AGM Statement

RNS Number : 2590I
Commonwealth Bank of Australia
17 November 2008

COMMONWEALTH BANK OF AUSTRALIA
CHAIRMAN'S ADDRESS - 2008 ANNUAL GENERAL MEETING

The 2008 financial year has been one of the most challenging that the global financial services industry has ever seen. While the
Australian economy has so far performed well and Australian banks have not had the difficulties experienced offshore, they have not been
immune from the effects of ongoing volatility and rising costs in global credit markets and slowing economic conditions. In this
environment, banks which are well managed with strong levels of capital and a sophisticated approach to risk management, like your
Commonwealth Bank of Australia, have proven resilient and outperformed peers. Nevertheless I recognise that the fall in share prices has
impacted all shareholders.
Even so, at a time when many international banks have reported substantial losses and have had to raise significant amounts of capital
and cut dividends, the Group has performed well. We reported a 7% rise in statutory net profit after tax to $4,791 million. A record final
dividend of $1.53 per share was declared taking dividends for the year to $2.66, an increase of 4% on the prior year.
The Group remains in a strong financial position. We are one of less than 20 banks worldwide with an AA credit rating or better. This
can be attributed to a number of factors including the Group's commitment to rigorous risk management disciplines which helped guide the
Group away from the global excesses affecting many of the world's major banks. We have also benefitted from operating in a stable well
regulated environment which is, to a large extent, a function of the excellent job done by the Reserve Bank and APRA in recent years.
Going into the current crisis your Board and management were firm in our resolve to ensure that the Group's capital position remained
strong. Given that the crisis in global financial markets has been longer and more challenging than most of us envisaged, this decision has
proved to be a wise one and has allowed the Group to benefit from a flight to quality with our home loan market share increasing every month
for the last 18 months and our household deposit market share growing to almost 30%. These increases in market share have also been driven
by significant improvements in customer service across the Group.
We have not, and will not be diverted from our focus on growing value for you our shareholders. We will continue to execute our
strategies of strengthening our domestic Australian retail and business banking franchises; pursuing selective growth in Asia; and seeking
out niche opportunities to grow our wealth management and institutional and global markets businesses internationally. In a market which is
increasingly short term in its focus, the Group will only pursue assets that will deliver you value and have the advantage of being able to
pursue attractive opportunities in an environment where many of our competitors are unable to do so.
The recent acquisition of BankWest and St Andrew's demonstrates the benefits of having a clear strategy, strong balance sheet,
disciplined approach to value and the ability to move quickly when attractive opportunities become available. This outstanding business,
which we acquired at a very attractive price, will be earnings accretive in year one and will create significant value for our
shareholders.
I know that some of our shareholders were disappointed that they were not able to participate in the $2 billion capital raising which
occurred on the same day we announced the acquisition. We would have liked to have included retail shareholders but this was not possible.
Given the volatility of global equity markets, the Board took the view that it was essential to immediately raise $2 billion of capital to
fund the acquisition. The only way to do this was by way of an institutional placement. A rights issue or similar offering to our entire
shareholder base would have taken several months and involved unacceptable market risk.
The strong position we are in, and our lack of involvement in the subprime mess in the United States, is not accidental. As well as
having a robust underlying business and a clear vision of where we are heading we have a very talented team running the business. I would
like to thank all of our people for their hard work and commitment once again this year. The key to our success is the quality of our
people and therefore it is essential that we continue to build capabilities within the organisation. As a result, a significant amount of
the Board's and management's time is committed to putting in place succession and management development plans so that the business will
continue to deliver superior performance over the long term.
It has been particularly pleasing this year to see that our commitment to health and safety is paying dividends with the Group's Lost
Time Injury Frequency Rate improving by a further 31 %. Employee workplace satisfaction scores have also increased further and have flowed
through into real improvements in our customer service which Ralph will talk about shortly.
While people are the most important driver of our performance, building and maintaining our relationship with other stakeholders remains
a priority for the Group. At a time when the community is increasingly concerned about climate change the Group has embarked on a number of
sustainability initiatives. In the environmental area we are focussed on reducing our greenhouse gas emissions as we upgrade and modernise
our office accommodation and branch networks, and we are raising people's awareness of climate change through staff engagement initiatives
such as Earth Hour. We also support a number of organisations who are working hard to improve our environment.
Your Group has a long and extensive history of working with the wider community and this year we continued, through The Commonwealth
Bank Foundation, with our financial literacy programme. Our people participated in activities to assist our community partners including
Legacy, St Vincent de Paul Night Patrol, Midnight Basketball, and the Clown Doctors. They are also involved in a range of national mentoring
initiatives through our membership of the Australian Business and Community Network.
This year, we launched our Reconciliation Action Plan, formalising our commitment to indigenous Australians. This plan focuses on
enhancing the involvement of indigenous Australians within the Group and better meeting the needs of indigenous customers and staff.
Each year you will see increased attention to how we report to you on these important areas of sustainability.
One of our objectives over the last few years has been to add more financial and banking experience to the Board. This has proved
particularly valuable in the current environment. As you will recall, last year we were joined by Sir John Anderson who has held many senior
positions in the financial services industry in New Zealand including Chief Executive of National Bank of New Zealand and Harrison Young who
has a long and distinguished career as an investment banker in the United States and Asia. The appointment, this year, of Andrew Mohl
further enhances our financial services experience. Andrew will be known to most of you having been Chief Executive Officer of AMP until his
retirement at the end of 2007.
I can assure you that the Board takes its responsibilities on your behalf seriously.
Finally, I just wanted to make a couple of general observations about the outlook before I hand over to Ralph, who will be more
specific. The last twelve months has been the most challenging period for financial organisations that we have ever experienced. As a
result, we know how difficult this period is for all shareholders as Australian share prices have been severely impacted by the global
situation. Initiatives by the Australian and offshore governments have been necessary to increase confidence. However virtually all sectors
of Australia's and most overseas' economies are now turning down with many countries facing recession. Australia is the best placed
developed country to ride out this storm and although we will likely avoid recession, our economy will slow, unemployment will rise, and it
will certainly feel like a recession for many people in many parts of Australia.
As a result, it will be some time before the critical element of confidence is restored and recovery in the broad economy commences. We
therefore remain cautious about the general outlook for the economy for at least the next 18 months.
Finally, once again, I want to thank our shareholders and our customers for their continuing support of the Commonwealth Bank Group.
Click on, or paste the following links into your web browser, to view the associated PDF documents.
2008 AGM Chairman Presentation Slides 13 November 2008
http://www.rns-pdf.londonstockexchange.com/rns/2590I_-2008-11-17.pdf 2008 AGM CEO Address 13 November 2008
http://www.rns-pdf.londonstockexchange.com/rns/2590I_1-2008-11-17.pdf 2008 AGM CEO Presentation Slides 13 November 2008
http://www.rns-pdf.londonstockexchange.com/rns/2590I_2-2008-11-17.pdf 2008 AGM Tombstone
http://www.rns-pdf.londonstockexchange.com/rns/2590I_3-2008-11-17.pdf Commonwealth Bank First Quarter Trading Update Media
Release 13 November 2008
http://www.rns-pdf.londonstockexchange.com/rns/2590I_4-2008-11-17.pdf Trading Update Presentation 13 November 2008
http://www.rns-pdf.londonstockexchange.com/rns/2590I_5-2008-11-17.pdf Basel II Pillar 3 Disclosure 30 June 2008
http://www.rns-pdf.londonstockexchange.com/rns/2590I_6-2008-11-17.pdf Basel II Pillar 3 Disclosure 30 September 2008
http://www.rns-pdf.londonstockexchange.com/rns/2590I_7-2008-11-17.pdf

[ENDS]

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