Commonwealth Bank Group full year results

Commonwealth Bank Group full year results announcement 1999/2000

Sydney, 30 August 2000: The Commonwealth Bank Group today announced a net operating profit after tax of $1,713 million (excluding abnormals) for the year ended 30 June 2000. Directors declared a final dividend of 72 cents per share, fully franked. Managing Director and CEO, Mr David Murray commented that the solid result reflected more Australians doing more business with the Group, despite a further fall in margins.

The result incorporates a minor profit contribution from Colonial Limited from 13 to 30 June 2000. Consequent upon the merger with Colonial, the life and funds management business of both groups have been valued on a consistent basis, resulting in a one-off revaluation adjustment of the Group’s life and funds management businesses of $987 million, net of restructuring charges.

Mr Murray said, “This result reflects our intent to become a more diversified financial services group. The merger with Colonial, which is proceeding as expected, complements this strategy.”

Reflecting continuing strength in the domestic economy, total lending assets* rose 11% but continuing margin compression limited net interest earnings growth to 5%. Income from financial markets trading, life insurance and funds management again grew strongly. Retail transaction fees remained at 4% of total operating income.

EzyBanking accounts with the Bank were made available at 640 Woolworths sites. These accounts are gaining increasing acceptance, with 50 free in-store transactions per month and competitive rates of interest. Other transaction accounts with the Bank, (Award Saver and Streamline) continue to grow at over 30,000 accounts per month. NetBank registrations grew by 230,000 with a fourfold increase in transaction numbers. As at 30 June 2000, the Bank had exceeded half a million online clients (including NetBank, ComSec, HomePath and MobileBank.)

Mr Murray said that the continuing growth of accounts and online customer numbers reflects both Australians’ response to convenience, and competitiveness of the Bank’s new services. He added that it remains imperative for transaction based accounts to be fairly priced if the full range of services is to be maintained for all Australians.

Mr Murray said, “This result demonstrates that the Group is appropriately placed to deal with growth and change in the domestic financial services industry. However, consolidation and convergence in the global financial industry, together with structural change in the Australian economy, means we will have to make a substantial and sustained leap in productivity in the medium term. This can only come through the application of technology and eCommerce, not only for enhanced customer services but also for more efficient processing, administration and decision making.”

Key aspects of the results:

 Net profit after income tax of $1,713 million (excluding abnormals and including contribution from Colonial)
 Total assets $177 billion (pre merger) $217.7 billion (post merger)
 Full year dividend 130 cents per share

For copies of the Profit Announcement and performance highlights, visit the Group’s website at www.commbank.com.au.

Commonwealth Bank Group is Australia’s:
 leading home lender
 leading issuer of credit cards
 largest holder of retail deposits
 largest retail fund manager
 largest wholesale fund manager
 most accessible financial services provider with over 125,000 points of access including over 5000 branch and agency sites, ATMs and EFTPOS and in-store banking services through 600 plus EzyBanking outlets.
 leading online and direct bank through services such as NetBank, Commonwealth Securities retail share trading and Quickline, online business banking.

Australian tax payable for the Group on the 1999/00 financial year profit is $661.6 million. The Group will also return a total dividend payment of $1.4 billion to shareholders, 90% (by value) of whom are Australian.

The Group has an international presence in New Zealand, Asia, Europe and the United States. With the merger, the proportion of profit earned in Australia is about 87%.

ENDS

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