||||
Intangible assets | 407 | — | — | — | — | — | — | 407 | — | |||||||||||||||||||||||||||
Other assets | 1,872 | — | — | — | — | — | — | 1,872 | — | |||||||||||||||||||||||||||
Total Assets | 57,137 | 15,540 | 10,663 | 4,112 | 6,723 | 13,796 | 1,519 | 4,784 | 6.04 | |||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||||
Deposits and other public borrowings | 26,915 | 16,866 | 4,995 | 3,220 | 1,102 | 542 | 186 | 4 | 5.44 | |||||||||||||||||||||||||||
Payables due to other financial institutions | 5,315 | 3,538 | 670 | �� | 870 | 237 | — | — | — | 4.23 | ||||||||||||||||||||||||||
Current tax liabilities | 85 | — | — | — | — | — | — | 85 | — | |||||||||||||||||||||||||||
Other provisions | 41 | — | — | — | — | — | — | 41 | — | |||||||||||||||||||||||||||
Insurance policy liabilities | 4,058 | — | — | — | — | — | 4,058 | (1) | — | |||||||||||||||||||||||||||
Debt issues | 18,381 | 3,378 | 4,059 | 9,389 | 387 | 1,122 | 46 | — | 2.28 | |||||||||||||||||||||||||||
Bills payable and other liabilities | 774 | — | — | — | — | — | — | 774 | — | |||||||||||||||||||||||||||
Total Liabilities | 55,569 | 23,782 | 9,724 | 13,479 | 1,726 | 1,664 | 232 | 4,962 | 3.80 | |||||||||||||||||||||||||||
Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||
Share capital and other equity | 5,425 | — | — | — | — | — | — | 5,425 | — | |||||||||||||||||||||||||||
Minority interests | 519 | — | — | — | — | — | — | 519 | — | |||||||||||||||||||||||||||
Total Shareholders’ Equity | 5,944 | — | — | — | — | — | — | 5,944 | — | |||||||||||||||||||||||||||
Off Balance Sheet Items | ||||||||||||||||||||||||||||||||||||
Swaps | (2) | 3,942 | 9,056 | (1,039 | ) | (3,254 | ) | (8,832 | ) | 87 | 39 | (3) | ||||||||||||||||||||||||
FRAs | (2) | (459 | ) | 463 | (551 | ) | 547 | — | — | — | (3) | |||||||||||||||||||||||||
Futures | (2) | — | 1,167 | (592 | ) | (575 | ) | — | — | — | (3) | |||||||||||||||||||||||||
Net Mismatch | (2) | (4,759 | ) | 11,625 | (11,549 | ) | 1,715 | 3,300 | 1,374 | (6,083 | ) | (3) | ||||||||||||||||||||||||
Cumulative Mismatch | (2) | (4,759 | ) | 6,866 | (4,683 | ) | (2,968 | ) | 332 | 1,706 | (4,377 | ) | (3) | |||||||||||||||||||||||
(1) | Technically, the insurance policy liabilities are not interest bearing, but the amount of the liability may change in line with changes in interest rates. This is particularly so with investment linked policies. | |
(2) | No balance sheet amount applicable. | |
(3) | No rate applicable. |
Exchange Rate | Interest Rate | |||||||||||||||||||||||
Related Contracts | Related Contracts | Total | ||||||||||||||||||||||
2006 | 2005 | 2006 | 2005 | 2006 | 2005 | |||||||||||||||||||
$M | $M | $M | $M | $M | $M | |||||||||||||||||||
Within 6 months | — | (8 | ) | 6 | (51 | ) | 6 | (59 | ) | |||||||||||||||
Within 6 months – 1 year | — | (7 | ) | 7 | 17 | 7 | 10 | |||||||||||||||||
Within 1 – 2 years | — | 29 | 55 | (20 | ) | 55 | 9 | |||||||||||||||||
Within 2 – 5 years | — | 34 | (10 | ) | (208 | ) | (10 | ) | (174 | ) | ||||||||||||||
After 5 years | — | 65 | 30 | (87 | ) | 30 | (22 | ) | ||||||||||||||||
Net deferred gain/(loss)(1) | — | 113 | 88 | (349 | ) | 88 | (236 | ) | ||||||||||||||||
(1) | Following the adoption of AASB 132 and AASB 139 at 1 July 2005 all derivatives including hedging derivatives are now at fair value on the balance sheet. For further details refer to Note 11. The 2006 data reflects those hedge derivatives classified as Cash Flow hedges which have been deferred into the Cash Flow Hedge Reserve. |
• | Provide risk management products and services to customers; |
• | Efficiently assist in managing the Group’s own market risks; and |
• | Conduct profitable trading within a controlled framework, leveraging off the Group’s market presence and expertise. |
Group | ||||||||||||||||
Face Value | Credit Equivalent | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Derivatives | ||||||||||||||||
Exchange rate related contracts | ||||||||||||||||
Forwards | ||||||||||||||||
Trading | 245,943 | 164,491 | 4,080 | 3,542 | ||||||||||||
Fair value through Income Statement | 6,802 | — | 242 | — | ||||||||||||
Hedging(1) | 1,253 | 31,776 | 16 | 786 | ||||||||||||
Total Forwards | 253,998 | 196,267 | 4,338 | 4,328 | ||||||||||||
Swaps | ||||||||||||||||
Trading | 104,942 | 85,978 | 2,730 | 7,439 | ||||||||||||
Fair value through Income Statement | 5,838 | — | 334 | — | ||||||||||||
Hedging(1) | 16,231 | 46,969 | 330 | 2,165 | ||||||||||||
Total Swaps | 127,011 | 132,947 | 3,394 | 9,604 | ||||||||||||
Futures | ||||||||||||||||
Trading | 8,063 | 25 | — | — | ||||||||||||
Fair value through Income Statement | — | — | — | — | ||||||||||||
Hedging | — | — | — | — | ||||||||||||
Total Futures | 8,063 | 25 | — | — | ||||||||||||
Options purchased and sold | ||||||||||||||||
Trading | 17,051 | 21,523 | 240 | 304 | ||||||||||||
Fair value through Income Statement | 252 | — | 8 | — | ||||||||||||
Hedging | 101 | 141 | 3 | 5 | ||||||||||||
Total Options Purchased and Sold | 17,404 | 21,664 | 251 | 309 | ||||||||||||
Total Exchange Rate Related Contracts | 406,476 | 350,903 | 7,983 | 14,241 | ||||||||||||
(1) | Derivative book restructured to meet AIFRS hedging guidelines. |
Group | ||||||||||||||||
Face Value | Credit Equivalent | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Interest rate related contracts | ||||||||||||||||
Forwards | ||||||||||||||||
Trading | 64,865 | 25,312 | 19 | 6 | ||||||||||||
Fair value through Income Statement | 7,691 | — | 2 | — | ||||||||||||
Hedging | — | 120 | — | 2 | ||||||||||||
Total Forwards | 72,556 | 25,432 | 21 | 8 | ||||||||||||
Swaps | ||||||||||||||||
Trading(1) | 404,493 | 273,456 | 4,031 | 3,185 | ||||||||||||
Fair value through Income Statement | 8,069 | — | 67 | — | ||||||||||||
Hedging | 95,321 | 146,799 | 283 | 2,843 | ||||||||||||
Total Swaps | 507,883 | 420,255 | 4,381 | 6,028 | ||||||||||||
Futures | ||||||||||||||||
Trading | 83,075 | 44,362 | — | — | ||||||||||||
Fair value through Income Statement | 1,916 | — | — | — | ||||||||||||
Hedging | 1,500 | 14,558 | — | 249 | ||||||||||||
Total Futures | 86,491 | 58,920 | — | 249 | ||||||||||||
Options purchased and sold | ||||||||||||||||
Trading | 34,899 | 26,659 | 238 | 185 | ||||||||||||
Fair value through Income Statement | 627 | — | 2 | — | ||||||||||||
Hedging | — | 4,098 | — | 43 | ||||||||||||
Total Options Purchased and Sold | 35,526 | 30,757 | 240 | 228 | ||||||||||||
Total Interest Rate Related Contracts | 702,456 | 535,364 | 4,642 | 6,513 | ||||||||||||
Credit risk related contracts | ||||||||||||||||
Swaps | ||||||||||||||||
Trading | 3,073 | 3,002 | 263 | 250 | ||||||||||||
Fair value through Income Statement | 275 | — | — | — | ||||||||||||
Hedging | — | 3,972 | — | 290 | ||||||||||||
Total Swaps | 3,348 | 6,974 | 263 | 540 | ||||||||||||
Total Credit Risk Related Contracts | 3,348 | 6,974 | 263 | 540 | ||||||||||||
Equity risk related contracts | ||||||||||||||||
Swaps | ||||||||||||||||
Hedging | 159 | 276 | 3 | 44 | ||||||||||||
Futures | ||||||||||||||||
Hedging | — | 115 | — | 115 | ||||||||||||
Options purchased and sold | ||||||||||||||||
Trading | — | 395 | — | 27 | ||||||||||||
Fair value through Income Statement | 171 | — | 19 | — | ||||||||||||
Hedging | — | 29 | — | 3 | ||||||||||||
Total Options Purchased and Sold | 171 | 424 | 19 | 30 | ||||||||||||
Total Equity Risk Related Contracts | 330 | 815 | 22 | 189 | ||||||||||||
Commodity contracts | ||||||||||||||||
Forwards | ||||||||||||||||
Trading | 1,919 | — | 234 | — | ||||||||||||
Fair value through Income Statement | 5 | — | 1 | — | ||||||||||||
Total Forwards | 1,924 | — | 235 | — | ||||||||||||
Swaps | ||||||||||||||||
Trading | 2,944 | — | 563 | — | ||||||||||||
Hedging | 47 | — | 1 | — | ||||||||||||
Total Swaps | 2,991 | — | 564 | — | ||||||||||||
Options purchased and sold | ||||||||||||||||
Trading | 1,522 | — | 152 | — | ||||||||||||
Total Options Purchased and Sold | 1,522 | — | 152 | — | ||||||||||||
Total Commodity Contracts | 6,437 | — | 951 | — | ||||||||||||
Total Derivative Exposures | 1,119,047 | 894,056 | 13,861 | 21,483 | ||||||||||||
(1) | Derivative book restructured to meet AIFRS hedging guidelines. |
Group | ||||||||||||||||
Fair Value | Average Fair Value | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Exchange rate related contracts | ||||||||||||||||
Forwards contracts: | ||||||||||||||||
Gross unrealised gains | 1,532 | 2,147 | ||||||||||||||
Gross unrealised losses | (1,686 | ) | (2,306 | ) | ||||||||||||
Total Forwards | n/a | (1) | (154 | ) | n/a | (1) | (159 | ) | ||||||||
Swaps: | ||||||||||||||||
Gross unrealised gains | 6,603 | 6,409 | ||||||||||||||
Gross unrealised losses | (6,177 | ) | (5,382 | ) | ||||||||||||
Total Swaps | n/a | (1) | 426 | n/a | (1) | 1,027 | ||||||||||
Futures: | ||||||||||||||||
Gross unrealised gains | 1 | 1 | ||||||||||||||
Gross unrealised losses | — | (1 | ) | |||||||||||||
Total Futures | n/a | (1) | 1 | n/a | (1) | — | ||||||||||
Options purchased and sold: | ||||||||||||||||
Gross unrealised gains | 146 | 262 | ||||||||||||||
Gross unrealised losses | (191 | ) | (351 | ) | ||||||||||||
Total Options Purchased and Sold | (45 | ) | (89 | ) | ||||||||||||
Net Unrealised Gains on Exchange Rate Related Contracts | n/a | (1) | 228 | n/a | (1) | 779 | ||||||||||
Interest rate related contracts | ||||||||||||||||
Forward contracts: | ||||||||||||||||
Gross unrealised gains | 2 | 6 | ||||||||||||||
Gross unrealised losses | (2 | ) | (5 | ) | ||||||||||||
Total Forwards | n/a | (1) | — | n/a | (1) | 1 | ||||||||||
Swaps: | ||||||||||||||||
Gross unrealised gains | 3,727 | 3,538 | ||||||||||||||
Gross unrealised losses | (3,761 | ) | (3,792 | ) | ||||||||||||
Total Swaps | n/a | (1) | (34 | ) | n/a | (1) | (254 | ) | ||||||||
Futures: | ||||||||||||||||
Gross unrealised gains | 10 | 14 | ||||||||||||||
Gross unrealised losses | (28 | ) | (15 | ) | ||||||||||||
Total Futures | n/a | (1) | (18 | ) | n/a | (1) | (1 | ) | ||||||||
Options purchased and sold: | ||||||||||||||||
Gross unrealised gains | 108 | 74 | ||||||||||||||
Gross unrealised losses | (50 | ) | (48 | ) | ||||||||||||
Total Options Purchased and Sold | 58 | 26 | ||||||||||||||
Net Unrealised Gains/(Losses) on Interest Rate Related Contracts | n/a | (1) | 6 | n/a | (1) | (228 | ) | |||||||||
Credit related trading derivative contracts | ||||||||||||||||
Swaps: | ||||||||||||||||
Gross unrealised gains | 4 | 7 | ||||||||||||||
Gross unrealised losses | (8 | ) | (12 | ) | ||||||||||||
Net Unrealised Losses on Credit Related Contracts | n/a | (1) | (4 | ) | n/a | (1) | (5 | ) | ||||||||
Equity related contracts | ||||||||||||||||
Options purchased and sold: | ||||||||||||||||
Gross unrealised gains | 13 | 13 | ||||||||||||||
Gross unrealised losses | (13 | ) | (13 | ) | ||||||||||||
Net Unrealised Gains on Equity Related Contracts | n/a | (1) | — | n/a | (1) | — | ||||||||||
Net Unrealised Gains on Trading Derivative Contracts | n/a | (1) | 230 | n/a | (1) | 546 | ||||||||||
(1) | Following the adoption of AASB 132 and AASB 139 at 1 July 2005 all derivatives including hedging derivatives are now at fair value on the balance sheet. For further details refer Note 11. |
Group | ||||||||
Fair Value | ||||||||
2006 | 2005 | |||||||
$M | $M | |||||||
Unrealised gains on trading derivatives (Note 22) | 12,144 | |||||||
Unrealised losses on trading derivatives (Note 30) | 11,914 | |||||||
Net unrealised gains on trading derivatives | n/a | (1) | 230 | |||||
(1) | Following the adoption of AASB 132 and AASB 139 at 1 July 2005 all derivatives including hedging derivatives are now at fair value on the balance sheet. For further details refer Note 11. |
Date of Last Actuarial | ||||||
Name of Plan | Type | Form of Benefit | Assessment of the Fund | |||
Officers’ Superannuation Fund | Defined Benefits(1) and | Indexed pension and | ||||
(“OSF”) | Accumulation | lump sum | 30 June 2003 | |||
Commonwealth Bank of Australia (UK) Staff Benefits | Defined Benefits(1) and | Indexed pension and | ||||
Scheme (“CBA(UK)SBS”) | Accumulation | lump sum | 1 July 2005 |
1) | The defined benefit formulae are generally comprised of final salary and service. |
CBA (UK) | ||||||||||||
OSF(1) | SBS(2) | Total | ||||||||||
$M | $M | $M | ||||||||||
Net Market Value of Assets(3) | 6,540 | 380 | 6,920 | |||||||||
Present Value of Accrued Benefits(4) | 4,593 | 427 | 5,020 | |||||||||
Difference between Net Market Value of Assets And Present Value of Accrued Benefits | 1,947 | (47 | ) | 1,900 | ||||||||
Differences as a percentage of plan assets (%) | 30 | (12 | ) | 28 | ||||||||
Value of Vested Benefits(4) | 4,593 | 422 | 5,015 |
(1) | The values for the OSF are the fund actuary’s estimates as at 31 March 2006. | |
(2) | The values for the CBA(UK)SBS are the fund actuary’s estimates as at 31 March 2006. | |
(3) | These values have been extracted from the latest available fund financial statements (which are unaudited). | |
(4) | The Present Value of Accrued Benefits and Value of Vested Benefits for the OSF have been calculated in accordance with the Australian Accounting Standard AAS25 – Financial Reporting by Superannuation Plans. For CBA(UK)SBS, the Present Value of Accrued Benefits and Value of Vested Benefits have been calculated in accordance with relevant UK actuarial standards and practices. |
OSF | CBA(UK)SBS | Total | ||||||||||||||||||||||
2006 | 2005 | 2006 | 2005 | 2006 | 2005 | |||||||||||||||||||
$M | $M | $M | $M | $M | $M | |||||||||||||||||||
Present value of funded obligations | (3,388 | ) | (3,593 | ) | (430 | ) | (408 | ) | (3,818 | ) | (4,001 | ) | ||||||||||||
Fair value of plan assets | 4,616 | 4,310 | 365 | 329 | 4,981 | 4,639 | ||||||||||||||||||
Total pension asset as at 30 June | 1,228 | 717 | (65 | ) | (79 | ) | 1,163 | 638 | ||||||||||||||||
Present value of unfunded obligations | — | — | — | — | — | — | ||||||||||||||||||
Unrecognised prior service cost | — | — | — | — | — | — | ||||||||||||||||||
Unrecognised actuarial gains/(losses) | — | — | — | — | — | — | ||||||||||||||||||
Unrecognised past service cost | — | — | — | — | — | — | ||||||||||||||||||
Asset/(liability) in balance sheet as at 30 June | 1,228 | 717 | (65 | ) | (79 | ) | 1,163 | 638 | ||||||||||||||||
Amounts in the balance sheet: | ||||||||||||||||||||||||
Liabilities (Note 30) | — | — | (65 | ) | (79 | ) | (65 | ) | (79 | ) | ||||||||||||||
Assets (Note 22) | 1,228 | 717 | — | — | 1,228 | 717 | ||||||||||||||||||
Net Asset | 1,228 | 717 | (65 | ) | (79 | ) | 1,163 | 638 | ||||||||||||||||
The amounts recognised in the Income Statement are as follows: | ||||||||||||||||||||||||
Current service cost | (39 | ) | (48 | ) | (5 | ) | (5 | ) | (44 | ) | (53 | ) | ||||||||||||
Interest cost | (173 | ) | (197 | ) | (21 | ) | (20 | ) | (194 | ) | (217 | ) | ||||||||||||
Expected return on plan assets | 312 | 298 | 20 | 18 | 332 | 316 | ||||||||||||||||||
Past service cost | — | — | — | — | — | — | ||||||||||||||||||
Employer financed benefits within Accumulation Division | (129 | ) | (121 | ) | — | — | (129 | ) | (121 | ) | ||||||||||||||
Gains/(losses) on curtailment and settlements | — | — | — | — | — | — | ||||||||||||||||||
Actuarial gains/(losses) recognised in Income Statement | — | — | — | — | — | — | ||||||||||||||||||
Total included in defined benefit superannuation plan expense | (29 | ) | (68 | ) | (6 | ) | (7 | ) | (35 | ) | (75 | ) | ||||||||||||
Actual Return on Plan Assets | 668 | 592 | 22 | 46 | 690 | 638 | ||||||||||||||||||
Changes in the present value of the defined benefit obligation are as follows: | �� | |||||||||||||||||||||||
Opening defined benefit obligation | (3,593 | ) | (3,504 | ) | (408 | ) | (398 | ) | (4,001 | ) | (3,902 | ) | ||||||||||||
Service cost | (36 | ) | (45 | ) | (5 | ) | (4 | ) | (41 | ) | (49 | ) | ||||||||||||
Interest cost | (173 | ) | (197 | ) | (21 | ) | (20 | ) | (194 | ) | (217 | ) | ||||||||||||
Member contributions | (14 | ) | (14 | ) | — | — | (14 | ) | (14 | ) | ||||||||||||||
Actuarial gains/(losses) | 184 | (142 | ) | 12 | (35 | ) | 196 | (177 | ) | |||||||||||||||
(Losses)/gains on curtailments | — | — | — | — | — | — | ||||||||||||||||||
Liabilities extinguished on settlements | — | — | — | — | — | — | ||||||||||||||||||
Liabilities assumed in a business combination | — | — | — | — | — | — | ||||||||||||||||||
Benefits paid | 244 | 309 | 12 | 12 | 256 | 321 | ||||||||||||||||||
Exchange differences on foreign plans | — | — | (20 | ) | 37 | (20 | ) | 37 | ||||||||||||||||
Closing Defined Benefit Obligation | (3,388 | ) | (3,593 | ) | (430 | ) | (408 | ) | (3,818 | ) | (4,001 | ) | ||||||||||||
Changes in the fair value of plan assets are as follows: | ||||||||||||||||||||||||
Opening fair value of plan assets | 4,310 | 4,137 | 329 | 321 | 4,639 | 4,458 | ||||||||||||||||||
Expected return | 312 | 298 | 20 | 18 | 332 | 316 | ||||||||||||||||||
Experience gains/(losses) | 356 | 294 | 2 | 28 | 358 | 322 | ||||||||||||||||||
Assets distributed on settlements | — | — | — | — | — | — | ||||||||||||||||||
Total contributions | 14 | 14 | 11 | 4 | 25 | 18 | ||||||||||||||||||
Assets acquired in a business combination | — | — | — | — | — | — | ||||||||||||||||||
Exchange differences on foreign plans | — | — | 15 | (30 | ) | 15 | (30 | ) | ||||||||||||||||
Benefits and expenses paid | (247 | ) | (312 | ) | (12 | ) | (12 | ) | (259 | ) | (324 | ) | ||||||||||||
Employer financial benefits within Accumulation Division | (129 | ) | (121 | ) | — | — | (129 | ) | (121 | ) | ||||||||||||||
Closing Fair Value of Plan Assets | 4,616 | 4,310 | 365 | 329 | 4,981 | 4,639 | ||||||||||||||||||
OSF | CBA(UK)SBS | Total | ||||||||||||||||||||||
2006 | 2005 | 2006 | 2005 | 2006 | 2005 | |||||||||||||||||||
$M | $M | $M | $M | $M | $M | |||||||||||||||||||
Experience gains/(losses) on plan liabilities | (55 | ) | 448 | 15 | 6 | (40 | ) | 454 | ||||||||||||||||
Experience gains/(losses) on plan assets | 356 | 294 | 2 | 28 | 358 | 322 | ||||||||||||||||||
Gains/(losses) from changes in actuarial assumptions | 239 | (590 | ) | (3 | ) | (41 | ) | 236 | (631 | ) | ||||||||||||||
Total net actuarial gains/(losses) | 540 | 152 | 14 | (7 | ) | 554 | 145 | |||||||||||||||||
OSF | CBA(UK)SBS | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Economic Assumptions | % | % | % | % | ||||||||||||
The above calculations were based on the economic assumptions set out below: | ||||||||||||||||
Discount rate at 30 June (gross of tax) | 5.80 | 5. 10 | 5.25 | 5.00 | ||||||||||||
Expected return on plan assets at 30 June | 8.25 | 7.50 | 6.00 | 5.75 | ||||||||||||
Expected rate salary increases | 4.75 | (1) | 4.25 | (1) | 4.10 | 3.70 |
(1) | For the OSF, additional age related allowances were made for the expected salary increases from future promotions. At 30 June 2006, these assumptions were broadly between 1.6% and 2.6% per annum for full time employees and 1.0% per annum for part time employees (30 June 2005: 2.6% and 3.6% per annum for full time employees and 1.0% per annum for part time employees). |
OSF | CBA(UK)SBS | |||||||||||||||
Expected Life Expectancies for Pensioners | 2006 | 2005 | 2006 | 2005 | ||||||||||||
Male pensioners currently aged 60 | 30.1 | 31.2 | 22.9 | 22.9 | ||||||||||||
Male pensioners currently aged 65 | 25.3 | 26.2 | 18.5 | 18.5 | ||||||||||||
Female pensioners currently aged 60 | 33.5 | 34.6 | 25.9 | 25.9 | ||||||||||||
Female pensioners currently aged 65 | 28.4 | 29.3 | 21.4 | 21.4 |
Benchmark Allocation | Actual Allocation | |||||||
Asset Allocations | % | % | ||||||
Australian Equities | 27. 5 | 29. 2 | ||||||
Overseas Equities | 21. 0 | 20. 2 | ||||||
Real Estate | 15. 0 | 14. 3 | ||||||
Fixed Interest Securities | 25. 5 | 26. 6 | ||||||
Cash | 5. 0 | 4. 4 | ||||||
Other(1) | 6. 0 | 5. 3 |
(1) | These are assets which are not included in the traditional asset classes of equities, fixed interest securities, real estate and cash. They include infrastructure investments as well as high yield and emerging market debt. | |
The value of the OSF’s equity holding in the Group as at 30 June 2006 was $95 million (2005: $91 million). Amounts on deposit with the Bank at 30 June 2006 totalled $7 million (2005: $13 million). Other financial instruments with the Group at 30 June 2006 totalled $90 million (2005: $108 million). |
Extent of Beneficial | ||||||||
Entity Name | Interest if not 100% | Incorporated in | ||||||
Australia | ||||||||
(a) Banking | ||||||||
Commonwealth Bank of Australia | Australia | |||||||
Controlled Entities: | ||||||||
CBA Investments Limited | Australia | |||||||
Industrie Limited Partnership | Australia | |||||||
Luca Limited Partnership | 99.84 | Australia | ||||||
CBA Investments (No. 2) Pty Limited | Australia | |||||||
CBA International Finance Pty Limited | Australia | |||||||
CBCL Australia Limited | Australia | |||||||
CBFC Limited | Australia | |||||||
Collateral Leasing Pty Limited | Australia | |||||||
Commonwealth Securities Limited | Australia | |||||||
Homepath Pty Limited | Australia | |||||||
Commonwealth Investments Pty Limited | Australia | |||||||
Sparad (No. 24) Pty Limited Australia | Australia | |||||||
Colonial Finance Limited | Australia | |||||||
PERLS III Trust (formally Preferred Capital Limited) | Australia | |||||||
PERLS II Trust | Australia | |||||||
GT Funding No.1 Pty Ltd | Australia | |||||||
GT Operating No.1 Pty Ltd | Australia | |||||||
Loft No.1 Pty Ltd | Australia | |||||||
Loft No.2 Pty Ltd | Australia | |||||||
Fringe Pty Ltd | Australia | |||||||
Lily Pty Ltd | Australia | |||||||
Medallion 2003-2G | Australia | |||||||
Broadcasting Infrastructure Asset Partnership | Australia | |||||||
Greenwood Lending Pty Ltd | Australia | |||||||
Series 2000-IG Medallion Trust | Australia | |||||||
Series 2000-2G Medallion Trust | Australia | |||||||
Series 2001-IG Medallion Trust | Australia | |||||||
Series 2002-IG Medallion Trust | Australia | |||||||
Series 2003-IG Medallion Trust | Australia | |||||||
Series 2004-IG Medallion Trust | Australia | |||||||
Series 2005-IG Medallion Trust | Australia | |||||||
Series 2005-2G Medallion Trust | Australia | |||||||
Hemisphere Lane Pty Ltd | Australia | |||||||
Medallion Series Trust 2006 1G | Australia | |||||||
Medallion Trust Series 2005 4P | Australia | |||||||
GT Operating No. 3 Pty Limited | Australia | |||||||
(b) Insurance and Funds Management | ||||||||
Commonwealth Insurance Limited | Australia | |||||||
Colonial Holding Company Limited | Australia | |||||||
Colonial Holding Company (No. 2) Pty Limited | Australia | |||||||
Commonwealth Insurance Holdings Limited | Australia | |||||||
Commonwealth Managed Investments Limited | Australia | |||||||
Colonial AFS Services Pty Limited | Australia | |||||||
Colonial First State Group Limited | Australia | |||||||
Colonial First State Investments Limited | Australia | |||||||
Avanteos Pty Limited | Australia | |||||||
Colonial First State Property Limited | Australia | |||||||
Colonial First State Property Retail Pty Limited | Australia | |||||||
Colonial First State Property Retail Trust | Australia | |||||||
Colonial International Holdings Pty Limited | Australia | |||||||
The Colonial Mutual Life Assurance Society Limited | Australia | |||||||
Jacques Martin Pty Limited | Australia | |||||||
Gandel Retail Management Trust | Australia | |||||||
Commonwealth Financial Planning Limited | Australia |
Extent of Beneficial | ||||||||
Entity Name | Interest if not 100% | Incorporated in | ||||||
New Zealand | ||||||||
(a) Banking | ||||||||
ASB Holdings Limited | New Zealand | |||||||
ASB Bank Limited | New Zealand | |||||||
CBA Funding (NZ) Limited | New Zealand | |||||||
ASB Capital No. 2 Limited | New Zealand | |||||||
CBA USD Funding Limited | New Zealand | |||||||
(b) Insurance and Funds Management | ||||||||
ASB Group (Life) Limited | New Zealand | |||||||
Sovereign Group Limited | New Zealand | |||||||
Sovereign Limited | New Zealand | |||||||
Colonial First State Investments (NZ) Limited | New Zealand | |||||||
Kiwi Income Properties Limited | New Zealand | |||||||
Kiwi Property Management Limited | New Zealand | |||||||
Other Overseas | ||||||||
(a) Banking | ||||||||
CBA Asia Limited | Singapore | |||||||
CTB Australia Limited | Hong Kong | |||||||
PT Bank Commonwealth | Indonesia | |||||||
National Bank of Fiji Limited | Fiji | |||||||
CBA (Delaware) Finance Incorporated | Delaware USA | |||||||
CBA Capital Trust 1 | Delaware USA | |||||||
CBA Funding Trust 1 | Delaware USA | |||||||
Capital Trust II | Delaware USA | |||||||
CBA (Europe) Finance Limited | United Kingdom | |||||||
Pontoon PLC | United Kingdom | |||||||
Quay (Funding) PLC | United Kingdom | |||||||
Burdekin Investments | Cayman Islands | |||||||
Pavillion Limited | UK | |||||||
Newport Limited | Malta | |||||||
CommInternational Limited | Malta | |||||||
CommCapital S.a.r.l | Luxembourg | |||||||
CommBank Europe Limited | Malta | |||||||
(b) Insurance and Funds Management | ||||||||
CMG Asia Life Holdings Limited | Bermuda | |||||||
Colonial Fiji Life Limited | Fiji | |||||||
Colonial First State (UK) Holdings Limited | United Kingdom | |||||||
First State (HK) LLC | United States | |||||||
First State Investment Holdings (Singapore) Ltd | Singapore |
Group | ||||||||||||||||||||
Extent of | ||||||||||||||||||||
2006 | 2005 | Ownership | Country of | Balance | ||||||||||||||||
$M | $M | Interest % | Principal Activities | Incorporation | Date | |||||||||||||||
PT Astra CMG Life | 12 | 10 | 50 | Life Insurance | Indonesia | 31 Dec | ||||||||||||||
AMTD Group Limited(1) | 1 | 1 | 30 | Financial Services | Virgin Islands | 31 Dec | ||||||||||||||
China Life CMG Life Assurance Company Limited | 11 | 10 | 49 | Life Insurance | China | 31 Dec | ||||||||||||||
Bao Minh CMG Life Insurance Company | 9 | 12 | 50 | Life Insurance Investment | Vietnam | 31 Dec | ||||||||||||||
CMG CH China Funds Management Limited | 1 | 1 | 50 | Management | Australia | 31 Mar | ||||||||||||||
BAC Airports Pty Ltd(2) | — | 18 | 33.3 | Airport Services Investment | Australia | 30 Jun | ||||||||||||||
452 Capital Pty Limited | 43 | — | 30 | Management | Australia | 30 Jun | ||||||||||||||
Hangzhou City Commercial Bank Limited | 102 | — | 19.9 | Commercial Banking | China | 31 Dec | ||||||||||||||
Alster & Thames Partnership | 3 | — | 25 | Leasing | Delaware | 31 Dec | ||||||||||||||
First State Cinda Fund Management Company Limited | 8 | — | 46 | Funds Management | China | 31 Dec | ||||||||||||||
Total | 190 | 52 | ||||||||||||||||||
(1) | Formally Allday Enterprises Ltd. | |
(2) | Investment sold 2 May 2005. |
Group | ||||||||
2006 | 2005 | |||||||
$M | $M | |||||||
Share of associates’ profits/(losses) | ||||||||
Operating profits/(losses) before income tax | 8 | 7 | ||||||
Income tax expense | (1 | ) | (2 | ) | ||||
Operating profits/(losses) after income tax | 7 | 5 | ||||||
Carrying amount of investments in associated entities | 190 | 52 |
Group | ||||||||
2006 | 2005 | |||||||
$M | $M | |||||||
Financial Information of Associates | ||||||||
Assets | 9,569 | 204 | ||||||
Liabilities | 9,098 | 167 | ||||||
Revenues | 220 | 18 | ||||||
Expenses | 89 | 22 |
Group | ||||||||
2006 | 2005 | |||||||
$M | $M | |||||||
Financial Information of Joint Ventures | ||||||||
Assets | 122 | 58 | ||||||
Liabilities | 81 | 32 | ||||||
Revenues | 65 | 26 | ||||||
Expenses | 69 | 30 |
For the year ended and as at 30 June 2006 | ||||||||||||
Joint | ||||||||||||
Associates | Ventures | Total | ||||||||||
Group | $M | $M | $M | |||||||||
Interest and dividend income | — | — | — | |||||||||
Interest expense | — | — | — | |||||||||
Fees and commissions for services rendered | 1 | 11 | 12 | |||||||||
Fees and commissions for services provided | (8 | ) | 11 | 3 | ||||||||
Loans, advances and equity contributions | 200 | 30 | 230 | |||||||||
Derivative assets | — | — | — | |||||||||
Other assets | — | 4 | 4 | |||||||||
Deposits | — | — | — | |||||||||
Derivative liabilities | — | — | — | |||||||||
Other liabilities | 1 | 6 | 7 |
For the year ended and as at 30 June 2006 | ||||||||||||||||
Joint | ||||||||||||||||
Subsidiaries | Associates | Ventures | Total | |||||||||||||
Bank | $M | $M | $M | $M | ||||||||||||
Interest and dividend income | 2,739 | — | — | 2,739 | ||||||||||||
Interest expense | 854 | — | — | 854 | ||||||||||||
Fees and commissions for services rendered | 55 | — | — | 55 | ||||||||||||
Fees and commissions for services provided | 124 | — | 1 | 125 | ||||||||||||
Loans, advances and equity contributions | 36,150 | 102 | — | 36,252 | ||||||||||||
Derivative assets | 680 | — | — | 680 | ||||||||||||
Other assets | 2,078 | — | 2 | 2,080 | ||||||||||||
Deposits | 38,652 | — | — | 38,652 | ||||||||||||
Derivative liabilities | 487 | — | — | 487 | ||||||||||||
Other liabilities | 1,069 | — | — | 1,069 |
For the year ended and as at 30 June 2005 | ||||||||||||
Joint | ||||||||||||
Associates | Ventures | Total | ||||||||||
Group | $M | $M | $M | |||||||||
Interest and dividend income | — | — | — | |||||||||
Interest expense | — | — | — | |||||||||
Fees and commissions for services rendered | — | 4 | 4 | |||||||||
Fees and commissions for services provided | — | 6 | 6 | |||||||||
Loans, advances and equity contributions | 30 | 22 | 52 | |||||||||
Derivative assets | — | — | — | |||||||||
Other assets | — | 1 | 1 | |||||||||
Deposits | — | — | — | |||||||||
Derivative liabilities | — | — | — | |||||||||
Other liabilities | — | 1 | 1 |
For the year ended and as at 30 June 2005 | ||||||||||||||||
Joint | ||||||||||||||||
Subsidiaries | Associates | Ventures | Total | |||||||||||||
Bank | $M | $M | $M | $M | ||||||||||||
Interest and dividend income | 1,715 | — | — | 1,715 | ||||||||||||
Interest expense | 496 | — | — | 496 | ||||||||||||
Fees and commissions for services rendered | 48 | — | 4 | 52 | ||||||||||||
Fees and commissions for services provided | 126 | — | 5 | 131 | ||||||||||||
Loans, advances and equity contributions | 29,161 | — | — | 29,161 | ||||||||||||
Derivative assets | — | — | — | — | ||||||||||||
Other assets | 1,897 | — | 1 | 1,898 | ||||||||||||
Deposits | 26,428 | — | — | 26,428 | ||||||||||||
Derivative liabilities | — | — | — | — | ||||||||||||
Other liabilities | 918 | — | 1 | 919 |
Acquired/Granted | ||||||||||||||||||||||||
Balance | as | On Exercise of | Net Change | Balance | ||||||||||||||||||||
Name | Class | 1 July 2005 | Compensation(1) | Options | Other(2) | 30 June 2006 | ||||||||||||||||||
Directors | ||||||||||||||||||||||||
R J Clairs | Ordinary | 13,357 | 776 | — | — | 14,133 | ||||||||||||||||||
A B Daniels(3) | Ordinary | 17,669 | 721 | — | 301 | 18,691 | ||||||||||||||||||
C R Galbraith | Ordinary | 8,824 | 740 | — | 466 | 10,030 | ||||||||||||||||||
S C H Kay | Ordinary | 3,669 | 721 | — | — | 4,390 | ||||||||||||||||||
W G Kent | Ordinary | 15,286 | 740 | — | 87 | 16,113 | ||||||||||||||||||
D V Murray(4) | Ordinary | 323,638 | — | 250,000 | (78,093 | ) | 495,545 | |||||||||||||||||
Deferred STI | 21,866 | — | — | (21,866 | ) | — | ||||||||||||||||||
Reward Shares | 325,000 | — | — | (325,000 | ) | — | ||||||||||||||||||
R J Norris(5) | Ordinary | 10,000 | — | — | — | 10,000 | ||||||||||||||||||
Reward Shares | — | 100,328 | — | — | 100,328 | |||||||||||||||||||
F D Ryan | Ordinary | 7,430 | 812 | — | — | 8,242 | ||||||||||||||||||
J M Schubert | Ordinary | 18,508 | 2,165 | — | 515 | 21,188 | ||||||||||||||||||
F J Swan | Ordinary | 5,954 | 704 | — | 316 | 6,974 | ||||||||||||||||||
B K Ward(6) | Ordinary | 5,766 | 739 | — | 124 | 6,629 | ||||||||||||||||||
Ordinary | 430,101 | 8,118 | 250,000 | (76,284 | ) | 611,935 | ||||||||||||||||||
Total For Directors | Deferred STI | 21,866 | — | — | (21,866 | ) | — | |||||||||||||||||
Reward Shares | 325,000 | 100,328 | — | (325,000 | ) | 100,328 | ||||||||||||||||||
(1) | For Non-Executive Directors, this represents shares acquired under NEDSP on 2 September 2005 and 15 March 2006 by mandatory sacrifice of fees. All shares acquired through NEDSP are subject to a 10 year trading restriction (shares will be tradeable earlier if the Director leaves the Board). See Note 33 Share Capital to the Financial Statements for further details on the NEDSP. For Mr Norris, this represents Reward Shares granted under the Equity Reward Plan (ERP) and subject to a performance hurdle. The first possible date for meeting the performance hurdle is 15 July 2008 with the last possible date for vesting being 15 July 2010. See Note 33 Share Capital to the Financial Statements for further details on the ERP. | |
(2) | ‘Net change other’ incorporates changes resulting from purchases and sales during the year by Directors and, for Mr Murray, vesting of deferred STI shares on retirement (which became Ordinary shares). | |
(3) | A related party of Mr Daniels beneficially holds an investment of $62,838 in Colonial First State Global Health and Biotech Fund, $403,860 in Colonial First State Future Leaders Fund and $361,464 in Colonial First State Imputation Fund. | |
(4) | Mr Murray retired on 22 September 2005. Mr Murray acquired 10,000 PERLS III securities during the year and continued to hold them at 30 June 2006. | |
(5) | Mr Norris commenced on 22 September 2005. | |
(6) | Ms Ward continued to hold 250 PERLS II securities at 30 June 2006. |
Shares held by Key Management Personnel
Acquired/Granted | ||||||||||||||||||||||
Balance | as | On Exercise | Net Change | Balance | ||||||||||||||||||
Name | Class | 30 June 2005 | Compensation(1) | of Options | Other(2) | 30 June 2006 | ||||||||||||||||
Executives | ||||||||||||||||||||||
M A Cameron | Ordinary | — | — | — | — | — | ||||||||||||||||
Deferred STI | 8,094 | �� | — | — | (5,246 | ) | 2,848 | |||||||||||||||
Reward Shares | 60,430 | 29,190 | — | — | 89,620 | |||||||||||||||||
L G Cupper(3) | Ordinary | 44,540 | — | — | 6,815 | 51,355 | ||||||||||||||||
Deferred STI | 9,385 | — | — | (6,118 | ) | 3,267 | ||||||||||||||||
Reward Shares | 84,000 | 22,440 | — | — | 106,440 | |||||||||||||||||
S I Grimshaw | Ordinary | 16,365 | — | 100,000 | (91,057 | ) | 25,308 | |||||||||||||||
Deferred STI | 14,133 | — | — | (9,442 | ) | 4,691 | ||||||||||||||||
Reward Shares | 113,800 | 35,140 | — | — | 148,940 | |||||||||||||||||
H D Harley | Ordinary | 25,852 | — | 87,500 | (87,071 | ) | 26,281 | |||||||||||||||
Deferred STI | 10,241 | — | — | (6,388 | ) | 3,853 | ||||||||||||||||
Reward Shares | 85,700 | 32,440 | — | — | 118,140 | |||||||||||||||||
M R Harte(4) | Ordinary | — | — | — | — | — | ||||||||||||||||
Deferred STI | — | — | — | — | — | |||||||||||||||||
Reward Shares | — | — | — | — | — | |||||||||||||||||
M A Katz(5) | Ordinary | 303,748 | — | 250,000 | (378,748 | ) | 175,000 | |||||||||||||||
Deferred STI | 14,061 | — | — | (14,061 | ) | — | ||||||||||||||||
Reward Shares | 139,130 | 38,380 | — | (177,510 | ) | — | ||||||||||||||||
R V McKinnon(6) | Ordinary | 43,991 | — | 37,500 | (81,491 | ) | — | |||||||||||||||
Deferred STI | 7,083 | — | — | (7,083 | ) | — | ||||||||||||||||
Reward Shares | 58,750 | 17,030 | — | (75,780 | ) | — | ||||||||||||||||
G L Mackrell | Ordinary | 27,319 | — | — | 7,611 | 34,930 | ||||||||||||||||
Deferred STI | 10,134 | — | — | (6,742 | ) | 3,392 | ||||||||||||||||
Reward Shares | 83,230 | 27,570 | — | — | 110,800 | |||||||||||||||||
J K O’Sullivan | Ordinary | 5,565 | — | — | 3,351 | 8,916 | ||||||||||||||||
Deferred STI | 6,702 | — | — | (3,351 | ) | 3,351 | ||||||||||||||||
Reward Shares | 59,440 | 23,250 | — | — | 82,690 | |||||||||||||||||
G A Petersen | Ordinary | 8,572 | — | — | 1,335 | 9,907 | ||||||||||||||||
Deferred STI | 5,177 | — | — | (3,327 | ) | 1,850 | ||||||||||||||||
Reward Shares | 35,500 | 20,280 | — | — | 55,780 | |||||||||||||||||
Total for Key Management Personnel | Ordinary | 475,952 | — | 475,000 | (619,255 | ) | 331,697 | |||||||||||||||
Deferred STI | 85,010 | — | — | (61,758 | ) | 23,252 | ||||||||||||||||
Reward Shares | 719,980 | 245,720 | — | (253,290 | ) | 712,410 | ||||||||||||||||
(1) | Represents: | |
• | Deferred STI — acquired under the mandatory component of the Bank’s Equity Participation Plan (EPP). Shares were purchased on 31 October 2004 in two equal tranches, vesting on 1 July 2005 and 1 July 2006 respectively. See Note 33 for further details on the EPP. | |
• | Reward Shares — granted under the Equity Reward Plan (ERP) and are subject to a performance hurdle. The first possible date for meeting the performance hurdle is 16 July 2008 with the last possible date for vesting being 15 July 2010. See Note 33 for further details on the ERP. | |
(2) | ‘Net change other’ incorporates changes resulting from purchases and sales during the year by Executives and vesting of Deferred STI and Reward Shares (which became Ordinary shares). | |
(3) | Mr Cupper acquired 6,000 PERLS III securities during the year, and continued to hold them at 30 June 2006. | |
(4) | Mr Harte commenced on 10 April 2006. | |
(5) | Mr Katz ceased employment on 24 March 2006. Mr Katz acquired 2,250 PERLS III securities during the year, and continued to hold these and 250 PERLS II securities as at 30 June 2006. | |
(6) | Mr McKinnon ceased employment on 31 December 2005. |
Vested and Exercisable at | ||||||||||||||||||||
30 June 2006(1) | ||||||||||||||||||||
Balance | Options | Balance | Exercise Price | |||||||||||||||||
Name | 1 July 2005 | Exercised | 30 June 2006 | Number | $ | |||||||||||||||
Directors | ||||||||||||||||||||
D V Murray (retired on 22 September 2005) | 250,000 | (250,000 | ) | — | — | — | ||||||||||||||
R J Norris (commenced on 22 September 2005) | — | — | — | — | — | |||||||||||||||
Executives | ||||||||||||||||||||
M A Cameron | — | — | — | — | — | |||||||||||||||
L G Cupper | 75,000 | — | 75,000 | 75,000 | 30.12 | |||||||||||||||
S I Grimshaw | 100,000 | (100,000 | ) | — | — | — | ||||||||||||||
H D Harley | 87,500 | (87,500 | ) | — | — | — | ||||||||||||||
M R Harte | — | — | — | — | — | |||||||||||||||
M A Katz (ceased employment on 24 March 2006) | 250,000 | (250,000 | ) | — | — | — | ||||||||||||||
R V McKinnon (ceased employment on 31 December 2005) | 37,500 | (37,500 | ) | — | — | — | ||||||||||||||
G L Mackrell | — | — | — | — | — | |||||||||||||||
J K O’Sullivan | — | — | — | — | — | |||||||||||||||
G A Petersen | — | — | — | — | — | |||||||||||||||
Total for Key Management Personnel | 800,000 | (725,000 | ) | 75,000 | 75,000 | n/a | ||||||||||||||
(1) | ‘Vested and Exercisable’ options represents those granted on 3 September 2001 with an exercise price of $30.12. |
Shares Vested and Options Exercised During the Year
Shares Granted on Exercise of Options | ||||||||||||||||||||||||
Value in Excess | Total Value | |||||||||||||||||||||||
of Exercise | of Options | |||||||||||||||||||||||
Deferred STI | Reward Shares | Exercise Price | Price(1) | Exercised(2) | ||||||||||||||||||||
Name | Vested | Vested | Number | $ | $ | $ | ||||||||||||||||||
Directors | ||||||||||||||||||||||||
D V Murray(3) | 21,866 | — | 250,000 | 30.12 | 10.88 | 2,720,000 | ||||||||||||||||||
R J Norris(4) | — | — | — | |||||||||||||||||||||
Executives | ||||||||||||||||||||||||
M A Cameron | 5,246 | — | — | — | — | — | ||||||||||||||||||
L G Cupper | 6,118 | — | — | — | — | — | ||||||||||||||||||
S I Grimshaw | 9,442 | — | 100,000 | 30.12 | 7.15 | 715,000 | ||||||||||||||||||
H D Harley | 6,388 | — | 37,500 | 26.97 | 16.85 | 631,875 | ||||||||||||||||||
50,000 | 30.12 | 13.70 | 685,000 | |||||||||||||||||||||
M R Harte(5) | — | — | — | — | — | — | ||||||||||||||||||
M A Katz(6) | 14,061 | — | 125,000 | 26.97 | 18.48 | 2,310,000 | ||||||||||||||||||
125,000 | 30.12 | 15.33 | 1,916,250 | |||||||||||||||||||||
R V McKinnon(7) | 4,696 | — | 37,500 | 30.12 | 13.53 | 507,375 | ||||||||||||||||||
G L Mackrell | 6,742 | — | — | — | — | — | ||||||||||||||||||
J K O’Sullivan | 3,351 | — | — | — | — | — | ||||||||||||||||||
G A Petersen | 3,327 | — | — | — | — | — | ||||||||||||||||||
Total for Key Management Personnel | 81,237 | — | 725,000 | n/a | n/a | 9,485,500 | ||||||||||||||||||
(1) | “Value in Excess of Exercise Price” represents the difference between the exercise price and closing market value of CBA shares on date of exercise. | |
(2) | “Total Value of Options Exercised” represents the number of options exercised multiplied by the “Value in Excess of Exercise Price”. No options were granted or lapsed during the year. Accordingly, this value represents the total value of options that were granted, lapsed and exercised during the year. | |
(3) | Mr Murray retired on 22 September 2005 and deferred STI vested at this time. | |
(4) | Mr Norris commenced on 22 September 2005. | |
(5) | Mr Harte commenced in the role on 10 April 2006. | |
(6) | Mr Katz ceased employment on 24 March 2006. | |
(7) | Mr McKinnon ceased employment on 31 December 2005. |
Year Ended | Balance | Interest | Interest Not | Balance | Number in | |||||||||||||||||||||||
30 June | 1 July | Charged | Charged | Write-off | 30 June | Group at | ||||||||||||||||||||||
$000s | $000s | $000s | $000s | $000s | 30 June | |||||||||||||||||||||||
Directors | ||||||||||||||||||||||||||||
2006 | — | 379 | — | — | 5,729 | 1 | ||||||||||||||||||||||
2005 | 2 | — | — | — | 3 | 1 | ||||||||||||||||||||||
Executives | ||||||||||||||||||||||||||||
2006 | 9,894 | 550 | — | — | 9,284 | 7 | ||||||||||||||||||||||
2005 | 8,706 | 523 | — | — | 8,803 | 6 | ||||||||||||||||||||||
Total for Key Management Personnel | 2006 | 9,894 | 929 | — | — | 15,013 | 8 | |||||||||||||||||||||
2005 | 8,708 | 523 | — | — | 8,806 | 7 | ||||||||||||||||||||||
Highest | ||||||||||||||||||||||||
Balance | Interest | Interest Not | Balance | Balance | ||||||||||||||||||||
1 July 2005 | Charged | Charged | Write-off | 30 June 2006 | in Period | |||||||||||||||||||
$000s | $000s | $000s | $000s | $000s | $000s | |||||||||||||||||||
Directors | ||||||||||||||||||||||||
D V Murray | — | 379 | — | — | 5,729 | 5,729 | ||||||||||||||||||
Executives | ||||||||||||||||||||||||
M A Cameron | — | 5 | — | — | 358 | 546 | ||||||||||||||||||
— | 3 | — | — | 300 | 302 | |||||||||||||||||||
S I Grimshaw | 1,485 | 73 | — | — | 857 | 1,485 | ||||||||||||||||||
— | 16 | — | — | 391 | 394 | |||||||||||||||||||
H D Harley | 332 | 19 | — | — | 304 | 334 | ||||||||||||||||||
243 | 11 | — | — | — | 243 | |||||||||||||||||||
347 | 7 | — | — | — | 427 | |||||||||||||||||||
M A Katz | 175 | 11 | — | — | 175 | 175 | ||||||||||||||||||
175 | 11 | — | — | 175 | 175 | |||||||||||||||||||
500 | 31 | — | — | 500 | 500 | |||||||||||||||||||
100 | — | — | — | 100 | 100 | |||||||||||||||||||
G L Mackrell | 1,080 | 43 | — | — | 1,017 | 1,080 | ||||||||||||||||||
J K O’Sullivan | 1,500 | 97 | — | — | 1,500 | 1,500 | ||||||||||||||||||
392 | 26 | — | — | 582 | 587 | |||||||||||||||||||
696 | 42 | — | — | 614 | 696 | |||||||||||||||||||
258 | 17 | — | — | 274 | 277 | |||||||||||||||||||
647 | 42 | — | — | 647 | 647 | |||||||||||||||||||
200 | 12 | — | — | 200 | 200 | |||||||||||||||||||
201 | 7 | — | — | — | 203 | |||||||||||||||||||
G A Petersen | 400 | 11 | — | — | 155 | 400 | ||||||||||||||||||
800 | 52 | — | — | 800 | 800 | |||||||||||||||||||
Total for Key Management Personnel | 9,531 | 915 | — | — | 14,678 | 16,800 | ||||||||||||||||||
Note 49(a) Reconciliation of Operating Profit after Income Tax to Net Cash Provided by Operating Activities
Year Ended 30 June | ||||||||||||||||
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Net profit after income tax | 3,959 | 3,410 | 4,267 | 3,012 | ||||||||||||
Net (Increase)/decrease in interest receivable | (99 | ) | (17 | ) | 219 | (667 | ) | |||||||||
Increase in interest payable | 784 | 64 | 24 | 531 | ||||||||||||
Net decrease in trading securities | — | 318 | — | 505 | ||||||||||||
Net (increase) in assets at fair value through Income Statement (excluding life insurance) | (53 | ) | — | (2,620 | ) | — | ||||||||||
Net (gain) on sale of investments | — | (8 | ) | — | (4 | ) | ||||||||||
Net (gain)/loss on sale of controlled entities and associates | (163 | ) | 13 | — | 35 | |||||||||||
Decrease/(increase) in derivative assets | 128 | — | (381 | ) | — | |||||||||||
(Gain)/loss on sale property plant and equipment | (4 | ) | (4 | ) | 2 | (4 | ) | |||||||||
Charge for bad debts | 398 | 322 | 380 | 292 | ||||||||||||
Depreciation and amortisation | 209 | 176 | 155 | 95 | ||||||||||||
Increase in liabilities at fair value through Income Statement (excluding life insurance) | 1,374 | — | 504 | — | ||||||||||||
(Decrease)/increase in derivative liabilities | (445 | ) | — | 78 | ||||||||||||
(Decrease) in other provisions | (92 | ) | (86 | ) | (50 | ) | (79 | ) | ||||||||
(Decrease)/increase in income taxes payable | (455 | ) | 406 | (430 | ) | 406 | ||||||||||
Increase/(decrease) in deferred income taxes payable | 182 | 332 | (434 | ) | 209 | |||||||||||
Decrease/(increase) in deferred tax assets | 184 | (86 | ) | 727 | (337 | ) | ||||||||||
(Increase)/decrease in accrued fees/reimbursements receivable | (88 | ) | (41 | ) | 71 | 94 | ||||||||||
Increase in accrued fees and other items payable | 133 | 106 | 217 | 9 | ||||||||||||
Amortisation of premium on investment securities | — | (4 | ) | — | (4 | ) | ||||||||||
Unrealised loss on revaluation of trading securities | — | 408 | — | 454 | ||||||||||||
Unrealised (gain) on revaluation of assets at fair value through Income Statement (excluding life insurance) | (112 | ) | — | (22 | ) | |||||||||||
Change in life insurance contract policy liabilities | (814 | ) | 56 | — | — | |||||||||||
Decrease in managed fund units on sale | (46 | ) | — | — | — | |||||||||||
Increase in cash flow hedge reserve | 31 | — | 7 | — | ||||||||||||
Dividend received from controlled entities | — | — | (2,080 | ) | (988 | ) | ||||||||||
Changes in operating assets and liabilities arising from cash flow movements | (3,458 | ) | (5,921 | ) | (2,405 | ) | (1,420 | ) | ||||||||
Other | (387 | ) | 220 | 144 | 100 | |||||||||||
Net Cash (used in) Operating Activities | (1,166 | ) | (336 | ) | (1,627 | ) | 2,239 | |||||||||
Year Ended 30 June | ||||||||||||||||
Group | Bank | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Notes, coins and cash | 1,703 | 1,723 | 1,213 | 1,318 | ||||||||||||
Other short term liquid assets | 491 | 859 | 342 | 415 | ||||||||||||
Receivables due from other financial institutions — at call(1) | 4,657 | 2,893 | 3,437 | 2,737 | ||||||||||||
Payables due to other financial institutions — at call(1) | (4,813 | ) | (4,199 | ) | (4,751 | ) | (4,156 | ) | ||||||||
Cash and cash equivalents at end of year | 2,038 | 1,276 | 241 | 314 | ||||||||||||
(1) | At call includes certain receivables and payables due from and to financial institutions within three months. |
2006 | 2005 | |||||||
$M | $M | |||||||
Disposal Proceeds | ||||||||
Cash received on disposals | 608 | — | ||||||
608 | — | |||||||
Fair value of net tangible assets disposed | ||||||||
Cash and liquid assets | 55 | — | ||||||
Assets at fair value through Income Statement | ||||||||
Trading | — | — | ||||||
Insurance | 2,297 | — | ||||||
Other | — | — | ||||||
Other assets | 148 | — | ||||||
Life Insurance policy liabilities | (1,996 | ) | — | |||||
Bills payable and other liabilities | (41 | ) | — | |||||
Profit on sale | 145 | — | ||||||
Cash consideration received | 608 | — | ||||||
Inflows of cash on disposals | ||||||||
Cash payments | 608 | — | ||||||
Less cash and cash equivalents disposed | (55 | ) | — | |||||
Net cash inflow on disposal | 553 | — | ||||||
Note 49(e) Acquisition of Controlled Entities
2006 | 2005 | |||||||
$M | $M | |||||||
Consideration | ||||||||
Cash paid on acquisitions | 414 | 44 | ||||||
414 | 44 | |||||||
Fair value of net tangible assets acquired | ||||||||
Cash and liquid assets | — | 4 | ||||||
Other intangibles | 122 | — | ||||||
Other assets | 167 | 4 | ||||||
Bills payable and other liabilities | (8 | ) | (8 | ) | ||||
Minority interests | 126 | — | ||||||
Goodwill | 7 | 44 | ||||||
Cash consideration paid | 414 | 44 | ||||||
Outflow/(inflows) of cash on acquisitions | ||||||||
Cash payments | 414 | 44 | ||||||
Less cash and cash equivalents acquired | — | (4 | ) | |||||
Net cash outflow on acquisition | 414 | 40 | ||||||
Group 2006 | Group 2005 | |||||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||||
Value | Value | Value | Value | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Assets | ||||||||||||||||
Cash and liquid assets | 5,131 | 5,131 | 6,055 | 6,055 | ||||||||||||
Receivables from other financial institutions | 7,107 | 7,107 | 6,087 | 6,087 | ||||||||||||
Assets at Fair Value through Income Statement: | ||||||||||||||||
Trading | 15,758 | 15,758 | 14,631 | 14,631 | ||||||||||||
Insurance | 24,437 | 24,437 | 27,484 | 27,484 | ||||||||||||
Other | 2,944 | 2,944 | — | — | ||||||||||||
Derivative assets(1) | 9,675 | 9,675 | — | — | ||||||||||||
Available-for-sale investments | 11,203 | 11,203 | — | — | ||||||||||||
Investment securities | — | — | 10,838 | 10,999 | ||||||||||||
Loans, advances and other receivables | 259,176 | 258,547 | 228,346 | 228,867 | ||||||||||||
Bank acceptances of customers | 18,310 | 18,310 | 16,786 | 16,786 | ||||||||||||
Other assets | 5,190 | 5,190 | 17,056 | 17,074 | ||||||||||||
Liabilities | ||||||||||||||||
Deposits and other public borrowings | 173,227 | 173,108 | 168,026 | 168,562 | ||||||||||||
Payables due to other financial institutions | 11,184 | 11,184 | 8,023 | 8,023 | ||||||||||||
Liabilities at Fair Value through Income Statement | 13,811 | 13,811 | — | — | ||||||||||||
Derivative liabilities(1) | 10,820 | 10,820 | — | — | ||||||||||||
Bank acceptances | 18,310 | 18,310 | 16,786 | 16,786 | ||||||||||||
Insurance policy liabilities | 22,225 | 22,225 | 24,694 | 24,694 | ||||||||||||
Debt issues | 78,591 | 76,645 | 70,765 | 69,799 | ||||||||||||
Managed fund units on issue | 1,109 | 1,109 | — | — | ||||||||||||
Bills payable and other liabilities | 6,053 | 6,056 | 17,551 | 17,548 | ||||||||||||
Loan capital | 9,895 | 9,913 | 6,291 | 6,113 | ||||||||||||
Asset and liability hedges — unrealised gains/(losses)(1) | — | — | — | (277 | ) |
(1) | Following the adoption of AASB 132 and 139 at 1 July 2005 all derivatives including hedging derivatives are now at fair value on the balance sheet. For further details refer Note 11. |
(a) | the financial statements and notes thereto of the Bank and the Group, and the additional disclosures included in the Directors’ Report designated as audited, comply with Accounting Standards and in their opinion are in accordance with the Corporations Act 2001; | |
(b) | the financial statements and notes thereto give a true and fair view of the Bank’s and the Group’s financial position as at 30 June 2006 and of their performance for the year ended on that date; | |
(c) | in the opinion of the Directors, there are reasonable grounds to believe that the Bank will be able to pay its debts as and when they become due and payable; and | |
(d) | the directors have been given the declarations required under Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2006 |
J M Schubert | R J Norris | |
Chairman | Managing Director and Chief Executive Officer | |
23 August 2006 |
• | examining, on a test basis, information to provide evidence supporting the amounts and disclosures in the financial report and the remuneration disclosures; and |
• | assessing the appropriateness of the accounting policies and disclosures used and the reasonableness of significant accounting estimates made by the directors. |
1. | the financial report of the Commonwealth Bank of Australia is in accordance with: | |
a) | theCorporations Act 2001, including: |
i. | giving a true and fair view of the financial position of Commonwealth Bank of Australia and the consolidated Group at 30 June 2006 and of their performance for the year ended on that date; and | ||
ii. | complying with Accounting Standards in Australia and theCorporations Regulations 2001; and |
b) | other mandatory financial reporting requirements in Australia. | |
2. | the remuneration disclosures that are contained on pages 51 to 68 of the directors’ report comply with Accounting Standard AASB 124Related Party Disclosures. |
Ernst & Young | S J Ferguson | |
Sydney | Partner | |
23 August 2006 |
Rank | Name of Holder | Number of Shares | % | |||||||
1 | J P Morgan Nominees Australia Limited | 113,464,882 | 8.84 | |||||||
2 | National Nominees Limited | 111,655,869 | 8.70 | |||||||
3 | Westpac Custodian Nominees Ltd | 72,147,286 | 5.62 | |||||||
4 | Citicorp Nominees Ltd | 71,998,891 | 5.61 | |||||||
5 | RBC Dexia Services Australia Nominees Pty Limited | 31,846,699 | 2.48 | |||||||
6 | ANZ Nominees Limited | 29,898,579 | 2.33 | |||||||
7 | Cogent Nominees Pty limited | 22,471,900 | 1.75 | |||||||
8 | Queensland Investment Corporation | 16,508,932 | 1.29 | |||||||
9 | AMP Life Limited | 11,616,993 | 0.91 | |||||||
10 | HSBC Custody Nominees (Australia) Limited | 8,668,658 | 0.68 | |||||||
11 | Australian Foundation Investment Company Limited | 8,095,245 | 0.63 | |||||||
12 | Bond Street Custodian Pty Limited | 7,183,574 | 0.56 | |||||||
13 | Invia Custodian Pty Limited | 6,833,176 | 0.53 | |||||||
14 | Westpac Financial Services Ltd | 4,989,074 | 0.39 | |||||||
15 | UBS Wealth Management Australia Nominees Pty Ltd | 4,968,605 | 0.39 | |||||||
16 | Australian Reward Investment Alliance | 2,935,854 | 0.23 | |||||||
17 | Suncorp Custodian Services Pty Ltd | 2,626,440 | 0.20 | |||||||
18 | Perpetual Trustee Co Ltd | 2,524,354 | 0.20 | |||||||
19 | Belike Nominees Pty Limited | 2,490,207 | 0.19 | |||||||
20 | CSFB Third Nominees Pty | 2,428,198 | 0.19 | |||||||
Number of | Percentage | Number of | Percentage | |||||||||||||
Range | Shareholders | Shareholders | Shares | Issued Capital | ||||||||||||
1 – 1,000 | 525,439 | 75.19 | 181,715,794 | 14. 16 | ||||||||||||
1,001 – 5,000 | 153,355 | 21.94 | 312,046,698 | 24. 32 | ||||||||||||
5,001 – 10,000 | 14,017 | 2.00 | 96,342,827 | 7. 51 | ||||||||||||
10,001 – 100,000 | 5,802 | 0.83 | 111,633,195 | 8. 70 | ||||||||||||
100,001 and over | 271 | 0.04 | 581,515,795 | 45. 31 | ||||||||||||
Total | 698,884 | 100.00 | 1,283,254,309 | 100. 00 | ||||||||||||
Less than marketable parcel of $500 | 12,493 | 15,641 | ||||||||||||||
• | on a show of hands — to one vote; and |
• | on a poll — to one vote for each share held or represented. |
• | none of them is entitled to vote on a show of hands; and |
• | on a poll only one official representative may exercise the member’s voting rights and the vote of each attorney shall be of no effect unless each is appointed to represent a specified proportion of the member’s voting rights, not exceeding in aggregate 100%. |
• | if a member appoints two proxies and both are present at the meeting: |
• | if the appointment does not specify the proportion or number of the member’s votes each proxy may exercise, then on a poll each proxy may exercise one half of the member’s votes; |
• | neither proxy shall be entitled to vote on a show of hands; and |
• | on a poll each proxy may only exercise votes in respect of those shares or voting rights the proxy represents. |
Rank | Name of Holder | Number of Units | % | |||||||
1 | J P Morgan Nominees Australia Limited | 336,831 | 8.98 | |||||||
2 | National Nominees Limited | 179,669 | 4.79 | |||||||
3 | Citicorp Nominees Pty Limited | 114,175 | 3.04 | |||||||
4 | UBS Nominees Pty Ltd | 99,570 | 2.66 | |||||||
5 | UBS Warburg Private Clients Nominees Pty Ltd | 90,780 | 2.42 | |||||||
6 | Questor Financial Services Limited | 67,631 | 1.80 | |||||||
7 | RBC Dexia Services Australia Nominees Limited | 65,135 | 1.74 | |||||||
8 | Invia Custodian Pty Limited | 51,550 | 1.37 | |||||||
9 | Westpac Custodian Nominees Limited | 50,000 | 1.33 | |||||||
10 | Bond Street Custodians Limited | 39,754 | 1.06 | |||||||
11 | ANZ Nominees Limited | 30,912 | 0.82 | |||||||
12 | The Australian National University Investment Section | 25,000 | 0.67 | |||||||
13 | Gordon Merchant No 2 Pty Ltd | 24,440 | 0.65 | |||||||
14 | Clycut Pty Ltd | 21,892 | 0.58 | |||||||
15 | J Neave Investments Pty Limited | 19,697 | 0.53 | |||||||
16 | Cogent Nominees Pty Limited | 19,581 | 0.52 | |||||||
17 | Cryton Investments No 9 Pty Ltd | 17,600 | 0.47 | |||||||
18 | Tynong Pastoral Co Pty Ltd | 17,450 | 0.47 | |||||||
19 | Woodross Nominees Pty Ltd | 16,000 | 0.43 | |||||||
20 | Perpetual Trustee Company Limited | 15,066 | 0.40 | |||||||
Number of | Percentage | Number of | Percentage | |||||||||||||
Range | Unitholders | Unitholders | Units | Issued Units | ||||||||||||
1 – 1,000 | 9,203 | 96.09 | 1,531,679 | 40. 85 | ||||||||||||
1,001 – 5,000 | 310 | 3.24 | 694,594 | 18. 52 | ||||||||||||
5,001 – 10,000 | 36 | 0.38 | 274,297 | 7. 31 | ||||||||||||
10,001 – 100,000 | 26 | 0.27 | 732,930 | 19. 55 | ||||||||||||
100,001 and over | 2 | 0.02 | 516,500 | 13. 77 | ||||||||||||
Total | 9,577 | 100.00 | 3,750,000 | 100. 00 | ||||||||||||
Less than marketable parcel of $500 | 3 | 4 | ||||||||||||||
• | If at the time of the meeting, a dividend has been declared but has not been paid in full by the relevant payment date; |
• | On a proposal to reduce the Bank’s share capital; |
• | On a resolution to approve the terms of a buy-back agreement; |
• | On a proposal that affects rights attached to Commonwealth Bank PERLS; |
• | On a proposal to wind up the Bank; |
• | On a proposal for the disposal of the whole of the Bank’s property, business and undertaking; |
• | During the winding up of the Bank; or |
• | As otherwise required under the Listing Rules from time to time, in which case the holders will have the same rights as to manner of attendance and as to voting in respect of each unit as those conferred on ordinary shareholders in respect of each ordinary share. |
• | On a show of hands, to exercise one vote when entitled to vote in respect of the matters listed above; and |
• | On a poll, to one vote for each unit. |
Rank | Name of Holder | Number of Shares | % | |||||||
1 | AMP Life Limited | 375,000 | 6.43 | |||||||
2 | RBC Dexia Services Australia Nominees Pty Limited | 169,791 | 2.91 | |||||||
3 | UBS Wealth Management Australia Nominees Pty Ltd | 153,734 | 2.64 | |||||||
4 | Cogent Nominees Pty Limited | 140,476 | 2.41 | |||||||
5 | J P Morgan Nominees Australia Limited | 108,025 | 1.85 | |||||||
6 | Bond Street Custodian Limited | 93,909 | 1.61 | |||||||
7 | ANZ Executors & Trustee Company Limited | 75,333 | 1.29 | |||||||
8 | Goldman Sachs JB Were Pty Ltd | 75,000 | 1.29 | |||||||
9 | Goldman Sachs JB Were Capital Markets Ltd | 72,001 | 1.23 | |||||||
10 | Mr Walter Lawton + Mrs Jan Rynette Lawton | 60,000 | 1.03 | |||||||
11 | Invia Custodian Pty Limited | 54,045 | 0.93 | |||||||
12 | The Australian National University Investment Section | 51,282 | 0.88 | |||||||
13 | Mr Reginald Surtees Geary | 50,000 | 0.86 | |||||||
14 | National Nominees Limited | 42,885 | 0.74 | |||||||
15 | Citicorp Nominees Pty limited | 35,320 | 0.61 | |||||||
16 | Questor Financial Services Limited | 35,061 | 0.60 | |||||||
17 | Truckmate (Australia) Pty Ltd | 35,000 | 0.60 | |||||||
18 | Equity Trustees Limited | 30,639 | 0.53 | |||||||
19 | Kerlon Pty Ltd | 30,000 | 0.51 | |||||||
20 | Australian Executor Trustees Limited | 28,168 | 0.48 | |||||||
Number of | Percentage | Number of | Percentage | |||||||||||||
Range | Shareholders | Shareholders | Shares | Issued Capital | ||||||||||||
1 – 1,000 | 15,397 | 96.26 | 2,428,892 | 41. 65 | ||||||||||||
1,001 – 5,000 | 510 | 3.19 | 1,120,472 | 19. 21 | ||||||||||||
5,001 – 10,000 | 38 | 0.24 | 300,646 | 5. 16 | ||||||||||||
10,001 – 100,000 | 45 | 0.28 | 1,222,126 | 20. 95 | ||||||||||||
100,001 and over | 4 | 0.03 | 760,145 | 13. 03 | ||||||||||||
Total | 15,994 | 100.00 | 5,832,281 | 100. 00 | ||||||||||||
Less than marketable parcel of $500 | 16 | 31 | ||||||||||||||
Head Office
Commonwealth Bank of Australia
48 Martin Place,
Sydney NSW 1155
Telephone: (61 2) 9378 2000
ASB Bank Limited
Level 28 ASB Bank Centre
135 Albert Street, Auckland
Telephone: (64 9) 377 8930
Facsimile: (64 9) 358 3511
Managing Director
H Burrett
33-45 Hurstmere Road
Takapuna, Auckland
Telephone: (64 9) 487 9000
Facsimile: (64 9) 486 1913
Acting Managing Director
J Raby
Fiji Islands
Colonial National Bank
Colonial Life Limited
3 Central Street, Suva
Telephone: (67 9) 3214 400
Facsimile: (67 9) 3303 448
Managing Director
L Mellsop
CBA Representative Office
2909 China World Towers 1
1 Jian Guo Men Wai Avenue
Beijing 100004
Telephone: (86 10) 6505 5350
Facsimile: (86 10) 6505 5354
Chief Representative
Y T Au
1010 Huahai (M) Road
Shanghai 200031
Telephone: (86 21) 6103 6500
Facsimile: (86 21) 6103 6598
Head of China Retail Banking
Vicky Liem
Room 3805-3806 K.Wah Centre
1010 Huahai (M) Road
Shanghai 200031
Telephone: (86 21) 6103 6500
Facsimile: (86 21) 6103 6598
Chief Executive Officer
L. Zhang
21st Floor
China Insurance Building
166 Lujiazui Dong Road
Shanghai 200120
Telephone: (86 21) 5882 5245
Facsimile: (86 21) 6887 5720
General Manager
C Lee
Room 4007 Bund Center
222 Yan An Road East
Shanghai 200002
Telephone: (86 21) 6335 1686
Facsimile: (86 21) 6335 1766
No. 29 Dong Zhong Street
Dong Cheng District
Beijing
Telephone: (86 10) 6418 1266
Facsimile: (86 10) 6418 1243
Regional Head Asia
L Mann
15th Floor, Chater House
8 Connaught Place,
Central
Hong Kong
Telephone: (852) 2844 7500
Facsimile: (852) 2845 9194
Regional General Manager Asia
S Poon
Room 1501 — 1505, Chater House
8 Connaught Road Centre
Hong Kong
Telephone: (852) 3667 8900
Facsimile: (852) 3667 8939
Executive General Manager
P Fancke
Level 6 Three Exchange Square
8 Connaught Place, Central
Hong Kong
Telephone: (852) 2846 7555
Facsimile: (852) 2868 4742/4783
Regional Head Asia
L Mann
CBA Representative Office
Unit 201, Level 2 (front portion) of Embassy
Classic
No. 11, Vittal Mallya Road
Bangalore 560001
Telephone: (91 80) 2210 7411
Fascimile: (91 80) 5112 1462
Chief Representative
Ravi Kushan
PT Bank Commonwealth
Ground Flr, Wisma Metropolitan II
Jl. Jendral Sudirman Kav. 29-31
Jakarta 12920
Telephone: (62 21) 5296 1222
Facsimile: (62 21) 5296 2293
President Director
S Brewis-Weston
11/F Sentra Mulia
Jl. H.R. Rason Said, Kav X-6 No 8
Jakarta 12940
Telephone: (62 21) 250 0385
Facsimile: (62 21) 250 0389
President Director
Malakai Naiyaga
29th Floor, Gedung Artha Graha
Sudirman Central Business District
Jl. Jend. Sudirman Kav. 52-53
Jakarta 12190
Telephone: (62 21) 515 0088
Facsimile: (62 21) 515 0033
Regional Head Asia
L Mann
CBA Branch Office
8th Floor
Toranomon Waiko Building
5-12-1 Toranomon
Minato-ku, Tokyo 105-0001
Telephone: (81 3) 5400 7280
Facsimile: (81 3) 5400 7288
General Manager
L Xia
CBA Branch Office
3 Temasek Avenue #20-01
Centennial Tower
Singapore 039190
Telephone: (65) 6349 7000
Facsimile: (65) 6224 5812
General Manager
R Buchan
3 Temasek Avenue
#20-01 Centennial Tower
Singapore 039190
Telephone: (65) 6538 0008
Facsimile: (65) 6538 0800
Regional Head Asia
L Mann
CBA Representative Office
Suite 202-203A
The Central Building
31 Hai Ba Trung, Hanoi
Telephone: (84 4) 826 9899
Facsimile: (84 4) 824 3961
Level 3, Saigon Riverside Office Center
2A-4A Ton Duc Thang
District 1, Ho Chi Minh City
Telephone: (84 4) 829 1919
Facsimile: (84 4) 829 3131
General Director
R Carkeet
United States of America
CBA Branch Office
Level 17, 599 Lexington Avenue
New York NY 10022
Telephone: (1 212) 848 9200
Facsimile: (1 212) 336 7725
General Manager, Head of North America
L C Tuzo
United Kingdom
CBA Branch Office
Senator House
85 Queen Victoria Street
London EC4V 4HA
Telephone: (44 20) 7710 3999
Facsimile: (44 20) 7710 3939
Regional General Manager Europe & North America
P Orchart
3rd Floor, 30 Cannon Street
London EC4M 6YQ
Telephone: (44 20) 7332 6500
Facsimile: (44 20) 7332 6501
23 St Andrew Square
Edinburgh EH2 1BB
Telephone: (44 131) 473 2200
Facsimile: (44 131) 473 2222
Managing Partners
S Paul & A Tulloch
Level 7, 48 Martin Place
Sydney NSW 1155
Telephone (02) 9378 2000
Facsimile (02) 9378 3317
JD Hatton
www.commbank.com.au/shareholder
Link Market Services Limited
Locked Bag A14
SYDNEY SOUTH NSW 1235
Telephone: (02) 8280 7199
Facsimile: (02) 9287 0303
Freecall: 1800 022 440
Internet
www.linkmarketservices.com.au
registrars@linkmarketservices.com.au
New Zealand
0800 442 845
United Kingdom
0845 769 7502
Fiji
008 002 054
Other International
612 8280 7199
CBA
To request a copy of the annual report
please call 1800 022 440